| 1. |
The Group’s interim condensed consolidated financial statements have been prepared in accordance with IAS 34 - Interim Financial Reporting.
The accounting policies and methods of computation applied in preparation of these financial statements are in accordance with IFRS and are
consistent with those applied in the preparation of the Group’s annual financial statements for the year ended 29 February 2012. The interim
condensed consolidated financial statements have been prepared by the Pick n Pay Finance Division under the supervision of the Chief Finance
Officer, Mr Bakar Jakoet (CA)SA. |
| 2. |
During the period, certain companies within the Group entered into transactions with each other. These intra-group transactions are eliminated
on consolidation. Related parties are unchanged from those reported at 29 February 2012. For further information, please refer to note 28 of
the 2012 annual financial statements. |
| 3. |
Revenue comprises turnover, other trading income and interest received. The Group has reviewed the terms of its franchise agreements in
Botswana, Lesotho and Swaziland, and the interpretation of its role in the supply of inventory to those franchisees. In the past, Pick n Pay
purchased inventory on behalf of its franchisees and sold this onto the franchisees at no margin. As such, the accounting treatment of the
transaction was to recognise the purchases as part of Group cost of merchandise sold and the sales as part of Group turnover, with no
impact on gross profit. The substance of the relationship has changed over time, with the franchisees ordering and receiving directly from the
suppliers, albeit being facilitated through the Pick n Pay supply chain. We believe it more appropriate therefore to reflect Pick n Pay’s role in the
transaction as that of agent, earning a franchise fee only. Therefore we are no longer recognising the turnover and the corresponding cost of
merchandise sold in the Group statement of comprehensive income. Prior period disclosures have been adjusted accordingly as follows:
| |
As previously
stated
Aug 2011
Rm |
Prior year
adjustment
Aug 2011
Rm |
As restated
Aug 2011
Rm |
| Turnover |
27 082.8 |
(359.6) |
26 723.2 |
| Cost of merchandise sold |
(22 282.4) |
359.6 |
(21 922.8) |
| Gross profit |
4 800.4 |
- |
4 800.4 |
No restatement of the prior period statement of financial position is required as the adjustment has had no impact on earnings. |
| 4. |
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. |
| 5. |
In September 2011 we sold our Australian business, Franklins, to Metcash Limited for R1.2 billion, net of fees. Franklins is disclosed as a
discontinued operation in the prior period. |
