The Pick n Pay integrated annual report

We are committed to achieving the highest standards of global best practice in reporting and continue on our journey to implement these standards in the Group. We have expanded our disclosures in 2014 and will continue to engage with all stakeholders to ensure that we improve year-on-year.

Introduction

We are pleased to provide you with our integrated annual report for 2014.

Our integrated annual report is intended for all our valued stakeholders that continue to support Pick n Pay, but is more specifically focused on our shareholders and investors.

The objective of our integrated annual report is to provide a review of the financial, social and environmental performance indicators and results for Pick n Pay Holdings Limited RF and Pick n Pay Stores Limited and all their subsidiaries and associate (the Group), as well as the opportunities and related risks faced by the Group and how these underpin our strategic objectives. We believe this report will provide our stakeholders with improved insight into our business and an increased understanding of how we create value and how we are ensuring that our value creation is sustainable in the long term.

We are committed to achieving the highest standards of global best practice in reporting, and continue on our journey to implement these standards in the Group. We have expanded our disclosures in 2014 and will continue to engage with all stakeholders to ensure that we improve year-on-year.

Scope of the report

This integrated annual report covers the financial performance, operational highlights and strategic objectives of the Group.

Pick n Pay Holdings Limited RF is an investment holding company listed on the JSE Limited (JSE), with a controlling shareholding in JSE listed Pick n Pay Stores Limited. Pick n Pay Stores Limited is an investment holding company whose subsidiaries and associate operate in the retail sector on the African continent. The Group’s two major trading subsidiaries are Pick n Pay Retailers Proprietary Limited and Boxer Superstores Proprietary Limited. Pick n Pay has a 49% share in its associate TM Supermarkets Pvt Limited, which operates in Zimbabwe.

Sustainability disclosures provided in this report are specific to our Pick n Pay branded business in South Africa. It is our intention to expand these disclosures in the future to include our Boxer business and our associate TM Supermarkets, in order to provide a comprehensive view of the social and environmental impact of the Group as a whole, including our impact outside South Africa.

The report covers the 2014 annual financial period, with relevant comparison to previous periods, and has been compiled and presented in line with the requirements and principles of the following:

• The King Report on Governance for South Africa, and the King Code of Governance Principles (King III);
• The International Integrated Reporting ‹IR› Framework;
• The Global Reporting Initiative’s G3.1 guidelines on reporting of non-financial information (GRI G3.1);
• The Companies Act, No 71 of 2008, as amended;
• The JSE Listings Requirements; and
• International Financial Reporting Standards (IFRS).

The report presents a range of financial and non-financial disclosures and performance measures to assist our stakeholders to make an informed and objective assessment of the Group’s overall performance in 2014. Our key performance measures are presented here.

In our continued effort to improve our reporting, we have made some changes to the structure and presentation of information, particularly in respect of our corporate governance report and remuneration report. This has not materially affected the consistency of our reporting, and no previously reported significant information has been excluded from the report.

Except for those listed in note 31 of the Group financial statements, there has been no other restatement of financial information in respect of prior periods, however, in considering year-on-year comparability we draw your attention to the following:

In February 2013 the Group adopted a 52-week financial reporting calendar for all future annual financial periods. This change has integrated external financial reporting with internal operational structures and will improve comparative reporting to both internal and external stakeholders going forward. As a result, the 2014 annual financial period began on 4 March 2013 and ended on 2 March 2014 (364 days) compared to the 2013 financial year, which began on 1 March 2012 and ended on 3 March 2013 (368 days). The comparative financial period therefore reflects four extra days of turnover. Expenditure is presented on a comparable basis with both the 2014 and 2013 financial years reflecting 12 calendar months of operating expenditure. Please refer to note 29 for the estimated impact on the financial statements.

Forward looking information

This integrated annual report contains certain forward looking statements as relates to the 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 depend on circumstances that may occur 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 Group’s external auditors.

External assurance

The Board, assisted by the audit committee, is ultimately responsible for overseeing the integrity of the integrated annual report. This has been achieved by establishing skilled and experienced teams and ownership structures to undertake the reporting process and by performing a thorough review of the report.

The financial statements, contained within the integrated annual report, have been prepared under the supervision of the Chief Finance Officer, Bakar Jakoet, CA(SA).

External assurance obtained in the current period is limited to the external audit opinion on the Group and Company financial statements. We worked with a qualified, independent third party to assist us with developing a comprehensive combined assurance approach, to ensure the integrity of all data contained within the report.

Additional information

In the interests of environmental sustainability, we do not post the integrated annual report or the sustainable living report to our shareholders. Printed copies are available on request from our Company Secretary, Debra Muller, at demuller@pnp.co.za or by fax at + 27 21 797 0314.

The integrated annual report, the sustainable living report and a number of supporting documents, such as our full corporate governance charter, code of ethics, BBBEE certificate and other information relevant to Pick n Pay stakeholders are available on the investor relations section of our website, at www.picknpayinvestor.co.za.

Feedback

We hope that this 2014 integrated annual report has achieved our objective of providing you with a deeper understanding of Pick n Pay – of who we are, how we do business and where we hope to be in the future. We are committed to building on and improving on this report next year and would value your feedback in this regard. Any comments or requests for additional information can be emailed to our Company Secretary (contact details above).

Approval of the integrated annual report

The audit committee has reviewed the 2014 integrated annual report and recommended it for approval to the Board.

The board of directors acknowledges its responsibility to ensure the integrity of the integrated annual report. The directors confirm that they have collectively reviewed the content of this report and agree that it addresses the material issues faced by the Group, and provides a fair presentation of the financial position of the Group as at 2 March 2014 and its performance for the related annual financial period.

The Board authorised the integrated annual report for release on 14 April 2014.

Gareth Ackerman Chairman	Richard Brasher Chief Executive Officer