Annual Report - JD Group

Directors’ report
Your directors have pleasure in submitting their report on the
affairs of the Company and the Group for the year ended
31 August 2004.
Nature of business
The Group carries on the business of furniture and appliance retail
as well as the provision of financial services.
Disposal and closure of BoConcept
In June we sold the master licence for “BoConcept UK”, three
stores and the contracts division back to the Danish parent
company. In addition, we assigned another two leases and put the
balance of the business, which was in effect three remaining
leases, into voluntary liquidation on 29 October 2004. This has
resulted in a loss on disposal and closure of R49,9 million which
has been charged to the income statement.
Closure of Profurn legacy stores
A total of 19 stores were closed in the BLNS countries at a cost of
R34 million. The Group is in the process of disposing of all seven
stores in Mozambique. These principally represent Profurn legacy
stores that were highlighted in the prior year’s segmental analysis
as operations to be integrated, disposed of or discontinued.
Results of operations
The Group’s income statement and segmental analysis sets out the
results of operations.
Corporate governance
During the period under review, the directors have complied with
all aspects of the Code of Corporate Practices and Conduct (“the
Code”) as set out in King II which are applicable to the Group’s
activities.
The Group is totally committed to the principles of transparency,
integrity and accountability as set out in the Code and the directors
are fully cognisant of the need to conduct the Group’s business in
accordance with generally accepted corporate practices, having
due regard for the rights of their employees, suppliers, lenders,
customers, the environment and community at large.
The Group has documented, implemented and tested a disaster
recovery plan and this will be maintained into the future.
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Independent auditors
The independent auditors, Deloitte & Touche, have been reappointed
during the year. All non-audit services provided by
Deloitte & Touche are tabled and approved by the audit committee.
The non-audit services in the current year primarily related to
taxation consulting services.
Share capital
The Company’s authorised share capital remained unchanged.
The Company’s issued share capital was increased during the year
as follows:
Number Value
of shares R
Ordinary shares of 5 cents each
Balance at 15 September 2003
Issued to The JD Group
Employee Share Incentive
Scheme
166 830 000 8 341 500
– on 8 December 2003 2 170 000 108 500
– on 17 May 2004 3 000 000 150 000
Balance at 15 September 2004 172 000 000 8 600 000
A maximum of ten million of the remaining unissued shares have
been placed under the control of the directors of the Company
until the forthcoming annual general meeting.
Share premium
Additional share premium of R124 million (2003: R994 million)
arose on the issue of 5 170 000 (2003: 54 100 000) shares net of
issue expenses amounting to R404 274 (2003: R202 734).
Share incentive trusts
25 800 000 (2003: 21 936 828) ordinary shares of 5 cents each
have been placed under the control of the directors of the
Company with the power to allot and issue them in accordance
with the terms of The JD Group Employee Share Incentive
Scheme. Refer note 15 and page 60.