Nature of business

The Company, which is domiciled and incorporated in the Republic of South Africa and listed on the JSE Limited, the recognised securities exchange in South Africa, is an investment holding company. The Group comprises trading subsidiaries that retail food, clothing, general merchandise, pharmaceuticals and liquor throughout southern Africa and in New South Wales, Australia, both on an owned and franchise basis. Subsidiary companies also, on occasion, acquire and develop strategic retail and distribution sites.

General review 

The Group statement of comprehensive income is presented here and reflects the Group’s operational results.

The Group’s headline earnings from continuing operations and dividends for the year are as follows:

Per share – cents	2010	% increase	2009
Headline earnings	236.33	1.1	233.86
Dividends*	174.50	2.6	170.00

* The dividend per share presented is the interim dividend paid in the current year and the final dividend declared after year-end, but in respect of current year profit.

Audit, Risk and Compliance committee

We draw your attention to the Audit, Risk and Compliance committee report where we set out the responsibilities of the committee and how it has discharged these responsibilities during the year. 

Dividends paid and declared

A cash dividend (number 82) of 134.25 cents per share was paid to shareholders on 15 June 2009. 

A cash dividend (number 83) of 39.75 cents per share was paid to shareholders on 14 December 2009. 

For further details refer note 7.

The directors have declared a cash dividend (number 84) of 134.75 cents per share. The last day of trade in order to participate in the dividend (CUM dividend) will be Friday, 4 June 2010. Shares will trade EX dividend from the commencement of business on Monday, 7 June 2010 and the record date is Friday, 11 June 2010. The dividend will be paid on Monday, 14 June 2010. Share certificates may not be dematerialised or rematerialised between Monday, 7 June 2010 and Friday, 11 June 2010, both dates inclusive. 

As dividend number 84 was declared on 20 April 2010 it will only be accounted for in the 2011 financial year. The declaration of this dividend will result in a charge for secondary tax on companies of approximately R61.8 million, which will be accounted for in the 2011 financial year. 

Share capital

The movement in the number of issued ordinary shares in the capital of the Company during the year was: 

As at 1 March 2009	506 133 882
Shares repurchased and cancelled	(25 736 561)
As at 28 February 2010	480 397 321

On 25 February 2010 the Company repurchased and cancelled 25 736 561 ordinary shares, which were held as treasury shares by a subsidiary company. As the transaction was between the Company and a subsidiary company the cancellation of the shares had no financial impact, other than R2.7 million paid in Securities Transfer Tax. For further information refer note 19.3. 

At year-end the Pick n Pay Employee Share Purchase Trust held 6 780 488 (2009: 7 614 604) shares in the Company and 10 077 639 (2009: 10 418 493) shares in Pick n Pay Holdings Limited. A subsidiary company held
1 784 303 (2009: 1 708 203) shares in Pick n Pay Holdings Limited, all of which are accounted for as treasury shares. These shares are held to meet obligations of options granted. 

Going concern

These annual financial statements have been prepared on the going concern basis. 

The Board has performed a formal review of the Group’s ability to continue trading as a going concern in the foreseeable future and, based on this review; consider that the presentation of the financial statements on this basis is appropriate. 

There are no pending or threatened legal or arbitration proceedings which have had or may have a material effect on the financial position of the Company or the Group. 

Special resolutions

On 12 June 2009 the Company’s shareholders approved the following special resolution: 

General authority to repurchase Company shares

It was resolved that the Company or any of its subsidiaries may, in accordance with sections 85 and 89 of the Companies Act, acquire issued shares of the Company or its holding company, upon such terms and conditions and in such amounts as the directors of the Company may determine from time to time. Acquisition of such shares is subject to the articles of association of the Company, the provisions of the Companies Act and the Listings Requirements of the JSE Limited (JSE), and provided further that acquisitions by the Company and its subsidiaries of shares in the Company may not, in the aggregate, exceed in any one financial year 10% of the Company’s issued share capital. 

Subsidiary companies’ special resolutions

100%-owned subsidiary companies, Carrefour (Pty) Limited and Pick n Pay (Mitchells Plain) (Pty) Limited passed special resolutions in terms of section 228 of the Companies Act, to sell their only asset being investment property. 

Directors and Secretary

In terms of the Company’s articles of association the directors listed here retire by rotation and they offer themselves for re-election. Information pertaining to the directors and the Company Secretary appear here. 

Holding company

The holding company is Pick n Pay Holdings Limited.

Directors’ interest in shares

	2010   %	2009 %
Beneficial	1.1	1.1
Non-beneficial	27.6	27.7
Total	28.7	28.8

The directors’ interest in shares is their effective direct shareholding in the Company (excluding treasury shares) and their effective indirect shareholding through Pick n Pay Holdings Limited (excluding treasury shares).

Subsidiary companies

Details of subsidiary companies are presented in note 21.

Borrowings

The Group’s overall level of debt decreased from R716.4 million to R709.5 million during the year. 

Subsequent events

There have been no facts or circumstances of a material nature that have arisen between the financial year-end and the date of this report.