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Directors’ Report

The directors of Outback Stores Pty Ltd (The Company or Outback Stores) and its controlled entity (the Group) submit herewith the annual consolidated financial statements of the Group for the year ended 30 June 2020. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

Information about the directors
The names and particulars of the directors of the Company during or since the end of the financial year are:

Name

Particulars

Mr. G. Cook

Joined the Board on 16 September 2015 in a non-executive capacity. Mr Cook has a strong background in retail, enterprise development, consultancy, training and tourism. Mr Cook has worked with both mainstream and indigenous enterprises.

Ms. S. Cleveland

Joined the Board on 1 September 2016 in a non-executive capacity. Ms. Cleveland is the partner in charge of the commercial disputes resolution team in the Darwin office of a national law firm, she is an experienced and pragmatic litigator specialising in the areas of construction, employment, and aboriginal land disputes.

Mr. S. Bate

Joined the Board on 1 September 2016 in a non-executive capacity. Mr Bate has extensive experience in retailing, having worked for Woolworths for 37 years. Mr. Bate was part of the Woolworths Senior Management Team, and has experience in both buying and operations at senior executive level

Assoc. Prof. J. Brimblecombe

Joined the Board on 1 September 2016 in a non-executive capacity. Assoc. Prof. J. Brimblecombe has worked cross-culturally in the South Pacific and with remote Northern Territory Aboriginal communities for over 20 years. Assoc. Prof. J. Brimblecombe is an Associate Professor in the Department of Nutrition, Dietetics.and Food, Faculty of Medicine, Nursing and Health Sciences at Monash University

Prof. S. Eades

Joined the Board on 1 September 2016 in a non-executive capacity. Professor Eades completed her medical degree in 1990 and after working as a general practitioner began her career in health research at the Telethon Institute for Child Health Research where her focus was on the epidemiology of Indigenous child health in Australia.

Ms. B. Price

Joined the board on 30 November 2017. Ms. Price has worked in education and training, public administration, the media, community development, interpreting, translating language, teaching and has experience in small business management. In 2008 the Northern Territory Labor Government appointed Ms. Price as Chairperson of its Indigenous Affairs Advisory Council (IAAC). She was elected as a Country Liberal Party member of the Northern Territory Legislative Assembly from 2012 to 2016, and was appointed Minister for Housing, Community Services, Parks and Wildlife, Local Government, Statehood and Women’s Policy in the Northern Territory government. Ms. Price currently works in cross cultural awareness training, community liaison and Warlpiri language services.

Dr. S. Gordon AM

Dr Gordon AM is a Ngoonooru Wadjari woman from the Yamatji people. A retired magistrate who served for 20 years on the bench of the Children’s Court of Western Australia, Dr Gordon AM has had a long and distinguished career, with extensive senior leadership experience. She has worked in the area of Indigenous employment, was a member of the first board of the Aboriginal and Torres Strait Islander Commission, chaired the National Indigenous Council, and led the Gordon Inquiry and the Northern Territory Emergency Response Taskforce. She has a Bachelor of Laws Degree from the University of Western Australia (UWA), an Honorary Degree of Doctor of Letters from UWA, Order of Australia -Australia Medal, Centenary Medal, Defence Service Medal, and was named Senior Woman Lawyer of the Year 2014 by the Women’s Lawyers of WA Inc.

Mr. D. Bourchier

Daniel Bourchier is a multi-award winning multi-platform journalist. He has reported across the country and around the world for close to 20 years. Daniel has worked as a newspaper reporter, video journalist, foreign correspondent, political reporter, and social commentator. Daniel grew up in the remote Northern Territory town of Tennant Creek, where he was mentored by elders from around the region, while coming to understand his own Indigenous heritage from his mother’s side of the family in coastal and inland parts of Victoria.

Mr. D. Evans

Joined the board on 24 September 2019. Mr Evans has over 30 years’ experience in banking and finance in Australia and the Asia-Pacific and is also a consultant and facilitator for the Australian Institute of Company Directors. Mr Evans contributes in various governance roles in the public and private sectors. He is also a recipient of the Centenary Medal for his services to the health industry through the National Heart Foundation.

The above named directors held office during the whole of the financial year except for:

⊲ Assoc. Prof. J. Brimblecombe expired on 31 August 2019

⊲ Mr. D. Evans was appointed on 24 September 2019

Shares options granted to directors and senior management
No share options were granted or authorised to directors and senior management.

Company secretary
Dr. B Orme continued to hold the position of company secretary of the Company.

Principal activities
The Company’s principal activities are management services provided to remote Indigenous community stores across Australia and commercial loans and other financial support to unviable remote community stores through the support of the Department of The Prime Minister and Cabinet (October 2013 to 30 June 2019) and National Indigenous Australians Agency (1 July 2019 to date).

Review of operations
Outback Stores managed 40 stores at the end of the financial year. Combined store turnover for the financial year was over $100.4 million.
The remote retail industry faced significant challenges in relation to the COVID-19 pandemic in the second half of the year. Whilst there is still more to unfold, we would like to acknowledge the collective effort from our team and communities to ensure that stores remained open and food security was not compromised. Despite the challenges faced due to the global pandemic, we have continued to encourage consumption of healthy food and have focused on increasing price affordability for staple products.
The business· of managing retail stores in remote communities continues to be challenging due to the ongoing high operating costs both for the stores and for the Group to service and support them. The Group continues to work to reduce costs in stores and become more efficient in the way we manage them. The Group still manages a large number of stores that are not viable due to small populations and geographical difficulties.

2020

2019

$

$

(Loss)/Profit for the year from continuing operations

(538,798)

342,344

Add back: Income tax (benefit)/expense

(260,660)

148,881

(Loss)/Profit before income tax from continuing operations

(799,458)

491,225

Less: Adjustments for non-operating profit

Revenue from Government grants

1,309,592

2,832,628

Gain on sale of fixed assets

134,491

239,192

Store grant expenditure (underpinning)

(1,156,452)

(2,709,282)

Other grant expenditure

(153,140)

(123,347)

Total non-operating profit from continuing operations

134,491

239,191

Total operating (loss)/profit from from continuing operations

(933,949)

252,034

Total loss from discontinued operations

(365,424)

(124,576)

Plus: Income tax benefit on loss from discontinued operations

119,578

69,956

Total operating loss from discontinued operations

(245,846)

(54,620)

Total operating (loss) / profit

(1,179,795)

197,414

Change in state of affairs
The Cardwell Supermarket was sold during the financial year on 11 March 2020. Refer to Note 18 to the financial statements for additional information regarding the sale of the business. There was no other significant change in the state of affairs of the Group during the financial year.

Subsequent events
There has not been any matter or circumstance occurring subsequent to the year end that has significantly affected, or may significantly affect, the operations of the Group, the results of its operations, or the state of affairs of the Group other than those matters outlined in Note 17 to the financial statements.

Future developments
The Group will continue to grow through expanding their services to other Indigenous community stores across Australia.

Dividends
No dividends have been paid or declared since the start of the financial year and the directors have not recommended the payment of a dividend for the current financial year’s performance.

Indemnification of officers
During the financial year, the Company paid a premium in respect of a contract insuring the directors of the Company (as named above) and all executive officers of the Company against a liability incurred as such a director or executive officer to the extent permitted by the Corporations Act 2001. The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company against a liability incurred as such an officer or auditor.

Auditor’s independence declaration
See Auditor’s Independence Declaration

Remuneration report

This remuneration report, which forms part of the directors’ report, sets out information about the
remuneration of the Company’s directors and its senior management for the financial year ended 30 June 2020. The prescribed details for each person covered by this report are detailed below under the following headings:

  • director and senior management details
  • directors’ meetings
  • remuneration policy
  • remuneration of directors and senior management
  • key terms of employment contracts

Director and senior management details
The following persons acted as directors of the company during or since the end of the financial year:

Non-executive Directors

  • Dr. S. Gordon AM (Chairperson)
  • Mr. G. Cook
  • Mr. D. Bourchier
  • Ms. S. Cleveland
  • Mr. S. Bate
  • Assoc. Prof. J. Brimblecombe
  • Prof. S. Eades
  • Ms. B. Price
  • Mr. D. Evans

Senior Management

  • Mr. M. Borg (Chief Executive Officer)
  • Mr. J. Rathore (Chief Financial Officer)
  • Mr. E. Ralph (Group Operations Manager)
  • Mr. R. Mead (Group Merchandise and IT Manager)

The term ‘senior management’ is used in this remuneration report to refer to the following persons that have the authority and responsibility for planning, directing and controlling the activities of the company. Except as noted below, the named persons held their current position for the whole of the financial year and since the end of the financial year.

Directors’ meetings

The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the financial year and the number of meetings attended by each director (while they were a director or committee member). During the financial year, 6 board meetings, 3 store assessment committee meetings, 5 audit and risk committee meetings, 1 social outcomes committee meeting and 1 investment committee meeting were held.

Board of Directors

Store Assessment Committee

Audit and Risk Committee

Social Outcomes Committee

Investment Committee

Directors

Held

Attended

Held

Attended

Held

Attended

Held

Attended

Held

Attended

Dr. S. Gordon AM

6

6

Mr. G. Cook

6

4

3

3

1

1

1

1

Mr. D.Bourchier

6

5

1

1

Ms. S. Cleveland

5

5

3

2

4

4

1

1

Mr. S. Bate

5

5

3

3

4

4

1

1

Assoc. Prof. J. Brimblecombe

2

1

1

1

Prof. S. Eades

5

4

Ms. B. Price

6

5

1

1

Mr. D. Evans

3

3

3

3

1

1

Remuneration policy

It is a requirement to agree any remuneration package and wage contract of senior management with the Board approval is required to change the remuneration package of the Chief Executive Officer after determination by the remuneration tribunal.
Remuneration for employees is based on employment contracts that are linked to the individual’s and Company. The Company’s earnings are reported under the statement of profit or loss and other comprehensive income.

Remuneration of directors and senior management

Non-executive

Remuneration has been paid to non-executive directors during the financial year.

2020

2019

$

$

Short term

366,945

339,466

Post employment

33,198

28,013

Total remuneration:

400,143

367,479

Executive officers

Short term

988,742

954,446

Long term employment

21,125

26,873

Post employment

85,378

82,371

Total remuneration:

1,095,245

1,063,690

Bonuses and share-based payments granted as compensation for the current financial year

Bonuses
Bonuses to senior management are provided for based on their individual employee contracts and are based on Company performance and at the Board’s discretion.

Employee share option plan
None.

Key terms of employment contracts
Employment contracts are negotiated on a per person basis and include the following details. Unless noted otherwise, the termination notice required to terminate the contract is four weeks.

Mr. M. Borg (Chief Executive Officer) - position commencing 24 October 2016, with a required
termination period of 3 months.
Mr. J. Rathore (Chief Financial Officer) - Position commencing 1 July 2015.
Mr. E. Ralph (Group Operations Manager) - Position commencing 19 December 2016.
Mr. R Mead (Group Merchandise and IT Manager) - Position commencing 15 January 2018.