annual report 2009

financial statements: notes to the annual financial statements
for the year ended 31 March 2009


      Group   
      2009  2008  
      Rm  Rm  
21. Investment income         
  Interest insurance business   55.3 42.3  
  Dividends from listed investments insurance business   19.0 7.3  
  Realised profit on disposal of insurance investments   2.6 22.1  
      76.9 71.7  
           
22. Net finance costs         
22.1 Interest paid         
  Bank loans and overdrafts   105.4 68.1  
  Other   3.1 0.1  
      108.5 68.2  
22.2 Interest received         
  Bank   (10.5) (5.7)  
  Other   (1.0) (0.8)  
      (11.5) (6.5)  
22.3 Forward exchange contracts         
  Realised   1.7 1.0  
  Unrealised   (12.2) (5.9)  
      (10.5) (4.9)  
22.4 Net finance costs    86.5 56.8  
           
23. Taxation         
23.1 Taxation charge         
  South Africa   244.0 285.6  
  Foreign   19.7 17.4  
  Taxation per income statement   263.7 303.0  
  Comprising:        
  Normal taxation        
     Current year   194.8 168.0  
     Prior year   (5.5) 0.5  
  Deferred taxation        
     Current year   40.1 104.2  
     Prior year   5.9 (0.2)  
     Rate change   – (0.1)  
  Secondary Tax on Companies   28.4 30.6  
  Taxation per income statement   263.7 303.0  
23.2 The rate of taxation on profit is reconciled as follows:         
  Profit before taxation   830.7 945.3  
  Taxation calculated at a tax rate of 28% (2008: 29%)   232.6 274.1  
  Disallowed expenditure/(exempt income)   0.2 (3.3)  
  Secondary tax on companies   28.4 30.6  
  Prior years   0.4 0.3  
  Differing tax rates in foreign countries   2.1 1.4  
  Rate change   – (0.1)  
  Taxation per income statement   263.7 303.0  
  Effective taxation rate   31.7% 32.1%  
           
      2009 2008  
      000’s 000’s  
24. Earnings per share         
24.1 Weighted average number of shares         
  Weighted average shares for earnings and headline earnings per share   88 209 89 583  
  Dilution resulting from share awards and options outstanding   424 220  
  Weighted average shares for diluted earnings and headline earnings per share   88 633 89 803  
  Diluted earnings and headline earnings per share is calculated by adjusting the weighted average number of ordinary shares assuming that all share options will be exercised. The dilution is determined by the number of shares that could have been acquired at fair value (determined as the average annual market price of the shares) less the number of shares that would be issued on the exercise of all the share options.        
24.2 Headline earnings    Rm  Rm  
  Attributable earnings   567.0 642.3  
  Profit on disposal of property, plant and equipment   (3.6) (4.5)  
  Profit on disposal of available-for-sale investments   (2.6) (22.1)  
  Taxation   1.2 2.2  
  Headline earnings   562.0 617.9  
24.3 Earnings per share    Cents  Cents  
  Earnings per share   642.8 717.0  
  Fully diluted earnings per share   639.7 715.2  
24.4 Headline earnings per share         
  Headline earnings per share   637.1 689.8  
  Fully diluted headline earnings per share   634.1 688.1  
           
25. Dividends paid    Rm  Rm  
  Dividend no. 6 declared on 21 May 2007 and paid on 23 July 2007     150.0  
  Dividend no. 7 declared on 12 November 2007 and paid on 28 January 2008     142.8  
  Dividend no. 8 declared on 19 May 2008 and paid on 28 July 2008   176.0    
  Dividend no. 9 declared on 10 November 2008 and paid on 26 January 2009   141.2    
  Dividends received on treasury shares:        
     Lewis Stores (Pty) Ltd   (29.7) (27.1)  
     Lewis Employee Share Incentive Scheme Trust   (3.2) (3.0)  
      284.3 262.7  
           
26. Notes to the cash flow statements         
26.1 Cash generated from operations         
  Operating profit   840.3 930.4  
  Adjusted for:         
     Share-based payments   10.6 6.7  
     Depreciation   45.8 40.9  
     Surplus on disposal of property, plant and equipment   (3.6) (4.5)  
     Movement in debtors impairment provision   136.9 18.3  
     Movement in retirement benefits provision   (3.8) (9.9)  
     Movement in other provisions   30.4 14.0  
      1 056.6 995.9  
  Changes in working capital:    (386.9) (439.7)  
  Decrease/(Increase) in inventories   4.1 (1.9)  
  Increase in trade and other receivables   (460.6) (440.3)  
  Increase in trade and other payables   69.6 2.5  
           
      669.7 556.2  
26.2 Taxation paid         
  Amount owing at the beginning of the year   29.6 (61.7)  
  Amount charged to the income statement   (263.7) (303.0)  
  Adjustment for deferred taxation   46.0 103.9  
  Amount owing at the end of the year   2.5 (29.6)  
      (185.6) (290.4)  
26.3 Cash and cash equivalents         
  Cash deposits and cash on hand   54.8 66.8  
  Short-term interest-bearing borrowings   (637.0) (703.4)  
  Cash and cash equivalents   (582.2) (636.6)  
 
27. Financial risk management
 Risk management is the identification of actual and potential areas of risk, followed by a process of risk mitigation. Responsibility for this process of risk management is with the Risk Working Group (“RWG”), a committee consisting of the members of the Executive Committee and the company secretary. The RWG formally reports to the Audit and Risk Committee on a bi-annual basis.

The Risk Working Group is responsible for identifying, evaluating and monitoring all significant risks facing the business. Members of the RWG are responsible for integrating risk management into the day-to-day activities of the business and ensuring that the staff are aware and accountable for managing risk and maintaining internal control.

The group is exposed to financial risks being credit risk, market risk (including currency, interest rate and price risks) and liquidity risk. The group manages the overall risk by focusing on minimising the potential adverse effects of these risks on the group’s financial performance.

The group’s primary business is that of a credit retailer. As such, credit risk features as the dominant financial risk. It provides the foundation of the group’s profitability, yet the mismanagement of credit risk will threaten the ongoing sustainability of the business.

Due to its pervasive and strategic importance, credit policies are continually evaluated by the Executive Committee to ensure that they are in line with prudent lending practices, yet maintain the group’s overall profitability and return on assets. The responsibility for the implementation of these policies rests with the chief operating officer, credit risk executive and their teams.
27.1 Credit risk
Credit risk is the risk of suffering financial loss, should any of the group’s customers and counterparties fail to fulfil their contractual obligations with the group. The main credit risk faced is that customers will not meet their payment obligations in terms of the sale agreements concluded. The maximum credit exposure is that of accounts receivable, fixed income securities and deposits.
  i) Accounts receivable
The group has developed advanced credit-granting systems to properly assess the customer. The credit underwriting process flows through the following stages.

  • Credit scoring: this involves the gathering of appropriate information from the client, use of credit bureaus and third parties such as employers. These input variables are run through the various credit scorecards. Lewis deals with its new customers and existing customers differently when credit scoring takes places.
The process differs as follows:
  • for new customers, application risk scorecards predict the risk with the emphasis for such an evaluation on information from credit bureaus and third-party information.
  • for existing customers, behavioural scorecards have been developed to assess the risk through predictive behaviour with the emphasis on the customer’s payment record with Lewis, bureau and other information being considered.
  • Assessing client affordability: this process involves collecting information regarding the customer’s income levels, expenses and current debt obligations. Lewis has its own priority expense model based on surveys conducted with customers which is done annually.
  • Determining the credit limit for the customer: the customer’s risk score determined by the scorecard together with the expense assessment and outstanding obligations are used to calculate a credit limit within the customer’s affordability level.

The credit granting systems enable the group to determine its appetite for risk. In determining the acceptable level of risk, the potential loss is weighed up against the revenue potential using the predictive behavioural models inherent in the credit-granting system. The group monitors any variances from the level of risk that has been adopted and adjusts the credit-granting process on a dynamic basis.

The group manages its risk effectively by assessing the borrower’s ability to service the proposed monthly instalment. However, collateral exists in that ownership of merchandise is retained until the customer settles the account in full.

In addition, a payment rating system manages the customer’s payment profile. A payment rating is applied to each customer individually and is based on the customer’s payment history relative to their contractual arrangements. This payment rating is integral to the calculation of the doubtful debt provision in terms of IAS 39. IAS 39 requires that all impaired receivables are carried at their net present value of the expected cash flows from such accounts, discounted at the original effective rate implicit in the credit agreement.
   
      Group   
      2009 2008  
      Rm Rm  
  The total net receivable balance can be analysed as follows:        
  Receivables satisfactory paid   2 437.8 2 207.0  
  Slow paying and non-performing receivables which have been impaired   950.0 731.7  
      3 387.8 2 938.7  
           
  The payment ratings categorise individual customers into 13 distinct categories and have been summarised into four main groupings:
           
        No. of customers Doubtful debt provision %  
        2009  2008 2009  2008  
  Satisfactory paid:               
  Customers fully up to date including those who have paid  70% or more of amounts due over the contract period   No 497 296 534 286      
    % 72.0% 75.1% 0% 0%  
  Slow payers:               
  Customers fully up to date including those who have paid 65% to 70% of  amounts due over the contract period   No 57 042 51 759      
    % 8.2% 7.3% 20% 17%  
  Non-performing customers                
  Customers who have paid 55% to 65% of amounts due over the period of the contract   No 50 300 47 130      
    % 7.3% 6.6% 42% 42%  
  Non-performing customers                
  Customers who have paid 55% or less of amounts due over the period of the contract   No 86 448 78 413      
    % 12.5% 11.0% 88% 86%  
  Total     691 086 711 588 15.7% 13.5%  
         
  The ageing of satisfactory paid receivables past due but not impaired as a percentage of satisfactory paid receivables is as follows:
         
      Group   
      2009 2008  
  1 instalment in arrear   4.7% 4.9%  
  2 instalments in arrear   3.0% 3.1%  
  3 instalments in arrear   2.0% 2.1%  
  4 instalments in arrear   1.4% 1.5%  
  4 or more instalments in arrear   2.2% 2.5%  
      13.3% 14.1%  
           
  ii) Fixed income securities and deposits
Credit risk may also arise when an entity has its credit rating downgraded causing the fair value of the group’s investment in that entity’s financial instruments to fall. The credit ratings of the financial institutions holding deposits on our behalf and those whose securities we hold are monitored on a regular basis.

Deposits are placed with high-quality South African institutions. Included in the cash on hand and deposits are bank balances held in foreign currency amounting to R11.7 million (2008: R16.7 million).

Fixed income securities are almost entirely risk-free government bonds or government-backed securities.
27.2 Market risk
Treasury management is carried out by the chief financial officer and senior members of the finance team under policies approved by the Audit and Risk Committee (“the Committee”). The Committee provides written treasury policies covering cash management, foreign exchange management, interest rate management and investment risk.

The group’s attitude to treasury risk can be summarised as follows:
  • investment risk: maximise returns at an acceptable level of risk.
  • foreign exchange risk: eliminate transaction risk and net investment risk as far as practically possible.
  • interest rate risk: manage short-term volatility
 
  i) Foreign exchange risk management
Foreign exchange risk is present in respect of imports of merchandise and the net investment in Botswana.

Imports of merchandise
Merchandise is sourced from foreign suppliers, particularly in the Far East. In order to minimise exposure to foreign currency fluctuations, forward cover is taken out to cover forward purchase commitments made with foreign suppliers. The group strives to maintain forward cover for the next six to nine months’ purchase commitments.

During the year, 23.7% (2008: 26.6%) of the purchases were in foreign denominated currencies. Below is a summary of the amounts payable under forward contracts:
   
          Foreign Rand Fair value  
          currency equivalent (gain)/loss  
      Term Rate FC 'fm R’m R’m  
  2009    Less than 9 Rates vary from        
  US dollar   months R9.51 to R10.24 20.2 199.3 12.2  
  2008     Rates vary from        
  US dollar   Less than 3 months R6.80 to R8.25 9.6 70.0 (5.9)  
                 
  Below is a sensitivity analysis of the effect of currency movements of 5% and 10% respectively on the above forward exchange rates:
                 
      -10% -5% +5% +10%  
  2009             
  Effect on (profit)/loss   6.6 13.1 (6.6) (13.1)  
  (Increase)/Decrease in equity   6.6 13.1 (6.6) (13.1)  
  2008            
  Effect on (profit)/loss   5.4 2.7 (2.7) (5.4)  
  (Increase)/Decrease in equity   5.4 2.7 (2.7) (5.4)  
               
  Net investment in foreign entities
The currency exposure is limited to the net investment in Botswana of R77.0 million (2008: R84.8 million), which includes a long-term loan account. The currency exposure is managed by keeping the net investment at a minimum practical level by remitting cash to South Africa on a regular basis through loan repayments and dividends.

Below is a sensitivity analysis of the effect of currency movements of 5% and 10% on the year-end value of our net investment in Botswana:
      -10% -5% +5% +10%  
  2009             
  (Increase)/Decrease in equity   9.4 4.7 (4.7) (9.4)  
  2008            
  (Increase)/Decrease in equity   9.2 4.6 (4.6) (9.2)  
               
  There is no impact on profit or loss for both years.
   
  ii) Interest rate risk

The principal objective of interest rate management is to:
  • minimise the impact of interest rate volatility on profits in the short term
  • ensure that the group is protected from volatile interest rate movements for the medium to long term


Borrowings
As part of the process of managing floating rate interest-bearing debt, the interest rate characteristics of borrowings are positioned according to the expected movements in interest rates. The chief financial officer may recommend to the Audit and Risk Committee (“the Committee”) the use of fixed interest debt and interest rate swaps as circumstances dictate. The use of such instruments must be specifically approved by the Committee.

Interest rate profiles are analysed by the changes in its borrowing levels and the interest rates applicable to the facilities available to the group. The sensitivity analysis for a 50 basis points change in the interest is set out below, assuming the current level of borrowings at year-end is maintained throughout the year:
      +50bp -50bp  
  2009         
  Effect on (profit)/loss   2.6 (2.6)  
  (Increase)/Decrease in equity        
  2008        
  Effect on (profit)/loss   2.8 (2.8)  
  (Increase)/Decrease in equity   2.8 (2.8)  
           
  In order to hedge exposures in the interest rate profile of peak borrowings, the group may make use of interest derivatives and other hedging instruments in terms of limits specified in the group’s treasury policy approved by the Audit and Risk Committee. During the current financial year, the group entered into an interest rate swap with the counterparty being a high quality institution. The value of borrowings hedged and the fair value of these contracts as at 31 March 2009 are as follows:
   
      Notional        
      amount Maturity Fair value (Rm)  
      Rm date 2009 2008  
  Zero premium interest rate collars with the cap and floor rates referenced to the 3-month JIBAR rate:            
  – commencing on 31 March 2008   100 30 Mar 2009 – 0.6  
  Interest rate swap with the group being the fixed rate payer at 10.58% and the counterparty being the floating rate payer            
  – commencing on 30 March 2009   100 30 Mar 2010 (2.9)    
          (2.9) 0.6  
               
    Accounts receivable
Interest rates charged to customers are fixed at the date the contract is entered into. Consequently, there is no interest rate risk associated with these contracts during the term of the contract.

Interest rate profile
The interest rate profiles of financial instruments are as follows:
     
        Average      
        closing      
        effective   Carrying  
      Term of interest rate Floating value  
      investment % or fixed Rm’s  
  2009             
  Assets             
  Gross instalment sale and loan receivables   Up to 3 years 30.6% Fixed 4 007.2  
  Fixed income securities   Varies 10.5% Fixed 351.3  
  Money market investments   Up to 6 months 11.7% Floating 199.1  
  Liabilities             
  Long-term interest-bearing borrowings   Varies (refer note 10) 11.4% Floating 100.0  
  Short-term interest-bearing borrowings   Varies (refer note 14) 12.1% Floating 637.0  
  2008            
  Assets             
  Gross instalment sale and loan receivables   Up to 3 years 30.8% Fixed 3 539.8  
  Fixed income securities   Varies 9.4% Fixed 312.9  
  Money market investments   Up to 6 months 11.1% Floating 159.5  
  Liabilities             
  Short-term interest-bearing borrowings   Varies (refer note 14) 12.8% Floating 703.4  
     
  iii) Price risk
There is exposure to securities price risk because of investments held by Monarch Insurance Company Limited (“Monarch”). These investments are classified as available-for-sale investments.

Monarch holds investments in order to meet the insurance liabilities and solvency margins required by the Short-term Insurance Act of 1998. The investments are managed by Sanlam Investment Management (Pty) Ltd (“Sanlam”) on Monarch’s behalf.

The overall management objectives of the portfolio are:
  • preservation of capital over the long term
  • managing market risk over the short to medium term
  • to ensure the portfolio is adequately diversified


Monarch’s board controls the investment strategy adopted by Sanlam. At each of the board’s quarterly meetings, a comprehensive report from Sanlam is presented and discussed. Particular emphasis is placed on:
  • current market conditions and future expectations
  • asset allocations considering the above
  • returns under each asset category
  • detailed reviews of the equity portfolio and the positioning of the bond portfolio
  • recommendations of the asset manager going forward

The Monarch board considers the recommendations of the asset managers. The investment strategy is then formulated for the following quarter and authority given to the chief financial officer to implement the strategy. The performance of this portfolio is presented to the group’s Audit and Risk Committee on a quarterly basis.

The market risk of the fixed security portfolio is monitored through the modified duration of the portfolio, a measure which approximates the movement in the fair value of such securities relative to interest rate movements. The modified duration of the fixed income portfolio at the respective year-ends and the JSE All-Bond Index is as follows:
      2009 2008  
  Modified duration of Monarch’s fixed income portfolio   5.7 5.1  
  Modified duration of the JSE All Bond index   5.8 5.1  
  The market risk of the equity portfolio is monitored through the portfolio’s sectoral allocation and beta. The respective measures for the portfolio at year-end can be summarised as follows:
        
  Portfolio sectoral analysis:        
     Resources   15.3% 22.5%  
     Financials   21.0% 20.3%  
     Industrial   63.7% 57.2%  
  Beta of portfolio relative to JSE index   0.85 0.88  
  Beta of portfolio relative to JSE index, excluding resources   0.95 1.02  
           
  Beta measures the portfolio volatility relative to the market index, which by definition has a beta of 1.0.
27.3 Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed facilities. Due to the dynamic nature of the underlying business, the group maintains flexibility in funding through the use of committed facility lines.

Management monitors the group’s cash flows through the monitoring of actual inflows and outflows against forecasted cash flows and the utilisation of borrowing facilities. A quarterly analysis is presented to the Audit and Risk Committee.

Below is a summary of the committed facilities and the utilisation thereof at year-end:
      2009 2008  
      Rm Rm  
  Total banking facilities   1 250.0 1 000.0  
  Less: drawn portion of facility   (737.0) (703.4)  
  Plus cash on hand   54.8 66.8  
  Available cash resources and facilities   567.8 363.4  
           
28. Insurance risk
The risks covered under insurance contracts entered into with customers by the group’s insurer, Monarch Insurance Company (“Monarch”), are as follows:

  • settlement of customer’s outstanding balance in the event of death or disability,
  • replacement of customer’s goods in the event of damage or theft of goods, and
  • settlement of customer’s account, should the customer become unemployed after three months subsequent to the sale.

The risk under the insurance contract is the possibility that the insured events as detailed above occur and the uncertainty of the amount of the resulting claim. By the very nature of the insurance contract, this risk is random and therefore unpredictable.

The principle risk that the group faces is that the actual claims exceed the amount of the insurance claims provisions. This could occur because the frequency or severity of claims are greater than estimated. Insurance events are random and the actual number of claims will vary from year to year from the estimated claims provision established using historical claims patterns.

The development of insurance claims provisions provides a measure of the group’s ability to estimate the ultimate value of the claims. The group does not underwrite long-term risks and, consequently, the uncertainty about the amount and timing of claims payments is limited. Regular estimates of claims are performed in reviewing the adequacy of the insurance claims provisions. Claims development is reviewed by management on a regular basis.

The frequency and severity of claims can be affected due to unforeseen factors such as patterns of crime, AIDS and employment trends. The group manages these risks through its underwriting strategy, adequate reinsurance arrangements and proactive claims handling. The geographical spread of the group ensures that the underwritten risks are well-diversified. No significant concentrations of insurance risks exist.

A proportional reinsurance arrangement has been entered into by Monarch to facilitate the transfer of 40% of the risk under these policies to an external reinsurer. Catastrophe cover has been placed with third-party insurers and reinsurers in order to reduce the potential impact of a single event on the earnings and capital of Monarch.

Due to the nature of the insurance risk, claims can be measured reliably. Past experience has indicated that claims provision estimates approximate the actual claims costs. The insurance result is dependent on the trend in the group’s merchandising sales. There is no significant insurance business other than with the group’s customers.
      Group   
      2009 2008  
      Rm Rm  
  Movement in provisions:         
  (i) Unearned premium reserve        
    Opening balance   290.5 214.3  
    Movement during year   69.5 76.2  
    Closing balance   360.0 290.5  
    Comprising:        
    Unearned premiums   598.1 479.1  
    Less: reinsurers’ share of provision   (238.1) (188.6)  
    Net balance   360.0 290.5  
  (ii) Insurance provisions        
    Insurance provisions include outstanding claims, IBNR reserve and deferred reinsurance acquisition reserve.        
    Opening balance   32.8 26.0  
    Movement during year   38.3 6.8  
    Closing balance   71.1 32.8  
             
  Regulatory requirements
The group’s insurer, Monarch Insurance Company Limited (“Monarch”), is required to maintain certain insurance liabilities and has a minimum solvency margin of 15% as set out in the Short-term Insurance Act of 1998. Furthermore, Monarch is required to hold certain prescribed assets to meet its insurance liabilities and solvency margins. These assets are subject to various limits in order to ensure an adequate spread and diversification of assets.

Monarch has met all the requirements of the Short-term Insurance Act regarding its insurance liabilities, solvency margins, prescribed assets and asset spread.
             
29. Financial instruments                 
  i) Categories                
                Fair value    
                through    
        Held-to- Amortised Loans and Available- profit and    
        maturity cost receivables for-sale loss Total  
    Assets                 
    2009                 
    Investments  insurance business         734.2   734.2  
    Trade and other receivables       2 943.7     2 943.7  
    Cash on hand and on deposit     54.8       54.8  
    2008                
    Investments  insurance business         664.9   664.9  
    Trade and other receivables       2 615.6     2 615.6  
    Cash on hand and on deposit     66.8       66.8  
    Liabilities                 
    2009                 
    Trade payables     84.8       84.8  
    Borrowings     737.0       737.0  
    2008                
    Trade payables     59.6       59.6  
    Borrowings     703.4       703.4  
                     
  ii) Maturity profile                 
    The maturity profiles of financial instruments at 31 March 2009 are as follows
               
        0 12 months 2 5 years >5 years Total  
    Assets            
    Available-for-sale insurance investments   199.1 351.3 183.8 734.2  
    Trade and other receivables*   2 943.7     2 943.7  
    Cash on hand and on deposit   54.8     54.8  
    Liabilities             
    Borrowings   (637.0) (100.0)   (737.0)  
    Trade payables   (84.8)     (84.8)  
        2 475.8 251.3 183.8 2 910.9  
                 
  * Amounts due from instalment sale receivables after one year are reflected as current, as they form part of the normal operating cycle. The credit terms of instalment sale receivables range from 6 – 36 months.
                 
  iii) Fair value estimation
The fair value of financial instruments traded in active markets is based on quoted prices at the balance sheet. The quoted market price used is the current bid price.

The fair value of interest swaps and collars is calculated as the present value of the estimated future cash flows. The fair value of forward exchange contracts is determined using quoted forward exchange rates at the balance sheet dates.

The carrying value of trade receivables and trade and other payables is assumed to approximate their fair values.
   
30. Capital risk management
The group’s objectives when managing capital are to:
  • safeguard the group’s ability to continue as a going concern
  • provide returns for shareholders
  • provide benefits for other stakeholders
  • maintain an optimal capital structure as approved by the board.

In order to maintain the optimal capital structure, dividends paid to shareholders may be adjusted, capital could be returned to shareholders or new shares could be issued.

Consistent with others in the industry, capital is monitored on the basis of the gearing ratio. This ratio is calculated as net debt divided by equity capital. Net debt is calculated as total interest-bearing borrowings less cash and cash equivalents.

During the 2009 financial year, the strategy was to maintain the gearing below 25%, which in the current credit conditions is considered to be prudent. The gearing rates at 31 March 2009 and 31 March 2008 were as follows:
      2009  2008  
      Rm  RM  
  Interest-bearing borrowings   737.0 703.4  
  Less: cash and cash equivalents   (54.8) (66.8)  
  Net debt   682.2 636.6  
  Shareholders’ equity   2 939.9 2 730.0  
  Gearing ratio   23.2% 23.3%  
31. Contingencies         
  Bank and other guarantees given by the group to third parties. The directors are of the opinion that no loss will be incurred on these guarantees.   7.5 8.1  
32. Capital commitments         
  Material capital commitments contracted for or authorised and contracted at the end of the year   10.0 35.0