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Financial Statements
2026
52 weeks ended 1 March
Contents
PICK N PAY STORES LIMITED GROUP
GROUP ANNUAL FINANCIAL STATEMENTS
COMPANY ANNUAL FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Group AnnuạW FrnạncrạW Stạtements ?0?6 1
Drrectors' responsrbrWrty stạtement
Compạny Secretạry's certrficạte
nternạW finạncrạW controW responsrbrWrty stạtement Drrectors' report
ndependent ạudrtor's report
Report ofi the ™roup Audrt, Rrsk ạnd CompWrạnce Commrttee
Revrew ofi operạtrons
?
Stạtement ofi comprehensrve rncome
Notes to the group ạnnuạW finạncrạW stạtements
Stạtement ofi comprehensrve rncome 8?
Stạtement ofi finạncrạW posrtron 83
Stạtement ofi chạnges rn equrty 84
Stạtement ofi cạsh flows 85
Notes to the compạny ạnnuạW finạncrạW stạtements 86
Pro fiormạ finạncrạW rnfiormạtron 93
ndependent Audrtor's Assurạnce Report on the 95
ComprWạtron ofi Pro Formạ FrnạncrạW nfiormạtron
Lrke-fior-Wrke turnover ạnd fiorwạrd Wookrng 9fi
rnfiormạtron
AnạWysrs ofi ordrnạry shạrehoWders 98
AnạWysrs ofi . shạrehoWders 99
Overvrew ofi store estạte 100
Number ofi stores 101
Corporạte rnfiormạtron 10?
These ™roup ạnd Compạny ạnnuạW finạncrạW stạtements
hạve been prepạred by the ™roup's Frnạnce Drvrsron under the supervrsron ofi the Chrefi Frnạnce Ofificer (CFO), Lerenạ OWrvrer, CA(SA).
Directors' responsibility statement
The drrectors ạre responsrbWe fior the prepạrạtron ạnd fiạrr presentạtron ofi the ™roup ạnnuạW finạncrạW stạtements ạnd ạnnuạW finạncrạW stạtements ofi Prck n Pạy Stores Lrmrted (the Compạny), comprrsrng the stạtements ofi finạncrạW posrtron ạs ạt 1 Mạrch ?0?6, the stạtements ofi comprehensrve rncome, chạnges rn equrty ạnd cạsh flows fior the perrod then ended, ạnd the notes to the finạncrạW stạtements, whrch rncWude ạ summạry ofi mạterrạW ạccountrng poWrcres ạnd other expWạnạtory notes, rn ạccordạnce wrth
FRS Accountrng Stạndạrds rssued by the nternạtronạW Accountrng Stạndạrds .oạrd ( FRS Accountrng Stạndạrds) ạnd the requrrements ofi the Compạnres Act ofi South Afirrcạ No.fi1 ofi ?008 (Compạnres Act), ạs ạmended, ạnd the drrectors' report.The drrectors ạre ạWso responsrbWe fior such rnternạW controW ạs the drrectors determrne rs necessạry to enạbWe the prepạrạtron ofi ạnnuạW finạncrạW stạtements thạt ạre firee firom mạterrạW mrsstạtement, whether due to firạud or error, ạnd fior mạrntạrnrng ạdequạte ạccountrng records ạnd ạn efifiectrve system ofi rrsk mạnạgement, ạs weWW ạs the prepạrạtron ofi the suppWementạry scheduWes rncWuded rn these ạnnuạW finạncrạW stạtements.
The drrectors hạve ạssessed the ạbrWrty ofi the ™roup ạnd Compạny to contrnue ạs ạ gorng concern ạnd hạve no reạson to beWreve thạt the busrnesses wrWW not be gorng concerns rn the perrod ạheạd. PWeạse refier to the Drrectors' Report fior fiurther rnfiormạtron.
The ạudrtor rs responsrbWe fior reportrng on whether the ™roup ạnd Compạny ạnnuạW finạncrạW stạtements ạre fiạrrWy presented rn ạccordạnce wrth the ạppWrcạbWe finạncrạW reportrng firạmework.
Approval of the Group annual financial statements and annual financial statements of the Company
The ™roup ạnd Compạny ạnnuạW finạncrạW stạtements ofi Prck n Pạy Stores Lrmrted, ạs rdentrfied rn the first pạrạgrạph, were ạpproved by the boạrd ofi drrectors on ?? Mạy ?0?6 ạnd srgned by:
2ạmes Formby | Seạn Summers | Lerenạ OWrvrer |
"Áạii | "Áiek Executive Okficei | "Áiek Mifiạfice Okficei |
?? Mạy ?0?6 | ?? Mạy ?0?6 | ?? Mạy ?0?6 |
Company Secretary's certificate
n my cạpạcrty ạs Compạny Secretạry, certrfiy thạt fior the 5?-week finạncrạW perrod ended 1 Mạrch ?0?6, Prck n Pạy Stores Lrmrted hạs fiWed ạWW returns ạnd notrces ạs requrred fior ạ compạny rn terms ofi sectron 88(?)(e) ofi the Compạnres Act No. fi1 ofi ?008, ạs ạmended, ạnd thạt such returns ạnd notrces ạre, to the best ofi my beWrefi, true, correct ạnd up to dạte.Vạughạn Prerce
"ofipạfiy 6ecietạiy
?? Mạy ?0?6
?
Chief Executive Officer and Chief Finance Officer internal financial control responsibility statement
n terms ofi ZSE Lrstrngs Requrrements 5.9, the drrectors, whose nạmes ạre stạted beWow, hereby confirm thạt -
ạ) the ạnnuạW finạncrạW stạtements set out on
to the best ofi our knowWedge ạnd beWrefi, no fiạcts hạve been omrtted or untrue stạtements mạde thạt wouWd mạke the ạnnuạW finạncrạW stạtements fiạWse or mrsWeạdrng;
rnternạW finạncrạW controWs hạve been put rn pWạce to ensure thạt mạterrạW rnfiormạtron reWạtrng to Prck n Pạy Stores Lrmrted ạnd rts consoWrdạted subsrdrạrres ạnd ạssocrạtes (the ™roup) hạve been provrded to efifiectrveWy prepạre the finạncrạW stạtements ofi the rssuer;
the rnternạW finạncrạW controWs ạre ạdequạte ạnd efifiectrve ạnd cạn be reWred upon rn comprWrng the ạnnuạW finạncrạW stạtements, hạvrng fiuWfiWWed our roWe ạnd fiunctron ạs executrve drrectors wrth prrmạry responsrbrWrty fior rmpWementạtron ạnd executron ofi controWs;
where we ạre not sạtrsfied, we hạve drscWosed to the Audrt, Rrsk ạnd CompWrạnce Commrttee ạnd the ạudrtors ạny deficrencres rn desrgn ạnd operạtronạW efifiectrveness ofi the rnternạW finạncrạW controWs, ạnd hạve tạken steps to remedy the deficrencres; ạnd
fi) we ạre not ạwạre ofi ạny firạud rnvoWvrng drrectors.
Seạn Summers Lerenạ OWrvrer
"Áiek Executive Okficei "Áiek Mifiạfice Okficei
?? Mạy ?0?6 ?? Mạy ?0?6
Group AnnuạW FrnạncrạW Stạtements ?0?6
3
Directors' report
The ?0?6 finạncrạW yeạr (FY?6) wạs chạrạcterrsed by ạ constrạrned ạnd hrghWy competrtrve consumer envrronment. Agạrnst thrs bạckdrop, the ™roup contrnued to execute rts strạtegrc turnạround wrthrn the Prck n Pạy segment. The yeạr reflects drscrpWrned executron ạnd steạdy progress rn rmprovrng operạtronạW perfiormạnce, wrth pạrtrcuWạrWy strong resuWts rn the .oxer busrness ạnd encourạgrng eạrWy srgns ofi recovery rn the Prck n Pạy segment. WhrWe srgnrficạnt work remạrns to restore the Prck n Pạy segment to rts tạrgeted breạk-even posrtron, the ™roup remạrns fiocused on strengthenrng sustạrnạbWe Wong-term profitạbrWrty ạnd rts overạWW finạncrạW posrtron.
Nature of business
Prck n Pạy Stores Lrmrted rs ạn rnvestment hoWdrng compạny thạt rs domrcrWed ạnd rncorporạted rn the RepubWrc ofi South Afirrcạ ạnd Wrsted on the ZSE ạnd A?X, the recognrsed securrtres exchạnges rn South Afirrcạ. The ™roup comprrses subsrdrạrres thạt engạge rn the retạrW ofi fiood, grocerres, heạWth ạnd beạuty products, generạW merchạndrse, cWothrng, Wrquor ạnd ạddrtronạW vạWue-ạdded servrces, throughout southern Afirrcạ, on ạn owned ạnd firạnchrsed bạsrs. The ™roup ạWso ạcqurres ạnd deveWops strạtegrc retạrW ạnd drstrrbutron srtes. Other thạn the ạcqursrtron ofi the Prck n Pạy firạnchrse operạtrons rn .otswạnạ, there were no other mạterrạW chạnges rn the nạture or composrtron ofi the ™roup's subsrdrạrres durrng the finạncrạW yeạr. Noteworthy subsrdrạrres ạre presented rn note fi to the ™roup ạnnuạW finạncrạW stạtements.
Overview of operations and financial results
The ™roup's finạncrạW ạnd operạtronạW perfiormạnce fior the ?0?6 finạncrạW yeạr rs outWrned rn the "Revrew ofi Operạtrons" presented on pạges ?1 to ?5 ofi the ™roup ạnnuạW finạncrạW stạtements. The
™roup mạnạges rts retạrW operạtrons on ạ 5?-week trạdrng cạWendạr bạsrs where the finạncrạW reportrng perrod ạWwạys ends on ạ
Capital management and liquidity
The ™roup mạrntạrned ạ strong fiocus on cạprtạW drscrpWrne ạnd Wrqurdrty mạnạgement durrng FY?6, fioWWowrng the efifiectrve deWrvery ofi the FY?5 recạprtạWrsạtron.
Solvency and liquidity
n ạccordạnce wrth the requrrements ofi the Compạnres Act, the™roup compWres wrth Wrqurdrty ạnd soWvency requrrements befiore ạny drvrdend pạyment ạnd provrsron ofi finạncrạW ạssrstạnce.
Borrowings
The ™roup's overạWW WeveW ofi debt (rncWudrng bạnk overdrạfits ạnd overnrght borrowrngs) decreạsed firom R1.? brWWron rn FY?5 to R?00 mrWWron ạt the cWose ofi FY?6. The ™roup remạrned compWrạnt wrth ạWW debt covenạnts durrng the finạncrạW yeạr.
Net cash position
The ™roup's net cạsh posrtron (defined ạs totạW cạsh ạnd cạsh equrvạWents net ofi borrowrngs) reduced firom R4.? brWWron ạt the end ofi FY?5 to R3.1 brWWron ạt the end ofi FY?6. Further detạrW rs provrded rn the Revrew ofi Operạtrons.
Shareholder distribution
n Wrght ofi the ™roup's cạprtạW posrtron ạnd ongorng recovery, drvrdend pạyments remạrned suspended durrng FY?6 ạnd no drvrdend wạs decWạred fior the yeạr. The .oạrd wrWW consrder resumrng shạrehoWder drstrrbutrons once rt rs sạtrsfied thạt the™roup's cạsh generạtron rs sufificrentWy strong, sustạrnạbWe ạnd supports ạ return to consrstent profitạbrWrty.
Share capital and treasury shares
FY?6 FY?5
Sundạy. To ensure cạWendạr reạWrgnment, the rncWusron ofi ạ 53rd
week ofi trạdrng rs requrred ạpproxrmạteWy every srx yeạrs. The
™roup reported on ạ 53-week bạsrs rn FY?5, fior the finạncrạW perrod ended ? Mạrch ?0?5 ạnd on ạ 5?-week bạsrs rn FY?6, fior the finạncrạW perrod ended 1 Mạrch ?0?6. CompạrạbWe pro fiormạ turnover rnfiormạtron rs provrded on pạge 93.
Going concern
The .oạrd ofi drrectors (the .oạrd) hạs undertạken ạ fiormạW revrew ofi the Compạny ạnd rts subsrdrạrres' ạbrWrty to contrnue trạdrng ạs gorng concerns rn the fioreseeạbWe fiuture. As pạrt ofi thrs revrew, the .oạrd hạs consrdered the rmpạct ofi the current economrc envrronment, revrewed current trạdrng trends, rnterrogạted the
™roup's fiorwạrd-Wookrng finạncrạW fiorecạsts, consrdered the ạdequạcy ofi rnsurạnce covers ạnd ạssessed the ™roup's soWvency ạnd Wrqurdrty. The .oạrd rs sạtrsfied ạs to the ™roup's ạnd Compạny's ạbrWrty to contrnue ạs ạ gorng concern fior the fioreseeạbWe fiuture ạnd hạs concWuded thạt the presentạtron ofi the
™roup ạnd Compạny AnnuạW FrnạncrạW Stạtements on ạ gorng concern bạsrs rs ạpproprrạte.
Lrsted ordrnạry shạres, no pạr vạWue
Authorrsed 8?8 500 000 8?8 500 000
ssued fi45 65fi 130 fi45 65fi 130UnWrsted B shạres, no pạr vạWue
Authorrsed 361 500 000 361 500 000
ssued 3?5 4?6 164 3?5 4?6 164Cancellation of B shares
As prevrousWy ạnnounced, Ackermạn
nvestment HoWdrngs (RF) Proprretạry Lrmrted ạnd rts reWạted ạnd rnter-reWạted persons (coWWectrveWy, the "Ackermạn FạmrWy") drsposed ofi 64 038 85fi ordrnạry shạres on 1fi November ?0?5 ạnd the 105 186 384. shạres heWd by the Ackermạn FạmrWy thạt were prevrousWy ạttạched to such ordrnạry shạres hạve ceạsed to hạve votrng rrghts. Subject to the reqursrte shạrehoWder ạpprovạW berng obtạrned ạt the ?0?6 A™M, these "unstạpWed" . shạres wrWW be repurchạsed by the Compạny fior ạ nomrnạW prrce ofi R0.00001 per
. shạre ạnd cạnceWWed, ạs contempWạted rn the Memorạndum ofi
4
Treasury shares
At finạncrạW yeạr end, 11 ?fi3 80fi shạres (?0?5: 9 945 fi86 shạres) ofi Prck n Pạy Stores Lrmrted were heWd wrthrn the ™roup to settWe fiuture obWrgạtrons under the ™roup's empWoyee shạre scheme.
Shareholders
The Compạny mạrntạrns ạ broạd ạnd drverse shạrehoWder bạse, wrth the Ackermạn fiạmrWy remạrnrng the ™roup's Wạrgest shạrehoWder. DetạrWs ofi the ™roup's shạrehoWder ạnạWysrs ạt 1 Mạrch ?0?6 ạre set out on pạges 98 ạnd 99. Further detạrWs ofi the ™roup's shạre cạprtạW ạnd treạsury shạres, rncWudrng ạWW movements fior the perrod under revrew ạre drscWosed rn notes ?4 ạnd ?5 ofi the ™roup's ạnnuạW finạncrạW stạtements.
Legal proceedings
The Compạny ạnd rts subsrdrạrres were not rnvoWved rn ạny WegạW or ạrbrtrạtron proceedrngs durrng FY?6 thạt mạy hạve, or mạy hạve hạd, ạ mạterrạW efifiect on the finạncrạW posrtron ofi the ™roup. The Compạny rs not ạwạre ofi ạny such proceedrngs thạt ạre pendrng or threạtened.
Special resolutions
At the AnnuạW ™enerạW Meetrng (A™M) heWd on 5 August ?0?5, shạrehoWders ạpproved the fioWWowrng specrạW resoWutrons ạs proposed rn the Notrce to the A™M. These resoWutrons ạre ạWrgned wrth the requrrements ofi the Compạnres Act ạnd the Compạny's MO.
Non-executive directors' fees for the 2026 and 2027 annual financial periods
ShạrehoWders ạpproved the proposed fiees pạyạbWe to non-executrve drrectors fior FY?6, whrch remạrned unchạnged firom FY?5 rn support ofi the cost ạnd efificrency efifiorts berng undertạken by the ™roup. ShạrehoWders ạWso ạpproved ạ CP
-Wrnked rncreạse rn drrectors' fiees fior FY?fi.General approval to repurchase Company shares
ShạrehoWders grạnted the Compạny ạnd rts subsrdrạrres ạ generạW ạuthorrty to ạcqurre Compạny shạres, subject to compWrạnce wrth the Compạnres Act, the MO, ạnd the ZSE Lrstrngs Requrrements. The ạuthorrty rs Wrmrted to 5% ofi the Compạny's rssued shạre cạprtạW rn ạny one finạncrạW yeạr.
Directors
DetạrWs ofi the drrectors who served on the .oạrd durrng the finạncrạW yeạr ạnd ạny chạnges ạt reportrng dạte ạre provrded beWow. The brogrạphrcạW detạrWs ofi the current drrectors, rncWudrng .oạrd commrttee membershrp, wrWW be pubWrshed rn the ?0?6
ntegrạted AnnuạW Report Wạter rn the yeạr ạnd ạre ạvạrWạbWe on the Compạny's websrte ạt: www.prcknpạyrnvestor.co.zạ.Nạme Desrgnạtron Apporntment/Retruement
Current drrectors
Seạn Summers Executrve - CEO
Lerenạ OWrvrer Executrve - CFO
™ạreth Ackermạn
Zonạthạn Ackermạn Suzạnne Ackermạn Hạroon .horạt Zạmes Formby Aboubạkạr Zạkoet Thạbo Leeuw
Audrey Mothupr-PạWmstrernạ
™rạnt Pạttrson
Annạmạrre vạn der Merwe Pooven Vrrạnnạ
Former drrector
Dạvrd FrredWạnd
Non-executrve
Non-executrve Non-executrve
ndependent non-executrve ndependent non-executrve - Chạrr ndependent non-executrve ndependent non-executrve ndependent non-executrve ndependent non-executrve ndependent non-executrve ndependent non-executrve
Appornted 1 Februạry ?0?6
Appornted 1 Februạry ?0?6
Appornted 1 Zune ?0?5
ndependent non-executrve
Retrred 5 August ?0?5
Group AnnuạW FrnạncrạW Stạtements ?0?6
5
Board and Committee changes during FY26
The fioWWowrng .oạrd ạnd Commrttee chạnges occurred durrng FY?6:
26 May 2025
Suzạnne Ackermạn stepped down ạs Chạrr ofi the SocrạW, Ethrcs ạnd Trạnsfiormạtron Commrttee ạnd wạs succeeded by rndependent non-executrve drrector, Hạroon .horạt. Suzạnne contrnues to serve ạs ạ member ofi the Commrttee.
1 June 2025
Pooven Vrrạnnạ wạs ạppornted to the .oạrd ạs ạn rndependent non-executrve drrector ạnd ạs ạ member ofi the ™roup Audrt, Rrsk ạnd CompWrạnce Commrttee.
5 August 2025 - AGM
Dạvrd FrredWạnd retrred firom the .oạrd, the ™roup Audrt, Rrsk ạnd CompWrạnce Commrttee ạnd the Frnạnce ạnd
nvestment Commrttee.™ạreth Ackermạn stepped down ạs .oạrd Chạrr ạnd wạs ạppornted to the Frnạnce ạnd
nvestment Commrttee.Zạmes Formby wạs ạppornted ạs .oạrd Chạrr ạnd stepped down firom the ™roup Audrt, Rrsk ạnd CompWrạnce Commrttee.
Hạroon .horạt wạs ạppornted ạs ạ member ofi the Nomrnạtrons ạnd Corporạte ™overnạnce Commrttee.
1 February 2026
Thạbo Leeuw wạs ạppornted ạs ạn rndependent non-executrve drrector ạnd ạs ạ member ofi the ™roup Audrt, Rrsk ạnd CompWrạnce Commrttee ạnd the SocrạW, Ethrcs ạnd Trạnsfiormạtron Commrttee.
™rạnt Pạttrson wạs ạppornted ạs ạn rndependent non-executrve drrector ạnd member ofi the ™roup Audrt, Rrsk ạnd CompWrạnce Commrttee, Remunerạtron Commrttee ạnd Frnạnce ạnd
nvestment Commrttee.Pooven Vrrạnnạ wạs ạppornted ạs ạ member ofi the SocrạW, Ethrcs ạnd Trạnsfiormạtron Commrttee.
28 February 2026
Post year-end Board and committee changes
Lerenạ OWrvrer wrWW step down ạs the ™roup's Chrefi Frnạnce Ofificer ạt the concWusron ofi the Compạny's ?0?6 A™M rn August ?0?6, rn Wrne wrth the ™roup's Wong-term successron pWạnnrng. The .oạrd extends rts srncere ạpprecrạtron to Lerenạ fior her srgnrficạnt contrrbutron ạnd dedrcạted servrce to the ™roup, ạnd rs pWeạsed thạt she wrWW contrnue to support the busrness rn ạ strạtegrc cạpạcrty thereạfiter. Trnạ RookWedge jorned the ™roup on 1 Februạry ?0?6 ạs pạrt ofi ạ structured trạnsrtron process to enạbWe ạ seạmWess hạndover ofi responsrbrWrtres.
t rs rntended thạt Trnạ wrWW ạssume the roWe ofi ™roup Chrefi Frnạnce Ofificer fioWWowrng the concWusron ofi the ?0?6 A™M. The .oạrd weWcomes Trnạ ạnd Wooks fiorwạrd to her contrrbutron.Finance and Investment Committee
n August ?0?5, the ™roup ạnnounced the rntentron thạt Zạmes Formby wouWd step down ạs Chạrr ofi the Frnạnce ạnd nvestment Commrttee ạt the end ofi FY?6. FoWWowrng fiurther consrderạtron, ạnd the ạnnuạW .oạrd ạnd commrttee evạWuạtrons, rt wạs ạgreed thạt he wouWd contrnue rn thrs roWe. The .oạrd rs sạtrsfied thạt thrs does not ạfifiect hrs rndependence ạs .oạrd Chạrr or the efifiectrveness ofi thrs non-stạtutory Commrttee, ạnd vạWues the srgnrficạnt benefit ofi hrs experrence rn treạsury ạnd Wrqurdrty mạnạgement.Director retirement and rotation
n Mạy ?0?4, the .oạrd rnrtrạted ạ structured process to support the rotạtron ạnd retrrement ofi Wong-servrng rndependent non-executrve drrectors. Supported by the Nomrnạtrons ạnd Corporạte ™overnạnce Commrttee, thrs .oạrd refireshment process hạs resuWted rn the retrrement ofi two ofi the ™roup's Wongest-servrng drrectors ạnd the ạpporntment ofi three new rndependent non-executrve drrectors over the pạst two yeạrs. As pạrt ofi thrs process, Audrey Mothupr-PạWmstrernạ wrWW retrre firom the .oạrd ạt the ?0?6 A™M, to be heWd rn August ?0?6.The drrectors stạndrng fior eWectron or re-eWectron ạt the ?0?6 A™M ạre set out beWow. Further detạrWs wrWW be rncWuded rn the Notrce ofi A™M, expected to be pubWrshed ạt the end ofi Zune ?0?6.
Cạtegouy | Druectou | Bạsrs |
Executrve | Trnạ RookWedge | EWectron, on ạpporntment ạs Chrefi Frnạnce Ofificer |
Non-executrve | ™ạreth Ackermạn | Retrrement ạnd re-eWectron ạfiter ạ three-yeạr term |
Non-executrve | Zonạthạn Ackermạn | Retrrement ạnd re-eWectron ạfiter ạ three-yeạr term |
|
ndependent non-executrve | Thạbo Leeuw | EWectron, fioWWowrng .oạrd ạpporntment on 1 Februạry ?0?6 |
|
ndependent non-executrve | ™rạnt Pạttrson | EWectron, fioWWowrng .oạrd ạpporntment on 1 Februạry ?0?6 |
|
ndependent non-executrve | Hạroon .horạt | Retrrement ạnd re-eWectron ạfiter ạ three-yeạr term |
|
ndependent non-executrve | Zạmes Formby | Retrrement ạnd re-eWectron ạfiter ạ three-yeạr term |
6
Directors' remuneration, interest in shares and related party transactions
The remunerạtron pạrd to the drrectors ofi the Compạny durrng the perrod under revrew rs set out rn note 6 ofi the ™roup ạnnuạW finạncrạW stạtements ạnd note ? ofi the Compạny ạnnuạW finạncrạW stạtements. Over the reportrng perrod, the drrectors ofi the Compạny beneficrạWWy heWd ordrnạry shạres rn the Compạny. DetạrWs ofi the shạrehoWdrng cạn be fiound rn notes 6 ofi the ™roup ạnnuạW finạncrạW stạtements ạnd fi ofi the Compạny ạnnuạW finạncrạW stạtements. There hạve been no fiurther chạnges to the drrectors' rnterests between the end ofi the reportrng perrod ạnd the dạte ofi the Drrectors' Report. Durrng the perrod, no drrectors hạd ạny mạterrạW rnterests rn contrạcts wrth the Compạny or ạny ofi rts subsrdrạrres thạt gạve rrse to ạ conflrct ofi rnterest. ReWạted pạrty trạnsạctrons, rn terms ofi
FRS Accountrng Stạndạrds, between the Compạny or rts subsrdrạrres, ạnd the drrectors or therr ạssocrạtes, ạre drscWosed rn note fi ofi the ™roup ạnnuạW finạncrạW stạtements.Company Secretary
Vạughạn Prerce .A (LL.) (LLM) hạs served ạs Compạny Secretạry ofi the Prck n Pạy ™roup srnce Mạrch ?0?4. Vạughạn hạd prevrousWy served ạs Senror LegạW Advrsor fior the ™roup fior 13 yeạrs. Durrng hrs tenure he perfiormed ạ number ofi other key roWes, rncWudrng ạs Vrce Chạrrperson ofi the Prck n Pạy MedrcạW Ard Scheme ạnd ạs Trustee on the Ackermạn Prck n Pạy Foundạtron ạnd Feed the Nạtron Foundạtron. Vạughạn Weạds the ™roup's EnvrronmentạW, SocrạW ạnd ™overnạnce (ES™) drvrsron.
Audit, risk and compliance committee
We drạw ạttentron to the ™roup Audrt, Rrsk ạnd CompWrạnce Commrttee report on pạges 14 to ?0, where the Commrttee Chạrr sets out the responsrbrWrtres ofi the Commrttee ạnd how rt drschạrged these responsrbrWrtres durrng the perrod.
Events subsequent to the reporting date
Consultation process in terms of Section 189A of the Labour Relations Act
Subsequent to perrod end, the ™roup's Prck n Pạy segment notrfied rts store-bạsed non mạnạgerrạW bạrgạrnrng unrt empWoyees, together wrth therr representạtrve trạde unrons, ofi restructurrng requrrements rn ạccordạnce wrth Sectron 189A ofi the Lạbour ReWạtrons Act, No. 66 ofi 1995. The stạtutory consuWtạtron perrod hạs commenced, wrth deWrberạtrons fiocused on the optrmrsạtron ofi the Prck n Pạy segment's store Wạbour modeW. Mạtters under consrderạtron rncWude guạrạnteed workrng hours by job cạtegory, flexrbrWrty ạnd scheduWrng efificrencres, non stạtutory Weạve entrtWements, ạs weWW ạs certạrn benefits ạnd reWạted provrsrons. Due to the rnherent uncertạrnty surroundrng the outcome ofi thrs event, the ™roup rs unạbWe to reWrạbWy estrmạte the finạncrạW efifiect ạt reportrng dạte.
Repayment of Borrowings
Subsequent to perrod end, the ™roup's .oxer segment repạrd borrowrngs ofi R?00 mrWWron, resuWtrng rn no remạrnrng Wong term debt rn the ™roup.
Logistics contract
Subsequent to perrod end, mạnạgement hạs concWuded ạ new Wogrstrcs ạgreement, whrch rs expected to benefit the Prck n Pạy Segment through suppWy chạrn cost efificrencres. The new contrạct hạd no rmpạct on finạncrạW rnfiormạtron reported fior the perrod under revrew. The ạgreement rncWudes ạn extensron to Weạses fior equrpment ạnd vehrcWes, resuWtrng rn ạn rncreạse rn the
FRS 16 rrght-ofi-use ạsset ạnd Weạse WrạbrWrty fior these ạssets ofi ạpproxrmạteWy R600 mrWWron, recorded rn FY?fi.Reduction of shareholding in Boxer Retail Limited
Subsequent to perrod end, the ™roup drsposed ofi 5fi.3 mrWWron
.oxer RetạrW Lrmrted (.oxer) shạres through ạn ạcceWerạted bookburWd ofifierrng (the trạnsạctron), generạtrng gross proceeds ofi R4.fi brWWron. The proceeds wrWW support Prck n Pạy's turnạround ạnd growth strạtegres, enhạncrng finạncrạW flexrbrWrty. The trạnsạctron reduces the ™roup's shạrehoWdrng rn .oxer firom 65.6% to 53.1% ạnd therefiore there hạs been no Woss ofi controW by the ™roup, wrth .oxer remạrnrng ạ consoWrdạted subsrdrạry ofi the
™roup. As ạ resuWt ofi .oxer berng fiuWWy consoWrdạted rnto the
™roup's resuWts, both befiore ạnd ạfiter the trạnsạctron, the rmpạcts ofi the reductron rn shạrehoWdrng shạWW be ạccounted fior wrthrn equrty ạs ạ trạnsạctron wrth owners fior the FY?fi finạncrạW reportrng perrod. There rs therefiore no rmpạct on the ạssets, WrạbrWrtres or profit ạnd Woss ofi the ™roup resuWtrng firom the shạrehoWdrng reductron. The trạnsạctron hạs been ạssessed, ạs per
AS10 Events ạfiter the reportrng perrod ạs ạ non-ạdjustrng event fior the perrod ended 1 Mạrch ?0?6.Geopolitical events and uncertainty
Subsequent to perrod end, geopoWrtrcạW tensrons hạve rntroduced uncertạrnty to the ™roup's outWook ạnd ạre berng cWoseWy monrtored. The potentrạW rmpạcts ạcross the ™roup, prrmạrrWy through hrgher orW prrces, rnflạtron, ạnd potentrạW currency voWạtrWrty, ạre berng ạssessed; the potentrạW finạncrạW efifiects cạnnot presentWy be quạntrfied. Thrs hạs not cạst doubt rn the
™roup's ạbrWrty to contrnue ạs ạ gorng concern.
The drrectors ạre not ạwạre ofi ạny other mạterrạW events thạt hạve occurred between the reportrng dạte ạnd the dạte ofi ạpprovạW ofi these finạncrạW stạtements.
2ạmes Formby Seạn Summers
"Áạii "Áiek Executive Okficei
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Lerenạ OWrvrer
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Group AnnuạW FrnạncrạW Stạtements ?0?6 fi
Independent auditor's report
To the shareholders of Pick n Pay Stores Limited
Report on the Audit of the Consolidated and Company Financial Statements
Opinion
We hạve ạudrted the consoWrdạted ạnd compạny finạncrạW stạtements ofi Prck n Pạy Stores Lrmrted ạnd rts subsrdrạrres (the
™roup ạnd compạny) set out on pạges ?fi to 91, whrch comprrse ofi the consoWrdạted ạnd compạny stạtements ofi finạncrạW posrtron ạs ạt 1 Mạrch ?0?6, the consoWrdạted ạnd compạny stạtements ofi comprehensrve rncome, the consoWrdạted ạnd compạny stạtements ofi chạnges rn equrty, the consoWrdạted ạnd compạny stạtements ofi cạsh flows fior the yeạr then ended, ạnd notes to the consoWrdạted ạnd compạny finạncrạW stạtements, rncWudrng mạterrạW ạccountrng poWrcy rnfiormạtron.
n our oprnron, the consoWrdạted ạnd compạny finạncrạW stạtements present fiạrrWy, rn ạWW mạterrạW respects, the consoWrdạted ạnd compạny finạncrạW posrtron ofi the group ạnd compạny ạs ạt1 Mạrch ?0?6, ạnd rts consoWrdạted ạnd compạny finạncrạW perfiormạnce ạnd consoWrdạted ạnd compạny cạsh flows fior the yeạr then ended, rn ạccordạnce wrth
FRS Accountrng Stạndạrds ạs rssued by the nternạtronạW Accountrng Stạndạrds .oạrd, ạnd the requrrements ofi the Compạnres Act ofi South Afirrcạ.Basis for Opinion
We conducted our ạudrt rn ạccordạnce wrth
nternạtronạW Stạndạrds on Audrtrng ( SAs). Our responsrbrWrtres under those stạndạrds ạre fiurther descrrbed rn the Audrtor's ResponsrbrWrtres fior the Audrt ofi the consoWrdạted ạnd compạny finạncrạW stạtements sectron ofi our report. We ạre rndependent ofi the group ạnd compạny rn ạccordạnce wrth the ndependent ReguWạtory .oạrd fior Audrtors' Code ofi ProfiessronạW Conduct fior Regrstered Audrtors ( R.A Code) ạs ạppWrcạbWe to ạudrts ofi finạncrạW stạtements ofi pubWrc rnterest entrtres, ạnd other rndependence requrrements ạppWrcạbWe to perfiormrng ạudrts ofi finạncrạW stạtements ofi the group ạnd compạny ạnd rn South Afirrcạ. We hạve fiuWfiWWed our other ethrcạW responsrbrWrtres rn ạccordạnce wrth the R.A Code ạnd rn ạccordạnce wrth other ethrcạW requrrements ạppWrcạbWe to perfiormrng ạudrts ofi the group ạnd compạny ạnd rn South Afirrcạ. The R.A Code rs consrstent wrth the correspondrng sectrons ofi the nternạtronạW Ethrcs Stạndạrds .oạrd fior Accountạnts'Final materiality
The
SAs recognrse thạt:Mrsstạtements, rncWudrng omrssrons, ạre consrdered to be mạterrạW rfi the mrsstạtements, rndrvrduạWWy or rn the ạggregạte, couWd reạsonạbWy be expected to rnfluence the economrc decrsrons ofi users tạken on the bạsrs ofi the finạncrạW stạtements;
Zudgements ạbout mạterrạWrty ạre mạde rn Wrght ofi surroundrng crrcumstạnces, ạnd ạre ạfifiected by the srze or nạture ofi ạ mrsstạtement, or ạ combrnạtron ofi both; ạnd
Zudgements ạbout mạtters thạt ạre mạterrạW to users ofi the finạncrạW stạtements consrder users ạs ạ group rạther thạn ạs specrfic rndrvrduạW users, whose needs mạy vạry greạtWy.
The ạmount we set ạs mạterrạWrty represents ạ quạntrtạtrve threshoWd used to evạWuạte the efifiect ofi mrsstạtements to the finạncrạW stạtements ạs ạ whoWe bạsed on our profiessronạW judgment. QuạWrtạtrve fiạctors ạre ạWso consrdered rn mạkrng finạW determrnạtrons regạrdrng whạt rs mạterrạW to the finạncrạW stạtements.
Group final materiality
We determrned the finạW mạterrạWrty fior the ™roup to be R108 mrWWron, whrch rs bạsed on ?% ofi eạrnrngs befiore rnterest, tạx, deprecrạtron ạnd ạmortrsạtron (E.
TDA). We rdentrfiedE.
TDA ạs the most ạpproprrạte eạrnrngs bạsrs. We beWreve eạrnrngs ạre ạ key metrrc fior users. E. TDA rs ạn rmportạnt metrrc whrch fiocuses on the operạtronạW strength ofi the group by provrdrng rnsrghts to the ™roup's operạtronạW perfiormạnce by excWudrng the efifiects ofi finạncrng ạnd non-cạsh ạccountrng rtems provrdrng ạ vrew ofi the entrty's eạrnrngs. Our revrew ofi rnfiormạtron provrded to users by the entrty ạnd ạnạWysts confirms our vrew.Company materiality
We determrned finạW mạterrạWrty fior the stạndạWone compạny to be R4fi mrWWron, whrch rs bạsed on 1% ofi equrty. We hạve rdentrfied thạt ạ cạprtạW-bạsed meạsure wạs most ạpproprrạte becạuse Prck n Pạy Stores compạny rs the hoWdrng compạny ofi the group's operạtronạW subsrdrạrres ạnd rs not ạ profit orrentạted operạtrng entrty rtseWfi. Our revrew ofi rnfiormạtron provrded to users by the entrty confirms our vrew.
8
Group Audit Scope
Our ạssessment ofi ạudrt rrsk, our evạWuạtron ofi mạterrạWrty ạnd our ạWWocạtron ofi perfiormạnce mạterrạWrty determrne our ạudrt scope fior eạch component wrthrn the group. Tạken together, thrs enạbWes us to fiorm ạn oprnron on the consoWrdạted finạncrạW stạtements. We tạke rnto ạccount the srze ạnd rrsk profiWe ofi the components rn the group.
n ạddrtron, we fiurther consrder the orgạnrsạtron ofi the group ạnd efifiectrveness ofi group wrde controWs, chạnges rn the busrness envrronment, ạnd other fiạctors such ạs our experrence rn prror yeạrs ạnd recent rnternạW ạudrt resuWts when ạssessrng the WeveW ofi work to be perfiormed ạt eạch component ofi the group. Our process fiocuses on rdentrfiyrng ạnd ạssessrng the rrsk ofi mạterrạW mrsstạtements ofi the group finạncrạW stạtements ạs ạ whoWe rncWudrng, wrth respect to the consoWrdạtron process.Ofi the fi components seWected, we rdentrfied:
? components (fiuWW scope components) whrch were seWected bạsed on the pervạsrveness ofi rrsk rn those components ạnd fior whrch we therefiore perfiormed procedures on whạt we consrdered to be the entrre finạncrạW rnfiormạtron ofi the component.
5 components (specrfic scope components) where our procedures were more fiocussed or Wrmrted to specrfic ạccounts whrch we consrdered hạd the potentrạW fior the greạtest rmpạct on the srgnrficạnt ạccounts rn the finạncrạW stạtements grven the specrfic rrsks rdentrfied.
At ạ ™roup WeveW we ạWso tested certạrn
T processes, the consoWrdạtron process, Weạse WrạbrWrtres ạnd reWạted rrght ofi use ạssets, rmpạrrment ofi non-finạncrạW ạssets ạnd certạrn shạre-bạsed pạyment schemes.Key Audit Matters
Key ạudrt mạtters ạre those mạtters thạt, rn our profiessronạW judgement, were ofi most srgnrficạnce rn our ạudrt ofi the consoWrdạted ạnd compạny finạncrạW stạtements ofi the current perrod. These mạtters were ạddressed rn the context ofi our ạudrt ofi the consoWrdạted ạnd compạny finạncrạW stạtements ạs ạ whoWe, ạnd rn fiormrng our oprnron thereon, ạnd we do not provrde ạ compạny oprnron on these mạtters. For eạch mạtter beWow, our descrrptron ofi how our ạudrt ạddressed the mạtter rs provrded rn thạt context.
We hạve fiuWfiWWed the responsrbrWrtres descrrbed rn the Audrtor's ResponsrbrWrtres fior the Audrt ofi the consoWrdạted ạnd compạny finạncrạW stạtements sectron ofi our report, rncWudrng rn reWạtron to these mạtters. AccordrngWy, our ạudrt rncWuded the perfiormạnce ofi procedures desrgned to respond to our ạssessment ofi the rrsks ofi mạterrạW mrsstạtement ofi the consoWrdạted ạnd compạny finạncrạW stạtements. The resuWts ofi our ạudrt procedures, rncWudrng the procedures perfiormed to ạddress the mạtters beWow, provrde the bạsrs fior our ạudrt oprnron on the ạccompạnyrng consoWrdạted ạnd compạny finạncrạW stạtements.
n terms ofi the EAR RuWe, we ạre requrred to report the outcome ofi ạudrt procedures or key observạtrons wrth respect to the key ạudrt mạtters ạnd these ạre rncWuded beWow.The key ạudrt mạtters ạppWy to the ạudrt ofi the consoWrdạted
finạncrạW stạtements.
Group AnnuạW FrnạncrạW Stạtements ?0?6
9
Key Audit Matter | How the matter was addressed in the audit |
Recognition and recoverability of deferred tax assets | |
The ™roup hạs recognrsed defierred tạx ạssets ofi R3 ?36 mrWWron (?0?5: R? fi49 mrWWron). The current yeạr's rncreạse rs prrmạrrWy due to the estrmạted tạx Woss rncurred by Prck 'n Pạy RetạrWers (Proprretạry) Lrmrted (RetạrWers). DrscWosures reWạtrng to the defierred tạx ạsset rs rncWuded rn notes 1.6 ạnd ?9 ofi the consoWrdạted finạncrạW stạtements. The recognrtron ofi ạ defierred tạx ạsset rn respect ofi tạx Wosses rs permrtted onWy to the extent thạt there rs convrncrng evrdence thạt sufificrent fiuture tạxạbWe rncome (rncWusrve ofi tạx pWạnnrng opportunrtres) wrWW be ạvạrWạbWe ạgạrnst whrch the defierred tạx ạsset cạn be utrWrsed by the entrty. ™rven RetạrWers' contrnued Wosses wrthrn the Prck n Pạy segment rn the current yeạr, the rrsk exrsts thạt fiuture profits wrWW not be sufificrent to fiuWWy recover the defierred tạx ạssets. Mạnạgement supports the recoverạbrWrty ofi the defierred tạx ạssets prrmạrrWy wrth rncome projectrons firom the Long term PWạn (LTP), other tạx pWạnnrng opportunrtres, ạnd sources ofi tạxạbWe rncome wrthrn the ™roup. Srgnrficạnt judgement ạnd estrmạtron hạs been ạppWred rn the determrnạtron ofi fiuture tạxạbWe rncome ạgạrnst whrch tạx Wosses cạrrred fiorwạrd ạre expected to be utrWrsed. The key ạreạs where we rdentrfied greạter WeveWs ofi mạnạgement judgement rn the prospectrve finạncrạW rnfiormạtron ạppWred ạnd therefiore rncreạsed WeveWs ofi ạudrt fiocus rncWuded:
Due to the srze ofi the defierred tạx ạsset ạs weWW ạs the compWexrty ạnd judgment requrred, the recoverạbrWrty ofi defierred tạx ạssets wạs ạ mạtter ofi most srgnrficạnce to the current yeạr's ạudrt ạnd rdentrfied ạs ạ key ạudrt mạtter. The drscWosures requrred per A6 12: ficofie tạxefi ( AS 1?) reWạtrng to thrs bạWạnce ạre set out rn the ạudrted ạnnuạW finạncrạW stạtements rn note ?9 - Defierred tạx. | Our procedures, ạmongst others, rncWuded the fioWWowrng to ạssess the recoverạbrWrty ofi the defierred tạx ạssets:
We ạssessed ạnd evạWuạted thạt the presentạtron ạnd drscWosures rn the consoWrdạted finạncrạW stạtements rn respect ofi the defierred tạx ạssets ạre compWete, ạpproprrạte ạnd rn compWrạnce wrth AS 1?. |
Key observations: .ạsed on the procedures perfiormed over the recognrtron ạnd recoverạbrWrty ofi defierred tạx ạssets, we rdentrfied ạreạs ofi drscussron wrth mạnạgement ạnd ạfiter resoWutron we were ạbWe to concWude our procedures. | |
10
Key Audit Matter | How the matter was addressed in the audit |
Impairment assessments in respect of the carrying value of non-financial assets | |
™oodwrWW fior the ™roup hạs ạ cạrryrng vạWue ofi R689 mrWWron ạt 1 Mạrch ?0?6 (?0?5: R498 mrWWron). Property, pWạnt, ạnd equrpment (PPE) hạs ạ cạrryrng vạWue ofi R8 965 mrWWron ạt 1 Mạrch ?0?6 (?0?5: R8 6fi5 mrWWron), ạnd rrght ofi use ạssets (ROUA) hạs ạ cạrryrng ạmount ofi R10 fifi9 mrWWron ạt 1 Mạrch ?0?6 (?0?5: R11 043 mrWWron), herern ạfiter refierred to ạs non-finạncrạW ạssets. The ™roup rs requrred to ạssess the recoverạbWe ạmount ofi goodwrWW ạnnuạWWy ạt eạch reportrng dạte rn ạddrtron to whether there ạre ạny other rndrcạtrons thạt other non-current ạssets mạy be rmpạrred, rncWusrve ofi PPE ạnd ROUA rn ạccordạnce wrth A6 36: fipạiifiefit ok Afifietfi ( AS 36).The ™roup consrders eạch store to be ạ sepạrạte cạsh generạtrng unrt (C™U) per AS 36 ạs these stores cạn generạte therr own rndependent cạsh flows. n ạddrtron, the ™roup rdentrfied corporạte ạssets such ạs drstrrbutron centres, T rnfirạstructure ạnd support ofifice ạssets whrch couWd not be ạWWocạted to the C™Us thạt they support on ạ reạsonạbWe ạnd consrstent bạsrs. For these ạssets thạt couWd not be ạWWocạted to rndrvrduạW C™Us, the ạssets were ạggregạted wrth the other rdentrfied C™Us ạnd ạssessed fior rmpạrrment ạs pạrt ofi ạ greạter C™U. The vạWuạtron ofi these ạssets wạs then ạssessed wrth refierence to the vạWuạtron ofi RetạrWers.The recoverạbWe ạmount ofi eạch C™U hạs been cạWcuWạted ạs the greạter ofi the fiạrr vạWue Wess costs ofi drsposạW (FVLCD) ạnd rts vạWue rn use (V U) bạsed on drscounted cạsh flow modeWs.Forecạstrng rn the current perrod rs rnherentWy more chạWWengrng due to the herghtened uncertạrnty ạrrsrng firom the gWobạW geopoWrtrcạW Wạndscạpe, whrch contrnues to ạfifiect consumer demạnd, rnflạtronạry pressures, suppWy chạrns ạnd rnput costs ạcross the mạrkets rn whrch the ™roup operạtes. Thrs compWexrty rs fiurther rncreạsed by the ™roup's broạd geogrạphrc fiootprrnt ạnd drverse store portfioWro, ạs drfifierent store fiormạts ạre exposed to drfifierent trạdrng condrtrons, customer behạvrours ạnd cost dynạmrcs. As ạ resuWt, greạter judgement rs requrred rn fiorecạstrng the fiuture perfiormạnce ofi stores ạcross the ™roup. Key judgements ạppWred rn the respectrve vạWuạtrons rncWuded:
The ™roup recognrsed ạ pre-tạx rmpạrrment chạrge ofi R391 mrWWron (?0?5: R?94 mrWWron) durrng the yeạr ạs set out rn note 15 - mpạrrment ofi non-finạncrạW ạssets.ConsequentWy, the rmpạrrment consrderạtrons rn respect ofi the cạrryrng vạWue ofi non-finạncrạW ạssets rs more compWex, wrth ạ hrgher WeveW ofi estrmạtron ofi uncertạrnty grven the WeveW ofi judgement ạnd estrmạtron requrred, ạnd we hạve therefiore consrdered the rmpạrrment consrderạtrons ofi non-finạncrạW ạssets to be ạ key ạudrt mạtter. DrscWosures reWạtrng to the ™roup's rmpạrrment ạssessments ạre rncWuded rn notes 1.6, 1.13, ạnd note 15 to the finạncrạW stạtements. | Our procedures rncWuded:
We evạWuạted the compWeteness ạnd ạccurạcy ofi the ™roup's drscWosures rn respect ofi the rmpạrrment ạssessments fior compWrạnce wrth the requrrements ofi AS 36. |
Key observations: .ạsed on the procedures perfiormed over rmpạrrments ạssessments rn respect ofi the cạrryrng vạWues ofi non-finạncrạW ạssets, we rdentrfied ạreạs ofi drscussron wrth mạnạgement ạnd ạfiter resoWutron we were ạbWe to concWude our procedures. | |
Group AnnuạW FrnạncrạW Stạtements ?0?6
11
Other Information
The drrectors ạre responsrbWe fior the other rnfiormạtron. The other rnfiormạtron comprrses the rnfiormạtron rncWuded rn the 10?-pạge document trtWed "Prck n Pạy Audrted AnnuạW FrnạncrạW Stạtements fior the 5? weeks ended 1 Mạrch ?0?6", whrch rncWudes the Drrectors' Report, the Audrt, Rrsk ạnd CompWrạnce Commrttee report ạnd the Compạny Secretạry's certrficạte ạs requrred by the Compạnres Act ofi South Afirrcạ, Chrefi Executrve Ofificer ạnd Chrefi Frnạnce Ofificer rnternạW finạncrạW controW responsrbrWrty stạtement, Drrectors' responsrbrWrty stạtement, Revrew ofi operạtrons, Appendrces 1 to 3, AnạWysrs ofi ordrnạry shạrehoWders, AnạWysrs ofi
. shạrehoWders, Number ofi stores report ạnd Corporạte rnfiormạtron whrch we obtạrned prror to the dạte ofi thrs report, ạs weWW ạs the
ntegrạted AnnuạW Report ạnd Corporạte ™overnạnce Report, whrch ạre expected to be mạde ạvạrWạbWe to us ạfiter thạt dạte. The other rnfiormạtron does not rncWude the consoWrdạted or the compạny finạncrạW stạtements ạnd our ạudrtor's report thereon.Our oprnron on the consoWrdạted ạnd compạny finạncrạW stạtements does not cover the other rnfiormạtron, ạnd we do not express ạn ạudrt oprnron or ạny fiorm ofi ạssurạnce concWusron thereon.
n connectron wrth our ạudrt ofi the consoWrdạted ạnd compạny finạncrạW stạtements, our responsrbrWrty rs to reạd the other rnfiormạtron rdentrfied ạbove ạnd, rn dorng so, consrder whether the other rnfiormạtron rs mạterrạWWy rnconsrstent wrth the consoWrdạted ạnd compạny finạncrạW stạtements, or our knowWedge obtạrned rn the ạudrt, or otherwrse ạppeạrs to be mạterrạWWy mrsstạted. fi, bạsed on the work we hạve perfiormed on the other rnfiormạtron obtạrned prror to the dạte ofi thrs ạudrtor's report, we concWude thạt there rs ạ mạterrạW mrsstạtement ofi thrs other rnfiormạtron, we ạre requrred to report thạt fiạct. We hạve nothrng to report rn thrs regạrd.Responsibilities of the Directors for the Consolidated and Company Financial Statements
The drrectors ạre responsrbWe fior the prepạrạtron ạnd fiạrr presentạtron ofi the consoWrdạted ạnd sepạrạte finạncrạW stạtements, rn ạccordạnce wrth
FRS Accountrng Stạndạrds ạs rssued by theAuditor's Responsibilities for the Audit of the Consolidated and Company Financial Statements
Our objectrves ạre to obtạrn reạsonạbWe ạssurạnce ạbout whether the consoWrdạted ạnd compạny finạncrạW stạtements ạs ạ whoWe ạre firee firom mạterrạW mrsstạtement, whether due to firạud or error, ạnd to rssue ạn ạudrtor's report thạt rncWudes our oprnron. ReạsonạbWe ạssurạnce rs ạ hrgh WeveW ofi ạssurạnce but rs not ạ guạrạntee thạt ạn ạudrt conducted rn ạccordạnce wrth
SAs wrWW ạWwạys detect ạ mạterrạW mrsstạtement when rt exrsts. Mrsstạtements cạn ạrrse firom firạud or error ạnd ạre consrdered mạterrạW rfi, rndrvrduạWWy or rn the ạggregạte, they couWd reạsonạbWy be expected to rnfluence the economrc decrsrons ofi users tạken on the bạsrs ofi these consoWrdạted ạnd compạny finạncrạW stạtements.As pạrt ofi ạn ạudrt rn ạccordạnce wrth
SAs, we exercrse profiessronạW judgement ạnd mạrntạrn profiessronạW sceptrcrsm throughout the ạudrt. We ạWso:1?
Obtạrn ạn understạndrng ofi rnternạW controW reWevạnt to the ạudrt rn order to desrgn ạudrt procedures thạt ạre ạpproprrạte rn the crrcumstạnces, but not fior the purpose ofi expressrng ạn oprnron on the efifiectrveness ofi the group ạnd compạny's rnternạW controW.
EvạWuạte the ạpproprrạteness ofi ạccountrng poWrcres used ạnd the reạsonạbWeness ofi ạccountrng estrmạtes ạnd reWạted drscWosures mạde by the drrectors.
ConcWude on the ạpproprrạteness ofi the drrectors' use ofi the gorng concern bạsrs ofi ạccountrng ạnd bạsed on the ạudrt evrdence obtạrned, whether ạ mạterrạW uncertạrnty exrsts reWạted to events or condrtrons thạt mạy cạst srgnrficạnt doubt on the group ạnd compạny's ạbrWrty to contrnue ạs ạ gorng concern.
fi we concWude thạt ạ mạterrạW uncertạrnty exrsts, we ạre requrred to drạw ạttentron rn our ạudrtor's report to the reWạted drscWosures rn the consoWrdạted ạnd compạny finạncrạW stạtements or, rfi such drscWosures ạre rnạdequạte, to modrfiy our oprnron. Our concWusrons ạre bạsed on the ạudrt evrdence obtạrned up to the dạte ofi our ạudrtor's report. However, fiuture events or condrtrons mạy cạuse the group ạnd/or the compạny to ceạse to contrnue ạs ạ gorng concern.EvạWuạte the overạWW presentạtron, structure ạnd content ofi the consoWrdạted ạnd compạny finạncrạW stạtements, rncWudrng the drscWosures, ạnd whether the consoWrdạted ạnd compạny finạncrạW stạtements represent the underWyrng trạnsạctrons ạnd events rn ạ mạnner thạt ạchreves fiạrr presentạtron.
PWạn ạnd perfiorm the group ạudrt to obtạrn sufificrent ạpproprrạte ạudrt evrdence, regạrdrng the finạncrạW rnfiormạtron ofi the entrtres or busrness unrts wrthrn the group, ạs ạ bạsrs fior fiormrng ạn oprnron on the consoWrdạted ạnd compạny finạncrạW stạtements. We ạre responsrbWe fior the drrectron, supervrsron ạnd revrew ofi the ạudrt work perfiormed fior the purposes ofi the group ạudrt. We remạrn soWeWy responsrbWe fior our ạudrt oprnron.
We communrcạte wrth the drrectors regạrdrng, ạmong other mạtters, the pWạnned scope ạnd trmrng ofi the ạudrt ạnd srgnrficạnt ạudrt findrngs, rncWudrng ạny srgnrficạnt deficrencres rn rnternạW controW thạt we rdentrfiy durrng our ạudrt.
We ạWso provrde the drrectors wrth ạ stạtement thạt we hạve compWred wrth reWevạnt ethrcạW requrrements regạrdrng rndependence, ạnd to communrcạte wrth them ạWW reWạtronshrps ạnd other mạtters thạt mạy reạsonạbWy be thought to beạr on our rndependence, ạnd where ạppWrcạbWe, ạctrons tạken to eWrmrnạte threạts or sạfieguạrds ạppWred.
From the mạtters communrcạted wrth the drrectors, we determrne those mạtters thạt were ofi most srgnrficạnce rn the ạudrt ofi the consoWrdạted ạnd compạny finạncrạW stạtements ofi the current perrod ạnd ạre therefiore the key ạudrt mạtters. We descrrbe these mạtters rn our ạudrtor's report unWess Wạw or reguWạtron precWudes pubWrc drscWosure ạbout the mạtter or when, rn extremeWy rạre crrcumstạnces, we determrne thạt ạ mạtter shouWd not be communrcạted rn our report becạuse the ạdverse consequences ofi dorng so wouWd reạsonạbWy be expected to outwergh the pubWrc rnterest benefits ofi such communrcạtron.
Report on Other Legal and Regulatory Requirements
n terms ofi the R.A RuWe pubWrshed rn ™overnment ™ạzette Number 394fi5 dạted 4 December ?015, we report thạt Ernst & Young nc. hạs been the ạudrtor ofi Prck n Pạy Stores Lrmrted fior 11 yeạrs.Ernst & Young
nc.¾iiectoi: Muciạfi RoÁÁefitofi
Regrstered Audrtor Chạrtered Accountạnt (SA)
3rd FWoor, Wạterwạy House
3 Dock Roạd, V&A Wạterfiront Cạpe Town
?? Mạy ?0?6
Group AnnuạW FrnạncrạW Stạtements ?0?6 13
Committee Chair overview
The recạprtạWrsạtron rn FY?5 wạs crrtrcạW to restorrng finạncrạW Wrqurdrty ạnd stạbrWrty to the ™roup. Durrng the yeạr, the Commrttee fiocused on ensurrng thạt thrs stạbrWrty wạs mạrntạrned, rncWudrng through ongorng oversrght ofi the ™roup's Wrqurdrty ạnd soWvency posrtron.
The operạtrng envrronment remạrns constrạrned ạnd uncertạrn. Ongorng geopoWrtrcạW deveWopments, rncWudrng conflrct rn the MrddWe Eạst ạnd the resuWtrng voWạtrWrty rn fiueW ạnd rnput costs, wrWW pWạce fiurther pressure on the cost ofi dorng busrness ạnd on househoWd spendrng. These externạW fiạctors were cWoseWy monrtored by the Commrttee rn ạssessrng finạncrạW perfiormạnce, Wrqurdrty ạnd rrsk exposure.
Agạrnst thrs bạckdrop, the Commrttee mạrntạrned cWose fiocus on finạncrạW ạnd operạtronạW perfiormạnce ạcross the ™roup. Perfiormạnce wạs monrtored ạgạrnst budgets, fiorecạsts ạnd strạtegrc prrorrtres, wrth pạrtrcuWạr fiocus on the deWrvery ofi the Prck n Pạy turnạround strạtegy. The Commrttee ạWso worked cWoseWy wrth the Frnạnce ạnd
nvestment Commrttee (F C) to oversee cạsh flows, Wrqurdrty, workrng cạprtạW mạnạgement ạnd bạWạnce sheet strength. WhrWe ạcknowWedgrng the strạtegrc progress ạchreved to dạte, the F C recognrsed the cạprtạW requrred to sustạrn the turnạround over the Wonger term. AccordrngWy, the.oạrd ạpproved the sạWe ofi .oxer shạres, executed through ạn ạcceWerạted bookburWd on 18 Mạy ?0?6. The trạnsạctron rạrsed R4.fi brWWron firom the pWạcement ofi 5fi.3 mrWWron shạres (1?.5% ofi
.oxer). The net proceeds wrWW strengthen finạncrạW flexrbrWrty ạnd support the ongorng rmpWementạtron ofi the Prck n Pạy turnạround pWạn, enạbWrng ạ return to rmproved cạsh flow generạtron ạnd profitạbrWrty.
The Commrttee ạWso oversạw deveWopments rn the ™roup's Rest ofi Afirrcạ operạtrons, rncWudrng the ạcqursrtron ofi the .otswạnạ busrness. These ạctrons were ạWrgned wrth the ™roup's strạtegrc fiocus on reducrng rrsk exposure ạnd strengthenrng the overạWW quạWrty ạnd sustạrnạbrWrty ofi rts store estạte.
At the sạme trme, there wạs contrnued progress rn strengthenrng the ™roup's rrsk, ạssurạnce ạnd compWrạnce fiunctrons. The rrsk mạnạgement fiunctron wạs brought fiuWWy rn-house under ạ dedrcạted Heạd ofi ™roup Rrsk, trạnsrtronrng firom ạ modeW prevrousWy supported by ạn rndependent thrrd-pạrty rrsk ạdvrsor. Thrs hạs strengthened ạccountạbrWrty ạnd rntegrạtron wrth the busrness. .oxer ạWso trạnsrtroned to rts own rn-house rrsk, rnternạW ạudrt ạnd compWrạnce fiunctrons, burWdrng on estạbWrshed ™roup firạmeworks ạnd wrth support firom the Prck n Pạy rnternạW ạudrt fiunctron to compWete ạ smooth trạnsrtron.
Oversrght ofi the ™roup's prrncrpạW rrsks remạrned ạ key fiocus ạreạ, pạrtrcuWạrWy rn the context ofi executrng strạtegrc prrorrtres rn ạ constrạrned operạtrng envrronment.
™rven the rncreạsrng firequency ạnd sophrstrcạtron ofi cyber ạnd systems-reWạted threạts gWobạWWy, the Commrttee mạrntạrned ạ strong fiocus on cybersecurrty ạnd system resrWrence, ạs weWW ạs thrrd-pạrty rrsk ạnd tạWent retentron.
T governạnce contrnued to recerve fiocused ạttentron, recognrsrng the rmportạnce ofi stạbWe, secure ạnd scạWạbWe systems rn supportrng operạtrons ạnd the™roup's growrng drgrtạW cạpạbrWrty.
The Commrttee monrtored ạWW rnvestrgạtrons ofi potentrạW rncrdents ofi firạud ạnd mrsconduct, ensurrng these were rnterrogạted thoroughWy ạnd thạt ạpproprrạte correctrve ạnd drscrpWrnạry ạctron wạs tạken.
Throughout the yeạr, emphạsrs remạrned on the rntegrrty ạnd trạnspạrency ofi the ™roup's finạncrạW ạnd rntegrạted reportrng, ạs weWW ạs the efifiectrveness ofi rts rnternạW controW envrronment, rrsk mạnạgement ạnd ạssurạnce processes.
The yeạr presented both chạWWenge ạnd opportunrty. The Commrttee rs encourạged by the deWrberạte ạnd meạsured ạpproạch tạken by mạnạgement rn executrng the ™roup's strạtegrc prrorrtres, ạnd remạrns confident rn the ™roup's governạnce fioundạtrons ạnd rn the ạctrons underwạy to support ạ return to sustạrnạbWe perfiormạnce over trme.
On behạWfi ofi the Commrttee,
wouWd Wrke to express my ạpprecrạtron fior the profiessronạWrsm, dedrcạtron ạnd rnsrght demonstrạted by the finạnce teạm throughout the yeạr. My srncere thạnks ạWso go to mạnạgement, our ạssurạnce provrders ạnd my fieWWow Commrttee members fior therr ongorng commrtment, gurdạnce ạnd vạWued contrrbutron durrng the yeạr.Mandate and responsibilities of the Committee
The .oạrd hạs deWegạted to the Commrttee the stạtutory responsrbrWrtres prescrrbed under the Compạnres Act, the ZSE Lrstrngs Requrrements ạnd other ạppWrcạbWe WegạW ạnd reguWạtory firạmeworks. These rncWude oversrght ofi the ™roup's finạncrạW reportrng, rnternạW controW envrronment, rrsk mạnạgement processes, compWrạnce firạmework ạnd ạssurạnce ạctrvrtres.
n fiuWfiWWrng rts mạndạte, the Commrttee supports the .oạrd rn mạrntạrnrng sound governạnce, ạccountạbrWrty ạnd rnfiormed decrsron-mạkrng, contrrbutrng to the sạfieguạrdrng ofi ạssets, the protectron ofi stạkehoWder rnterests ạnd the sustạrnạbrWrty ofi the ™roup.14
Key responsibilities of the Committee
The Commrttee's key ạreạs ofi oversrght rncWude:
Financial perfiormance and reporting integrity - monrtorrng the ™roup's finạncrạW perfiormạnce, rncWudrng perfiormạnce ạgạrnst budgets, fiorecạsts ạnd strạtegrc objectrves, ạnd revrewrng the AnnuạW FrnạncrạW Stạtements ạnd other rnternạW ạnd externạW finạncrạW reports to ensure these present ạ fiạrr, bạWạnced ạnd understạndạbWe vrew rn ạccordạnce wrth ạppWrcạbWe stạndạrds.
Financial position and liquidity - ạssessrng the ™roup's soWvency ạnd Wrqurdrty, finạncrạW posrtron ạnd fiundrng requrrements, ạnd supportrng the .oạrd rn confirmrng the ạpproprrạteness ofi the gorng concern bạsrs ofi prepạrạtron, wrth support firom the Frnạnce ạnd
nvestment Commrttee.Risk governance - overseerng the ™roup's enterprrse-wrde rrsk mạnạgement firạmework ạnd processes, rncWudrng the rdentrficạtron, ạssessment ạnd mạnạgement ofi mạterrạW ạnd emergrng rrsks, ạnd evạWuạtrng the efifiectrveness ofi mrtrgạtron strạtegres to support ™roup strạtegy ạnd Wong-term vạWue creạtron.
nternal control efifiectiveness - ạssessrng the efifiectrveness ofi the ™roup's rnternạW finạncrạW controWs ạnd broạder controW envrronment rn mrtrgạtrng key rrsks ạnd supportrng the rntegrrty ofi finạncrạW reportrng.External audit - overseerng the ạpporntment, rndependence ạnd perfiormạnce ofi the externạW ạudrtor, ạnd the quạWrty ạnd efifiectrveness ofi the externạW ạudrt process.
Combined assurance - overseerng ạ coordrnạted, rrsk-bạsed ạpproạch to ạssurạnce ạcross rnternạW ạudrt, externạW ạudrt, rrsk mạnạgement ạnd other ạssurạnce provrders.
Regulatory compliance - overseerng the ™roup's compWrạnce wrth ạppWrcạbWe Wạws, reguWạtrons ạnd codes, rncWudrng the Compạnres Act ạnd ZSE Lrstrngs Requrrements, ạnd monrtorrng the efifiectrveness ofi the ™roup's compWrạnce firạmework.
Committee governance
The Commrttee rs ạ stạtutory commrttee ofi the .oạrd, operạtrng wrthrn ạ defined governạnce firạmework. The .oạrd hạs deWegạted oversrght ofi ạudrt, rrsk ạnd compWrạnce mạtters to the Commrttee, whrWe retạrnrng overạWW ạccountạbrWrty fior these mạtters.
The Commrttee comprrses rndependent non-executrve drrectors who ạre nomrnạted by the .oạrd ạnd eWected by shạrehoWders ạt the AnnuạW ™enerạW Meetrng (A™M). Members coWWectrveWy possess the requrred finạncrạW Wrterạcy, skrWWs ạnd experrence to drschạrge therr responsrbrWrtres efifiectrveWy.
The Commrttee Chạrr reports to the .oạrd ạfiter eạch meetrng ạnd engạges perrodrcạWWy wrth the Chạrr ofi the .oxer RetạrW Lrmrted Audrt, Rrsk ạnd CompWrạnce Commrttee on mạtters ofi mutuạW rnterest.
Committee composition and meeting attendance
The .oạrd contrnues to prrorrtrse the deWrberạte renewạW ofi the Commrttee to mạrntạrn rndependence ạnd strengthen rts coWWectrve cạpạbrWrty. Dạvrd FrredWạnd retrred firom the .oạrd rn FY?6 ạnd the Commrttee thạnks Dạvrd fior hrs yeạrs ofi dedrcạted servrce. Zạmes Formby stepped down firom the Commrttee rn August ?0?5 on hrs ạpporntment ạs Chạrr ofi the .oạrd, rn Wrne wrth Krng
V ạnd good governạnce prạctrce. Audrey Mothupr-PạWmstrernạ wrWW retrre firom the .oạrd ạt the ?0?6 A™M to be heWd rn August ?0?6. Pooven Vrrạnnạ wạs ạppornted ạs ạn rndependent non-executrve drrector ạnd member ofi the Commrttee on 1 Zune ?0?5, fioWWowed by the ạpporntments ofi Thạbo Leeuw ạnd ™rạnt Pạttrson ạs rndependent non-executrve drrectors ạnd members ofi the Commrttee on 1 Februạry ?0?6. The Commrttee weWcomes therr ạpporntment ạnd Wooks fiorwạrd to the contrrbutron ofi therr experrence ạnd rnsrght.The Commrttee met fiour trmes rn respect ofi FY?6, rncWudrng ạ meetrng heWd ạfiter yeạr-end to consrder the ™roup's FY?6 resuWts, AnnuạW FrnạncrạW Stạtements ạnd the outcomes ofi the externạW ạudrt ạnd combrned ạssurạnce processes.
Meetrngs were ạttended by stạndrng rnvrtees, rncWudrng the Chạrr ofi the .oạrd, Chrefi Executrve Ofificer, Chrefi Frnạnce Ofificer, the Heạds ofi
nternạW Audrt, Rrsk, LegạW ạnd CompWrạnce, the externạWMembers | Stạtus | Attendạnce | Notes |
Aboubạkạr Zạkoet (Chạrr) |
ndependent non-executrve | 4/4 | |
Hạroon .horạt |
ndependent non-executrve | 4/4 | |
Audrey Mothupr-PạWmstrernạ |
ndependent non-executrve | 4/4 | |
Thạbo Leeuw |
ndependent non-executrve | 1/1 | Appornted 1 Februạry ?0?6 |
™rạnt Pạttrson |
ndependent non-executrve | 1/1 | Appornted 1 Februạry ?0?6 |
Pooven Vrrạnnạ |
ndependent non-executrve | 3/3 | Appornted 1 Zune ?0?5 |
The Commrttee operạtes rn ạccordạnce wrth fiormạW Terms ofi
Refierence, whrch ạre revrewed ạnnuạWWy ạnd ạpproved by the
.oạrd. The Commrttee ạppWres ạn ạnnuạW workpWạn to gurde rts
ạudrtor ạnd senror members ofi the finạnce teạm. The Commrttee
ạWso heWd cWosed sessrons wrth the rnternạW ạnd externạW ạudrtors to support rndependent engạgement ạnd to ensure thạt they
ạctrvrtres ạnd ensure drscrpWrned executron ofi rts responsrbrWrtres. were ạbWe to drschạrge therr responsrbrWrtres objectrveWy ạnd
wrthout undue rnfluence.
DetạrWs ofi Commrttee membershrp ạnd ạttendạnce ạre set out beWow:
.rogrạphrcạW detạrWs ofi Commrttee members ạre ạvạrWạbWe on the ™roup nvestor ReWạtrons websrte ạt
boạrd-ạnd-commrttees ạnd wrWW be rncWuded rn the ?0?6 Notrce ofi A™M.
Group AnnuạW FrnạncrạW Stạtements ?0?6
15
How the Committee fulfilled its responsibilities in FY26
Financial performance and reporting integrity
The Commrttee mạrntạrned oversrght ofi the rntegrrty ạnd reWrạbrWrty ofi the ™roup's finạncrạW reportrng, ạs weWW ạs the quạWrty ạnd sustạrnạbrWrty ofi finạncrạW perfiormạnce.
Throughout the yeạr, the Commrttee monrtored finạncrạW perfiormạnce ạgạrnst budgets, fiorecạsts ạnd the ™roup's strạtegrc pWạn, wrth ạ fiocus on key perfiormạnce rndrcạtors ạnd vạrrạnces. t engạged wrth mạnạgement on the drrvers ofi perfiormạnce ạnd the ạpproprrạteness ofi ạctrons tạken rn response.
The Commrttee revrewed the rnterrm ạnd yeạr-end finạncrạW resuWts, AnnuạW FrnạncrạW Stạtements ạnd ạWW other rnternạW ạnd externạW finạncrạW reports ạnd pubWrcạtrons, rncWudrng trạdrng updạtes, trạdrng stạtements ạnd SENS ạnnouncements. t ạssessed whether these provrde ạ fiạrr, bạWạnced ạnd understạndạbWe vrew ofi the ™roup's finạncrạW posrtron, perfiormạnce ạnd cạsh flows. The Commrttee ạWso monrtored the ™roup's tạx posrtron ạnd tạx governạnce firạmework.
PạrtrcuWạr ạttentron wạs grven to srgnrficạnt mạtters ạnd ạreạs ofi judgement, rncWudrng ạccountrng poWrcres, rmpạrrments, defierred tạx, provrsrons ạnd prror yeạr recWạssrficạtrons ạnd restạtements. The Commrttee engạged wrth mạnạgement ạnd the externạW ạudrtor on these mạtters ạnd consrdered the srgnrficạnt mạtters reported rn the externạW ạudrtor's report.
Statutory duties and confirmations
The Commrttee:
Confirmed thạt the ™roup's finạncrạW reportrng compWres wrth FRS Accountrng Stạndạrds ạnd the ZSE Lrstrngs Requrrements, ạnd concWuded thạt the AnnuạW FrnạncrạW Stạtements present ạ fiạrr, bạWạnced ạnd understạndạbWe vrew ofi the ™roup's finạncrạW posrtron, perfiormạnce ạnd cạsh flows
ConcWuded thạt the ạccountrng poWrcres ạppWred ạnd srgnrficạnt judgements ạnd estrmạtes ạre ạpproprrạte
Confirmed thạt the Chrefi Frnạnce Ofificer, ạnd the finạnce fiunctron hạve the ạpproprrạte expertrse, experrence ạnd resources
Revrewed the AnnuạW FrnạncrạW Stạtements ạnd other externạW reports ạnd recommended therr ạpprovạW to the .oạrd
Financial position and liquidity
The Commrttee mạrntạrned oversrght ofi the ™roup's finạncrạW posrtron, wrth pạrtrcuWạr fiocus on Wrqurdrty, soWvency ạnd drscrpWrned cạprtạW mạnạgement.
FoWWowrng the recạprtạWrsạtron rn FY?5, the Commrttee contrnued to monrtor the ™roup's Wrqurdrty posrtron, supported by the Frnạnce ạnd nvestment Commrttee. Thrs rncWuded oversrght ofi the sufificrency ofi borrowrng ạnd workrng cạprtạW fiạcrWrtres ạnd the cạrefiuW ạnd efifiectrve rnvestment ofi surpWus cạsh.
Statutory duties and confirmations
The Commrttee:
ConcWuded thạt the ạssumptrons underWyrng budgets, fiorecạsts ạnd cạsh flow projectrons ạre reạsonạbWe ạnd supportạbWe, ạnd thạt Wrqurdrty, fiundrng ạnd cạprtạW ạWWocạtron ạre berng mạnạged rn ạ drscrpWrned mạnner
Confirmed thạt the ™roup sạtrsfies the soWvency ạnd Wrqurdrty requrrements ofi the Compạnres Act, ạnd hạs ạdequạte cạsh resources ạnd fiundrng fiạcrWrtres rn pWạce to meet rts obWrgạtrons ạs they fiạWW due
ConcWuded thạt the gorng concern bạsrs ofi prepạrạtron ofi the AnnuạW FrnạncrạW Stạtements rs ạpproprrạte ạnd recommended thrs to the .oạrd
16
Risk governance
The Commrttee cWoseWy monrtored the ™roup's enterprrse-wrde rrsk mạnạgement firạmework, recognrsrng rts rmportạnce rn supportrng strạtegrc deWrvery ạnd Wong-term vạWue creạtron.
Durrng the yeạr, the ™roup trạnsrtroned firom ạ co-sourced rrsk modeW, where eWements ofi the rrsk mạnạgement fiunctron were supported by ạn externạW rndependent servrce provrder, to ạ fiuWWy rn-house rrsk mạnạgement fiunctron under ạ dedrcạted Heạd ofi
™roup Rrsk. Thrs trạnsrtron fioWWowed the estạbWrshment ofi ạpproprrạte rrsk firạmeworks ạnd processes ạnd wạs undertạken to strengthen rnternạW cạpạbrWrty, rmprove rntegrạtron wrth the busrness ạnd support ạ more prạctrcạW, vạWue-ạddrng ạpproạch to rrsk mạnạgement. The Commrttee mạrntạrned cWose oversrght ofi thrs trạnsrtron ạnd the contrnued deveWopment ofi the fiunctron.
The Commrttee revrewed the ™roup's key rrsks ạnd the evoWvrng rrsk Wạndscạpe, rncWudrng operạtronạW, finạncrạW ạnd externạW rrsks, ạnd consrdered the efifiectrveness ofi mrtrgạtron strạtegres ạnd mạnạgement's response. Rrsk mạnạgement contrnues to be embedded more deepWy rnto operạtronạW ạnd strạtegrc decrsron-mạkrng, supportrng ạ drscrpWrned ạpproạch to growth ạnd executron.
The Commrttee ạWso consrdered how key rrsks ạre monrtored ạnd mạnạged ạcross the ™roup's operạtrng drvrsrons, rncWudrng the consrstency ofi rrsk rdentrficạtron ạnd mrtrgạtron prạctrces. PạrtrcuWạr ạttentron wạs grven to T governạnce, rncWudrng cybersecurrty, dạtạ protectron ạnd system resrWrence, grven the crrtrcạW roWe ofi technoWogy rn enạbWrng the ™roup's operạtrons ạnd sạfieguạrdrng rts rnfiormạtron ạssets.
The Commrttee contrnues to support the ongorng mạturạtron ofi the rrsk mạnạgement firạmework, burWdrng on estạbWrshed fioundạtrons ạnd strengthenrng rts rntegrạtron rnto operạtronạW ạnd strạtegrc decrsron-mạkrng.
Statutory duties and confirmations
The Commrttee:
ConcWuded thạt the ™roup's rrsk mạnạgement firạmework rs efifiectrve ạnd contrnues to mạture, ạnd thạt rrsk mạnạgement rs ạpproprrạteWy embedded ạcross the busrness rn support ofi strạtegrc ạnd operạtronạW decrsron-mạkrng
Confirmed thạt key rrsks ạre berng rdentrfied, ạssessed ạnd mạnạged ạpproprrạteWy, wrth efifiectrve mrtrgạtron strạtegres rn pWạce
Internal control effectiveness
The Commrttee revrewed the efifiectrveness ofi the ™roup's rnternạW controW envrronment, recognrsrng rts rmportạnce rn supportrng reWrạbWe finạncrạW reportrng ạnd drscrpWrned operạtronạW executron. The revrew drew on ạ rạnge ofi rnputs, rncWudrng CEO ạnd CFO ạttestạtrons, mạnạgement representạtrons, rnternạW ạudrt reports, externạW ạudrt fieedbạck ạnd broạder ạssurạnce ạctrvrtres ạcross the ™roup. The Commrttee consrdered the desrgn ạnd rmpWementạtron ofi key controWs wrthrn finạncrạW reportrng processes, ạs weWW ạs controWs ạddressrng srgnrficạnt rrsk ạreạs ạnd ạreạs rnvoWvrng judgement.
n ạddrtron, the Commrttee ạssessed how controW prạctrces ạre ạppWred ạcross the ™roup's operạtrng drvrsrons ạnd monrtored the resoWutron ofi controW-reWạted mạtters rạrsed through ạssurạnce processes. Engạgement wrth mạnạgement fiocused on understạndrng the root cạuses ofi rdentrfied rssues ạnd the ạctrons tạken to strengthen the controW envrronment over trme.
Statutory duties and confirmations
The Commrttee:
ConcWuded thạt the ™roup's rnternạW finạncrạW controWs were efifiectrve ạnd thạt ạpproprrạte finạncrạW reportrng procedures ạre rn pWạce ạnd fiunctronrng efifiectrveWy ạcross the ™roup
Confirmed thạt the controW envrronment supports the rntegrrty ofi finạncrạW ạnd rntegrạted reportrng
Group AnnuạW FrnạncrạW Stạtements ?0?6 1fi
Internal audit
The Commrttee oversạw the rnternạW ạudrt fiunctron, recognrsrng rts roWe ạs ạn rndependent thrrd Wrne ofi defience ạnd ạ key component ofi the ™roup's combrned ạssurạnce modeW. The Commrttee ạpproved the rnternạW ạudrt chạrter ạnd the ạnnuạW rrsk-bạsed ạudrt pWạn, ensurrng ạWrgnment wrth the ™roup's key rrsks ạnd prrorrtres. t retạrned oversrght ofi the executron ofi the pWạn, rncWudrng coverạge ofi finạncrạW, operạtronạW ạnd T controWs, ạnd engạged wrth mạnạgement on the findrngs ạrrsrng firom rnternạW ạudrt revrews. Focus wạs pWạced on the efifiectrveness ofi rnternạW controWs, the quạWrty ofi mạnạgement's response to ạudrt findrngs ạnd the trmeWy rmpWementạtron ofi ạgreed ạctrons. The Commrttee ạWso monrtored outstạndrng ạudrt rssues to ensure ạpproprrạte resoWutron.
The rnternạW ạudrt fiunctron contrnues to operạte ạs ạ mạture ạnd efifiectrve rn-house cạpạbrWrty. The Heạd ofi nternạW Audrt reports drrectWy to the Commrttee ạnd engạges reguWạrWy wrth the Commrttee Chạrr, supportrng rndependence ạnd open communrcạtron. Durrng the yeạr, the fiunctron ạWso supported .oxer rn rts trạnsrtron to ạn rndependent rn-house rnternạW ạudrt cạpạbrWrty.
Statutory duties and confirmations
The Commrttee:
ConcWuded thạt the rnternạW ạudrt fiunctron rs efifiectrve, rndependent ạnd ạpproprrạteWy posrtroned wrthrn the ™roup, wrth the necessạry ạuthorrty, ạccess ạnd resources to perfiorm rts responsrbrWrtres
Confirmed thạt the rnternạW ạudrt pWạn rs ạWrgned to the ™roup's key rrsks ạnd thạt the fiunctron provrdes ạpproprrạte ạssurạnce over the efifiectrveness ofi rnternạW controWs
ConcWuded thạt mạnạgement responds ạpproprrạteWy to rnternạW ạudrt findrngs ạnd thạt ạgreed ạctrons ạre rmpWemented rn ạ trmeWy mạnner
External audit
The Commrttee oversạw the externạW ạudrt process, wrth ạ fiocus on ạudrt quạWrty, rndependence ạnd the robustness ofi the ạudrt ạpproạch. The Commrttee revrewed ạnd ạpproved the externạW ạudrt pWạn, rncWudrng scope, mạterrạWrty ạnd key ạreạs ofi fiocus, ensurrng ạWrgnment wrth the ™roup's finạncrạW reportrng rrsks ạnd ạreạs ofi judgement. n ạccordạnce wrth Commrttee poWrcy, ạWW non-ạudrt servrces provrded by the externạW ạudrtor must be pre-ạpproved by the Commrttee. These ạmounted to R95 9fi0 (FY?5: R?5 000) representrng 0.4% ofi the ™roup's ạssurạnce fiees. The Commrttee engạged wrth the externạW ạudrtor on ạudrt progress, key ạudrt mạtters ạnd rnternạW controW findrngs, ạnd monrtored mạnạgement's response where reWevạnt. The Commrttee consrdered the key ạudrt mạtters reported rn the externạW ạudrt report on pạges 8 to 13 ạnd rs sạtrsfied thạt these mạtters hạve been ạpproprrạteWy ạddressed rn the AnnuạW FrnạncrạW Stạtements.
Durrng the yeạr, Trnạ RookWedge rotạted ofifi ạs the desrgnạted ạudrt pạrtner ạnd wạs succeeded by Lucrạn RoWWeston. The Commrttee consrdered hrs experrence, surtạbrWrty ạnd rndependence ạs pạrt ofi rts oversrght ofi the ạudrt process.
Ernst & Young nc. (EY) hạs served ạs the ™roup's externạW ạudrtor srnce ?015. The Commrttee undertạkes ạn ạnnuạW ạssessment ofi rndependence, competence ạnd ạudrt quạWrty. n the context ofi the ™roup's recent perrod ofi srgnrficạnt chạnge, rncWudrng the FY?5 recạprtạWrsạtron, stạbrWrty, contrnurty ạnd rnstrtutronạW knowWedge were key consrderạtrons rn the Commrttee's decrsron not to rnrtrạte ạn ạudrt tender ạt thrs trme. The need fior ạudrt firm rotạtron contrnues to be ạssessed ạnnuạWWy.
FoWWowrng the ạpporntment ofi Trnạ RookWedge ạs the rncomrng Chrefi FrnạncrạW Ofificer, the Commrttee ạppWred rts oversrght responsrbrWrtres rn Wrne wrth the ạppWrcạbWe reguWạtory ạnd ethrcạW stạndạrds. The Commrttee sạtrsfied rtseWfi thạt ạpproprrạte rndependence sạfieguạrds were rmpWemented, rncWudrng ạn ạdequạte cooWrng ofifi perrod, cWeạr sepạrạtron firom the FY?6 finạncrạW reportrng ạnd ạssurạnce processes, ạnd the ongorng protectron ofi the rndependence ạnd objectrvrty ofi the externạW ạudrt.
Statutory duties and confirmations
The Commrttee:
Approved the externạW ạudrtor's engạgement terms, ạudrt pWạn ạnd fiees, ạnd concWuded thạt the ạudrt ạpproạch rs ạpproprrạte ạnd responsrve to the ™roup's finạncrạW reportrng rrsks
The Commrttee concWuded thạt Ernst & Young nc. rs rndependent ạnd efifiectrve rn perfiormrng rts dutres ạs externạW ạudrtor. n ạccordạnce wrth pạrạgrạph 5.fi (h)(rrr) ofi the ZSE Lrstrngs Requrrements, the Commrttee consrdered the ạudrtor's surtạbrWrty, rndependence, perfiormạnce ạnd quạWrty ofi ạudrt work, rncWudrng the ạppWrcạtron ofi profiessronạW sceptrcrsm ạnd the resoWutron ofi ạWW mạterrạW ạudrt mạtters
Recommended the reạpporntment ofi EY to shạrehoWders ạt the A™M
18
Combined assurance
The Commrttee oversạw ạ coordrnạted ạpproạch to ạssurạnce ạcross the ™roup, ensurrng thạt ạssurạnce ạctrvrtres ạre ạWrgned to key rrsks ạnd support efifiectrve oversrght ofi controWs ạnd perfiormạnce.
Durrng the yeạr, the Commrttee ạpproved the Combrned Assurạnce Frạmework ạnd ạnnuạW Combrned Assurạnce workpWạn, whrch set out how ạssurạnce rs ạppWred ạcross the ™roup's key rrsk ạreạs. A mạnạgement Combrned Assurạnce Forum wạs estạbWrshed to rmprove coordrnạtron between busrness unrts ạnd ạssurạnce provrders, strengthen ạccountạbrWrty ạnd provrde cWeạrer vrsrbrWrty ofi rrsk mạnạgement ạnd ạssurạnce ạctrvrtres.
The Commrttee revrewed ạssurạnce outcomes ạcross rnternạW ạudrt, externạW ạudrt, rrsk ạnd compWrạnce, wrth ạ fiocus on the coverạge ofi key rrsks, the quạWrty ofi ạssurạnce provrded ạnd the efifiectrveness ofi mạnạgement's response to rdentrfied rssues. PạrtrcuWạr ạttentron wạs grven to rnternạW finạncrạW controWs, rncWudrng therr efifiectrveness, the consrstency ofi controW prạctrces ạcross the ™roup ạnd the trmeWy resoWutron ofi rdentrfied controW weạknesses.
Statutory duties and confirmations
The Commrttee:
Approved the Combrned Assurạnce Frạmework ạnd ạnnuạW work pWạn, ạnd concWuded thạt ạssurạnce ạctrvrtres ạre ạWrgned to the ™roup's key rrsks
Confirmed thạt coordrnạtron ạcross rnternạW ạudrt, externạW ạudrt, rrsk mạnạgement ạnd other ạssurạnce provrders rs efifiectrve
ConcWuded thạt the combrned ạssurạnce modeW provrdes sufificrent ạnd ạpproprrạte ạssurạnce over the efifiectrveness ofi rnternạW controWs, rrsk mạnạgement ạnd finạncrạW reportrng processes
Regulatory compliance
The Commrttee oversạw the ™roup's compWrạnce firạmework ạnd reguWạtory obWrgạtrons, supportrng ạ cuWture ofi ethrcạW conduct ạnd responsrbWe busrness prạctrces.
The Commrttee monrtored compWrạnce processes ạcross the ™roup, rncWudrng key WegạW ạnd reguWạtory deveWopments ạnd therr rmpạct on operạtrons. t revrewed reports on compWrạnce mạtters, rncWudrng rncrdents ofi non-compWrạnce, ạnd engạged wrth mạnạgement on the ạctrons tạken to ạddress these ạnd strengthen controWs where requrred.
PạrtrcuWạr fiocus wạs pWạced on whrstWebWowrng processes, rncWudrng reports recerved, rnvestrgạtron outcomes ạnd the efifiectrveness ofi remedrạtron ạctrons. The Commrttee ạWso consrdered thrrd-pạrty compWrạnce ạnd governạnce processes, recognrsrng the rmportạnce ofi mạnạgrng reguWạtory ạnd reputạtronạW rrsks ạcross the ™roup's broạder ecosystem.
Statutory duties and confirmations
The Commrttee:
Confirmed thạt the ™roup mạrntạrns ạn efifiectrve compWrạnce firạmework thạt supports ạdherence to ạppWrcạbWe Wạws, reguWạtrons ạnd governạnce stạndạrds, ạnd concWuded thạt srgnrficạnt compWrạnce mạtters ạre ạpproprrạteWy rdentrfied, ạddressed ạnd resoWved
Confirmed thạt whrstWebWowrng processes ạre efifiectrve, wrth ạpproprrạte rnvestrgạtron ạnd remedrạtron ofi reported mạtters, ạnd thạt compWrạnce prạctrces support ethrcạW conduct ạnd sound governạnce ạcross the ™roup
Events subsequent to the reporting date
The Commrttee rs not ạwạre ofi ạny mạterrạW events thạt hạve occurred between the reportrng dạte ạnd the dạte ofi ạpprovạW ofi these finạncrạW stạtements, other thạn those thạt ạre drscWosed rn the ™roup ạudrted ạnnuạW finạncrạW stạtements. PWeạse refier to pạge fi9 fior fiurther rnfiormạtron.
Group AnnuạW FrnạncrạW Stạtements ?0?6 19
Key focus areas for FY27
FrnạncrạW resrWrence - wrth contrnued fiocus on Wrqurdrty, fiundrng ạnd cạprtạW drscrpWrne
Strengthenrng the ™roup's rrsk ạnd ạssurạnce envrronment - rncWudrng embeddrng the rn-house rrsk fiunctron ạnd strengthenrng combrned ạssurạnce wrth ạ fiocus on thrrd pạrty compWrạnce
Mạrntạrnrng fiocus on key rrsk ạreạs - rncWudrng systems ạnd operạtronạW resrWrence
Oversrght ofi the ™roup's prepạrạtron fior the ạdoptron ofi Krng V - rncWudrng the revrew ạnd ạWrgnment ofi governạnce firạmeworks, poWrcres ạnd prạctrces to evoWvrng best prạctrce
Committee effectiveness and re-election
The Commrttee conducted ạ fiormạW seWfi-ạssessment durrng the yeạr ạnd rs sạtrsfied thạt rt hạs operạted efifiectrveWy ạnd rn ạccordạnce wrth rts mạndạte. Areạs fior contrnued fiocus rncWude supportrng ongorng governạnce mạturrty, strengthenrng oversrght rn key rrsk ạreạs, ạnd ensurrng ạpproprrạte successron ạnd renewạW ofi Commrttee membershrp.
n ạccordạnce wrth the Compạnres Act, ạWW members ofi the Commrttee wrWW be put to shạrehoWders fior fiormạW eWectron or re-eWectron ạt the ?0?6 A™M to be heWd rn August ?0?6..ạsed on the work perfiormed by mạnạgement, rnternạW ạudrt, the externạW ạudrtor ạnd other ạssurạnce provrders, the Commrttee rs sạtrsfied thạt the ™roup's governạnce, rrsk mạnạgement, rnternạW controW ạnd ạssurạnce processes ạre efifiectrve.
The Commrttee fiurther confirms thạt these processes support the rntegrrty ofi the ™roup's finạncrạW ạnd rntegrạted reportrng ạnd provrde ạ sound bạsrs fior reWrạbWe finạncrạW stạtements.
Aboubạkạr 2ạkoet
"Áạii: ™ioup Au¾it, Rifik ạfi¾ "ofipÁiạfice "ofifiittee
?? Mạy ?0?6
?0
Review of operations
Audited financial results for the 52 weeks ended 1 March 2026 (FY26)
5? weeks to | 53 weeks to | ||
1 Mạuch ?0?6 | ? Mạrch ?0?5 | % | |
Key kroup finạncrạW rndrcạtors | FY?6 | FY?5 | rmprovement |
Turnover | R1?0.3 brWWron | R119.0 brWWron1 | 1.0 |
Turnover (pro fiormạ 5?w fior FY?5)? | R1?0.3 brWWron | R116.3 brWWron1 | 3.4 |
Trạdrng profit | R1 685 mrWWron | R1 fi59 mrWWron | (4.?) |
Trạdrng profit mạrgrn | 1.4% | 1.5% | |
Profit/(Woss) befiore tạx ạnd cạprtạW rtems | R360 mrWWron | (R?3fi mrWWron) | |
HeạdWrne Woss | (R386 mrWWron) | (R408 mrWWron) | 5.4 |
HeạdWrne Woss per shạre (HEPS) | (5?.58 cents) | (61.54 cents) | 14.6 |
FY26 Group highlights
n FY?6 the ™roup put rn pWạce crrtrcạW rnrtrạtrves fior the Prck n Pạy supermạrkets turnạround pWạn, whrWe .oxer contrnued to drrve rts store roWWout. Achrevements durrng the perrod rncWude:
Prck n Pạy SA Supermạrkets Wrke-fior-Wrke sạWes ạcceWerạtron ạnd gross profit mạrgrn ạccretron: Compạny-owned supermạrkets Wrke-fior Wrke sạWes momentum rmproved to 3.9% vs. 3.3% rn FY?5, wrth the gross profit mạrgrn ofi the Prck n Pạy segment srmuWtạneousWy rmprovrng by 0.4%;
CrrtrcạW progress on key Prck n Pạy SA supermạrkets turnạround rnrtrạtrves: rncWudrng srgnrng ạ mạterrạWWy rmproved Wogrstrcs contrạct, concWudrng the store estạte reset ạnd rmprovrng the product rạnge, pạrtrcuWạrWy wrthrn Fresh cạtegorres. Post yeạr end, Prck n Pạy rnrtrạted ạn engạgement wrth our store-bạsed empWoyees ạnd Wạbour pạrtners to ạWrgn wrth our operạtronạW needs ạnd normạWrse our Wạbour prạctrces ạnd costs compạred to rndustry norms;
ExceptronạW perfiormạnce firom Boxer: .oxer's mạrket Weạdrng 1?.3% turnover growth on ạ 5?/5?w bạsrs fiurther soWrdrfied rts posrtron ạs South Afirrcạ's Weạdrng grocery drscounter;
kroup profit recovery: WhrWe the Prck n Pạy segment reported ạ Wạrger FY?6 trạdrng Woss vs. FY?5, the ™roup reduced rts HeạdWrne Woss by R?? mrWWron to R386 mrWWron.
Group result summary
The ™roup reported ạ R59fi mrWWron posrtrve yeạr-on-yeạr swrng rn profit befiore tạx ạnd cạprtạW rtems to ạ R360 mrWWron profit, ạgạrnst ạ Woss ofi R?3fi mrWWron rn FY?5. The rmprovement wạs drrven by ạ R681 mrWWron posrtrve swrng rn net fiundrng rnterest, pạrtrạWWy ofifiset by ạ Rfi4 mrWWron reductron rn consoWrdạted trạdrng profit. The profitạbrWrty rmprovement wạs srgnrficạntWy Wower ạt the HeạdWrne eạrnrngs WeveW ạs ạ resuWt ofi the R450 mrWWron rncreạse rn the .oxer non-controWWrng rnterest to R535 mrWWron, whrch resuWted firom the 34.4% .oxer non-controWWrng rnterest berng rncWuded fior the whoWe ofi FY?6 vs. 3 months rn FY?5. The net resuWt wạs thạt the ™roup HeạdWrne Woss decreạsed by R?? mrWWron to R386 mrWWron.
™roup turnover rncreạsed 3.4% (5?/5?w bạsrs), wrth 1?.3% growth firom .oxer ạnd ạ 1.6% decWrne firom Prck n Pạy, rmpạcted by the store estạte reset progrạmme. ™ross profit mạrgrn expạnded 0.5% to 18.8%, wrth rmprovement rn both the Prck n Pạy ạnd .oxer gross profit mạrgrn. Other rncome grew 0.6%. Trạdrng expenses rncreạsed by 4.1%, drrven by the .oxer store roWWout. The Rfi4 mrWWron (4.?%) decWrne rn ™roup trạdrng profit to R1.fi brWWron wạs the combrned resuWt ofi ạ R330 mrWWron rncreạse rn .oxer trạdrng profit (to R?.6 brWWron) ạnd ạ R404 mrWWron rncreạse rn the Prck n Pạy trạdrng Woss (to R1.0 brWWron).
Turnover (Rm)
FY?6
(5? weeks)
FY?5
(53 weeks ạs
reported)1
FY?5
(5? weeks pro fiormạ)1,?
5?/53 weeks
% chạnge
5?/5? weeks
% chạnge
.oxer 46 68? 4? 59fi 41 551 9.6% 1?.3%
Prck n Pạy* fi3 608 fi6 45? fi4 fi98 (3.fi%) (1.6%)
South Afirrcạ Rest ofi Afirrcạ
™roup 1?0 ?90 119 049 116 349 1.0% 3.4%
˙ Pick fi Pạy tuifiovei giowtÁ ifipạcte¾ ďy ạ cufiuÁạtive fiet ie¾uctiofi ok tÁe fitoie efitạte ok 98 cofipạfiy-owfie¾ ạfi¾ kiạficÁifie fiupeifiạiketfi ifi MY?5 ạfi¾ MY?6.
1 MY?5 tuifiovei iefitạte¾ to fiow ificÁu¾e ceitạifi itefifi pievioufiÁy iecogfiifie¾ witÁifi cofitfi ok goo¾fi fioÁ¾. MY?5 tiạ¾ifig piofit ifi fiot ifipạcte¾; MY?5 tiạ¾ifig piofit fiạigifi Áạfi ďeefi ievifie¾ ạfi ạ cofifie¾uefice ok tÁifi tuifiovei iefitạtefiefit.
2 Rekei to Appefi¾ix 1 pio koifiạ fifiạficiạÁ ifikoifiạtiofi.
Group AnnuạW FrnạncrạW Stạtements ?0?6 ?1
fi0 405
3 ?03
fi? 965
3 48fi
fi1 381
3 41fi
(3.5%)
(8.1%)
(1.4%)
(6.3%)
Boxer segment operational performance
.oxer, the ™roup's 65.6% owned subsrdrạry (fioWWowrng the
?8 November ?0?4 .oxer
PO) reported ạn exceptronạWWy strong FY?6 perfiormạnce. As consoWrdạted by the ™roup, .oxer turnover grew 1?.3% (5?/5?w) to R46.fi brWWron, ạnd trạdrng profit grew to R?.6 brWWron. The fiuWW FY?6 .oxer resuWts, ạs pubWrshed by .oxer RetạrW Lrmrted on 11 Mạy ?0?6, cạn be fiound on the .oxer websrte ạt https://boxerrnvestor.co.zạ/.Pick n Pay (PnP) segment operational performance
Pick n Pay segment turnover
Prck n Pạy mạde ongorng progress on rts turnover objectrve ofi drrvrng rmproved Wrke-fior-Wrke sạWes growth rn profitạbWe stores ạnd those stores wrth reạsonạbWe prospects ofi ạchrevrng profitạbrWrty, whrWst cWosrng or convertrng those stores wrth Wrmrted opportunrty fior ạ profitạbWe recovery.
Prck n Pạy turnover decWrned 1.6% (5?/5?w) rn FY?6, wrth Prck n Pạy South Afirrcạ decWrnrng 1.4%, reflectrng the cWosures ạnd conversrons, ạnd Rest ofi Afirrcạ decWrnrng 6.3%, rmpạcted by the Woss ofi the Nạmrbrạn firạnchrse firom ZuWy ?0?5 ạnd ạ weạkenrng
.otswạnạ PuWạ.
Prck n Pạy rs chạngrng rts rnternạW seWWrng prrce rnflạtron reportrng method to the voWume-heWd-constạnt method, to be rn Wrne wrth
.oxer. On thrs bạsrs, FY?6 Prck n Pạy rnternạW seWWrng prrce rnflạtron wạs 1.9%. To provrde hrstorrcạW compạrrson Prck n Pạy's rnternạW seWWrng prrce rnflạtron on ạ voWume-heWd-constạnt bạsrs wạs ?.?% rn FY?5 (prevrousWy reported ạt ạs ?.1%).
Prck n Pạy's FY?6 rnternạW seWWrng prrce rnflạtron wạs weWW beWow Stạtrstrcs SA fiood ạnd non-ạWcohoWrc beverạge rnflạtron fior the perrod ofi +4.4%, ạs Prck n Pạy mạrntạrned rts commrtment to deWrver Wow prrces to customers.
South African company-owned and franchise supermarkets
FY?6 Wrke-fior-Wrke sạWes fior compạny-owned supermạrkets grew 3.9% yeạr-on-yeạr, ạn rmprovement on the 3.3% reported fior FY?5. H? FY?6 Wrke-fior-Wrke sạWes sWowed firom the 4.8% reported rn H1 FY?6 to 3.0% rn H?, ạs ạ consequence ofi ạ sWow November ?0?5 (wrth ạ Wrke-fior-Wrke decWrne), but thrs wạs fioWWowed by ạ return to pWeạsrng growth rn December, Zạnuạry ạnd Februạry.
Frạnchrse Wrke-fior-Wrke sạWes growth wạs 0.9% rn FY?6 vs - 0.1% rn FY?5. The ™roup contrnues rts efifiorts to rmprove the firạnchrse ofifierrng to drrve sạWes ạnd profitạbrWrty fior Prck n Pạy ạnd our firạnchrsee pạrtners.
The store estạte reset pWạn, whereby Prck n Pạy rs cWosrng those compạny-owned supermạrkets wrth Wrmrted scope fior reạchrng profitạbrWrty, wạs mostWy concWuded durrng FY?6. As ạ consequence ofi thrs, Prck n Pạy reduced the number ofi South Afirrcạn compạny owned supermạrkets ạnd hypermạrkets by ạ net 13 stores durrng the perrod, to ?fi5 stores. Over the course ofi FY?5 ạnd FY?6, the cumuWạtrve reductron totạWWed ạ net 49 stores.
WhrWe the totạW number ofi Prck n Pạy firạnchrse supermạrkets decWrned by 49 stores durrng FY?6, the mạjorrty ofi these cWosures reWạted to Nạmrbrạ.
The number ofi South Afirrcạn firạnchrse supermạrkets reduced by ạ net 1fi stores durrng FY?6, to cWose wrth 198 stores.
Lrke-fior-Wrke sạWes growth | FY?5 | H1 FY?6 | H? FY?6 | FY?6 |
PnP South Afirrcạ | ?.0% | 4.4% | 1.3% | ?.8% |
PnP SA supermạrkets | ?.0% | 3.fi% | 1.9% | ?.8% |
PnP SA compạny-owned supermạrkets | 3.3% | 4.8% | 3.0% | 3.9% |
PnP SA firạnchrse supermạrkets | (0.1%) | 1.8% | (0.?%) | 0.9% |
PnP CWothrng stạndạWone stores | ?.0% | fi.5% | (5.6%) | 0.fi% |
Note: 1) PfiP 6A fiupeifiạiketfi ificÁu¾efi Áypeifiạiketfi. ?) MiạficÁifie fiạÁefi iekeifi to wÁoÁefiạÁe fiạÁefi kiofi Pick fi Pạy to kiạficÁifieefi.
3) H1 MY?6 Áike-koi-Áike fiạÁefi Áạfi ďeefi iefitạte¾ to fioifiạÁifie koi ạ cÁạfige ifi tÁe kiạficÁifie fio¾eÁ.
Pick n Pay Online
Prck n Pạy's onWrne busrness hạd ạ strong FY?6, wrth turnover rncreạsrng by 3?.fi% (5?/5?w bạsrs) ạnd the busrness ạchrevrng rts profitạbrWrty tạrgets. On-demạnd pWạtfiorms (ạsạp! ạnd PnP grocerres on Mr D) deWrvered turnover growth ofi 3fi.6%.
The roWWout ofi the next-generạtron ạsạp! ạpp rn AprrW ?0?5 wạs ạ key enạbWer ofi new customer ạcqursrtron ạnd customer retentron, through the rntroductron ofi rntegrạted Smạrt Shopper rewạrds, enhạnced vạWue-ạdded servrces, ạ redesrgned, rnturtrve user experrence, ạnd the flexrbrWrty ofifiered to customers to scheduWe therr deWrvery ạnd seWect therr prefierred deWrvery store. The pWạtfiorm's scạWe ạnd cạpạbrWrtres hạve been supported by rncreạsed rnvestment to deWrver ạ fiạster shopprng ạnd pạyment process, ạs weWW ạs rmproved operạtrons. ạsạp! rs now ạvạrWạbWe rn 6?0+ stores nạtronwrde (compạny-owned supermạrkets, hypermạrkets, ạnd firạnchrse stores) wrth ? 500+ drrvers rmprovrng deWrvery speed ạnd reWrạbrWrty.
Pick n Pay Clothing
Prck n Pạy CWothrng turnover rn stạndạWone stores grew 5.3% rn FY?6 (5?/5?w) ạnd 0.fi% on ạ Wrke-fior-Wrke bạsrs. Afiter reportrng ạ strong first hạWfi ofi the yeạr (turnover +1?.0% ạnd Wrke-fior-Wrke
+fi.5%), the busrness experrenced ạ sWowdown rn H?, wrth turnover
-0.9% ạnd Wrke-fior-Wrke sạWes -5.6%.
The drsạpporntrng perfiormạnce over the second hạWfi ofi the yeạr wạs prrmạrrWy drrven by ạn exceptronạWWy sofit cWothrng mạrket, exạcerbạted by ạ deWạyed onWrne Wạunch. Over 3 yeạrs, Prck n Pạy CWothrng's Wrke-fior-Wrke sạWes growth ạverạge ofi 3.5% remạrns strong reWạtrve to competrtors.
Prck n Pạy CWothrng opened net ?? stores durrng FY?6 to brrng the totạW estạte to 43fi stores, consrstrng ofi 419 compạny-owned ạnd 18 firạnchrse stores.
Pick n Pay segment gross profit
Prck n Pạy's FY?6 gross profit mạrgrn expạnded 0.4% yeạr-on-yeạr to 1fi.0%. The rmproved gross profit mạrgrn wạs due to the combrned rmpạcts ofi reduced wạste especrạWWy wrthrn the Fresh cạtegory, better cạtegory mạnạgement, ạnd the corporạtrsạtron ofi the .otswạnạ stores, ạWW ofi whrch were pạrtrạWWy ofifiset by ạ reduced mạrgrn on sạWes to firạnchrsees rn Wrne wrth Prck n Pạy's efifiorts to rmprove the profitạbrWrty ofi rts firạnchrse pạrtners.
??
Pick n Pay segment trading expenses
FY?6 trạdrng expenses rncreạsed 1.1%, rncWudrng the ạddrtronạW week rn the prror yeạr bạse. WhrWe totạW trạdrng expense growth wạs contạrned ạs ạ resuWt ofi the store cWosures ạnd conversrons, Wrke-fior-Wrke trạdrng expense growth wạs 6.fi%, ạheạd ofi 3.9% compạny-owned supermạrket Wrke-fior-Wrke sạWes growth. As ạ consequence, trạdrng expenses ạs ạ % ofi turnover rncreạsed to
Pick n Pay segment trading loss
Prck n Pạy FY?6 trạdrng Woss rncreạsed to R953 mrWWron (-1.3% trạdrng mạrgrn) firom R549 mrWWron (-0.fi% trạdrng mạrgrn) rn FY?5. The trạdrng profit decWrne wạs the resuWt ofi the 0.4% gross mạrgrn rmprovement berng more thạn ofifiset by the 1.0% rncreạse rn trạdrng expenses ạs ạ % ofi turnover.
?1.fi% vs. ?0.fi% the prevrous yeạr. The reWạtrveWy hrgh Wrke-fior-Wrke
FY?6
FY?51
Turnover ™ross profit Other rncome Trạdrng expenses | fi3 608 1? 546 ? 4fi? (15 9fi1) | fi6 45? 1? fi11 ? 53? (15 fi9?) | (3.fi) (1.3) (?.4) 1.1 |
EmpWoyee costs | (6 609) | (6 444) | ?.6 |
Occupạncy costs | (? 163) | (? ?fi8) | (5.0) |
Operạtrons costs | (4 06fi) | (4 119) | (1.3) |
Merchạndrse ạnd ạdmrn | (? 90?) | (? fi4fi) | 5.6 |
Expected credrt Woss ạWWowạnce | (?30) | (?04) | 1?.fi |
Trạdrng Woss | (953) | (549) | fi3.6 |
Net Weạse finạnce expense# | (1 080) | (1 141) | (5.3) |
Trạdrng Woss ạfiter Weạse rnterest* | (? 033) | (1 690) | ?0.3 |
expense growth wạs drrven by rncreạsed ạdvertrsrng ạnd Rm empWoyee costs. Prck n Pạy rncurred costs reWạted to rts vạrrous restructurrng rnrtrạtrves ofi R?35 mrWWron durrng the perrod.
EmpWoyee costs - rncreạsed ?.6% to R6.6 brWWron. The sWrght rncreạse rn empWoyee costs, desprte the rmpạct ofi the cWosed or converted compạny-owned supermạrkets, wạs the resuWt ofi seWectrve hrrrng ofi skrWWs rn stores ạnd regronạW ofifices to rmprove rn-store executron ạnd drrve Wrke-fior-Wrke sạWes, ạnd ạbove-rnflạtron store WeveW wạge rncreạses.
Occupạncy costs - decWrned 5.0% to R?.? brWWron. Occupạncy wạs rmpạcted by ạ R?60 mrWWron
FRS16 profit on Weạse termrnạtron (R136 mrWWron rn FY?5), whrch ạrose firom store cWosures ạnd conversrons. ExcWudrng thrs FRS16 profit firom both perrods, occupạncy cost rncreạsed 0.4%.Operạtrons costs - decWrned 1.3% to R4.1 brWWron.
ncreạsed energy ạnd utrWrty costs, drrven by prrce rncreạses, exerted upwạrd pressure on Operạtrons costs when meạsured on ạ Wrke-fior-Wrke(5? weeks) (53 weeks) % chạnge
bạsrs. PPE deprecrạtron ạnd ạmortrsạtron decWrned durrng the perrod ạs ạ resuWt ofi store cWosures ạnd conversrons.
Merchạndrsrng ạnd ạdmrnrstrạtron costs - rncreạsed 5.6% to R?.9 brWWron ạs ạ resuWt ofi rncreạsed ạdvertrsrng costs ạs Prck n Pạy rnvested rn the brạnd to drrve turnover growth.
Expected credrt Woss ạWWowạnce - the chạrge rncreạsed 1?.fi% to R?30 mrWWron.
™ross profit mạrgrn 1fi.0% 16.6%
Trạdrng expenses ạs % ofi
turnover | ?1.fi% | ?0.fi% |
Trạdrng Woss mạrgrn | (1.3%) | (0.fi%) |
Trạdrng Woss ạfiter Weạse rnterest mạrgrn | (?.8%) | (?.?%) |
1 Miguiefi Áạve ďeefi iefitạte¾ witÁ fio cÁạfige to ™iofifi piofit,
iạ¾ifig Áofifi, oi iạ¾ifig Áofifi ạktei Áeạfie ifiteiefit. Rekei to fiote 5 ok tÁe ™ioup ạfifiuạÁ fifiạficiạÁ fitạtefiefitfi.Group trading profit segmentation
Turnover
Trạdrng (Woss)/profit Trạdrng (Woss)/profit mạrgrn Net Weạse finạnce expense#
Trạdrng (Woss)/profit ạfiter Weạse rnterest*
Trạdrng (Woss)/profit ạfiter Weạse rnterest mạrgrn
FY?6 (5? weeks)
Prck n Pạy Boxeu
fi3 608 46 68?
(953) ? 638
(1.3%) 5.fi%
(1 080) (483)
(? 033) ? 155
(?.8%) 4.6%
Guoup
1?0 ?90
1 685
1.4%
(1 563)
1??
0.1%
FY?5 (53 weeks)
Prck n Pạy Boxer
fi6 45? 4? 59fi
(549)
(0.fi%) (1 141)
(1 690) (?.?%)
? 308
5.4%
(41?)
1 896
4.5%
kroup
119 049
1 fi59
1.5%
(1 553)
?06
0.?%
#
Afi pei tÁe 6tạtefiefit ok "ofipieÁefifiive ficofie. Meạfie fifiạfice expefifie Áefifi Áeạfie fifiạfice ificofie, wÁicÁ ifi ificofie ieceive¾ kiofi kiạficÁifie fiuď-Áeạfiefi wÁeie tÁe ™ioup ÁoÁ¾fi Áeạ¾ Áeạfiefi.
˙ Rekei to Appefi¾ix 1 Pio koifiạ fifiạficiạÁ ifikoifiạtiofi.
Group AnnuạW FrnạncrạW Stạtements ?0?6
?3
Group net finance costs
™roup net finạnce costs, rncWudrng rmpWred rnterest chạrges under
FRS 16, decWrned 33.6% yeạr-on-yeạr to R1.3 brWWron. Prck n Pạy segment net finạnce costs decWrned 48.3% yeạr-on-yeạr to R843 mrWWron (due to the FY?5 recạprtạWrsạtron ạnd the store estạte reset progrạmme), whrWe .oxer net finạnce costs rncreạsed 31.3% yeạr-on-yeạr to R48? mrWWron (due to debt tạken on prror to the PO ạnd store estạte growth).Fundrng rnterest - ™roup net fiundrng rnterest swung firom ạ net R443 mrWWron expense rn FY?5 to R?38 mrWWron net rncome rn FY?6.
Leạse rnterest -
mpWred net rnterest chạrges under FRS 16 rncreạsed 0.6% yeạr-on-yeạr to R1.6 brWWron. The rncreạse wạs drrven by the store roWWout rn .oxer (Weạse rnterest up 1fi.?% yeạr-on-yeạr), wrth net Weạse rnterest rn the Prck n Pạy segment decWrnrng by 5.3%.FY?6 | FY?5 | % | |
Net finạnce costs (Rm) | (5? weeks) (53 | weeks) | chạnge |
kroup | (1 3?5) | (1 996) | (33.6) |
Net fiundrng rnterest1 | ?38 | (443) | (153.fi) |
Net Weạse rnterest? | (1 563) | (1 553) | 0.6 |
Prck n Pạy | (843) | (1 6?9) | (48.3) |
Net fiundrng rnterest | ?3fi | (488) | (148.6) |
Net Weạse rnterest | (1 080) | (1 141) | (5.3) |
Boxer | (48?) | (36fi) | 31.3 |
Net fiundrng rnterest | 1 | 45 | (9fi.8) |
Net Weạse rnterest | (483) | (41?) | 1fi.? |
1 Net kufi¾ifig ifiteiefit ificÁu¾efi ifiteiefit ieceive¾ ofi tiạ¾e ạfi¾ otÁei ieceivạďÁefi ok R65 fiiÁÁiofi ạfi¾ RZ8 fiiÁÁiofi ifi MY?6 ạfi¾ MY?5 iefipectiveÁy, wÁicÁ ifi piifiạiiÁy ifiteiefit ificofie ofi ovei¾ue kiạficÁifie ieceivạďÁefi witÁifi tÁe Pick fi Pạy fiegfiefit.
2 Afi pei tÁe 6tạtefiefit ok "ofipieÁefifiive
ficofie. Meạfie ÁiạďiÁity fifiạfice cofitfi Áefifi fiet ifivefitfiefit ifi Áeạfie ieceivạďÁefi fifiạfice ificofie, wÁicÁ ifi ificofie ieceive¾ kiofi fiuď-Áeạfiefi wÁeie tÁe ™ioup ÁoÁ¾fi Áeạ¾ Áeạfiefi.Group capital items
The ™roup recorded ạn FY?6 cạprtạW Woss ofi R44? mrWWron, compạred wrth R388 mrWWron rn FY?5. R398 mrWWron ofi the cạprtạW Woss wạs recorded wrthrn the Prck n Pạy segment, whrWe R44 mrWWron
HeạdWrne eạrnrngs per shạre (HEPS) - The HeạdWrne Woss per shạre reduced by 14.6% to ạ Woss ofi 5?.58 cents per shạre. AWW rmpạrrment Wosses ạnd other cạprtạW rtems ạre excWuded firom the cạWcuWạtron ofi heạdWrne eạrnrngs.
Eạrnrngs per shạre (EPS) - The Woss per shạre reduced by 10.fi% to ạ Woss ofi 99.1fi cents per shạre, ạnd rncWudes ạWW rtems ofi ạ cạprtạW nạture.
Detailed review of Group financial position
Funding
™roup net cạsh ạt perrod-end wạs R3.1 brWWron, rncWudrng R?.4 brWWron ofi net cạsh wrthrn Prck n Pạy ạnd R0.fi brWWron ofi net cạsh wrthrn .oxer. ™roup net cạsh reduced by R1.1 brWWron srnce Mạrch ?0?5, comprrsrng ạ R0.9 brWWron posrtrve swrng wrthrn
.oxer, ạnd ạ R?.0 brWWron cạsh utrWrsạtron wrthrn Prck n Pạy.
The Prck n Pạy segment hạs R3.0 brWWron ofi short-term workrng cạprtạW fiạcrWrtres rn pWạce to fiund rntrạ-month workrng cạprtạW requrrements where necessạry. Thrs fiạcrWrty rs unsecured ạnd rs not guạrạnteed by .oxer RetạrW Lrmrted.
Fundrng (Rm) FY?6 FY?5
™roup gross debt (excWudrng Weạses) ™roup cạsh ạnd cạsh equrvạWents | (?00) 3 ?fifi | (1 150) 5 3?8 |
kroup net cạsh/(debt) | 3 0fifi | 4 1fi8 |
Prck n Pạy net cạsh | ? 368 | 4 358 |
.oxer net cạsh/(debt) | fi09 | (180) |
Working capital
Workrng cạprtạW ạbsorbed R0.4 brWWron ofi ™roup Wrqurdrty rn FY?6. Thrs rncWuded ạ R1fi mrWWron Wrqurdrty utrWrsạtron wrthrn Prck n Pạy ạnd ạ R386 mrWWron utrWrsạtron wrthrn .oxer. The FY?6 Wrqurdrty reWeạse rs ạttrrbuted to the fioWWowrng:
Trght workrng cạprtạW controWs wrthrn Prck n Pạy, desprte rnvestrng rn rnventory rạnge; ạnd
A R0.9 brWWron rnventory rncreạse wrthrn .oxer, ạrrsrng firom strạtegrc rnventory rnvestments, stockrng the new Tongạạt DC, ạnd store growth.
occurred wrthrn .oxer. The ™roup cạprtạW Woss reflected ạ R391 mrWWron net ạsset rmpạrrment together wrth ạ R51 mrWWron net
Net workrng cạprtạW movement (Rm)
FY?6
(5? weeks)
FY?5
(53 weeks)
Woss on drsposạW ofi ạssets.
Prck n Pạy .oxer | (1fi) (386) | (505) (fi8) |
kroup Wrqurdrty ạbsorptron | (403) | (583) |
Group tax
The ™roup's efifiectrve tạx rạte reflects the combrned efifiects ofi ạ
?0.3% ạnd ?6.3% efifiectrve tạx rạte rn the Prck n Pạy segment ạnd
.oxer respectrveWy. The ™roup expects to pạy mrnrmạW tạx rn the Prck n Pạy segment fior the fioreseeạbWe fiuture, grven the ạntrcrpạtron ofi fiurther Wosses wrthrn thrs segment ạnd the ạccumuWạted tạx Wosses.
Earnings per share
The ™roup notes the substạntrạW rmpạct ofi the 34.4% .oxer non-controWWrng rnterest, whrch wạs consoWrdạted fior fiuWW yeạr FY?6 versus three months wrthrn FY?5. The hrgh vạWue ofi the FY?6 non-controWWrng rnterest, ạt R535 mrWWron, hạs ạ mạterrạW rmpạct on the cạWcuWạtron ofi FY?6 ạttrrbutạbWe eạrnrngs.
The FY?6 Woss ạnd HeạdWrne Woss reduced by 1.1% to Rfi?8 mrWWron ạnd 5.4% to R386 mrWWron respectrveWy. Per shạre eạrnrngs metrrcs contrnue to be rmpạcted by the August ?0?4 P
K Rrghts Ofifier, whrch resuWted rn the werghted ạverạge number ofi ordrnạry shạres rn rssue (net ofi treạsury shạres) rncreạsrng by 10.fi% firom663.0 mrWWron rn FY?5 to fi34.1 mrWWron fior FY?6.
?4
Group capital investment
™roup FY?6 net cạprtạW rnvestment (r.e. net ofi proceeds firom ạsset drsposạWs) ofi R1.9 brWWron reflected ạ ??.3% rncreạse on the R1.6 brWWron rnvested rn FY?5. The rncreạse wạs prrmạrrWy drrven by Prck n Pạy whrch rncreạsed rts net rnvestment by 41.?% to R0.9 brWWron.
™roup gross cạprtạW rnvestment fior the FY?fi finạncrạW yeạr rs WrkeWy to be ạpproxrmạteWy R?.8 brWWron, rncWudrng R1.fi brWWron fior Prck n Pạy ạnd R1.1 brWWron fior .oxer.
Astute mạnạgement ofi trạdrng expenses rs ạ crrtrcạW Wever on the journey to ạchrevrng breạk-even ạt the trạdrng WeveW wrthrn the Prck n Pạy segment. EmpWoyee costs ạre the Prck n Pạy segment's Wạrgest expense (equạtrng to 41.4% ofi FY?6 trạdrng expenses) ạnd ạre out ofi krWter wrth the wrder retạrW rndustry. Support ofifice empWoyee costs were tạrgeted rn FY?6 (ạnd contrnued to be ạddressed), wrth restructurrng ạnd ạ sạWạry fireeze. Post yeạr end, Prck n Pạy rnrtrạted ạ s.189A (ofi the Lạbour ReWạtrons Act) process wrth our bạrgạrnrng unrt store-bạsed empWoyees ạnd Wạbour pạrtners wrth the express purpose ofi restructurrng our Wạbour modeW ạnd brrngrng Prck n Pạy's empWoyee costs, prạctrces ạnd efificrencres rn-Wrne wrth the mạrket. The outcome ofi thrs process,
Net cạprtạW rnvestment (Rbn) | FY?6 | FY?5 |
Prck n Pạy | 0.9 | 0.6 |
.oxer | 1.0 | 0.9 |
kroup | 1.9 | 1.6 |
rn combrnạtron wrth the other turnạround rnrtrạtrves, rs crrtrcạW to
Prck n Pạy's ạbrWrty to reạch profit breạk-even, to creạte ạ sustạrnạbWe busrness wrth secure fiutures fior Prck n Pạy empWoyees.
EWevạted orW ạnd dreseW prrces meạn thạt the trạdrng outWook fior FY?fi rs uncertạrn. The ™roup expects the wạr rn the Persrạn ™uWfi to rmpạct fiood rnflạtron, WogrstrcạW costs, ạnd the ạbrWrty ofi the
Shareholder distribution
As ạ resuWt ofi the heạdWrne Woss rncurred, the .oạrd hạs not decWạred ạ drvrdend, ạnd does not expect to decWạre ạny drvrdends untrW the ™roup hạs returned to sustạrnạbWe profitạbrWrty.
Subsequent event: R4.7 billion Boxer share sale
On 18 Mạy ?0?6 the ™roup compWeted ạ pWạcement ofi 5fi.3 mrWWron
.oxer shạres vrạ ạn ạcceWerạted bookburWd fior gross proceeds ofi R4.fi brWWron. The shạres soWd represent 1?.5% ofi .oxer shạres rn rssue, ạnd reduce the ™roup's .oxer shạrehoWdrng firom 65.6% to 53.1%.
The net proceeds ofi the sạWe, together wrth the R?.4 brWWron ofi net cạsh wrthrn the Prck n Pạy segment, wrWW be used to rnvest rn ạnd fiund the Prck n Pạy segment's journey to growth ạnd profitạbrWrty.
The ™roup rs firmWy commrtted to retạrnrng ạ mạjorrty stạke rn
.oxer, whrch rs ạ vrtạW pạrt ofi the ™roup.
Group strategic plan and outlook
FY?6 sạw ạn exceptronạW perfiormạnce firom .oxer. Agạrnst thạt, the Prck n Pạy segment's rncreạsed trạdrng Woss rndrcạtes thạt the rn-progress turnạround strWW hạs some wạy to go.
The Woss ofi R?.0 brWWron ạt the trạdrng profit ạfiter Weạse rnterest WeveW rn the Prck n Pạy segment underprns the urgency ofi returnrng Prck n Pạy to ạ sustạrnạbWe enterprrse. Notwrthstạndrng the chạWWenges, posrtrve progress rs berng mạde rn rmprovrng the customer experrence, whrch rs our WrfiebWood.
CrrtrcạW eWements ofi the Prck n Pạy turnạround strạtegy hạve ạWreạdy been put rn pWạce, wrth the fiuWW benefits strWW to be reạWrsed. nrtrạtrves rncWudrng cWosrng Woss-mạkrng stores, strengthenrng store ạnd regronạW mạnạgement, ạnd rmprovrng the product ofifier hạve drrven ạ steạdy rmprovement rn Wrke-fior-Wrke sạWes coupWed wrth ạ gross profit mạrgrn recovery. The new Wogrstrcs contrạct rs expected to drrve fiurther gross mạrgrn ạccretron rn FY?fi ạnd FY?8.
consumer to spend. How these fiạctors uWtrmạteWy pWạy out rs uncWeạr, ạnd rs WạrgeWy predrcạted on the durạtron ofi the wạr.
™rven the trme rt wrWW tạke fior the turnạround rnrtrạtrves ạWreạdy rn pWạy to deWrver therr fiuWW benefits, ạnd the chạWWenges fiạcrng the South Afirrcạn retạrW mạrket, the ™roup rs pushrng out rts profit breạk-even tạrget fior the Prck n Pạy segment by one yeạr. The
™roup rs now tạrgetrng the Prck n Pạy segment to breạk even ạt the trạdrng profit ạfiter Weạse rnterest WeveW rn FY?9 (prevrousWy FY?8). The deWạy reflects the phạsrng ofi the vạrrous eWements ofi the turnạround pWạn, rạther thạn ạny reductron rn the .oạrd's confidence thạt the turnạround objectrves wrWW uWtrmạteWy be ạchreved.
n the 9 weeks post perrod-end, the Prck n Pạy segment's South Afirrcạn supermạrket Wrke-fior-Wrke sạWes growth wạs sWrghtWy ạheạd ofi thạt ạchreved rn FY?6.We thạnk ạWW .oxer ạnd Prck n Pạy coWWeạgues, ạnd our vạWued firạnchrse pạrtners, fior therr commrtment ạnd contrrbutron ạs we reburWd ạnd re-energrse the ™roup fior ạ prosperous fiuture.
2ạmes Formby Seạn Summers
"Áạii "Áiek Executive Okficei
?? Mạy ?0?6
Group AnnuạW FrnạncrạW Stạtements ?0?6 ?5
Group annual
financial sLaLemenLs?fi Stạtement ofi comprehensrve rncome
?8 Stạtement ofi finạncrạW posrtron
?9 Stạtement ofi chạnges rn equrty
Stạtement ofi cạsh flows
Notes to the group annual financial statements
1 MạterrạW ạccountrng poWrcres
? Revenue
Loss befiore tạx
.ạsrc, heạdWrne ạnd drWuted eạrnrngs per shạre
Operạtrng segments
Drrectors remunerạtron ạnd rnterest rn shạres fi ReWạted pạrty trạnsạctrons
Cạsh ạnd cạsh equrvạWents
.orrowrngs
nventory
Trạde ạnd other recervạbWes 1? Trạde ạnd other pạyạbWes
Defierred revenue
Provrsrons
mpạrrments ofi non-finạncrạW ạssets
Property, pWạnt ạnd equrpment 1fi ntạngrbWe ạssets
Rrght-ofi-use ạssets
Net rnvestment rn Weạse recervạbWes
?0 Leạse WrạbrWrtres
?1 Purchạse ofi operạtrons
?? PạrtWy-owned subsrdrạry
?3 nvestment rn ạssocrạte ạnd jornt operạtrons
?4 Shạre cạprtạW
?5 Treạsury shạres
?6 Shạre-bạsed pạyments
?fi Drvrdends decWạred
?8 ncome tạx
?9 Defierred tạx
Retrrement benefits
Loạns
3? FrnạncrạW rnstruments
™orng concern
Contrngent WrạbrWrtres
Commrtments
Subsequent events
3fi Stạndạrds ạnd rnterpretạtron rssued but not yet efifiectrve
?6
Group statement of
comprehensive incomefor the period ended
Note
5? weeks to
1 Mạuch
?0?6
Rm
Restạted* 53 weeks to
? Mạrch
?0?5
Rm
Revenue ? 1?3 6fi4 1?? 458
Turnover ? 1?0 ?90 119 049
Cost ofi merchạndrse soWd (9fi 6fi?) (9fi ?85)
kross profit ?? 618 ?1 fi64
Other rncome ? 86? ? 844
1 1fi3
93
1 596
1 ?44
111
1 489
Frạnchrse fiee rncome ?
Operạtrng Weạse rncome ?
Commrssrons, drvrdend ạnd other rncome ?
(10 009)
(3 456)
(6 4?3)
(3 6fifi)
(?30)
(9 516)
(3 460)
(6 ?1fi)
(3 45?)
(?04)
Trạdrng expenses (?3 fi95) (?? 849)
EmpWoyee costs 3
Occupạncy costs Operạtrons costs
Merchạndrsrng ạnd ạdmrnrstrạtron costs
Expected credrt Woss ạWWowạnce 11
Trạdrng profit 1 685 1 fi59
30fi
?15
349
?16
Frnạnce rncome ? 5?? 565
Fundrng finạnce rncome
Leạses finạnce rncome 19
(69)
(1 fifi8)
(fi9?)
(1 fi69)
Fundrng finạnce expense
Leạses finạnce expense
?0
Frnạnce costs (1 84fi) (? 561)
Profit/(Woss) befiore tạx befiore cạprtạW rtems 360 (?3fi)
Loss on cạprtạW rtems (44?) (388)
(51)
(391)
(94)
(?94)
19
(5)
3
(1)
(3)
(3) -
(8)
(1) -
(99.1fi)
(99.1fi)
(111.01)
(111.01)
Net Woss on drsposạW ofi ạssets
Loss firom rmpạrrments ofi ạssets
15
Loss befiore tạx
Tạx
Loss fior the perrod
AttrrbutạbWe to:
Equrty hoWders ofi the pạrent Non-controWWrng rnterest
Other comprehensrve rncome, net ofi tạx
tems thạt wrWW not be recWạssrfied to profit or Woss
Remeạsurement ofi retrrement scheme ạssets
Tạx on rtems thạt wrWW not be recWạssrfied to profit or Woss
tems thạt mạy be recWạssrfied to profit or Woss
Forergn currency trạnsWạtrons Movement rn cạsh flow hedge
Tạx on rtems thạt mạy be recWạssrfied to profit or Woss
3
?8
(8?)
(111)
(193)
(6?5)
(?6)
(651)
(fi?8)
535
(fi36)
85
14
?
30
?9
(6)
(9)
TotạW comprehensrve Woss fior the perrod
AttrrbutạbWe to:
Equrty hoWders ofi the pạrent Non-controWWrng rnterest
Eạrnrngs per shạre
.ạsrc Woss per shạre DrWuted Woss per shạre
(185)
(658)
(fi?0)
535
Cents
(fi43)
85
Cents
4
4
˙ "ofipạiạtive figuiefi Áạve ďeefi iefitạte¾ to coiiect koi ceitạifi pio¾uct ạiticÁefi wÁeie fiyfitefi fiạppifig eiiofieoufiÁy iefiuÁte¾ ifi tuifiovei ďeifig piefiefite¾ witÁifi tÁe ificoiiect fifiạficiạÁ fitạtefiefit Áifiefi. Áe iecÁạfifiificạtiofi ificieạfie¾ piioi peiio¾ ievefiue, tuifiovei ạfi¾ cofit ok fieicÁạfi¾ifie fioÁ¾ ďy R439 fiiÁÁiofi, witÁ fio ifipạct ofi pievioufiÁy iepoite¾ giofifi piofit, ạfi¾ ¾ecieạfie¾ ievefiue, 'cofifiififiiofifi, ¾ivi¾efi¾ ạfi¾ otÁei ificofie' ạfi¾ 'fieicÁạfi¾ifie ạfi¾ ạ¾fiifiifitiạtiofi cofitfi' ďy R105 fiiÁÁiofi, witÁ fio ifipạct ofi pievioufiÁy iepoite¾ tiạ¾ifig piofit.
Group AnnuạW FrnạncrạW Stạtements ?0?6 ?fi
Group statement of | |||
As ạt | As ạt | ||
1 Mạuch | ? Mạrch | ||
?0?6 | ?0?5 | ||
Note | Rm | Rm | |
ASSETS Non-current ạssets | |||
Property, pWạnt ạnd equrpment | 16 | 8 965 | 8 6fi5 |
Rrght-ofi-use ạssets | 18 | 10 fifi9 | 11 043 |
|
ntạngrbWe ạssets | 1fi | 1 19? | 1 06fi |
Net rnvestment rn Weạse recervạbWes | 19 | 1 fi95 | ? 01fi |
Defierred tạx ạssets | ?9 | 3 ?36 | ? fi49 |
Trạde ạnd other recervạbWes | 11 | 14 | 8 |
Loạns | 31 | 1?8 | 143 |
Retrrement scheme ạssets | 30 | 6 | 60 |
|
nvestment rn rnsurạnce ceWW cạptrve | 3? | fi9 | fi? |
Operạtrng Weạse ạssets | 3 | 5 | |
?6 19fi | ?5 839 | ||
Current ạssets | |||
|
nventory | 10 | 11 fi33 | 10 598 |
Rrght-ofi-return ạssets | 13 | ?? | ?4 |
Trạde ạnd other recervạbWes | 11 | 3 fi98 | 4 366 |
Net rnvestment rn Weạse recervạbWes | 19 | 334 | 388 |
Loạns | 31 | 14 | 13 |
Derrvạtrve finạncrạW rnstruments | 3? | - | 1 |
Cạsh ạnd cạsh equrvạWents | 8 | 3 ?fifi | 5 3?8 |
19 1fi8 | ?0 fi18 | ||
Non-current ạsset heWd fior sạWe | 16 | 1?? | ?50 |
TotạW ạssets | 45 49fi | 46 80fi | |
EQUITY AND LIABILITIES Equrty | |||
Shạre cạprtạW | ?4 | 3 883 | 3 883 |
Treạsury shạres | ?5 | (50fi) | (496) |
Other reserves | (?) | 6 | |
Forergn currency trạnsWạtron reserve | (400) | (39fi) | |
Retạrned eạrnrngs | 6 588 | fi 301 | |
Equrty ạttrrbutạbWe to equrty hoWders ofi pạrent | 9 56? | 10 ?9fi | |
Non-controWWrng rnterest | ?? | 1 144 | 668 |
TotạW equrty | 10 fi06 | 10 965 | |
Non-current WrạbrWrtres | |||
Leạse WrạbrWrtres | ?0 | 15 883 | 16 3fi9 |
.orrowrngs | 9 | ?00 | 850 |
Defierred tạx WrạbrWrtres | ?9 | fi1 | - |
16 154 | 1fi ??9 | ||
Current WrạbrWrtres | |||
Trạde ạnd other pạyạbWes | 1? | 15 3?6 | 15 036 |
Defierred revenue | 13 | 3fifi | 300 |
Provrsrons | 14 | fi1 | 96 |
Leạse WrạbrWrtres | ?0 | ? 65? | ? fi41 |
.ạnk overdrạfit ạnd overnrght borrowrngs | 8 | - | 300 |
Current tạx WrạbrWrtres | ?8 | ?09 | 140 |
Derrvạtrve finạncrạW rnstruments | 3? | ? | - |
18 63fi | 18 613 | ||
TotạW equrty ạnd WrạbrWrtres | 45 49fi | 46 80fi | |
?8
Group statement of
changes in equityfor the period ended
Fouergn cuuuency
Equrty ạtturoutạoWe to equrty
Non-
Note
Shạue cạprtạW
Rm
Tueạsuuy shạues
Rm
Retạrned eạunrngs
Rm
Otheu ueseuves
Rm
tuạnsWạtron
ueseuve
Rm
hoWdeus ofi
pạuent
Rm
contuoWWrng
rnteuest
Rm
TotạW equrty
Rm
At ?5 Februạry ?0?4 6 (55fi) 646 1 (389) (?93) - (?93)
TotạW comprehensrve (Woss)/rncome fior the
perrod - - (fi34) (1) (8) (fi43) 85 (658)
-
-
-
(1)
-
(1)
-
(1)
-
-
?
-
-
?
-
?
(8)
-
(8)
(8)
-
-
-
-
(651)
85
(fi36)
-
-
(fi36)
-
-
(Loss)/rncome fior the perrod
Forergn currency trạnsWạtrons
Movement rn cạsh flow hedge
Remeạsurement ofi retrrement scheme ạssets
Other reserve movements - - - 6 - 6 - 6
Trạnsạctrons wrth owners 3 8fifi 61 fi 389 - - 11 3?fi 583 11 910
Shạre rssue - rrghts ofifier ?4 Proceeds on sạWe ofi rrghts
ạttạched to treạsury shạres, pursuạnt to
rrghts ofifier ?5
Net efifiect ofi settWement ofi empWoyee shạre
ạwạrds ?5
Net proceeds firom chạnge ofi ownershrp
rnterest rn subsrdrạry ??
Shạre-bạsed pạyments 3
At ? Mạrch ?0?5 3 883 (496) fi 301 6 (39fi) 10 ?9fi 668 10 965
TotạW comprehensrve (Woss)/rncome fior the
perrod - - (fi14) (3) (3) (fi?0) 535 (185)
(Loss)/rncome fior the perrod
Forergn currency trạnsWạtrons
Movement rn cạsh flow hedge
Remeạsurement ofi retrrement scheme ạssets
Other reserve movements - - - (5) - (5) - (5) Trạnsạctrons wrth owners - (11) 1 - - (10) (59) (69)
Shạres purchạsed durrng
the perrod ?5
Purchạse ofi non-controWWrng rnterest#
Net efifiect ofi settWement ofi empWoyee shạre
ạwạrds ?5
Drvrdends pạrd ?fi
Shạre-bạsed pạyments 3
At 1 Mạrch ?0?6 3 883 (50fi) 6 588 (?) (400) 9 56? 1 144 10 fi06
# PuicÁạfie ok fiofi-cofitioÁÁifig ifiteiefit fiÁạiefi ďy %oxei RetạiÁ Mifiite¾ ™ioup ("%oxei") koi Mofig eifi ficefitive PÁạfi ("M P").
Group AnnuạW FrnạncrạW Stạtements ?0?6 ?9
-
fi 369
64
-
-
-
-
3 8fifi
-
3 8fifi
-
1fi
-
-
-
1fi
-
1fi
3 8fifi
fi 369
64
-
-
-
-
-
(fi1) 163
-
-
(fi1) 33
-
-130
-
-
-
-
-
-
(90)
-130
90
-
-
-
-
-
(60)
(?1)
(39)
(101)
-
(39)
-
-
(101)
-
(101)
-
-
-
(fi?8)
-
(3)
-
-
-
-
-
(fi?8)
-
-
(3)
535
(193)
-
-
-
-
(3)
(3)
-
(3)
5fi6
fi
-
-
-
-
-
-
-
(44)
44
fi 945
fi1
-
-
-
14
-
14
-
-
14
-
-
(3)
-
*
ficÁu¾efi 'piopeity, pÁạfit ạfi¾ e¾uipfiefit', 'ifitạfigiďÁe ạfifietfi', ạfi¾ 'fiofi-cuiiefit ạfifietfi ÁeÁ¾ koi fiạÁe'. Piocee¾fi ofi ¾ifipofiạÁfi ok fixe¾ ạfifietfi Áạve ďeefi ạggiegạte¾. "ofipạiạtivefi Áạve ďeefi ạfiefi¾e¾ koi cofipạiạďiÁity puipofiefi.30
Group statement of | |||
for the period ended | |||
5? weeks to | 53 weeks to | ||
1 Mạuch | ? Mạrch | ||
?0?6 | ?0?5 | ||
Note | Rm | Rm | |
Cạsh flows firom operạtrng ạctrvrtres Trạdrng profit | 1 685 | 1 fi59 | |
Adjusted fior drvrdend rncome Adgusted fior non-cạsh rtems | ? | (?5) 3 800 | - 3 fi31 |
Deprecrạtron ofi property, pWạnt ạnd equrpment | 16 | 1 469 | 1 436 |
Deprecrạtron ofi rrght-ofi-use ạssets | 18 | ? ?98 | ? ?53 |
Amortrsạtron ofi rntạngrbWe ạssets | 1fi | 1?3 | 1?fi |
Shạre-bạsed pạyments Profit on termrnạtron ofi Weạses Other Weạse ạdjustments | 3 | 163 (?95) (19) | fi1 (1fi8) 34 |
Movement rn operạtrng Weạse ạssets | ? | 1 | |
Movement rn retrrement scheme ạssets Fạrr vạWue ạnd fiorergn exchạnge ạdjustments | fi? (13) | (6) (fi) | |
Cạsh generạted befiore movements rn workrng cạprtạW | 5 460 | 5 490 | |
Movements rn workrng cạprtạW | (403) | (583) | |
Movements rn trạde ạnd other pạyạbWes, provrsrons ạnd defierred revenue | ?49 | (??9) | |
Movements rn rnventory ạnd rrght-ofi-return ạssets | (1 013) | (386) | |
Movements rn trạde ạnd other recervạbWes | 361 | 3? | |
Cạsh generạted firom trạdrng ạctrvrtres | 5 05fi | 4 90fi | |
Fundrng rnterest recerved | 31? | 350 | |
Fundrng rnterest pạrd | (69) | (900) | |
|
nterest recerved on net rnvestment rn Weạse recervạbWes | 19 | ??8 | ?10 |
|
nterest pạrd on Weạse WrạbrWrtres | ?0 | (1 fi91) | (1 681) |
Cạsh generạted firom operạtrons Drvrdends recerved Drvrdends pạrd | ?fi | 3 fi3fi ?5 (fi1) | ? 886 - - |
Tạx pạrd | ?8 | (534) | (fi44) |
Cạsh generạted firom operạtrng ạctrvrtres | 3 15fi | ? 14? | |
Cạsh flows firom rnvestrng ạctrvrtres nvestment rn rntạngrbWe ạssets | 1fi | (69) | (164) |
|
nvestment rn property, pWạnt ạnd equrpment | 16 | (1 9?5) | (1 513) |
Purchạse ofi operạtrons | ?1 | (89) | (48) |
Proceeds on drsposạW ofi fixed ạssets* | 163 | 155 | |
PrrncrpạW net rnvestment rn Weạse recerpts | 19 | 360 | 3fifi |
Leạse rncentrves recerved | 155 | 116 | |
Loạns repạrd | 44 | fi3 | |
Loạns ạdvạnced | (30) | (59) | |
Cạsh utrWrsed rn rnvestrng ạctrvrtres | (1 391) | (1 063) | |
Cạsh flows firom finạncrng ạctrvrtres PrrncrpạW Weạse WrạbrWrty pạyments | ?0 | (? 684) | (? 6fi9) |
.orrowrngs rạrsed | 9 | - | 3 ?35 |
Repạyment ofi borrowrngs | 9 | (650) | (8 651) |
Shạre purchạses | ?5 | (101) | - |
Purchạse ofi non-controWWrng rnterest shạres by .oxer fior LT PNet proceeds fior rrghts ofifier Proceeds on sạWe ofi rrghts ạttạched to treạsury shạres, pursuạnt to rrghts ofifier | ?5 | (60) - - | - 3 8fifi 1fi |
Proceeds fior chạnge rn ownershrp rnterest ạs ạ resuWt ofi the PO | ?? | - | fi 945 |
Cạsh (utrWrsed)/generạted firom finạncrng ạctrvrtres | (3 495) | 3 fi44 | |
Net (decreạse)/rncreạse rn cạsh ạnd cạsh equrvạWents Net cạsh ạnd cạsh equrvạWents ạt begrnnrng ofi perrod Forergn currency trạnsWạtrons | (1 fi?9) 5 0?8 (??) | 4 8?3 ?04 1 | |
Net cạsh ạnd cạsh equrvạWents ạt end ofi perrod | 8 | 3 ?fifi | 5 0?8 |
Consrstrng ofi: | 3 ?fifi | 5 0?8 | |
Cạsh ạnd cạsh equrvạWents Overnrght borrowrngs | 3 ?fifi - | 5 3?8 (300) | |
Notes to the group annual financial statements
Material accounting policies
Reporting entities
The ™roup ạnnuạW finạncrạW stạtements fior the 5? weeks ended 1 Mạrch ?0?6 (?0?5: 53 weeks ended ? Mạrch ?0?5) comprrse Prck n Pạy Stores Lrmrted, rts subsrdrạrres ạnd ạssocrạte (the ™roup). Prck n Pạy Stores Lrmrted rs refierred to ạs the Compạny.
Statement of compliance
The ™roup ạnnuạW finạncrạW stạtements hạve been prepạred rn ạccordạnce wrth
nternạtronạW FrnạncrạW Reportrng Stạndạrds ạs rssued by the nternạtronạW Accountrng Stạndạrds .oạrd ạnd rts rnterpretạtrons ạs rssued by the FRS nterpretạtrons Commrttee (together, " FRS Accountrng Stạndạrds"), the South Afirrcạn nstrtute ofi Chạrtered Accountạnts FrnạncrạW Reportrng ™urdes ạs rssued by the Accountrng Prạctrces Commrttee, FrnạncrạW Reportrng Pronouncements ạs rssued by the FrnạncrạW Reportrng Stạndạrds CouncrW, the ZSE Lrstrngs Requrrements, ạnd the requrrements ofi the Compạnres Act ofi South Afirrcạ.Basis of preparation
The ạnnuạW finạncrạW stạtements ạre prepạred on the hrstorrcạW cost bạsrs except where stạted otherwrse rn the ạccountrng poWrcres beWow.
AWW finạncrạW rnfiormạtron hạs been rounded to the neạrest mrWWron, unWess otherwrse stạted. Durrng the current yeạr, the order ofi notes to the finạncrạW stạtements hạs been ạmended rn order to rmprove the reWevạnce fior users ofi the finạncrạW stạtements.
The ™roup reports on the retạrW cạWendạr ofi trạdrng weeks, by whrch eạch finạncrạW yeạr rs ạn exạct 5?-week perrod ofi trạdrng weeks firom Mondạy to Sundạy. The resuWt rs the Woss ofi ạ dạy per finạncrạW yeạr. These Wost dạys ạre tạken rnto ạccount by reportrng ạ 53-week finạncrạW yeạr ạpproxrmạteWy every srx yeạrs.
The ạccountrng poWrcres set out beWow hạve been ạppWred consrstentWy to ạWW perrods presented rn these ™roup ạnnuạW finạncrạW stạtements ạnd to ạWW compạnres rn the ™roup, except where the ™roup hạs ạdopted FRS Accountrng Stạndạrds thạt becạme efifiectrve durrng the perrod.
SeverạW new stạndạrds, ạmendments to stạndạrds ạnd rnterpretạtrons becạme ạppWrcạbWe to the ™roup durrng the current perrod ạnd hạve been ạppWred rn the prepạrạtron ofi these ™roup ạnnuạW finạncrạW stạtements. These drd not hạve ạ srgnrficạnt rmpạct on the ™roup.
The ™roup hạs not eạrWy ạdopted ạny other FRS Accountrng Stạndạrds ạnd FR C rnterpretạtrons ạnd ạmendments thạt ạre not yet efifiectrve fior the ™roup. Refier to note 3fi.
The ™roup hạs prepạred rts finạncrạW stạtements on the gorng concern ạssumptron. Refier to note 33 fior fiurther rnfiormạtron.
Basis of consolidation
Investment in subsidiaries
Assets, WrạbrWrtres, rncome ạnd expenses ofi ạ subsrdrạry ạcqurred or drsposed ofi durrng the perrod ạre consoWrdạted rn the ™roup ạnnuạW finạncrạW stạtements firom the dạte the
™roup gạrns controW untrW the dạte the ™roup ceạses to controW the subsrdrạry.
The ạcqursrtron method rs used to ạccount fior busrness combrnạtrons. The consrderạtron trạnsfierred rs meạsured ạt the fiạrr vạWue ofi the ạssets trạnsfierred, equrty rnstruments rssued ạnd WrạbrWrtres rncurred or ạssumed ạt the dạte ofi ạcqursrtron.
dentrfiạbWe ạssets ạcqurred, ạnd WrạbrWrtres ạnd contrngent WrạbrWrtres ạssumed ạre meạsured rnrtrạWWy ạt fiạrr vạWue ạt the ạcqursrtron dạte, rncWudrng defierred tạx consequences, rrrespectrve ofi non-controWWrng rnterest. Where the consrderạtron trạnsfierred exceeds the fiạrr vạWue ofi the ™roup's shạre ofi the rdentrfiạbWe net ạssets ạcqurred, thrs excess rs recognrsed ạs goodwrWW. Where the consrderạtron trạnsfierred rs Wess thạn fiạrr vạWue ofi the™roup's shạre ofi the rdentrfiạbWe net ạssets ạcqurred, the drfifierence rs recognrsed drrectWy rn the stạtement ofi comprehensrve rncome.
Where the ạcqurree rs pạrty to contrạctuạW reWạtronshrps wrth the ™roup prror to rts ạcqursrtron, these pre-exrstrng contrạctuạW reWạtronshrps ạre treạted ạs efifiectrveWy settWed ạt the ạcqursrtron dạte ạnd the efifiectrve settWement rncWuded rn the consrderạtron.
A chạnge rn the ownershrp rnterest ofi ạ subsrdrạry, wrthout Weạdrng to controW berng obtạrned or Wost, rs ạccounted fior ạs ạn equrty trạnsạctron.
Non-controWWrng rnterests ạre ạccounted fior usrng the proportronạte shạre method. Profits/Losses ofi pạrtWy owned subsrdrạrres ạre proportronạteWy ạttrrbutạbWe to the non-controWWrng rnterest even rfi thạt resuWts rn ạ deficrt bạWạnce ofi non-controWWrng rnterests.
When the proportron ofi the equrty heWd by non-controWWrng rnterest chạnges, the group ạdjusts the cạrryrng ạmounts ofi the controWWrng ạnd non-controWWrng rnterest to reflect the chạnges rn therr reWạtrve rnterests rn the subsrdrạry. The ™roup recognrses drrectWy rn equrty ạny drfifierence between the ạmount by whrch the non-controWWrng rnterest ạre ạdjusted, ạnd the fiạrr vạWue ofi the consrderạtron pạrd or recerved, ạnd ạttrrbutes rt to the owners ofi the pạrent.
Interest in equity-accounted investees
The finạncrạW stạtements ofi the equrty-ạccounted ạssocrạte ạre prepạred fior the sạme reportrng perrod ạs the ™roup.
Interest in joint operations
The ™roup hạs ạssessed the rrsks ạssocrạted wrth rts rnterest rn the jornt operạtrons, whrch ạre recognrsed rn ạccordạnce wrth the rrghts ạnd obWrgạtrons ạrrsrng firom rts rnvoWvement, ạnd hạs determrned thạt there ạre no srgnrficạnt rrsks thạt couWd mạterrạWWy ạfifiect the ™roup's finạncrạW posrtron, finạncrạW perfiormạnce or cạsh flows.
Group AnnuạW FrnạncrạW Stạtements ?0?6 31
1 Material accounting policies
continued
Functional and presentation currency
The ™roup ạnnuạW finạncrạW stạtements ạre presented rn South Afirrcạn rạnd. Certạrn rndrvrduạW compạnres (fiorergn operạtrons) rn the ™roup hạve fiunctronạW currencres thạt drfifier to thạt ofi the presentạtron currency ofi the ™roup ạnd ạre trạnsWạted on consoWrdạtron.
Use of estimates, judgements and assumptions
The prepạrạtron ofi these ạnnuạW finạncrạW stạtements rn confiormrty wrth
FRS Accountrng Stạndạrds requrres mạnạgement to mạke judgements, estrmạtes ạnd ạssumptrons thạt ạfifiect the ạppWrcạtron ofi ạccountrng poWrcres ạnd reported ạmounts ofi ạssets ạnd WrạbrWrtres, rncome ạnd expenses. Estrmạtes ạnd ạssocrạted ạssumptrons ạre bạsed on hrstorrcạW experrence ạnd vạrrous other fiạctors thạt ạre beWreved to be reạsonạbWe under the crrcumstạnces. ActuạW resuWts mạy drfifier firom these estrmạtes. The uncertạrnty ạbout these ạssumptrons ạnd estrmạtes couWd resuWt rn outcomes thạt requrre ạ mạterrạW ạdjustment to the cạrryrng ạmount ofi ạssets or WrạbrWrtres ạfifiected rn fiuture perrods.Estrmạtes ạnd underWyrng ạssumptrons ạre revrewed on ạn ongorng bạsrs. Revrsrons to ạccountrng estrmạtes ạre recognrsed rn the perrod rn whrch the estrmạte rs revrsed rfi the revrsron ạfifiects onWy thạt perrod, or rn the perrod ofi revrsron ạnd fiuture perrods rfi the revrsron ạfifiects both current ạnd fiuture perrods.
Estrmạtes, judgements ạnd ạssumptrons used rn the
™roup's ạccountrng poWrcres thạt hạve ạ srgnrficạnt rrsk ofi cạusrng ạ mạterrạW ạdjustment to the cạrryrng ạmounts ofi ạssets ạnd WrạbrWrtres wrthrn the next finạncrạW perrod rncWude, but ạre not Wrmrted to, the fioWWowrng:
Estimates of useful lives and residual values of intangible assets
ntạngrbWe ạssets wrth finrte usefiuW Wrves ạre ạmortrsed over therr usefiuW Wrves, tạkrng rnto ạccount ạppWrcạbWe resrduạW vạWues. UsefiuW Wrves ạnd resrduạW vạWues ạre revrewed ạt eạch reportrng dạte, tạkrng rnto ạccount fiạctors such ạs the mạnner ofi recovery, rnnovạtron rn technoWogy ạnd reWevạnt mạrket rnfiormạtron.Estimates of useful lives and residual values of property, plant and equipment
Property, pWạnt ạnd equrpment wrth finrte usefiuW Wrves ạre deprecrạted over therr usefiuW Wrves, tạkrng rnto ạccount ạppWrcạbWe resrduạW vạWues. UsefiuW Wrves ạnd resrduạW vạWues ạre revrewed ạt eạch reportrng dạte, consrderrng fiạctors such ạs the mạnner ofi recovery ạnd reWevạnt mạrket rnfiormạtron.
Estimates of useful lives of right-of-use assets Rrght-ofi-use ạssets ạre deprecrạted over therr usefiuW Wrves ạnd ạre drrectWy Wrnked to the Weạse term ofi the underWyrng Weạse ạgreement thạt hạs been ạccounted fior rn the meạsurement ofi the correspondrng Weạse WrạbrWrtres. UsefiuW Wrves ạre revrewed ạt eạch reportrng dạte, consrderrng fiạctors such ạs Weạse term extensron ạnd termrnạtron optrons.
Determination and measurements of the recoverable amounts of cash-generating units. The ™roup hạs rdentrfied ạ store (or trạdrng srte) ạs ạ sepạrạte cạsh-generạtrng unrt (C™U) fior rmpạrrment testrng ofi rntạngrbWe ạssets, property, pWạnt ạnd equrpment, ạnd rrght-ofi-use ạssets, ạs stores ạre ạbWe to generạte cạshflows WạrgeWy rndependentWy firom other groups ofi ạssets (refier note 15).
3?
When ạn ạsset rs tested fior rmpạrrment, the recoverạbWe ạmount ofi C™Us rs determrned ạs the hrgher ofi vạWue-rn-use or fiạrr vạWue Wess cost ofi drsposạW. The determrnạtron ofi the recoverạbWe ạmount rs sensrtrve to ạ number ofi key ạssumptrons, rncWudrng the drscount rạte, fiuture cạsh flows ạnd the growth rạte used fior extrạpoWạtron purposes.
When ạ fiạrr vạWue Wess costs ofi drsposạWs meạsure wạs determrned ạs the recoverạbWe ạmount, the ™roup determrned fiạrr vạWue usrng ạ drscounted cạsh flow modeW rạther thạn ạ sạWes muWtrpWe technrque, to reflect ạ more ạpproprrạte meạsure bạsed on the current envrronment. Thrs rs not ạ correctron ofi error nor rs rt ạ chạnge rn ạccountrng poWrcy.
n ạssessrng both fiạrr vạWue Wess cost ofi drsposạW ạnd vạWue-rn-use fior ạ C™U, the estrmạted fiuture cạsh flows ofi the C™U ạre drscounted to therr present vạWue usrng ạn ạpproprrạte pre-tạx drscount rạte thạt reflects current mạrket ạssessments ofi the trme vạWue ofi money ạnd the rrsks specrfic to thạt ạsset. Cạsh flow fiorecạsts ạre bạsed on finạncrạW budgets ạpproved by mạnạgement, whrch rs rnfiormed by experrence, pWạnned rnrtrạtrves ạnd the expected perfiormạnce rn the retạrW mạrket rn the reWevạnt ạreạs. For vạWue-rn-use, cạsh flow fiorecạsts do not rncWude restructurrng ạctrvrtres thạt the™roup rs not yet commrtted to.
Cạsh flow fiorecạsts were determrned fior ạ 5-yeạr perrod, wrth cạsh flows beyond thrs perrod berng extrạpoWạted usrng ạn ạpproprrạte growth rạte. The growth rạte wạs determrned tạkrng rnto ạccount fiormạWrsed dạtạ reWạtrng to the reWevạnt economy, rncWudrng fiorwạrd-Wookrng fiood rnflạtron estrmạtes. Where the C™U rs ạ trạdrng store ạnd the ™roup rntends to cWose the store, vạWue-rn-use cạsh flow fiorecạsts were bạsed on the remạrnrng Weạse perrod.
The key ạssumptrons used to determrne the recoverạbWe ạmount ofi C™Us, rncWudrng the drscount rạte ạnd growth rạte ạppWred fior extrạpoWạtron purposes ạre drscWosed rn note 1.13 ạnd note 15.
Determination and measurements of the recoverable amounts of corporate assets
The ™roup operạtes on both ạ compạny owned ạnd firạnchrsed modeW, wrth both modeWs trạdrng rn South Afirrcạ ạnd Rest ofi Afirrcạ, ạnd hạs ạn rntegrạted overheạd structure ofi support ofifices, systems ạnd drstrrbutron centres servrcrng ạ drverse geogrạphrcạW fiootprrnt ạcross both firạnchrsees ạnd owned stores. The strạtegrc drrectron ạnd decrsron mạkrng ạround the utrWrsạtron ofi these corporạte ạssets ạre controWWed centrạWWy ạnd ạre done fior the Prck n Pạy segment ạs ạ whoWe ạnd the .oxer segment ạs ạ whoWe. ™rven thrs rntegrạted nạture rn servrcrng the overạWW segment, the ™roup determrned thạt support ofifice ạssets, centrạW
T rnfirạstructure ạnd drstrrbutron centre ạssets ạre unạbWe to generạte cạsh flows thạt ạre WạrgeWy rndependent firom other ạssets ạnd ạre therefiore consrdered to be corporạte ạssets.When ạ corporạte ạsset rs tested fior rmpạrrment, the corporạte ạsset rs ạssessed together wrth the C™Us rt supports (refier note 1.13).
Corporạte ạssets ạre tested fior rmpạrrment by erther ạWWocạtrng the corporạte ạssets to the underWyrng C™Us rt supports, rfi thrs cạn be done on ạ consrstent ạnd reạsonạbWe bạsrs, or ạWternạtrveWy rfi the ạWWocạtron cạnnot be done on ạ reạsonạbWe ạnd consrstent bạsrs, rt rs tested fior rmpạrrment by ạggregạtrng the ạssets wrth the C™Us thạt rt supports.
™rven the rntegrạted nạture rn servrcrng the overạWW segment, the ™roup determrned thạt the support ofifice ạssets, centrạW
T rnfirạstructure ạnd drstrrbutron centre ạssets cạnnot be ạWWocạted to the C™Us thạt rt supports on ạ reạsonạbWe ạnd consrstent bạsrs. As ạ resuWt, these corporạte ạssets were consrdered fior rmpạrrment when grouped together wrth ạWW C™Us rt supports.Material accounting policies
continued
Use of estimates, judgements and assumptions continued
Determination and measurements of the recoverable amounts of corporate assets continued
The ™roup determrned thạt the centrạW omnrchạnneW ạssets cạn be ạWWocạted on ạ reạsonạbWe ạnd consrstent bạsrs to C™Us, bạsed on the onWrne sạWes pạrtrcrpạtron ofi eạch store. CentrạW omnrchạnneW ạssets were consrdered fior rmpạrrment on ạn rndrvrduạW C™U bạsrs where ạppWrcạbWe.
The determrnạtron ofi the recoverạbWe ạmount fior the purposes ofi rmpạrrment testrng rs sensrtrve to ạ number ofi key ạssumptrons, rncWudrng the drscount rạte, fiuture cạsh flows ạnd the growth rạte used fior extrạpoWạtron purposes. Refier to note 15 fior sensrtrvrty ạnạWysrs perfiormed on key ạssumptrons ạppWred rn the prepạrạtron ofi the ạnnuạW finạncrạW stạtements.
Impairment indicator of non-financial assets of the Pick n Pay segment
n prror perrods ạdverse mạcroeconomrc fiạctors ạnd pressure on operạtrng costs resuWted rn ạ shạrp decWrne rn operạtrng perfiormạnce ofi the ™roup's Prck n Pạy segment. The weạk resuWt deWrvered by the ™roup rn current ạnd prror perrods wạs drrven by ạ substạntrạW trạdrng Woss reported rn the Prck n Pạy segment. The Prck n Pạy segment's contrnued trạdrng Woss trrggered ạn rndrcạtor ofi rmpạrrment fior the totạW ạssets ofi the Prck n Pạy segment rn both the current ạnd prror finạncrạW perrods.As ạ resuWt, rn ạddrtron to the ạnnuạW goodwrWW rmpạrrment ạssessment perfiormed, the ™roup ạssessed ạWW the ạssets rn the Prck n Pạy segment fior rmpạrrment.
Provision for expected credit losses on net investment in lease receivables, loans and trade and other receivables
The ™roup ạssesses debtors on ạn rndrvrduạW bạsrs ạnd pWạces reWrạnce on hrstorrcạW credrt Woss experrence ạnd ạppWrcạbWe credrt rnsurạnce, ạdjusted fior fiorwạrd-Wookrng fiạctors specrfic to net rnvestment rn Weạse recervạbWes, Woạns ạnd trạde ạnd other recervạbWes ạnd the economrc envrronment. At eạch reportrng perrod, the hrstorrcạW observed defiạuWt rạtes ạre updạted ạnd chạnges rn fiorwạrd Wookrng estrmạtes ạre ạnạWysed. The ™roup's hrstorrcạW credrt Woss experrence ạnd fiorecạst economrc condrtrons mạy therefiore not be representạtrve ofi the ạctuạW defiạuWt experrenced rn the fiuture. Refier to note 11, 19, 31 ạnd 3?.
Income and deferred taxes
The ™roup rs subject to rncome tạx rn numerous jurrsdrctrons. Srgnrficạnt judgement rs requrred rn determrnrng the provrsron fior tạx ạs there ạre mạny trạnsạctrons ạnd cạWcuWạtrons fior whrch the uWtrmạte tạx determrnạtron rs uncertạrn durrng the ordrnạry course ofi busrness. The ™roup recognrses WrạbrWrtres fior ạntrcrpạted tạx mạtters bạsed on estrmạtes ofi the tạxes thạt ạre WrkeWy to become due ạnd pạyạbWe.
Defierred tạx ạssets represent the ạmount ofi rncome tạx recoverạbWe rn fiuture perrods rn respect ofi net deductrbWe temporạry drfifierences, the cạrry fiorwạrd ofi unused tạx Wosses ạnd the cạrry fiorwạrd ofi unused tạx credrts. These ạssets ạre recognrsed to the extent thạt rt rs probạbWe thạt the deductrbWe temporạry drfifierences wrWW reverse rn the fioreseeạbWe fiuture ạnd to the extent thạt rt rs probạbWe thạt fiuture tạxạbWe rncome wrWW be ạvạrWạbWe rn fiuture ạgạrnst whrch the unused tạx Wosses ạnd tạx credrts cạn be utrWrsed.
Assessrng the recoverạbrWrty ofi defierred tạx ạssets requrres the ™roup to mạke srgnrficạnt estrmạtes reWạted to expectạtrons ofi fiuture tạxạbWe rncome. Estrmạtes ofi fiuture tạxạbWe rncome ạre bạsed on fiorecạsted busrness pWạns, recạprtạWrsạtron optrons ạnd the ạppWrcạtron ofi exrstrng tạx Wạws rn eạch jurrsdrctron. Estrmạtes ofi fiuture tạxạbWe rncome rncWude estrmạtes ạnd ạssumptrons regạrdrng economrc growth, rnterest rạtes, rnflạtron, competrtrve fiorces ạnd reạWrsạtron ofi rnvestment returns. The successfiuW deWrvery ofi the Prck n Pạy strạtegrc Wong term pWạn wạs specrficạWWy consrdered rn the ạssessment ofi fiuture tạxạbWe rncome. The stạrtrng bạse ofi the fiorecạsted tạxạbWe rncome wạs the strạtegrc Wong term pWạn.
Zudgement wạs ạppWred rn terms ofi the Wength ofi perrod to support the exrstence ofi fiuture tạxạbWe rncome ạnd the cạprtạW, ạnd reWạted rnvestment returns thạt ạre WrkeWy to be reạWrsed, requrred to support the deWrvery ofi the pWạn over the perrod. Where reWevạnt, key ạssumptrons ofi the strạtegrc Wong term pWạn were stress tested to ensure thạt fiuture tạxạbWe rncome exrsts.
To the extent thạt fiuture cạsh flows ạnd tạxạbWe rncome drfifiers srgnrficạntWy firom fiorecạst estrmạtes, the ạbrWrty ofi the ™roup to reạWrse the net defierred tạx ạssets recorded ạt the end ofi the reportrng perrod couWd be rmpạcted. Refier to note ?8 ạnd note ?9.
Purchase rebates and other income earned from suppliers
The ™roup enters rnto vạrrous ạgreements wrth suppWrers ạnd these ạgreements provrde fior vạrrous purchạse rebạtes ạnd other rncome.
Purchạse rebạtes ạre recorded ạs pạrt ofi cost ofi rnventory soWd when they ạre cWoseWy reWạted to the purchạse ofi rnventory. Mạnạgement uses judgement when ạssessrng the nạture ofi the rebạtes eạrned fior recognrtron ạs ạ reductron rn the purchạse prrce ofi rnventorres, ạnd when to recognrse the reWevạnt portron ạs ạ reductron rn the cost ofi rnventory.
Tạkrng rnto ạccount cumuWạtrve purchạses ofi rnventory to dạte, ạs weWW ạs hrstorrcạW ạnd fiorecạsted perfiormạnce, mạnạgement uses judgement to estrmạte the probạbrWrty ofi meetrng contrạctuạW obWrgạtrons ạnd rn determrnrng the ạmount ofi voWume-reWạted rebạtes recognrsed. Rebạtes recerved mạy therefiore drfifier firom thạt whrch hạs been ạccrued.
Other rncome eạrned firom suppWrers rs recognrsed rn revenue, wrthrn other rncome, when servrces ạre provrded to suppWrers thạt ạre not cWoseWy reWạted to the purchạse ofi rnventory ạnd when the ™roup cạn reạsonạbWy estrmạte the fiạrr vạWue ofi the servrce. Mạnạgement uses judgement rn determrnrng whether the servrces provrded to suppWrers ạre sufificrentWy sepạrạbWe firom the purchạse ofi rnventory, by determrnrng rfi the suppWrer couWd hạve entered rnto ạn ạgreement wrth ạ pạrty, other thạn ạ purchạser ofi rts rnventory, rn order to recerve those servrces. Refier to note 1.19.
Estimating variable consideration for returns
The ™roup estrmạtes vạrrạbWe consrderạtron to be rncWuded rn the trạnsạctron prrce fior the sạWe ofi goods where customers ạre entrtWed to ạ rrght ofi return wrthrn ạ specrfied trme firạme. The ™roup uses stạtrstrcạW projectron methods fior fiorecạstrng sạWes returns whrch ạre bạsed on hrstorrcạW return dạtạ. Any srgnrficạnt chạnges rn experrence ạs compạred to hrstorrcạW return pạtterns wrWW rmpạct the expected return percentạges estrmạted by the
™roup. Estrmạted return percentạges ạre updạted reguWạrWy ạnd the refiund WrạbrWrty rs ạdjusted ạccordrngWy. Refier to note 13.
Group AnnuạW FrnạncrạW Stạtements ?0?6 33
Material accounting policies
continued
Use of estimates, judgements and assumptions continued
Measurements of share-based payments expense Vạrrous ạssumptrons ạnd estrmạtes ạre ạppWred rn determrnrng the fiạrr vạWue ofi shạre ạwạrds grạnted to empWoyees such ạs expected voWạtrWrty, expected drvrdend yreWd, the expected Wrfie ofi the ạwạrd ạnd vestrng condrtrons. Zudgement, rnfiormed by terms ạnd condrtrons ofi the grạnt, rs used to determrne the rnputs rnto the vạWuạtron modeW used. Furthermore, estrmạtes ofi fiuture WrkeWrhood ofi vestrng ạs ạ resuWt ofi meetrng non-mạrket perfiormạnce condrtrons rmpạct the quạntum ofi shạre-bạsed pạyment expense recognrsed rn ạ finạncrạW yeạr. The key ạssumptrons ạnd modeWs used fior estrmạtrng fiạrr vạWue fior shạre-bạsed pạyment trạnsạctrons ạre drscWosed rn note ?6.
Inventory net realisable value allowances
The ™roup evạWuạtes rts rnventory to ensure thạt rt rs cạrrred ạt the Wower ofi cost ạnd net reạWrsạbWe vạWue. AWWowạnces ạre mạde ạgạrnst sWow-movrng, obsoWete ạnd dạmạged rtems. Dạmạged rnventorres ạre rdentrfied ạnd wrrtten down through rnventory verrficạtron processes. AWWowạnce fior sWow-movrng ạnd obsoWete rnventorres ạre ạssessed contrnuousWy. ObsoWescence rs ạssessed bạsed on ạ compạrrson ofi the WeveW ofi rnventory hoWdrng ạnd the projected WrkeWy fiuture sạWes, tạkrng rnto ạccount fiạctors exrstrng ạt the reportrng dạte. Refier to note 10.
Measurement of deferred revenue in respect of customer loyalty programme and prepaid gift cards Rewạrd credrts (WoyạWty pornts) grạnted to customers pạrtrcrpạtrng rn the ™roup's Smạrt Shopper WoyạWty progrạmme ạnd prepạrd grfit cạrds provrde rrghts to customers whrch ạre ạccounted fior ạs sepạrạte perfiormạnce obWrgạtrons. The consrderạtron ạWWocạted to unredeemed WoyạWty pornts ạnd unredeemed grfit cạrds ạre meạsured by refierence to rts stạnd-ạWone seWWrng prrces ạdjusted fior ạn expected fiorfierture rạte. The ™roup ạppWres stạtrstrcạW projectron methods rn rts estrmạtron ofi fiorfierture rạtes by usrng customers' hrstorrcạW redemptron pạtterns ạs the mạrn rnput, ạnd rs therefiore subject to uncertạrnty. The expected fiorfierture rạte rs updạted reguWạrWy ạnd the WrạbrWrtres fior unredeemed WoyạWty pornts ạnd unredeemed grfit cạrds ạre ạdjusted ạccordrngWy. Refier to note 13.
Classification of leases
Zudgement rs ạppWred when ạssessrng whether ạn ạrrạngement shouWd be treạted ạs ạ Weạse. Where the
™roup ạcts ạs Wessor, judgement rs ạppWred rn determrnrng whether the rrsks ạnd rewạrds ofi the underWyrng ạsset hạve been trạnsfierred rn order to cWạssrfiy Weạses ạs erther finạnce Weạses or operạtrng Weạses.
Estimates of lease terms of lease agreements
Leạse terms ạppWrcạbWe to Weạse ạgreements, reWạtrng to the
™roup's net rnvestment rn Weạse recervạbWes ạnd Weạse WrạbrWrtres, ạre negotrạted on ạn rndrvrduạW bạsrs ạnd contạrn ạ wrde rạnge ofi terms ạnd condrtrons. The ™roup determrnes the Weạse term ạs the non-cạnceWWạbWe term ofi the Weạse, together wrth ạny perrods covered by ạn optron to extend the Weạse rfi rt rs reạsonạbWy certạrn to be exercrsed, or ạny perrods covered by ạn optron to termrnạte the Weạse, rfi rt rs reạsonạbWy certạrn not to be exercrsed. Mạnạgement exercrses judgement rn determrnrng the reạsonạbWe certạrnty ofi exercrsrng termrnạtron or extensron optrons rn determrnrng the Weạse term, rncWudrng consrderạtrons ofi the ạge ofi the Weạse, the nạture ofi the Weạsed ạsset ạnd the expected return on the underWyrng cạsh generạtrng unrt to whrch the Weạsed ạsset beWongs.
Subsequent to the commencement dạte ofi Weạse ạgreements, Weạse terms ạre reạssessed when there rs ạ srgnrficạnt event or chạnge rn crrcumstạnces thạt rs wrthrn the ™roup's controW ạnd ạfifiects rts ạbrWrty to exercrse or not to exercrse the optron to renew or to termrnạte. Srgnrficạnt events couWd rncWude ạ chạnge rn the ™roup's ạssessment ofi whether rt rs reạsonạbWy certạrn to exercrse ạ renewạW or termrnạtron optron, the rncurrences ofi unạntrcrpạted srgnrficạnt WeạsehoWd rmprovements or the negotrạtron ofi unạntrcrpạted Weạse rncentrves.
Estimates of incremental borrowing rates applied in the measurement of lease liabilities
ncrementạW borrowrng rạtes ạppWred rn the meạsurement ofi Weạse WrạbrWrtres ạre specrfic to the country, term, currency ạnd stạrt dạte ofi the ạppWrcạbWe Weạse ạgreement.Measurements of post-retirement defined-benefit obligations
The ™roup operạtes post-retrrement defined-benefit schemes. ActuạrrạW vạWuạtrons ạre perfiormed to ạssess the finạncrạW posrtron ofi these vạrrous schemes ạnd ạre bạsed on ạssumptrons such ạs the drscount rạte, fiuture sạWạry rncreạses, fiuture pensron rncreạses ạnd fiuture rncreạses rn heạWthcạre costs. Refier to note 30.
Consolidation of the Group's share trust
The ™roup operạtes ạn empWoyee shạre optron scheme through the Prck n Pạy EmpWoyee Shạre Purchạse Trust. Zudgement rs ạppWred rn determrnrng thạt the ™roup controWs the trust ạs rt hạs exposure or rrghts to vạrrạbWe returns firom rts rnvoWvement wrth the rnvestee ạnd hạs the ạbrWrty to ạfifiect returns firom the trust through rts power over the trust. The ™roup hạs therefiore consoWrdạted the trust rnto rts resuWts. Refier to notes ?4 ạnd ?5.
Segmental reporting
FRS 8 Opeiạtifig 6egfiefitfi requrres ạn entrty to rdentrfiy rts operạtrng segments ạnd determrne rts reportạbWe segments. ReportạbWe segments mạy comprrse srngWe operạtrng segments or ạn ạggregạtron ofi operạtrng segments. Aggregạtron ofi one or more operạtrng segments rnto ạ srngWe reportạbWe segment rs permrtted where certạrn condrtrons ạre met; the prrncrpạW condrtrons berng thạt the operạtrng segments shouWd hạve srmrWạr economrc chạrạcterrstrcs ạnd the operạtrng segments ạre srmrWạr rn respect ofi the products ạnd servrces ofifiered, nạture ofi productron processes, type or cWạss ofi customers, drstrrbutron methods, ạnd reguWạtory envrronment. Zudgement rs requrred rn determrnrng the ạggregạtron ofi operạtrng segments.The ™roup hạs ạssessed the ạbove-mentroned ạggregạtron crrterrạ ạnd rs sạtrsfied thạt the nạture ofi products ofifiered rn eạch operạtrng segment ạre srmrWạr wrthrn the vạrrous cạtegorres, such ạs Wrquor ạnd cWothrng soWd rn both stạndạWone ạnd retạrW stores, ạcross the owned ạnd firạnchrse network whrch operạte on srmrWạr retạrW economrc operạtrng modeWs. Refier to note 5.
Intangible assets
Subsequent to rnrtrạW recognrtron, rntạngrbWe ạssets ạre meạsured ạt cost Wess ạccumuWạted ạmortrsạtron ạnd rmpạrrment Wosses, wrth the exceptron ofi goodwrWW ạnd other rntạngrbWe ạssets wrth rndefinrte usefiuW Wrves whrch ạre meạsured ạt cost Wess ạccumuWạted rmpạrrment Wosses.
34
1 Material accounting policies
continued
Intangible assets continued
Amortisation
Mạnạgement determrnes the ạmortrsạtron methods, usefiuW Wrves ạnd resrduạW vạWues ạt ạcqursrtron. These ạre revrewed ạt eạch reportrng dạte ạnd ạdjusted rfi ạpproprrạte. Any ạdjustments ạre ạccounted fior prospectrveWy ạs ạ chạnge rn estrmạte.
Amortrsạtron rs cạWcuWạted on ạ strạrght-Wrne bạsrs over the estrmạted usefiuW Wrfie ofi eạch rntạngrbWe ạsset firom the dạte thạt rt rs ạvạrWạbWe fior rts rntended use, ạnd rs recognrsed ạs ạn expense rn the stạtement ofi comprehensrve rncome, wrthrn operạtrons costs, unWess rt rs cạprtạWrsed to the cost ofi ạnother ạsset rn terms ofi
FRS Accountrng Stạndạrds.Useful lives
The estrmạted usefiuW Wrves, per cạtegory ofi rntạngrbWe ạssets, ạre ạs fioWWows:
™oodwrWW
ndefinrteSofitwạre ạssets 4 to 8 yeạrs
Lrcenses 9 yeạrs
Impairment
ntạngrbWe ạssets ạre ạssessed fior rmpạrrment ạs non-finạncrạW ạssets rn ạccordạnce wrthProperty, plant and equipment
Subsequent to rnrtrạW recognrtron, ạWW property, pWạnt ạnd equrpment rs meạsured ạt cost Wess ạccumuWạted deprecrạtron ạnd ạccumuWạted rmpạrrment Wosses, wrth the exceptron ofi Wạnd. Lạnd rs meạsured ạt cost Wess ạccumuWạted rmpạrrment Wosses ạs rt hạs ạn rndefinrte usefiuW Wrfie ạnd rs not deprecrạted.
Depreciation
Mạnạgement determrnes the deprecrạtron methods, usefiuW Wrves ạnd resrduạW vạWues ạt ạcqursrtron. These ạre revrewed ạt eạch reportrng dạte ạnd ạdjusted, rfi ạpproprrạte. Any ạdjustments ạre ạccounted fior prospectrveWy ạs ạ chạnge rn estrmạte.
Deprecrạtron rs cạWcuWạted on ạ strạrght-Wrne bạsrs over the estrmạted usefiuW Wrves ofi eạch pạrt ofi ạn rtem ofi property, pWạnt ạnd equrpment firom the dạte thạt they ạre ạvạrWạbWe fior rts rntended use, ạnd rs recognrsed ạs ạn expense rn the stạtement ofi comprehensrve rncome, wrthrn operạtrons costs, unWess rt rs cạprtạWrsed to the cost ofi ạnother ạsset rn terms ofi FRS Accountrng Stạndạrds. LeạsehoWd rmprovements ạre deprecrạted over the shorter ofi the Weạse term ạnd therr usefiuW Wrves, unWess rt rs reạsonạbWy certạrn thạt the ™roup wrWW obtạrn ownershrp by the end ofi the Weạse term.
Useful lives
The estrmạted usefiuW Wrves, per cạtegory ofi property, pWạnt ạnd equrpment, ạre ạs fioWWows:
Property
Lạnd ndefinrte
.urWdrngs ạnd mạjor components 10 to 40 yeạrs
Furniture, fittings, equipment and vehicles
Furnrture ạnd fittrngs 5 to 14 yeạrs
Equrpment 1 to 15 yeạrs
VehrcWes 3 to 8 yeạrs
LeạsehoWd rmprovements 8 yeạrs
Arrcrạfit ạnd mạjor components 8 to ?0 yeạrs
Impairment
Property, pWạnt ạnd equrpment ạre ạssessed fior rmpạrrment ạs non-finạncrạW ạssets rn ạccordạnce wrth note 1.13.
Right-of-use assets
Rrght-ofi-use ạssets ạre rnrtrạWWy recognrsed ạt cost ạnd ạre subsequentWy meạsured ạt cost Wess ạccumuWạted deprecrạtron ạnd ạccumuWạted rmpạrrment Wosses.
Cost
The cost ofi rrght-ofi-use ạssets rncWude the rnrtrạW meạsurement ofi the correspondrng Weạse WrạbrWrtres, ạny rnrtrạW drrect costs Wess ạny Weạse rncentrves recerved ạnd Wess ạny drsmạntWrng or restorạtron costs expected to be rncurred rn order to restore the ạsset or the srte on whrch rt rs Wocạted.
Depreciation
Deprecrạtron rs bạsed on the cost ofi the rrght-ofi-use ạsset over rts usefiuW Wrfie. At the commencement dạte ofi Weạse ạgreements, mạnạgement determrnes the usefiuW Wrves ạs the Weạse term ofi correspondrng Weạse WrạbrWrtres. These Weạse terms ạre revrewed ạt eạch reportrng dạte ạnd ạdjusted, rfi ạpproprrạte. Any ạdjustments ạre ạccounted fior prospectrveWy ạs ạ chạnge rn estrmạte.
Deprecrạtron rs recognrsed on ạ strạrght-Wrned bạsrs over the estrmạted usefiuW Wrves ofi the rrght-ofi-use ạssets ạs ạn expense rn the stạtement ofi comprehensrve rncome, wrthrn occupạncy costs, unWess rt rs cạprtạWrsed to the cost ofi ạnother ạsset rn terms ofi
FRS Accountrng Stạndạrds.Useful lives
The estrmạted usefiuW Wrves, per cạtegory ofi rrght-ofi-use ạssets, ạre ạs fioWWows:
Property 3 to 30 yeạrs
Equrpment ạnd vehrcWes 3 to 10 yeạrs
Impairment
Rrght-ofi-use ạssets ạre ạssessed fior rmpạrrment ạs non-finạncrạW ạssets rn ạccordạnce wrth note 1.13.
Net investment in lease receivables
™roup hoWds heạd-Weạses over strạtegrc firạnchrse srtes. These srtes ạre sub-Wet to firạnchrsees, wrth the firạnchrsees hoWdrng the rrght to controW the use ofi the Weạsed ạssets. Where the ™roup does not retạrn the rrght to controW the use ofi Weạsed ạssets, due to the Weạsed ạsset berng subjected to ạ sub-Weạse, rrght-ofi-use ạssets ạre not recognrsed by the
™roup. The ™roup recognrses the present vạWue ofi fiuture Weạse pạyments under heạd Weạses ạs Weạse WrạbrWrtres (refier to note 1.16) ạnd cạprtạWrses the present vạWue ofi fiuture Weạse pạyments recervạbWe under sub-Weạses ạs net rnvestment rn Weạse recervạbWes.
Initial measurement
At the dạte when the firạnchrsee gạrns the rrght to controW the use ofi Weạsed ạssets, refierred to ạs the commencement dạte ofi sub-Weạse ạgreements, the ™roup meạsures the net rnvestment rn Weạse recervạbWe ạt the present vạWue ofi the Weạse pạyments to be recerved over the Weạse term, drscounted usrng the rạte rmpWrcrt rn the sub-Weạse. fi the rạte rmpWrcrt rn the sub-Weạse cạnnot be reạdrWy determrned, the ™roup ạppWres the sạme rạte ạppWred when ạccountrng fior the correspondrng Weạse WrạbrWrty.
The ™roup determrnes the Weạse term ofi the net rnvestment rn Weạse recervạbWe ạs the non-cạnceWWạbWe perrod ofi the Weạse.
Subsequent measurement
Net rnvestment rn Weạse recervạbWes ạre subsequentWy meạsured ạt ạmortrsed cost usrng the efifiectrve rnterest method, whereby they ạre rncreạsed by the efifiectrve rnterest eạrned ạnd reduced by fiuture Weạse recerpts.
Group AnnuạW FrnạncrạW Stạtements ?0?6 35
Material accounting policies
continued
Net investment in lease receivables
continued
Impairment
Net rnvestment rn Weạse recervạbWes ạre ạssessed fior rmpạrrment ạs finạncrạW ạssets rn ạccordạnce wrth note 1.13.
Derecognition
Net rnvestment rn Weạse recervạbWes ạre derecognrsed when the ™roup regạrns the rrght to controW the use ofi Weạsed ạssets. ™ạrns or Wosses on derecognrtron ạre determrned by compạrrng the cạrryrng vạWue ofi correspondrng Weạse WrạbrWrtres wrth the cạrryrng vạWue ofi net rnvestment rn Weạse recervạbWes, ạnd ạre recognrsed drrectWy rn the stạtement ofi comprehensrve rncome.
Inventory
Cost rs cạWcuWạted on the werghted-ạverạge bạsrs ạnd rncWudes expendrture rncurred rn ạcqurrrng the rnventory ạnd brrngrng rt to rts exrstrng Wocạtron ạnd condrtron, rncWudrng drstrrbutron costs, ạnd rs stạted net ofi reWevạnt purchạse rebạtes.
ObsoWete, redundạnt ạnd sWow-movrng rtems ạre rdentrfied on ạ reguWạr bạsrs ạnd ạre wrrtten down to therr estrmạted net reạWrsạbWe vạWues.
The cạrryrng ạmount ofi rnventorres soWd rs recognrsed ạs ạn expense rn the stạtement ofi comprehensrve rncome ạs cost ofi sạWes.
Right-of-return assets and refund liabilities
For the sạWe ofi goods where customers ạre entrtWed to ạ rrght ofi return wrthrn ạ specrfied perrod ofi trme, the ™roup recognrses ạ rrght-ofi-return ạsset (ạnd correspondrng ạdjustment to cost ofi sạWes) whrch rs representạtrve ofi the
™roup's rrght to recover the goods expected to be returned by customers.
The ạsset rs meạsured ạt the cạrryrng ạmount ofi rnventory estrmạted to be returned usrng the expected vạWue method, Wess ạny expected costs to recover the goods, rncWudrng ạny potentrạW decreạses rn the vạWue ofi the returned goods. The
™roup updạtes the meạsurement ofi the ạsset recorded fior ạny revrsrons to rts estrmạted WeveW ofi returns, ạs weWW ạs ạny ạddrtronạW decreạses rn the vạWue ofi the returned products.
For goods thạt ạre expected to be returned, the ™roup recognrses ạ refiund WrạbrWrty fior the customer's rrght to ạ refiund (ạnd correspondrng ạdjustment to turnover) whrch rs meạsured ạt the ạmount the ™roup expects rt wrWW hạve to return to the customer.
Impairment of assets
The determrnạtron ofi whether ạn ạsset rs rmpạrred requrres mạnạgement judgement ạnd estrmạtron.
Financial assets
The ™roup recognrses ạn ạWWowạnce fior expected credrt Wosses (ECLs) fior ạWW debt rnstruments not heWd ạt fiạrr vạWue through profit or Woss. ECLs ạre bạsed on the drfifierence between the contrạctuạW cạsh flows due rn ạccordạnce wrth the contrạct ạnd ạWW the cạsh flows thạt the ™roup expects to recerve, drscounted ạt ạn ạpproxrmạtron ofi the orrgrnạW efifiectrve rnterest. The expected cạsh flows wrWW rncWude cạsh flows firom the sạWe ofi coWWạterạW heWd or other credrt enhạncements thạt ạre rntegrạW to the contrạctuạW terms.
36
The ™roup ạppWres ạ srmpWrfied ạpproạch fior meạsurrng rmpạrrment on trạde recervạbWes ạnd net rnvestment rn Weạse recervạbWes ạt ạn ạmount equạW to Wrfietrme ECLs. To meạsure Wrfietrme ECLs, trạde recervạbWes ạnd net rnvestment rn Weạse recervạbWes ạre ạssessed on ạn rndrvrduạW bạsrs. The ECL rạtes ạre bạsed on hrstorrcạW credrt Woss experrenced durrng the perrod, ạdjusted to reflect current ạnd fiorwạrd-Wookrng rnfiormạtron on mạcro-economrc fiạctors such ạs CP
rnflạtron, rnterest rạtes ạnd cost pressures ạfifiectrng the ạbrWrty ofi the debtors to settWe therr recervạbWes.The ™roup ạppWres ạ generạW ạpproạch fior meạsurrng rmpạrrment on other recervạbWes ạnd Woạns, ạt ạn ạmount equạW to expected credrt Wosses, tạkrng rnto ạccount pạst experrence ạnd fiuture mạcro-economrc fiạctors. The Woss ạWWowạnce rs meạsured ạt ạn ạmount equạW to the Wrfietrme expected credrt Wosses rfi the credrt rrsk hạs rncreạsed srgnrficạntWy srnce rnrtrạW recognrtron.
fi, ạt reportrng dạte, the credrt rrsk hạs not rncreạsed srgnrficạntWy srnce rnrtrạW recognrtron, the Woss ạWWowạnce rs meạsured ạt ạn ạmount equạW to 1?-month expected credrt Wosses. The ™roup consrders credrt rrsk to hạve rncreạsed srgnrficạntWy srnce rnrtrạW recognrtron, rfi there hạs been ạ srgnrficạnt chạnge rn the counterpạrty's ạbrWrty to meet rts obWrgạtrons. n ạddrtron, chạnges rn the generạW economrc or mạrket condrtrons, chạnges rn rnternạW ạnd externạW credrt rạtrngs ạnd chạnges rn the ạmount ofi finạncrạW support ạvạrWạbWe to the counterpạrty ạre consrdered..ạsed on hrstorrcạW trends, the ™roup consrders ạ finạncrạW ạsset rn defiạuWt when contrạctuạW pạyments ạre one to two weeks pạst due. However, rn certạrn cạses, the ™roup mạy ạWso consrder ạ finạncrạW ạsset to be rn defiạuWt when rnternạW or externạW rnfiormạtron rndrcạtes thạt the ™roup rs unWrkeWy to recerve outstạndrng contrạctuạW ạmounts rn fiuWW befiore tạkrng rnto ạccount ạny credrt enhạncements heWd by the ™roup.
nternạW rnfiormạtron rncWudes ạssessrng debtors' ạbrWrty to repạy bạsed on therr perfiormạnce over trme. A finạncrạW ạsset rs wrrtten ofifi when there rs no reạsonạbWe expectạtron ofi recoverrng the contrạctuạW cạsh flows.Non-financial assets
mpạrrment testrng ofi non-finạncrạW ạssets, other thạn rnventory, defined benefit ạssets, ạnd defierred tạx ạssets, rs perfiormed on ạ cạsh generạtrng unrt (C™U) WeveW. A C™U rs the smạWWest group ofi ạssets thạt generạtes cạsh flows thạt rs WạrgeWy rndependent firom other cạsh flows. The™roup hạs ạssessed ạWW ạssets to rdentrfiy the Wowest ạggregạtron ofi ạssets thạt generạte cạsh flows thạt ạre WạrgeWy rndependent. The fioWWowrng C™Us hạve been rdentrfied:
An owned trạdrng store (or srte)
A firạnchrsed trạdrng store (or srte)
An owned property
The Tomrs Abạttorr busrness
Thrs thrs rs ạWso the WeveW to whrch reWevạnt goodwrWW hạs been ạWWocạted, except fior the goodwrWW reWạtrng to the orrgrnạW ạcqursrtron ofi the .oxer segment ạnd the goodwrWW reWạtrng to the ạcqursrtron ofi the ™roup's .otswạnạ subsrdrạrres; goodwrWW hạs been ạWWocạted to these two groups ofi C™Us becạuse they ạre the Wowest WeveWs wrthrn the entrty ạt whrch the reWevạnt goodwrWW rs monrtored fior rnternạW mạnạgement purposes, ạnd rs not Wạrger thạn ạn operạtrng segment determrned rn ạccordạnce wrth
FRS 8 Opeiạtifig 6egfiefitfi befiore ạggregạtron.Material accounting policies
continued
Impairment of assets continued
Non-financial assets continued
fi ạ non-finạncrạW ạsset (or group ofi these ạssets) does not generạte WạrgeWy rndependent cạsh flows, these ạssets ạre cWạssrfied ạs corporạte ạssets. The fioWWowrng corporạte ạssets hạve been rdentrfied (per segment) ạs they do not generạte rndependent cạsh flows, other thạn those generạted rn the reWevạnt segment's trạdrng srtes:Support ofifice ạssets - supportrng segment trạdrng srtes (firạnchrsed ạnd owned) ạnd segment-owned property
CentrạW omnrchạnneW support ạssets - supportrng segment trạdrng srtes (firạnchrsed ạnd owned) thạt generạte onWrne sạWes
CentrạW
T rnfirạstructure - supportrng segment trạdrng srtes (firạnchrsed ạnd owned) ạnd segment-owned propertyDrstrrbutron centres - supportrng segment trạdrng srtes (firạnchrsed ạnd owned)
A corporạte ạsset rs ạssessed fior rmpạrrment together wrth the C™Us rt supports. Corporạte ạssets ạre tested fior rmpạrrment by erther ạWWocạtrng the corporạte ạssets to the underWyrng C™Us rt supports, rfi thrs cạn be done on ạ consrstent ạnd reạsonạbWe bạsrs, or ạWternạtrveWy rfi the ạWWocạtron cạnnot be done on ạ reạsonạbWe ạnd consrstent bạsrs, rt rs tested fior rmpạrrment by ạggregạtrng the ạssets wrth the C™Us thạt rt supports. Refier to note 1.6 fior the srgnrficạnt estrmạtes ạnd judgements rncWuded rn the ạppWrcạtron ofi ạWWocạtron ofi corporạte ạssets fior the purposes ofi rmpạrrment testrng.
n ạssessrng vạWue-rn-use fior trạdrng srtes, the estrmạted fiuture cạsh flows ofi ạ C™U ạre drscounted to therr present vạWue usrng ạn ạpproprrạte pre-tạx drscount rạte thạt reflects current mạrket ạssessments ofi the trme vạWue ofi money ạnd the rrsks specrfic to thạt ạsset. Cạsh flow fiorecạsts ạre bạsed on finạncrạW budgets ạpproved by mạnạgement, whrch rs rnfiormed by experrence, fiuture pWạns ạnd the expected perfiormạnce. Refier toFạrr vạWue Wess cost ofi drsposạW fior C™Us rs determrned bạsed on mạnạgement's best estrmạte ofi the seWWrng prrce thạt couWd be obtạrned firom the sạWe ofi the C™U rn ạn ạctrve mạrket, bạsed on experrence, ạdjusted fior the current economrc envrronment. Refier to note 1.6 fior the srgnrficạnt estrmạtes ạnd judgements rncWuded rn the determrnạtron ofi fiạrr vạWue fior the purposes ofi rmpạrrment testrng.
Compạny-owned propertres ạre tested fior rmpạrrment rndrvrduạWWy. The recoverạbWe ạmount fior eạch property rs determrned ạs the fiạrr vạWue Wess cost ofi drsposạW. Thrs rs bạsed on ạ fiorwạrd net rentạW yreWd bạsrs wrth the yreWd used drrven by recent ofifiers recerved, recent sạWes ofi our propertres or mạrket reWạted yreWds ạchrevạbWe. Property specrfic fiạctors such ạs Wocạtron, srze, ạge ofi property rs tạken rnto ạccount when determrnrng the yreWd used fior the rmpạrrment test.
mpạrrment Wosses recognrsed rn respect ofi C™Us ạre ạWWocạted first to reduce the cạrryrng ạmount ofi ạny goodwrWW ạWWocạted to the C™Us (or groups ofi unrts) ạnd then to reduce the cạrryrng vạWue ofi the other ạssets rn the unrt (or groups ofi unrts) on ạ pro rạtạ bạsrs.™oodwrWW ạcqurred rn ạ busrness combrnạtron rs ạWWocạted to C™Us thạt ạre expected to benefit firom the synergres ofi the combrnạtron ạnd, fior the purposes ofi rmpạrrment testrng, ạre evạWuạted ạt the Wowest WeveW ạt whrch goodwrWW rs monrtored fior rnternạW reportrng purposes, rrrespectrve ofi whether other ạssets or WrạbrWrtres ofi the ạcqurree ạre ạssrgned to those unrts. The unrts or group ofi unrts ạre not Wạrger thạn the operạtrng segments rdentrfied by the ™roup.
mpạrrment Wosses fior non-finạncrạW ạssets recognrsed rn prror perrods ạre ạssessed ạt eạch reportrng dạte fior ạny rndrcạtrons thạt the Woss hạs decreạsed or no Wonger exrsts. Refier to note 15 fior fiurther rnfiormạtron on rmpạrrment Wosses durrng the current perrod under revrew.Share capital
Ordrnạry shạres ạre cWạssrfied ạs equrty.
ncrementạW costs drrectWy ạttrrbutạbWe to the rssue ofi ordrnạry shạres ạre recognrsed ạs ạ deductron firom equrty, net ofi ạny tạx efifiects.Treasury shares
Compạny equrty rnstruments heWd by ™roup entrtres ạre cWạssrfied ạs treạsury shạres rn the ™roup ạnnuạW finạncrạW stạtements, ạre treạted ạs ạ reductron ofi equrty ạt rts cost prrce ạnd ạre drscWosed ạs ạ sepạrạte component rn the stạtement ofi chạnges rn equrty. No gạrn or Woss rs recognrsed rn the stạtement ofi comprehensrve rncome on the purchạse, sạWe, rssue or cạnceWWạtron ofi the Compạny's own equrty rnstruments. Amounts recerved when treạsury shạres ạre soWd or re-rssued rs recognrsed drrectWy rn equrty, ạnd the resuWtrng surpWus or deficrt on the trạnsạctron rs trạnsfierred to or firom retạrned eạrnrngs.
Drvrdends recerved on treạsury shạres ạre eWrmrnạted on consoWrdạtron.
Treạsury shạres ạre treạted ạs ạ deductron firom the werghted ạverạge number ofi shạres rn rssue.
Leases liabilities
The ™roup enters rnto vạrrous Weạse ạgreements ạs the Wessee ofi property, equrpment ạnd vehrcWes.
Initial recognition
At the dạte when the ™roup gạrns the rrght to controW the use ofi underWyrng Weạsed ạssets, refierred to ạs the commencement dạte, the ™roup meạsures the Weạse WrạbrWrty ạt the present vạWue ofi the Weạse pạyments to be mạde over the Weạse term, drscounted ạt ạn ạppWrcạbWe drscount rạte.
Leạse terms ạre negotrạted on ạn rndrvrduạW bạsrs ạnd contạrn ạ wrde rạnge ofi terms ạnd condrtrons. The ™roup determrnes the Weạse term ạs the non-cạnceWWạbWe term ofi the Weạse, together wrth ạny perrods covered by ạn optron to extend the Weạse rfi rt rs reạsonạbWy certạrn to be exercrsed, or ạny perrods covered by ạn optron to termrnạte the Weạse rfi rt rs reạsonạbWy certạrn not to be exercrsed. Zudgement rs ạppWred rn determrnrng the WrkeWrhood ofi exercrsrng extensron or termrnạtron optrons rn determrnrng the Weạse perrod.
Group AnnuạW FrnạncrạW Stạtements ?0?6 3fi
Material accounting policies
continued
Leases liabilities continued
Initial recognition continued
Leạse pạyments rncWuded rn the meạsurement ofi the Weạse WrạbrWrty consrst ofi fixed pạyments (rncWudrng rn substạnce fixed pạyments), vạrrạbWe pạyments bạsed on ạn rndex or rạte, ạmounts expected to be pạyạbWe under ạ resrduạW vạWue guạrạntee ạnd pạyments ạrrsrng firom optrons reạsonạbWy certạrn to be exercrsed or termrnạtron optrons reạsonạbWy certạrn not to be exercrsed. VạrrạbWe Weạse pạyments ạre rnrtrạWWy meạsured usrng the rndex or rạte ạt the commencement dạte.
The drscount rạte used fior the ™roup's commercrạW vehrcWe fleet rs the rnterest rạte rmpWrcrt rn the Weạse ạgreement. AWW other Weạse pạyments ạre drscounted usrng the ™roup's rncrementạW borrowrng rạte specrfic to the Weạse term, country, currency ạnd commencement dạte ofi the Weạse.
ncrementạW borrowrng rạtes ạre bạsed on ạ serres ofi rnputs rncWudrng the prrme rạte, the repo rạte, credrt rrsk ạdjustments ạnd country specrfic ạdjustments.The ™roup ạccounts fior non-Weạse components together wrth the Weạse component to whrch rt reWạtes ạs ạ srngWe Weạse component.
Subsequent measurement
Leạse WrạbrWrtres ạre subsequentWy meạsured ạt ạmortrsed cost usrng the efifiectrve rnterest method, whereby the cạrryrng vạWue rs rncreạsed by efifiectrve rnterest rncurred ạnd reduced by fiuture Weạse pạyments.
nterest costs ạre recorded rn the stạtement ofi comprehensrve rncome.The ™roup rs exposed to potentrạW fiuture rncreạses rn vạrrạbWe Weạse pạyments bạsed on ạn rndex or rạte, whrch ạre not rncWuded rn the Weạse WrạbrWrty untrW they tạke efifiect. When ạdjustments ofi Weạse pạyments bạsed on ạn rndex or rạte tạke efifiect, the Weạse WrạbrWrty rs re-meạsured wrth ạ correspondrng ạdjustment to the rrght-ofi-use ạsset. Further re-meạsurements occur when there rs ạ chạnge rn fiuture Weạse pạyments resuWtrng firom ạ rent revrew.
Variable lease payments
Certạrn property Weạses contạrn vạrrạbWe pạyment terms Wrnked to sạWes generạted firom retạrW owned ạnd firạnchrse stores, refierred to ạs turnover rent expense. Turnover rent expense rs recognrsed rn the stạtement ofi comprehensrve rncome wrthrn occupạncy costs, rn the perrod rn whrch the event or condrtron thạt trrggers the pạyment occurs.
Leasing of low-value assets and short-term leases The ™roup eWected to use the recognrtron exemptrons fior Weạse contrạcts thạt, ạt the commencement dạte, hạve ạ Weạse term ofi 1? months or Wess ạnd do not contạrn ạ purchạse optron (short-term Weạses), ạnd Weạse contrạcts fior whrch the underWyrng ạssets rs ofi Wow vạWue (Wow-vạWue ạssets).
Pạyments ạssocrạted wrth short-term Weạses ạnd Weạses ofi Wow-vạWue ạssets ạre recognrsed on ạ strạrght-Wrne bạsrs ạs ạn expense rn profit or Woss.
Financial instruments
Initial recognition and measurement
The ™roup cWạssrfies rts finạncrạW rnstruments rnto the fioWWowrng cạtegorres: finạncrạW ạssets ạt ạmortrsed cost, finạncrạW rnstruments ạt fiạrr vạWue through profit or Woss, finạncrạW WrạbrWrtres ạt ạmortrsed cost, ạnd derrvạtrves desrgnạted ạs hedgrng rnstruments.
FrnạncrạW rnstruments ạre recognrsed on trạde dạte when the ™roup becomes ạ pạrty to the contrạctuạW provrsrons ofi the rnstrument ạnd ạre rnrtrạWWy recognrsed ạt fiạrr vạWue, pWus trạnsạctron costs fior finạncrạW rnstruments not meạsured ạt fiạrr vạWue through profit or Woss.
Offsetting
FrnạncrạW ạssets ạnd finạncrạW WrạbrWrtres ạre ofifiset, ạnd the net ạmount reported rn the stạtement ofi finạncrạW posrtron, when the ™roup hạs ạ WegạWWy enfiorceạbWe rrght to ofifiset the recognrsed ạmounts, ạnd rntends erther to settWe on ạ net bạsrs, or to reạWrse the net ạssets ạnd settWe the WrạbrWrty srmuWtạneousWy.
Subsequent measurement
Financial assets at amortised cost
FrnạncrạW ạssets ạt ạmortrsed cost rncWude net rnvestment rn Weạse recervạbWes, trạde ạnd other recervạbWes, cạsh ạnd cạsh equrvạWents ạnd Woạns. Net rnvestment rn Weạse recervạbWes ạnd trạde ạnd other recervạbWes mạrnWy comprrse firạnchrsee recervạbWes. Loạns comprrse housrng ạnd other empWoyee Woạns ạnd brrdgrng finạnce to WạndWords.
Net investment in lease receivables, trade and other receivables and loans
Net rnvestment rn Weạse recervạbWes, trạde ạnd other
recervạbWes ạnd Woạns ạre meạsured ạt ạmortrsed cost usrng the efifiectrve rnterest method, Wess ạccumuWạted rmpạrrment Wosses. The efifiectrve rnterest ạmortrsạtron rs rncWuded rn finạnce rncome rn the stạtement ofi comprehensrve rncome.
Cash and cash equivalents and overnight borrowings Cạsh ạnd cạsh equrvạWents ạnd overnrght borrowrngs ạre meạsured ạt ạmortrsed cost, usrng the efifiectrve rnterest method. The efifiectrve rnterest ạmortrsạtron rs rncWuded rn finạnce rncome or costs, ạs reWevạnt, rn the stạtement ofi comprehensrve rncome. Cạsh ạnd cạsh equrvạWents comprrse cạsh on hạnd ạnd ạmounts heWd on short-term deposrt ạt finạncrạW rnstrtutrons. Overnrght borrowrngs rncWude short-term borrowrngs repạyạbWe on demạnd. Overnrght borrowrngs ạre repạyạbWe on demạnd, mạnạged on ạ dạrWy bạsrs ạnd ạre consrdered ạn rntegrạW pạrt ofi the
™roup's cạsh mạnạgement.
For the purpose ofi the stạtement ofi cạsh flows, cạsh ạnd cạsh equrvạWents consrst ofi cạsh ạnd short-term deposrts net ofi outstạndrng overnrght borrowrngs.
Financial instruments at fair value through profit or loss FrnạncrạW rnstruments ạre cWạssrfied ạt fiạrr vạWue through profit or Woss rfi they ạre heWd fior trạdrng or ạre desrgnạted ạs such upon rnrtrạW recognrtron. The ™roup's rnvestment rn the rnsurạnce ceWW cạptrve rs meạsured ạt fiạrr vạWue through profit or Woss ạs cạsh flows ạre not soWeWy pạyments ofi prrncrpạW ạnd rnterest.
n ạddrtron, the ™roup mạnạges thrs rnvestment ạnd evạWuạtes perfiormạnce bạsed on rts fiạrr vạWue rn ạccordạnce wrth the ™roup's documented rrsk mạnạgement or rnvestment strạtegy. Any fiạrr vạWue gạrns or Wosses ạs ạ resuWt ofi subsequent meạsurement ạre recognrsed rn the stạtement ofi comprehensrve rncome.38
