SHOPRITE GROUP P.L.C. Annual Report and Accounts...

SHOPRITE GROUP P.L.C.

Annual Report and Accounts 2010

Contents

Chairman's statement 3 - 5

Directors and advisers 6

Directors' report 7- 8

Group profit and loss account 9

Group balance sheet 10

Company balance sheet 11

Group cash flow statement 12

Group statement of total recognised gains and losses andGroup reconciliation of movements in equity and shareholders' funds 13

Accounting policies 14 - 15

Notes to the accounts 16 - 28

Report of the independent auditors 29 - 30

Statement of directors' responsibilities 31

Summary of past four years (unaudited) 32

Chairman's Statement

I am very pleased to report that the Group results for the year ended 1 January 2011 produced a profit on

ordinary activities of £528,000 against a loss of £54,000 for the previous accounting period. This

improvement has been gained by enhancing our offer to customers, by controlling costs, and by investing in

our business.

Grocery Retailing

Turnover for 2010 showed an increase of 3.4% compared with the previous accounting period.

Your Board continue to focus on ensuring that our offer across all the communities in the Island meets the

needs of local shoppers. Whilst we are pleased with the improvement in turnover and profitability achieved

in 2010, we believe that the outlook for grocery retailing on the Island remains extremely challenging.

We continue to enhance our offer and in the coming year we anticipate further operational efficiencies in our

supply chain and store operational productivity, in part brought about by continuing heavy investment in our

IT systems. We also continue to enjoy strong support from all of our suppliers, and shareholders will note

that we have started featuring our local partners in much of our advertising. We are proud to be partners

with over 160 Island based suppliers and to support their businesses.

Additionally, our strategic partnerships with Waitrose, Iceland, Cook, Peacocks, Wilkinsons, and Subway

continue to allow us to enhance and extend our range and ensure that we cater for all tastes on the island.

All of these arrangements are exclusive to Shoprite in the Isle of Man.

We have commenced work in Port Erin on re-fitting the store and anticipate that the "new look" store will be

trading during July. The new format for Shoprite will have "serviced" counters catering for artisan bread,

delicatessen, fish and meat, in addition to an enhanced range of Waitrose products. The initial trading

results from Phase 1 of the re-development of Port Erin are extremely encouraging.

In my last statement, I indicated that work was due to start on the Peel extension in the autumn.

Unfortunately due to a combination of factors, work has been delayed on this extension but we hope to be

able to break ground this summer. This store will follow the same format as our Port Erin store, and we

hope our customers in Peel and the west of the Island are as excited about this development as we are.

Motor Retailing

The economy at large continues to suffer and whilst turnover has increased at Mercedes Benz of Mann,

contribution to the Group has reduced. However, we continue to believe that Mercedes Benz of Mann forms

an integral part of the Group.

Chairman's Statement (continued)

Property

Village Walk and Summerhill Village continue to maintain satisfactory occupancy and rent levels, both

providing valuable income to the Group.

Corporate Strategy and Outlook

Change of name

The directors propose changing the name of the Group to Isle of Man Enterprises PLC, so as to more fully

reflect the Group's diverse interests. We have consent for this change from the Isle of Man Companies

Registry and will put forward a resolution to shareholders at the forthcoming General Meeting to effect the

change.

Proposed Delisting & Share Buy Back

In addition to the above resolution, a resolution to delist the shares of the Company from PLUS will be

tabled at the forthcoming AGM.

As shareholders will be aware, general investor interest in smaller listed companies has declined

considerably in recent years, and it is apparent to the Board that accessing the capital market, for example,

in order to raise funding for expansion, would be unlikely to be successful. Further enhancement of our

stores will require considerable capital expenditure going forward. In addition, the Board are concerned with

regard to the ongoing compliance costs associated with the maintenance of a public listing.

Over the past several years, the Board have attempted to create an opportunity for shareholders to dispose

of their shareholding by offering to buy back their shares at current market value. A significant number of

shareholders have taken advantage of this offering. Accordingly, at the same time as the shares of the

Company are delisted from PLUS, we would anticipate making a further and final offer to buyback the shares

of those shareholders who would not wish to continue to maintain their investment in an unlisted company.

The price per share will be calculated in accordance with the formula applied under previous share buyback

offers. Shareholders may expect to receive further details regarding this opportunity within a month from

the date of the AGM.

At previous AGM's shareholders have granted authority for the Company to buy back up to 20% of the

issued share capital. Pursuant to the further and final buy back offer referred to above, at the forthcoming

AGM resolutions will be proposed to authorise the buy back of up to 30% of the issued share capital. This

increased authority will enable the Company to offer an exit to minority shareholders.

Chairman's Statement (continued)

Outlook

The global economic outlook remains extremely uncertain, notwithstanding the extensive Government

intervention which has taken place in the world's developed economies. The Isle of Man is not immune from

global economic trends, and it is apparent that overall economic activity in the Isle of Han has slowed

considerably by comparison to the past several years. These trends, together with competitive market

pressures, continue to impact on the Group's trading margins and performance.

I would like to take this opportunity to thank all of my colleagues within the Group for their continued hard

work and support.

Deryck Nicholson

Chairman

31 May 2011

Directors and advisers

Directors

Secretary

Registered Office

Registrar

Executive ChairmanDeputy Chairman (Non-executive)

Director (Non-executive)

D K B NicholsonG F Karran MBEI A R NicholsonN A Gushing ACMA(resigned 16 March 2010)A E Thomas BSc. FCA(appointed 10 March 2010)C B HoustonJ Corlett FCIB(resigned 15 July 2010)K P A Nicholson(appointed 25 February 2011)

D S McAdam FCCA

Centre House, Little Switzerland, Douglas, Isle of Man, IM2 4RE.

Computershare Investor Services (Ireland) LimitedHeron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, Ireland

Auditors KPMG Audit LLCHeritage Court, 41 Athol Street, Douglas, Isle of Man, IM99 1HN

Advocates Long & HumphreyThe Old Courthouse, Athol Street, Douglas, Isle of Man, IM1 1LD

Bankers Lloyds TSB Offshore LimitedVictory House, Prospect Hill, Douglas, Isle of Man, IM99 1AH

Isle of Man Bank LimitedRoyal Bank House, 2 Victoria Street, Douglas, Isle of Man, IM99 1NJ

Alliance & Leicester Commercial Bank picBootle, Merseyside G1R OAA

Stockbrokers Shore Capital & Corporate LimitedThe Atlantic Suite, Ground Floor, The Corn Exchange, Fenwick StreetLiverpool L2 7RB

Directors' report

Principal activities and business reviewThe Group is principally engaged in retailing and property investment in the Isle of Man. A review of theGroup's performance during the period is included in the Chairman's statement on pages 3 to 4.

Results and dividendsThe results of the Group for the 52 weeks ended 1 January 2011 are set out on page 8. Comparatives arefor the 52 week period ended 2 January 2010. The profit on ordinary activities before exceptional items andtaxation was £528,000 (2009 loss: £54,000). The directors do not propose a dividend (2009: £nil). Theretained profit for the period of £528,000 (2009 loss: £3,634,000) has been transferred to reserves.

Share capital and ultimate holding CompanyAt 01 June 2011 notification of holdings of 3% or more of the issued share capital of the Company hadbeen received from:

Shareholder

Nicholson Investments Limited (note 1)South Quay Estates Limited

Number ofOrdinary Shares

38,657,4406,631,890

Percentage ofthe issued share

capital of theCompany

57.48 %9.86 %

Directors' interestsThe Directors and their beneficial interests in the share capital of the Company, were as follows:

G F KarranD K B Nicholson (note 1)I A R Nicholson (note 1)KPA NicholsonAE ThomasNicholson Investments Limited (note 1)Beedon Limited (note 1)Investment & Overseas Management Limited (note 1)

1 January 2011 and2 January 2010

Number ofOrdinary Shares

434,995275,695275,695153,351135,000

38,657,4401,872,7951,652,465

Percentage ofthe issued share

capital of theCompany

0.65 %0.41 %0.41 %0.23 %0.20 %57.48%2.78 %2.46 %

NotelD K B Nicholson, I A R Nicholson and K P A Nicholson are beneficially interested in the share capital ofNicholson Investments Limited and Investment and Overseas Management Limited. In addition D K BNicholson and I A R Nicholson are beneficially interested in the share capital of Beedon Limited. Investment& Overseas Management Limited is a wholly owned subsidiary of Nicholson Investments Limited.

Directors' report (continued)

DirectorsIn accordance with the Articles of Association G F Karran retires, and being eligible offers himself for re-election.

Non-executive directorsG F Karran MBE, is an advocate and has been associated with the Company since 1974 and was appointed aDirector in 1976.

Fixed assets, investment properties and other investmentsThe movement in fixed assets, investment properties and other investments during the period is set out innotes 7 to 11 to the accounts.

The Directors are of the opinion that the market value of freehold land and buildings is at least equal to theamounts shown in these accounts.

AuditorsOur Auditors, KPMG Audit LLC, being eligible, have expressed their willingness to continue in office inaccordance with section 12(2) of the Isle of Man Companies Act 1982.

InsuranceThe Company maintains Directors' and Officers' liability insurance, providing insurance cover for Directorsand other officers of Group companies.

Special business to be proposed at the Annual General Meeting:

Resolution 7: Approval to Company to change the name of the CompanyYour directors consider it would be appropriate that the company's current name of Shoprite Group P.L.C.should revert to Isle of Man Enterprises P.L.C. to more fully reflect the Group's diverse interests.

Resolution 8: Approval to Company to apply to de-list from the PLUS stock exchangeDue to the lack of dealings in the Company's shares and the ongoing costs of such, the directors consider itappropriate to apply for de-listing from the PLUS market.

Resolution 9: Approval to Company to alter ArticleThis approval is sought to enable the Company to buy back up to thirty percent of the issued share capital.

Resolution 10: Approval to Company to make off-market purchases of its own shares.This approval is being sought to ensure continuity of that granted at the Company's Annual General Meetingin July 2010.

Resolution 11: Approval to Company to make market purchases of its own shares.This approval is being sought to ensure continuity of that granted at the Company's Annual General Meetingin July 2010.

By order of the BoardD S McAdamSecretary

31 May 2011

Group profit and loss account

Note

52 weeks ended1 January 2011

£000

Profit/(loss) on ordinary activities afterexceptional items and taxation 17 528


£000

Turnover including concession salesConcession salesTurnover excluding concession sales 1

Operating profit 1,2

Net interest payable 3

Profit/floss) on ordinary activities beforeexceptional items and taxation

Exceptional items 4

Profit /(loss) on ordinary activities afterexceptional items but before taxation 20

Taxation 5

72,470(9,857)62,613

794

(266)

528

-

528

-

70,520(9,963)60,557

251

(305)

(54)

(3,580)

(3,634)

-

(3.634)

Profit/(loss) per share (basic and fully diluted) 0.777p (5.241)p

There is no difference between the profit/loss on ordinary activities before taxation and the profit/lossfor the periods stated above, and their historical cost equivalents.

In the Directors' opinion the consolidated results derive from continuing operations.

The accounting policies and notes on pages 14 to 28 form part of these accounts.

Group balance sheet

Fixed AssetsIntangible fixed assetsTangible fixed assetsInvestment propertiesInvestment land held for developmentOther investments

Current AssetsStockDebtors and other receivablesCash at bank and in hand

Creditors: amounts falling due withinone year

1 January 2011Note £000 £000

7 28 18,8149 8,54510 2,13011 2

29,493

12 4,25413 1,642

5496,445

14 (10,906)

2 January 2010£000 £000

219,3388,3952,130

229,867

4,2522,103

7367,091

(10,540)

Net current liabilities

Total assets less current liabilities

Creditors: amounts falling due aftermore than one year 15

Net Assets

Capital and reservesShare Capital 16Reserves 17

Equity shareholders' funds

(4,461)

25,032

(9,767)

15,265

3,36411,901

15,265

(3,449)

26,418

(11,824)

14,594

3,36811,226

14,594


The accounts were approved by the Board of Directors on 31 May 2011 and signed on their behalf by:

D K B Nicholson

C B Houston

>} Directors}

10

Company balance sheet

Fixed AssetsTangible fixed assetsInvestment propertiesInvestment land held for developmentOther investments

Current AssetsDebtors and other receivablesCash at bank and in hand

Creditors: amounts falling due withinone year

Net current assets


Creditors: amounts falling due aftermore than one year

Note

14

15

1 January 2011£000 £000

891011

13

7102,7302,130

26

9,115

9,115

(3,056)

5,596

6,059

11,655

(6,450)

2 January 2010£000 £000

7282,6302,130

265,514

10,1423

10,145

(2,842)

7,303

12,817

(7,685)

Net Assets 5,205 5,132

Capital and reservesShare CapitalReserves

1617

3,3641,841

3,3681,764

Equity shareholders' funds 5,205 5,132


The accounts were approved by the Board of Directors on 31 May 2011 and signed on their behalf by:

D K B Nicholson

C B Houston

}} Directors}

I I

Group cash flow statement

Cash inflow from operating activities

Returns on investments and servicing offinance


Note £000

22 2,065

23 (241)


£000

1,921

(470)

Taxation

Capital expenditure and financial investment 23

Financing 23

(458)

(1,553)

(142)

(828)

(Decrease)/Increase in cash in period (187) 481

Reconciliation of net cash flow to movement in net debt (note 24)


(Decrease)/increase in cash in periodCash inflow from net decrease in debt and HP and leasefinancing

Change in net debt resulting from cash flows

Other non cash changes

£000

(187)

1,546

£000

1,359


The accounting policies and notes on page 14 to 28 form part of these accounts.

£000

481

828

£000

1,309

Net inception of HP and finance leasesBank stocking loan

Movement in net debt in the period

Net debt brought forward

Net debt carried forward

(281)(159)

919

(11,656)

(10,737)

(125)

1,184

(12,840)

(11,656)

12

Group statement of totalrecognised gains and losses

Unrealised gain on revaluation of investmentproperties and investment land held for development

Profit/floss) for the period


£000

150

528


£000

(3,634)

Total recognised profit/(loss) for the period 678 (3,634)

Group reconciliation of movementsin equity shareholders1 funds



Profit/floss) for the period after taxation

Other recognised gains

Purchase of own shares

Net increase/freduction) to equity shareholders' funds

Opening equity shareholders' funds

Closing equity shareholders' funds

£000

528

150

(7)

671

14,594

15,265

£000

(3,634)

-

(142)

(3,776)

18,370

14,594


13

Accounting policies

Basis of preparationThe accounts have been prepared under the historical cost convention, as modified by the revaluation ofcertain tangible fixed assets, and in accordance with the Isle of Man Companies Acts 1931 to 2004.

The accounts have been prepared for the 52 weeks ended 1 January 2011. Comparative amounts are for the52 weeks ended 2 January 2010,

The accounts have been drawn up to comply with applicable Accounting Standards generally accepted in theUnited Kingdom.

Principles of consolidationThe Group financial statements include the accounts of the Company and its subsidiaries, of which the principalsubsidiaries are listed in note 11. Inter-company transactions are eliminated on consolidation.

In the Company's balance sheet, investments in subsidiaries are stated at the lower of cost and recoverableamount.

Marketing supportReceivables relating to marketing support are included in revenue over the related period of marketing support.

TurnoverTurnover comprises the value of sales excluding VAT and intra-Group transactions. Turnover is accounted fornet of ClubMANN discount, staff discount and money-off vouchers.

Intangible fixed assetsFranchise fees are included in intangible fixed assets and are amortised on a straight line basis over the shorterof 10 years or the term of the lease of the property in which the franchise operates.

Tangible fixed assetsTangible fixed assets are stated at cost or valuation less accumulated depreciation.

Assets used by the Group which have been funded through hire purchase and finance lease agreements arecapitalised and the resulting obligations are included in creditors, net of finance charges. Interest costs inrespect of hire purchase and finance lease agreements and all payments in respect of operating leases arecharged directly to the profit and loss account.

The cost of freehold land and buildings includes interest capitalised on specific borrowings to finance propertyconstruction from the date of acquisition until the properties are brought into use.

Depreciation of tangible fixed assetsFreehold land is not depreciated.

Depreciation of tangible fixed assets is provided where it is necessary to reflect a reduction from book value toestimated residual value over the useful life of the asset.

Depreciation has been calculated on a straight-line basis to write off the net cost over the estimated useful livesof the assets on the following bases:

Freehold buildings 50 yearsLeasehold property term of leaseFixed plant 10 - 20 yearsPlant furniture and equipment 3 - 15 yearsMotor vehicles 4 - 10 years

14

Accounting policies (continued)

Investment propertiesInvestment properties are revalued annually. If any resulting deficit on a property is considered to bepermanent that deficit is charged to the profit and loss account in the period the deficit arises; otherwise theresulting surplus or deficit is transferred to a revaluation reserve. No depreciation is provided.

Investment land held for developmentInvestment land held for development is revalued annually. If any resulting deficit is considered to bepermanent, that deficit is charged to the profit and loss account in the period the deficit arises; otherwise theresulting surplus or deficit is transferred to a revaluation reserve. No depreciation is provided.

StockRetail stocks which include motor trade consignment stocks, are valued at the lower of cost and net realisablevalue. The valuation of stock held in warehouses and in retail outlets is based on net invoice cost.

Deferred taxationDeferred tax is recognised in respect of all timing differences between the treatment of certain items fortaxation and accounting purposes which have arisen but not reversed by the balance sheet date, except asotherwise required by FRS 19.

Pension costsThe pension cost charge for defined contribution pension schemes represents contributions payable by theGroup to independently administered funds.

Provision for onerous lease contractsA provision for onerous lease contracts is recognised when the expected benefits to be derived by the Groupfrom a contract are lower than the unavoidable cost of continuing with the contract. The provision ismeasured at the present value of the lower of the expected costs of terminating the contract and theexpected net cost of continuing with the contract.

Exceptional itemsExceptional items are items classified by the Group as exceptional in nature. These are not regarded asforming part of the trading activities of the Group and so merit separate presentation to allow stakeholdersto understand the elements of and assess the trends in financial performance.

Pricing Policy re: purchase of own sharesThe Group follow the procedures laid down in the Companies' Act and the Stock Exchange Rules. These arecontained within the Special Resolution contained in the Notice of the Meeting, as follows;

The minimum price which may be paid for the Ordinary shares is their par value from time to time and themaximum price which may be paid for the Ordinary shares is 10 per cent above the middle market quotationavailable on any recognised stock exchange that the shares are traded on the close of the business day prior tothe offer being made.

15

Notes to the Accounts

Segmental information

Profit/(loss) onordinary activities

Turnover before taxation2010 2009 2010 2009£000 £000 £000 £000

Retailing 61,739 59,609 3,843 3,025Property 874 948 353 351Central Costs - - (3,402) (3,125)

62,613 60,557 794 251

Net interest payable (266) (305)Net interest bearing liabilities

528 (54)

No geographic analysis is required as all business is carried out in the Isle of

Operating profit

Operating profit is stated

After crediting:

Rents receivable

After charging:

Rents payable

Operating lease payments relating to plant and machinery

Depreciation - owned assets

- leased assets

Directors' fees

(Profit) on sale of fixed assets

Pension costs

Auditors' remuneration - Group

Net2010£000

11,13714,865

26,002

(10,737)

15,265

Man.

2010£000

794

696

52

1,057

215

30

(6)

299

50

Assets2009£000

11,37214,877

26,249

(11,655)

14,594

2009£000

799

668

75

1,125

293

30

(3)

268

50

(of which Company £10,000 (2009: £10,000))

Auditors' fees for other services

16

Notes to the Accounts (continued)

3. Net interest payable

2010 2009£000 £000

Hire purchase and finance lease charges (23) (37)

Bank interest payable (243) (268)

(266) (305)

4. Exceptional items

In 2009 the Group recognised a provision for onerous lease contracts of £3,480,642 in accordancewith Financial Reporting Standard 12, "Provisions, contingent liabilities and contingent assets". This,in the opinion of the Board, represented the best estimate of the amount by which the total costsrelating to certain leasehold properties would exceed the revenue / contribution generated by thesame leasehold properties.

In 2009 the Group recognised a provision for repairs and legal fees of of £100,000 in accordancewith Financial Reporting Standard 12, "Provisions, contingent liabilities and contingent assets".

5. Taxation

The income of the Group is subject to Manx income tax at 0%, with the exception of Manx sourcerental income which is subject to Manx tax at a rate of 10%. Due to the incidence of tradinglosses and the availability of group loss relief no provision for Manx income tax has been made inthe profit and loss account (2009: nil).

There was no provision for deferred tax at the start or end of the period.

6. Profit per share

Basic profit per share is stated under the net basis, calculated on profit on ordinary activities aftertaxation.

2010 2009

Profit/(loss) for the period £000 528 (3,634)

Weighted average number of shares in issue during the period 67,911,610 69,350,599

Profit/floss) per share ._._P=ZZZP (5.241}p

There is no difference between the basic and diluted loss per share.

7. Intangible fixed assets

The intangible fixed assets represent the franchise fee necessary for the operation of asubsidiary. The net book value of the franchise fee as at 1 January 2011 was £1,500 (2 January2010 : £2,000)

17


Tangible fixed assets

GroupCost or valuationOpening balanceAdditionsDisposal

Closing balance

DepreciationOpening balanceCharge for the periodDisposal

Closing balance

Freehold Leasehold Plant,land and Property furniturebuildings and

equipment£000 £000 £000

17,408 4,338 13,45655 - 580

-

17,463 4,338 14,036

2,437 2,384 11,234281 489 427

2,718 2,873 11,661

MotorVehicles

£000

724144

. (103)

765

53375

(72)

536

Total

£000

35,926779

(103)

36,602

16,5881,272

(72)

17,788

Net book valueAt 1 January 2011

At 2 January 2010

Company

Cost or valuation

Opening balance

Additions

Closing balance

DepreciationOpening balanceCharge for the period

Closing balance

14,745 1,465 2,375

14,971 1^954 2,222

Freeholdland andbuildings

£000

883

-

883

17718

195

229

191

Plant,furniture

andequipment

£000

600

3

603

5783

581

18,814

19,338

Total

£000

1,483

3

1,486

75521

776

Net book value

At 1 January 2011

At 2 January 2010

688

706

22

22

710

728

18


Tangible fixed assets (continued)

Group tangible fixed assets include assets held under hire purchase and finance lease agreementsas follows:

Plant,furniture and Motor

equipment vehicles Total

£000 £000 £000

Net book value

At 1 January 2011 1,136 126 1,262

At 2 January 2010 ._ 892 .15 937

(a) Freehold land and buildings were revalued as at 30 April 1989 by Chesterton, CharteredSurveyors, on an open market existing use basis.

(b) Freehold land and buildings of the Group with a book value of £13,838,000 have beenpledged as security for the bank borrowings of the Group (note 15 (c)).

9. Investment propertiesGroup Company£000 £000

Valuation as at 2 January 2010 8,395 2,630Revaluation 150 100Valuation at 1 January 2011 8,545 2,730

(a) Investment properties were valued on an open market existing use basis as at 1 January2011, in accordance with the RICS Statements of Asset Valuation Practice and GuidanceNotes, by B L Woods MA MRICS who is a Member of the Royal Institute of CharteredSurveyors, and Colliers International.

(b) Investment properties of the Group with a book value of £3,900,000 (2009:£3,900,000)have been pledged as security for the bank borrowings of the Group (note 15(c)).

19


10. Investment land held for development

Groupand

Company£000

Valuation at 1 January 2011 and at 2 January 2010 2,130

(a) Investment land held for development is valued annually on an open market existinguse basis in accordance with the RICS Statements of Asset Valuation Practice andGuidance Notes. The valuations were performed by B L Woods MA MRICS who is aMember of the Royal Institute of Chartered Surveyors. There was no change in thevaluation of the land as at the end of the period.

(b) Investment land held for development with a book value of £1,939,000 (2009: £1,939,000)has been pledged as security for the bank borrowings of the Group (note 15(c)).

11. Other investments

Group 2011 2010

£000 £000

Trade investments at cost 2 2

CompanySharesjn subsidiary companies at cost 26 26

Principal subsidiaries, all of which are wholly owned by the Company, are as follows:-

Subsidiary Principal activity Place of incorporationShoprite (Isle of Man) Limited Supermarket retailing Isle of ManMyWay Limited Supermarket retailing Isle of ManSummerhill Properties Limited Property investment Isle of ManVillage Walk Limited Property investment Isle of ManWhitestone Garage Limited Mercedes-Benz dealership Isle of Man

20

12.


StockGroup

2010 2009

£000 £000

Company

2010 2009

£000 £000

13.

14.

Retail stock

Retail stock includes motor trade consignmentConsignment stock held is matched by a relatea sale or twelve months and in the interveninglinked to base rate.

Debtors and other receivables

Trade debtors and prepayments

Amounts owed by subsidiaries

4,254 4,252

stock totalling £228,000 (2009:d liability. The liability is dischaiperiod the liability bears intere;

Group

2010

£000

1,642

-

1,642

2009

£000

2,103

-

2,103

Creditors: amounts falling due within one year

Group

Obligations under hire purchase and financelease agreements

Other creditors and accruals

Trade creditors

Onerous lease provision (note 4)

Bank overdraft

Bank loans (note 14(b) and (c))

Bank stocking loan (note (a))

Loan from related party (note 28)

2010

£000

127

1,337

5,330

848

1,008

1,458

298

500

10,906

2009

£000

98

1,489

5,145

743

1,434

1,460

171

-

10,540

- -

£217,000).•ged at the earlier ofit at a variable rate

Company

2010

£000

74

9,041

9,115

Company

2010

£000

819

18

-

1,008

1,211

-

-

3,056

2009

£000

92

10,050

10,142

2009

£000

296

2

-

1,351

1,193

-

-

2,842

(a) The bank stocking loan relates to a motor vehicle stocking facility of a subsidiary. This issecured on the motor vehicles within the stocking plan.

21


15. Creditors: amounts falling due after more than one year

Group

2010

£000

2009

£000

Company

2010 2009

£000 £000

Onerous lease provision (note 4)

Obligations under hire purchase and finance

1,872 2,595

lease agreements (note (a))

Bank loan (notes (b) and (c))

307

7,588

9,767

150

9,079

11,824

6,450

6,450

7,685

7,685

(a) Obligations under hire purchase and finance lease agreements are all repayable as shown below.

Group Company

2010 2009 2010 2009

£000 £000 £000 £000

Due within one to two years

Due within two to five years

107

200

307

75

75

150

Obligations under hire purchase and finance lease agreements are stated net of future financecharges of £58,000 (2009:£28,000).

(b) The bank loans and overdrafts carry variable interest rates and are repayable as follows:

Group Company

2010 2009 2010 2009

£000 £000 £000 £000

Due within one year

Due within one to two years

Due within two to five years

Due within five to ten years

2,466

1,487

4,619

1,482

10,054

2,894

1,456

4,529

3,094

11,973

2,219

1,235

3,832

1,383

8,669

2,544

1,208

3,758

2,719

10,229

(c) The bank loans are secured by charges over certain of the Group's freehold land and buildings,investment properties, and investment land held for development (notes 8, 9 and 10).

22

16.


Share capital

Authorised:

Ordinary shares of 5p each

2010 2009

Shares £ Shares £

5,000,000 100,000,000 5,000,000

Issued:Ordinary shares of 5p:

Fully paid

0.2p paid - Scheme shares

67,263,547 3,362,794

600,000 1,200

67,340,646 3,366,649

600,000 1,200

17.

67,863,547 3,363,994 67,940,646 3,367,849

The uncalled balance of 24.2p in respect of 350,000 0.2p paid shares and 25.8p in respect of250,000 0.2p paid shares is payable in circumstances specified in the Shoprite 1988 Executive ShareOption Scheme. Whilst they remain partly paid, the Scheme shares do not rank parri-passu with thefully paid ordinary shares, and do not attract voting or dividend rights.During the year the Company completed the purchase of 77,099 Ordinary shares of 5p each at9.00p per share.

ReservesCapital

sharepremium

£000

Group:

Redemption Capital Revaluation Revenue Totalreserve reserve reserve reserves reserves

£000 £000 £000 £000 £000

Opening balance 52

Re-allocation 1,248

Purchase ofshares

Profit retainedfor the period

Propertyrevaluation

Closingbalance 1,300

135 73 13,536 (2,570)

440 - - (1,688)

4 (7)

528

150

579 73 13,686 (3,737)

11,226

-

(3)

528

150

11,901

23


17. Reserves (continued)

Capitalshare Redemption Capital Revaluation Revenue Total

premium reserve reserve reserve reserves reserves£000 £000 £000 £000 £000 £000

Company;

18.

Opening balance 546 135

Re-Allocation 754 440

Purchase ofshares - 4

Loss retained forthe period

Propertyrevaluation

Closingbalance 1,300 579

3,383 (2,300)

(1,194)

(7)

(20)

100

3,483 (3,521)

1,764

-

(3)

(20)

100

1,841

The revaluation reserve of the Group includes a revaluation surplus of £2,745,000(2009:£2,745,000) in respect of investment property and £1,779,000 (2009: £1,779,000) in respectof investment land held for development.

Financial commitments

Group

2010 2009

£000 £000

Company

2010 2009

£000 £000

The Directors have authorised future capitalexpenditure for the Group as follows:

Contracted

Authorised but not contracted

112

Group Company

2010 2009 2010 2009

£000 £000 £000 £000

The annual commitment under non-cancellableoperating leases which relates to land andbuildings is as follows

Leases expiring within one year

Leases expiring between one and five years

Leases expiring after five years

86

358

244

688

119

325

244

688


19. Contingent liabilities

There is a contingent liability of £35,000 (2009: £35,000) in respect of performance bonds.

20. Parent company loss

The loss on ordinary activities after taxation dealt with in the accounts of the Company amounts to£20,000 (2009: loss £74,000).

21. Dividends on ordinary shares

No dividend was paid during the period or is proposed (2009: £Nil).

22. Reconciliation of operating profit to net cash inflow from operating activities2010 2009£000 £000

Operating profit

Depreciation and amortisation

Profit on sale of fixed assets

(Increase) / decrease in stock

Increase in operating debtors

Increase / (decrease) in operating creditors

Increase in banking stocking loanDecrease in onerous lease provision

Net cash inflow from operating activities

23. Analysis of cash flows for headings netted in the cash flow statement

Returns on investments and servicing of finance

Purchase of ordinary shares

Interest paid

Interest element of hire purchase and finance lease rental payments

Capital expenditure and financial investmentPayments for fixed assets

Receipts from sale of fixed assets

794

1,272

(6)

(2)

461

5

159

(618)

2,065

2010£000

-

(215)

(26)

(241)

2010£000

(495)

37

_(458)

251

1,417

(3)

666

1,193

(1,361)

-

(242)

1,921

2009£000

(142)

(280)

(48)

(470)

2009£000

(170)

28

(142)_

25


23. Analysis of cash flows for headings netted in the cash flow statement (continued)

Financing

Receipt of loan from related party

Bank overdraft

Capital element of hire purchase and finance lease rental payments

Repayment of bank loan

Purchase of ordinary shares

2010£000

500

(426)

(95)

(1,525)

(7)

(1,553)

2009£000

797

(112)

(1,513)

(828)

24. Analysis of net debt

Cash in hand and at bank

Bank overdrafts

Bank loans

HP and finance leases

Loan from related party

Total

At2 January

2010

£000

736

(1,434)

(10,710)

(248)

-

(11,656)

Cashflow

£000

(187)

426

1,525

95

(500)

1,359

Othernon-cashchanges

£000

-

-

(159)

(281)

-

(440)

At1 January

2011

£000

549

(1,008)

(9,344)

(434)

(500)

(10,737)

25. Financial instruments

The Group's financial instruments comprise borrowings, cash and liquid resources.The main purpose of these financial instruments is to raise finance for the Group's operations.Short term debtors and creditors are not included in these disclosures.

It is, and has been throughout the period under review, the Group's policy that no trading infinancial instruments shall be undertaken.

The main risks arising from the Group's financial instruments are interest rate risk, liquidity riskand credit risk. The Board reviews and agrees policies for managing each of these risks.

All of the Group's monetary assets and liabilities at the balance sheet date are in Sterling. Thereis therefore no currency risk.

26


25. Financial instruments (continued)

Interest rate risk

The Group finances its operations through a mixture of capital and reserves, bank borrowingsand hire purchase and finance lease agreements. At the period end all of the Group's bank borrowingswere at floating rates of interest based on the lending bank's base rate, and the hire purchase andfinance lease borrowings were at fixed interest rates.

During the period, the average rate for fixed interest borrowings was 6% (2009:9%)

Liquidity risk

As regards liquidity, the Group's policy has throughout the period has been that, to ensurecontinuity of funding, at least 50% of its borrowings should mature in more than five years. At theperiod end, 14% (2009: 26%) of the Group's borrowings were due to mature in more than fiveyears. The maturity profile of the Group's borrowings is shown in note 15(b).

Short term flexibility is achieved by overdraft facilities. The current facility is repayable after 90days notice and it is due for renewal on 1 July 2011. Taking into account other agreed loanfacilities the Group expects to operate within the overdraft facility currently agreed and within thatexpected to be agreed on 1 July 2011. These views are based on the Group's plans and on thesuccessful outcome of discussions with the Group's bankers.

Credit risk

Credit risk arises when the possibility exists of a counter-party defaulting on its obligations. Initialreviews of creditworthiness are undertaken and subsequent exposures are constantly reviewed bymanagement. The Group is exposed to credit risk to the extent of the carrying amounts of it'scash at bank and receivable balances.

Fair values

The fair value of financial assets and liabilities is equivalent to the balance sheet values with theexception of hire purchase and finance lease obligations which are at fixed interest rates. It is notpractical to estimate fair value for these liabilities with sufficient reliability

26. Pension Scheme

The Group no longer operates a defined contribution pension scheme, but makes contributionsinto Employee's personal pension plans. There are no unfunded liabilities in respect of pensions.The pension cost charged for the period was £299,000 (2009: £268,000). As at the period endcontributions totalling £27,000 were prepaid (2009: £7,000 accrued).

27. Parent company

The Company is a subsidiary of Nicholson Investments Limited which is incorporated in the Isle ofMan.

27


28. Related Party Transaction

On 9 April 2010 a company, in which DKB Nicholson and IAR Nicholson hold the beneficialinterest, advanced a loan of £500,000 to the Group. The loan is unsecured at a rate of 1.5%above the Bank of England base rate with interest payable on a quarterly basis. The loan doesnot have a fixed term, but will be repayable within 6 months' of notice being given by the lender.The Company is able to pay back the loan prior to notice being given without incurring an earlyredemption charge. There is no requirement to pay down the balance of the loan until such timeas the full balance is redeemed.

29. Post balance sheet events

On 25 February 2011 Mr K P A Nicholson was appointed a director of the Company.

On 8 February 2011 and 3 March 2011 the Company completed a buy-back of 5,000 and 320shares respectively.

28

Report of the Independent Auditors, KPMG Audit LLC, to themembers of Shoprite Group P.L.C.

We have audited the financial statements of Shoprite Group P.L.C. for the period ended 1 January 2011which comprise the Group Profit and Loss Account, the Group and Parent Company Balance Sheets, theGroup Statement of Cash Flows, the Group Statement of Total Recognised Gains and Losses and the GroupReconciliation of Movements in Equity Shareholders' Funds and the related notes. The financial reportingframework that has been applied in their preparation is applicable law and UK Accounting Standards.

This report is made solely to the Company's members, as a body, in accordance with Section 15 of theCompanies Act 1982. Our audit work has been undertaken so that we might state to the Company'smembers those matters we are required to state to them in an auditor's report and for no other purpose. Tothe fullest extent permitted by law, we do not accept or assume responsibility to anyone other than theCompany and the Company's members as a body, for our audit work, for this report, or for the opinions wehave formed.

Respective responsibilities of Directors and Auditor

As explained more fully in the Directors' Responsibilities Statement set out on page 29, the Directors areresponsible for the preparation of financial statements that give a true and fair view. Our responsibility is toaudit, and express an opinion on, the financial statements in accordance with applicable law andInternational Standards on Auditing (UK and Ireland). Those standards require us to comply with theAuditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficientto give reasonable assurance that the financial statements are free from material misstatement, whethercaused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate tothe Group's circumstances and have been consistently applied and adequately disclosed; the reasonablenessof significant accounting estimates made by the Directors; and the overall presentation of the financialstatements.

Opinion on the financial statements

In our opinion the financial statements:

• give a true and fair view of the state of the Group's and Parent Company's affairs as at 1 January 2011and of the Group's profit for the period then ended;

• have been properly prepared in accordance with UK Accounting Standards; and

• have been properly prepared in accordance with the provisions of Companies Acts 1931 to 2004.

29

Report of the Independent Auditors, KPMG Audit LLC, to themembers of Shoprite Group P.L.C. (continued)

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Acts 1931 to 2004require us to report to you if, in our opinion:

• proper books of account have not been kept by the Parent Company and proper returns adequate forour audit have not been received from branches not visited by us; or

• the Parent Company's balance sheet and profit and loss account are not in agreement with the books ofaccount and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

KPMG Audit LLCChartered AccountantsHeritage Court41 Athol StreetDouglasIsle of Man IM99 1HN

31 May 2011

30

Statement of Directors' Responsibilities in Respect of the Directors'Report and the Financial Statements

The Directors are responsible for preparing the Directors' Report and the financial statements in accordancewith applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year, which meet therequirements of Isle of Man company law. In addition, the Directors have elected to prepare the financialstatements in accordance with UK Accounting Standards.

The financial statements are required by law to give a true and fair view of the state of affairs of the Groupand Parent Company and of the profit or loss of the Company for that period.

In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether they have been prepared in accordance with UK Accounting Standards; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume thatthe Group and Parent Company will continue in business.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explainthe Parent Company's transactions and disclose with reasonable accuracy at any time the financial positionof the Parent Company and to enable them to ensure that its financial statements comply with theCompanies Acts 1931 to 2004. They have general responsibility for taking such steps as are reasonablyopen to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

3 1

Summary of past four years (Unaudited)

Turnover including concession sales

Concession sales

Turnover excluding concession sales

Analysed as follows

Retail sales

Rents

Operating profit

Profit/(loss) before tax

Fixed assets

Other investments

Net current liabilities


Creditors: amounts falling due aftermore than one year

Net assets

Capital and reserves

Share capital

Reserves

2010£000

72,470

(9,857)

62,613

61,739

874

62,613

794

528

29,341

2

(4,461)

24,882

(9,767)

15,115

3,364

11,751

2009£000

70,520

(9,963)

60,557

59,609

948

60,557

251

_ _ . _ _C54)_

29,865

2

(3,449)

26,418

(11,824)

14,594

3,368

11,226

2008£000

71,464

(9,834)

61,630

60,625

1,005

61,630

294

(592)

31,013

2

(2,006)

29,009

(10,639)

18,370

3,447

14,923

2007£000

70,327

(9,882)

60,445

59,593

852

60,445

432

(481)

31,472

2

(1,579)

29,895

(10,698)

19,197

3,575

15,622

Equity shareholders' funds 15,115 14,594 18,370 19,197

32

NOTICE OF MEETING

NOTICE IS HEREBY GIVEN that the sixty fifth Annual General Meeting of the Company will be held at theTraining Room, First Floor, Shoprite Store, Little Switzerland, Douglas, Isle of Man on Friday 1 July 2011 at9.00am for the following purposes:-

1. To receive and consider the Directors' Report and Accounts for the 52 weeks ended 1 January 2011.

2. To declare that no final dividend should be paid.

3. To re-elect G Karran as a director.

4. To elect A E Thomas as a director.

5. To re-appoint auditors and authorise the directors to determine their remuneration.

6. To transact any other Ordinary business.

To transact the following Special business:

7. To consider, and if thought fit, pass the following Special Resolution:-That the name of the Company be changed to Isle of Man Enterprises Pic

8. To consider, and if thought fit, pass the following Special Resolution:-That the directors be and are hereby authorised to apply for the Company's issued Ordinary shares of 5peach to be de-listed from the PLUS Stock Exchange.

9. To consider, and if thought fit, pass the following Special Resolution:-That Article 53(a) be altered in that the words "up to a maximum of twenty percent" be replaced withthe words "up to a maximum of thirty percent".

10. To consider and if thought fit, pass the following Special Resolution:-That the Company generally be is hereby authorised for the purposes of section 11(4) of the Isle of ManCompanies Act 1992 to make off-market purchases (as defined in section 11(2) of the said Act) ofOrdinary shares of 5p each in the capital of the Company ("Ordinary shares") provided that:-

(i) the maximum number of Ordinary shares hereby authorised to be purchased is 20,177,468 being30 per cent of the Company's issued share capital;

(ii) the minimum price which may be paid for the Ordinary shares is their par value from time to timeand the maximum price which may be paid for the Ordinary shares is 10 per cent above themiddle market quotation available on any recognised stock exchange that the shares are tradedon the close of the business day prior to the offer being made;

(iii) the authority hereby conferred shall (unless previously renewed or revoked) expire on the datewhich is eighteen months after the date on which the resolution is passed; and

(iv) the Company may make a contract to purchase its own shares under the authority herebyconferred prior to the expiry of such authority which will or may be executed wholly or partly afterthe expiry of such authority and may make a purchase of its own shares in pursuance of any suchcontract.

11. To consider and if thought fit, pass the following Ordinary Resolution:-That the Company generally be and is hereby authorised for the purposes of section 13(3) of the Isle ofMan Companies Act 1992 to make market purchases (as defined in section 13(2) of the said Act) on anyapplicable recognised stock exchange of Ordinary shares of 5p each in the capital of the Company("Ordinary shares") provided that:-

(i) the maximum number of Ordinary shares hereby authorised to be purchased is 20,177,468 being30 per cent of the Company's issued share capital;

33

NOTICE OF MEETING (continued)

(ii) the minimum price which may be paid for the Ordinary shares is their par value from time to timeand the maximum price which may be paid for the Ordinary shares is the market price providedthat the market price is within 10 per cent above the middle market quotation available on thatexchange at the close of the business day prior to the purchase;

(Hi) the authority hereby conferred shall (unless previously renewed or revoked) expire on the datewhich is eighteen months after the date on which the resolution is passed; and

(iv) the Company may make a contract to purchase its own shares under the authority herebyconferred prior to the expiry of such authority which will or may be executed wholly or partly afterthe expiry of such authority and may make a purchase of its own shares in pursuance of any suchcontract.

By Order of the BoardDS Me AdamSecretary

31 May 2011

NOTES

1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attendand, on a poll, to vote in his stead. A proxy need not be a member of the company. A form of Proxy isenclosed and must be returned not later than 48 hours before the commencement of the meeting.

2. The register of directors' interests will be available for inspection during normal business hours at theregistered office from this date until the date of the Annual General Meeting and at the Meeting from 15minutes prior to and until the termination of the Meeting.

3. Members attending should have proof of identity or any person attending on behalf of a corporate entityshould be in possession of a legal authority to operate as a proxy on behalf of that entity.

34

SHOPRITE GROUP P.L.C. Annual Report and Accounts...

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