annual report 2009

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NOTES TO THE FINANCIAL STATEMENTS
for the years ended 31 March




           
        2009 2008
        Rm Rm

11.

TRADE RECEIVABLES – RETAIL

    
  Loans and receivables        
  6-month revolving credit     1 136,0 1 356,2
  12-month extended credit     1 610,3 1 089,4
        2 746,3 2 445,6
  The effective rate of interest earned on the above receivables during the year under review is 18,8% (2008: 15,3%).    
           
  The group’s management of and exposure to credit and market risk is disclosed in notes 21 and 22.    
           

12.

CASH

        
  Bank balances     296,2 169,5
           

13.

SHARE CAPITAL

        
13.1 Authorised        
  200 000 (2008: 200 000) 6,5% cumulative preference shares of R2 each 0,4 0,4
  600 000 000 (2008: 600 000 000) ordinary shares of 1,25 cents each 7,5 7,5
        7,9 7,9
           
    Number of shares    
    2009 2008    
13.2 Issued        
  Ordinary share capital        
  Ordinary shares of 1,25 cents each        
  Total in issue – company and group 240 498 241 240 498 241 3,0 3,0
  Shares held by subsidiary (24 049 824) (24 049 824) (0,3) (0,3)
  Shares held by share incentive trust (9 092 806) (11 883 952) (0,1) (0,1)
  Balance at the end of the year – company 240 498 241 240 498 241 3,0 3,0
  Balance at the end of the year – group 207 355 611 204 564 465 2,6 2,6
  Preference share capital        
  200 000 (2008: 200 000) 6,5% cumulative preference shares of R2 each     0,4 0,4
  Total issued share capital – company     3,4 3,4
  Total net issued share capital – group     3,0 3,0
           
13.3 Dividends        
  The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the company. Holders of the cumulative preference shares receive a cumulative dividend of 6,5 cents per share at interim (September) and year-end (March) of each year.    
           
13.4 Unissued        
  In terms of the provisions of the Companies Act No 61 of 1973, and limited to the issuing of shares in terms of the company’s obligations under the staff share incentive schemes, the unissued ordinary shares are under the control of the directors only until the forthcoming annual general meeting.    
       
13.5 Directors’ interest    
  At 31 March 2009, the directors had the following interests in the company’s issued shares:    
                 
    Shares Options
exercised		 Share
appreciation
rights
accepted		 Price
per share		 Year of 2009
Total		 2008
Total
    000’s 000’s 000’s R delivery 000’s 000’s
  Non-executive              
  E Osrin (beneficial)# 105,0 – – – – 105,0 105,0
  D M Nurek (non-beneficial) 10,0 – – – – 10,0 10,0
  F Abrahams – – – – – – –
  S E Abrahams – – – – – – –
  W V Cuba – – – – – – –
  K N Dhlomo – – – – – – –
  N H Goodwin (beneficial)** n/a – – – – – 27,0
  N V Simamane – – – – – – –
    115,0 – –     115,0 142,0
  M Lewis (beneficial) 222,1 – – – – 222,1 222,1
  M Lewis (non-beneficial) 15 904,1 – – – – 15 904,1 14 932,6
    16 126,2 – –     16 126,2 15 154,7
  D M Polak (beneficial) 2 212,0 – – – – 2 212,0 2 273,8
  D M Polak (non-beneficial) 212,0 – – – – 212,0 212,0
  D M Polak – – – 36,00 2009 – 200,0
  D M Polak – – – 60,95 2009 – 150,0
  D M Polak – 200,0 – 36,00 2011 200,0 200,0
  D M Polak – 150,0 – 60,95 2011 150,0 150,0
  D M Polak – 150,0 – 60,95 2013 150,0 150,0
    2 424,0 500,0 –     2 924,0 3 335,8
  Total non-executive 18 665,2 500,0 –     19 165,2 18 632,5
                   
 
# Mr E Osrin retired from his position as chairman and non-executive director on 31 March 2009.
** Mr N H Goodwin retired as a non-executive director on 3 September 2008.
   
                   
  Executive                
  A D Murray (beneficial)   1 140,7 – – – – 1 140,7 1 035,8
  A D Murray (non-beneficial)   137,6 – – – – 137,6 137,6
  A D Murray   – – – 9,70 2009 – 200,0
  A D Murray   – – – 60,95 2009 – 133,3
  A D Murray   – – – 36,00 2009 – 116,7
  A D Murray   – 123,3 – 18,80 2010 123,3 123,3
  A D Murray   – 166,7 – 16,60 2010 166,7 166,7
  A D Murray   – 83,3 – 60,55 2010 83,3 83,3
  A D Murray   – 133,3 – 60,95 2011 133,3 133,3
  A D Murray   – 116,7 – 36,00 2011 116,7 116,7
  A D Murray   – 83,3 – 60,55 2012 83,3 83,3
  A D Murray   – 133,3 – 60,95 2013 133,3 133,3
  A D Murray   – 83,3 – 60,55 2014 83,3 83,3
      1 278,3 923,2 –     2 201,5 2 546,6
  A D Murray       555,0 41,87 2011 555,0 –
  A D Murray       250,0 40,00 2012 250,0 –
  A D Murray       275,0 42,28 2012 275,0 –
          1 080,0     1 080,0 –
  R Stein (beneficial)   600,8 – – – – 600,8 600,8
  R Stein (non-beneficial)   275,7 – – – – 275,7 275,7
  R Stein   – – – 36,00 2009 – 90,0
  R Stein   – – – 9,70 2009 – 143,3
  R Stein   – – – 60,95 2009 – 76,7
  R Stein   – 93,3 – 18,80 2010 93,3 93,3
  R Stein   – 116,7 – 16,60 2010 116,7 116,7
  R Stein   – 90,0 – 36,00 2011 90,0 90,0
  R Stein   – 76,7 – 60,95 2011 76,7 76,7
  R Stein   – 76,7 – 60,95 2013 76,7 76,7
      876,5 453,4 –     1 329,9 1 639,9
  R Stein       225,0 41,87 2011 225,0 –
  R Stein       130,0 40,00 2012 130,0 –
  R Stein       130,0 42,28 2012 130,0 –
          485,0     485,0 –
  Total executive   2 154,8 1 376,6       3 531,4 4 186,5
  Total executive share appreciation rights       1 565,0     1 565,0 –
  Total   20 820,0 1 876,6 –     22 696,6 22 819,0
  Total share appreciation rights       1 565,0     1 565,0 –
 
# Mr E Osrin retired from his position as chairman and non-executive director on 31 March 2009.
** Mr N H Goodwin retired as a non-executive director on 3 September 2008.
                   
  The following changes have taken place since 31 March 2009:
 
1 Mr P S Meiring was appointed as an executive director on 1 April 2009.
2 The indirect non-beneficial holding of Mr M Lewis reduced by 888 500 shares due to a sale during June 2009.
   
  Aside from the above, no further changes have been advised since 31 March 2009.
   

14.

TREASURY SHARES
  In terms of a special resolution passed at the annual general meeting of the company on 3 September 2008 shareholders renewed the approval, as a general authority, of the acquisition by the company or any of its subsidiaries, of the issued ordinary shares of the company, not exceeding 20% in aggregate in any one financial year. The general authority is subject to the Listings Requirements of the JSE Limited and the Companies Act No. 61 of 1973 of South Africa as amended, and is valid only until the company’s next annual general meeting.
       
    Number of shares
    2009 2008
  Foschini Stores (Proprietary) Limited 24 049 824 16 877 827
  The Foschini Share Incentive Trust 11 883 952 11 667 877
  Balance at the beginning of the year 35 933 776 28 545 704
  Foschini Stores (Proprietary) Limited – 7 171 997
  The Foschini Share Incentive Trust – 5 307 620
  Shares purchased during the year – 12 479 617
  The Foschini Share Incentive Trust (2 791 146) (5 091 545)
  Shares delivered during the year (2 791 146) (5 091 545)
  Foschini Stores (Proprietary) Limited 24 049 824 24 049 824
  The Foschini Share Incentive Trust 9 092 806 11 883 952
  Balance at the end of the year 33 142 630 35 933 776
  As at 31 March 2009 a subsidiary, Foschini Stores (Proprietary) Limited, held 24 049 824 (2008: 24 049 824) shares, representing 10,0% (2008: 10,0%) of the company’s share capital. The Foschini Share Incentive Trust held 9 092 806 (2008: 11 883 952) shares, representing 3,8% (2008: 4,9%) of the company’s share capital.
   

15.

RESERVES

    
15.1 Dividend reserve    
  A liability for cash dividends and the related secondary taxation on companies (STC) charge is recognised in the period when the dividend is declared. An amount equal to dividends declared subsequent to the balance sheet date is transferred to the dividend reserve.
   
  A final dividend of 170,0 (2008:170,0) cents per ordinary share was declared on 28 May 2009 payable on 13 July 2009. This will give rise to STC of R30,9 million (2008: R33,7 million) (net of relevant STC credits).
       
  No liability has been raised, as this dividend was declared subsequent to the balance sheet date.
    2009 2008
    Rm Rm
  Balance at 1 April 408,8 408,8
  Transfer from dividend reserve to distributable earnings (408,8) (408,8)
  Transfer to dividend reserve from distributable earnings 408,8 408,8
  Balance at 31 March 408,8 408,8
       
15.2 Hedging (deficit) reserve    
  The hedging (deficit) reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred.    
       
  Balance at 1 April 12,1 (0,3)
  Unrealised (loss) gain on hedging instruments (19,5) 12,4
  Balance at 31 March (7,4) 12,1
       
15.3 Share-based payments reserve    
  This comprises the cumulative fair value of options granted to employees after    
  7 November 2002.    
  Balance at 1 April 91,6 60,9
  Share-based payment reserve movement 25,7 30,7
  Balance at 31 March 117,3 91,6
       
15.4 Insurance cell reserves    
  As the insurance cells are defined as short-term insurers, they are required in terms of the provisions of the Short-Term Insurance Act No. 53 of 1998 to maintain a contingency reserve for adverse claims development. This reserve is calculated at a minimum of 10,0% of net written premium as defined in the legislation.    
       
  No distribution of this reserve can be made without the prior approval of the Registrar of Short-Term Insurance.    
       
  Balance at 1 April 1,5 –
  Transfer to reserves – 1,5
  Balance at 31 March 1,5 1,5
       

16.

MINORITY INTEREST

    
  The Standard Bank of South Africa Limited (SBSA) has a 45% shareholding in the RCS Group.    
       
  Certain other minorities have insignificant shareholdings in two other entities which are majority-owned by the group.    
       

17.

INTEREST-BEARING DEBT

    
  Non-current    
  Unsecured fluctuating loans in terms of long-term bank facilities at prevailing interest rates 937,4 172,2
  Current 402,5 1 201,0
  Included in interest-bearing debt is an amount of R900,0 (2008: R100,0) million which bears interest at fixed rates.    
       
  The group’s borrowing powers in terms of the articles of association of the company are unlimited.    
       
  The group’s management of and exposure to market and cash flow and liquidity risk is disclosed in notes 21 and 22.    
       

18.

MINORITY INTEREST LOANS

    
  Non-current    
  The Standard Bank of South Africa Limited (SBSA) 778,9 495,2
  Other minorities 4,3 –
    783,2 495,2
  The amount advanced by SBSA to RCS Investment Holdings (Proprietary) Limited (RCSIH) and its subsidiaries is in terms of a funding agreement between the parties. This funding agreement is not subject to any guarantee or security from Foschini Limited or any of its subsidiaries except RCSIH and accordingly can only be repaid out of the cash flows of RCSIH and its subsidiaries. Refer notes 6 and 7.    
       

19.

POST-RETIREMENT DEFINED BENEFIT PLAN

    
  Post-retirement medical aid    
  Balance at 1 April 84,1 84,1
  Increase in liability – –
  Balance at 31 March 84,1 84,1
  Further details in respect of post-retirement medical aid benefits are included in note 33.5.    
       

20.

TRADE AND OTHER PAYABLES

    
  Financial liabilities    
  Trade payables 881,9 478,4
  Other liabilities    
  VAT payable – 12,1
  Other payables and accruals 370,6 251,3
    1 252,5 741,8
  The group’s management of and exposure to market and cash flow and liquidity risk is disclosed in notes 21 and 22.

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