Scope and boundary of the report
The Massmart Integrated Annual Report covers the integrated performance of the Group’s four Divisions and key functions for the 53 weeks ended 31 December 2017. This 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 IV Report on Corporate Governance for South Africa, 2016 (King IV);
- JSE Listing Requirements;
- International Financial Reporting Standards (IFRS), relevant to the extracts from the consolidated Annual Financial Statements (AFS) in this report and the Chief Financial Officer review; and
- The Companies Act of South Africa, No. 71 of 2008 (as amended).
In assessing the risks, opportunities and outcomes that materially impact the Group’s ability to create value for its stakeholders, the boundary has been extended beyond the financial reporting boundary to include the material interest attributable to/associated with our key stakeholders.
With respect to comparability, all significant items are reported in a manner consistent with the previous financial year, except for the restatement in note 43 of the Group Annual Financial Statements.
This Integrated Annual Report focuses on those matters that could substantially affect Massmart’s ability to create value over the short, medium and long term.
In identifying material matters, consideration was given to Massmart’s business model and interactions with the six capitals (financial, manufactured, intellectual, human, social and relationship, and natural); our operating context; and the interests of our key stakeholders.
Management’s bases for determining materiality is reviewed and signed off by the Audit Committee on behalf of the Board.
Massmart’s combined assurance framework seeks to optimise the assurance obtained from Management and internal and external assurance providers on the significant risks and opportunities facing the Group. The model incorporates and enhances all assurance services and functions so that, taken as a whole, they: enable an effective control environment; support the integrity of information used for internal decision making by management and the Board; and support the integrity of Massmart’s external reports.
Massmart applies the five lines of assurance approach to co-ordinate and optimise our risk and assurance efforts. Combined assurance includes Executive and senior management monitoring and oversight; specialist department monitoring; internal audit and external assurance providers; as well as Board and relevant sub-Committee oversights.
The 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 external service providers and the Group.
Massmart has obtained assurance on the data included in the Integrated Annual Report from the following sources:
- Group and Company Annual Financial Statements are audited by Ernst & Young Inc.
- Emissions data was assured by Moore Stephens
- Massmart’s BBBEE scorecard were verified by Honeycomb BEE Ratings Proprietary Limited
- Key compliance, CSI and human capital performance indicators were assured by Massmart Audit Services (MAS)
The Massmart Board of Directors confirm that they have collectively assessed the content of this Integrated Annual Report and accompanying statutory information, and acknowledge their responsibility for ensuring the integrity of the 2017 Integrated Annual Report.
Together with management, and reflecting on Massmart’s operating context, strategy and business model, the Board of Directors is satisfied that the report adequately addresses the relationship between Massmart and the capitals that the Group uses or affects.
On recommendation to 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 53 weeks ended 31 December 2017, the Board of Directors has approved the Integrated Annual Report and the audited consolidated Group Annual Financial Statements for release to shareholders on 29 March 2018.
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 depend on events and 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.
This Integrated Annual Report is our primary report to our stakeholders.
While it 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 government and civil society.