Investor Presentaiton

Key risks (continued) Risk Description RETAIL FOOD GROUP Potential and existing litigation RFG may from time to time be involved in legal proceedings with a variety of parties, including franchisees, shareholders, landlords or employees. Litigation is costly and time consuming and consumes board and management time and resources. The outcome of litigation cannot be predicted with certainty, and could be costly and damaging to RFG's reputation and business relationships, and its performance and financial position. It may also create potential liabilities for the Company, its Directors, officers and employees. Ongoing litigation also creates uncertainty for the Company and may adversely impact on the Company's ability to source debt funding. The Company, along with two of its related entities involved in the operation of the Michel's Patisserie brand system, are respondents in representative proceedings commenced in the Federal Court of Australia. The possibility of the proceedings was disclosed in the Company's past accounts. The representative proceedings have been commenced by a former Michel's Patisserie franchisee on behalf of herself and certain other Michel's Patisserie franchisees, former franchisees and their related parties. Specifically, group members are defined in the proceeding as persons who were Michel's Patisserie franchisees between 15 October 2015 and 30 August 2019 and who meet other criteria specified in the Originating Application. No allegations have been made in the proceedings in respect of the other brand systems operated by the Group. The proceedings were commenced in October 2021 and relate to the historical conduct and operation of the Michel's Patisserie brand system under former RFG leadership, including in relation to changes implemented to the supply chain during the period 2015 to 2016 (the 'fresh to frozen' model). The applicant alleges breach of Franchise Agreement, contraventions of the Australian Consumer Law and the Franchising Code of Conduct. The proceedings were commenced by way of Originating Application and Concise Statement and not by way of a fully particularized Statement of Claim. Additionally, in December 2021 the applicant filed an interlocutory application seeking declarations from the Court that the litigation funding arrangements in connection with the proceedings were not subject to the Australian Financial Services Licensing regime and related requirements imposed by the Corporations Amendment (Litigation Funding) Regulations 2020 (Cth). That application was opposed by the Company. Subsequent to the foregoing, at the request of the Company, the representative applicant agreed to file a Statement of Claim in the proceedings, and did so on 2 September 2022. On 25 October 2022, the Company was successful in obtaining orders from the Court striking out the applicant's entire statement of claim, with costs. At that hearing, the Court separately refused to adjudicate on, and therefore dismissed, the applicants' application seeking declarations as to the legality of her litigation funding arrangements. The Company is seeking orders that the applicant pay the respondent RFG entities' costs of that application. At the time of this Presentation, the Court has not ruled on that question of costs. In striking out the applicant's original Statement of Claim, the Court provided the applicant leave to replead and file a further Statement of Claim by 6 December 2022. On 14 December 2022, the applicant filed an Amended Originating Application and Statement of Claim. The Court has made orders setting down a timetable for the RFG respondent entities to file their Defence to the Statement of Claim and a Cross-Claim against the applicant and the litigation funder. It is anticipated at the date of this Presentation that the Cross-Claim will be based on an allegation that the litigation funding agreement entered into at the time of commencement of the proceedings in October 2021 contravened the applicable legislative regime and thereby provided the applicant and group members with an improper forensic advantage in the proceeding. The Cross-Claim will also be made in respect of debts which the respondent alleges are owed by the applicant. In the proceedings, the representative applicant is seeking damages, declarations, interest and costs. It is currently not possible to determine the potential outcome or financial impact of the proceedings for the Group. The Company denies the allegations raised against it and its related entities and will be vigorously defending the proceedings and pursuing the Cross-Claim outlined above. These proceedings have the potential to materially adversely impact the Company's financial and operating performance. The legal firm Phi Finney McDonald has also previously advertised a possible shareholder class action claim (first announced 10 May 2018) against the Company. The Company has had no contact with any plaintiff law firm in relation to the threatened class action, and no shareholder class action claim has been lodged against the Group to date. It is currently not possible to determine whether a shareholder class action or any other proceedings will be commenced, and what the financial impact of such proceedings, if any, may be for the Group in the future. If legal proceedings are initiated, the Group intends to vigorously defend its position. Page 22

View entire presentation