This Integrated Annual Report is our primary report to stakeholders and is aimed at addressing our stakeholders’ information needs. It aims to demonstrate how the material matters in relation to our financial and non-financial performance, governance, risks and strategy lead to the creation of value in the short-, medium- and long-term.
While this report is primarily aimed at the providers of financial capital, it takes into account the information needs of our diverse range of stakeholders including shareholders, customers, employees, suppliers and communities.
Scope of the report
The scope of the Massmart Integrated Annual Report includes the Group’s four Divisions and key functions. With respect to comparability, all significant items are reported in a manner consistent with the previous financial year, with no material restatements.
The report has been prepared in accordance with the framework principles set out in the Integrated Reporting Framework of the International Integrated Reporting Council (IIRC). Other reporting frameworks applied where appropriate include:
- The King Code of Governance Principles (King III);
- JSE Listing Requirements;
- International Financial Reporting Standards (IFRS), relevant to financial information provided in the summary financial results and the Chief Financial Officer review;
- The Companies Act of South Africa, No. 71 of 2008 (as amended); and
- The ‘core’ reporting requirements of the G4 Sustainability Reporting Guidelines.
In accordance with the stated objectives of integrated reporting, the Massmart Integrated Annual Report focuses on those matters that are material to Massmart’s ability to create value over the short-, medium- and long-term. Material issues have been identified and reported with regard to the six capitals, namely: financial, manufactured, human, natural, social and relationship, and intellectual.
Management’s interpretation of materiality, being those transactions, balances and information that are significant in terms of Rand value, the Group’s risk profile or the Group’s strategic intent, such that Management believe omission of disclosure thereof would influence the Group’s stakeholders’ decisions, has been applied in determining the financial and non-financial content and disclosure in this Report.
Massmart applies a combined assurance model, introduced by King III, which seeks to optimise the assurance obtained from Management and internal and external assurance providers. The Group’s Risk Committee monitors all the significant risks facing the Group and with the help of Management, provides the Massmart Board of Directors with assurance that it has implemented and monitored the Group’s risk management plan, and that it is integrated into day-to-day activities. They are also responsible for monitoring and implementing the necessary internal controls.
The internal audit function, overseen by the Group’s Audit Committee, assesses the effectiveness of Massmart’s system of internal control. The Group receives external assurance on certain aspects of the business. For example, the Group’s external auditors, Ernst & Young Inc. provide an opinion on the fair presentation of the Group and Company Annual Financial Statements.
The Group’s Audit Committee ensures that the combined assurance model is applied throughout the Group to provide a co-ordinated approach to all assurance activities and this Committee also monitors the relationship between the external service providers and the Group.
The Massmart Board of Directors confirm that they have collectively assessed the content of this Integrated Annual Report and accompanying statutory information, and confirm it addresses all material issues and presents a balanced and fair account of the Group’s performance.
On recommendation of the Audit Committee, which has oversight for the integrity of the Integrated Annual Report and the audited consolidated Group Annual Financial Statements prepared for the 52 weeks ended 25 December 2016, the Board of Directors has therefore approved the Integrated Annual Report and the audited consolidated Group Annual Financial Statements for release to shareholders on 31 March 2017. They are signed on the Board’s behalf by:
|Kuseni Dlamini||Guy Hayward|
|Chairman||Chief Executive Officer|
Forward looking statements
The Massmart Integrated Annual Report includes forward looking statements which relate to the possible future financial position and results of the Group’s operations. These statements by their nature involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Group to be materially different from the future results, performance or achievements expressed or implied by such forward looking statements, as they relate to events and depend on circumstances that may or may not occur in the future.
Factors that could cause actual results to differ materially from those in forward looking statements include, but are not limited to, global and national economic and market conditions, competitive conditions, the cyclical nature of the retail sector, consumer and trade credit and the associated costs and risks of lending, inventory levels and regulatory factors.
The Group is not under any obligation to update or alter any forward looking statements publicly, whether as a result of new information, future events or otherwise. Investors are cautioned not to place undue reliance on any forward looking statements contained herein, as they have not been reviewed or reported on by the Group’s external auditors.
How to read our report
|THIS REPORT HAS BEEN DEVELOPED TO EXPLAIN HOW MASSMART CREATES VALUE OVER TIME. TO ASSIST STAKEHOLDERS IN MAKING THIS ASSESSMENT, THIS REPORT HAS BEEN DESIGNED IN THE FOLLOWING STRUCTURE:|
|AN INTRODUCTION TO MASSMART EXPLAINING OUR BUSINESS; HOW WE CREATE VALUE; AND REFLECTING ON OUR OPERATING CONTEXT AND STRATEGIC RESPONSE TO IT|
|OPENING CHAIRMAN AND CEO STATEMENTS|
|AN EVALUATION OF THE VALUE CREATED ACROSS THE SIX CAPITALS|
|A REVIEW OF OUR GOVERNANCE STRUCTURES|
Highlighting our values
The structure of the report is centred around the six capitals as a holistic framework against which to measure value created. As part of this value creation story, we have also highlighted initiatives applicable to our values as these guide the way we work. Our values are marked by the following icons:
|ETHICAL AND RESPECTFUL
Good business at the centre of everything we do
Thoughtful choices for a better future
Smart ideas that inspire everyday excellence
Creating opportunities for everyone to prosper