SUPER RETAIL GROUP LIMITED — Earnings Release 2011

Aug 18, 2011

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18 August 2011

ASX/Media Announcement

Super Retail Group announces a 46% increase in full year net profit after tax

Super Retail Group (ASX:SUL) today announced a 46.1% increase in net profit after tax to $55.6 million for the 52 weeks to 2 July 2011.

Highlights for the year included:

• 16.4% increase in Group Sales to $1092 million

• 37.3% increase in Group EBIT to $87.5 million

• 22.1% increase in earnings per share

• $48.3 million invested in new and refurbished stores

• $5.3 million reduction in net debt

• Post tax return on capital of 17.5%

• Supercheap Auto recognised as the Oracle Retail World Australian Retailer of the Year

The Board has declared a fully franked final dividend of 17.5 cents per share resulting in the year’s fully franked dividend totalling 29 cents per share, an increase of 35% (7.5 cents per share) over the prior year. The final dividend will be paid on 26 September 2011 with a record date of 29 August 2011.

The 2010/11 financial year was a 52 week period compared to the 53 week period in the previous year, with the extra week contributing an additional $18 million in sales and $800,000 in profit after tax to the prior year’s results. The 2010/11 results included a full year contribution from the Ray’s Outdoors business, which was acquired on 31 May 2010.

Super Retail Group’s Managing Director, Mr Peter Birtles, said the very pleasing increase in both sales and profit results reflected the strength of the Group’s resilient business model and were delivered despite the widespread slowing in retail spending growth.

“New stores, solid like for like sales growth and a strong improvement in gross margins are the major drivers of these results. They have been delivered through a continued focus on new product introduction, sourcing and supply chain initiatives and the further development of business capabilities,” said Mr Birtles.

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“These results have been achieved through a combination of the continued strong performance of the Supercheap Auto and BCF Boating Camping Fishing businesses and the full year contribution of Ray’s Outdoors.”

Auto and Cycle Retailing

Divisional sales at $708.2 million were 3.4% higher than the prior period or 6% after adjusting for the extra week sales in the prior period. EBIT at $63.6 million was 32% higher than the prior comparative period.

Supercheap Auto continued to perform extremely well with strong like for like sales growth of 4.8% maintaining the rate of growth delivered over the last four years. Like for like growth in both customer numbers and average number of items per transaction were the major drivers of sales growth.

The business continued to focus on new product introduction, with 20% of the product range renewed during the year, and in delivering further improvement in in-store stock presence and merchandising standards. The business continued its store refurbishment program with a further 34 stores refurbished or relocated during the year including three stores reconfigured as Superstores.

Gross margin improved by a further 1.7% points over the prior year and has now increased by 3.6% points over the last three years. There are many factors contributing to this exceptional result including direct sourcing of imported products, development of own brand ranges, investment in product quality reducing returns, supply chain efficiencies, improvement in trading terms and the stronger Australian dollar.

Nine new stores were opened and two stores were closed during the year which resulted in 274 stores across Australia and New Zealand at the end of June 2011.

Performance at Goldcross Cycles, which represents 2% of the Group’s sales, continued to fall below expectations. Like for like sales declined by 14% during the year which was in line with trends across the wider bicycle market. Industry statistics indicate that approximately 16% of purchases now made by Australian consumers in the bicycle market are from international websites.

The shortfall in like for like sales was offset by the contribution from two new stores opened during the year, control of operating costs and improvement in gross margin. Overall gross margin increased by 3.0% points through the successful launch of own brand bicycles and various supply chain initiatives, despite the impact of market wide discounting and stock clearance actions.

The Board completed a review of the performance of the business and determined that the most viable medium term value creating strategy will be to maintain the focus on performance improvement across the existing network of stores. This will be achieved through relocating underperforming stores to smaller lower cost locations, reducing stock holdings, developing a range of own brand parts and accessories, driving supply chain efficiencies and adapting business processes to facilitate a greater focus on customer service.

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Leisure Retailing

The division performed well with sales at $384.1 million and EBIT at $32.0 million, both 50% higher than the prior comparative period.

The $2 million synergy benefits from the acquisition of Ray’s Outdoors, which were forecast to be delivered in the 2011/12 year, were fully realised in 2010/11.

Overall gross margins across the division increased by 2.0% points through the contribution of the higher margin Ray’s Outdoors business and the work undertaken in BCF Boating Camping Fishing to increase the volume of directly sourced product, to improve supply chain processes and to secure improved trading terms.

Overall operating costs to sales increased by 2.1% of sales which reflected the impact of the higher cost structures in the Ray’s Outdoors business to support sales of footwear, BBQs and outdoor furniture and the increase in the number of smaller format BCF stores.

The BCF Boating Camping Fishing business continued to deliver strong sales growth with nine new stores opened during the year and a 4.6% like for like sales growth in existing stores driven by an increase in both customer numbers and an average item value.

The sales contribution from the Ray’s Outdoors business was below expectations. For much of the year, the business suffered from high levels of out of stocks across key merchandise ranges through a loss of focus in the lead up to the acquisition in May of last year and during the integration period post acquisition.

Gross margin in the Ray’s Outdoors business was ahead of expectations at the time of the acquisition which partly offset the sales shortfall. Good progress was also made in developing the network of Ray’s Outdoors stores across Australia with 12 new stores opened during the year.

The management team have conducted an extensive review of product ranging and pricing policies to bring these into line with customer expectations. New product ranges are being introduced into the business and there is a strong focus on improving product quality. A new customer value proposition has been developed along with a new marketing campaign and this will be launched in the early part of the 2011/12 year.

At the end of June, the division had 78 BCF Boating Camping Fishing stores and 50 Ray’s Outdoors stores trading across Australia.

During the year, the division developed a third business concept to trade under the name FCO Fishing Camping Outdoors. This new business, which takes elements from both the BCF Boating Camping Fishing and the Ray’s Outdoors businesses, has been designed specifically for the New Zealand market.

Plans are in progress to launch the business in November 2011 with ten stores across the North Island and a further two stores in the post Christmas period. This will require a net capital investment of circa $12 million. The Board will monitor performance over the initial 12 month period before committing further capital.

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Group Costs

Group Costs included $1.9 million of integration costs associated with the Ray’s Outdoors business, $0.9 million of non recurring corporate development costs, $0.7 million of multi channel development program costs, $2.1 million of costs associated with unutilised distribution centre, support office and store space (mainly arising from the integration of Ray’s Outdoors) and $2.5 million public company costs.

Group Logistics and Sourcing

The Ray’s Outdoors business was integrated into the Group’s supply chain operations within three months of acquisition.

In addition to the increase in units flowing through the distribution centres as a result of the growth of the Group’s businesses, the BCF Boating Camping Fishing business was able to achieve gross profit improvements through directing more products through distribution centres rather than direct from trade partners to stores.

The value of product sourced by the Group Sourcing Team based in China increased by 150% to more than $70 million. This growth has been a major factor underpinning the increase in gross margins across the Group’s businesses over the last four years.

Review of Financial Condition

Cash flow from operations was $70.9 million which was $18.3 million higher than the prior period reflecting continued strong control of working capital across the Supercheap Auto and BCF Boating Camping Fishing businesses. The Ray’s Outdoors business introduced new product ranges which resulted in an increase in inventory per store.

Group capital expenditure was $36.5 million which included $12.9 million in new store fitouts, $10.9 million in store refurbishments, $6.7 million in information technology projects and $5.9 million in general capital projects.

The Group fully funded all growth investment and continued to reduce net debt which stood at $73.5 million at the end of June. This represented a decrease of $5.3 million compared to the prior comparative period. The Group operated comfortably within debt facility limits and with significant head room against all facility covenants throughout the year.

Looking Forward

Mr Birtles said that the Group had a track record of delivering strong increases in revenue and profitability during periods of both high and low growth in retail spending.

“Although wider economic conditions mean that the short term outlook for retail spending remains uncertain, we are confident of our ability to grow our store network, deliver like for like sales growth and improve gross margins,” he said.

“We also expect to continue to deliver working capital efficiencies across the Group.

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“In the current year, we plan to open five new stores, convert two stores to Superstores and refurbish another 30 stores in our Supercheap Auto business and to open 20 to 25 stores across the Leisure Retailing division.

“We have made a solid start to the new financial year with like for like sales growth in the first six weeks of around 5% in the Supercheap Auto and BCF Boating Camping Fishing businesses. During the same period, like for like sales growth in the Ray’s Outdoors business was below last year reflecting the re-phasing of marketing and promotional activity to support the brand relaunch in late August and early September.

“We will continue to invest in developing our multi channel and customer relationship management capabilities. We plan to be able to offer our customers options to order online with either pick up in store or home delivery and we expect to launch a loyalty scheme in the Supercheap Auto business in the coming year.

We will also continue to explore opportunities to extend our retail operations into adjacent retail categories through either acquisition or organic development.”

ENDS

For further information: Mr Peter Birtles Mr Gary Carroll Managing Director Chief Financial Officer Super Retail Group Super Retail Group 07 3482 7500 07 3482 7500

Peter Birtles and Gary Carroll will be presenting the results by teleconference on 19 August 2011 at 10am (AEST). To listen to this presentation go to the Boardroom Radio website (brr.com.au)

Released through: Ms Stephanie Paul Ms Clarissa Lynch Managing Director Group Executive Director Philips Group Phillips Group 07 3230 5000 07 3230 5000 M: 0418 753 062 0433 783 129

APPENDIX 4E PRELIMINARY FINAL REPORT

SUPER RETAIL GROUP LIMITED (SUL) Formerly Super Cheap Auto Group Limited

ABN 81 108 676 204

Statutory Results

Current Reporting Period: Previous Reporting Period:

From 4 July 2010 to 2 July 2011 (52 weeks) From 28 June 2009 to 3 July 2010 (53 weeks)

Results for Announcement to the Market

	Statutory Results $’000	Comparison to 2010 Statutory Results $’000
Revenuefromordinary activities	1,093,398	Up 16.5% to $1,093,398
Profit from ordinary activities after tax attributable tomembers	55,599	Up 46.1% to $55,599
Net profit for the period attributable to members	55,599	Up 46.1% to $55,599

Dividends

Dividends	Dividends
Amount Per Share Franked Amount Per Share Interim dividend–Current Period 11.5¢ 11.5¢
Final dividend – Current Period Declared 18 August 2011 (payable 26 September 2011) 17.5¢	17.5¢
Record date for determining entitlements to the final dividend	29 August 2011

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, Long Tan Room, 375 Hamilton Road, Chermside South, Queensland Date Wednesday, 26 October 2011 Time 11.00 am

Approximate date the annual report will

be available: 26 September 2011

Page 1

Super Retail Group Limited Formerly Super Cheap Auto Group Limited Income statements

For the period ended 2 July 2011

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 Income tax relating to components of other comprehensive income Other comprehensive income for the year, net of tax Total comprehensive income for the year Total comprehensive income for the year is attributable to: Owners of Super Retail Group Limited Earnings per share for profit attributable to the ordinary equity holders of the company: Basic earnings per share Diluted earnings per share	Consolidated 2011 2010 $'000 $'000 1,093,398 938,602 1,359 163
	1,094,757 938,765
	(598,067) (535,825) (138,415) (112,502) (51,188) (43,462) (90,307) (74,716) (128,155) (107,903) (10,973) (10,477)
	(1,017,105) (884,885)
	77,652 53,880 (22,053) (15,827)
	55,599 38,053
	(3,414) (1,274) (1,200) 526 0 0
	(4,614) (748)
	50,985 37,305 50,985 37,305
	Cents Cents 41.5 34.0 40.9 33.0

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

Page 2

Super Retail Group Limited Formerly Super Cheap Auto Group Limited Statement of Financial Position As at 2 July 2011

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 Capital and reserves attributable to equity holders of Super Retail Group Limited	Consolidated 2011 2010 $'000 $'000 25,697 30,200 22,160 22,195 292,874 253,101
	340,731 305,496
	109,277 105,309 10,789 7,611 111,251 103,830
	231,317 216,750
	572,048 522,246
	122,373 99,563 32 10,096 11,013 7,694 12,286 11,781
	145,704 129,134
	15,538 13,217 99,143 98,912 0 0 7,983 10,426
	122,664 122,555
	268,368 251,689
	303,680 270,557
	194,541 182,158 (3,239) 158 112,378 88,241
	303,680 270,557

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

Page 3

Notes Balance at 27 June 2009 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 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	Super Retail Group Limited Formerly Super Cheap Auto Group Limited Statements of changes in equity For the period ended 2 July 2011 Contributed Equity Reserves Retained Earnings Total $’000 $’000 $’000 $’000 84,627 42 71,685 156,354
	0 0 38,053 38,053 0 (748) 0 (748)
	0 (748) 38,053 37,305
	97,531 0 0 97,531 0 0 (21,497) (21,497) 0 864 0 864
	97,531 864 (21,497) 76,898
	182,158 158 88,241 270,557
	0 0 55,599 55,599 0 (4,614) 0 (4,614)
	0 (4,614) 55,599 55,599
	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

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

Page 4

Super Retail Group Limited Formerly Super Cheap Auto Group Limited Cash Flow statements For the period ended 2 July 2011

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 2011 2010 $'000 $'000 1,207,864 1,040,615 (1,023,148) (891,068) (82,519) (72,736) (10,384) (10,346) (20,911) (13,905)
	70,902 52,560
	(37,647) (27,136) 1,129 86 0 (52,943)
	(36,518) (79,993)
	241,591 313,920 (251,667) (336,358) (9,894) (10,714) (20,797) (14,395) 1,966 88,390
	(38,801) 40,843
	(4,417) 13,410 30,200 16,810 (86) (20)
	25,697 30,200

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

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NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011

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 (formerly Super Cheap Auto Group Limited) and its controlled entities and Super Retail Group Limited as an individual parent entity.

2 Segment information

(a) Description of segments

Management has determined the operating segments based on the reports reviewed by the Chief Operating Officers that are used to make strategic decisions.

The Chief Operating Officers consider the business from the following business segments:

Auto & Cycle Retailing: Retail and distribution of motor vehicle spare parts and bicycle accessories, tools and equipment. Leisure Retailing: Retail and distribution of boating, camping, fishing, outdoor equipment and apparel.

(b) Segment information provided to the Chief Operating Officers

The segment information provided to the Chief Operating Officers for the reportable segments for the year ended 2 July 2011 is as follows:

			Total	Inter-segment
	Auto & Cycle	Leisure	continuing	eliminations/
2011	Retailing	Retailing	operations	unallocated	Consolidated
	$’000	$’000	$’000	$’000	$’000
Segment Revenue
Sales to externalcustomers	713,332	384,368	1,097,700	0	1,097,700
Inter segment sales	(5,099)	(280)	(5,379)	0	(5,379)
Total sales revenue					1,092,321
Other revenue/income	1,772	391	2,163	273	2,436
Total revenue and other income					1,094,757
Segment result (pre-borrowing costs and impairment)	63,611	32,042	96,653	(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	537,850	34,198	572,048
Unallocated assets				0	0
Total assets					572,048
Segment liabilities	(206,162)	(115,187)	(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	26,740	11,889	38,629
Depreciation and amortisation expense	(15,797)	(6,860)	(22,657)	(145)	(22,802)
Goodwill impairment					0
Other non-cash expenses					1,222

Page 6

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (continued)

2 Segment information (continued)

The segment information provided to the Chief Operating Officers for the reportable segments for the year ended 3 July 2010 is as follows:

			Total	Inter-segment
	Auto & Cycle	Leisure	continuing	eliminations/
2010	Retailing	Retailing	operations	unallocated	Consolidated
	$’000	$’000	$’000	$’000	$’000
Segment Revenue
Sales to externalcustomers	687,856	254,005	941,861	0	941,861
Inter segment sales	(3,061)	(792)	(3,853)	0	(3,853)
Total sales revenue					938,008
Other revenue/income	284	130	414	343	757
Total revenue and other income					938,765
Segment result (pre-borrowing costs and impairment)	48,180	21,290	69,470	(3,113)	66,357
Finance costs				(10,477)	(10,477)
Impairment of goodwill	(2,000)	0	(2,000)	0	(2,000)
Profit before income tax					53,880
Income tax expense					(15,827)
Profit for the period					38,053
Segment Assets & Liabilities
Segment assets	319,796	154,766	474,562	47,684	522,246
Unallocated assets				0	0
Total assets					522,246
Segment liabilities	(161,422)	(96,563)	(257,985)	115,208	(142,777)
Unallocated liabilities				(108,912)	(108,912)
Total liabilities					(251,689)
Acquisitions of property, plant
and equipment and other non- current segment assets	16,605	48,809	65,414	5,420	70,834
Depreciation and amortisation expense	(15,609)	(4,976)	(20,585)	(145)	(20,730)
Goodwill impairment	(2,000)				(2,000)
Other non-cash expenses					784

(c) Other information

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

Australia

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

New Zealand

Supercheap Auto and FCO operate in New Zealand.

Page 7

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (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 Computer systems Plant and equipment Motor vehicles Total depreciation Amortisation and Impairment Computer software Brand name Goodwill Supplier agreement Finance costs Interest and finance charges Other finance costs (a) Accretion of put option Finance costs expensed Employee benefits expense Superannuation expense Salaries and wages Rental expense relating to operating leases Lease expenses Equipment hire Total rental expense relating to operating leases Foreign exchange gains and losses Net foreign exchange (gains)/losses	Consolidated 2011 2010 $'000 $'000 1,092,321 938,008
	1,092,321 938,008
	1,077 594
	1,077 594
	1,093,398 938,602
	Consolidated 2011 2010 $'000 $'000 1,359 163
	1,359 163
	Consolidated 2011 2010 $'000 $'000 294 516 5,306 5,402 13,864 12,275 30 35
	19,200 17,712
	3,457 2,873 125 125 0 2,000 20 20
	3,602 5,018
	10,859 12,564 0 (2,201) 114 114
	10,973 10,477
	12,273 10,749 192,436 158,895
	204,709 169,644
	90,879 71,832 4,907 4,174
	95,786 76,006
	(1,419) 2,323

Page 8

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (continued)

5 Expenses (continued)

(a) Other finance costs

A market-to-market loss on a $60,000,000 swap was $2,201,000 as at 27 June 2009 and was included as a finance cost expense in the 2009 year as the swap was deemed to be ineffective as a cash flow hedge for the period. The loss was reversed in the 2010 year due to the expiry of the swap, reducing finance cost expense by $2,201,000 in 2010.

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% (2010 - 30%) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Tax consolidation adjustments re NZ branch Investment allowance Goodwill impairment R & D credits Sundry items Adjustments for current tax of prior periods Income tax expense Amounts recognised directly in equity Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss but directly debited or credited to equity Net deferred tax – debited/(credited) directly to equity (notes 11 and 19) Tax expense (income) relating to items of other comprehensive income Cash flow hedges	Consolidated 2011 2010 $'000 $'000 23,975 17,867 (1,807) (1,652) (115) (388)
	22,053 15,827
	(1,771) (1,614) (36) (38)
	(1,807) (1,652)
	77,652 53,880
	23,296 16,164 (44) (39) 0 (199) 0 600 (1,207) (434) 123 123
	22,168 16,215 (115) (388)
	22,053 15,827
	(1,228) (1,137)
	(1,228) (1,137)
	(1,463) (548)
	(1,463) (548)

(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 2 JULY 2011 (continued)

7 Current assets - Cash and cash equivalents

Cash at bank and in hand

Consolidated	Consolidated
2011	2010
$'000	$'000
25,697	30,200

8 Current assets - Trade and other receivables

Trade receivables Provision for impairment of receivables (a) Other receivables Tax receivable Prepayments	Consolidated 2011 2010 $'000 $'000 13,176 10,969 (268) (210)
	12,908 10,759 3,777 2,030 1,818 548 3,657 8,858
	22,160 22,195

(a) Impaired trade receivables

As at 2 July 2011 current trade receivables of the Group with a nominal value of $268,000 (2010: $210,000) were impaired. The amount of the provision was $268,000 (2010: $210,000). The individually impaired receivables mainly relate to wholesalers who are in unexpectedly difficult economic situations.

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

As at 3 July 2010 Provision for impairment recognised during the year Receivables written off during the year as uncollectible	Consolidated 2011 2010 $'000 $'000 (210) (347) (236) (947) 178 1,084
	(268) (210)

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

(b) Past due but not impaired

As of 2 July 2011, trade receivables of $3,586,000 (2010: $3,009,000) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:

0 to 3 months 3 to 6 months Over 6 months	Consolidated 2011 2010 $'000 $'000 2,435 1,588 668 333 483 1,088
	3,586 3,009

Page 10

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (continued)

9 Current assets – Inventories

Finished goods - at lower of cost or net realisable value	Consolidated 2011 2010 $'000 $'000 292,874 253,101

(a) Inventory expense

Inventories recognised as expense during the year ended 2 July 2011 amounted to $583,164,000 (2010: $518,626,000).

Write-downs of inventories to net realisable value recognised as an expense/(benefit) during the year ended 2 July 2011 amounted to ($1,388,000) (2010: ($1,323,000)). The benefit has been included in ‘costs of sales of goods’ in the income statement.

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 2011 2010 $'000 $'000 160,141 141,546 (63,964) (51,581)
	96,177 89,965
	266 912 (240) (251)
	26 661
	45,805 42,377 (32,731) (27,694)
	13,074 14,683
	109,277 105,309

Assets pledged as security are detailed in Note 18

Reconciliations - consolidated entity Carrying amounts at 4 July 2010 Additions Disposals Business acquisitions Depreciation and amortisation Foreign currency exchange differences Carrying amounts at 2 July 2011 Reconciliations - consolidated entity Carrying amounts at 28 June 2009 Additions Disposals Business acquisitions Depreciation and amortisation Foreign currency exchange differences Carrying amounts at 3 July 2010	Plant and equipment $’000 Motor vehicles $’000 Computer systems $’000 Total $’000 89,965 661 14,683 105,309 23,084 0 4,522 27,606 (3,390) (197) (157) (3,774) 185 (413) (668) (896) (13,864) (30) (5,306) (19,200) 197 5 0 186
	96,177 26 13,074 109,277
	73,200 70 14,678 87,948 18,643 0 4,467 23,110 (439) (32) (118) (589) 10,965 658 1,079 12,702 (12,275) (35) (5,402) (17,712) (129) 0 (21) (150)
	89,965 661 14,683 105,309

Page 11

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (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 Employee benefits Accruals Inventories Deferred make good provision Straight line lease adjustment Deferred income Depreciation Provision for warranties and legal costs Amounts recognised directly in equity Cash flow hedges Share placement costs Set off with deferred tax liabilities (note 19) Net deferred tax assets Movements: Opening balance Credited/(charged) to the income statement Credited/(charged) to equity Foreign exchange on translation of NZ subsidiary Acquired in acquisition Closing balance Deferred tax assets to be recovered after more than 12 months Deferred tax assets to be recovered within 12 months	Consolidated 2011 2010 $'000 $'000 85 63 5,779 4,569 312 103 2,137 2,100 257 1,175 4,662 3,965 127 107 2,512 1,875 13 13
	15,884 13,970 1,235 0 354 589
	17,473 14,559 (6,684) (6,948)
	10,789 7,611
	14,559 11,206 1,771 1,614 1,000 589 0 0 143 1,150
	17,473 14,559
	14,543 12,013 2,930 2,546
	17,473 14,559

Page 12

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (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 - 2010 Carrying amounts at 4 July 2010 Additions Disposals/Revision in provisional accounting Amortisation/Impairment charge Foreign currency exchange differences Carrying amounts at 2 July 2011	Goodwill $’000 Trademarks $’000 Computer Software $’000 74,701 14 6,505 0 0 9,455 1,751 0 (183) 0 0 (3,457) 0 0 0	Consolidated 2011 2010 $’000 $’000 78,452 76,701 (2,000) (2,000)
		76,452 74,701 14 14 0 0
		14 14 32,614 23,356 (20,294) (16,851)
		12,320 6,505 22,500 22,500 (375) (250)
		22,125 22,250 400 400 (60) (40)
		340 360
		111,251 103,830
		Brand Name $’000 Supplier Agreement $’000 Totals $’000 22,250 360 103,830 0 0 9,455 0 0 1,568 (125) (20) (3,602) 0 0 0
	76,452 14 12,320	22,125 340 111,251

Amortisation of $3,602,000 (2010: $5,018,000) is included in “Administration” in the consolidated income statement.

Reconciliations – consolidated entity - 2010 Carrying amounts at 28 June 2009 Acquisitions Additions Disposals/Revision in provisional accounting Amortisation/Impairment charge Foreign currency exchange differences Carrying amounts at 3 July 2010	Goodwill $’000 Trademarks $’000 Computer Software $’000 Brand Name $’000 Supplier Agreement $’000 Totals $’000 67,280 14 5,358 2,375 380 75,407 9,421 0 0 20,000 0 29,421 0 0 4,033 0 0 4,033 0 0 (24) 0 0 (24) (2,000) 0 (2,873) (125) (20) (5,018) 0 0 11 0 0 11
	74,701 14 6,505 22,250 360 103,830

(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 2 JULY 2011 (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	Total
2011	$’000	$’000	$’000	$’000	$’000
Goodwill	45,336	12,950	7,954	10,212	76,452
	Supercheap		Goldcross	Ray’s
	Auto	BCF	Cycles	Outdoors	Total
2010	$’000	$’000	$’000	$’000	$’000
Goodwill	45,336	12,950	7,954	8,461	74,701

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

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

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

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

	Growth	rate	Discount	rate
	2011	2010	2011	2010
	%	%	%	%
Supercheap Auto	3	3.0	15	15
BCF	5	5.0	15	15
Goldcross Cycles	10	10.0	15	15
Ray’s Outdoors	10	-	15	-

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

(c) Impairment charge

An impairment charge of $2,000,000 arose in the Goldcross Cycles CGU for the period ended 3 July 2010 following a review of sales and gross margin performance against business plan expectations in December 2009. No class of asset other than goodwill was impaired. This has been included in the Auto & Cycle Retailing segment in note 2.

(d) 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 brand on the basis that it is considered to have an indefinite useful life.

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

• the strong recognition of the Ray’s Outdoors brand; and

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

Page 14

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (continued)

13 Current liabilities - Trade and other payables

13 Current liabilities - Trade and other payables
Trade payables Other payables Loans from related parties 14 Current liabilities – Borrowings Secured Finance leases Cash advance Total current liabilities – secured interest bearing liabilities Unsecured Related parties Unsecured bank financing Total current liabilities – unsecured interest bearing liabilities Total current liabilities – interest bearing liabilities		Consolidated 2011 2010 $'000 $'000 83,050 70,459 39,305 29,084 18 20
		122,373 99,563
		Consolidated 2011 2010 $'000 $'000 32 96 0 10,000
		32 10,096
		0 0 0 0
		0 0
		32 10,096

(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 16 Current liabilities – Provisions Put option provision(a) Provision for warranties(b) Make good provision(c) Employee benefits(d)	Consolidated 2011 2010 $'000 $'000 11,013 7,694
	Consolidated 2011 2010 $'000 $'000 871 758 44 44 460 346 10,911 10,633
	12,286 11,781

(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.

Page 15

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (continued)

16 Current liabilities – Provisions (continued)

(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.

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 Cash advance Less borrowing costs capitalised, net	Consolidated 2011 2010 $'000 $'000 15,538 13,217
	Consolidated 2011 2010 $'000 $'000 8 0 100,000 100,000 (865) (1,088)
	99,143 98,912

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

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

Financing arrangements Unrestricted access was available at balance date to the following lines of credit: Total facilities - Bank debt funding facility - Multi-option facility (including indemnity/guarantee) Totals Facilities used at balance date - Bank debt funding facility - Multi-option facility (including indemnity/guarantee) Totals Unused balance of facilities at balance date - Bank debt funding facility - Multi-option facility (including indemnity/guarantee) Totals	Consolidated 2011 2010 $’000 $’000 190,000 190,000 7,000 7,000
	197,000 197,000 100,000 110,096 3,030 2,689
	103,030 112,785 90,000 79,904 3,970 4,311
	93,970 84,215

Page 16

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (continued)

18 Non-current liabilities – Borrowings (continued)

In addition, the Company has access to a $132 million (2010: $122 million) transactional facility for clean credit and foreign currency dealings.

The current interest rates on the financing arrangements are:

• Bank debt funding facility 3.97%- 5.08% (2010: 3.97%-7.09%)

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 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 Foreign exchange on translation of NZ subsidiary Acquired in acquisition Closing balance Deferred tax liabilities to be settled after more than 12 months Deferred tax liabilities to be settled within 12 months	Consolidated 2011 2010 $'000 $'000 3 2 6,638 6,675
	6,641 6,677
	0 0 43 271
	6,684 6,948 (6,684) (6,948)
	0 0
	6,948 1,534 (36) (38) (228) (548) 0 0 0 6,000
	6,684 6,948
	6,681 6,946 3 2
	6,684 6,948

Page 17

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (continued)

20 Non-current liabilities – Provisions

20 Non-current liabilities – Provisions
Make good provision Employee benefits Provision for Oceania future dividend (a)	Consolidated 2011 2010 $'000 $'000 4,899 8,087 2,952 2,207 132 132
	7,983 10,426

(a) Provision for Oceania future dividend

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

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

Opening balance as at 4 July 2010 Additional provisions recognised Indexing of provisions Provision released Acquisitions Closing balance as at 2 July 2011	Put option $’000 Warranties $’000 Make good $'000 Oceania future dividend $’000 Total $’000 758 44 8,433 132 9,367 0 0 0 0 0 113 0 0 0 113 0 0 (3,074) 0 (3,074) 0 0 0 0 0
	871 44 5,359 132 6,406

21 Contributed equity

(a) Share Capital

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 Less transaction costs on share issue Deferred tax credit recognised directly in equity Closing balance 2 July 2011	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	Parent Entity 2011 2010 $'000 $'000 194,541 182,158
		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
		196,163 (1,976) 354
	130,018,739	194,541

The purpose of the issue on 27 April 2010 was to finance the acquisition of Ray’s Outdoors and provide additional funds to meet capital expenditure and working capital requirements associated with growing the Ray’s Outdoors store network.

Page 18

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (continued)

21 Contributed equity (continued)

Dividend reinvestment plan

The company has established a dividend reinvestment plan under which holders of ordinary shares may elect to have all or part of their dividend entitlements satisfied by the issue of new ordinary shares rather than by being paid in cash. Shares issued under the plan at a 2.5% discount to the market price.

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

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

Options over nil (2010: nil) ordinary shares were issued during the period, with 797,500 options being exercised during the period. Performance rights over 363,427 (2010: 375,165) ordinary shares were issued during the period. Nil performance rights were exercised during the period.

(c) Capital risk management

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

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

During 2011 the Group’s strategy, which was unchanged from 2010, was to ensure that the gearing ratio remained below 50%. This target ratio range excludes the short-term impact of acquisitions. The gearing ratios at 2 July 2011 and 3 July 2010 were as follows:

Total borrowings Less: Cash & cash equivalents Net Debt Total Equity Total Capital Gearing Ratio	Consolidated 2011 2010 $'000 $'000 99,175 109,008 (25,697) (30,200)
	73,478 78,808 303,680 270,557
	377,158 349,365
	19.5% 22.6%

The decrease in the gearing ratio was due to dividend reinvestment plan in place for shareholders as well as a small reduction in debt levels. The Group now has significant capacity to fund its growth plans, including continued expansion of the store network.

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

During 2011 the Group’s strategy, which was unchanged from 2010, was to maintain a fixed charge cover ratio of around 2.0 times. The fixed charge cover ratios at 2 July 2011 and 3 July 2010 were as follows:

Earnings Add: Taxation expense Finance costs Depreciation and amortisation Rental expense EBITDAR Finance costs (excluding MTM adjustment) Rental expense Fixed charges Fixed charge cover ratio	Consolidated 2011 $’000 2010 $’000 55,599 38,053 22,053 15,827 10,973 10,477 22,802 22,730 84,486 69,833
	195,913 156,920 10,973 12,678 84,486 69,833
	95,459 82,511 2.05 1.90

The improvement in the fixed charge cover ratio was due to the increased profitability of the Group.

Page 19

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (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 2011 2010 $'000 $'000 (3,607) (2,407) 3,149 1,932 (2,781) 633
	(3,239) 158
	(2,407) (2,933) (1,200) 526
	(3,607) (2,407)
	1,932 1,068 0 0 1,217 864
	3,149 1,932
	633 1,907 (4,877) (1,822) 1,463 548
	(2,781) 633
	88,241 71,685 55,599 38,053 (31,462) (21,497)
	112,378 88,241

Nature and purpose of reserves

(i) Hedging reserve - cash flow hedges

The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised directly in equity. 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 2 JULY 2011 (continued)

23 Dividends

23 Dividends
	Parent Entity
	2011	2010
	$’000	$’000
Ordinary shares
Dividends paid by Super Retail Group Limited during the reporting period were as
follows:
Interim dividend for the period ended 1 January 2011 of 11.5 cents (2010: 8.5 cents per
share) paid on 5 April 2011. Fully franked based on tax paid @ 30%	14,844	9,182
Final dividend for the period ended 3 July 2010 of 13.0 cents per share (2010: 11.5
cents per share) paid on 1 October 2010. Fully franked based on tax paid @ 30%	16,618	12,315
Total dividends provided and paid	**31,462 **	21,497
Dividends paid in cash or satisfied by the issue of shares under the dividend
reinvestment plan were as follows:
Paid in cash	20,797	14,395
Satisfied by issue of shares	10,665	7,102
	31,462	21,497
Dividends not recognised at year end
Subsequent to year end, the Directors have declared the payment of a final dividend of
17.5 cents per ordinary share (2010: 13.0 cents per ordinary share), fully franked based
on tax paid at 30%.
The aggregate amount of the dividend expected to be paid on 26 September 2011, out
of retained profits at 2 July 2011, but not recognised as a liability at year end, is	22,753	16,579
Franking credits
The franked portions of dividends paid after 2 July 2011 will be franked out of existing
franking credits and out of franking credits arising from the payments of income tax in
the years ending after 2 July 2011.
Franking credits remaining at balance date available for dividends declared after the
current balance date based on a tax rate of 30%	**52,681 **	47,147
The above amounts represent the balance of the franking account as at the end of the financial period, adjusted for:
- franking credits that will arise from the payment of the current tax liability; and,
- franking debits that will arise from the payment of the dividend as a liability at the reporting date.

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

The impact on the franking account of the dividend recommended by the directors since year end, but not recognised as a liability at year end, will be a reduction in the franking account of $9,751,405 (2010: $7,105,371).

24	Net tangible asset backing
		Consolidated	Entity
		2011	2010
		Cents	Cents
Net	tangible asset per ordinary share	$1.40	$1.28

Page 21

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (continued)

25 Business Combinations

(a) Ray’s Outdoors (prior period)

(i) Summary of acquisition

On 31 May 2010, the parent entity acquired 100% of the issued share capital of Ray’s Outdoors Pty Ltd.

Details of the fair value of the assets and liabilities acquired and goodwill are as follows: Purchase consideration Cash paid Consideration in shares Total purchase consideration (referred to (ii) below) Less: Provisional allocation of fair value of net identifiable assets acquired (see below) Goodwill recognised on acquisition	$'000 51,685 1,548
	53,233 (43,021)
	10,212

(ii) Purchase considerations

The assets and liabilities recognised as a result of the acquisition are as follows:

Cash Other Receivables Inventory (net of provisions) Plant & Equipment Brand name Deferred make good Tax Assets Trade Payables Provision for Employee Entitlements Make-good provision Other Payables Deferred tax liability Net Identifiable Assets Acquired Outflow of cash to acquire subsidiary, net of cash acquired Total purchase consideration Less: Consideration in shares Less: Balances acquired Cash Outflow of cash	Fair Value $’000 70 346 26,874 11,104 20,000 702 1,503 (7,500) (1,864) (1,389) (614) (6,211)
	43,021
	Consolidated 2010 $’000 53,233 (1,548) (70)
	(1,618)
	51,615

The Ray’s Outdoor acquisition was disclosed provisionally in the financial report for the year ended 3 July 2010. Since this date, the completion statement has been reviewed and adjustments were made to inventory (decrease of $266,000), provisions for employee entitlements (increase of $217,000), plant and equipment (decrease of $896,000), a corresponding increase to tax assets of $143,000 and gift voucher liability increase of $515,000.

A corresponding increase has been recognised in goodwill of $1,751,000.

The goodwill is attributable to Ray’s Outdoors strong position and profitability in the outdoor and leisure market and the synergies expected to arise from the acquisition.

Page 22

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JULY 2011 (continued)

25 Business Combinations (continued)

(b) Explore Outdoors (prior period)

Acquisition by controlled entity

On 27 October 2009, BCF Australia Pty Ltd acquired certain assets and assumed certain liabilities of the Explore Outdoors Dubbo business from an entity external to the Group.

Net assets acquired are as follows: Purchase consideration Cash Paid Total purchase consideration Less: Provisional allocation of fair value of net identifiable assets acquired (refer below) Goodwill recognised on acquisition The goodwill is attributable to Explore Outdoors Dubbo strong position and profitability in the leisure synergies expected to arise after the company’s acquisition Fair value of identifiable net assets acquired Inventory (net of provisions) Gift voucher liability Employee entitlements Other creditors Net identifiable assets acquired	$’000 1,331
	1,331 371
	960 market and $’000 387 (6) (8) (2)
	371

The amounts recognised by the vendor immediately before acquisition for each class of asset and liability are not significantly different from the fair values included in the table above.

26 Events occurring after balance date

No matter or circumstance has arisen since 2 July 2011 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 23