notes

1.	Basis of preparation The interim financial statements comply with IAS 34 – Interim Financial Reporting. These financial statements do not contain all the information and disclosures required in the annual financial statements, and should be read in conjunction with the group consolidated annual financial statements as at 30 June 2006.
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 2006, except for the adoption of the following IFRS, IFRIC interpretations and amendments that became effective during the current period and had no impact on the reported results:
	–	IFRIC 4 Determining whether an Arrangement Contains a Lease;
	–	IFRIC 8 Scope of IFRS 2;
	–	IFRIC 9 Reassessment of Embedded Derivatives;
	–	AC 503 Accounting for Black Economic Empowerment (BEE) Transactions;
	–	IAS 19 Amendment - Employee Benefits and Actuarial Gains and Losses, Group Plans and Disclosures;
	–	IAS 39 Amendment - The Fair Value Option; and
	–	IAS 39 Amendment – Financial Guarantee Contracts.
3.	Change in comparative period classifications In accordance with the recommendation by SAICA regarding the treatment of settlement discounts, the measurement of cost of sales for the period to December 2005 has been adjusted by R105.5m representing the settlement discounts received from suppliers in respect of merchandise purchases.
4.	Seasonality of turnover No material variations in the turnover of the group are expected to occur between the first and second half of the financial year.
5.	Exceptional item During the interim period to December 2006, the group disposed of property with a net book value of R27.9m. The full pre-tax profit on disposal of R54.6m is treated as an exceptional item as the transaction is non-recurring in nature and falls outside the scope of the group’s operational activities.
6.	Tax The tax rate of 32.5% (2005: 31.5%) is the estimated annual effective income tax rate of 28.1% plus Secondary Tax on Companies (STC) on the final dividend for the year ended 30 June 2006, paid in September 2006. STC recognised in the comparative period was lower than current STC as the final 2005 distribution was made partially from share premium.The estimated annual effective tax rate is less than the corporate tax rate of 29% mainly due to the capital gain on the disposal of property.
7.	Earnings per share The difference between earnings per share and diluted earnings per share is due to outstanding options.
8.	Property, plant and equipment During the six months ended December 2006, the group acquired assets with a cost of R409.3m (2005: R292.7m). Assets with a net book value of R19.9m (2005: R8.5m) were disposed of by the group during the same period, resulting in a profit of R1.8m (2005: R2.4m). This does not include the disposal of property referred to in note 5.
9.	Issue of shares During the six months ended December 2006, 3 139 956 (2005: 8 947 408) ordinary shares were issued in terms of the group’s share incentive scheme.
10.	Financial instruments The interest rate exposure on an additional R1 000m of existing borrowings was hedged during the interim period to fix the interest rate at 8.71%.This brings the total hedged borrowings to R1 950m.
11.	Contingent liabilities The holding company provides sureties for the banking facilities and lease obligations of certain subsidiaries. In the opinion of the directors, the possibility of loss arising therefrom is remote.
12.	Borrowing facilities Un-utilised banking facilities amount to R1 168.1m (2005: R1 971.4m). In terms of the articles of association, there is no limit on the group’s authority to raise interest bearing debt.
13.	Events subsequent to balance sheet date The group anticipates completing a second securitised bond issue of approximately R1 000m during the first quarter of 2007.