Africa We are progressing well with our expansion into Africa and are pleased with the progress to date. Our focus remains on countries where we have identified significant opportunities to provide customers with better value for money and where we can support local enterprise and give back to communities in terms of infrastructure and career opportunities. We have two stores in Zambia, one opened in the year under review, and we have been overwhelmed by the incredible support and positive feedback from our new Zambian customers. Both stores are performing well and have exceeded expectations. We will open three more stores in Zambia in the year to February 2012. We have signed new local master franchise agreements in Mozambique and Mauritius where we will open three and two stores, respectively in the year to February 2012. We are once again accounting for our share of profits from our 25% investment in TM Supermarkets in Zimbabwe (TM). We are encouraged by the improved economic climate and trading stability in

Zimbabwe and are impressed with the strides made by the team at TM in rebuilding that business. We have successfully concluded negotiations to purchase a further 24% of TM, to bring our total shareholding to 49%. The transaction is awaiting approval by the Reserve Bank of Zimbabwe and the Zimbabwean Indigenisation Board.

Discontinued operations Franklins, Australia I refer you to this link of the Chairman’s report for a commentary on Franklins. Integrating sustainability I can confidently say that sustainability has gained a solid foothold within our Company. While our efforts are more tightly focused on our core business, we continue to encourage staff to undertake initiatives of importance to them.

Our engagement with a wide range of stakeholders on sustainability-related matters is increasing. Whilst we have specific initiatives covering issues of food safety, product auditing, climate change and recycling, our two focus areas are energy and waste reduction. We have committed to reducing our energy consumption by 20% by 2014, and by 2015 we are aiming for zero waste to landfill.

We established an Operational Steering committee during the year to focus all the good work we are doing in the area of sustainability on the core operations of the business. I am proud of the active contribution our people are making in many areas.

Some highlights from the year include:

• our year on year energy and waste data is showing encouraging reductions in both energy usage and waste-to-landfill;
• an expansion in our corporate branded “Green” merchandise range;
• our close work with the Ackerman Pick n Pay Foundation to assist and empower emerging entrepreneurs and enable access to markets through Pick n Pay stores; and
• our involvement with public and private partners in training and mentoring emerging farmers.

We face some key challenges going forward, including:

• improving productivity and business efficiency;
• improving the integrity and scope of sustainability related data;
• achieving price parity on sustainable and ethical product lines, and sourcing sustainable packaging at competitive prices;
• balancing the priorities of small-scale and emerging entrepreneurs with sustainability performance measures;
• expanding our climate change strategy to include suppliers most at risk; and
• growing our business while significantly reducing our consumption of and impact on natural resources.

In addition, higher energy and fuel costs are a significant concern to us and will affect our distribution and purchasing activities. While we are addressing these through continuing efforts to maximise operational efficiencies, we anticipate that growing resource constraints will increase the volatility of the supply and distribution of certain raw materials.

Further information is available in the Sustainability overview. I would also like to encourage you to read our stand alone Sustainability Report available on our website (www.picknpay.co.za) from early June 2011.