| 1. |
These preliminary financial
statements have been prepared in accordance
with the recognition and measurement requirements
of IFRS and the disclosure requirements
of IAS 34. Accounting policies are consistent
with those of prior years except for the
application of IFRIC 4 Determining whether
an Arrangement contains a Lease (IFRIC 4)
which has been applied by the Group for
the first time. |
| 2. |
IFRIC 4 requires an entity
to determine whether an arrangement, such
as a service contract, is or contains a
lease. Where this is the case, such a contract
is accounted for in accordance with IAS
17 Leases. The Group has identified equipment
used by third party distribution centre
operators as finance leases and the trucks
used by contracted operators to distribute
merchandise to our stores as operating leases.
The effect of the finance leases was to
recognise the value of the assets and the
related liabilities on the balance sheet
in the current year with no effect on the
Group’s equity. The operating leases
(which have no income statement or balance
sheet effect) require additional disclosure
in the annual report. The comparative balance
sheet has been adjusted accordingly. |
| 3. |
Revenue comprises turnover,
other trading income, interest received
and dividends received. |
| 4. |
With the adoption of
IFRS in the 2006 financial year an error
was made in the restatement of opening balances
relating to operating lease liabilities.
This has been corrected as a prior year
adjustment to opening equity with no effect
on comparative earnings. |
| 5. |
The weighted average
number of shares is lower than that in issue
due to the treasury shares held by the Group
being treated as cancelled for this calculation. |
| 6. |
In accordance with IFRS
the 25% investment in TM Supermarkets in
Zimbabwe is accounted for on the equity
basis. Our share of the after-tax profits
of TM Supermarkets is translated into Rands
at the most realistic rate at which dividends
may be remitted. Due to worsening economic
conditions in Zimbabwe and a lack of available
foreign exchange, the possibility of remitting
funds from Zimbabwe is currently remote.
An impairment review has been performed
on the value of the investment in TM Supermarkets
and the investment has been written down
by R64.0 million to an estimated fair
value of R9.1 million. |
| 7. |
The tax charge includes
a reversal of the deferred tax asset of
R46.4 million relating to Score Supermarkets.
As this charge has not arisen from current
year activity we consider a headline earnings
calculation excluding this charge to more
fully reflect the Group’s result for
the year. |
| 8. |
This amount represents
an impairment of goodwill on the original
acquisition of Score Supermarkets. |
| 9. |
Certain cost recoveries
disclosed as other trading income in the
2006 financial year are now included in
trading expenses to accord with current
year classifications. This reclassification
had no effect on earnings. |
