+27 11 315 3000

478 James Crescent, Halfway House, South Africa, 1685

INTEGRATED ANNUAL REPORT FOR THE YEAR ENDED 28 FEBRUARY 2021

About Famous Brands Value creation

process

Strategic intent and viability

Governance and remuneration

Annual financial statements

Supplementary information

Navigational icons

Icons are used in this report to assist with navigating information:

Optimising capital management

Ensuring regulatory compliance

Financial capital

Manufactured capital

Intellectual capital

Human capital

Social and relationship

Natural capital

ABOUT OUR INTEGRATED ANNUAL REPORT	2
ABOUT FAMOUS BRANDS	4
VALUE CREATION PROCESS	10
Business model	10
Reset. Refocus. Renegotiate.	17
Key differentiators and investment case	18
STRATEGIC INTENT AND VIABILITY	19
Operating context	19
Key stakeholders	26
Risks and opportunities	37
Strategic focus areas and key enablers at a glance	46
Scorecard by strategic matter	48
SUSTAINABILITY	54
Our sustainability journey	54
Environmental report	57
Transformation report	62
Corporate Social Investment report	70
LEADERSHIP COMMENTARY	72
Chairman's statement	72
Chief Executive Officer's report	76
Group Financial Director's report	86
Operational review	91

GOVERNANCE AND REMUNERATION	108
Oversight summaries	108
Board of Directors and Executive management	112
Governance at Famous Brands	116
Social and Ethics Committee report	122
Remuneration Committee report	126
Investment Committee report	129
Nomination Committee report	130
Remuneration report – Background statement	132
Remuneration report – Policy	136
Remuneration report – Implementation	145
ANNUAL FINANCIAL STATEMENTS	148
Audit and Risk Committee report	148
Summarised Consolidated Annual Financialstatements	151
Notes to the Consolidated Summarised AnnualFinancial Statements	156
Shareholder spread	167
SUPPLEMENTARY INFORMATION	168

Value creation

process

Strategic intent and viability

Governance and remuneration

Reporting suite and principles

We are committed to reporting transparently to our stakeholders. We continue to enhance the transparency and quality of our disclosures. We are aware that further improvements are possible, and we invite feedback to be sent to [email protected].

This FY2021 Integrated Annual Report is our primary report to stakeholders. Our suite of reports comprises:

Reportingsuite	Integrated Annual Report(IAR or this report)1	Group AuditedFinancialStatements (AFS)	Notice ofAnnual GeneralMeeting (AGM)
Reporting period
	Covers the year from 1 March 2020 to 28 February 2021.
Scope
	Addresses the performance of Famous Brands Limited (Famous Brands or the Company) and its subsidiaries (togetherreferred to as the Group), as well as its associates in all territories where the Company operates, being South Africa (SA), therest of Africa and the Middle East (AME) and the United Kingdom (UK).
Boundary
	The scope of this report covers our core operations'financial and non-financial performance. We report onstrategy, the six capitals on which we rely, and theopportunities, risks and outcomes attributable to orassociated with our key stakeholders, who significantlyinfluence our ability to create value.	A comprehensivereport of the Group'sfinancial performanceof the year.	Information forshareholders toparticipate in the AGM.
	For the most part, unless stated otherwise, statistics in thisreport relate to the South African business (excluding ourassociates). Statistics related to a specific geographicterritory are denoted as such.
Materiality applied
	The legitimate interests of all our key stakeholderswere considered in determining informationconsidered to be material for inclusion in this report.	The AFS are audited bythe materiality asdetermined by the	All information asrequired by regulation.
	Key stakeholders26.	external auditor interms of the
	We define strategic matters as those which are mostmaterial to our formulation and execution of strategy andthose that have the potential to significantly affect ourability to create stakeholder value and contribute to thefuture sustainability of the Group.	International Standardson Auditing (ISA).
	Strategy and key strategic material matters46.

ABOUT OUR INTEGRATED ANNUAL REPORT

Reportingsuite	Integrated Annual Report(IAR or this report)1	Group AuditedFinancialStatements (AFS)	Notice ofAnnual GeneralMeeting (AGM)
Frameworks used
	• Companies Act, No 71 of 2008, as amended(Companies Act)• Listings Requirements of the JSE Limited (JSE)(JSE Listings Requirements)• King IV Report on Corporate GovernanceTM for SouthAfrica, 2016 (King IV)2• International Financial Reporting Standards (IFRS) andInternational Accounting Standards (IAS), specificallyIAS 34 Interim Financial Reporting• International Integrated Reporting Council (IIRC)Integrated Reporting Framework	Companies Act,the JSE ListingsRequirements, IFRSand ISA.	Companies Act, the JSEListings Requirementsand King IV.
Assurance obtained
Combinedassurance120	• Internal controls• Management review• Internal audit assurance• Board of Directors (Board) approval, with the supportof the Audit and Risk Committee• Independent unmodified audit opinion by KPMG onthe audited financial statements• Verification certificate by Binder Dijker Otte (BDO)on broad-based black economic empowerment(BBBEE) statistics• Annual Greenhouse Gas Emissions Assessment byThe Carbon Report	Independentunmodified auditopinion by KPMGon AFS.Refer to page 148of AFS	• Internal controls• Management review• Board approval, withthe support of theAudit and RiskCommittee

The IAR, AFS and Notice of AGM are available online at: www.famousbrands.co.za.

Forward looking statements disclaimer

This report contains forward looking statements, which are based on assumptions and best estimates made by management with respect to the Company's future performance. Such statements are, by their nature, subject to risks and uncertainties, which may result in the Company's actual performance in future being different from that expressed or implied in any forward looking statements. These statements have not been audited by the Company's external auditors.

The Company neither accepts any responsibility for any loss arising from the use of information contained in this report, nor undertakes to publicly update or revise any of its forward looking statements.

Board responsibility statement

The Board, assisted by the Audit and Risk and Social and Ethics Committees, acknowledges its responsibility for ensuring the integrity of the IAR and has applied its collective mind in the preparation thereof. The Board believes that the

report has, in all material respects, been presented in accordance with the IIRC's Framework.

The Board authorised this report for release on 22 June 2021.

Santie Botha Independent Chairman

Darren Hele Chief Executive Officer

1 There has been no material change in the scope and boundary of the IAR compared to the prior year or to historical financial data. 1 There has been no material change in the scope and boundary of the IAR compared to the prior year or to historical financial data. 2 Copyright and trademarks are owned by the Institute of Directors in South Africa (IoDSA) NPC and all of its rights are reserved.

About Famous Brands Value creation process

Strategic intent and viability

Sustainability Leadership

commentary

Governance and remuneration

Annual financial statements

What drives us

We are deeply passionate about innovative branded food services solutions

We value our mutually beneficial relationships with our franchise

partners

We strive to be the best in the world at unique customer experiences

Our economic engine is driven by sustainable likefor-like growth

ABOUT FAMOUS BRANDS

Who we are

Famous Brands is Africa's leading branded food services franchisor.

Vision and values

Famous Brands began as a family business in the early 1960s with the brand Steers. Today, the Group owns several well-known brands supported by a vertically integrated business model and operations on three continents.

Global footprint 7

In 1994 Famous Brands listed on the JSE in the Travel and Leisure sector.

What we do

Famous Brands is a branded food services business operating franchised, master licence and Company-owned restaurants. Our vertically integrated business model comprises three core pillars: Brands, Manufacturing and Logistics.

Our portfolio of market-leading brands offers a powerful business proposition to our franchise partners and a high-quality solution across a diverse range of dining occasions to consumers across income groups. The Brands portfolio consists of 19 restaurant brands, represented by a network of 2 773 restaurants across SA, AME and the UK.

The portfolio is segmented into Leading (mainstream) brands and Signature (niche) brands. The Leading brands are further categorised as Quick Service and Casual Dining.

Our integrated supply chain comprises our Manufacturing and Logistics operations which support our Brands pillar in SA and selected African countries.

Our Brands, Manufacturing and Logistics divisions are supported by a range of central services, including shared facilities, human resources (HR) and information technology (IT). Central services costs are shared proportionately relative to activity. In addition, a core of corporate services supports the entire organisation.

Business model 10

Vision

To be the leading, innovative, branded franchised and food services business in SA and selected markets.

About our Integrated Annual Report

About Famous Brands Value creation

process

Strategic intent and viability

commentary

Governance and remuneration

Annual financial statements

ABOUT FAMOUS BRANDS continued

Quick Service restaurants (QSRs)

Casual Dining restaurants (CDRs)
Wholly owned
Joint venture (JV)/Associate
Under licence

Our brands Global footprint

71UK

5United Arab Emirates
3Ethiopia
7Sudan
56Nigeria
35Zambia
6Angola
38Botswana
48Namibia
2 436South Africa
SA statistics	UK statistics
2 436 restaurants(2020: 2 441)	71 restaurants(2020: 135)
9 logistics sites(2020: 10)	14 employees(2020: 1 342)
12 manufacturing sites(2020: 12)2 056 employees(2020: 2 276)

930 employees (2020: 847)

Leading brands

Signature brands

About Famous Brands Strategic intent and viability

Sustainability Leadership

commentary

Governance and remuneration

Annual financial statements

ABOUT FAMOUS BRANDS continued

The year in review

The value we create for our stakeholders is measured through tangible and intangible indicators.

Key performance indicator (KPI)	Link to value creation	Year-on-yearchange
Total return to shareholders
Full year dividend per share	Return on investment (ROI) for shareholders
Share price performance	Share price appreciation
Headline earnings per share (HEPS)	ROI for shareholders
Net debt:equity	Strength of liquidity and funding position
Debt finance structure	Debt finance renegotiated to levels moreappropriate for the business
Annual employee costs	Remuneration and benefits to employees
Training spend	Investment in employee development;value through education
Employee engagement score	Investment in employee development; valuethrough education
Union engagement	Stable bargaining environment

Link to value creation	Year-on-yearchange
Contribution to society
Progressing diversity in line with society'sdemographics
Support for local suppliers
Recognition and reward from our customers
Proactive management of our impact on society
Indicator of adherence to regulatory requirements
Reduces the negative impact of our business onsociety and the environment
Impact of our business on the environment

About Famous Brands Value creation process

Strategic intent and viability

Sustainability Leadership commentary Governance and remuneration

Our innovative branded food services solutions and unique customer experiences drive sustainable like-for like growth and value creation. Our ability to create aspirational and market-leading brands that delight our customers is key to our success. Through the appropriate use of our inputs in efficient business processes, we maintain our capacity to create sustainable long-term value outcomes for all stakeholders.

Key factors that impact on our ability to deliver value

BUSINESS MODEL VALUE CREATION PROCESS

Within our control Beyond our control

Operational efficiencies
Brand offering (appeal, service, value)
Product quality • Cost management
Stakeholder relationships
Commodity prices (food inflation)
Macro-economic factors (consumer spend)
Demand for products
Market and demographic dynamics affecting site viability • Country-specific risks (load shedding, socio-political instability)

Operating context page 19

Shared services and core corporate services

Strategic objectives

Placement of the strategic objective icons in the business model to the left, represents the link between strategy and business model.

Improving our operational efficiencies

Enhancing our financial performance

Prioritising our franchise partners

Developing our people; ongoing commitment to transformation

Leading in the categories we compete in

Optimising capital management

Ensuring regulatory compliance

About Famous Brands Value creation process

Strategic intent and viability

Sustainability Leadership commentary Governance and remuneration

BUSINESS MODEL continued

Creating value using our capitals

(excludes our associate companies)

Financial capital

The key to creating long-term value for our stakeholders is the best possible capital management and allocation. We invest in other capital in a deliberate fashion to grow and sustain our business.

Input	2021	2020
Total equity (R million)	391	1 800
Gross interest-bearing debt (excluding lease liabilities) (R billion)	1.5	1.7
Cash and cash equivalent (R million)	444	486

Outcome (value for stakeholders)	2021	2020
Revenue (R billion)	5.0	7.8
Operating profit before non-operational items (R million)	193	912
Net finance costs (R million)	214	219
Cash generated from operations (R million)	574	1 340
HEPS (cents)	(86)	417
Return on equity (ROE) (%)	(7.9)	25.1
Return on capital employed (ROCE) (%)	(50.9)	20.0
Gearing (%)*	351	143
Wealth created (R billion)	1.4	2.8
Net asset value per share (cents)	390	1 797
Closing share price at year-end (cents)	4 603	5 360

* Includes IFRS 16 lease liabilities.

Manufactured capital

Ongoing investment in Company-owned restaurants, facilities, equipment, fleet and IT infrastructure allows us to remain relevant to customers and supportive to our franchise partners. Over time, we will continue to reduce our environmental impact. Through our business activities we create social, economic and environmental value.

Input	2021	2020
Total restaurants* (units)	2 773	2 898
– Opened*	92	127
– Revamped*	90	295
Total manufacturing plants (units)**	12	12
– Capital investment (R million)	20	37
– % of plants certified Food Safety System Certification (FSSC) 22000 or Food Standards Agency	100	92
Total logistics centres (units)**	9	10
– Capital investment (R million)	4	26
– Logistics fleet (trucks)**	109	104
IT infrastructure capital investment (R million)	2	8

* Pertains to total restaurant network.

** Pertains to SA.

Outcome (value for stakeholders)	2021	2020
Restaurants which are conveniently sited and appealing for our customers and provide
optimal returns for our franchise partners and investors
Customers served/ transactions concluded (million units)	66.3	136.9
Efficient manufacturing, logistics and distribution operations that provide a good,
competitive service to our franchise partners
• Product lines warehoused (units)	1 338	1 703
• Product procured (million tons)	32.8	44.6
• Product processed (million tons)	47.2	67.1
Distribution of product
• Distance travelled (million km)	5.3	6.9
• Cases delivered (million units)	9.6	13.5

Distribution of product

Intellectual capital

It is essential that we stay informed of fast-changing consumer trends affecting menu design, food choices and dining experiences. We rely on our franchise partners to re-invest responsibly in their businesses and confidence among our stakeholders and that we protect those brands with the appropriate legal framework.

to manage their operations efficiently to create value. It is a business imperative that our brands instil

Input	2021	2020
Franchise workshops	531	9 674
Brand product training	1 240	5 179
Fundamental restaurant management training	488	871
Other ad hoc training	1 690	5 580
Marketing fund contribution by franchise partners (R million)	313	583
Leading brands' total media investment (decrease)/increase (%)	(46)	1
Digital media spend (decrease)/increase (%)	(30)	18
Research and development spend (R million)	10	17

Outcome (value for stakeholders)	2021	2020
Trademarks and brand names (R million)	353	1 602
Average years business relationship with franchisee	7.90	8.41

process

commentary

Human capital

Our business model relies on having the right people with the right skills in the right jobs to create value. We invest in upfront and ongoing training for franchise partners and their employees to ensure that all stores deliver on their brand promise.

Input	2021	2020
Total employees trained	201	226
Total training spend (R million)	6.7	12.8
African, coloured and Indian (ACI) employees trained	122	174
Black women trained	53	101
Managers Challenge
• Candidates	18	20
• Graduates	N/A*	18
Junior Management Programme (New internal learnership)
• Candidates	25	–
• Graduates	N/A*	N/A
Supervisory Programme (New internal learnership)
• Candidates	12	–
• Graduates	N/A*	N/A
Executive Development Programme**
• Candidates	–	4
• Graduates	–	4
International Executive Development Programme**
• Candidates	–	2
• Graduates	–	2
Number of new interns**	30	57
People with Disabilities Learnership
• Candidates	69	80
• Graduates	N/A*	59
Ethics Programme
• Candidates	53	37
• Graduates	42	35

Outcome (value for stakeholders)	2021	2020
Internships completed**	–	49
Interns employed by the Group	–	32
Employee engagement score %	75	72
Bargaining unit (BU) employee engagement score %	60	60
Employee turnover %	2.8	6.5
Internal promotions (number)	51	115
BBBEE score – Board presentation against 6-point target	5.27	5.27
BBBEE score – Employment equity against 13-point target	9.11	8.98
BBBEE score – Skills development against 20-point target	19.76	19.69
Lost time injuries	1	16
Fatalities	–	–

* The course is still to be completed.

** Cancelled due to COVID-19.

Natural capital

Our business model uses natural resources in the supply chain process with unavoidable environmental impacts. Our environmental and climate change policy outlines our responsible practices with targets aimed at reducing our carbon footprint. We are committed to contributing to a more sustainable environment for the benefit of all.

Eliminating food waste is a priority issue for our industry. Here we actively promote portion control and practices across our stores. Our franchise partners voluntarily participate in the responsible redistribution of food by donating excess food.

We have committed to eliminate all single use plastic across our restaurant network by 2025. This will be replaced by fully recyclable or biodegradable alternatives.

These numbers are for the SA supply chain operations and numbers for the UK or AME are not reflected here.

Input	2021	2020
Number of certified manufacturing plants	12	12
Proteins (tons)	10 398	14 258
Dairy (tons)	51 645	58 002
Grains (tons)	1 495	1 759
Vegetables (tons)	13 604	17 559
Fruit concentrates (Kl)	210	468
Coffee beans (tons)	631	1 097
Water (Kl)Number of distribution centres	287 2019	368 37110
Electricity (MWh)	25 914	30 734
Electricity generated by solar (MWh)	548	442
Diesel (Kl)	1 461	2 073
Petrol (Kl)	452	731
Paraffin (Kl)	54	182
Liquefied petroleum gas (LPG) (tons)	32	48
Natural gas (Gigajoules)	29 257	35 696
Coal (tons)	2 121	4 667
Steam	6 617*	–
Cardboard boxes (m)	3.4	4.9
Plastic bottles (m)	10.9	12.4
Paper serviettes (tons)	525	634

Outcome (value for stakeholders)	2021	2020

Consistently safe, high-quality processed, branded food products for menu and brand-specific

baskets for our franchise partners and customers
Proteins (tons)Cheese (tons)	13 2347 887	16 2318 738
Ice cream (tons)	5 738	7 220
Bread products (tons)	3 107	3 182
Vegetable products (tons)	5 313	8 166
Juice (tons)	1 861	1 778
Coffee (tons)	789	857
Sauces and spices (tons)	16 539	16 842
Distance travelled (km)	5 297 719	6 871 100
Product delivered (cases)	9 631 707	13 474 228
Greenhouse gas emissions (metric tons CO2e)
• Scope 1	12 467	21 688
• Scope 2	28 464	31 963
• Scope 3	988636	605761
Cardboard and paper recycled (tons)Plastic recycled (tons)	128	110
Metal recycled (tons)	78	62
General waste to landfill (tons)	1 249	1 685
Number of Black Eastern Cape beef farms supportedNumber of livestock under care by Black and/or land reform farmers	22014 500	18816 000

* Supplied from a third party coal user.

Social and Relationship capital

Our business model is highly dependent on strong, mutually beneficial relationships with stakeholders. These relationships secure our reputation and enable us to meet our growth objectives. We are committed to community upliftment through our CSI initiatives.

Input	2021	2020
Total sports sponsorship (R million)	8.0	20.1
Total funds raised for charities and donation of products	15.7	14.2
Percentage of FSSC 22000 or FSA certificated sites	100	92
Number of CSI initiatives	5	5
Total CSI spend (R million)	15	12
Disabled training and development spend (100% ACI) (R million)	4.6	3.6
Invested in bursaries (R million)	0.1	0.1
Qualifying BBBEE supplier spend (R billion)	2.3	2.2
Preferential procurement spend on small, medium and micro-enterprises (SMMEs) (R million)	511.0	653.3
Spend on >51% Black-owned suppliers (R billion)	1.2	1.1
Spend on Black women-owned suppliers (R billion)	1.0	0.9
Investment into community Beef initiative per year (R million)	5	5
Value of purchases through Beef initiative	279	240
Manhours invested into Beef initiative	120	96
Investment in owner-driver initiative to support supply chain (since inception; R million)	12.7	10.0

Outcome (value for stakeholders)	2021	2020
Total number of awards	7	18
% decrease in customers	(38.2)	(13.8)
% increase in loyalty members	173	97
% increase in social media followers:
• Facebook	4.8	10.4
• Twitter	16.9	58.8
• Instagram	55.1	198.0
BBBEE contributor status level	4	4
BBBEE score against target of 111 points	81.97	83.07
BBBEE ESD score against 40 point target	31.32	33.97
ESD suppliers supported	2 866	1 800
SMME suppliers supported	1 454	450
BBBEE socio-economic development (SED) score against target of 5	5	5
Beef initiative
• Jobs created since inception	850	800
• Beneficiaries (direct and indirect)	3 500	3 500
Owner driver initiative
• Number of drivers	28	37
• Jobs created	110	100
Number of varsity sports beneficiaries	170	400

* Not measured in 2020.

To balance the factors within our control with factors out of our control, we need to remain agile by changing and trading off capitals against each other, as they are all inter-related and subject to change. It is a balancing and renegotiating of resource allocation with the aim of creating sustainable long-term value.

Some of the significant trade-off decisions made by Famous Brands in the current year are discussed below.

Gourmet Burger Kitchen enters administration

After the UK and Irish governments forced all restaurants to close for an indefinite period to reduce the spread of COVID-19, Famous Brands took the decision to cease further investment into GBK. Although GBK showed promising signs of recovery, the uncertainty surrounding the length of the lockdown forced the GBK Board to place GBK under administration in October 2020. Administrators were appointed to assume control of the business. While relinquishing control over GBK means that we reduce our geographic footprint, the move means that no further operating losses will impact the Group's results and no additional capital will be

allocated as the business has been disposed of.

Implementing salary reductions

In March 2020 we took the decision to freeze planned salary increases for Executive and Admin staff. In April 2020 we took the decision to implement salary reductions to preserve our cash reserves and protect the sustainability of the Group. While we recognise that the salary freeze and reductions have an impact on our Human capital in the form of employee morale, we believe this was the right course of action as it enabled job security in the face of the economic uncertainty caused by the pandemic.

Refocusing on our core business

In August 2020 we sold our 51% controlling stake in the boutique café brand tashas back to its founders, the Sideris family, who held the remaining 49%. In October we sold our 49.9% stake in It's a Matter of Taste to majority shareholders and founders Karen and Adrian Short. The business comprises the By Word of Mouth and Frozen for You brands. These sales are in line with the Group's three-year strategic road map, which includes a

narrower focus of resources in the Signature brands portfolio. During 2020 we mothballed the Europa and Keg brands in SA. While these sales reduce our brand portfolio and footprint, they allow us to focus on our core business and preserve cash for optimal financial capital allocation in the medium to long-term.

Placing franchise partners first

The success of the Group is dependent on a financially healthy franchise network. Many of our franchise partners were in business survival mode as COVID-19 forced them to temporarily close their businesses. We supported our franchise partners by offering fee breaks and payment deferrals that continued until February 2021. In some instances, we committed to take on some Leading brands company stores to retain key locations where franchisees have struggled to get through the difficult trading conditions. Whenever possible we also stepped in to negotiate fairer rental terms with landlords. While this negatively impacted our financial results in the short term, we believe that these fee breaks safeguard the Group's Financial and Social and Relationship capital in the long term.

RESET. REFOCUS. RENEGOTIATE.

About Famous Brands Value creation process

Strategic intent and viability

Established market leader

The leading branded food services franchisor in Africa, with exposure to growth markets;
a strong trading track record established over 27 years as a JSE listed company;
underpinned by a highperformance culture; and
a compelling business proposition for franchise partners and a quality solution for customers.

About Famous Brands 4

Performance overview 91

Aspirational brands and exceptional franchise partners

A strategic best-in-class brand portfolio positioned to appeal to a wide range of consumers across the income and demographic spectrum, and across meal preferences and value propositions;
ambitious, entrepreneurial franchise partners, with a proven track record in competitive trading conditions;
strong demand for brands from existing and prospective franchise partners; and
good pipeline of prospective franchisees and sites.

Operational review: Brands 91

Competent leadership and clear strategies

An experienced Board and energetic management team with extensive industry and related knowledge; and
a focused strategy to grow locally and in other selected markets, both organically and by acquisition to enhance long-term sustainable value for stakeholders.

Board of Directors and Group Executive Committee 112

Strategy and key strategic material matters 46

Strategic business model

A vertically integrated supply chain underpins the brand network, providing manufacturing and distribution capabilities to our franchise partners; and
reliable, competitive services lead to a strategic advantage and positions our franchisees to deliver like-for-like growth.

Business model 10

Effective capital allocation

Sustainable value is generated by ensuring the best return on invested capital across our diverse Brands, Retail, Manufacturing and Logistics operations.

Chief Executive Officer's (CEO's) report 76

Supportive financial position

A healthy balance sheet;
cash-generative operations;
sustainable earnings; and
an effective debt structure.

Group Financial Director's (FD's) report 86

ESG mindfulness

The Group is a responsible corporate citizen committed to continuous improvement, sustainable development through sound governance, regulatory compliance and global best practice transformation.

Embedding SDGs into strategy 53

KEY DIFFERENTIATORS AND INVESTMENT CASE

OPERATING CONTEXT STRATEGIC INTENT AND VIABILITY

Our operating context shapes the successful implementation of our strategy, sustainable growth and value creation for all our stakeholders.

The period under review was characterised by:

lockdown restrictions in different markets, including curfews, alcohol bans and capacity restrictions; • high food inflation;
economic and political turmoil across our trading markets leading to low business and consumer confidence;
concentrated competition in a subdued consumer spend environment;
technology is becoming increasingly pervasive in the food services industry and a differentiating driver; and
South African-specific challenges including high unemployment, load shedding, service delivery protests and ratings downgrades.

Trend	Impact andimplication forfuture value	Our response	Future expectations,aligned focus areasand key enablers
	Consumer behaviour
Decline incustomervisits	COVID-19 and fierce pricecompetition has meant less visitsto restaurants.	We strive to make sure that weoffer more options across thevalue/price spectrum.	We will continue to improveour operational efficiencies toboost margins.
		We also place more emphasison delivery.	We will market our value offeringsand promotions aggressively todrive revenue growth and winmarket share.
Time-poorconsumersdemandconvenienceand safety	Footfall in medium and majormalls has fallen further due toCOVID-19. This has meant thatsmaller, more accessible localshopping centres have seenincreased foot traffic and onlineordering and delivery offeringshave expanded.	• Significant investment ofresources into home delivery.• Expansion into new outlyingmarkets.• Rolled out smaller formatconvenience-centred outlets.	Convenience and home mealreplacement is likely to remaina key trend for time-poor,travelling consumers.

About Famous Brands Value creation

process

Strategic intent and viability

Sustainability Leadership commentary

Trend	Impact andimplication forfuture value	Our response	Future expectations,aligned focus areasand key enablers	Trend	Impact andimplication forfuture value	Our response	Future expectations,aligned focus areasand key enablers
	Consumer behaviour				Dining trends
ESG activismon the riseConsumersand socialmedia	Stakeholders demand greatertransparency on responsible foodsourcing, fair trade practices andimpact of farming andproduction on the environment.Institutional investors arefocusing more on responsibleinvestment opportunities.Social media is increasinglyused to complain or publiclycensure brands who don'tmeet expectations.Additionally, consumers are	We are a responsible andcompliant corporate citizenand are mindful of operationalpractices.Social and Ethics Committeereport122We have developed policiesand committed to timeframesregarding single-use plasticand packaging, as well ascage-free eggs.We strive for responsibleconsumption of resourcesacross the Group.Natural capital15• Our entrenched processesallow us to respond quickly todamaging social media posts.• Our store designs and revampprogrammes are aimed atboosting our appeal to the	We expect momentum inconsumer and shareholderactivism regarding ESG issuesincluding climate, plastic wasteand sustainable farming practices.We will continue to implementand refine our sustainabilityinitiatives.We continue to monitorreputational risk and innovateimproved brand campaignsvia social media.	TraditionalmealtimesblurringEating outreplaced byhome-diningexperiences	With consumers increasinglyworking and learning from home,mealtimes have become moreflexible and spread across the day.Snacking and all-day breakfastsare evidence of this trend.The popularity of sandwiches asa quick and easy meal continuesto rise.With consumers being muchmore home bound than everbefore, there has been a renewedenjoyment of cooking at home.Increased availability of onlineordering and delivery, includingalcohol, has led to an increasein at-home-dining.Safety concerns during thepandemic and restaurantrestrictions further promotedat-home-dining.	We constantly scan local andinternational trends to remainahead of emerging menuinnovation opportunities.• Our niche Signature brandsare deliberately positionedto capitalise on this trend.• We have invested in onlineordering and home deliveryand have extended thisoffering to includeSignature brands.	We can expect that consumerswill become more demanding inthe limited discretionary spendenvironment.We anticipate that healthiereating will remain a focus areafor interest groups. Here, we willcontinue to review our menu,introduce healthier meals on ourstandard and children's menus.We will continue to monitorour compliance with industrylegislation regarding salt andsugar consumption.We will continue to deliver anunbeatable offering that meetsconsumer requirements in termsof quality, service and price.We will ensure that we areaccessible across every brand,format and channel.
	looking for an experience aswell as a meal. This meansthat interesting décor andbackgrounds make for shareablecontent. Free Wi-Fi is expected.	millennial market.• Our promotional activitieskeep the in-store elementin mind to drive social mediainteraction.			As a result, menus and packagingneeds should be designed to suitan at-home dining experience intaste and presentation.
				Chickenconsumptioncontinuesto rise	Chicken continues to representthe largest fast-food categoryin SA and other African markets.	While we do not have anexclusive chicken brand in ourportfolio, we do offer manychicken options on most ofour menus.	We remain open to potentialchicken brand acquisitions aswell as in-house start-ups. We willcontinue to enhance chickenoptions on our menus.

OPERATING CONTEXT continued

About Famous Brands Value creation

process

Strategic intent and viability

Sustainability Leadership commentary Governance and remuneration

Trend	Impact andimplication forfuture value	Our response	Future expectations,aligned focus areasand key enablers	Trend	Impact andimplication forfuture value	Our response	Future expectations,aligned focus areasand key enablers
Dining trends					Competitive landscape
Food asmedicine	The trend for food as medicineis a strong sign of consumers'growing need to take moreresponsibility for their health.COVID-19 has led to moreconsumers taking this approachand considering the long-termhealth benefits of what theyconsume.They will require brands to makethem feel taken care of. Thisranges from brands taking the	We are innovating our menus tomeet this trend.	We will expand our menuofferings to include beneficialingredients. This includesevaluating existing menusto profile health benefitsof ingredients.	FoodaggregatorsincreasesDark	Food delivery aggregators areimportant players in the foodservice landscape in SA andthe UK. The popularity ofthese aggregators has beenaccelerated by COVID-19.Consumers benefit from theconvenience of ordering onlinefrom a variety of restaurants withthe option to compare menusand prices and read reviews.Dark kitchens, also known as	We have embraced these playersand collaborate with them buthave not and will not give upour own delivery capability andwe together with our franchisepartners continue to invest incapacity in this regard.We consider the opportunities	We recognise that the restaurantof the future will use technologythroughout the customerjourney. We have severalinnovations, including self-serviceterminals and delivery drivertracking, all aimed at improvingthe customer experience.We expect to see industryparticipants and competitorscontinuing to invest heavily inthis market segment. We
	necessary health precautions tobrands enabling consumers'self-care.			kitchens	ghost and cloud kitchens, refersto kitchens that prepare food fordelivery only. Orders are placedonline without the option for the	and risks presented by thischannel but remain cautious.	recognise that we need tocontinually upgrade our deliveryand pre-ordering systems.
Plant-basedalternativesare becomingmainstream	The plant-based-protein oralternative-meat market isestimated to grow 28% peryear to $85 billion by 20301Plant-based diets – whetherflexitarian, vegetarian or vegan– are here to stay. This is driven bya consumer desire to be heathierand have less environmentalimpact.	We have vegetarian andvegan options on our menus.	We expect consumers' demandfor plant-based products andplan to dedicate more menuspace to plant-based options.		public to enter the premises,dramatically reducing overheads.Dark kitchens are alreadyestablished in the UK and aregaining momentum in SA.		Our sophisticated customerrelationship management (CRM)programmes are continuallyimproving. These programmesuse proprietary data, in line withPOPIA, to provide insights thatallow us to communicate withcustomers in a tailored manner.We need to understand howdifferent channels impact eachother in relation to service
	Mushrooms are gainingpopularity as meat replacement.			E-commerce	Access to credit cards,	COVID-19 accelerated the use	and efficiencies.The use of artificial intelligence
	Competitive landscape			andcontactlesspayment	smartphones and the internetcontinues to rise. This increasesthe demand for e-commerce	of contactless payment for alldeliveries.	and immersive technology,including augmented reality,will become more pervasive.
Concentratedcompetition	With subdued consumerspend during the pandemic,competition has become	We strive to make sure that weoffer more options across thevalue/price spectrum.	The industry remains extremelycompetitive as operators strive tosurvive in the weak economy. We		solutions, contactless paymentoptions and the integration ofphysical stores with online retail.		We will continue to exploretechnology that improves ourcustomer experience and
	more concentrated.The franchise market hasbecome smaller as a resultof economic conditions andpotential franchise ownersare weighing up more optionsbefore they commit to a brand.	We also place more emphasison delivery.	are committed to ensuring thesustainability of our brands andfranchise partners. Unrelentingeffort is made to offer an optimalsolution to our customers andrestaurant network.	Foodtechnology	There are several food technologytrends influencing the global foodservices industry. This includestraceability enabled by thedigitisation of the food supplyindustry and greater levels oftransparency across the foodsupply chain. Other technology	We have increased ourtechnology interfaces in store.These include digital menuboards, digital payment optionsand self-ordering terminals.	provides actionable insights forour business.
	1 https://markets.businessinsider.com/news/stocks/beyond-meat-ubs-plant-based-meat-market-85-billion-2030-2019-7-1028367962				trends include robotic chefsand servers, self-service kiosks andemployee scheduling softwarethat allows our managers tospend less time on scheduling.

OPERATING CONTEXT continued

Strategic intent and viability

Sustainability Leadership commentary Governance and remuneration

Annual financial statements

Supplementary information

Trend	Impact andimplication forfuture value	Our response	Future expectations,aligned focus areasand key enablers	Trend	Impact andimplication forfuture value	Our response	Future expectations,aligned focus areasand key enablers
	General trading and economic conditions				General trading and economic conditions
The SouthAfricanconsumer	48% of South Africans areyounger than 24. Unemploymentis a big challenge amongyounger consumer groups whoexperience an inability to jointhe job market.The middle-income market(53% of total population) isexperiencing severe economicstrain.Consumers have less disposable	We constantly review menupricing and portion sizes todeliver on our value promise.We offer loyalty offering, rewardsand valuable bundles, whichresonate with our customers.Menu innovation will createnew interest for consumers.We will continue to leverage costand productivity efficienciesthroughout the business, and	We anticipate that consumerswill remain under pressure asunemployment, inflation, livingcosts and debt rise.Sub-Saharan Africa growth issubdued, and regional marketsare expected to recover at variousrates post-COVID-19. Althoughpockets of growth do exist it isexpected that it will take sometime to return to a pre-pandemic	Loadshedding	Load shedding impactsconsumer sentiment, accessto stores and lost sales. Loadshedding also increases costs forour Manufacturing and Logisticsoperations when we switch toexpensive alternative powersupplies. There are further indirectcosts related to delayed deliveriesto stores.	Wherever practical andpossible, generators are installedin stores. Our Manufacturing andLogistics divisions doubled theiruse of generators during theperiod, impacting negatively onthe Group's carbon footprint.	Eskom has warned that SA isexpecting an electricity shortfallof between 4 000 and 6 000 MWfor the next five years. This meansthat South Africans can expectintermittent load shedding forthe foreseeable future. Wecontinue to adapt to a scenariowhere unstable power supply is abusiness reality. We will continueto explore opportunities toreduce our reliance on Eskom.
High foodinflation	income and are eating at homeas much as possible to savemoney.The prices of certain ingredientsare driving up food prices. Theprices of fruits, oils and fats haveincreased by approximately 11%.Meat prices increased with 8.4%and dairy products with 6.4%.Beef and pork trimmings	specifically in our supply chainoperations, to support improvedprofitability for our franchisepartners.It is not feasible to implementabove-food-inflation menu priceincreases when demand issubdued, consumers are cashstrapped, and the economyis recessionary.	economy.This will continue to apply intensemargin pressure on the businessand management's key priority inthis regard will be to ensure thebusiness adjusts and grows inthis environment.	Black Fridayhas beenestablishedas one ofthe biggesttradingweekendsin the year	Consumers look forward to BlackFriday, which impacts spendingfor the weeks before andfollowing the Black Fridayweekend. Greater mall footfallresults in higher turnover forshopping centre stores. InNovember 2020, Black Friday wasmore subdued due to COVID-19.	We ensure our offering is tailoredto maximise Black Friday spend.We work with franchise partnersto ensure smooth revenue flowover the period.	Black Friday will continue to growin popularity. Some Black Fridayspecials have been extended forweeks instead of being confinedto the day. With several years ofexperience, we are well-equippedto ensure that Black Friday is asuccess for our franchise partnersand customers.
	had double digit growth inOctober 2020. Overall foodinflation is 5.4%Trade in volatile markets,exchange rate pressure andimport parity on wheat, maizeand oil are driving food inflation.	Our cost price inflation for allexternally supplied andproduced items were 5.3%based on bi-annual Novemberprice cycle.
COVID-19leads tocorporates,includingmajor foodproducers,stepping in todistributefood	SA imposed a severe lockdownin late March 2020, deepeningan existing, pre-COVID-19 crisisof unemployment, poverty andhunger. The government shutdown its school feedingprogramme, which exacerbatedhunger among children.	Famous Brands donatedR7.8 million worth of food toSA Harvest, a non-profitorganisation.	As a major food producer, wehave a role to play in alleviatinghunger in the markets wherewe operate.

OPERATING CONTEXT continued

Lauwrens, Steers, Western Cape

About Famous Brands Value creation

process

Each stakeholder is essential to us and we are committed to delivering value to all groups that have an impact on our business.

KEY STAKEHOLDERS

Our stakeholders are those individuals or organisations that have an impact on, or are affected by, our operations. The Group believes that strong, sustainable stakeholder relationships form the foundation of our ability to create shared value in the short, medium, and long term. In line with the inclusive approach recommended by King IV, we strive to engage constructively with our stakeholders to understand their interests and concerns, and address these where possible.

Stakeholders are engaged by employees and business units with the expertise to do so constructively. Our stakeholder engagement and management principles rest on positive partnerships, consultation and teamwork to achieve common goals.

The functional disciplines embed the structured and thorough processes monitoring stakeholder engagement, including:

Investor input and feedback through investor roadshows, one on one access and virtual events
Formal customer feedback through customer service channels
Monitoring social media for negative and positive reviews
Community involvement through CSI activities
A union relationship monitoring mechanism provided through the HR department
Employee feedback through annual surveys
Franchise partner feedback through regular engagement, national representative forums and annual franchise forums

Stakeholder management

Concerns and improvement opportunities are escalated to the responsible senior executives, or to the Exco or the Board if necessary.

The Social and Ethics Working Group assists the Social and Ethics Committee on an executive level to ensure effective stakeholder management within Famous Brands. The Working Group reports to the Social and Ethics Committee on a regular basis.

Social and Ethics Committee report 122

Evaluating the quality of relationships with our stakeholders

This evaluation is based on our internal assessment of our relationships.

some opportunity for improvement

Strong, mutually beneficial relationship

Nature of engagement

Our engagement strategies are based on the degree to which our stakeholders' impact on us, our impact on them and the degree to which we interact with them.

Work closely Engage

Measuring the impact of our stakeholders

Stakeholder relationship impact assessment

Identifying our priority stakeholders

We use the following criteria to prioritise the relative importance of the wide range of individuals and organisations that have a stake in our Company:

Our dependence on the stakeholder's support to achieve our strategic goals;
the stakeholder's influence on our organisational performance;
the significance of the issues linking the stakeholder to the Group; and
the risks we face should we not engage constructively with the stakeholder.

1 Shareholders, market analysts and prospective investors 2 Funding institutions

3 Franchise partners
4 Customers and prospective customers
5 Civil society and communities
6 Suppliers and business partners

7 Employees
8 Trade unions
9 Government and regulators

About Famous Brands Value creation process

Strategic intent and viability

Sustainability Leadership

commentary

Governance and remuneration

Annual financial statements

Shareholders, market analysts and prospective investors Funding institutions

Stakeholder role	Their primary interestand our goal	Board/Excomember accountable
Provide financial capitalfor growth	Solid investment propositionand sustainable growth	Darren Hele, Lebo Ntlhaand Celeste Appollis
How we engage		Key risks
• JSE Stock Exchange News Service (SENS) announcements• Media releases		37
• IAR
• AGM		12345678
• Company's website		9 10
• Results presentation		Deterioration of investor confidence
• One-on-one interactions with investors and prospective investors
Interests and issues raised		Opportunities
• Return on invested capital		By clearly and regularly communicating
• Regular dividend payments		our investment case and delivering on
• Sustainable earnings growth		our strategy, we build confidence in
• Judicious capital allocation		management and the business's
• Corporate governance, ethical and competent leadershipOur strategic response and future focus• Management has extensive experience in our industry		investment potential
• The LTI Plan and other remuneration and reward structures serve to align management's interests with thoseof shareholders
• Management has a judicious approach to gearing in line with ensuring an appropriate capital structure• Management endeavours to lead by example, and through behaviour and policies instil good corporate

Stakeholder role	Their primary interestand our goal	Board/Excomember accountable
Provide Financial capital for growthand facilitate balance sheet support	Responsiblecapital management	Darren Hele andLebo Ntlha
How we engage• One-on-one interactions		Key risks37189Breach of debt covenants and
Interests and issues raised		undertakings to the primary lenderOpportunities
• Timely payment of interest and capital• Compliance with debt covenants		By demonstrating our commitment tomeeting our funding obligations, we willfoster supportive long-term relationships

governance practices throughout the business

How we engage

• One-on-one interactions

Interests and issues raised

Timely payment of interest and capital
Compliance with debt covenants

Our strategic response and future focus

Ensure debt service requirements are met in line with our debt repayment obligations, and that our covenants are complied with
Proactive management of the debt maturity profile

	Internal assessment ofrelationship quality	Work closely	Engage		Internal assessment ofrelationship quality	Work closely	Engage
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About our Integrated
Annual Report

About

Famous Brands

Value creation process

Strategic intent and viability

Sustainability Leadership

commentary

Governance and remuneration

Stakeholder role	Their primary interestand our goal	Board/Excomember accountable
The primary interface withour customers, custodians ofour brand and reputation	Supportive, preferredbusiness partner	Darren Hele, Derrian Nadauld,Philip Smith and Andrew Mundell
How we engage• National franchise forums• Personal contact• Operational audits and reviews• Operations campaigns		Key risks3713456789
• Web and call-in support• Annual brand conferences		• Health of the franchise networkdeteriorates in the weak economy• Group's relationship with franchiseesdeteriorates due to our failure tomeet their expectations
Interests and issues raised• ROI• Strong brands• Efficient and competitive supply chain• Marketing spend• Location of restaurants• Ongoing business management support• Product quality		OpportunitiesConstant interaction with ourfranchisees and responsiveness totheir needs will improve our goodrelationships
Our strategic response and future focusOur franchisees are our valued partners. We have dedicated operations teams which ensure franchisees receivesupport in all aspects of managing a successful restaurant, namely finance, marketing, design and development,training and procurement.
Our vertically integrated Manufacturing and Logistics operations strive to consistently supply high-qualityproducts timeously.
We are committed to the franchise business model and are confident it remains the preferred source of growth forthe Group.

Stakeholder role	Their primary interestand our goal	Board/Excomember accountable
Purchase our products, providingthe basis for revenue growth	First-choice brand offering	Darren Hele, Derrian Nadauld,Philip Smith and Andrew Mundell
How we engage• Web and call-in support• Digital and social media• IAR• Loyalty programmes• Customer satisfaction surveys• Industry competitions		Key risks37123456789 10Loss of market share due to failure tomeet our customers' expectations
Interests and issues raised• Strong brands and value offering• Location accessibility and convenience• Positive total consumer experience		OpportunitiesGrow market share in new and existingmarkets by leading in the categories wecompete in
Our strategic response and future focusManagement is cognisant that for our brands to maintain and gain market share they must remain relevant,contemporary and accessible, and offer value.
We are passionate about unique consumer experiences through innovation, flawless execution and continuous

We welcome the contribution and input of our franchise partners and will continue to evolve and improve our engagement with them to enable us to harness the unique and valuable insights they can provide. We view our partnerships as long-term relationships which require consistent attention and mindfulness to benefit all parties.

How we engage

Web and call-in support
Digital and social media
IAR
Loyalty programmes
Customer satisfaction surveys
Industry competitions

Interests and issues raised

Strong brands and value offering
Location accessibility and convenience
Positive total consumer experience

Our strategic response and future focus

improvement:

We conduct regular restaurant reviews and audits to ensure our high standards are maintained
We prioritise food quality and safety in all components of the supply chain
We conduct an ongoing restaurant revamp programme to continue to meet our customers' expectations
We strive to innovate across all areas of our business to meet evolving trends in the industry
We operate a call centre to manage queries and complaints and we value and act on the feedback of our customers

KEY STAKEHOLDERS continued

Internal assessment ofrelationship quality	Work closely	Engage		Internal assessment of

relationship quality Work closely Engage

About Famous Brands

Value creation process

Strategic intent and viability

Sustainability Leadership

commentary

Governance and remuneration

Annual financial statements

Civil society and communities Suppliers and business partners

Stakeholder role	Their primary interestand our goal
Contribute to our ability toprovide quality, cost-effectiveproducts and services

Stakeholder role	Their primary interestand our goal	Board/Excomember accountable
Provide the socio-economiccontext we operate in andimpact on our reputation	Responsiblecommunity participant	Darren Hele, Philip Smithand Jabulani Mahange
How we engage		Key risks
• CSI initiatives and other sponsorships		37169
		• Declining revenue dictates smallerCSI budgets• Reputation taint leads to adeterioration of relationships with CSIbeneficiaries and other stakeholders
Interests and issues raised• Sustained support• Association with a reputable brand• Responsible use of natural resources		Opportunities• Continue to grow market share andimprove the Group's favourablereputation by making a meaningfulcontribution to the communities inwhich we trade• Ensure our compliance culture iscommunicated through improvedESG reporting

Our Leading brands conduct extensive CSI fundraising programmes to support worthy charities. We also invest in a sponsorship alliance with Varsity Sports to promote the development of future sporting stars in SA
Our environmental policy sets out our commitment to responsible environmental practices and identifies key areas of focus and objectives regarding reducing our environmental footprint and contributing to a more sustainable operating environment

How we engage

Regular procurement interactions
Supplier audits, assessments and reviews
Recognition of and awards for excellence

Interests and issues raised

Timely payment
Continuity of supply
Fair treatment
BBBEE compliance

Our strategic response and future focus

Contractual agreements facilitate quality and food safety adherence and transparent, healthy relationships with suppliers. Our procurement and planning teams interact with suppliers on a frequent basis to ensure mutually beneficial partnerships.

KEY STAKEHOLDERS continued

relationship quality Work closely Engage

About

Famous Brands

Value creation process

Strategic intent and viability

Sustainability Leadership

commentary

Governance and remuneration

Employees Trade unions Stakeholder role Their primary interest and our goal Board/Exco member accountable Provide skills, knowledge, experience and productivity to drive the development and execution of our strategy Employer of choice Darren Hele and Jabulani Mahange How we engage • Open-door policy • Business feedback sessions • Employee morale surveys • Performance reviews and development discussions • Core values Key risks 37 1 2 3 4 5 6 7 8 9 • Difficulty in attracting and retaining the calibre of skills the business requires • Slow pace of transformation Interests and issues raised • Fair remuneration and recognition • Equal opportunities and career development • Training and skills development • Safe working environment • Sustainable earnings growth which could impact on job security • Corporate governance, ethical and competent leadership Opportunities • Strengthen our career development plans and communicate growth opportunities better • Achieve improved BBBEE status Our strategic response and future focus We regard Human capital as a core asset. Our HR policies ensure our employees are appropriately remunerated, incentivised and offer career development opportunities. We support the principles of BBBEE in SA and our transformation policy and strategies are aimed at uplifting

Stakeholder role	Their primary interestand our goal	Board/Excomember accountable
Serve as the interface with ourunionised labour force	Responsive employer	Jabulani Mahange
How we engage• Open-door policy• Regular interactions		Key risks37
• Wage recognition agreements		12567 10
		On behalf of their members:• Difficulty in attracting and retainingthe calibre of skills which thebusiness requires• Sustainable earnings growth whichcould impact on job security• Fair remuneration and recognition• Equal opportunities and careerdevelopment• Training and skills development• Safe working environment
Interests and issues raisedOn behalf of their members:• Sustainable earnings growth which could impact job security• Fair remuneration and recognition• Equal opportunities and career development• Training and skills development• Safe working environment		Opportunities• By demonstrating that we are anemployer of choice and a good faithpartner, we can continue to enhanceour existing mutually respectfulrelationship

historically disadvantaged individuals. We are committed to creating a culture of learning and invest significant resources in this regard. In addition to

training our own employees, we conduct extensive training for our franchise partners and their employees.

How we engage

Open-door policy
Wage recognition agreements

Interests and issues raised

Equal opportunities and career development
Safe working environment

Our strategic response and future focus

We recognise and respect the role of unions and engage professionally and cordially to find common ground on all matters.

KEY STAKEHOLDERS continued

Internal assessment ofrelationship quality	Work closely	Engage		Internal assessment of

About our Integrated

Annual Report

About Famous Brands Value creation process

Strategic intent and viability

Annual financial statements

Supplementary information

Government and regulators

Stakeholder role	Their primary interestand our goal	Board/Excomember accountable
Provide regulatory parameters andmeasures with cost implications;provide operating licences	Responsible corporate citizen	Darren Hele, Celeste Appollis,Lebo Ntlha, Ntando Ndabaand Jabulani Mahange
How we engage• Interactions with the relevant authorities• On-site inspections• Regulatory reports and disclosures		Key risks37126 10
		• Health and safety and/or food qualityrisk control mechanisms fail• Failure to ready the business tocomply with new legislation
Interests and issues raised• Tax revenues• Compliance with legislation and regulations• Transformation• Supporting communities• Responsible use of natural resources		Opportunities• Continue to improve our internalprocesses and risk preparednessprogrammes• Ensure our compliance culture iscommunicated through improveddisclosure in ESG reporting

We have systems and structures in place to monitor changes to legislation, assess the implication of any changes on our operations and communicate this to relevant stakeholders.

Maintaining our level 4 BBBEE status is a key management priority and the following areas have been prioritised for improvement: procurement, equity and skills development.

KEY STAKEHOLDERS continued

RISKS AND OPPORTUNITIES

Risk Management Policy and process

At Famous Brands we believe that calculated risk taking is integral to our business success and growth. It is the responsibility of the management team and the Board to optimise the balance between risk and reward.

The Group is exposed to a wide spectrum of risk, including but not limited to strategic, financial, operational, compliance and reputational risk. Risk management is an important discipline and one of our core focus areas.

Our overarching risk management framework is aligned to the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Framework, illustrated below. Our risk philosophy is connected to our strategy to create value for stakeholders through sustainable growth, without exposing the business to unwarranted levels of risk or overextending its risk appetite.

Our risk management process and frameworks enabled the Group to remain agile and resilient in extremely difficult trading conditions overcast by global economic uncertainty due to COVID-19. Risk and opportunity co-exist; having a forum that focuses on identifying and responding to risks has allowed us to realise opportunities to innovate and deliver sustainable value for stakeholders.

Internal assessment of relationship quality Work closely Engage

RISKS AND OPPORTUNITIES continued

The Board has delegated the Audit and Risk Committee with the responsibility to oversee risk management for the Group. The Committee and the management team, together with the established Risk Forum, provide a culture of risk governance and awareness throughout the Group.

Risk activity and accountability

As illustrated below, risk is proactively managed across the Group.

		Governance Assessment	Monitoringandreporting	Quantification	Assurance	Orientationandawareness	Response
Board	X	X	X
Board CommitteeChairman	X		X
Audit and RiskCommittee	X	X	X	X	X
Executivemanagement	X	X	X	X	X	X	X
Senior operationalmanagement		X	X	X	X	X	X
External Audit					X
Internal Audit					X	X

Key risks are identified based on:

risk-bearing capacity (the capacity to absorb losses related to risks without threatening the Group's ongoing sustainability based on its current business model);
risk appetite (the amount and type of risk the Group is willing to accept in pursuit of its strategic objectives); and
risk tolerance (the acceptable levels of variation relative to the achievement of the Group's strategic objectives).

Key risks

Our top 10 key risks are outlined below, together with their potential impact, our mitigating actions, the opportunities presented, future focus and outlook. Both internal and external risks have been identified and are addressed through focusing on our business's key material matters.

The risks are ranked according to their materiality to the Group's sustainability based on the inherent exposure. Likelihood categories are

based on probability of occurrence. Impact categories are determined based on tolerance levels across four areas: finance, reputation, consumer and employee factors. Timeframes across which impacts can occur are included in the four lenses through which we view impact and range from one month to over one year.

Residual risk assessment

The residual risk and extent of mitigation is illustrated through the following graph:

Inherent rating

Inherent and residual risk ratings

Inherent risk heat map

About Famous Brands

process

Strategic intent and viability

Root causes

Shift in consumer behaviour regarding safety due to COVID-19 impacts brands, particularly CDRs
Uncertainty regarding future COVID-19 restrictions including liquor, capacity and curfew
Limited movement in hospitals, which negatively impacts the Signature brands captive market
Contraction of consumer discretionary spend due to economic depression
Third-party aggregator disruption accelerated by COVID-19

Strategic matter

Impact on value• Cashflow and working capital pressure• Market share erosion• Margin erosion• Business structure rationalisation• Debt covenants and undertakings breach	Capital
Residual mitigation actions	Opportunities
• Legacy CDRs big box format being addressed via smaller and more agile formats	• Leverage our presence in AME
• More focus given to delivery offering	• Leverage flexible trading formats
• Company-owned store defence strategy in place for key sites	• Own Home Delivery
• Cash generation and preservation will continue to be a key focus for the business	• Leverage BI and CRM technology
• Continued investment in the AME division and retail basket will move the revenue	• Menus and basket innovation

needle in the medium to long term

Root causes

Strategy and investment not in line with current and future economic and consumer trends
Dependency on third-party providers for technology solutions

Impact on value

Negative impact on consumer experience
Growth opportunities not capitalised

Residual mitigation actions

Strategic matter
Capital
Opportunities• Leverage BI and CRM technology• Next generation cloud-based POSsystem• Payment gateway development

Execute on the consumer-facing technology strategy
Refine and drive each brand's technology consumer experience requirements
Step-up technology-enabled home delivery in AME growth pockets

Revenue growth deceleration and recovery impacted by COVID-19

Lagging on consumer-facing technology in the industry

Root causes• IT structure misalignment to complexities, governance and risks associated withthe group technology stack.• Failure to adequately address identified IT security and general controlvulnerabilities.	Strategic matter
Impact on value• Loss of intellectual property• Regulatory contravention• System downtime• Reputational damage	Capital
Residual mitigation actions• Appropriately resource the IT structure to support the recently mapped applicationsand technology architecture• Implement the three year IT security plan which includes enhanced cyber securitycontrol measures	Opportunities• Innovative technologyadvancement

Information security breach through cyber and/or internal attacks

Root causes

Dependency on unreliable Eskom and local distribution network
Generator back-up solution not fit for purpose

Impact on value

Operational inefficiencies resulting in margin erosion
Reduced day stock cover
Interruption of service to franchise network and consumers

Strategic matter
Capital
Opportunities• Alternative energy sources withreduced impact on theenvironment

Residual mitigation actions

• Continue monitoring impact of load shedding on the business and execute response plan

Unreliable electricity supply impacting the supply chain and restaurant trade

About Famous Brands

Value creation process

Strategic intent and viability

Root causes

Lack of a comprehensive business continuity plan for local and international entities
Labour laws limiting speed and agility in a disruptive environment

Strategic matter

Impact on value

Extended time lag in recovering operations resulting in loss of revenue and increased operating costs
Interruption of service to franchise network and consumers

Capital

Residual mitigation actions

Supply chain business continuity and disruption plans in place for majority of manufacturing sites
BCM Steering committee in place to address key dependencies and outstanding actions
Insurance gap analysis project underway to limit impact of insurable and noninsurable disruptions

Opportunities

• Shareholder value protection and

enhancement

Root causes

Strained working capital due to recurring COVID-19 restrictions
Uncertainty over favourable lease renegotiations and renewal terms as commercial landlords continue to experience cash flow pressure due to COVID-19
Total cost of production of licensed products may be uncompetitive in some buckets due to operational inefficiency and food inflation

Impact on value

Store growth deceleration
Increased franchisee business failures
Margin erosion

Residual mitigation actions

Providing business sustainability relief packages to franchisees for short to medium term
Continuing to co-ordinate rent relief and lease renegotiations on behalf of franchisees
Co-ordinating class action on business interruption claims with various insurance companies on behalf of franchisees
Continuing to identify manufacturing technology that will increase operational efficiencies
Ongoing weekly market price review meetings in collaboration with Leading brands and supply chain

Strategic matter
Capital
Opportunities• Apply and leverage total cost ofownership principles across thesupply chain• Accelerate franchisee COVID-19recovery phase with leaserenegotiation and renewals• Menus and basket innovation

Inability to respond appropriately to business disruptions Uncertainty over franchisee sustainability and profitability

Root causes

Unstructured monitoring of relevant government legislation due to absence of a regulatory compliance framework
Failure to effectively ready the business for new standards and regulations, including amendments to JSE listing requirements, the Protection of Personal Information Act, No 4 of 2013 (POPIA), Administrative Adjudication of Road Traffic Offences Act, No 46 of 1998 (AARTO Act), National Environmental Management
Waste Act, No 59 of 2008 (Regulations regarding extended producer responsibility)

Strategic matter

Impact on value• Reputational damage• Regulatory fines and penalties• Loss of consumer confidence, especially on food related failures• Litigation	Capital
Residual mitigation actions• Develop and implement a regulatory compliance framework• Project teams have been put in place to ensure the business is ready for newregulatory requirements	Opportunities• Enhanced stakeholder value

Regulatory and compulsory standards compliance failures

Root causes

Financial systems inadequacies contributing to month-end inefficiencies and human errors
Delayed detection of breakdown in internal financial controls
Delayed reporting from associates' that do not use SAGE reporting

Impact on value

Reduced dependency on financial information for decision-making
Inefficient financial consolidation and reporting

Residual mitigation actions

Strategic matter

Capital
Opportunities• Enhanced financial modellingcapability

Rationalise the financial processes and technology stack (upgrade/replace/automate)
Standardise across the business, general financial controls implementation and evaluation based on the COSO and combined assurance frameworks

Inefficient financial systems impacting on organisational agility

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Supplementary information

Root causes• Unethical conduct by any key stakeholder• Non-adherence to agreed company procedures and escalation framework• Ineffective management of litigations and court action	Strategic matter
Impact on value• Key stakeholder trust deficit• Share price erosion	Capital
Residual mitigation actions• Continue promotion of ethical practices among our key stakeholders Group-wide• Ensure all business policies are regularly updated and communicated	Opportunities• Enhanced stakeholder value

Loss of reputation and severe brand damage

Root causes• Failure to effectively implement health and safety management system• Failure to effectively implement COVID-19 regulations	Strategic matter
Impact on value• Reputational damage• Regulatory fines and penalties• Loss of life	Capital
Residual mitigation actions• Health and safety is a standing item on the Exco agenda• Embed cloud-based injury and follow-up action system• COVID-19 risk assessments and related procedures in line with the regulationimplemented for each operational site	Opportunities• Enhanced stakeholder value

Failure to prevent and respond to major health and safety incidents

Emerging risks

Our risk management processes and responses include identifying emerging risks and will evolve as operating conditions change. Although black swan events such as COVID-19 are difficult to predict, our risk management process is agile enough to respond to outlier events. The pandemic further highlighted the importance of ongoing review of our insurance risk management strategy.

1 Jaco, Milky Lane, Gauteng 2 Kobus, Fishaways, Free State

3 Shereen and Dean, Mugg & Bean, Gauteng 4 Ahmed and Vernesia, Steers, Western Cape
5 Sazi and Thanda, Wimpy, KwaZulu-Natal 6 Richard, Debonairs Pizza, Mpumalanga

Leading brands, All regions

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STRATEGIC FOCUS AREAS AND KEY ENABLERS AT A GLANCE

SCORECARD BY STRATEGIC MATTER

Our approach to our key strategic business matters is outlined below.

We track management's delivery on our strategic material matters using KPIs that line up to our remuneration structure 145.

Improve our operational efficiencies

Why it matters

We need to ensure we are as efficient as possible to enable the long-term sustainability of the business and that of our franchise partners and achieve our goal of being the leading innovative branded food services business in our markets.

KPI

• Revenue growth

• Operating profit growth Remuneration report 132 Impact on capitals

Stakeholders impacted	Related risks
Franchise partners, customers and prospective customers,	Risks and opportunities
suppliers and business partners, employees, shareholders,	134578
market analysts and prospective investors
Key stakeholders26	37

12 to 16

Enhance our financial performance

Why it matters

We aim to grow capability, capacity and scale across manufacturing, branded franchised and food services spaces.
Trading conditions in all the Group's markets are extremely challenging. We need to make strategic choices to ensure our business is optimally structured to be efficient, competitive, achieve our benchmarks and meet the expectations of our stakeholders.

Stakeholders impacted

Franchise partners, suppliers and business partners, employees, shareholders, market analysts and prospective investors; civil society and communities.

Key stakeholders 26

Three-year trend Revenue (R million)

Operating profit (R million)

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Lead in the categories we compete in

Prioritise our franchise partners

Why it matters

We are passionate about unique consumer experiences, through innovation, flawless execution and continuous improvement
The food service industry is increasingly competitive. In a challenging operating environment, local and international operators compete for a shrinking wallet, and in some cases, for survival. To promote the Group's continued success, we need to ensure our brands are differentiated through their irresistible customer appeal

KPI

• Internal research metrics • Like-for-like sales growth Remuneration report 132 Impact on capitals

Stakeholders impacted

Franchise partners, suppliers and business partners, employees, shareholders, market analysts and prospective investors

Key stakeholders 26

Related risks

Risks and opportunities 1 3 4 5 9

12 to 16

Why it matters We understand that our franchise partners represent our brands and that their success translates into our success. We work hard to develop close, mutually beneficial relationships with them. KPI Regular interactions are conducted with the national franchise forums for each brand and set metrics are evaluated. These metrics are strategic and therefore not disclosed. Impact on capitals Stakeholders impacted Franchise partners, customers and prospective customers, suppliers and business partners, employees, shareholders, market analysts and prospective investors Key stakeholders 26 Related risks Risks and opportunities 3 4 5 6 7 9 37 12 to 16

Ensure regulatory compliance

Why it matters

We understand that compliance with all relevant regulations and strong relationships with industry authorities gives us permission to operate and enhances our reputation as a responsible corporate citizen among our stakeholders.

Stakeholders impacted

Government and regulators, customers and prospective consumers, shareholders, market analysts and prospective investors

Key stakeholders 26

Related risks Risks and opportunities 2 6 10

Three-year trend

Develop our people; ongoing commitment to transformation

Why it matters

We are a team of results-oriented people operating in a high-performance culture
Human capital is considered a core corporate asset at Famous Brands and the quality of our people is critical to our success. Mutually beneficial relationships stem from ensuring our people are developed, recognised and rewarded appropriately

Stakeholders impacted

Employees, trade unions, government and regulators Key stakeholders 26

KPI• Annual morale engagementsurvey• Training conducted andcompleted	Impact oncapitals
• BBBEE ratingRemuneration report132
Related risksFailure to develop our people andcommit to ongoingtransformation will impactnegatively on our goodrelationships with them and havean adverse effect on the businessand its growth objectives.	12 to 16

Three-year trend Employment engagement survey (%)

BBBEE score

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SCORECARD BY STRATEGIC MATTER continued

Optimise capital management

Why it matters

We are focused on organic and acquisitive growth in SA and other selected markets
Following a series of acquisitions in FY2017, the Group's capital structure includes debt as a permanent feature. We need to ensure that capital is correctly deployed to meet operational requirements, service debt, support future growth and pay dividends to shareholders when appropriate

KPI

Net debt:earnings before interest, taxation, depreciation and amortisation (EBITDA) Remuneration report 132

Impact on capitals

Stakeholders impacted Shareholders, market analysts and prospective investors; funding institutions

Key stakeholders 26

Related risks

Risks and opportunities

1 8

12 to 16

Three-year trend

Embedding SDGs into strategy

Famous Brands is a responsible corporate citizen. In the prior year, we reported our commitment to support and contribute to the United Nations' Sustainable Development Goals (UN SDGs). We recognise that the achievement of these SDGs is critical

to long-term sustainability. Not only will our contribution assist in eradicating social and economic inequality, but it will assist in our operational efficiency objectives. Due to our vertically integrated business model we have long since understood the benefits of reduced and greener consumption

to business model. For many years

As a responsible corporate citizen, we are moving away from simply mapping existing activities to the SDGs. During FY2021 we have commenced the process of identifying aspirational goals for each SDG. After approval by our Social and Ethics Committee, targets for each of the specific goals will be set, communicated and integrated into

business processes. SDGs 1 and 5 overlap with identified initiatives under our responsible consumption, equality, decent work

and economic growth ideals. We can relate our SDG commitment to

these areas: • reducing food waste generated from plants going to landfill;
reducing kilograms CO2 e generated from supply chain;
recycling non-food waste products from supply chain (packaging material recycling);
deliberately investing in renewable energy e.g. solar, wind, wave power; and

SDG

Promote sustained, inclusive and sustainable economic growth, full and productive employment

Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster

and decent work for all. End poverty in all its forms everywhere.
innovation
Ensure sustainable consumption and production patterns
Take urgent action to combat climate change and its impacts

Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss

• reducing water usage from municipalities and wastewater sent to municipalities.

In future we aim to our progress in embedding selected goals and measurements into mainstream operations.

Jeff and team, Vovo Telo, Western Cape

we have monitored progress on consumption initiatives and which to link our historic practices to our SDG commitments.

We have identified the SDGs that are the most relevant to our business and where we believe we can have the greatest contribution. We have committed dedicated executive management oversight to these areas.

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SUSTAINABILITY OUR SUSTAINABILTY JOURNEY

We recognise that sustainability and ESG matters have become a business imperative for our industry. We are on a journey to achieve sustainable growth through several best practice activities and policies together with timeframes in place to track progress.

Our commitment for the future

Our food philosophy is centred around creating food that is good for our customers, our people, local communities and the environment. We believe in FOOD with thought:

Through continued innovation, research and development, and with the best-of-breed energy efficient practices, we are designing a sustainable food services business that benefits our customers and has a positive impact on the environment.

As we progress our mindful FOOD journey in line with best practice, we will:

review and update our goals and timeframes on an ongoing basis;
strive to ensure we remain responsive to emerging trends that have an impact on health and wellness, sustainability, and our communities;
be continually mindful of the interests and expectations of our stakeholders; and
be accountable for our actions.

All plastic straws were removed from the SA and UK restaurant network and replaced with paper straws.

Recycling logos were added to all our plastic cutlery to drive awareness that the material can be recycled

Year	Heading
FY2019	Our Logistics supply chain operation ceased stocking plastic straws.
	All plastic straws were removed from the SA and UK restaurant network and replaced with paper straws.
FY2020	We commenced converting all hot take away coffee cups to a fully recyclable and compostablealternative. Vovo Telo and Mugg & Bean conversion complete.
	Recycling logos were added to all our plastic cutlery to drive awareness that the material can be recycledand responsibly disposed of.
	Cage-free eggs in use by Vovo Telo, Mugg & Bean, Fego Caffé, PAUL and Creative Coffees. EffectiveOctober 2019 egg products were removed from all manufactured sauces, and a phased roll out of thesauces commenced.
	All polystyrene eliminated from our Leading brands restaurant network and replaced with recyclablepackaging.
FY2021	Concluded elimination of balloons in Debonairs Pizza, Fishaways, Wimpy SA and AME restaurants.
	Steers concluded the cage-free egg transition in October 2020.
	All brand packaging ranges are currently 100% recyclable and work is going ahead to improve our statusby converting to bio-degradable and compostable packaging.
	Famous Brands became signatories of the South Africa Food Loss and Waste Agreement.
	We launched our fully recyclable, compostable and biodegradable packaging into Wimpy as areplacement for the widely used grill and breakfast box.
FY2022	Milky Lane converted to fully recyclable and compostable hot takeaway cups.
	NetCafé and Coffee Couture will be converted to fully recyclable and compostable hot takeaway cups.
	Targets to be set for Famous Brands' selected UN SDGs.
	Wimpy to transition to using cage-free eggs in October 2021.
	Wimpy to convert to fully recyclable and compostable hot takeaway cups.
2025	All operations will use cage-free eggs.
	Ensure that all our brand packaging material is 100 % recyclable, biodegradable and or compostableby 2025.
2030	Consumer Goods Council of South Africa is driving a project to reduce food waste by 50% by 2030.

All brand packaging ranges are currently 100% recyclable and work is going ahead to improve our status

South Africa Food Loss and Waste Agreement

Famous Brands have become a core signatory to the South Africa Food Loss and Waste Agreement and have committed to:

• working with the SA government, food sector and associated organisations to achieve the United Nations SDG 12.3 target which states "by 2030, halve per

capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses; • adopt the food utilisation hierarchy which prioritises increased food utilisation and the reduction of food waste, followed by the redistribution of edible, nutritious

surplus food for human

consumption, and creation of secondary markets for surplus food, taking food safety into account; and

• confidentially report our annual quantities of food waste and quantities diverted to food surplus redistribution, according to the agreed reporting protocol.

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OUR SUSTAINABILTY JOURNEY continued

Our efforts will be focused on:

identifying food loss and waste arising in our operations and isolating the underlying causes;
ensuring that food safety is maintained at every level; and
building on our partnership with non-profit SA Harvest to redistribute edible surplus food to those in need.

We have an established partnership with the charitable organisation SA Harvest whose motto is 'Rescuing Food, Fighting Hunger'. This relationship began during the COVID-19 pandemic where Famous Brands management worked closely with the organisation to re-distribute stock which our hibernated operations were not able to use. SA Harvest provides an outstanding service to needy local communities and we look forward to developing this mutually beneficial partnership.

The information pertains to our SA restaurant network unless otherwise specified.

Better for You awareness

With our customers' health in mind and aligned to the Department of Health's goal to combat obesity, our Leading brands run several initiatives to promote healthier eating. Our extensive meal offerings across our wide variety of brands cater for dietary restrictions, food allergies, intolerances and lifestyle choices.

All Leading brands' menus:

showcase a "Better for You" offering;
offer vegetarian and/or vegan options;
differentiate between sugar soda versus sugar-free soda; the sugar-free option being cheaper; and
our TruFruit juice range's new formulation complies with beverage sugar legislation.

In addition:

full nutritional guidelines, including a list of allergens, are provided on our Leading brands' websites to enable customers to make informed choices; and
images of beverages on menus are of sugar-free varieties;
beverages containing sugar may be swopped out for bottled water at no extra cost at Steers;
Steers no longer promotes upselling, to disincentivise upsizing of meals;
all QSR brands (Steers, Debonairs Pizza and Fishaways) have full kilojoule counts on their menus;
Mugg & Bean On The Move menus had full kilojoule counts this April 2021.

ENVIRONMENTAL REPORT

During the last review period we identified three of the UN SDGs that are aligned to our environmental philosophy and activities across the Group. These are goal 12 (responsible consumption and production) and goal 13 (climate action).

Our Environmental and Climate Change Policy outlines the Group's commitment to responsible environmental practices and identifies key areas of improvement. This includes measures to reduce air pollution and eco-efficiency aimed at reducing our environmental footprint and creating a more sustainable operating environment for the benefit of our stakeholders.

At present, we see the greatest opportunity for reducing our environmental impact in:

food waste reduction across the supply chain; and
utilities reduction (particularly fossil fuels) across the supply chain.

Lessening our environmental impact is a priority for Famous Brands. We identify our environmental impacts and monitor them with the aim of introducing continual improvements over time.

Famous Brands sustainable development focus areas

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ENVIRONMENTAL REPORT continued

Our current activities to reduce our environmental impact include:

Manufacturing	Logistics	Restaurants
• Efficient water usage and effluentmanagement set against a continuousimprovement target• Maximising recycling opportunities forour general waste• Responsible sourcing of sustainablefood products for processing• Responsible re-use or redistribution offood through donation of excess foodproducts• New plant design focused onresponsible consumption• Planned projects around renewableenergies to replace fossil-basedsources of energy	• Investigating alternative cleaner fueland energy options (with lowergreenhouse gas (GHG) emissionfactors)• Optimisation of transport efficienciesin our Logistics fleet• Better route planning• Reduction in number of trips• Responsible redistribution of nearexpiry date stock through donationsto identified charities• Use of improved quality refrigerants,reducing electricity consumption	• Maximising recycling opportunitiesfor our general waste• Eliminating balloons• Eliminating plastic straws• Rolling out fully bio-degradable andcompostable takeaway coffee cups• Converting from plastic toothpickwrapping to paper wrapping• All brand packaging ranges arecurrently 100% recyclable• We are investigating converting tobio-degradable and compostablepackaging• Reduction in food wastage throughportion control and made-to-orderpractices in our restaurants• Responsible re-use or redistributionof food through donation of excessfood products

The Group's consumption of non-renewable resources on a geographical basis is detailed below. All energy sources have decreased in the year under review when compared to the comparable periods in the previous years.

Input	Unit of measurement	2021	2020
SA operations: Manufacturing and Logistics divisions and
head office
Water	kilolitres	287 201	368 371
Energy
Electricity	MWh	25 366	30 734
Electricity – solar	MWh	548	442
Diesel	kilolitres	1 461	2 073
Petrol	kilolitres	452	731
Paraffin	kilolitres	54	182
Liquefied petroleum gas	kilolitres	32	48
Natural gas	gigajoules	29 257	35 696
Coal	tons	2 121	4 667
Steam	tons	6 617*	–
CO2emissions	metric tons CO2e
Direct		14 961	21 688
Indirect		25 970	31 963
SA operations: Signature brands excluding Group associates
Electricity
All Company-owned restaurants	MWh	1 084	3 238
Water
All Company-owned restaurants	kilolitres	5 584	10 288

* Supplied from a third party coal user.

Carbon footprint report

In line with the SA regulatory and tax landscape regarding climate change, the Group has aligned its environmental assessment methods with local legislation and international best practice. This approach will allow the Group to comply with legislative requirements, adequately prepare for the introduction of carbon tax and take proactive steps to reduce its overall carbon footprint.

Famous Brands has conducted a detailed assessment of the Group's carbon footprint, with specific focus on the following:

identifying and quantifying direct (Scope 1) emissions that will require reporting to the Department of Environment, Forestry and Fisheries, and be liable for the carbon tax; and
understanding the main sources of indirect emissions (Scope 2 and 3) contributing to the Group's overall carbon footprint.

The carbon footprint assessment applies to the Group's Manufacturing and Logistics divisions. The Group does not have equity in, nor financial and/or operational control of franchised restaurants, and therefore the franchise operations are not included in this assessment. The GHG emission categories assessed are:

direct which includes mobile fuel combustion (own fleet) and stationary fuel combustion (on-site equipment); and
indirect including purchased electricity, water supply and waste disposal.

Johan, Steers, Northern Cape

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ENVIRONMENTAL REPORT continued

The Group's total GHG emissions in FY2021 by Scope are detailed in the table below:

Scope	Emission source	ManufacturingtCO2e	LogisticstCO2e	TotaltCO2e	% increase/decreasefrompreviousfinancialyear
Scope 1	Mobile fuel combustionStationary fuel combustion	116.826 890.94	5 414.9243.90	5 531.746 934.84	-31%-31%
	Total Scope 1 emissions	7 007.75	5 458.82	12 466.58	-31%
Scope 2	Purchased electricity, heat and steam	20 935.12	7 528.72	28 463.84	-19%
	Total Scope 2 emissions	20 935.12	7 528.72	28 463.84	-19%
	Total Scope 1 + 2 emissions	27 942.87	12 987.54	40 930.42	-24%
Scope 3	Water supplyWaste disposal	340.63536.13	19.0491.87	359.67628.00	72%59%
	Total Scope 3 emissions	876.76	110.91	987.67	63%
All scopes	Total Scope 1, 2 and 3 emissions	28 819.63	13 098.45	41 918.08	-23%

Steam emissions at Coega Cheese, previously categorised as Scope 1, have been recategorised to Scope 2 purchased electricity, heat and steam. To compare like with like, the percentage increase or decrease from the previous year in stationary fuel combustion emissions, purchased electricity emissions and Scope 1 and Scope 2 totals have been based on the previous year's emission source categorisation.

Purchased electricity use across operations decreased 17%, however due to the 2% decrease in the Eskom grid emission factor purchased electricity emissions decreased 19%.

Lifecycle studies in the water industry have shown that the contributor which carries the highest environmental burden is the use of electricity. This presents an argument for the use of an electricity index as a measure of environmental performance for urban water systems.

For this reason, the measurement approach was changed to use an emission factor based on electricity use. This has increased the emission factor by 120% from the previous financial year. Water use in Famous Brands' operations decreased 22% from the previous year, however the emission factor change has had the net effect of increasing water supply emissions by 72%.

Waste generated in operations has increased due to more complete data across operations, as well as a significantly higher emission factor applied to mixed industrial and commercial waste to landfill (458.176 kg CO2 e/tonne waste compared to the previous year's factor of 99.7592 kg CO2 e). The emission factor increase was due to remodelling based on the most up to date compositional analysis.

Carbon footprint by type (FY2018 to FY2021) (tCO2e)

waste disposal

Overall, the carbon footprint report reveals that the Group's emissions have decreased by 22% over the past year and 28% over the past two years. This can be attributed to the following:

Less operational activity due to COVID-19;
a Company-wide utilities savings awareness programme;
smart metering of electricity, water and key fuel usage tied to key performance indicator settings for each business unit;
fuel type conversion to lower carbon fuels;
paraffin consumption has stopped in KwaZulu-Natal since April 2020, with the closure of the ice cream plant;
the annual electricity generated from solar systems increased during the year;
close monitoring and evaluate of new generators; and

• employee awareness campaigns to encourage environmentally responsible behaviour.

To reduce our carbon footprint in future, we have identified the following possible opportunities:

Improving plant efficiencies to make more units per hour of plant time
Better measurement of large utility users to bring more management focus to must win sites daily and even every shift
Making fuel switches to low carbon fuels where practical For example, less Coal and paraffin and more gas and solar)
ton produced by improving refrigeration plant efficiencies • Fleet route optimisation, reducing
- the number of trips taken and so the carbon impact

• Reduction of electricity usage per

• Investment in renewable energy, for example Solar.

The Meat Plant, Cater Chain, Lamberts Bay Foods and our Midrand Campus are the heaviest consumers of non-renewable resources and utilities in the Group. In the year ahead, particular attention will be paid to introducing mitigating measures to offset the GHG emissions of these business units.

We are targeting a 25% improvement in our water and carbon usage per case of production over the next 5 years. F2022 to F2026.

Carbon tax implications

Although Famous Brands is below the threshold for paying carbon tax, all sites are registered for carbon tax

by business unit.

Figure 2 illustrates GHG emissions by Scope, with most of the Group's emissions being Scope 2 (indirect emissions from purchased electricity).

Figure 3 illustrates emission source contributions to total GHG emissions.

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TRANSFORMATION REPORT

We view transformation a social, moral and strategic business imperative. We are committed to developing a more equal, inclusive and fair society through the ongoing transformation of our business and initiatives that empower the communities in which we operate.

In SA, our business transformation strategy follows the objectives of the Department of Trade and Industry's BBBEE Codes of Good Practice (CoGP). This year Famous Brands moved from the CATHSSETA (Tourism and Hospitality) to the FOODBEVSETA (Food and Beverages) which is more aligned to our business activities.

Our Group Transformation Manager together with our executive leadership team are responsible to execute our BBBEE transformation strategy across the business. We have made good progress over the years.

Our transformation journey is monitored by our Social and Ethics Committee and Working Group. We endeavour to follow best practice and align our activities with the 10 Principles of the UN Global Compact. We aim to ensure that our operations are responsible, ethical and accountable.

Our transformation journey

Famous Brands works towards an employee demographic that represents South Africa (SA). We observe the principles of equality and fair treatment in all operations and interactions with employees.

Our consistent progress achieved in improving our BBBEE score is depicted below.

This report provides details on our progress, targets and outlook regarding our transformation journey. While pleasing progress was made, we are mindful that there is still room for improvement.

11.46	14.43	19.76	31.32	5.00	=	81.97%
Ownership	Managementcontrol	Skillsdevelopment	Enterprise and supplierdevelopment (ESD)	Socio-economicdevelopment		Overall scoreand level
					BBBEE score analysis
Scoring element				Targetpoints	AchievedpointsFY2021	AchievedpointsFY2020
Ownership				27.00	11.46	10.16
Management control				19.00	14.43	14.25
• Board representation				6.00	5.27	5.27
• Employment equity				13.00	9.11	8.98
Skills development				20.00	19.76	19.69
ESD• Procurement				40.0025.00	31.3215.32	33.9717.97
• Supplier development				10.00	10.00	10.00
• Enterprise development				5.00	5.00	5.00
Socio-economic development				5.00	5.00	5.00
Total				111	81.97	83.07
	Level contributor status				4	4

Black people. This includes the entitlement of Black people to the voting rights and economic interest associated with equity holding. Voting rights refer to the rights to direct the Company's strategic and operational policies, while economic interests,

such as shareholding, build the wealth to 14.4% from 12.20%, based on an analysis of mandated investments.

» Black voting rights » Black women voting rights
Economic interest
» Black economic interest
» Designated group
economic interest • Net value

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TRANSFORMATION REPORT continued

• Disabled

Management control is exerted through the company's governing bodies including the Board level and executive management level. The Board is measured according to African, Coloured and Indian (ACI) for transformation purposes.

As a result of COVID-19, retrenchments are ongoing and new employment equity targets will be set and communicated with the Department of Labour. An

At Famous Brands, we acknowledge the value that diversity brings to our

employment equity target template is being developed to enable managers to keep track of targets and use for the hiring process. The Talent and Development team utilises the template to align with training and succession planning processes for employment equity candidates. This element reflects the composition of the Board and Exco. The Board includes 40% Black directors and 20% Black female directors.

breakdown of our employment

equity numbers.

Voting rights
» Exercisable voting rights
» Black executive directors
Black top management » Black senior top management
» Black senior other management

Board participation and other executives

Management control

Board of directors: gender composition (%)

	African		IndianColoured		White andDesignated Groups
Occupational Levels	Male	Female	Male	Female	Male	Female	Male	Female	Total
Executive ManagementOther Executive	–	1	–	–	–	–	1	–	2
Management	6	2	3	2	2	–	27	9	51
Senior Management	2	1	1	–	–	–	6	3	13
Middle Management	38	38	12	9	8	2	64	57	228
Junior ManagementOther, Semi-Skilled	275	100	11	10	58	30	43	51	578
& Unskilled*	834	216	3	5	38	45	2	13	1 156
Total	1 155	358	30	26	106	77	143	133	2 028**

* Includes employees with disabilities.

** BBBEE audited employment equity breakdown at the end of August 2020 for SA operations.

White male

White female

1 4

Skills development initiatives

The skills development element measures the extent to which enterprise's executives initiate ongoing training to enhance the core technical skills and competencies of Black employees to support their optimal performance and enrich SA's labour pool.

Continuous training of our talent is a business imperative and acts as a bridge between employment equity and talent development. We are

and internships • Absorption

Skills development

Nazeer, Wimpy, Gauteng

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TRANSFORMATION REPORT continued

committed to engaging, developing and retaining a highly skilled workforce by investing in the development and upskilling of employees. Our Human Resources team plays a leadership role in training employees and supporting the business to achieve its strategic objectives. The Group achieved 19.76 points for this element. The CoGPs are changing, especially in skills development, where it is now more costly to achieve the same score.

The COVID-19 pandemic forced the Group to cancel or postpone key skills development initiatives:

the internship and YES programme were cancelled at the start of COVID-19 (130 people); and
the International Executive Development programme, Executive Development Programme, Managers Challenge and Junior Management Programme were not completed.

The pandemic also reduced our spend across our total skills development budget. In FY2021, we spent approximately 90% of our total skills development budget on the development of Black employees across the organisation. Approximately 15% was spent at senior and executive management levels.

Enterprise and supplier development

ESD comprises two elements: preferential procurement and ESD. Preferential procurement refers to the extent to which enterprises buy goods and services from suppliers with strong BBBEE credentials. ESD refers to the financial and nonfinancial support given to grow and nurture new or existing small and micro-enterprises.

We scored 15.32 out of 25 points for preferential procurement (2020: 17.97 points). We believe that preferential procurement offers the greater immediate improvement opportunity.

Preferential procurement
» Spend on BBBEE suppliers » Spend on qualifying small enterprise suppliers
» Spend on exempted
micro-enterprise suppliers » Spend on >51% Blackowned suppliers
» Spend on >30% Black
women-owned suppliers
Enterprise development
Supplier development

ESD

We are actively investing in the development and transformation of our supply chain; however, these initiatives take time. We focus on understanding the contributor level of each supplier in the database. Suppliers between non-compliant and a level 5 contributor status will be assisted with a transformation plan or replaced with a qualifying supplier.

Preferential procurement spend

We currently also track BBBEE certificates which have expired and monitor our initiatives on a monthly basis.

ESD

We have assembled a task team to inject new energy into our key ESD initiatives. We achieved a score of 15.00 points for ESD.

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TRANSFORMATION REPORT continued

Socio-economic development

Socio-economic development contributions are any financial or non-financial contributions implemented for individuals or communities where at least 75% of the beneficiaries are classified as Black. The Group achieved the full five points available for this element and our socio-economic development initiatives are rooted in supporting and investing in communities where we operate. A few of our key initiatives are included below:

Transformation will remain a key priority for the Group as measured by the achievement of our goals within our set implementation timelines. Our transformation plans include initiatives to address the five elements of the CoGP. We will continue to promote diversity at all levels of management. We are excited by the opportunities and partnerships that exist in our downstream supply chain. We are cognisant that some of our initiatives were and will be negatively impacted by the COVID-19 pandemic and associated restrictions.

Cupcakes for Hope

Support for children with cancer. This is an entirely community driven project

Over 170

beneficiaries

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CORPORATE SOCIAL INVESTMENT REPORT

Famous Brands' Corporate Social Investment (CSI) Programme is a deliberate, focused, coherent and progressive programme that is professionally managed, guided by a common policy framework and is seen as strategic to the business. All CSI activities are coordinated by the Transformation Office and Social and Ethics Committee.

CSI Programme's Strategic Objectives

To achieve our CSI goals, our policy and programmes are aimed at:

focusing on initiatives which enjoy broad-based stakeholders' support while avoiding handout tendencies which prove unsustainable;
ensuring that communities and beneficiaries of the programmes are actively consulted in the process of project selection, implementation and evaluation;
quantifying the costs and benefits of the programmes selected and evaluating them in terms of their ability to contribute to capacity building, improving the quality of life and ensuring sustainable development;
defining the roles and responsibilities of stakeholders and projects/programme beneficiaries, with specific emphasis on financial

Famous Brands makes a substantial contribution to economic and social development in SA and beyond through annual CSI initiatives.

controls and corporate governance compliance;

building community awareness and recognition of the role played by Famous Brands in developing communities through appropriate and transparent outreach initiatives;
contributing to the socioeconomic upliftment of primarily historically disadvantaged communities; and
to build and improve relationships with the company's existing and potential stakeholders through forming mutually beneficial partnerships.

Corporate social investment initiatives

Our biggest CSI initiatives are driven by our Leading brands. These brands' promotional activities elevate the profiles of recipient charities and funding campaigns and the funds raised allow beneficiaries to expand their activities.

Sport is a big focus for all our Leading brands. These brands support the FNB Varsity Cup (rugby for 2020). Sponsorships provide funding to talented student athletes after they leave school and before turning professional, boosting the

development of rising sporting stars in SA.

In 2020, the COVID-19 pandemic brought all Varsity Sports to a halt. Famous Brands donated R8 million to support rugby grassroots development in 2020.

COVID-19 food donation

Our Manufacturing division provided essential food donations to the value of R7.8 million to SA Harvest, a non-profit organisation. SA Harvest was founded to address food security as one of the most urgent crises facing SA today. Even before COVID-19, millions of South Africans had inadequate access to nutritious food, and this crisis was exacerbated by the pandemic. COVID-19 and the resultant lockdowns have caused mass unemployment, which has dramatically increased food insecurity. SA Harvest delivers to more than 40 vetted beneficiaries who, combined, are responsible for feeding approximately 6 000 people per day.

Cupcakes of Hope

Mugg & Bean has supported Cupcakes of Hope since 2012. The aim of this organisation is to raise awareness for the early detection of cancer, which can save children's lives. In FY2021, we significantly revised our planned CSI activities due to trading restrictions and financial constraints. In September 2020, we hosted a scaled-down donation drive and invited customers to donate on our online portal. We firmly support the work Cupcakes of Hope does to assist families with cancer-affected children and are evolving our activity with their input and involvement.

Botswana's CSI activities

Debonairs Pizza's Doughnation initiative was started in 2012 and is a daily community project that encourages Debonairs Pizza restaurants to use the excess pizza dough to make flat breads. The flat breads are then donated to charities in local communities. In 2020, the Doughnation initiative was enhanced in Botswana with each Debonairs Pizza restaurant supporting a local charity from their community on a monthly basis.

Famous Brands Canteen – Tembisa Feeding Scheme

Tembisa Child Welfare was established in 1986 to provide for abandoned, abused and neglected children and HIV/AIDS infected orphans. Ideally, the organisation aims to place children with foster or adoptive families. Where this is not possible, children are placed in two children's homes. The organisation also creates local employment through projects such as a sewing school, a bakery, food gardening and soap recycling. The Famous Brands Head Office Canteen supports the organisation through a daily feeding scheme for 80 children and staff members.

Steers Rounda and Shout initiative

Food insecurity has long been an issue in South Africa, with 11% of the population (6.5 million people) suffering from hunger in 2019,

according to Statistics South Africa. A 2016 survey by the South African Book Council found that six out of ten South Africans older than 16 years lived in households without a single book present.

Steers developed Rounda as a CSI initiative to both alleviate hunger and promote reading. The initiative, which runs both in-store and online, allows customers to donate an additional R1 with the purchase of any Steers product.

Rounda has fed thousands of hungry stomachs and enabled the building of five Shout libraries across South Africa. These libraries provide access to books for many South Africans who would not otherwise enjoy the benefits of reading.

Steers, with the support of staff and franchise partners, raised R940 329 in FY2021 to donate to the Shout Foundation, for building libraries, and to the Nikela Trust, for running several feeding schemes.

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Reset. Refocus. Restore.

Chairman's statement

The year under review was one of the toughest in Famous Brands' 60-year history. We had to place our expansion plans aside to accommodate a new business reality with the onslaught of the COVID-19 pandemic and reset all our business plans. We understood that rapid actions were required as we shifted gears to safeguard our business.

While our numbers may change, our core strategy remains the same. We remain committed to our vision of being the leading, innovative, branded franchised and food services business in SA and selected markets.

Aligned with our three-year roadmap, and accelerated by the COVID-19

pandemic, our focus over the review period was to right-size the business, reduce costs, and preserve cash to facilitate balance sheet flexibility. These immediate and decisive actions allowed us to navigate through the first year of the pandemic while positioning the business for future growth.

COVID-19 impact on the food services industry

Across all our trading markets being SA, AME and the UK, the negative financial impact of the COVID-19 pandemic on the business due to national lockdowns and trading restrictions has been severe. These restrictive trading conditions forced us to become a leaner and even more focused organisation. It included making the right decisions early to prepare for a worst-case scenario.

As a business, we acted swiftly to help prevent the spread of the COVID-19 virus and implemented a coordinated response to protect our employees, franchise partners and customers. We rolled out personal protective equipment and other

safety measures seamlessly. The health and wellbeing of our employees, including mental health, were made an immediate priority by the business. We were also wellprepared for when lockdown restrictions eased.

SA was already in an economic recession before the COVID-19 pandemic came into effect due to structurally weak government finances, ongoing electricity shortages, lacklustre industry growth and dwindling business and consumer confidence. This meant that restaurants were already facing economic headwinds, including constrained consumer spend.

The SA economy deteriorated, with gross domestic product (GDP) slumping and negative economic growth for the year. The effects of the lockdown on unemployment were severe. According to Stats SA, SA shed 2.2 million jobs in the second quarter of 2020.

From award-winning top restaurants to local eateries, COVID-19 devasted the South African restaurant landscape. All restaurants in SA ceased trading on 27 March 2020. Restaurants could only commence trading on a delivery-only basis from 1 May 2020, with collection service being permitted from 1 June 2020. Full sit-down service was resumed on 29 June 2020. Lockdown regulations during the first phase of the pandemic including curfews, alcohol bans and travel restrictions shut down many businesses in the food services industry. The Signature brands

portfolio was particularly hard hit as they are more reliant on evening trade and alcohol sales. Although lockdown restrictions have subsequently eased, trading conditions have not returned to pre-COVID-19 levels. Due to continuing COVID-19 fears and less spending power, larger malls are seeing lower footfall numbers. This obviously has a negative impact on our franchise partners based at these locations.

Measures to reduce the spread of COVID-19 were damaging for the UK restaurant industry as well. On 20 March 2020 restaurants were forced to close and only opened again on 4 July 2020, providing they followed strict hygiene conditions. The country re-introduced lockdown measures affecting all restaurants again on 5 November 2020, following a resurgence of COVID-19 infection cases. Data compiled by the Centre for Retail Research revealed that a significant number of jobs was lost across fine dining, independent businesses and large multiple casual dining chains during the calendar year. Despite a relaxation of lockdown restrictions, consumers have largely not returned to restaurants. As of March 3, 2021, the percentage of seated restaurant diners in the UK was down a staggering -99.63%1 .

GBK enters administration

Famous Brands acquired Gourmet Burger Kitchen (GBK) in 2016. Its contribution to Group profitability had taken longer than expected, hampered by pressure on consumer spending as well as high property rates, increased input costs and a highly competitive restaurant market. We worked hard to reshape GBK to meet our performance targets and spent significant management time

Santie Botha

We remain committed to our vision of being the leading, innovative, branded franchised and food services business in SA and selected markets.

on improving the product and customer offering and experience. The burger chain started to show solid signs of recovery before the pandemic started. Unfortunately, the brand simply could not survive the lockdown restrictions without a further cash injection from the Famous Brands Group. The Board evaluated the GBK investment case as well as the uncertainty in the UK market caused by the pandemic and resolved that no further financial assistance will be provided to the GBK business. GBK was placed under administration in October 2020 in accordance with the insolvency legislation in the UK. The administrator oversaw the sale of GBK to UK-based Boparan Restaurant Group in a rescue deal that will save 35 restaurants and 669 jobs going forward.

A narrower focus of resources

In line with our three-year strategic roadmap which includes a narrower focus of resources in the Signature brands portfolio and non-core assets, we concluded two key disposals in FY2021. In August 2020, the controlling 51% stake in boutique café brand, tashas, was sold to the founding Sideris family, who hold the remaining 49%. In October 2020, the Group sold its 49.9% stake in It's a Matter of Taste, comprising the brands By Word of Mouth and Frozen for You, to majority shareholders and founders Karen and Adrian Short. In addition, we mothballed the Keg and Europa brands in SA.

Leading in a time of crisis

The Board met frequently in FY2021 and supported management wherever possible. The Board's

primary focus was to assist and protect our franchise and JV partners. This assistance included royalty and marketing fee relief and stepping in to secure better rental agreements from landlords. Management's strong relationships with franchise and JV partners will lead to greater collaboration to find solutions that suit the business and partnership.

The continued transformation of our Group remains a social, moral and strategic business imperative. I am pleased to confirm that we retained our Level 4 BBBEE rating.

COVID-19 is an unprecedented global event. As a Board, we have interrogated how we can better protect the business should a similar event occur in the future.

Looking forward to restoration

Looking ahead, I am confident that Famous Brands is well positioned to deliver value for its shareholders. Famous Brands is a fully integrated food service business and the most successful branded food service franchisor in Africa. Achieving this ambition demanded vision, guiding principles, strategic intent and an audacious growth agenda – these will continue to inspire our future endeavours. There is still much work to be done to restore Famous Brands to its former glory.

Famous Brands will continue to reset the business with a focus on right-sizing, reducing costs and preserving cash to facilitate balance sheet flexibility in line with our threeyear roadmap.

LEADERSHIP COMMENTARY

1 This statistic is from https://www.statista.com/statistics/1104991/coronavirus-restaurant-visitation-impact-united-kingdom-uk/.

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Operating conditions are anticipated to remain challenging across all geographies and sectors in the year ahead whilst the pandemic is still with us. In the coming months and years, we anticipate that governments will focus on revitalising the economy.

We predict a slower roll-out of the COVID-19 vaccine in SA and AME due to funding and production constraints. This, and the resulting lower levels of economic growth, could result in greater financial woes for consumers. Yet, unlike small independent restaurateurs, franchise partners benefit from a proven brand system and ongoing support from the Group.

As the world moves from crisis mode to a new 'normal', there will be other growth avenues to consider. While we have withheld capital expenditure in the short term, our goal to be at the forefront of our industry is undiminished and we remain committed to embracing further expansion opportunities.

Closing remarks

The COVID-19 pandemic has affected the health and wellbeing of millions of people across the globe and has had severe secondary effects on our economies and communities. Tragically, it has taken many lives and devasted families.

On behalf of the Board, I extend my sincerest sympathy to those who have lost loved ones during the past year. This includes the passing of seven of our franchise partners and a JV partner. Our thoughts and prayers remain with you during this difficult time.

Emma Mashilwane has given notice to the Board that she intends to retire at the upcoming Famous Brands AGM in July 2021 and will not be available for re-election as an independent non-executive director. She will

further step down as a member of the Audit and Risk Committee and as Chairman of the Remuneration Committee. Emma has been a committed Board member since December 2017, and I would like to thank her for her valuable time and contributions over the past years.

Lebo Ntlha resigned as

Group Financial Director effective 30 November 2021. On behalf of the Board, I would like to thank Lebo for her dedication, hard work and commitment over the past few years and wish her well in the future.

Fagmeedah Petersen-Cook has been appointed as an independent non-executive director to the Board, and member of the Audit and Risk and Investment and Remuneration Committees effective from 1 June 2021. I welcome Fagmeedah and look forward to her contribution.

I would also like to thank Darren Hele, our CEO, and the executive team for steering the Group through these difficult and uncertain times. Their entrepreneurial leadership and resilience have been exemplary in guiding our franchisees, employees and customers to a new normal.

I would also like to acknowledge our franchise partners who have endured hardship but have emerged resolute. Thank you for your continued faith in our leadership and brands.

My sincere appreciation to my fellow Board members for their steadfast support, constant availability and wise counsel during the year.

Finally, I would like to thank our various stakeholders who contribute meaningfully to our business.

Santie Botha Chairman

22 June 2021

CHAIRMAN'S STATEMENT continued

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2020: the year everything changed.

Chief Executive Officer's report

SA was declared a state of disaster due to COVID-19 on 15 March 2020 – fifteen days into our financial year; the first year of our three-year strategic roadmap. Likewise, the UK and AME regions closed borders and put in measures to curb the spread of the virus. While we are accustomed to trading in tough economic conditions, nothing could have prepared us for the economic devastation of the COVID-19 pandemic and resulting lockdown restrictions.

The restaurant industry was one of the hardest hit by various lockdown levels across our trading markets. Stats SA's breakdown of the food and beverages industry shows a decline of 44.4% in food and beverages income for the first six calendar months of 2020 over March to July R18 billion in revenue year-on-year was lost due to the various levels of lockdown and the impact it had on the economy.

The restaurant industry is a significant employer of young people. It is unfortunate that jobs have been shed and few entry level positions exist. This means that we need strong economic growth in SA to recover these positions and grow the pool of job opportunities available.

A significant decrease in revenue and cash flows is a frightening prospect for any business. Famous Brands reacted quickly by implementing several measures to reduce cash outflows. We also stepped in to assist franchise partners get through the hardest months. Plans to expand were suddenly replaced by plans to survive.

The Group's performance SA Brands

The SA restaurant industry was badly affected by the various lockdown levels, starting with a hard lockdown from

27 March 2020. Our combined SA Brands division reported a 42% decline in revenue to R567 million. Operating profit fell by 64% to R169 million (2020: R472 million), while the operating profit margin dropped to 29.9% from 48.5%. The initial re-opening of delivery and take away in May 2020 played to our relative strength in these channels and demand remained strong. Casual Dining experienced a much slower recovery due to seating capacity restrictions, reduced trading hours as a result of the curfew and consumer nervousness around eating out. Consumers' changing their shopping and travelling habits impacted sales in major malls and major transport routes. Leading brands' system-wide sales declined by 28.6%, while like-for-like sales decreased 29.1%. Signature brands' system-wide sales deteriorated by 53.7%, while likefor-like sales reduced by 52.0%.

Supply chain

Supply chain consists of our Manufacturing, Logistics and Retail divisions. These divisions' primary function is to support our franchise partners through competitive pricing and efficient supply. We sold 34% less units in FY2021 across all plants. This was a knock-on effect of the COVID-19 lockdowns on the frontend of the business. The lockdowns impacted each plant differently. Plants that primarily service QSRs were impacted less than plants with a high CDR exposure. Combined revenue by supply chain operations declined to R3.3 billion (2020: R4.5 billion). The operating

margin declined to 5.0%, down from 10.2%, primarily due to rising food inflation and lower volumes produced. We kept our margins lower to support our franchise partners.

Retail

This was the first full year that Retail was measured as a standalone division – with pleasing results. The division reported sales of R151 million (2020: R124 million) and benefited from increased consumer demand for at-home consumption.

AME

All AME markets experienced border closures, curfews, travel restrictions and health protocol measures in varying degrees and timeframes over the past year. Many restaurants underwent temporary closures and all franchise partners experienced financial stress. We provided franchise partners assistance in the form of reduced royalties and extended payment terms. Our AME revenue (royalties, joining fees and project management fees) ended the year at 100% of the prior year.

UK

The UK experienced incredible economic hardship due to the COVID-19 pandemic and stringent lockdown conditions. Wimpy UK turnover was down by a total of 8%. While trading conditions remained tough throughout the year, franchise partners embraced delivery across third-party platforms and take away services. This meant Wimpy UK continued to trade throughout all lockdown stages.

Darren Hele

Our focus was on the continued financial sustainability of our business and navigating the new normal.

LEADERSHIP COMMENTARY

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Strategy and performance scorecard

Our management team and Group performance is assessed against our achievement in delivering on our seven key strategic imperatives. The commentary below outlines the Group's progress in the review period. It is important to recognise that these plans were developed in February 2020 before the onslaught of the COVID-19 pandemic. Given the devasting effects of the pandemic on the Group, these goals and targets need to be viewed in a context where our priorities needed to change overnight. Our focus was on the continued financial sustainability of our business and navigating the new normal.

• Disposed of our stake in café brand tashas and It's a Matter of Taste (comprising By Word of Mouth and

Frozen for You) • Closed KZN ice cream plant

• Successfully downscaled and relocated Nelspruit distribution centre and relocated the Polokwane crossdock facility to add in multi temperature capability

• Roll out a proof of concept cloud based point of sale (POS) system to escape the constraints of charges in US dollars of legacy systems

Enhance our financial performance

FY2020/21 what we did

Drove cost-reduction initiatives across the business • Placed the major portion of our business into hibernation during the hard lockdown
Implemented stringent cash flow management measures
Disposed of our stake in café brand tashas and It's a Matter of Taste (comprising By Word of Mouth and Frozen for You)
Negotiated temporary payment terms with suppliers to protect cash flow
The GBK business entered administration

Lead in the categories we compete in

FY2020/21 what we did

Innovated in format, category and technology to maintain and win market share
Quickly pivoted to online delivery
Simplified the Signature brands portfolio

Further simplify the Signature brands portfolio and invest in those brands that can achieve critical mass
Pursue promising SA or AME franchise brand acquisitions

Prioritise our franchise partners

FY2020/21 what we did

Supported franchise partners with royalty fee discounts and payment deferrals
Stepped in to renegotiate lease agreements with landlords
Supported a class action case for the payment on business interruption insurance
Simplified menus to allow for better operational efficiencies and profitability for franchisees

CHIEF EXECUTIVE OFFICER'S REPORT continued

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Prospects

Trading is likely to remain subdued in the first half of FY2022 and is highly dependent on how well the infection rate and associated risks are managed. The possibility of a third wave in winter could potentially lead to tighter lockdown restrictions, resulting in further revenue pressure. More

stringent restrictions over the July school holidays when consumers travel could have a negative impact on revenues. We have observed that as infections drop, consumer confidence and spending picks ups. Promotional activity and advertising spend will be a priority over the winter months to drive sales activity. We

Executed on some of our strategies to accelerate transformation initiatives; other strategies were not deliverable due to COVID-19 (such as internships and skills development programmes)
Maintained our BBBEE rating
Migrated some of our employee training programmes online
Maintain and improve about BBBEE rating through initiatives to address each BBBEE element
Restart skills development programmes
Scale up training programmes for employees
Retain key talent

Optimise capital management

FY2020/21 what we did

Refinanced debt with primary lender with more favourable terms
Proactively offered good payment terms and deferrals to franchisees to avoid bad debt
Improved our working capital management
Exited non-core brands in the Signature brands portfolio
Negotiated better payment terms and deferrals with suppliers

FY2021/22 what we will do • Increase free cash flow

• Decrease interest-bearing debt • Improve working capital management

• Tightly control capital investment programme and be prudent in our capital investment decisions and

budgeting

Evaluation

Implemented and enforced rigorous hygiene and health and safety controls and COVID-19 protocols across the Group
Maintained our NOSA gradings

Ensure regulatory compliance FY2020/21 what we did • Improved our disclosure in our Transformation and Remuneration reports • Communicated regularly and responsibly with the market FY2021/22 what we will do • Uphold hygiene and health and safety controls and COVID-19 protocols across the business framework Evaluation

• Develop and implement a regulatory compliance

Ensure the business is ready for POPIA, AARTO Act and amendments to the JSE Listings Requirements as they get enforced
Maintain and improve our NOSA gradings (3 and 4)

anticipate that delivery, which is traditionally strong in winter, will remain a key channel across all brands and lessen the impact of reduced foot counts in restaurants.

Our three-year strategic road map 47 sets out expectations against our strategic objectives.

CHIEF EXECUTIVE OFFICER'S REPORT continued

Condolences during COVID-19

The health and wellness of our people throughout the Group is a priority. Sadly, I pay respects to nine of our franchise partners, Phillip Silenge, Tyrone Emmanuel Padayachee, Gerrie Kruger, Schalk Erasmus, Gary Poovan, Charl du Plooy, Joe Dunga Hlabangane, Lunga Gwayi and Victor Mntonga. We also tragically lost Rui Manuel Fernandes Tem Tem, our JV partner.

Other staff members have lost family and friends as a result of COVID-19, and I extend my condolences to them.

OUR DEEPEST CONDOLENCES

Western Cape

KwaZulu-Natal

Phillip Silenge

Phillip joined the Famous Brands family in 2001 successfully operating multiple outlets, both CDRs and QSRs, across northern KZN. He was humble, a joy to be around, willing to lend a hand and always had time to chat. His passing has left a void within the KZN team as well as the Wimpy family. He will be missed by all. Our thoughts and prayers are with his family and friends. May he rest in peace.

Schalk Erasmus

Schalk was our franchisee at Mugg & Bean Langeberg Mall in Mossel Bay, which he ran with his two sons. Schalk's passing is a great loss to his loving family, as well as to Mugg & Bean. Our thoughts and prayers are with his family during this difficult time.

KwaZulu-Natal Eastern Cape

Eastern Cape

CHIEF EXECUTIVE OFFICER'S REPORT continued

Tyrone Emmanuel Padayachee

Tyrone joined our Wimpy family on 1 December 2018. Within this very short time he achieved amazing results. He was loved by his staff, customers, his Wimpy family and all those he met. He leaves behind his wife, Praveena, and his two little boys, Austin and Mason. His passing has left a hole within the KZN team as well as the Wimpy family, and he will be missed dearly by all. We wish his family and the Wimpy Pavilion staff sincere condolences, strength and courage during this difficult time.

Charl du Plooy

Charl joined the Debonairs Pizza brand in April 2019 at Total Cradock. He had the kindest heart and always made one feel welcome when visiting his restaurant. The Cradock team lost a gentle soul. Our thoughts go out to Charl's family and

staff members.

Lunga Gwayi

Lunga was a long-serving franchisee along with his wife, Buyela, for Debonairs Pizza Mdantsane City Mall, Mdantsane North, as well as Kuyasa Mall. Lunga was an astute businessman who carried his passion on his sleeve and operated five successful businesses. Our heartfelt condolences to Buyela and the family on the passing of such an admirable gentleman and family man.

Victor Mntonga

Long-serving franchisee from the Eastern Cape, Sicelo Victor Mntonga was a successful multiple operator trading across southern KZN and the Eastern Cape. Despite his success, he remained humble and was an inspiration to all who knew him. His passion for the brands and his teams will be sorely missed.

Gary Poovan

Gary's business career started when he joined Woolworths as a trainee auditor in 1980 and became a regional manager in 1988. He became a franchise owner of Woolworths Oxford Street in 2001, and eventually acquired Woolworths Grahamstown. Gary and his wife, Leonie, became successful owners of Engen Bonza Bay Service Station in Beacon Bay in 2016 and took Steers and Debonairs Pizza to great heights. Gary was respected by many and his generosity was felt by all who met him. Our thoughts are with his family and team.

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CHIEF EXECUTIVE OFFICER'S REPORT continued

Appreciation

I could not be prouder of our Group and how we responded to the challenging environment.

Thank you to our Chairman, Santie Botha, and our Board for their support and counsel over the past year. They have gone beyond the call of duty to support the Exco during these trying times.

I would also like to thank our management team for their insights and tireless commitment. In an uncertain time, one thing I know for certain is that we have the right management team to take on whatever challenges arise.

To our employees, thank you for hard work and dedication over the past year. We know that the circumstances have not been easy.

Our franchise partners were remarkably brave, both during the hard lockdowns when they were not able to trade and when they could re-open their restaurants. For many of our franchise partners, keeping the lights on demanded a huge sacrifice. Thank you for your courage and persistence in the face of incredible challenges.

I would also like to thank all customers, shareholders, suppliers and communities for your continued loyalty during this challenging trading period.

Darren Hele Chief Executive Officer 22 June 2021

Our thoughts are with their families, friends and teams. May their souls rest in peace.

WHEN WE LOSE SOMEONE WE LOVE WE MUST LEARN NOT TO LIVE WITHOUT THEM, BUT WITH THE LOVE THEY LEAVE BEHIND.

Gerrie Kruger

Gerrie was a partner in the Petroport Panorama N1 which he ran for many years. He was known to all as a gentle giant who was always willing to assist, and his love for the Steers brand showed in the way he ran his operation. Gerrie will be sorely missed.

Joe Dunga Hlabangane

Joe joined the Famous Brands family in 2011 at Mugg & Bean Festival Mall and later ventured on to open a Steers and Debonairs Pizza in 2018. Joe was a pillar of strength to his family as well as his staff. He was a humble, gentle and exceptional businessman who led from the front through his hands-on approach. Joe will continue to live on in our hearts.

Rui Manuel Fernandes Tem Tem

Rui was our JV partner at Cater Chain Food Services. Sadly, Rui passed away on Christmas day 2020, leaving behind a massive hole for his family, friends, his brother, John, and the Famous Brands family. We salute his contribution, attitude, love for life and his beloved Liverpool FC. Our sincere condolences go to Charmaine, Luchi, Tyron, Daniella and Dylan for their personal loss.

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Our focus was to right-size the business, reduce costs, and preserve cash to facilitate balance sheet flexibility.

Group Financial Director's report

In my 2020 report I noted that our financial objectives would be to deliver against two of our fundamental strategic imperatives, namely, to improve our financial performance and optimise our capital management. These remain our overarching objectives for the coming year.

The COVID-19 pandemic shifted the Group into a survival masterclass. We had to take quick, drastic measures to ensure the ongoing sustainability of the Group. In line with our three-year roadmap,

accelerated by the pandemic, our focus over the review period was to right-size the business, reduce costs, and preserve cash to facilitate balance sheet flexibility.

Some of our achievements for the year are as follows:

implemented several actions to manage our cash flow;
stringent working capital measures;
proactively offered favourable payment terms and deferrals to franchise partners to mitigate debt risk;
successfully renegotiated more appropriate terms with our primary lender;
executed disposals of non-core assets; and
negotiated payment terms and deferments with suppliers.

Financial performance

Across our trading markets in SA, AME and the UK,

the negative financial impact of the COVID-19 pandemic and resulting national lockdowns and trading restrictions has been severe. During the lockdowns, in line with regulations, our SA and UK operations were shut in April 2020, excluding the SA Retail division. Restrictions in the AME region were slightly less onerous, affording some trading activity. The gradual easing of restrictions in SA and the UK in the first and second half of the reporting period enabled improved performance of the business while complying with regulations.

Revenue

Revenue from continuing operations declined to R4.7 billion (2020: R6.5 billion). This decrease can be attributed to poor trading conditions across our markets. Brands revenue declined to R567 million (2020: R974 million), reflecting lower royalty payments due to lower turnovers. Supply chain, which comprises the Manufacturing and Logistics divisions and supports the Brands division in SA, was particularly hard hit by restrictions. Compared to the prior year, Manufacturing revenue declined by 24% to R2.1 billion while Logistics revenue decreased by 27% to R3.0 billion. The Retail division, which supplies third-party retailers and wholesalers in SA with branded licensed products, was permitted to trade throughout the lockdown. Sales reported for the period were R151 million (2020: R124 million).

Operating profit before non-operational items and operating profit margins

Due to COVID-19's toll on the business, the Group's operating profit before non-operational items declined to R193 million (2020: R912 million). Our SA business experienced a decline in margin to 5.9% (2020: 13.8%). The AME region recorded a margin of 9.5%, down from 17.5% in the prior year. The financial year played out in one of the toughest economic years the UK has seen due to the COVID-19 pandemic and the subsequent lockdown situations. The profit margin for Wimpy UK was 12.8%.

The COVID-19 pandemic shifted the Group into a survival masterclass.

LEADERSHIP COMMENTARY

Wimpy UK had a weaker performance, demonstrated by a decrease of 38% in operating profit to R14 million (2020: R23 million). The Group's overall profit margin was 3.8%.

Net finance costs

The Group's net finance costs decreased to R214 million (2020: R219 million). We have secured more favourable terms on the refinanced debt structure.

Income from associates

The Group holds equity stakes in the following associates: Sauce Advertising (37%), UAC Restaurants (Mr Bigg's) in Nigeria (49%) and FoodConnect (49%). The Group's

share of associates' profit for the review period was R5 million (2020: R5 million). The Group sold its 49.9% stake in It's a Matter of Taste, comprising the By Word of Mouth and Frozen for You brands.

Profit attributable to noncontrolling interests

Non-controlling interests are JV partnerships we hold with the founders of key businesses in our Manufacturing division and Signature brands portfolio. Profit attributable to non-controlling interests declined to R23 million (2020: R65 million).

HEPS and earnings per share (EPS)

Headline loss per share was recorded at -86 cents (2020: HEPS of 417 cents) while EPS dropped to negative 1 237 cents (2020: 362 cents). EPS decreased due to impairments recognised during the review period and poor financial performance.

Lebo Ntlha

Cash flow movement during the review period (R million)

* Includes discontinued operations.

* Excludes net finance costs paid, income tax paid and dividends paid.

About Famous Brands Value creation process

Governance and remuneration

Cash flows and financial position

Salient features	2021	2020
Statement of cash flows
Cash generated from operationsR million	574	1 340
Net cash outflow utilised in investing activitiesR million	(71)	(116)
Net cash outflow from financing activitiesR million	(308)	(554)
Cash realisation rate*%	116.7	107.9
Statement of financial position
Cash and cash equivalentsR million	444	486
Net asset value per shareCents	390	1 797
Net debt^R million	1 370	2 574
Net debt/equity (gearing)%	351	143
Total equityR million	391	1 800
Return on equity (ROE)**%	(7.9)	25.1
Return on capital employed (ROCE)^^%	(50.9)	20.0

* Cash generated by operations as a percentage of EBITDA.

^ Total interest-bearing borrowings (including lease liabilities) less cash.

** Headline earnings as a percentage of average total equity.

^^ Operating profit including non-operational items, divided by capital employed (which is calculated as the sum of total equity and interestbearing debt and lease liabilities).

Net cash inflow from operating activities

The Group generated cash from operations of R574 million (2020: R1.3 billion), with a cash realisation rate of 116.7% (2020: 107.9%). Working capital changes for the review period were R94 million compared to R112 million reported in the previous reporting period. We have put significant work into managing our working capital in an incredibly difficult year in which our trading activity was constrained by the COVID-19 pandemic. The Group's net cash inflow from operating activities was R337 million (2020: R692 million).

Net cash outflow utilised in investing activities

We put a freeze on non-critical capital investments considering the

Debt structure and financial covenants

We successfully concluded our negotiations with the Group's primary lender regarding a more favourable debt finance structure (refer to Borrowings Note 19, 165). The debt covenants were concluded as set out below.

Dates	Leverageratio	Interestcoverratio	Liquidity
Feb-21		Not required^^ Not required^^	R250 m^
Aug-21	3.75x	2.75x	R250 m
Feb-22	3.25x	3.00x	R250 m
Aug-22	2.60x	3.00x	R250 m
Feb-23	2.50x	3.00x	R250 m
Aug-23	2.50x	3.00x	R250 m
Feb-24	2.50x	3.00x	R250 m

^ The liquidity covenant test for the year ended 28 February 2021 has been satisfied.

^^ As agreed with the Group's primary lender, these financial covenants were not required to be measured for the period under review.

COVID-19 pandemic. Capex incurred

on additions to property, plant and equipment and intangible assets decreased to R84 million (2020: R173 million). This represents 67% invested in our SA business (2020: 68%), 3% in our UK business (2020: 20%) and 30% in our AME business (2020: 12%). Famous Brands bought out the minority shareholders of Salsa Mexican Grill in October 2020, which means that the brand is now 100% owned by Famous Brands. This buyout was obligatory as specified in the initial purchase agreement which contained a put option.

Net cash outflow from financing activities

The net cash outflow from financing activities was R308 million (2020: R554 million). The Group allocated R188 million (2020: R430 million) towards deleveraging the balance

sheet. The Group's closing cash position as at 28 February 2021 was R444 million (2020: R486 million).

Financial position

The Group's balance sheet remains strong with net assets of R391 million (2020: R1.8 billion), representing a net asset value per share of R3.90 (2020: R17.97). The decrease in net asset position is largely attributable to the impairment of GBK, at R1.5 billion pre-tax. The gearing ratio increased to 351% (2020: 14.5%) mainly as a result of the GBK impairment. ROE decreased from 25.1% to -7.9%. ROCE was -50.9% (2020: 20.0%).

Going concern

The going concern assumption is evaluated based on information available up to the date on which the Annual Financial Statements (AFS) are approved for issuance by the Board. While there is widespread uncertainty regarding the extent of the impact of COVID-19 on the economies of the geographies in which the Group operates, key being South Africa, the going concern assumption was considered to be appropriate for the preparation of the Group's AFS for the year under review. In this regard, key considerations included:

the Group's outlook regarding trading conditions that will persist into the foreseeable future;
the Group's debt service and covenants requirements;
the Group's working capital requirements and access to short-term funding; and
the Group's unutilised facilities.

Post-balance sheet events

Famous Brands Design Studio (Pty) Ltd trading as DHQ has from March 2021 transitioned to an associate company. Famous Brands now holds 49% – formerly 60% – after the creation of the DHQ employees share trust. Famous Brands

Management Company (Pty) Ltd donated the shares to the trust. Famous Brands Great Bakery Company (Pty) Ltd trading as Bread Basket was 51% owned by Famous Brands and this majority stake was sold on 1 May 2021 to our long standing partner and family founders

of the business.

Lupa Osteria was 51% owned by Famous Brands. On 1 May 2021 Famous Brands acquired the 49% non-controlling interest from the founders of Lupa Osteria , Guy Cluver and Chris Black.

None of the above transactions were categorised transactions in terms of the Listings Requirements of the JSE.

Liquidity review

Our cash flow forecasts reveal that the Group's overall liquidity, which considers potential future restrictions due to COVID-19, remains adequate and stable to meet our working capital and operational needs for the foreseeable future. The Board and management remain committed to meeting obligations to suppliers and service providers according to negotiated terms.

The Group has a solid, mutually beneficial relationship with its primary lender, which allows for a steady funding platform and essential liquidity for the business.

GROUP FINANCIAL DIRECTOR'S REPORT continued

Value creation process

Strategic intent and viability

COVID-19-related measures to ensure financial viability

We undertook the following measures to ensure the financial viability of our business:

we froze capital expenditure and headcount;
took several measures to reduce salary costs including salary cuts, furloughing employees, small scale retrenchments and freezing planned salary increases; froze planned salary increases;
Board members agreed to fee sacrifices;
we renegotiated rental terms on behalf of franchise partners and for Company-owned restaurants; and
we commenced plans to disinvest from non-core operations.

Dividend

We will not be declaring a dividend for the period under review. The restriction from our primary lender is that the Group will need two measurement periods to reduce net debt: EBITDA to be less than 2.5 times before resuming a dividend. The Board acknowledged the importance of the dividend to shareholders and has committed to resuming dividend payments in the future.

Brands summary

Our Brands portfolio comprises Leading brands and Signature brands. The Leading (mainstream) brands portfolio is segmented into Quick Service and Casual Dining brands. Several of our Signature (niche) brands are JV partnerships with the founders of the respective brands. 98

Our brands are represented through a network of 2 725 franchised and 48 Company-owned restaurants in SA, AME and the UK.

Salient features – Global footprint

	Start ofFY2021	Newstores	Convertedstores	Revampedstores	Storesclosed	End ofFY2021		Segmentrevenue(%)	Like-forlike salesgrowth(%)	Operatingmargin(%)
AMESA	3102 451	1374	02	578	5791	2662 436	102	611	(23.1)(32)	9.529.9
Leading brandsSignature brands	2 291160	695	20	771	5140	2 311125
UK	67	5	0	7	1	71	103	2		12.8
	2 828	92	2	90	149	2 773

SA

	Leading brands
Salient features – SA	2021	2020
Segment revenue (%)	86.6	80.4
Like-for-like sales growth (%)	(29.1)	3.5
Operating margin (%)	40.9	57.4
Total number of restaurants	2 311	2 290
New restaurants opened	74	81
Number of restaurants revamped and/or converted	80	260
Number of restaurants closed	65	34

Outlook

COVID-19 caused significant disruption to our business, especially during the hard lockdowns where minimal trading activity was possible. We anticipate that our revenue recovery will be slow with incremental improvements as consumer confidence returns to the markets where we operate.

Our focus for the coming year is centred on creating further operational efficiencies, prioritising core operations, optimising investment returns for our franchise partners and preserving cash. This will be achieved through:

growing our Leading brands and Retail division and building depth in the AME region;
disinvesting from non-core brands; and
optimising capital management and allocation.

We are concerned about the weak state of the economy which, together with the financial and psychological impact of COVID-19, will continue to dampen consumer confidence and discretionary spend. As we have seen in the review period, the easing of restrictions is followed by increased consumer activity, reflected by an upwards sales trend.

Change in auditors

As announced on SENS on 9 March 2020, there was a rotation of auditors during the financial year. KPMG was appointed to replace Deloitte as the Company's external auditor. We welcomed Nick Southon, KPMG's designated audit partner, and team as our incoming auditors. This appointment was approved by the Company's shareholders at the AGM on 24 July 2020.

Appreciation

Thank you to my colleagues for their sustained input to improve the Group's financial performance during these unprecedented times. You have demonstrated that you have the determination to withstand any crisis. We also thank our long-standing shareholders for their continued support and ongoing engagement with management and we welcome new investors.

Lebo Ntlha Group Financial Director

22 June 2021

Brands

GROUP FINANCIAL DIRECTOR'S REPORT continued

OPERATIONAL REVIEW

About Famous Brands

Steers

Launched in the 1960s in SA, Steers is an iconic hamburger brand, loved across generations for its legendary 100% pure flame-grilled burgers, hand-cut chips, fresh ingredients and real flavour.

Key developments and initiatives

Steers acted with speed to comply with different lockdown regulations and build trust with consumers
With work from home, Steers saw a shift in trading from lunch to mid-afternoon to mid-morning
Consumers ate with family rather than work colleagues, resulting in the growth of sharing meals and a higher average spend
Wacky Wednesday continues to drive sales activity as Steers continues to "own" Wednesdays as the biggest turnover day of the week
The second COVID-19 wave and lockdown in December resulted in subdued sales figures for promotional items
Escalation of input costs, most notably on beef and oil, had a massive impact on pricing strategy and margin management

Areas of focus in FY2021

Ensured that hygiene standards and COVID-19 protocols were upheld
Launched a limited menu to increase operational efficiencies
New opportunities and growth for delivery and Kerbside Collection
Developing value offering for cashconstrained consumers

Focus for FY2022

Continue to drive convenience and ensure that there is maximum presence on every available order channel
Own delivery and third-party delivery platforms will continue to be a growth driver
Continue to build capacity and drive operational efficiencies with the roll-out of self-service terminals and a mobile point of sale solution
Deliver on improved profitability for the franchise partner

Leading brands portfolio: Quick Service

Quick Service Prioritise take away and delivery offerings. These restaurants have smaller sit-down areas and focus on quick service.

	Start ofFY2021	Newstores	Convertedstores	Revampedstores	Storesclosed	End ofFY2021
Steers	617	21	0	28	7	631
Debonairs Pizza	591	26	0	21	7	610
Fishaways	252	3	0	8	7	248
Milky Lane	83	3	1	3	2	85
Fego	38	2	0	0	4	36
Giramundo	4	0	0	0	0	4
Wakaberry	6	0	0	0	3	3
Total	1 591	55	1	60	30	1 617

Debonairs Pizza

Debonairs Pizza is a market-leading Quick Service pizza brand that owes its popularity to an unwavering focus on pizza innovation, cutting edge customer-interactive technology and free home delivery, which it pioneered in 1996.

Key developments and initiatives

Consumer response to COVID-19 impacted sales from the start of the financial year
Due to the national lockdown, the brand had no trade in April and minimal sales activity in May when only delivery was allowed
From July, the brand returned to year-on-year growth with strong sales in July, October and January despite tightened lockdown restrictions
Non-delivery restaurants, particularly those in shopping malls, took the most strain as foot traffic dropped significantly
Regionally, the Western Cape was hardest hit, with the impact of the decline in tourism, absence of university students and workers in the Cape Town central business district
The brand responded to shifting consumer behaviour by enabling additional ordering channels including Kerbside Collection and rolling out with third-party delivery providers
From June 2002 we promoted our flagship speciality pizzas, sharing value bundles and the Real Deal offer at counters to meet the consumers' demand for good value
The average order value increased due to an uptick of larger sharing bundles and a decline in demand for meals for one

Areas of focus in FY2021• Ensured that hygiene standards andCOVID-19 protocols were upheld• Entrenched the use of the Debonairs Pizzaapp and delivery channel• Rolled out delivery via third-partyaggregators• Targeted communications campaigns topromote the brand's value offerings
Focus for FY2022• Online ordering and third-party delivery willcontinue to be a growth driver• Continue to promote value sharing bundles• Win market share through popular favouritesand innovative new products

Awards

Daily Sun Readers' Choice Platinum Award 2020 Best Pizza Outlets
Twitter creative award February 2021
Sunday Times Generation Next Awards 5th place in the Coolest Fast Foods brands category

Fishaways

Fishaways is SA's leading Quick Service seafood brand, offering uncompromisingly fresh and nutritious seafood- based meals that cater to the discerning and health-conscious consumer.

Key developments and initiatives

Due to the national lockdown, the brand had no trade in April and minimal sales activity in May, when only delivery was allowed
Franchise partners re-invested in the brand with three new restaurants and seven revamps
We saw an increase in consumer confidence as lockdown restrictions eased, with more consumers returning to the brand
Take away became the preferred consumer channel, supported by call and collect and delivery
A channel margin strategy was set up to better understand how each channel performs and how to better service each channel

Areas of focus in FY2021

Ensured that hygiene and COVID-19 protocols were upheld
Menu rationalisation to improve supply and operational efficiencies
Marketing campaigns including TV advertising for national promotions
Continual communication to franchise partners regarding health and safety standards

Focus for FY2022

Promotion of ordering channels including Kerbside Collection and third-party aggregators
Continued brand investment into TV advertising and across digital platforms via national and regional campaigns
The brand will leverage its strong loyal following through value propositions and promotional offerings

Milky Lane

Since the late 1950s, Milky Lane has been a household name in SA, serving deliciously decadent ice cream treats and desserts. Popularly known as the "Feelgood Specialists", this brand is a leader in the indulgence category.

Key developments and initiatives

Due to the national lockdown, the brand had no trade in April and minimal sales activity in May, when only delivery was allowed
Opened five new restaurants, closed one restaurant and relocated one restaurant
Launched the hub (standard, kiosk and pop-up formats) and spoke (carts, bicycles, carry boxes and third-party delivery) model to the franchise partner network. This model addresses downtime in restaurants during quieter morning trade and is in line with current consumer trends around impulse and convenience
Promoted the Nicecream Cakes to consumers for special occasions
Most Milky Lane restaurants signed up for third-party delivery
We launched the Milky Lane app and online ordering to drive brand turnover on new channels

Areas of focus in FY2021

Ensured that hygiene standards and COVID-19 protocols were upheld
Improved online brand presence
Accelerated adoption of third-party delivery

Focus for FY2022

• Continued product innovation and more points of purchase to improve appeal and access for consumers

OPERATIONAL REVIEW continued

Leading brands portfolio: Casual Dining

Casual Dining		Offers customers a full-service, sit-down experience.
	Start ofFY2021	Newstores	Convertedstores	Revampedstores	Storesclosed	End ofFY2021
Mugg & Bean	236	9	1	7	10	236
Wimpy	464	5	0	10	11	458
	700	14	1	17	21	694

Mugg & Bean

Since opening in 1996, Mugg & Bean restaurants have been synonymous with the spirit of generosity, and the brand's bottomless coffee, giant muffins and substantial portion sizes are legendary. Mugg & Bean is also accessible to customers through a range of convenient formats including On The Move, OTM Limited Service and OTM Express.

Key developments and initiatives

Due to the national lockdown, the brand had no trade in April and minimal sales activity in May, when only delivery was allowed
Consumers are eating out less in sit-down restaurants due to fears about contracting COVID-19 and financial constraints
Following the hard lockdown, we saw a gradual improvement in turnover performance from June to October
The second COVID-19 wave from November led to a challenging last quarter of the financial year
Airport sites were impacted by restrictions on domestic and international travel
Sit-down restaurants in major malls experienced a greater decline in customer numbers
We have grown our average basket size through relevant communications and offerings
Menu innovation was focused on value items in the form of bundling favourite items at a lower price than buying individually
Comfort food experienced growth over the past year
Our footprint remained at 236 stores. We opened several On The Move format restaurants, offsetting the closure of some sit-down restaurants
Our partnership with Discovery Vitality remained strong. We continued to develop our partnership in Healthy Dining and Vitality Active rewards -both had direct and indirect benefits to the brand

Areas of focus in FY2021• Ensured that hygiene standards andCOVID-19 protocols were upheld• Reduced menus to simplify franchisepartners' operation• Managed menu price increases below foodinflation to remain competitive• Cancelled or postponed marketingcampaigns that were not essential• Ongoing direct financial and non-financialsupport to our franchisees to guide themthrough the challenging year• Increased use of third-party delivery

Focus for FY2022• Continue our successful partnership withDiscovery Vitality and increase communicationto Discovery consumers• Enhance our presence in the digital orderingspace• Build our CRM and digital media capabilities• Re-assess our advertising plan with a focuson out-of-home media• Third-party delivery will remain a growthdriver

About Famous Brands Value creation process

Strategic intent and viability

Sustainability Leadership

commentary

Governance and remuneration

Annual financial statements

Supplementary financial information

Supplementary information

Wimpy

Wimpy is a leading Casual Dining restaurant and family favourite, built on the principle "enjoy every moment". The brand is renowned for its famous Wimpy coffee, all-day breakfasts, burgers and grills, complemented by a wide selection of shakes and desserts

Due to the national lockdown, the brand had no trade in April and minimal sales activity in May, when only delivery was allowed
Our operational plan focused on business sustainability during these uncertain times
We saw consumer behaviour change in response to COVID-19 with a shift to off-site dining as consumers were nervous to leave their homes
Our December holiday period started off well, but the second wave restrictions impacted sales as consumers become more cautious
We opened five new stores and revamped six stores, although store openings and revamps were slowed due to the pandemic
We closed 11 stores due to changing market conditions as a result of the pandemic

Areas of focus in FY2021

Ensured that hygiene standards and COVID-19 protocols were upheld
Simplified operations to deliver better efficiencies in our kitchens and improve franchisee profitability
Simplified our menu to contribute to optimal operations while enhancing our core product categories
Kept our food costs low to deliver a better bottom-line for franchise partners while still delivering a popular menu
Developed our lunch options while maintaining our leadership within the breakfast category
Utilised our newly launched app to deliver superior customer service and welcome more customers in their home language

Awards

Reach for a Dream Virtual Slipper Week Orchids Award
Read for a Dream Virtual Slipper week Assegai Certificate
Wimpy Engen Summer Campaign Craft Mention
2020 Sunday Times Generation Next Awards 3rd place in the Coolest Brands to Go Out and Eat Category

Focus for FY2022

Invest in technology to improve service speeds and customer experience
Position Wimpy as the inclusive restaurant that welcomes all South Africans
Balance price and product to ensure compelling price points and profitability
Continue strategic partnerships including Engen, FNB and Momentum
Focus on building CSI partnerships with Reach for a Dream and Lifesaving South Africa
Continue with our "safe to sit-down" promotional campaign

OPERATIONAL REVIEW continued

1 Amanda and Antoinette, Debonairs Pizza, Western Cape 2 Vasu and Asho, Mugg & Bean, KwaZulu-Natal 3 Johan and Sarel, Multiple brand franchisees, Mpumalanga 4 Hendrik, Wimpy Engen, Gauteng

5 Songeza and Phumla, Steers, Western Cape 6 Dean, Pat and team, Milky Lane, KwaZulu-Natal

About Famous Brands Value creation process

Strategic intent and viability

Governance and remuneration

Signature brands portfolio

Our Signature brands portfolio comprises a wide range of bespoke Casual Dining offerings. Some of these brands are wholly owned, while others are JV partnerships* with the founders of the respective brands. During the review period, we sold tashas and mothballed the Europa and Keg brands (excluding one new format Europa store).

OPERATIONAL REVIEW continued

* Nine stores are Company-owned.

Mythos

Mythos is a contemporary Greek restaurant with a traditional spirit, serving time-honoured dishes and modern cuisine in a stylish Mediterranean setting. The authentic dining experience is infused with the customary Greek passion for life.

Turn 'n Tender

In 1977, four brothers with a love for the finest steak, opened their first Turn 'n Tender restaurant, a traditional South African steakhouse. Four decades later the brand has evolved to become a destination for discerning lovers of steak, ribs, burgers and fine wine, in a contemporary setting.

FEGO CAFFÉ

Fego Caffé* epitomises café-style dining, serving delicious light meals and unsurpassed coffee. With the finest beans sourced from South America and Africa, the brand is the connoisseur's choice for an extraordinary coffee experience.

PAUL

Founded in 1889 in France, PAUL is an internationally renowned fifth generation family-owned artisanal bakerycafé chain. The brand's authentic French offering, served in its trademark chic restaurants or to take away, includes traditionally-crafted baked products and gourmet meals. Famous Brands holds the licence agreement for PAUL in SA.

VOVO TELO

Sustainability Leadership commentary Leadership commentary

Vovo Telo is a specialist artisan bakery, synonymous with excellence in craft baking, mouth-watering breakfasts and lunches and perfectly brewed coffee. The brand uses local artisanal products, supporting producers who share its respect for quality and integrity

House of Coffees

Established in 1965, House of Coffees is a specialist coffee shop serving a premium coffee offering and sumptuous meals. The bespoke coffee blends are enjoyed by the brand's restaurant patrons and are also available in leading retailers nationwide.

Coffee Couture

Coffee Couture is a specialised hospital coffee shop brand, situated in Mediclinic hospitals nationwide. Coffee Couture's offering comprises tasty meals, complemented by a creative coffee offering; a range of gifts and other convenience retail items are also available.

Salsa

Salsa serves authentic Mexican food prepared traditionally, with a modern, inspired twist. The cuisine is complemented by craft tequilas and beers and a dining experience epitomises authentic Mexican entertaining – vibrant, welcoming and festive.

NetCafé

Our bespoke NetCafé brand was created to cater to the Netcare Group's hospital staff, patients and their visitors. The brand offering comprises a combination of full sit-down menu, a deli section and a retail convenience outlet. Netcare operates the largest private hospital business in SA.

Lupa Osteria

With a strong Roman influence, Lupa Osteria offers modern yet traditional neighbourhood authentic artisanal Italian food in a warm, welcoming ambience. Homemade pasta and wood-fired pizzas made from the finest ingredients are complemented by a wide range of other mouth-watering meals and alcoholic beverages.

Governance and remuneration

* Moved to the Signature brands portfolio in March 2021.

About Famous Brands Value creation process

Strategic intent and viability

Sustainability Leadership

commentary

Governance and remuneration

Annual financial statements

Supplementary information

OPERATIONAL REVIEW continued

Trading conditions

Our Signature brands operated in a crowded and difficult Casual Dining market segment. Their performance reflects a year when the COVID-19 lockdown forced restaurant closures and led to capacity restrictions, curfews and alcohol bans. Constrained consumer spending and economic hardships are the main drivers of Signature brands' subdued performance, which had a significant effect on the portfolio.

Performance and focus areas

Like-for-like sales were down by 52.0% and system-wide sales were down by 53.7% for the review period. Operating margins declined to 41.1% and we achieved only 69% of our overall target to roll-out new stores and revamp existing stores. Store closures increased to 14 stores from seven stores in the prior year. In addition, 26 stores were sold as part of the tashas exit, making a total decline of 40 stores.

NetCafé and Coffee Couture, which operate in the Netcare and Mediclinic hospitals respectively, were impacted most severely. Patient numbers were restricted in hospitals nationwide. Sit-down was restricted and these restaurants relied solely on counter sales.

PAUL showed the best performance in the Signature brands portfolio. This can be attributed to the fact that the brand has strong day-trading and relies less on alcohol sales and evening trade. Sit-down, take away and delivery sales performed well during the post-lockdown period.

As margins on alcohol sales are high and bans precluded alcohol sales, most Signature brands' revenue were severely impacted. To assist restaurants, menus were streamlined to simplify restaurant operations and manage gross profit margins. Restaurants had to quickly adopt delivery platforms to capitalise on revenue where possible. When

restaurants could re-open, all hygiene, health and safety standards and COVID-19 protocols were rolled out across the portfolio.

Future focus

The pandemic and resulting economic conditions in SA will continue to impact the growth of our Signature brands portfolio significantly. To scale brands, double digit growth in Signature brands over the next five years is required. As a result, we aim to:

grow selected brands in SA;
increase franchisee profitability through operational efficiencies and cost reduction initiatives. This would entail simplification of Signature brands' operating structures;
accelerate usage of own delivery and third-party delivery platforms;
consider minority buy-outs; and • continue to seek out good
acquisition opportunities and develop own brands.

	Signature brands
Salient features – SA	2021	2020
Segment revenue (%)	13.4	19.6
Like-for-like sales growth (%)	(52.0)	(0.8)
Operating margin (%)	(41.1)	12.0
Total number of restaurants	125	151
New restaurants opened	5	11
Number of restaurants revamped and/or converted	1	2
Number of restaurants closed/sold	40	7

3 Liza and team, Mythos, Gauteng 4 Leon, Lupa, KwaZulu-Natal

1 Anita, Turn 'n Tender, Gauteng 2 Stephen, PAUL, Gauteng (joint venture partner) 5 Maria and John, Vovo Telo, Gauteng 6 Chris and team, Coffee Couture, Western Cape

Signature brands, All regions

About Famous Brands Value creation process

Strategic intent and viability

Sustainability Leadership

Governance and remuneration

AME

	Leading andSignature brands
Salient features – AME	2021	2020
Segment revenue (%)	6	4
Like-for-like sales growth (%)	(23.1)	2.8
Operating margin (%)	9.5	17.5
Total number of restaurants	266	310
New restaurants opened	13	28
Number of restaurants revamped and/or converted	5	26
Number of restaurants closed	57	41

AME	Start ofFY2021	Newstores	Convertedstores	Revampedstores	Storesclosed	End ofFY2021
Leading brands
Debonairs Pizza	110	7	–	1	18	99
Steers	45	3	–	1	7	41
Wimpy	25	–	–	–	–	25
Fego	1	–	–	–	1	–
Fishaways	9	–	1	–	2	7
Mugg & Bean	34	–	–	3	6	28
Milky Lane	8	2	–	–	1	9
	232	12	1	5	35	209
Signature brands
Keg	5	–	–	–	–	5
Europa	1	–	–	–	–	1
Mr Bigg's	72	1	–	2	22	51
	78	1	–	2	22	57
AME total	310	13	1	7	57	266

Several key developments in this region include:

a flagship Debonairs Pizza launched in Botswana, incorporating an enhanced dine-in
experience and children's play area; • we entered Oman through the opening of a Steers drive-through;
legal action to defend the Debonairs Pizza and Steers brands in Kenya was concluded with the closure of all Hoggers outlets;
the first company-owned Debonairs Pizza and Steers combo store was opened in Kenya;
a new format dark kitchen was opened for Debonairs Pizza in the UAE;
the repurchase of the UAE Debonairs Pizza master licence was concluded; and
a master licence agreement for Mugg & Bean On The Move was signed with Total Angola.

Future focus

We aim to continue leveraging strategic partnerships and geographic expansion in this region. Investments into company owned stores will still be considered, albeit at more prudent levels in order to preserve cash. We will continue to enhance online ordering, call centre and social media platform capabilities across key markets.

UK

Since GBK was placed under administration, the CDR brand Wimpy is our only brand operating in the UK. Comparative results should be viewed from this perspective.

Trading conditions

The Group trades in 17 countries in the AME region and although less stringent COVID-19 trading restrictions were imposed by AME countries, macro-economic trends were like those of SA. Consumers were impacted by the economic effects of COVID-19 and similar buying behaviours were noted as far as in-home dining vs delivery preferences were concerned. Consumers globally are more cautious of sit-down dining options.

Performance and focus areas

In the context of less stringent COVID-19 trading restrictions, the AME region delivered solid results. System-wide sales in this region declined by 22.9%.

13 new restaurants were opened in FY2021 and five stores were revamped. 57 stores closed during FY2021 for a several reasons, including operational, financial or revamp compliance failures, expiry of franchise agreements, COVID-19 financial stress and legal disputes.

QSR brands in Botswana, Ethiopia, Kenya, Nigeria and Sudan achieved a significant increase in home delivery channel sales, due to an agile response to consumer demand.

Operational efficiencies were achieved by leveraging strategic alliances, specifically petroleum partnerships, and by developing localised supply chains.

	Wimpy
Salient features – UK	2021	2020
Segment revenue (%)	112.3	122.1
Operating margin (%)	12.8	19.0
Total number of restaurants	71	67
New restaurants opened	4	2
Number of restaurants revamped and/or converted	7	0
Number of restaurants closed	1	2

Trading conditions

Overall, the impact of the COVID-19 pandemic has placed significant pressure on the hospitality industry in the UK, through one of the toughest economic years the UK has seen. Trading conditions remained tough throughout the year; however, with franchisees embracing take away services and delivery across several third-party platforms, Wimpy UK continued to trade throughout all lockdown periods.

We expect trade to increase from 12 April 2021 with the return of non-essential retail driving foot fall on the high street and then again on 17 May 2021 with the return of indoor hospitality enabling restaurants to re-open seating.

Performance and focus areas

Turnover was down by a total of 8%. Revenue in Rand terms declined to R112 million (2020: R122 million). Operating profit declined by 38% to R14 million (2020: R23 million). The operating margin for the year was 12.8% (2020: 19.0%).

The government-backed furlough scheme was implemented to contain employee costs. The Group supported franchise partners with discounts on key product lines to boost profitability and to mitigate against the high fees charged by third-party delivery platforms.

Future focus

The UK government has indicated that as from 21 June 2021, all legal limits on social contact will be removed (subject to review), which will stabilise revenue earning opportunities. Continuous focus on operational efficiencies and Wimpy revamps aims to embed the brand further in the region at profitable margins.

OPERATIONAL REVIEW continued

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Annual financial statements

Supplementary information

Vertical integration

The Group's supply chain comprises our Manufacturing and Logistics and Retail divisions, which are managed and measured independently. Most of our manufacturing plants are wholly owned, but we also operate certain JV partnerships. The Retail business sells condiments (sauces, dressings, spices), frozen meat products, coffee (ground and

beans), frozen chips and other value-added products.

	Manufacturing			Logistics	Retail
Salient features	2021	2020	2021	2020	2021	2020
Segment revenue (R million)Segment operating profit	2 118	2 771	2 994	4 095	151	124
(R million)	181	419	(13)	60	1	(22)
Operating margin (%)	8.6	15.1	(0.4)	1.5	0.5	(18.1)
Capex (R million)	20	37	4	26	–	–

Trading conditions

Manufacturing was particularly hard hit by lockdown restrictions. Government restrictions on operating times and employee capacity forced management to adapt to new operational plans based on restricted capacity. As a result, a four-day work week was agreed with unions across all plants and certain manufacturing capacity was outsourced or suspended.

Extreme food safety precautions had to be taken, more so than under pre-pandemic times. Safety protocols would dictate an immediate plan shutdown in the event of COVID-19 safety breaches.

Food trends impact manufacturing directly notably food inflation and shortages. A national shortage of potatoes required 1 250 tons be imported at higher exchange rates. The following factors are driving food price inflation:

an increase in chicken and edible oil commodity prices. Local chicken suppliers have lifted their pricing to match imported prices as new import duties filtered into the imported prices;
the shortage of oil seed in the Baltic area is affecting oil imports into SA for use in our products;
the increase in the price of soya beans had an impact on feed prices for chicken, beef and pork;
beef and pork trimmings prices have increased with 18.5% and 19% respectively. Pork ribs increased at a point by a staggering 57% before retreating;
Stats SA estimated FY2021 food inflation for the period September 2020 to February 2021 at 6%. Key drivers for the increase were meat, wheat, fruit, milk, eggs and cheese; and

• the latter part of the year saw our own price basket increase in price. Beef (10%), pork (12%), ribs (40%), green coffee beans (7%), milk and whey powders (8%), oil (16%), flour (7%) and spices (5%).

While the Eastern Cape is still experiencing a drought, good summer rains have improved dam levels and support good agricultural production. Water scarcity and electricity availability requires operational focus to drive consumption efficiencies and contribute to cleaner operations.

COVID-19 continues to affect and disrupt global supply chains. This has led to increases in shipping costs, volatile commodity prices and extended lead times for shipping and clearing. Shortages of containers and reduced routes by cargo ships caused further delays.

Hygiene, health and safety standards and COVID-19 protocols were rolled out across all operations. We focus on a leader-led safety culture across the supply chain. Asset care practices apply across the value chain and ensures sufficient maintenance capex. The focus of asset care is on safety and environmental impact factors.

Manufacturing Performance and focus areas

Manufacturing revenue declined by 24% and ultimately the operating margin by 6.5%. Across all our plants we sold 34% less units in FY2021 and produced 30% less volume. This was driven by lack of demand from the front end of the value chain and the exposure that each plant has to the different brands. Plants with higher QSR exposure performed better than plants with a high CDR exposure. Increased Retail sales due to higher in-home consumer demand assisted in softening the declined demand from stores.

Operational adjustments in capacity were made as follows to combat cost increases and/or per lockdown regulation:

• Famous Brands Bakery in Gauteng

was closed for the months of April, May and June 2020, with volume outsourced. The plant only reopened for production in July 2020; • the KZN ice cream plant was only operational for the first three weeks of March 2020 and then permanently closed. This volume moved to our Gauteng ice cream plant;
Famous Brands serviette plant was closed for three months, with volume outsourced;
specialist maintenance skills were added to the engineering team;
Four-star NOSA rating at Turn 'n Tender butchery for the first time; and
found to be fully compliant with OHS legislation.

• all plants assessed by NOSA were

Year-on-year, the capital investment is up slightly to R37.5 million. Most capital expenditure plans were deferred for FY2021. Cash preservation measures required a prudent approach around maintenance and expansion capital.

Food safety risk was managed well, and no plant stoppages occurred during the year. 100% food safety accreditation at all manufacturing facilities was achieved with, only one lost-time injury compared to 16 in the prior year.

Alan, Paul and team, Debonairs Pizza, Botswana

Trading conditions impacting the front and back end of the value chain

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Manufacturing plant statistics

		2021		2020
			Revenuegrowthyear		Revenuegrowthyear
Plant	Product	Plantsize (m²)	on-year(%)	Plantsize (m²)	on-year(%)
Famous Brands Bakery	Burger Rolls
Gauteng		1 065	(31.2)	1 065	(4.1)
Famous Brands Coffee	Espresso and filter coffee and
Company^	powdered products	1 850	(43.4)	1 850	(7.7)
TruBev^	Juice and water	1 650	(50.5)	1 650	33.9
Famous Brands Meat Plant	Beef and chicken patties, boerewors,
	sausages and pizza toppings	6 045	(21.4)	6 045	6.2
Turn 'n Tender Central	Brand-specific, choice-cut
Kitchen^	meat products	905	(43.2)	905	0.2
Cater Chain^	Beef, lamb, mutton, chicken and pork	8 950	(18.5)	8 950	15.2
Famous Brands sauce	Steers, Wimpy and Debonairs Pizza
and spice plant	sauces, sugar and seasoning sachets	2 970	(17.1)	2 970	(2.4)
Famous Brands	Soft serve, hard ice cream and
ice cream plant	milkshake flavours	980	(23.8)	980	1.9
Famous Brands Fine	Mozzarella, cheese slices,
Cheese Company^	cheddar cheese and cheese spread	5 200	(13.3)	5 200	13.1
Famous Brands Great	Specialised breads, baked and frozen
Bakery Company^	products, pastries and confectionaries	652	(28.4)	652	(9.5)
Lamberts Bay Foods	French fries and other value-added
	potato products	13 000	(23.4)	13 000	(23.3)
Famous Brands
serviette plant	Serviettes	244	(36.9)	244	9.8

^ JV.

Future focus areas

Ongoing focus on enhancing efficiencies and reducing costs to improve sustainable profitability of the business and franchise partners;
stringent working capital management measures;
ongoing focus on maintaining and improving NOSA ratings;
implementing a new bacon production system to manage pork costs; and
the upgrade of the effluent plant at our Meat Plant.

Logistics

Salient features	2021	2020
Number of trucks	109	104
% of cases delivered by owner drivers	42	61
Energy consumption (diesel, petrol, other) (L)	1 853 511	2 733 400
CO₂ emissions	5 414	8 037
Number of owner drivers	28	37

live racking; and

increased Gauteng ambient distribution centre capacity by 692 additional pallets storage by installing bridge bay racking and
increased the Eastern Cape distribution centre capacity by re-racking the facility and gained 20 additional pick faces and 160 pallet storage capacity.
Our capex of R4 million focused on driving efficiencies and increasing

depot capacity.

Future focus areas

centres;

Review current national fleet mix; • roll-out of warehouse management systems across the KZN and Eastern Cape distribution
implementation of the AARTO management system. Review all policies and procedures to align with the new AARTO Act that is scheduled to go live 1 July 2021; • ongoing benchmarking of logistics processes, costs and margins to market best practice to enhance efficiencies and reduce operating
continued focus on management and reducing negative environmental impacts.

costs; and

Performance and focus areas

Logistics revenue decreased by 27%, mainly due to lower case volumes and this decrease filtered through to an operating margin of -0.4%. To maintain logistic efficiency, we focused on route planning optimisation. This initiative had to be balanced with restaurant delivery requirements where bursts in open economy during lockdown required inventory delivery on a somewhat irregular basis and cash flow pressures experienced were top of mind and whilst it would have been tempting to cut frequency of deliveries this would have been counterproductive in our support of franchise partners..

Distribution had to be adapted to the conditions in lockdown as follows:

decommissioned the Longmeadow primary distribution centre to consolidate primary distribution volume into the Gauteng ambient distribution centre;
relocated the Limpopo cross-dock to a new site to optimise routes and deliver full basket (ambient and frozen) in multi-temperature units;
decommissioned the Mpumalanga distribution centre to open a new cross-dock facility to optimise the operations and routes;

Performance and focus areas

The Retail business has operated for a full financial year as a stand-alone business unit. Sales reported for the period were R151 million (2020: R124 million). This business unit saw an increase in sales during the COVID-19 lockdown as consumer demand for at-home consumption increased. We launched several new product lines, including coffee, sauces and house brand products.

Future focus areas

Launch a new range of dressings and sauces;
Expand on the range of potato products offered to retail chains; and
Introduce new coffee pack designs and size variations.

Shareholding owned by the Group

49%

Shareholding owned by the Group

37%

Shareholding owned by the Group

49%

The Group holds strategic stakes in the following entities: UAC Restaurants Limited in Nigeria and Sauce Advertising and FoodConnect in SA.

This business comprises the Mr Bigg's and Debonairs Pizza brands in Nigeria, as well as a central kitchen (bakery and manufacturing) and distribution component.

Sauce assists the Group by providing enhanced marketing capabilities and leveraging marketing spend with the aim of improving the business's competence

in the digital market.

FoodConnect is a sales and distribution business in the food and beverage sector. It owns the rights to the Group's Baltimore ice cream brand and distributes and sells the product on to third parties, which affords the Company a strategic route-to-market. As a Level 2 BBBEE contributor, FoodConnect supports the Company's transformation agenda.

Group associates

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GOVERANCE AND REMUNERATION OVERSIGHT SUMMARIES

Governance at a glance

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Remuneration at a glance

Pay for performance: executive directors

BU: Bargaining unit; TCC: Total cost to company = Basic salary + medical insurance + retirement fund + benefits; STI: Short-term incentive; LTI: Long-term incentive; 13th Cheque: One month's TCC; Executive directors refers to the CEO and the Group FD, while the Executive Committee is referred to as Exco. Executive management team includes the executive directors and Exco

STI

Profile of scorecard	%
Personal weighting	30
Group and/or regional weighting	70
Financial and operational plan performance	60
Market-share performance and customer measures	20
People performance	10
Transformation and ESG	10
Total	100

Percentage STI earned adjusted based on personal performance rating

Remuneration landscape and eligibility

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BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT

Non-executive directors Executive directors Exco

Independent non-executive director B Bus. Sci (Hons), MBA

Christopher Hardy Boulle (49)

Independent non-executive

director BCom, LLB, LLM

Deon Jeftha Fredericks (60) Independent non-executive director

BCompt (Hons), Business Management (Hons), CA(SA), CIMA

Alexander (Alex) Komape Maditse (58)

Independent non-executive director

BProc, LLB, LLM, Dip Company Law

Thetele Emmarancia (Emma) Mashilwane (45)

Independent non-executive director

CA(SA), RA, MBA, BCompt, BCom (Hons)/CTA, Global Executive Development Programme

Nicolaos (Nik) Halamandaris (46) Non-executive director

Darren Paul Hele (49) Chief Executive Officer BCom

Non-executive directors Executive directors Exco

Santie Botha (56) Independent non-executive

Chairman

BEcon (Hons) The Chairman of the Board is independent.

years	More than10 years

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BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT continued

Exco demographics (%)

Male Female

Business Marketing Strategy Risk Finance Legal Audit

Governance Franchising Food services

Property management

Stakeholder engagement

Statistics

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GOVERNANCE AT FAMOUS BRANDS

Good governance is at the heart of our business. Our governance practices help us achieve our objectives, drive improvement and maintain our ethical reputation in the eyes of shareholders, regulators and the wider community.

Our approach to governance

Famous Brands' governance philosophy is integral to its business approach and is based on our seven core values (refer to 5 for our values) established over more than five decades. The Board and management of Famous Brands exercise effective leadership through living these values and applying the four King IV governance outcomes, namely ethical leadership, sustainable value creation, effective control and legitimacy.

The Board is satisfied that the delegation of authority framework contributes to role clarity and the effective exercise of authority and responsibilities are disclosed.

Board composition

Refer to the detailed CVs on 169.

In line with King IV and the Board Charter, the Board comprises a majority of independent non-executive directors (six), two non-executive directors and two executive directors, being the CEO and the Group FD.

Board diversity and balance of skills and experience

The Board values diversity of gender, race, age, culture and fields of expertise. In FY2020, the Board adopted a broad Diversity Policy as part of the Nominations Committee Charter. The Board is satisfied that the size of the Board and the knowledge, skill, diversity, experience and

independence of the Board members are appropriate for the Company. No targets have been set for gender and race representation in the membership of the Board.

Rotation and changes to the Board

The following directors will retire by rotation and have made themselves available for re-election at the AGM:

• Santie Botha (Chairman); and • Nik Halamandaris.

The Board supports their re-election. Although Santie Botha is completing her ninth year as an independent non-executive director, the Board is nevertheless satisfied of her independence in her role as an independent non-executive director and Chairman.

There were no changes to the composition of the Board in the review period. Succession planning is in place to replace the CEO and other key non-executive and executive positions.

Emma Mashilwane has given notice to the Board that she intends to retire at the upcoming AGM and will not be available for re-election as an independent non-executive director. She will further step down as a member of the Audit and Risk Committee and chairman of the Remuneration Committee.

The Board has approved the appointment of Fagmeedah Petersen-Cook to the Board with effect from 1 June 2021. Her appointment will be tabled to shareholders for approval on 23 July 2021 at the Annual General Meeting. Following the Annual General Meeting, the following changes will take effect:

Chris Boulle will succeed Emma Mashilwane as Chair of the Remuneration Committee;
Fagmeedah Petersen-Cook will succeed Chris Boulle as Chair of the Investment Committee; and
John Halamandres will step down as full-time member of the Investment Committee but will remain an invitee.

Lebo Ntlha has resigned as Group Financial Director with effect from 30 November 2021. The Board has begun the process to select an appropriate successor.

Board and Committee performance Key governance matters addressed during FY2021

Operational	Strategy andfinancing	Risk management,internal controland compliance	Corporate andperformancereporting	Corporatecitizenship
• Approved measuresto reduce costs(retrenchments,salary cuts, Boardfee reductions)• Reviewed and notedthe adjustmentsrequired in fleet andlogistics capacity andplanning in responseto lockdown• COVID-19 protocolsand measures werereviewed andmonitoredfor effectiveimplementation	• Review investmenthurdle rates andinvestment choicesadapted based onCOVID-19 impacts• Reviewed adjustedbusiness plan• Approved thedisposal ofnon-core assets• Approved theminority buy-out ofSalsa Mexican Grill• Approved thedecision not toprovide furtherfunding to GBK• Approval of adaptedthree-year strategyroadmap to accountfor COVID-19influencedadaptations• Monitoring workingcapital• Approval ofmanagement'snegotiatedNedbank facility• Approval ofvarious financialmechanisms toaccommodatefranchise partnersin time of crisis	• Transition of newexternal audit firm• Reviewedcompliance of AFSwith JSE proactivemonitoringrecommendations• Reviewed InternalFinancial Control'sprogramme tosupport GroupFD/ CEO attestationstatement• Critical evaluationof effectiveness ofhealth and safetyprotocols roll-outacross the Group• Monitoring progressto ready the businessfor POPIA andAARTO regulation• Understanding theimplications ofenterprise resourceplanning legislationon logistics	• Reconsideredremuneration basedon the impact ofCOVID-19• Evaluated Boardperformance• Reviewed Boardsuccession andcomposition in linewith Diversity Policy• Ongoing training ofBoard members• Recommended theappointment of anew independentdirector with digitaland IT skills	• FurtheringSDG integration• Maintained Level 4BBBEE status andassessed theimplications ofchanging scorecardson currentcontributor level• Approval of fooddistributiondonations andcontinued donationsto beneficiaries ascommitted to beforeCOVID-19

Legal Audit

Board and Committee Charters

The Board and its Committees have Charters that are reviewed on an annual basis. The latest reviews took place during the period under review and, where necessary, the Charters were amended or updated in line with the King IV recommendations and the JSE Listings Requirements.

Meeting attendance for the reporting period

	Board	Auditand RiskCommittee	Socialand EthicsCommittee	NominationsCommittee	RemunerationCommittee	InvestmentCommittee
Number of meetingsBoard/Committee	13	3	3	3	3	–
members	10	3	4	3	3	–
Meeting attendance
NJ Adami	12	3	–	3	–	–
SL Botha	13	3*	–	3	3	–
CH Boulle	13	3*	3	–	3	–
DJ Fredericks	12	3	–	–	–	–
N Halamandaris	13	3*	3	–	–	–
JL Halamandres	11	1*	–	–	–	–
DP Hele	13	3*	3	3*	3*	–
TE Mashilwane^	13	3	–	–	3	–
K Ntlha	13	3*	–	–	–	–
A Maditse	13	2	3	3	–	–

* By invitation.

^ Resigned 4 March 2021.

Performance evaluations

Performance evaluations of Board members and the overall effectiveness of the Board were undertaken during the review period.

The Board undertook a performance self-evaluation in May 2020, reviewing its performance under the following categories:

Board Composition
Board Culture, Role and Responsibilities
Board Committees
Relationship between Board and Executive Management
Board Meetings
Evaluation and Fees
Leadership
Stakeholder engagement

The Board concluded that it was functioning well with open and thorough discussion of issues. The Board and management work well together and are addressing key concerns and matters. There has been improvement in terms of concise yet sufficiently detailed and informative packs. The tone set by Exco is highly rated especially with the introduction of a risk culture which has been embraced by Exco.

The Board further concluded that the key focus areas for 2021 include:

Board composition in terms of age and gender split be improved on for succession purposes when considering new directors for appointment. Retail, digital and e-commerce skills should be considered;
deep dives into strategy covering various topics should continue;
feedback from stakeholder engagements should be more regularly communicated.

The Board agreed that the next evaluation should take place in October 2021 and that at this stage it was comfortable that the evaluation does not need to be externally facilitated.

The Board is satisfied with the performance and effectiveness of itself and its Committees.

Leading ethically and effectively

The Board

The Board is held accountable for ethical and effective leadership through a Code of Conduct and performance evaluations of the Board and its members. Declarations of Interests of all members are regularly reviewed and updated, and possible conflicts of interests are noted at every meeting. The Nomination and Governance Committee will consider any interests of board members that are of concern and the Chairman of the Board or Chairman of a relevant Committee will be mandated to discuss the matter with the member concerned.

The Company

The Company has a Code of Ethics that is reviewed on an annual basis. Compliance with the Code is a requirement of employment. To maintain ethical culture, we have the following :

the Gift Policy;
Ethics Management Programme;
- the Whistle-blowing Policy; • the Anti-Occupational Fraud
- Policy; and • trained 42 managers through
- The Ethics Institute (cumulative number of managers trained: 77).

Other standard Famous Brands e-learning modules offered to employees to establish ethical conduct, due care and compliance include, among others: • Meeting Etiquette

Dealing with Bullying
Sexual Harassment
- Risk Management
- Labour Relations Act

• Basic Conditions of Employment

Act

Occupational Health and Safety
Workplace Ethics
Protection of Personal Information Act
Public Finance Management Act
Workplace Professionalism
Treating Customers Fairly (TCF)
FAIS Awareness
FICA (AML and CTF)

We received 13 calls on the whistle blowing hotline of which six cases were investigated and the remainder of the calls were concept queries only. Of the six cases requiring investigation, five were resolved leaving one open case at year-end. The whistle blowing cases investigated related to theft of assets, unfair labour practice, inappropriate discounting, misappropriation of funds and unethical vendor practice.

Technology governance

To thrive in a digital world, it is essential for an organisation to establish a technology governance framework that embraces disruptive technologies and encourages innovation while ensuring risks are identified and managed.

At Famous Brands, we deploy technologies to assist with quality assurance and remove risk of human error from critical operational and financial data. This enables effective decision making and quality reporting. In the current year it was particularly important to deploy payment and ordering solutions to mitigate the sustainability risk of the organisation. Technology applications assist with capturing critical consumer information, such as location, safely and accurately. Secure payment platforms are critical to keep information safe and mitigate unlawful access. Technologies fundamentally assist in each of our strategic objectives.

GOVERNANCE AT FAMOUS BRANDS continued

The Board is satisfied that it has fulfilled its responsibilities in accordance with its Charter for the period under review.

Board and Committee meetings

Value creation process

Our focus this year was to oversee the implementation of critical technologies to assist in business sustainability.

Promoting online ordering We deployed e-gifting, kerbside collect and loyalty features in applications. Huawei app gallery additions for all applications;
ensuring a safe payment environment – We implemented cloud-based POS functionality, introduced mobile POS devices and integrated ordering application with other technologies such as Mpesa and Zapper. We introduced self-service terminals and "order-and-pay-attable"; and
health and safety monitoring – Our comply system provides critical raw material data to ensure food safety. It monitors plant conditions and issues alerts in the case of health and safety risks.

Projects included:

Project Mercury reviewing the current e-commerce environment to ensure that Famous Brands is using best-inclass technology at the most cost efficient rates;
Project Switch creating a single payment switching environment to enhance current payment platforms, systems and rates available to franchisees;
CRM enabling the brand teams to run personalised consumer marketing campaigns using consumer data ingested via multiple sources. This data is then sorted, cleaned, modelled and segmented according to strategic and ad hoc requirements and enabled via a web portal with a simple user interface;
E-Vouchering enabling brands to remove plastic credit card-based gift cards with digital versions that are simple to purchase, simple to

issue and applicable to all points of purchase in the Famous Brands ecosystem; and

• Yext – international online search and reputation management platform.

The Audit and Risk Committee will oversee critical technology deployment planned for FY2022 noting the ability of critical technologies to reduce risks related to cyber attacks, secure payment and financial sustainability. These technologies include:

CRM system for personalised marketing communications;
social commerce;
chat commerce;
- payments platform for all brands, channels and franchisees;
- integration platform for all channels, service providers, systems and partners, with the aim of creating a Famous Brands platform that drives all the digital outputs required at restaurant and consumer level;
- artificial intelligence for consumer data in order to enhance personalisation and propensity marketing;
- enhanced recons and reporting for franchisees;
- cloud-based point-of-sale;
- Wi-Fi captive portal for brand consistency and consumer data capture; and
- in-venue beaconing.

Compliance

Several key regulatory and legislative developments occurred during FY2021. Attention was given to the progress of the business to ready itself for compliance in these areas. Key compliance areas include:

POPIA: Tracking progress of readiness programme;
AARTO: Understanding the business impact on our logistics fleet;
JSE Listings Requirements: Oversight of the progress and findings related to the internal control environment enabling the required CEO and Group FD attestation statement in the AFS;
NOSA gradings: Monitor progress to 100% NOSA compliance for all plants;
fines and penalties review: We disclose that we received no material or repeated regulatory penalties, sanctions or fines for contraventions of, or noncompliance with, statutory obligations, whether imposed on the Company or on members of the or on officers of the Company; and
environmental compliance review: We were found to be compliant with environmental regulations and have no findings of noncompliance with environmental laws, nor criminal sanctions and prosecutions for such non-compliance.
Our planned future areas of focus are:
Extended Producer Responsibility: Understanding the proposed law and providing feedback;
Continued monitoring of system implementation and operational changes to comply with POPIA; and
A formal legal and regulatory framework be developed and communicated.

Combined assurance

The Audit and Risk Committee supports the Board in entrenching combined assurance processes across the Group. The Committee is responsible for overseeing Famous Brands' system of internal control which is intended to evaluate, manage and provide reasonable assurance against material misstatement and loss. The Audit and

Risk Committee, together with the Group Risk Executive, oversees that risk and opportunities are properly identified, assessed and quantified. The Board is further supported by divisional management through the Group Risk Forum. The Group's combined assurance model enhances the assurance obtained from management and internal and external assurance providers while developing a strong ethical environment and mechanisms to ensure compliance. The Internal Audit and Risk departments ensure adequate controls are in place. The external auditor, KPMG, covers key controls and accounting matters during its audit.

Internal audit

Famous Brands conducted 16 internal assurance audits across the business (2020: 17) of which 81% was executed by internal resources (2020: 59%). These audits included the Famous Brands Management Company, Famous Brands Cheese Company and Cater Chain. Our focus for 2021 was on Manufacturing, Logistics and Corporate. The scope of our work included inventory management, COVID-19 regulatory compliance, general financial controls and correct payroll administration (accuracy of salary payments, TERS payments, notice pay, and severance pay). Three plants and five Distribution centres were included in the inventory management audits. General financial control audits were performed at central Finance, Manufacturing and Logistics level and included controls over revenue, trade receivables, financial reporting and treasury.

GOVERNANCE AT FAMOUS BRANDS continued

Company Secretary

Celeste Appollis, the Company Secretary, ensures that the Board is aware of its fiduciary duties and that the Board and management execute their functions in accordance with the Board's Delegation of Authority. In addition to acting as Secretary to the Board and its Committees, she facilitates the appointment, induction and ongoing training of all directors. The Board and each individual director have unfettered access to the Company Secretary. The Board has assessed the Company Secretarial function in accordance with the JSE Listings Requirements and the Companies Act and is satisfied that Celeste has the necessary experience and expertise to fulfil the role and that there is an arm's-length relationship

between her and the Board in order to effectively execute her role. The Board has confidence in the arrangements in place for accessing professional governance services and that these arrangements are effective. As a Company Secretary, Celeste can reach out directly to the Chairman of the Board to raise issues of concern.

About Famous Brands Value creation process

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Governing and managing ethics

We have the following measures in place to ensure that we adequately govern and manage ethics within the Group:
activities of the Committee and Social and Ethics Working Group reported to the Board;
published policies related to ethics published on the Group intranet;
Whistle Blowing Policy in place together with channels to report unethical activity;
training for managers and executives.
regular communication campaigns to employees on topics related to values and ethics; and

Oversight areas

The Committee, together with Social and Ethics Working Group (made up of the executives of the Group), have adopted best practice as recommended by the IoDSA, which encapsulates King IV, the Companies Act, the 10 Principles of the UN Global Compact and legislation related to the areas below:

SOCIAL AND ETHICS COMMITTEE REPORT

The purpose of the Social and Ethics Committee (Committee) is to assist the Board in discharging its oversight responsibilities regarding how the Company does business according to its values, ethical standards and social responsibility. The duties of the Committee as outlined in the Companies Act include oversight over social and economic development, good corporate citizenship, the environment, health and public safety, consumer relationships

and labour and employment.

Mandate

Attendance and composition

Composition and meeting attendance

Three meetings held in FY2021

Chairman

• CH Boulle (3/3)

Members

DP Hele: CEO (3/3)
N Halamandaris (3/3)
A Maditse (3/3)

Invitees

J Mahange: Group HR Executive
AC Mundell: Group Executive: Business Development
N Ndaba: Group Risk Executive
R Jivan: Group Transformation Manager
CD Appollis: Company Secretary

About Famous Brands Value creation

process

Strategic intent and viability

Sustainability Leadership

Annual financial statements

Focus areas for the reporting period

During the review period, the Committee and/or the Social and Ethics Working Group worked on the following issues:

Focus areas for FY2022

The key focus areas for the Committee for FY2022 are:

wage negotiations with unions;
improve POPIA awareness among employees;
POPIA gap analysis and remedial actions;
organising policy documents on the intranet to make them more accessible to employees;
improving staff communications through digital tools;
migrating training material online;
transformation reporting;
set targets against our selected UN SDGs;
developing a Competition Law Compliance Policy;
- publishing and circulating our new CSI policy;
- coming year;
- investigate new ESD projects; and • investigate extended Producer Responsibility (a newly gazetted
maintaining Level 4 BBBEE status;
improve the detail of
recommending CSI projects for the
requirement to ensure that producers are responsible for the product they produce throughout the sourcing, production and

disposal process). The Committee is satisfied that it has fulfilled its responsibilities in

General

Reviewed and approved the Committee Charter
Reviewed and approved annual Committee workplan
Reviewed and accepted management's feedback (based on relevant legislation and best practice) regarding the Group's activities relating to:
» Social and economic development
» Good corporate governance
» ESG matters
» Consumer relationships
» Labour and employment
Reviewed and recommended to the Board for approval the non-financial disclosures contained in the IAR
Approved the Group's CSI Policy and provided the Board with updates on existing projects and progress achieved, as well as made recommendations regarding new proposed projects

Transformation

Reviewed and reported to the Board on the Group's employment equity performance relative to the Group's Employment Equity Plan
Reviewed and reported to the Board on the Group's detailed BBBEE strategy, targets and budget, as well as progress made aligned to the scorecard
Reviewed and approved the approach regarding the employment of people with disabilities
Noted the impact of COVID-19 on the BBBEE strategy

Ethical conduct

Noted roll-out of the Group's Code of Ethics and policies regarding gifts, conflict of interest, fraud and whistle blowing
Monitor the progress of ethics training across the Group
Ensured management conducted an employee survey, the results of which will be assessed in FY2022
Whistle blowing cases monitored and investigated
Conflict of Interest Declaration Policy exercise
Equal work for equal pay analysis completed in 2021
Considered and debated the IODSA Practice Note on Group Governance

Environmental impact

Evaluated management plans and its progress. These projects related to:

Measures to monitor and improve our water and electricity consumption
Working towards the 2025 cage-free eggs commitment
More environmentally friendly packaging options
An initiative to reduce food waste

Health and safety

Monitoring our health and safety procedures against globally accepted best practice
Monitoring enhanced food safety measures across the business and the new implementation of the system rolled out for food safety effectiveness
Monitored management's implementation of COVID-19 protocols across the operation and reports on COVID-19 statistics across the Group
Monitoring management initiatives to address consumption of water and electricity in the Manufacturing businesses
Reviewed safety reports related to injuries and fatalities and agree on extended management reports to include near miss incidents

accordance with its terms of reference for the reporting period. As chairman of this Committee, I will be present at the Group's AGM to answer any questions regarding the statutory obligations of the Committee.

Chris Boulle Chairman: Social and Ethics Committee 22 June 2021

SOCIAL AND ETHICS COMMITTEE REPORT continued

Tim, Mythos, Gauteng

Focus areas for the reporting period

During FY2021 the Committee focused on the following:

Reviewing and approving remuneration-related disclosures in the IAR and AFS;
completing an annual review and update to our Charter and workplan;
drafting the Remuneration report for presentation at the AGM for purposes of passing non-binding advisory votes on the Remuneration Policy and Implementation report;
submitting a proposal on changes in STI and LTI metrics based on current market trends. The Committee considered the impact of the proposed metrics in relation to fair remuneration principles;
evaluating the scope of the STI rules;
considering an amended Executive Job Evaluation Report presented to the Committee. The appropriateness of the performance evaluation report and its alignment to remuneration principles were considered;
considering the appropriateness of a 75%/25% split in performance and retention shares based on benchmarked LTI trends. See the Remuneration Policy 136 for the outcome of this deliberation;
debating STI rules based on market benchmarking with the aim of alignment between roles, especially the CEO and Group FD roles, and setting appropriate targets. Target weighting across the various geographies were interrogated;
reviewing weightings of key performance areas;
re-evaluating Malus and Clawback Policy wording;
approving amended naming conventions for executive roles:
approving admin staff increases and considered bargaining council mandatory increases;

Old	New
Chief Operating Officer – EnterpriseDevelopment	Group Executive – BusinessDevelopment
Managing Executive AME	Managing Director – AME
Supply Chain Executive	Group Executive – Manufacturingand Logistics

the Committee noted the changes in BBBEE scorecard targets;
monitoring the progress of Project Genesis and its impact on the Group's wage bill. Regretfully » an estimated 90 non-bargaining
- 3 representative unions, SCMAWU, FAWU and NUPSAW on the treatment of our unionised employees. 689 members were temporarily scheme on behalf of the received. Ultimately the total
number of BU employees that remained retrenched were less than 20; » our group of 64 interns appointed in 2019, all had
their contracts ended on the 13 May 2020 due to the pandemic;
» 59 contractors completed the People with Disabilities learnership programme on commenced in August 2020 with 70 learners registered.
were all terminated on the 31st May 2020. • noting management's proposed
senior management roles; • noting a report from remuneration consultants on the effects of COVID-19 on remuneration across industries. Based on deliberations the Committee approved adjustments to basic salaries and STIs;

• the Committee noted the changes	• approving executive directors' STI
in BBBEE scorecard targets;	allocation at target and increases
• monitoring the progress of Project	on basic salary;
Genesis and its impact on the
Group's wage bill. Regretfully	• approved LTI allocations to
» an estimated 90 non-bargaining	executives based on the
unit employees were retrenched;	75%/25% split;
» an estimated 50 Company stores	• evaluating and setting of fees for
employees were retrenched;	non-executive directors, noting no
» agreement was reached with our	inflationary increases for FY2021;
3 representative unions,	• approving the vesting of LTI shares
SCMAWU, FAWU and NUPSAW	on 1 November 2020 and the
on the treatment of our	purchase of shares by the Famous
unionised employees. 689	Brands Share Incentive Scheme to
members were temporarily	settle the number of shares due to
laid-off. We then agreed with the	participants;
Unions to apply for the UIF TERS	• approving LTI vesting for GBK
scheme on behalf of the	executives at point of
impacted employees which they	commencement of the
received. Ultimately the total	Administration process;
number of BU employees that	• monitoring progress on bargaining
remained retrenched were less	unit wage negotiations;
than 20;	• obtaining feedback from
» our group of 64 interns	shareholders on the Remuneration
appointed in 2019, all had	Policy and succession planning;
their contracts ended on the	• approving salary increases and
13 May 2020 due to the	adjustments for executive
pandemic;	directors, executives and senior
» 59 contractors completed	management;
the People with Disabilities	• evaluating and approving STI
learnership programme on	allocations for executive directors,
31 May 2020. A new programme	executives and senior management
commenced in August 2020	in line with the STI rules;
with 70 learners registered.	• evaluating and approving the
» 130 YES learners and interns	requisite vesting conditions in
were all terminated on the	respect of the LTIP share allocations
31st May 2020.	for FY2016 and FY2018; and
• noting management's proposed	• approving the purchase of shares
succession plan for executive and	by the Famous Brands Share
senior management roles;	Incentive Scheme to settle the
• noting a report from remuneration	shares to the participants in
consultants on the effects of	accordance with the rules of

the scheme, by way of an equity market book transaction.

REMUNERATION COMMITTEE REPORT

The purpose of the Remuneration Committee (Committee) is to assist the Board in discharging its oversight responsibilities relating to all compensation matters, including reviewing all components of remuneration, proposing measures for the STI and LTI schemes, implementation of all relevant employee compensation policies, ensuring alignment with market best practices and compliance with King IV.

Mandate

Attendance and composition

Composition and meeting attendance

Three meetings held in FY2021

Chairman

• TE Mashilwane (3/3)

Members

SL Botha (3/3)
CH Boulle (3/3)

Invitees

DP Hele: CEO
J Mahange: Group HR Executive
CD Appollis: Company Secretary

About Famous Brands

Value creation process

Strategic intent and viability

Sustainability Leadership commentary Governance and remuneration

Focus areas for FY2022

Follow up on delayed UIF TERS payments;
finalised wage agreement with BU employees;
further work to be completed in terms of Group FD and Group HR Executive succession planning;
continued Remuneration Report disclosure improvement;
shareholder engagement on Remuneration Policy and Implementation Report;
focus on fair and responsible remuneration, noting differentials based on gender and race, as well as remuneration at various levels in the organisation;
improved governance structures to oversee the implementation of the Remuneration Policy;
setting the correct baseline for measuring performance shares appropriately;
improvement in market competitiveness and benchmarking with a measured approach to determining remuneration ensuring sustainability, transparency and fair and responsible remuneration; and
more education for our employees around remuneration matters, the impact of inflation and other factors driving our key decisions whilst creating further transparency.

I confirm that the Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference for the reporting period. As Chairman of this Committee, I will be present at the Group AGM to answer any questions regarding the activities of the Committee.

Emma Mashilwane Chairman: Remuneration Committee 22 June 2021

I confirm that the Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference for the reporting period. As chairman of this Committee, I will be present at the Group's AGM to answer any questions regarding the activities of the Committee.

Chris Boulle Chairman: Investment Committee

22 June 2021

REMUNERATION COMMITTEE REPORT continued

INVESTMENT COMMITTEE REPORT

The purpose of the Investment Committee (Committee) is to assist the Board in discharging its oversight responsibilities regarding the Company's investment strategy and investment policy. The Committee assists the Board in considering investment opportunities, approving acquisitions, disposals and capex and reviewing the performance of previous investments.

Attendance and composition

Composition and meeting attendance

No meetings held in FY2021

Chairman

• CH Boulle

Members

NJ Adami
SL Botha
TE Mashilwane

Invitees

DP Hele: CEO
L Ntlha: Group FD
N Halamandaris
N Ntando: Group Risk Executive
CD Appollis: Company Secretary

Due to COVID-19 the number of Board meetings was ramped up significantly and it was appropriate that investment related decisions were elevated and addressed at Board level. Investment Committee meetings have resumed as normal in March 2021.

About Famous Brands Value creation process

Strategic intent and viability

Sustainability Leadership

commentary

Governance and remuneration

Focus areas for the reporting period

Over and above the annual review, amendment and agreement of the Committee workplan and Charter, the Committee:

Evaluated the Exco succession plan and related organogram for reasonableness;
reviewed the Board composition and was comfortable with the balance between independent directors, non-independent directors and executive directors. The Committee Charter was however updated to include specific evaluation of the independence of directors reaching nine years tenure;
considered the appropriate composition and rotation of members of various Board Committees;
took into consideration the leadership structures by evaluating a schedule of JV and subsidiary directors;
concluded after investigation that the Gender Diversity Policy should be amended to include broader diversity attributes as required by the JSE Listing Requirements amendments;
supported the appointments of: » Mr Jito Kayumba to the Board of Famous Brands Zambia as an independent director;
» Mr Jean-Paul Renouprez to the role of Group Executive: Famous Brands; and
and effectiveness.

Manufacturing and Logistics at • evaluated the Board's performance

After year-end, the Committee approved the appointment of Fagmeedah Petersen-Cook to the Board with effect from 1 June 2021. Her appointment will be tabled to shareholders for approval on 23 July 2021 at the Annual General Meeting.

Focus areas for FY2022

The key focus areas for the coming year are the appointment of a new independent director to the Board and the focus on succession planning within the IT and HR departments.

The Committee will also be responsible for the process of selecting an appropriate successor for the Group Financial Director.

Santie Botha Chairman 22 June 2021

NOMINATION COMMITTEE REPORT

The purpose of the Nomination Committee (Committee) is to ensure that the composition and structure of the Board and its Committees as well as the executive leadership team perform at its best in support of the business and stakeholders. The Committee is also responsible for evaluating the overall performance of the Board and individual Board members as well as selecting the best candidates for each seat on the Board.

Mandate

Attendance and composition

Composition and meeting attendance

Three meetings held in FY2021

Chairman

• SL Botha (3/3)

Members

NJ Adami (3/3)
A Maditse (3/3)

Invitees

DP Hele: CEO
CD Appollis: Company Secretary

It is the view of the Remuneration Committee (Committee) that the Remuneration Policy has achieved its stated objective of driving performance whilst ensuring retention.

Factors influencing remuneration

External considerations

Shareholder views and recommendations;
economic trends;
competitive pressure;
the labour market, and the pay gap between executive management and other employees of the Company;
requests from the BU representatives;
market benchmarks for employees, premised on correct job grades, and choosing the appropriate benchmarks in the market with similar attributes including complexity, industry, size, and geographic spread;
the potential maximum total remuneration that each executive could earn, benchmarked against
the market at the 50th percentile; and
reports on the effects of COVID-19 on remuneration across industries.

Internal considerations

Consideration of the appropriateness of the performance evaluation report and its alignment to remuneration principles;
cash flow management and cost leadership are integral parts of the business, with the hospitality industry being severely impacted during the COVID-19 imposed lockdown;
launched Project Genesis, a programme designed to position the business to survive, reduce operating expenses and implement initiatives designed to save the Famous Brands jobs;
alignment between roles, especially the CEO and Group FD roles;
alignment between executive roles across SA, AME and the UK; and
executive recruitment considerations.

Most recent remuneration voting results

At the FY2020 AGM the voting results in favour of remuneration related resolutions were:

Remuneration Policy 76.20%;
Implementation report 86.96%; and
non-executive directors' remuneration >96%.

The Committee evaluated feedback from various shareholders regarding the root cause for dissenting votes. The main concerns received through written submissions to the Committee and the Committee responses are tabled on the next page.

Shareholder feedback Committee response

LTIP – the retention share portion is not performance related. Shareholders indicate a preference to create a performance link

The Committee reviewed the retention share scheme both from an allocation split and a performance perspective. It is comfortable both with the 25% retention share allocation vs the 75% SARs allocation. Independent research by 21st Century indicated that the market tends towards a 50/50 split between RS and SARS, but the Committee remains comfortable with the higher portion of the LTIP being allocated to high risk performance linked awards. The vesting criteria of the RS require that vesting is linked directly to the average individual performance measures – individuals need to as a minimum, "meet expectations" as well as the employee being in employment at the time of vesting.

Disclosure of LTIP targets – there was insufficient disclosure of the performance hurdles for threshold, target and stretch Implementation report 145

CEO's scorecard – this was found to be confusing and more detail on what is being measured is required

The Committee has reviewed the scorecard and changed it to provide greater clarity and detail, specifically around what is being measured and the outcomes against those measures.

Implementation report 145

STI and LTI measurements, shareholders wanted HEPS growth to be measured against nominal GDP and more disclosure on the ROCE measurement

The Committee remains comfortable that HEPS be measured relative to CPI and not GDP.

The Committee approved the LTI measures as HEPS, TSR and ROCE. HEPS, TSR and ROCE disclosure and targets are set out in the Implementation report 145

MSR – the shareholders recommend that a defined timeline be imposed on meeting the requirements and penalties be applied for failure to comply

MSR is a fairly new remuneration principle. Given the underperformance of the Famous Brands share price in pandemic conditions the Committee is comfortable that no timelines are imposed on Directors.

Above inflation increases and an over application of benchmarking

Historically the Admin / Group employees have received a CPI increase. Due to the COVID-19 impact the focus and strategy were around cutting costs and no annual increases were awarded. The Committee does however endeavour to ensure that they will note the comment for future practices.

Malus and clawback – disclosure of trigger events and policy application Remuneration at a glance 108

Encouraged open disclosure on COVID-19 and the impact on Famous Brands Remuneration Committee report 126

Key decisions and substantial changes to policy 136

We believe that key decisions taken during FY2021 (see next page) will address the concerns of shareholders.

Throughout this report, the term executive directors is used to refer to the CEO and the Group FD, while the Exco (excluding the executive directors) is referred to as Exco. Reference to the executive management team includes the executive directors and Exco.

REMUNERATION REPORT – BACKGROUND STATEMENT

Key decisions and substantial changes to policy

Focus areaConsequent decision by the Committee		RemunerationPolicy reference
Based on benchmarkedLTI trends theCommittee consideredthe appropriatenessof a 75%/25% split inperformance andretention shares	• Split will be 75%/25%• Vesting will be in line with Scheme Rules	LTI140
Maximum STI targets forF-lower grade categories	• F-lower grade maximum is now 70% and target is 35%	STI138
STI key performance	• Key performance areas are as follows:» Financial and operational performance 60%» Market share 20%» People 10%» ESG 10%• Financial and market share KPAs will be measured using HEPSand EBITDA	STI138
LTI FY2022 KPIs	• HEPS, Absolute TSR and ROCE• Using a relative TSR results in undesirable consequences of comparingthe Group to peer companies whose operations significantly differ fromthat of Famous Brands• The view is that a methodology aiming for share price growth thatexceeds cost of equity is a sound approach. Cost of Equity is calculatedusing the Capital Asset Pricing Model.• The Group's FY22 absolute TSR target is minimum growth in share priceof 15.3% relative to the 30-day VWAP share price at 28 February 2021• Achieving ROCE growth equal, or greater than the WACC is required	LTI140
Malus andClawback Policy	Policy was reworded to better suit the business intent	Malus andClawback141
COVID-19 effects onremuneration	• 405 employees, due to the nature of their roles, went into an imposedhibernation (furloughed) and their salaries were reduced by 50%• All Executive and senior managers from Paterson D Upper to F band,took a 30% pay cut• 41 active employees on Paterson C to D3 bands received a 15% pay cut• 72 non-unionised, active roles on Paterson A and B bands receiveda 10% pay cut• 98 employees were placed on a three-day week and their salaries werereduced by 40%• Employees were allowed to take a Provident Fund contributionholiday to assist with managing their cash flow, this practice ended inFebruary 2021• No employee salary increases for FY2021, except for BU employees• Employee 13th cheque of 50% deferred from December 2020 toApril 2021, subject to performance criteria being met• Business unit staff still qualify for December 2020 13th cheques with noperformance criteria	TCC137STI138

Focus area	Consequent decision by the Committee
COVID-19 effects onremuneration(continued)	• FY2020 STI allocations are based on performance pre-COVID-19 andmotivate executives even when the timing of payment was not ideal.To preserve cash, STI payments to executives were paid in four tranchesas follows and they were subject to cash flow indicators and would havebeen forfeited if indicators were not met at each of the four check points:» 25% paid June 2020» 25% paid August 2020» 25% paid November 2020» 25% paid February 2021• FY2021 STI allocations capped at 50% of the respective cap
Administrationemployee increases	• Approved at 4% effective March 2021
Executive salaryincreases	• No salary increases for FY2021, except for Group FD in order to align to50th percentile• STI allocation of target: 55% (CEO) and 35% (Group FD)• Salary reductions from May to Nov 2020 from 30% to 15%
Non-executivedirectors' fees	• No increases for FY2021• 30% reduction in fees for the quarter ending May 2020• 15% reduction for quarters ending August and November• No fees for special/ad hoc meetings relating to COVID-19
2015, 2016 and 2017LTI vesting	• Famous Brands Incentive Scheme to purchase shares to settle sharesdue to participants, this was a first time and was based on shareholderfeedback as previously shares were issued• Total retention shares vesting: 127 345 (R6 million)• No value for share appreciation rights (SARs) as share price is <r100< td=""></r100<>
LTI vesting for GBKexecutives	• Retention shares vested on 14 October 2020, the date GBK applied foradministration• No value for SARs as share price was <r100• Pro-rata shares were settled in cash: 29 773 shares, R640 899 valuedetermined as at date of administration 14 October 2020</r100

	RemunerationPolicy reference
• FY2020 STI allocations are based on performance pre-COVID-19 andmotivate executives even when the timing of payment was not ideal.To preserve cash, STI payments to executives were paid in four tranchesas follows and they were subject to cash flow indicators and would havebeen forfeited if indicators were not met at each of the four check points:» 25% paid June 2020» 25% paid August 2020» 25% paid November 2020» 25% paid February 2021• FY2021 STI allocations capped at 50% of the respective cap	TCC137STI138
• Approved at 4% effective March 2021	TCC137
• No salary increases for FY2021, except for Group FD in order to align to50th percentile• STI allocation of target: 55% (CEO) and 35% (Group FD)• Salary reductions from May to Nov 2020 from 30% to 15%	TCC137STI138
• No increases for FY2021• 30% reduction in fees for the quarter ending May 2020• 15% reduction for quarters ending August and November• No fees for special/ad hoc meetings relating to COVID-19	NED fees147
• Famous Brands Incentive Scheme to purchase shares to settle sharesdue to participants, this was a first time and was based on shareholderfeedback as previously shares were issued• Total retention shares vesting: 127 345 (R6 million)• No value for share appreciation rights (SARs) as share price is <r100< td="">Implementationreport145</r100<>	Implementationreport145
• Retention shares vested on 14 October 2020, the date GBK applied foradministration• No value for SARs as share price was <r100• Pro-rata shares were settled in cash: 29 773 shares, R640 899 valuedetermined as at date of administration 14 October 2020</r100	LTI140

Remuneration consultants

Where appropriate, the Committee obtains advice from independent remuneration consultants. The consultants are employed directly by the Committee and the Committee engages directly with them to ensure independence.

The Committee engaged the services of 21st Century Remuneration Consultants. The consultants presented:

a proposal on changes in STI and LTI metrics based on current market trends. The Committee considered the impacts of the proposed metrics in relation to fair remuneration principles. In relation to the STIs for the CEO and Group FD, the proposal contained proposed alignment in weightings of target remuneration;
benchmarked LTI trends with regards to the appropriateness of the split in performance and retention shares; and
a report on the impacts of COVID-19 on remuneration across industries.

The Committee also considered Marsden Advisory's independent report on an objective methodology in deriving target share price growth targets.

The Committee is satisfied with the independence and objectivity of 21st Century and Marsden Advisory, both reputable remuneration consulting companies.

About Famous Brands Value creation process

Strategic intent and viability

commentary

Key principles of the Remuneration Policy

In order to continue to support our remuneration approach, we have a Remuneration Policy which is based on the following key principles:

reward, retain and, where necessary, attract talent through fair, transparent and competitive remuneration;
reward short-term and long-term performance by linking short-term incentives to operational, financial and other targets and long-term incentives to achievement of strategic objectives of the Company;
key focus areas are reflected in the scorecard of executive management, and in the annual performance evaluations for employees. Scorecards reflect key performance areas and the associated KPIs;
we reward for value created, contribution and performance to ensure alignment to shareholder interests;
employee rewards are influenced by individual and Company performance and employees' contributions are recognised by way of a discretionary performance bonus; and
BU employees are subject to the terms of wage agreements and are part of a "basic plus benefits" remuneration scheme.

Components of remuneration in FY2021

TCC Operation and objective

Base salary Base salary is targeted at the 50th percentile of the market benchmark • Reviewed annually in May after audited results • Increase backdated and effective 1 March of each year • The CEO makes recommendations in respect of the Exco to the Committee but does not make any recommendations on his own base salary, which is reviewed by the Committee Retirement fund Provides a retirement benefit • The funds vary depending on jurisdiction and legislation (some countries have national insurance) • All Company-related funds are defined contribution funds • Any Company contribution is part of TCC Medical insurance Provides medical aid assistance • The funds vary depending on jurisdiction and legislation (some countries have national insurance) • Any Company contribution towards a medical aid fund is part of TCC Benefits Provided to ensure broad competitiveness in the respective markets. Benefits are provided based on local market trends and can include items such as life assurance, disability and accidental death insurance, assistance with tax filing, cash in lieu of leave not taken (above legislated minimum leave requirements) and occasional spousal travel as per the executive travel guidelines. Bonus Discretionary bonus Bonus is provided based on individual performance subject to Company performance criteria

Maximumopportunity	Performancemeasures

• Informed by CPI• Upward or downwardadjustment torecognise individualperformance• The overall increasepool being limited toa percentage agreedby the Committee• BU employeeincreases based onwage agreements	Individual performanceis reviewed on a scale of1 to 5. The 1 – 5performance ratingdetermines thepercentage of the CPIincrease pool which anexecutive will receive.Performance is measuredagainst specific KPIsapproved by theCommittee.

In line with countryspecific legislation.	Not applicable.

All contributions tomedical aid funds formpart of the totalguaranteed package, inline with Company policy.	Not applicable.

In line with Companypolicy.	Not applicable.

• Up to 120% of onemonth's TCC• Sliding scaleadjustment torecognise individualperformance	Individual performanceis reviewed on a scale of1 to 5. Performance<3 does not qualify.

Remuneration landscape and eligibility

Our full Remuneration Policy is available at https://famousbrands.co.za/iar2021/governance/

REMUNERATION REPORT – POLICY

(includes 191 temporary positions)

About Famous Brands Value creation process

Strategic intent and viability

Sustainability Leadership

Annual financial statements

STI

STI promotes delivery of short to medium-term priorities. It rewards superior performance and attracts scarce talent. The STI is paid as a cash bonus (usually in June) after Company financial results have been externally audited. This year it was paid in four tranches. Background statement 132

Individual STI earned = [Target STI Amount] X [% of target STI]

Target STI Amount = TCC X %
Target STI is merely a targeted amount		Paterson Grade	Target STI %
applicable to a person's grade.Actual STI earned depends on performance.		F Upper	60
		F Lower – GFD	45
		F Lower – Other	35
		E	15
Capped at maximum %
Paterson Grade	Target STI %
F Upper	120
F Lower – GFD	90
F Lower – Other	70
E	30

Where is it measurable?
Position	Group	SA	AME	UK	Individual
CEO and GFD	70%				30%
Other Group Executives	30%				70%
AME Executive	10%		60%		30%
SA Executive		70%			30%
UK Executive	10%			60%	30%

Which KPA?	Weighting
Financial performance andoperational plan performance	60%
Market share performance andcustomer measures	20%
People measures	10%
Transformation, environment,

[Target STI Amount] [% of target STI]

Determined by performance
Which KPA?	Weighting	Before the start of each half-year, the Board will approvethis, including associated KPIs
Financial performance andoperational plan performance	60%	FY2022 KPIs
Market share performance andcustomer measures	20%	• HEPS (50%)• EBITDA (50%)
People measures	10%	Base: Growth in CPI +25% of CPIStretch: Growth in CPI +50% of CPI
Transformation, environment,social and governance	10%	Threshold (95%), target (100%) and stretch (>110%)
		* Assumes non-pandemic conditions
Rating	Score	Rating < 3 = No STI
3	100%
4	150%
5	200%	Capped
Straight-line scoring for points in between

Weight the score	% of target STI	For example
<100%	0%
>104%	125%
>108%	150%
>112%	175%
>116%	200%

Which KPA?	Weighting	Before the start of each half-year, the Board will approvethis, including associated KPIs
Financial performance andoperational plan performance	60%	FY2022 KPIs
Market share performance andcustomer measures	20%	• HEPS (50%)• EBITDA (50%)
People measures	10%	Base: Growth in CPI +25% of CPIStretch: Growth in CPI +50% of CPI
Transformation, environment,	10%	Threshold (95%), target (100%) and stretch (>110%)
social and governance		* Assumes non-pandemic conditions

Rating	Score	Rating < 3 = No STI
3	100%
4	150%
5	200%	Capped
Straight-line scoring for points in between


Weight the score	% of target STI	For example
<100%	0%
>104%	125%
>108%	150%
	175%
>112%>116%	200%

REMUNERATION REPORT – POLICY continued

Objective Operations

Drives performance against medium to long-term Company objectives. Aligns with shareholder interests. Facilitates retention and succession. Considers peer benchmarking.

No vesting period Award value of unvested shares = [TCC] X [Award multiple]

For future grants:
Company performance	Weighting %
HEPS, (defined as growth in HEPS vs CPI)	50%
Targets CPI +25% and a stretch target of CPI +50%
ROCE (Audited at 28 February 2021. WACC determined at 28 February 2021)	20%
Absolute TSR	30%
(FY22 target: 30-day VWAP share price + cost of equity. Determined on 28 February 2021)

	Target multipleto be held at apoint in time		Annual Awardof 0.33% oftarget
	SARs	RSs	SARs	RSs
Chief Executive Officer	6.53	0.55	2.18	0.18
Group Financial Director	5.60	0.47	1.87	0.16
F – Lower Executives	4.67	0.40	1.56	0.13
E – Upper Executives	3.54	0.30	1.18	0.10
E – lower Executives	2.84	0.24	0.95	0.08
D – Upper Executives	2.13	0.18	0.71	0.06

Note: LTI on target is depicted as 50% of the maximum Maximum and on target have no COVID-19 modification

Ancillary policies – Executive management

Minimum shareholding requirements

Executive directors shall build and maintain a minimum holding of Famous Brands shares:

CEO: 200% of net base salary
Group FD: 100% of net base salary

Executive directors may sell only up to 50% of their shares that vest until such time as they have reached their minimum shareholding requirement.

Malus and Clawback

Famous Brands have implemented malus and clawback provisions that enable adjustments to variable pay.

In keeping with the emerging market practice in corporate governance, the Board may take action on recommendation of the Committee to reduce/cancel/adjust unvested variable remuneration (malus), or to recover (clawback) vested/paid variable remuneration where there is reasonable evidence that an Executive Director of Famous Brands materially contributed to, or was materially responsible for, but not limited to:

Personally acting fraudulently or dishonestly or in a manner that adversely affects the Company's reputation, or which is characterised as gross misconduct;
Directing an employee, contractor or advisor to act fraudulently, dishonestly or to undertake other misconduct;
Receiving an STI or LTI Award because of fraud, dishonesty or a breach of obligation committed by another person; and/or
Receiving an STI or LTI award because of an intentional error in the calculation of a performance measure.

Service contracts

The executive management team's contracts include a three-month notice period.

LTI

REMUNERATION REPORT – POLICY continued

Objective

About Famous Brands

process

Ancillary policies – Executive management

Recruitment policy

A comparative benchmarking exercise is done to determine the size, nature and complexity of the role and the skills availability in the market prior to making a competitive offer. For new appointments, the Committee may compensate for remuneration forfeited by the appointee. The intention is to not grant more than what the executive would have received from the Company in a 12-month period. The Committee does have the discretion to compensate higher values if it can be demonstrated through a fair-value valuation that the forfeited amounts exceed the grants. The Committee will compensate the forfeits through a combination of equity and cash.

Termination policy

The executive management team does not have fixed-term contracts and thus contracts are open-ended (except where prescribed retirement ages apply), but they do have defined termination notice periods. The incentive scheme rules are clear on the termination provisions by termination category. In the event of termination, the Company has the discretion to allow the executive to either work out his or her notice period or to pay the base pay for the stipulated notice period in lieu of notice.

Reason for termination

	Voluntaryresignation	Dismissal/terminationfor cause	Normal andearly retirement,retrenchmentand death	Mutual separation
Base salary	Paid over the noticeperiod or as a lump sum.	Base pay is paid up todate of dismissal (exitdate).	Base pay is paid up todate of retirement ordeath or for a definedperiod based on policyand legislation governingretrenchment conditions.Death benefits paid tothe spouse (if relevant).	Paid over the noticeperiod or as a lump sumor per agreement toremain on FamousBrands' payroll untilagreed date.
Retirementfund	Provident fundcontributions for thenotice period will bepaid; the lump sum doesnot include providentfund contributionsunless contractuallyagreed.	Contributions toprovident fund will bepaid until employmentceases.	Contributions to theprovident fund will bepaid until employmentceases.	Provident fundcontributions for thenotice period will bepaid; the lump sum willexclude provident fundcontributions andrisk benefits.
Medicalprovisions	Where applicable,medical provision for thenotice period will bepaid.	Medical provision/payment will beprovided until such timeas employment ceases.	Medical provision/payment will beprovided until such timeas employment ceases.Subject to the medicalaid rules, the employeecan become a directpaying member to themedical aid.	Where applicable,medical provision for thenotice period will bepaid; the lump sum caninclude medical fundemployee contributionsif contractually agreed.
Benefits	Applicable benefits maycontinue to be providedduring the notice periodbut will not be paid on alump sum basis.	Benefits will fall awaywhen employmentceases.	Benefits will fall awaywhen employmentceases.	Applicable benefits maycontinue to be providedduring the notice period.

Normal and
early retirement,
retrenchment

	Voluntaryresignation	Dismissal/terminationfor cause	early retirement,retrenchmentand death	Mutual separation
STI	No bonus.	No bonus.	No bonus, butCommittee hasdiscretion to awardpro-rata STI.	No bonus, butCommittee hasdiscretion to providepro-rata STI.
Sign-on orretentiondeferredbonuses	Lapse all deferredbonuses.	Lapse all deferredbonuses.	Pro-rata deferredbonuses based on thelength of employmentfrom date of allocation.	Committee determineswhether a pro-rataportion may be granted.Work-back clause may
	Sign-on bonus work-back clause will apply – i.e. if not worked back in full,pro-rata repayment.	not apply.
LTI	Unvested shares willlapse in their entirety.	Lapse of all unexercisedand unvested shares;vested shares will beunaffected.	Pro-rata unvested LTIsbased on the length ofemployment from dateof offer. Performanceconditions tested overthe full performanceperiod and vest on thenormal vesting dates. (Incase of death, testperformance as per thelatest results applyimmediate vesting).	Committee determineswhether a pro-rataportion may be granted(or the Board in the caseof the executivedirectors). Performanceconditions tested overthe full performanceperiod and vest on thenormal vesting dates.

Non-executive directors

The Company's non-executive directors are paid based on their role. The policy is applied using the following principles: • A Board fee is paid for the five Board meetings held each year and the Committee members receive Committee fees for participation. The fees are split with a base fee of 20% and the remaining 80% paid based on meeting attendance. Each

director's fee is paid quarterly in arrears
Fees are reviewed annually, and increases are implemented from June after approval by shareholders at the AGM. The level of fees is set using a benchmark comparable group which is derived from companies with similar size, complexity and geographic spread
The non-executive directors are not eligible to receive any short or long-term incentives.

The Committee approved the fees of non-executive directors as follows:

No increases for the period FY2020/21
Board fees reduced by 30% for the quarter ended 31 May 2020, 15% for the quarters ended August and November 2020;
No Board fees were earned for the special/ad hoc Board meetings convened to date (with the exception of the special Board meeting held on 23 March 2020). This applied to all ad hoc meetings relating to the COVID-19 global pandemic crisis

FY2022 proposed fee increases are to be approved by shareholders during the next AGM are:

Chairperson of a Committee 4%
Member of a Committee 4%
Additional fee of R2 500 per hour for consulting services

Fair and responsible remuneration

The remuneration principles are underpinned by a fair and responsible remuneration approach where:

Remuneration must be free from any form of discrimination;
market benchmarking is applied to reference to the correct remuneration bands and levels with progression reflected for experience and accountability;
remuneration design and application that drives internal and external parity;
all the applied remuneration components are designed and implemented within the applicable tax and regulatory requirements;
performance and value are defined and measured over the short, medium and long terms and protect our shareholders' interests; and
an overarching drive for the correct moral and legally defensible remuneration practices.

Pay audits

In SA, pay audits are conducted in terms of the Code of Good Practice on Equal Pay/Remuneration For Work of Equal Value (Code of Good Practice) under the Employment Equity Act, No 5 of 1998 (as amended) (Employment Equity Act). In the UK, gender pay audits are conducted under the terms of the Equality Act 2010.

Equal pay for equal work

The Group continues to focus on the development of an equitable workplace and is committed to equal pay/ remuneration for equal value of work and gender equity in line with the JSE Listings Requirements, King IV guidelines and our diversity policy. Furthermore, the Company continues to develop the leadership succession pool and has implemented strategies to attract, motivate and retain a skilled workforce through fair, responsible, transparent and competitive remuneration.

Gender pay disclosures

UK legislation requires specific gender pay disclosures. After the placement of GBK under administration the total UK employees are less than the prescribed threshold for gender pay disclosures.

REMUNERATION REPORT – IMPLEMENTATION

The Remuneration Committee confirms compliance with the Remuneration Policy and confirms that there were no deviations from policy.

The implementation report provides a breakdown of both the executive director and non-executive director remuneration. The Committee assessed the prescribed officer definition in relation to definition of 'executive management' per King IV and has determined that of the Executive Committee, only Darren Hele, CEO and Lebo Ntlha, GFD meet the definition.

Directors' performance

CEO – Darren Hele

Due to the COVID-19 pandemic it was necessary to create an interim scorecard for the CEO that outlined a framework to review performance. The scorecard was intended to be simple, fluid and agile to allow the business to respond to COVID-19.

Total reward

Awarded remuneration (R'000)	FY2021	FY2020
Salary	4 371	4 767
Medical aid	205	190
Retirement benefit	419	606
Other benefits	100	658
TCC (total fixed remuneration)	5 095	6 221
STI	2 938*	1 306^
SARs	0	881
RSs	1 258	1 554
LTI	1 258	2 435
Total awarded remuneration	9 291	9 962

* Relates to FY2020 performance. ^ Relates to FY2019 performance.

About Famous Brands Value creation process

Strategic intent and viability

Sustainability Leadership commentary Annual financial statements

Supplementary information

REMUNERATION REPORT – IMPLEMENTATION continued

CEO Individual Scorecard

Performance commentary		Outcome
	• Extricate the business from any cash burden from GBK.• Manage the business on a "direct cash flow" method until a revised FY21 action plan andbudget are approved by the Board with only essential Opex and Capex approved.• Meet "going concern" criteria quarterly with a first review post FY20 year end and half yearresults.• Ensure balance sheet stability through one or all of the below:» Refinance current loan structure to suit the new environment» Equity raise• Cash preservation
	Revise the signed off 2021 Action Plan to reprioritise adjustment to the COVID-19 landscapeyet retaining the wider goals laid out in the three-year plan
	Bring Project Genesis to a conclusion with a right sized organisation in place for a postCOVID-19 trading environment	Partial conclusion
	Keep the Board appraised whilst COVID-19 remains a disruption to normal business activities
	Adjust all JV, business unit and/or associate FY21 action plans to reprioritise adjusting toCOVID-19 landscape, prepare revised budgets, and exit where appropriate
	Individual performance score	3.5

Non-executive directors' remuneration

	FY2021R'000	FY2020R'000
NJ Adami	567	419
CH Boulle	585	708
SL Botha	911	1 252
DJ Fredericks	445	506
AK Maditse	507	328
N Halamandaris	502	550
JL Halamandres	238	334
TE Mashilwane	576	699
Total	4 331	4 796

* Approved the Board fee decreases in line with management and staff salary reductions.

Group FD – Lebo Ntlha

Total reward

Awarded remuneration (R'000)	FY2021	FY2020
Salary	2 601	2 574
Medical aid	55	52
Retirement benefit	76	327
Other benefits	0	370
TCC (total fixed remuneration)	2 732	3 271
STI	870*	638^
SARs	0	310
RSs	389	522
LTI	389	832
Total awarded remuneration	3 991	4 741

* Relates to FY2020 performance.

^ Relates to FY2019 performance.

Karen, NetCafé, Gauteng

Total shareholding and value of shares held by CEO and GFD is set out in detail in our Group Annual Financial Statements. Refer to note 29.

About Famous Brands Value creation process

Strategic intent and viability

Sustainability Leadership

AUDIT AND RISK COMMITTEE REPORT

The purpose of the Audit and Risk Committee (Committee) is to assist the Board in discharging its oversight responsibilities which includes the safeguarding of the Company's assets, ensure adequate risk management and control processes and in the preparation of financial statements in compliance with all applicable legislation and regulations.

Mandate

Attendance and composition

Composition and meeting

attendance

Three meetings held in FY2021

Chairman

• DJ Fredericks (3/3)

Members

NJ Adami (3/3)
TE Mashilwane (3/3)

Invitees

DP Hele: Group CEO (3/3)
K Ntlha: Group FD (3/3)
SL Botha (3/3)
AK Maditse (2/3)
N Halamandaris (3/3)
CH Boulle (3/3)
Mr JL Halamandres (1/3)
N Ndaba: Group Risk Executive (3/3)
N Mabidi: Group Financial Executive (2/2)
CD Appollis: Group Company Secretary (3/3)

Annual assessments

In a closed session with the auditors, the Committee reviewed and considered the following assessments:

the Group Finance Director;
the finance structure; and
the Head of Internal Audit.

Overall, the Committee reflected that it was satisfied with the expertise and competency of the Group FD and the finance function and identified areas for improvement. The Committee found that the Head of Internal Audit was knowledgeable and provided strong leadership to the department. The chairman of the Committee provided feedback directly to the parties concerned.

External audit

Appointed KPMG as the registered independent auditor for the financial year ended 28 February 2021, after satisfying itself through enquiry, that KPMG and Nick Southon are independent as defined in terms of the Companies Act and the Independent Regulatory Board for Auditors in terms of the Auditing Profession Act, no 26 of 2005 (Auditing Profession Act);
ensured that the appointment of KPMG complied with the legislation relating to the appointment of auditors; • determined the terms of
engagement, reviewed the *external audit plan and reviewed the remuneration of the auditors;
considered the quality controls processes of the external auditor and specifically audit quality reviews conducted over the designated auditor, including those performed by the Independent Regulatory Board for Auditors (IRBA) as part of its routine review process in terms of the Auditing Profession Act;
considered the appropriateness of the other auditors engaged to perform audits within the Group, being Rees Pollock Chartered Accountants in the UK and PKF Botswana, and deemed them appropriate;
understood and assessed the procedures performed by KPMG to place reliance on the work performed by other auditors; and • reviewed the external auditors' report on the consolidated and Company financial statements and the key audit matter.

Internal Audit

reviewed and approved the Internal Audit business plan, budget and audit plan;
performed the annual review and approval of the Internal Audit Charter; and
reviewed the Internal Audit reports and processes.

Risk management

reviewed and approved the risk management business plan and budget;
performed the annual review and approval of the Risk management Charter;
reviewed the Group risk register; and
reviewed the IT governance.

Financial statements, accounting practices and other financial matters

management of the going concern

• Reviewed assessment prepared by status of the Group and company and made recommendations to the Board. The Committee concurred that the adoption of the going concern is appropriate for the preparation of the AFS;

reviewed the financial and general covenants applicable to the Group based on the current lending and capital structure, which was found to have been appropriate and complied with;
considered matters raised relating to financial reporting and accounting practices, internal audit, contents of the Group's and the Company's financial statements, internal financial controls and any related matters;
evaluated and reported to the Board on the effectiveness of risk management controls and governance processes;
reviewed the processes in place for reporting matters relating to financial reporting and accounting practices, internal audit, contents of the Group's and the Company's AFS, internal financial controls and any related matters. The Committee can confirm that there were matters of concern noted;
reviewed and recommended the short and long-form announcements to the Board for approval;
reviewed and recommended the interim results and AFS to the Board for approval and considered the appropriateness of the accounting policies adopted and changes thereto;
considered accounting treatments, significant unusual transactions and key accounting judgements;
reviewed and recommended the AFS to the Board for approval;
considered the reports of the internal and external auditor on the Group's systems of internal control including financial controls, business risk management and maintenance of an effective internal control system;

* The Committee reviewed and applied the JSE's requirement for the CEO and GFD's responsibility statement.

About Famous Brands

received assurance from management that proper and adequate accounting records were maintained and the systems safeguard the assets against unauthorised use or disposal thereof;
annual review and approval of the Committee Charter; and
considered and noted the following reports published by the JSE and ensured that appropriate actions were taken to apply the recommendations made:
» the activities of the Financial Reporting Investigation Panel in 2019 (published 22 October 2019); and
» combined findings of the JSE's proactive monitoring of financial statements report-backs done from 2011 to 2019 (published 18 February 2020).

Based on the above, the Committee formed the opinion that there were no material breakdowns in internal control, including financial control, business risk management and the maintenance of effective material control systems.

Going concern

The Committee has considered the going concern assessment as prepared by management, including the Group's outlook regarding trading conditions that will persist into the foreseeable future, as well as access to financial resources. This assessment is based on a range of varied scenarios (including assumptions regarding a worst-case scenario of a three- month lockdown, the rate of return to normal trading, debt service and covenant requirements, working capital

requirements, and relief measures implemented by the respective governments in our various trading jurisdictions), and are satisfied that the Group is a going concern for the foreseeable future based on the information available at the time of approval of the financial statements.

Impairment of Gourmet Burger Kitchen (GBK) and subsequent disposal

GBK was placed under administration on 14 October 2020 in accordance with insolvency legislation in the UK. The Group's investment in GBK has been impaired in full, and GBK subsequently disposed of. The Group awaits the finalisation of the administration process being managed by the Administrator. There are no further operating losses impacting the Group's results from the date on which GBK entered administration. The financial results of GBK have been disclosed as a discontinued operation as a result of the disposal.

Focus areas for the review period

Transitioning to a new external auditor;
approving the Internal Audit plan and budget;
approving the Internal Audit business plan and Charter for FY2021
approving the Risk business plan and Charter for FY2021;
reviewing and approving the Audit and Risk Committee Charter;
reviewing and approving the Audit and Risk Committee's annual work plan;
reviewing and approving the Interims and FY2021 AFS;
tabling the Risk report;
tabling a report on the Group's tax matters;
tabling an accounting paper on the disclosures to be included in the summarised AFS; and
approving the King IV application register.

Conclusion

Having considered all the material factors and key audit matter, the Committee recommended the financial statements for the year ended 28 February 2021 for approval to the Board. The Board has approved the AFS which will be open for discussion at the forthcoming AGM of shareholders. As Chairman of this Committee, I will be available at the Group's AGM to answer any questions regarding the activities of the Committee.

DJ Fredericks Chairman

31 May 2021

AUDIT AND RISK COMMITTEE REPORT continued

SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

Summarised consolidated statement of financial position

at 28 February 2021

ASSETS

EQUITY AND LIABILITIES

	2021	2020
Notes	R000	R000
ASSETS
Non-current assets	1 695 450	4 640 963
Property, plant and equipment7Intangible assets8Investments in associatesOther receivables	667 098917 45021 71429 122	2 226 7972 274 89562 29955 357
Deferred tax	60 066	21 615
Current assets	1 297 723	1 532 208
InventoriesCurrent tax assetsDerivative financial instrumentsTrade and other receivablesCash and cash equivalents	354 2435 4708 011485 642444 357	426 69014 8911 783602 587486 257
Total assets	2 993 173	6 173 171
EQUITY AND LIABILITIESEquity attributable to owners of Famous Brands LimitedNon-controlling interests	269 506121 258	1 680 132120 260
Total equity	390 764	1 800 392
Non-current liabilities	1 805 314	3 237 510
Borrowings19Lease liabilitiesDeferred tax	1 462 600256 93485 780	1 655 6301 263 821318 059
Current liabilities	797 095	1 135 269
Non-controlling shareholder loansDerivative financial instrumentsLease liabilitiesTrade and other payablesShareholders for dividendsCurrent tax liabilitiesBorrowings19	1 6922 36388 142673 7682 41822 3006 412	601126 035119 419851 3722 42313 61221 807
Total liabilities	2 602 409	4 372 779
Total equity and liabilities	2 993 173	6 173 171

Strategic intent and viability

Total comprehensive (loss)/income attributable to:

	2021	2020Restated*
Notes	R000	R000
Total comprehensive (loss)/income attributable to:
Owners of Famous Brands Limited	(1 417 423)	436 090
Non-controlling interests	22 765	64 553
	(1 394 658)	500 643
Basic (loss)/earnings per share (cents) including discontinued operation
Basic17	(1 237)	362
Diluted17	(1 234)	361
Basic (loss)/earnings per share (cents) from continuing operations
Basic17	(127)	468
Diluted17	(127)	467

Basic (loss)/earnings per share (cents) including discontinued operation Basic 17 (1 237) 362 Diluted 17 (1 234) 361 Basic (loss)/earnings per share (cents) from continuing operations

Summarised consolidated statement of profit or loss and other comprehensive income

for the year ended 28 February 2021

Notes	2021R000	2020Restated*R000
Continuing operations
Revenue10Cost of sales	4 683 828(2 677 794)	6 495 275(3 407 582)
Gross profitSelling and administrative expenses	2 006 034(1 711 315)	3 087 693(2 175 644)
Operating profit before non-operational itemsNon-operational items^	294 719(193 485)	912 049–
Operating profit including non-operational itemsNet finance costs	101 234(175 667)	912 049(164 287)
Finance costs13.1Finance income13.1	(192 269)16 602	(211 180)46 893
Share of profit of associates	4 862	5 228
(Loss)/Profit before taxTax	(69 571)(35 303)	752 990(220 240)
(Loss)/Profit from continuing operations	(104 874)	532 750
Loss from discontinued operation, net of tax16	(1 111 440)	(105 933)
Total (Loss)/profit for the year	(1 216 314)	426 817
(Loss)/profit for the year attributable to:Owners of Famous Brands LimitedNon-controlling interests	(1 239 079)22 765	362 26464 553
	(1 216 314)	426 817
(Loss)/profit for the yearOther comprehensive income, net of tax:	(1 216 314)	426 817
Exchange differences on translating foreign operations**Pre-tax foreign exchange differences on translating foreign operationsTax effect on exchange differences on translating foreign operations	102 956142 728(39 772)	79 68395 396(15 713)
Other comprehensive income arising from discontinued operation	(299 664)	–
Pre-tax foreign exchange differences on translating discontinued foreignoperationTax impact on foreign exchange differences on translating discontinued	(367 549)	–
foreign operation	67 885	–
Movement in hedge accounting reserve**	18 364	(5 857)
Pre-tax change in fair value of cash flow hedgesTax on movement in hedge accounting reserve	25 505(7 141)	(8 134)2 277
Total comprehensive (loss)/income for the year	(1 394 658)	500 643

* Comparatives have been restated to provide a split between continuing and discontinued operation.

** This item may be reclassified subsequently to profit or loss.

^ Relates to impairments.

Summarised consolidated statement of cash flows

for the year ended 28 February 2021

Cash generated from investing activities

	2021R000	2020R000
Cash generated from operationsNet finance costs paid	573 845(161 394)	1 340 390(215 895)
Finance income receivedFinance costs paid	13 242(174 636)	46 892(262 787)
Income tax paid	(69 540)	(183 392)
Net cash inflow from operating activities before dividends paidDividends paid to owners of Famous Brands LimitedDividends paid to non-controlling interests	342 911(5)(5 507)	941 103(190 070)(59 094)
Net cash inflow from operating activities	337 399	691 939
Cash generated from investing activitiesAdditions to property, plant and equipmentIntangible assets acquiredProceeds from disposal of property, plant and equipmentProceeds from disposal of intangible assetsAdditional investment in associateNet cash inflow on disposal of subsidiaryNet cash outflow on disposal of subsidiaryNet cash inflow on disposal of associateDividends received from associates	(72 580)(11 357)15 18850(1 724)43 890(63 732)15 0004 048	(151 804)(21 524)24 678–(3 159)31 699––4 146
Net cash outflow from investing activities	(71 217)	(115 964)
Cash flow from financing activitiesNet borrowings repaidBorrowings raisedBorrowings repaid	(188 303)3 228 867(3 417 170)	(430 000)–(430 000)
Settlement of interest rate swapNon-controlling shareholder loans received/(repaid)Principal repayments of lease obligationsSettlement of put option over non-controlling interest in subsidiaryOther receivables (head-leases)Proceeds from disposal of non-controlling interest in subsidiaryShare-based payment grant settlements	(40 383)1 091(73 490)(14 828)14 356–(6 541)	–(1 899)(123 444)––1 450–
Net cash outflow from financing activities	(308 098)	(553 893)
Net (decrease)/increase in cash and cash equivalentsForeign currency effectCash and cash equivalents at the beginning of the year	(41 916)16486 257	22 0829 451454 724
Cash and cash equivalents at the end of the year*	444 357	486 257

Cash flow from financing activities

* Comprises cash and cash equivalents of R444 million (2020: R486 million), of which R92 million (2020: R40 million) is restricted cash related to marketing funds.

Summarised consolidated statement of changes in equity

for the year ended 28 February 2021

	2021	2020
	R000	R000
Balance at the beginning of the year	1 800 392	1 527 529
Issue of capital and share premium	601	9 498
Equity settled share-based payment scheme	34 449	14 047
Put-options over non-controlling interests	(31 729)	9 173
Total comprehensive (loss)/income for the year	(1 394 658)	500 643
Payment of dividends	(15 307)	(249 392)
Non-controlling interest arising	–	1 960
Change in ownership interests in subsidiaries	–	(16 050)
Other reserve	(2 984)	2 984
Balance at the end of the year	390 764	1 800 392

Famous Brands Limited (the "company") is a South African registered company. The summarised consolidated financial statements of the company comprise the company and its subsidiaries (together referred to as the Group) and the Group's interest in associates.

1 Statement of compliance

These summarised consolidated financial statements have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB) in issue and effective for the Group at 28 February 2021, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by Financial Reporting Standards Council, and contains the information required by IAS 34 Interim financial reporting, the JSE Listings Requirements, and the Companies Act of South Africa.

2 Basis of preparation

The summarised consolidated financial statements do not include all the information and disclosures required for the full set of audited consolidated financial statements, and should be read in conjunction with the full set of the audited financial statements which are available on our website at www.famousbrands.co.za.

The Group's audited financial statements and the summarised consolidated financial statements as at and for the year ended 28 February 2021 were prepared on the going-concern basis. The accounting policies applied in the presentation of the summarised consolidated financial statements are consistent with those applied for the year ended 28 February 2021, except for new standards that became effective for the Group's financial period beginning 1 March 2020.

The summarised consolidated financial statements were prepared on the historical cost basis, under the supervision of Kelebogile (Lebo) Ntlha, Group Financial Director.

3 Going concern

the Group's outlook regarding trading conditions that will persist into the foreseeable future;
the Group's debt service and covenants requirements;
the Group's working capital requirements and access to short-term funding; and
the Group's unutilised facilities.

4 Changes in accounting policies

The Group has adopted all the new, revised or amended accounting standards which were effective for the Group from 1 March 2020, including:

IFRS 3 Business Combinations (Amendment).
IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (Amendment); and

• IFRS 7 Financial Instruments Disclosure and IFRS 9 Financial Instruments (Amendment).

These do not have a significant impact on the Group's financial results or position.

NOTES TO THE SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 28 February 2021

5 Accounting standards and interpretations issued but not yet adopted

The Group has chosen not to early adopt the following amendments and interpretations, which have been published and are mandatory for the Group's accounting periods beginning on or after 1 March 2020 or later periods:

IFRS 3 Business Combinations (Amendment, effective for financial years beginning on or after 1 January 2022)

The amendment updates a reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations.

Management is determining the impact of the standard on the financial statements. No significant impact is expected.

IFRS 7 Financial Instruments Disclosure, IFRS 9 Financial Instruments and IFRS 16 Leases (Amendment, effective for financial years beginning on or after 1 January 2021)

The amendments to the standards amend requirements relating to changes in the basis for determining contractual cash flows of financial assets, financial liabilities and lease liabilities, hedge accounting and disclosures.

Management is determining the impact of the standard on the financial statements. No significant impact is expected.

IAS 1 Presentation of Financial Statements (effective for financial years beginning on or after 1 January 2023)

Narrow-scope amendments to IAS 1 to clarify how to classify debt and other liabilities as current or non-current. Management is determining the impact of the standard on the financial statements. No significant impact is expected.

IAS 16 Property, plant, and equipment (effective for financial years beginning on or after 1 January 2022)

The amendments prohibit an entity from deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the cost of producing those items, in profit or loss.

Management is determining the impact of the standard on the financial statements. No significant impact is expected.

IAS 37 Provisions, Contingent Liabilities and Contingent Assets (effective for financial years beginning on or after 1 January 2022)

The amendments specify which costs should be included in an entity's assessment whether a contract will be lossmaking.

Management is determining the impact of the standard on the financial statements. No significant impact is expected.

6 Capital expenditure and commitments

	2021R000	2020R000
Capital expenditure and commitmentsInvested	83 937	173 328
Property, plant and equipmentIntangible assets	72 58011 357	151 80421 524
Authorised, not yet contracted	167 599	235 388
Property, plant and equipmentIntangible assets	130 14737 452	202 37233 016

NOTES TO THE SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS continued

Closing balance	667 098	2 226 797
Impairment	(286 924)	(52 953)
Depreciation	(275 983)	(306 252)
Disposals (discontinued operation)	(1 298 684)	–
Disposals (continuing operations)	(25 875)	(24 751)
Foreign currency translation	163 313	108 182
Additions	72 580	151 804
Additions due to application of IFRS 16	91 874	1 302 230
Opening balance	2 226 797	1 048 537
Property, plant and equipment
	R000	R000
	2021	2020

Impairment

An impairment of Rnil (2020: R53 million) was recognised during the year under review at GBK restaurant level. All remaining GBK assets were derecognised post the business being placed under administration in accordance with the Insolvency legislation in the UK, and GBK subsequently disposed of.

	2021R000	2020R000
Intangible assets
Opening balance	2 274 895	2 179 770
Additions	11 357	21 524
Foreign currency translation	62 105	100 106
Disposals (continuing operations)	(14 070)	(2 864)
Amortisation	(22 847)	(23 641)
Impairments (continuing operations)	(175 485)	–
Impairments (discontinued operation)	(1 218 505)	–
Closing balance	917 450	2 274 895

All remaining GBK assets were derecognised post the business being placed under administration in accordance with the Insolvency legislation in the UK, and GBK subsequently disposed of.

9 Related party transactions

The Group entered into various sale and purchase transactions with related parties, in the ordinary course of business. The nature of related-party transactions is consistent with those reported previously.

		2021R000	2020Restated*R000
10	Revenue
	Continuing operations
	Sale of goods	3 349 104	4 478 560
	Services rendered, franchise and restaurant revenue	1 009 721	1 433 882
	Marketing funds**	325 003	582 833
		4 683 828	6 495 275

* Comparatives have been restated to provide a split between continuing and discontinued operation.

** Marketing funds relate to funds contributed by franchisees for the various brands across the Group and are administered in line with the Consumer Protection Act ("CPA"). Further analysis of revenue is provided in the primary (business units) and secondary (geographical) segment report based on the information reviewed by the chief operating decision maker.

11 Financial instruments

Accounting classifications and fair values

The table below sets out the Group's classification of each class of financial assets and liabilities, as well as a comparison to their fair values. The different fair value levels are described below:

• Level 1: quoted prices (adjusted) in active markets for identical assets or liabilities that the Group can access at the

measurement date.
Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: unobservable inputs for the asset or liability.

FINANCIAL ASSETS

FINANCIAL LIABILITIES

Level	2021R000	2020R000
FINANCIAL ASSETS
Measured at amortised cost:
Trade and other receivables	492 392	610 374
Cash and cash equivalents	444 357	486 257
Fair value through profit or loss:
Derivative financial instruments	8 011	1 783
	944 760	1 098 414
FINANCIAL LIABILITIES
Measured at amortised cost:
Trade and other payables	469 586	684 181
Shareholders for dividends	2 418	2 423
Lease liabilities	345 076	1 383 240
Non-controlling shareholder loans	1 692	601
Borrowings	1 469 012	1 677 437
Fair value through profit or loss:
Derivative financial instruments (put options over non-controlling
interests)3	–	104 295
Derivative financial instruments (foreign exchange contracts)2	2 363	120
Fair value through other comprehensive income:
Derivative financial instruments (interest-rate swaps)2	–	21 260
	2 290 147	3 873 557

The carrying amounts of financial assets and liabilities are considered to approximate the fair values.

11 Financial instruments (continued)

Movements in level 3 financial instruments carried at fair value

The following tables illustrates the movements during the year of level 3 financial instruments carried at fair value:

	2021R000	2020R000
Put options over non-controlling interests:
Carrying value at beginning of the year	104 295	105 783
Unwinding of discount	–	8 232
Derecognition through equity	–	(9 173)
Reclassified to trade and other payables	(85 510)	–
Settlement of put option	(14 828)	–
Remeasurement	(3 957)	(547)
Carrying value at end of the year	–	104 295

12 UK Business Segmental Results

The table below sets out the performance of the UK Business Segment in GBP and ZAR respectively:

		2021	2020
Revenue	GBP000	21 119	75 524
Operating (loss)/profit	GBP000	(4 098)	1 284
Operating (loss)/profit margin	%	(19.4)	1.7
Revenue	R000	449 991	1 407 170
Operating (loss)/profit	R000	(87 308)	23 543
Operating (loss)/profit margin	%	(19.4)	1.7

		2021R000	2020R000
13	Net finance (costs)/income
	Continuing operations
13.1	Finance costs
	Interest on borrowings	(160 523)	(169 457)
	Interest on put-option liabilities	–	(8 232)
	Interest on lease liabilities	(31 491)	(22 714)
	Other finance costs	(255)	(10 777)
		(192 269)	(211 180)
13.2	Finance income
	Interest from lease receivables	3 360	6 064
	Interest from bank deposits	13 097	33 800
	Other finance income	145	7 029
		16 602	46 893
	Net finance costs	(175 667)	(164 287)

14 Capital management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, to provide sustainable returns for shareholders, benefits for other stakeholders and to maintain, over time, an optimal structure to reduce the cost of capital.

The capital structure of the Group consists of Cash and cash equivalents, Borrowings (Note 19) and Equity as disclosed in the statement of financial position. There are no externally imposed capital requirements.

Financial Covenants

The Group's borrowings (refer Note 19 Borrowings) are subject to the following financial covenants. The covenants are limited to the SA business.

Dates	Leverageratio	Interestcoverratio	Liquidity
Feb-21		Not required^^ Not required^^	R250 m^
Aug-21	3.75x	2.75x	R250 m
Feb-22	3.25x	3.00x	R250 m
Aug-22	2.60x	3.00x	R250 m
Feb-23	2.50x	3.00x	R250 m
Aug-23	2.50x	3.00x	R250 m
Feb-24	2.50x	3.00x	R250 m

^ The liquidity covenant test for the year ended 28 February 2021 has been satisfied.

^^ As agreed with the Group's primary lender, these financial covenants were not required to be measured for the period under review.

Gearing

The Group's gearing ratio is set out below:

	2021R000	2020R000
Borrowings	1 469 012	1 677 437
Lease liabilities	345 076	1 383 240
Cash and cash equivalents	(444 357)	(486 257)
Net debt	1 369 731	2 574 420
Equity	390 764	1 800 392
Gearing ratio*	351%	143%

* Calculated as Net debt divided by Equity.

15 Contingent liabilities

The Group's borrowings are unsecured, no pledges have been issued.

The company and its South African subsidiaries have issued an unlimited suretyship in favour of First Rand Bank Limited to secure the banking facilities entered into by certain subsidiary companies.

Refer to Note 19 for other guarantees and facilities in the Group.

Strategic intent and viability

16 Discontinued operation

Famous Brands Limited acquired GBK in October 2016. GBK was placed under administration on the 14th October 2020 in accordance with the insolvency legislation in the UK. The financial results have been disclosed as a discontinued operation as a result of the disposal.

	2021R000	2020R000
Revenue	337 669	1 285 040
Cost of sales	(65 281)	(264 448)
Gross profit	272 388	1 020 592
Selling and administrative expenses^	(374 088)	(1 020 207)
Operating (loss)/profit before non-operational items	(101 700)	385
Non-operational items^^	(1 121 698)	(52 953)
Operating loss including non-operational items	(1 223 398)	(52 568)
Net finance costs	(38 320)	(54 395)
Loss before tax	(1 261 718)	(106 963)
Tax	150 278	1 030
Loss from discontinued operation	(1 111 440)	(105 933)
^ Selling and administrative expenses include:Depreciation of property, plant and equipmentAmortisation of intangible assetsAudit fee^^Non-operational items	112 2171871 534(1 121 698)	161 8103311 260(52 953)
Impairment	(1 489 247)	(52 953)
Realised foreign exchange on disposal	367 549	–
Loss for the yearOther comprehensive income, net of tax:Exchange differences on translating foreign operation	(1 111 440)88 078	(105 933)61 661
Pre-tax foreign exchange differences on translating foreign operation	127 850	90 385
Tax effect on exchange differences on translating foreign operation	(39 772)	(28 724)
Post-tax foreign exchange differences on discontinued operation	(299 664)	–
Pre-tax foreign exchange differences on discontinued foreign operation	(367 549)	–
Tax impact on foreign exchange differences on discontinued foreign operation	67 885	–
Total comprehensive loss for the year	(1 323 026)	(44 272)
Net cash inflow generated from operating activities	17 329	63 012
Net cash outflow from investing activities	(63 732)	(35 404)
Net cash outflow from financing activities	–	(69 825)
Net decrease in cash and cash equivalents	(46 403)	(42 217)
Basic loss per share (cents) from discontinued operationBasicDiluted	(1 110)(1 107)	(106)(106)

17 (Loss)/earnings and diluted (loss)/earnings per share ("EPS")

		2021			2020
EPS – including discontinuedoperation	GrossR000	TaxR000	NetR000	GrossR000	TaxR000	NetR000
TotalReconciliation between basic anddiluted basic (loss)/earnings(Loss)/profit attributable to ownersof Famous Brands Limited	(1 239 079)	–	(1 239 079)	362 264	–	362 264
Basic and diluted basic (loss)/earnings (1 239 079)		–	(1 239 079)	362 264	–	362 264
Basic (loss)/earnings per share (cents)BasicDiluted			(1 237)(1 234)			362361
	Gross	2021Tax			2020
EPS – continuing operations	R000	R000	NetR000	GrossR000	TaxR000	NetR000
Reconciliation between basic anddiluted basic (loss)/earnings(Loss)/profit attributable to owners ofFamous Brands Limited	(127 639)	–	(127 639)	468 197	–	468 197
Basic and diluted basic (loss)/earnings	(127 639)	–	(127 639)	468 197	–	468 197

Interest rate

19 Borrowings

	Currency	Maturitydate	Nature	Margin%	Rate	2021%	2020%	2021R000	2020R000

Unsecured
Long-term borrowings								1 462 600	1 655 630
Short-term portion of borrowings								6 412	21 807
								1 469 012	1 677 437
Interest is paid quarterly in arrears.
The company has unlimited borrowing powers in terms of itsMemorandum of Incorporation.
Terms of repayment
FY2020
					3-month
Loan facility: 3-year bullet	ZAR	Dec-21	Variable	1.60	JIBAR3-month		6.80		600 000
Loan facility: 4-year bullet	ZAR	Dec-22	variable	1.70	JIBAR		6.80		850 000
Loan facility: 5-year					3-month
revolving facility	ZAR	Dec-23	variable	1.70	JIBAR		6.80		207 169
FY2021
Loan facility:Amortising loan	ZAR	Aug-23	variable	2.95	3-monthJIBAR 6.44			750 000
Loan Facility: Revolving					3-month
Credit Facility (RCF)	ZAR	Feb-24	variable	3.20	JIBAR 6.69			700 000
General Banking
Facility (GBF)Loan Facility: Term Loan	ZARZAR	364 daysJun-21	variablevariable	N/A0.10	Prime 7.00Prime 7.10			–6 266
Loan Facility: Term Loan	GBP	Sep-25	fixed	N/A		Fixed 2.02		12 600
								1 468 866	1 657 169
Transaction costs								–	(2 468)
Interest accrued								146	22 736
								1 469 012	1 677 437
Maturity analysis
Payable within 1 yearPayable between								6 412	21 807
2 and 5 years								1 462 600	1 655 630
								1 469 012	1 677 437

18 Headline (loss)/earnings and diluted headline (loss)/earnings per share

		2021			2020
HEPS – including discontinuedoperation	GrossR000	TaxR000	NetR000	GrossR000	TaxR000	NetR000
TotalReconciliation between (loss)/earnings, headline (loss)/earnings and diluted headline(loss)/earnings(Loss)/profit attributable to owners
of Famous Brands Limited	(1 239 079)		– (1 239 079)	362 264	–	362 264
Adjustment for:	1 303 602		(151 158) 1 152 444	55 890	(822)	55 068
Loss on disposal of property,plant and equipmentLoss on disposal of intangible assets	3 14412 950	(880)–	2 26412 950	2 937–	(822)–	2 115–
Profit on sale of businessRealised foreign exchange on	(27 675)	–	(27 675)	–	–	–
disposal of discontinued operation	(367 549)	67 885	(299 664)	–	–	–
Impairments	1 682 732		(218 163) 1 464 569	52 953	–	52 953
Headline (loss)/earnings	64 523	(151 158)	(86 635)	418 154	(822)	417 332
Headline (loss)/earnings per share(cents)
Basic			(86)			417
Diluted			(86)			416

	2021			2020
HEPS – continuing operations	GrossR000	TaxR000	NetR000	GrossR000	TaxR000	NetR000
Reconciliation between (loss)/earnings, headline earningsand diluted headline earnings(Loss)/profit attributable to ownersof Famous Brands LimitedAdjustment for:	(127 639)181 904	–(880)	(127 639)181 024	468 1972 937	–(822)	468 1972 115
Loss on disposal of property,plant and equipmentLoss on disposal of intangible assetsProfit on disposal of businessImpairments	3 14412 950(27 675)193 485	(880)–––	2 26412 950(27 675)193 485	2 937–––	(822)–––	2 115–––
Headline earnings	54 265	(880)	53 385	471 134	(822)	470 312
Headline earnings per share (cents)BasicDiluted			5353			470469

About Famous Brands Value creation process

Strategic intent and viability

Sustainability Leadership commentary Governance and remuneration

SHAREHOLDER SPREAD

	2021% of			2020% of
	Numberof shareholders	totalshareholdings	Numberof shares	% ofissuedcapital	Numberof shareholders	totalshareholdings	Numberof shares	% ofissuedcapital
1 – 10 000	5 913	93.74	3 951 395	3.94	4 432	92.43	3 940 583	3.93
10 001 – 50 000	204	3.23	4 693 826	4.68	211	4.40	4 727 046	4.72
50 001 – 100 000	64	1.01	4 514 898	4.51	38	0.79	2 507 149	2.50
100 001 – 1 000 000	101		1.60 29 762 444 29.70		96		2.00 34 841 052	34.78
Over 1 000 000Total	26		0.42 57 279 721 57.176 308 100.00 100 202 284 100.00		184 795		0.38 54 170 228100.00 100 186 058 100.00	54.07
Distribution of shareholders
Individuals	5 462		86.59 17 434 306 17.40		3 944		82.25 20 979 114	20.94
Insurance companies	7	0.11	2 133 812	2.13	9	0.19	1 181 098	1.18
Investment trustsOther companies and corporate	240	3.80	7 651 578	7.64	274	5.71	7 644 852	7.63
bodies	599		9.50 72 982 588 72.83		568		11.85 70 380 994	70.25
Total			6 308 100.00 100 202 284 100.00		4 795		100.00 100 186 058 100.00
Shareholder typeNon-public shareholders	26		0.41 22 343 809 22.30		23		0.48 23 645 580	23.60
Directors and associates (Direct)Directors and associates (Indirect)	179	0.14	0.27 12 351 246 12.339 992 563	9.97	914	0.29	0.19 13 758 1179 887 463	13.739.87
Public shareholders	6 282		99.59 77 858 475 77.70		4 772		99.52 76 540 478	76.40
Total			6 308 100.00 100 202 284 100.00		4 795		100.00 100 186 058 100.00
Fund managers greater than 5%
of the issued shares
Coronation Fund Managers			28 556 235 28.50				26 117 658	26.07
Public Investment CorporationBMO LGM Investments			7 856 095	7.84			9 312 345	9.30
Management Group			–	–			8 021 206	8.01
Visio Capital Management			7 025 964	7.01			–	–
Total			43 438 294 43.35				43 451 209	43.38
Direct and indirect beneficialshareholders greater than 5%of the issued shares(excluding directors)
Coronation Fund ManagersGovernment Employees			16 188 808 16.16				14 341 846	14.32
Pension Fund			8 784 294	8.77			10 818 519	10.80
BMO LGM InvestmentsManagement Group			–	–			8 021 206	8.01
Halamandaris Theofanis Mr			4 677 598	4.67			7 017 598	7.00
Panis Trust			6 828 955	6.82			6 828 955	6.82
Total			36 479 655 36.42				47 028 124	46.95
Total number of shareholdings	6 308				4 795
Total number of shares in issue			100 202 284				100 186 058

19 Borrowings (continued)

Sensitivity analysis

A change of 1% in interest rates at the reporting date would have increased/(decreased) profit or loss by R15 million (2020: R17 million).

Interest risk management

The Group utilises interest rate swap contracts to hedge its exposure to the variability of cash flows arising from unfavourable movements in interest rates. Refer Note 32 Risk management of the financial statements and Note 11 Derivative financial instruments for further details.

Facilities

Total ZAR overdraft facility in place: R200 million (2020: Rnil). Unutilised portion at year-end: R200 million (2020: Rnil).
The Group has a 5-year revolving loan facility of R1 100 million (2020: R970 million). Unutilised portion is R400 million (2020: R763 million) at year end.

Guarantees

Famous Brands Limited, Famous Brands Management Company (Pty) Ltd, Mugg and Bean Franchising (Pty) Ltd, Lamberts Bay Foods (Pty) Ltd, Famous Brands Logistics Company (Pty) Ltd, Creative Coffee Franchising (Pty) Ltd, Hawk Like Trade and Invest (Pty) Ltd and Vovo Telo Bakery and Cafe (Pty) Ltd have guaranteed in terms of the loan agreement:

Punctual performance by the Group of amounts due in the agreement.
Immediate payment of amounts due which the Group has not paid.

• To indemnify the lender against any cost, loss or liability it incurs as a result of the Group not paying amounts that are due.

Transaction costs

The unamortised portion of transaction costs related to the refinanced loan facility amount to nil (2020: R2 million) as at 28 February 2021.

20 Post-balance sheet events

Famous Brands Design Studio (Pty) Ltd trading as DHQ has from March 2021 transitioned to an associate company. Famous Brands now holds 49% – formerly 60% – after the creation of the DHQ employees share trust. Famous Brands Management company (Pty) ltd donated the shares to the trust.

Famous Brands Great Bakery Company (Pty) Ltd trading as Bread Basket was 51% owned by Famous Brands and this majority stake was sold on 1 May 2021 to our long standing partner and family founders of the business.

Lupa Osteria was 51% owned by Famous Brands. On 1 May 2021 Famous Brands acquired the 49% non-controlling interest from the founders of Lupa Osteria , Guy Cluver and Chris Black.

None of the above transactions were categorised transactions in terms of the Listings Requirements of the JSE.

About Famous Brands Value creation process

Governance and remuneration

Shareholders' diary

Financial year end	28 February 2021
AGM	23 July 2021
Reports
Announcement of annual financial results for the year ended 28 February 2021	31 May 2021
Publication of the IAR for the year ended 28 February 2021	22 June 2021
Announcement of interim results for the half-year ended 31 August 2021	26 October 2021

Administration

Famous Brands Limited

Incorporated in the Republic of South Africa Registration number: 1969/004875/06 JSE and A2X share code: FBR ISIN code: ZAE000053328

Directors

Norman Adami, Santie Botha (Independent Chairman), Chris Boulle, Deon Fredericks, Nik Halamandaris, John Halamandres, Darren Hele (CEO)*, Alex Maditse, Emma Mashilwane and Lebo Ntlha (Group FD) *.

* Executive

Group Company secretary

Celeste Appollis

Registered office

478 James Crescent, Halfway House, Midrand, 1685 PO Box 2884, Halfway House, 1685 Telephone: +27 11 315 3000 Email: [email protected] Website address: www.famousbrands.co.za

Transfer secretaries

Computershare Investor Services Pty Limited Registration number: 2004/003647/07 Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 Private Bag X9000, Saxonwold, 2132

Sponsor

The Standard Bank of South Africa Limited Registration number: 1969/017128/06 30 Baker Street, Rosebank, 2196

Auditors

KPMG Registration number: 1999/012876/07 85 Empire Rd, Parktown, Johannesburg, 2193

SUPPLEMENTARY INFORMATION

Directors' CVs

Role at Famous Brands

• Member of the Audit and Risk Committee; • member of the Nominations Committee; and • member of the Investment Committee.

Directorships in other listed entities

• CCB Africa – Board member.

Norman had an extensive career with SABMiller, which commenced at SAB Pty Limited in 1979. He was appointed Managing Director of SAB in 1994 and Chairman in 2000. In 2003, he was installed as President and CEO of the newly acquired Miller Brewing Company. In 2006, he was appointed President and CEO of SABMiller Americas. In this position he was responsible for Miller Brewing Company and SABMiller's South and Central American business units. In October 2008, he once again took on the role of Managing Director and Chairman of SAB Limited. He retired from SABMiller on 31 October 2014.

Norman is a partner in Stud Game Breeders, one of the pre-eminent groups leading the emergence of SA's burgeoning game breeding industry, which has made great strides in revitalising threatened animal species and in creating sustainable employment in many rural areas.

Areas of expertise

General management, risk, strategy, marketing, operational management,

mergers and acquisitions

Role at Famous Brands

• Chairman of the Nominations Committee; • member of the Remuneration Committee; • member of the Investment Committee; and • attends the Audit and Risk Committee meetings by invitation.

Directorships in other listed entities

• Curro Holdings – Independent Chairman; and • Capitec Bank Holdings – Independent Chairman.

Santie served as an executive director of the MTN Group (2003 to 2010) and prior to that, of Absa Bank (1996 to 2003). She served as Chancellor of Nelson Mandela University from 2011 until 2017. Santie has received a range of awards, including Business Woman of the Year (2010).

Areas of expertise

Governance, general management, operations, marketing, strategy, remuneration, consumer insight and stakeholder relationships

Santie Botha (56)

Independent non-executive

Chairman BEcon (Hons)

The Chairman of the Board is

independent.

Independent non-executive

director

B Bus, Sci (Hons), MBA

About Famous Brands

Value creation process

Strategic intent and viability

Role at Famous Brands

Member of the Social and Ethics Committee; and
attends the Audit and Risk Committee meetings and Investment Committee meetings by invitation.

Nik has extensive experience in the food services industry, having been a franchisee of many of the Group's mainstream brands over the past two decades up until 2010. He is currently an executive director of several non-listed property development and construction companies with primary responsibility for strategy and new business development.

Areas of expertise

General management, strategy, franchise management, food services and property management

Role at Famous Brands

• Member of the Social and Ethics Committee; and • member of the Nomination Committee.

Directorships in other listed entities

• African Rainbow Minerals Limited – lead independent director, member of the Board, Audit, Remuneration, and Social and Ethics Committees, Chairman of the Investment Committee and Remuneration Committee;

• The Bidvest Group Limited – member of the Board, Remuneration, and Social and Ethics Committees; and

• Murray & Roberts – member of the Board, Remuneration, and Social and Ethics Committees.

Alex is an admitted attorney and is currently the CEO of Copper Moon Trading Pty Limited. He serves as a director on several boards and committees of listed companies. He has previously held the positions of Country Manager Coca-Cola East and Central Africa and Franchise Operations Director of Coca-Cola SA.

Areas of expertise

Law, governance, strategy, franchising, management and operations

Role at Famous Brands

• Chairman of the Remuneration Committee; • member of the Audit and Risk Committee; and

member of the Investment Committee.

Directorships in other listed entities

• Tiger Brands-Board member, chairman of the Audit Committee and member of the Risk and Sustainability Committee (until February 2021), member of the Investment and Social, Ethics & Transformation Committees;

• Capitec Bank Holdings Limited and Capitec Bank Limited – Board member and Member of the Audit Committee.

Emma is a seasoned chartered accountant with extensive experience in Internal Audit, Risk Management, Corporate Governance and External Audit. She is the co-founder and CEO of MASA Risk Advisory Services and MASA Chartered Accountants Incorporated. Emma was a finalist in the Standard Bank Top Women 2020, Women in Finance category as well as the Businesswomen's Association of South Africa 2017 Regional Business Achiever Awards

(Professional Services category).

Areas of expertise

Internal and external audit, risk management, financial management, corporate governance, strategy and general management

Role at Famous Brands

Chairman of the Investment Committee;
chairman of the Social and Ethics Committee;
member of the Remuneration Committee; and
attends Audit and Risk Committee meetings by invitation.

Directorships in other listed entities

• Advtech – Chairman and non-executive director

Chris is a commercial, corporate finance, tax and trust attorney and his expertise includes cross-border transactions, mergers and acquisitions, Black economic empowerment transactions and advising on stock exchange listings both locally and internationally. His experience as a non-executive director of listed companies spans over two decades.

Areas of expertise

Law, governance, strategy, risk and corporate finance

Role at Famous Brands

• Chairman of the Audit and Risk Committee

Deon has previously held various other directorships, including Telkom, Vodacom,

BCX, Trudon, Gyro Group, SAA and the Telkom Retirement Fund.

Areas of expertise

General management, risk and finance

SUPPLEMENTARY INFORMATION continued

Deon Jeftha Fredericks (60)

Independent non-executive director

BCompt (Hons), Business Management (Hons), CA(SA), CIMA

Alexander (Alex) Komape Maditse (58)

Independent non-executive director

BProc, LLB, LLM, Dip Company Law

Thetele Emmarancia

(Emma) Mashilwane (45)

Independent non-executive director

CA(SA), RA, MBA, BCompt, BCom (Hons)/CTA, Global Executive Development Programme

Christopher Hardy Boulle (49) Independent non-executive director

BCom, LLB, LLM

Nicolaos (Nik) Halamandaris (46) Non-executive director

nent Equity Act definition








l amortisation


















A








al

About Famous Brands Value creation

process

Strategic intent and viability

Sustainability Leadership

Governance and remuneration

Annual financial statements

Role at Famous Brands

Member of the Social and Ethics Committee; and
attends all Committee meetings by invitation and attends various subsidiary and associate company Board meetings as a director.

Darren commenced his career at Pleasure Foods Limited while studying for and completing a BCom. After participating in the management buy-out of Pleasure Foods in 1996, he held executive roles at Whistle Stop and Wimpy before joining Famous Brands in 2003. He served as Managing Director of Wimpy in SA and later in the UK.

Darren was appointed Chief Operating Officer – Franchising division in May 2011 and in January 2013 assumed the position of Chief Operating Officer of the Group. With effect from 1 March 2014, Darren assumed the role of CEO – Food Services. He was appointed CEO of the Group with effect from 1 March 2016.

Areas of expertise

General management, franchise management, marketing, strategy and stakeholder relationships

Role at Famous Brands

Attends the Audit and Risk Committee meetings by invitation; and
attends the Investment Committee meetings by invitation.

Lebo is a CA(SA) and holds an MBA degree (awarded cum laude) from the University of the Witwatersrand and a post-graduate diploma in tax. She completed her articles with PwC in 2007, after which she gained extensive experience in IFRS in her roles as Group Technical Accounting Adviser at Eskom and Group Reporting Manager at African Oxygen Limited. Lebo joined Famous Brands in July 2014 as the Group Financial Executive and Company Secretary and was appointed to the Board as Group FD effective 1 July 2016.

Areas of expertise

Finance, risk and strategy

Role at Famous Brands

• Member of the Investment Committee

With experience in all aspects of Famous Brands' business, John retired from executive management in March 2001. A founding member of the Company, he served as Managing Director from November 1994 until March 1997, after which he assumed the role of CEO until his appointment as non-executive Deputy Chairman in March 2001, a position he held until May 2010.

Areas of expertise

General management, franchise management, governance and strategy

SUPPLEMENTARY INFORMATION continued

Glossary

ACI	African, coloured and Indian per the Employment Equity Act definition
AGM	Annual General Meeting
AME	Africa, Middle East and Europe
BBBEE	Broad-based black economic empowerment
BU	Bargaining unit
Capex	Capital expenditure
CDR	Casual Dining restaurant
CSI	Corporate social investment
EBITDA	Earnings before interest, tax, depreciation and amortisation
ESD	Enterprise and supplier development
ESG	Environmental, social and governance
Exco	Executive Committee
FD	Financial Director
FSSC	Food Safety System Certification
FY	Financial year
GBK	Gourmet Burger Kitchen Restaurants
HR	Human Resources
HEPS	Headline earnings per share
IT	Information technology
JV	Joint venture
KPI	Key performance indicator
LPG	Liquefied petroleum gas
LTI	Long-term incentive
MSR	Minimum shareholding requirements
NOSA	National Occupational Safety Association of SA
OTM	On The Move (Mugg & Bean format)
QSR	Quick Service restaurant
ROCE	Return on capital employed
ROI	Return on investment
SMME	Small, medium and micro-enterprises
STI	Short-term incentive
TSR	Total shareholder return
UN SDG	United Nations Sustainable Development Goal
WACC	Weighted average cost of capital

Kelebogile (Lebo) Ntlha (38)

Group Financial Director

CA(SA), MBA, PGDip Tax

Darren Paul Hele (49) Chief Executive Officer

BCom

GREYMATTERFINCH # 15215

AI assistant

FAMOUS BRANDS LIMITED — Annual Report 2021

48721_rns_2021-06-24_8251e07b-3f41-46cf-8768-6894a1b61f9e.pdf

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CONTENTS

Reporting suite and principles

ABOUT OUR INTEGRATED ANNUAL REPORT

Forward looking statements disclaimer

Board responsibility statement

What drives us

We value our mutually beneficial relationships with our franchise

ABOUT FAMOUS BRANDS

Who we are

Famous Brands is Africa's leading branded food services franchisor.

Vision and values

Global footprint 7

What we do

Signature brands

The year in review

BUSINESS MODEL VALUE CREATION PROCESS

Within our control Beyond our control

Strategic objectives

Improving our operational efficiencies

Creating value using our capitals

Financial capital

Manufactured capital

Intellectual capital

Human capital

Natural capital

Social and Relationship capital

Gourmet Burger Kitchen enters administration

Implementing salary reductions

Refocusing on our core business

Placing franchise partners first

RESET. REFOCUS. RENEGOTIATE.

Established market leader

Aspirational brands and exceptional franchise partners

Competent leadership and clear strategies

Strategic business model

Effective capital allocation

Supportive financial position

ESG mindfulness

KEY DIFFERENTIATORS AND INVESTMENT CASE

OPERATING CONTEXT STRATEGIC INTENT AND VIABILITY

OPERATING CONTEXT continued

OPERATING CONTEXT continued

OPERATING CONTEXT continued

KEY STAKEHOLDERS

Stakeholder management

Evaluating the quality of relationships with our stakeholders

Nature of engagement

Measuring the impact of our stakeholders

Identifying our priority stakeholders

Shareholders, market analysts and prospective investors Funding institutions

How we engage

Interests and issues raised

Our strategic response and future focus

How we engage

Interests and issues raised

Our strategic response and future focus

KEY STAKEHOLDERS continued

Civil society and communities Suppliers and business partners

How we engage

Interests and issues raised

Our strategic response and future focus

KEY STAKEHOLDERS continued

How we engage

Interests and issues raised

Our strategic response and future focus

KEY STAKEHOLDERS continued

Government and regulators

KEY STAKEHOLDERS continued

Risk Management Policy and process

RISKS AND OPPORTUNITIES continued

Risk activity and accountability

Key risks

Residual risk assessment

Root causes

Root causes

Impact on value

FAMOUS BRANDS LIMITED Annual Report 2021