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 requirements of the Companies Act 71 of 2008 and the AC 500 standards as issued by the Accounting Practices Board or its successor. These condensed financial statements contain the information as per IAS 34 Interim Financial Reporting, using accounting policies that have been consistently applied to prior years.
   
2. During the current year, the only Massmart shares acquired in the market were by the Massmart Employee Share Trusts where 2.1 million shares (1.0% of average shares in issue) were bought at an average price of R131.60 totalling R273.9 million. During the prior year, the Massmart Employee Share Trusts acquired 1.2 million shares (0.6% of average shares in issue) at an average price of R114.44 totalling R137.2 million.
   
3. The impairment of assets in the current year relates to the impairment of certain acquired goodwill in Masscash. 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 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 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 R64.7 million (2010: R69.7 million). The acceleration IFRS 2 Share-based Payment charge as a result of the Walmart Transaction totalled R22.8 million, (included in the R70.1 million in note 6 below). The ‘A’ and ‘B’ preference shares were issued to the Thuthukani Trust and the Black Scarce Skills Trust respectively.
   
6. The Walmart Transaction costs are made up as follows:
    Rm
  Advisors' fees 238.7
  Accelerated share-based payment charge 70.1
  Supplier fund 100.0
    408.8
   
   
7. The preference shareholders’ dividend amount of R38.4 million (2010: R46.5 million) represents the 2010 final cash dividend of 134 cents and the 2011 interim cash dividend of 252 cents paid to all Thuthukani beneficiaries. The Thuthukani dividend was equivalent to 100% of the ordinary dividend for the current and prior year.
   
8. Other non-current liabilities and provisions include the lease smoothing liability of R414.3 million (2010: R422.8 million).
   
9. The net asset value of the businesses acquired during the year was R46.0 million (2010: R188.9 million) on the date of acquisition.
   
10. Included in current assets and current liabilities in the Statement of Financial Position are two amounts of R1,093.6 million each. These amounts represent the net cash proceeds held in the three Massmart Employee Share Trusts, and the corresponding liability to the beneficiaries, as a result of the Walmart Transaction. The cash was distributed to beneficiaries shortly after 26 June 2011. The Massmart Employee Share Trusts are consolidated with the Group results. In the Statement of Cash Flows, the two amounts have been contra’d in the Cash inflow from Financing Activities.
   
11. The increase in share premium is a result of Walmart acquiring Massmart shares arising from the conversion of 51% of the vested and unvested share options held by beneficiaries of the Massmart Employee Share Trusts. This resulted in 9,751,231 new ordinary shares being issued and net cash of R481.6 million being received.
   
12. 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.
   
13. There are no material post balance sheet events. Two conditional acquisitions, Fruitspot and Rhino Cash & Carry, have been filed with the Competition Commission whose findings are expected to be issued in September or October 2011.
   
14. 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 JSE Limited Listings Requirements and ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. The preparation of the Group’s condensed consolidated reviewed results was supervised by the Chief Financial Officer, Guy Hayward, BCom, CTA, CA(SA).