![New Clicks Holdings Limited [logo]](i/nch_logo.gif){kind=logo}
| 6 months to | 6 months to | Year to | |||||
| 28 February | 28 February | 31 August | |||||
| 2006 | 2005 restated | 2005 restated | |||||
| R’000 | (unaudited) | (unaudited) | (unaudited) | ||||
| Increase in share capital and premium | 38 997 | 47 063 | 57 061 | ||||
| Decrease in non-distributable reserve | (37) | (601) | (1 464) | ||||
| Increase in treasury shares | – | (126 806) | (126 697) | ||||
| Profit for the period restated | 138 709 | 124 294 | 179 163 | ||||
| Profit for the period reported | 129 233 | 128 938 | 204 633 | ||||
| Adjustments | 9 476 | (4 644) | (25 470) | ||||
| Share option reserve | 2 913 | 2 466 | 5 379 | ||||
| Distributions to shareholders | (63 533) | (75 097) | (112 465) | ||||
| Net increase/(decrease) in shareholders’ funds | 117 049 | (28 681) | 977 | ||||
| Opening shareholders’ interest restated | 1 416 939 | 1 415 962 | 1 415 962 | ||||
| Opening shareholders’ interest as previously stated |
1 340 223 | 1 319 155 | 1 319 155 | ||||
| Adjustments | 76 716 | 96 807 | 96 807 | ||||
| Closing shareholders’ interest | 1 533 988 | 1 387 281 | 1 416 939 | ||||
| Adjustments Impact on profit for the period |
6 months to | 6 months to | Year to | Cumulative prior to |
|||
| 28 February | 28 February | 31 August | 31 August | ||||
| R’000 | 2006 | 2005 | 2005 | 2004 | |||
| Re-recognition of trademarks previously written off |
– | – | – | 260 400 | |||
| Inventory adjustments | 2 396 | (3 210) | (14 046) | (113 407) | |||
| Irrecoverable debtors’ balances written off |
– | – | – | (25 080) | |||
| Leave pay and bonus accruals | 6 836 | 9 687 | (110) | (13 006) | |||
| Onerous leases | 984 | (3 222) | (2 854) | (10 697) | |||
| Other | 2 173 | (5 433) | (3 081) | (1 403) | |||
| Total adjustment to equity | 12 389 | (2 178) | (20 091) | 96 807 | |||
| Share options | (2 913) | (2 466) | (5 379) | (9 035) | |||
| Total adjustment to profit | 9 476 | (4 644) | (25 470) | 87 772 | |||
The effects disclosed are net of deferred taxation at the rates prevailing during the relevant period.
The group has applied IFRS2 - Share-based payments to all options granted after 7 November 2002 which had not vested at 31 August 2004. The fair value of these options were determined at the grant date using the Binomial option pricing model. The fair value of the options that are expected to vest have been amortised over the vesting period. The cumulative value amortised at 28 February 2006 amounts to R17.3 million.
The provisions of IFRS1 have required the group to re-recognise trademarks to the value of R372 million which were written off against share premium in 1996. These trademarks are treated as intangibles with indefinite useful lives in accordance with IAS 38 – Intangible assets. Accordingly these trademarks are not amortised, but are subject to an annual impairment test.
Rebates, settlement discounts and distribution costs have been included as part of the cost of merchandise which has had the effect of reducing the value of inventories. In addition, the group has historically used the Retail Inventory Method to estimate the FIFO cost of inventory. The assumptions and methodology applied by the group in using the Retail Inventory Method were reviewed and refined during the period, in the context of more reliable information becoming available, to more accurately reflect the FIFO cost of inventory.
Irrecoverable debtors’ balances represent amounts that should have been written off in previous years.
Leave pay and bonus accruals relate to known over and underprovisions in the periods indicated.
Onerous leases relate to onerous contract costs which had previously not been recognised.
As reported in the annual report for the year ended 31 August 2005, the group changed its accounting treatment in respect of operating leases subject to a fixed escalation. The group now recognises the total value of lease payments over the term of the lease on a straight-line basis. This change was effected after the results for the six-month period ended 28 February 2005 were published and the comparatives have accordingly been restated.
In addition to the reallocation of rebates and settlement discounts from other revenue to gross profit and the reallocation of distribution costs from operating expenditure to gross profit as described above, the group has also reallocated distribution and logistic fee income in its distribution business from gross profit to other revenue.