The directors have pleasure in presenting their report together with the financial statements of the company and of the group for the year ended 31 August 2008.

Nature of business

The company is an investment holding company listed in the Consumer Services: General Retailers sector of the JSE Limited. Its subsidiaries as a group comprise the country's leading provider of health, beauty and lifestyle merchandise through a network of over 500 stores in southern Africa. The company's subsidiaries cover the pharmaceutical supply chain from wholesale distribution to retail pharmacy.

Group financial results

The results of operations for the year are set out in the consolidated income statement here. The profit attributable to ordinary shareholders for the year is R442 million (2007: R381 million).

Share capital

The following ordinary shares of 1 cent each, held as treasury shares by a subsidiary of the company, were bought back by the company and cancelled.

10 000 000		cancelled on 13 February 2008
1 818 017		cancelled on 12 August 2008
11 818 017

During the year under review the company continued with its share buy-back programme as set out below.

17 033 064		held by a subsidiary of the company as treasury shares at 1 September 2007
32 087 282		general repurchases between between 8 November 2007 and 29 August 2008 by a subsidiary of the company
(6 296 282)		shares utilised pursuant to the company’s obligations to deliver ordinary shares to Share Trust participants in respect of share options granted
(10 000 000)		shares bought back into the company and cancelled on 13 February 2008
(1 818 017)		shares bought back into the company and cancelled on 12 August 2008
(3 400 000)		shares sold to the Share Trust on 12 August 2008
27 606 047		held by a subsidiary of the company as treasury shares at 31 August 2008

Distributions to shareholders

Interim

The directors approved a distribution of 18.8 cents per share comprising an interim cash dividend of 3.7 cents per share and a capital reduction distribution out of share premium of 15.1 cents per share in lieu of a dividend (collectively “the distribution”). The distribution was paid on 23 June 2008 to shareholders registered on 20 June 2008.

Final

The directors have approved a distribution of 42.3 cents per share comprising a final cash dividend of 3.7 cents per share and a capital reduction distribution out of share premium of 38.6 cents per share in lieu of a dividend, payable on 15 December 2008 to shareholders registered on 12 December 2008.

Events subsequent to balance sheet date

No significant events, other than the declaration of the final distribution, as set out above, took place between the end of the financial year under review and the date of this report.

Directors and secretary

The names of the directors in office at the date of this report are set out here, and the company secretary’s details are given on the inside back cover.

Appointments

On 1 March 2008 Professor Fatima Abrahams and Fatima Jakoet were appointed as independent non-executive directors and Bertina Engelbrecht was appointed as an executive director. John Bester was appointed as an independent non-executive director on 1 October 2008.

Resignations

Lucia Swartz retired as a non-executive director at the annual general meeting held on 29 January 2008. Roy Smither resigned as a non-executive director on 31 January 2008. Rob Lumb will be resigning from the board effective from 30 November 2008.

Retirement and re-election of directors

In accordance with the company’s articles of association Messrs M Rosen, DA Kneale, MJ Harvey and JA Bester, Professor F Abrahams and Mesdames B Engelbrecht and F Jakoet retire by rotation at the forthcoming annual general meeting. The retiring directors, being eligible, offer themselves for re-election.

Directors’ interest in shares

Details of the directors’ beneficial interests in the company’s issued share capital are given here.

Details of the share options granted to directors are given here.

Share incentive schemes

Information relating to the share incentive scheme is set out here.

Special resolutions

No special resolutions of a material nature have been passed by the company or its subsidiaries since the last annual general meeting of the company.

Holding company

The company has no holding company.

Subsidiary companies

The names of the company’s main subsidiaries and financial information relating thereto appear here.

The interest of the company in the aggregate income after taxation before goodwill amortisation and impairment of its subsidiaries is R443 million (2007: R237 million).