New Clicks Holdings Limited   Reviewed Group Results  
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Accounting policies and restatement of comparatives
These financial statements have been prepared in accordance with South African Statements of Generally Accepted Accounting Practice, and the accounting policies used are consistent with those applicable for the 2002 annual financial statements, other than the changes reflected in the notes below.

1. Loan to Purchase Milton & Associates (PM&A)
PM&A, the pharmacy chain that the group is in the process of acquiring, has an estimated shareholders’ deficit of R176.1 million as at 31 August 2003. The net loan to PM&A from the group amounted to R295 million at the end of August 2003, after the impairment disclosed at August 2002 and the interest provision explained in note 2 below. After trading at a loss of R8 million in the six months to February 2003, PM&A recorded a trading profit of R8 million in the second half of the year to break even for the year, before the interest charge from the group. The directors are of the opinion that no further impairment of the loan is required on the basis of a value in use calculation.

2. Net interest
As PM&A traded at a break even level for the year, the directors have decided to provide in full for the interest accrued on the loan to PM&A. The comparatives for the year to August 2002 have been restated to achieve consistency, with part of the R78 million impairment being allocated as a provision against interest accrued, and the balance remaining as an impairment. The effect of this on headline earnings is included in note 3 below.

3. Accounting circular on headline earnings
In line with the new definition of headline earnings, any impairment in respect of the loan to PM&A must be taken into account in headline earnings. The comparative figures for the year to August 2002 have been restated in line with this. The effect of this change for the year to August 2002 is to reduce headline earnings by R54.6 million and to reduce diluted headline earnings per share by 17.2 cents.

4. AC133 – Financial instruments: recognition and measurement
The group has adopted this statement with effect from 1 September 2002. There has been no need to adjust opening reserves, and there is no significant impact on profit in the current year.

These results have been reviewed by KPMG Inc. Chartered Accountants (SA), the auditors of New Clicks Holdings Limited, and their unqualified review opinion is available for inspection at New Clicks Holdings’ registered office.

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