NOTES


1. Review report – The consolidated statement of financial position at 30 June 2013 and the consolidated statement of comprehensive income, statement of changes in equity, segmental analysis and statement of cash flows for the year then ended, have been reviewed by KPMG Inc. Their unmodified report is available for inspection at the company’s registered office. Basis of Preparation – The financial statements for the year ended 30 June 2013 have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (“IFRS”), the presentation and disclosure requirements of IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the requirements of the South African Companies Act (No. 71 of 2008) and the JSE Limited Listings Requirements. The accounting policies and methods of computation applied in the preparation of these financial statements are in accordance with IFRS and are consistent with those applied in the preparation of the group’s annual financial statements for the year ended 30 June 2012.
2. With effect from 1 October 2012, the group acquired a 90% interest in Trinity Leasing Limited (“Trinity Leasing”) for £40 000 (the equivalent of R0.538 million) from Trinity Leisure Limited (“Trinity Leisure”), the company that previously held the master franchise rights for the group in the United Kingdom. Trinity Leasing owns the lease in respect of the former Arapaho Spur in Staines, England, which restaurant ceased trading and was liquidated prior to the transaction in question. Trinity Leasing also owned the tangible assets of the former Arapaho Spur at the time of the transaction, which assets were, subsequent to the transaction, sold to a wholly-owned group entity. The group concluded the transaction in order to secure the trading site of the former Arapaho Spur. The group now trades a new restaurant, Two Rivers Spur, in the same location, through a wholly-owned subsidiary. The purchase consideration was settled by way of a reduction of the pre-existing loan receivable from Trinity Leisure. The fair value of the identifiable assets and liabilities acquired was R0.598 million at the date of the acquisition and comprised: R0.067 million for property, plant and equipment; R0.037 million for inventory; R0.934 million for leasing rights; R0.666 million for trade and other receivables; R0.844 million for trade and other payables; and a deferred tax liability on fair value adjustments of R0.262 million. The fair value of identifiable assets and liabilities attributable to non-controlling interests was R0.060 million. Subsequent to the acquisition, Trinity Leasing earned revenue of R1.754 million (all of which was intercompany and has been eliminated on consolidation) and incurred a loss of R0.059 million which is included in profit. Trinity Leasing is not expected to contribute significantly to group revenue or profits in future, as all income is intercompany.
3. With effect from 1 April 2013, the group acquired the lease of the site at which the Iowa Spur in Dublin, Ireland previously traded, for £177 000 (the equivalent of R2.453 million). Iowa Spur was previously owned and operated by a subsidiary of Trinity Leisure but ceased trading in December 2012. The lease was acquired from a subsidiary of Trinity Leisure and the consideration for the lease was settled by way of a reduction in the pre-existing loan receivable from Trinity Leisure. A new restaurant, Rapid River Spur, commenced trading (through a wholly-owned subsidiary of the group) at the site in April 2013.
4. In the prior year and with effect from 1 March 2012, the group acquired the Captain DoRegos fast food franchise and distribution centre businesses. The fair value of the identifiable net assets acquired (net of deferred tax) was R37.918 million on the effective date, resulting in a bargain purchase gain of R3.694 million included in profit in the prior year.
5. In the prior year and with effect from 25 January 2012, the group acquired the 35% interest in John Dory’s Franchise (Pty) Ltd held by the non-controlling shareholder of that company resulting in the group owning 100% of the subsidiary.
6. In the prior year and with effect from 30 June 2012, the group acquired the 10% interest in Larkspur One Ltd (which trades Cheyenne Spur, in the O2 Dome in London, England) held by the non-controlling shareholder of that company resulting in the group owning 100% of the subsidiary. Ownership of the shares was assumed after the non-controlling shareholder absconded and defaulted on a loan advanced by the group for which the shares served as collateral. The transaction resulted in a fair value gain on the realisation of collateral of R0.843 million recognised in profit in the prior year.
7. With reference to the contingent liability referred to in note 41 on page 140 of the annual integrated report for the year ended 30 June 2012, the South African Revenue Service has issued the group with assessments in respect of income relating to controlled foreign companies of the group in the amount of R2.842 million (comprising income tax of
R2.273 million and interest of R0.569 million) for the 2009, 2010 and 2011 years of assessment. Management has objected to the assessments and is confident that it is able to defend the assessments. Following the objection process, should any amount of tax be payable, it is expected that the tax liability will be substantially less than that assessed. Consequently, a liability has not been raised in respect of the assessments issued.