WELCOME TO OUR ONLINE ANNUAL REPORT 2011

Massmart’s accountability by the numbers

Five years ago Massmart developed four accountability scorecards that became the core of our accountability reporting. In 2009 we added a fth scorecard covering our African Operations following input received from the Benchmarks Foundation, an NGO that focuses on corporate practice in Africa.

These scorecards, which are covered in this section, provide data describing BBBEE, Human Capital, Environmental, Corporate Social Investment and African Operations accountability performance over a four-year period and with reference to comparative industry practice.

Data gathering and consolidation accuracy can prove challenging in areas such as water consumption and greenhouse gas emissions, so it is important to disclose that there could be up to a 15% margin for error in these areas. e estimated margin for error is also indicated in the comments associated with each scorecard. Comparative data is provided for context and represents the best available performance data as reported by other South African retailers.

Looking forward we have taken the decision, following recent stakeholder engagement feedback about product safety and related issues, to introduce another scorecard in 2012 that will cover Group performance with reference to the Consumer Protection Act (CPA). We anticipate that this scorecard will cover aspects such as product recalls, National Consumer Commission (NCC) complaints and supplier compliance to the ethical, quality and safety requirements set out by Massmart. Since the enforcement of the CPA on 1 April 2011 Massmart has initiated 31 product recalls and responded to three NCC complaints.

Human Capital Performance Indicators

Notes
Comparative data represents the best available performance disclosed by South African retailers, except for:
  • Employees with medical benefits sourced from 2010 South African General Household survey;
  • HIV prevalence which represents published national prevalence rate; and
  • Average minimum wage sourced from Sectoral Determination for Wholesale and Retail Sector.
  • Non-permanents and Unionised Staff sourced from Massmart’s 2009/2010 Sustainability Report.
Human capital data measurements and assumptions

Human capital data is based on Group and Divisional payroll data. HIV prevalence data is based on Right to Care VCT testing figures. Data is internally audited prior to publication. Estimated figures include the percentage of staff with medical benefits, HIV prevalence, staff turnover and per capita training investment.

BBBEE Performance Indicators

Notes
  • Comparative data represents the best performance in the retail sector as published in the FM Top Empowerment Companies Survey 2011.
  • (%) indicates percentage score achieved on the BBBEE scorecard.
  • An updated scorecard for the period ended June 2011 will be published on the Massmart website in November 2011.
BBBEE data measurements and assumptions

Massmart’s BBBEE figures are calculated externally by Empowerdex Economic Empowerment Rating Agency. These figures are based on actual staff numbers (not estimates) and are believed to be 100% accurate at the time at which they were published. BBBEE scores are calculated retrospectively, therefore the data reported is based on the scorecard compiled in February 2011 for the period ended June 2011.

CSI Performance Indicators

Notes
  • Investment in feeding projects includes spend on container kitchens, vegetable tunnels, NGO and government feeding schemes and Gauteng Foodbank contributions.
  • Investment in icon projects includes spend on Game Stores tools-to-play early childhood development kits, Makro Excellence in Education school gift voucher awards and the Massmart bursary scheme.
  • Investment in discretionary projects includes donations to Starfish Foundation, Tomorrow Trust, Vodacom Wheelchair Fund, Business Against Crime and others
CSI data measurements and assumptions

CSI data is based on actual Group expenditure figures which have been internally audited. CSI figures are believed to be 100% accurate at time of publication.

Africa Operations Performance Indicators

Notes
  • HIV testing has been carried out in Africa, however, insufficient tests have been conducted to calculate a reliable prevalence percentage. We realise that HIV and AIDS is a significant concern in Africa and we hope to expand voluntary HIV and AIDS testing in our Africa Operations in the future.
Africa operations data measurements and assumptions

Africa Operations information is limited to data from the Group’s Massdiscounters division. Local management as a percentage of total management is based on all employees whose job titles contain the word “manager”. The calculation of local executive store managers as a percentage of total executive store managers was based on store manager and store manager designated job titles. Energy consumption figures are based on total spend on energy and have a 10%-15% margin of error. Data is internally audited prior to publication.

Climate Change and Environmental Performance Indicators

• No data available for this year

Climate change data measurements and assumptions

Scope 1 and 2 emissions figures are calculated externally by Global Carbon Exchange consultants. Scope 1 emissions relate to direct emissions resulting from Company owned vehicle, generator use and refrigerant gas emissions. Massmart trend data is not available for Scope 1 2008/2009 emissions since this information has historically been reported by calendar rather than financial year.

Scope 2 figures are based on divisional electricity consumption figures. Energy consumption data is annualised and normalised (outlying data is excluded). Consequently, the margin for error on reported data is considered to be between 10%-15%. Gross Lettable Area (GLA) is used to calculate per m2 intensity figures. GLA covers the total functional uses area for commercial purposes such as retail shop, office, etc. inside the building excluding all common areas, car parking and service areas. Electricity consumption and Scope 2 emissions figures relate to South African operations only.

Electricity consumption figures from the Group’s Africa Operations are excluded due to data inaccuracy and difficulties associated with determining what percentage of the electricity supply comes from renewable sources. The total Group sales are used to calculate Scope 1 and 2 emissions’ intensity per Rand million (Rm). Water usage has been derived with reference to the cost of water consumed. Water consumption is based on Rand Water Tariff 2010/2011 of 858,89 c/kl.