Académique Documents
Professionnel Documents
Culture Documents
Financial highlights
Revenue (Rm)
Revenue up
3 000
12%
2 500
2 000
1 500
1 000
500
to R2.83 billion
0
2009
2010
2013 2014
2011 2012
20.0%
600
500
400
300
up from 18.5%
200
100
0
2010
2013 2014
2011 2012
400
2009
300
to R567 million
23%
200
100
2009
2010
2013 2014
2011 2012
Headline earnings up
20%
250
200
150
50
0
2009
2010
2011 2012
2013 2014
Dividend up
100
20%
50
40
30
20
10
0
-10
2009
2010
2011 2012
2013 2014
R10 billion
Contents
About Famous Brands
IFC
Financial highlights
Highlights
Trading footprint
Business model
Franchise network
Board of directors
10
Leadership
12
Chairmans statement
16
Report to stakeholders
24
Six-year review
24
Definitions
25
26
Financial results
40
41
41
42
43
44
46
47
48
49
50
96
97
Shareholder analysis
97
Shareholders diary
98
103
Form of proxy
IBC
Administration
Highlights
Vision
To become Africas
first choice branded
food services
franchisor by 2015.
Group highlights
20th
Strategic intent
Our business is focused
on building capability
across brands, logistics
and manufacturing,
which provides a total
solution to our investment
partners and consumers.
>
Champions
milestone
project successfullyconcluded
Brand highlights
Gained
Core beliefs
restaurants
of Mr Biggs in Nigeria
Launched Steers
>
Quality
> Innovation
> Speed
> Agility
> Integrity
> Humility
Logistics highlights
Achieved record R2
Reported best
programme
Manufacturing highlights
Significantly
Famous Brands
Trading footprint
Domestic
International
Total
509
497
382
157
10
16
12
144
1
5
18
15
12
58
3
9
10
8
23
42
30
94
64
10
10
3
2
14
1
551
527
94
446
167
10
16
12
154
1
8
20
15
12
72
4
9
10
8
24
36
Steers
Wimpy
Wimpy UK
Debonairs Pizza
FishAways
House of Coffees
Brazilian Caf
tashas
Mugg & Bean
Blacksteer
OHagans
KEG
Giramundo
Vovo Telo
Milky Lane
Juicy Lucy
The Brewers Guild
Creative Coffees
Net Caf
Europa
Fego Caff
35
Turn n Tender
Mr Biggs
171
171
Total
1 1935
935
443
443
2 2378
378
Business model
SA operations and logistics
Brand portfolio
Steers
Wimpy
Debonairs Pizza
Mugg & Bean
FishAways
Milky Lane
Europa
Fego Caff
Pubs:
KEG
The Brewers
Guild
OHagans
Famous Brands
Centres of
excellence
Gauteng
Mpumalanga
Free State
KwaZulu-Natal
Eastern Cape
Western Cape
International operations
Brand portfolio
Steers
Wimpy
Debonairs
Pizza
Mugg & Bean
FishAways
Milky Lane
Europa
Fego Caff
Pubs:
KEG
OHagans
Mr Biggs
Country
representation
Namibia
Botswana
Swaziland
Lesotho
Mozambique
Zambia
Tanzania
UAE
Nigeria
Ivory Coast
Zimbabwe
Kenya
Malawi
Mauritius
Sudan
DRC
India
United Kingdom
Marketing
Country
representation
Casual
dining
South Africa
Wimpy
Mugg &
Bean
Europa
Fego
Caff
Pubs
tashas
Vovo Telo
House of
Coffees
Net Caf
Turn n
Tender
The Bread
Basket
QSR
Retail
wholesale
Sauce
advertising
Steers
Debonairs
Pizza
FishAways
Milky Lane
Giramundo
Mr Biggs
Wakaberry
Steers
Wimpy
Mugg &
Bean
Trufruit
Aqua
Monte
Baltimore
Point of sale
Social media
Locality
marketing
Website
development
Franchise network
Total
restaurants
2 378
94
UK
Sudan
Dubai
179
Nigeria
India
Ivory Coast
DRC
Kenya
10
30
Zambia
Tanzania
Zimbabwe
Malawi
28
Botswana
Mauritius
35
Namibia
1 935
South Africa
Manufacturing
Wholly owned
Product
Location
Product
Location
Coffee
Gauteng
Cheese
Speciality breads
Gauteng
Gauteng and
KwaZulu-Natal
KwaZulu-Natal
Gauteng
Bakery
Sauces and spices
Ice-cream
Fruit juice
Mozambique
Swaziland
Development
Joint venture
25
Franchise enquiries
Strategic alliance
partnerships
Plans
Costing
Project management
Famous Brands
Corporate
Finance
Human resources
Information technology
Legal
Procurement
Demand planning
Building
brand capability
Famous Brands
Famous Brands
Board of directors
Non-executive director
Peter, a founding member of the company, has made an
important contribution to the Famous Brands Group since
1974. He has served on various portfolio committees over the
years, assuming the position of Chairman of the listed entity
upon listing in November 1994. As from March 2007, Peter
assumed the position of non-executive Chairman. On
24October 2013, Peter retired as non-executive Chairman.
Hehas remained on the board as a non-executive director.
Non-executive director
Periklis was one of the original founding members of the
Group and has in excess of 20years experience in the food
and franchising industry. He was appointed to the board of
Famous Brands Limited in 1994 and was responsible for
expanding the operations of the Group beyond the borders
ofSouth Africa. Periklis resigned from the board during the
course of 1999 to concentrate on his private business. In
March 2001, he was reappointed to the board as a nonexecutive director.
Non-executive director
Theofanis has made a significant contribution to the Group
since 1974 through the fulfilment of various responsibilities. He
assumed the position of Chief Executive Officer in March 2001,
after serving as the Group Managing Director for three years.
After retiring as Chief Executive Officer in May 2010, Theofanis
took over from John Halamandres as Deputy Chairman of the
Group. In 2014, he became a non-executive director.
Famous Brands
Non-executive director
With experience in all aspects of Famous Brands business,
John retired from executive management in March 2001.
Afounding member of the company, he served as Managing
Director from November 1994 until March 1997, after which he
assumed the role of Chief Executive Officer until his
appointment as non-executive Deputy Chairman in March
2001, a position he held until May 2010. John continues to
serve on the Famous Brands board in the capacity of nonexecutive director.
Famous Brands
Non-executive director
BEcon and International Studies, CA (England and Wales)
Khumo is a business executive with extensive experience in
finance, mergers and acquisitions, private equity and
corporate strategy. Between June 2007 and June 2013, he
served as Group Chief Mergers and Acquisitions Officer for
MTN Group Limited and was a board member of several of its
key subsidiaries and joint venture companies.
Khumo was previously head of Principal Investments at
Investec Bank Limited and a member of the executive
committee of Investecs South African operations. Prior to
taking responsibility for the Principal Investments division in
2005, he was a member of Investecs Corporate Finance
division for seven years.
Non-executive director
Chairman of the audit committee and
remuneration committee
BCom, LLB, LLM, H Dip Tax Law, H Dip Company Law
Hymie has been a non-executive director of Famous Brands
Limited since its listing on the JSE in 1994. Heisa senior
partner of HR Levin Attorneys and his experience spans more
than 40 years. His areas of expertise include corporate law,
mergers, local and international taxation, acquisitions and
listings. Hymie is also a non-executive director of several listed
and non-listed companies and Chairman of some of them.
Hymie retired from the board and committees on 27 February
2014.
Non-executive director
Chairman of the social and ethics committee and
member of the audit committee
BCom, LLB, LLM
Chris is a commercial, corporate finance, tax and trustattorney
and his expertise includes cross-bordertransactions, mergers
and acquisitions, BEE transactions and advising on stock
exchange listings both locally and internationally. He currently
serves as a non-executive director of four companies listed on
the JSE and as a trustee of various trusts. His experience as a
non-executive director of listed companies spans over a
decade. Hecommenced his legal career at HRLevin Attorneys
where he is now one of the two senior partners. Chris joined
the Famous Brands Limited board in December 2011.
Famous Brands
Independent Chairman
Member of the remuneration committee
BEcon Honours
Santie is currently Chancellor of the Nelson Mandela
Metropolitan University in Port Elizabeth and a non-executive
director of Tiger Brands and ImperialHoldings.
She served as an executive director of the MTN group
(2003 to 2010) and prior to that, of Absa Bank (1996 to 2003).
She commenced her career at Unilever, which culminated in
her appointment as Commercial Sales Director of VdB
Foodservice in 1996.
Santie has received a range of awards including Marketer of
the Year (Marketing Federation of South Africa, 2002)
and Business Woman of the Year (2010). Santie joined the
Famous Brands Limited board in June 2012.
Famous Brands
Leadership
Famous Brands
Famous Brands
Chairmans statement
Overview
Almost 20 years ago, on 9 November
1994, Famous Brands listed on the
Johannesburg Securities Exchange (JSE)
at a price of R1.65 per share, equating
to a market capitalisation of R41 million.
O BE
PIC T IED
L
P
P
SU
operations.
In this momentous anniversary year, it
Results
Revenue increased by 12% to
R2.83billion (2013: R2.52 billion), while
profit before tax improved 23% to
R567million (2013: R462 million).
Headline earnings per share grew 20%
to 406 cents per share (2013: 339 cents).
Famous Brands
Market recognition
Labour relations
R482 million).
R119 million).
No bank finance was raised during the
Sustainability and
transformation
empowerment
enhancement.
Famous Brands
Directorate
industry.
my position as non-executive
Independent Chairman.
Appreciation
an independentnon-executive director,
February 2014.
Panagiotis Halamandaris
Famous Brands
Non-executive director
Outlook
Santie Botha, Independent Chairman
Santie Botha
Independent Chairman
Famous Brands
Year in review
Macro-economic environment
Confronted by continued economic
hardship, South African consumers,
specifically those in the middle-income
segment which comprises the bulk of
the domestic market, demonstrated
substantially reduced confidence levels
and restrained disposable income,
particularly during the second half of
the year.
Industry overview
Industry statistics reveal that 62.5% of
all South Africans aged 15+ visit quick
service (QS) and casual dining (CD)
restaurants at least once a month or
more, which is 13% higher than four
years ago. However, if this trend is
interrogated closely, the following
observations are evident,
contextualised by the subdued
economic environment experienced
during the year:
> While the overall percentage of
consumers eating out of home has
grown, more people are visiting QS
and CD restaurants less often, but
spending more on those occasions.
> Consumers sustained demand for
value offerings has promoted
increased competition among
industry participants and intensified
pressure on margins, resulting in
operators deviating from traditional
menu offerings and recognised meal
times to gain market share.
billion
Famous Brands
Divisional report
Franchising
South Africa
Overview
Revenue increased 13% to R538 million
(2013: R477 million), with operating
profit rising in line with turnover growth
to R325 million (2013: R287 million). The
operating profit margin improved to
60.4% from 60.1% in the prior year.
Results
Market penetration
During the period, 144 restaurants were
opened locally and 181 were revamped.
Although this performance was behind
target, management is cognisant that
implementation of the Fit 4 Purpose
project and the general economic
slow-down were contributing factors.
An increase in commercial
development activity was experienced
and the Group now has a significant
presence in a range of new malls
including Cradlestone (Johannesburg),
Dihlabeng (Bethlehem), Secunda Mall
and Kalahari Mall (Upington). We
anticipate that, while future growth
from new mall activity will be lower
than previous years, we are optimistic
Brand highlights
Mainstream brands
Solid performances were reported
across the portfolio:
> While the Groups mother brand,
Steers, delivered slower growth for
the period contained by intense
competitor pricing, the brand has
embarked on an aggressive
programme to defend and gain
market share. Steers has also
recently launched a flame-grilled
chicken offering, which has been
very well accepted and at present
accounts for on average 10% of sales.
> Wimpy continues to hold its coffee
and breakfast category leadership
position despite the warzone
environment of this market segment.
The brand is currently the subject of
a 360 degree review strategy
designed to position it for long-term
category pre-eminence. In a first for
the Group, Wimpy was awarded the
food service licence at Pretoriuskop,
Satara and Letaba in the Kruger
National Park.
> Debonairs Pizza reported another
year of strong growth, recording an
increase of 18.6% in customer count,
largely due to the appeal of its
innovative product and use of
technology, as well as increased
consumption in the lower LSM
market segment. The brand will
exceed the 500 restaurant milestone
this year, which is phenomenal given
its age.
Famous Brands
Famous Brands
Supply chain
The Groups supply chain comprises
itsLogistics and Manufacturing
businesses, which are managed and
measured separately.
The results delivered by both divisions
were extremely pleasing. Consolidated
revenue increased by 12% to
R2.15billion (2013: R1.92 billion), while
operating profit rose 27% to
R204million (2013: R161 million). The
operating margin was 9.5% up from
8.4% in the comparative period.
Famous Brands
Divisional report
Logistics
A key component of the Fit 4 Purpose
programme was closer alignment of
our Franchising and Logistics
businesses. The six distribution centres
established to support the franchise
operations all delivered strong growth,
exceeding for the first time the
milestone R2.0 billion mark, which is an
improvement of 12% over the prior
year. This result is in line with our
brands system-wide sales growth,
together with the additional turnover
derived from growing the basket of
products supplied to our franchisees.
The divisions operating profit improved
29% to R82 million, while a best ever
operating margin of 4.0% (2013: 3.5%)
was reported despite a contextual
environment characterised by aboveinflation increases in labour and diesel
and the impact of e-toll costs.
This division reported a number of
highlights for the period, including:
> The relocation of our Eastern Cape
distribution centre to a new worldclass facility at the Coega
Development Zone;
> The advancement of phase 2 of the
owner-driver programme, whereby
drivers are empowered to acquire
their own vehicles; and
> The introduction to the Gauteng
region of FLO, a routing and
scheduling software programme
which will transform and add
efficiencies to these disciplines.
Capital expenditure of R8 million was
employed on new and replacement
fleet and warehouse racking.
Famous Brands
Divisional report
Manufacturing
This division reported very creditable
results for the period, attributable to
significant improvements in yields and
efficiencies and substantial savings on
utilities usage.
Revenue increased by 30% to
R927million (2013: R715 million), while
operating profit improved by 25% to
R122 million (2013: R98 million). The
divisions operating margin declined to
13.1% (2013: 13.6%) due to deliberate
margin absorption in the sauce and
spice plant, meat processing plant and
ice-cream plant, in line with the Groups
strategy to support franchisees value
offering to consumers.
These results include the full-year
contribution of Famous Brands Coffee
Company for the first time and take-on
of additional franchised brand coffee
business. In addition, the Coega Cheese
business was successfully turned
around after initial start-up
shortcomings and produced an
improved performance in the latter six
months of the year.
A range of integration projects were
successfully concluded during the
period, including:
> Turn n Tender sauce products into
Famous Brands sauce and spice
plant;
> Various speciality bread products into
the Famous Brands Great Bakery
Company; and
Building manufacturing
capability
A range of capacity and capability
building projects will be implemented
over the next year aimed at leveraging
opportunities in the supply chain.
Among them are:
> expanding Famous Brands Coffee
Companys range to include espresso
capsules;
> preparing for take-on of the
manufacture of frozen yoghurt
product for Wakaberry;
> expanding the supply of product from
our Famous Brands Great Bakery
Company and Famous Brands Choice
Meats Company to parts of the
franchised network;
> optimising the contribution from and
profitability of Coega Cheese; and
> commissioning of the pastry
manufacturing plant in Lagos to
service the Mr Biggs network.
Capital expenditure of R18 million has
been budgeted for in the forthcoming
period.
The future
Building Group capability
In the Chairmans statement, reference
was made to the major step-change
strategy we have crafted to ensure the
Groups continued vigorous growth in
future years.
This strategy centres on cautious
expansion into the related leisure
sector by leveraging Famous Brands
core competencies: leadership, brands,
manufacturing, logistics and retail, and
Prospects
Unchanged from recent years, we
anticipate the period ahead to feature
intense competition as operators strive
to retain and gain market share; new
and non-traditional participants joining
the industry will exacerbate this
competitiveness. Value and quality will
remain the key drivers of growth as
cash-strapped consumers selectively
spend reduced disposable income,
while innovative marketing will afford
an important strategic advantage in
creating top-of-mind awareness. Margin
pressure, which has been the
watchword for several years, will
become more acute, both at Group and
franchisee level.
Appreciation
Once again my extraordinary team has
proved equal to the challenging
environment in which we operate. The
executive management, ably supported
by our staff across the Group, have
delivered an impressive performance,
both in terms of the results we have
reported and their commitment to
implementing our programmes and
initiatives which will transform the
Group.
Kevin A Hedderwick
Group Chief Executive
Famous Brands
Building logistics
capability
Famous Brands
Famous Brands
Six-year review
Growth %*
2014
2013
2012
2011
2010
2009
R000
R000
%
R000
R000
R000
%
R000
2 825 979
565 517
20.0
405 460
593 559
603 943
98.3
401 942
2 516 287
465 842
18.5
331 052
482 279
499 397
96.6
330 188
2 155 615
412 656
19.1
268 054
398 710
441 692
90.3
267 438
1 878 036
358 453
19.1
230 999
396 929
384 486
103.2
230 502
1 684 840
307 947
18.3
191 640
351 961
331 572
106.1
194 307
1 549 244
261 916
16.9
147 902
277 184
281 806
98.4
150 283
R000
R000
R000
R000
1 692 839
1 234 948
1 300 070
(25 699)
1 510 467
1 000 088
1 152 796
81 091
1 221 169
840 370
985 227
81 572
1 139 312
708 594
871 200
101 389
1 070 829
583 926
815 363
160 665
1 052 208
492 291
796 089
225 286
%
%
%
times
times
%
35.3
46.1
36.0
2.3
176.1
(2.1)
34.1
43.6
35.9
2.4
117.4
8.1
35.0
44.5
34.5
2.3
38.7
9.7
32.4
42.5
35.7
2.2
24.0
14.3
29.0
38.2
36.1
2.1
14.9
27.5
27.4
37.4
33.4
2.2
5.9
45.8
cents
cents
cents
times
cents
cents
405.9
406.2
300
1.4
367
1 244
337.6
339.1
250
1.4
204
1 022
277.6
278.3
200
1.4
151
874
241.8
242.0
155
1.6
51
740
202.5
205.6
114
1.8
(31)
615
159.3
159.2
76
2.1
(71)
521
cents
cents
cents
%
%
times
9 700
11 095
8 072
3.1
4.2
23.9
99 242 435
8 350
8 350
4 431
3.0
4.1
24.6
97 827 435
4 405
4 650
3 510
4.5
6.3
15.8
96 192 435
3 850
4 525
2 456
4.0
6.3
15.9
95 817 596
2 560
2 560
1 325
4.5
8.0
12.5
94 894 596
1 475
1 800
1 200
5.2
10.8
9.3
94 448 096
Rm
9 627
8 169
4 237
3 689
2 429
1 393
12.8
16.6
21.7
20.2
Shareholders ratios
Earnings per share
Headline earnings per share
Dividends per share
Dividend cover
Net tangible asset value per share
Net asset value per share
31.6
47.2
Definitions
Basic earnings per share: Net profit for the year divided by the weighted average number of
ordinary shares in issue during the year.
Closing price to earnings ratio: Market value per share divided by headline earnings per
share at year end.
Cash generated by operations: Comprises cash receipts from customers less cash paid to
suppliers and employees as reflected in the statement of cash flows.
Dividend cover: Headline earnings per share divided by dividends per share declared out of
earnings for the year.
Cash realisation rate: This ratio is calculated by expressing cash generated by operations as
a percentage of EBITDA and reflects the proportion of cash operating profit realised after
working capital movements.
EBITDA: Earnings before interest, taxation, depreciation, amortisation and impairment losses.
Closing dividend yield: Dividends per share as a percentage of market value per share at
year end.
Closing earnings yield: Headline earnings per share as a percentage of market value per
share at year end.
Famous Brands
Headline earnings: Net profit for the year adjusted for profit/loss on sale of property, plant
and equipment, investments and impairment losses.
Headline earnings per share: Headline earnings divided by the weighted average number of
ordinary shares in issue during the year.
Interest cover: Operating profit divided by net interest paid. (Measures the capability to
service borrowing obligations from current profit.)
2014
R000
2013
R000
Wealth created
Turnover
Cost of materials and services
Share of profits from associates
Other income
2 825 979
(1 879 944)
5 140
9 223
2 516 287
(1 714 938)
5 499
960 398
100
806 848
100
Employees
Salaries, wages and related benefits
342 092
36
301 952
37
Providers of capital
Dividends to shareholders
Interest paid on borrowings and finance charges
270 946
12 435
Wealth distributed
223 748
9 468
283 381
29
233 216
29
161 985
17
130 821
16
Government
Company tax
38 426
134 514
33 555
107 304
172 940
18
140 859
18
960 398
100
806 848
100
The value added statement shows the wealth that the Group has created through its activities and how this wealth has been
distributed to stakeholders. The statement reflects the amounts retained and reinvested in the Group for the replacement of
assets and the development of future operations.
.........................................................................................................................................................................................................................................................................................................................
Wealth distribution
18%
36%
17%
2014
Employees
Providers of capital
Government
Retained for future growth
29%
18%
37%
16%
2013
29%
.........................................................................................................................................................................................................................................................................................................................
Definitions continued
Net assets: Total assets other than cash, bank balances and deferred tax assets less
interest-free trading liabilities.
Operating profit margin: Operating profit as a percentage of revenue. (Measures the return
on revenue of the operating activities of the Group.)
Net asset value per share: Ordinary shareholders equity divided by number of shares
in issue.
Net debt: Total interest-bearing borrowings less cash. It is calculated by adding current and
non-current interest-bearing borrowings and bank overdrafts and deducting positive cash
balances.
Return on net assets: Operating profit as a percentage of average net assets. (Measures the
effectiveness with which net assets were utilised.)
Net tangible asset value per share: Ordinary shareholders equity less intangible assets
divided by the number of shares inissue.
Return on total assets: Operating profit as a percentage of average total assets. (Measures
the effectiveness with which the total assets were utilised.)
Famous Brands
Famous Brands
The board
During the year under review, the board
of Famous Brands underwent
significant changes, which include:
> Mr P Halamandaris stepped down as
non-executive Chairman effective
23October 2013;
> Ms SL Botha, previously the lead
independent director was appointed
as Independent Chairman effective
23 October 2013;
> Mr HR Levin retired from the board
on 27 February 2014;
> Mr CH Boulle, previously alternate
non-executive director was
appointed as a non-executive
director on 27 February 2014;
> Mr K Shuenyane was appointed as
independent non-executive director
on 27 February 2014; and
> The Group Financial Director (FD),
MrSJ Aldridge, retired on 30 June
2014 and was replaced by
MrNSRichards.
These changes have significantly
enhanced the independence of the
board in terms of the King III
requirements. Certain of the founding
shareholders occupy non-executive
positions on the board. There is a clear
balance of power and authority to
ensure that no single director has
unfettered powers in decision making.
The primary functions of the board,
which is governed by a charter, are to:
> review and approve corporate
strategy;
> determine the Groups purpose and
values;
> retain full and effective control of the
Group;
> approve and oversee major capital
expenditures, acquisitions and
disposals;
> review and approve annual budgets
and business plans;
> monitor operational performance and
management;
> endeavour to ensure that information
technology (IT) governance is
appropriate for the size and
complexity of the business;
Company Secretary
Mr JG Pyle (CA)SA held office as
Company Secretary throughout the
year and maintained an arms length
relationship with the board. The board
considers him to be suitably competent
and qualified to fulfil the role. His
biographical details and curriculum
vitae (CV) are set out on page 11 of this
Integrated Annual Report. Mr Pyle
resigned from the company with effect
from 31 July 2014.
Board sub-committees
To enable the board to discharge its
numerous responsibilities and duties,
certain of these responsibilities have
been delegated to board committees.
The following committees have been
constituted:
> Audit committee;
> Remuneration committee;
> Social and ethics committee; and
> Nominations committee.
Charters approved by the board govern
the activities of these committees. All
are chaired by non-executive directors
and are directly responsible to the
board, which retains ultimate
responsibility.
Audit committee
The audit committee consists of three
non-executive directors and meets at
least twice a year. Mr HR Levin retired
as Chairman and member of the audit
committee on 27 February 2014.
Subsequently, MrKShuenyane was
nominated by the board as a member
of the audit committee and accepted
the nomination on 15 May 2014.
Shareholders will be asked to approve
his appointment to the audit committee
at the AGM to be held on 24July 2014.
Independent non-executive directors
will then comprise a majority of
committee members.
The Group CE, Group FD, as well as
internal and external auditors attend
meetings as invitees. The committee is
entirely satisfied with the competence
and expertise of the Group FD and has
reported as such to the board, which
endorses the recommendation. The
committee provides support to the
board on good corporate governance
and on the risk profile and risk
management of the Group. Both
internal and external auditors have
unfettered access to the Chairman of
the audit committee. The role of the
committee is, inter alia:
> to review the effectiveness of the
Groups systems of internal controls,
including financial controls and
business risk management, and to
>
>
>
>
>
>
>
Remuneration committee
The charter of this committee provides
for at least three members of which the
majority must be non-executive. The
Chairman, Mr B Sibiya, is a nonexecutive director. The committee
meets three times a year.
The key mandate of the committee is
tocompile emolument proposals in
accordance with the Groups
remuneration strategy. This is designed
and tailored to:
> continue to attract, retain and
motivate executives of the highest
calibre;
> enable the Group to remain an
employer of choice; and
> ensure a blend of skills that
consistently achieves predetermined
business objectives and targets.
Famous Brands
>
>
Famous Brands
>
>
>
>
corruption, contribution to
development of the communities in
which its activities are predominantly
conducted or within which its
services are predominantly marketed,
and record sponsorship, donations
and charitable giving;
Review the adequacy and
effectiveness of the Groups
engagement and interaction with its
stakeholders;
Research, evaluate and make
recommendations to the board
regarding the appropriate nature,
extent and methods of
implementation of transformation at
all levels within the Group;
Create an enabling environment
within the Group which encourages
and develops a new way of doing
business which embraces and
celebrates diversity;
As a group substantially invested in
South Africa, develop a skilled and
motivated workforce whose profile is
representative of the demographics
of the country;
Report to the board on the
transformation work undertaken, and
the extent of any action taken by
management to address areas
identified for improvement;
Oversee the monitoring, assessment
and measurement of the Groups
consumer relationships, including the
Groups advertising, public relations
and compliance with consumer
protection laws;
Oversee the monitoring of the
Groups labour and employment
practices, including the Groups
standing in terms of the International
Ethics
The Groups code of ethics requires all
directors and employees to act with
honesty and integrity, and to maintain
the highest ethical standards. The code
deals with compliance with laws and
regulations, conflicts of interest,
relationships with customers and
suppliers, remuneration, outside
employment and confidentiality.
Stakeholder communication
The board ensures that material
matters of interest and concern to
shareholders and other stakeholders
are addressed transparently in the
Groups public disclosure and
communication. The Group CE and
Group FD meet with shareholders and
analysts, as well as with the financial
press, in order to ensure accurate
reporting of Group matters. All pertinent
Group announcements are placed on
the Groups website.
Relationship
Explanation
Material matters
Communication forum
Private
shareholders
and
institutional
investors
Shareholders
Achieve returns in
the form of
dividends from
trading and
financial
performance and
capital
appreciation from
the market value
of Famous Brands
shares.
>
>
>
>
>
>
>
>
>
>
Our franchisees
Franchisee
partners across
our portfolio of
brands
Achieve returns
from their
investment into
franchise
businesses from
trading operations
and capital growth
from strong cash
flows.
>
>
>
>
>
>
>
>
>
Strong brands
Marketing spend
Product quality
Efficient, effective and
competitive supply
chain
Franchise and
business management
support
Ease of doing business
Competitive pricing
Track record of
success
Famous Brands
reputation
Our consumers
Purchasers of
products from
our franchisees
Franchisees
provide consumers
with offerings of
superior quality at
affordable prices.
Suppliers
Provision of
goods and
services to
Famous Brands
Supply
arrangements with
suppliers to
provide key inputs
into our
manufacturing
plants, distribution
operations and
routine operations
processes.
Reliance on
Famous Brands for
their livelihood and
personal
development to
meet career
aspirations.
Bankers
Employees and
executives
Transaction
banking and
financiers
Staff
Famous Brands
Relationship
Explanation
Material matters
Communication forum
Government
Tax collection
and
transformation
Reliance on Famous
Brands to collect
and remit employeerelated and other
indirect taxes, to pay
direct taxes and to
progress BBBEE.
>
>
>
>
>
>
>
>
>
Municipalities
Provision of
municipal
services and
utilities
Famous Brands is
reliant upon the
services provided;
Famous Brands
behaving as a good
corporate citizen in
terms of usage of
services, utilities and
effluent.
Community
Communities
within which
we do business
Consumers of our
products; where
Famous Brands
behaves as a good
corporate citizen.
Attendance at board and committee meetings during the year ended 28 February 2014
Number of meetings
Board/committee member
SJ Aldridge**
SL Botha
CH Boulle
P Halamandaris
P Halamandaris (Jnr)
T Halamandaris
JL Halamandres
KA Hedderwick
DP Hele
J Legote
HR Levin***
JG Pyle (Company Secretary)
NS Richards****
BL Sibiya
Board
Audit
committee
Remuneration
committee
Social and
ethics
committee
n/a
3
2
n/a
n/a
n/a
1
3
n/a
n/a
2
n/a
n/a
1
n/a
3
n/a
n/a
n/a
n/a
n/a
3
3
n/a
3
2
n/a
1
4
3
4
1
1
4
4
4
n/a
2
4
4
3
1*
n/a
3
3*
n/a
n/a
1
3*
n/a
n/a
2
3*
3*
2
*By invitation
**Retired 30 June 2013
***Retired 27 February 2014
****Appointed 1 July 2013
Mr HR Levin was unable to attend two of the board meetings during the year and was represented at these meetings by his
alternate, Mr CH Boulle.
Famous Brands
Specific exposure
Current controls
Action steps
Carrying value of
investments and
intangibles
Carrying value of UK
investments and
intangibles.
Board composition
Majority of board
members do not meet
King III independence
criteria.
Executive succession
and retention
BBBEE and
transformation
Potential erosion of
strategic alliance
partnerships.
Disaster recovery
A national recognition
agreement has been signed.
Industrial action
board.
> Board composition is
currently under review.
> Revised share option scheme
introduced and in place.
> Executive development.
> BBBEE ownership and board
representation is to be
addressed.
> Capacity to invest in training
and CSI to be reviewed.
> Offsite disaster recovery
environment to be
established.
Our strong portfolio of brands is supported by ongoing marketing investment and is backed up by a successful and integrated
business model. These factors, combined with excellent management, detailed control and strong cash generation are key factors
in mitigating the above-mentioned risks.
Famous Brands
Directors shareholding
Sustainability report
Going concern
Based on positive forward financial
projections, the directors are confident
that the Group operates a highly
sustainable business model which will
continue as a going concern in the
years ahead. The annual financial
statements set out in this Integrated
Annual Report have been prepared in
accordance with International Financial
Reporting Standards and they are based
on appropriate accounting policies that
have been consistently applied.
Famous Brands
Human capital
Key areas of focus are:
> empowerment and talent
management;
> employee satisfaction and morale;
> group health and wellness;
> employment equity, skills
development and broad-based black
economic empowerment;
> industrial relations;
> remuneration, benefits and
performance bonuses;
> legislative compliance; and
> employee safety.
Empowerment and talent
management
Human capital is considered a core
corporate asset at Famous Brands, with
the calibre of our people being a key
ingredient to our success. This means
hiring the best and helping them fulfil
their potential thus building
management capability. Key
competitive advantage will arise from a
team of motivated, well-trained
employees passionate about what they
do. At Famous Brands we believe true
empowerment gives people
responsibility and also the freedom to
live up to that responsibility.
Talent management (performance and
potential) is measured through our
bi-annual human capital reviews.
Performance is assessed through a
scorecard measurement process
against clearly defined accountabilities
or goals set out at the commencement
of the year. Potential is identified
Workforce composition
Category
Black
Asian
Coloured
Indian
White
Total
Percentage
Number
Total workforce
Women
71.98
0.14
4.45
2.14
21.29
1 038
2
64
31
307
177
2
35
10
156
100.00
1 442
380
Famous Brands
Union representation
Number of
employees
% of bargaining
unit
% of unionised
employees
SCMAWU
HOTELICCA
NASECGU
FAWU
MEWUSA
PTAWU
610
15
6
2
2
1
67.7
1.7
0.7
0.2
0.2
0.1
95.9
2.4
0.9
0.3
0.3
0.2
636
70.6
100.0
Union
901
265
29.4
901
100.0
The Group Human Resources Executive, together with two appointed line executives, engage with the union regarding negotiations
and various other bargaining unit employee-related matters.
Famous Brands
Rand value
Sport sponsorships
Donation of product
CSI
3 306 400
211 316
1 037 328
Famous Brands
Corporate governance
Analysis of the application of the corporate governance principles as recommended in the King III Report
Ethical leadership and corporate citizenship
Effective leadership based on an ethical foundation
Responsible corporate citizen
Effective management of ethics
Board and directors
The board is the focal point for and custodian of corporate governance
Strategy, risk, performance and sustainability are inseparable
The board provides effective leadership based on ethical foundation
The board ensures the company is and is seen to be a responsible corporate citizen
The board ensures that the companys ethics are managed effectively
The company has an effective and independent audit committee
Explanation:
At the AGM to be held on 24 July 2014, shareholders will be asked to ratify the appointment of Mr K Shuenyane. Independent directors will
then comprise a majority of audit committee members.
The board is responsible for the governance of risk
The board is responsible for information technology (IT) governance
The board ensures that the company complies with applicable laws and considers adherence to non-binding rules, codes and standards
The board ensures that there is an effective risk-based internal audit
The board appreciates that stakeholders perceptions affect the companys reputation
The board ensures the integrity of the companys Integrated Annual Report
The board reports on the effectiveness of the companys system of internal controls
The board and directors act in the best interests of the company
The board should consider business rescue proceedings or other turnaround mechanisms as soon as the company is financially
distressed as defined in the Act
The board chair is an independent non-executive director
The board appointed the Group CE and a framework for the delegation of authority has been established
The board should comprise a balance of power, with a majority of non-executive directors who are independent
Explanation:
The board comprises a majority of non-executive directors, including founding shareholders and directors who do not meet the
independence criteria of King III although the individual members apply their minds independently, comply with the Companies Act and
act in the interests of all shareholders. Future appointments to the board will be proposed mindful of King III independence criteria.
Directors are appointed through a formal process
Formal induction and ongoing training of directors is conducted
Explanation:
An induction programme exists but there is not a formal development programme. Legislative changes are briefed to the board.
The board is assisted by a competent, suitably qualified and experienced Company Secretary
The performance of the board, its committees and individual directors should be assessed every year
Explanation:
The assessment is of the boards performance as a whole.
The board has appointed well-structured committees without abdicating its responsibilities
An agreed governance framework between the Group and its subsidiary boards is in place
Directors and executives are fairly and responsibly remunerated
Remuneration of directors and prescribed officers is disclosed
Explanation:
Only directors are designated as prescribed officers.
Shareholders approve the companys remuneration policy
Explanation:
A non-binding advisory vote is included in the notice of the AGM to be held on 24 July 2014.
Audit committee
The company has an effective and independent audit committee
Explanation:
At the AGM to be held on 24 July 2014 shareholders will be asked to ratify the appointment of Mr K Shuenyane. Independent directors will
then comprise a majority of committee members.
Audit committee members should be suitably skilled and experienced independent non-executive directors
Explanation:
See note above with regard to independent directors.
The audit committee should be chaired by an independent non-executive director
Explanation:
The Chairman of the audit committee retired on 27 February 2014.
The audit committee oversees integrated reporting
The audit committee applies a combined assurance model to provide a co-ordinated approach to all assurance activities
The audit committee satisfies itself as to the expertise, resources and experience of the companys finance function
The audit committee oversees internal audit
The audit committee is integral to the risk management process
The audit committee oversees the external audit process
The audit committee reports to the board and shareholders as to how it has discharged its duties
Famous Brands
Principle
applied
Governance of risk
Principle
applied
The audit committee assists the board in carrying out its risk responsibilities
The board has delegated to management the responsibility to design, implement and monitor the risk management plan
The board ensures that risk assessments are performed on a continual basis
The board ensures that frameworks and methodologies are implemented to increase the probability of anticipating unpredictable risks
The board ensures that management considers and implements appropriate risk responses
The board receives assurance regarding the effectiveness of the risk management process
Explanation:
The cost of obtaining external assurance is not warranted.
The board ensures that there are processes in place enabling complete, timely, relevant, accurate and accessible risk disclosure to
stakeholders
The board has delegated to management the responsibility for the implementation of an IT governance framework
The audit committee assists the board in carrying out its IT responsibilities
The board and each individual director and senior manager has a working understanding of the effect of laws, rules, codes and standards
applicable to the company and its businesses
Compliance risk forms an integral part of the companys risk management process
The implementation of an effective compliance framework and process has been delegated to management
Internal audit
The board ensures that there is an effective risk-based internal audit function
Internal audit provides a written assessment of the effectiveness of the companys system of internal controls and risk management
The board has delegated to management to proactively deal with stakeholder relationships
The board strives to achieve an appropriate balance between its various stakeholder groupings in the best interests of the company
Transparent and effective communication with stakeholders is essential for building and maintaining their trust and confidence
The board ensures that disputes are resolved effectively, efficiently and as expeditiously as possible
Sustainability reporting and disclosure is be integrated with the companys financial reporting
Famous Brands
Building manufacturing
capability
Famous Brands
Famous Brands
The reports and statements set out below were prepared under the supervision of Mr NS Richards, Group Financial Director, and
comprise the annual financial statements presented to the shareholders.
Contents
Report by the audit committee
41
41
42
43
44
46
47
48
49
50
96
Shareholder analysis
97
Level of assurance
These annual financial statements have been audited in compliance with the applicable requirements of the Companies Act of
South Africa.
Exchange rates
The following significant exchange rates were applied in the preparation of the Groups results:
2014
2013
Rand to GB Pound
average
closing
15.77
18.00
13.31
13.39
Rand to Euro
average
closing
13.34
14.78
10.82
11.58
Rand to US Dollar
average
closing
10.00
10.80
8.39
8.85
Euro to GB Pound
average
closing
1.18
1.22
1.23
1.16
average
closing
0.54
0.54
0.60
0.60
average
16.39
closing
15.50
CH Boulle
Audit committee Chairman
I certify that Famous Brands Limited has lodged with the Companies and Intellectual Property Commission all such returns as are
required of a public company in terms of the Companies Act of South Africa and that all such returns are to the best of my
knowledge and belief true, correct and up to date.
JG Pyle
Company Secretary
15 May 2014
SL Botha
Independent Chairman
KA Hedderwick
Group Chief Executive
Auditors responsibility
Our responsibility is to express an opinion on these
consolidated and separate annual financial statements based
on our audit. We conducted our audit in accordance with
International Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance whether the
annual financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the annual
financial statements. The procedures selected depend on the
auditors judgement, including the assessment of the risks of
material misstatement of the annual financial statements,
whether due to fraud or error. In making those risk
assessments, the auditor considers the internal control
relevant to the entitys preparation and fair presentation of the
annual financial statements in order to design audit
procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness
of the entitys internal control. An audit also includes
evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of
the annual financial statements.
Opinion
In our opinion, the consolidated and separate annual financial
statements present fairly, in all material respects, the
consolidated and separate financial position of Famous Brands
Limited as at 28 February 2014, and its consolidated
andseparate financial performance and its consolidated and
separate cash flows for the year then ended in accordance
with International Financial Reporting Standards, the SAICA
Financial Reporting Guides as issued by the Accounting
Practices Committee and Financial Reporting Pronouncements
as issued by the Financial Reporting Standards Council, and
the requirements of the Companies Act of South Africa.
Nature of business
Famous Brands Limited is a holding company listed on the JSE
Limited under the category Consumer Services: Travel and
Leisure. Famous Brands Limited is Africas leading quick
service and casual dining restaurant franchisor. The global
footprint of the Group now stands at 2 378 franchised
restaurants spread across South Africa, 14 other African
countries, the Middle East, India and the United Kingdom. Its
franchise brand portfolio includes Steers, Wimpy, Debonairs
Pizza, Mugg & Bean, FishAways, Longhorn, House of Coffees,
Coffee Couture, Brazilian Caf, tashas, KEG, OHagans,
Giramundo, Vovo Telo Bakery & Caf, Milky Lane, Blacksteer,
The Brewers Guild, Europa, Fego Caff, Net Caf, The Bread
Basket, Turn n Tender, Wakaberry and Mr Biggs. The Group
manufactures and supplies its franchisees, the retail trade and
broader hospitality industry with a wide range of meat, cheese,
sauces, bakery, ice-cream, coffee, other hot beverage
products, fruit juice and mineral water products.
Final ordinary
The directors declared a final gross ordinary dividend No. 39 of
170 cents per ordinary share, payable on 14 July 2014 to
ordinary shareholders recorded in the books of the company
at the close of business on 4 July 2014.
Share capital
The authorised and issued share capital of the company at
28February 2014 is set out in note 16 to the annual financial
statements.
Issued during the year
The company issued 1 415 000 ordinary shares for a cash
subscription of R37.8 million to participants of the Famous
Brands Share Incentive Scheme.
Shareholder spread
In terms of the JSE Listings Requirements, Famous Brands
Limited complies with the minimum shareholder spread
requirements, with 65.90% (2013: 62.82%) of ordinary shares
being held by the public at 28 February 2014. Details of the
companys shareholder spread are as recorded on page 97.
Directors responsibilities
The responsibilities of the companys directors are detailed on
page 42 of this report.
Material shareholders
According to information received by the directors, besides
the directors themselves, there were three shareholders
beneficially holding, directly or indirectly, at 28 February 2014
5.0% or more of the ordinary share capital. They were:
> Arisaig Africa Consumer Fund 12.90% (2013: 9.67%).
> Public Investment Corporation 7.28% (2013: 2.46%).
> Coronation Life Managers Limited 6.48% (2013: 20.20%).
Dividends
> Mr K Shuenyane was appointed as independent nonexecutive director effective 27 February 2014; and
> Mr SJ Aldridge retired effective 30 June 2013 and was
replaced by Mr NS Richards as Group Financial Director.
Borrowing powers
In terms of the companys memorandum of incorporation
Messrs P Halamandaris and P Halamandaris (Jnr) retire at the
AGM, and being eligible, offer themselves for re-election.
Subsidiaries
Details of the companys subsidiary companies are contained
in Annexure A to the annual financial statements. The
company had an interest in its subsidiaries aggregate profit
after taxation of R427 million (2013: R339 million) and in their
losses after taxation of R5 million (2013: R0.6 million).
Acquisitions
The Group acquired 51% of the following businesses during
the year:
> The Bread Basket (subsequently renamed Famous Brands
Great Bakery Company Proprietary Limited) effective
1April 2013, for a purchase consideration of R5.5 million.
> Turn n Tender Steakhouse (Pink Potato Trading 103
Proprietary Limited) effective 1 June 2013, for a purchase
consideration of R9.3 million.
Subsequent events
Subsequent to 28 February 2014 the Group acquired 70% of
the following business:
> Wakaberry effective 1 April 2014.
The initial purchase consideration was R48 million with a
potential second tranche consideration to be paid after the
audited results to 30 June 2014 are analysed. The acquisition
aligns with the Groups strategy to leverage its business model
by building capability across brands, logistics and
manufacturing operations providing a total solution to
investment partners and consumers.
Special resolutions
On 25 July 2013 shareholders approved the following special
resolutions:
> Approval of non-executive directors remuneration for
services as directors.
> General authority to repurchase shares of the company.
At the next AGM to be held on 24 July 2014 shareholders will
be asked to renew the above two approvals as set out in the
notice to shareholders.
A third special resolution of a general authority to provide
financial assistance to related or inter-related entities is also
proposed.
Group
2013
R000
2014
R000
2013
R000
2 825 979
(1 598 583)
2 516 287
(1 463 721)
988
986
Gross profit
Selling and administrative expenses
1 227 396
(661 879)
1 052 566
(586 724)
988
2 227
986
578
Operating profit
Share of profit of associates
Dividends received from subsidiaries
565 517
5 140
465 842
3 215
270 003
1 564
222 000
570 657
(3 212)
465 842
(3 969)
273 218
36
223 564
41
567 445
(161 985)
461 873
(130 821)
273 254
(2 236)
223 605
(845)
405 460
59 029
331 052
19 337
271 018
222 760
464 489
350 389
271 018
222 760
401 637
3 823
328 805
2 247
271 018
222 760
460 666
348 142
271 018
222 760
3 823
2 247
Notes
Revenue
Cost of goods sold
4
5
Non-controlling interests
2014
R000
Company
406
338
405
334
Group
Company
2014
R000
2013
R000
2014
R000
2013
R000
205 575
870 344
52 934
194 080
800 470
11 075
11 587
323 107
712
282 247
1 866
1 139 928
1 006 137
323 819
284 113
177 511
6 834
277 867
90 699
167 277
2 780
249 537
84 736
998
308
1 740
552 911
504 330
998
2 048
1 692 839
1 510 467
324 817
286 161
101 031
101 241
1 022 093
63 256
38 964
889 523
102 401
47 495
170 271
64 626
44 247
168 423
1 224 365
10 583
991 743
8 345
320 167
277 296
Total equity
Non-current liabilities
Long-term borrowings
Deferred lease liabilities
Deferred tax liabilities
1 234 948
1 000 088
320 167
277 296
1 123
52 612
77 313
2 544
50 599
2 544
53 735
130 456
2 544
290 995
65 000
2 544
29 344
3 672
1 067
11 534
261 348
88 514
5 271
12 283
1 604
1 246
9 657
256
2 544
1 067
783
40
4 120
1 202
959
404 156
379 923
4 650
6 321
1 692 839
1 510 467
324 817
286 161
Notes
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments in associates
Investments in subsidiaries
Deferred tax assets
9
10
11
12
13
14
15
22.7
16
17
18
19
13
20
18
19
21
28.2
Notes
Share
capital
R000
Nondistributable
Share
premium reserves
R000
R000
Attributable to
owners of
Foreign
NonFamous
currency
Brands controlling
translation Retained
interests
Limited
reserve earnings
R000
R000
R000
R000
Total
equity
R000
Group
28 February 2013
Balance at 1 March 2012
Issue of capital and share
premium
Recognition of share-based
payments
Total comprehensive income for
the year
Payment of dividends
Non-controlling interest arising
on business combination
36 075
16
26 203
28 016
(13 845)
783 584
5 456
19 337
8
962
328 805
(222 866)
5 578
840 370
26 219
26 219
5 456
5 456
348 142
(222 866)
2 247
(882)
350 389
(223 748)
1 402
1 402
978
62 278
33 472
5 492
889 523
991 743
978
62 278
33 472
5 492
889 523
991 743
14
37 761
37 775
37 775
3 248
3 248
460 666
(269 067)
3 248
59 029
8
834 792
992
100 039
36 720
962
37 445
38 791
16
26 203
401 637
(269 067)
508
508
(214)
(214)
Company
28 February 2013
Balance at 1 March 2012
Issue of capital and share
premium
Recognition of share-based
payments
Total comprehensive income for
the year
Payment of dividends
245 747
245 747
26 219
26 219
5 456
5 456
222 760
(222 886)
222 760
(222 886)
222 760
(222 886)
5 456
168 549
978
63 648
44 247
168 423
277 296
277 296
978
63 648
44 247
168 423
277 296
277 296
14
37 761
37 775
37 775
3 248
3 248
271 018
(269 170)
271 018
(269 170)
271 018
(269 170)
170 271
320 167
320 167
3 248
8
992
101 409
47 495
Group
Notes
2014
R000
Company
2013
R000
2014
R000
2013
R000
2 794 588
(2 201 029)
2 482 019
(1 999 740)
989
(945)
986
(1 196)
(210)
222 000
41
(986)
22.1
593 559
482 279
22.2
(3 212)
(166 748)
(3 969)
(136 507)
44
270 003
36
(1 258)
22.3
423 599
(271 125)
341 803
(223 173)
268 825
(269 305)
220 845
(222 355)
152 474
118 630
(480)
(1 510)
(25 642)
(18 428)
(49 608)
(18 433)
1 809
(7 492)
250
(5 500)
(9 022)
(221)
(47 794)
2 239
(4 291)
(85 000)
(7 257)
(221)
(401)
(112 040)
(162 350)
(221)
(401)
37 775
26 219
17 061
(100 827)
12 283
130 000
(86 325)
37 775
(37 816)
26 219
(23 653)
(45 991)
22.4
22.5
22.6
82 177
(41)
2 566
(5 557)
38 457
(742)
655
11 520
84 736
5 699
40 580
1 740
1 085
90 699
84 736
998
1 740
Accounting policies
1.
Options granted
Management uses the Black-Scholes-Merton model, which
takes account of the vesting period (European style option), to
determine the value of the options at issue date. Additional
details regarding the estimates are included in note 28
Share-based payments.
Impairment testing
The recoverable amounts of cash-generating units and
individual assets have been determined based on the higher
of value-in-use calculations and fair values less costs to sell.
These calculations require the use of estimates and
assumptions. It is reasonably possible that the assumptions
may change which may then impact our estimations and may
then require a material adjustment to the carrying value of
intangible and tangible assets.
The Group reviews and tests the carrying value of assets when
events or changes in circumstances suggest that the carrying
amount may not be recoverable. In addition, intangible assets
are tested on an annual basis for impairment. Assets are
grouped at the lowest level for which identifiable cash flows
are largely independent of cash flows of other assets and
liabilities. If there are indications that impairment may have
occurred, estimates are prepared of expected future cash
flows for each group of assets. Expected future cash flows
used to determine the value-in-use of intangible and tangible
assets are inherently uncertain and could materially change
over time.
Provisions
Provisions were raised and management determined an
estimate amount based on the information available.
Taxation
Judgement is required in determining the provision for income
taxes due to the complexity of legislation. There are many
transactions and calculations for which the ultimate tax
determination is uncertain during the ordinary course of
business. Where the final tax outcome of these matters is
different from the amounts that were initially recorded, such
differences will impact the income tax and deferred tax
provisions in the period in which such determination is made.
The Group recognises the net future tax benefit related to
deferred income tax assets to the extent that it is probable
that the deductible temporary differences will reverse in the
foreseeable future. Assessing the recoverability of deferred
income tax assets requires the Group to make significant
estimates related to expectations of future taxable income.
Estimates of future taxable income are based on forecast cash
flows from operations and the application of existing tax laws
in each jurisdiction. To the extent that future cash flows and
taxable income differ significantly from estimates, the ability of
the Group to realise the net deferred tax assets recorded at
the end of the reporting period could be impacted.
Leases
Management has applied its judgement to classify all lease
agreements that the Group is party to as operating leases, as
they do not transfer substantially all the risks and rewards of
ownership to the Group. Furthermore, as the operating lease
in respect of premises is only for a relatively short period of
time, management has made a judgement that it would not
bemeaningful to classify the lease into separate components
for the land and for the buildings for the current lease, and
theagreement will be classified in its entirety as an operating
lease.
1.2
Property, plant and equipment
The cost of an item of property, plant and equipment is
recognised as an asset when:
> it is probable that future economic benefits associated with
the item will flow to the Group; and
> the cost of the item can be measured reliably.
1.3
Intangible assets
An intangible asset is recognised when:
> it is probable that the expected future economic benefits
that are attributable to the asset will flow to the entity; and
> the cost of the asset can be measured reliably.
1.9
Impairment of assets
The Group assesses at each end of the reporting period
whether there is any indication that an asset may be impaired.
If any such indication exists, the Group estimates the
recoverable amount of the asset.
the exchange rate between the Rand and the foreign currency
at the date of the cash flow.
Investments in subsidiaries and associates
The results and financial position of a foreign operation are
translated into the functional currency using the following
procedures:
> assets and liabilities for each statement of financial position
presented are translated at the closing rate at the date of
that statement of financial position;
> income and expenses for each item of profit or loss are
translated at exchange rates at the dates of the
transactions; and
> all resulting exchange differences are recognised to other
comprehensive income and accumulated as a separate
component of equity.
Exchange differences arising on a monetary item that forms
part of a net investment in a foreign operation are recognised
initially to other comprehensive income and accumulated in
the translation reserve. They are recognised in profit or loss as
a reclassification adjustment through to other comprehensive
income on disposal of the net investment.
Any goodwill arising on the acquisition of a foreign operation
and any fair value adjustments to the carrying amounts of
assets and liabilities arising on the acquisition of that foreign
operation are treated as assets and liabilities of the foreign
operation.
The cash flows of a foreign subsidiary are translated at
theexchange rates between the functional currency and the
foreign currency at the average rate of the year or period.
1.19 Consolidation
Basis of consolidation
The consolidated annual financial statements incorporate the
annual financial statements of the company and all investees
which are controlled by the company.
Control exists when the company has power over the
investee; it is exposed to or has rights to variable returns from
involvement with the investee; and it has the ability to use its
power over the investee to affect the amount of the investors
returns.
2.
2.1
2.2
Standards and interpretations early adopted
The Group has chosen not to early adopt any new standards
and interpretations.
2.3
Standards and interpretations not yet effective
The Group has chosen not to early adopt the following
standards and interpretations, which have been published and
are mandatory for the Groups accounting periods beginning
on or after 1 March 2014 or later periods:
IFRS 9 Annual Improvements for 2010 2012 cycle
The effective date of the amendment is for years beginning on
or after 1 July 2014.
The Group expects to adopt the standard for the first time in
the 2016 annual financial statements.
It is unlikely that the standard will have a material impact on
the Groups annual financial statements.
IFRS 9 Financial Instruments
The effective date of the amendment has not yet been
announced.
The adoption of this amendment is not expected to impact on
the results of the Group, but may result in more disclosure
than is currently provided in the annual financial statements.
IFRS 2 Annual Improvements for 2010 2012 cycle
The effective date of the amendment is for years beginning on
or after 1 July 2014.
The Group expects to adopt the amendment for the first time
in the 2016 annual financial statements.
It is unlikely that the amendment will have a material impact
on the Groups annual financial statements.
IFRS 3 Annual Improvements for 2010 2012 cycle
The effective date of the amendment is for years beginning on
or after 1 July 2014.
The Group expects to adopt the amendment for the first time
in the 2016 annual financial statements.
It is unlikely that the amendment will have a material impact
on the Groups annual financial statements.
IFRS 3 Annual Improvements for 2011 2013 cycle
The effective date of the amendment is for years beginning on
or after 1 July 2014.
The Group expects to adopt the amendment for the first time
in the 2016 annual financial statements.
The Group expects to adopt the amendment for the first time
in the 2016 annual financial statements.
The Group expects to adopt the amendment for the first time
in the 2016 annual financial statements.
The Group expects to adopt the amendment for the first time
in the 2016 annual financial statements.
The Group expects to adopt the amendment for the first time
in the 2016 annual financial statements.
It is unlikely that the amendment will have a material impact
on the Groups annual financial statements.
IAS 24 Annual Improvements for 2010 2012 cycle
The effective date of the amendment is for years beginning on
or after 1 July 2014.
Group
3.
2013
R000
2014
R000
2013
R000
2 234 862
591 117
1 984 508
514 988
16 791
988
986
2 825 979
2 516 287
988
986
4 871
3 998
3 235
763
33 555
3 083
3 635
3 096
539
30 472
336 776
(508)
12 435
(9 223)
94 123
(65 926)
3 554
295 805
(270)
2 040
9 468
(5 499)
83 930
(40 972)
2 750
602
(5 140)
3 248
(119)
5 456
720
(98)
2 068
691
164 213
308
135 228
(1 741)
1 082
1 154
435
410
(1 262)
(1 404)
130 821
2 236
845
5.
2014
R000
Revenue
Sale of goods
Services rendered and franchise revenue
Financing element of revenue
4.
Company
1 338
13 197
1 338
(13 197)
(669)
(36)
19 321
(23 483)
711
12 211
711
(12 211)
(303)
(41)
16 222
(17 650)
Taxation
Normal taxation
Current taxation
Deferred taxation
Movement in deferred taxation due to change in
taxation rate
Overprovision prior years (deferred and current)
Secondary taxation on companies
(2 556)
20
161 985
Group
5.
6.
Company
2014
%
2013
%
2014
%
2013
%
28.0
(0.3)
(0.3)
0.8
0.8
28.0
(0.3)
(0.3)
0.6
0.6
28.0
(27.3)
(27.3)
0.1
0.1
28.0
(27.6)
(27.6)
28.5
28.3
0.8
0.4
Taxation continued
R000
R000
401 637
328 805
1 487
2 711
Diluted earnings
403 124
331 516
406
338
405
334
Group
7.
Company
2014
R000
2013
R000
401 637
328 805
2 040
1 469
602
(119)
433
(86)
(183)
(128)
2014
R000
2013
R000
8.
Headline earnings
Adjustment for:
After taxation interest receivable on future share
placements
401 942
330 188
1 487
2 711
403 429
332 899
406
339
405
335
140 433
128 737
117 308
105 578
140 433
128 737
117 308
105 578
269 170
222 886
269 170
222 886
Dividends
No. 37 of 142 cents, paid 15 July 2013
No. 38 of 130 cents, paid 9 December 2013
Dividends on treasury shares held through the share
incentive scheme
(103)
269 067
(20)
222 866
269 170
222 886
Land and
buildings
R000
9.
Leasehold
improve- Plant and
ments equipment
R000
R000
Motor Computer
vehicles equipment
R000
R000
Furniture,
fittings
Computer and office
software equipment
R000
R000
Total
R000
Property,
plant and
equipment
2014
Group
Cost
Opening
balance
Additions
Acquired in
business
combination
Foreign
currency
translation
Disposals
Transfer
Closing
balance
Accumulated
depreciation
Opening
balance
Depreciation
for the year
Foreign
currency
translation
Disposals
Transfer
Closing
balance
Net carrying
amount
13 029
149
17 467
549
172 375
25 314
85 073
7 609
26 929
1 731
18 181
5 433
121
2 284
332
202
(2 582)
880
(8 338)
10 596
10 679
423
(1 800)
13 806
168
3 107
14
(4 778)
(2 671)
(99)
(1 318)
211 979
85 579
27 445
24 301
9 086
56 371
45 668
21 693
11 331
564
17 354
6 663
4 071
2 941
(852)
6 366
1
(3 538)
(4 463)
(60)
(994)
(17)
704
(6)
572
1 594
2 488
(6 694)
(10 139) (10 538)
1 962
33 555
(196)
878
(2 999)
1 498
2 377
(4 456)
(8 824) (10 538)
227
7 529
79 239
44 331
24 710
14 838
10 369
3 150
132 740
41 248
2 735
9 463
Land and buildings comprise Erf 344 Halfway House Ext. 17, Township Registration division I.R. in Gauteng province
measuring 7 505 square metres, Erf 219 Sunderland Ridge Ext. 1, Centurion in Gauteng province measuring 1 500 square
metres and Erf 218 Sunderland Ridge Ext. 1, Centurion in Gauteng province measuring 1 500 square metres.
The cost and net carrying amount of the land within land and buildings (see above) is R6 453 750 (2013: R6 453 750).
The fair value of land and buildings is estimated by the directors to be R12 500 000 (2013: R13 500 000). Land and
buildings are valued every three years by an independent valuer. The last valuation date was 28 February 2014.
9.
Computer
software
R000
Furniture,
fittings
and office
equipment
R000
Total
R000
24 602
2 388
13 875
4 306
29 153
2 415
298 284
68 041
232
70
127
2 981
(838)
(4 123)
(131)
24
(2)
559
(5 094)
17 467
172 375
85 073
26 929
18 181
31 717
364 771
299
7 012
43 140
40 632
18 000
10 212
23 250
142 545
124
1 586
13 569
7 426
3 796
1 119
2 852
30 472
488
(338)
(2 390)
(103)
19
(2)
507
(2 833)
423
9 086
56 371
45 668
21 693
11 331
26 119
170 691
12 606
8 381
116 004
39 405
5 236
6 850
5 598
194 080
Land and
buildings
R000
Leasehold
improvements
R000
Plant and
equipment
R000
Motor
vehicles
R000
Computer
equipment
R000
10 598
2 431
10 043
6 813
127 708
43 029
82 305
6 659
76
2 476
535
13 029
Property,
plant and
equipment
continued
2013
Group
Cost
Opening
balance
Additions
Acquired in
business
combination
Foreign
currency
translation
Disposals
Closing
balance
Accumulated
depreciation
Opening
balance
Depreciation
for the year
Foreign
currency
translation
Disposals
Closing
balance
Net carrying
amount
2014
2013
Franchise
incentives,
lease
premiums
and
Tradesimilar
marks Goodwill
R000
R000
R000
10.
Total
R000
Trademarks Goodwill
R000
R000
Franchise
incentives,
lease
premiums
and
similar
R000
Total
R000
Intangible assets
Group
Cost
Opening balance
Acquisitions through
business
combinations
Additions
Disposal
Transfer
Impairment
Foreign currency
translation
Closing balance
374 735
414 298
7 525
(651)
(750)
8 753
19 767
7 492
(292)
750
808 800
16 278
7 492
(943)
282 947
402 621
14 329
699 897
85 000
5 019
(2 040)
4 291
90 019
4 291
(2 040)
21 843
27 312
4 291
53 446
6 788
8 698
1 147
16 633
402 702
450 363
32 008
885 073
374 735
414 298
19 767
808 800
8 330
8 330
4 920
4 920
Accumulated
amortisation
Opening balance
Amortisation for the
year
Disposal
Foreign currency
translation
4 871
(292)
4 871
(292)
3 083
3 083
1 820
1 820
327
327
Closing balance
14 729
14 729
8 330
8 330
402 702
450 363
17 279
870 344
374 735
414 298
11 437
800 470
Net carrying
amount
Trademarks
All the Groups trademarks have been assessed as indefinite life intangible assets. The trademark acquired in 2014
through business combinations related to the acquisition of the business of The Bread Basket. The trademarks acquired in
2013 as part of business combinations related to the acquisition of the businesses of Europa and Fego Caff. The
Blacksteer and Juicy Lucy trademarks were disposed of during the year.
The Group does not amortise its brands by value. In arriving at the conclusion that a brand has an indefinite life,
management considers that the Group is a brands business and expects to acquire, hold and support brands for an
indefinite period. The Group supports its brands through spending on consumer marketing and through significant
investment in promotional support.
Indefinite life trademarks are assessed as such, as management believes there is no foreseeable limit over which the
Group will continue to generate revenues from their continued use. Supporting this assumption is the fact that the brands
held are established, well known, and can reasonably be expected to generate revenues beyond the Groups strategic
planning horizon. In addition, the Group can continue to renew legal rights attached to such trademarks, without
significant costs, and intends to do so beyond the foreseeable future.
As disclosed in notes 18 and 23, until 11 November 2013, certain trademarks of the Group were hypothecated in favour of
Investec Bank Limited.
Goodwill
Goodwill acquired during the year ended February 2014 as part of business combinations related to the acquisition of
the Turn n Tender business (Pink Potato Trading 103 Proprietary Limited). Goodwill acquired during the year ended
February 2013 as part of business combinations related to the acquisition of the Famous Brands Coffee Company
Proprietary Limited.
10.
Trademarks
Domestic
Wimpy, Debonairs Pizza,
FishAways, Milky Lane, Steers,
tashas, Vovo Telo, KEG,
Mugg & Bean, Europa,
Fego Caff, The Bread Basket
International
Wimpy UK
Goodwill
Domestic
Wimpy, Debonairs Pizza,
FishAways, Steers, OHagans,
Famous Brands Coffee
Company, Turn n Tender
International
Wimpy UK
Unit(s) allocated
2014
Carrying
amount
R000
2013
Carrying
amount
R000
317 377
311 253
85 325
63 482
343 675
302 442
106 688
79 376
11.
Investment in associates
Principal
activity
Place of
incorporation
and operation
Year end
Effective
date of
acquisition
Name of associate
UAC Restaurants Limited
Sauce Advertising Proprietary Limited
Quick service
restaurants
Advertising
1 Oct 2013
1 Mar 2013
Proportion of
ownership
interest
and voting
power held by
Famous
Brands Group
Investment in
associate
2014
2013
R000
49%
35%
50 786
2 148
52 934
All of the above associates are accounted for using the equity method in these consolidated financial statements.
Summarised financial information in respect of the Groups material associate is set out below. The summarised financial information
below represents the associates financial statements prepared in accordance with IFRS.
UAC Restaurants Limited
UAC Restaurants Limited is a subsidiary of UAC of Nigeria plc, a leading diversified conglomerate with operations in foods, paints, logistics
and real estate, listed on the Nigerian stock exchange. The year end of UAC of Nigeria plc is 31 December 2013.
The latest available IFRS-compliant financial statements of UAC Restaurants Limited were at 31 December 2013 (stated in Nigerian Naira (N)).
Management accounts to 28 February 2014 were used to calculate the share of profits of associates post 31 December 2013.
31 December 2013
N000
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Revenue
Profit from continuing operations
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Dividends received from the associate during the year
896 289
331 876
(769 244)
1 534 064
285 431
285 431
285 431
Reconciliation of the above summarised financial information to the carrying amount of the interest in UAC Restaurants Limited
recognised in the consolidated financial statements:
N000
Net assets of the associate
Proportion of the Groups ownership interest
458 921
49%
R000
14 508
36 278
50 786
1 813
1 813
2 148
Group
2014
R000
12.
Company
2013
R000
2014
R000
2013
R000
Investment in subsidiaries
Unlisted shares at cost less amounts written off
Net amount owing to subsidiaries
335 699
(12 592)
332 656
(50 409)
323 107
282 247
13.
Deferred taxation
Movement
Balance at the beginning of the year
Acquired in business combinations
Adjustment in respect of the prior year
Foreign currency effect
Movement through profit and loss
Movement due to change in taxation rate
Analysis
Excess capital allowances over depreciation
Effect of taxation losses
Prepayments
Provisions
Other temporary differences
Trademark valuation upon business combinations
39 012
126
4 647
308
(2 556)
40 162
183
1 670
(1 741)
(1 262)
(1 866)
41 537
39 012
(712)
(1 866)
23 700
(5 667)
2 900
(6 502)
(10 492)
21 804
(261)
1 037
(6 139)
(11 715)
(712)
(1 866)
3 939
37 598
4 726
34 286
(712)
(1 866)
41 537
39 012
(712)
(1 866)
(11 075)
52 612
(11 587)
50 599
(712)
(1 866)
41 537
39 012
(712)
(1 866)
54 042
113 418
3 639
6 412
92 776
70 098
4 403
177 511
167 277
1 154
(2 276)
410
14.
Inventories
Raw materials
Finished goods
Stock in transit
Consumables
Cost of goods sold during the period amounted to R1 598 583 135 (2013: R1 463 721 547).
Writedowns of inventories to their net realisable value and obsolete stock provisions, mainly relating to finished goods,
amounted to R135 115 (2013: R662 304), and have reduced gross inventories to the carrying amounts above.
There are no inventories pledged as security for liabilities.
Group
2014
R000
15.
Company
2013
R000
2014
R000
2013
R000
264 842
(4 474)
234 064
(4 133)
260 368
12 734
3 023
1 742
229 931
10 176
4 569
4 861
14
294
277 867
249 537
308
255 414
3 182
1 935
895
3 416
193 381
23 970
6 641
2 113
7 959
264 842
234 064
1 213
5 939
Group
Credit quality of trade and other receivables
The Group has a wide customer base. No credit rating
has been obtained from banks. One debtor has a
current balance in excess of 5% of the trade
receivables balance amounting to R28 721 670
(2013: R18 227 427).
The table below illustrates the trade receivables
ageing analysis:
Less than 30 days
31 to 60 days
61 to 90 days
91 to 120 days
Over 120 days
It is the policy of the company to allow seven to
90-day payment terms.
Fair value of trade and other receivables
There is no material difference between the fair value
of trade and other receivables and their book value.
Trade and other receivables past due and not
impaired
Trade and other receivables that are less than three
months past due are not considered to be impaired
unless specific circumstances indicate otherwise.
At 28 February 2014, amounts further past due but
notimpaired were R1 211 738 (2013: R5 938 494).
Theageing of these amounts further past due but
notimpaired was as follows:
Over 120 days
Group
15.
Company
2014
R000
2013
R000
1 342
406
329
194
2 203
4 133
4 474
4 133
4 133
3 093
(2 752)
6 252
(1 618)
(501)
4 474
4 133
2014
R000
The maximum exposure to credit risk at the reporting date is the fair value of trade and other receivables above.
The Group does not hold any collateral as security.
2013
R000
Group
16.
Company
2014
R000
2013
R000
2014
R000
2013
R000
Share capital
Share premium
992
100 039
978
62 278
992
101 409
978
63 648
101 031
63 256
102 401
64 626
2 000
2 000
2 000
2 000
992
978
992
978
1 008
1 022
1 008
1 022
62 278
37 761
36 075
26 203
63 648
37 761
37 445
26 203
100 039
62 278
101 409
63 648
10 775
10 775
64 521
36 720
5 492
33 472
36 720
33 472
101 241
38 964
47 495
44 247
Share capital
Authorised
200 000 000 (2013: 200 000 000) ordinary par value
shares of 1 cent each
Issued
99 242 435 (2013: 97 827 435) ordinary par value
shares of 1 cent each
Unissued
100 757 565 (2013: 102 172 565) ordinary par value
shares of 1 cent each
3% of the unissued shares are under the control of the
directors until the next annual general meeting.
7 272 538 (2013: 8 687 538) of the unissued ordinary
shares are specifically reserved for the share incentive
scheme, of which 635 000 (2013: 2 000 000) options
have already been offered to and accepted by
directors and employees.
Share premium
Balance at the beginning of the year
Premium on shares issued
Balance at the end of the year
17.
Other reserves
Capital profit on sale of the companys business to a
subsidiary
Foreign currency translation reserve
Share-based payments
Group
18.
Company
2014
R000
2013
R000
2014
R000
2013
R000
65 000
130 000
8 214
27 613
65 000
165 827
65 000
88 514
Non-current liabilities
77 313
77 313
Interest-bearing borrowings
Secured loans
Secured loan from Absa Bank Limited bearing interest
at 1.25% above the three-month JIBAR rate. The final
quarterly repricing JIBAR rate was 6.925%
(2013:5.083%). The loan is repayable in quarterly
instalments which commenced on 31 May 2013 with a
final instalment on 28 February 2015. The current
instalment payable is R17 372 229 (2013: R18 325 142).
The loan arose to fund the acquisition of the Europa
and Fego Caff business and is secured by an
irrevocable and unconditional guarantee issued by the
company.
Group
19.
Company
2014
R000
2013
R000
2014
R000
2013
R000
7 815
(4 148)
8 823
(1 008)
6 664
(4 120)
8 128
(1 464)
Closing balance
3 667
7 815
2 544
6 664
Analysed as follows
Current liabilities
Non-current liabilities
2 544
1 123
5 271
2 544
2 544
4 120
2 544
3 667
7 815
2 544
6 664
137 106
136 479
6 364
9 526
1 520
116 574
128 142
6 488
9 341
803
254
40
290 995
261 348
256
40
23 666
12 283
5 279
399
29 344
12 283
20.
21.
The book value of the loans is considered to be in line with the fair value.
Group
2014
R000
2013
R000
2014
R000
2013
R000
567 445
461 873
273 254
223 605
4 871
33 555
3 083
30 472
(3 957)
2 068
(4 148)
3 212
(942)
2 040
691
(1 008)
(2 119)
3 969
(270 003)
(4 120)
(36)
(222 000)
(1 464)
(41)
602
(5 140)
3 248
(119)
5 456
601 756
(8 197)
(9 955)
(22 674)
24 432
503 396
(21 117)
(47 281)
(46 911)
73 075
(185)
229
12
217
2
(212)
(12)
(200)
593 559
482 279
44
(210)
(6 877)
(161 985)
(2 248)
155
(493)
4 700
(11 330)
(130 821)
(1 150)
(83)
6 877
(959)
(2 236)
1 154
(166 748)
(136 507)
(1 258)
(986)
(1 246)
(270 946)
1 067
(671)
(223 748)
1 246
(1 202)
(269 170)
1 067
(671)
(222 886)
1 202
(271 125)
(223 173)
(269 305)
(222 355)
22.
22.1
22.2
22.3
Company
720
783
(98)
(1 510)
(845)
410
959
Group
2014
R000
22.
22.4
22.5
Company
2013
R000
3 034
7 525
225
10 784
(5 284)
Amount capitalised
5 500
5 500
85 000
85 000
85 000
Investment in subsidiary
Effective 1 June 2013, a 51% interest was acquired in
Pink Potato Trading 103 Proprietary Limited, for the
Turn n Tender Steakhouse business, for a purchase
consideration of R9.3 million. R8.8 million was
allocated to goodwill because of anticipated scale and
merger benefits related to both franchising and
manufacturing capabilities.
Fair value of assets and liabilities acquired
Property, plant and equipment
Trade and other receivables
Inventories
Cash and cash equivalents
Trade and other payables
Tax receivable
Net assets acquired
Non-controlling interests measured at their share of
the fair value of net assets
Amount capitalised
73
2 050
220
260
(1 721)
155
1 037
(508)
529
Goodwill
8 753
Purchase price
Less: Cash and cash equivalents
9 282
(260)
9 022
2014
R000
2013
R000
Group
2014
R000
22.
22.5
Company
2013
R000
2014
R000
2013
R000
2 981
4 178
3 103
3
(6 347)
(183)
3 735
(1 494)
Amount capitalised
2 241
Goodwill
5 019
Purchase price
Less: Cash and cash equivalents
7 260
(3)
7 257
Investment in associates
Effective 1 March 2013, the Group acquired a 35%
stake in McEwan Advertising Proprietary Limited
(renamed Sauce Advertising Proprietary Limited)
Effective 1 October 2013, the Group acquired a 49%
stake in UAC Restaurants Limited in Nigeria which
houses the Mr Biggs brand
335
47 459
47 794
Group
22.
22.7
Company
2014
R000
2013
R000
2014
R000
2013
R000
90 699
84 736
998
1 740
23.
Contingent liabilities
23.1
The company and its South African subsidiaries had issued an irrevocable, unconditional, joint and severable guarantee in
favour of Investec Bank Limited to secure the Groups obligations. The total Group obligation at year end amounts to Rnil
(2013: R35 827 272). As a further security, until 11 November 2013, certain companies within the Group had hypothecated
rights to trademarks in favour of Investec Bank Limited.
23.2
The company and its wholly owned South African subsidiaries have issued an unlimited suretyship in favour of FirstRand
Bank Limited to secure the banking facilities entered into by certain subsidiary companies.
23.3
Guarantees issued by banks in favour of trade creditors totalled R5 579 873 (2013: R18 520 763).
23.4
The company has issued an irrevocable and unconditional guarantee in favour of Absa Bank Limited to secure the Groups
obligations. The total Group obligation at year end amounts to R65 million (2013: R130 million).
24.
Commitments
24.1
Group
Company
2014
R000
24.
Commitments continued
24.1
2013
R000
2014
R000
2013
R000
Capital expenditure
Approved by the directors but not contracted for
167 857
(115 059)
161 140
(87 048)
11 180
(11 180)
31 432
(31 432)
52 798
74 092
59 040
108 817
59 078
94 804
7 258
11 180
19 362
12 070
167 857
161 140
11 180
31 432
52 389
46 942
25.
26.
Total
Direct
000
Indirect
000
2014
000
2013
000
984
125
984
125
1 156
72
35
1 616
7 167
9 750
5 040
9 000
155
10 616
7 322
9 750
5 040
10 866
7 877
10 000
5 369
1 000
24 682
9 155
33 837
36 375
No director has any non-beneficial interest in the ordinary shares of the company.
The company has not been advised of any changes in the above interests of the directors during the period up to the date
of this report.
27.
Directors remuneration
Name of director
For services
as directors
R000
28 February 2014
Executive
Mr KA Hedderwick
Mr DP Hele
Mr NS Richards
(appointed: 1 July 2013)
Mr SJ Aldridge
(retired: 30 June 2013)
Non-executive
Ms SL Botha
Mr HR Levin
(retired:27February2014)
Mr P Halamandaris
Mr P Halamandaris (Jnr)
Mr T Halamandaris
Mr JL Halamandres
Mr BL Sibiya
Mr CH Boulle
Less: Paid by subsidiaries
Remuneration
R000
Provident
fund contributions
Bonuses
R000
R000
Allowances
and
benefits
R000
Total
R000
4 461
2 213
2 634
1 218
246
108
114
7 203
3 791
974
480
40
1 494
709
709
262
262
57
192
50
50
192
230
305
57
192
50
50
192
230
305
1 338
1 338
8 357
(8 357)
4 332
(4 332)
246
(246)
262
(262)
14 535
(13 197)
1 338
Directors remuneration is only reflected from the date upon which an appointment commences and up to the date of
resignation.
Performance bonuses reflect the amounts accrued in respect of the year to which the performance relates.
IFRS 2 Share-based Payments amounts of R750 944 (2013: R1 645 241), R172 867 (2013: R943 996), R432 483 (2013:
R508363) and R250 315 (2013: R535 966) were recognised in respect of options granted to Mr KA Hedderwick,
MrTHalamandaris, Mr DP Hele and Mr SJ Aldridge respectively.
The directors share-based payment amounts are not included in the remuneration above.
27.
Name of director
For services
as directors
R000
28 February 2013
Executive
Mr T Halamandaris
Mr KA Hedderwick
Mr DP Hele (appointed: 1 June 2012)
Mr SJ Aldridge
Remuneration
R000
1 094
3 928
1 399
1 533
Bonuses
R000
2 016
876
612
Provident
fund contributions
R000
Allowances
and
benefits
R000
Total
R000
164
395
108
86
1 489
6 052
2 525
2 145
Non-executive
Ms SL Botha (appointed: 1 June 2012)
Mr H R Levin
Mr P Halamandaris
Mr P Halamandaris (Jnr)
Mr T Halamandaris
Mr JL Halamandres
Mr BL Sibiya
Mr CH Boulle
84
124
84
42
154
84
139
711
7 954
(7 954)
3 504
(3 504)
164
(164)
589
(589)
12 922
(12 211)
711
711
84
124
84
42
154
84
139
28.
Share-based payments
28.1
Vesting category
Vests at
the end of
the year
% vesting
100
Type A
Expiry after
grant (years)
7
Number of
options
2014
2013
15.00 43.40
90.51
n/a
15.00 28.00
15.00 43.40
n/a
n/a
28.00 43.40
15.00 18.25
2014
2 000 000
50 000
(1 415 000)
635 000
2013
3 835 000
(200 000)
(1 635 000)
2 000 000
570 000
50 000
635 000
28.
28.1
Subscription
price
Option
Rand
vesting date
Executive
Mr T Halamandaris
Mr KA Hedderwick
Mr DP Hele
Mr SJ Aldridge
(retired:30 June 2013)
19 May 2013
19 May 2013
30 May 2014
22 May 2012
19 May 2013
30 May 2014
19 May 2013
30 May 2014
28.00
28.00
43.40
16.10
28.00
43.40
28.00
43.40
Outstanding
as at
28February
2013
Granted
during the
period
Exercised
during the
period
250 000
300 000
150 000
100 000
100 000
100 000
100 000
50 000
250 000
300 000
1 150 000
100 000
100 000
100 000
850 000
Outstanding
as at
28February
2014
150 000
100 000
50 000
300 000
The share options granted have been valued, at grant date, using the Black-Scholes-Merton model which takes account of
the vesting period (European style option).
Expected volatility of the share price was determined by giving consideration to the historical volatility of the Famous
Brands Limited share price.
The weighted fair value of the options granted and the related assumptions utilised are detailed below.
2014
2013
50 000
24.88
n/a
94.99
90.51
4.0
39.1
6.77
2.6
28.
28.2
29.
29.1
Franchise agreements
Directors have interests in 13 franchised outlets. Franchise fees and product sales have been charged under terms and
conditions no more favourable than those entered into with third parties.
29.2
Lease agreements
The Group has entered into lease agreements with an entity controlled by certain directors. The transactions were
concluded at market-related rates prevailing at the time of entering into the transactions.
29.3
Supply agreements
The Group has entered into a supply agreement with an entity controlled by certain directors. All products purchased were
concluded at market-related prices.
29.4
Professional fees
Professional fees have been paid to a firm of which two non-executive directors are partners. The transactions were
conducted at market-related rates prevailing at the time of entering into the transactions.
29.
29.5
Management fees
Management fees have been paid to the non-controlling shareholders of certain subsidiary companies for providing
operational management services to the related businesses. The transactions were conducted at market-related rates
prevailing at the time of entering into the transactions.
29.6
Advertising fees
Advertising fees have been paid to an associate. The transactions were conducted at market-related fees prevailing at the
time of entering into the transactions.
The aggregate of the above transactions is as follows:
2014
R000
2013
R000
12 076
19 321
93 258
2 125
5 467
45 780
29 344
2 717
1 530
25 071
17 685
38 744
441
4 122
13 573
508
1 397
19 361
270 003
17 650
222 000
989
986
29.8
Directors remuneration
The remuneration for directors of the holding company paid during the year by subsidiaries within the Group has been
disclosed in note 27. Executive directors are defined as key management.
29.9
Employees remuneration
The remuneration to all employees amounted to R336 776 365 (2013: R295 804 577).
30.
Risk management
The board of directors has approved strategies for the management of financial risks, which are in line with corporate
objectives. These guidelines set up the short-term and long-term objectives and actions to be taken in order to manage the
financial risks that the Group faces.
The major guidelines of this policy are the following:
> Minimise interest rate, currency and market risk for all transactions.
> All financial risk management activities are carried out and monitored at a central level.
> All financial risk management activities are carried out on a prudent and consistent basis.
The Groups activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price
risk), credit risk, liquidity risk and capital risk.
The following table summarises the carrying amount of financial assets and liabilities recorded at 28 February 2014 by
IAS39 category:
Group
Financial assets
Loans and receivables: Cash and cash equivalents
Loans and receivables: Trade and other receivables
Fair value through profit or loss: Loans to group
companies
Financial liabilities
Measured at amortised cost: Trade and other payables
Measured at amortised cost: Borrowings
Fair value through profit or loss: Loans from group
companies
Measured at amortised cost: Shareholders for
dividends
Fair value through profit or loss: Non-controlling
shareholder loan
Company
2014
R000
2013
R000
2014
R000
2013
R000
90 699
262 110
84 736
244 968
998
1 740
294
3 091
2 422
352 809
329 704
4 089
4 456
275 105
65 000
252 007
165 827
40
15 683
52 831
1 067
1 246
1 067
1 202
29 344
12 283
370 516
431 363
16 752
54 073
For financial instruments measured at fair value through profit or loss, in terms of the hierarchy, these are classified as level
3 as the valuation techniques used are not based on observable market data. For these financial instruments the carrying
amount is equal to its fair value as these loans are interest-free and have no fixed terms of repayment.
30.
30.1
Liquidity risk
The Group manages liquidity risk on the basis of expected maturity dates, through an ongoing review of future
commitments and credit facilities. Cash flow forecasts are prepared, adequate borrowing facilities are secured and
utilisation monitored.
The following table analyses financial liabilities by remaining contractual maturity (contractual and undiscounted cash flows).
Less than
1year
R000
1 5 years
R000
Total
R000
275 105
67 668
1 067
29 344
275 105
67 668
1 067
29 344
373 184
373 184
252 007
97 183
1 246
12 283
80 437
252 007
177 620
1 246
12 283
362 719
80 437
443 156
2
15 683
1 067
2
15 683
1 067
16 752
16 752
40
52 831
1 202
40
52 831
1 202
54 073
54 073
Group
2014
Trade and other payables
Interest-bearing borrowings
Shareholders for dividends
Non-controlling shareholder loans
2013
Trade and other payables
Interest-bearing borrowings
Shareholders for dividends
Non-controlling shareholder loan
Company
2014
Trade and other payables
Loans from Group companies
Shareholders for dividends
2013
Trade and other payables
Loans from Group companies
Shareholders for dividends
The carrying amount of the financial liabilities is considered to be in line with the fair value at the reporting date.
At present the Group expects to pay all liabilities at their contractual maturity. In order to meet such cash commitments the
Group expects operating activities to generate sufficient cash inflows. In addition, the Group holds financial assets for
which there is a liquid market and that are readily available to meet liquidity needs.
The Group has access to financing facilities, of which R60 million (2013: R140 million) were unused at the end of the
reporting period. The Group expects to meet its obligations from operating cash flows.
30.
30.2
Group
Floating rate
Non-interest-bearing
Company
2014
R000
2013
R000
2014
R000
2013
R000
65 000
305 516
165 827
265 536
16 752
54 073
370 516
431 363
16 752
54 073
Sensitivity analysis
A hypothetical increase/decrease in interest rates of 50 basis points, with all other variables remaining constant, would
increase/decrease profit after taxation by R234 000 (2013: R596 978).
A hypothetical increase/decrease in interest rates by 100 basis points, with all other variables remaining constant, would
increase/decrease profit after taxation by R468 000 (2013: R1 193 956).
The analysis has been performed for floating interest rate financial liabilities.
The impact of a change in interest rates on floating interest rate financial liabilities has been assessed in terms of the
changing of their cash flows and net expenses.
As the Group has no significant interest-bearing assets, the Groups income and operating cash flows are substantially
independent of changes in market interest rates.
30.3
Group
2014
CU000*
2013
CU000*
1 278
1 895
352
2 611
Euro
Trade and other receivables
Cash and cash equivalents
6
133
6
160
US Dollar
Trade and other receivables
Cash and cash equivalents
1 180
41
1 192
Zambian Kwacha
Trade and other receivables
Cash and cash equivalents
2 739
5 392
1 244
1 130
GB Pound
Trade and other payables
968
846
Euro
Trade and other payables
11
11
Zambian Kwacha
Trade and other payables
401
1.22
14.78
18.00
10.80
0.54
1.16
11.58
13.39
8.85
0.60
Sensitivity analysis
R000
R000
2 858
136
918
301
2 041
130
786
103
30.
30.3
30.
30.4
Credit risk
Credit risk is managed on a Group-wide basis.
Credit risk consists mainly of cash deposits, cash equivalents and trade debtors. The Group only deposits cash with major
banks with high-quality credit standing and limits exposure to any one counterparty to R105 million.
Trade receivables comprise a widespread customer base. Management evaluates credit risk relating to customers on an
ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating,
risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other
factors. Sales to retail customers are settled in cash or using major credit cards. Refer to note 15 for details on the quality
and provision for impairment of trade receivables.
Financial assets exposed to credit risk (maximum exposure) at year end were as follows.
Group
Company
2014
R000
2013
R000
2014
R000
2013
R000
262 110
90 699
244 968
84 736
998
294
1 740
352 809
329 704
998
2 034
The Group is exposed to a number of guarantees for the overdraft facilities of Group companies and for guarantees issued
in favour of Absa Bank Limited. Refer to note 18 for additional details.
30.5
Capital risk
The Groups objectives when managing capital are to safeguard the Groups ability to continue as a going concern, to
provide sustainable returns for shareholders, benefits for other stakeholders and to maintain, over time, an optimal
structure to reduce the cost of capital.
The capital structure of the Group consists of interest-bearing borrowings (note 18), cash and cash equivalents (note 22.7)
and equity as disclosed in the statement of financial position. There are no externally imposed capital requirements.
There have been no material changes to the Groups management of capital, the strategy for capital maintenance or
externally imposed capital requirements from the previous years.
31.
2013
R000
Segment revenue*
Franchising and Development
Supply Chain
Manufacturing
Logistics
Eliminations
Corporate
537 817
2 145 105
926 911
2 021 417
(803 223)
1 355
19
76
32
72
(28)
476 896
1 919 400
715 418
1 812 358
(608 376)
1 296
19
76
28
72
(24)
South Africa
International
2 684 277
141 702
95
5
2 397 592
118 695
95
5
91 916
49 786
3
2
83 030
35 665
4
1
UK
Rest of Africa
Total
2 825 979
100
2 516 287
100
Segment profit*
Franchising and Development
Supply Chain
Manufacturing
Logistics
Corporate
324 925
203 513
121 855
81 658
1 248
58
36
22
14
286 639
160 694
97 618
63 076
722
61
35
21
14
South Africa
International
UK
Rest of Africa
529 686
35 831
12 872
22 959
94
6
2
4
448 055
17 787
5 391
12 396
96
4
1
3
Total
565 517
100
465 842
100
* Within segmental information, the Rest of Africa has been reclassified separately and the Development division has been reclassified
from Corporate to Franchising South Africa. Comparative numbers have been restated.
31.
2013
R000
767 445
513 010
243 771
269 239
24 662
50
34
16
18
2
720 240
502 736
252 913
249 823
25 481
51
36
18
18
2
South Africa
International
UK
Rest of Africa
1 305 117
226 180
226 161
19
86
14
14
1 248 457
162 907
162 907
89
11
11
Total
1 531 297
100
1 411 364
100
Segment liabilities*
Franchising and Development
Supply Chain
Manufacturing
Logistics
Corporate
100 363
166 953
61 812
105 141
63 216
27
46
17
29
17
106 914
125 873
60 311
65 562
56 234
33
39
19
20
18
South Africa
International
UK
Rest of Africa
330 532
34 510
34 423
87
90
10
10
289 021
30 364
30 364
90
10
10
Total
365 042
100
319 385
100
5 382
35 609
27 523
8 086
6 005
11
75
58
17
14
4 158
56 535
51 632
4 903
10 283
6
80
73
7
14
South Africa
International
UK
Rest of Africa
46 996
181
181
100
70 976
46
46
100
Total
47 177
100
71 022
100
Depreciation*
Franchising and Development
Supply Chain
Manufacturing
Logistics
Corporate
4 307
23 071
15 916
7 155
5 886
13
68
47
21
18
3 724
21 148
12 611
8 537
5 369
12
69
41
28
18
South Africa
International
UK
Rest of Africa
33 264
291
249
42
99
1
1
30 241
231
231
99
1
1
Total
33 555
100
30 472
100
Segment assets*
Franchising and Development
Supply Chain
Manufacturing
Logistics
Corporate
* Within segmental information, the Rest of Africa has been reclassified separately and the Development division has been reclassified
from Corporate to Franchising South Africa. Comparative numbers have been restated.
31.
Assets
Investment in associates
Deferred taxation
Taxation
Cash and cash equivalents
Liabilities
Borrowings
Deferred taxation
Shareholders for dividend
Taxation
2014
R000
2013
R000
52 934
11 075
6 834
90 699
11 587
2 780
84 736
161 542
99 103
65 000
15 248
1 067
11 534
165 827
14 264
1 246
9 657
92 849
190 994
Share
capital
Direct
Debonairs Pizza Proprietary Limited3
100
70 657 847
Famous Brands Cyprus Limited2
Famous Brands Food Services
Proprietary Limited4
100
Famous Brands Management
Company Proprietary Limited1
100
2 000
FishAways Proprietary Limited3
Mugg & Bean Franchising Proprietary
Limited3
101
800
Pleasure Foods Proprietary Limited4
Pleasure Foods Intellectual Property
Company Proprietary Limited3
800
Pleasure Foods Property Holdings 1
Proprietary Limited1
100
100
Stedewish Foods Proprietary Limited1
The Steers Share Incentive Trust
200
Steers Proprietary Limited3
Indirect
100
Catermeat Proprietary Limited4
Creative Coffee Franchise Systems
Proprietary Limited1
100
100
Coega Cheese Proprietary Limited1
Famous Brands Coffee Company
Proprietary Limited1
100
Famous Brands Great Bakery
Company Proprietary Limited1
100
5 434 185
Famous Brands UK Limited2
Hawk Like Trade and Invest Proprietary
Limited4
1
Mountain Rush Trading 4 Proprietary
Limited1
100
Pink Potato Trading 103 Proprietary
Limited1
100
Quantum International Franchising
Proprietary Limited4
1 000
Quickstep Investment 10 Proprietary
Limited4
1 000
Souldance Holdings 11 Proprietary
Limited1
100
19
Steers Holdings (Jersey) Limited2
Vovo Telo Bakery and Caf Proprietary
Limited1
1 000
9 584
Venus Solutions Limited2
Wimpy Marketing Fund Proprietary
Limited1
2
Amounts owing
by/(to)
subsidiaries
Shares
2014
2013
2014
2013
R000
R000
R000
R000
Interest
2014
2013
%
%
Profit/(loss)
2014
2013
R000
R000
100
100
100
100
110
70 471
110
70 471
3 091
2 422
7 322
3 611
6 168
2 096
100
100
100
100
100
100
49 107
2 269
100
100
4 158
3 662
100
27 011
26 222
100
100
100
100
51
100
100
93
6 419
24
(563)
22
6 474
100
100
61
51
61
51
1 361
(5 170)
1 108
(72)
60
60
9 105
2 835
51
100
100
164
7 559
2 622
100
100
51
51
2 404
2 681
6 243
51
1 183
936
205
6 243
1 529
100
100
(21)
100
100
240
51
100
51
100
231
4 815
120
1 867
51
100
51
100
521
1 309
452
1 424
100
100
335 699 332 656 (12 592) (50 409) 421 741 338 393
Total losses
Total profits
(5 191)
(635)
426 932 339 028
All the above subsidiaries are incorporated in South Africa, except for Famous Brands UK Limited and Venus Solutions Limited,
incorporated in the United Kingdom, Famous Brands Cyprus Limited, incorporated in Cyprus, and Steers Holdings (Jersey) Limited,
incorporated in Jersey.
Main business
1. Franchisor, product manufacture, distribution, management and/or administration
2. Offshore holding company
3. Trademark owner
4. Dormant
Shareholder analysis
Number of
shareholders
Analysis of shareholders
Holdings
1 10 000
10 001 50 000
50 001 100 000
100 001 1 000 000
1 000 001 and more
Analysis of holding
Individuals
Insurance companies
Investment trusts
Other companies and corporate bodies
Number of
shares
6 983
290
33
64
11
94.60
3.93
0.45
0.87
0.15
8 560 026
5 897 628
2 408 370
21 714 172
60 662 239
8.62
5.94
2.43
21.88
61.13
7 381
100.00
99 242 435
100.00
5 877
16
839
649
79.62
0.22
11.37
8.79
39 934 901
1 165 424
12 972 459
45 169 651
40.25
1.17
13.07
45.51
7 381
100.00
99 242 435
100.00
12 797 657
7 221 104
6 426 642
12.90
7.28
6.48
26 445 403
Shareholder spread
Public
Non-public directors
7 375
6
99.92
0.08
65 405 557
33 836 878
65.90
34.10
7 381
100.00
99 242 435
100.00
Shareholders diary
Financial year end
Reports and profit announcements
> Profit and dividend announcement
> Integrated Annual Report
> Interim Report
> Annual general meeting
Dividend No. 39 information
> Last day to trade cum-dividend
> Shares commence trading ex-dividend
> Record date
> Payment of dividend
Share certificates may not be dematerialised or rematerialised between Monday, 7 July 2014 and Friday, 11 July 2014, both dates
inclusive.
2.
3.2
Explanatory note
The reason for and effect of ordinary resolutions No.3.1 to
3.2 is to re-elect the directors that retire by rotation in terms
of the MOI of the company.
3.3
3.4
3.5
4.
4.1
4.2
4.3
4.4
4.5
Explanatory note
The reason for and effect of ordinary resolutions 4.1to4.5
is to appoint and re-elect the Chairman andmembers of
the audit committee of the company asrequired in terms of
section 94(2) of the CompaniesAct.
Brief curricula vitae of directors who have offered
themselves for appointment and re-election are included
on pages 6 to 9 of the report.
5.
Non-binding resolution
7.
Non-binding resolution No. 1: Endorsement of
remuneration policy
RESOLVED THAT shareholders endorse, through a
non-binding advisory vote to ascertain the shareholders
view of Famous Brands remuneration policy and its
implementation. The remuneration report is set out on page
27 of this Integrated Annual Report.
Explanatory note
In terms of the King Code of Governance Principles, an
advisory vote should be obtained from shareholders on the
companys annual remuneration policy. The vote allows
shareholders to express their view on the remuneration
policies adopted and their implementation, but will not be
binding on the company.
Special resolutions
The percentage of voting rights required for a special resolution to
be adopted is more than 75% (seventy five percent) of the voting
rights exercised on the resolution at a quorate meeting.
To consider and, if approved, to pass, with or without modification,
the following three special resolutions:
8.
Per meeting
To June 2014
Rand
60 000
50 000
d)
e)
f)
20 000
Explanatory note
This resolution is proposed in order to comply with the
requirements of the Companies Act. In terms of section
65(11)(h) of the Companies Act, read with sections 66(8) and
66(9), remuneration may only be paid to directors for their
services as directors in accordance with a special
resolution approved by the shareholders within the
previous two years.
9.
g)
h)
Explanatory note
Notwithstanding the title of section 45 of the Companies
Act, being Loans or other financial assistance to directors,
on a proper interpretation, thebody of the section may also
apply to financial assistance provided by a company to
related or inter-related companies, including, among others,
its subsidiaries, for any purpose. Furthermore, section 44 of
the Companies Act may also apply to the financial
assistance so provided by a company to related or
inter-related companies, in the event that financial
assistance is provided for the purposes of, or in connection
with, the subscription of any option, or any securities,
issued or to be issued by the company or a related or
inter-related company, or for the purchase of any securities
of the company or a related or inter-related company. Both
sections 44 and 45 of the Companies Act provide, among
others, that theparticular financial assistance must be
provided only pursuant to a special resolution of the
shareholders, adopted within the previous two years, which
approved such assistance whether for the specific
recipient, or generally for a category of potential recipients,
and the specific recipient falls within that category and the
board of directors must be satisfied that (a) immediately
after approving the financial assistance, the company
would satisfy the solvency and liquidity test; and (b) the
terms under which the financial assistance is proposed to
be given are fair and reasonable to the company.
In the normal course of business the company is often
required to grant financial assistance, including but not
limited to loans, guarantees in favour of third parties, such
as financial institutions, service providers and
counterparties (in respect of the provision of banking
facilities, acquisition transactions and debt capital) for the
obligations of the company or a related or inter-related
company, or to a shareholder of a related or inter-related
company, or to a person related to any such company.
Special resolution No. 3 will enable the company to provide
such financial assistance to subsidiaries and juristic
persons in the Famous Brands Group or other person that
is or becomes related or inter-related to the company for
any purpose in the normal course of business.
Litigation statement
The directors of the company whose names appear on
pages 6 to 9 of the Integrated Annual Report of which this
notice forms part, are not aware of any legal or arbitration
proceedings including proceedings that are pending or
threatened, that may have or had in the recent past (being
at least the previous 12 months) a material effect on the
Groups financial position.
Material changes
Other than the facts and developments reported on in the
Integrated Annual Report, there have been no material
changes in the affairs or financial position of the company
and its subsidiaries since the date of signature of the audit
report and up to the date of this notice.
Voting and proxies
A shareholder of the company entitled to attend, speak and vote at
the annual general meeting is entitled to appoint a proxy or proxies
to attend, speak and on a poll to vote, in his/her stead. The proxy
need not be a shareholder of the company. A form of proxy is
attached for the convenience of any certificated shareholder and
own name registered dematerialised shareholder who cannot
attend the annual general meeting, but who wishes to be
represented.
JG Pyle
Company Secretary
15 May 2014
Form of proxy
ordinary shares in
For*
Number of votes
Against*
Abstain*
1.
day of
2014
2.
6.
7.
8.
3.
4.
9.
10.
11.
12.
13.
5.
Administration
Transfer secretaries
Registration number
1969/004875/06
Company Secretary
Mr JG Pyle
Registered office
478 James Crescent
Halfway House
1685
Tel: +27 11 315 3000
investorrelations@famousbrands.co.za
Postal address
PO Box 2884
Halfway House
1685
Sponsor
The Standard Bank of South Africa Limited
(Registration number 1969/017128/06)
30 Baker Street
Rosebank
2196
Website address
www.famousbrands.co.za
Auditors
RSM Betty & Dickson (Johannesburg)
Bankers
Absa Bank Limited
Bidvest Bank Limited
FirstRand Bank Limited
Investec Bank Limited
Nedbank Limited
Standard Bank Limited
BASTION GRAPHICS
Contact information
Tel: +27 11 315 3000
investorrelations@famousbrands.co.za
478 James Crescent
Halfway House, South Africa, 1685