RFG Annual Report 2007 - Retail Food Group

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06/07 Annual Report 36 Retail Food Group Annual Report Critical judgements in applying the entity’s accounting policies The following are the critical judgements (apart from those involving estimations, which are dealt with below), that management has made in the process of applying the Group’s accounting policies and that have the most signifi cant effect on the amounts recognised in the fi nancial statements: Capitalisation of CMF-related interest and borrowing costs It is the Group’s policy to capitalise interest and borrowing costs directly attributable to the acquisition, construction or production of qualifying assets. The quantum of costs relating to the commissioning of the purpose-built Central Manufacturing Facility (‘CMF’) at Yatala amounted to $237,000. Capitalisation of interest and borrowing costs ceased in July 2007 upon commencement of commercial production. Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial year: Impairment of intangibles During the year, management reconsidered the recoverability of its internally-generated intangible asset arising from the Group’s two cash-generating units (CGUs), namely: • Donut King • bb’s café. The models by which the Group’s management monitor impairment and determine the recoverable amount of a CGU include: • comparison of total store numbers year to date compared with same time in the prior year; • comparison of network sales year to date compared with same time in the prior year; • comparison of average weekly sales year to date compared with same time in the prior year; • the total of franchise revenue year to date compared with same time in the prior year; • the total of all revenue year to date compared with same time in the prior year; • the total of the Group’s EBIT compared to the same time in the prior year; and, • the forecast for the next fi nancial year. Detailed analysis of the above indicators has been carried out and, based on a comparison of FY2007 results to FY2006 results, management is confi dent that the carrying amount of the intangible asset is not overstated. 5. Segment Information The Group operates solely in the industry of administration, management, operation and franchise of full retail franchise systems.
6. Revenue An analysis of the Group’s revenue for the year, from both continuing and discontinued operations, is as follows: 2007 $’000 Consolidated 2006 $’000 2007 $’000 Company Continuing operations Revenue from the sale of goods 5,250 3,825 – – Revenue from the rendering of services 22,954 21,159 – – Rental revenue: Operating lease rental revenue: 84 80 – – Interest revenue: Bank deposits 197 81 150 3 Other loans and receivables 1 12 240 – 198 93 390 3 Management fee—subsidiaries – – 2,355 2,434 Dividends: Subsidiaries – – 4,250 10,244 Other (aggregate of immaterial items) 1,233 806 203 – 29,719 25,963 7,198 12,678 Discontinued operations Revenue from the sale of goods – 863 – – Other Income – 2 – – – 865 – – 29,719 26,828 7,198 12,681 7. Finance costs 2006 $’000 37 Retail Food Group Annual Report 2007 $’000 Consolidated 2006 $’000 2007 $’000 Company 2006 $’000 Interest on bank overdrafts and loans 1,627 1,241 1,627 1,241 Interest on obligations under fi nance leases 52 – – – Less: amounts included in the cost of qualifying assets (237) – (199) – Total interest expense 1,442 1,241 1,428 1,241 Other fi nance costs – 103 – 103 1,442 1,344 1,428 1,344 Attributable to: Continuing operations 1,442 1,344 1,428 1,344 Discontinued operations – – – – 1,442 1,344 1,428 1,344 The weighted average capitalisation rate on funds borrowed generally is 8.20%p.a. (2006:8.18%p.a.).
Page 1: Retail Food Group Limited ACN 106 8
Page 5 and 6: Chairman’s letter Dear Shareholde
Page 7 and 8: Managing Director’s Report The Co
Page 9 and 10: OUTLOOK The 2007 fi nancial year ha
Page 11 and 12: The role of the Board and delegatio
Page 13 and 14: Directors’ Report The directors o
Page 15 and 16: The Group also continued with its s
Page 17 and 18: 4. Coffee Roasting Facility (CRF) T
Page 19 and 20: Directors’ meetings The following
Page 21 and 22: The following table discloses the r
Page 23 and 24: Deloitte Touche Tohmatsu A.C.N. 74
Page 25 and 26: 23 Auditor’s Independence Declara
Page 27 and 28: Income statement for the financial
Page 29 and 30: Statement of changes in equity for
Page 31 and 32: Notes to the financial statements f
Page 33 and 34: The directors anticipate that the a
Page 35 and 36: On consolidation, the assets and li
Page 37: (p) Property, plant and equipment L
Page 41 and 42: 9. Income taxes 39 Income tax recog
Page 43 and 44: 9. Income taxes (continued) Deferre
Page 45 and 46: 10. Trade and other receivables 43
Page 47 and 48: 13. Property, plant and equipment 4
Page 49 and 50: 14. Other intangible assets (contin
Page 51 and 52: 19. Other liabilities 49 2007 $’0
Page 53 and 54: 23. Earnings per share 51 2007 Cent
Page 55 and 56: 26. Contingent liabilities and cont
Page 57 and 58: 28. Subsidiaries 55 Name of entity
Page 59 and 60: 30. Discontinued operations Disposa
Page 61 and 62: 31. Notes to the cash flow statemen
Page 63 and 64: 32. Financial instruments (continue
Page 65 and 66: 33. Share-based payments (continued
Page 67 and 68: 34. Key management personnel compen
Page 69 and 70: 35. Related party transactions (con
Page 75 and 76: 37. Subsequent events (continued) F
Page 77: Twenty largest holders of quoted eq
Page 80: Retail Food Group Limited ACN 106 8

RFG Annual Report 2007 - Retail Food Group

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