Notes

 

  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), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the information as required by IAS 34 Interim Financial Reporting, the JSE Listings Requirements and the requirements of the Companies Act of South Africa. The accounting policies applied are consistent with that of the previous financial year, except for the IAS 1: Presentation of Financial Statements with regard to the presentation of items within the Statement of Comprehensive Income. The adoption of the amendment to IAS 1 has no impact on these Condensed Financial Statements.
  2. During the current period the only Massmart shares acquired in the market were by the Massmart Employee Share Trusts where 0.7 million shares (0.3% of average shares in issue) were bought at an average price of R174.38 totalling R124.5 million. During the comparative six month period, the Massmart Employee Share Trusts acquired 0.6 million shares (0.3% of average shares in issue) at an average price of R154.99 totalling R86.3 million.
  3. The impairment of assets in the current period relates to the impairment of leasehold improvements in Masscash. The impairment of assets in the comparative six month period relates to the closure of the Game Mauritius store.
  4. The Massmart BEE transaction, which came into operation in October 2006, gave rise to an IFRS 2 Share-based Payment charge of R9.9 million
    (2011: R9.8 million). The ‘A’ and ‘B’ preference shares were issued to the Thuthukani Trust and the Black Scarce Skills Trust respectively.
  5. Walmart transaction, integration and related costs comprise professional fees, integration costs, expatriate employment costs, share-based payments, travel, consulting costs and other direct expenses relating to the Walmart transaction, of which certain amounts remain unpaid at the reporting date, as well as the additional R140 million being the increase in the Supplier Development Fund required by the judgement of the Competition Appeal Court.
  6. The preference shareholders’ dividend amount of R1.4 million (2011: R2.5 million) represents the June 2012 final cash dividend of 146 cents
    (2011: 134 cents) paid to all Thuthukani beneficiaries. The Thuthukani dividend was equivalent to 100% of the ordinary dividend for the current and
    prior year.
  7. Other non-current liabilities and provisions include the net lease smoothing liability of R302.7 million (2011: R354.5 million).
  8. The net asset value of the businesses acquired during the year was R22.8 million on the date of acquisition. There were no businesses acquired in the comparative six month period.
  9. With effect from the end of January 2013, Massmart acquired control of seven Makro stores that had previously been lease-held. The cash consideration paid for control amounted to R575 million. We expect that the income statement effect of this transaction will be neutral in 2013 but then positive, with significant annual cash flow benefits.
  10. Massmart and its divisions enter into certain transactions with related parties in the normal course of business. Details of these are, and will be, disclosed
    in Massmart’s Integrated Annual Report. Transactions between the Company and Walmart (its Holding Company), are accounted for in Walmart transaction, integration and related costs in the Condensed income statement. Further detail relating to these costs is disclosed in note 5 above. As a 51% shareholder, Walmart will also be receiving a dividend based on their number of shares held.
  11. Due to Christmas trading, Massmart’s earnings are weighted towards the six months to December.
  12. The results of the 26 weeks and 52 weeks ended December 2012, have been reviewed by independent external auditors, Ernst & Young Inc., and their unmodified review report is available for inspection at the Company’s registered office. The review was performed in accordance with ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. The results of the 26 weeks and 52 weeks ended December 2011 as well as the 52 weeks ended June 2012, were reviewed/audited by independent external auditors, Deloitte & Touche, and their unmodified review report is available for inspection at the Company’s registered office. The review was performed in accordance with ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. Any reference to future financial performance included in this announcement has not been reviewed or reported on by the Group’s external auditors. The preparation of the Group’s condensed consolidated reviewed results was supervised by the Financial Director, Ilan Zwarenstein, BCom, BAcc, CA(SA).