1. These condensed consolidated year end results have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), its interpretations issued by the IFRS Interpretations Committee, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, presentation and disclosure as required by International Accounting Standard (IAS) 34 Interim Financial Reporting, the JSE Limited Listings Requirements and the requirements of the Companies Act 71 of 2008 of South Africa. The accounting policies and methods of computation used in the preparation of the condensed consolidated results are in terms of IFRS and are consistent in all material respects with those applied in the most recent annual financial statements, as none of the amendments coming into effect in the current financial year have had an impact on the financial reporting of the Group.
  2. During the current year, 0.6 million Massmart shares (0.3% of average shares in issue) were acquired in the market by the Massmart Employee Share Trust at an average price of R128.22 totalling R73.7 million. During the prior year, the Massmart Employee Share Trust acquired 1.2 million shares (0.6% of average shares in issue) at an average price of R186.76 totalling R223.0 million.
  3. The impairment of assets in the current year relates to the impairment of tangible assets in Masscash as a result of store closures. The impairment also includes the write-down on reclassification to ‘Non-current Assets Held for Sale’ of a Masscash store which was closed in the 2012 financial period, but had remained owned by the Group. The impairment of assets in the prior period relates to the impairment of acquired goodwill in Masscash and tangible assets in Masscash and Makro as a result of store closures.
  4. The Massmart BEE transaction, which came into operation in October 2006, gave rise to an IFRS 2 Share-based Payment charge of R21.2 million (December 2013: R17.3 million). The ‘B’ preference shares were issued to the Black Scarce Skills Trust.
  5. Other non-current liabilities and provisions include the lease smoothing liability of R912.5 million (December 2013: R822.2 million).
  6. Property acquisitions during the current year amounted to R876.6 million. The property acquisitions include, amongst others, the acquisition of 12 Masscash Wholesale properties; the Makro Strubens Valley and Builders Warehouse Northriding stores; and the Massmart Head Office complex. Massmart acquired Capensis Investments 241 (Pty) Ltd in the prior period, resulting in control of seven Makro properties that were previously lease held.
  7. In the prior year, Massmart entered into an agreement to acquire the Makro Amanzimtoti store. A property loan of R214.2 million was provided to the seller in terms of the agreement and was reflected in ‘Non-current assets’. However, as the legal transfer was approved in February 2015, the loan has been reflected in ‘Current assets’ at year end.
  8. 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. At December 2014, the Supplier Development Fund, a separate entity created in line with the judgement of the Competition Appeal Court at the time of the Walmart transaction, had a closing balance of R157.2 million (December 2013: R202.5 million). A net amount of R206.2 million remains unpaid to Walmart (December 2013: R126.0 million), which has been accounted for in ‘trade, other receivables and prepayments’ and ‘trade, other payables and provisions’. During the prior year the Group secured a medium-term loan with Walmart repayable after five years. Interest of 7.46% is paid quarterly. The loan of R600.0 million is accounted for under interest-bearing non-current liabilities. As a 52.4% shareholder, Wal-Mart Stores, Inc. will also be receiving the ordinary dividend based on their number of shares held.
  9. The pro forma financial effects, for which the Directors of Massmart are responsible, are provided for illustrative purposes only to show the effect of the additional week of trading in the prior year on the financial information of Massmart allowing for a comparison of the 52-week periods. These pro forma adjustments are not expected to have a continuing effect as they will only occur in every 53-week year. The pro forma financial effects have been prepared using accounting policies that comply with IFRS. The accounting policies are consistent with those applied in the previous financial year. The pro forma financial effects have been compiled from the financial information for the 53 weeks ended December 2013, and in deriving our 52-week comparative, we have excluded the 53rd week.
  10. Due to Christmas trading, Massmart’s earnings are weighted towards the six months to December.
  11. These condensed consolidated year end results 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 reviews were performed in accordance with ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity for the year ended 28 December 2014 and ISAE 3420 Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus for the year ended 29 December 2013. Any reference to future financial performance included in this announcement has not been reviewed or reported on by the Group’s external auditors. The auditor’s report does not necessarily report on all of the information contained in this announcement/financial results. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor’s engagement they should obtain a copy of the auditor’s report together with the accompanying financial information from the issuer’s registered office. The preparation of the Group’s condensed consolidated financial statements was supervised by the Group Finance Director, Ilan Zwarenstein, BCom, BAcc, CA(SA).