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annual report
2007
Lewis Group Limited is a holding company listed on the JSE Limited, operating through two main trading subsidiaries, Lewis Stores (Proprietary) Limited and Monarch Insurance Company Limited. Lewis Stores (Proprietary) Limited offers a selected range of furniture and appliances through 407 Lewis and 79 Best Electric stores. Sales are mainly on credit. Monarch Insurance Company Limited, a registered short-term insurer underwrites Customer Protection Insurance benefits to South African customers. In addition, there are also trading subsidiaries in Botswana, Lesotho, Namibia and Swaziland operating under the Lewis brand. Lifestyle Living has 19 stores which focuses on the upmarket segment of the furniture retailing market.
The nature of the business of the subsidiaries is set out here.
The financial results and affairs of the group are reflected in the annual financial statements set out here.
Segmental information is set out in note 30 to the annual financial statements.
There were no significant post-balance sheet events that occurred between the year-end and the date of approval of the financial statements by the directors.
The company’s authorised and issued shares remained unchanged during the year.
The group purchased 7 507 000 (7.5%) of its own shares on the open market through its subsidiary, Lewis Stores (Proprietary) Limited, acting in terms of the general authority granted by shareholders at a general meeting held on 4 August 2006. Refer to note 7.1 and 7.2 for more detail.
The Lewis Employee Incentive Scheme Trust effectively holds 1 400 530 shares, of which 463 153 are unallocated and 937 377 retained to cover share awards and options granted to executives. Details have been set out in note 7 and 17.3 to the financial statements.
The following dividends have been declared or proposed for the financial year ended 31 March 2007.
| Dividend | Date | ||
| per share | declared | Payable | |
| Interim – declared | 116 cents | 13 November 2006 | 29 January 2007 |
| Final – proposed | 150 cents | 21 May 2007 | 23 July 2007 |
| For the year | 266 cents |
Notice is hereby given that a final dividend of 150 cents per share in respect of the year ended 31 March 2007 has been declared payable to the holders of ordinary shares recorded in the books of the company on Friday, 20 July 2007. The last day to trade cum dividend will therefore be Friday, 13 July 2007 and Lewis shares will trade ex-dividend from Monday, 16 July 2007. Payment of the dividend will be made on Monday, 23 July 2007. Share certificates may not be dematerialised or rematerialised between Monday, 16 July 2007 and Friday, 20 July 2007, both days inclusive.
David Nurek, Alan Smart, Hilton Saven, Ben van der Ross and Professor Fatima Abrahams remained directors during the year. Les Davies, the group’s chief financial officer, was appointed as a director with effect 1 April 2007.
In terms of the Articles of Association of the company, David Nurek, Ben van der Ross and Les Davies will retire and have offered themselves for re-election.
P B Croucher remained as company secretary throughout the year. The address of the company secretary is that of the registered offices as stated on the inside cover.
At 31 March 2007, the directors’ beneficial direct and indirect interest in the company’s issued shares was as follows:
| 2007 | 2006 | ||||
| Direct | Indirect | Direct | Indirect | ||
| D M Nurek | – | 10 000 | – | 10 000 | |
| H Saven | – | 540 | – | 540 | |
| A J Smart | 235 428 | – | 235 428 | – | |
| 235 428 | 10 540 | 235 428 | 10 540 |
A J Smart is entitled to 219 428 options and 80 917 share awards. Full details of the terms and conditions in relation to these options and share awards are set out in note 17.4 to the financial statements.
During the course of the year, no director had a material interest in any contract of significance with the company or any of its subsidiaries that could have given rise to a conflict of interest.
No related party transactions in terms of the JSE Limited Listings Requirements took place between the company or its subsidiaries and the directors or their associates, other than remuneration for services rendered to the company as set out in note 17.4 to the financial statements.
Details of the company’s subsidiaries are set out here.
The company’s interest in the aggregate profits and losses after taxation of the subsidiary companies is as follows:
| 2007 | 2006 | ||
| Rm | Rm | ||
| Profits | 602.6 | 452.2 | |
| Losses | – | (0.2) |
Borrowings were R430.3 million at 31 March 2007 (2006: R134.6 million). Borrowings are subject to the treasury policy adopted by the Board of directors.
In terms of the Articles of Association, the group has unlimited borrowing powers.
At the annual general meeting on 4 August 2006, the following special resolution was passed:
“Resolved that the Company hereby approves, as a general approval contemplated in Sections 85 and 90 of the Companies Act (Act No. 61 of 1973, as amended) (“the Companies Act”), the acquisition by the Company or any of its subsidiaries from time to time of the issued shares of the Company, upon such terms and conditions and in such amounts as the directors of the Company may from time to time determine, but subject to the Articles of Association of the Company and the provisions of the Companies Act and if for so long, the shares of the Company are listed on the JSE, subject to the JSE Listings Requirements as presently constituted and which may be amended from time to time.”
No special resolutions were passed by the subsidiaries.