2023 Audited Annual Financial Statements Spreads

ANNUAL FINANCIAL STATEMNTS 2023
AUDITED ANNUAL
FINANCIAL STATEMENTS
2023
23
FOR THE PERIOD ENDED 26 FEBRUARY
PNP.CO.ZA
Pick n Pay Stores Limited Group Group annual financial statements Company annual financial statements Additional information
CONTENTS
1 Pick n Pay Stores Limited Group

Directors’ responsibility statement 2
CEO/CFO internal financial control responsibility statement 3
Company Secretary's certificate 3
Directors' report 4
Independent auditor's report 6
Audit, risk and compliance committee report 10
Review of operations 16
Pro forma earnings performance 22
Dividend declaration 24
2 Group annual financial statements

Statement of comprehensive income 26
Statement of financial position 27
Statement of changes in equity 28
Statement of cash flows 29
Notes to the annual financial statements 30
3 Company annual financial statements

Statement of comprehensive income 88
Statement of financial position 89
Statement of changes in equity 90
Statement of cash flows 91
Notes to the annual financial statements 92
4 Additional information
Appendix 1 – Pro forma information 99
Appendix 2 – Additional information 102
Appendix 3 – Pro forma headline earnings 103
Analysis of ordinary shareholders 104
These Group and Company annual Analysis of B shareholders 105

financial statements have been prepared
by the Group’s Finance Division under the Corporate information IBC
supervision of the Chief Finance Officer
(CFO), Lerena Olivier, CA(SA).
G www.pnp.co.za Audited Annual Financial Statements 2023 1

DIRECTORS’ RESPONSIBILITY CHIEF EXECUTIVE OFFICER

STATEMENT AND CHIEF FINANCE OFFICER
Pick n Pay Stores Limited Group
INTERNAL FINANCIAL CONTROL
RESPONSIBILITY STATEMENT
The directors are responsible for the preparation and fair presentation of the Group annual financial statements and annual financial statements
of Pick n Pay Stores Limited (the Company), comprising the statements of financial position at 26 February 2023, and the statements of
comprehensive income, changes in equity and cash flows for the period then ended, and the notes to the financial statements which include a
summary of significant accounting policies and other explanatory notes, in accordance with International Financial Reporting Standards and the
requirements of the Companies Act of South Africa No.71 of 2008 (Companies Act), as amended, and the directors’ report.
The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of annual financial
statements that are free from material misstatement, whether due to fraud or error, and for maintaining adequate accounting records and an
In terms of JSE Listing Requirements 3.84(k), the directors, whose names are stated below, hereby confirm that –
effective system of risk management as well as the preparation of the supplementary schedules included in these annual financial statements.
a) the annual financial statements set out on pages 26 to 105, fairly present in all material respects the financial position, financial performance
The directors have made an assessment of the ability of the Company and its subsidiaries to continue as going concerns and have no reason to
and cash flows of the issuer in terms of IFRS;
believe that the businesses will not be going concerns in the period ahead.
b) to the best of our knowledge and belief, no facts have been omitted or untrue statements made that would make the annual financial
The auditor is responsible for reporting on whether the Group annual financial statements and annual financial statements of the Company are
statements false or misleading;
fairly presented in accordance with the applicable financial reporting framework.
c) internal financial controls have been put in place to ensure that material information relating to the Company and its consolidated subsidiaries
and associates have been provided to effectively prepare the financial statements of the issuer;
Approval of Group annual financial statements and annual financial statements of
d) the internal financial controls are adequate and effective and can be relied upon in compiling the annual financial statements, having fulfilled
the Company our role and function as executive directors with primary responsibility for implementation and execution of controls
The Group annual financial statements and annual financial statements of Pick n Pay Stores Limited, as identified in the first paragraph, were
e) where we are not satisfied, we have disclosed to the audit committee and the auditors any deficiencies in design and operational effectiveness
approved by the Board of directors on 3 May 2023 and signed by:
of the internal financial controls, and have taken steps to remedy the deficiencies; and
Gareth Ackerman Pieter Boone f) we are not aware of any fraud involving directors.
Chairman Chief Executive Officer
Pieter Boone Lerena Olivier
Chief Executive Officer Chief Finance Officer
3 May 2023
COMPANY SECRETARY’S
CERTIFICATE
In my capacity as Company Secretary, I certify that for the period ended 26 February 2023, Pick n Pay Stores Limited filed all returns and notices
as required for a company in terms of section 88(2)(e) of the Companies Act No.71 of 2008, as amended, and that such returns and notices are,
to the best of my belief, true, correct and up to date.
Penelope Gerber
Company Secretary
3 May 2023
2 www.pnp.co.za Audited Annual Financial Statements 2023 3

DIRECTORS’ REPORT
Nature of business Share capital Replacement of the Company’s Memorandum of Jonathan Ackerman retired as an executive director on 31 March 2023
and served as a non-executive director from that date and is to be
Pick n Pay Stores Limited is an investment holding company that is At period end, 5 367 653 shares (2022: 5 517 150 shares) of Pick n Pay
Incorporation (MOI)
proposed for formal shareholder election at the 2023 AGM.
domiciled and incorporated in the Republic of South Africa and listed Stores Limited were held within the Group in order to settle obligations The Group’s previous MOI was replaced at the annual general meeting
on the JSE and A2X, the recognised securities exchanges in South of share options granted under the Group’s employee share scheme. (AGM) on 26 July 2022 with an updated MOI to ensure alignment with James Formby was appointed to the Board as an independent
Africa. The Group comprises subsidiaries and an associate that retail recent changes in the Companies Act. The Group was in compliance non-executive director on 10 October 2022 and is to be proposed for
In addition, 7 012 500 shares (2022: 7 707 650 shares) of Pick n Pay with the MOI during the period under review. formal shareholder election at the 2023 AGM.
food, clothing, general merchandise and liquor throughout Africa,
Stores Limited were held within the Group in order to settle obligations
both on an owned and franchise basis. The Group also acquires and The Company Secretary is Penelope Gerber.
under the Group’s restricted share plan (RSP). Dividends in respect of
develops strategic retail and distribution sites.
RSP awards are deferred until the shares have vested and are paid Directors, prescribed officers and Directors’ interest in shares
Noteworthy subsidiaries held directly are presented in note 29 of the
Group Annual Financial Statements.
according to the number of shares that vest on vesting date. Refer to
note 5 of the Group Annual Financial Statements.
Company Secretary Refer to note 4 of the Group Annual Financial Statements and note
Refer to note 4 of the Group Annual Financial Statements for a list of 8 of the Company Annual Financial Statements for details of the
directors of the Company for the 2023 financial year. directors’ interest in shares.
Overview of financial results and activities Borrowings
Refer to the review of operations on pages 16 to 21 for an overview of The Group’s overall level of debt (including bank overdraft and
Hugh Herman resigned as a director at the AGM on 26 July 2022. Audit, risk and compliance committee
financial results and activities of the Group. overnight borrowings) is at R5 699.4 million. The non-executive directors listed below retire by rotation, and being We draw your attention to the Audit, Risk and Compliance Committee
eligible, they offer themselves for re-election at the 2023 annual report on pages 10 to 15, where we set out the responsibilities of the
The Group manages its retail operations on a 52-week trading The Group’s net funding position (defined as overall debt net of cash Committee and how it has discharged these responsibilities during
general meeting (AGM) on 19 July 2023:
calendar where the reporting period will always end on a Sunday. and cash equivalents) increased by R3 293.8 million, as a result of the period.
To ensure calendar realignment, a 53rd week of trading is required higher levels of capital investment under the Group’s long-term • Gareth Ackerman
approximately every six years. Ekuseni strategy. Refer to the review of operations for further • Haroon Bhorat Gareth Ackerman Pieter Boone
information on the Group’s net funding position. Chair Chief Executive Officer
In order to provide useful and transparent comparative information, • Mariam Cassim
we have presented our results on a pro forma basis by adjusting • David Friedland 3 May 2023
for the hyperinflation effects of IAS 29 Financial Reporting in Legal proceedings • Audrey Mothupi
Hyperinflationary Economies as well as insurance recoveries received
during this financial year. These insurance recoveries relate to the The Company and its subsidiaries are not involved, and have not in
Jeff van Rooyen will retire at the 2023 AGM.
civil unrest losses suffered by the Group in the prior reporting period the 2023 financial period been involved, in any legal or arbitration
and were included in the prior period pro forma earnings. Refer to the proceedings which may have or have had a material effect on the Suzanne Ackerman retired as an executive director on 31 March 2022
Appendices for further information. financial position of the Group, nor is the Company aware of any such and was re-appointed on that date as a non-executive director.
proceedings that are pending or threatened.
Going concern Special resolutions

The Board of directors (the Board) has performed a formal review of
the Company and its subsidiaries’ ability to continue trading as going On 26 July 2022, the Company’s shareholders approved the following
concerns in the foreseeable future. As part of this review, the Board special resolutions as tabled in the notice to the annual general
has considered the impact of the current economic environment, meeting:
which has been severely impacted by the load-shedding crisis
Directors’ fees for the 2023 and 2024 annual
experienced in South Africa during the current financial period. In
line with standard governance practice, the Board has assessed the financial periods
Group’s solvency and liquidity and is satisfied as to the Group’s ability Shareholders approved the directors’ fees.
to continue as going concern for the foreseeable future and that the
presentation of the Annual Financial Statements on a going concern Provision of financial assistance to related or
basis is appropriate. inter-related companies and others
In accordance with the requirements of the Companies Act, the Group Shareholders resolved, in terms of the provisions of section 45 of
ensures that it complies with the liquidity and solvency requirements the Companies Act, that the Company may from time to time provide
before any dividend payment and provision of financial assistance. direct or indirect financial assistance to any director, prescribed
officer, related company, inter-related company or member of a
related or inter-related company on such terms and conditions as
Shareholder distribution determined by the Board.
The directors have declared a final dividend (dividend 110) of
140.30000 cents per share out of income reserves, maintaining the General approval to repurchase Company shares
Group’s dividend cover of 1.3 times pro forma headline earnings per Shareholders resolved that the Company or any of its subsidiaries
share. Refer to the Appendices for further information on the Group’s may acquire issued shares of the Company, upon such terms and
pro forma headline earnings per share. The Group will change from its conditions and in such amounts as the directors of the Company may
1.3 times cover to a range of between 1.5 times and 1.8 times cover determine from time to time.
effective from the 2024 financial year. The new policy will contribute
towards the Group having the necessary balance sheet flexibility to Acquisition of such shares is subject to the Memorandum of
support the elevated capital expenditure required by the Ekuseni Incorporation of the Company, the provisions of the Companies
strategy. For further information on the dividend declaration, refer to Act and the Listings Requirements of the JSE, provided further
page 24. that acquisitions of shares in the Company by the Company and its
subsidiaries may not, in the aggregate, exceed in any one financial
year 5% of the Company’s issued share capital of the class of
repurchased shares.

INDEPENDENT AUDITOR’S REPORT Key audit matter
Allowance for impairment of franchise debtors

How the matter was addressed in the audit
Our audit procedures, amongst others, included the following

procedures to assess the adequacy of the allowance for
To the shareholders of Pick n Pay Stores Limited The current socio-economic conditions in Southern Africa continue to
put pressure on customers with the added impacts of loadshedding impairment of franchise debtors:
further constraining franchisee’ finances and their ability to meet
• We obtained an understanding of management’s controls and
payment terms.
Report on the Audit of the Consolidated Key Audit Matters processes for identifying, quantifying and impairing franchise
debtors.
and Separate Financial Statements Key audit matters are those matters that, in our professional Pick n Pay has franchise owners throughout South Africa, Botswana,
Namibia, Lesotho and eSwatini; resulting in a significant amount of trade
judgement, were of most significance in our audit of the consolidated • We assessed and tested the design and operating
Opinion and separate financial statements of the current period. These matters receivables from franchise fees and sales to franchisees with a gross effectiveness of the controls over the franchise debtors’ data
were addressed in the context of our audit of the consolidated and debt balance of R4 003 million (2022: R3 787 million). by testing on a sample basis:
We have audited the consolidated and separate financial statements
separate financial statements as a whole, and in forming our opinion In assessing the recoverability of franchise debtors and raising the – The approval of credit limits for franchise debtors,
of Pick n Pay Stores Limited and its subsidiaries (‘the group’)
thereon, and we do not provide a separate opinion on these matters. estimated allowance for impairment of these franchise debtors in the
and company set out on pages 26 to 97, which comprise of the – The aging of franchise debtors,
For the matter below, our description of how our audit addressed the consolidated annual financial statements of Pick n Pay Stores Limited,
consolidated and separate statements of financial position as at – Confirmations from franchise debtors of the outstanding
matter is provided in that context. management exercised significant judgement.
26 February 2023, the consolidated and separate statements of balance.
comprehensive income, the consolidated and separate statements We have fulfilled the responsibilities described in the Auditor’s Management judgement included consideration of the lifetime expected • We recalculated a sample of individual expected credit
of changes in equity and the consolidated and separate statements Responsibilities for the audit of the consolidated and separate credit loss from individual franchisees after taking into account their losses making up the provision, considering various factors
of cash flows for the year then ended, and notes to the consolidated financial statements section of our report, including in relation to creditworthiness; whether the individual franchisee has financial influencing the calculation, including:
and separate financial statements, including a summary of significant these matters. Accordingly, our audit included the performance difficulties; experience of default or delinquency in interest or principal
accounting policies. of procedures designed to respond to our assessment of the – Historical data adjusted for current market conditions,
payments and revised repayment terms; the age analysis of the
risks of material misstatement of the consolidated and separate outstanding debt; and, if applicable, the fair value of collateral provided by – Guarantees provided by the franchisee,
In our opinion, the consolidated and separate financial statements
financial statements. The results of our audit procedures, including franchisees. The judgements applied by management are subjective and – Subsequent receipts in our roll-forward testing period,
present fairly, in all material respects, the consolidated and separate
the procedures performed to address the matters below, provide have a significant impact on determining the level of provision required
financial position of the group and company as at 26 February 2023, – Stock balances,
the basis for our audit opinion on the accompanying consolidated and for trade receivables.
and its consolidated and separate financial performance and
separate financial statements. – VAT adjustments,
consolidated and separate cash flows for the year then ended in
The allowance for impairment of franchise debtors is R195 million – Variation agreements,
accordance with International Financial Reporting Standards and the The key audit matter only applies to the audit of the consolidated (2022: R141 million). Due to the materiality of the amount and the
requirements of the Companies Act of South Africa. financial statements. – Loyalty fees deductible,
significant judgement applied by management; we considered this a key
audit matter in the current year. – Conversion of foreign currency into Rands,
Basis for Opinion
– Together with our quantitative advisory specialists,
We conducted our audit in accordance with International Standards The disclosures related to the allowance for credit losses on franchise
we recalculated the probability given default and the loss
on Auditing (ISAs). Our responsibilities under those standards are debtors are reflected in notes 1.6, 1.19 and note 17 of the financial
given default for franchise debtors.
further described in the Auditor’s Responsibilities for the Audit of the statements.
consolidated and separate financial statements section of our report. • We also considered the sensitivity of the collective provisions
We are independent of the group and company in accordance with to changes in modelling assumptions.
the Independent Regulatory Board for Auditors’ Code of Professional Goodwill and store impairments With the assistance of our internal valuation specialists, our
Conduct for Registered Auditors (IRBA Code) and other independence
Goodwill for the Group has a carrying value of R952.8 million at procedures relating to the goodwill and store impairment
requirements applicable to performing audits of financial statements
26 February 2023 (2022: R624.7 million). Goodwill originated from the assessment, included, amongst others:
of the group and company and in South Africa. We have fulfilled our
purchase of subsidiaries in prior years, and the purchase of individual
other ethical responsibilities in accordance with the IRBA Code and in • Evaluation of the methodology applied by management in
stores in the current and prior years. Disclosures relating to goodwill is
accordance with other ethical requirements applicable to performing determining the fair value less costs of disposal and value
included in notes 1.6, 1.7 and note 9 of the financial statements.
audits of the group and company and in South Africa. The IRBA Code in use for cash generating units, with reference to the
is consistent with the corresponding sections of the International The group also considers each store to be a separate cash generating requirements of accounting standards and our knowledge of
Ethics Standards Board for Accountants’ International Code of Ethics unit (CGU). The disclosures of the impairment of property, plant and the business.
for Professional Accountants (including International Independence equipment and right of use assets is reflected in notes 1.6, 1.8, 1.10, 1.15 • Evaluating the key assumptions and judgements in
Standards). We believe that the audit evidence we have obtained is notes 10 and 11 of the financial statements. management’s forecasts, including the revenue growth rates,
sufficient and appropriate to provide a basis for our opinion. trading margins, cost growth rate assumptions, working
In assessing the recoverable amount of the goodwill and store cash
generating unit, management applies judgement in determining the capital and capital expenditure cash flows, and the weighted
methodology used to determine which store cash generating units to average cost of capital used to discount the forecast cash
test as well as assumptions and inputs to calculate the fair value less flows, by assessing the reasonableness of key assumptions
costs of disposal and value-in-use computations. against historic performance and market information.
• Assessing the discount rates against external market
We focused our attention on the assumptions applied and inputs used
references and recalculating the discount rates used.
by management in forecasting cash flows as well as those used in the
calculation of fair value less costs of disposal, including forecast growth • Assessing the assumptions and calculations of fair
rates for the explicit and terminal forecast periods and forecast trading value less cost of disposal for cash generating units with
margins. Furthermore, we focused our attention on the assumptions reference to recent market transactions and to evaluate the
and inputs used in calculating discount rates, including the judgement reasonableness of management’s assessments.
involved in quantifying a specific risk premium for the increased number • Recalculating management’s discounted cash flow models for
of stores to which the goodwill is attributable due to the significant arithmetical accuracy.
increase in stores purchased compared to prior periods. • In conjunction with our internal financial reporting specialists,
Due to the difficult trading environment and deteriorating macro- we assessed the completeness and accuracy of the
economic conditions, the assessment of the reasonableness of disclosures relating to the impairment assessments with
assumptions relating to cash flow forecasts required robust dialogue and reference to the requirements of IAS 36 Impairment
extensive use of internal valuation specialists. Accordingly, the matter of Assets.
has been considered a key audit matter.

Key audit matter How the matter was addressed in the audit Responsibilities of the Directors for the Consolidated • Evaluate the overall presentation, structure and content of the
consolidated and separate financial statements, including the
and Separate Financial Statements
Supplier rebates and other income earned from suppliers Our procedures relating to the effect of rebates and other income disclosures, and whether the consolidated and separate financial
The directors are responsible for the preparation and fair presentation statements represent the underlying transactions and events in
Refer to note 1.6 (Use of estimates and assumptions – Purchase rebates earned from suppliers as a reduction in the purchase price of
of the consolidated and separate financial statements in accordance a manner that achieves fair presentation.
and other income earned from suppliers) of the group consolidated inventories included, amongst others:
with International Financial Reporting Standards and the requirements
financial statements for the related disclosures. • Obtain sufficient appropriate audit evidence regarding the
• We inspected several major supplier agreements to of the Companies Act of South Africa, and for such internal control
financial information of the entities or business activities within
The Group earns significant amounts of rebates and other income and understand their terms and conditions. as the directors determine is necessary to enable the preparation of
the group to express an opinion on the consolidated and separate
recognises the relevant portion of these as a reduction in the cost of • We assessed management’s conclusion as to whether consolidated and separate financial statements that are free from
financial statements. We are responsible for the direction,
inventory where the payments do not relate to a specific and genuine the rebate relates to a specific and genuine service, and material misstatement, whether due to fraud or error.
supervision and performance of the group audit. We remain solely
service. Management have applied significant judgement relating to consequently the treatment of the rebate in relation to the In preparing the consolidated and separate financial statements, the responsible for our audit opinion.
the determination of these rebates and other income received as a measurement of the cost of inventory at year end. directors are responsible for assessing the group and company’s
reduction in the purchase price of inventory which has an impact on the We communicate with the directors regarding, among other matters,
• We assessed the systems used to calculate rebates as ability to continue as a going concern, disclosing, as applicable,
measurement of inventory as at 26 February 2023. the planned scope and timing of the audit and significant audit
well as the controls implemented in the process of rebate matters related to going concern and using the going concern basis
findings, including any significant deficiencies in internal control that
We had focused attention in this area due to the judgement required in calculation. of accounting unless the directors either intend to liquidate the group
we identify during our audit.
assessing the accounting for various rebate and other income contracts, • We recalculated and assessed the rebate amounts and company or to cease operations, or have no realistic alternative
as well as the complexity of the calculation used in recognising the recognised and the period in which they were recognised. but to do so. We also provide the directors with a statement that we have complied
relevant portion of these as a reduction in the closing cost of inventory. This was based on the inspection of contractual performance with relevant ethical requirements regarding independence, and
In addition to the complexity of the calculation, we note that as a result
Auditor’s Responsibilities for the Audit of the to communicate with them all relationships and other matters that
obligations on a sample of contracts with suppliers to assess
of the volume and variety of rebate and other income agreements, for the conditions required for supplier rebates to be recognised Consolidated and Separate Financial Statements may reasonably be thought to bear on our independence, and where
which the terms vary from period to period, there is significant audit and whether these had been met. applicable, actions taken to eliminate threats or safeguards applied.
Our objectives are to obtain reasonable assurance about whether
effort required. the consolidated and separate financial statements as a whole are From the matters communicated with the directors, we determine
• We assessed the recognition and classification of the rebates
This fact and the materiality of the impact to the valuation of the closing and other income from suppliers and related costs in terms of free from material misstatement, whether due to fraud or error, and those matters that were of most significance in the audit of the
cost of inventory meant we considered this a key audit matter in the the requirements of IAS 2 Inventories. to issue an auditor’s report that includes our opinion. Reasonable consolidated and separate financial statements of the current period
current period. assurance is a high level of assurance but is not a guarantee that an and are therefore the key audit matters. We describe these matters
audit conducted in accordance with ISAs will always detect a material in our auditor’s report unless law or regulation precludes public
Accounting treatment of the Eastport transaction Our procedures relating to the accounting for the Eastport misstatement when it exists. Misstatements can arise from fraud or disclosure about the matter or when, in extremely rare circumstances,
In the prior financial year, the Group entered into a head of agreement with transaction, amongst others, included: error and are considered material if, individually or in the aggregate, we determine that a matter should not be communicated in our report
Fortress REIT Limited for the development of the Eastport Distribution they could reasonably be expected to influence the economic because the adverse consequences of doing so would reasonably
• We obtained an understanding of the core terms of the decisions of users taken on the basis of these consolidated and
Centre (“DC”). We reviewed the agreement during the prior year audit; be expected to outweigh the public interest benefits of such
contract. separate financial statements.
however, the core terms of the contract had not yet come into effect. communication.
• We assessed management’s accounting treatment of the
During the period ended 26 February 2023, certain core terms came transaction. As part of an audit in accordance with ISAs, we exercise professional Report on Other Legal and Regulatory Requirements
into effect including the leasing of the DC by the Group from Fortress. judgement and maintain professional scepticism throughout the
• Our assessment involved our internal financial reporting audit. We also: In terms of the IRBA Rule published in Government Gazette Number
The effect of these terms resulted in the consideration of the following
specialists in assessing management’s IFRS 5 and IFRS 16 39475 dated 4 December 2015, we report that Ernst & Young Inc. has
accounting standards: • Identify and assess the risks of material misstatement of the
considerations. been the auditor of Pick n Pay Stores Limited for 8 years.
• IFRS 5: Non-Current Assets Held for Sale; and • Applying the lease terms embedded in the heads of consolidated and separate financial statements, whether due to
agreement, we recalculated management’s computation fraud or error, design and perform audit procedures responsive
• IFRS 16 Leases.
of the lease liability and assessed the incremental to those risks, and obtain audit evidence that is sufficient and
Given the complexity and materiality of the agreement additional effort borrowing rate. appropriate to provide a basis for our opinion. The risk of not
was required in assessing the management’s accounting treatment of detecting a material misstatement resulting from fraud is higher
• In conjunction with our internal financial reporting than for one resulting from error, as fraud may involve collusion, Ernst & Young Inc.
the transaction. This matter was considered a key audit matter in our
specialists, we assessed the completeness and accuracy of forgery, intentional omissions, misrepresentations, or the Director: Tina Lesley Rookledge Registered Auditor
audit of the consolidated financial statements of the Group.
disclosures with reference to the requirements of IFRS 16 override of internal control. Chartered Accountant (SA)
The disclosures required by IFRS 16 Leases have been addressed in Notes Leases and IFRS 5 Non-current assets held for sale.
1.16, 1.18, notes 11 and 25 of the financial statements. The disclosures of • Obtain an understanding of internal control relevant to the audit 3rd Floor, Waterway House
non-current assets held for sale have been reflected in note 10 of the in order to design audit procedures that are appropriate in the 3 Dock Road, V&A Waterfront
financial statements. circumstances, but not for the purpose of expressing an opinion Cape Town
on the effectiveness of the group and company’s internal control.
3 May 2023
• Evaluate the appropriateness of accounting policies used and the
Other Information Our opinion on the consolidated and separate financial statements
does not cover the other information and we do not express an audit reasonableness of accounting estimates and related disclosures
The directors are responsible for the other information. The other opinion or any form of assurance conclusion thereon. made by the directors.
information comprises the information included in the 109-page
• Conclude on the appropriateness of the directors’ use of the
document titled “Pick n Pay Group Annual Financial Statements for In connection with our audit of the consolidated and separate financial
going concern basis of accounting and based on the audit
the period ended 26 February 2023,” which includes the Directors’ statements, our responsibility is to read the other information and,
evidence obtained, whether a material uncertainty exists related
responsibility statement, Chief Executive Officer and Chief Finance in doing so, consider whether the other information is materially
to events or conditions that may cast significant doubt on the
Officer Internal Financial Control Responsibility Statement, Company inconsistent with the consolidated and separate financial statements
group and company’s ability to continue as a going concern. If we
Secretary’s certificate, Directors’ report, and the Audit, risk and or our knowledge obtained in the audit, or otherwise appears to be
conclude that a material uncertainty exists, we are required to
compliance committee report as required by the Companies Act of materially misstated. If, based on the work we have performed,
draw attention in our auditor’s report to the related disclosures
South Africa and Review of operations, Dividend declaration, Pro we conclude that there is a material misstatement of this other
in the consolidated and separate financial statements or, if
Forma Earnings Performance, Analysis of ordinary shareholders, information, we are required to report that fact. We have nothing to
such disclosures are inadequate, to modify our opinion. Our
Analysis of B shareholders, Appendices 1 to 3, Number of Stores and report in this regard.
conclusions are based on the audit evidence obtained up to the
Corporate Information which we obtained prior to the date of this
date of our auditor’s report. However, future events or conditions
report, and the Integrated Annual Report and Corporate Governance
may cause the group and/or the company to cease to continue as
Report, which are expected to be made available to us after that date.
a going concern.
Other information does not include the consolidated and separate
financial statements and our auditor’s report thereon.

AUDIT, The role and responsibility of the Board The Committee meets formally twice a year with the Board Chair,
The Audit, Risk and Compliance Committee the Chief Executive Officer, the Chief Finance Officer, the Head of
is pleased to present its report for the The Board retains the overall responsibility to review and approve the Internal Audit, the Head of Risk and Compliance and the external
financial year ended 26 February 2023. This
RISK AND
Annual Financial Statements for the Group and the Company, and for auditor. Additional ad hoc meetings are held as required.
Group-wide combined assurance, compliance and risk governance.
report was prepared in accordance with In addition, the Committee Chair meets with senior management,
The Board acknowledges that it will be exposed to certain risks to the Head of Risk and Compliance and the internal and external
the requirements of the Companies Act, achieve sustainable growth in the fast-moving consumer goods auditors whenever necessary. The Head of Risk and Compliance
COMPLIANCE the King IV™ Code of Governance for South

Africa (King IV), the JSE Limited Listings
Requirements, International Financial
industry in South Africa and the rest of the African continent.
The Board’s focus on risk and compliance management is aimed
at maintaining an appropriate balance between risk and reward,
and the internal and external auditors have unfettered access to the
Committee and its members throughout the year.
There is an open invitation to all Board members to attend Committee
COMMITTEE Reporting Standards (IFRS) and other

applicable regulatory requirements.
protecting all stakeholders against avoidable risks, and mitigating the
impact of unavoidable risks.
meetings, and all directors have access to the papers for each of the
Committee’s meetings. Other senior executives and professional
advisors are invited to meetings when required to provide insight into
REPORT
specific matters. Formal minutes of meetings are made available to
Governance and Committee members the Committee and are available on request to other Board members.
Mandate of the Audit, Risk and Compliance The Committee is chaired by an independent non-executive director The Committee Chair reports to the Board at the quarterly
Committee (the Committee) and comprises only independent non-executive directors. Members Board meetings on the Committee’s activities over the period, and
of the Committee are nominated for appointment annually by the highlights the key items deliberated and those requiring specific
The Board of directors (the Board) has delegated the statutory and Board for the ensuing financial period and are elected by shareholders Board attention.
regulatory duties arising from the Companies Act, No 71 of 2008, at the annual general meeting (AGM).
as amended (Companies Act), JSE Listings Requirements, and risk Meeting attendance
All Committee members satisfy the requirements to serve as
governance and legislative compliance to the Committee. Aboubakar Jakoet was elected by shareholders to serve on the
members of an audit committee, as provided in section 94 of the
The mandate and responsibilities of the Committee are incorporated Companies Act, and have the necessary financial literacy skills and Committee at the AGM in June 2022. This was in line with the Board’s
in the Committee’s charter, which is reviewed annually and approved experience to execute their duties effectively. Independence on succession planning, and followed his classification as an independent
the Committee is assessed by the Board’s annual independence non-executive director. Aboubakar took over from Jeff van Rooyen
by the Board. The charter is contained within the Group’s Corporate
review. The curriculum vitae of each Committee member will be made as Chair on that date.
Governance Charter and can be viewed at
www.picknpayinvestor.co.za/governance.php. available to shareholders in the 2023 Notice of AGM. James Formby was appointed to the Board and the Committee
The Committee follows a formal work plan designed to effectively on 10 October 2022, subject to formal election by shareholders at
The Committee is a statutory committee responsible for fulfilling the the 2023 AGM.
deliver the execution of its responsibilities over the year.
responsibilities under section 94(7) of the Companies Act, including:
• to provide independent oversight of the effectiveness of the

Group’s framework of combined assurance, the integrity of The committee’s composition and meeting attendance for FY23 is set out below.
external financial reporting and risk governance and compliance
• to consider the independence and effectiveness of the external Members Qualifications and experience Attendance
auditor and recommend to shareholders the external auditor’s Aboubakar Jakoet (Chair) A chartered accountant with extensive experience in the retail industry, having previously served 2/2
appointment as the Group’s Chief Finance Officer.
Haroon Bhorat Professor of Economics and Director of the Development Policy Research Unit at the University of 2/2
The Committee’s responsibilities Cape Town. Haroon is a member of the Presidential Economic Advisory Council.
Mariam Cassim A chartered accountant with broad auditing and business experience, Mariam is CEO of 2/2
The Committee is responsible for developing, communicating and
Vodacom Financial and Digital Services and a member of Vodacom Group’s executive committee
monitoring financial and risk management policies and processes
(telecommunications industry).
across all Group divisions. It discharges this responsibility through
James Formby A chartered accountant with a Master’s in Philosophy in Management Studies. James retired 2/2
the oversight of management’s implementation of these policies and
as CEO of RMB after a successful 25-year career with the FirstRand Group (financial services
processes.
industry).
The Committee ensures that adequate systems are in place to David Friedland A chartered accountant with expertise in auditing, risk and compliance. David had an extensive 2/2
identify, evaluate and manage key business risks. It ensures that it career as audit engagement partner with major audit companies.
dedicates sufficient time to assurance functions, financial reporting Audrey Mothupi An Honours graduate with business experience in financial services and in data and digital 2/2
and risk governance and compliance. The Committee is authorised by innovation. Audrey is the CEO of the Systemic Logic Group.
the Board to investigate any activity within its terms of reference. Jeff van Rooyen A chartered accountant with experience across private and public sectors. Jeff’s former 2/2
involvement in the accounting profession includes as a Trustee of the IFRS Foundation, Chair of the
The Committee has the right to:
Public Accountants and Auditors Board (now IRBA) and founding president of the Association for
• Request and obtain unrestricted access to records and information the Advancement of Black Accountants. Jeff is the founder CEO of Uranus Investment Holdings.
• Consult directly with the Group internal audit function, external
auditor and senior management Specialist sub-committees
• Obtain outside legal or other professional advice The Committee is supported by smaller sub-committees, including divisional Financial Review Committees, the Treasury Committee and
• Have access to the resources it needs to fulfil its responsibilities the Franchise Committee. These sub-committees comprise executive and non-executive directors, meet at least twice a year and provide
additional oversight, guidance and feedback in critical focus areas.
• Set and maintain an appropriate mandate for subsidiary company
audit committees
Aboubakar Jakoet
Chair: Audit, risk and
compliance committee

Committee’s responsibilities and activities performed Reporting • Considered internal audit reports on the Group’s system of internal control, including financial controls, corporate
Financial reporting, integrated reporting and the Group finance function matters governance and business risk management, and ensured ongoing progress in the integration of the Group’s framework of
combined assurance
The Committee provides independent oversight and objective assessment of the effectiveness of the Group’s finance • Received assurance that proper and adequate accounting records were maintained, and that systems of internal control
function and the accuracy and integrity of the Group’s internal and external financial reporting. were adequate to prevent and/or detect fraud and safeguard assets
• Maintained focus on the adequacy and effectiveness of controls over information systems and cybersecurity
Key areas of activity during the year • Reviewed the approach of the internal audit function to develop and integrate data analytics and digital capability within
internal audit processes and procedures
Internal • Reviewed internal reports regarding the Group’s financial performance, including divisional results, budgets, forecasts, • Reviewed significant issues raised by internal audit processes and monitored and challenged, where appropriate, the
reporting capital expenditure and progress against financial targets of the Group’s long-term Ekuseni strategy (“Ekuseni”) corrective action taken by management regarding adverse internal audit findings
• Monitored the significant operational and financial impact of accelerated levels of load-shedding
• Reviewed treasury reports and cash flow forecasts, monitored liquidity and adherence to internal debt covenants and Outcome The Committee considered the skill, experience and independence of the Group internal audit function and concluded that
found all to be within the guidelines of treasury policy the internal audit function is appropriate and effective for the Group.
• Considered additional long-term funding proposals to support the capital investment requirements of Ekuseni
• Received feedback on the Group’s tax position and its tax compliance and are satisfied with the Group’s status and compliance
• Reviewed the reporting process and controls around the compilation of the financial information and found it to be External audit
effective, appropriate and responsive to business needs The Committee provides independent oversight and objective assessment of the effectiveness of the Group’s external
• Reviewed the Group’s integrated reporting function and progress, considering factors and risks that could impact on the
audit function.
integrity of the Integrated Annual Report and the environmental, social and governance (ESG) disclosures provided
Following a tender process, Ernst & Young Inc. (EY) was appointed as external auditor to the Group in July 2015, bringing their tenure to eight years.
External • Reviewed the basis for determining materiality for external reporting The Committee annually considers whether a tender process should be adopted to appoint new external auditors. The Independent Regulatory
reporting • Reviewed the appropriateness of the Group’s accounting policies and guided on increased segmental turnover disclosure Board for Auditors’ (IRBA) rule on mandatory audit firm rotation was considered.
in respect of the Group’s operating divisions
• Assessed and confirmed the appropriateness of the going concern assumption used in the Group’s Annual Financial In terms of the rule, the Committee concluded that the external auditor firm would be rotated in the financial period ended 2026 (a maximum
Statements tenure of ten years). As such, a tender process was not required in FY23.
• Reviewed the pro forma disclosures presented in order to ensure that shareholders are presented with appropriate In terms of section 92 of the Companies Act, the designated auditor of a company is required to be rotated after serving as a company’s auditor
financial information to understand the Group’s underlying FY23 performance for five consecutive financial years. Tina Rookledge is the designated audit partner for FY23, and was appointed on 5 August 2020. She was
assessed to have the necessary competence, ability and independence required for this position.
Specific • Reviewed and guided on a proposal for a more prudent dividend policy from FY24
items • Reviewed the effectiveness of the Group’s capital structure, including the shareholder approvals required for a potential Key areas of activity during the year
future equity raise, when and if appropriate
• Confirmed that the listed company always had an independent sponsor during FY23
External • Approved the external audit plan and related scope of work for the FY23 annual audit to ensure adequate coverage
• Ensured that the appointment of the external auditor was included as a resolution for a shareholders’ vote in the Notice of the 2023
audit of material matters and critical risk areas
AGM
process • Approved the audit fees for the FY23 external audit
• Reviewed feedback from the JSE proactive monitoring panel and included additional disclosure where relevant
• Received confirmation from EY as to their internal governance processes that are in place to ensure independence
• Reviewed and confirmed compliance with the JSE regulations relating to the financial sign-off by the CEO and CFO on
and effectiveness
the internal financial framework
• Requested and reviewed the information as per paragraph 22.15(h) of the JSE Limited Listings Requirements from
EY when assessing their suitability for their appointment for FY23
Outcome Reviewed and recommended to the Board for approval the Annual Financial Statements, interim results and preliminary • Met with management, independently of the external auditor, to discuss issues relevant to the audit and for
results announcements and ensured all reports complied with IFRS, the Companies Act, the JSE Listings Requirements and purposes of evaluating the quality and effectiveness of the external audit function
King IV. The Integrated Annual Report and related suite of governance documents are separately reviewed and approved in • Reviewed the independence of EY in accordance with the provisions of sections 90 and 94 of the Companies Act
June of each year. and assessed the performance and accreditation of EY and Tina Rookledge in terms of the JSE Limited Listings
Requirements, applicable regulations and legislation, and the appropriate audit quality indicators, and concluded that
it is satisfied with the external auditor’s independence, JSE accreditation, and performance
Internal audit
The Committee provides independent oversight and objective assessment of the effectiveness of the Group’s internal Reporting • Engaged directly with the Group and subsidiary designated audit partners and acted as a liaison between the
audit function. matters external auditor and the Board
• Dealt with questions arising from audit activities and reviewed EY’s findings and recommendations, and confirmed
The internal audit function follows a risk-based methodology to identify material business risks, which informs the internal audit plan as part of that there were no material unresolved matters at the date that the Annual Financial Statements were approved
the Group’s annual combined assurance programme. The internal audit function is independent of business operations and provides assurance • Evaluated the performance and reviewed the reports of the external auditors and ensured that the reporting was
on the adequacy and effectiveness of internal controls. reliable, transparent and a fair representation for the use by stakeholders
• Received and appropriately dealt with any queries relating to the accounting practices of the Group, the content of
Key areas of activity during the year its financial statements and the internal financial controls of the Group or to any related matter
• Made submissions to the Board on matters concerning the Group’s accounting policies, financial controls, records
Internal • Reviewed and approved the internal audit coverage plan and reporting
audit • Considered and appointed the new Group Head of Internal Audit and confirmed appropriate expertise and experience for • Confirmed that no reportable irregularities were identified and reported by the external auditor in terms of the
function the role Auditing Profession Act, 26 of 2005
• Evaluated and confirmed the composition, experience, skill and independence of the internal audit function • Met separately with the external auditor to confirm that full co-operation was received by them from management
• Met with the Group Head of Internal Audit independently of management to confirm that they had received the full • Monitored the effectiveness of the external auditor in terms of their audit quality, expertise and independence, as
co-operation of management well as the content and execution of the audit plan
• Assessed the adequacy of the performance of the internal audit function and found it to be effective
• Received confirmation that internal audit members conform to the recognised industry code of ethics and that the Outcome The Committee has concluded that it is satisfied with the level of service rendered by EY during FY23 and is
internal audit function had conformed to the key principles of the International Institute of Internal Auditors standards satisfied with EY’s independence and JSE accreditation. The Group will table a resolution at the 2023 AGM to be held on
for professional practice of internal auditing 19 July 2023 to re-appoint EY as the external auditor for the 2024 financial year.

Risk management Combined assurance Key focus areas for FY24

The Committee provides independent oversight and objective assessment of the effectiveness of the Group’s risk assurance The Committee closely monitored the relationship between external
function, focusing on material existing and emerging risks which could negatively impact on the Group’s ability to create and and internal assurance providers and the Group. It ensured that
The Committee has set the following key areas of focus
protect stakeholder value. the Group’s combined assurance model adequately addressed the
and monitoring:
Group’s significant risks.
The Group’s risk assurance function is designed to ensure that the Group has adequate processes in place to identify, monitor and manage all • Financial and operating performance in line with the Ekuseni
The Committee was satisfied that the Group’s combined assurance strategy objectives
significant business and financial risk areas. The function takes overall responsibility for ensuring that the Group’s information and accounting
model had been effective in achieving transparent and accurate
systems are adequate, secure, well-controlled and continue to function effectively. The Group Risk function takes overall accountability for the • Project Future cost savings initiatives, including the effective
Group’s compliance with all relevant laws, regulations and codes of conduct. financial reporting, sound risk management and mitigation, and an
effective level of residual risk. implementation of the Group’s Office of the Future programme
The Chief Finance Officer serves as the Chief Risk Officer for the Group and, along with the Group Head of Risk and Compliance, attends all • Optimal capital allocation to ensure the prioritisation of
Committee meetings by invitation. The day-to-day responsibility for identifying, evaluating and managing risk remains the responsibility of senior investment returns
management, who are supported by the risk assurance function, under the Group Head of Risk. King IV • Optimal capital allocation to advance energy resilience and
The combined assurance plan serves as the source for the Group’s top-down risk management programme. These risks are typically strategic and The Group applies the principles of King IV, details of which will be ensure the prioritisation of mitigation plans to minimise the
operational, and are quantified by the finance function, where relevant. reported in the 2023 Integrated Annual Report, which is expected to impact of load-shedding and disrupted water supply
be published on or about 15 June 2023. • A balanced short-term and long-term debt portfolio to support
Key areas of activity during the year growth, maintain a strong balance sheet, actively manage
Risk • Assisted management in identifying risk areas, including emerging risks, and evaluated the mitigation management had put Significant matters increased funding costs and achieve targeted gearing levels
• Increased focus on emerging and accelerated risks, including
management in place to minimise the impact on the Group The Committee considered the key audit matters reported in
processes • Discharged all Risk and Compliance Committee responsibilities of all the Group’s subsidiary companies significant operational risk on the transition from the
the external audit report on page 6 and, after discussions with Longmeadow distribution centre to the Eastport distribution
• Together with Group Head of Risk, internal and external auditors and management, reviewed the findings of the Financial management and the external auditors, is satisfied that the
Review Committees of the Group’s material operating divisions centre in Gauteng, increased cyber risk driven by the growth
Consolidated Annual Financial Statements appropriately address
• Reviewed internal audit findings from a risk perspective in online sales, and the potential for civil and labour unrest as a
the critical judgements and key estimates pertaining to the key
• Reviewed the risk assurance report and findings and the corrective or mitigative action taken result of challenging socio-economic conditions in South Africa
audit matters.
• Further progress in integrated reporting, including in ESG
Specific • Considered and appointed the new Group Head of Risk and Compliance and confirmed the appropriate expertise and Other significant matters of focus included considering that the
focus areas experience for the role disclosures
below items were appropriately dealt with in the Consolidated
• Evaluated and confirmed the composition, experience, skill and independence of the risk function
Annual Financial Statements:
• The material financial and operational impact of load-shedding on the business, including the related impact on water
•
supply, and the mitigation plans put in place to minimise the impact
The security of supply chain and store operations, including plans to protect the safety of customers and employees and
• Consideration of the pro forma financial information provided Committee evaluation and re-election
in respect of insurance proceeds received in March 2022
the security of assets during civil unrest related to the civil unrest of July 2021 The Committee’s performance and effectiveness are assessed
• The maintenance of food safety and occupational health and safety policies on an annual basis by the Board, assisted by the Nominations and
• The Group’s insurance covers, including considering ongoing challenges experienced in renewing business interruption • Accounting treatment of the Group’s investment in its
Corporate Governance Committee. The Board’s assessment was
covers post the July 2021 unrest and the impact of higher insurance premiums on the cost of doing business associate, TM Supermarkets (Pvt) Ltd, in a hyperinflationary
positive, with no concerns raised, and the Board remains satisfied
• Employee welfare, talent retention and the potential for labour disruption in a period of high inflation and low economic growth economy
that the Committee has performed its duties effectively and that
• The effectiveness of the franchise model, the security of franchise contributions to the Group and the recoverability of • Expanded division turnover information Committee members have the necessary skills and experience to
franchise debt
• Classification of assets held for sale discharge their duties effectively.
• The social, political and economic events in South Africa and other countries in Africa in which the Group is operating, or in
which the Group is considering operating • Consideration of the accounting treatment of material Committee members will be put to shareholders for formal election at
elements of the Group’s Eastport transaction, including the 2023 AGM to be held on 19 July 2023.
Outcome The Committee has concluded that it is satisfied with the effectiveness of the Group’s risk management function in recognition of the long-term lease of the distribution centre
identifying, evaluating and mitigating issues which may have a material impact on the Group’s ability to protect and
create sustainable stakeholder value.
Annual Financial Statements Appreciation
I extend sincere thanks to Jeff van Rooyen, who will retire from
The Annual Financial Statements for the financial year ended
the Board at the 2023 AGM. Jeff has served on the Board for
26 February 2023 were compiled under the supervision of the Chief
Policy on non-audit services Legal requirements Finance Officer, Lerena Olivier CA (SA).
16 years, with 15 years as Chair of this Committee. Jeff’s rich history
in private practice, including his leadership of the Financial Services
All non-audit services provided by the Group’s external auditor are The Committee complied with all applicable legal, regulatory and other Following its review of the consolidated Group and separate Board alongside his broad experience with a number of large South
required to be pre-approved by the Committee. EY did not provide responsibilities for the 2023 financial year. Company Annual Financial Statements for the financial year ended African listed companies, has proved invaluable to the Committee.
non-audit services during FY23. All non-audit services undertaken 26 February 2023, the Committee is of the opinion that, in all I am grateful to Jeff for his valuable guidance and wise counsel over
during the 2022 financial period were approved in accordance with
this policy. Internal financial controls material respects, the financial statements comply with IFRS and the
Companies Act and that they fairly present the financial position of
the years, and particularly for his support and guidance when handing
over the role of Chair.
The nature and extent of non-audit services provided by the external The Committee examined the effectiveness of internal financial the Group and Company for the 2023 financial year and the results
controls to assess if there were any significant weaknesses in the The more difficult macro-economic environment has made for a
auditor are reviewed to ensure that the fees for such services do not of the operations and cash flows for the year then ended. The
design, implementation or execution of internal financial controls that challenging year, and the elevated levels of load-shedding in particular
become so significant as to call into question their independence. Committee recommended them for approval to the Board on
In FY22, EY received R24 500 relating to agreed-upon non-audit could result in material financial loss, fraud, corruption or error. have had a significant impact on the 2023 financial results. I extend
3 May 2023.
procedures (0.2% of the audit fee). thanks to EY, the internal audit and risk management teams, and
No material matter has come to the attention of the Committee or The Committee reviewed and considered representations by the executive management team for their regular, constructive and
the Board that has caused the directors to believe that the Group’s management on the going concern statement for the Group and transparent engagement under trying circumstances.
Expertise and experience of Chief Finance system of internal controls and risk management is not effective and
that the internal financial controls do not form a sound basis for the
recommended the adoption of the going concern concept to the
The Committee is satisfied that it complied with, and discharged, all
Officer and the finance function preparation of reliable financial statements. The Committee concluded
Board. The 2023 Integrated Annual Report will be published in addition
to these Annual Financial Statements.
statutory duties in terms of section 94(7) of the Companies Act and
that the design of internal financial controls is effective but will the JSE Limited Listings Requirements, as well as with the functions
The Committee, together with the lead external audit partner,
continue to be watchful. and responsibilities assigned to it by the Board under its terms of
considered the composition, experience, resources and skills of the
Group finance function. The Committee is satisfied that Lerena Olivier reference and Committee mandate, for FY23.
has the appropriate expertise and experience for her position. In
addition, the Committee is satisfied that the composition, experience Aboubakar Jakoet
and skills of the finance function meet the Group’s requirements. Chair: Audit, Risk and Compliance Committee
3 May 2023

REVIEW OF OPERATIONS
Customer response to the CVP converted stores has been positive, from Longmeadow near completion. We expect Eastport’s
with weekly sales growth from converted stores significantly higher larger capacity, improved layout, and enhanced systems to
than sales in the remainder of the Pick n Pay estate. The refurbished drive further supply chain efficiencies. However, we anticipate
stores have achieved a post-conversion sales uplift of >10%, well approximately R120 million of duplicated costs in H1 FY24 due
ahead of the 4.3% Pick n Pay South Africa growth. to the double-up on costs during the handover process.
Driving Ekuseni through unprecedented load shedding Boxer’s accelerated store roll-out puts it on track to achieve • Better buying and collaboration with suppliers, as they
52 weeks to 52 weeks to Ekuseni expansion targets demonstrate support for the Ekuseni strategy and its ability to
26 February 2023 27 February 2022 % deliver greater value for customers.
Boxer reported FY23 sales of R32.0 billion. Excluding its 9 eSwatini
KEY FINANCIAL INDICATORS FY23 FY22 change stores, Boxer reported South Africa sales of R31.3 billion (30.5% of • Multi-skilling agreement signed, allowing Pick n Pay
the Group’s South Africa sales) up 20.2% (7.3% like-for-like), driven Supermarkets, for the first time, to schedule employees for
Group turnover R106.6 billion R97.9 billion 8.9
by the store roll-out programme and its great value customer offer. more than one task within a single shift. Pick n Pay began to
Gross profit margin 19.6% 18.8%
Boxer SA’s sales growth slowed from 27.2% in H1 FY23 to 14.4% in H2 implement multi-skilling in H2 FY23, and we anticipate the
Trading expenses R20.2 billion R18.0 billion 11.9 customer service and efficiency benefits to come through
as it lapped a stronger base caused by the impact of the July 2021
Trading profit R3 048.0 million R2 886.5 million 5.6 civil unrest on Boxer’s promotional campaign timing in the base year. from FY24.
Pro forma trading profit1 R2 902.8 million R3 031.7 million (4.3) • Announcing the consolidation of the Cape Town and
Boxer opened 60 new stores in FY23, well ahead of the 36 new stores
Pro forma trading profit margin 2.7% 3.1% Johannesburg support offices by December 2023.
opened in FY22. The new stores took Boxer’s total store estate to
Profit before tax and capital items R1 800.2 million R1 807.7 million (0.4) 428, delivering space growth of 14.4%. At the current roll-out rate, In March 2023, post our financial year-end, Pick n Pay commenced
Pro forma profit before tax1 R1 678.4 million R1 978.0 million (15.1) Boxer is well on its way to achieving the Ekuseni goal of opening two new Project Future staffing initiatives which both impact the entire
Pro forma profit before tax – South Africa1 R1 524.1 million R1 859.0 million (18.0) 200 new Boxer stores between FY22 and FY26 and doubling sales Group (excluding Boxer):
Profit after tax R1 169.9 million R1 214.5 million (3.7) in the process.
• A voluntary severance programme (VSP), aimed at delivering
Headline earnings per share (HEPS) 259.25 cents 262.59 cents (1.3) Driving an Online sales step-change via the Mr D launch targeted benchmarks in terms of support office and store-level
Pro forma HEPS1 242.37 cents 289.64 cents (16.3) Online sales growth for the year was accelerated by the launch of efficiency gains.
Total dividend per share 185.15 cents 221.15 cents (16.3) Pick n Pay’s food and grocery offer on the Takealot Group’s Mr D app. • A modernisation of Pick n Pay Junior Store Management
This offer grew from a limited number of stores in early October to structures, to reflect changing customer and operational needs,
1
FY23 pro forma trading profit, profit before tax (PBT) and pro forma headline earnings per share (HEPS) exclude R145.2m (R104.5m net of tax) business interruption
insurance proceeds received and accounted for in FY23, but previously included in FY22 pro forma earnings as it relates to losses incurred during FY22. In line with a nationwide offer by the end of the year. The offer benefits from increase efficiency, and deliver better customer service. It is
normal Group practice, pro forma earnings also exclude all non-cash hyperinflation gains and losses related to the Group’s TM business in Zimbabwe. Pro forma HEPS a synergistic combination of Pick n Pay’s extensive store network, anticipated that some roles are likely to be lost through an S189
is the Group’s dividend driver. stock-management system, fresh product offering, and in-store retrenchment process. However, the business is also creating a
picking experience, and Mr D’s strengths in user-interface design, broadly equivalent number of new roles at a more junior level.
Results summary • Maintaining a flat underlying gross profit margin in a highly
competitive market, despite higher diesel prices impacting
a 2.5 million active customer base, and a delivery fleet of 15 000
scooters. Taken together with strong growth in sales from the highly The Group will be in a position to comment on the financial impact of
The Group delivered a resilient performance in a heavily disrupted logistics costs popular Pick n Pay asap! offer, the Group achieved on-demand online these initiatives once they are both complete.
first year of its Ekuseni strategic plan. In addition to executing on the • Reaching a multi-skilling agreement with our largest union, sales growth for the year well in excess of 100%.
plan, the Group had to contend with the impacts of unprecedented
levels of load shedding. Despite spending an incremental R522 million
SACCAWU, and commencing implementation across the Pick n Pay The Group achieved total online sales growth for the year of 72.0%, Pick n Pay’s response to unprecedented
store base to improve customer service and productivity
on diesel to run generators (R430 million net of electricity savings),
• R800 million Project Future savings, enabling Pick n Pay South
including its scheduled delivery service. The Group is working on
improvements to its scheduled delivery service, to provide customers
load shedding
and incurring planned costs in implementing the Ekuseni plan,
Africa to restrict like-for-like cost growth to just 5.6%, despite with wider choice and greater flexibility on delivery. The ongoing crisis in national electricity generation is having a
the Group managed to hold year-on-year trading expense growth
the significant load shedding related expenditure incurred profound impact on the Group and the country as a whole. All
to just 11.9%, as a result of gains from Project Future cost-saving Pick n Pay Clothing store roll-out rate doubles, with strong
Pick n Pay and Boxer stores have backup power and are operational
initiatives. profit growth
Group turnover increased by 8.9%, driven primarily by Boxer SA
Ekuseni strategic plan execution Pick n Pay Clothing is a casualwear-focused, value-oriented clothing
throughout load shedding. However, load shedding results in
customer disruption, supply chain and procurement challenges,
(+20.2%), while underlying gross profit margin remained flat at 19.6% Successful Pick n Pay QualiSave launch gives the Group a format targeting family shoppers. While womenswear has traditionally significant diesel expenditure costs to run generators, extra repairs
(excluding the impact of the July 2021 civil unrest on the FY22 gross portfolio of 3 tailored grocery banners underpinned the format’s success, Pick n Pay Clothing is also gaining and maintenance on generators running ahead of normal demands,
profit margin). Group pro forma profit before tax of R1 678.4 million solid traction in childrenswear and menswear. During FY23 Pick n Pay
The QualiSave banner was launched on 15 August, and 118 stores and product spoilage in instances when generators break down and
Clothing gained market share across all market segments.1 Locally
declined 15.1% year-on-year. If one were to exclude the R430 million were converted to QualiSave by February 2023. QualiSave gives cannot be immediately replaced.
sourced product accounts for 45% of sales, double the volume since
net incremental energy costs, underlying PBT would have been an the Group a highly competitive low-price, great quality 8 000 SKU the start of a localisation strategy in 2019. Diesel cost to run generators is the most significant challenge.
estimated R2.1 billion, up 7% year-on-year. format tailored to lower-to-middle income customers. QualiSave sales
The Group spent an incremental R522 million on diesel costs to run
growth has outpaced Pick n Pay sales growth since launch. Pick n Pay Clothing opened 58 new stores in FY23, over twice
Highlights from the year include: the 27 new store openings achieved in FY22. The new store roll- generators in FY23, resulting in net incremental energy costs of
Pick n Pay, our banner targeting middle-to-upper-income customers out resulted in an FY23 stand-alone Pick n Pay Clothing estate of R430 million, after taking R92 million of associated electricity savings
• 17 May launch of the Ekuseni strategic plan into account. The Group is working exceptionally hard to mitigate as
is being revamped to ensure its customers get best quality at great 333 stores (adding 16.8% space growth), consisting of 311 corporate
• 15 August launch of Pick n Pay QualiSave, serving lower-to- value, a wide range of up to 18 000 products, and an improved in- stores and 22 franchise stores. much as possible of the additional cost pressure. The key elements of
middle-income customers, providing the Group with three tailored store experience. The Group’s portfolio of three supermarket the Group’s plan to reduce in-store diesel costs are:
banners of Pick n Pay, QualiSave, and Boxer banners (Pick n Pay, QualiSave, and Boxer), each optimised to meet Pick n Pay Clothing grew FY23 SA sales in stand-alone stores by
15.3% (5.6% like-for-like), and reported net profit growth of 11.6%. • Operating expenditure initiatives. Energy usage reduction has
• Rebranding 118 supermarkets to QualiSave their individual target customer needs, allows the Group to compete
Clothing sales growth was driven by ramped-up new store roll-out multiple workstreams including further investment in energy-
• Fully revamping 131 Pick n Pay and QualiSave stores to the effectively across the full customer spectrum, which is particularly
(new stores are performing in line with budget) and positive like-for- efficient LED lighting, installation of automated controls to switch
new customer value propositions (CVPs) via an accelerated important in the diverse South African market.
like sales growth. off certain equipment during load shedding, reconsideration of
refurbishment programme to differentiate the banners and 131 stores fully upgraded to new CVP via accelerated store the optimal refrigeration footprint, improved production planning
improve the customer experience Project Future Phase 2 e.g. minimising the use of bakery ovens during load shedding, and
refurbishment
Project Future Phase 2 encompasses a range of projects focused reviewing stores with above-average diesel usage.
• Market-leading SA sales growth of 20.2% from Boxer, with Following the completion of the first CVP upgrade in mid-May, the on improving efficiency, increasing flexibility, and reducing costs by
60 new stores opened in FY23 vs. 36 in FY22 Group fully upgraded 41 stores by the end of H1, and fully upgraded • Maximising usage of landlord supplied solar. Negotiations with
R3 billion between FY23 and FY25. R800 million of Project Future
• 15.3% sales growth from stand-alone Pick n Pay Clothing stores, 131 stores by the end of February 2023 (almost 40% of Pick n Pay landlords are ongoing in support of maximising landlord solar
savings were achieved in FY23, captured in both gross profit margin
with 58 new stores opened in FY23, more than double the South Africa’s company-owned grocery estate). The CVP upgrades installation and the purchase of renewable electricity from
and trading expenses. Key achievements over the period include:
number of new stores opened in FY22 are the core element of an accelerated refurbishment programme landlords.
for the Pick n Pay and QualiSave banners, bringing the stores in line • Greater efficiency in the Group’s supply chain operations • Installing in-store battery energy storage solutions to operate
• Online sales growth of 72%, with on-demand sales growth well
with the new CVPs. The refurbishments entail a realignment of store through a more optimised transport network, and greater labour supermarkets sustainably through load shedding. The Group
over 100%, driven by both asap! and the October launch of
layout to implement the optimised product counts and emphasise productivity in Distribution Centres (DCs). The new Eastport is in the process of trialling such solutions in a number of
Pick n Pay groceries on Takealot’s Mr D app
each banner’s power categories, as well as upgraded energy-efficient DC in Gauteng opened in March 2023, with the transition supermarkets and will critically assess the return on investment
fixtures and fittings to provide the banners with fresh new looks. on these initiatives.
1
According to RLC (Retailers’ Liaison Committee) data.

• Making the case to government for diesel tax rebates. The Group
feels it is unconscionable to pay significant tax, including the
Detailed review of financial and operational liquor restrictions on franchise sales in the base period, offset by
the conversion of a number of franchise stores to company-owned
Funding interest – The Group’s net funding cost (net of trade receivables
interest) increased from R21.4 million to R171.1 million, reflecting
Road Accident Fund levy, on diesel used to power generators to performance Pick n Pay and Boxer stores over the year. Strong franchise partners increased net gearing (driven by increased capital investment) and
keep grocery stores open. are a key growth driver for the Group, with 35 new franchise stores higher interest rates over the period (325 basis point repo rate rise
Turnover opened over the period. between February 2022 and February 2023).
The Group is targeting FY24 diesel cost savings of at least R200 million,
driven by the above-mentioned initiatives. The envisaged savings will Group sales growth for the year was 8.9%, with like-for-like sales
Commissions and other income – this broad category includes income Lease interest – implied net interest charges under IFRS 16 increased
be heavily oriented towards H2 FY24, as the various initiatives gain growth of 4.8%. Internal selling price inflation for the period was 8.5%,
from value-added services and all other commission and incentive 2% year-on-year to R1.2 billion, reflecting supply chain savings under
traction. FY24 diesel cost expenditure will ultimately be driven by well below Statistics SA Food CPI of 10.4% for the 12 months.
income not directly related to the sale of inventory. Commissions Project Future, specifically related to a strategic change in contracted
the levels of load shedding experienced, which brings a high level of The Group’s South Africa Segment (96.4% of Group sales) grew sales and other income, excluding insurance recoveries, increased 15.4% logistics services. Combined net lease interest and depreciation
uncertainty to the outlook. 8.7% to R102.7 billion, with like-for-like sales growth of 4.5%. South year-on-year to R1.4 billion. Value-added services, which includes of right-of-use assets (the effective lease expense under IFRS16)
With respect to capital investment, the Group is prioritising energy African sales growth was driven by Boxer, with South African sales Financial Services and Mobile, grew 19.8%. Financial services has increased 6.1% to R3.3bn, driven by new store roll-out.
cost mitigations in FY24 that do not require investment (i.e. reducing growth of 20.2% to R31.3 billion. Pick n Pay South Africa (Pick n Pay shown strong growth, driven by banking services in stores and
and QualiSave banners combined) grew sales 4.3% to R71.4 billion. domestic money transfers. Our newly launched SmartSave Funeral Rest of Africa segment
the energy load in stores during load shedding), or which are limited
in cost, yet have a proven record of quick and sustainable returns, Insurance has seen encouraging adoption, and we also have a wider The Group’s Rest of Africa segment contributed R5.1 billion of
e.g. LED lighting. This should enable the Group to continue to focus range of finance solutions powered by RCS (PnP Store Cards) and segmental sales, up 14.6% year-on-year, and up 7.8% in constant
its capital investment towards Ekuseni growth targets. However, the Tyme Bank (More Tyme) which has increased our capability to assist currency terms. The Rest of Africa segment delivered pro forma
Group is assessing the potential for a large battery energy solution, with consumer affordability and financial inclusion. Digital and media profit before tax of R154.3 million (before the application of
including various funding mechanisms to limit the call on capital income increased by 10.1% year-on-year. hyperinflation accounting) up 29.7% on the R119.0 million achieved
expenditure. in FY22. The underlying PBT growth from the Rest of Africa division
Trading expenses was driven by an improved performance from consolidated Rest of
FY23 FY22 % Like-for-like Trading expenses increased 11.9% year-on-year (7.9% like-for-like) to Africa operations, with Zimbabwe earnings (excluding net monetary
Rm Rm change % change R20.2 billion. FY23 trading expenses included cost pressures from a adjustments) broadly flat.
range of costs related to the higher levels of load shedding experienced
Pick n Pay SA sales 71 372.2 68 450.4 4.3 3.5 The performance of the Group’s key African operations is summarised
in FY23, and particularly H2 FY23. The greatest consequence of these
Boxer SA sales 31 349.1 26 084.8 20.2 7.3 as follows:
was the R430 million net incremental energy costs to power our
SA total sales 102 721.3 94 535.2 8.7 4.5 stores through generators (c. 80% of this spent in H2). FY23 trading • Franchise operations: Our 80 Pick n Pay franchise stores in
expense growth excluding net incremental energy costs was a more Namibia, eSwatini, Botswana and Lesotho continue to trade well,
Rest of Africa sales (inc. DSDs*) 5 086.5 4 438.8 14.6
moderate 9.5%, showing tight cost control in the context of broad notwithstanding challenging macro-economic conditions.
Total segment turnover 107 807.8 98 974.0 8.9 inflationary pressures (particularly on rates and utility costs), the Boxer
• Zambia corporate stores: Our 23 Pick n Pay corporate stores
Elimination of RoA DSDs (1 246.0) (1 101.2) 13.1 and Pick n Pay Clothing store roll-outs, and sharply higher insurance
delivered a much-improved FY23 result. Management continues
costs (a consequence of the July 2021 civil unrest). The Group’s well-
Group turnover 106 561.8 97 872.8 8.9 4.8 to implement and maintain robust operational standards to
controlled underlying trading expense growth was largely driven by
* DSDs included in Rest of Africa sales are in-country direct-to-store deliveries by Group suppliers to certain foreign franchisees that are not included in Group turnover enhance the customer value proposition.
containing employee costs, our largest single cost line.
as per IFRS requirements.
• TM Supermarkets, Zimbabwe: The 72 stores of our 49%
Trading expenses grew 13.1% in H2, after increasing by 10.6% in H1,
associate-accounted investment delivered another resilient
Boxer consolidates its position as SA’s leading Group liquor sales grew 20.4% for FY23 vs. 36.2% in H1 FY23 as driven by the greater impact of the Group’s store roll-out in the second
performance in a difficult economic environment. The Group’s
the base effects of Covid-19 liquor trading restrictions normalised.
soft-discounter half, and the higher levels of load shedding experienced during H2.
share of TM’s earnings, before any hyperinflation net monetary
The Group lost 66 days of liquor trading in the base period (FY22), of FY23 trading expenses include R111 million in restructuring costs
Boxer’s market-leading 20.2% South Africa sales growth was driven which 55 were in H1 FY22 and 11 in H2 FY22. adjustments, increased 1.8% year-on-year to R98.4 million.
(R83.7 million in H1), arising from the reorganisation of the Pick n Pay
by an aggressive ramp-up in space roll-out combined with robust Sharp local currency devaluation during the year meant
estate into two banners, the rebranding of QualiSave, some technical
7.3% like-for-like sales growth. Extraordinarily strong 27.2% H1 Gross profit advisory services, and limited retrenchment costs.
that hyperinflation and local currency translation into Rands
sales growth moderated to a strong 14.4% in H2, with the slowdown negatively impacted the result. The Group received a R16.0 million
Gross profit rose 13.8% to R20.9 billion, with reported gross profit margin
driven by an H2 like-for-like sales moderation. The strong H1 like-for- Employee costs – increased 6.5% to R8.3 billion over the period (2.9% dividend from TM in this period (R20.1 million in FY22).
increasing to 19.6% from 18.8%. The FY22 gross margin was negatively
like sales performance was driven by a disrupted base (Boxer was like-for-like). Growth in our largest expense line, employee cost, was
relatively highly impacted by the July 2021 civil unrest due to its skew
impacted by the July 2021 civil unrest. If the impact of civil unrest is
well contained despite the aggressive Boxer and Clothing store roll-out, Profit before tax – before hyperinflation and capital
stripped out of the FY22 base, the underlying FY22 gross profit margin
towards KwaZulu-Natal). The H2 like-for-like sales slowdown was also reflecting exceptionally tight employee cost control in Pick n Pay South items (Pro forma PBT)
was 19.6%, indicating that the Group’s underlying FY23 gross profit
driven by base effects: Boxer had a relatively strong H2 FY22 as Africa as this entity strives to hit targeted efficiency benchmarks. The Group’s pro forma PBT declined 15.1% year-on-year to
margin was flat year-on-year.
sales promotions which typically happen in the first half were delayed R1 678.4 million. Group pro forma PBT growth was driven by a 18.0%
Occupancy costs – increased 14.7% (8.2% like-for-like) to R3.1 billion.
to the second half of the year as a result of the civil unrest. The Group regards the flat underlying gross margin performance as decrease in South African pro forma PBT to R1 524.1 million, together
Occupancy cost growth was driven by both the accelerated Boxer and
a solid performance in the context of higher fuel prices impacting with 29.7% growth in Rest of Africa pro forma PBT to R154.3 million.
Pick n Pay and Pick n Pay QualiSave focus on clothing store roll-outs and above-inflation increases in rates, security
logistics costs and an intensely competitive market. The stable
and insurance costs. Elevated occupancy cost growth is directly FY23 FY22 %
like-for-like sales margin was the net impact of the Group re-investing gains from
attributable to the July 2021 riots, which have resulted in additional
better buying, logistics efficiencies and strategic inventory buy-ins Rm Rm change
The Pick n Pay and QualiSave banners grew sales 4.3% (like-for- security costs, and insurance premiums accelerating by 86%.
into price investment to support under-pressure consumers. While Profit before tax and
like sales of 3.5%). The Ekuseni strategy is prioritising driving like-
the Group is doing its utmost to offset increased load shedding costs, Operations costs – increased 18.7% (13.0% like-for-like) to R5.4 billion, capital items (PBT) 1 800.2 1 807.7 (0.4)
for-like sales growth ahead of new space for the large Pick n Pay
it believes that it is inevitable that consumers will have to, over time, driven by utilities costs more than doubling (increased fuel consumption Non-cash hyperinflation net
store footprint. The 3.5% like-for-like sales growth was impacted by
absorb some of these additional costs. to drive store generators and a higher fuel price) and higher electricity monetary loss 23.4 25.1 (6.8)
disruption from the 131 full CVP upgrades completed during the period.
costs (due to tariff hikes, and despite the forced savings from Insurance recoveries
Sales growth slowed in H2 as the pace of CVP upgrades accelerated Other income load shedding). re-allocated (145.2) 145.2
(90 CVP upgrades completed in H2 vs. 41 in H1) and as the base
hardened (H1 FY22 sales negatively impacted by the July 2021 civil Other income declined 9.6% to R2.3 billion, primarily driven by Pro forma PBT 1 678.4 1 978.0 (15.1)
Merchandising and administration costs – increased 13.0% year-on- 1
unrest and Covid-19 liquor trading restrictions). Notwithstanding the insurance recoveries of R748.2 million from the July 2021 civil
year to R3.4 billion as the Group increased advertising spend in support South Africa 1 524.1 1 859.0 (18.0)
trade disruption caused, the Group is pleased with the early results unrest included in the FY22 base. In addition to this, R145.2 million
of the drive to rejuvenate sales growth. Rest of Africa 154.3 119.0 29.7
from the upgraded stores, which are on aggregate delivering sales of insurance recoveries were received and accounted for in FY23
(but included in FY22 pro forma earnings and reciprocally excluded
1
Pro forma PBT excludes Zimbabwe net monetary adjustments, and in FY23
growth well ahead of the rest of the estate. Net interest exclude R145.2m (R104.5m net of tax) of business interruption insurance
from FY23 pro forma earnings). Underlying other income, excluding proceeds received and accounted for in this period, but relating to FY22.
Pick n Pay owned and franchised South African food and grocery all insurance recoveries from both periods, grew 14.1% year-on-year, Net interest paid, including implied interest charges under IFRS 16,
stores (excl. Clothing and Liquor) had 27 new store openings during from R1.8 billion to R2.0 billion. increased 15% year-on-year to R1.3 billion.
FY23, and a net decline of four stores, to total 766. Including Liquor
and Clothing, Pick n Pay South Africa opened 48 net new stores to a Franchise fee income – the Group’s royalty fee income, earned on
total of 1 599 stores at the end of FY23, including 621 liquor stores franchise point of sale turnover, increased 4.5% to R447.7 million.
and 330 clothing stores. This growth reflected the negative impacts of the civil unrest and

Tax While the majority of the inventory growth is attributable to specific

factors funded by trade payables, the Group is targeting an improved
Summary and outlook optimising our cost base. The Group will continue to drive its capital
investment programme while carefully balancing investment against
The Group’s effective tax rate of 31.5% (31.1% in FY22) reflects FY24 inventory performance. The anticipated inventory benefit of FY23 was an intensive period for the Group as it launched and began gearing levels. Unprecedently high levels of load shedding, particularly
improved but still relatively low levels of profitability in operations the ongoing Pick n Pay and QualiSave range optimisation has begun diesel costs to keep stores open, add to the operational challenge.
execution of its Ekuseni strategic plan, and simultaneously dealt with
outside of South Africa. The Group expects its tax rate to remain to deliver results, and we expect this to have an increasingly positive The Group is working intensively to reduce monthly diesel costs,
unprecedently high levels of load shedding during the second half.
above South Africa’s statutory tax rate of 28.0% (27.0% from FY24 impact on Group inventory as the range optimisation is completed but the results will ultimately depend on the levels of load shedding
The results achieved in year one of the multi-year plan have been
onwards) for the foreseeable future. in FY24. experienced.
encouraging, particularly in respect of our growth engines, Boxer,
Earnings per share Trade and other receivables omnichannel, and Pick n Pay Clothing. Extensive progress has been The Group will incur FY24 restructuring charges related to the VSP
Trade and other receivables (current and non-current) increased made within our core Pick n Pay supermarkets business, including and Junior Store Management processes, after which associated
Pro forma headline earnings per share (pro forma HEPS) – excludes the
5.6% to R4.6 billion. Net franchise debt increased 4.4% to R3.8 billion. the successful launch of QualiSave, and the full revamp of 131 efficiency gains will contribute from H2 FY24. The FY24 earnings
Group’s share of non-cash hyperinflation accounting remeasurements
The Group raised the provision on franchise debt from 3.7% at supermarkets to their new CVPs via the accelerated refurbishment outlook will largely be driven by load shedding diesel costs and
in TM Supermarkets, and also excludes R145.2 million (R104.5 million
net of tax) business interruption insurance proceeds received and February 2022 to 4.9% at February 2023, given the impact of the programme. While the results are not yet visible on the Pick n Pay top increased finance charges from higher gearing, offset by savings from
accounted for in FY23, but previously included in FY22 pro forma difficult trading environment, including load shedding costs borne by line, within this there are very encouraging signs from QualiSave and the multiple Project Future initiatives. Overall, FY24 earnings (before
HEPS. All impairment losses and other capital items are excluded from franchisees. The Group is confident in the quality of its debtors’ book the CVP converted stores. restructuring charges) may not exceed FY23 pro forma headline
the calculation of pro forma headline earnings per share. Pro forma and the prudence of its impairments. earnings, depending on the levels and frequency of load shedding
The Group has made substantial progress on Project Future Phase 2,
HEPS – the Group’s primary measure in determining its dividend pay- experienced during the year. Turnover growth for the first eight weeks
Creditors saving R800 million within FY23. The groundwork has been laid
out ratio – declined by 16.3% year-on-year to 242.37 cents per share of FY24 was broadly in line with H2 FY23 for Boxer, and slightly softer
Trade and other payables increased 13.0% year-on-year to for further efficiency gains in FY24 and FY25 via multi-skilling for Pick n Pay, where we have adjusted promotional activity to a new
reflecting the significant impact of load shedding on this result.
R14.7 billion. Increased trade payables was partly driven by a implementation, opening the new Eastport DC, preparing for the calendar, while continuing to hold prices below CPI food.
Headline earnings per share (HEPS) – declined by 1.3% to corresponding increase in inventory as detailed previously. December 2023 support office consolidation, and the VSP and Junior
259.25 cents per share and includes the Group’s share of non-cash Store Management restructurings which began in March 2023. We thank all Boxer and Pick n Pay colleagues, and our valued
hyperinflation accounting remeasurements in TM Supermarkets, as Reported payables understates the Group’s underlying payables franchise partners, for their commitment and contribution, and for
well as R145.2 million (R104.5 million net of tax) business interruption position as suppliers on the Group’s Fast Pay invoice financing platform When taking account of the net generator diesel costs that enable their dedication to customers and communities. In particular, we
insurance proceeds received in FY23. All related impairment losses are reported within net debt in terms of IFRS requirements. Including us to continue serving customers during load shedding, FY23 thank our colleagues and partners for the energy they are bringing
and other capital items are excluded from the calculation of headline this fast-growing facility (+48.7% year-on-year to R599.4 million) underlying earnings were ahead of the broadly flat guidance that we towards realising the Ekuseni goals.
earnings per share. gives total year-on-year payables growth of 14.1%. had communicated to the market earlier in the year.
Gareth Ackerman Pieter Boone
Earnings per share (EPS) – declined by 3.9% to 243.37 cents per Looking forward, the Group recognises that much work remains to be
share and includes the Group’s share of non-cash hyperinflation Capital investment done to deliver the Ekuseni plan in terms of sustaining the momentum
Chair Chief Executive Officer
remeasurements in TM Supermarkets, all items of a capital nature, The Group invested R4.0 billion in capital projects in FY23, an 87% of our growth engines, rejuvenating Pick n Pay supermarkets, and 3 May 2023
and R145.2 million (R104.5 million net of tax) business interruption
increase on the R2.1 billion invested in FY22, in line with accelerated
insurance proceeds in FY23.
investment plans under Ekuseni. FY23 capital allocation was shifted
in favour of the Group’s high ROI growth engines, with Boxer capital
Detailed review of financial position investment up 104% to R1.3 billion, and Pick n Pay Clothing capital
investment up 113% to R145 million.
Gearing
Capital investment for FY24 is expected to be in the range of R3.5 to
Group net gearing (excluding leases) rose from R0.4 billion at R4.5 billion.
February 2022, to R3.7 billion at February 2023 as the Group
increased its capital investment in accordance with Ekuseni, and as
working capital temporarily absorbed cash, driven by inventory. The Shareholder distribution
Group is nearing closure on a R5.5 billion medium- and long-term debt
The Board declared a final dividend of 140.30 cents per share. This
package to rebalance its short-term debt portfolio towards a longer-
brings the total FY23 dividend to 185.15 cents per share, down 16.3%
term maturity profile more suited to higher levels of net gearing. The
on last year in line with the decline in the Group’s pro forma headline
debt package will be unsecured and ESG linked.
earnings per share, maintaining a divided cover of 1.3x pro forma
earnings. The dividend will be paid on 5 June 2023. Please refer to
26 February 28 August 27 February
the dividend declaration included with this announcement for detailed
2023 2022 2022
information.
Rm Rm Rm
Gross debt 5 669.4 6 693.0 6 803.1
Cash and cash equivalents (1 997.8) (5 253.6) (6 425.3)
Change to dividend policy from FY24
Net gearing 3 671.6 1 439.4 377.8 Taking into account the capital investment requirements of the Ekuseni
Plan and the uncertainties brought about by the unprecedented levels
of load shedding, the Board has resolved to amend the dividend policy
Working capital from FY24. Going forward, the Group will change from its 1.3x cover
The Group absorbed R968.2 million of liquidity from working capital (76% pay-out ratio) to a range of between 1.5x (67% pay-out) and
during FY23, primarily as a result of increased inventory caused by 1.8x (56% pay-out). The new policy will contribute towards the Group
multiple factors including inflation, strategic buy-ins, and the timing having the necessary balance sheet flexibility to support the elevated
of Eastport commencing operations. capital expenditure required by the Ekuseni Plan. The cover will likely
tend towards the upper end of the range over FY24 and FY25. The
Inventory Group notes that the upper end of the cover range remains broadly in
Inventory increased 28.6% to R10.7 billion. The increased inventory line with the FY22 (fixed) covers of its retail peers.
is largely a function of high inflation, strategic inventory buy-ins,
new stores (particularly in Boxer) and the Longmeadow to Eastport
handover. The timing of the handover from Longmeadow to Eastport Changes to the Board during
coinciding with financial year-end has resulted in the Group carrying
an additional R400 million of inventory at balance sheet date, which
the period under review
the Group expects to be cleared by the end of May with the conclusion Jonathan Ackerman retired as an executive director on 31 March 2023
of the handover period and the exit of Longmeadow. Given still high and was appointed as a non-executive director from that date.
food inflation, the Group has for the moment maintained the majority
of its strategic inventory investment on a rolling basis.

PRO FORMA EARNINGS

Insurance
recoveries
received* Pro forma Pro forma#
52 weeks to 52 weeks to 52 weeks to 52 weeks to
PERFORMANCE 26 February
2023
Rm
26 February
2023
Rm
26 February
2023 % of
Rm turnover
%
change
27 February
2022 % of
Rm turnover
South Africa operating segment**
The table below presents the Group’s earnings performance on a pro forma basis.
Sales from customers 102 721.3 102 721.3 8.7 94 535.2
The financial results for the 52 weeks ended 26 February 2023 includes the cash receipt of R145.2 million (R104.5 million net of tax) of insurance Profit before tax before capital items 1 669.3 (145.2) 1 524.1 (18.0) 1 859.0
proceeds. These insurance recoveries relate directly to the losses suffered by the Group during the prior reporting period as a result of civil unrest,
and which were accounted for in the prior period pro forma earnings presented. Refer to the 2022 audited Group annual financial statements at Rest of Africa operating segment**
www.picknpayinvestor.co.za for further information. As a result, the Group has presented its earnings performance for the current period on a Sales from customers 5 086.5 5 086.5 14.6 4 438.8
pro forma basis, excluding the insurance proceeds received.
Profit before tax, before capital items and
In addition, in line with normal Group practice, the Group has excluded hyperinflation net monetary adjustments from earnings for the current before net monetary adjustments* 154.3 154.3 29.7 119.0
and prior periods under review in respect of the Group’s investment in associate attributable to IAS 29 Financial Reporting in Hyperinflationary
Earnings per share Cents Cents Cents
Economies (IAS 29).
Basic earnings per share 243.37 243.37 (3.9) 253.34
Refer to Appendix 1 for further information.
Diluted earnings per share 242.54 242.54 (3.9) 252.43
Insurance Headline earnings per share 259.25 259.25 (1.3) 262.59
recoveries Diluted headline earnings per share 258.36 258.36 (1.3) 261.65
received* Pro forma Pro forma#
Pro forma headline earnings per share* Cents Cents Cents Cents
26 February 26 February 26 February 27 February Pro forma headline earnings per share 259.25 (16.88) 242.37 (16.3) 289.64
2023 2023 2023 % of % 2022 % of Pro forma diluted headline earnings per share 258.36 (16.81) 241.55 (16.3) 288.59
Rm Rm Rm turnover change Rm turnover
* Profit before tax before capital items include non-cash hyperinflationary net monetary adjustments in respect of the Group’s investment in associate attributable to
Turnover 106 561.8 – 106 561.8 8.9 97 872.8 the requirements of IAS 29. In order to present the underlying performance of the Group on a comparable basis, the share of associate’s earnings has been separately
Cost of merchandise sold (85 625.2) – (85 625.2) (79 476.7) disclosed between components including and excluding these non-cash hyperinflation net monetary adjustments. In addition, during the current period only, the Group
has excluded insurance proceeds received which were accounted for in the pro forma earnings for the 2022 financial year. The Group has therefore presented pro
Gross profit 20 936.6 – 20 936.6 19.6 13.8 18 396.1 18.8 forma profit before tax, before capital items which exclude non-cash hyperinflation net monetary adjustments and insurance proceeds received. Refer to Appendix 1
Other income 2 265.3 (145.2) 2 120.1 2.0 (20.0) 2 650.3 2.7 for further information.
** Refer to note 28 for further information on the Group's operating segment performance.
Franchise fee income 447.7 – 447.7 0.4 4.5 428.3 0.4 #
Refer to Appendix 1 and the 2022 audited Group annual financial statements for the reconciliation of the prior period pro forma earnings information presented.
Operating lease income 157.4 – 157.4 0.2 36.2 115.6 0.1
Commissions and other income 1 399.5 – 1 399.5 1.3 15.4 1 213.0 1.3
Insurance recoveries* 260.7 (145.2) 115.5 0.1 893.4 0.9
Trading expenses (20 153.9) – (20 153.9) 18.9 11.9 (18 014.7) 18.4
Employee costs (8 347.9) – (8 347.9) 7.8 6.5 (7 836.3) 8.0
Occupancy (3 054.2) – (3 054.2) 2.9 14.7 (2 662.1) 2.7
Operations (5 384.3) – (5 384.3) 5.0 18.7 (4 535.1) 4.6
Merchandising and administration (3 367.5) – (3 367.5) 3.2 13.0 (2 981.2) 3.1
Trading profit 3 048.0 (145.2) 2 902.8 2.7 (4.3) 3 031.7 3.1

Net finance costs (1 322.8) – (1 322.8) 1.2 15.0 (1 150.4) 1.2
Net funding (171.1) – (171.1) 0.2 (21.4) –
Leases (1 151.7) – (1 151.7) 1.0 (1 129.0) 1.2
Share of associate’s earnings excluding net
monetary adjustments* 98.4 – 98.4 1.8 96.7
Profit before tax, before capital items and
before net monetary adjustments* 1 823.6 (145.2) 1 678.4 1.6 (15.1) 1 978.0 2.0
Share of associate's hyperinflation net
monetary adjustments* (23.4) – (23.4) (25.1)
Profit before tax before capital items* 1 800.2 (145.2) 1 655.0 1 952.9
Loss on capital items (92.6) – (92.6) (46.2)
(Loss)/profit on disposal of assets and
insurance recoveries on scrapping of assets (20.1) – (20.1) 241.8
Loss from impairments and scrapping of
assets (66.8) – (66.8) (273.6)
Impairment loss on investment in associate (5.7) – (5.7) (14.4)
Profit before tax 1 707.6 (145.2) 1 562.4 1.5 (18.1) 1 906.7 1.9
Tax (537.7) 40.7 (497.0) 0.5 (15.4) (587.7) 0.6
Profit for the period 1 169.9 (104.5) 1 065.4 1.0 (19.2) 1 319.0 1.3

GROUP ANNUAL
Pick n Pay Stores Limited 26 Statement of comprehensive income
Incorporated in the Republic of South Africa
Registration number: 1968/008034/06 27 Statement of financial position
FINANCIAL
ISIN: ZAE000005443
JSE share code: PIK 28 Statement of changes in equity
29 Statement of cash flows
DIVIDEND STATEMENTS
30 Notes to the annual financial statements
DECLARATION
Tax reference number: 9275/141/71/2
Number of shares in issue: 493 450 321
Notice is hereby given that the directors have declared a final gross
dividend (number 110) of 140.30000 cents per share out of income
reserves.
The dividend declared is subject to dividend withholding tax at 20%.
The tax payable is 28.06000 cents per share, resulting in shareholders
2
who are not exempt from dividends tax with a net dividend of 112.24000
cents per share.
Dividend dates
The last day of trade in order to participate in the dividend
(CUM dividend) will be Tuesday, 30 May 2023.
The shares will trade EX dividend from the commencement of business
on Wednesday, 31 May 2023 and the record date will be Friday,
2 June 2023. The dividend will be paid on Monday, 5 June 2023.
Share certificates may not be dematerialised or rematerialised
between Wednesday, 31 May 2023 and Friday, 2 June 2023, both
dates inclusive.
On behalf of the Board of directors
Penelope Gerber
Company Secretary
3 May 2023

GROUP STATEMENT OF GROUP STATEMENT OF

COMPREHENSIVE INCOME FINANCIAL POSITION
for the period ended
52 weeks to 52 weeks to As at As at
26 February 27 February 26 February 27 February
2023 2022 2023 2022
Note Rm Rm Note Rm Rm
Revenue 2 109 278.2 100 902.4 ASSETS
Non-current assets
Turnover 2 106 561.8 97 872.8
Intangible assets 9 1 424.4 987.1
Cost of merchandise sold (85 625.2) (79 476.7)
Property, plant and equipment 10 8 893.2 7 150.5
Gross profit 20 936.6 18 396.1 Right-of-use assets 11 11 195.0 9 588.9
Other income 2 265.3 2 505.1 Net investment in lease receivables 12 1 949.1 2 069.0
Franchise fee income 2 447.7 428.3 Deferred tax assets 13 734.1 822.5
Operating lease income 2 157.4 115.6 Investment in associate 14 72.4 106.0
Commissions and other income 2 1 399.5 1 213.0 Loans 15 117.8 85.9
Insurance recoveries 2 260.7 748.2 Retirement scheme assets 22 68.6 122.0
Investment in insurance cell captive 30 71.3 47.4
Trading expenses (20 153.9) (18 014.7) Operating lease assets 8.9 7.9
Employee costs 3 (8 347.9) (7 836.3) Trade and other receivables 17 84.7 106.5
Occupancy (3 054.2) (2 662.1) 24 619.5 21 093.7
Operations (5 384.3) (4 535.1)
Merchandising and administration* (3 367.5) (2 981.2) Current assets
Inventory 16 10 647.0 8 277.3
Trading profit 3 048.0 2 886.5 Trade and other receivables 17 4 472.0 4 207.6
Finance income 2 451.1 524.5 Cash and cash equivalents 18 1 997.8 6 425.3
Finance costs 3 (1 773.9) (1 674.9) Net investment in lease receivables 12 333.4 319.1
Share of associate’s earnings 14 75.0 71.6 Right-of-return assets 26 23.4 21.5
Derivative financial instruments 30 22.0 –
Profit before tax before capital items 1 800.2 1 807.7
Loss on capital items (92.6) (46.2) 17 495.6 19 250.8
(Loss)/profit on disposal of assets and insurance recoveries on scrapping of assets (20.1) 241.8 Non-current asset held for sale 10 250.0 –
Loss from impairments and scrapping of assets (66.8) (273.6) Total assets 42 365.1 40 344.5
Impairment loss on investment in associate 14 (5.7) (14.4)
EQUITY AND LIABILITIES
Profit before tax 3 1 707.6 1 761.5 Equity
Tax 6 (537.7) (547.0) Share capital 19 6.0 6.0
Treasury shares 20 (643.8) (702.1)
Profit for the period 1 169.9 1 214.5
Retained earnings 4 685.2 4 717.3
Other comprehensive income, net of tax Other reserves 20.1 (8.6)
Foreign currency translation reserve (364.7) (296.9)
Items that will not be reclassified to profit or loss (0.2) 25.4
Total equity 3 702.8 3 715.7
Remeasurement in retirement scheme assets 22 (1.6) 35.3
Non-current liabilities
Tax on items that will not be reclassified to profit or loss 13 1.4 (9.9)
Lease liabilities 25 15 133.2 13 656.5
Items that may be reclassified to profit or loss (38.1) 16.2
15 133.2 13 656.5
Foreign currency translations (67.3) 19.0
Current liabilities
Movement in cash flow hedge 29.7 (0.2)
Trade and other payables* 23 14 661.0 12 976.4
Tax on items that may be reclassified to profit or loss 13 (0.5) (2.6)
Lease liabilities 25 2 470.8 2 431.4
Total comprehensive income for the period 1 131.6 1 256.1 Deferred revenue 26 377.9 385.1
Bank overdraft and overnight borrowings 18 2 800.0 2 800.0
Earnings per share Cents Cents Borrowings 21 2 869.4 4 003.1
Basic earnings per share 7 243.37 253.34 Current tax liabilities 6 269.8 279.8
Diluted earnings per share 7 242.54 252.43 Provisions* 24 80.2 88.8
Derivative financial instruments 30 – 7.7
* Included in merchandising and administration expenses is expected credit loss allowances, related to the Group’s trade and other receivables, of R198.9 million
23 529.1 22 972.3
(2022: R89.7 million). Refer to note 17.
Total equity and liabilities 42 365.1 40 344.5
* In order to improve disclosure, the Group has separately disclosed provisions previously recorded within trade and other payables

GROUP STATEMENT OF GROUP STATEMENT OF

CHANGES IN EQUITY CASH FLOWS
for the period ended for the period ended
Foreign
52 weeks to 52 weeks to
currency
Share Treasury Retained Other translation 26 February 27 February
capital shares earnings reserves reserve Total equity 2023 2022
Note Rm Rm Rm Rm Rm Rm Note Rm Rm
At 28 February 2021 6.0 (873.4) 4 573.5 (6.6) (313.3) 3 386.2 Cash flows from operating activities
Trading profit 3 048.0 2 886.5
Total comprehensive income for the period – – 1 239.9 (0.2) 16.4 1 256.1 Adjusted for non-cash items 3 626.3 3 391.5
Profit for the period – – 1 214.5 – – 1 214.5 Depreciation of property, plant and equipment 10 1 320.5 1 216.0
Foreign currency translations – – – – 16.4 16.4 Depreciation of right-of-use assets 11 2 148.2 1 979.9
Movement in cash flow hedge – – – (0.2) – (0.2) Amortisation of intangible assets 9 96.6 123.4
Remeasurement in retirement scheme assets – – 25.4 – – 25.4 Share-based payments expense 3 59.4 149.0
Lease adjustments (28.9) (42.4)
Other reserve movements – – – (1.8) – (1.8)
Movement in operating lease assets (1.0) 3.1
Transactions with owners – 171.3 (1 096.1) – – (924.8) Movement in retirement scheme assets 51.8 (4.0)
Fair value and foreign exchange adjustments (20.3) (33.5)
Dividends paid – – (959.6) – – (959.6)
Share purchases 20 – (114.2) – – – (114.2) Cash generated before movements in working capital 6 674.3 6 278.0
Net effect of settlement of employee Movements in working capital (968.2) (563.6)
share awards 20 – 285.5 (285.5) – – –
Movements in trade and other payables, provisions and deferred revenue 1 668.9 898.2
Share-based payments expense 3 – – 149.0 – – 149.0
Movements in inventory and right-of-return assets (2 338.2) (1 074.2)
Movements in trade and other receivables (298.9) (387.6)
At 27 February 2022 6.0 (702.1) 4 717.3 (8.6) (296.9) 3 715.7
Total comprehensive income for the period – – 1 169.7 29.7 (67.8) 1 131.6 Cash generated from trading activities 5 706.1 5 714.4
Other interest received 2 251.7 300.1
Profit for the period – – 1 169.9 – – 1 169.9
Other interest paid 3 (431.4) (341.0)
Foreign currency translations – – – – (67.8) (67.8) Interest received on net investment in lease receivables 12 191.9 203.7
Movement in cash flow hedge – – – 29.7 – 29.7 Interest paid on lease liabilities 25 (1 446.0) (1 364.4)
Remeasurement in retirement scheme assets – – (0.2) – – (0.2)
Cash generated from operations 4 272.3 4 512.8
Other reserve movements – – – (1.0) – (1.0) Dividends received 16.0 20.1
Dividends paid (1 112.8) (959.6)
Transactions with owners – 58.3 (1 201.8) – – (1 143.5)
Tax paid 6 (458.4) (403.9)
Dividends paid – – (1 112.8) – – (1 112.8)
Cash generated from operating activities 2 717.1 3 169.4
Share purchases 20 – (90.1) – – – (90.1)
Net effect of settlement of employee Cash flows from investing activities
share awards 20 – 148.4 (148.4) – – – Investment in intangible assets 9 (231.5) (88.1)
Share-based payments expense 3 – – 59.4 – – 59.4 Investment in property, plant and equipment 10 (3 401.9) (1 990.1)
Purchase of operations 31 (329.7) (55.7)
At 26 February 2023 6.0 (643.8) 4 685.2 20.1 (364.7) 3 702.8 Proceeds on disposal of intangible assets 25.7 4.0
Proceeds on disposal of property, plant and equipment 42.6 135.9
Insurance proceeds on capital items 13.8 210.5
Principal net investment in lease receipts 12 299.1 251.6
Lease incentives received 89.6 52.0
Loans repaid 62.4 14.8
Loans advanced (94.3) (41.5)
Cash utilised in investing activities (3 524.2) (1 506.6)
Cash flows from financing activities
Principal lease liability payments 25 (2 408.8) (2 059.8)
Borrowings raised 21 6 804.8 6 020.4
Repayment of borrowings 21 (7 938.5) (5 348.5)
Share purchases 20 (90.1) (114.2)
Cash utilised in financing activities (3 632.6) (1 502.1)
Net (decrease)/increase in cash and cash equivalents (4 439.7) 160.7
Net cash and cash equivalents at beginning of period 3 625.3 3 463.7
Foreign currency translations 12.2 0.9
Net cash and cash equivalents at end of period 18 (802.2) 3 625.3
Consisting of :
Cash and cash equivalents 1 997.8 6 425.3
Overnight borrowings (2 800.0) (2 800.0)

NOTES TO THE GROUP ANNUAL

FINANCIAL STATEMENTS
for the period ended 26 February 2023
Significant accounting policies All inter-group assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members of
Significant accounting policies (continued) under the circumstances. Actual results may differ from
these estimates. The uncertainty about these assumptions
1.1 Reporting entities the Group are eliminated in full on consolidation. 1.5 Foreign currency transactions and translations and estimates could result in outcomes that require a material
adjustment to the carrying amount of assets or liabilities
The Group annual financial statements for the 52 weeks ended Interest in equity-accounted investees (continued)
affected in future periods.
26 February 2023 (2022: 52 weeks ended 27 February 2022) Associates are those entities over which the Group exercises Transactions and balances
comprise Pick n Pay Stores Limited and its subsidiaries and significant influence but not control. Significant influence is Transactions denominated in foreign currencies are translated Estimates and underlying assumptions are reviewed on
associate (the Group). Pick n Pay Stores Limited is referred the power to participate in the financial and operating policy to the respective functional currencies of Group entities at an ongoing basis. Revisions to accounting estimates are
to as the Company. decisions of the investee but does not provide control or joint the rates of exchange ruling on the dates of the transactions. recognised in the period in which the estimate is revised if the
control over those policies. The Group’s interest in equity- Differences arising on settlement or translation of monetary revision affects only that period, or in the period of revision
1.2 Statement of compliance accounted investees comprises its interests in associates. and future periods if the revision affects both current and
items are recognised in the statement of comprehensive
The Group annual financial statements have been prepared in income. future periods.
Under the equity method, the investment in an associate
accordance with International Financial Reporting Standards is initially recognised at cost. The carrying amount of the Estimates, judgements and assumptions used in the Group’s
(IFRS) and its interpretations adopted by the International Monetary assets and liabilities denominated in foreign
investment is adjusted to recognise post-acquisition changes currencies at the reporting date are translated to South accounting policies that have a significant risk of causing a
Accounting Standards Board (IASB), the South African in the Group’s share of net assets of the associate. Goodwill material adjustment to the carrying amounts of assets and
Institute of Chartered Accountants Financial Reporting African rand at the rates of exchange ruling at that date.
relating to the associate is included in the carrying amount of The foreign currency gain or loss on monetary items is liabilities within the next financial period include, but are not
Guides as issued by the Accounting Practices Committee the investment and is not tested for impairment separately. limited to, the following:
and Financial Reporting Pronouncements as issued by the the difference between amortised costs in the functional
Financial Reporting Standards Council, the JSE Listings The aggregate of the Group’s share of profit or loss of an currency at the beginning of the period, adjusted for effective Purchase rebates and other income earned from
Requirements and the requirements of the Companies Act of associate is shown in the statement of comprehensive interest and payments during the period, and amortised costs suppliers
South Africa. income and represents profit or loss after tax and after non- in foreign currency translated at the exchange rate at the The Group enters into various agreements with suppliers and
controlling interests in the subsidiaries of the associate. end of the period. Foreign exchange differences arising on these agreements provide for various purchase rebates and
1.3 Basis of preparation Where there are changes recognised directly in the other translation are recognised in the statement of comprehensive other income.
comprehensive income (OCI) or equity of the associate, the income.
The Group annual financial statements are prepared on Purchase rebates are accrued for as part of cost of inventory
the historical cost basis except where stated otherwise in Group recognises its share of any changes, when applicable, Non-monetary assets and liabilities denominated in foreign
in the statement of other comprehensive income and sold when they are closely related to the purchase of
the accounting policies below. currencies that are measured at fair value are translated inventory. Management uses judgement when assessing the
statement of changes in equity, respectively. Any dividends to South African rand at the exchange rate at the date that
All financial information has been rounded to the nearest received by the Group is credited against the investment in nature of the rebates earned for recognition as a reduction in
the fair value was determined. Foreign exchange differences the purchase price of inventories and when recognising the
million, unless otherwise stated. associate. arising on translation are recognised in the statement of relevant portion as a reduction in the cost of inventory.
The accounting policies set out below have been applied Unrealised gains or losses resulting from transactions comprehensive income. Non-monetary items that are
consistently to all periods presented in these Group annual between the Group and the associate are eliminated to the measured in terms of historical cost in a foreign currency Taking into account cumulative purchases of inventory
financial statements and to all companies in the Group, except extent of the interest in the associate. are translated using the exchange rate at the date of the to date, as well as historical and forecasted performance,
where the Group has adopted IFRS and International Financial transaction. management uses judgement to estimate the probability
Reporting Interpretations Committee (IFRIC) interpretations The financial statements of the associate are prepared for of meeting contractual obligations and in determining the
the same reporting period as the Group. Foreign operations amount of volume-related rebates recognised. Rebates
and amendments that became effective during the period.
The assets and liabilities of foreign operations are translated received may therefore differ from that which has been
Several new standards, amendments to standards and After application of the equity method, and at each reporting at the relevant foreign exchange rates ruling at the reporting accrued.
interpretations became applicable to the Group during the date, the Group determines whether there is objective date to the presentation currency of the Group. The income
current period and have been applied in the preparation of evidence that the investment in the associate is impaired. If Other income earned from suppliers is recognised in revenue,
and expenses of foreign operations are translated to the
these Group annual financial statements. New standards, there is such evidence, the Group determines whether it is within other income, when services are provided to suppliers
presentation currency of the Group at the weighted-average
amendments to standards and interpretations did not have a necessary to recognise an impairment loss, and calculates that are not closely related to the purchase of inventory and
rate of exchange for the period. Profits or losses arising on
significant impact on the Group. the amount of impairment as the difference between the when the Group can reasonably estimate the fair value of the
the translation of assets and liabilities of foreign operations
The Group has not early adopted any other IFRS and IFRIC recoverable amount of the associate and its carrying value. are recognised in other comprehensive income (OCI) and service. Management uses judgement in determining whether
interpretations and amendments that are not yet effective Refer to note 14. presented within equity in a foreign currency translation the services provided to suppliers are sufficiently separable
for the Group. Refer to note 33. reserve. from the purchase of inventory, by determining if the supplier
1.5 Foreign currency transactions and translations could have entered into an agreement with a party, other
1.4 Basis of consolidation Functional and presentation currency When the settlement of a monetary item receivable from or than a purchaser of its inventory, in order to receive those
payable to a foreign operation is neither planned nor likely services. Refer to note 1.21.
Investment in subsidiaries The Group annual financial statements are presented in
in the foreseeable future, foreign exchange gains or losses
The Group controls an entity when it is exposed to, or has the South African rand. Certain individual companies (foreign Estimating variable consideration for returns
arising from such a monetary item are considered to form part
rights to, variable returns from its involvement with the entity operations) in the Group have functional currencies that
of a net investment in a foreign operation, and are recognised The Group estimates variable consideration to be included in
and has the ability to affect those returns through its power differ to that of the presentation currency of the Group and
in OCI and presented in a foreign currency translation reserve. the transaction price for the sale of goods where customers
over the entity. Consolidation of a subsidiary begins when the are translated on consolidation.
are entitled to a right of return within a specified time frame.
Group obtains control over the subsidiary and ceases when 1.6 Use of estimates, judgements and assumptions The Group uses statistical projection methods for forecasting
the Group loses control of the subsidiary. Assets, liabilities, sales returns which is based on historical return data. Any
The preparation of these annual financial statements
income and expenses of a subsidiary acquired or disposed of significant changes in experience as compared to historical
in conformity with IFRS requires management to make
during the period are included in the Group annual financial return patterns will impact the expected return percentages
judgements, estimates and assumptions that affect the
statements from the date the Group gains control until the estimated by the Group. Estimated return percentages
application of accounting policies and reported amounts of
date the Group ceases to control the subsidiary. are updated regularly and the refund liability is adjusted
assets and liabilities, income and expenses. Estimates and
associated assumptions are based on historical experience accordingly. Refer to note 26.
and various other factors that are believed to be reasonable

Significant accounting policies (continued) Useful lives and residual values are reviewed at each reporting Significant accounting policies (continued) Measurements of post-retirement defined-benefit
date, considering factors such as the manner of recovery and obligations
1.6 Use of estimates, judgements and assumptions relevant market information. 1.6 Use of estimates, judgements and assumptions The Group operates post-retirement defined-benefit
(continued) Estimates of useful lives of right-of-use assets (continued) schemes. Actuarial valuations are performed to assess the
financial position of these various schemes and are based
Measurements of share-based payments Right-of-use assets are depreciated over their useful lives Foreign currency translations of equity-accounted on assumptions such as the discount rate, future salary
Various assumptions and estimates are applied in determining and are directly linked to the lease term of the underlying lease investee in Zimbabwe increases, future pension increases and future increases in
the fair value of share awards granted to employees such as agreement that has been accounted for in the measurement Significant judgement was applied in the estimation and healthcare costs. Refer to note 22.
expected volatility, expected dividend yield, the expected life of the corresponding lease liabilities. Useful lives are reviewed application of the Zimbabwe Dollar (ZWL$) to South Africa
of the award and vesting conditions. Judgement, informed by at each reporting date, considering factors such as lease rand (ZAR) exchange rate. Consolidation of the Group’s share trust
terms and conditions of the grant, is used to determine the term extension and termination options. The Group operates an employee share option scheme
inputs into the valuation model used. The key assumptions Effective 1 June 2020, Zimbabwe implemented a formal through the Pick n Pay Employee Share Purchase Trust.
Measurements of the recoverable amounts of cash- market-based foreign exchange trading system to establish
and models used for estimating fair value for share-based Judgement is applied in determining that the Group controls
generating units formalised trading in ZWL$ with other currencies (referred
payment transactions are disclosed in note 5. the trust as it has exposure or rights to variable returns
The recoverable amount of cash-generating units (CGU) to as the auction rate). The intention of this auction rate from its involvement with the investee and has the ability
Provision for expected credit losses on net investment containing goodwill is determined by calculating its value system is expected to bring transparency and efficiency in to affect returns from the trust through its power over the
in lease receivables, loans and trade and other in use. The Group treats a store as a separate CGU for the trading of foreign currency in the economy. trust. The Group has therefore consolidated the trust into its
receivables impairment testing of intangible assets, property, plant and
In line with prior period assessments, management assessed results. Refer to notes 19 and 20.
The Group has established a provision matrix that is based on equipment and right-of-use assets. The recoverable amount
is sensitive to the discount rate used for the discounted that the closing auction exchange rate to the South African Insurance claims receivable
historical credit loss experience and applicable credit insurance, rand is not available for immediate settlement, as shortages
adjusted for forward looking factors specific to net investment cash flow model, future cash flows and the growth rate used Judgement is required in assessing the virtual certainty of the
for extrapolation purposes. The key assumptions used to of foreign currency results in the official exchange rate not recoverability of insurance claims, which is supported by the
in lease receivables, loans and trade and other receivables being liquid and was therefore not an appropriate rate to use
and the economic environment. At each reporting period, the determine the recoverable amount of CGUs are disclosed in insurer’s validation of the progress in the claims assessment
note 9, 10 and 11. when accounting for the Group’s investment in associate. process and payments received to date.
historical observed default rates are updated and changes in An estimated exchange rate was used when translating the
forward looking estimates are analysed. The assessment of Classification of leases results of TM Supermarkets during the period under review. Prior period considerations of the COVID-19 Pandemic
historical observed default rates and forward-looking factors Judgement is applied when assessing whether an Inputs considered in this estimate include the official inflation During the prior period under review, the COVID-19 pandemic
require significant judgement and estimates. The Group’s arrangement should be treated as a lease. Where the Group rate and the in-country fuel price. placed strain on global economies, influenced customer trends
historical credit loss experience and forecast economic acts as lessor, judgement is applied in determining whether and influenced trading activities of the Group. Where relevant,
conditions may therefore not be representative of the actual the risks and rewards of the underlying asset have been The share of associate’s income and net asset value of
the subsequent impacts of the pandemic was considered in
default in the future. Refer to notes 12, 15, 17 and 30. transferred in order to classify leases as either finance leases TM Supermarkets have been translated into the Group’s
the prior period key assumptions, estimates and judgements
or operating leases. presentation currency at the closing rate in accordance with
Inventory net realisable value allowances made by management when assessing the carrying value of
the hyperinflationary provisions of IAS 21. Refer to note 14.
The Group evaluates its inventory to ensure that it is carried property, plant and equipment, intangible assets, right-of-
Estimates of lease terms of lease agreements
at the lower of cost and net realisable value. Allowances Impairment reviews of investment in associate use assets, retirement scheme assets, deferred tax assets,
Lease terms applicable to lease agreements, relating to
are made against slow moving, obsolete and damaged Judgement is required in determining whether indicators of investment in associate, net investment in lease receivables,
the Group’s net investment in lease receivables and lease
items. Damaged inventories are identified and written down impairment exist, which includes the liquidity and devaluation deferred tax assets, trade and other receivables, inventory,
liabilities, are negotiated on an individual basis and contain
through inventory verification processes. Allowance for slow of Zimbabwean currency, currency shortages experienced and lease liabilities.
a wide range of various terms and conditions. The Group
moving and obsolete inventories are assessed continuously. in-country, rapid increases in Zimbabwe inflation rates and
Obsolescence is assessed based on a comparison of the level
determines the lease term as the non-cancellable term of
the liquidity restrictions imposed by the Reserve Bank of
1.7 Intangible assets
the lease, together with any periods covered by an option to
of inventory holding and the projected likely future sales, extend the lease if it is reasonably certain to be exercised, Zimbabwe which could prevent the Group from realising its Intangible assets are held by the Group for use in the supply
taking into account factors existing at the reporting date. or any periods covered by an option to terminate the lease, investment. The recoverable amount of the Group’s equity- of goods or administrative purposes and are expected to be
Refer to note 16. if it is reasonably certain not to be exercised. Management accounted investee in Zimbabwe is determined as the higher used for more than one financial period. Intangible assets
exercises judgement in determining the reasonable certainty of fair value less costs of disposal and value in use. Estimates acquired are initially recognised at cost if it is probable that
Measurement of deferred revenue in respect of of the future cash flows are used in the value in use calculation associated future economic benefits will flow to the Group
customer loyalty programme and prepaid gift cards of exercising termination or extension options in determining
the lease term, including considerations of the age of the and are sensitive to the discount rate used for the discounted and the cost can be measured reliably.
Reward credits (loyalty points) granted to customers cash flow model and the growth rate used for extrapolation
lease, the nature of the leased asset and the expected return If intangible assets are acquired via a business combination,
participating in the Group’s Smart Shopper loyalty programme purposes. Refer to note 14.
on the underlying cash generating unit to which the leased initial recognition is at fair value.
and prepaid gift cards provide rights to customers which are
asset belongs. Income and deferred taxes
accounted for as separate performance obligations. The Intangible asset development consists of two phases;
consideration allocated to unredeemed loyalty points and Subsequent to the commencement date of lease agreements, The Group is subject to income tax in numerous jurisdictions.
research phase and development phase. Expenditure incurred
unredeemed gift cards are measured by reference to its lease terms are reassessed when there is a significant Significant judgement is required in determining the provision
during the research phase is expensed as incurred.
stand-alone selling prices adjusted for an expected forfeiture event or change in circumstances that is within the Group’s for tax as there are many transactions and calculations for
rate. The Group applies statistical projection methods in its control and affects its ability to exercise or not to exercise which the ultimate tax determination is uncertain during the Intangible assets that are developed are initially recognised
estimation of forfeiture rates by using customers’ historical the option to renew or to terminate. Significant events could ordinary course of business. The Group recognises liabilities at cost if the cost can be measured reliably, the intangible
redemption patterns as the main input, and is therefore include a change in the Group’s assessment of whether it for anticipated tax issues based on estimates of the taxes assets are technically and commercially feasible, future
subject to uncertainty. The expected forfeiture rate is is reasonably certain to exercise a renewal or termination that are likely to become due. economic benefits are probable and the Group intends to, and
updated regularly and the liabilities for unredeemed loyalty option, the incurrences of unanticipated significant leasehold has sufficient resources to, complete the development. If not,
The Group recognises the net future tax benefit related to
points and unredeemed gift cards are adjusted accordingly. improvements or the negotiation of unanticipated lease the development expenses are recognised in the statement
deferred income tax assets to the extent that it is probable
Refer to note 26. incentives. of comprehensive income when they are incurred.
that the deductible temporary differences will reverse in the
Estimates of useful lives and residual values of Estimates of incremental borrowing rates applied in foreseeable future. Assessing the recoverability of deferred Intangible assets are subsequently measured at cost less
intangible assets the measurement of lease liabilities tax assets requires the Group to make significant estimates accumulated amortisation and impairment losses, with the
Intangible assets are amortised over their useful lives, related to expectations of future taxable income. Estimates exception of goodwill. Goodwill is measured at cost less
Incremental borrowing rates applied in the measurement of
taking into account applicable residual values. Useful lives of future taxable income are based on forecast cash flows accumulated impairment losses as it has an indefinite useful
lease liabilities are specific to the country, term, currency
and residual values are reviewed at each reporting date, from operations and the application of existing tax laws in life and is not amortised.
and start date of the applicable lease agreement. Incremental
taking into account factors such as the manner of recovery, each jurisdiction. To the extent that future cash flows and
borrowing rates are based on a series of inputs including the Internally generated intangible assets, excluding capitalised
innovation in technology and relevant market information. taxable income differ significantly from estimates, the ability
prime lending rate, the repo rate, a credit risk adjustment and development costs, are not capitalised but are expensed
of the Group to realise the net deferred tax assets recorded
a country specific adjustment. in the statement of comprehensive income when they are
Estimates of useful lives and residual values of at the end of the reporting period could be impacted. Refer to
incurred.
property, plant and equipment notes 6 and 13.
Property, plant and equipment are depreciated over their
useful lives, taking into account applicable residual values.

Significant accounting policies (continued) derecognition of an intangible asset are determined by Significant accounting policies (continued) Depreciation
comparing the proceeds from disposal, if applicable, with the Depreciation is based on the cost of the right-of-use asset
1.7 Intangible assets (continued) carrying amount of the intangible asset and are recognised 1.8 Property, plant and equipment (continued) over its useful life. At the commencement date of lease
directly in the statement of comprehensive income. agreements, management determines useful lives as the
Cost Useful lives
lease term of corresponding lease liabilities. These lease
The cost of intangible assets includes expenditure that 1.8 Property, plant and equipment The estimated useful lives, per category of property, plant terms are reviewed at each reporting date and adjusted, if
is directly attributable to the acquisition of the intangible and equipment, are as follows: appropriate. Any adjustments are accounted for prospectively
Property, plant and equipment are tangible assets held by
asset. The cost of developed intangible assets includes as a change in estimate.
the Group for use in the supply of goods or for administrative Property
the cost of materials, direct labour and any overhead costs
purposes and are expected to be used for more than one • Land Indefinite Depreciation is recognised as an expense in the statement
directly attributable to preparing the intangible asset for its
financial period. Property, plant and equipment are initially of comprehensive income, within occupancy costs, on a
intended use. • Buildings and major components 10 to 40 years
recognised at cost if it is probable that associated future straight-lined basis over the estimated useful lives of the
The Group recognises in the carrying amount of intangible economic benefits will flow to the Group and the cost can Furniture, fittings, equipment and vehicles right-of-use assets.
assets, subsequent expenditure when that cost is incurred, be measured reliably. All property, plant and equipment
• Furniture and fittings 5 to 14 years
if it is probable that the future economic benefits embodied are subsequently measured at cost less accumulated Useful lives
with the cost will flow to the Group and the cost can be depreciation and impairment losses, with the exception of • Equipment 3 to 15 years The estimated useful lives, per category of right-of-use
measured reliably. All other costs, such as costs associated land. Land is measured at cost less impairment losses as it • Vehicles 4 to 8 years assets, are as follows:
with the implementation or maintenance of intangible assets, has an indefinite useful life and is not depreciated. Leasehold improvements 8 years • Property 5 to 30 years
are recognised in the statement of comprehensive income as
Cost Aircraft and major components 10 to 20 years • Equipment and vehicles 5 to 11 years
an expense when incurred.
The cost of property, plant and equipment includes
Impairment Impairment
Goodwill is acquired through business combinations and expenditure that is directly attributable to the acquisition of
initially measured at the fair value of the consideration Property, plant and equipment are assessed for impairment Right-of-use assets are assessed for impairment as non-
the asset. The cost of self-constructed assets includes the
transferred, including the recognised amount of any non- as non-financial assets in accordance with note 1.15. financial assets in accordance with note 1.15.
cost of materials and direct labour, any other costs directly
controlling interest in the acquiree, less the net recognised attributable to bringing the asset to a working condition for its Derecognition Derecognition
amount (generally fair value) of the identifiable assets intended use, and the costs of dismantling and removing the Property, plant and equipment are derecognised upon
acquired and liabilities assumed, all measured as at the Right-of-use assets are derecognised upon the loss of control
items and restoring the site on which they are located. disposal or when no future economic benefits are expected
acquisition date. by the Group of the right to use the leased assets. Gains or
The Group recognises in the carrying amount of property, to flow to the Group from either their use or disposal. Gains losses on derecognition are determined by comparing the
After initial recognition, goodwill is measured at cost less plant and equipment subsequent expenditure, including the or losses on derecognition of an item of property, plant value of corresponding lease liabilities, with the carrying
any accumulated impairment losses. For the purpose cost of replacing part of such an item, when that cost is and equipment are determined by comparing the proceeds amount of right-of-use assets and are recognised directly in
of impairment testing, goodwill acquired in a business incurred, if it is probable that the future economic benefits from disposal, if applicable, with the carrying amount of the statement of comprehensive income.
combination is, from the acquisition date, allocated to each embodied within the cost will flow to the Group and the cost the item and are recognised directly in the statement of
of the Group’s cash-generating units that are expected to of the item can be measured reliably. The carrying amount comprehensive income. 1.11 Net investment in lease receivables
benefit from the combination, irrespective of whether other of the replaced part is derecognised. All other costs, such as
assets or liabilities of the acquiree are assigned to those units. day-to-day servicing costs, are recognised in the statement
1.9 Non-current assets held for sale In addition to its primary property lease portfolio, the Group
holds head-leases over strategic franchise sites. These sites
of comprehensive income as an expense when incurred. Non-current assets are classified as held for sale if their are sub-let to franchisees, with the franchisees holding the
Amortisation
carrying amount will be recovered principally through a sale right to control the use of the leased assets. Where the Group
Amortisation is calculated on the cost of an intangible asset, Depreciation transaction rather than through continuing use. This condition
less its residual value, over its useful life. The residual value is does not retain the right to control the use of leased assets,
Depreciation is based on the cost of an asset, less its residual is regarded as met, only when the sale is highly probable and
the estimated amount that the Group would receive from the due to the leased asset being subjected to a sub-lease, right-
value, over its useful life. The residual value is the estimated the asset or disposal group is available for immediate sale in
disposal of the intangible asset, after deducting the estimated of-use assets are not recognised by the Group. The Group
amount that the Group would receive from the disposal of the its present condition, subject only to terms that are usual
costs of disposal, if the intangible asset was already of the recognises the present value of future lease payments
asset, after deducting the estimated costs of disposal, if the and customary for sales of such an asset or disposal group.
age and the condition expected at the end of its useful life. under head leases as lease liabilities (refer to note 1.18) and
asset was already of the age and the condition expected at Management must be committed to the sale, which should capitalises the present value of future lease receivables
the end of its useful life. be expected to qualify for recognition as a completed sale
Management determines the amortisation methods, useful under sub-leases as net investment in lease receivables.
lives and residual values at acquisition. These are reviewed Management determines the depreciation methods, useful within one year from the date of classification. Non-current
at each reporting date and adjusted if appropriate. Any lives and residual values at acquisition. These are reviewed assets held for sale are measured at the lower of the previous Initial measurement
adjustments are accounted for prospectively as a change in at each reporting date and adjusted, if appropriate. Any carrying amount and fair value less costs to sell, other than At the date when the franchisee gains the right to control
estimate. adjustments are accounted for prospectively as a change in financial assets and deferred tax assets which continue to the use of leased assets, referred to as the commencement
estimate. be measured in accordance with their relevant accounting date of sub-lease agreements, the Group measures the
Amortisation is recognised as an expense in the statement standards. Property, plant and equipment are not depreciated net investment in lease receivable at the present value of
of comprehensive income, within operational expenses, on Depreciation is recognised as an expense in the statement or amortised once classified as held for sale. the lease payments to be received over the lease term,
a straight-line basis over the estimated useful life of each of comprehensive income, within operational expenses, on discounted using the rate implicit in the sub-lease. If the rate
intangible asset from the date that it is available for its a straight-line basis over the estimated useful lives of each 1.10 Right-of-use assets implicit in the sub-lease cannot be readily determined, the
intended use. part of an item of property, plant and equipment from the Group applies the same rate applied in accounting for the
The Group enters into various lease agreements as the lessee
date that they are available for its intended use. Leasehold corresponding lease liability.
Useful lives of property, equipment and vehicles. Where leases convey
improvements are depreciated over the shorter of the lease the right to control the use of the underlying leased assets,
The estimated useful lives, per category of intangible assets, term and their useful lives, unless it is reasonably certain that The Group determines the lease term of the net investment
are as follows: the Group classifies these leases as right-of-use assets in in lease receivable as the non-cancellable period of the lease,
the Group will obtain ownership by the end of the lease term. a consistent manner to its property, plant and equipment. and determines the incremental borrowing rate as the rate
Goodwill Indefinite Where significant components of an item of property, Right-of-use assets are initially recognised at cost at the applicable to the corresponding head lease liability.
Systems development 4 to 8 years plant and equipment have different useful lives, they are date in which the Group gains control of the right to use the
depreciated separately. leased asset, referred to as the commencement date of Subsequent measurement
Licences 9 to 10 years
lease agreements, and are subsequently measured at cost Net investment in lease receivables are subsequently
Impairment less accumulated depreciation and accumulated impairment measured at amortised cost using the effective interest
Intangible assets are assessed for impairment as non- losses. method, reduced by future lease receipts net of interest
financial assets in accordance with note 1.15. earned.
Cost
Derecognition The cost of right-of-use assets include the initial Impairment
Intangible assets are derecognised upon disposal or when measurement of the corresponding lease liabilities, any initial Net investment in lease receivables are assessed for
no future economic benefits are expected to flow to the direct costs less any lease incentives received and less any impairment as financial assets in accordance with note 1.15.
Group from either their use or disposal. Gains or losses on dismantling or restoration costs expected to be incurred in
order to restore the asset or the site on which it is located.

Significant accounting policies (continued) 1.15 Impairment of assets Significant accounting policies (continued) 1.18 Leases Liabilities
The determination of whether an asset is impaired requires The Group enters into various lease agreements as the
1.11 Net investment in lease receivables (continued) management judgement. Among others, the following factors
1.15 Impairment of assets (continued) lessee of property, equipment and vehicles. Where lease
Derecognition will be considered: estimated profit and cash forecasts, Non-financial assets (continued) agreements convey the right to control the use of underlying
Net investment in lease receivables are derecognised when discount rates, duration and extent of the impairment, regional The recoverable amount of an asset is the greater of its fair leased assets, the Group recognises the present value of
the Group regains the right to control the use of leased economic factors and geographical and sector performance. value less costs to sell and its value in use. In assessing value future lease payments under the lease as lease liabilities.
assets. Gains or losses on derecognition are determined in use, the estimated future cash flows are discounted to
Financial assets Initial recognition
by comparing the carrying value of corresponding lease their present value using a pre-tax discount rate that reflects
The Group recognises an allowance for expected credit losses At the date when the Group gains the right to control the use of
liabilities with the carrying value of net investment in lease current market assessments of the time value of money and
(ECLs) for all debt instruments not held at fair value through underlying leased assets, referred to as the commencement
receivables, and are recognised directly in the statement of the risks specific to that asset. For an asset that does not
profit or loss. ECLs are based on the difference between the date, the Group measures the lease liability at the present
comprehensive income. generate largely independent cash inflows, the recoverable
contractual cash flows due in accordance with the contract value of the lease payments to be made over the lease term,
amount is determined for the cash-generating units (CGUs)
1.12 Operating lease assets and all the cash flows that the Group expects to receive,
to which the asset belongs. A CGU is the smallest group of
discounted at an applicable discount rate.
discounted at an approximation of the original effective
Leases where the lessor retains the right to control the use assets that generates cash inflows from continuing use that Lease terms are negotiated on an individual basis and contain
interest. The expected cash flows will include cash flows from
of underlying leased assets are classified as operating leases. is largely independent of the cash inflows of other assets or a wide range of different terms and conditions. The Group
the sale of collateral held or other credit enhancements that
Operating leases include leases for kiosk space within retail groups of assets. determines the lease term as the non-cancellable term of
are integral to the contractual terms.
owned sites provided to third parties. the lease, together with any periods covered by an option to
Goodwill acquired in a business combination is allocated to
The Group applies a simplified approach for measuring extend the lease if it is reasonably certain to be exercised,
Rentals receivable under operating leases are credited to CGUs that are expected to benefit from the synergies of the
impairment on trade receivables and net investment in lease or any periods covered by an option to terminate the lease
the statement of comprehensive income on a straight-line combination and, for the purposes of impairment testing, are
receivables at an amount equal to lifetime ECLs. To measure if it is reasonably certain not to be exercised. Judgement is
basis over the term of the relevant lease. This results in the evaluated at the lowest level at which goodwill is monitored
lifetime ECLs, trade receivables and net investment in lease applied in determining the likelihood of exercising extension or
raising of an asset for future lease income on the statement for internal reporting purposes. The units or group of units
receivables are assessed on an individual basis. The ECL termination options in determining the lease period.
of financial position. Operating lease assets are classified as are not larger than the operating segments identified by
rates are based on historical credit loss experienced during
non-current assets, with the exception of the portion with a the Group. Lease payments included in the measurement of the
the period, adjusted to reflect current and forward-looking
maturity date of less than 12 months of the reporting date lease liability consist of fixed payments (including in
information on macro-economic factors affecting the ability An impairment loss is recognised whenever the carrying
which are disclosed as current assets and are included under substance fixed payments), variable payments based on
of the debtors to settle their receivables. The Group has amount of an asset or its CGU exceeds its recoverable
trade and other receivables. The asset reverses during the an index or rate, amounts expected to be payable under
identified CPI inflation and internal selling price inflation to amount. The carrying amount is impaired and the non-
latter part of each lease term when the actual cash flow a residual value guarantee and payments arising from
be the most relevant factors and accordingly adjusts the financial asset is written down to its recoverable amount with
exceeds the straight-lined lease income included in the options reasonably certain to be exercised or termination
historical loss rates based on expected changes in these the related impairment loss recognised in the statement of
statement of comprehensive income. options reasonably certain not to be exercised. Variable
factors. comprehensive income. Impairment losses recognised in
lease payments are initially measured using the index or rate
respect of CGUs are allocated first to reduce the carrying
1.13 Inventory The Group applies a general approach for measuring
amount of any goodwill allocated to the CGUs (or groups
at the commencement date.
Inventory comprises merchandise for resale and impairment on other receivables and loans, at an amount equal
of units) and then to reduce the carrying value of the other Lease payments are discounted using the interest rate
consumables. Inventory is measured at the lower of cost to expected credit losses, taking into account past experience
assets in the unit (or groups of units) on a pro rata basis. implicit in the lease. If that rate cannot be readily determined,
and net realisable value, and is classified as a current and future macro-economic factors. The loss allowance
the Group’s incremental borrowing rate is used. The
asset as it is expected to be sold within the Group’s normal is measured at an amount equal to the lifetime expected An impairment loss for a non-financial asset is reversed if
incremental borrowing rate is the rate that the Group would
operating cycle. credit losses if the credit risk has increased significantly there has been a change in the estimates used to determine
have to pay to borrow the funds necessary to obtain an asset
since initial recognition. If, at reporting date, the credit risk the recoverable amount. An impairment loss is reversed only to
Cost is calculated on the weighted-average basis and includes of a similar value to the right-of-use asset in a similar economic
has not increased significantly since initial recognition, the the extent that the asset’s carrying amount does not exceed
expenditure incurred in acquiring the inventory and bringing environment with similar terms, security and conditions.
loss allowance is measured at an amount equal to 12-month the carrying amount that would have been determined, net of
it to its existing location and condition, including distribution expected credit losses. The Group considers credit risk to depreciation or amortisation, if no impairment loss had been The discount rate used for the Group’s commercial vehicle
costs, and is stated net of relevant purchase rebates. have increased significantly since initial recognition, if there recognised. Impairment losses in respect of goodwill are not fleet is the interest rate implicit in the lease agreement. All
has been a significant change in the counterparty’s ability reversed. other lease payments are discounted using the Group’s
Net realisable value is the estimated selling price in the
to meet its obligations. In addition, changes in the general incremental borrowing rate specific to the lease term,
ordinary course of business, less the estimated costs of Impairment losses for non-financial assets recognised in
economic or market conditions, changes in internal and country, currency and commencement date of the lease.
completion and selling expenses. Obsolete, redundant and prior periods are assessed at each reporting date for any
external credit ratings and changes in the amount of financial Incremental borrowing rates are based on a series of inputs
slow-moving items are identified on a regular basis and are indications that the loss has decreased or no longer exists.
support available to the counterparty are considered. including the prime rate, the repo rate, credit risk adjustments
written down to their estimated net realisable values.
The Group considers a financial asset in default when 1.16 Share capital and country specific adjustments.
The carrying amount of inventories sold is recognised as an
contractual payments are one to two weeks past due. Ordinary shares are classified as equity. Incremental costs The Group accounts for non-lease components together
expense in the statement of comprehensive income.
However, in certain cases, the Group may also consider a directly attributable to the issue of ordinary shares are with the lease component to which it relates as a single lease
1.14 Right-of-return assets and refund liabilities financial asset to be in default when internal or external recognised as a deduction from equity, net of any tax effects. component.
information indicates that the Group is unlikely to receive
For the sale of goods where customers are entitled to a right of outstanding contractual amounts in full before taking into 1.17 Treasury shares Subsequent measurement
return within a specified period of time, the Group recognises account any credit enhancements held by the Group. A Lease liabilities are subsequently measured at amortised
a right-of-return asset (and corresponding adjustment to Own equity instruments held by Group entities are classified cost using the effective interest method, reduced by future
financial asset is written off when there is no reasonable
cost of sales) which is representative of the Group’s right to as treasury shares in the Group annual financial statements, lease payments net of interest charged. Interest costs are
expectation of recovering the contractual cash flows.
recover the goods expected to be returned by customers. is treated as a reduction of equity at its cost price and recorded in the statement of comprehensive income.
Non-financial assets is disclosed as a separate component in the statement
The asset is measured at the carrying amount of inventory The carrying amounts of non-financial assets (other than of changes in equity. No gain or loss is recognised in the The Group is exposed to potential future increases in
estimated to be returned using the expected value method, inventory, defined-benefit assets and deferred tax assets) statement of comprehensive income on the purchase, sale, variable lease payments based on an index or rate, which
less any expected costs to recover the goods, including any are reviewed at each reporting date to determine whether issue or cancellation of the Group’s own equity instruments. are not included in the lease liability until they take effect.
potential decreases in the value of the returned goods. The there is any indication of impairment. If any such indication Amounts received when treasury shares are sold or re-issued When adjustments of lease payments based on an index
Group updates the measurement of the asset recorded for exists, the asset’s recoverable amount is estimated. For non- is recognised directly in equity, and the resulting surplus or or rate take effect, the lease liability is re-measured with a
any revisions to its estimated level of returns, as well as any financial assets, such as goodwill, which have indefinite useful deficit on the transaction is transferred to or from retained corresponding adjustment to the right-of-use asset. Further
additional decreases in the value of the returned products. lives and are not subject to depreciation or amortisation, or earnings. re-measurements occur when there is a change in future
that are not yet available for use, the recoverable amount is lease payments resulting from a rent review.
For goods that are expected to be returned, the Group Dividends received on treasury shares are eliminated on
recognises a refund liability for the customer’s right to a estimated at each reporting date. consolidation.
refund (and corresponding adjustment to turnover) which is
measured at the amount the Group expects it will have to Treasury shares are treated as a deduction from the weighted
return to the customer. Refer to note 26. average number of shares in issue.

Significant accounting policies (continued) Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
Significant accounting policies (continued) Financial liabilities at amortised cost
Financial liabilities at amortised cost mainly comprise of lease
1.18 Leases Liabilities (continued) market participants at the measurement date. The fair value 1.19 Financial instruments (continued) liabilities, borrowings and trade and other payables.
of an asset or a liability is measured using the assumptions
Subsequent measurement (continued) that market participants would use when pricing the asset
Subsequent measurement (continued) Lease liabilities
Lease terms are reassessed when there is a significant event or liability, assuming that market participants act in their Financial assets at amortised cost (continued) Refer to note 1.18 for further information.
or change in circumstance that is within the Group’s control economic best interest. Where there is no active market, the The Group’s financial assets at amortised cost include net
and affects the Group’s ability to exercise or not to exercise Group uses valuation techniques that are appropriate under investment in lease receivables, trade and other receivables, Borrowings
the option to renew or to terminate. Significant events may the circumstances and for which sufficient data is available to cash and cash equivalents and loans. Net investment in lease Borrowings are measured at amortised cost using
include a change in the Group’s assessment of whether it measure fair value, maximising the use of relevant observable receivables and trade and other receivables mainly comprise the effective interest method. The effective interest
is reasonably certain to exercise a renewal or termination inputs and minimising the use of unobservable inputs. franchisee receivables. Certain net investment in lease amortisation is included in finance costs in the statement of
options, the occurrence of unanticipated significant receivables and trade and other receivables are considered comprehensive income. The maturity date of each financial
leasehold improvements or the negotiation of unanticipated All assets and liabilities for which fair value is measured or to be long term in nature and are recorded as non-current in liability is dependent on the contractual terms of the related
lease incentives. Upon the occurrence of the significant disclosed in the annual financial statements are categorised the statement of financial position. Loans comprise housing borrowing.
event, lease liabilities are re-measured with a corresponding within the fair value hierarchy, described as follows, based and other employee loans and bridging finance to landlords.
adjustment to corresponding right-of-use assets. on the lowest level input that is significant to the fair value Trade and other payables
Short-term loans are recorded within current trade and other
measurement as a whole: receivables. Trade and other payables are measured at amortised cost
Derecognition using the effective interest method. The effective interest
Lease liabilities are derecognised upon the Group’s loss of Level 1 – Quoted (unadjusted) market prices in active markets
Net investment in lease receivables, trade and other amortisation is included in finance costs in the statement
control of the right to use leased assets, or if the Group’s for identical assets or liabilities
receivables and loans of comprehensive income. Trade and other payables mainly
obligations specified in the lease agreement expire, are Level 2 – Valuation techniques for which the lowest level input comprise trade payables for merchandise for resale and are
Net investment in lease receivables, trade and other
discharged or cancelled. Gains or losses on derecognition that is significant to the fair value measurement is directly or all short term in nature.
receivables and loans are measured at amortised cost using
are determined by comparing the carrying value of indirectly observable the effective interest method, less impairment losses. The Derivatives designated as hedging instruments
corresponding right-of-use assets with the carrying value of
effective interest amortisation is included in finance income The Group holds derivative financial instruments, being
lease liabilities and are recognised directly in the statement of Level 3 – Valuation techniques for which the lowest level
in the statement of comprehensive income. forward exchange contracts (FECs) that are designated as
comprehensive income. input that is significant to the fair value measurement is
unobservable Cash and cash equivalents and overnight borrowings hedging instruments, in order to mitigate the risks associated
Variable lease payments with the firm commitment of purchasing imported inventory,
Certain property leases contain variable payment terms For the purpose of fair value disclosures, the Group has Cash and cash equivalents and overnight borrowings are
defined as the hedged item.
linked to sales generated from retail owned and franchise determined classes of assets and liabilities on the basis of measured at amortised cost, using the effective interest
stores, referred to as turnover rent expense. Turnover rent the nature, characteristics and risks of the asset or liability method, less accumulated impairments. The effective The relationship between the FECs and the underlying
expense is recognised in the statement of comprehensive and the level of the fair value hierarchy, as explained above. interest amortisation is included in finance income or costs inventory is classified as a cash flow hedge, as the FECs are
income within occupancy costs, in the period in which the in the statement of comprehensive income. Cash and cash used to hedge the variability in cash flows attributable to the
Derecognition equivalents comprise cash on hand and amounts held foreign currency risks of importing inventory.
event or condition that triggers the payment occurs.
Financial assets (or where applicable, a part of a financial asset on short-term deposit at financial institutions. Overnight
Leasing of low-value assets and short-term leases or a group of similar financial assets) are derecognised if the borrowings include short-term borrowings repayable on The hedge is deemed to be highly effective as the terms
The Group elected to use the recognition exemptions for Group’s contractual rights to the cash flows from the financial demand. Overnight borrowings are repayable on demand, of the FEC match the terms of the purchase of imported
lease contracts that, at the commencement date, have a assets expire or if the Group transfers the financial assets managed on a daily basis and are considered an integral part inventory. The effective portion of the change in fair value of
lease term of 12 months or less and do not contain a purchase to another party without retaining control or substantially all of the Group’s cash management. the FECs are recognised in other comprehensive income and
option (short-term leases), and lease contracts for which the risks and rewards of the asset. accumulated in the cash flow hedging reserve within equity.
For the purpose of the statement of cash flows, cash and The accumulated amount in the reserve is released to the
underlying assets is of low value (low-value assets). Financial liabilities are derecognised if the Group’s obligations cash equivalents consist of cash and short-term deposits net statement of comprehensive income when the underlying
Payments associated with short-term leases and leases of specified in the contract expire, are discharged or are of outstanding overnight borrowings. inventory is sold. Where a forecast transaction is no longer
low-value assets are recognised on a straight-line basis as an cancelled. The resulting differences between the carrying expected to occur, the cumulative unrealised gain or loss is
expense in profit or loss. Short-term leases are leases with a values on derecognition of the financial instrument and the Financial instruments at fair value through profit
recognised immediately in the statement of comprehensive
lease term of 12 months or less. amount received or paid is recognised in the statement of or loss income.
comprehensive income. Financial instruments are classified at fair value through profit
1.19 Financial instruments Offsetting
or loss if they are held for trading or are designated as such FECs are measured at fair value and are carried as derivative
upon initial recognition. Financial instruments at fair value financial assets when the fair value is positive and as
A financial instrument is any contract that gives rise to a Financial assets and financial liabilities are offset, and the
through profit or loss are measured at fair value, and changes derivative financial liabilities when the fair value is negative.
financial asset of one entity and a financial liability or equity net amount reported in the statement of financial position,
instrument of another entity. therein are recognised in the statement of comprehensive
when the Group has a legally enforceable right to offset
income. 1.20 Provisions
Initial recognition and measurement the recognised amounts, and intends either to settle on a
Provisions are recognised within trade and other payables
net basis, or to realise the net assets and settle the liability Financial assets are classified and measured at amortised
The classification of the Group’s financial instruments at when the Group has a present legal or constructive obligation
simultaneously. cost or fair value through OCI, if it gives rise to cash flows that
initial recognition depends on the financial instrument’s as a result of past events; it is probable that an outflow of
are ‘solely payments of principal and interest (SPPI)’ on the
contractual cash flow characteristics and the Group’s model Subsequent measurement principal amount outstanding. This assessment is referred
resources embodying economic benefits will be required to
for managing them. The Group manages its financial assets Financial assets at amortised cost settle the obligation; and a reliable estimate of the amount
to as the SPPI test and is performed at an instrument level.
in order to generate cash flows, by determining whether of the obligation can be made. The Group has discounted
The Group measures financial assets at amortised cost if Financial assets with cash flows that are not SPPI are
cash flows will result from collecting cash flows, selling the provisions to their present value where the effect of the
both the following conditions are met: classified and measured at fair value through profit or loss,
financial asset, or both, and whether the contractual cash time value of money is material. The notional interest charge
irrespective of the business model.
flows are solely payments of principal amounts and interest. • The financial asset is held with the objective to hold the representing the unwinding of the provision discounting is
financial asset in order to collect contractual cash The Group’s investment in the insurance cell captive included in the statement of comprehensive income.
The Group classifies its financial instruments into the
flows; and is measured at fair value through profit or loss as cash
following categories: financial assets at amortised cost, Provision for insurance liability
• The contractual terms of the financial asset give rise to flows are not solely payments of principal and interest. In
financial instruments at fair value through profit or loss, The Group recognises a provision for the estimated direct
cash flows on specified dates that are solely payments addition, the Group manages this investment and evaluates
financial liabilities at amortised cost and derivatives cost of settling all outstanding claims at year-end, which
of principal and interest on the principal amount performance based on its fair value in accordance with
designated as hedging instruments. includes a provision for the cost of claims incurred but not yet
outstanding. the Group’s documented risk management or investment
reported (IBNR) at year-end as well as for the cost of claims
Financial instruments are recognised on trade date when strategy. Any fair value gains or losses as a result of
Financial assets at amortised cost are subsequently reported but not yet settled at year-end. The IBNR provision
the Group becomes a party to the contractual provisions of subsequent measurement are recognised in the statement
measured using the effective interest method and are subject is determined by using established claims patterns. Full
the instrument and are initially recognised at fair value, plus of comprehensive income.
to impairment. Gains and losses are recognised in profit or provision is made for the cost of claims reported but not yet
transaction costs for financial instruments not measured at
loss when the asset is derecognised, modified or impaired. settled at year-end by using the best information available.
fair value through profit or loss.

Significant accounting policies (continued) Franchise fee income Significant accounting policies (continued) Share-based payment transactions
Income from franchisees, calculated as a percentage of the The share ownership programme enables Group employees
1.21 Revenue sale of goods by franchisees through their point of sale to 1.23 Taxes (continued) to acquire shares in Pick n Pay Stores Limited (PIK), thereby
their customers, in accordance with the substance of the treating them as equity-settled share-based payment
Revenue is recognised when the Group satisfies performance Deferred tax
relevant franchise agreement, is recognised at a point in time, transactions in the Group.
obligations and transfers control of goods or services to its Deferred tax is recognised for temporary differences
as franchisee fee income, when the sale that gives rise to the
customers at an amount that reflects the consideration the between the carrying amounts of assets and liabilities for The fair value of awards granted is recognised as an employee
income takes place.
Group expects to be entitled to in exchange for these goods financial reporting purposes and the tax base of the assets cost expense in the statement of comprehensive income with
or services, allocated to each specific performance obligation. Lease income and liabilities at the reporting date. a corresponding increase in equity for these equity-settled
Income from operating leases in respect of property is share-based transactions. The fair value is measured at grant
Turnover Deferred tax is not recognised for the following temporary
recognised on a straight-line basis over the term of the lease. date and the cost of the awards granted is spread over the
Revenue from the sale of goods, or turnover, comprises sales differences: the initial recognition of goodwill; the initial period during which the employees become unconditionally
to customers through its owned stores and the Group’s Certain property sub-leases contain variable payment terms recognition of assets or liabilities in a transaction that is not entitled to the awards (the vesting period).
supply arrangements. All turnover is stated exclusive of value linked to sales generated from franchise stores, referred to a business combination and that affects neither accounting
added tax. as turnover rent income. Turnover rent income is recognised nor taxable profit; and investments in subsidiaries, to the The fair value of the awards granted is measured using an
in the statement of comprehensive income in the period in extent that the holding company has the ability to control the actuarial binomial option pricing model, taking into account
Turnover is recognised at a point in time when the Group the terms and conditions upon which the awards are granted.
which the event or condition that triggers the payment reversal of the temporary difference and it is probable that
transfers control of goods to its customer at the point Service and non-market performance conditions are not
occurs. the temporary difference will not reverse in the foreseeable
of sale and is measured at the consideration received or taken into account when determining the grant date fair value
future.
receivable, net of returns, trade discounts, loyalty discounts Commissions and other income of awards, but the likelihood of the conditions being met is
and volume rebates. Discounts, rebates or loyalty payments The Group acts as a payment office for the services provided The amount of deferred tax provided is based on the expected assessed as part of the Group’s best estimate of the number
to customers are deducted from turnover, unless it is directly by a variety of third parties to the Group’s customers, such manner of realisation or settlement of the carrying amount of of equity instruments that will ultimately vest. Market
funded by suppliers. Payment of the transaction price in as bill payments, sale of electricity and travel tickets. The assets and liabilities using tax rates enacted or substantively performance conditions are reflected within the grant date
respect of the sale of goods is due immediately when the related agent’s commission received is recognised as income enacted at the reporting date. fair value. Any other conditions attached to an award, but
customer purchases goods and takes delivery. at a point in time, when the transaction that gives rise to the without an associated service requirement, are considered
Deferred tax is recognised in the statement of comprehensive
income takes place. to be non-vesting conditions. Non-vesting conditions are
Turnover recognised through deferred revenue transactions income, except to the extent that it relates to a transaction
(Smart Shopper loyalty programme, prepaid gift cards and Commissions relating to the sale of third-party services are that is recognised directly in equity or other comprehensive reflected in the fair value of an award and lead to an immediate
refunds arising from virtual transactions) is not recognised recognised over time, based on the stage of completion by income, or a business combination. The effect on deferred tax expensing of an award, unless there are also service and/or
at the time of the initial transaction, but is deferred and reference to services performed to date as a percentage of any changes in tax rates is recognised in the statement of performance conditions.
recognised as a contract liability (deferred revenue) when the of total services to be performed. Commissions related to comprehensive income, except to the extent that it relates to No cumulative expense is recognised for awards that do
consideration is received and recognised as turnover over the sale of third-party products are recognised at a point in items previously recognised in other comprehensive income not ultimately vest because non-market performance and/
time, as and when the Group’s obligations are fulfilled. time, when the underlying third-party product is sold to the or directly to equity, in which case it is recognised in other or service conditions have not been met. Where awards
customer. comprehensive income or directly in equity. include a market or non-vesting condition, the transactions
Smart Shopper loyalty programme
Other income is recognised as and when the Group satisfies Deferred tax assets and liabilities are offset if there is a are treated as vested, irrespective of whether the market
The Group has a customer loyalty programme in South
its obligations in terms of the contract and includes income legally enforceable right to offset current tax liabilities and or non-vesting condition is satisfied, provided that all other
Africa, Smart Shopper, whereby customers are awarded with
earned from the sale of Smart Shopper analytical data and assets, and they relate to income taxes levied by the same performance and/or service conditions are satisfied.
reward credits (loyalty points) which are effectively used as
cash back against future purchases. Loyalty points granted the sale of advertising space through the Group’s various tax authority on the same taxable entity, or on different tax Retirement benefits
to customers participating in the Smart Shopper loyalty advertising mediums. entities but they intend to settle current tax liabilities and
The Group operates several retirement schemes comprising
programme provide rights to customers that are accounted assets on a net basis or their tax assets and liabilities will be
Finance income defined-contribution funds (one of which has a defined-
for as separate performance obligations. realised simultaneously.
Finance income is recognised over time as it accrues in the benefit element), the assets of which are held in trustee-
The consideration received under the Smart Shopper loyalty statement of comprehensive income, using the effective A deferred tax asset is recognised to the extent that it is administered funds.
programme is allocated between the sale of goods supplied interest method, by reference to the principal amounts probable that future taxable profits will be available against
Defined-contribution plans
and the loyalty points granted. The consideration allocated to outstanding and at the interest rate applicable. which the associated unused tax losses and deductible
temporary differences can be utilised. Deferred tax assets A defined-contribution plan is a post-employment benefit
the loyalty points is measured by reference to their relative
Dividend income are reviewed at each reporting date and are reduced to the plan under which the Group pays fixed contributions into a
stand-alone selling price which is calculated as the amount
Dividend income is recognised when the shareholders’ right extent that it is no longer probable that the related tax benefit separate legal entity and will have no legal or constructive
for which the loyalty points could be separately sold, adjusted
to receive payment is established. will be realised. obligation to pay further amounts.
for an expected forfeiture rate. Such consideration is not
recognised as turnover at the time of the sales transaction, Dividends withholding tax Obligations for contributions to defined-contribution
1.22 Finance costs
but is recognised as a deferred revenue liability until the retirement plans are recognised as an expense in the
Dividends withholding tax is a tax levied on shareholders and
loyalty points have been redeemed or forfeited. The likelihood Finance costs incurred are recognised as an expense in the statement of comprehensive income when they are due.
is applicable on dividends declared. The Company withholds
of redemption, based on judgement applied when determining statement of comprehensive income and are accrued on an
dividends tax on behalf of their shareholders at a rate of 20% Where the Group is responsible for providing retirement
the expected redemption rates, is reviewed on a regular effective interest basis by reference to the principal amounts
on dividends declared for shareholders that are not exempt benefits to employees with a retirement scheme outside the
basis and any adjustments to the deferred revenue liability is outstanding and at the interest rate applicable.
from this tax. Group, contributions are made on behalf of the employee and
recognised in turnover. Refer to note 26.
1.23 Taxes the cost is accounted for in the period when the services
Prepaid gift cards
1.24 Employee benefits have been rendered.
Income tax on the profit or loss for the period comprises
Gift cards represent a prepaid value card which effectively Short-term employee benefits
current and deferred tax. Income tax is recognised in the Contributions to a defined-contribution plan that are made
can be redeemed as cash consideration against future statement of comprehensive income except to the extent The cost of all short-term employee benefits is recognised as more than 12 months after the end of the period in which
purchases. The consideration allocated to prepaid gift cards that it relates to items recognised in other comprehensive an expense during the period in which the employee renders the employees render the services are discounted to their
is measured at the fair value of the consideration received income or directly in equity, in which case it is recognised in the related service. present value.
in advance, adjusted for an expected forfeiture rate. Such other comprehensive income or directly in equity. Accruals for employee entitlements to wages, salaries,
consideration is not recognised as turnover at the time of the Defined-benefit plans
Current tax bonuses and annual leave represent the amount which the
initial transaction, but is recognised as a deferred revenue A defined-benefit plan is a post-employment benefit plan
Group has a present obligation to pay as a result of employees’
liability until the prepaid gift card has been redeemed or Current tax comprises tax payable calculated on the basis of other than a defined-contribution plan.
services provided up to the reporting date. These accruals
when the Group’s obligations have been fulfilled. The Group the expected taxable income for the period using tax rates
have been calculated at undiscounted amounts based on The Group’s net obligation in respect of the defined-benefit
updates its estimates of forfeiture on a regular basis and any enacted or substantively enacted at the reporting date and
current wage and salary rates. plans is calculated separately by estimating the amount
adjustments to the deferred revenue liability are recognised any adjustment of tax payable for previous periods.
in turnover. Refer to note 26. of future benefit that qualifying employees have earned in
the current and prior periods, discounting that amount and
deducting the fair value of any plan assets.

Significant accounting policies (continued) Operating segments are individual components of an

entity that engages in business activities from which it
52 weeks to
26 February
52 weeks to
27 February
1.24 Employee benefits (continued) may earn revenues and incur expenses, whose operating 2023 2022
results are regularly reviewed by the entity’s CODM and for Rm Rm
Retirement benefits (continued) which discrete financial information is available. The CODM
Defined-benefit plans (continued) evaluates segmental performance based on profit before 2 Revenue
The calculation of defined-benefit obligations is performed tax as management believes that such information is most
by a qualified actuary using the projected unit credit method. relevant in evaluating the results of the segments against 2.1 Revenue
When the calculation results in a potential asset for the each other and other entities that operate within the retail Revenue from contracts with customers 108 409.0 99 514.1
Group, the recognised asset is limited to the present value of industry. Operating segments that display similar economic
economic benefits available in the form of any future refunds characteristics are aggregated for reporting purposes. Turnover (note 2.2) 106 561.8 97 872.8
from the plan or reductions in future contributions to the Franchise fee income 447.7 428.3
plan. To calculate the present value of economic benefits, The Group has two operating segments, namely South Africa Commissions and other income 1 399.5 1 213.0
consideration is given to any applicable minimum funding and Rest of Africa with no individual customer accounting
Insurance recoveries** 260.7 748.2
requirements. for more than 10% of turnover. South Africa operates in
Operating lease income 157.4 115.6
various formats under the Pick n Pay and Boxer brands in
Finance income 451.1 524.5
Remeasurements of the net defined-benefit liabilities or South Africa. The Rest of Africa segment is responsible for
assets, which comprise actuarial gains or losses, the return the Group’s expansion into the rest of Africa. Bank balances and investments 196.5 268.9
on plan assets (excluding amounts included in net interest on Trade receivables and other 63.8 50.7
the net defined-benefit liability) and the effect of the asset Segmental profit before tax is the reported measure used
Net investment in lease receivables (note 12) 190.8 204.9
ceiling (if any, excluding amounts included in net interest on for evaluating the Group’s operating segments’ performance.
the net defined-benefit liability) are recognised immediately in On an overall basis the segmental profit before tax is equal 109 278.2 100 902.4
other comprehensive income. The Group determines the net to the Group’s reported profit before tax. The Rest of
interest expense or income on the net defined-benefit liability Africa segment’s segmental profit before tax comprises 2.2 Disaggregation of turnover*
or asset for the period by applying the discount rate used to the segment’s trading result and directly attributable costs
South Africa operating segment (note 28) 102 721.3 94 535.2
measure the defined-benefit obligation at the beginning of the only. No allocations are made for indirect or incremental cost
incurred by the South Africa segment relating to the Rest of Pick n Pay 71 372.2 68 450.4
period to the then net defined-benefit liability or asset, taking
into account any changes in the net defined-benefit liability Africa segment. Boxer 31 349.1 26 084.8
or asset during the period as a result of contributions and Rest of Africa operating segment (note 28) 3 840.5 3 337.6
1.28 Net asset value per share
benefit payments. Net interest expense or income and other
Net asset value per share is calculated by taking the total Pick n Pay 3 292.5 2 839.7
expenses related to defined-benefit plans are recognised in
equity value of the Group, adjusted with the differential Boxer 548.0 497.9
the statement of comprehensive income.
between the carrying value and the directors’ valuation
When the benefits of a plan are changed, or when the plan 106 561.8 97 872.8
of property, divided by the number of shares held outside
is curtailed, the resulting change in benefit that relates to the Group.
past service or the gain or loss on curtailment is recognised Revenue recognised during the period, recorded within turnover, from amounts included in deferred revenue at the beginning of the
immediately in the statement of comprehensive income. 1.29 Earnings per share period amounted to R237.2 million (2022: R242.5 million). Refer to note 26.
The Group recognises gains or losses on the settlement of a Basic earnings per share is calculated by dividing the profit * In order to improve disclosure, the Group has disaggregated turnover by operating segments and further by brand. Refer to note 28 for further information.
attributable to ordinary equity holders of the Group for the ** Insurance recoveries includes insurance proceeds of R145.2million received during the current year which related to the losses suffered in the prior year as a
defined-benefit plan when the settlement occurs.
result of the civil unrest which occurred in South Africa during July 2021.
period by the weighted average number of shares in issue
1.25 Expenses (excluding treasury shares).
Expenses, other than those dealt with under a specific Dilutive earnings per share is calculated by adjusting the
accounting policy note, are recognised in the statement of profit attributable to ordinary equity holders of the Group,
comprehensive income when it is probable that an outflow of and the weighted average number of shares in issue, for the
economic benefits associated with the transaction will occur effects of all dilutive potential ordinary shares. Share options
and that it can be measured reliably. held by participants in the Group’s employee share schemes
Expenditure relating to advertising and promotional activities and forfeitable shares have dilutive potential.
are recognised as an expense when the Group has received
such services.
1.30 Pro forma information
Certain financial information presented in these Group
1.26 Dividends distributed to shareholders annual financial statements constitutes pro forma financial
Dividends are accounted for in the period that they have been information. The pro forma financial information is the
declared by the Company and are directly charged to equity. responsibility of the Board of directors of the Company and
is presented for illustrative purposes only. Because of its
1.27 Operating segments nature, the pro forma financial information may not fairly
present the Group’s financial position, changes in equity,
The Group discloses segmental financial information which
result of operations or cash flows. The Group’s external
is used internally by the entity’s Chief Operating Decision-
auditors has issued a reporting accountants report on the pro
Maker (CODM) in order to assess performance and allocate
forma financial information, which is available for inspection
resources. The Group annually performs a detailed review
at the Group’s registered office. Refer to the Appendix 1 for
of the executive, or group of executives, that could be
further information.
considered the appropriate and relevant CODM of the Group.
During the current and prior period under review, the CODM of
the Group comprised the group executive committee, which
consisted of the Chief Executive Officer and Chief Finance
Officer.

26 February 27 February
2023 2022
Rm Rm
3 Profit before tax

Profit before tax is stated after taking into account the following expenses:
3.1 Employee costs

Salaries and wages 7 594.6 6 996.8
Staff benefits and training 433.5 396.5
Share-based payments expense 59.4 149.0
Net expense recognised on defined-benefit plan (note 22.1) 6.8 1.0
Contributions to defined-contribution plans (note 22.2) 253.6 293.0
8 347.9 7 836.3
3.2 Auditor’s remuneration

Assurance services – current year 11.5 10.7
Assurance services – prior period under provision 1.6 0.6
13.1 11.3
3.3 Finance costs

Lease liabilities (note 25) 1 342.5 1 333.9
Borrowings and other 431.4 341.0
1 773.9 1 674.9
3.4 Foreign exchange (losses)/gains

Leases liabilities (6.2) 15.7
Other foreign exchange gains/(losses) 2.7 (2.8)
(3.5) 12.9
3.5 Fair value gains

Investment in insurance cell captive 23.9 14.7
Other fair value gains 2.6 3.1
26.5 17.8

46
4 Directors’ remuneration and interest in shares
4.1 Directors’ remuneration
Fees for Long-term
Fees for committee Retirement Fringe Short-term share awards
board and other and medical and other Total fixed performance Retirement Total charges –
meetings work Base salary contributions benefits remuneration bonus gratuity5 remuneration current year6
R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’ 000
2023
Non-executive directors 9 514.6 2 989.6 – – – 12 504.2 – – 12 504.2 –
www.pnp.co.za
Gareth Ackerman 4 893.0 – – – – 4 893.0 – – 4 893.0 –
Suzanne Ackerman1 430.8 286.9 – – – 717.7 – – 717.7 –
Haroon Bhorat 470.0 355.2 – – – 825.2 – – 825.2 –
Mariam Cassim 470.0 156.3 – – – 626.3 – – 626.3 –
James Formby2 235.0 78.1 – – – 313.1 – – 313.1 –
David Friedland 470.0 253.4 – – – 723.4 – – 723.4 –
Hugh Herman3 195.8 – – – – 195.8 – – 195.8 –
Aboubakar Jakoet4 470.0 383.6 – – – 853.6 – – 853.6 –

Audrey Mothupi 470.0 514.7 – – – 984.7 – – 984.7 –
David Robins 470.0 101.8 – – – 571.8 – – 571.8 –
Annamarie van der Merwe 470.0 199.0 – – – 669.0 – – 669.0 –
Jeff van Rooyen 470.0 660.6 – – – 1 130.6 – – 1 130.6 –
Executive directors – – 17 336.1 1 751.3 3 893.1 22 980.5 14 062.8 1 512.0 38 555.3 10 815.9
Pieter Boone – – 10 707.0 968.5 3 200.0 14 875.5 9 814.8 – 24 690.3 5 817.8
Lerena Olivier – – 5 160.0 488.1 340.4 5 988.5 3 870.0 – 9 858.5 3 838.0
Jonathan Ackerman – – 1 217.1 271.2 324.5 1 812.8 378.0 1 512.0 3 702.8 1 098.7
Suzanne Ackerman1 – – 252.0 23.5 28.2 303.7 – – 303.7 61.4
Total remuneration 9 514.6 2 989.6 17 336.1 1 751.3 3 893.1 35 484.7 14 062.8 1 512.0 51 059.5 10 815.9
1
Suzanne Ackerman retired as an executive director on 31 March 2022, and was appointed as a non-executive director on that date.
2
James Formby was appointed as non-executive director, effective 10 October 2022.
3
Hugh Herman retired during July 2022.
4
Aboubakar Jakoet replaced Jeff van Rooyen as Chair of the Audit, Risk and Compliance Committee in July 2022.
5
Gratuities were paid on retirement of the director in recognition of their exemplary service to the Group.
6
The long-term share awards expense or recoupment is determined in accordance with IFRS 2 Share-Based Payments, and reflects the current year’s charge recorded in the Group’s statement of comprehensive income and
statement of changes in equity. The fair value of share awards are determined at grant date, and are recognised in the statement of comprehensive income and statement of changes in equity over the period during which
the employee becomes unconditionally entitled to the award (the vesting period). Long-term share awards will vest in the future only if all the vesting criteria set out in the rules of the 1997 Employee Share Options Scheme
and the Restricted Share Plan (RSP), previously named Forfeitable Share Plan (FSP) are met. Dependent on the nature of the vesting criteria, long-term share awards expense may be reversed and recouped by the Group if
the vesting criteria are not met. Vesting criteria in respect of the RSP 2020 awards, due to vest in June 2023, have not been fully met. As a result, and as directed by the Remuneration Committee, 50% of the RSP 2020
long-term share awards have been forfeited, and the related expense recouped by the Group in the 2023 financial year. This is in line with the remuneration committee’s decision in the prior year to forfeit 50% of the
FSP 2019 awards.
Group annual financial statements
4 Directors’ remuneration and interest in shares (continued)

4.1 Directors’ remuneration (continued)
Fees for Long-term
Fees for committee Retirement Fringe Short-term share awards
board and other and medical and other Total fixed performance Retirement Total charges –
meetings work Base salary contributions benefits remuneration bonus gratuity2 remuneration current year 3
R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’ 000
2022
Non-executive directors 9 006.0 2 562.5 – – – 11 568.5 – – 11 568.5 –
Gareth Ackerman 4 893.0 – – – – 4 893.0 – – 4 893.0 –
Haroon Bhorat 457.0 345.5 – – – 802.5 – – 802.5 –
Mariam Cassim 457.0 152.0 – – – 609.0 – – 609.0 –
David Friedland 457.0 246.5 – – – 703.5 – – 703.5 –
Hugh Herman 457.0 – – – – 457.0 – – 457.0 –
Aboubakar Jakoet 457.0 242.0 – – – 699.0 – – 699.0 –
Audrey Mothupi 457.0 500.5 – – – 957.5 – – 957.5 –
David Robins 457.0 99.0 – – – 556.0 – – 556.0 –
Company annual financial statements
Annamarie van der Merwe 457.0 193.5 – – – 650.5 – – 650.5 –

Jeff van Rooyen 457.0 783.5 – – – 1 240.5 – – 1 240.5 –
Executive directors – – 20 754.5 2 028.3 5 260.7 28 043.5 15 616.9 3 024.0 46 684.4 14 163.0
Pieter Boone1 – – 8 922.5 799.1 2 759.5 12 481.1 10 492.9 – 22 974.0 5 798.6
Lerena Olivier – – 5 070.0 478.5 336.4 5 884.9 3 612.0 – 9 496.9 5 577.7
Jonathan Ackerman – – 1 512.0 268.9 322.6 2 103.5 504.0 – 2 607.5 633.3
Suzanne Ackerman – – 3 024.0 281.6 291.5 3 597.1 1 008.0 3 024.0 7 629.1 2 153.4
Richard Brasher1 – – 1 806.0 163.8 1 522.1 3 491.9 – – 3 491.9 –
Richard van Rensburg – – 420.0 36.4 28.6 485.0 – – 485.0 –
Total remuneration 9 006.0 2 562.5 20 754.5 2 028.3 5 260.7 39 612.0 15 616.9 3 024.0 58 252.9 14 163.0
Prescribed Officer
Pieter Boone1 – – 1 784.5 154.5 506.5 2 445.5 – – 2 445.5 –
1
Richard Brasher retired as CEO at the end of April 2021 and Pieter Boone was appointed as CEO on 20 April 2021. Pieter Boone was a prescribed officer up until his date of appointment.
2
Gratuities were paid on retirement of the director in recognition of their exemplary service to the Group.
3
The long-term share awards expense or recoupment is determined in accordance with IFRS 2 Share-Based Payments, and reflects the current year’s charge recorded in the Group’s statement of comprehensive income and
statement of changes in equity. The fair value of share awards are determined at grant date, and are recognised in the statement of comprehensive income and statement of changes in equity over the period during which
the employee becomes unconditionally entitled to the award (the vesting period). Long-term share awards will vest in the future only if all the vesting criteria set out in the rules of the 1997 Employee Share Options Scheme
and the Restricted Share Plan (RSP), previously named Forfeitable Share Plan (FSP) are met. Dependent on the nature of the vesting criteria, long-term share awards expense may be reversed and recouped by the Group
if the vesting criteria are not met. Vesting criteria in respect of the RSP 2020 awards, due to vest in June 2023, have not been fully met. As a result, and as directed by the Remuneration Committee, 50% of the RSP 2020
long-term share awards have been forfeited, and the related expense recouped by the Group in the 2023 financial year. This is in line with the remuneration committee’s decision in the prior year to forfeit 50% of the FSP
Additional information
2019 awards.
Audited Annual Financial Statements 2023
47
4 Directors’ remuneration and interest in shares (continued) 4 Directors’ remuneration and interest in shares (continued)
4.2 Directors’ interest in ordinary shares 4.2 Directors’ interest in ordinary shares (continued)
Balance Balance Balance Balance
held at held at Beneficial/ held at held at Beneficial/
27 February Additions/ 26 February non-beneficial 28 February Additions/ 27 February non-beneficial
2023 How held1 2022 grants Disposals Forfeits6 202311 interest2 2022 How held 1 2021 grants Disposals Forfeits6 20229 interest2
Gareth Ackerman direct 309 – – – 309 Beneficial Gareth Ackerman direct 309 – – – 309 Beneficial
indirect 1 713 106 17 920 – – 1 731 026 Beneficial indirect 1 713 106 – – – 1 713 106 Beneficial
indirect 19 762 – – – 19 762 Non-beneficial indirect 19 762 – – – 19 762 Non-beneficial
Ackerman Pick n Pay Ackerman Pick n Pay
Foundation3 indirect 101 900 – – – 101 900 Non-beneficial Foundation3 indirect 101 900 – – – 101 900 Non-beneficial
Ackerman Family Investment Ackerman Family Investment
Holdings Proprietary Limited4 indirect 1 – – – 1 Non-beneficial Holdings Proprietary Limited4 indirect 1 – – – 1 Non-beneficial
Ackerman Investment Holdings Ackerman Investment Holdings
Proprietary Limited5 indirect 124 677 237 – – – 124 677 237 Non-beneficial Proprietary Limited5 indirect 124 677 237 – – – 124 677 237 Non-beneficial
Mistral Trust 7
indirect 2 812 000 38 000 – – 2 850 000 Non-beneficial Mistral Trust 7
indirect 2 800 000 12 000 – – 2 812 000 Non-beneficial
Pieter Boone direct – RSP 500 000 178 500 – – 678 500 Beneficial Pieter Boone direct – RSP – 500 000 – – 500 000 Beneficial
Lerena Olivier direct 51 300 26 750 (14 000) – 64 050 Beneficial Lerena Olivier direct 40 500 10 800 – – 51 300 Beneficial
direct – RSP/FSP 257 000 87 000 (50 000) (60 000) 234 000 Beneficial direct – RSP/FSP 240 000 87 000 (20 000) (50 000) 257 000 Beneficial
Suzanne Ackerman8 direct 120 528 – – – 120 528 Beneficial Suzanne Ackerman8 direct 120 528 – – – 120 528 Beneficial
direct – RSP/FSP 122 500 – (38 714) (83 786) – Beneficial direct – RSP/FSP 90 000 55 000 (15 000) (7 500) 122 500 Beneficial
indirect 533 169 20 714 – – 553 883 Beneficial indirect 625 069 8 100 (100 000) – 533 169 Beneficial
Jonathan Ackerman9 direct 122 888 – – – 122 888 Beneficial Jonathan Ackerman direct 122 888 – – – 122 888 Beneficial
direct – RSP/FSP 61 000 – (4 000) (15 000) 42 000 Beneficial direct – RSP/FSP 46 000 27 000 (8 000) (4 000) 61 000 Beneficial
indirect 807 419 21 371 – – 828 790 Beneficial indirect 799 419 8 000 – – 807 419 Beneficial
indirect 2 161 – – – 2 161 Non-beneficial indirect 2 161 – – – 2 161 Non-beneficial
Aboubakar Jakoet direct 758 764 – (750 000) – 8 764 Beneficial Aboubakar Jakoet direct 758 764 – – – 758 764 Beneficial
indirect – 750 000 – – 750 000 Beneficial indirect 13 059 – – – 13 059 Non-beneficial
indirect 13 059 – – – 13 059 Non-beneficial
David Friedland indirect 51 688 – (10 000) – 41 688 Beneficial
David Friedland indirect 41 688 – (7 500) – 34 188 Beneficial
David Robins direct 975 – – – 975 Beneficial
David Robins direct 975 – – – 975 Beneficial indirect 90 436 – – – 90 436 Non-beneficial
indirect 90 436 – – – 90 436 Non-beneficial
Hugh Herman direct 30 000 – – – 30 000 Beneficial
James Formby10 direct 4 000 – – – 4 000 Beneficial indirect 256 – – – 256 Beneficial
indirect 13 625 13 100 – – 26 725 Beneficial 1
Direct interests represent a holding in the director’s personal capacity. Indirect interests represent a holding by a trust (of which the director is a trustee),
1
Direct interests represent a holding in the director’s personal capacity. Indirect interests represent a holding by a trust (of which the director is a trustee), a spouse or minor children of directors.
a spouse or minor children of directors. 2
Beneficial interest represents an interest in shares in which a person is entitled to receive income payable in respect to that shareholding and obtain any
2
Beneficial interest represents an interest in shares in which a person is entitled to receive income payable in respect to that shareholding and obtain any benefit as a result of holding those shares. Non-beneficial interest represents an interest in shares in which a person will not benefit directly as a result of
benefit as a result of holding those shares. Non-beneficial interest represents an interest in shares in which a person will not benefit directly as a result of holding those shares.
holding those shares. 3
The indirect non-beneficial interest in the Ackerman Pick n Pay Foundation represents the holdings of Gareth Ackerman and Suzanne Ackerman in their
3
The indirect non-beneficial interest in the Ackerman Pick n Pay Foundation represents the holdings of Gareth Ackerman and Suzanne Ackerman in their capacities as trustees.
capacities as trustees. 4
The indirect non-beneficial interest in Ackerman Family Investment Holdings Proprietary Limited represents a portion of the holdings of Gareth Ackerman,
4
The indirect non-beneficial interest in Ackerman Family Investment Holdings Proprietary Limited represents a portion of the holdings of Gareth Ackerman, Suzanne Ackerman and Jonathan Ackerman.
Suzanne Ackerman and Jonathan Ackerman. 5
The indirect non-beneficial interest in Ackerman Investment Holdings Proprietary Limited represents a portion of the holdings of Gareth Ackerman,
5
The indirect non-beneficial interest in Ackerman Investment Holdings Proprietary Limited represents a portion of the holdings of Gareth Ackerman, Suzanne Ackerman and Jonathan Ackerman.
Suzanne Ackerman and Jonathan Ackerman. 6
As a result of the trade disruptions experienced in the 2022 financial year, the Group did not fully achieve the three-year headline earnings per share
6
As a result of the disruptions experienced in the 2023 financial year, the Group did not fully achieve the three-year headline earnings per share performance performance target required for the successful delivery of the 2019 FSP award. As a result, and as directed by the Remuneration Committee, 50% of the
target required for the successful delivery of the 2020 RSP award. As a result, and as directed by the Remuneration Committee, 50% of the RSP 2020 long- FSP 2019 long-term share awards have been forfeited, and the related expense recouped by the Group in the 2022 financial year. The remaining shares will
term share awards have been forfeited, and the related expense recouped by the Group in the 2023 financial year. The remaining shares will be delivered to be delivered to participants at the end of June 2022.
participants at the end of June 2023. 7
The indirect non-beneficial interest in Mistral Trust represents a portion of the holdings of Gareth Ackerman, Suzanne Ackerman and Jonathan Ackerman in
7
The indirect non-beneficial interest in Mistral Trust represents a portion of the holdings of Gareth Ackerman, Suzanne Ackerman and Jonathan Ackerman in their capacity as trustees and/or potential beneficiaries.
their capacity as trustees and/or potential beneficiaries. 8
8
Suzanne Ackerman retired as an executive director on 31 March 2022, and was appointed as a non-executive director on that date. 9
There have been no changes in the directors’ interest in ordinary shares since 27 February 2022 up to the date of approval of the 2022 audited Group annual
9
Jonathan Ackerman retired as an executive director on 31 March 2023, and was appointed as a non-executive director on that date. financial statements.
10
James Formby was appointed as non-executive director on 10 October 2022. The balance as at 27 February 2022 and the additions during the current year,
reflects the interest and movement in shares prior to the non-executive director appointment.
11
There have been no changes in the directors’ interest in ordinary shares since 26 February 2023 up to the date of approval of the 2023 audited Group annual
financial statements.

4 Directors’ remuneration and interest in shares (continued) 4 Directors’ remuneration and interest in shares (continued)
4.3 Directors’ interest in B shares 4.4 Share awards granted to directors
Balance Balance Beneficial/ Balance Balance
held at held at non- Calendar Award held at Exercise held at
27 February 26 February beneficial year grant price 27 February Granted/ price 26 February Available
2023 granted R 2022 Forfeits 3 (exercised) R 2023 for take-up
2023 How held1 2022 Additions Disposals 20237 interest2
Pieter Boone
Gareth Ackerman direct 522 – – 522 Beneficial
Restricted shares 2021 Nil 500 000 – – – 500 000 June 2024
indirect 3 227 861 – – 3 227 861 Beneficial 2022 Nil – – 178 500 – 178 500 June 2025
indirect 39 140 – – 39 140 Non-beneficial
500 000 – 178 500 678 500
Ackerman Investment Holdings Lerena Olivier
Proprietary Limited3 indirect 246 936 847 – – 246 936 847 Non-beneficial Share options 2019 58.05 80 000 – – – 80 000 Now
Mistral trust4 indirect 5 349 559 – – 5 349 559 Non-beneficial 2019 58.05 60 000 – – – 60 000 September 2024
2019 58.05 60 000 – – – 60 000 September 2026
Suzanne Ackerman5 direct 233 767 – – 233 767 Beneficial Forfeitable shares 2019 Nil 50 000 – (50 000) 59.14 – n/a
indirect 926 084 – – 926 084 Beneficial Restricted shares 2020 Nil 120 000 (60 000) – – 60 000 June 2023
2021 Nil 87 000 – – – 87 000 June 2024
Jonathan Ackerman6 direct 243 307 – – 243 307 Beneficial
2022 Nil – – 87 000 – 87 000 June 2025
indirect 1 135 009 – – 1 135 009 Beneficial
indirect 4 280 – – 4 280 Non-beneficial 457 000 (60 000) 37 000 434 000
Suzanne Ackerman 1
David Robins direct 1 931 – – 1 931 Beneficial
Forfeitable shares 2019 Nil 7 500 – (7 500) 59.14 – n/a
indirect 179 118 – – 179 118 Non-beneficial Restricted shares 2020 Nil 60 000 (28 786) (31 214) 59.14 – n/a
1
Direct interests represent a holding in the director’s personal capacity. Indirect interests represent a holding by a trust (of which the director is a trustee), 2021 Nil 55 000 (55 000) – – – n/a
a spouse or minor children of directors. 122 500 (83 786) (38 714) –
2
Beneficial interest represents an interest in shares in which a person is entitled to receive income payable in respect to that shareholding and obtain any
benefit as a result of holding those shares. Non-beneficial interest represents an interest in shares in which a person will not benefit directly as a result of Jonathan Ackerman2
holding those shares. Forfeitable shares 2019 Nil 4 000 – (4 000) 59.14 – n/a
3
The indirect non-beneficial interest in Ackerman Investment Holdings Proprietary Limited represents a portion of the holdings of Gareth Ackerman, Restricted shares 2020 Nil 30 000 (15 000) – – 15 000 June 2023
Suzanne Ackerman and Jonathan Ackerman. 2021 Nil 27 000 – – – 27 000 June 2024
4
The indirect non-beneficial interest in Mistral Trust represents a portion of the holdings of Gareth Ackerman, Suzanne Ackerman and Jonathan Ackerman 61 000 (15 000) (4 000) 42 000
in their capacity as trustees and/or potential beneficiaries.
5
Suzanne Ackerman retired as an executive director on 31 March 2022, and was appointed as a non-executive director on that date. 1
6
Jonathan Ackerman retired as an executive director on 31 March 2023, and was appointed as a non-executive director on that date. 2
Jonathan Ackerman retired as an executive director on 31 March 2023, and was appointed as a non-executive director on that date.
7
There have been no changes in the directors’ interest in shares since 26 February 2023 up to the date of approval of the 2023 audited Group annual 3
As a result of the disruptions experienced in the 2023 financial year, the Group did not fully achieve the three-year headline earnings per share performance
financial statements.
target required for the successful delivery of the 2020 RSP award. As a result, and as directed by the Remuneration Committee, 50% of the RSP 2020 long-
term share awards have been forfeited, and the related expense recouped by the Group in the 2023 financial year. The remaining shares will be delivered to
Balance Balance Beneficial/
participants at the end of June 2023.
held at held at non-
28 February 27 February beneficial Balance Balance
2022 How held1 2021 Additions Disposals 2022 interest2 Calendar Award held at Exercise held at
year grant price 28 February Granted/ price 27 February Available
Gareth Ackerman direct 522 – – 522 Beneficial 2022 granted R 2021 Forfeits2 (exercised) R 2022 for take-up
Pieter Boone
indirect 39 140 – – 39 140 Non-beneficial Restricted shares 2021 Nil – – 500 000 – 500 000 June 2024
Ackerman Investment Holdings – – 500 000 – 500 000
Proprietary Limited3 indirect 246 936 847 – – 246 936 847 Non-beneficial
Lerena Olivier
Mistral trust 4
indirect 5 349 559 – – 5 349 559 Non-beneficial Share options 2019 58.05 80 000 – – – 80 000 September 2022
2019 58.05 60 000 – – – 60 000 September 2024
Suzanne Ackerman 5
direct 233 767 – – 233 767 Beneficial 2019 58.05 60 000 – – – 60 000 September 2026
indirect 926 084 – – 926 084 Beneficial Forfeitable shares 2018 Nil 20 000 – (20 000) 51.71 – n/a
Jonathan Ackerman direct 243 307 – – 243 307 Beneficial 2019 Nil 100 000 (50 000) – – 50 000 June 2022
Restricted shares 2020 Nil 120 000 – – – 120 000 June 2023
2021 Nil – – 87 000 – 87 000 June 2024
440 000 (50 000) 67 000 457 000
David Robins direct 1 931 – – 1 931 Beneficial
Suzanne Ackerman1
Forfeitable shares 2018 Nil 15 000 – (15 000) 51.71 – n/a
1
Direct interests represent a holding in the director’s personal capacity. Indirect interests represent a holding by a trust (of which the director is a trustee), 2019 Nil 15 000 (7 500) – – 7 500 June 2022
a spouse or minor children of directors. Restricted shares 2020 Nil 60 000 – – – 60 000 June 2023
2
Beneficial interest represents an interest in shares in which a person is entitled to receive income payable in respect to that shareholding and obtain any 2021 Nil – – 55 000 – 55 000 June 2024
benefit as a result of holding those shares. Non-beneficial interest represents an interest in shares in which a person will not benefit directly as a result of
holding those shares. 90 000 (7 500) 40 000 122 500
3
The indirect non-beneficial interest in Ackerman Investment Holdings Proprietary Limited represents a portion of the holdings of Gareth Ackerman, Jonathan Ackerman
Suzanne Ackerman and Jonathan Ackerman. Forfeitable shares 2018 Nil 8 000 – (8 000) 51.71 – n/a
4
The indirect non-beneficial interest in Mistral Trust represents a portion of the holdings of Gareth Ackerman, Suzanne Ackerman and Jonathan Ackerman in 2019 Nil 8 000 (4 000) – – 4 000 June 2022
their capacity as trustees and/or potential beneficiaries. Restricted shares 2020 Nil 30 000 – – – 30 000 June 2023
5
Suzanne Ackerman retired as an executive director on 31 March 2022, and was appointed as a non-executive director on that date. 2021 Nil – – 27 000 – 27 000 June 2024
46 000 (4 000) 19 000 61 000
1
2
As a result of the trade disruptions experienced in the 2022 financial year, the Group did not fully achieve the three-year headline earnings per share
performance target required for the successful delivery of the 2019 FSP award. As a result, and as directed by the Remuneration Committee, 50% of the FSP
2019 long-term share awards have been forfeited, and the related expense recouped by the Group in the 2022 financial year. The remaining shares will be
delivered to participants at the end of June 2022.

5 Share-based payments 52 weeks to

26 February
52 weeks to
27 February
Share options 2023 2022
Number of Number of
The Group’s legacy share option scheme (the 1997 Employee Share Option Scheme) was replaced by a cash retention scheme during options options
the 2021 financial period. The share option scheme remains in operation and all outstanding share options previously awarded under 000’s 000’s
the scheme will be delivered to participants within the next 5 years under the original terms and conditions of the awards. Share option
awards ceased in August 2020 and no further share options will be awarded under this scheme. 5 Share-based payments (continued)
The Scheme is administered by the Employee Share Purchase Trust (the share trust) and its board of trustees. All options previously
granted were in accordance with the rules of the Scheme, which have been approved by shareholders and the Johannesburg Stock
5.1 Outstanding share options
Exchange (JSE). Reconciliation of the total number of share options outstanding:
Share options were granted at the volume-weighted average market price (VWAP) for the 20 trading days preceding the option grant At beginning of period 18 566.9 21 927.5
date. No discount was applied. There are no performance conditions attached to outstanding share options. Vesting is only dependent on Options taken up (4 428.7) (1 963.6)
the employee meeting the service requirement of remaining in the employ of the Group over the specified vesting period. If the employee Options forfeited (975.9) (1 397.0)
leaves before the vesting period is complete, all the unvested share options will lapse. At end of period 13 162.3 18 566.9
Restricted Share Plan (RSP) The weighted average grant price of outstanding share options are as follows:
The RSP recognises executive and senior management employees who have a significant role to play in delivering Group strategy At beginning of period R57.95 R56.53
and ensuring the growth and sustainability of the Group. Through the attachment of performance conditions, the RSP incentivises Options taken up R35.68 R37.20
participating employees to deliver long-term earnings growth in line with the objectives set out in the Group’s long-term strategic plan. Options forfeited R66.06 R62.08
An award of shares may also be used to attract talented prospective employees. At end of period R64.79 R57.95
Shares awarded under the RSP have performance conditions attached. Performance conditions include a three-year compound annual
growth rate of the Group’s pro forma headline earnings per share (HEPS), and a gatekeeper clause which specifies that the Group’s Outstanding share options may be taken up during the following financial periods: 000’s 000’s
return on capital employed (ROCE) must be greater than its weighted average cost of capital (WACC) over the vesting period. Vesting is Year Average grant price
dependent on service and performance conditions being met, subject to the discretion of the Group’s remuneration committee, within 2024 R64.17 9 694.0 12 859.7
the RSP scheme rules. 2025 R64.58 1 412.6 1 995.2
2026 R70.19 1 347.6 1 520.2
The RSP is a modernisation of the Group’s (previously named) Forfeitable Share Plan, following shareholder approval received at the
2027 R65.35 619.1 1 427.4
AGM in August 2020 for the remuneration committee to utilise greater discretion in respect of dividend rights granted to participants.
2028 and thereafter R51.03 89.0 764.4
In issuing the 2020 and subsequent RSP awards, the remuneration committee exercised its discretion and dividends will only be paid
to participants on the successful vesting of the scheme, in direct proportion to the number of shares which vest. Going forward, the 13 162.3 18 566.9
remuneration committee will annually consider if dividends will be withheld on shares which ultimately do not vest.
Number of outstanding options as a percentage of issued shares 2.7% 3.8%
Funding of employee share incentive schemes
Shareholders have authorised the Board to utilise up to 63.9 million (2022: 63.9 million) Pick n Pay Stores Limited (PIK) shares to manage Number of Number of
the Group’s employee share option and restricted share schemes, representing 13% (2022: 13%) of issued share capital. restricted shares restricted shares
000’s 000’s
5.2 Outstanding restricted shares

Reconciliation of the total number of restricted shares outstanding:
At beginning of period 7 707.6 9 004.5
Shares granted 2 629.1 3 302.9
Shares delivered to participants (note 20) (815.5) (3 562.0)
Share awards forfeited (2 508.7) (1 037.8)
At end of period 7 012.5 7 707.6
Rights to RSP shares are issued with a grant price of zero.

The fair value of rights to RSP shares is the market price of the share at grant date adjusted for the
expected dividend yield, which is the best estimate of the forward looking dividend yield over the
life of the RSP. Estimates are based on the historical average dividend yield during the two year
period preceding the grant.
Vesting criteria in respect of the RSP 2020 awards, due to vest in June 2023, have not been fully
met. As a result, and as approved by the remuneration committee, 50% of the RSP 2020 share
awards have been forfeited.
Outstanding restricted shares vest during the following financial periods:
2023 – 846.7
2024 1 549.5 3 600.0
2025 2 833.9 3 260.9
2026 2 629.1 –
7 012.5 7 707.6
Number of restricted shares as a percentage of issued shares 1.4% 1.6%


2023 2022 2023 2022
Number of Number of Cents per share Cents per share
share awards share awards
000’s 000’s 7 Basic, headline and diluted earnings per share
5 Share-based payments (continued) Basic earnings per share
Diluted earnings per share
243.37
242.54
253.34
252.43
5.3 Total outstanding share awards Headline earnings per share 259.25 262.59
Diluted headline earnings per share 258.36 261.65
Share options (note 5.1) 13 162.3 18 566.9
Restricted shares (note 5.2) 7 012.5 7 707.6 Rm Rm
Total 20 174.8 26 274.5
7.1 Reconciliation between basic and headline earnings
Number of share awards as a percentage of issued shares 4.1% 5.5%
Profit for the period – basic earnings for the period 1 169.9 1 214.5
000’s 000’s Adjustments: 76.3 44.4
Total shares authorised to be utilised, from issued share capital, for settling obligations under the Loss/(profit) on disposal of assets 33.9 (31.6)
employee share schemes 63 892.8 63 892.8 Tax effect of (loss)/profit on disposal of assets (9.5) 3.5
Shares remaining for utilisation under current authorisations 43 718.0 37 618.3 Loss from impairments and scrapping of assets 66.8 273.6
Tax effect of loss from impairments and scrapping of assets (10.7) (63.9)
Refer to note 4 for details of share awards held by and granted to directors. Insurance recoveries on scrapping of assets due to civil unrest (13.8) (210.5)
Tax effect of insurance recoveries on scrapping of assets due to civil unrest 3.9 58.9
52 weeks to 52 weeks to Impairment loss on investment in associate 5.7 14.4
2023 2022 Headline earnings for the period 1 246.2 1 258.9
Rm Rm For pro forma headline earnings per share and pro forma diluted headline earnings per share, refer to Appendix 3.
6 Income tax 000’s 000’s

6.1 Tax recognised in profit or loss 7.2 Number of ordinary shares
Normal tax 448.4 479.4 Number of ordinary shares in issue (note 19) 493 450.3 493 450.3
– current period 431.0 510.7 Weighted average number of ordinary shares in issue (excluding treasury shares) 480 702.1 479 389.3
– prior period under/(over) provision 17.4 (31.3) Diluted weighted average number of ordinary shares in issue 482 344.2 481 128.4
Deferred tax (note 13) 89.3 67.6 Reconciliation of weighted average number of ordinary shares to diluted weighted average
number of ordinary shares:
537.7 547.0
Weighted average number of ordinary shares in issue (excluding treasury shares) 480 702.1 479 389.3
6.2 Tax paid Dilutive effect of share awards 1 642.1 1 739.1
Owing – beginning of period 279.8 218.6 Diluted weighted average number of ordinary shares in issue 482 344.2 481 128.4
Recognised in profit or loss 448.4 479.4
Interest income – (14.3) Any outstanding restricted shares granted in terms of the Group’s executive restricted share plan, that have not yet met required
Owing – end of period (269.8) (279.8) performance hurdles, have no dilutive impact on the weighted average number of shares in issue.
Total tax paid 458.4 403.9
% %
6.3 Reconciliation of effective tax rate

South African statutory tax rate 28.0 28.0
ETI allowances and other exempt income (2.8) (2.9)
Learnership and other allowances (1.2) (1.5)
Impact of foreign tax rates 1.2 2.3
Impact of fair value adjustments (0.4) (0.2)
Non-deductible impairment loss on intangible assets 0.1 0.1
Non-deductible leasehold improvement and property depreciation 4.7 3.8
Impact of share-based payments 0.3 1.5
Other non-deductible expenditure 0.4 0.5
Net prior period under/(over) provisions 0.3 (1.1)
Effect of reduction in South Africa tax rate 0.9 0.6
Effective tax rate 31.5 31.1

52 weeks to 52 weeks to Systems

26 February 27 February Goodwill development* Licences Total
2023 2022 Rm Rm Rm Rm
Cents per share Cents per share
9 Intangible assets
8 Dividends 52 weeks to 26 February 2023
8.1 Dividends paid during the financial period Carrying value 952.8 459.3 12.3 1 424.4
Final dividend number 108 – declared 16 May 2022 – paid 6 June 2022 Cost 1 005.3 939.4 22.5 1 967.2
(2022: Number 106 – declared 20 April 2021 – paid 7 June 2021) 185.35 161.00 Accumulated amortisation and impairment losses (52.5) (480.1) (10.2) (542.8)
Interim dividend number 109 – declared 17 October 2022 – paid 5 December 2022 Reconciliation of carrying value
(2022: Number 107 – declared 19 October 2021 – paid 6 December 2021) 44.85 35.80 At beginning of period 624.7 348.4 14.0 987.1
Total dividends per share for the period 230.20 196.80 Additions – 228.5 3.0 231.5
Expansion of operations – 158.9 0.4 159.3
8.2 Dividends declared related to the financial period
Maintaining operations – 69.6 2.6 72.2
Final dividend declared on 3 May 2023 – number 110
Amortisation – (92.2) (4.4) (96.6)
(2022: Final dividend declared on 16 May 2022 – number 108) 140.30 185.35
Impairment (4.7) – – (4.7)
Interim dividend declared on 17 October 2022 – number 109
Disposals – (25.4) (0.3) (25.7)
(2022: Interim dividend declared on 19 October 2021 – number 107) 44.85 35.80
Purchase of operations (note 31) 332.8 – – 332.8
185.15 221.15
At end of period 952.8 459.3 12.3 1 424.4
The directors have declared a final dividend (dividend 110) of 140.30000 cents per share out of income reserves. The dividend is subject 52 weeks to 27 February 2022
to dividend withholding tax at 20%, where shareholders are subject to this tax. The last day to trade in order to participate in the dividend Carrying value 624.7 348.4 14.0 987.1
(CUM dividend) will be Tuesday, 30 May 2023. The shares will trade EX dividend from the commencement of business on Wednesday,
Cost 678.0 765.2 19.8 1 463.0
31 May 2023 and the record date will be Friday, 2 June 2023. The dividends will be paid on Monday, 5 June 2023.
Accumulated amortisation and impairment losses (53.3) (416.8) (5.8) (475.9)
Reconciliation of carrying value
At beginning of period 603.5 382.3 20.2 1 006.0
Additions – 88.1 – 88.1
Expansion of operations – 30.4 – 30.4
Maintaining operations – 57.7 – 57.7
Amortisation – (117.4) (6.0) (123.4)
Impairment (6.6) (1.0) – (7.6)
Scrapping of assets – civil unrest – (0.3) – (0.3)
Disposals – (3.8) (0.2) (4.0)
Purchase of operations (note 31) 27.8 – – 27.8
Foreign currency translations – 0.5 – 0.5
At end of period 624.7 348.4 14.0 987.1
* Majority of additions to systems development assets during the current and prior periods are internally generated.
Cash-generating units (CGUs) to which goodwill has been allocated have been identified as trading sites or clusters. The recoverable
amount for each CGU was determined based on value-in-use calculations. The value-in-use calculations discount cash flow forecasts
at an appropriate pre-tax rate that reflects the specific risks of the relevant CGU. Cash flow forecasts are based on financial budgets
(informed by past experience and the expected performance on the retail market in the relevant areas) approved by management.
Goodwill that is significant to the Group’s total carrying amount of goodwill, with a carrying value of R135.0 million (2022: R135.0 million),
relates to the acquisition of the CGU trading as Boxer. The value-in-use was determined based on cash flow projections approved by
management covering a five-year reporting period. Cash flows beyond these planning periods were extrapolated using an estimated
growth rate of 6.5% (2022: 7.0%), derived from average industry retail sales growth. The growth rate does not exceed the long-term
average growth rate for the business units in which this CGU operates. The pre-tax discount rate applied to cash flow projections was
15.3% (2022: 10.9%). Management believes that any reasonable possible change in the key assumptions on which this CGU’s recoverable
amount is based would not cause its carrying amount to exceed its recoverable amount.
The remaining goodwill, with a carrying value of R817.8 million (2022: R489.7 million), relates to various acquisitions or conversions of
underperforming franchise stores to owned stores. Goodwill recognised by the Boxer CGU amounts to R270.4million (2022: R178.4 million),
and R113.2 million relates to the purchase of a single franchise store. The remaining purchases are immaterial in relation to the Group’s
total carrying amount of goodwill.
The value-in-use for each CGU was determined based on cash flow projections approved by management covering the relevant CGU’s
refurbishment cycles, which averages five years. The pre-tax discount rate applied to these cash flow projections was 16.7% (2022: 9.9%)
in the South Africa operating segment and 16.0% (2022: 16.0%) in the Rest of Africa operating segment. Cash flows for CGUs in the
South Africa operating segment beyond these planning periods were extrapolated using an estimated growth rate of 4.1% (2022: 4.8%).
Management believes that any reasonable possible change in key assumptions on which these CGU’s recoverable amounts are based
would not result in any additional significant impairment losses.
The impairment charge in the current financial year of R4.7 million (2022: R6.6 million) arose in one (2022: nine) CGUs. These CGUs are
individual owned stores, which is not material to the Group’s overall portfolio of stores. This impairment was as a result of a significant
reduction in the future expected revenue of the CGU due to a weakening in the general economic conditions in which the CGU operates.
During the period under review, the Group incurred R73.2 million on research activities, recorded as an expense within merchandising and
administration in the statement of comprehensive income.

Furniture,
fittings,
11 Right-of-use assets
equipment and Leasehold The Group enters into various lease agreements as the lessee of property, equipment and vehicles. Where leases convey the right to
Property vehicles improvements Aircraft Total control the use of the underlying leased assets, the Group classifies these leases as right-of-use assets in a consistent manner to its
Rm Rm Rm Rm Rm property, plant and equipment.
10 Property, plant and equipment 52 weeks to

26 February
52 weeks to
27 February
52 weeks to 26 February 2023 2023 2022
Carrying value 1 399.1 6 226.1 1 218.2 49.8 8 893.2 Rm Rm
Cost 1 674.3 10 030.9 2 393.0 78.3 14 176.5 Reconciliation of carrying value of right-of-use assets
Accumulated depreciation and impairment losses (275.2) (3 804.8) (1 174.8) (28.5) (5 283.3) At beginning of period 9 588.9 10 050.6
Reconciliation of carrying value Additions 3 849.7 2 299.9
At beginning of period 1 490.5 4 618.6 986.6 54.8 7 150.5 Depreciation (2 148.2) (1 979.9)
Additions 210.4 2 685.3 506.2 – 3 401.9 Property (1 806.1) (1 654.6)
Expansion of operations 189.9 1 165.2 139.0 – 1 494.1 Equipment and vehicles (342.1) (325.3)
Maintaining operations 20.5 1 520.1 367.2 – 1 907.8 Other movements* (87.8) (747.2)
Depreciation (40.0) (1 019.9) (255.6) (5.0) (1 320.5) Impairment (12.2) (56.6)
Impairment – (42.7) (7.2) – (49.9) Foreign currency translations 4.6 22.1
Disposals (11.8) (52.9) (11.8) – (76.5) At end of period 11 195.0 9 588.9
Purchase of operations (note 31) – 30.0 – – 30.0
Transfer to non-current asset held for sale (250.0) – – – (250.0) Comprising of:
Foreign currency translations – 7.7 – – 7.7 Property 10 089.1 9 125.7
Equipment and vehicles 1 105.9 463.2
At end of period 1 399.1 6 226.1 1 218.2 49.8 8 893.2
52 weeks to 27 February 2022 * Other movements include lease incentives received, remeasurements and termination of leases.
Carrying value 1 490.5 4 618.6 986.6 54.8 7 150.5 The Group treats each store as a separate CGU for impairment testing of right-of-use assets. The recoverable amount of each CGU is the
Cost 1 928.1 8 527.2 1 918.6 78.3 12 452.2 higher of its value-in-use and its fair value less costs of disposal. Each CGU is tested for impairment at the reporting date to determine if
Accumulated depreciation and impairment losses (437.6) (3 908.6) (932.0) (23.5) (5 301.7) any indicators of impairment have been identified. Impairment loss indicators include loss-making stores.
Reconciliation of carrying value The recoverable amount for each CGU was determined based on value-in-use calculations. The value-in-use calculations discount cash
At beginning of period 1 357.1 4 277.9 947.6 60.0 6 642.6 flow forecasts at an appropriate pre-tax rate that reflects the specific risks of the relevant CGU. Cash flow forecasts are based on
Additions 226.3 1 485.3 278.5 – 1 990.1 financial budgets (informed by past experience and the expected performance on the retail market in the relevant areas) approved by
management.
Expansion of operations 202.6 568.3 98.6 – 869.5
Maintaining operations 23.7 917.0 179.9 – 1 120.6 The value-in-use was determined based on cash flow projections approved by management covering the relevant CGU’s refurbishment
Depreciation (35.8) (953.4) (221.6) (5.2) (1 216.0) cycles, which averages five years. The pre-tax discount rate applied to these cash flow projections was 16.7% (2022: 9.9%) in the South
Impairment – (49.0) (3.6) – (52.6) Africa operating segment and 16.0% (2022: 16.0%) in the Rest of Africa operating segment. Cash flows for CGUs in the South Africa
Scrapping of assets – civil unrest – (144.9) (11.6) – (156.5) operating segment beyond these planning periods were extrapolated using an estimated growth rate of 4.1% (2022: 4.8%). Management
believes that any reasonable possible change in key assumptions on which these CGU’s recoverable amounts are based would not result
Disposals (57.1) (48.9) (4.5) – (110.5)
in any additional significant impairment losses.
Purchase of operations (note 31) – 27.9 – – 27.9
Foreign currency translations – 23.7 1.8 – 25.5 The impairment charge in the current financial year of R12.2 million (2022: R56.6 million) arose in five (2022: 12) CGUs. These CGUs are
At end of period 1 490.5 4 618.6 986.6 54.8 7 150.5 individual owned stores, which is not material to the Group’s overall portfolio of stores. This impairment was as a result of a significant
Property includes land with an indefinite useful life, with a carrying value of R342.7 million (2022: R366.7 million).
The Group treats each store as a separate CGU for impairment testing of property, plant and equipment. The recoverable amount of each
CGU is the higher of its value-in-use and its fair value less costs of disposal. Each CGU is tested for impairment at the reporting date to
determine if any indicators of impairment have been identified. Impairment loss indicators include loss-making stores.
The recoverable amount for each CGU was determined based on value-in-use calculations. The value-in-use calculations discount cash
flow forecasts at an appropriate pre-tax rate that reflects the specific risks of the relevant CGU. Cash flow forecasts are based on financial
budgets (informed by past experience and the expected performance on the retail market in the relevant areas) approved by management.
The value-in-use was determined based on cash flow projections approved by management covering the relevant CGU’s refurbishment
cycles, which averages five years. The pre-tax discount rate applied to these cash flow projections was 16.7% (2022: 9.9%) in the South
Africa operating segment and 16.0% (2022: 16.0%) in the Rest of Africa operating segment. Cash flows for CGUs in the South Africa
operating segment beyond these planning periods were extrapolated using an estimated growth rate of 4.1% (2022: 4.8%). Management
believes that any reasonable possible change in key assumptions on which these CGU’s recoverable amounts are based would not result
in any additional significant impairment losses.
The impairment charge in the current financial year of R49.9 million (2022: R52.6 million) arose in 26 (2022: 21) CGUs. These CGUs are
individual owned stores, which are not material to the Group’s overall portfolio of stores. This impairment was as a result of a significant
Non-current asset held for sale

The Group’s Longmeadow Distribution Centre, with a property carrying value of R250 million, previously disclosed as property, plant and
equipment, has been reclassified to non-current assets held for sale within the South Africa segment, as it is in the process of being
sold. The Group is in the final stages of concluding the sale, which is expected to occur within the next 12 months. The Group is replacing
its Longmeadow Distribution Centre with the new Eastport Distribution Centre. At period-end, the property is recognised at carrying
value, which is the lower of carrying value and fair value less costs to sell and the reclassification had no impact on the statement of
comprehensive income. Refer to the review of operations for more information.

12 Net investment in lease receivables 52 weeks to

26 February
52 weeks to
27 February
In addition to its primary property lease portfolio, the Group holds head leases over strategic franchise sites. These sites are sub-let 2023 2022
to franchisees, with the franchisees holding the right to control the use of leased assets. Where the Group does not retain the right to Rm Rm
control the use of leased assets due to the leased asset being subjected to a sub-lease, right-of-use assets are not recognised on the
statement of financial position. The Group recognises the present value of future lease payments under head leases as lease liabilities 13 Deferred tax
(note 25), and capitalises the present value of future lease receivables under sub-leases as net investment in lease receivables. Future
lease payments are discounted at an average borrowing rate of 8.2% (2022: 8.2%). Deferred tax assets 734.1 822.5
The movement in net deferred tax assets are as follows:
At beginning of period 822.5 902.6
2023 2022 Recognised in profit or loss (note 6) (89.3) (67.6)
Rm Rm Property, plant and equipment and intangible assets (103.9) (31.5)
12.1 Reconciliation of net investment in lease receivables Net operating lease assets (0.2) 0.9
Retirement benefits and actuarial gains 13.9 (0.8)
At beginning of period 2 388.1 2 411.2 Prepayments (9.4) 9.3
New leases 273.4 270.7 Allowance for impairment losses 12.4 (0.7)
Lease receipts (506.0) (483.9) Deferred revenue (3.1) 3.0
Principal lease receipts (314.1) (280.2) Income received in advance 1.5 (0.3)
Interest received (191.9) (203.7) Leases (0.7) 26.6
Income and expense accruals 0.2 (74.1)
Finance income (note 2) 190.8 204.9
Other movements* (70.7) (7.1)
Foreign currency translations 6.9 (7.7) Recognised in other comprehensive income 0.9 (12.5)
At end of period 2 282.5 2 388.1 Tax effect on items that will not be reclassified to profit or loss 1.4 (9.9)
Tax effect on items that may be reclassified to profit or loss (0.5) (2.6)
Net investment in lease receivables are presented in the statement of financial position as follows:
Current 333.4 319.1 At end of period 734.1 822.5
Non-current 1 949.1 2 069.0 Comprising of:
* Other movements include remeasurements and terminations of leases Property, plant and equipment and intangible assets (679.9) (576.0)
Net operating lease assets (2.4) (2.2)
12.2 Lease receipts Retirement benefits and actuarial gains (18.5) (33.8)
Lease receipts included in the measurement of net investment in lease receivables 506.0 483.9 Prepayments (11.9) (2.5)
Variable lease receipts not included in the measurement of net investment in lease receivables 12.0 11.0 Allowance for impairment losses 45.7 33.3
Deferred revenue 42.6 45.7
518.0 494.9 Income received in advance 19.6 18.1
Certain property sub-leases contain variable receipts terms linked to sales generated from Leases 1 108.2 1 108.9
franchise stores, referred to as turnover rent. Turnover rent income averages 1.5% of turnover Income and expense accruals 230.7 231.0
(2022: 1.7% of turnover) of franchise stores.
734.1 822.5
12.3 Maturity analysis
The undiscounted contractual maturities of lease receivables are as follows:
Less than one year 494.7 494.1
One to two years 514.2 483.6
Two to three years 437.0 492.7
Three to four years 344.2 409.4
Four to five years 297.3 308.8
More than five years 898.3 1 039.7
Total undiscounted lease receivables 2 985.7 3 228.3
Unearned finance income (703.2) (840.2)
Net investment in lease receivables 2 282.5 2 388.1

14 Investment in associate 14 Investment in associate (continued)

14.1 Accounting for investment in associate 14.3 Reconciliation of investment in associate
The Group has a 49% investment in TM Supermarkets (Pvt) Limited (TM Supermarkets), a private company incorporated in Zimbabwe, 52 weeks to 52 weeks to
and which operates supermarkets throughout Zimbabwe. The Group accounts for its investment in associate under the equity method 26 February 27 February
of accounting in accordance with IAS 28 Investment in Associates and Joint Ventures. 2023 2022
Rm Rm
In accordance with the provisions of IAS 29 Financial Reporting in Hyperinflationary Economies (IAS 29), entities operating in Zimbabwe
have been assessed to be operating in a hyperinflationary economy. The equity accounted results of TM Supermarkets included in this At beginning of period 106.0 69.7
Group result have therefore been prepared in accordance with IAS 29, with the following key accounting principles applied within the Share of associate’s earnings 75.0 71.6
results of TM Supermarkets: Share of associate’s earnings before net monetary adjustments 98.4 96.7
• All previously published financial information was restated to reflect the current buying power of the Zimbabwe dollar (ZWL$), and Share of associate’s hyperinflation net monetary adjustments (23.4) (25.1)
• All assets and liabilities were revalued to reflect current values, which resulted in a non-cash net monetary adjustment recognised in Foreign currency translations (86.9) (0.8)
the statement of comprehensive income of TM Supermarkets. Impairment loss (5.7) (14.4)
Dividend declared and received (16.0) (20.1)
As the Group’s presentation currency is not that of a hyperinflationary economy, the comparative information of the Group’s financial
results related to TM Supermarkets is not restated. Any difference between the Group’s share of the TM Supermarkets adjusted equity At end of period 72.4 106.0
balance after applying IAS 29 and the balance previously recorded by the Group is recognised in other comprehensive income in the
current period, as part of foreign currency translations. 14.4 Impairment of investment in associate
During the period under review, significant judgement was applied by management in determining that the following impairment indicators
14.2 Exchange rates applied in translating the results of investment in associate of the Group’s investment in associate exist:
The share of associate’s income and net asset value of TM Supermarkets have been translated into the Group’s presentation currency at
• The devaluation and illiquidity of currency in Zimbabwe and the resultant impact on the Zimbabwean economy;
the closing rate in accordance with the hyperinflationary provisions of IAS 21 The Effects of Changes in Foreign Exchange Rates.
• Currency shortages and currency devaluation led to high levels of food and other inflation;
Zimbabwe operates a formal market-based foreign exchange trading system to establish formalised trading in ZWL$ with other currencies
• The economy was subjected to increases in Zimbabwe inflation rates as published by the Reserve Bank of Zimbabwe; and
(referred to as the auction rate). The intention of this auction rate system is expected to bring transparency and efficiency in the trading
of foreign currency in the economy. • The upward valuation of the assets of TM Supermarkets attributable to the application of hyperinflation accounting in terms of IAS 29.
In line with prior period assessments, management assessed that the closing auction rate of 0.020 ZWL$ (2022: 0.123 ZWL$) to the Impairment reviews were performed and the Group concluded that the carrying value of its investment in associate exceeded its
South African rand is not available for immediate settlement, as shortages of foreign currency results in the official exchange rate not recoverable amount, resulting in an impairment loss of R5.7 million (2022: R14.4 million) recognised by the Group.
being liquid, and is therefore not an appropriate rate to use when accounting for the Group’s investment in associate. An estimated The recoverable amount of TM Supermarkets was determined based on value-in-use calculations. The calculation discounts future cash
exchange rate of 0.019 ZWL$ (2022: 0.082 ZWL$) to the South African rand was used when translating the result of TM Supermarkets flow forecasts at an appropriate pre-tax rate that reflects the specific risks and challenges relating to TM Supermarkets. Management-
as at 26 February 2023. Inputs considered in this estimate include the official inflation rate, the in-country fuel price and the exchange approved future cash flow forecasts, over a period of five years, were based on past experience and the expected performance of the
rate applicable to dividends received from the Group’s investment in associate during the period. retail market in Zimbabwe. Cash flows beyond this period were extrapolated by applying a nil growth rate. The pre-tax discount rate
The table below summarises the exchange rates at which the results of TM Supermarkets have been translated into South African rand, applied to cash flow projections was 42.1% (2022: 44.9%).
for the relevant periods under review. The closing ZWL$ to ZAR exchange rate was calculated using the official USD to ZAR exchange Management believes that the carrying value of the Group’s investment in associate of R72.4 million is reflective of the value of its
rate divided by the management estimated USD to ZWL$ exchange rate. For comparative informational purposes, exchange rates based investment in TM Supermarkets and that any reasonable possible change in key assumptions on which the recoverable amounts are
on the USD to ZWL$ auction rate have also been presented. based would not result in significant impairment losses. Refer to note 14.5.
ZWL$ : ZAR USD : ZAR USD : ZWL$
Closing rates at 26 February 2023
Exchange rates used by management 0.019 18.22 966.00
Auction rate 0.020 18.22 889.10
Closing rates at 27 February 2022

Exchange rates used by management 0.082 15.29 186.00
Auction rate 0.123 15.29 124.00

14 Investment in associate (continued) 14 Investment in associate (continued)

14.5 Sensitivity analysis 52 weeks to 52 weeks to
The following tables represent the sensitivity analysis performed by management on the significant judgements applied in the accounting 26 February 27 February
of the Group’s investment in associate for the 52 weeks ended 26 February 2023. 2023 2022
Rm Rm
14.5.1 Exchange rates applied in the translation of the results of the Group’s investment in associate
If the exchange rate applied by management had been 10% higher or 10% lower, or the auction rate was applied, with all other variables 14.6 Summary financial information of associate
held constant, the impact on the statement of comprehensive income and statement of financial position would have been as follows: The summary financial information has been presented in South African rand, the presentation
Exchange rate currency of the Group.
applied by Statement of comprehensive income (100%)
+10% management -10% Auction rate* Revenue 6 139.5 4 990.7
1.0 ZWL$ : 0.0170 1.0 ZWL$ : 0.0189 1.0 ZWL$ : 0.0208 1.0 ZWL$ : 0.0205
ZAR ZAR ZAR ZAR Profit for the period 159.4 150.6
Attributable to other owners of the Company 72.0 70.5
Impact on statement of comprehensive income
Attributable to the Group 75.0 71.6
Share of associate’s earnings (Rm) 68.2 75.0 83.4 81.5
Non-controlling interest 12.4 8.5
Impairment loss on investment in associate (Rm) 5.2 5.7 6.3 6.2
Statement of financial position (100%)
Impact on statement of financial position
Total assets 1 499.8 1 452.9
Investment in associate (Rm) 65.8 72.4 80.4 78.6
Current assets 689.8 619.4
* Calculated by applying the auction rate of 1 USD to 889.1 ZWL$.
Non-current assets 810.0 833.5
14.5.2 Discount rate applied in the assessment of the recoverable amount of the Group’s investment in associate Total liabilities 738.6 630.4
If the discount rate had been 10% higher or 10% lower, with all other variables held constant, the impact on the statement of comprehensive
income and statement of financial position would have been as follows: Current liabilities 523.3 389.2
Non-current liabilities 215.3 241.2
+10% As reported -10% Net assets (100%) 761.2 822.5
Impact on statement of comprehensive income Attributable to other owners of the Company 361.9 390.9
(Impairment loss on)/reversal of impairment on investment in associate (Rm) (22.7) (5.7) 23.4 Attributable to the Group 347.7 375.6
Non-controlling interest 51.6 56.0
Impact on statement of financial position
Investment in associate (Rm) 55.4 72.4 101.5 52 weeks to 52 weeks to
14.5.3 Growth rate applied in the assessment of the recoverable amount of the Group’s investment in associate
2023 2022
The sensitivity of the Group’s exposure to the growth rate risk is estimated by assessing the impact of a reasonable expected movement Rm Rm
in the relevant growth rates on our investment in TM Supermarkets. A sensitivity analysis is not presented as the estimated impact is
not considered to be material. 15 Loans
Employees 56.1 50.2
Executive directors 0.2 0.2
Other employees 55.9 50.0
Other 61.7 35.7
117.8 85.9
Loans to directors and employees bear interest at varying rates averaging at a rate of 4.7% (2022: 4.2%) per annum and have varying
repayment terms. At period end, R37.5 million (2022: R38.4 million) of employee loans were secured.
Other loans relates to bridging finance for landlords with repayment terms between two and ten years and average interest rates linked
to the South African prime rate, averaging at a rate of 10.6% (2022: 7.3%).

52 weeks to
26 February
52 weeks to
27 February
17 Trade and other receivables (continued)
2023 2022 17.2 Credit risk exposure
Rm Rm
Set out below is the credit risk exposure on the Group’s trade and other receivables. The expected credit loss (ECL) relating to trade and
16 Inventory other receivables within payment terms, and relating to trade and other receivables exceeding payment terms by less than 14 days, is
insignificant as a result of the credit quality of these debtors, stringent credit-granting policies and the various forms of security and
Merchandise for resale 10 797.6 8 451.8 collateral held by the Group. Refer to note 30.2 for the Group’s credit risk management disclosure.
Provision for shrinkage, obsolescence and markdown of inventory (244.6) (255.7)
Exceeding Exceeding
Consumables 94.0 81.2
payment payment
10 647.0 8 277.3 terms by terms by
Gross Within less than more than
52 weeks to 52 weeks to receivables payment terms 14 days 14 days
26 February 27 February 52 weeks to 26 February 2023 Rm Rm Rm Rm
2023 2022 4 620.9 3 723.9 236.9 660.1
Rm Rm
Trade receivables from contracts with customers 4 368.8 3 622.7 236.9 509.2
17 Trade and other receivables Other receivables 252.1 101.2 – 150.9
Gross trade and other receivables 4 853.1 4 521.2

52 weeks to 27 February 2022
Trade receivables from contracts with customers 4 368.8 4 075.1
Prepayments 232.2 121.9 4 399.3 3 421.8 99.8 877.7
Other receivables 252.1 324.2 Trade receivables from contracts with customers 4 075.1 3 282.9 99.8 692.4
Allowance for impairment losses (296.4) (207.1) Other receivables 324.2 138.9 – 185.3
Trade receivables from contracts with customers (234.0) (155.0)

Other receivables (62.4) (52.1) 52 weeks to 52 weeks to
Net trade and other receivables 4 556.7 4 314.1 2023 2022
Disclosed as: Rm Rm
Non-current 84.7 106.5 18 Cash and cash equivalents

Current 4 472.0 4 207.6
Cash and cash equivalents 1 997.8 6 425.3
Bank overdraft and overnight borrowings (2 800.0) (2 800.0)
Current trade and other receivables are interest-free unless overdue and have payment terms ranging between 7 and 35 days
(2022: 7 and 35 days). The carrying value approximates its fair value due to the short-term nature of the receivables. Cash and cash equivalents at end of period (802.2) 3 625.3
17.1 Allowance for impairment losses Cash and cash equivalents

Set out below is the movement in the allowance for impairment on trade and other receivables. Cash and cash equivalents includes cash floats at stores as well as the Group’s current account balances. The Group’s primary banker,
Trade which at period-end, had a long-term credit rating of zaAA, facilitates the collection of cash at stores, provides general banking facilities
Trade receivables and facilitates the payment of suppliers via an electronic banking platform. The interest rate on the current account varied between 2.5%
and other from contracts Other and 6.7% per annum (2022: 2.8% and 3.3% per annum). Refer to note 30.3.2.
receivables with customers receivables
52 weeks to 26 February 2023 Rm Rm Rm
Cash investments
The Group invested its surplus cash in money market accounts during the period. The interest rate on these accounts varied between
At the beginning of the period 207.1 155.0 52.1
4.6% and 8.3% per annum (2022: 4.0% to 5.4% per annum). Refer to note 30.3.2.
Irrecoverable debts written off (109.6) (109.3) (0.3)
Additional impairment losses recognised 209.4 198.4 11.0 Bank overdraft
Prior allowances for impairment reversed (10.5) (10.1) (0.4)
The Group utilised its bank overdraft during the period. The overdraft interest rate varied between 6.3% and 9.5% per annum (2022: 5.5% to
At end of period 296.4 234.0 62.4
6.3% per annum). Refer to note 30.3.2.
52 weeks to 27 February 2022 Overnight borrowings

At the beginning of the period 199.7 156.4 43.3 The Group utilised overnight borrowings during the period. Interest rates varied between 4.6% and 8.5% per annum (2022: 4.1% and 4.9%
Irrecoverable debts written off (82.3) (81.5) (0.8) per annum). Refer to note 30.3.2.
Additional impairment losses recognised 92.8 80.1 12.7
Prior allowances for impairment reversed (3.1) – (3.1)
At end of period 207.1 155.0 52.1
Impairment losses are recorded in the allowance account until the Group is satisfied that no recovery of the amount owing is possible, at
which point the amount is considered irrecoverable and is written off against the financial asset directly. Impairment losses have been
included in the statement of comprehensive income.
Allowance for impairment on trade and other receivables increased during the current period under review, as a matter of prudence, due
to the weakening in the general economic conditions, including load shedding costs borne by franchisees.


2023 2022 2023 2022
Rm Rm Rm Rm
19 Share capital 20 Treasury shares

19.1 Ordinary share capital At beginning of period 702.1 873.4
Shares purchased during the period 90.1 114.2
Authorised
Settlement of employee share awards (148.4) (285.5)
800 000 000 (2022: 800 000 000) ordinary shares of 1.25 cents each 10.0 10.0
At end of period 643.8 702.1
Issued
000’s 000’s
000’s 000’s The movement in the number of treasury shares held is as follows:
The number of shares in issue is made up as follows: At beginning of period 13 224.8 15 268.6
Shares purchased during the period 1 617.9 2 200.0
Treasury shares (note 20) 12 380.1 13 224.8
Shares sold during the period pursuant to the take-up of share options by employees (1 647.1) (681.8)
Shares held outside the Group 481 070.2 480 225.5
Shares delivered to participants of restricted share plan (note 5.2) (815.5) (3 562.0)
Total shares in issue at end of period 493 450.3 493 450.3
At end of period 12 380.1 13 224.8
The Company can issue new shares to settle the Group’s obligations under its employee share schemes, but issues in this
R R
regard are limited, in aggregate, to 5% of total issued share capital or 24 672 516 (2022: 24 672 516) shares. To date, 15 743 000
(2022: 15 743 000) shares have been issued, resulting in 8 929 516 (2022: 8 929 516) shares remaining for this purpose. Average purchase price of shares purchased during the period 55.7 51.9
The holders of ordinary shares are entitled to receive dividends as declared, and are entitled to one vote per share at meetings of the
Company. 52 weeks to 52 weeks to
Certain ordinary shares are stapled to B shares and are subject to restrictions upon disposal. Refer to note 19.2. 2023 2022
Rm Rm
Refer to note 4 for details of directors’ interest in shares.
Refer to note 5 for details of share-related awards granted by the Group. 21 Borrowings
52 weeks to 52 weeks to Unsecured borrowings
26 February 27 February Short-term loans varying-maturities bearing interest ranging between 5.6% – 9.2% (2022: 5.1%)
2023 2022 and repaid between 27 February 2023 and 12 June 2023 (2022: repaid between
Rm Rm 10 March 2022 and 11 April 2022) 599.4 403.1
19.2 B share capital Three-month short-term loans bearing interest ranging between 8.0% – 8.4% (2022: 4.6% – 5.0%)
and repaid between 27 February 2023 to 23 May 2023 (2022: repaid between
Authorised 28 February 2022 and 24 May 2022) 1 470.0 1 650.0
1 000 000 000 (2022: 1 000 000 000) unlisted, non-convertible, non-participating,
no par value B shares – – Six-month short-term loans bearing interest at 8.2% (2022: 4.8% – 5.3%), repaid on
27 February 2023 (2022: repaid between 28 February 2022 and 18 August 2022) 800.0 1 000.0
Issued Twelve-month short-term loans bearing interest ranging between 5.4%– 6.1% (2022: 5.0% – 5.1%)
259 682 869 (2022: 259 682 869) unlisted, non-convertible, non-participating, were repaid between 26 August 2022 and 27 August 2022 – 950.0
no par value B shares – –
Total borrowings at end of period 2 869.4 4 003.1
B shares are stapled to certain ordinary shares and cannot be traded separately from each other. Stapled ordinary shares, together with Less: current portion (repayable within one year) (2 869.4) (4 003.1)
B shares, are subject to restrictions upon disposal. Non-current portion (repayable after one year) – –
The holders of B shares are entitled to the same voting rights as holders of ordinary shares, but are not entitled to any rights to distributions 21.1 Reconciliation of carrying value of borrowings
by the Company or any other economic benefits. Refer to note 19.1.
Refer to note 4 for details of directors’ interest in shares. Non-cash movements for the period 231.5 175.9
Finance costs 231.5 175.9
Cash movements for the period (1 365.2) 496.0
Borrowings raised 6 804.8 6 020.4
Borrowings repaid (7 938.5) (5 348.5)
Interest paid (231.5) (175.9)
At end of period 2 869.4 4 003.1

22 Retirement benefits 22 Retirement benefits (continued)

The Group, through its trading and employer subsidiaries, provides post-retirement benefits to its employees in accordance with local Pensioners’ Retirement Total Total
benchmarks in the countries in which it operates. These benefits are mainly provided through the Pick n Pay Retirement schemes which defined-benefit defined-benefit obligation obligation
incorporates the Pick n Pay Paid-up Pension Fund and The Pick n Pay Contributory Provident Fund defined-contribution plans. guarantee guarantee 2023 2022
Rm Rm Rm Rm
The Group’s largest defined-contribution fund is the Pick n Pay Contributory Provident Fund. Certain members of this fund were
guaranteed that should their defined-contribution benefit be less than their previous defined-benefit guarantee (under the previous 22.1 Defined-benefit obligations (continued)
Pick n Pay Retirement Fund) they would retain the latter. Due to this guarantee, and that the pensioners are paid by the Pick n Pay
Paid-up Pension Fund, the Retirement scheme’s liabilities may be broken down between those which are defined contribution in nature Movement in the fund’s obligations and plan assets
and those which are defined benefit in nature and for which the employer has an obligation to make additional contributions to ensure recognised on the statement of financial position is
this element of the scheme is fully funded. Subsequent to period-end, it was agreed with members of the defined benefit plan to convert as follows:
their retirement benefits to a defined contribution plan. Liability – beginning of period 571.3 257.2 828.5 822.3
Service cost – ordinary – 8.1 8.1 8.1
The defined benefit and defined-contribution plans are regulated by the Pension Funds Act, 1956 (of South Africa) and is governed by a
Transfer 162.1 – 162.1 –
board of trustees of the Pick n Pay Contributory Provident Fund and Pick n Pay Paid-up Pension Fund, in line with governance policies set
Interest cost 56.1 24.8 80.9 70.1
in terms of the PF130 circulars. The board of trustees of the Pick n Pay Contributory Provident Fund comprises 6 employer-appointed
Actuarial loss/(gain) from experience 16.0 (21.5) (5.5) 23.1
and 6 member-elected trustees and for the Pick n Pay Paid-up Pension Fund it comprises of 2 employer-appointed and 2 member-
Benefits paid (42.4) (45.3) (87.7) (95.1)
elected trustees.
Liability – end of period 763.1 223.3 986.4 828.5
Pensioners’ Retirement Total Total
defined-benefit defined-benefit obligation obligation Plan assets – beginning of period 571.3 383.0 954.3 905.0
guarantee guarantee 2023 2022 Transfer 162.1 – 162.1
Rm Rm Rm Rm Expected return 46.8 35.8 82.6 77.2
Actuarial gain/(loss) from experience 25.3 (36.6) (11.3) 62.2
22.1 Defined-benefit obligations Contributions – (45.0) (45.0) 5.0
The amount recognised in the statement of financial Contributions by employees – 2.5 2.5 2.5
position is as follows: Contributions by employer – 2.5 2.5 2.5
Present value of funded obligations 763.1 223.3 986.4 828.5 Contribution holiday – (50.0) (50.0) –
Fair value of assets (763.1) (291.9) (1 055.0) (954.3)
Effect of asset ceiling – – – 3.8 Benefits paid (42.4) (45.3) (87.7) (95.1)
– (68.6) (68.6) (122.0) Plan assets – end of period 763.1 291.9 1 055.0 954.3
Amounts recognised in the statement of comprehensive % % % %

income are as follows:
Current service cost – ordinary – 8.1 8.1 8.1 Estimated return on plan assets 10.0 9.2 9.8 9.0
Net interest on the obligation 9.3 (10.6) (1.3) (7.1) Composition of plan assets
Total included in employee costs 9.3 (2.5) 6.8 1.0 Equities 4.1 41.2 14.4 21.8
Fixed interest – bonds 1.6 15.4 5.4 54.4
Asset ceiling Fixed interest – cash 24.3 2.1 18.2 1.5
Refund (employer surplus account) – 68.6 68.6 122.0 Property – 3.7 1.0 1.3
– 68.6 68.6 122.0 Global Absolute – 2.2 0.6 0.9
Global Balanced 7.7 35.3 15.4 20.1
Effect of asset ceiling – beginning of period – 3.8 3.8 –
Liability driven investment 62.3 0.1 45.0 –
Interest cost – 0.4 0.4 –
Remeasurement – (4.2) (4.2) 3.8 100.0 100.0 100.0 100.0
Effect of asset ceiling – end of period – – – 3.8
The value of contributions expected to be paid in the next financial period is R4.8 million (2022: R5.2 million).
Movement in the asset recognised on the statement
of financial position is as follows: The weighted-average duration of the defined benefit obligation is 8 years (2022: 8 years).
Net asset – beginning of period – (122.0) (122.0) (82.7)
Total included in employee costs in profit or loss 9.3 (2.5) 6.8 1.0 2023 2022
Amount recognised in other comprehensive income (9.3) 10.9 1.6 (35.3) % per annum % per annum % per annum % per annum
Contributions – 45.0 45.0 (5.0) Pensioners Executives Pensioners Executives
Contributions by employees – (2.5) (2.5) (2.5) The principal actuarial assumptions at the last valuation
Contributions by employer – (2.5) (2.5) (2.5) date are:
Contribution holiday – 50.0 50.0 – Discount rate 11.0 9.5 10.0 10.0
Future salary increases n/a 6.5 n/a 7.3
Net asset – end of period – (68.6) (68.6) (122.0)
Future pension increases 6.3 n/a 6.3 n/a
Remeasurement recognised in other comprehensive
income
Actuarial loss/(gain) – liabilities 16.0 (21.5) (5.5) 23.1
Actuarial (gain)/loss – assets (25.3) 36.6 11.3 (62.2)
Effect of asset ceiling – (4.2) (4.2) 3.8
Remeasurement recognised in other comprehensive
income (before tax) (9.3) 10.9 1.6 (35.3)

22 Retirement benefits (continued) 25 Lease liabilities

22.1 Defined-benefit obligations (continued The Group enters into various lease agreements as the lessee of property, equipment and vehicles. Where leases convey the right to
control the use of underlying leased assets, the Group recognises the present value of future lease payments under the lease contract
Sensitivity analysis as lease liabilities. Future lease payments are discounted at an average borrowing rate of 8.1% (2022: 8.1%).
At 26 February 2023, if either the discount rate, salary inflation or pension increase had been 1% higher or 1% lower (with all other
variables held constant), the impact on the financial statements would have been as follows: 52 weeks to 52 weeks to
Discount rate effect Salary inflation effect Pension increase effect 2023 2022
Rm Rm
As As As
-1% reported +1% -1% reported +1% -1% reported +1% 25.1 Reconciliation of lease liabilities
8.5% 9.5% 10.5% 5.5% 6.5% 7.5% 5.3% 6.3% 7.3%
Rm Rm Rm Rm Rm Rm Rm Rm Rm
New leases 4 123.1 2 570.6
Statement of comprehensive income Lease payments (3 869.8) (3 452.8)
Employee costs (2.5) (2.5) (2.5) (2.7) (2.5) (2.3) n/a n/a n/a Principal lease liability payments (2 423.8) (2 088.4)
Statement of financial position Interest paid (1 446.0) (1 364.4)
Asset at end of period (67.6) (68.6) (68.6) (68.6) (68.6) (62.3) (68.6) (68.6) (68.6) Rent concessions (0.4) (13.1)
Finance costs (note 3) 1 342.5 1 333.9
The following assumptions were used in the sensitivity analysis: Other movements* (91.2) (731.6)
Foreign currency translations 11.9 21.5
• The effect of a 1% change in the discount rate and a 1% change in the salary inflation rate were assessed independently of
each other; At end of period 17 604.0 16 087.9
• As the minimum guarantee is applicable to Pick n Pay Non-contributory Provident Fund members, the liability is unaffected by Lease liabilities are presented in the statement of financial position as follows:
changes in the pension increase rate or by changes in mortality;
Current 2 470.8 2 431.4
• The pension liability is also similarly unaffected by changes in the pension increase rate or by changes in mortality as the value of Non-current 15 133.2 13 656.5
the notional pensioner account is much higher than the pensioner liability.
* Other movements include remeasurements and terminations of leases
The above assumptions are limited in that they do not cater for extreme events.
25.2 Lease payments
26 February 27 February Lease payments included in the measurement of lease liabilities 3 869.8 3 452.8
2023 2022 Variable lease payments not included in the measurement of lease liabilities 67.1 117.5
Rm Rm Short-term and low value lease payments 61.8 32.2
3 998.7 3 602.5
22.2 Defined current contribution benefits
Certain property head leases contain variable payment terms linked to sales generated from
Current contributions (refer to note 3.1) 253.6 293.0
retail owned stores, referred to as turnover rent. Turnover rent expense averages 1.7% of turnover
(2022: 1.7% of turnover).
26 February 27 February 25.3 Maturity analysis
2023 2022
Rm Rm The undiscounted contractual maturities of lease liabilities are as follows:
Less than one year 3 747.2 3 535.5
23 Trade and other payables* One year to five years 12 127.1 10 977.2
Trade and other payables 14 661.0 12 976.4 Five to ten years 6 760.9 6 875.2
More than ten years 1 057.3 944.1
Included in trade and other payables are leave pay obligations and value-added tax (VAT) payables which are not considered to be financial Total undiscounted lease liabilities 23 692.5 22 332.0
instruments. Trade and other payables considered as financial instruments are settled within 60 days. Refer to note 30. Finance costs to be incurred in future (6 088.5) (6 244.1)
* In order to improve disclosure, the Group has separately disclosed provisions previously recorded within trade and other payables. Refer to note 24. Lease liabilities 17 604.0 16 087.9
25.4 Lease terms

Lease terms include any non-cancellable periods and reasonably certain extension or termination options. Approximately 84%
(2022: 68%) of the Group’s portfolio of property leases contain extension options and approximately 16% (2022: 32%) contain
2023 2022
termination options. The majority of extension and termination options held are exercisable by the Group and not by the respective lessor.
Rm Rm
The average lease term of the Group’s portfolio of qualifying leases are:
24 Provisions
At beginning of period 88.8 78.2 26 February 27 February
Additional provisions raised during the period 7.5 10.9 2023 2022
Reversals (10.6) –
Property 11 years 11 years
Utilised amounts (5.5) (0.3)
Equipment and vehicles 6 years 6 years
At end of period 80.2 88.8
Provisions are short term in nature and relates to outstanding claims and legal disputes arising in the ordinary course of business.
In management’s opinion, any adverse outcome of pending claims will not have a material adverse effect on the financial condition or
future operations of the Group.
An amount of R9.3 million is included within trade and other receivables, relating to expected reimbursements for provisions raised.

2023 2022
Rm Rm
26 Deferred revenue
Prepaid gift card liability 174.6 171.3
Smart Shopper loyalty programme liability 176.7 189.4
Refund liability 26.6 24.4
377.9 385.1
Prepaid gift card liability

Gift cards can be redeemed as cash against future purchases, are redeemable on demand and expire three years after last date used.
The balance outstanding at period end represents the fair value of the revenue received in advance, adjusted for an expected forfeiture
rate of 5.0% (2022: 5.4%).
Smart Shopper loyalty programme liability

Customers are rewarded with Smart Shopper loyalty points (reward credits) and personal Smart Shopper discounts which are effectively
redeemed as cash against future purchases. Smart Shopper loyalty points and discounts are redeemable on demand and expire, on
average, 12 months after its award date. The balance outstanding at period end represents the stand-alone selling prices of points and
discounts granted yet to be redeemed, adjusted for an expected forfeiture rate of 25.0% (2022: 20.0%).
Refund liability
Customers are entitled to return goods purchased within a specified period of time, for a full or partial refund of the amount paid.
The refund liability represents the amount that the Group is expected to refund to customers within the next financial period. In
addition, the Group recognised a right-of-return asset of R23.4 million (2022: R21.5 million) for its right to recover goods returned by
the customer.
2023 2022
Rm Rm
27 Commitments
Authorised capital expenditure
Contracted for 740.0 1 221.2
Not contracted for 3 260.0 2 778.8
Total commitments 4 000.0 4 000.0
The Group anticipates to spend R4 billion of capital expenditure to deliver on its Ekuseni strategic plan, balancing these investment
requirements against what is needed to ensure we are energy resilient in light of the load shedding in South Africa. This will be funded
through free cash flow generated and borrowings.
In addition to the commitments disclosed above, the Group has completed the development of Pick n Pay’s new Eastport Distribution
Centre in Gauteng in partnership with Fortress Reit Limited, replacing the Group’s Longmeadow Distribution Centre. It is the intention to
purchase 60% of the Eastport distribution centre at a projected value of R1.2bn, however the purchase is subject to conditions precedent
in the sale agreement. The purchase will be funded by the proceeds from the sale of Longmeadow asset held for sale, and the Group is
considering alternative financing arrangements for the 60% stake, including lease financing alternatives. As a result, the Group has made
the commitment to lease any portion of the Eastport distribution centre that it will not own in the future.

28 Operating segments 28 Operating segments (continued)

Operating segments are identified based on financial information regularly reviewed by the Chief Operating Decision Maker (CODM) of South Africa Rest of Africa Total operations
the Group, for performance assessments and resource allocations. The Group annually performs a detailed review of the executive, or Rm Rm Rm
group of executives, that could be considered the appropriate and relevant CODM of the Group. During the current and prior periods under
52 weeks to 27 February 2022
review, the CODM of the Group consisted of the Group executive directors. At period-end, the Group executive directors consisted of the
Chief Executive Officer and Chief Finance Officer. Sales from customers# 94 535.2 4 438.8 98 974.0
The Group has two operating segments, as described below, with no individual customer accounting for more than 10% of turnover. Turnover (note 2) 94 535.2 3 337.6 97 872.8
Direct deliveries* – 1 101.2 1 101.2
South Africa – operates in various formats under the Pick n Pay and Boxer brands in South Africa.
Sales from customers disaggregated by brand# 94 535.2 4 438.8 98 974.0
Rest of Africa – responsible for the Group’s expansion into the rest of Africa.
Pick n Pay 68 450.4 3 940.9 72 391.3
Performance is measured based on the segmental profit before tax, as management believes that such information is most relevant in Boxer 26 084.8 497.9 26 582.7
evaluating the results of the segments against each other and other entities that operate within the retail industry.
Revenue# 97 521.9 3 380.5 100 902.4
South Africa Rest of Africa Total operations
Revenue from contracts with customers (note 2) 96 163.1 3 351.0 99 514.1
Rm Rm Rm
Operating lease income (note 2) 114.9 0.7 115.6
52 weeks to 26 February 2023 Insurance recoveries (note 2) 748.2 – 748.2
Finance income (note 2) 495.7 28.8 524.5
Sales from customers 102 721.3 5 086.5 107 807.8
Pro forma profit before tax, before capital items and before net monetary
Turnover (note 2) 102 721.3 3 840.5 106 561.8
adjustments**^ 1 859.0 119.0 1 978.0
Direct deliveries* – 1 246.0 1 246.0
Profit before tax before capital items 1 713.8 93.9 1 807.7
Sales from customers disaggregated by brand 102 721.3 5 086.5 107 807.8
Hyperinflation net monetary adjustments – 25.1 25.1
Pick n Pay 71 372.2 4 538.5 75 910.7 Insurance recoveries 145.2 – 145.2
Boxer 31 349.1 548.0 31 897.1
Profit before tax** 1 672.5 89.0 1 761.5
Revenue 105 358.3 3 919.9 109 278.2
Other information
Revenue from contracts with customers (note 2) 104 553.6 3 855.4 108 409.0 Statement of comprehensive income
Operating lease income (note 2) 155.2 2.2 157.4 Depreciation and amortisation 3 235.7 83.6 3 319.3
Insurance recoveries (note 2) 245.0 15.7 260.7 Finance costs (note 3) 1 641.3 33.6 1 674.9
Finance income (note 2) 404.5 46.6 451.1 Share of associate’s earnings (note 14) – 71.6 71.6
Pro forma profit before tax, before capital items and before net monetary Profit on disposal of assets and insurance recoveries on scrapping of assets 237.3 4.5 241.8
adjustments**^ 1 524.1 154.3 1 678.4 Loss from impairments and scrapping of assets 235.7 37.9 273.6
Impairment loss on investment in associate (note 14) – 14.4 14.4
Profit before tax before capital items 1 669.3 130.9 1 800.2 Statement of financial position
Hyperinflation net monetary adjustments – 23.4 23.4 Total assets 38 735.1 1 609.4 40 344.5
Insurance recoveries (145.2) – (145.2) Total liabilities 35 726.1 902.7 36 628.8
Profit before tax** 1 596.5 111.1 1 707.6 Investment in associate (note 14) – 106.0 106.0
Additions to non-current assets 4 328.5 105.3 4 433.8
Other information
Statement of comprehensive income * Included in sales from customers, as reviewed by the CODM of the Group, are deliveries made directly to franchisees by in‑country suppliers, in those
countries where the Group does not have a statutory presence. These deliveries do not qualify as sales, or turnover, in terms of IFRS but are included in
Depreciation and amortisation 3 491.3 74.0 3 565.3 sales from customers for the purposes of the Group’s review of operating segments. In those countries where the Group has a statutory presence, including
Finance costs (note 3) 1 734.9 39.0 1 773.9 South Africa, direct deliveries are included in the Group’s reported turnover.
Share of associate’s earnings (note 14) – 75.0 75.0 ** “Segmental profit before tax” and “segmental pro forma profit before tax, before capital items and before net monetary adjustments” are reported measures
Loss on disposal of assets and insurance recoveries on scrapping of assets 20.1 – 20.1 used for evaluating the performance of the Group’s operating segments. On an overall basis, these metrics equal the Group’s reported “profit before tax”, and
Loss from impairments and scrapping of assets 52.7 14.1 66.8 “pro forma profit before tax, before capital items and before net monetary adjustments”, respectively. These metrics, for the Rest of Africa segment, comprise
the segment’s trading result and directly attributable costs only. No allocations are made for indirect or incremental costs incurred by the South Africa
Impairment loss on investment in associate (note 14) – 5.7 5.7 segment relating to the Rest of Africa segment.
Statement of financial position ^ Calculated as profit before tax before capital items, excluding the Group’s share of hyperinflation net monetary adjustments recognised by the Group’s
Total assets 40 405.0 1 960.1 42 365.1 associate attributable to the application of IAS 29 for the current and prior period, and for the prior period only, including insurance recoveries received post
Total liabilities 37 681.3 981.0 38 662.3 year-end of R145.2 million. Refer to Appendix 1 for further information.
Investment in associate (note 14) – 72.4 72.4
#
In line with improvements to current year disclosures, prior year disclosures were amended.
Additions to non-current assets 7 745.5 100.4 7 845.9
* Included in sales from customers, as reviewed by the CODM of the Group, are deliveries made directly to franchisees by in‑country suppliers, in those
countries where the Group does not have a statutory presence. These deliveries do not qualify as sales, or turnover, in terms of IFRS but are included in
sales from customers for the purposes of the Group’s review of operating segments. In those countries where the Group has a statutory presence, including
South Africa, direct deliveries are included in the Group’s reported turnover.
** “Segmental profit before tax” and “segmental pro forma profit before tax, before capital items and before net monetary adjustments” are reported measures
used for evaluating the performance of the Group’s operating segments. On an overall basis, these metrics equal the Group’s reported “profit before tax”, and
“pro forma profit before tax, before capital items and before net monetary adjustments”, respectively. These metrics, for the Rest of Africa segment, comprise
the segment’s trading result and directly attributable costs only. No allocations are made for indirect or incremental costs incurred by the South Africa
segment relating to the Rest of Africa segment.
^ Calculated as profit before tax before capital items, excluding the Group’s share of hyperinflation net monetary adjustments recognised by the Group’s
associate attributable to the application of IAS 29 for the current and prior period and, for the current period only, excluding insurance recoveries received of
R145.2 million. Refer to Appendix 1 for further information.

29 Related party transactions 30 Financial instruments

29.1 Transactions between Group subsidiaries Overview
During the period, in the ordinary course of business, certain companies within the Group entered into transactions with each other. The Group’s principal financial liabilities comprise borrowings, trade and other payables, lease liabilities, refund liabilities and derivatives
These inter-group transactions and related balances are eliminated on consolidation. designated as hedging instruments. The main purpose of these financial liabilities is to finance the Group’s operations. The Group’s principal
financial assets include net investment in lease receivables, loans, trade and other receivables, cash and short-term deposits, investment
The Pick n Pay Stores Group comprise of the following noteworthy wholly-owned subsidiaries:
in insurance cell captive and derivatives designated as hedging instruments that are derived directly from its operations. The Group
• Pick n Pay Retailers Proprietary Limited, incorporated in South Africa holds fair value through profit or loss financial instruments and enters into derivative transactions which comprises of forward foreign
exchange rate contracts (FEC) to hedge future foreign currency exposures. Where all relevant criteria are met, hedge accounting is
• Boxer Superstores Proprietary Limited, incorporated in South Africa
applied, to remove the accounting mismatch between the hedging instrument and the hedged item.
• Pick n Pay Supply Chain Proprietary Limited, incorporated in South Africa
The Group is exposed to credit, market and liquidity risk due to the effects of changes in debt, exchange rates and interest rates
• Pick n Pay Zambia Limited, incorporated in Zambia
experienced in the normal course of business. The Group’s objective is to effectively manage each of the risks associated with its
• Pick n Pay Namibia Proprietary Limited, incorporated in Namibia financial instruments in order to minimise the potential adverse effect on the financial performance and position of the Group.
29.2 Transactions with equity accounted associate The Board is ultimately responsible for ensuring that adequate procedures and processes are in place to identify, assess, manage and
Refer to note 14 for further information. monitor financial risks. A treasury committee, appointed by the Board, comprising executive directors and senior executives, sets and
monitors the adherence to appropriate risk limits and controls. Risk management is carried out by a central treasury department in line
29.3 Loans to executive directors with the overall treasury policy as reviewed and approved by the Board on a regular basis.
Loans to directors amount to R0.2 million at the end of the period (2022: R0.2 million). These loans are unsecured and interest free. 30.1 Financial assets and financial liabilities by category
For further information refer to note 15.
The table below sets out the Group’s financial assets and financial liabilities by category:
29.4 Key management personnel Financial assets Derivatives
Key management personnel remuneration is set out below. Key management personnel had no interest in any contract with any Group Financial assets at fair value designated Financial
company during the period under review. at amortised through profit as hedging liabilities at
cost and loss instruments amortised cost Total
52 weeks to 52 weeks to 52 weeks to 26 February 2023 Rm Rm Rm Rm Rm
2023 2022 Financial assets
Rm Rm Net investment in lease receivables
(note 12) 2 282.5 – – – 2 282.5
Key management personnel remuneration comprises: Loans (note 15) 117.8 – – – 117.8
Fees for board meetings, committee and other work 14.4 11.6 Trade receivables from contracts with
Base salary 50.3 66.8 customers (note 17) 4 134.8 – – – 4 134.8
Retirement and medical aid contributions 5.7 7.5 Other receivables (note 17) 189.7 – – – 189.7
Fringe and other benefits 7.0 9.7 Cash and cash equivalents (note 18) 1 997.8 – – – 1 997.8
Fixed remuneration 77.4 95.6 Investment in insurance cell captive – 71.3 – – 71.3
Short term performance bonus, severance and retirement gratuities 31.5 48.1 Derivative financial instruments –
forward exchange contracts (FEC) – – 22.0 – 22.0
Total remuneration 108.9 143.7
8 722.6 71.3 22.0 – 8 815.9
Expense relating to share awards granted 34.3 37.3
Financial liabilities
Overnight borrowings (note 18) – – – 2 800.0 2 800.0
Unsecured borrowings (note 21) – – – 2 869.4 2 869.4
Trade and other payables – – – 14 243.8 14 243.8
Lease liabilities (note 25) – – – 17 604.0 17 604.0
Refund liability (note 26) – – – 26.6 26.6
– – – 37 543.8 37 543.8

30 Financial instruments (continued) 30 Financial instruments (continued)

30.1 Financial assets and financial liabilities by category (continued) 30.3 Market risk
Financial assets Derivatives Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
Financial assets at fair value designated Financial prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk (such as equity price risk). Financial
at amortised through profit as hedging liabilities at instruments affected by market risk include borrowings, lease liabilities, loans, deposits, fair value through profit or loss financial
cost and loss instruments amortised cost Total instruments and derivative financial instruments. The objective of market risk management is to manage and control exposure to market
52 weeks to 27 February 2022 Rm Rm Rm Rm Rm risk, while optimising the return on the risk.
Financial assets 30.3.1 Currency risk

Net investment in lease receivables Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
(note 12) 2 388.1 – – – 2 388.1 foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating
Loans (note 15) 85.9 – – – 85.9 activities and the Group’s net investment in foreign subsidiaries.
Trade receivables from contracts
Transactional currency risk – FEC’s
with customers (note 17) 3 920.1 – – – 3 920.1
The Group has transactional currency exposures arising from the acquisition of goods and services in currencies other than its functional
Other receivables (note 17) 272.1 – – – 272.1
currency. The Group operates internationally and is exposed to currency risk through the importation of merchandise, however it does
Cash and cash equivalents (note 18) 6 425.3 – – – 6 425.3
not have material foreign creditors as inventory imports are mostly prepaid. Investments in foreign operations and master franchise
Investment in insurance cell captive – 47.4 – – 47.4
agreements with international counter parties do not contribute to transactional currency risk as the related transactions and balances
13 091.5 47.4 – – 13 138.9 are denominated in South African rands.
Financial liabilities The Group imports inventory from foreign countries and is exposed to fluctuations in foreign exchange rates. The Group uses FEC’s to
Overnight borrowings (note 18) – – – 2 800.0 2 800.0 mitigate its foreign exchange risks from the import of inventory. It is the Group’s policy to cover all foreign inventory purchases by utilising
Unsecured borrowings (note 21) – – – 4 003.1 4 003.1 a derivative contract (FEC). The Group does not use derivatives for speculative purposes.
Trade and other payables – – – 12 495.4 12 495.4
Lease liabilities (note 25) – – – 16 087.9 16 087.9 The Group’s FEC’s have been designated as cash flow hedges of firm commitments. All firm commitments are expected to be realised
Refund liability (note 26) – – – 24.4 24.4 within 12 months. An economic relationship exists between the hedged items and the hedging instruments. The Group has established a
Derivative financial instruments – hedge ratio of 1:1, as the terms of the FEC’s match the terms of the firm commitments. To test hedge effectiveness, the Group uses the
forward exchange contracts (FEC) – – 7.7 – 7.7 hypothetical derivative method and compares the changes in the fair value of the hedging instruments against the changes in fair value
of the hedged items attributable to the hedged risks. The effective portion of the gain or loss on the hedging instrument is recognised
– – 7.7 35 410.8 35 418.5 in other comprehensive income in the cash flow hedge reserve. During the period under review, R1.0 million (2022: R1.8 million) was
reclassified to cost of sales in the statement of comprehensive income.
30.2 Credit risk
Contract foreign Rand Average
Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual obligations.
currency equivalent forward rate Fair value
Financial assets, which potentially subject the Group to credit risk, consist principally of net investment in lease receivables, loans, trade
Forward exchange contract assets/(liabilities) m Rm R Rm
and other receivables and cash and cash equivalents.
2023
Net investment in lease receivables and trade and other receivables US Dollars 6.7 121.8 18.0 3.4
Net investment in lease receivables and trade and other receivables mainly relate to amounts owing by franchisees and are presented Euro 12.6 229.5 18.3 16.9
net of impairment losses (refer to note 12 and 17). Rigorous credit granting procedures are applied to assess the credit quality of debtors, British Pound 0.1 1.0 19.5 0.1
taking into account their financial position and credit rating. The Group obtains various forms of security from its debtors, including bank Australian Dollar 0.1 0.8 13.1 –
guarantees, notarial bonds over inventory and moveable assets and suretyships from shareholders. The total credit risk with respect to Chinese Renminbi 0.9 2.3 2.4 0.2
receivables from franchise debtors is further limited as a result of the dispersion amongst the individual franchisees and across different Swedish Krone 13.3 22.2 1.7 1.4
geographic areas. Consequently, the Group does not consider there to be any significant concentration or exposure to credit risk.
377.6 22.0
Loans
2022
Loans comprise employee loans, granted in line with the Group’s remuneration policy, and other landlord loans. Loans are granted after
reviewing the affordability of each debtor and, where appropriate, suitable forms of security are obtained. Majority of the loans are US Dollars 13.2 202.9 15.4 (4.1)
secured and are considered to have low credit risk. Refer to note 15. Euro 3.5 64.1 17.9 (3.1)
British Pound 0.4 8.5 21.5 (0.4)
Cash and cash equivalents Australian Dollar 0.1 1.5 11.1 –
The Group’s cash is placed with major South African and international financial institutions, which at period end had a high credit standing Chinese Renminbi 2.0 4.9 2.5 (0.1)
and had a long-term credit rating of zaAA (refer to note 18).
281.9 (7.7)

30 Financial instruments (continued) 30 Financial instruments (continued)

30.3 Market risk (continued) 30.4 Liquidity risk
30.3.1 Currency risk (continued) Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages this risk by
Transactional currency risk – Foreign cash balances, trade and other receivables, trade and other payables and lease maintaining adequate reserves and unutilised borrowing facilities (listed below) and by continuously monitoring forecasted and actual
liabilities cash flows, ensuring that the maturity profiles of financial assets and liabilities do not expose the Group to liquidity risk.
The Group has exposure to foreign currency translation risk through its foreign cash balances, trade and other receivables, trade and On average, trade and other receivables and inventory are realised within 30 days; and trade and other payables are settled within
other payables and lease liabilities included in the net assets and liabilities of foreign subsidiaries denominated in currencies other than 60 days and lease liabilities are used to fund right-of-use assets and net investment in lease receivables. In terms of the Company’s
the South African rand. These balances are immaterial in relation to the total of the line items they are included in. These risks are Memorandum of Incorporation, the Group’s borrowing powers are unlimited, however, the treasury committee maintains strict control
not hedged. over the acceptance and draw-down of any loan facility.
Sensitivity of the Group’s exposure to material foreign currencies is estimated by assessing the impact of a reasonable expected In support of the Group’s increased gearing as it has entered a strategic investment cycle, the Group is nearing closure of R5.5 billion
movement of the currencies on the statement of comprehensive income, statement of financial position and statement of changes medium- and long-term debt packages. R1.0 billion of which was approved by the Board post the balance sheet date and the remaining
in equity of the Group. A sensitivity analysis is not presented as the estimated impact of the expected movement in currencies is R4.5 billion funded through a syndicated loan process currently being concluded and will be finalised by the end of May 2023. Refer to
not material. the subsequent events note 32 for more detail. This is in order to rebalance its short-term debt portfolio towards a longer term maturity
profile more suited to higher levels of net gearing as the Group has entered a strategic investment cycle.
Average spot rate Closing rate
The following significant foreign exchange rates applied Under the terms of these new major borrowing facilities, the Group will be required to comply with the following financial covenants,
during the period: 2023 2022 2023 2022 calculated on the basis that IAS 17: Leases is still applied:
USD/ZAR 16.7 14.9 18.4 15.2 • The leverage ratio (net debt to earnings before interest, income tax, depreciation and amortisation (EBITDA)) must not exceed
Euro/ZAR 17.4 17.4 19.5 17.1 2.75 times; and
GBP/ZAR 20.3 20.4 22.0 20.3 • The net finance costs cover ratio (EBITDA divided by net finance costs) must be a minimum of 3.5 times.
USD/ZMW 17.1 19.4 19.7 17.6
As at the reporting date, these ratio’s measured as follows:
AUD/ZAR 11.5 11.0 12.4 11.0
ZAR/CNH 0.4 0.4 0.4 0.4 52 weeks to 52 weeks to
ZAR/SEK 0.6 n/a 0.6 n/a 26 February 27 February
2023 2022
30.3.2 Interest rate risk Times Times
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
Leverage ratio 1.1 0.1
interest rates. The Group’s interest rate risk arises from borrowings, cash and cash equivalents and loans. Variable-rate interest-bearing
borrowings, loans, cash and cash equivalents and overnight borrowings results in cash flow interest rate risk. The exposure to interest Net finance costs cover ratio 19.4 144.7
rate risk is managed though the Group’s cash management system taking into account expected movements in interest rates when Rm Rm
funding or investing decisions are made.
Unutilised borrowing facilities
52 weeks to 52 weeks to Total available facilities 9 827.0 10 829.2
26 February 27 February Total actual borrowings (5 669.4) (6 803.1)
2023 2022 Utilisation of FEC (377.6) (130.6)
% % Bilateral loan approved post balance sheet date (Refer note 32) 1 000.0 –
The effective weighted average interest rates on financial instruments at end of period are: 4 780.0 3 895.5
Financial assets
Variable-rate interest-bearing financial assets The Group has drawn-down, on average during the year, 62% of its available facilities to strengthen liquidity. All surplus funds were
Cash and cash equivalents and cash investments (note 18) 2.5 – 8.3 2.8 – 5.4 invested in high yielding money market funds.
Other loans (note 15) 10.6 7.3 The following are the undiscounted contractual maturities of financial liabilities, including estimated interest payments:
Fixed-rate interest-bearing financial assets
Net investment in lease receivables (note 12) 8.2 8.2 Carrying Contractual Within Within Within More than
Employee loans (note 15) 4.7 4.2 amount cash flows 1 year 2 – 5 years 6 – 10 years 10 years
Financial liabilities Rm Rm Rm Rm Rm Rm
Variable-rate interest bearing liabilities 52 weeks to 26 February 2023
Bank overdraft (note 18) 6.3 – 9.5 5.5 – 6.3
Overnight borrowings (note 18) 4.6 – 8.5 4.1 – 4.9 Overnight borrowings 2 800.0 2 800.0 2 800.0 – – –
Unsecured loans (note 21) 5.4 – 9.2 4.6 – 5.3 Unsecured loans 2 869.4 2 869.4 2 869.4 – – –
Fixed-rate interest-bearing liabilities Trade and other payables 14 243.8 14 243.8 14 243.8 – – –
Lease liabilities (note 25) 8.1 8.1 Lease liabilities 17 604.0 23 692.5 3 747.2 12 127.1 6 760.9 1 057.3
Refund liabilities 26.6 26.6 26.6 – – –
Sensitivity of the Group’s exposure to interest rate risk is estimated by assessing the impact of a reasonable expected movement in the
Total financial obligations 37 543.8 43 632.3 23 687.0 12 127.1 6 760.9 1 057.3
relevant interest rates on the statement of comprehensive income and statement of changes in equity of the Group. The Group performed
a sensitivity analysis for financial instruments exposed to interest rate risk during the current financial period. As at 26 February 2023, 52 weeks to 27 February 2022
a change of 1% in the applicable interest rates for the various financial instruments would have had an effect on net financing costs of
Overnight borrowings 2 800.0 2 800.0 2 800.0 – – –
approximately R33 million (2022: R22 million).
Unsecured loans 4 003.1 4 003.1 4 003.1 – – –
Trade and other payables 12 495.4 12 495.4 12 495.4 – – –
Lease liabilities 16 087.9 22 332.0 3 535.5 10 977.2 6 875.2 944.1
Refund liabilities 24.4 24.4 24.4 – – –
Forward exchange contracts (FEC) 7.7 7.7 7.7 – – –
Total financial obligations 35 418.5 41 662.6 22 866.1 10 977.2 6 875.2 944.1

30 Financial instruments (continued) 31 Purchase of operations

30.5 Fair value of financial instruments The Group converted 22 (2022: seven) franchise stores to Pick n Pay and Boxer company owned stores, none of which is individually
material to the Group. These acquisitions had no significant impact on the Group’s results, but are now delivering stronger store sales
All financial instruments held by the Group are measured at amortised cost, with the exception of financial instruments at fair value growth and improved store profitability. The goodwill arising from these acquisitions represents the value creation that the Group
through profit or loss and derivatives designated as hedging instruments. expects to realise in the future.
Financial instruments measured at fair value are classified using a 3 level hierarchy to rank inputs used in measuring fair value. The levels 52 weeks to 52 weeks to
are explained below: 26 February 27 February
Level 1 – quoted (unadjusted) market prices in active markets for identical assets or liabilities 2023 2022
Rm Rm
Level 2 – valuation techniques for which the lowest level of input that is significant to the fair value measurement is directly or indirectly
observable The net assets arising from these acquisitions were as follows:
Level 3 – valuation techniques for which the lowest level of input that is significant to the fair value measurement is unobservable. Identifiable net assets
Property, plant and equipment (note 10) 30.0 27.9
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation Inventory 34.4 13.8
techniques maximise the use of observable market data, where it is available, and rely as little as possible on entity-specific estimates.
Total identifiable net assets at fair value 64.4 41.7
If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Goodwill
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Purchase price of acquisitions at fair value 397.2 69.5
The fair values of financial instruments are as follows: Less: total identifiable net assets at fair value (64.4) (41.7)
52 weeks to 52 weeks to Goodwill acquired (note 9) 332.8 27.8

26 February 27 February Net cash paid in respect of acquisitions
2023 2022 Purchase price of acquisitions at fair value 397.2 69.5
Rm Rm Less: amounts net settled against trade and other receivables (67.5) (13.8)
Financial assets at fair value through profit or loss Net cash paid 329.7 55.7
Investment in insurance cell captive – Level 2 71.3 47.4
Derivative financial instruments (designated as hedging instruments)
Forward exchange contract assets/(liabilities) – Level 2 22.0 (7.7) 32 Subsequent events
Basis for determining fair values
Restructuring programmes
The fair value of the investment in insurance cell captive is determined based on the net asset value of the underlying cell captive at the Companies within the Pick n Pay Stores Limited Group formalised and communicated a Voluntary Severance Programme (VSP), and
reporting date. a junior store management s189 restructuring programme aimed at delivering targeted benchmarks in terms of support office and
store-level efficiency gains, during March 2023. Both these processes are currently underway and the financial impact will be reflected
The Group enters into derivative financial instruments with various counterparties, principally financial institutions with investment in the 2024 financial year.
grade credit ratings. Foreign exchange forward contracts are valued using a forward pricing model utilising present valuation techniques,
allowing for counterparty credit risk. Long-term Funding
The carrying value of all other financial instruments held at amortised cost approximate their fair value. The Board approved an unsecured bilateral loan of R1 billion on 3 May 2023. The Group is currently in the final stages of concluding a
syndicated loan process of R4.5 billion, with an expected completion date being the end of May 2023. Both of these loans are linked to
There have been no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. our Environmental, Social and Governance (ESG) targets.
30.6 Capital management
The Group’s capital management strategy is to maintain investor, creditor and market confidence and to sustain future development
of the business. Capital is represented by total shareholders’ equity as per the Statement of Financial Position. The Group’s capital 33 Standards and interpretation issued but not yet adopted
management objectives are to safeguard the Group’s ability to continue as a going concern in order to provide shareholder-returns, as
well as benefits to all stakeholders. The Group aims to maintain an optimal capital structure to reduce the cost of capital. The Board of International Financial Reporting Standards (IFRS)
directors is ultimately responsible for capital. The following new or amended standards are not expected to have a significant impact on the Group’s financial statements:
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to • Reference to the Conceptual Framework – (Amendments to IFRS 3)
shareholders, issue new shares or sell assets to reduce debt.
• AIP IFRS 1 First-time Adoption of International Financial Reporting Standards – Subsidiary as a first-time adopter
The Group assesses the effectiveness of the use of capital in providing a return to shareholders using the ratio of return on capital • AIP IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities
employed which is calculated as pro forma headline earnings* divided by average shareholders’ equity plus borrowings (excluding
• AIP IAS 41 Agriculture – Taxation in fair value measurements
lease liabilities):
• Property, Plant and Equipment : Proceeds before Intended Use – (Amendments to IAS 16)
2023 2022
• Onerous Contracts – Costs of Fulfilling a Contract – (Amendments to IAS 37)
Return on capital employed 31.4% 39.1% • IFRS 17 Insurance Contracts
Weighted average cost of capital 11.3% 8.9% • Deferred Tax related to Assets and Liabilities arising from a Single Transaction – (Amendments to IAS 12)
• Disclosure of Accounting Policies – (Amendments to IAS 1 and IFRS Practice Statement 2)
The Group purchases its own shares on the market, from time to time, to cover share awards granted under the Pick n Pay Employee
share scheme. All share purchases are done in accordance with an official mandate and levels of authority set by the Board of directors. • Definition of Accounting Estimates – (Amendments to IAS 8)
The Group’s objective is to maintain a dividend cover based on pro forma headline earnings per share* of 1.3 times (2022: 1.3 times) to
ensure that sufficient capital is retained for expansion of the business.
There were no changes in the Group’s approach to capital management during the period.
* Refer to Appendix 1 for further information

COMPANY 88 Statement of comprehensive income

89 Statement of financial position
ANNUAL FINANCIAL
90 Statement of changes in equity
91 Statement of cash flows
STATEMENTS
92 Notes to the annual financial statements

COMPANY STATEMENT OF COMPANY STATEMENT OF

COMPREHENSIVE INCOME FINANCIAL POSITION
for the period ended
52 weeks to 52 weeks to As at As at
2023 2022 2023 2022
Note Rm Rm Note Rm Rm
Revenue ASSETS
Finance income 0.1 0.1 Non-current assets
Dividend income 8 1 146.1 982.7 Investments in subsidiaries 5 0.1 5.1
1 146.2 982.8 0.1 5.1
Administration expenses 2 (16.7) (15.4)
Current assets
Profit before tax 1 129.5 967.4 Loan to subsidiary 8 932.4 934.4
Tax 3 – – Trade and other receivables 0.2 0.2
Cash and cash equivalents 6 1.7 3.5
Profit for the period 1 129.5 967.4
934.3 938.1
Total comprehensive income for the period 1 129.5 967.4
Total assets 934.4 943.2
EQUITY AND LIABILITIES
Equity
Share capital 7 6.2 6.2
Share premium 835.5 835.5
Retained earnings 89.2 95.6
Total equity 930.9 937.3
Current liabilities
Trade and other payables 9 3.5 5.9
3.5 5.9
Total equity and liabilities 934.4 943.2

COMPANY STATEMENT OF COMPANY STATEMENT

CHANGES IN EQUITY OF CASH FLOWS
for the period ended for the period ended
Share Share Retained Total 52 weeks to 52 weeks to

capital premium earnings equity 26 February 27 February
Note Rm Rm Rm Rm 2023 2022
Note Rm Rm
At 28 February 2021 6.2 835.5 99.3 941.0
Cash flows from operating activities
Total comprehensive income for the period – – 967.4 967.4
Profit before tax 1 129.5 967.4
Profit for the period – – 967.4 967.4 Adjusted for dividend income 8.1 (1 146.1) (982.7)
Dividends paid 4.1 – – (971.1) (971.1) Cash utilised before movements in working capital (16.6) (15.3)
At 27 February 2022 6.2 835.5 95.6 937.3 Movements in working capital (2.4) (2.5)
Total comprehensive income for the period – – 1 129.5 1 129.5 Movements in trade and other payables (2.4) (2.5)
Profit for the period – – 1 129.5 1 129.5 Cash utilised in operations (19.0) (17.8)
Dividends paid 4.1 – – (1 135.9) (1 135.9) Dividends received 8.1 1 146.1 982.7
Dividends paid 4.1 (1 135.9) (971.1)
At 26 February 2023 6.2 835.5 89.2 930.9 Tax paid 3 – –
Cash utilised in operating activities (8.8) (6.2)
Cash flows from investing activities
Loan repaid by subsidiary 8 7.0 3.4
Cash generated from investing activities 7.0 3.4
Net movement in cash and cash equivalents (1.8) (2.8)
Cash and cash equivalents at beginning of period 3.5 6.3
Cash and cash equivalents at end of period 6 1.7 3.5

NOTES TO THE COMPANY

ANNUAL FINANCIAL STATEMENTS
for the period ended 26 February 2023
1 Accounting policies 2 Administration expenses

Except as presented below, the accounting policies and notes to the Company annual financial statements are identical to those Administration expenses are stated after taking into account the following expenses:
disclosed in note 1 of the Pick n Pay Stores Limited Group (referred to as “the Group”) annual financial statements.
2.1 Directors’ remuneration1
1.1 Statement of compliance
Directors’ remuneration paid by Pick n Pay Stores Limited is detailed below.
The Company’s financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and its
interpretations adopted by the International Accounting Standards Board (“IASB”), the South African Institute of Chartered Accountants Fees for
Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by Fees for committee and Total
the Financial Reporting Standards Council, the JSE Listings Requirements and the requirements of the Companies Act of South Africa. board meetings other work remuneration
R’000 R’000 R’000
1.2 Basis of preparation 2023
The Company’s financial statements are prepared on the historical cost basis except where stated otherwise in the accounting Non-executive directors
policies below. Gareth Ackerman 4 893.0 – 4 893.0
Suzanne Ackerman-Berman2 430.8 286.9 717.7
The accounting policies have been consistently applied to all periods presented.
Haroon Bhorat 470.0 355.2 825.2
1.3 Foreign currency transactions and translations Mariam Cassim 470.0 156.3 626.3
James Formby3 235.0 78.1 313.1
The financial statements are presented in South African rand, which is the Company’s functional currency. All transactions are in David Friedland 470.0 253.4 723.4
South African rand. Hugh Herman4 195.8 – 195.8
Aboubakar Jakoet5 470.0 383.6 853.6
1.4 Revenue
Audrey Mothupi 470.0 514.7 984.7
Revenue is recognised when the Company satisfies its performance obligations relating to revenue transactions, at an amount that David Robins 470.0 101.8 571.8
reflects the consideration that the Company expects to be entitled to. Annamarie van der Merwe 470.0 199.0 669.0
Revenue is measured based on the amount which the Company expects to be entitled to and is allocated to each specific performance Jeff van Rooyen 470.0 660.6 1 130.6
obligation. Depending on whether certain criteria are met, revenue is recognised either over time or at a point in time. Revenue is measured Total remuneration 9 514.6 2 989.6 12 504.2
at the value of consideration received or receivable.
2022
Dividend income Non-executive directors
Dividend income is recognised when the shareholders’ right to receive payment is established. Gareth Ackerman 4 893.0 – 4 893.0
Haroon Bhorat 457.0 345.5 802.5
Finance income Mariam Cassim 457.0 152.0 609.0
Finance income is recognised over time as it accrues in the statement of comprehensive income, using the effective interest method, David Friedland 457.0 246.5 703.5
by reference to the principal amounts outstanding and at the interest rate applicable. Hugh Herman 457.0 – 457.0
Aboubakar Jakoet 457.0 242.0 699.0
1.5 Investments in subsidiaries Audrey Mothupi6 457.0 500.5 957.5
The Company carries its investments in subsidiaries at cost less accumulated impairment losses. David Robins 457.0 99.0 556.0
Annamarie van der Merwe 457.0 193.5 650.5
Jeff van Rooyen 457.0 783.5 1 240.5
Total remuneration 9 006.0 2 562.5 11 568.5
1
Executive directors salaries are paid by a subsidiary company. Refer to note 4 of the Group annual financial statements.
2
3
James Formby was appointed as non-executive director, effective 10 October 2022.
4
Hugh Herman retired during July 2022.
5
Aboubakar Jakoet replaced Jeff van Rooyen as Chair of the Audit, Risk and Compliance Committee in July 2022.
6
Audrey Mothupi was appointed as Chairman of the Remuneration Committee effective 1 March 2021.


2023 2022 2023 2022
Rm Rm Rm Rm
3 Tax 5 Investments in subsidiaries

3.1 Tax recognised in the statement of comprehensive income: Shares at cost 0.1 5.1
Normal tax – current period – – 0.1 5.1
3.2 Tax paid During the period under review, the company sold its dormant subsidiary, Pick n Pay Holdings Proprietary Limited, to Pick n Pay Retailers
Proprietary Limited at cost. This transaction had no impact on the Company’s statement of comprehensive income, statement of changes
Owing – beginning of period – –
in equity and statement of cash flows. Pick n Pay Retailers Proprietary Limited is the remaining wholly owned subsidiary of the Company.
Recognised in statement of comprehensive income – –
Owing – end of period – – 52 weeks to 52 weeks to
Total tax paid – – 26 February 27 February
2023 2022
Rm Rm
3.3 Reconciliation of effective tax rate % %
South African statutory tax rate 28.0 28.0 6 Cash and cash equivalents
Exempt income – dividends received (28.4) (28.4) Cash and cash equivalents 1.7 3.5
Non-deductible holding company expenses 0.4 0.4
Effective tax rate – – Cash and cash equivalents represents a current bank account held for administrative purposes, at an institution which is in line with those
used by the Group. Refer to note 18 and note 30 of the Group annual financial statements.
2023 2022
2023 2022
Cents per share Cents per share
Rm Rm
4 Dividends 7 Share capital
4.1 Dividends paid during the financial period 7.1 Ordinary share capital
Final dividend number 108 – declared 16 May 2022 – paid 6 June 2022
Authorised
(2022: Number 106 – declared 20 April 2021 – paid 7 June 2021) 185.35 161.00
Interim dividend number 109 – declared 17 October 2022 – paid 5 December 2022
(2022: Number 107 – declared 19 October 2021 – paid 6 December 2021) 44.85 35.80 Issued
Total dividends per share for the period 230.20 196.80
The Company can issue new shares to settle the Group’s obligations under its employee share schemes, but issues in this regard are
Rm Rm
limited, in aggregate, to 5% of total issued share capital or 24 672 516 (2022: 24 672 516) shares. To date, 15 743 000 (2022: 15 743 000)
Total value of dividends paid by the Company 1 135.9 971.1 shares have been issued, resulting in 8 929 516 (2022: 8 929 516) shares remaining for this purpose.
The holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at meetings of
Cents per share Cents per share the Company.
4.2 Dividends declared related to the financial period Certain ordinary shares are stapled to B shares and are subject to restrictions upon disposal. Refer to note 7.2.
Final dividend declared on 3 May 2023 – number 110 Refer to note 8.3 and 8.4 for details of directors’ interest in shares.
(2022: Final dividend declared on 16 May 2022 – number 108) 140.30 185.35
Interim dividend declared on 17 October 2022 – number 109 52 weeks to 52 weeks to
(2022: Interim dividend declared on 19 October 2021 – number 107) 44.85 35.80 26 February 27 February
2023 2022
185.15 221.15
Rm Rm
The directors have declared a final dividend (dividend 110) of 140.30000 cents per share out of income reserves. The dividend is subject 7.2 B share capital
to dividend withholding tax at 20%, where shareholders are subject to this tax. The last day to trade in order to participate in the dividend
(CUM dividend) will be Tuesday, 30 May 2023. The shares will trade EX dividend from the commencement of business on Wednesday, Authorised
31 May 2023 and the record date will be Friday, 2 June 2023. The dividends will be paid on Monday, 5 June 2023. 1 000 000 000 (2022: 1 000 000 000) unlisted, non-convertible, non-participating,
Issued
259 682 869 (2022: 259 682 869) unlisted, non-convertible, non-participating,
B shares are stapled to certain ordinary shares and cannot be traded separately from each other. Stapled ordinary shares, together with
B shares, are subject to restrictions upon disposal.
The holders of B shares are entitled to the same voting rights as holders of ordinary shares, but are not entitled to any rights to distributions
by the Company or any other economic benefits.
Refer to note 8.3 and 8.4 for details of directors’ interest in shares.

52 weeks to
26 February
52 weeks to
27 February
9 Financial instruments
2023 2022 Overview
Rm Rm
The Company has limited exposure to risk in respect of financial instruments, as its only significant financial asset is its loan to a
8 Related party transactions subsidiary. Market risk is negated as financial assets and liabilities have no exposure to changes in exchange rates and have limited
exposure to changes in interest rates.
8.1 Dividends received
9.1 Credit risk
Pick n Pay Retailers Proprietary Limited 1 135.9 971.2
Pick n Pay Employee Share Purchase Trust 10.2 11.5 Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations.
Financial assets, which potentially subject the Company to credit risk, consist of the loan to a subsidiary. Refer to note 8.2.
Total dividends received from related parties 1 146.1 982.7
The Company applies a general approach for measuring impairment losses on the loan to subsidiary, at an amount equal to expected
8.2 Loan to subsidiary credit losses, taking into account past experience and future macro-economic factors, including estimated profits and cash forecasts.
Pick n Pay Retailers Proprietary Limited 932.4 934.4 Based on these factors, the credit risk is considered to be low, and no impairment losses have been recognised.
932.4 934.4 9.2 Liquidity risk

The loan to subsidiary is unsecured, interest-free, and repayable on demand. The fair value of the loan approximates its carrying value. Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has unlimited
access to the funds and facilities of companies within the Group. The Company’s liquidity risk is therefore linked to the liquidity of Group
8.3 Ordinary shares held by directors companies. Refer to note 30 of the Group annual financial statements.
The percentage of ordinary shares held by directors of Pick n Pay Stores Limited at the reporting date are disclosed below. This percentage The following are the contractual maturities of financial liabilities, including estimated interest payments:
is their effective shareholding in the Company (excluding treasury shares), which includes shares held under the Group’s restricted share
plan. Refer to note 4.2 of the audited Group annual financial statements.
52 weeks to 52 weeks to 2023 2022
26 February 27 February Rm Rm
2023 2022
Financial obligations at carrying value
% %
Trade and other payables (all contractual cash flows are repayable within 1 year) 3.5 5.9
Beneficial 1.1 1.1
3.5 5.9
Non-beneficial 26.6 26.6
27.7 27.7 9.3 Capital management
The Company considers the management of capital with reference to Group policy, refer to note 30 of the Group annual financial
8.4 B shares held by directors statements.
The percentage of B shares held by directors of Pick n Pay Stores Limited at the reporting date are disclosed below. Refer to note 4.3 of
the audited Group annual financial statements. 9.4 Suretyships
52 weeks to 52 weeks to The Company has provided suretyships in the ordinary course of business in respect of its subsidiary’s operations for certain banking
26 February 27 February facilities. As at 26 February 2023 the total utilised facilities for which surety is provided is R6.0 billion (2022: R6.9 billion). No losses
2023 2022 are expected to be incurred on these suretyships.
% %
Beneficial 2.2 2.2
Non-beneficial 97.2 97.2
99.4 99.4

ADDITIONAL APPENDIX 1
99 Appendix 1 – Pro forma information
102 Appendix 2 – Additional information
103 Appendix 3 – Pro forma headline earnings
INFORMATION 104 Analysis of ordinary shareholders

105 Analysis of B shareholders
Pro forma information
Certain financial information presented in the audited Group annual financial statements constitutes pro forma financial information.
1 Pro forma earnings metrics

IBC Corporate information
The pro forma earnings information presented in accordance with the JSE Listing Requirements and the SAICA guide on Pro forma
Financial Information, is the responsibility of the Board of directors of the Group and is presented for illustrative purposes only. Because
4
of its nature, the pro forma earnings information may not fairly present the Group's financial position, changes in equity, results of
operations or cash flows. The pro forma earnings information is based on the audited financial information of the Group for the period
ended 26 February 2023 and has been prepared using the accounting policies of the Group which comply with IFRS and are consistent
with those applied in the audited financial information.
Insurance proceeds received during the period under review
The financial result for the 52 weeks ended 26 February 2023 includes the cash receipt of R145.2 million (R104.5 million net of tax)
of insurance proceeds. These insurance recoveries relate directly to the civil unrest losses suffered by the Group during the prior
reporting period as a result of civil unrest, and which was accounted for in the pro forma earnings presented in the 52 weeks ended
27 February 2022. Refer to the 2022 audited Group annual financial statements.
In management's view, these losses and insurance recoveries should be viewed together. Recording the losses in one financial year and
the recoveries in the next financial year does not provide users with an accurate assessment of the Group's comparable year-on-year
earnings performance. As a result, the insurance recoveries were included in prior year pro forma earnings. The Group has therefore
presented its current period earnings on a pro forma basis, by excluding the R145.2 million insurance proceeds (R104.5 million, net of tax)
received during the period.
Hyperinflation net monetary adjustments
Zimbabwe is classified as a hyperinflationary economy. The equity accounted earnings of the Group’s investment in associate operating
in Zimbabwe is accounted for under IAS 29 Financial Reporting in Hyperinflationary Economies (IAS 29), with the impact presented below.
2023 2022
Rm Rm
Share of associate’s earnings excluding net monetary adjustments 98.4 96.7
Share of associate's hyperinflation net monetary adjustments (23.4) (25.1)
Reported share of associate's earnings 75.0 71.6
Impairment loss on investment in associate as a result of hyperinflation accounting (5.7) (14.4)
69.3 57.2
Reported profit before tax and reported headline earnings include the impact of hyperinflation accounting attributable to the Group’s
investment in associate. In management’s view, this impact of hyperinflation accounting does not provide stakeholders with an accurate
assessment of the Group’s comparable year‑on‑year earnings performance. As a result, the Group has presented its earnings for
the current and prior period on a pro forma basis, by excluding the Group’s share of associate’s hyperinflation net monetary loss of
R23.4 million (2022: R25.1 million), with no impact on tax. Refer to note 14 of the audited Group annual financial statements for more
information.

Pro forma information (continued) Pro forma information (continued)

1 Pro forma earnings metrics (continued) 2 Constant currency disclosures
The table below presents the key changes to items presented on a pro forma basis: Constant currency information constitutes pro forma information. The Group discloses constant currency information in order to report
The Group’s external auditor, Ernst & Young Inc., has issued an independent reporting accountant’s assurance report on the pro forma on the Group’s turnover and the Group’s Rest of Africa sales from customers, excluding the impact of foreign currency fluctuations
adjustments made by the Group (namely, removing the impact of IAS 29 and insurance recoveries received during the current year), (collectively the “constant currency pro forma information”).
which is available for inspection at the Company’s (Pick n Pay Stores Limited) registered office.
The constant currency pro forma information has been presented to illustrate the impact of changes in the Group’s major foreign
Remove currencies, namely the Zambia kwacha and the Botswana pula.
insurance
Remove recoveries The Group’s turnover growth in constant currency is calculated by translating the prior period local currency turnover at the current
Impact of received during period average exchange rates on a country-by-country basis and then comparing that against the current period turnover translated
As reported IAS 29 the period Pro forma at current period average exchange rates.
52 weeks to 26 February 2023 Rm Rm Rm Rm The sales from customers growth in constant currency is calculated by translating the prior period local currency sales from customers
Group at the current period average exchange rates on a country-by-country basis and then comparing that against the current period sales
Other income 2 265.3 – (145.2) 2 120.1 from customers translated at the current period average exchange rates.
Trading profit 3 048.0 – (145.2) 2 902.8
The average Zambia kwacha exchange rate to the South African rand for the 52 weeks ended 26 February 2023 was 1.02 (2022: 1.27)
Profit before tax before capital items 1 800.2 23.4 (145.2) 1 678.4
and the average Botswana pula exchange rate to the South African rand for the 52 weeks ended 26 February 2023 was 0.75 (2022: 0.75).
Profit before tax 1 707.6 – (145.2) 1 562.4
Tax 537.7 – (40.7) 497.0 The constant currency pro forma information is presented in accordance with JSE Listings Requirements, is the responsibility of the
Profit for the period 1 169.9 – (104.5) 1 065.4 Board of directors of the Group and is presented for illustrative purposes only. Because of its nature, the constant currency pro forma
Headline earnings (Appendix 3) 1 246.2 23.4 (104.5) 1 165.1 financial information may not fairly present the Group's financial position, changes in equity, results of operations or cash flows.
South Africa operating segment The Group’s external auditor has issued a reporting accountant’s report on the constant currency pro forma information, which is available
Profit before tax before capital items 1 669.3 – (145.2) 1 524.1 for inspection at the Company’s (Pick n Pay Stores Limited) registered office.
Rest of Africa operating segment Increase Increase
Profit before tax before capital items 130.9 23.4 – 154.3 reported constant
52 weeks to 26 February 2023 currency currency
Cents Cents Cents Cents
Group turnover (%) 8.9 8.6
Headline earnings per share (Appendix 3) 259.25 4.87 (21.75) 242.37 Rest of Africa sales from customers (%) 14.6 7.8
Diluted headline earnings per share (Appendix 3) 258.36 4.85 (21.66) 241.55
Add
insurance
Remove recoveries
Impact of received post
As reported IAS 29 year-end Pro forma
52 weeks to 27 February 2022 Rm Rm Rm Rm
Group
Other income 2 505.1 – 145.2 2 650.3
Trading profit 2 886.5 – 145.2 3 031.7
Profit before tax before capital items 1 807.7 25.1 145.2 1 978.0
Profit before tax 1 761.5 – 145.2 1 906.7
Tax 547.0 – 40.7 587.7
Profit for the period 1 214.5 – 104.5 1 319.0
Headline earnings (Appendix 3) 1 258.9 25.1 104.5 1 388.5
South Africa operating segment
Profit before tax before capital items 1713.8 – 145.2 1 859.0
Rest of Africa operating segment
Profit before tax before capital items 93.9 25.1 – 119.0
Cents Cents Cents Cents

Headline earnings per share (Appendix 3) 262.59 5.25 21.80 289.64
Diluted headline earnings per share (Appendix 3) 261.65 5.22 21.72 288.59

APPENDIX 2 APPENDIX 3
Additional information The table below presents the Group’s earnings performance on a pro forma basis.
Additional information may not represent a defined term under IFRS and, as a result, it may not be comparable with similarly titled measures The Group has presented its earnings on a pro forma basis, by excluding R145.2 million (R104.5 million net of tax) of insurance proceeds received
reported by other companies. Additional information is the responsibility of the Board of directors of the Group, is presented for illustrative in the current period, but which related to the civil unrest losses suffered by the Group in the prior period. During the prior period the Group
purposes only and has not been reviewed nor reported on by the Group’s auditors. accounted for these insurance proceeds in pro forma earnings presented. Furthermore, the Group has excluded hyperinflation net monetary
adjustments attributable to IAS 29 from the current and prior periods. Refer to Appendix 1 for further information.
1 Like-for-like turnover and expense growth comparisons
Like-for-like turnover and expense growth comparisons remove the impact of store openings, closures; and conversions in the current 26 February 27 February
and previous reporting periods. 2023 2022
% Cents per Cents per
2 Underlying earnings metrics change share share
The Group has presented underlying metrics for gross profit margin and profit before tax before capital items.
Earnings per share
Underlying gross profit margin for the 52 weeks ended 27 February 2022, excludes management’s best estimate of the impact of the Basic earnings per share (3.9) 243.37 253.34
civil unrest which occurred in July 2021 in South Africa on gross profit. Refer to the 2022 audited Group annual financial statements for Diluted earnings per share (3.9) 242.54 252.43
more detail. Headline earnings per share (1.3) 259.25 262.59
Diluted headline earnings per share (1.3) 258.36 261.65
Underlying profit before tax before capital items for the 52 weeks ended 26 February 2023, exclude the R430 million of net incremental
energy costs incurred in the current period related to loadshedding in South Africa. The R430 million reflects management’s best estimate Pro forma headline earnings per share
of the incremental costs of running diesel generators to power the Group’s estate during loadshedding (R522 million), net of estimated Pro forma headline earnings per share (16.3) 242.37 289.64
electricity cost savings we would have incurred if there was no loadshedding (R92 million). Pro forma diluted headline earnings per share (16.3) 241.55 288.59
Rm Rm
Reconciliation between basic and headline earnings
Profit for the period – basic earnings for the period 1 169.9 1 214.5
Adjustments: 76.3 44.4
Loss/(profit) on disposal of assets 33.9 (31.6)
Tax effect of (loss)/profit on disposal of assets (9.5) 3.5
Loss from impairments and scrapping of assets 66.8 273.6
Tax effect of loss from impairments and scrapping of assets (10.7) (63.9)
Insurance recoveries on scrapping of assets due to civil unrest (13.8) (210.5)
Tax effect of insurance recoveries on scrapping of assets due to civil unrest 3.9 58.9
Impairment loss on investment in associate 5.7 14.4
Headline earnings for the period (note 7) 1 246.2 1 258.9

Adjusted for hyperinflation net monetary adjustment (note 14) 23.4 25.1
Adjusted for insurance proceeds received (Appendix 1) (145.2) 145.2
Adjusted for tax effect of insurance proceeds received (Appendix 1) 40.7 (40.7)
Pro forma headline earnings 1 165.1 1 388.5
The table below presents the Group’s share information
000’s 000’s
Number of ordinary shares in issue (note 19.1) 493 450.3 493 450.3
Weighted average number of ordinary shares in issue (excluding treasury shares) 480 702.1 479 389.3
Diluted weighted average number of ordinary shares in issue 482 344.2 481 128.4

ANALYSIS OF ORDINARY ANALYSIS OF B SHAREHOLDERS

SHAREHOLDERS as at 26 February 2023
as at 26 February 2023 SHAREHOLDER SPREAD

Number of
shareholders %
Number of
shares %
1 – 1 000 shares 1 4.0 522 0.0
Number of Number of 1 001 – 10 000 shares 7 28.0 43 599 0.0
SHAREHOLDER SPREAD shareholders % shares % 10 001 – 100 000 shares 8 32.0 181 479 0.1
1 – 1 000 shares 17 983 77.5 2 593 816 0.5 100 001 – 1 000 000 shares 4 16.0 1 582 276 0.6
1 001 – 10 000 shares 4 006 17.2 12 903 485 2.6 1 000 001 shares and over 5 20.0 257 874 993 99.3
10 001 – 100 000 shares 960 4.1 29 521 944 6.0 Total 25 100.0 259 682 869 100.0
100 001 – 1 000 000 shares 235 1.0 63 663 715 12.9
1 000 001 shares and over 47 0.2 384 767 361 78.0
Number of Number of
Total 23 231 100.0 493 450 321 100.0 PUBLIC/NON-PUBLIC SHAREHOLDERS shareholders % shares %
Non-public shareholders 12 48.0 258 277 425 99.4
Number of Number of
Ackerman Investment Holdings Proprietary Limited 1 4.0 246 936 847 95.1
PUBLIC/NON-PUBLIC SHAREHOLDERS shareholders % shares %
Directors of Pick n Pay Stores Limited# 10 40.0 5 991 019 2.3
Non-public shareholders 16 0.1 144 380 835 29.3 Mistral Trust 1 4.0 5 349 559 2.0
Ackerman Investment Holdings Proprietary Limited 1 0.0 124 677 237 25.3 Public shareholders 13 52.0 1 405 444 0.6
Pick n Pay Retailers Proprietary Limited 1 0.0 1 163 000 0.2
Total 25 100.0 259 682 869 100.0
Shares held on behalf of FSP/RSP participants 1 0.0 7 012 500 1.4
Boxer Superstores Proprietary Limited 1 0.0 386 500 0.1
Pick n Pay Stores Employee Share Purchase Trust 1 0.0 3 818 153 0.8 Number of
Directors of Pick n Pay Stores Limited 8 0.0 4 371 544 0.9 BENEFICIAL SHAREHOLDERS HOLDING 1% OR MORE shares %
The Mistral Trust 1 0.0 2 850 000 0.6 Ackerman Investment Holdings Proprietary Limited 246 936 847 95.1
Ackerman Pick n Pay Foundation 1 0.0 101 900 0.0 Mistral Trust 5 349 559 2.1
Ackerman Family Investment Holdings Proprietary Limited 1 0.0 1 0.0 Gareth Ackerman (Director of Pick n Pay Stores Limited) 3 228 383 1.2
Public shareholders 23 215 99.9 349 069 486 70.7 #
Includes direct and indirect holdings. Refer to note 4.3 of the audited Group annual financial statements for further information.
Total 23 231 100.0 493 450 321 100.0
The holders of B shares are entitled to the same voting rights as holders of ordinary shares, but are not entitled to any rights to distributions by the
Company or any other economic benefits. All B shares are stapled to certain ordinary shares.
Number of
BENEFICIAL SHAREHOLDERS HOLDING 1% OR MORE shares %
Ackerman Investment Holdings Proprietary Limited 124 677 237 25.3
Government Employees Pension Fund 99 783 465 20.2
Fidelity Series Emerging Markets Opportunities Fund 25 960 299 5.3
J.P. Morgan Equities South Africa (Pty) Ltd. 16 430 669 3.3
Allan Gray Balanced Fund 15 228 723 3.1
Alexander Forbes Investments Limited 7 590 803 1.5
Shares held on behalf of FSP/RSP participants 7 012 500 1.4
FIAM Group Trust For Employee Benefit Plans 5 479 925 1.1
Vanguard Emerging Markets Stock Index Fund (US) 4 896 533 1.0
Allan Gray Stable Fund 4 832 365 1.0

NOTES NOTES

NOTES CORPORATE INFORMATION

Pick n Pay Stores Limited JSE Limited sponsor
Registration number: 1968/008034/06 Investec Bank Limited
JSE and A2X share code: PIK 100 Grayston Drive
ISIN: ZAE000005443 Sandton 2196
Board of directors Auditors

Executive Ernst & Young Inc.
Pieter Boone (CEO)
Lerena Olivier (CFO) Principal transactional bankers
Absa Limited
Non-executive
First National Bank
Gareth Ackerman (Chair)
Suzanne Ackerman1 Company Secretary
Jonathan Ackerman2 Penelope Gerber4
David Robins Email address: CompanySecretary@pnp.co.za
Independent non-executive
Haroon Bhorat
Promotion of Access to Information Act
informationofficer@pnp.co.za
Mariam Cassim
James Formby3 Investor relations
David Friedland Stephen Carrott
Aboubakar Jakoet Email address: StephenCarrott@pnp.co.za
Audrey Mothupi
Annamarie van der Merwe Website
Jeff van Rooyen Pick n Pay: www.pnp.co.za
Pick n Pay Clothing: www.picknpayclothing.co.za
Registered office Investor relations: www.picknpayinvestor.co.za
Pick n Pay Office Park
101 Rosmead Avenue Customer careline
Kenilworth Pick n Pay
Cape Town 7708 Tel: +27 860 30 30 30
Tel +27 21 658 1000 Email address: customercare@pnp.co.za
Fax +27 (0)86 675 1475
Boxer
Postal address Tel: +27 860 02 69 37
PO Box 23087 Email address: customercare@boxer.co.za
Claremont
Cape Town 7735 Online shopping
Tel +27 860 30 30 30
Registrar www.pnp.co.za
Computershare Investor Services Proprietary Limited
Rosebank Towers Engage with us on
15 Biermann Avenue
Rosebank 2196
Tel +27 11 370 5000
Postal address
Private Bag X9000
Saxonwold 2132
1
Suzanne Ackerman retired as an executive director on 31 March 2022 and was appointed as a non-executive director on that date.
2
Jonathan Ackerman retired as an executive director on 31 March 2023 and was appointed as a non-executive director from that date.
3
James Formby was appointed as an independent non-executive director on 10 October 2022.
4
Penelope Gerber was appointed as Company Secretary on 31 July 2022.
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ANNUAL FINANCIAL STATEMNTS 2023

1 Pick n Pay Stores Limited Group

CEO/CFO internal financial control responsibility statement 3

Company Secretary's certificate 3

Independent auditor's report 6

Audit, risk and compliance committee report 10

Pro forma earnings performance 22

2 Group annual financial statements

Statement of financial position 27

Statement of changes in equity 28

Statement of cash flows 29

Notes to the annual financial statements 30

3 Company annual financial statements

Statement of financial position 89

Statement of changes in equity 90

Statement of cash flows 91

Notes to the annual financial statements 92

Appendix 2 – Additional information 102

Appendix 3 – Pro forma headline earnings 103

Analysis of ordinary shareholders 104

These Group and Company annual Analysis of B shareholders 105

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DIRECTORS’ RESPONSIBILITY CHIEF EXECUTIVE OFFICER

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Going concern Special resolutions

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INDEPENDENT AUDITOR’S REPORT Key audit matter

Allowance for impairment of franchise debtors

Our audit procedures, amongst others, included the following

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COMPLIANCE the King IV™ Code of Governance for South

COMMITTEE Reporting Standards (IFRS) and other

• to provide independent oversight of the effectiveness of the

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Risk management Combined assurance Key focus areas for FY24

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Tax While the majority of the inventory growth is attributable to specific

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PRO FORMA EARNINGS

Trading profit 3 048.0 (145.2) 2 902.8 2.7 (4.3) 3 031.7 3.1

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GROUP STATEMENT OF GROUP STATEMENT OF

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GROUP STATEMENT OF GROUP STATEMENT OF

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NOTES TO THE GROUP ANNUAL

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Significant accounting policies (continued) Operating segments are individual components of an

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