Selected notes to the summarised financial statements

In February 2012, the Group subscribed for a further 24% stake in TM Supermarkets (Pvt) Limited (TM) for US$13 million (R102.5 million), taking its total investment in TM to 49%, being the maximum foreign shareholding allowed in terms of Zimbabwean legislation. TM will use the proceeds received to refurbish existing stores and to develop local procurement processes. The Group has great confidence in TM’s management team and in its business model and with the guidance from Pick n Pay, they are well placed to help grow the business and to expand their footprint in Zimbabwe. The economic environment has stabilised somewhat in Zimbabwe and although TM is currently incurring operating losses, our share for the year being R1.9 million, detailed five-year turnover and cash flow forecasts do not indicate any impairment in the value of our investment.