Pick n Pay Group of Companies financial statements

notes to the group financial statements

Pick n Pay Stores Group

Pick n Pay Holdings Group

52 weeks

1 March

2015

Rm

52 weeks

2 March

2014

Rm

52 weeks

1 March

2015

Rm

52 weeks

2 March

2014

Rm

11.

OPERATING LEASES

The Group has entered into various operating lease agreements as the lessee of premises. Leases on premises are contracted for periods of between five and 20 years (2014: five and 20 years) with renewal options for a further five to 20 years (2014: five and 20 years). Rentals comprise minimum monthly payments and additional payments based on turnover levels. Turnover rentals, where applicable, average 1.5% (2014: 1.5%) of turnover. Rental escalations vary, averaging 6.5% (2014: 6.5%) per annum.

Operating lease charges

Property – minimum lease payments

1 341.4

1 133.7

1 341.4

1 133.7

– turnover clause payments

13.7

14.1

13.7

14.1

1 355.1

1 147.8

1 355.1

1 147.8

Leases contained within service agreements

226.9

215.9

226.9

215.9

The Group has entered into various operating lease agreements as the lessor of premises. Leases on premises are contracted for periods of between three and 15 years (2014: three and 15 years). Rentals comprise mainly minimum monthly payments. Rental escalations vary between 6.5% and 10.0% (2014: 6.5% and 8.0%) per annum.

Operating lease income

67.3

77.8

67.3

77.8

11.1

Operating lease assets

At beginning of period

132.8

105.5

132.8

105.5

Accrual

17.0

27.3

17.0

27.3

At end of period

149.8

132.8

149.8

132.8

At end of the period, future minimum rentals receivable from non-cancellable sublease contracts amount to:

Cash flow due in 2016

238.8

280.3

238.8

280.3

Cash flow due in 2017 to 2020

855.7

870.9

855.7

870.9

Cash flow due after 2020

1 246.3

1 072.7

1 246.3

1 072.7

Total future cash flows

2 340.8

2 223.9

2 340.8

2 223.9

Less: Operating lease assets

(149.8)

(132.8)

(149.8)

(132.8)

Total operating lease receivables still to be recognised

2 191.0

2 091.1

2 191.0

2 091.1

11.2

Operating lease liabilities

At beginning of period

1 042.7

924.6

1 042.7

924.6

Accrual

95.8

118.1

95.8

118.1

At end of period

1 138.5

1 042.7

1 138.5

1 042.7

At end of the period, future non-cancellable minimum lease rentals are payable during the following financial periods:

Cash flow due in 2016

1 510.7

1 402.2

1 510.7

1 402.2

Cash flow due in 2017 to 2020

5 631.1

5 020.5

5 631.1

5 020.5

Cash flow due after 2020

7 022.3

6 109.7

7 022.3

6 109.7

Total future cash flows

14 164.1

12 532.4

14 164.1

12 532.4

Less: Operating lease liabilities

(1 138.5)

(1 042.7)

(1 138.5)

(1 042.7)

Total operating lease commitments still to be recognised

13 025.6

11 489.7

13 025.6

11 489.7