1. These condensed financial statements have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), Schedule 4 of the Companies Act and the AC 500 standards as issued by the Accounting Practices Board or its successor. The financial statements are in accordance with IAS 34 Interim Financial Reporting, using accounting policies that have been consistently applied to prior periods.
2. During the period under review, the only shares bought in the market were by the Share Trust where 1.4 million shares (0.7% of average shares in issue) were bought at an average price of R126.84 totalling R175.2 million. No Massmart shares were bought in the market for the prior six month period. During the prior year, the only shares bought in the market were by the Share Trust where 1.2 million shares (0.6% of average shares in issue) were bought at an average price of R114.44 totalling R137.2 million.
3. There was no impairment of assets in the current or prior six month period. The impairment of assets in the prior year relates to the impairment of computer software in Builders Warehouse due to an IT upgrade and the impairment of fixed assets in Game due to a fire in the Benoni store.
4. Foreign exchange movements relating to the cost of stock have been reallocated from ‘Foreign exchange loss’ to ‘Cost of sales’ in December 2009 (R54.8 million) and June 2010 (R76.6 million), in line with the Group’s accounting policy. Water and electricity charges have been reallocated from ‘Other operating costs’ to ‘Occupancy costs’ in December 2009 (R43.0 million) and June 2010 (R88.4 million) in line with the Group’s accounting policy.
5. The Massmart BEE transaction, which came into operation in October 2006, gave rise to an IFRS 2 Share-based Payment charge of R20.2 million (2009: R39.1 million). The ‘A’ and ‘B’ preference shares have been issued to the Thuthukani Trust and the Black Scarce Skills Trust respectively.
6. The preference shareholders’ dividend amount of R16.9 million (2009: R13.5 million) represents the final cash dividend of 134 cents (2009: 100.5 cents) paid to all Thuthukani participants. The Thuthukani dividend was equivalent to 100% of the ordinary dividend for the current and prior period.
7. The assets classified as held for sale in the current period relate to the Saverite corporate owned stores in Masscash which are due to be sold/closed during the remainder of the financial year and the start of the next financial year.
8. Other non-current liabilities and provisions includes the lease smoothing liability of R418.6 million (2009: R471.6 million).
9. The net asset value of the businesses acquired during the period was R62.9 million (2009: R36.2 million) on the date of acquisition.
10. Related party transactions include private aircraft, used from time to time, in the normal course of business by Massmart and its divisions and hired from competitively selected charter companies, two of which operate aircraft indirectly beneficially owned by Mr MJ Lamberti.
11. Due to Christmas trading, Massmart’s earnings are weighted towards the six months to December.
12. These results have been reviewed by independent external auditors, Deloitte & Touche, and their unmodified review report is available for inspection at the registered office. The review was performed in accordance with the JSE Listings Requirements and ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity.