About this report

 

the pick n pay 2012 integrated annual report

We are pleased to publish our second Integrated Annual Report, compiled and presented in line with the requirements of the King Code and Report on Governance for South Africa (King III).

King III has introduced new standards of global best practice in reporting and we are on a journey to implement those standards as far as possible in our Group. We aim to improve our disclosure year on year, in order to provide all our stakeholders with a balanced and transparent understanding of our business. We aim to give a comprehensive report on the financial performance and position of the Group, the material issues and opportunities faced by the Group and how these underpin our strategic objectives. In so doing, we hope to communicate adequately to all our stakeholders on how we create value and how we will ensure that our value creation is sustainable in the long term.

We hope that this Integrated Annual Report gives you a better understanding of our business – of who we are, how we do business and where we hope to be in the future. We are committed to improving on this report and would appreciate your feedback in this regard. Any comments can be emailed to Debra Muller, our Company Secretary, at demuller@pnp.co.za.

scope and boundary

This report covers the financial performance, operational highlights and strategic objectives of Pick n Pay Holdings Limited and Pick n Pay Stores Limited and all their subsidiaries and associate.

The scope of reporting on sustainability issues and sustainable performance is specific to Pick n Pay only, and does not refer to any non-Pick n Pay branded subsidiary or associate.

The report covers the period 1 March 2011 to 29 February 2012, although on occasion, attention is also drawn to the six months to 31 August 2011 (interim result or first half) and the six months to 29 February 2012 (second half).

The Integrated Annual Report should be read together with the audited Annual Financial Statements, available on our website at www.picknpay-ir.co.za. The Annual Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS), the requirements of the Companies Act and the Listings Requirements of the JSE. Financial information contained within this Integrated Annual Report was extracted from the audited Annual Financial Statements.

There have been no restatements of financial information in respect of prior periods, other than a restatement of turnover and cost of merchandise sold (with no impact on gross profit) in respect of certain franchise arrangements in Botswana, Lesotho and Swaziland – please refer to note 30 of the Annual Financial Statements for further information. In further considering year-on-year comparability we draw your attention to the following:
  • The sale of Franklins, our Australian subsidiary, on 30 September 2011 – please refer to note 18 of the Annual Financial Statements;
  • The purchase of an additional 24% investment in our associate TM Supermarkets in Zimbabwe, bringing our total stake to 49% – please refer to note 11 of the Annual Financial Statements;
  • The introduction of our Smartshopper loyalty programme – please refer to notes 1 and 25 of our Annual Financial Statements.

The principle of materiality has been applied in determining the content and extent of disclosure in the Integrated Annual Report.

forward looking information

This Integrated Annual Report contains certain forward looking statements relating to the financial performance and position of the Group. All forward looking statements are solely based on the views and considerations of the directors. These statements involve risk and uncertainty as they relate to events and circumstances in the future. Factors that could cause actual results to differ materially from those in forward looking statements include, but are not limited to, global and national economic and market conditions, competitive conditions and regulatory factors. These forward looking statements have not been reviewed or reported on by the external auditors.

external assurance

The Board, assisted by the Audit committee, is ultimately responsible for overseeing the integrity of the Integrated Annual Report. This was achieved through setting up the appropriate teams and structures to undertake the reporting process, and performing a thorough review of the report.

A combined assurance approach will be developed in the future to ensure the appropriate application of integrated reporting principles and the integrity of data contained in the report. External assurance obtained in the current year was limited to the audit opinion on the Group Annual Financial Statements.