• + 17. Inventories
             
    17. Inventories        
             
    Rm   December 2018   December 2017
             
    Food        
    Inventory at cost     4,090.1     3,890.3
    Provisions     (94.7)     (86.0)
          3,995.4     3,804.3
             
    Liquor        
    Inventory at cost     1,241.1     1,033.9
    Provisions     (20.9)     (16.1)
          1,220.2     1,017.8
             
    General Merchandise        
    Inventory at cost     5,097.5     4,567.8
    Provisions     (162.8)     (209.3)
          4,934.7     4,358.5
             
    Home Improvement        
    Inventory at cost     2,106.2     1,881.0
    Provisions     (75.6)     (77.0)
          2,030.6     1,804.0
             
    Total inventory net of provisions     12,180.9     10,984.6
             
    Carrying amount of inventories carried at net realisable value     181.7     173.5
    Inventory recognised as an expense in the year     76,916.6     75,349.3
    Write-down recognised as an expense in the year     493.8     1,049.7
    Right of return asset^     77.8  
             
    ^Refer to note 44.
    Inventory is fully funded by trade payables. Details of trade payables can be found in note 24.
    No inventory is pledged as security.        
             
             
  • + 18. Trade and other receivables
                     
           
    18. Trade and other receivables                
                     
    Rm           December 2018   December 2017
                     
    Trade receivables   2,753.0   2,539.4
    Allowance for doubtful debts^   (144.6)   (108.1)
                2,608.4   2,431.3
    Prepayments   199.3   241.3
    Rebates and advertising from buying members   1,808.6   1,682.0
    Other accounts receivable   1,053.5   760.6
    FEC asset (not designated)   23.4   3.9
    Total receivables net of provisions   5,693.2   5,119.1
    Trade receivables neither past due nor impaired   2,428.6   1,881.2
                     
    Movement in allowance for doubtful debts        
    Balance at the beginning of the year   108.1   105.6
    Change in accounting standards^           9.4  
    Amounts previously in the provision written off during the year   (8.9)   (15.1)
    Additional amounts raised   36.0   17.6
    Balance at the end of the year   144.6   108.1
        December 2018        
    Ageing of impaired trade debtors provided for:   Expected credit loss rate   Gross Carrying amount        
    0 to 60 days (December 2017: 30 to 60 days)   1%   2,477.9   21.6   24.9
    60 to 90 days   11%   40.5   4.3   7.3
    90 to 120 days   25%   24.1   6.0   5.3
    120+ days   54%   210.5   112.7   70.6
    Total   5.3%   2,753.0   144.6   108.1
                     
                     
    Set out above is the information about the credit risk exposure on the Group’s trade receivables and contract assets using a provision matrix.
    Trade receivables are well controlled throughout the Group, with trade receivable days remaining constant at 9.2 days (December 2017: 9 Days). Allowance for doubtful debts at year end was 5.3% of trade receivables (December 2017: 4.3%).
    No interest is charged on the trade receivables and generally repayment terms do not extend past 30 days. Trade receivables between 0 days and 180 days (December 2017: from 30 days) are provided for based on ECL impairment method, determined predominatly by reference to past default experience as economic conditions have changed. It is the Group’s policy to provide against receivables that are past due and not insured as well as those receivables over which the Group does not hold any security, which as a result of historical experience are not considered to be recoverable.
    Before accepting any new customer, the Group uses an external credit scoring system to assess the potential customer’s credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed quarterly to once a year. No customer represents more than 5% of the total balance of trade receivables.
    Included in the Group’s trade receivables balance are receivables with a carrying amount of R179.8 million (December 2017: R550.1 million) which are past due at the reporting date for which the Group has not provided. The average age of these receivables is 83.4 days (December 2017: 75 days).
    Included in ‘Other accounts receivable’ is Value Added Taxation, an insurance debtor, sundry debtors and other miscellanous receivables.
                     
            December 2018   December 2017
    Rm           Insured and recoverable   Insured and recoverable
                     
    Ageing of past due but not impaired trade debtors                
    30 to 60 days           27.6   143.6
    60 to 90 days           36.2   239.1
    90 to 120 days           18.1   45.3
    120+ days           97.9   122.1
                179.8   550.1
                     
    The Group recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. Refer to note 38 for the Group’s management of credit risk exposure.
    There were no specific trade receivables under liquidation in the current and prior financial year.
    ^Refer to note 44.                
  • + 19. Non-current assets classified as held for sale
               
    19. Non-current assets classified as held for sale        
             
    At the end of the current year non-current assets classified as held for sale represents properties in the Masscash and Massbuild Divisions in the process of being sold . The Group had entered into a sale agreement with the respective purchasers, however transfer of the property had not yet been effected.

    In the prior year, non-current assets classified as held for sale represent two properties in the Masscash Division in the process of being sold following a store closure in the one and a purchase offer received for the other. The Group had entered into a sale agreement with the respective purchaser for one property, however transfer of the property had not yet been effected. During the course of the 2018 financial year the sale of the other property ceased to be highly probable with the result that the recognition criteria as a non-current asset classified as held for sale was no longer met and the property ceased to be classified as held for sale.
             
    Rm   December 2018   December 2017
             
    Included in the Statement of Financial Position:        
    Non-current assets     11.6     19.9
    -Freehold land, property, plant and equipment     11.6     19.9
             
    Total assets     11.6     19.9
             
    Fair value of the properties are based on the respective sale agreements. For more information on the fair value of these non-current assets held for sale, refer to note 37.
     
             
  • + 20. Issued capital
                     
    20. Issued capital    
                     
        Share capital   Share premium
    Rm   December 2018   December 2017   December 2018   December 2017
                     
    Authorised                
    500,000,000 (December 2017: 500,000,000) ordinary shares of 1 cent each   5.0   5.0    
    20,000,000 (December 2017: 20,000,000) non-redeemable cumulative non-participating preference shares of 1 cent each   0.2   0.2    
    18,000,000 (December 2017: 18,000,000) ‘A’ convertible redeemable non-cumulative participating preference shares of 1 cent each   0.2   0.2    
    4,000,000 (December 2017: 4,000,000) ‘B’ convertible redeemable non-cumulative participating preference shares of 1 cent each        
                     
    Issued                
    217,179,142 (December 2017: 217,145,489) ordinary shares of 1 cent each   2.2   2.2   139.1   401.2
    2,797,675 (December 2017: 2,831,328) ‘B’ convertible redeemable non-cumulative participating preference shares of 1 cent each        
            Number of   Share capital   Share premium
    Ordinary shares       shares   Rm   Rm
    Ordinary shares issued – December 2017   217,145,489   2.2   569.0
    Treasury shares and share-based payment vesting       (33,653)     (167.8)
    Ordinary shares issued excluding treasury shares – December 2017   217,111,836   2.2   401.2
                     
    Balance at December 2017       217,145,489   2.2   401.2
    Shares issued in terms of the Massmart Black Scarce Skills Trust   33,653    
    Ordinary shares issued – December 2018       217,179,142   2.2   401.2
    Treasury shares and share-based payment vesting       (1,177,645)     (262.1)
    Ordinary shares issued excluding treasury shares – December 2018   216,001,497   2.2   139.1
                     
    Ordinary shares, which have a par value of 1 cent, carry one vote per share and carry the right to dividends.
                     
    ‘A’ convertible redeemable non-cumulative participating preference shares        
    There are no ‘A’ convertible redeemable non-cumulative participating preference shares in issue as the residual shares were automatically redeemed on the vesting of the Massmart Thuthukani Empowerment Trust scheme, in terms of the Trust Deed in the 2013 financial year.
                     
    ‘B’ convertible redeemable non-cumulative participating preference shares   Number of   Share capital   Share premium
            shares   Rm   Rm
    Balance at December 2016          
    Net shares issued in terms of the Massmart BEE transaction   2,840,483    
    Shares converted to ordinary shares       (9,155)    
    Treasury shares       (2,831,328)    
    Balance at December 2017          
    Net shares issued in terms of the Massmart BEE transaction   2,831,328    
    Shares converted to ordinary shares       (33,653)    
    Treasury shares       (2,797,675)    
    Balance at December 2018          
                     
    B’ convertible redeemable non-cumulative participating preference shares, which have a par value of 1 cent, are held in the Massmart Black Scarce Skills Trust. These shares carry one vote per share, which are cast by the trustees, and do not carry the right to dividends. On election of the beneficiary, the shares will convert to ordinary shares on a one-for-one basis and will rank pari passu with all ordinary shares then in issue.
    Share options granted under the Massmart Holdings Limited Employee Share Trust    
    At December 2018, executives and senior employees have options of 4,234,937 (December 2017: 5,466,854) ordinary shares of which 134,782 (December 2017: 134,782) are unvested.
    Share options granted under the Employee Share Incentive Schemes carry no rights to dividends and no voting rights. Additional information of the Employee Share Incentive Schemes can be found in note 27.
    During the current financial year, 1.9 million shares (0.9% of average shares in issue) were bought in the market by the Massmart Holdings Limited Executive Share Trust at an average price of R127.85 totalling R246.1 million.
    During the prior financial year, 1.5 million shares (0.7% of average shares in issue) were bought in the market by the Massmart Holdings Limited Executive Share Trust at an average price of R127.21 totalling R195.6 million.
    The Directors have the authority, until the next annual general meeting, to issue the ordinary shares of the Company up to a maximum of 5% of the shares already issued.
                     
                     
  • + 21. Other reserves
                   
    21. Other reserves          
                   
    Rm         December 2018   Restated
    December 2017*
                   
    Foreign currency translation reserve1     (338.1)     (413.1)
    Hedging reserve2       (14.9)
    Share-based payment reserve3     1,627.0     1,454.0
    Fair value adjustment of available-for-sale financial asset       0.3
    Change in non-controlling interest     (581.8)     (581.8)
    Treasury shares       0.2
    Post-retirement medical aid actuarial gain           33.8     20.4
    Other reserves           (11.3)     (11.7)
                729.6     453.4
                   
    1Reconciliation of the foreign currency translation reserve:   December 2018   Restated
    December 2017
    Balance at the beginning of the year           (413.1)     (322.2)
    Change in accounting standards^           (0.7)  
    Translation on consolidation           75.7     (90.9)
                (338.1)     (413.1)
                   
    Exchange differences relating to the translation from functional currencies of the Group’s foreign subsidiaries into Rands are accounted for in the foreign currency translation reserve. In addition, exchange differences arising on the Group’s net investment in its foreign operations is also accounted for in the foreign currency translation reserve.
                   
              December 2018   Restated
    December 2017
    2Reconciliation of the hedging reserve:    
    Balance at the beginning of the year           (14.9)     (5.7)
    Foreign exchange gain in cost of sales           20.8     28.5
    FEC asset             (1.2)
    FEC liability             (41.5)
    Deferred taxation           (5.9)     5.0
                (0.0)     (14.9)
                   
              December 2018   Restated
    December 2017
    3Reconciliation of the share-based payment reserve:    
    Balance at the beginning of the year           1,454.0     1,250.3
    Share-based payment expense relating to the Massmart Holdings Limited Employee Share Trust   190.6     156.9
    Deferred tax recognised in equity relating to the Massmart Holdings Limited Employee Share Trust   (21.6)     16.7
    Share-based payment expense relating to the Massmart Black Scarce Skills Trust   4.0     6.8
    Share-based payment relating to freehold land             23.3
                1,627.0     1,454.0
                   
    The share-based payment reserve arises on the granting of share options and share awards to employees under the Employee Share Incentive Schemes. For additional information, refer to note 27.
    *Refer to note 41.              
    ^Refer to note 44.              
  • + 22. Non-current liabilities
                 
    22. Non-current liabilities    
                 
    Rm       December 2018   Restated
    December 2017*
                 
    Interest-bearing borrowings            
    Secured            
    Medium-term loan           600.0
    Medium-term bank loans         2,291.1     2,606.7
    Less: Payable within one year included in other current liabilities (note 26)     (616.1)     (961.7)
              1,675.0     2,245.0
                 
    Capitalised finance leases         648.1     580.5
    Less: Payable within one year included in other current liabilities (note 26)     (69.0)     (64.8)
              579.1     515.8
                 
    Total non-current interest-bearing liabilities     2,254.1     2,760.8
                 
    Interest-free borrowings            
    Unsecured            
    Loans from non-controlling interests         1.9     2.0
    Operating lease liability – lease smoothing adjustment         1,357.9     1,282.2
    Other non-current interest-free borrowings         27.4     30.7
    Less: Payable within one year included in trade and other payables (note 24)     (109.0)     (95.2)
    Total non-current interest-free liabilities     1,278.2     1,219.7
                 
                 
    Medium-term loan            
    The medium-term loan was a fixed term loan of R600.0 million owed to Walmart. The interest was repayable quarterly over five years and was effective from 18 April 2013 at a fixed interest rate of 7.46%. The loan was repaid in one final instalment in April 2018 and has been accounted for in note 28. The loan wass secured by intragroup cross-suretyships.
                 
    Medium-term bank loans
    Included in medium-term bank loans above was a fixed term loan of R500.0 million which was secured during the first half of the December 2014 financial year repayable quarterly over five years. The drawdown of the loan occurred on 2 June 2014 at a fixed interest rate of 8.40%. The loan balance was repaid in March 2018. The loan was secured by intragroup cross-suretyships.
    Included in medium-term bank loans above was a fixed term loan of R600.0 million which was secured during the second half of the December 2014 financial year repayable quarterly over five years. The drawdown of the loan occurred on 28 November 2014 at a fixed interest rate of 8.17%. The loan balance was repaid in April 2018. The loan was secured by intragroup cross-suretyships.
    Included in medium-term bank loans above was a fixed term loan of R500.0 million which was secured during the second half of the December 2014 financial year repayable quarterly over five years. The drawdown of the loan occurred on 7 July 2014 at a fixed interest rate of 8.61%. The loan balance was repaid in April 2018. The loan was secured by intragroup cross-suretyships.
    Included in medium-term bank loans above was a fixed term loan of R500.0 million which was secured during the first half of the December 2015 financial year repayable quarterly over four years. The drawdown of the loan occurred on 25 March 2015 at a fixed interest rate of 8.02%. The loan balance was repaid in March 2018. The loan was secured by intragroup cross-suretyships.
    Included in medium-term bank loans above is a fixed term loan of R1.4 billion. The loan is repayable in one final instalment in February 2021. The drawdown of the loan occurred on 31 March 2016 at a fixed interest rate of 10.62%, the interest is repayable monthly. The loan is secured by intragroup cross-suretyships.
    Included in medium-term bank loans above is a fixed term loan of R600.0 million. The loan is repayable in one final instalment in February 2019. The long-term portion of the loan at the end of the current financial year is Rnil (December 2017: R600 million) and the short-term portion is R600 million (December 2017: R0 million). The drawdown of the loan occurred on 31 March 2016 at a fixed interest rate of 9.78%, the interest is repayable monthly. The loan is secured by intragroup cross-suretyships. The short-term portion has been accounted for in note 26.
    Foreign bank loans comprise of an offshore USD facility (USD 19.0 million), granted by Standard Chartered Bank, available for working capital and general corporate requirements. The Group is using this loan to fund its African expansion. In October 2018 the original loan matured and was refinanced for a period of 2 years. Interest is incurred daily at the 6 monthly USD LIBOR rate plus 205 basis points, in arrears.
    Capitalised finance leases    
    Capitalised finance leases are repayable in monthly instalments varying from two to 20 years at variable interest rates of between 5.0% and 15.0% (December 2017: between 5.0% and 14.0%). The short-term portion has been accounted for in note 26.
    The capitalised finance leases are secured by assets with a book value of R537,7 million (December 2017: R513.7 million). No renewal terms nor contingencies exist. These assets are accounted for in note 11.
                 
    Operating lease liability
    The increase in the operating lease liability primarily relates to the increased number of stores opened during the current financial year.
    For more information on the Group’s liquidity risk and interest rate risk management, refer to note 38.
    Additional information on the fair value of ‘non-current liabilities’ can be found in note 37.
    *Refer to note 41.            
                 
  • + 23. Provisions
                         
                       
    23. Provisions                    
                         
    Rm               December 2018   December 2017
                         
    Onerous lease provision               1.9   3.1
    Less: Payable within one year included in current provisions (note 25)               (1.9)   (3.1)
    Provision for post-retirement medical aid contributions               94.1   98.9
    Less: Payable within one year included in current provisions (note 25)               (8.6)   (3.3)
                    85.5   95.6
                         
    Reconciliation of provisions                    
                         
    Rm   Opening balance   Additional amounts provided   Amounts utilised   Unused amounts reversed   Closing balance
                         
    December 2018                    
    Provision for post-retirement medical aid contributions   95.6   19.3     (29.4)   85.5
        95.6   19.3     (29.4)   85.5
                         
    December 2017                    
    Onerous lease provision   17.5     (10.0)   (7.5)  
    Provision for post-retirement medical aid contributions   105.7   11.5     (21.6)   95.6
        123.2   11.5   (10.0)   (29.1)   95.6
                         
                         
    Rm       Repayable within 1 year1   Repayable in 2 – 5 years   Repayable after 5 years   Total
                         
    December 2018       10.5   85.5     96.0
    December 2017       6.4   0.4   95.2   102.0
                         
    1Included in current provisions in note 25.                    
                         
    Post-retirement medical aid                    
                         
    Employees of Massmart participate on Massmart Health Plan and Resolution Health Medical Scheme administered by Universal Healthcare Proprietary Limited and Agility Global Health Solutions Health Proprietary Limited respectively. The post-retirement subsidy policy is summarised below:
    Members who joined Makro and Dion Stores prior to 1 July 1999 are eligible for a subsidy of medical scheme contributions upon retirement. Members who joined Massmart prior to 1 January 2000 are also eligible for a subsidy upon retirement;
    Members and their spouses are entitled to a 50% subsidy of medical scheme contributions upon retirement; and
    Dependants of eligible continuation members receive a subsidy before and after the death of the principal member.
    If a member eligible for a subsidy of medical scheme contributions upon retirement dies in service, their dependants are eligible for a subsidy of medical scheme contributions as described above for a period of three months.
                         
    The significant risks faced by Massmart as a result of the post-retirement healthcare obligation can be summarised as follows:
    The risk that future CPI inflation and healthcare cost inflation are higher than expected and uncontrolled; and
    The risk that pensioners live longer than expected and thus their healthcare benefit is payable for longer than expected.
                         
    The liability is unfunded. The significant assumptions are listed below.
    Of particular importance is the ‘interest rate – medical inflation rate’ gap of 1.7% (December 2017: 0.5%) used in calculating the provision.
                         
                    December 2018   December 2017
                         
    Significant assumptions:                    
    Discount rate               10.6% p.a.   11.6% p.a.
    Healthcare cost inflation               8.9% p.a.   10.1% p.a.
    Consumer Price Index inflation1               6.9% p.a.   8.1% p.a.
    Expected retirement age               65 years   63 years
    Membership discontinued at retirement or death-in-service               0%   0%
                         
    Movements in the post-retirement medical aid liability (Rm):                    
    Opening defined benefit obligation               98.9   111.7
    Current service cost               8.1   2.7
    Interest cost               11.2   11.5
    Employer benefits paid               (3.6)   (6.0)
    Actuarial gain recognised in the year               (20.5)   (20.9)
    Closing defined-benefit obligation               94.1   98.9
                         
    1CPI inflation by itself is not a significant assumption used in the valuation. This assumption has been based on the relationship between current conventional bond yields and current index-linked bond yields. The healthcare cost inflation exceeds CPI inflation by an average of 2.0% per annum over the long term, which is seen to be appropriate.
                         
    The last valuation of the liability for the post-retirement medical aid contributions was performed as at December 2018 by Alexander Forbes, Fellow of the Institute of Actuaries (December 2017: Alexander Forbes, Fellow of the Institute of Actuaries). The current financial year costs have been assessed in accordance with the advice of independent actuaries.
     
    The net actuarial gain in the current year arose as a result of a combination of the following factors:
    Unexpected changes in the membership and membership profile resulted in a net gain of R1.7 million (December 2017: R2.5 million);
    Lower than expected healthcare cost inflation resulted in a gain of R4.9 million (December 2017: R1.7 million); and
    An unexpected gain of R8.1 million (December 2017: R16.7 million) arose as a result of an increase in the real discount rate, i.e. an increase in the difference between the discount rate and the healthcare cost inflation assumption from 1.5% per annum to 1.7% per annum (December 2017: 0.5% per annum to 1.5% per annum).
                         
    Projection of defined-benefit obligation                    
                         
    Provided that all actuarial assumptions are borne out in practice, the accrued liability is expected to increase each year in line with:
    The rate of discount;
    Plus the cost of an additional year’s accrual for in-service members (service cost); and
    Less the benefit payments made by the employer in respect of continuation members.
                         
    A projection of results:                    
                         
    Rm                   December 2018
                         
    Defined-benefit obligation at December 2018                   94.1
    Current service cost                   2.1
    Interest cost                   10.2
    Expected employer benefits paid                   (3.7)
    Defined-benefit obligation at December 2019                   102.7
                         
                         
                         
    Maturity profile of defined-benefit obligation                    
                         
    The expected contributions to the defined benefit plan obligation in the following financial year is R3.7 million (December 2017: 4.0 million).
    The average duration of the defined benefit plan obligation at the end of the reporting period is 16.8 years (December 2017: 17.3 years).
                         
                         
    Sensitivity analysis                    
                         
    The valuation results are based on a number of assumptions. The value of the defined benefit obligation could be overstated or understated, depending on the extent to which actual experience differs from the assumptions adopted.
                         
    2018           Central assumption   Decrease   Increase
                         
    Sensitivity analysis on the defined benefit obligation:                    
    1% decrease or increase in the rate of healthcare cost inflation           8.9%   -1.0%   1.0%
    Defined-benefit obligation in (Rm)           94.1   85.2   114.8
    % change               -13.4%   16.6%
    0.5% decrease or increase in the rate of healthcare cost inflation for the next 5 years, thereafter returning to a healthcare cost inflation of 8.9%           8.9%   -0.5%   0.5%
    Defined-benefit obligation in (Rm)           94.1   91.5   106.2
    % change               -7.1%   7.9%
    5% or 10% increase in the rate of healthcare cost inflation for the next 5 years, thereafter returning to a healthcare cost inflation of 8.9%           8.9%       5.0% – 10.0%
    Defined-benefit obligation in (Rm)           94.1       120.9 – 147.6
    % change                   22.9%- 50.0%
    1% decrease or increase in the discount rate           10.6%   -1.0%   1.0%
    Defined-benefit obligation in (Rm)           94.1   114.6   85.5
    % change               16.4%   13.1%
    1 year decrease or increase in the expected retirement age           63 years   – 1 year   1 year
    Defined-benefit obligation in (Rm)           94.1   103.1   94.1
    % change               4.7%   -4.4%
    Sensitivity analysis on the aggregate of the current service and interest cost:                    
    1% decrease or increase in the rate of healthcare cost inflation from previous valuation           10.1%   -1.0%   1.0%
    Current service cost and interest cost from the previous valuation (Rm)           19.3   11.4   15.8
    % change               -14.8%   18.4%
                         
    2017           Central assumption   Decrease   Increase
                         
    Sensitivity analysis on the defined benefit obligation:                    
    1% decrease or increase in the rate of healthcare cost inflation           10.1%   -1.0%   1.0%
    Defined-benefit obligation in (Rm)           98.9   85.0   115.3
    % change               -13.7%   17.0%
    0.5% decrease or increase in the rate of healthcare cost inflation for the next 5 years, thereafter returning to a healthcare cost inflation of 10.3%           10.1%   -0.5%   0.5%
    Defined-benefit obligation in (Rm)           98.9   91.4   106.4
    % change               -7.2%   8.0%
    5% or 10% increase in the rate of healthcare cost inflation for the next 5 years, thereafter returning to a healthcare cost inflation of 10.3%           10.1%       5.0% – 10.0%
    Defined-benefit obligation in (Rm)           98.9       120.8 – 147.2
    % change                   22.7%- 49.5%
    1% decrease or increase in the discount rate           11.6%   -1.0%   1.0%
    Defined-benefit obligation in (Rm)           98.9   115.1   85.3
    % change               16.9%   -13.4%
    1 year decrease or increase in the expected retirement age           63 years   – 1 year   1 year
    Defined-benefit obligation in (Rm)           98.9   102.8   94.1
    % change               4.4%   -4.4%
    Sensitivity analysis on the aggregate of the current service and interest cost:                    
    1% increase or decrease in the rate of healthcare cost inflation from previous valuation           10.3%   -1.0%   1.0%
    Current service cost and interest cost from the previous valuation (Rm)           14.2   11.9   17.1
    % change               -16.0%   20.4%
                         
                         
  • + 24. Trade and other payables
                 
    24. Trade and other payables      
                 
    Rm       December 2018   December 2017
                 
    Trade payables         18,698.2     17,396.7
    Operating lease liability – lease smoothing adjustment     109.0     95.2
    Payroll accruals         493.0     673.5
    FEC liability (Not designated)         24.8     52.5
    Contract liability         162.1     119.2
    Rebates and advertising owing to buying members     128.7     178.1
    Interest accrual on loans and borrowings         79.7     15.1
    Amounts due to Walmart         0.1     4.8
    Sundry payables and other accruals     2,102.2     1,962.8
              21,797.8     20,497.9
                 
    For more information on amounts due to Walmart refer to note 26.    
    Trade payables do not attract interest.
    For more information on the operating lease liability refer to note 30.
    The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe, normally around 60 – 90 days, following industry norm. Trade creditors remain controlled at an average term of 81 days (December 2017: 74 days). Settlement discounts received were 1.0% to 5.0% (December 2017: 1.0% to 5.0%).
    Sundry payables and other accruals’ comprises other sundry creditor accruals, VAT payable and a gift card liability of R115,4 million (December 2017: R112.4 million).
                 
                 
  • + 25. Provisions
                               
    25. Provisions              
                               
    Rm                     December 2018   December 2017
                               
    Onerous lease provision     1.9     3.1
    Provisions raised on asset acquisitions     0.0     31.5
    Provision for Supplier Development Fund     10.8     34.5
    Provision for post-retirement medical aid contributions     8.6     3.3
    Provision for restructuring     6.6  
    Right of return and other                       99.4     11.1
                            127.3     83.5
                               
    The Group established the Supplier Development Fund in line with the judgement of the Competition Appeal Court at the time of the Walmart transaction. The purpose of the fund is to assist the Group’s suppliers, particularly Black Economic Empowerment suppliers, in order to promote and benefit from the growth of their businesses. The fund has no fixed utilisation requirements per year.
                               
                               
    Reconciliation of provisions            
                               
    Rm   Opening balance   Change in acccounting standard^   Amounts provided   Amounts utilised   Unused amounts reversed   Closing balance
                               
    December 2018                          
    Onerous lease provision     3.1       1.9     (3.1)       1.9
    Provisions raised on acquisitions     31.5       0.1     (20.0)     (11.6)     0.0
    Provision for Supplier Development Fund     34.5         (23.7)       10.8
    Provision for post-retirement medical aid contributions     3.3       8.9     (3.6)       8.6
    Provision for restructuring           130.1     (122.2)     (1.3)     6.6
    Right of return^       85.0     38.2     (1.3)     (22.5)     99.4
    Other       11.1           (11.1)  
            83.5     85.0     179.2     (173.9)     (46.5)     127.3
                               
    December 2017                        
    Onerous lease provision     5.4       1.2     10.0     (13.5)     3.1
    Provisions raised on acquisitions     33.0       5.6       (7.1)     31.5
    Provision for Supplier Development Fund     72.2         (37.7)       34.5
    Provision for post-retirement medical aid contributions     6.0       0.5     (3.2)       3.3
    Other     1.7       26.5     (4.5)     (12.6)     11.1
            118.3       33.8     (35.4)     (33.2)     83.5
                               
                               
    Refer to note 44.                          
  • + 26. Other interest bearing borrowings
                 
    26. Other interest bearing borrowings    
                 
    Rm       December 2018   Restated
    December 2017*
                 
    Medium-term bank loans     600.0     361.7
    Capitalised finance leases     69.0     64.8
    Massmart Education Foundation loan     5.8     5.8
    Other Medium-term loans         10.3     844.4
    – Foreign bank loans       239.3
    – Lamberti Education Foundation Trust loan     10.3     5.1
    – Walmart loan       600.0
              685.1     1,276.7
                 
    Medium-term bank loans and capitalised finance leases        
    For more information on the medium-term bank loans and capitalised finance leases, refer to note 22.
                 
    Medium-term loans        
    Foreign bank loans comprise of an offshore USD facility (USD 19.0 million), granted by Standard Chartered Bank, available for working capital and general corporate requirements. The Group is using this loan to fund its African expansion. In October 2018 the original loan matured and was refinanced for a period of 2 years. Interest is incurred daily at the 6 monthly USD LIBOR rate plus 205 basis points, in arrears.
    The Massmart Education Foundation loan represents cash reserves invested with Group Treasury. Interest was incurred at a fixed rate of 8.8% (December 2017 : Variable rate based on the daily prime rate plus 25 basis points) , is unsecured and has no fixed terms of repayment.
    The Massmart Education Foundation loan represents cash reserves invested with Group Treasury. Interest was incurred at a fixed rate of 8.8% (December 2017 : Variable rate based on the daily prime rate plus 25 basis points), is unsecured and has no fixed terms of repayment.
                 
    For more information on fair value disclosure, refer to note 37.
    For more information on the Group’s liquidity risk and interest rate risk management, refer to note 38.
    *Refer to note 41.            
                 
  • + 27. Employee Share Incentive Schemes
                                 
    27. Employee Share Incentive Schemes                            
                                 
                                 
    Massmart Holdings Limited Employee Share Trust
                                 
    Massmart introduced a Share Incentive Scheme in the 2013 financial year referred to as the Employee Share Incentive Plan. Massmart Holdings Limited’s shareholders approved the scheme at the Annual General Meeting held on 22 May 2013. The new scheme entails participation through a restricted share grant and a performance share award, further explained below. The first grant of restricted grants and performance awards under the new scheme was made on 16 September 2013. The purpose of the new scheme is to replace the existing Employee Share Option Scheme which had its last grant date on 1 May 2013. The Employee Share Option Scheme will continue to give rise to an equity-settled share-based payment expense until the end of the December 2018 financial year. The final options of this scheme will expire in the 2023 financial year. Both Employee Share Incentive Schemes are administered through the Massmart Holdings Limited Employee Share Trust.
                                 
    Shares to satisfy awards and options
    It is Massmart’s practice to satisfy grants, awards and options granted under the Employee Share Incentive Schemes through shares purchased in the market and held by the Massmart Holdings Limited Employee Share Trust, which was established for the purpose of satisfying grants, awards and options under the Employee Share Incentive Schemes, and is funded by the Group.
                                 
    Employee Share Option Scheme        
                                 
    Massmart granted share options entitling certain employees within the Group to its shares under the Employee Share Option Scheme. The options were granted by Massmart in its own shares resulting in them being accounted for as equity-settled share-based payments. Employees are required to be employed up to the date of vesting in order to receive the share options earned by them. The share-based payment valuation was performed by Alexander Forbes for all periods with respect to the share options.
                                 
    Vesting occurs over a five-year period as follows:        
    – 25% two years after the offer date;        
    – 50% three years after the offer date;        
    – 75% four years after the offer date;        
    – 100% five years after the offer date; and        
    – expires ten years after the offer date.        
                                 
                                 
    The following options granted to employees and Executive Directors in terms of the Employee Share Option Scheme have not yet been exercised:
                                 
    2018                            
    Offer date   Expiry date   Exercise price (R)   No of options at December 2017   No of options forfeited and expired   No of options exercised   No of options December 2018    
                                 
    1 April 2008   31 March 2018   66.91   38,205     38,205      
    26 May 2008   25 May 2018   72.86   120,113     120,113      
    1 September 2008   31 August 2018   79.86   61,471     61,471      
    15 November 2008   14 November 2018   79.91   27,245     27,245      
    1 March 2009   28 February 2019   70.71   5,258     5,258      
    27 May 2009   26 May 2019   77.55   199,475     60,357   139,118    
    1 September 2009   31 August 2019   79.15   9,367     2,438   6,929    
    16 November 2009   15 November 2019   88.71   10,272       10,272    
    1 March 2010   28 February 2020   90.49   22,057     22,057      
    1 May 2010   30 April 2020   110.00   8,781       8,781    
    1 September 2010   31 August 2020   120.42   64,261     19,862   44,399    
    1 September 2011   31 August 2021   153.84   2,306,948   100,187   412,177   1,794,584    
    1 November 2011   31 October 2021   157.27   294,560   28,962   46,867   218,731    
    1 March 2012   28 February 2022   174.88   284,334   36,768     247,566    
    1 April 2012   31 March 2022   164.09   58,041       58,041    
    16 May 2012   15 May 2022   159.62   241,638     28,596   213,042    
    1 September 2012   31 August 2022   168.03   854,133   65,405   45,099   743,629    
    15 October 2012   14 October 2022   167.06   321,729   10,004   16,532   295,193    
    1 March 2013   28 February 2023   186.05   505,059   84,314     420,745    
    1 May 2013   30 April 2023   187.53   33,907       33,907    
                5,466,854   325,640   906,277   4,234,937    
                                 
                                 
                                 
    2017                            
    Offer date   Expiry date   Exercise price (R)   No of options at December 2016   No of options forfeited and expired   No of options exercised   No of options December 2017    
                                 
    2 April 2007   1 April 2017   82.67   5,573     5,573      
    24 May 2007   23 May 2017   94.25   138,954     138,954      
    24 August 2007   23 August 2017   80.75   41,216     41,216      
    30 November 2007   29 November 2017   71.58   12,854     12,854      
    1 April 2008   31 March 2018   66.91   134,048     95,843   38,205    
    26 May 2008   25 May 2018   72.86   334,881     214,768   120,113    
    1 September 2008   31 August 2018   79.86   88,464     26,993   61,471    
    15 November 2008   14 November 2018   79.91   32,549     5,304   27,245    
    1 March 2009   28 February 2019   70.71   21,973     16,715   5,258    
    27 May 2009   26 May 2019   77.55   327,639     128,164   199,475    
    1 September 2009   31 August 2019   79.15   33,208     23,841   9,367    
    1 October 2009   30 September 2019   87.60   9,605     9,605      
    16 November 2009   15 November 2019   88.71   10,272       10,272    
    1 March 2010   28 February 2020   90.49   38,575     16,518   22,057    
    1 May 2010   30 April 2020   110.00   8,781       8,781    
    1 September 2010   31 August 2020   120.42   157,333   2,116   90,956   64,261    
    1 September 2011   31 August 2021   153.84   2,467,579   160,631     2,306,948    
    1 November 2011   31 October 2021   157.27   332,436   37,876     294,560    
    1 March 2012   28 February 2022   174.88   362,449   78,115     284,334    
    1 April 2012   31 March 2022   164.09   111,328   53,287     58,041    
    16 May 2012   15 May 2022   159.62   241,638       241,638    
    1 September 2012   31 August 2022   168.03   926,741   72,608     854,133    
    15 October 2012   14 October 2022   167.06   321,729       321,729    
    1 March 2013   28 February 2023   186.05   613,971   108,912     505,059    
    1 May 2013   30 April 2023   187.53   33,907       33,907    
                6,807,703   513,545   827,304   5,466,854    
                                 
                                 
                                 
                            December 2018   December 2017
    Reconciliation of the number of shares options issued   000s   000s
                                 
                                 
    Total shares and options available to the scheme   39,500   39,500
    Shares and treasury shares issued to the scheme   (16,493)   (16,493)
    Remaining capacity for issue in terms of the JSE practice   23,007   23,007
    Opening balance of shares and options issued   5,715   7,084
    Shares and options sold by employees and Executive Directors   (986)   (855)
    Shares repurchased from/forfeited by employees and options lapsed/ forfeited   (326)   (514)
    Closing balance of shares and options issued   4,403   5,715
                                 
    The closing balance includes 168,102 (December 2017: 249,733) shares and 4,234,937 (December 2017: 5,466,854) options. Shares and options previously issued to employees who then subsequently left the Group are excluded from the figures above.
                                 
    Once the options have vested they may be exercised at any time, up to ten years, from the offer date. Once exercised, the relevant shares can be sold at the discretion of the participants. In terms of the scheme rules, share trust loans have been raised on offers made to Executive Directors and other employees. Refer to note 15 on Employee Share Trust loans to Executive Directors and other employees.
                                 
    Movement in the year                    
    The following options granted to employees and Executive Directors in terms of the Employee Share Option Scheme have not yet been exercised:    
       
                    December 2018   December 2017
                    Number of share options   Weighted average exercise price   Number of share options   Weighted average exercise price
                      Rand     Rand
                                 
    Outstanding at the beginning of the year   5,466,854   154.24   6,807,703   146.50
    Exercised during the year       (906,277)   125.47   (827,304)   83.09
    Forfeited or expired during the year       (325,640)   168.12   (513,545)   167.06
    Outstanding at the end of the year       4,234,937   159.33   5,466,854   154.24
                         
    Exercisable at the end of the year 4,234,937       5,332,072    
                                 
    In December 2018, the weighted average share price at the date of exercise for share options exercised during the year was R125.47. The options outstanding at the end of the year had a weighted average remaining contractual life of 3.1 years. No options were granted in the current financial year.
                                 
    In December 2017, the weighted average share price at the date of exercise for share options exercised during the year was R143.11. The options outstanding at the end of the year had a weighted average remaining contractual life of 3.9 years. No options were granted in the current financial year.
                                 
    Fair value of share options granted during the year
                                 
    There were no grants issued during the current financial year.        
                                 
                                 
    Employee Share Incentive Plan        
                                 
    Massmart granted restricted share grants and performance share awards entitling certain employees within the Group to fully-paid shares under the Employee Share Incentive Plan. The grants and awards were granted by Massmart in its own shares resulting in the grants and awards being treated as equity-settled share-based payments. The Employee Share Incentive Plan is split into two incentive structures, mainly, restricted share grants and performance share awards. Restricted share grants require the employee to remain employed at the date of vesting in order to receive the shares earned by them. In determining the spot price at grant date its fair market value is the volume weighted average price of a share on the Johannesburg Stock Exchange (JSE) over the ten trading days immediately prior to the day in question. Performance share awards are subject to non-market conditions in years one, two and three based 50% on Group Return of Investment (ROI) and 50% on Group nominal sales against the budgeted equivalent for that year. The share-based payment valuation was performed using a valuation system acquired by the Group with the necessary model inputs having been determined by management. Management derived these inputs through consultation with various financial institutions, and they are representative of the market data available for Massmart Holdings Limited’s share at the reporting date. Vesting occurs over a five-year period for restricted share grants and over a three-year period for performance share awards as follows:
                                 
            Restricted share grants   Performance share awards                
    – Three years after the offer date   33%   100%                
    – Four years after the offer date   33%   N/A                
    – Five years after the offer date   33%   N/A                
                                 
                                 
    The following grants and awards granted to employees and Executive Directors in terms of the Employee Share Incentive Plan have not yet been exercised:
                    December 2018   December 2017   December 2012
    Restricted share grants   Number of share grants and awards   Vesting Period   Number of share grants and awards   Vesting Period
    16 September 2013       88,764   2018
    15 September 2014   163,264   2018 to 2019   407,076   2018 to 2019
    16 March 2015               28,339   2018 to 2020   42,505   2018 to 2020
    15 September 2015               385,989   2018 to 2020   687,426   2018 to 2020
    16 September 2016               692,089   2019 to 2021   795,194   2019 to 2021
    18 April 2017               25,275   2020 to 2022   25,275   2020 to 2022
    15 September 2017               965,337   2020 to 2022   1,083,621   2020 to 2022
    15 September 2018               1,480,672   2021 to 2023     2021 to 2023
    Performance share awards                
    16 March 2015                 2018   875,217   2,018
    18 March 2016               972,130   2019   1,243,979   2,019
    18 April 2017               1,195,001   2020   1,484,014   2,020
    13 April 2018               1,067,154   2021     2,021
    Total awards   6,975,250       6,733,071    
    Exercisable at the end of the year            
                                 
    Movement in the Year                
                    December 2018   December 2017
                    Number of share grants and awards   Weighted average exercise price   Number of share grants and awards   Weighted average exercise price
                      Rand     Rand
                                 
    Outstanding at the beginning of the year   6,733,071     5,869,679  
    Granted during the year   2,614,914     2,740,349  
    Vested during the year   (1,540,033)     (1,378,625)  
    Forfeited or expired during the year   (832,702)     (498,332)  
    Outstanding at the end of the year   6,975,250     6,733,071  
    Exercisable at the end of the year            
                                 
    The estimated fair values of the restricted share grants at grant date was R102,83 (December 2017: R108,42) and the performance share awards was R132.53 (December 2017: R128.06).
           
    These fair values were calculated using the Lattice Model. The inputs into the model at grant date were as follows:        
    Restricted share grants   December 2018   December 2017
    10 day volume weighted average share price (Rand)   103.3   120.0
    Expected volatility   28.87% – 33.95%   33.54% – 35.15%
    Expected life   2.75 – 4.25 years   2.75 – 4.25 years
    Risk-free rate   7.88% – 8.19%   7.02% -7.32%
    Expected dividend yield   3.44%   2.97%
    Performance share awards and restricted share grants        
    10 day volume weighted average share price (Rand)   164.2   132.5
    Expected volatility   39.34%   35.51%
    Expected life   2.25 years   2.25 years
    Risk-free rate   6.93%   7.04%
    Expected dividend yield   3.22%   2.83%
    Exercise price                        
                                 
    Expected volatility was determined by calculating the historical volatility of the Company’s share price over the number of previous years corresponding with the share awards vesting period. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The risk-free rate used was the swap rate over the vesting period of the share grants and awards.
                                 
    Massmart Black Scarce Skills Trust
                                 
    The Black Scarce Skills Trust is a share-scheme used to attract and retain African, Coloured and Indian employees. The Executive Committee of each of the Divisions and the Massmart Remuneration Committee submit their nominations to the Black Scarce Skills Trust trustees for approval, upon which allocations are made bi-annually in April and October of each year. A beneficiary can only receive one allocation.
                                 
    Vesting occurs over a five-year period as follows:        
    – 25% two years after the offer date;        
    – 50% three years after the offer date;        
    – 75% four years after the offer date;        
    – 100% five years after the offer date; and        
    – expires five years after the offer date.        
                                 
    The following options granted to eligible employees in terms of the Massmart Black Scarce Skills Trust have not yet been exercised:
                                 
    Offer date   Expiry date   Exercise price (R)   No of options opening balance   No of options forfeited and expired   No of options exercised   New options granted   No of options closing balance
                                 
    December 2018                            
    1 April 2013   30 March 2018   189.13   91,625   91,625      
    1 October 2013   30 September 2018   170.31   633,976   633,976      
    1 April 2014   30 March 2019   136.69   212,776   8,136   73,263     131,377
    1 October 2014   30 September 2019   120.29   370,899     76,768     294,131
                1,309,276   733,737   150,031     425,508
                                 
    December 2017                      
    1 April 2012   31 March 2017   164.09   304,722   304,722      
    1 October 2012   30 September 2017   166.91   142,738   142,738      
    1 April 2013   30 March 2018   189.13   111,340   19,715       91,625
    1 October 2013   30 September 2018   170.31   667,419   33,443       633,976
    1 April 2014   30 March 2019   136.69   253,140   28,823   11,541     212,776
    1 October 2014   30 September 2019   120.29   427,124   12,885   43,340     370,899
                1,906,483   542,326   54,881     1,309,276
                                 
                            December 2018   December 2017
                            000s   000s
    Reconciliation of the number of options issued        
    Opening balance of share options   1,309   1,906
    New share options offered to employees    
    Share options exercised by employees   (150)   (55)
    Share options repurchased from/forfeited by employees and options lapsed/forfeited   (734)   (542)
    Closing balance of share options   425   1,309
    Number of options exercisable     812
                                 
    In the current financial year 150,031 options were exercised. The options outstanding at the end of the year had a weighted average remaining contractual life of 0.6 years.
    In December 2017, 54,881 options were exercised. The options outstanding at the end of the year had a weighted average remaining contractual life of 1.1 years.
                                 
                                 
    Expense recognised in Profit or Loss      
    The expense recognised for employee services received during the year on equity-settled share-based payment transactions is shown in the following table:
                                 
    Rm                       December 2018   December 2017
                                 
    Expense arising from Employee Share Option Scheme   (5.3)   (12.4)
    Expense arising from Employee Share Incentive Plan   195.9   169.3
    Expense arising from Black Scarce Skills Trust   4.0   6.8
    Total expense arising from equity-settled share-based payment transactions   194.6   163.7
                                 
                                 
  • + 28. Retirement benefit information
    28. Retirement benefit information    
       
    All full-time permanent Massmart staff are members of either the Massmart Pension Fund, the Massmart Provident Fund or the SACCAWU National Provident Fund. These funds are defined contribution funds and are subject to the Pension Funds Act, 1956. Following the recent acquisitions, some staff are still members of the retirement funds of the previous business owners. Projects are underway to transfer these employees to one of the above funds in future.
    The Massmart Pension Fund and Massmart Provident Fund have been classified as valuation exempt. The Board of Trustees successfully submitted the renewal applications for exemption from valuation in 2017 and the funds therefore remain exempt from the provisions of sections 9A and 16 of the Pension Funds Act. The exemption expires on 31 May 2020. This exemption may be extended upon submission of an application in terms of the Notice, which must be submitted to the registrar on or before 31 May 2020; failing which the fund must undergo a statutory actuarial valuation as at 31 May 2020, which must be submitted to the registrar by 31 May 2020. The fund will reapply if required.
    Contributions received by the funds for the year ended December 2018 amounted to R719.5 million (December 2017: R681.7 million). The Group’s contribution of R428.6 million (December 2017: R406.7 million) was included in the Income Statement for the year in ‘Employee costs’.
  • + 29. Commitments
    29. Commitments      
         
    Rm December 2018 December 2017
    Commitments in respect of capital expenditure approved by Directors:
    Contracted for
    Stores to be opened   513.5   247.1
    Stores to be refurbished   7.2   42.3
    Purchase of plant and equipment   11.3   17.5
    Purchase of new system software   322.8   341.6
    Purchase of new computer hardware   46.6   41.2
    Purchase of motor vehicles   0.2
    Store relocations   18.9   4.0
    Minor revamps   19.7
    Store expansion and reduction   17.9   61.0
    Distribution centre to be opened   20.4   23.2
      958.8   797.6
    Not contracted for
    Stores to be opened   524.1   748.8
    Stores to be refurbished   96.3   90.8
    Purchase of plant and equipment   240.8   152.5
    Purchase of new system software   318.2   161.4
    Purchase of new computer hardware   104.5   44.3
    Purchase of motor vehicles   16.5   59.0
    Store expansion and reduction   8.4   97.0
    Distribution centre to be opened   58.0   3.5
    Logistical expansion   15.0   14.0
    Store relocations   32.1   7.0
      1,413.9   1,378.3
          2,372.7   2,175.9
           
  • + 30. Lease commitments
             
    30. Lease commitments        
             
    Rm   December 2018   Restated
    December 2017*
             
    Net lease commitments        
             
    Real Estate        
             
    Short-term        
    Year 1     2,343.8     2,240.8
    Years 2 to 5     7,807.2     7,846.9
    Subsequent to year 5     6,102.7     4,927.6
          16,253.7     15,015.3
    Long-term 1        
    Year 1     5.0     4.7
    Years 2 to 20     212.8     198.0
    Years 21 to 50     2,209.8     2,055.7
    Subsequent to year 50     12,719.4     12,893.4
          15,147.0     15,151.7
    Non-real estate        
    Year 1     52.1     12.0
    Years 2 to 5     68.3     31.7
    Subsequent to year 5    
          120.4     43.7
             
          31,521.1     30,210.7
             
             
    Leases on properties are normally contracted for periods of between 3 and 12 years with renewal options averaging a further 3 to 10 years. Rental comprises minimum monthly payments and in some cases, contingent payments based on turnover levels. Turnover rentals, where applicable, average 1.1% of turnover. Rental escalations vary, but are between 0 and 10% p.a.
    1The long-term lease of land relates to a 99-year lease arrangement that was entered into in 1994 for the Makro Woodmead Store. The basic rental escalation is set at 7.5%. The present value of the minimum lease payments is R251,9 million. This is the only finance lease included in the net lease commitments.
    *Refer to Note 41.        
  • + 31. Contingent liabilities
    31. Contingent liabilities      
         
    Rm December 2018 December 2017
       
    Contingent liabilities   6.8
    During the 2018 reporting period, we managed various litigation matters, regulatory complaints and other contingent liabilities which were considered risks for the Group, some of which have been successfully resolved while others remain ongoing but highly unlikely to occur. In the period, a competition complaint referral by the Competition Authority of Botswana (CA) brought against Trident Holdings Limited, a wholly owned subsidiary of Massmart International Holdings Limited was finally settled with the CA during April 2018 without the imposition of penalties. The Competition Commission (Commission) grocery retail sector market inquiry panel which is considering, amongst other issues, the potential anti-competitive effects of exclusive lease terms completed its final round of public hearings in Pretoria in November 2017. Massmart and a number of big retailers, select property funds and banks were invited, and Massmart participated and made further submissions in this round of consultation and public hearings. On 26 September 2018 the Commission issued a notice in the Government Gazette in terms of which it extended the completion date of the Inquiry from 28 September 2018 to 30 September 2019 in order to allow the panel more time to consult further with key stakeholders and to finalise and publish its provisional report of its investigation.

  • + 32. Related-party transactions
             
    32. Related-party transactions        
             
    Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.
             
        December 2018   Restated
    December 2017
    Rm   52 weeks   53 weeks
             
    Compensation of key management personnel:        
             
    The remuneration of Executive Directors and other key management were as follows:        
    Short-term benefits (salaries, benefits and short-term incentives)     87.3     96.2
    Retirement benefits     4.2     4.1
    Other long-term benefits     0.5     0.5
    Gains on exercise of share options     33.6     34.0
          125.6     134.8
             
             
    Other related-party transactions:        
             
    Of the Walmart integration and related costs, an amount due to Walmart of R0.1 million (December 2017: R4.8 million) remains unpaid at the end of the current financial year and has been included in ‘Amount due to Walmart’ in note 24. There are no amounts due from Walmart at the end of the current and prior financial year. This loan is non-interest bearing and has no fixed terms of repayment.

    A net amount of R2.3 million remains due from Walmart, which has been accounted for in ‘trade, other payables and provisions’ and trade, other receivables and prepayments’
    Main Street 830 Proprietary Limited, a subsidiary of Wal-Mart Stores, Inc. and the direct holding company of Massmart Holdings Ltd receives dividends from the Company. Dividends of R385.7 million (December 2017: R342.5 million) were paid during the year.
    Loans to Executive Directors and Executive Committee members have been disclosed in note 15.
    The Massmart Health Plan and Resolution Health Medical Scheme, Massmart Pension Fund and Massmart Provident Fund are managed for the benefit of past and current employees of the Group. Additional information can be found in note 23 and note 28.
    Refer to note 33 and 34 for more information regarding Directors remuneration and interests in the Company’s Share Incentive Schemes.
             
             
  • + 33. Directors’ emoluments
                                         
    33. Directors’ emoluments                                    
                                         
    R’000   Services as Directors of Massmart Holdings Limited   Salary and allowances   Bonuses and performance related payments1   Other benefits   Retirement and related benefits   Subtotal   Fringe benefit of interest-free loans used to finance shares2   Gains on exercise of share options and on shares purchased by Directors   Total
                                         
    For the 52 weeks ended December 2018                                    
    Executive Directors                                    
    Hayward, GRC     6,345   1,306   228   666   8,545   332   3,921   12,798
    van Lierop, JJM     5,566   1,055   2,603     9,224     13,017   22,241
          11,911   2,361   2,831   666   17,769   332   16,938   35,039
    Non-Executive Directors                                    
    Dlamini, KD   2,262           2,262       2,262
    Seabrooke, CS   1,965           1,965       1,965
    Burnley, R                  
    Gwagwa, NN   845           845       845
    Ighodaro, O3   533           533       533
    Langeni, P   1,541           1,541       1,541
    Muigai, S                  
    Ostale, E                  
        7,146           7,146       7,146
                                         
    Total   7,146   11,911   2,361   2,831   666   24,915   332   16,938   42,185
                                         
                                         
    R’000   Services as Directors of Massmart Holdings Limited   Salary and allowances   Bonuses and performance related payments1   Other benefits   Retirement and related benefits   Subtotal   Fringe benefit of interest-free loans used to finance shares2   Gains on exercise of share options and on shares purchased by Directors   Total
                                         
    For the 53 weeks ended December 2017                                    
    Executive Directors                                    
    Hayward, GRC     5,909   3,149   163   620   9,841   341   4,333   14,515
    van Lierop, JJM     5,250   2,384   3,749     11,383       11,383
          11,159   5,533   3,912   620   21,224   341   4,333   25,898
    Non-Executive Directors                                    
    Dlamini, KD   1,961           1,961       1,961
    Seabrooke, CS   1,419           1,419       1,419
    Burnley, R                  
    Clarke, A4                  
    Gwagwa, NN   738           738       738
    Ostale, E                  
    Kgosana, M5   768           768       768
    Langeni, P   1,106           1,106       1,106
    Muigai, S                  
    Suarez, JP6                  
        5,992           5,992       5,992
                                         
    Total   5,992   11,159   5,533   3,912   620   27,216   341   4,333   31,890
                                         
    1In order to match incentive awards with the performance to which they relate, bonuses above reflect the amounts accrued in respect of each year and not amounts paid in that year
    2Held in terms of the rules of the Company’s share scheme
    3Appointed with effect from May 2018                                
    4Resigned with effect from February 2017                                
    5Resigned with effect from September 2017                                
    6Resigned with effect from May 2017                                
     
                                         
  • + 34. Interests of Directors in the Company’s share scheme
                         
    34. Interests of Directors in the Company’s share scheme
                         
    Details of Directors’ shares and share options per Director:
        Grant dates   Subscription price (R)   Number of shares/share options   Gain on sale/exercise (R 000’s)   Expiry date
    Hayward, GRC                    
    Employee Share Option Scheme (note 27)                  
    Balance at December 2017           436,994      
    Options exercised/ shares sold       73   (36,573)   842    
    Options exercised/ shares sold       94   (24,444)   245    
    Balance at December 2018           375,977        
    Comprising: Shares 27-May-09   77.56   105,448      
      Options 1-Sep-11   153.84   120,987     1-Sep-21
      Options 16-May-12   159.62   149,542     16-May-22
                         
                         
    Employee Share Incentive Plan (note 27)                  
    Balance at December 2017           159,859        
    Performance shares vested   16-Mar-15     (25,430)     16-Mar-18
    Performance share award forfeitures*   16-Mar-15       (2,544)       16-Mar-18
    Restricted shares vested   16-Sep-13     (2,318)     16-Sep-18
    Restricted shares vested   15-Sep-14     (3,834)     15-Sep-18
    Restricted shares vested   15-Sep-15     (4,732)     15-Sep-18
    Performance share award forfeitures*   18-Mar-16     (3,481)     18-Mar-19
    Performance share award forfeitures*   18-Apr-17     (3,639)     18-Apr-20
    Performance share awards   13-Apr-18     36,150     13-Apr-21
    Restricted share grants   14-Sep-18     6,475     14-Sep-21
    Restricted share grants   14-Sep-18     6,475     14-Sep-22
    Restricted share grants   14-Sep-18     6,477     14-Sep-23
    Balance at December 2018           169,458        
    Comprising: Restricted share grants 15-Sep-14     3,838     15-Sep-19
      Restricted share grants 15-Sep-15     4,732     15-Sep-19
      Restricted share grants 15-Sep-15     4,734     15-Sep-20
      Performance share awards 18-Mar-16     34,794     18-Mar-19
      Restricted share grants 16-Sep-16     4,650     16-Sep-19
      Restricted share grants 16-Sep-16     4,650     16-Sep-20
      Restricted share grants 16-Sep-16     4,653     16-Sep-21
      Performance share awards 18-Apr-17     35,792     18-Apr-20
      Restricted share grants 15-Sep-17     5,345     15-Sep-20
      Restricted share grants 15-Sep-17     5,345     15-Sep-21
      Restricted share grants 15-Sep-17     5,348     15-Sep-22
      Performance share awards 13-Apr-18     36,150     13-Apr-21
      Restricted share grants 14-Sep-18     6,475     14-Sep-21
      Restricted share grants 14-Sep-18     6,475     14-Sep-22
      Restricted share grants 14-Sep-18     6,477     14-Sep-23
                         
                         
    van Lierop, JJM                    
    Employee Share Incentive Plan (note 27)                  
    Balance at December 2017           200,924        
    Performance shares vested   16-Mar-15     (65,969)        
    Performance share award forfeitures*   16-Mar-15     (6,601)     16-Mar-18
    Restricted shares vested   16-Mar-15     (7,943)     16-Mar-18
    Restricted shares vested   15-Sep-15     (4,116)     15-Sep-18
    Performance share award forfeitures*   18-Mar-16     (3,433)     18-Mar-19
    Performance share award forfeitures*   18-Apr-17     (2,839)     18-Apr-20
    Performance share awards   13-Apr-18     24,922     13-Apr-21
    Restricted share grants   14-Sep-18     5,253     14-Sep-21
    Restricted share grants   14-Sep-18     5,253     14-Sep-22
    Restricted share grants   14-Sep-18     5,255     14-Sep-23
    Balance at December 2018           150,706        
    Comprising: Restricted share grants 16-Mar-15     7,943     16-Mar-19
      Restricted share grants 16-Mar-15     7,946     16-Mar-20
      Restricted share grants 15-Sep-15     4,116     15-Sep-19
      Restricted share grants 15-Sep-15     4,119     15-Sep-20
      Performance share award 18-Mar-16     34,314     18-Mar-19
      Restricted share grants 16-Sep-16     3,858     16-Sep-19
      Restricted share grants 16-Sep-16     3,858     16-Sep-20
      Restricted share grants 16-Sep-16     3,862     16-Sep-21
      Performance share award 18-Apr-17     27,921     18-Apr-20
      Restricted share grants 15-Sep-17     4,028     15-Sep-20
      Restricted share grants 15-Sep-17     4,028     15-Sep-21
      Restricted share grants 15-Sep-17     4,030     15-Sep-22
      Performance share award 13-Apr-18     24,922     13-Apr-21
      Restricted share grants 14-Sep-18     5,253     14-Sep-21
      Restricted share grants 14-Sep-18     5,253     14-Sep-22
      Restricted share grants 14-Sep-18     5,255     14-Sep-23
                         
    The Directors’ interest in the Company’s shares and options held at reporting date can be found in the Directors’ Report.
    At the date of approval of the Group Annual Financial Statements, GRC Hayward held 105,448 shares and 270,529 share options/grants/awards and JJM van Lierop held 150,706 share grants/awards. There were no other changes in the interests held by the Directors in the Company’s shares after the reporting date up to the date of approval.