ONLINE ANNUAL REPORT 2010

BROAD-BASED BLACK ECONOMIC EMPOWERMENT

COMMENTARY

Massmart’s objective has been to achieve a Broad-based Black Economic Empowerment (B-BBEE) score of 65%, equivalent to Level 4 B-BBEE contributor status, by June 2011. We are pleased that we surpassed this to achieve an Empowerdex-verified score of 66.1% in February 2010, 21 months earlier than anticipated.

This led Massmart to be ranked the second most empowered listed retailer in the 2010 FM Top Empowerment Companies Survey, 3.5% lower than the most empowered retailer, which achieved a score of 69.6%. From a transformation perspective, Massmart achieved the highest Employment Equity score in the retail industry and the sixth highest score of the 100 listed companies who participated in the survey.

The improvement in our scorecard performance is mainly the result of increased investment in skills development, improved black representation in management and professional positions and greater emphasis on gathering the preferential procurement credentials of our suppliers.

Meanwhile, our Thuthukani Staff Empowerment Trust continues to disburse financial benefits to staff participants, who have collectively received R114.2 million in dividend payments from inception of the trust to 30 June 2010. Capital growth of the shares in the trust had increased from R49.98 per share to R119.72 (by 30 June 2010), representing total growth of R69.74 per share.

Thuthukani participants reach an important milestone on 1 October 2010 when they will be able to vest the first 33.3% of the units that they have been allocated in the trust. We are currently implementing a further awareness programme to advise Thuthukani participants on the vesting process and the alternatives available to them.

Going forward our objective is to maintain Level 4 B-BBEE contributor status.

Insight

1.   The B-BBEE scorecard, although issued in February 2010, is based on performance for the period July 2008 to June 2009 and is active for the period March 2010 to February 2011.
2.   Level 4 B-BBEE contributor status requires a scorecard score that is >65% but <75%.
3.   FM Top Empowerment Companies Survey refers to an annual survey of the B-BBEE performance of the top 100 listed companies that is compiled by Empowerdex and published in the FM (Financial Mail) magazine.

For additional reading refer to http://www.massmart.co.za/additionalreading

  • Massmart B-BBEE philosophy (website video). A 30-second video interview in which the Massmart Group Corporate Affairs Executive describes Massmart’s perspective on B-BBEE.
  • Massmart announces staff empowerment programme (website pdf). A two-page article distributed to staff at the inception of the Thuthukani Empowerment Trust that provides an easy to understand overview of the scheme.
  • B-BBEE scorecard February 2010 (website pdf). The scorecard issued by Empowerdex in February 2010 that quantifies Massmart’s performance on all scorecard elements.

B-BBEE SCORECARD PERFORMANCE INDICATORS

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--- Comparative data

   
   
   
   
 

Notes

1.   B-BBEE scores are calculated retrospectively, therefore the data reported is based on the scorecard compiled in February 2010 for the period ended June 2009.
2.   Comparative data represents the best performance in the retail sector as published in the FM Top Empowerment Companies Survey 2010.
3.   (%) indicates percentage score achieved on the B-BBEE scorecard.
4.   An updated scorecard for the period ended June 2010 will be published on the Massmart website in November 2010.

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