1
|
Basis of preparation
The abridged group financial statements comply with IAS 34 – Interim Financial Reporting. These abridged financial statements do not contain all the information and disclosures required in the annual financial statements. Accounting policies used in the abridged consolidated financial statements are the same as those used to prepare the group annual financial statements. |
| |
|
2
|
Significant accounting policies
The accounting policies applied are consistent with those followed in the preparation of the consolidated annual financial statements for the year ended 30 June 2008, except for the adoption of the following IFRS and IFRIC interpretations and amendments that became effective during the current period, which had no significant impact on the reported results: |
| |
– |
IFRIC 13 Customer Loyalty Programmes |
| |
– |
IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interactions |
| |
– |
IAS 39 and IFRS 7 Amendments – Reclassification of Financial Assets |
| |
– |
IAS 18 Revenue – amendment
|
| |
|
| |
Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards and IAS 27 Consolidated and Separate Financial Statements relating to Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate have been early adopted and had no impact on the reported results. |
| |
|
3
|
Reclassification of comparative figures
Internally generated distribution costs previously included in other operating costs are included in cost of sales. |
| |
|
| |
Total operating costs are disclosed based on function. Previously, operating costs were disclosed under the categories: depreciation, employment, occupancy, net bad debts and bad debt provisions, and other operating costs. |
| |
|
| |
Net interest received is disclosed as a separate segment. Previously, net interest received was disclosed as part of Woolworths retail. |
| |
|
| |
None of these reclassifications had an impact on reported results. |
| |
|
4
|
Tax
The effective tax rate of 30.2% (2008: 36.9%) is higher than the standard rate of normal tax mainly due to the impact of STC incurred on the special dividend, STC on the normal dividends and the non-deductible IFRS 2 charge arising from the group's BEE employee share ownership and executive share incentive schemes, off-set by the impact of the exceptional item. |
| |
|
5
|
Earnings per share
The difference between earnings per share and diluted earnings per share is due to the impact of outstanding options under the group share incentive schemes and preference shares issued in terms of the BEE employee share ownership scheme.
|
| |
|
6
|
Property, plant and equipment and intangible assets
During the year, the group acquired assets with a cost of R753.0m (2008: R638.4m). |
| |
| Assets with a net book value of R94.4m (2008: R70.7m) were disposed of by the group during the same period, resulting in a loss before tax of R3.5m (2008: R0.8m). |
| |
|
7
|
Issue and repurchase of shares
During
the year, 5 595 343 (2008: 4 074 229) ordinary shares were issued in terms
of the group's executive share incentive scheme. |
| |
|
| |
86 871 694 (2008: nil) treasury shares amounting
to R891.1m held by E-Com (Proprietary) Limited were repurchased and
cancelled. |
| |
|
| |
26 384 969 (2008: nil) shares to the value of
R316.6m were repurchased from the market by E-Com (Proprietary) Limited and
are held as treasury shares by the group. |
| |
|
| |
In 2008, 17 872 545 ordinary shares amounting to
R200m were repurchased. |
| |
|
8
|
Exceptional item
On 1 October 2008, Woolworths Financial Services (Proprietary) Limited ("WFS") issued shares to Absa Bank Limited to the value of R875m resulting in the dilution of the group's shareholding to 50% less one share and a net profit on disposal of controlling interest of R380m. As a result of the transaction, the group's remaining interest in WFS is accounted for by using the equity method.
|
| |
|
| |
The carrying value of assets and liabilities of WFS at the transaction date were as follows: |
| |
|
Rm |
| |
Loans to customers |
1 008.1 |
| |
Woolworths card debtors |
3 461.0 |
| |
Credit card receivables |
949.8 |
| |
Property, plant and equipment |
8.1 |
| |
Intangible assets |
3.1 |
| |
Cash |
535.0 |
| |
Other receivables and deferred tax |
184.9 |
| |
Assets |
6 150.0 |
| |
Interest-bearing borrowings |
(2 179.0) |
| |
Other payables, deferred tax and provisions |
(3 019.2) |
| |
Liabilities |
(5 198.2) |
| |
Net asset value on disposal of controlling interest |
951.8 |
| |
The net profit on disposal is as follows: |
|
| |
Proceeds |
875.0 |
| |
Additional consideration received |
29.0 |
| |
Net asset value of WFS disposed |
(475.9) |
| |
|
428.1 |
| |
Costs |
(48.1) |
| |
Net profit on disposal of controlling interest |
380.0 |
| |
The difference between the net asset value on disposal and
net assets classified as held for sale is mainly due to the inter-company
loan amount having been settled by the joint venture partner. |
| |
|
| 9 |
Contingent liabilities
Various group companies are parties to legal disputes and investigations which arise in the ordinary cause of business, whilst the outcome of some of these matters cannot readily be foreseen, the directors believe that they will be disposed of without material effect. |
| |
|
| 10 |
Borrowing facilities
Unutilised banking facilities
amount to
R3 477.0m
(2008: R2
875.1m). In terms of the articles of association, there is no limit on the group's authority to raise interest-bearing debt. |
| |
|
11
|
Events subsequent to balance sheet date
No event material to the understanding of these financial statements has occurred between the end of the financial year and the date of approval. |
| |
|
12
|
Related party transactions
During the
year ended 30 June 2009, group companies entered into various transactions.
These transactions were entered into in the ordinary course of business and
under terms that are no less favourable than those arranged with independent
third parties. |
| |
|
| |
All such subsidiary-related intra-group related
party transactions and outstanding balances are eliminated in preparation of
the consolidated financial statements of the group. |
| |
|
13
|
Audit opinion
These abridged consolidated financial statements have been extracted from the audited financial statements on which Ernst & Young Inc and SAB & T Inc have issued an unqualified report. This report is available for inspection at the company's registered office. |
| |
|
14
|
Approval of annual financial statements
The annual financial statements were approved by the board of directors on 26 August 2009.
|
