SUPER RETAIL GROUP LIMITED — Annual Report 2012

Aug 21, 2012

APPENDIX 4E PRELIMINARY FINAL REPORT

SUPER RETAIL GROUP LIMITED (SUL)

ABN 81 108 676 204

Statutory Results

Current Reporting Period: Previous Reporting Period:

From 3 July 2011 to 30 June 2012 (52 weeks) From 4 July 2010 to 2 July 2011 (52 weeks)

Results for Announcement to the Market

	Statutory Results $’000	Comparison to 2011 Statutory Results $’000
Revenuefromordinary activities	1,655,474	Up 51.4% to $1,655,474
Profit from ordinary activities after tax attributable tomembers	83,521	Up 50.2% to $83,521
Net profitforthe period attributable tomembers	83,521	Up 50.2% to $83,521

Dividends

Dividends	Dividends
Amount Per Share Franked Amount Per Share Interimdividend–CurrentPeriod 13.0¢ 13.0¢
Final dividend – Current Period Declared21 August2012(payable 3 October 2012) 19.0¢	19.0¢
Record date for determining entitlements to the final dividend	31 August 2012

Brief explanation of figures reported above to enable the figures to be understood

Refer press release

Audit

This report is based on accounts which have been audited. The audit report, which was unqualified, will be made available with the Company’s Financial Report.

Details of Annual General Meeting

Place Kedron Wavell Services Club, Community Centre, 375 Hamilton Road, Chermside South, Queensland

Date Monday, 22 October 2012

Time 11.30 am

Approximate date the annual report will be available: 21 September 2012

Page 1

Super Retail Group Limited Consolidated Comprehensive Income Statement For the period ended 30 June 2012

Notes Revenue from continuing operations 3 Other income 4 Total revenues and other income Cost of sales of goods Other expenses from ordinary activities - selling and distribution - marketing - occupancy - administration Finance costs expense Total expenses Profit before income tax Income tax (expense)/benefit 6 Profit attributable to Members of Super Retail Group Limited Other comprehensive income Cash flow hedges 22 Exchange differences on translation of foreign operations 22 Other comprehensive income for the year, net of tax Total comprehensive income for the year Total comprehensive income for the year is attributable to: Owners of Super Retail Group Limited Earnings per share for profit attributable to the ordinary equity holders of the company: Basic earnings per share Diluted earnings per share	Consolidated 2012 2011 $'000 $'000 1,655,474 1,093,398 916 1,359
	1,656,390 1,094,757
	(927,679) (598,067) (208,154) (138,415) (76,891) (51,188) (124,584) (90,307) (176,982) (128,155) (21,995) (10,973)
	(1,536,285) (1,017,105)
	120,105 77,652 (36,584) (22,053)
	83,521 55,599
	360 (3,414) 301 (1,200)
	661 (4,614)
	84,182 50,985 84,182 50,985
	Cents Cents 46.1 40.6 45.8 40.1

The above consolidated comprehensive income statement should be read in conjunction with the accompanying notes.

Page 2

Super Retail Group Limited Consolidated Statement of Financial Position As at 30 June 2012

Notes ASSETS Current assets Cash and cash equivalents 7 Trade and other receivables 8 Inventories 9 Total current assets Non-current assets Property, plant and equipment 10 Deferred tax assets 11 Intangible assets 12 Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables 13 Borrowings 14 Current tax liabilities 15 Provisions 16 Total current liabilities Non-current liabilities Trade and other payables 17 Borrowings 18 Deferred tax liabilities 19 Provisions 20 Total non-current liabilities Total liabilities Net assets EQUITY Contributed equity 21 Reserves 22 Retained profits 22 Total equity attributable to equity holders of Super Retail Group Limited	Consolidated 2012 2011 $'000 $'000 47,043 25,697 28,532 22,160 416,719 292,874
	492,294 340,731
	170,863 109,277 0 10,789 722,350 111,251
	893,213 231,317
	1,385,507 572,048
	197,888 122,373 8 32 9,199 11,013 19,832 12,286
	226,927 145,704
	17,527 15,538 388,009 99,143 54,718 0 9,463 7,983
	469,717 122,664
	696,644 268,368
	688,863 303,680
	541,835 194,541 (706) (3,239) 147,734 112,378
	688,863 303,680

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

Page 3

Super Retail Group Limited Consolidated Statement of Changes in Equity For the period ended 30 June 2012

Notes Balance at 3 July 2010 Profit for the year Other comprehensive income Total comprehensive income for the year Transactions with owners in their capacity as owners Contributions of equity, net of transaction costs 22 Dividends provided for or paid 23 Employee share options and performance rights 22 Balance at 2 July 2011 Profit for the year Other comprehensive income Total comprehensive income for the year Transactions with owners in their capacity as owners Contributions of equity, net of transaction costs 22 Dividends provided for or paid 23 Employee share options and performance rights 22 Balance at 30 June 2012	Contributed Equity Reserves Retained Earnings Total $’000 $’000 $’000 $’000 182,158 158 88,241 270,557
	0 0 55,599 55,599 0 (4,614) 0 (4,614)
	0 (4,614) 55,599 50,985
	12,383 0 0 12,383 0 0 (31,462) (31,462) 0 1,217 0 1,217
	12,383 1,217 (31,462) (17,862)
	194,541 (3,239) 112,378 303,680
	0 0 83,521 83,521 0 661 0 661
	0 661 83,521 **84,182 **
	347,294 0 0 347,294 0 0 (48,165) (48,165) 0 1,872 0 1,872
	347,294 1,872 (48,165) 301,001
	541,835 (706) 147,734 688,863

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Page 4

Super Retail Group Limited Consolidated Cash Flow Statement For the period ended 30 June 2012

Notes Cash flows from operating activities Receipts from customers (inclusive of goods and services tax) Payments to suppliers and employees (inclusive of goods and services tax) Rental payments - external - related parties Income taxes paid Net cash (outflow) inflow from operating activities Cash flows from investing activities Payments for property, plant and equipment Proceeds from sale of property, plant and equipment Payments for purchase of subsidiary, net of cash acquired Net cash (outflow) inflow from investing activities Cash flows from financing activities Proceeds from borrowings Payments for borrowings Interest paid Dividends paid to company’s shareholders 22 Proceeds from issue of shares Net cash inflow (outflow) from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of year 7	Consolidated 2012 2011 $'000 $'000 1,825,528 1,207,864 (1,506,423) (1,023,148) (140,200) (82,519) (9,350) (10,384) (34,308) (20,911)
	135,247 70,902
	(60,380) (37,647) 171 1,129 (621,704) 0
	(681,913) (36,518)
	998,405 241,591 (710,860) (251,667) (16,720) (9,894) (31,692) (20,797) 328,820 1,966
	567,953 (38,801)
	21,287 (4,417) 25,697 30,200 59 (86)
	47,043 25,697

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

Page 5

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012

1 Basis of preparation

This Preliminary Final Report has been prepared in accordance with ASX Listing Rule 4.3A and the disclosure requirements of ASX Appendix 4E.

This financial report covers the consolidated entity of Super Retail Group Limited and its controlled entities.

2 Segment information

(a) Description of segments

Following the acquisition of the Rebel Group, the Board has determined the operating segments based on the reports reviewed by the Divisional Managing Directors that are used to make strategic decisions.

This results in the following business segments:

Auto & Cycle Retailing: Retail and distribution of motor vehicle spare parts and bicycle accessories, tools and equipment. Leisure Retailing: Retail and distribution of boating, camping, fishing, outdoor equipment and apparel. Sports Retailing: Retail and distribution of sporting equipment and apparel (as a result of the Rebel Group acquisition).

(b) Segment information provided to the Managing Directors

The segment information provided to the Divisional Managing Directors for the reportable segments for the year ended 30 June 2012 is as follows:

				Total	Inter-segment
	Auto & Cycle	Leisure	Sports	continuing	eliminations/
2012	Retailing	Retailing	Retailing	operations	unallocated	Consolidated
	$’000	$’000	$’000	$’000	$’000	$’000
Segment Revenue
Sales to external customers	757,949	456,271	441,909	1,656,129	119	1,656,248
Intersegment sales	(2,139)	0	0	(2,139)	0	(2,139)
Total sales revenue	755,810	456,271	441,909	1,653,990	119	1,654,109
Other revenue/income	51	22	703	776	1,505	2,281
Total revenue and other income	755,861	456,293	442,612	1,654,766	1,624	1,656,390
Segment result (pre-borrowing costs andimpairment)	72,186	32,832	54,477	159,495	(17,318)	142,177
Finance costs						(21,995)
Impairment of goodwill	(77)					(77)
Profit before income tax						120,105
Income tax expense						(36,584)
Profit for the period						83,521
Segment Assets & Liabilities
Segment assets	428,062	234,346	186,966	849,374	536,133	1,385,507
Unallocated assets					0	0
Total assets						1,385,507
Segmentliabilities	(277,899)	(178,161)	(148,539)	(605,599)	16,706	(588,893)
Unallocated liabilities					(107,751)	(107,751)
Total liabilities						(696,644)
Acquisitions of property, plant
and equipment and other non- current segment assets	17,755	15,097	656,238	689,090	21,815	710,905
Depreciation and amortisation expense	17,628	9,188	8,395	35,211	193	35,404
Goodwill impairment	77					77
Other non-cash expenses						1,873

Page 6

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

2 Segment information (continued)

The segment information provided to the Divisional Managing Directors for the reportable segments for the year ended 2 July 2011 is as follows:

2011 is as follows:
					Total	Inter-
	Auto & Cycle	Leisure	Sports		continuing	segment
2011	Retailing	Retailing	Retailing		operations	eliminations/	Consolidated
	$’000	$’000	$’000		$’000	unallocated	$’000
						$’000
Segment Revenue
Sales to external customers	713,332	384,368		0	1,097,700	0	1,097,700
Intersegment sales	(5,099)	(280)		0	(5,379)	0	(5,379)
Total sales revenue	708,233	384,088		0	1,092,321	0	1,092,321
Other revenue/income	1,772	391		0	2,163	273	2,436
Total revenue and other income	710,005	384,479		0	1,094,484	273	1,094,757
Segment result (pre-
borrowing costs and impairment)	63,611	32,042		0	95,653	(7,028)	88,625
Finance costs							(10,973)
Impairment of goodwill							0
Profit before income tax							77,652
Income tax expense							(22,053)
Profit for the period							55,599
Segment Assets &
Liabilities
Segment assets	366,253	171,597		0	537,850	34,198	572,048
Unallocated assets						0	0
Total assets							572,048
Segment liabilities	(206,162)	(115,187)		0	(321,349)	160,587	(160,762)
Unallocated liabilities						(107,606)	(107,606)
Total liabilities							(268,368)
Acquisitions of property, plant
and equipment and other non- current segment assets	13,673	13,067		0	26,740	11,889	38,629
Depreciation and amortisation expense	(15,797)	(6,860)		0	(22,657)	(145)	(22,802)
Goodwill impairment							0
Other non-cash expenses							1,222

(c) Other information

The consolidated entity’s divisions are operated in two main geographical areas.

Australia

The home country of the parent entity. The three areas of operation are (i) automotive, bicycles and accessories (ii) boating, camping, outdoor entertainment and fishing (iii) sporting equipment and apparel.

New Zealand

Supercheap Auto and FCO operate in New Zealand.

Page 7

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

3 Revenue From continuing operations Sales revenue Sale of goods Other revenue Interest 4 Other Income Other income 5 Expenses Profit before income tax includes the following specific gains and expenses: Expenses Net loss on disposal of property, plant and equipment Depreciation Plant and equipment Motor vehicles Computer systems Total depreciation Amortisation and Impairment Computer software Brand name Goodwill Supplier agreement Finance costs Interest and finance charges Accretion of put option Finance costs expensed Employee benefits expense Superannuation expense Salaries and wages Rental expense relating to operating leases Lease expenses Equipment hire Total rental expense relating to operating leases Foreign exchange gains and losses Net foreign exchange gains	Consolidated 2012 2011 $'000 $'000 1,654,109 1,092,321
	1,654,109 1,092,321
	1,365 1,077
	1,365 1,077
	1,655,474 1,093,398
	Consolidated 2012 2011 $'000 $'000 916 1,359
	916 1,359
	Consolidated 2012 2011 $'000 $'000 786 294 23,409 13,864 244 30 6,844 5,306
	30,497 19,200
	4,685 3,457 125 125 77 0 20 20
	4,907 3,602
	22,335 10,859 (340) 114
	21,995 10,973
	19,038 12,273 270,519 192,436
	289,557 204,709
	137,408 90,879 8,146 4,907
	145,554 95,786
	250 1,419

Page 8

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

6 Income tax expense

(a) Income tax expense Current tax Deferred tax Adjustments for current tax of prior period Deferred income tax (revenue) expense included in income tax expense comprises: Decrease (increase) in deferred tax assets (note 11) (Decrease) increase in deferred tax liabilities (note 19) (b) Numerical reconciliation of income tax expense to prima facie tax payable Profit from continuing operations before income tax expense Tax at the Australian tax rate of 30% (2011 - 30%) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Tax consolidation adjustments re NZ branch Business acquisition costs Goodwill impairment R & D credits Sundry items Difference in overseas tax rates Adjustments for current tax of prior periods Income tax expense Amounts recognised directly in equity Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss but directly debited or credited to equity Net deferred tax – debited/(credited) directly to equity (notes 11 and 19) Tax expense (income) relating to items of other comprehensive income Cash flow hedges	Consolidated 2012 2011 $'000 $'000 35,089 23,975 1,505 (1,807) (10) (115)
	36,584 22,053
	(396) (1,771) 1,901 (36)
	1,505 (1,807)
	120,105 77,652
	36,032 23,296 (382) (44) 3,371 0 23 0 (2,672) (1,207) 51 123
	36,423 22,168 171 0 (10) (115)
	36,584 22,053
	(1,328) (1,228)
	(1,328) (1,228)
	154 (1,463)
	154 (1,463)

(c) Tax consolidation legislation

Super Retail Group Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 1 July 2003.

On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement which, in the opinion of the directors, limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity, Super Retail Group Limited.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Super Retail Group Limited for any current tax payable assumed and are compensated by Super Retail Group Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Super Retail Group Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements.

The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The funding amounts are recognised as current intercompany receivables or payables.

Page 9

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

7 Current assets - Cash and cash equivalents

Cash at bank and in hand

Consolidated	Consolidated
2012	2011
$'000	$'000
47,043	25,697

8 Current assets - Trade and other receivables

Trade receivables Provision for impairment of receivables (a) Other receivables Tax receivable Prepayments	Consolidated 2012 2011 $'000 $'000 18,051 13,176 (219) (268)
	17,832 12,908 4,219 3,777 703 1,818 5,778 3,657
	28,532 22,160

(a) Impaired trade receivables

As at 30 June 2012 current trade receivables of the Group with a nominal value of $219,000 (2011: $268,000) were impaired and provided for. The individually impaired receivables mainly relate to wholesalers who the Group no longer trade with.

Movements in the provision for impairment of receivables are as follows:

As at 2 July 2011 Provision for impairment recognised during the year Receivables written off during the year as uncollectible	Consolidated 2012 2011 $'000 $'000 (268) (210) (14) (236) 63 178
	(219) (268)

The creation and release of the provision for impaired receivables has been included in ‘Administration’ in the income statement. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.

(b) Past due but not impaired

As of 30 June 2012, trade receivables of $4,009,000 (2011: $3,586,000) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:

0 to 3 months 3 to 6 months Over 6 months	Consolidated 2012 2011 $'000 $'000 3,230 2,435 297 668 482 483
	4,009 3,586

Page 10

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

9 Current assets – Inventories

Finished goods - at lower of cost or net realisable value	Consolidated 2012 2011 $'000 $'000 416,719 292,874

(a) Inventory expense

Inventories recognised as expense during the year ended 30 June 2012 amounted to $897,904,000 (2011: $583,164,000).

Write-downs of inventories to net realisable value recognised as an expense/(benefit) during the year ended 30 June 2012 amounted to ($735,000) (2011: ($1,388,000)). The benefit has been included in ‘costs of sales of goods’ in the income statement.

10 Non-current assets – Property, plant and equipment

Plant and equipment, at cost Less accumulated depreciation Net plant and equipment Motor vehicles, at cost Less accumulated depreciation Net motor vehicles Computer systems, at cost Less accumulated depreciation Net computer equipment Total net property, plant and equipment	Consolidated 2012 2011 $'000 $'000 237,903 160,141 (85,354) (63,964)
	152,549 96,177
	1,588 266 (367) (240)
	1,221 26
	52,426 45,805 (35,333) (32,731)
	17,093 13,074
	170,863 109,277

Assets pledged as security are detailed in Note 18

Reconciliations - consolidated entity Carrying amounts at 3 July 2011 Additions Business acquisitions Disposals Depreciation and amortisation Foreign currency exchange differences Carrying amounts at 30 June 2012 Reconciliations - consolidated entity Carrying amounts at 4 July 2010 Additions Business acquisitions Disposals Depreciation and amortisation Foreign currency exchange differences Carrying amounts at 2 July 2011	Plant and equipment $’000 Motor vehicles $’000 Computer systems $’000 Total $’000 96,177 26 13,074 109,277 48,928 62 6,902 55,892 33,485 1,499 4,011 38,995 (2,736) (122) (66) (2,924) (23,409) (244) (6,844) (30,497) 104 0 16 120
	152,549 1,221 17,093 170,863
	89,965 661 14,683 105,309 23,084 0 4,522 27,606 185 (413) (668) (896) (3,390) (197) (157) (3,744) (13,864) (30) (5,306) (19,200) 197 5 0 202
	96,177 26 13,074 109,277

Page 11

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

11 Non-current assets - Deferred tax assets

11 Non-current assets - Deferred tax assets
The balance comprises temporary differences attributable to: Amounts recognised in profit or loss Doubtful debts Prepayments Employee benefits Accruals Inventories Deferred make good provision Straight line lease adjustment Deferred income Depreciation Provision for warranties and legal costs Tax losses Amounts recognised directly in equity Cash flow hedges Foreign exchange revaluation reserve Share placement costs Set off with deferred tax liabilities (note 19) Net deferred tax assets Movements: Opening balance Credited/(charged) to the income statement Credited/(charged) to equity Acquired in acquisition Closing balance Deferred tax assets to be recovered after more than 12 months Deferred tax assets to be recovered within 12 months	Consolidated 2012 2011 $'000 $'000 66 85 275 0 8,765 5,779 1,206 312 1,858 2,137 1,584 257 5,024 4,662 86 127 5,782 2,512 0 13 844 0
	25,490 15,884 1,131 1,235 32 0 1,836 354
	28,489 17,473 (28,489) (6,684)
	0 10,789
	17,473 14,559 396 1,771 1,410 1,000 9,210 143
	28,489 17,473
	23,835 14,543 4,654 2,930
	28,489 17,473

Page 12

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

12 Non-current assets – Intangible assets

Goodwill at cost Less impairment charge Net goodwill Trademarks, at cost Less accumulated depreciation Net trademarks Computer software Less accumulated amortisation Net computer software Brand names at cost Less amortisation Net brand names Supplier agreement Less amortisation Net supplier agreement Total net intangibles Reconciliations – consolidated entity - 2012 Carrying amounts at 3 July 2011 Additions Business acquisitions Disposals/Revision in provisional accounting Amortisation/Impairment charge Carrying amounts at 30 June 2012	Goodwill $’000 Trademarks $’000 Computer Software $’000 76,452 14 12,320 0 0 6,842 361,812 0 2,364 0 0 (12) (77) 0 (4,685)	Consolidated 2012 2011 $’000 $’000 440,264 78,452 (2,077) (2,000)
		438,187 76,452 14 14 0 0
		14 14 41,808 32,614 (24,979) (20,294)
		16,829 12,320 267,500 22,500 (500) (375)
		267,000 22,125 400 400 (80) (60)
		320 340
		722,350 111,251
		Brand Name $’000 Supplier Agreement $’000 Totals $’000 22,125 340 111,251 0 0 6,842 245,000 0 609,176 0 0 (12) (125) (20) (4,907)
	438,187 14 16,829	267,000 320 722,350

Amortisation of $4,907,000 (2011: $3,602,000) is included in “Administration” in the consolidated income statement.

Reconciliations – consolidated entity - 2011 Carrying amounts at 4 July 2010 Additions Disposals/Revision in provisional accounting Amortisation/Impairment charge Carrying amounts at 2 July 2011	Goodwill $’000 Trademarks $’000 Computer Software $’000 Brand Name $’000 Supplier Agreement $’000 Totals $’000 74,701 14 6,505 22,250 360 103,830 0 0 9,455 0 0 9,455 1,751 0 (183) 0 0 1,568 0 0 (3,457) (125) (20) (3,602)
	76,452 14 12,320 22,125 340 111,251

(a) Impairment tests for goodwill

Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to the group of assets based on acquisition.

Page 13

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

12 Non-current assets – Intangible assets (continued)

A segment level summary of the goodwill allocation is presented below:-

	Supercheap		Goldcross	Ray’s
	Auto	BCF	Cycles	Outdoors	Rebel Group	Total
2012	$’000	$’000	$’000	$’000	$’000	$’000
Goodwill	45,336	12,950	7,877	11,002	361,022	438,187
	Supercheap		Goldcross	Ray’s
	Auto	BCF	Cycles	Outdoors	Total
2011	$’000	$’000	$’000	$’000	$’000
Goodwill	45,336	12,950	7,954	10,212	76,452

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by the Board of Directors covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. The growth rate does not exceed the long-term average growth rate for the business in which the CGU operates.

Goodwill allocation presented for Goldcross Cycles includes goodwill for Riders Cycles.

Goodwill allocation presented for Rebel Group includes Rebel Sport and A-Mart All Sports.

(b) Key assumptions used for value-in-use calculations

The following assumptions have been used for the analysis of each CGU within the business segment. Management determined budgeted gross margin based on past performance and its expectations for the future. The weighted average growth rates used are consistent with forecasts included in industry reports. The discount rates used are pre-tax. The factors used by each business segment is shown below.

	Growth	rate	Discount	rate
	2012	2011	2012	2011
	%	%	%	%
Supercheap Auto	3	3	12	15
BCF	5	5	12	15
Goldcross Cycles	5	10	12	15
Ray’s Outdoors	10	10	12	15
Rebel Group	*	*	*	*

• A value-in-use calculation was not performed for the Rebel Group due to an external valuation being performed as at the date of acquisition. As with the other business segments, performance of the Rebel Group will be assessed on an ongoing basis.

The initial two year’s of a store operating growth rate is assumed to be 10% for Supercheap Auto, BCF, Ray’s Outdoors and 5% for Goldcross Cycles.

(c) Useful life for brand

The Goldcross Cycles brand has been determined to have a 20 year life and is amortised over this period.

No amortisation is provided against the carrying value of the purchased Ray’s Outdoors, Rebel Sport and A-Mart All Sports brands on the basis that it is considered to have an indefinite useful life.

Key factors taken into account in assessing the useful life of brands were:

• the strong recognition of the Ray’s Outdoors, Rebel Sports and A-Mart All Sports brands; and

• there are currently no legal, technical or commercial factors indicating that the life should be considered limited.

13 Current liabilities - Trade and other payables

Trade payables Other payables Loans from related parties	Consolidated 2012 2011 $'000 $'000 130,672 83,050 67,200 39,305 16 18
	197,888 122,373

Page 14

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

14 Current liabilities – Borrowings

Secured Finance leases Total current liabilities – secured interest bearing liabilities Unsecured Related parties Unsecured bank financing Total current liabilities – unsecured interest bearing liabilities Total current liabilities – interest bearing liabilities		Consolidated 2012 2011 $'000 $'000 8 32
		8 32
		0 0 0 0
		0 0
		8 32

(a) Cash Advances

Cash advances have been drawn as a source of short-term financing on a needs basis.

15 Current liabilities – Current tax liabilities

Income tax payable

Consolidated	Consolidated
2012	2011
$'000	$'000
9,199	11,013

16 Current liabilities – Provisions

Put option provision(a) Provision for warranties(b) Make good provision(c) Employee benefits(d)	Consolidated 2012 2011 $'000 $'000 409 871 0 44 119 460 19,304 10,911
	19,832 12,286

(a) Put Option Provision

The put option relates to the acquisition of Oceania Bicycles Pty Ltd. As part of this acquisition, Super Retail Group Limited has granted the vendor an option to sell the remaining 50% to the Group at an agreed EBITA multiple. This option can be exercised at any time up to 10 years from acquisition.

(b) Provision for Warranties

Provision is made for the estimated warranty claims in respect of products sold which are still under warranty at balance date. These claims are expected to be settled in the next financial year. Management estimates the provision based on historical warranty claim information and any recent trends.

(c) Make good provision

Provision is made for costs arising from contractual obligations in lease agreements at the inception of the agreement. A provision has been recognised for the present value of the estimated expenditure required to remove any leasehold improvements. These costs have been capitalised as part of the cost of the leasehold improvements and are amortised over the shorter of the term of the lease or the useful life of the assets.

(d) Employee benefits

The current provision for employee benefits includes accrued annual leave and long service leave. For long service leave it covers all unconditional entitlements where employees have completed the required period of service.

Page 15

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

17 Non-current liabilities – Trade and Other Payables

17 Non-current liabilities – Trade and Other Payables
Straight line lease adjustment 18 Non-current liabilities – Borrowings Secured Finance lease Bank debt funding facility Less borrowing costs capitalised, net	Consolidated 2012 2011 $'000 $'000 17,527 15,538
	Consolidated 2012 2011 $'000 $'000 0 8 390,000 100,000 (1,991) (865)
	388,009 99,143

The facilities are secured by first registered floating company charges over all the assets and undertakings of Super Retail Group Limited and all its wholly-owned subsidiaries in favour of ANZ Banking Group Limited, HSBC, Commonwealth Bank of Australia and National Australia Bank and by cross guarantees and indemnities between Super Retail Group Limited and all its wholly-owned subsidiaries in favour of ANZ Banking Group Limited, HSBC, Commonwealth Bank of Australia and National Australia Bank. Financial covenants are provided by Super Retail Group Limited with respect to leverage, gearing, fixed charges coverage and shareholder funds.

The carrying amount of assets pledged as security are equal to those shown in the consolidated statement of financial position.

Financing arrangements Unrestricted access was available at balance date to the following lines of credit: Total facilities - Bank debt funding facility - Multi-option facility (including indemnity/guarantee) Totals Facilities used at balance date - Bank debt funding facility - Multi-option facility (including indemnity/guarantee) Totals Unused balance of facilities at balance date - Bank debt funding facility - Multi-option facility (including indemnity/guarantee) Totals	Consolidated 2012 2011 $’000 $’000 500,000 190,000 17,000 7,000
	517,000 197,000 390,000 100,000 8,264 3,030
	398,264 103,030 110,000 90,000 8,736 3,970
	118,736 93,970

In addition, the Company has access to a $89.5 million (2011: $132 million) transactional facility for clean credit and foreign currency dealings.

Current interest rates on bank loans of the economic entity are 5.63% - 6.62% (2011: 6.71% - 6.88%).

Page 16

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

19 Non-current liabilities - Deferred tax liabilities

19 Non-current liabilities - Deferred tax liabilities
The balance comprises temporary differences attributable to: Amounts recognised in profit or loss Prepayments Brand values Goodwill Other receivables Depreciation Amounts recognised directly in equity Foreign exchange revaluation reserve Cash flow hedges Set-off of deferred tax liabilities of parent entity pursuant to set-off provisions Net deferred tax liabilities Movements: Opening balance Charged/(credited) to the income statement Charged/(credited) to equity Acquired in acquisition Closing balance Deferred tax liabilities to be settled after more than 12 months Deferred tax liabilities to be settled within 12 months	Consolidated 2012 2011 $'000 $'000 9 3 80,196 6,638 126 0 280 0 2,471 0
	83,082 6,641
	125 0 0 43
	83,207 6,684 (28,489) (6,684)
	54,718 0
	6,684 6,948 1,901 (36) 82 (228) 74,540 0
	83,207 6,684
	82,793 6,681 414 3
	83,207 6,684

20 Non-current liabilities – Provisions Make good provision Employee benefits Provision for Oceania future dividend (a)	Consolidated 2012 2011 $'000 $'000 4,467 4,899 4,864 2,952 132 132
	9,463 7,983

(a) Provision for Oceania future dividend A provision has been recognised for the present value of the estimated cost of the future dividend required to be paid with respect to Oceania.

(b) Movements in provisions (consolidated entity) (notes 16 & 20)

Opening balance as at 3 July 2011 Additional provisions recognised Indexing of provisions Provision released Acquisitions Closing balance as at 30 June 2012	Put option $’000 Warranties $’000 Make good $'000 Oceania future dividend $’000 Total $’000 871 44 5,359 132 6,406 0 0 143 0 143 0 0 55 0 55 (462) (44) (1,955) 0 (2,461) 0 0 984 0 984
	409 0 4,586 132 5,127

Page 17

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

21 Contributed equity

(a) Share Capital Ordinary shares fully paid (b) Movement in ordinary share capital Issue of shares on incorporation (8 April 2004) Issue of shares on 23 April 2004 Share split on 19 May 2004 Issue of shares on 8 March 2008 Dividend reinvestment plan issue on 14 October 2009 Dividend reinvestment plan issue on 17 March 2010 Issue of shares on 4 May 2010 Shares issue under share option Share placement plan on 27 May 2010 Shares issue under share option Shares issued on 31 May 2010 as consideration for Ray’s Outdoors Pty Ltd Dividend reinvestment plan issue on 1 October 2010 Dividend reinvestment plan issue on 5 April 2011 Shares issue under share option Dividend reinvestment plan issue on 26 September 2011 Institutional equity raising – 17 October 2011 Retail equity raising – 21 November 2011 Dividend reinvestment plan issue on 3 April 2012 Shares issued under share option Less transaction costs on share issue Deferred tax credit recognised directly in equity Closing balance 30 June 2012	Number of Shares 1 49,697,150 56,732,471 200,000 714,234 661,137 15,900,000 612,500 2,529,809 185,000 300,000 775,040 941,397 770,000 1,411,206 53,166,176 9,428,472 1,148,378 980,000	Parent Entity 2012 2011 $'000 $'000 541,835 194,541
		Issue Price $’000 1.00 0 1.69 84,233 0 0 1.97 394 5.35 3,821 4.96 3,279 4.80 76,320 2.36 1,346 4.80 12,143 2.42 448 5.16 1,548 5.98 4,637 6.40 6,028 2.55 1,966 5.94 8,385 5.34 283,907 5.34 50,349 7.04 8,088 2.45 2,399
		(9,810) 2,354
	196,152,971	541,835

The October 2011 and November 2011 institutional and retail equity raisings were done to finance the acquisition of Rebel Group Limited.

Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.

Dividend reinvestment plan

The company has established a dividend reinvestment plan under which holders of ordinary shares may elect to have all or part of their dividend entitlements satisfied by the issue of new ordinary shares rather than by being paid in cash.

The ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present, in person or by proxy, at a meeting of shareholders of the parent entity is entitled to one vote and, upon a poll, each share is entitled to one vote.

Options over nil (2011: nil) ordinary shares were issued during the period, with 980,000 (2011: 770,000) options being exercised during the period. Performance rights over 453,151 (2011: 363,427) ordinary shares were issued during the period. Nil performance rights were exercised during the period.

Page 18

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

21 Contributed equity (continued)

(c) Capital risk management

The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The Group monitors overall capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the statement of financial position (including minority interest) plus net debt.

During 2012 the Group’s strategy, which was unchanged from 2011, was to ensure that the gearing ratio remained below 50%. This target ratio range excludes the short-term impact of acquisitions. The gearing ratios at 30 June 2012 and 2 July 2011 were as follows:

Total borrowings Less: Cash & cash equivalents Net Debt Total Equity Total Capital Gearing Ratio	Consolidated 2012 2011 $'000 $'000 388,017 99,175 (47,043) (25,697)
	340,974 73,478 688,863 303,680
	1,029,837 377,158
	33.1% 19.5%

The increase in the gearing ratio was due to the acquisition of Rebel Group Limited.

The Group monitors ongoing capital on the basis of the fixed charge cover ratio. The ratio is calculated as earnings before finance costs, tax, depreciation, amortisation and store and DC rental expense divided by fixed charge obligations (being finance costs and store and DC rental expenses). Rental expenses are calculated net of straight line lease adjustments, while finance costs exclude non-cash mark-to-market losses or gains on interest rate swaps.

During 2012 the Group’s strategy, which was unchanged from 2011, was to maintain a fixed charge cover ratio of around 2.0 times. The fixed charge cover ratios at 30 June 2012 and 2 July 2011 were as follows:

Earnings Add: Taxation expense Finance costs Depreciation and amortisation Rental expense EBITDAR Finance costs (excluding MTM adjustment) Rental expense Fixed charges Fixed charge cover ratio	Consolidated 2012 $’000 2011 $’000 83,521 55,599 36,584 22,053 21,995 10,973 35,404 22,802 135,844 84,486
	313,348 195,913 21,995 10,973 135,844 84,486
	157,839 95,459 1.99 2.05

The slight reduction in the fixed charge cover ratio in 2012 reflects the financing costs associated with the acquisition of Rebel Group Limited.

Page 19

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

22 Reserves and retained profits

Reserves Foreign currency translation reserve Share based payments reserve Hedging reserve Movements Foreign currency translation reserve Balance at the beginning of the financial period Net exchange difference on translation of foreign controlled Entity Balance at the end of the financial period Share based payments reserve Balance at beginning of the financial period Options lapsed Options and performance rights expense Balance at the end of the financial period Hedging reserve Balance of beginning of the financial period Revaluation – gross Deferred tax Balance at the end of the financial period Retained earnings Balance at the beginning of the financial period Net profit/(loss) for the financial period attributable to shareholders of Super Retail Group Limited Dividends provided for or paid Retained profits/(losses) at the end of the financial period	Consolidated 2012 2011 $'000 $'000 (3,306) (3,607) 5,021 3,149 (2,421) (2,781)
	(706) (3,239)
	(3,607) (2,407) 301 (1,200)
	(3,306) (3,607)
	3,149 1,932 0 0 1,872 1,217
	5,021 3,149
	(2,781) 633 514 (4,877) (154) 1,463
	(2,421) (2,781)
	112,378 88,241 83,521 38,053 (48,165) (31,462)
	147,734 112,378

Nature and purpose of reserves

(i) Hedging reserve - cash flow hedges

The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised directly in equity. Amounts are recognised in profit and loss when the associated hedged transaction affects profit and loss.

(ii) Share-based payments reserve

The share-based payments reserve is used to recognise the fair value of options and performance rights issued but not exercised.

(iii) Foreign currency translation reserve

Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency translation reserve. The reserve is recognised in profit and loss when the net investment is disposed of.

Page 20

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

23 Dividends

23 Dividends
	Parent Entity
	2012	2011
	$’000	$’000
Ordinary shares
Dividends paid by Super Retail Group Limited during the reporting period were as
follows:
Interim dividend for the period ended 31 December 2011 of 13 cents (2011: 11.5 cents
per share) paid on 27 March 2012. Fully franked based on tax paid @ 30%	25,331	14,844
Final dividend for the period ended 2 July 2011 of 17.5 cents per share (2011: 13.0 cents per share) paid on 19 September 2011. Fully franked based on tax paid @ 30%	22,834	16,618
Total dividends provided and paid	48,165	31,462
Dividends paid in cash or satisfied by the issue of shares under the dividend
reinvestment plan were as follows:
Paid in cash	31,692	20,797
Satisfied by issue of shares	16,473	10,665
	48,165	31,462
Dividends not recognised at year end
Subsequent to year end, the Directors have declared the payment of a final dividend of
19.0 cents per ordinary share (2011: 17.5 cents per ordinary share), fully franked based
on tax paid at 30%.
The aggregate amount of the dividend expected to be paid on 3 October 2012, out of
retained profits at 30 June 2012, but not recognised as a liability at year end, is	37,269	22,753
Franking credits
The franked portions of dividends paid after 30 June 2012 will be franked out of existing
franking credits and out of franking credits arising from the payments of income tax in
the years ending after 30 June 2012.
Franking credits remaining at balance date available for dividends declared after the
current balance date based on a tax rate of 30%	58,030	52,124
The above amounts represent the balance of the franking account as at the end of the financial period, adjusted for:
- franking credits that will arise from the payment of the current tax liability; and,
- franking debits that will arise from the payment of the dividend as a liability at the reporting date.

The amount recorded above as the franking credit amount is based on the amount of Australian income tax paid or to be paid in respect of the liability for income tax at the balance date.

The impact on the franking account of the dividend recommended by the directors since year end, but not recognised as a liability at year end, will be a reduction in the franking account of $15,972,456 (2011: $9,751,405).

24 Net tangible asset backing

	Consolidated	Entity
	2012	2011
	Cents	Cents
Net tangible asset per ordinary share	$0.24	$1.40

Page 21

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2012 (continued)

25 Business Combinations

(a) Rebel Group Limited

Effective from 30 October 2011, Super Retail Group Limited acquired 100% of the issued share capital of Rebel Group Limited, a retailer of sporting equipment and apparel. Total consideration for the acquisition was $625m, comprising a $610m purchase price, a $10.4m working capital adjustment and $4.5m net cash acquired. The initial purchase price has been determined provisionally pending the completion of the final valuation of the fair value of net assets acquired. The provisional acquisition note is shown below.

$’000

Net assets acquired and goodwill are as follows:

Purchase consideration Cash Paid Direct costs relating to the acquisition Total purchase consideration Provisional allocation of Fair value of net identifiable assets acquired (refer below) Goodwill The goodwill is attributable to Rebel Group Limited position and profitability in the sporting goods market and synergies expected to arise after the Group’s acquisition Cash Other receivables Prepayments Inventory (net of provisions) Plant and equipment Computer software Tax assets Brand name Trade payables Other payables Provisions Deferred tax liability	624,954 0
	624,954 263,932
	361,022 $’000 4,517 415 1,695 102,152 38,851 2,364 10,011 245,000 (35,206) (20,645) (10,682) (74,540)
	263,932

Acquisition related costs of $11.1 million are included in Administration expenses in the income statement.

The acquired Group contributed revenues of $441.9 million for the period 30 October 2011 to 30 June 2012. If the acquisition had occurred on 3 July 2011, the contribution to the group revenue would have been $619.0 million, while the contribution to Group net profit after tax would have been $55.0 million.

26 Events occurring after balance date

No matter or circumstance has arisen since 30 June 2012 that has significantly affected, or may significantly affect:

• (a) the Group’s operations in future financial years; or

• (b) the results of those operations in future financial years; or

• (c) the Group’s state of affairs in future financial years.

Page 22