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Annual Financial Statements3 Apr 2016 - 1 Apr 2017

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SI BirdCEO

NG PayneCHAIRMAN

reasonable judgements and estimates, have been applied; and• theannualfinancialstatementsfairlypresentthe resultsandthefinancialpositionofthecompany and the group.

Theannualfinancialstatementsarepreparedonthegoingconcernbasisandnothinghascometotheattentionofthedirectorstoindicatethatthecompanyandthegroupwillnotremainagoingconcern.Theseannualfinancialstatementsasat1April2017havebeenpreparedunderthesupervisionofthechieffinancialofficer,MrMMBlairCA(SA).Theannualfinancialstatementsofthecompanyandthegroupwereapprovedbytheboardon30May2017andaresignedonitsbehalfby:

Thepreparationandpresentationoftheannualfinancialstatementsandallinformationincludedinthisreportaretheresponsibilityofthedirectors.TheannualfinancialstatementswerepreparedinaccordancewiththeprovisionsoftheCompaniesActandcomplywithInternationalFinancialReportingStandards,asissuedbytheAccountingPracticesBoardanditssuccessors,theSAICAFinancialReportingGuidesasissuedbytheAccountingPracticesCommitteeandtheFinancialReportingPronouncementsasissuedbytheFinancialReportingStandardsCouncil.Indischargingtheirresponsibilities,bothfortheintegrityandfairnessofthesestatements,thedirectorsrelyontheinternalcontrolsandriskmanagementproceduresappliedbymanagement. Basedontheinformationandexplanationsprovidedbymanagementandtheinternalauditorsandoncommentbytheindependentauditorontheresultsoftheirstatutoryaudit,thedirectorsareoftheopinionthat:

• theinternalcontrolsareadequate;• thefinancialrecordsmayberelieduponinthe preparationoftheannualfinancialstatements;• appropriateaccountingpolicies,supportedby

JP CheadleCOMPANY SECRETARY30 MAY 2017

company secretarystatementIherebycertifythatthecompanyhaslodgedwiththeCompaniesandIntellectualPropertyCommissionallsuchreturnsasarerequiredofapubliccompanyintermsoftheCompaniesActandthatallsuchreturnsaretrue,correctanduptodate.

Approval of the Annual Financial Statements


78

Nature of business

Themainbusinessofthegroupisomni-channelretaildistributionthrough1216corporate-ownedstores,21franchisedstoresinAfricaanditsonlinechannels.Theretailchainsfocusonclothing,footwear,sportswear,sportinggoods,accessoriesandhomewares.Thefinancialservicesdivisionmanagesthecredit,insuranceandcellularoperations.

Corporate governance

ThedirectorssubscribetothevaluesofgoodcorporategovernanceassetoutintheKingReportforCorporateGovernanceinSouthAfrica2009(KingIII).BysupportingKingIIIthedirectorshaverecognisedtheneedtoconductthebusinesswithintegrityandtoaccounttostakeholdersinaccordancewithInternationalFinancialReporting Standards.

Retail calendar

ThegroupreportsontheretailcalendaroftradingweeksincorporatingtradefromSundaytoSaturdayeachweek.Accordinglytheresultsforthefinancialyearunderreviewarefora52-weekperiodfrom3April2016to1April2017(2016:53-weekperiodfrom29March2015to2April2016).

Financial results

Thefinancialresultsofthecompanyandthegrouparesetoutintheincomestatementsandstatementsofcomprehensiveincomeonpages88to89.

Dividends

OrdinaryandBordinarydividends

Itisthegroup’spolicytomaketwodividendpaymentseachyear,aninteriminDecemberandafinalinJune.

Interim:Acashdividendof228.2centspershare (2016:248.0centspershare)wasmadepayableon12December2016toshareholdersregisteredon9December2016.

Final:Acashdividendof438.8centspershare(2016:419.0centspershare)hasbeendeclaredpayableon26June2017toshareholdersregisteredon23June2017.

Consolidated entities

Theaggregateamountofgroupprofitsandlossesaftertaxationattributabletoconsolidatedentitieswas:

Net shareholders’ equity

Authorisedandissuedsharecapital

Therewerenochangestoauthorisedsharecapital.Duringtheyear,1200000Bordinaryshareswereconvertedtoordinaryshares.

TherewasashareallotmentandissueinMay2016of2312013sharestovariousshareoptionsschemes.

2000000shareswererepurchasedintermsofaspecialresolutionapprovedbyshareholdersattheannualgeneralmeetingon31August2016.Thesesharesweresubsequentlycancelledandreturnedtothestatusofauthorised and unissued.

Subsequent events

On19May2017thecompanyreceivednotificationfromtheNationalCreditRegulatorthatithasbeenreferredto the National Consumer Tribunal as a consequence of allegedly contravening sections 90, 100, 101(1)(a)and102(1)oftheNationalCreditAct,2005(refertonote26).Other than this, no events, material to the understandingofthisreport,haveoccurredbetweenthefinancialyear-endandthedateofthisreport.

Directorate

MarkBowmanwasappointedasanindependentnon-executivedirectoron28February2017.Particularsofthepresentdirectorsandcompanysecretaryareprovidedonpages75and124.Noneofthedirectorshavelong-termservicecontractswiththecompanyoranyofitsconsolidatedentities.

Emoluments

Detailsofemolumentspaidtoexecutiveandnon-executivedirectorsaresetoutintheremunerationreportonpages57to74.

R’m 2017 2016

Profits 115 91Losses (97) (115)

18 (24)

report of the directors for the year ended 1 April 2017


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B Ordinary shares2017 2016

Direct Beneficial

Indirect Beneficial

Held By Associate Total % Direct

BeneficialIndirect

BeneficialHeld By

Associate Total %

SBCohen 500000 3500000 500000 4500000 4500000 - 4500000 - 4500000 41.11%MRJohnston - - 46504 46504 46504 - - 46504 46504 0.42%

Total 4 546 504 46.65% 4 546 504 41.53%

Total B ordinary issued share capital 9 745 081 10 945 081

Ordinary shares2017 2016

Direct Beneficial

Indirect Beneficial

Held By Associate Total % Direct

BeneficialIndirect

BeneficialHeld By

Associate Total %

SIBird 397460 119000 - 516460 0.20% 365626 119000 - 484626 0.19%MMBlair 198771 71770 400 270941 0.11% 180389 100000 400 280789 0.11%SBCohen 15875 - 44588 60463 0.02% 490 500000 44588 545078 0.21%SAEllis 72179 87401 - 159580 0.06% 67799 67248 - 135047 0.05%KGetz - - 20 000 20 000 0.01% - - 20 000 20 000 0.01%MRJohnston - - 91250 91250 0.04% - - 91250 91250 0.04%WJSwain - 611670 - 611670 0.24% - 611670 - 611670 0.24%

Total 1 730 364 0.68% 2 168 460 0.85%

Total ordinary issued share capital 255 195 880 253 683 867

Notes:1 The5198577(2016:6398577)Bordinarysharesnotdetailedabovebelongto:

(a)trusts1397618shares(2016:1397618shares)ofwhichMrMRJohnston’smajorchildrenarebeneficiaries.MrJohnstonhasnodirectorindirectbeneficialownershipinthesesharesandhasrelinquishedallvotingrightsthereto(b)LaurieChiappini3200912shares(2016:5000759shares)andhisdaughterTraceyChiappini-Young599847shares(2016:599847shares)(c)AlastairMcArthur200shares(2016:200shares).

2 TraceyChiapinni-Youngconverted69000and200000Bordinarysharestoordinaryshareson24April2017and16May2017respectively.Consequently,theissuedBordinarysharecapitalhasreducedby269000to9476081Bordinarysharesandtheissuedordinarysharecapitalhasincreased by269000to255464880ordinaryshares.3Otherthanthechangedetailedinnote2above,therehavebeennochangesintheaboveinterestsbetweentheyearendandthedateofapprovalofthesefinancialstatements.

Interest in shares of the company

Atthefinancialyearend,thedirectorswereinterestedinthecompany’sissuedsharesasfollows:

report of the directors for the year ended 1 April 2017 (continued)


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To the Shareholders of Mr Price Group Limited

Opinion

We have audited the consolidated and separate annual financial statements of Mr Price Group Limited (“the Group”), which comprise theremunerationreport,theconsolidatedandseparatestatementsoffinancialpositionasat1April2017,andtheconsolidatedandseparatestatementsofcomprehensiveincome,consolidatedandseparatestatementofchangesinequityandconsolidatedandseparatecashflowsforthe52weeksthenendedandasummaryofsignificantaccountingpoliciesandotherexplanatorynotes,assetoutonpages57to74andpages83to124.

Inouropinion,theaccompanyingconsolidatedandseparatefinancialstatementspresentfairly,inallmaterialrespects,theconsolidatedandseparatefinancialpositionoftheGroupasat1April2017,theconsolidatedandseparatefinancialperformanceanditsconsolidatedandseparatecashflowsfortheyearthenendedinaccordancewithInternationalFinancialReportingStandards(IFRS)andtherequirementsoftheCompaniesAct,2008.

Basis for opinion

We conducted our audit in accordancewith International Standards on Auditing (ISAs). Our responsibilities under those standards are furtherdescribedintheAuditor’sResponsibilitiesfortheAuditoftheConsolidatedFinancialStatementssectionofourreport.WeareindependentoftheGroup inaccordancewiththe InternationalEthicsStandardsBoardforAccountants’CodeofEthicsforProfessionalAccountants (IESBACode)togetherwiththeethicalrequirementsthatarerelevanttoourauditofthefinancialstatementsinSouthAfrica,andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeserequirementsandtheIESBACode.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.

Key audit matters

Keyauditmattersarethosemattersthat, inourprofessionaljudgement,wereofmostsignificanceinourauditoftheconsolidatedandseparatefinancialstatementsof thecurrentperiod.Thesematterswereaddressed in thecontextofourauditof theconsolidatedandseparatefinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.

WehavefulfilledtheresponsibilitiesdescribedintheAuditor’sresponsibilitiesfortheauditofthefinancialstatementssectionofourreport,includinginrelationtothesematters.Accordingly,ourauditincludedtheperformanceofproceduresdesignedtorespondtoourassessmentoftherisksofmaterialmisstatementofthefinancialstatements.Theresultsofourauditprocedures,includingtheproceduresperformedtoaddressthemattersbelow,providethebasisforourauditopinionontheaccompanyingfinancialstatements.

Noticeisherebygiventhatafinalgrosscashdividendof438.8centspersharehasbeendeclaredforthe52weeksended1April2017.Asthedividendhasbeendeclaredfromincomereserves,shareholders,unlessexemptorwhoqualifyforareducedwithholdingtaxrate,willreceiveanetdividendof351.04centspershare.Thedividendwithholdingtaxrateis20%.

Theissuedsharecapitalatthedeclarationdateis255464880listedordinaryand9476081unlistedBordinaryshares.Thetaxreferencenumberis9285/130/20/0.

Thesalientdatesforthedividendwillbeasfollows: Lastdatetotradecumthedividend Tuesday 20 June 2017 Datetradingcommencesexthedividend Wednesday 21 June 2017 Recorddate Friday 23 June 2017 Paymentdate Monday 26 June 2017 ShareholdersmaynotdematerialiseorrematerialisetheirsharecertificatesbetweenWednesday,21June2017andFriday,23June2017,bothdatesinclusive.

Thedividendwasapprovedonbehalfoftheboardon29May2017inDurbanby:

final cash dividend declaration independent auditor’s report

Key audit matter How our audit addressed the key audit matter

Inventory provisioning:

Inventoryprovisioningrepresentsmanagement’sbestestimateoftheextenttowhichinventoriesonhandatthereportingdatewillbesoldbelowcost,ornotsoldatall.Wefocusedonthisareaastheinventoryprovisionincludesestimatesandassumptionswhichrequiremanagementtoapplyjudgement.Themostsignificantassumptionsincludeanassessmentoffuturesaleabilityandtheeffectsoffashiontrendsandseasonalchanges.

Werefertonote2(criticalaccountestimatesandjudgements)andnote7(inventory)ofthefinancialstatementsfortherelateddisclosure.

Our procedures included, amongst others, the following:

• Wetestedmanagement’sassumptionsrelatingtofashiontrendsandseasonalchangesappliedintheobsolescenceprovisionbyassessingtheaccuracyofthecalculationanddata,whichuseshistoricalinformationandtrendsappliedagainstthecurrentinventoryagingprofile.

• Inassessingthefuturesaleabilityofinventories,weunderstoodmanagement’sprocessanditseffectontheprovisioning.Inaddition,weassessedthesetrendsagainstothercomparableSouthAfricanretailers.

• Weevaluatedtheobsolescencelevelsagainstwritedownratesbycomparingthesetohistoricaldatatrends.

• Weconsideredthecurrentmacro-economictradingconditionsanditseffectontheinventoryprovisioning.

• WeassessedthecompletenessandaccuracyofthedisclosuresrelatingtotheprovisiontoassesscompliancewithIFRSdisclosurerequirementsinnote7.


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Ernst&YoungInc.Director–VinodhanPillayRegisteredAuditorCharteredAccountant(SA)1PencarrowCrescent,LaLuciaRidgeOfficeEstate,Durban,400030May2017

independent auditor’s report (continued)

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordancewiththeIFRSandtherequirementsoftheCompaniesAct,2008,andforsuchinternalcontrolasmanagementdeterminesisnecessarytoenablethepreparationofconsolidatedandseparatefinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.Inpreparingtheconsolidatedandseparatefinancialstatements,managementisresponsibleforassessingtheGroup’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlessmanagementeitherintendstoliquidatetheGrouportoceaseoperations,orhasnorealisticalternativebuttodoso.ThosechargedwithgovernanceareresponsibleforoverseeingtheGroup’sfinancialreportingprocess.

Auditor’s responsibilities for the audit of the financial statements

Ourobjectivesare toobtain reasonable assuranceaboutwhether theconsolidatedandseparate financial statements asawhole are free frommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,but isnotaguaranteethatanauditconducted inaccordancewith ISAswillalwaysdetectamaterialmisstatementwhen itexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterial if, individuallyor intheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.

AspartofanauditinaccordancewithISAs,weexerciseprofessionaljudgementandmaintainprofessionalscepticismthroughouttheaudit.Wealso:

-Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol;

-Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheinternalcontrol;

-Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosuresmade bymanagement;

-Concludeontheappropriatenessofmanagement’suseofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheGroup’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditor’sreporttotherelateddisclosuresintheconsolidatedfinancialstatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditor’sreport.However,futureeventsorconditionsmaycausetheGrouptoceasetocontinueasagoingconcern;

-Evaluate theoverall presentation, structure andcontent of the consolidated and separate financial statements, including thedisclosures, andwhether the consolidated and separate financial statements represent the underlying transactions and events in amanner that achieves fairpresentation;

-ObtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithintheGrouptoexpressanopinionontheconsolidatedandseparatefinancialstatements.Weareresponsibleforthedirection,supervisionandperformanceoftheGroupaudit.Weremainsolelyresponsibleforourauditopinion;

- Communicatewiththosechargedwithgovernanceregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit;

-Providethosechargedwithgovernancewithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.

Fromthematterscommunicatedwiththosechargedwithgovernance,wedeterminethosemattersthatwereofmostsignificanceintheauditoftheconsolidatedandseparatefinancialstatementsofthecurrentperiodandarethereforethekeyauditmatters.Wedescribethesemattersinourauditor’sreportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.

Other information

TheGroup’sdirectorsareresponsible for theother information.Theother informationcomprisesthe information included in theAnnualFinancialStatementsthatincludestheDirectors’Report,theAuditCommittee’sReportandtheCompanySecretary’sCertificateasrequiredbytheCompaniesAct,butdoesnot include theconsolidatedandseparatefinancialstatementsandourauditor’s report thereon.Ouropinionon theconsolidatedfinancialandseparatestatementsdoesnotcovertheotherinformationandwedonotexpressanyformofassuranceconclusionthereon.

Inconnectionwithourauditoftheconsolidatedfinancialstatements,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththeconsolidatedfinancialstatementsorourknowledgeobtainedintheaudit,orotherwiseappears tobemateriallymisstated. If, basedon theworkwehaveperformed,weconclude that there is amaterialmisstatement of this otherinformation,wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.

Report on other legal and regulatory requirements

IntermsoftheIRBARulepublishedinGovernmentGazetteNumber39475dated4December2015,andsubsequentguidance,wereportthatErnst&YoungInc.,anditspredecessorfirm,hasbeentheauditorofMrPriceGroupLimitedforthirtyfiveyears.Ernst&YoungInc.wasappointedasauditorofORRCORetailLimitedin1982.ORRCORetailLimitedwaslaterrenamedSpecialityStoresin1989,andin2000toMrPriceGroupLimited.WeconfirmthatweareindependentinaccordancewiththeIndependentRegulatoryBoardforAuditorsCodeofProfessionalConductforRegisteredAuditorsandotherindependencerequirementsapplicabletotheindependentauditofMrPriceGroupLimited.Theengagementpartnerontheauditresultinginthisindependentauditor’sreportisVinodhanPillay.

Key audit matter How our audit addressed the key audit matter

Trade receivables provisioning:

Thetradereceivablesprovisionrepresentsmanagement’sbestestimateoftheextenttowhichtradereceivablesatthereportingdatewillnotbesubsequentlyrecovered.Thereissignificantjudgementappliedincalculatingthetradereceivablesprovision,particularlyregardingtheestimationoffuturecashcollectionsincludedwithintheprovisioningmodel.Themostsignificantvariableswhicharelikelytoimpactrecoverabilityincludetheimpactofexpectedrecoveries,debtreviewsandmacro-economicriskfactors. Werefertonote2(criticalaccountestimatesandjudgements)andnote8(tradeandotherreceivable)ofthefinancialstatementsfortherelateddisclosure.


• We involvedour actuarial experts to assess theassumptionsapplied within the provisioning model. This included anassessment of any changes to theprovisioningmethodologyand an independent recalculation of the trade receivablesprovision.

• We assessed changes in the aging profile of the tradereceivables to determine the impact on the credit quality ofcustomers and consequently on the level of provisioning.Weassessedthe impactof thecreditgrantingprocess inthecurrentyearontheprovision.

• We assessed the completeness and accuracy of thedisclosuresrelatingtotheprovisiontoassesscompliancewithIFRSdisclosurerequirementsinnote8.

Taxation:

TheGroupissubjecttoincometaxinmultiplejurisdictions.Significantjudgement isrequired indeterminingtheprovisionfor incometaxesdue to the interpretation of certain tax laws. In those caseswheretheamountoftaxpayableorrecoverableisuncertain,managementapplies its judgement of the probable amount of the liability orrecovery. We refer to note 2 (critical account estimates and judgements)andnotes16,20and26of thefinancialstatements for therelateddisclosure.


• We involved our internal tax specialists to evaluate therecognitionandmeasurementofthecurrenttaxliabilities.Thisincludedanalysingthecurrent taxcalculations forcompliancewith the relevant tax legislation and principles at a statutorylevel,aswellasassessingtheconsolidatedtaxcomputations.

• We assessed the assumptions made regarding uncertaintax positions to assesswhether the basis used to recogniseappropriateprovisionsisbasedonthemostprobableoutcomeand is appropriate.

• Weassessedtaxrisks,legislativedevelopmentsandthestatusofongoingtaxauthorityaudits.

• WeevaluatedtheGroup’sjudgementsinrespectofestimatesoftaxexposures,recoverableamountsandcontingencies.

• WeconsideredtheadequacyoftheGroup’sIFRSdisclosuresinnotes16,20and26regardingtaxpositionsandrecogniseddeferredtaxassets.


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Shareholders’ diaryMay/June AnnouncementofannualresultsandfinaldividendtoshareholdersJune Publicationof2017annualintegratedreport Settlementoffinaldividendtoshareholders August Annualgeneralmeetingofshareholders November Publicationofhalf-yearresults AnnouncementofinterimdividendtoshareholdersDecember Settlementofinterimdividendtoshareholders

Ordinary shares B Ordinary shares

Holdings

Number of share-

holders %Number

of shares %

Number of share-

holders %Number

of shares %1-1000 17389 74.42 5580033 2.19 1 12.50 200 0.00

1001-10000 4800 20.54 14264037 5.59

10001-100000 935 4.00 29182681 11.43

100001-1000000 203 0.87 55910886 21.91 4 50.00 2543995 26.11

1000001andover 39 0.17 150258243 58.88 3 37.50 7200886 73.89

23 366 100.00 255 195 880 100.00 8 100.00 9 745 081 100.00

Category

Number of share-

holders %Number

of shares %

Number of share-

holders %Number

of shares %Pensionfunds 341 1.46 70383842 27.58

Unittrusts/MutualFunds 400 1.71 92942587 36.42

Nomineecompaniesandcorporatebodies 22248 95.34 66316310 25.99 2 25.00 3999974 41.00

Individuals and trusts 339 1.45 19157903 7.50 6 75.00 5745107 59.00

Staffshareschemes 8 0.03 6395238 2.51

23 336 100.00 255 195 880 100.00 8 100.00 9 745 081 100.00

shareholder informationfor the year ended 1 April 2017

public and non-public shareholders

At1April2017thepercentagedirectorindirectshareholdingsofpublicandnon-publicshareholdersinthelistedordinarysharesofthecompanywasasfollows:

major shareholders

Tothecompany’sbestknowledgeandbelief,thefollowingshareholdersorfundmanagershelddiscretionarybeneficialinterestand/oradministeredclientportfoliosamountingto5%ormoreoftheissuedordinarysharesofthecompanyat1April2017:

Number of share-

holders %

Publicshareholders 23 343 99.90Non-publicshareholders 23 0.10Directorsofthecompanyoritssubsidiaries 15 0.07Trusteesofemployees’shareschemesorretirementbenefitschemes 8 0.03

Beneficial holdingPortfolio administration

discretionary

% Shares % Shares

PublicInvestmentCorporation* 12.18 31086220 13.97 35644276J.P.MorganAssetManagement 5.97 15241192AllanGrayInvestmentCouncil 5.46 13923155FoordAssetManagement 5.12 13059157

DetailsofthebeneficialinterestinBordinarysharesarereflectedinthereportofthedirectors,page79.

*TenunderlyingshareholdersunderPublicInvestmentCorporationLimited.


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statement of accounting policies for the year ended 1 April 2017

1. ConsolidationConsolidatedentities(whichincludespecialpurposeentitiessuchasstaffsharetrusts)aredefinedasentitiesinwhichthegrouphasthepowertogovernthefinancialandoperatingpoliciesoftheentitysoastogainbenefitfromitsactivities.Controlisachievedwhenthegroupisexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvesteeandhastheabilitytoaffectthosereturnsthroughitspowerovertheinvestee.Specifically,thegroupcontrolsaninvesteeif,andonlyif,thegrouphas:

-Powerovertheinvestee(i.e.existingrightsthatgiveitthecurrentabilitytodirecttherelevantactivitiesoftheinvestee);

-Exposure,orrights,tovariablereturnsfromitsinvolvement with the investee; and

-Theabilitytouseitspowerovertheinvesteetoaffectits returns.

Whenthegrouphaslessthanamajorityofthevotingorsimilarrightsofaninvestee,thegroupconsidersallrelevantfactsandcircumstancesinassessingwhetherithaspoweroveraninvestee,including:

-thecontractualarrangementwiththeothervote holdersoftheinvestee;

-rightsarisingfromothercontractualarrangements;and

-thegroup’svotingrightsandpotentialvotingrights.

Thegroupre-assesseswhetherornotitcontrolsaninvesteeiffactsandcircumstancesindicatethatthereare

changestooneormoreofthethreeelementsofcontrol.Consolidationofasubsidiarybeginswhenthegroupobtainscontroloverthesubsidiaryandceaseswhenthegrouplosescontrolofthesubsidiary.

Profitorlossandeachcomponentofothercomprehensiveincome(OCI)areattributedtotheequityholdersoftheparentofthegroupandtothenon-controllinginterests,evenifthisresultsinthenon-controllinginterestshavingadeficitbalance.Allintra-groupassetsandliabilities,equity,income,expensesandcashflowsrelatingtotransactionsbetweenmembersofthegroupareeliminatedinfullonconsolidation.Inthecompanyfinancialstatementsinvestmentsinsubsidiariesareaccountedforatcostlessimpairment.Costisadjustedtoreflectchangesinconsiderationarisingfromcontingentconsiderationamendments.Costalsoincludesdirectattributablecostsofinvestment.

Inthegroupfinancialstatementstheexcessoftheconsiderationtransferred,theamountofanynon-controllinginterestintheacquireeandtheacquisition-datefairvalueofanypreviousequityinterestintheacquireeoverthefairvalueofthegroup’sshareoftheidentifiablenetassetsacquiredisrecordedasgoodwill.

Intercompanytransactions,balancesandunrealisedgains/lossesontransactionsbetweengroupcompaniesare eliminated.

2. Fair value measurementFairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.Thefairvaluemeasurementisbasedonthepresumptionthatthetransactiontoselltheassetortransfertheliabilitytakesplaceeither:-Intheprincipalmarketfortheassetorliability,or-Intheabsenceofaprincipalmarket,inthemostadvantageousmarketfortheassetorliability.

Theprincipalorthemostadvantageousmarketmustbeaccessibleto/bythegroup.

Thefairvalueofanassetoraliabilityismeasuredusingtheassumptionsthatmarketparticipantswouldusewhenpricingtheassetorliability,assumingthatmarketparticipantsactintheireconomicbestinterest.

Afairvaluemeasurementofanon-financialassettakesintoaccountamarketparticipant’sabilitytogenerateeconomicbenefitsbyusingtheassetinitshighestandbestuseorbysellingittoanothermarketparticipantthat would use the asset in its highest and best use.

Thegroupusesvaluationtechniquesthatareappropriateinthecircumstancesandforwhichsufficientdataisavailabletomeasurefairvalue,maximisingtheuseofrelevantobservableinputsandminimisingtheuseofunobservableinputs.

Allassetsandliabilitiesforwhichfairvalueismeasuredordisclosedinthefinancialstatementsarecategorisedwithinthefairvaluehierarchy,describedasfollows,basedonthelowestlevelinputthatissignificanttothefairvaluemeasurementasawhole:

-Level1—Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsorliabilities.

-Level2—Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvaluemeasurementisdirectlyorindirectlyobservable.

-Level3—Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvaluemeasurement is unobservable.

Forassetsandliabilitiesthatarerecognisedinthefinancialstatementsonarecurringbasis,thegroupdetermineswhethertransfershaveoccurredbetweenlevelsinthehierarchybyre-assessingcategorisation(basedonthelowestlevelinputthatissignificanttothefairvaluemeasurementasawhole)attheendofeachreporting period.

Forthepurposeoffairvaluedisclosures,thegrouphasdeterminedclassesofassetsandliabilitiesonthebasisofthenature,characteristicsandrisksoftheassetorliabilityandthelevelofthefairvaluehierarchyasexplainedabove.FairvaluesoffinancialinstrumentsmeasuredatamortisedcostaredisclosedinNote27.

2. Property, plant and equipment

Capitalisedleasedofficebuildingsarerecognisedatthefairvalueofthebuildingsatdateofcommencementoftheleaseagreement,oriflower,thepresentvalueoftheminimumleasepayments.Thebuildingsaredepreciatedovertheshorteroftheperiodofthefinanceleaseandtheusefullifeofthebuildings.Buildingsoccupiedinthenormalcourseofthebusinessarerecognisedatcostlessaccumulateddepreciationandimpairmentlosses.Furniture,fittings,equipment,vehicles,computerequipmentandimprovementstoleaseholdpremisesarestatedathistoriccostlessaccumulateddepreciationandanyaccumulatedimpairmentandaredepreciated,onthestraight-linebasistotheirexpectedresidualvalues,overtheestimatedusefullivesoftheassetsconcernedwhichareasfollows:

•Furniture,fittings,equipmentandvehicles-Furnitureandfittings 6to8years-Vehicles 5to6years-Otherequipment 6to14years

•Computerequipment 3to5years•Improvementstoleasehold Overperiodofleasepremises subjecttoamaximum of10years

•Buildings 20years

Subsequentcostsareincludedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,andonlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtothegroupandthecostoftheitemcanbemeasuredreliably.Thecarryingamountofthereplacedpartisderecognised.Allotherrepairsandmaintenancearechargedtotheincomestatementduringthefinancialperiodinwhichtheyareincurred.

Theassets’expectedresidualvalues,estimatedusefullives,anddepreciationpolicyarereviewed,andadjustedifappropriate,onanannualbasis.Changesintheestimatedusefullifeorexpectedpatternofconsumptionoffuturebenefitsembodiedintheassetareaccountedforbychangingthedepreciationperiodormethod,asappropriate,andaretreatedaschangesinaccountingestimates.

The annual financial statements have been prepared on the historic cost and going concern basis, exceptwhere indicated otherwise in a policy below. The annual financial statements are prepared in accordancewith InternationalFinancialReportingStandards(IFRS), Interpretations issuedbytheInternationalAccountingStandardsBoard,theSAICAFinancialReportingGuidesasissuedbytheAccountingPracticesCommittee,theFinancialReportingPronouncementsasissuedbytheFinancialReportingStandardsCouncil,theJSEListingsRequirementsandtherequirementsoftheCompaniesAct,71of2008ofSouthAfrica.Theconsolidatedfinancialstatementsarepresentedinrandsandallvaluesareroundedtothenearestmillion(Rm),exceptwhenotherwiseindicated.

Theconsolidatedfinancialstatementscomprisethefinancialstatementsofthegroupanditsconsolidatedentitiesasat1April2017.ThegroupreportsontheretailcalendaroftradingweeksincorporatingtradefromSundaytoSaturdayeachweek.Accordinglytheresultsforthefinancialyearunderreviewarefora52-weekperiodfrom3April2016to1April2017(2016:53-weekperiodfrom29March2015to2April2016).

Theconsolidatedfinancialstatementsprovidecomparativeinformationinrespectofthepreviousperiod.Unlessotherwiseindicated,anyreferencestothegroupincludethecompany.


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4. Intangible assetsIntangibleassetsacquiredseparatelyaremeasuredoninitialrecognitionatcost.Followinginitialrecognition,intangibleassetsarecarriedatcostlessanyaccumulatedamortisationandaccumulatedimpairmentlosses.Internallygeneratedintangibleassets,excludingcapitaliseddevelopmentcosts,arenotcapitalisedandexpenditureisreflectedinprofitandlossintheperiodinwhichtheexpenditureisincurred.

Computer softwareAcquiredsoftwarenotregardedasanintegralpartofhardwareiscapitalisedathistoriccostandisamortisedonthestraight-linebasisoveritsestimatedusefullife(twoto10years),fromthedateofitsbeingcommissionedintothegroup.Allothercoststhataredirectlyassociatedwiththeproductionofidentifiablesoftwarecontrolledbythegroup,andthatareexpectedtogenerateeconomicbenefitsexceedingoneyear,arerecognisedaspartofthecostoftheintangibleassets.Directcostsincludethesoftwaredevelopmentemployeecosts.Costsassociatedwithdevelopingsoftwarearerecognisedasanexpenseasincurredifitisnotexpectedthattheywillprovidefutureeconomicbenefitstothegroup.

GoodwillGoodwillrepresentstheexcessofthecostofacquisitionoverthefairvalueofthenetidentifiableassetsoftheacquiredconsolidatedentityoroperationatdateofacquisition,andiscarriedatcostlessaccumulatedimpairment losses.

5. Impairment and derecognition of non-financial assets

Assets,otherthanfinancialassets,goodwillandintangibleassetsnotyetbroughtintouse,aretestedforindicatorsofimpairmentonanannualbasis.Shouldsuchanindicatorexist,theassetisthentestedforimpairment. Separatelyrecognisedgoodwillandintangibleassetsnotyetbroughtintousearetestedforimpairmentannuallyormorefrequentlyifchangesincircumstancesindicatethatthecarryingamountmaybeimpaired.

Theamountoftheimpairmentisdeterminedbyassessingtherecoverableamountoftheassetorcashgeneratingunittowhichtheassetrelates.Therecoverableamountisthehigherofanasset’sfairvaluelesscoststosellandvalueinuse.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethat

reflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.Indeterminingfairvaluelesscoststosell,recentmarkettransactionsaretakenintoaccount,ifavailable.Ifnosuchtransactionscanbeidentified,anappropriatevaluationmodelisused.Thesecalculationsarecorroboratedbyvaluationmultiples,quotedsharepricesforpubliclytradedsubsidiariesorotherfairvalueindicators.Wheretherecoverableamountoftheassetorcashgeneratingunitorgroupofcashgeneratingunitsislessthanthecarryingamount,animpairmentlossisrecognisedintheincomestatement. Whenanimpairmentlosssubsequentlyreverses,thecarryingamountoftheassetorcashgeneratingunitisincreasedtotherevisedestimateofitsrecoverableamount,butonlytotheextentofthecarryingamountthat would have been determined had no impairment loss beenrecognisedpreviously.Impairmentsarereversedintheincomestatementintheperiodthattheindicatorofsuchreversalisinexistence,unlesstherelevantassetiscarriedatarevaluedamount,inwhichcasethereversalistreatedasarevaluationincrease.Impairmentstogoodwillareneverreversed.Thederecognitionofanon-financialassettakesplaceupondisposalorwhenitisnolongerexpectedtogenerateanyfurthereconomicbenefits.Anyderecognitiongain/lossisrecordedintheincomestatementintheperiodofderecognition.

6. InventoriesInventoriesarevaluedatthelowerofcostornetrealisablevalue.Costisdeterminedonthefollowingbasis:

-Thecostofmerchandisepurchasedforresaleisdetermined using the weighted average method; and

-Consumablesarevaluedatinvoicecostonafirst-in,first-outbasis.

Costsincludethechargesincurredinbringinginventoriestotheirpresentlocationandconditionandarenetofdiscountsfromsuppliers.Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lessapplicablevariablesellingexpenses.

7. TaxationThetaxationexpenserepresentsthesumofcurrenttaxationanddeferredtaxation.Taxationratesthathavebeenenactedorsubstantivelyenactedbythereportingdateareusedtodeterminethetaxationbalances.

Current taxationCurrentincometaxationassetsandliabilitiesfortheperiodaremeasuredattheamountexpectedtoberecoveredfromorpaidtothetaxationauthorities.Thetaxationcurrentlypayableisbasedonthetaxableprofitfortheyear,whichdiffersfromtheprofitfortheyearintheincomestatementasitexcludesbothitemsofincomeorexpensethataretaxableordeductibleinotheryearsandthoseitemsthatarenevertaxableordeductible.Currentincometaxationrelatingtoitemsrecogniseddirectlyinequityisalsorecognisedinothercomprehensiveincomeorequityandnotinprofitorloss.

Deferred taxationDeferredtaxationisprovidedforalltemporarydifferences(otherthantemporarydifferencescreatedoninitialrecognitionwhicharenotpartofabusinesscombinationandatthetimeofthetransactionnotaxationoraccountingeffecthasbeenrecognisedandgoodwillforwhichamortisationisnotdeductibleforaccountingpurposes)arisingbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsonthestatementoffinancialposition.Deferredtaxationrelatingtoitemsrecognisedoutsideprofitandlossisrecognisedoutsideprofitandloss.Deferredtaxationitemsarerecognisedincorrelationtotheunderlyingtransactioneitherinothercomprehensiveincomeordirectlyinequity.

Deferredtaxationassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyintheyearwhentheassetisrealisedortheliabilityissettled,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantivelyenactedatthereportingdate.

Deferredtaxationassetsareonlyrecognisedtotheextentthatitisprobablethatthetemporarydifferenceswillreverseintheforeseeablefutureandthatfuturetaxableprofitwillbeavailabletoallowallorpartofthedeferredtaxationassettobeutilised.Deferredtaxationisprovidedontemporarydifferencesarisingoninvestmentsinconsolidatedentitiesandassociates,exceptfordeferredtaxliabilitieswherethetimingofthereversalofthetemporarydifferenceiscontrolledbythegroupanditisprobablethatthetemporarydifferencewillnotreverseintheforeseeablefuture.Thecarryingamountofdeferredtaxationassetsisreviewedateachreportingdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitswillbeavailabletoallowallorpartoftheassettoberecovered.

Deferredtaxationassetsanddeferredtaxationliabilitiesareoffsetifalegallyenforceablerightexiststosetoff

currenttaxassetsagainstcurrentincometaxliabilitiesandthedeferredtaxesrelatetothesametaxableentityandthesametaxationauthority.Taxbenefitsacquiredaspartofabusinesscombination,butnotsatisfyingthecriteriaforseparaterecognitionatthatdate,arerecognisedsubsequentlyifnewinformationaboutfactsandcircumstanceschange.Theadjustmentiseithertreatedasareductiontogoodwill(aslongasitdoesnotexceedgoodwill)ifitwasincurredduringthemeasurementperiodorrecognisedinprofitorloss.

Value-Added Tax (VAT)ExpensesandassetsarerecognisednetoftheamountofVAT,except:-WhentheVATincurredonapurchaseofassetsorservicesisnotrecoverablefromthetaxationauthority,inwhichcasetheVATisrecognisedaspartofthecostofacquisitionoftheassetoraspartoftheexpenseitem,asapplicable.

RevenueandincomearerecognisednetoftheamountofVAT,except:-WhentheVATdueonthesaleorincomeisnotpayabletothetaxationauthority,inwhichcasethefullamountisrecognisedasrevenueorincomeasapplicable.

ThenetamountofVATrecoverablefrom,orpayableto,thetaxationauthorityisincludedaspartofreceivablesorpayablesinthestatementoffinancialposition.

Dividend Withholding Tax (DWT)DWTisataxleviedonthebeneficialownerofthesharesinsteadofthecompany.ThetaxiswithheldbythecompanyandispaidovertotheSouthAfricanTaxAuthorityonthebeneficiaries’behalf.Theresultanttaxexpenseandliabilityhasbeentransferredtotheshareholderandisnolongeraccountedforaspartofthetaxchargeforthecompany.AmountsnotyetpaidovertotheSouthAfricanTaxAuthorityareincludedintradeandotherpayablesandthemeasurementofthedividendamountisnotimpactedbythewithholdingtax.

8. ProvisionsProvisionsarerecognisedwhenthegrouphasapresentobligation(legalorconstructive)asaresultofapastevent,itisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligationandareliableestimateoftheobligationcanbemade.Wheretheeffectofdiscountingtopresentvalueismaterial,provisionsraisedareadjustedtoreflectthetimevalueofmoney.Provisionsarereviewedateachreportingdateandadjustedtoreflectcurrentbestestimates.

statement of accounting policies for the year ended 1 April 2017 (continued)


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9. Revenue recognitionRevenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivable,andisrecognisedwhenitisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflowtothegroupandtheamountofrevenuecanbereliablymeasured.Revenueisshownnetofestimatedcustomerreturns,discountsandVATandaftereliminatingsaleswithinthe group.

Revenueisrecognisedwhenthereisevidenceofanarrangement,collectabilityisprobable,andthedeliveryoftheproductorservicehasoccurred.Incertaincircumstancesrevenueissplitintoseparatelyidentifiablecomponentsandrecognisedwhentherelatedcomponentsaredeliveredinordertoreflectthesubstanceofthetransaction.Theconsiderationofeachcomponentisallocatedonarelativefairvaluebasis.

Retail salesRetailsalescomprisenetincomefromthesaleofmerchandiseandarerecognisedwhenthesignificantrisksandrewardsofownershippasstothecustomer.Itisthegroup’spolicytosellitsproductstotheretailcustomerwitharighttoreturnwithinaspecifiedperiod.Accumulatedexperienceisusedtoestimateandprovideforsuchreturns.

Premium incomePremiumsarerecognisedwhendueintermsoftherelevantcontractandareshownbeforethedeductionofcommissionandclaims,whicharerecognisedinadministrativeandotheroperatingexpenses.

Service fee revenueRevenuefromacontracttoprovideservicesisrecognisedinthemonthinwhichtheservicechargeaccrues.Servicefeerevenueisderivedfromtheprovisionofinformationtechnologyanddebtormanagementservices.

Club feesClubfeesarerecognisedinthemonthinwhichthecustomerchargeaccrues.

InterestInterestreceivedisrecognisedonatimeproportionbasisattheeffectiveinterestrateasimputedinthecontract.

Rental incomeRentalincomeinrespectofoperatingleasesisrecognisedonastraight-linebasisovertheleaseperiod.

Dividend incomeDividendincomeincludesthevalueofcashdividendsreceivedandsurplusesdistributedbyastaffsharetrust.Dividendsarerecognisedwhentherighttoreceivepaymenthasbeenestablished.

FeesFeesrepresentfeeincomefromconsolidatedentitiesinrespectofvariousadministrativeandoperatingfunctionsperformedontheirbehalf.Feesarerecognisedwhenthechargeaccrues.

Prepaid airtime salesPrepaidairtimesalesarerecognisedoncethesignificantrisksandrewardsofownershippasstothecustomer.

ContractsContractproductsaredefinedasarrangementswithmultipledeliverables.Revenuefromthehandsetisrecognisedwhenthehandsetisdelivered.Monthlyservicerevenuereceivedfromthecustomerisrecognisedintheperiodwhichtheserviceisdelivered.Airtimerevenueisrecognisedontheusagebasiscommencingonactivationdate.Unusedairtimeisdeferredinfullandrecognisedinthemonthofusageoronexpiryoftheairtime.

Retail voice and dataServicearrangementsincludesubscriptionfees,typicallymonthlyrevenue,whicharerecognisedoverthesubscriptionperiod.Revenuerelatedtolocal,longdistance,network-to-network,roamingandinternationalcallconnectionservicesisrecognisedwhenthecallisplacedortheconnectionprovided.

10. LeasesOperatingleasepaymentsarerecognisedasanexpenseonastraight-linebasisoverthetermofthelease.Contingentrentals(includingturnoverclauserentals)arisingunderoperatingleasesarerecognisedasanexpenseintheperiodinwhichliabilityisaccrued.Theresultingdifferencearisingfromthestraight-linebasisandcontractualcashflowsisrecognisedasanoperating lease obligation or asset.

11. Borrowing costsBorrowingcostsarecapitalisedwheretheyaredirectlyattributabletotheacquisition,constructionorproductionofaqualifyingasset.Allotherborrowingcostsareexpensedintheperiodinwhichtheyoccur.

12. Dividends to shareholdersDividendsinrespectofequityinstrumentsarerecordedintheperiodinwhichthedividendispaidandarechargeddirectlytoequity.

13. Foreign currenciesFunctional and presentation currencyItemsincludedinthefinancialstatementsofthegroup’sforeignconsolidatedentitiesaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(functionalcurrency).TheconsolidatedfinancialstatementsarepresentedinRands,whichisthegroup’sfunctionalandpresentationcurrency.

Transactions and balancesTransactionsinforeigncurrenciesareinitiallyrecordedbythegroup’sentitiesattheirrespectivefunctionalcurrencyspotratesatthedatethetransactionfirstqualifiesforrecognition.

Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedatthefunctionalcurrencyspotratesofexchangeatthereportingdate.Differencesarisingonsettlementortranslationofmonetaryitemsarerecognisedinprofitorloss.

Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyaretranslatedusingtheexchangeratesatthedatesoftheinitialtransactions.Non-monetaryitemsmeasuredatfairvalueinaforeigncurrencyaretranslatedusingtheexchangeratesatthedatewhenthefairvalueisdetermined.

Thegainorlossarisingontranslationofnon-monetaryitemsmeasuredatfairvalueistreatedinlinewiththerecognitionofthegainorlossonthechangeinfairvalueoftheitem(i.e.,translationdifferencesonitemswhosefairvaluegainorlossisrecognisedinOCIorprofitorlossarealsorecognisedinOCIorprofitorloss,respectively).

Group companiesTheresultsandpositionofconsolidatedentitiesthathaveafunctionalcurrencythatdiffersfromthe presentation currencyaretranslatedintothepresentationcurrencyasfollows:

-Assetsandliabilitiesforeachstatementoffinancialpositionpresentedaretranslatedattheclosingrateatthedateofthatstatementoffinancialposition;

-Incomestatementitemsaretranslatedattheaverageratefortheperiod(unlessthisaverageisnotareasonableapproximationofthecumulativeeffectoftheratesprevailingonthetransactiondates,inwhichcaseincomeandexpensesaretranslatedattherateonthedatesofthetransactions);and

-AllresultingexchangedifferencesarerecognisedasaseparatecomponentofOCI.

Financialassetsarereviewedannuallyforanyevidenceofimpairmentandanyimpairmentlossisrecognisedimmediatelyintheincomestatement.

Ondisposaloftheconsolidatedentity,theaccumulatedexchangedifferencesinothercomprehensiveincomearerecognisedintheincomestatement.

14. Financial instrumentsFinancialassetsandfinancialliabilitiesarerecognisedonthestatementoffinancialpositionwhenthegroupbecomesapartytothecontractualprovisionsoftheinstrument.Financialinstrumentsareinitiallyrecognisedatfairvalueplustransactioncostsforallfinancialassetsnotcarriedatfairvaluethroughprofitorloss.Financialassetscarriedatfairvaluethroughprofitorlossareinitiallyrecognisedatfairvalue,andtransactioncostsareexpensedintheincomestatement.SubsequentmeasurementismadeinaccordancewiththespecificinstrumentprovisionsofIAS39FinancialInstruments:RecognitionandMeasurement.Wherealegallyenforceablerightofoffsetexistsforrecognisedfinancialassets and liabilities, and the group intends to settle on anetbasis,ortorealisetheassetandsettletheliabilitysimultaneously,therelatedassetandliabilityareoffset.

Long-term receivablesLong-termreceivablesareclassifiedasaloanorreceivableandarerecordedatfairvalueatinceptionusingtheeffectiveinterestrateimplicitinthecashflowsofthereceivable.Thiseffectiveinterestrateisestablishedbyconsideringthemarketrateofinterestforasimilarinvestmentonthedateofeachcontribution.Thelong-termreceivablesarecarriedatamortisedcost.

Trade and other receivablesTradereceivables,whichgenerallyhavesixto12monthtermsarerecognisedandareinitiallymeasuredatamortisedcost,namelytheoriginalinvoiceamountplus


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associatedcostsandinterestchargestodate,lessanyimpairmentallowanceforuncollectibleamounts,areclassifiedasloansandreceivables.Provisionismadewhenthereisobjectiveevidencethatthegroupwillhavedifficultycollectingthedebts.Variouseconomicfactorsandchangesinthedelinquencyofpaymentsareconsideredindicatorsthatthetradereceivablesareimpaired.Thecarryingamountoftheassetisreducedthroughtheuseofanallowanceaccount,andtheamountofthelossisrecognisedintheincomestatementwithinsellingexpenses.

Baddebtsarewrittenoffintheincomestatementwhenitisconsideredthatthegroupwillbeunabletorecoverthedebtandithasbeenhandedoverforcollection.Subsequentrecoveriesofamountspreviouslywrittenoffarecreditedagainstsellingexpensesintheincomestatement.

Otherreceivablesareinitiallymeasuredatfairvalueandaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestratemethodandarecarriednetofanyaccumulatedimpairment.

Cash and cash equivalentsCashandcashequivalentscomprisecashatbanksandonhandandshort-termdepositswithanoriginalmaturityofthreemonthsorless,netofbankoverdrafts.Cashandcashequivalentsareclassifiedasreceivablesoriginatedbytheenterpriseandaremeasuredatamortisedcost.

Derivative financial instrumentsThegroupusesderivativefinancialinstrumentssuchasforwardexchangecontractstohedgeitsrisksassociatedwithforeigncurrencyfluctuations.Derivativefinancialinstrumentsareinitiallyrecognisedatfairvalueonthedatethecontractisenteredintoandaresubsequentlymeasuredatfairvalue,whichiscalculatedwithreferencetocurrentforwardexchangecontractswithequivalentmaturityperiods.Gainsorlossesarisingfromfairvalueadjustmentsaretakendirectlytotheincomestatement,exceptfortheeffectiveportionofcashflowhedges,whichisrecognisedinOCI.Whenthehedgeditemresultsintherecognitionofanon-financialassetornon-financialliability,theamountsrecognisedasOCIaretransferredtotheinitialcostorothercarryingamountofthenon-financialassetorliability.

Forthepurposeofhedgeaccounting,hedgesareclassifiedascashflowhedgeswhenhedgingtheexposuretovariabilityincashflowsthatiseither

attributabletoaparticularriskassociatedwitharecognisedassetorliabilityorahighlyprobableforecasttransactionortheforeigncurrencyriskinanunrecognisedfirmcommitment.

Attheinceptionofahedgerelationship,thegroupformallydesignatesanddocumentsthehedgerelationshiptowhichitwishestoapplyhedgeaccountingandtheriskmanagementobjectiveandstrategyforundertakingthehedge.Thedocumentationincludesidentificationofthehedginginstrument,thehedgeditemortransaction,thenatureoftheriskbeinghedgedandhowtheentitywillassesstheeffectivenessofchangesinthehedginginstrument’sfairvalueinoffsettingtheexposuretochangesinthehedgeditem’scashflowsattributabletothehedgedrisk.Suchhedgesareexpectedtobehighlyeffectiveinachievingoffsettingchangesinthecashflowsandareassessedonanongoingbasistodeterminethattheyactuallyhavebeenhighlyeffectivethroughoutthefinancialreportingperiodsforwhichtheyweredesignated.

Hedgesthatmeetthestrictcriteriaforhedgeaccountingareaccountedfor,asdescribedbelow:

Cash flow hedgesTheeffectiveportionofthegainorlossonthehedginginstrumentisrecognisedinOCIinthecashflowhedgereserve,whileanyineffectiveportionisrecognisedimmediatelyinincomestatement.

Thegroupusesforwardcurrencycontractsashedgesofitsexposuretoforeigncurrencyriskinforecasttransactions.RefertoNote27.3formoredetails.

Whenthehedgeditemresultsintherecognitionofanon-financialassetornon-financialliability,theamountsrecognisedinOCIaretransferredtotheinitialcostorothercarryingamountofthenon-financialassetorliability.Ifthehedginginstrumentexpiresorissold,terminatedorexercisedwithoutreplacementorrollover(aspartofthehedgingstrategy),orifitsdesignationasahedgeisrevoked,orwhenthehedgenolongermeetsthecriteriaforhedgeaccounting,anycumulativegainorlosspreviouslyrecognisedinOCIremainsseparatelyinequityuntiltheforecasttransactionoccurs.

Trade and other payablesTradepayables,whichareprimarilysettledon30-dayterms,areinitiallymeasuredatcost,beingthefairvalueoftheconsiderationtobepaidinthefuturefor

goodsandservicesrendered.Thesearesubsequentlymeasuredatamortisedcostusingtheeffectiveinterestrate method.

Otherpayablesareinitiallymeasuredatfairvalueandaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestratemethod.

Loans and borrowings Loansandborrowingsareinitiallyrecognisedatthefairvalueoftheconsiderationreceivedplusdirectlyattributabletransactioncosts.Theyaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestrate method.

Financial guaranteesFinancialguaranteesareinitiallyrecognisedattheirfairvalueandaresubsequentlymeasuredatthehigherof:

-Theamountoftheobligationunderthecontract,asdeterminedinaccordancewithIAS37Provisions,ContingentLiabilitiesandContingentAssets;and

-Theamountinitiallyrecognisedless,whereappropriate,cumulativeamortisationrecognised.

Amounts owing by/to consolidated entitiesConsolidatedentitybalancesareinitiallyrecognisedatthefairvalueoftheconsiderationreceived,andaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestratemethod.Currentamountsowingaresettledon30-dayterms.

Impairments and derecognitionFinancialassetsarereviewedannuallyforanyevidenceofimpairment.Provisionismadeforimpairmentif,andonlyif,thereisobjectiveevidenceofimpairmentasaresultofoneormoreeventsthatoccurredaftertheinitialrecognitionoftheassetandthatlossevent(orevents)hasanimpactontheestimatedfuturecashflowsofthefinancialassetorgroupoffinancialassetsthatcanbereliablymeasured.

Forloansandreceivables,theamountofthelossismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflows(excludingfuturecreditlossesthathavenotbeenincurred),discountedatthefinancialasset’soriginaleffectiveinterestrate.Thecarryingamountisreducedandtheamountofthelossisrecognisedintheincomestatement.Iftheloanhasavariablerate,thediscountrateformeasuringanyimpairmentlossisthecurrenteffectiveinterestrateunderthecontract.Ifconsidered

practical,theimpairmentmaybemeasuredonthebasisofaninstrument’sfairvalueusinganobservablemarketprice.

If,inasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecanbeobjectivelyrelatedtoaneventoccurringaftertheimpairmentwasrecognised,thepreviouslyrecognisedimpairmentlossisreversedintheincomestatement.

15. ReinsuranceThegroupassumesinsuranceriskinthenormalcourseofbusiness.Reinsuranceassetsrepresentsbalancesduefromregisteredinsurancecompanies.Amountsreceivableareestimatedinamannerconsistentwiththerelatedreinsurancecontract.Reinsuranceassetsarereviewedforimpairmentateachreportingdate,ormorefrequently,whenanindicationofimpairmentarisesduringthereportingyear.Impairmentoccurswhenthereisobjectiveevidenceasaresultofaneventthatoccurredafterinitialrecognitionofthereinsuranceassetthatasaresultofwhichthegroupmayormaynotreceivealloutstandingamountsdueunderthetermsofthecontactandtheeventhasareliablymeasurableimpactontheamountsthatthegroupwillreceivefromtheinsurer.Anyrelatedimpairmentlossisrecordedintheincomestatement.Reinsuranceliabilitiesrepresentbalancesduetoregisteredinsurancecompanies.Amountspayableareestimatedinamannerconsistentwiththeoutstandingclaimsprovisionorsettledclaimsassociatedwiththeinsurer’spoliciesandareinaccordancewiththerelatedreinsurancecontract.

Premiumsandclaimsonassumedreinsurancearerecognisedasrevenueorexpensesinthesamemannerastheywouldbeifthereinsurancewereconsideredadirectbusiness/activityofthegroup,takingintoaccounttheproductclassificationofthereinsurancebusiness.Premiumsandclaims,assetsandliabilities,arepresentedonagrossbasisfortheassumedreinsurance.Reinsuranceassetsandliabilitiesarederecognisedwhenthecontractualrightsareextinguishedorexpireorwhenthecontractistransferredtoanotherparty.

16. Employee benefitsShort-term employee benefitsShort-termemployeebenefitsarerecognisedintheperiodofservice.Short-termemployeebenefitspaidinadvancearetreatedasprepaymentsandareexpensedovertheperiodofthebenefit.



Post-retirement benefits

Defined benefit retirement fund and post-retirement medical aid fund Thecostsofprovidingbenefitsunderthedefinedretirementbenefitfundandtheobligationforpost-retirementmedicalaidbenefits(whichislimitedtomembersofthedefinedbenefitretirementfund)isdeterminedusingtheprojectedunitcreditactuarialvaluationmethod.Actuarialgainsorlosses,whichcanarisefromdifferencesbetweenexpectedandactualoutcomes,orchangesinactuarialassumptions,arerecognisedimmediatelyinothercomprehensiveincome.Anyincreaseinthepresentvalueofplanliabilitiesexpectedtoarisefromemployeeserviceduringtheperiodischargedtooperatingprofit.

Thedefinedbenefitfundassetreflectedinthestatementoffinancialpositionrepresentsthepresentvalueofthedefinedbenefitassetasadjustedforunrecognisedpastservicecostsandasreducedbythefairvalueofschemeassets.Theassetresultingfromthiscalculationislimitedtopastservicecosts,plusthepresentvalueofavailablerefundsandreductionsinfuturecontributionstotheplan.Pastservicecostsarerecognisedimmediatelytotheextentthatbenefitshavealreadyvested,andareotherwiseamortisedonastraight-linebasisovertheaverageperioduntilthebenefitsbecomevested.

Defined contribution retirement fund Paymentstodefinedcontributionretirementfundsareexpensedastheyaccrueintermsofservicesprovidedbyemployees.

Share-based paymentsThegroupoperatesshareincentiveschemesforthegrantingofnon-transferableoptionsorsharestoassociates(employees).Equity-settledshare-basedpaymentsintermsoftheschemesaremeasuredatfairvalue(excludingtheimpactofanynon-marketvestingconditions)atthedateofthegrant,whichisexpensedovertheperiodofvestingofthegrant,withacorrespondingadjustmenttoequity.Fairvalueisactuariallydeterminedusingabinomialvaluationmodel.Ateachreportingdatetheestimateofthenumberofoptionsthatareexpectedtovestisrevised,andtheimpactofthisrevisionisrecognisedonacumulativecatch-upbasisintheincomestatement,withacorrespondingadjustmenttoequity.Assumptionsusedintherespectivevaluationsaredetailedinnote9.5.

Uponvesting,theamountremainingintheshare-basedpaymentreserverelatingtoanysuchvestedtrancheistransferredwithinequitytoretainedincome.

Performance incentivesThegrouprecognisesaliabilityandexpenseforperformanceincentiveswhichincludeacomponentbasedonformulaewhichtakeintoconsiderationtheprofitfortheyearandotheroperationaltargets.

17. Treasury sharesSharesinMrPriceGroupLimitedheldbythestaffsharetrustsareclassifiedastreasurysharesandarerecognisedatcostanddeductedfromequity.Nogainorlossisrecognisedinprofitorlossonthepurchase,sale,issueorcancellationofthecompany’sownequityinstruments.Anydifferencebetweenthecarryingamountandtheconsideration,ifreissued,isrecognisedasequity.Votingrightsrelatedtothesesharesarerestrictedforthecompanyonlyonresolutionsapplicabletothesharetrusts.Shareoptionsexercisedduringthereportingperiodaresettledwithtreasuryshares.

18. Segmental reportingThe group’s retailing operations are reported within three operatingsegments,namelytheApparel,HomeandFinancialServicesandCellularsegments.GroupservicedivisionsarereportedintheCentralServicessegment.Thegrouppresentsinformationaboutgeographicalareasbasedonretailsalesandotherincome.Theinformationreportedissimilartotheinformationprovidedtothemanagementtoenablethemtoassessperformanceandallocateresources.

19. Cost of salesCostofsalescomprisethedirectcostofmerchandisesoldandincorporatesthecostofdistribution,inventorylossesandprovisionsformarkdownslessdiscountsreceivedfromsuppliers.

20. Selling expenses Sellingexpensescomprisethecostsincurredinthe

marketingandadvertisingofmerchandise,storeoperationsandtheprovisionofcredit,airtimeandmobilefacilities.

21. Administrative and other operating expensesTheseexpensescomprisecostsrelatedtotheoperationofthesupportfunctionswithinthegroupotherthanthoseincludedinsellingexpenses.

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88

Group Company

R’m Notes2017

1 April20162April

20171 April

20162April

Assets Non-currentassets 2 577 2241 2 490 2113Propertyplantandequipment 3 2 130 1672 2 042 1560Intangible assets 4 356 373 323 343Consolidatedentities 5.1 73 49Long-termreceivablesandotherinvestment 6 23 18 4 5Definedbenefitfundasset 28.1 48 41 48 41Deferredtaxationassets 16 20 137 - 115

Currentassets 6 338 5822 5 935 5588Inventories 7 2 102 2168 1 945 2004Tradeandotherreceivables 8 2 207 2136 2 098 2042Derivativefinancialinstruments 27.3 14 - 14 -Reinsuranceassets 14 129 99 129 99Currentamountsowingbyconsolidatedentities 5.1 592 503Taxation 63 - 55 -Cashandcashequivalents 1 823 1419 1 102 940

Total assets 8 915 8063 8 425 7701

Equity and liabilitiesEquityattributabletoequityholdersoftheparent 6 741 5632 6 370 5399Issuedcapital* 9.2 - - - -Capitalreserves 10 317 298 267 241Treasurysharetransactions 11 (1 306) (1748) (2 134) (1761)Retainedincome 7 845 7184 8 257 7009Foreigncurrencytranslationreserve 12 (95) (12) - -

Definedbenefitfundactuarialgainsandlosses 13 (3) (5) (3) (5)Cashflowhedgereserves 27.3 (17) (85) (17) (85)

Non-controllinginterests 5.2 (12) (12)

Total equity 6 729 5620 6 370 5399

Non-currentliabilities 335 244 273 188Lease obligations 15 192 169 187 161Deferredtaxationliabilities 16 59 8 58 -Long-termprovisions 17 7 5 2 1Long-termliabilities 5.2 51 36 - -Postretirementmedicalbenefits 28.2 26 26 26 26

Currentliabilities 1 851 2199 1 782 2114Tradeandotherpayables 18 1 713 1987 1 635 1903Derivativefinancialinstruments 27.3 31 118 31 118Reinsuranceliabilities 14 41 30 41 30Currentamountsowingtoconsolidatedentities 5.1 23 12Currentprovisions 17 10 12 4 1Currentportionofleaseobligations 15 11 48 9 44Taxation 6 4 - 6Bankoverdraft 39 - 39 -

Total liabilities 2 186 2443 2 055 2302

Total equity and liabilities 8 915 8063 8 425 7701

*lessthanR1million

Group Company

R’m Notes2017

1 April20162April

20171 April

20162April

Revenue 19 763 20004 19 754 19548

Retail sales and other revenue 19 679 19923 19 676 19474Retail sales 18 575 19038 18 088 18536Interestontradereceivables 351 384 350 382Incomefromconsolidatedentities 725 185Premiumincome 225 199 221 198Clubfees 22 20 22 20Airtimeandrelatedmobilerevenue 401 259 187 145Other revenue 105 23 83 8Financeinterestreceived 84 81 78 74

Costs and expenses 16 631 16320 16 030 15810Costofsales 11 365 11314 11 197 11189Sellingexpenses 3 995 3848 3 593 3491Administrativeandotheroperatingexpenses 1 271 1158 1 240 1130

Profit from operating activities 19 3 048 3603 3 646 3664Financecosts (2) -* (2) (1)Financeinterestreceived 84 81 78 74Profit before taxation 3 130 3684 3 722 3737Taxation 20.1 867 1042 837 1011Profit after taxation 2 263 2642 2 885 2726Attributableto:Non-controllinginterests 5.2 -* (3)Equityholdersoftheparent 2 263 2645Profit attributable to shareholders 2 263 2642 2 885 2726

Earnings per share cents per share centspershare % changeBasic 21 884.6 1046.5 (15.5)Headline 21 911.4 1057.8 (13.8)Dilutedbasic 21 861.8 1002.1 (14.0) Dilutedheadline 21 887.9 1012.9 (12.3)

consolidated statements of financial position as at 1 April 2017 consolidated income statements for the year ended 1 April 2017


89

Group Company

R’m Notes

20171 April

20162April

20171 April

20162April

Profit attributable to shareholders 2 263 2642 2 885 2726

Other comprehensive income

Items that may be reclassified subsequently to profit or loss:

Currencytranslationadjustments 12 (83) 31

Netgain/(loss)onhedgeaccounting 96 (118) 96 (118)

Deferredtaxationthereon (28) 33 (28) 33

Items that will not be reclassified subsequently to profit or loss:

Definedbenefitfundactuarialgains/(losses) 13 3 (3) 3 (3)

Deferredtaxationthereon 13 (1) 1 (1) 1

Total comprehensive income for the year attributable to shareholders, net of taxation 2 250 2586 2 955 2639

Attributableto:

Non-controllinginterests -* (3)

Equityholdersoftheparent 2 250 2589 2 955 2639

Total comprehensive income for the year attributable to shareholders, net of taxation 2 250 2586 2 955 2639

*lessthanR1million

Group Company

R’m Notes

20171 April

20162April

20171 April

20162April

Cash flows from operating activities

Operatingprofitbeforeworkingcapitalchanges 24.1 3 081 3596 3 644 3600

Workingcapitalchanges 24.2 (251) (813) (248) (765)

Cashgeneratedfromoperations 2 830 2783 3 396 2835

Interestontradereceivables 351 384 351 382

Netfinanceincomereceived 82 81 76 73

Taxationpaid 24.3 (689) (1340) (654) (1292)

Netcashinflowsfromoperatingactivities 2 574 1908 3 169 1998

Cash flows from investing activities

Net(outflows)/inflowsinrespectoflong-termreceivables 24.4 (4) (12) 2 1

Acquisitionofotherinvestment (1) - (1) -

Replacementofintangibleassets (25) (27) (25) (27)

Additionstointangibleassets (71) (92) (68) (90)

Replacementofproperty,plantandequipment (121) (104) (118) (101)

Additionstoproperty,plantandequipment (588) (921) (572) (885)

Proceedsondisposalofproperty,plantandequipment 1 3 1 1

Netcashoutflowsfrominvestingactivities (809) (1153) (781) (1101)

Cash flows from financing activities

Proceedsfromissueofshares 11 - - 403 -

Repurchaseofshares 11 - - (454) -

Decreaseinnetcurrentamountsowingbyconsolidatedentities 24.5 - - (78) (77)

Netinflowinrespectoflong-termliability 15 21 - -

Dividendstoshareholders 24.6 (1 688) (1592) (1 723) (1631)

Grantstostaffsharetrusts - - (422) (365)

Treasurysharetransactions 335 (553) - (7)

Netcashoutflowsfromfinancingactivities (1 338) (2124) (2 274) (2080)

Netincrease/(decrease)incashandcashequivalents 427 (1369) 114 (1183)

Cashandcashequivalentsatbeginningoftheyear 1 419 2764 940 2123

Exchange(losses)/gains (62) 24 9 -

Cashandcashequivalentsatendoftheyear 24.7 1 784 1419 1 063 940

consolidated statements of comprehensive income for the year ended 1 April 2017

consolidated statements of cash flows for the year ended 1 April 2017


90

statement of changes in equity for the year ended 1 April 2017

Attributable to the equity holders of the parentCapital reserves Treasury share transactions

R’m

Notes Sharecapital*

Share premium

Participantsinstaffshare

investment trust

Share-basedpayments

reserve

Treasuryshares at

cost

Deficitontreasury

share transactions

Taxationrelating to grants to

share trusts

Foreigncurrency

translation reserve

Definedbenefitfund

actuarialgains and

losses

Cashflow

hedge reserve

Retained income Total

Non-controlling

interests Total Equity

Group

Balance at 28 March 2015 - 12 32 219 (583) (826) 174 (43) (3) - 6 048 5 030 (9) 5 021

Total comprehensive income 31 (2) (85) 2645 2 589 (3) 2 586

Profitfortheyear 2645 2 645 (3) 2 642 Othercomprehensiveincome: 31 (2) (85) - (56) - (56) Currencytranslationadjustments 12 31 31 31 Netlossonhedgeaccounting 14 (118) (118) (118) Deferredtaxationthereon 33 33 33 Definedbenefitfundactuarialgains 13 (3) (3) (3) Deferredtaxationthereon 13 1 1 1

ConversionofBordinarytoordinarysharecapital* 9.4 - - - - Treasurysharesacquired 11 (789) (789) (789) Taxationrelatingtograntstosharetrusts 11 53 53 53 Effectofconsolidationofstaffsharetrusts 11 13 (13) - - Deficitontreasurysharetransactions 11 (132) (132) (132) Recognitionofshare-basedpayments 105 105 105 Share-basedpaymentsreservereleasedtoretainedincomeforvestedoptions (83) 83 - -

Treasurysharessold 11 368 368 368 2015finaldividendtoshareholders 22 2016interimdividendtoshareholders 22 (948) (948) (948)

(644) (644) (644)

Balance at 2 April 2016 - 12 45 241 (1 017) (958) 227 (12) (5) (85) 7 184 5 632 (12) 5 620

Total comprehensive income (83) 2 68 2263 2 250 - 2 250

Profitfortheyear 2263 2 263 - 2 263Othercomprehensiveincome (83) 2 68 - (13) - (13) Currencytranslationadjustments 12 (83) (83) (83) Fairvalueadjustmentsonfinancialinstruments 96 96 96 Deferredtaxationthereon (28) (28) (28) Definedbenefitfundactuariallosses 13 3 3 3 Deferredtaxationthereon 13 (1) (1) (1)

ConversionofBordinarytoordinarysharecapital* 11 - - - - Treasurysharesacquired 11 (422) (422) (422)Taxationrelatingtograntstosharetrusts 11 100 100 100 Effectofconsolidationofstaffsharetrusts 11 (7) 7 - - Deficitontreasurysharetransactions 11 (304) (304) (304) Recognitionofshare-basedpayments 112 112 112 Share-basedpaymentsreservereleasedtoretainedincomeforvestedoptions (86) 86 - -

Treasurysharessold 11 1061 1 061 1 061 2016finaldividendtoshareholders 22 (1089) (1 089) (1 089) 2017interimdividendtoshareholders 22 (599) (599) (599)

Balance at 1 April 2017 - 12 38 267 (371) (1 262) 327 (95) (3) (17) 7 845 6 741 (12) 6 729*lessthanR1million


91

statement of changes in equity for the year ended 1 April 2017 (continued)

Attributable to the equity holders of the parentCapital reserves Treasury share transactions

R’m

Notes Sharecapital*

Sharepremium

Participantsinstaffshare

investment trust

Share-basedpayments

reserve

Treasury shares atcost

Deficitontreasury

share transactions

Taxationrelating to grants to

share trusts

Foreigncurrency

translation reserve

Defined benefitfund

actuarial gains and

losses

Cashflow

hedgereserve

Retained income Total

Company

Balance at 28 March 2015 - - - 219 (1 402) (214) 174 (3) - 5 831 4 605

Total comprehensive income (2) (85) 2726 2 639

Profitfortheyear 2726 2 726 Othercomprehensiveincome (2) (85) - (87) Definedbenefitfundactuarialgains 13 (3) (3)Deferredtaxationthereon 13 1 1 Netlossonhedgeaccounting (118) (118) Deferredtaxationthereon 13 33 33

ConversionofBordinarytoordinarysharecapital* 9 - Grantstostaffsharetrusts 11 (365) (365) Deficitontreasurysharetransactions 11 (7) (7) Taxationrelatingtograntstosharetrusts 11 53 53 Recognitionofshare-basedpayments 105 105 Share-basedpaymentsreservereleasedtoretainedincomeforvestedoptions (83) 83 -

2015finaldividendtoshareholders 22 (975) (975) 2016interimdividendtoshareholders 22 (656) (656)

Balance at 2 April 2016 - - - 241 (1 767) (221) 227 (5) (85) 7 009 5 399

Total comprehensive income 2 68 2885 2 955

Profitfortheyear 2885 2 885Othercomprehensiveincome 2 68 70 Definedbenefitfundactuariallosses 13 3 3 Deferredtaxationthereon 13 (1) (1)Netgainonhedgeaccounting 96 96 Deferredtaxationthereon 13 (28) (28)

ConversionofBordinarytoordinarysharecapital* 11 - - - Grantstostaffsharetrusts 11 (422) (422) Deficitontreasurysharetransactions 11 - Taxationrelatingtograntstosharetrusts 11 100 100Recognitionofshare-basedpayments 9 112 112 Share-basedpaymentsreservereleasedtoretainedincomeforvestedoptions (86) 86 -

Repurchaseandcancellationofshares 10 (51) (51) 2016finaldividendtoshareholders 22 (1118) (1 118) 2017interimdividendtoshareholders 22 (605) (605)

Balance at 1 April 2017 - - - 267 (2 189) (272) 327 - (3) (17) 8 257 6 370*lessthanR1million


92

notes to the financial statements for the year ended 1 April 2017

Statement, interpretation or standard Effective for annual periods beginning

IAS1DisclosureInitiative–amendments 1January2016IAS16andIAS38-ClarificationofAcceptableMethodsofDepreciationandAmortisation-amendments 1January2016AnnualImprovements2012-2014Cycle 1January2016

1. Adoption of new standards and changes in accounting policies

Thefollowingnewstandardsandinterpretationsthatwereapplicablewereadoptedduringtheyearanddidnotleadtoanychangesinthegroup’saccountingpolicies.TherewereotheramendmentsissuedbytheIASBwhichcameintoeffectforthecurrentfinancialperiodwhichwerenotapplicabletothegroup.

Statement, interpretation or standard Effective for annual periods beginning

IAS7DisclosureInitiative–amendments 1January2017IAS12RecognitionofDeferredTaxAssetsforUnrealisedLosses-amendments 1January2017IFRS15RevenuefromContractswithCustomers 1January2018IFRS9FinancialInstruments 1January2018IFRIC22ForeignCurrencyTransactionsandAdvanceConsideration 1January2018IFRS2ClassificationandMeasurementofShare-basedPaymentTransactions-amendments 1January2018

IAS40TransfersofInvestmentProperty-amendments 1January2018AnnualImprovementstoIFRSStandards2014-2016Cycle 1January2018IFRS16Leases 1January2019IFRS17Insurancecontracts 1January2021

1.2 Change in accounting policy

Treatmentofamountspreviouslyrecognisedinequityasaresultofcashflowhedgeaccounting.

FromJanuary2016,thegroupappliedCashFlowHedgeAccountingunderIAS39FinancialInstruments:RecognitionandMeasurement,withgainsorlossesarisingfromfairvalueadjustmentsbeingrecognisedinothercomprehensiveincome(OCI).Theseamountsweretobereclassifiedtoprofitorlosswhenthehedgeitemaffectedprofitorloss(recyclingmethod).

Inthecurrentyearthegroupchangeditstreatmentofamountspreviouslyrecognisedinequityinanefforttoprovidemorereliableinformationtotheusersoftheannualfinancialstatements.Theresultofthechangeisthatwhenthehedgeditemisanon-financialassetornon-financialliability,theamountsrecognisedinOCIaretransferredtotheinitialcarryingamountofthenon-financialassetorliability(basisadjustmentmethod).Theamountsarestillrecognisedtoprofitorlosswhentheitemsaresold.

Thischangehashadnoimpactonthestatementofcomprehensiveincome,statementoffinancialposition,statementinchangesofequityorthestatementofcashflowsonpreviouslyreportedfinancialstatementsastheamountsrecognisedinequityattheendofthepreviousfinancialyearrelatedonlytofairvaluegains/lossesonopenhedginginstrumentsforwhichtheunderlyinghedgedtransactionhadnotyettakenplace.

1.3 Standards and amendments issued but not yet effective

Atthedateofauthorisationofthesefinancialstatements,thefollowingstatements,interpretationsandstandardswereinissuebutnotyeteffective:

The directors anticipate that the adoption of the above-mentioned standards in future periods will havenomaterial financial impacton the financial statementsof thegroupandwill result in additionaldisclosurerequirements,withtheexceptionofIFRS9,15and16,asdiscussedbelow.Thesestatements,interpretationsandstandardswillbeadoptedattherespectiveeffectivedates.

IFRS 9 Financial Instruments

Thiswillimpacttheclassificationandmeasurementofthefinancialinstrumentsandwillrequirecertainadditionaldisclosures.ThetradereceivableimpairmentmodelunderIFRS9willreflectexpectedcreditlosses,asopposedtoincurredcreditlossesunderIAS39andwillmainlyimpactthefinancialservicesdivision. ThegroupisengagedinaprojecttoensurethetimeousimplementationofIFRS9.Thisincludestheuseofindependentconsultantsandwillrequiresystemenhancementsanddevelopments.

Basedoninitialassessments,nomaterialimpactisexpectedonthegroup’sannualfinancialstatements.

IFRS 15 Revenue from Contracts with Customers

ThisisexpectedtohaveanimpactonmrpMobile,andmayincludeachangeinthetimingandtheamountof revenue recognised. The new standard requires revenue from a contract to be allocated to separatecomponentsofthecontractbasedonastandalonesellingpricebasis.


93


2. Significant accounting estimates

Estimation uncertainty

Thekeyassumptionsconcerningthefutureandotherkeysourcesofinformationuncertaintyatthereportingdatethathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararesetoutasfollows:

Employee benefits actuarially determined

Thecostsofthedefinedbenefitpensionfundplan,thepost-retirementmedicalbenefitfundandshare-basedpaymentsaredeterminedactuarially.Theactuarialvaluations involvemakingassumptionsregardingvariousfactors(asdetailedinnotes9.4,9.5and28.2).Duetothelong-termnatureoftheseliabilitiessuchestimatesaresubjecttouncertainty.

Provision for net realisable value of inventories

Theprovision fornet realisablevalueof inventoryrepresentsmanagement’sestimateof theextent towhichmerchandiseonhandatthereportingdatewillbesoldbelowcost.Thisestimatetakesintoconsiderationpasttrends,evidenceofimpairmentatyear-endandanassessmentoffuturesaleability,whichtakesintoaccountfashionabilityandseasonalchanges.

Provision for impairment of trade receivables

Theprovisionforimpairmentoftradereceivablesrepresentsmanagement’sestimateoftheextenttowhichtradereceivablesatthereportingdatewillnotbesubsequentlyrecovered.Thisestimatetakesintoconsiderationpasttrendsandmakesanassessmentofadditionalriskfactors,whicharelikelytoimpactrecoverability.

Income taxes

Thegroupissubjecttoincometaxinmorethanonejurisdiction.Significantjudgementisrequiredindeterminingthe provision for income taxes. There are many transactions and calculations for which the ultimate taxdeterminationisuncertainduringtheordinarycourseofbusiness.Thegrouprecognisesliabilitiesforanticipatedtaxissuesbasedonestimatesofwhetheradditionaltaxeswillbedue.Wherethefinaltaxoutcomeofthesemattersisdifferentfromtheamountsthatwereinitiallyrecorded,suchdifferenceswillimpactthecurrentanddeferredincometaxassetsandliabilitiesintheperiodinwhichsuchdeterminationismade.

1.3 Standards and amendments issued but not yet effective (continued)

Theimpactofthenewstandardhasbeenconsideredinthewordingofcurrentcontracts,andtheimpactonchangesrequiredtothesystemhasbeenassessed.ThechangeinstandardisnotexpectedtobematerialtothegroupasmrpMobilerevenuewasonly1%ofretailsalesandotherincomeasat1April2017.

IFRS 16 Leases

ThemainfeaturesofIFRS16are:

• Alesseeisrequiredtorecognisearight-of-useasset(representingitsrighttousetheunderlyingleasedasset)andaleaseliability(representingitsobligationtomakeleasepayments).

• A lessee recognises depreciation on the right-of-use asset and interest on the lease liability. Cashrepaymentsoftheleaseliabilityaresplitintoaprincipalportionandaninterestportion,whichareseparatelypresentedinthestatementofcashflows.

• Assetsand liabilitiesarisingfroma leaseare initiallymeasuredonapresentvaluebasis.Measurementincludesnon-cancellableleasepayments(includinginflation-linkedpayments),andpaymentstobemadeinoptionperiodsifthelesseeisreasonablycertaintoexerciseanoptiontoextendthelease,ornottoexerciseanoptiontoterminatethelease.

Thisstandardisexpectedtohavethemostimpactonthestatementoffinancialposition,reflectinganincreaseinassetsandliabilitiesandadecreaseinequityforthegroupasalessee.Thereisalsoexpectedtobeadecreaseinoperatingleaseexpensesinthestatementofcomprehensiveincome,butanincreaseindepreciationandinterest.Agapanalysishasbeenperformedonthecurrentleasemanagementsystem,andaprovisionalmodelhasbeendevelopedtounderstandtheimpactonthegroup’sannualfinancialstatements.Thereare1286storeleasesattheendofthecurrentyearwithleasetermsbetweenoneand10yearsandoptiontorenewperiodsarebetweenoneand10years.

IFRS 17 Insurance Contracts

Thisstandardwasreleasedon18May2017.Thegroupwillcommenceanimpactassessmentinduecourse.


94


Furniture fittings equipment and

vehiclesComputer equipment

Improvements to leasehold premises Land Buildings Lease buildings Total

R’m 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016

Group

Netcarryingamountatbeginningoftheyear 1 084 722 120 83 24 21 166 - 278 12 - - 1 672 838Costorcarryingamount 2 075 1625 318 254 60 54 166 - 282 15 27 27 2 928 1976Accumulateddepreciationandimpairment (991) (903) (198) (171) (36) (33) - - (4) (3) (27) (27) (1 256) (1137)

CurrentyearmovementsAdditionsarisingfrom: 547 522 36 64 2 6 6 166 118 267 - - 709 1025externaldevelopment/acquisition 267 230 36 64 2 6 - - - - - - 305 300itemscapitalisedtoworkinprogress* 280 292 - - - - 6 166 118 267 - - 404 725

Disposals,scrappingandreclassification (11) (15) (1) - - - - - - - - - (12) (15)Impairments/writeoff (11) 4 - - - - - - - - - - (11) 4Exchangedifferences (13) 10 - - - - - - - - - - (13) 10Depreciation (175) (159) (35) (27) (4) (3) - - (1) (1) - - (215) (190)

Net carrying amount at end of the year 1 421 1084 120 120 22 24 172 166 395 278 - - 2 130 1672

Madeupasfollows:Netcarryingamount 1 421 1084 120 120 22 24 172 166 395 278 - - 2 130 1672Costorcarryingamount 2 482 2075 258 318 51 60 172 166 400 282 27 27 3 390 2928Accumulateddepreciationandimpairment (1 061) (991) (138) (198) (29) (36) - - (5) (4) (27) (27) (1 260) (1256)

Company

Netcarryingamountatbeginningoftheyear 985 650 118 81 24 21 166 - 267 - - - 1 560 752Costorcarryingamount 1 938 1532 311 248 49 43 166 - 267 - 27 27 2 758 1850Accumulateddepreciationandimpairment (953) (882) (193) (167) (25) (22) - - - - (27) (27) (1 198) (1098)

CurrentyearmovementsAdditionsarisingfrom: 528 484 36 63 2 6 6 166 118 267 - - 690 986externaldevelopment/acquisition 248 192 36 63 2 6 - - - - - - 286 261itemscapitalisedtoworkinprogress* 280 292 - - - - 6 166 118 267 - - 404 725

Disposals,scrappingandreclassification (11) (10) (1) - - - - - - - - - (12) (10)Impairment/writeoff (2) 4 - - - - - - - - - - (2) 4Depreciation (157) (143) (33) (26) (4) (3) - - - - - - (194) (172)

Net carrying amount at end of the year 1 343 985 120 118 22 24 172 166 385 267 - - 2 042 1560

Madeupasfollows:Netcarryingamount 1 343 985 120 118 22 24 172 166 385 267 - - 2 042 1560Costorcarryingamount 2 356 1938 252 311 39 49 172 166 385 267 27 27 3 231 2758Accumulateddepreciationandimpairment (1 013) (953) (132) (193) (17) (25) - - - - (27) (27) (1 189) (1198)

*ThecumulativebalanceofworkinprogressthatisnotsubjecttodepreciationatyearendamountstoR1.2bn(2016:R725m).Detailsoflandandbuildings:RemainingextentofErf4749BethlehemDistrict,Bethlehem,FreeState,inextentof3538m2.

RemainingextentofErf249CliffdaleDistrict,KwaZulu-NatalProvince,inextentof19.5hectres.

3. Property, plant and equipment


95


Computer software Customer lists Goodwill Trademarks Total

R’m2017 2016 2017 2016 2017 2016 2017 2016 2017 2016

GroupNetcarryingamountatbeginningoftheyear 347 298 - - 26 30 - - 373 328Costorcarryingamount 444 379 26 26 26 30 18 18 514 453Accumulatedamortisationandimpairment (97) (81) (26) (26) - - (18) (18) (141) (125)

CurrentyearmovementsAdditionsarisingfrom 96 119 - - - - - - 96 119externaldevelopment/acquisition 18 42 - - - - - - 18 42internaldevelopment/acquisition 20 20 - - - - - - 20 20itemscapitalisedtoworkinprogress* 58 57 - - - - - - 58 57

Disposals,scrappingandreclassification 2 - - - - - - - 2 -Impairment/writeoff (74) (32) - - - - - - (74) (32)Exchangedifferences - - 2 (4) 2 (4)Amortisation (43) (38) - - - - - - (43) (38)

Net carrying amount at end of the year 328 347 - - 28 26 - - 356 373

Madeupasfollows:Netcarryingamount 328 347 - - 28 26 - - 356 373Costorcarryingamount 440 444 26 26 28 26 18 18 512 514Accumulatedamortisationandimpairment (112) (97) (26) (26) - - (18) (18) (156) (141)

Company

Netcarryingamountatbeginningoftheyear 342 294 - - 1 1 - - 343 295Costorcarryingamount 438 374 26 26 1 1 18 18 483 419Accumulatedamortisationandimpairment (96) (80) (26) (26) - - (18) (18) (140) (124)

CurrentyearmovementsAdditionsarisingfrom 93 117 - - - - - - 93 117externaldevelopment/acquisition 15 40 - - - - - - 15 40internaldevelopment/acquisition 20 20 - - - - - - 20 20 itemscapitalisedtoworkinprogress 58 57 - - - - - - 58 57

Disposals,scrappingandreclassification 2 - - - - - - - 2 -Impairment/writeoff (73) (32) - - - - - - (73) (32)Exchangedifferences - - - - - - - -Amortisation (42) (37) - - - - - - (42) (37)

Net carrying amount at end of the year 322 342 - - 1 1 - - 323 343

Madeupasfollows:Netcarryingamount 322 342 - - 1 1 - - 323 343Costorcarryingamount 431 438 26 26 1 1 18 18 476 483Accumulatedamortisationandimpairment (109) (96) (26) (26) - - (18) (18) (153) (140)

*ThecumulativebalanceofworkinprogressthatisnotsubjecttoamortisationatyearendamountstoR217m(2016:R243m).

4. Intangible assets


96

5. Consolidated entities and material partly-owned subsidiary 5.2 Material partly-owned subsidiary

Financialinformationofsubsidiarythathasanexternalnon-controllinginterestsareprovidedbelow:

Company

R’m 2017 2016

5.1 Consolidated entities

Carryingvalueofshares 5 5Ordinarysharesatcost 5 5

Carryingvalueoflong-termloan 68 44Long-termloanatcost 69 45Impairment provision (1) (1)

Theloanisunsecured,bearsinterestatratesofupto15%perannumandhasnofixeddatesofrepayment.

73 49Netcurrentamountsowingbyconsolidatedentities 569 491Currentamountsowingbyconsolidatedentities 592 503Currentamountsowingtoconsolidatedentities (23) (12)Currentaccountsareinterestfreeandaresettledwithin12months.

642 540

Ananalysisofthefinancialinterestinconsolidatedentitiesisshownonpage123.

MRP Mobile (Pty) Ltd

% 2017 2016

Proportionofequityinterestheldbynon-controllinginterests 45 45

R’m

Accumulatedbalancesofmaterialnon-controllinginterest (12) (9)Lossallocatedtomaterialnon-controllinginterest -* (3)

Totalcomprehensiveloss (12) (12)

Thesummarisedfinancialinformationofthesesubsidiariesisprovidedbelow.

R’m

Summarised statement of profit or loss for:

Revenue 218 114Costofsales (157) (102)Sellingexpenses (59) (26)Administrationandotheroperatingexpenses -* (1)Profit/(loss)beforetaxation 2 (15)Taxation (2) 9

Totalcomprehensiveloss -* (6)Attributabletonon-controllinginterests -* (3)*lessthanR1million



97

5.2 Material partly-owned subsidiary (continued)

Financialinformationofthesubsidiarywithanexternalnon-controllinginterestisprovidedbelow:

MRP Mobile (Pty) Ltd

R’m 2017 2016

Summarised statement of financial position:

Inventories 6 11Intangible assets 4 3Deferredtaxasset 8 8Tradeandotherreceivables 78 55Long-termportion 19 12Currentportion 59 43Cashandcashequivalents 27 3Long-termliability (51) (36)Tradeandotherpayables (18) (26)Inter-companybalance (80) (45)

Netequity (26) (26)Attributabletoequityholdersofparent (14) (14)Non-controllinginterest (12) (12)

Summarised statement of cash flows:

Cashinflows/(outflows)fromoperatingactivities 2 (6)Cashoutflowsfrominvestingactivities (7) (14)Cashinflowsfromfinancingactivities 29 21

Netincreaseincashandcashequivalents 24 1

Long-term liability

Thelong-termliabilitydisclosedaboverepresentsaloanreceivedfromthenon-controllingshareholderofMRPMobile(Pty)Ltd.Theloanhasnosetdateofrepaymentandbearsinterestataratedeterminedatthediscretionofthedirectorsandiscurrentlyinterestfree.


97


98

6. Long-term receivables and other investments

6.1 Long-term receivablesGroup Company

R’m 2017 2016 2017 2016

Enterprise development loan 3 5 3 5Totalloantoaccreditedsupplier 5 6 5 6Less:amounttobereceivedinthenextfinancialyeartransferredtotradeandotherreceivables (2) (1) (2) (1)

mrpMobilelong-termreceivables 19 13 - -Totalreceivables 89 56 - -Less:amounttobereceivedinthenextfinancialyeartransferredtotradeandotherreceivables (70) (43) - -

Totallong-termreceivables 22 18 3 5

ThecompanyloanedR10mtoalong-standingsupplieraspartofanenterprisedevelopmentinitiativetoassistintheconstructionofanewfootwearfactorywithenhancedcapacity.TheloanbearsnointerestandisrepayableinmonthlyinstalmentsofR131080.ThemonthlyinstalmentcommencedinJanuary2013andincreasesannuallyby7.0%.

ThemrpMobilelong-termreceivablesreferstotheportionofthehandsetdebtorsthatisduebeyondthenext12months.Thedebtorisrecognisedwhenthehandsetisdeliveredtothecustomerandisamortisedovertheexpectedcontractterm.

R’mMerchandisepurchasedforresale 2 077 2144 1 926 1986Consumablestores 25 24 19 18

2 102 2168 1 945 2004

Thewrite-downofinventoriesprovidedforinthevaluationofmerchandisepurchasedforresalewas: 185 169 173 158

R’mUnlistedequityinvestment 1 - 1 -

Total long-term receivables andother investments 23 18 4 5

8. Trade and other receivables

InterestischargedonoutstandingaccountsinaccordancewiththeNationalCreditAct(NCA).

Thegrouphasprovidedforreceivablesinallageingstatuslevelsbasedonestimatedirrecoverableamountsfromthesaleofmerchandise,determinedbyreferencetopastdefaultexperience.

Beforeacceptinganynewcreditcustomer,thegroupusesanexternalcreditscoringsystemtoassessthepotentialcustomer’screditqualityanddefinescreditlimitsbycustomer,whileensuringcompliancewiththerequirementsoftheNCA.LimitsandscoringarereviewedatleastannuallyinaccordancewiththerequirementsoftheNCAanduponrequestbyacustomer.Duetothenatureofthebusiness,therearenocustomersthatrepresentmorethan5%ofthetotalbalanceoftradereceivables.Thegroupdoesnothaveanybalanceswhicharepastduedateandhavenotbeenprovidedfor,astheprovisioningmethodologyappliedtakestheentiredebtorpopulationintoconsideration.

Group Company

R’m 2017 2016 2017 2016

Grosstradereceivables 2 083 1986 2 008 1934Impairment provision (161) (147) (148) (142)

Nettradereceivables 1 922 1839 1 860 1792Prepayments 186 187 173 172Otherreceivables 99 110 65 78

2 207 2136 2 098 2042

Theageingofthegrosstradereceivablesisasfollows:

R’mDaysfromtransaction

Current 30 1 587 1509 1 528 1468

Status1 60 283 268 277 263

Status 2 90 93 94 90 92

Status3 120 56 54 53 53

Status4 150 39 36 35 35

Status5 180+ 25 25 25 23

2 083 1986 2 008 1934

7. Inventories

6.2 Other investment



99

Indeterminingtherecoverabilityoftradereceivables,thegroupconsidersanychangesincreditqualityofthereceivablesuptoreportingdate.Theconcentrationofcreditriskislimited,asthecustomerbaseislargeandunrelated.Asaresultoftheexternalcreditscoringsystemapplied,andindividualcreditlimitsassigned,tradereceivablesthatareneitherpastduenorimpairedareconsideredtobefullyrecoverable.Theageingprofilesoftheimpairmentprovisionareasfollows:

Group Company

R’m 2017 2016 2017 2016

Balanceatbeginningoftheyear (147) (174) (142) (172)Impairmentlossesnetofreversals (14) 27 (6) 30

Balanceatendoftheyear (161) (147) (148) (142)

R’m Daysfromtransaction 2017 2016 2017 2016

Currentandimpaired 0-30 12 15 10 11Past due and impairedStatus1 31-60 27 22 25 21Status 2 61-90 28 24 25 23Status3 91-120 34 29 31 30Status4 121-150 35 34 32 34Status5 151-180+ 25 23 25 23

161 147 148 142

8.2 Movement in the impairment provision

9. Share capital

R’m

Theexpectedmaturityforotherreceivablesisasfollows:

On demand 42 10 7 11Less than three months 37 65 51 44Threemonthstooneyear 20 35 7 23

99 110 65 78

Group Company

R’000 2017 2016 2017 2016

9.1 Authorised323300000ordinarysharesof0.025centeach 81 81 81 8119700000Bordinarysharesof0.300centeach 59 59 59 59

Totalauthorisedsharecapital 140 140 140 140

R’000

9.2 Issued

Ordinary

255195880(2016:253683867)ordinarysharesof0.025centeach 64 63 64 63Bordinary

9745081(2016:10945081)Bordinarysharesof0.300centeach 29 33 29 33

Totalissuedsharecapital 93 96 93 96

8. Trade and other receivables (continued)

9.3 B ordinary shares

TheBordinarysharesareunlistedandareconvertible intoordinarysharesonaone-for-onebasisattheinstanceoftheBordinaryshareholders.ThevotingrightsattachedtotheordinaryandBordinarysharesareinthesameratioastheparvalueoftherespectiveshares.Intheeventofapoll,ordinaryshareholdersareentitledtoonevotepershareandBordinaryshareholdersto12votespershare.

9.4 Share trusts and share purchase schemes

Thecompanyoperatessixsharetrustsandtwoforfeitableshareplansforthebenefitofassociates,includingexecutivedirectors,employedbythecompanyanditsconsolidatedentities.Intermsofthedeedsoftrust,ordinarysharesinMrPriceGroupLimitedmaybeacquiredbythetrustorawardedundertheschemesforthebenefitofassociatesinthegroup,includingdirectors.Theseshareschemesaremorefullydetailedintheremunerationreportonpages57to74.

Detailsofsharesandoptionsheldintermsofthedeedoftrustandtheschemesareasfollows:

8.3 Other receivables



100

Group

Number 2017 2016

OptionsoverordinarysharesinMrPriceGroupLimitedBeginningoftheyear - 5800Surrenderedbyparticipants - -Optionsexercised - (5800)

Endoftheyear - -

Therewerenooptionsheldatthebeginningofthecurrentyear.Nonewoptionswillbeissuedunderthisscheme.

9. Share capital (continued)

9.4 Share trusts and share purchase schemes (continued)9.4.1 The Mr Price Group Share Option Scheme


100


101

FivesharetrustswereestablishedinNovember2006,toreplaceTheMrPriceGroupShareOptionSchemeandtwoForfeitableSharePlans(FSP)wereintroducedduring2014.Detailsoftheseplansareasfollows:

MrPriceExecutive

DirectorShareTrust

MrPriceExecutive

Share Trust

MrPriceSenior

ManagementShare Trust

MrPriceGeneralStaff

Share Trust

MrPricePartners

Share Trust

MrPriceGroup

ForfeitableShare Plan

MrPriceExecutiveForfeitableShare Plan

Group Total

Award type Options Options Options Options Shares Shares Shares

Options/sharesat28March2015 2402442 2330827 3731263 7424703 4403376 457233 167256 20917100Newoptions/sharesgranted 190691 280578 559759 1153326 669524 46197 86806 2986881Surrenderedbyparticipants - (33224) (214894) (443970) (740453) - (8221) (1440762)Options/sharesexercised (619994) (670001) (981001) (2866398) (29265) - - (5166659)Options/sharesat2April2016 1973139 1908180 3095127 5267661 4303182 503430 245841 17296560Newoptions/sharesgranted* 637166 814497 1080659 1277413 670249 - 138490 4618474Surrenderedbyparticipants - (224173) (317025) (504789) (722460) (11849) (18304) (1798600)Options/sharesexercised (1162100) (581750) (870190) (2496795) (22804) (5078) - (5138717)Options/sharesat1April2017 1448205 1916754 2988571 3543490 4228167 486503 366027 14977717

*Newoptions/sharesweregrantedduringthecurrentyearatastrikepriceof(Rpershare):Thestrikepricewasdeterminedbythelowerofthe30-dayvolume-weightedaveragepriceandtheclosingsharepriceonthebusinessdaypriortotheaward.

R138.00 R138.00-R195.64 R138.00-R195.64 R138.00-R219.50 Nil Nil Nil

Thevestingperiodsoftheoptions/sharesaredetailedonpages66to68.Theearliestopportunityatwhichshareoptionsareexercisablefallswithinfinancialyearsending:Numberofoptions/sharesbyfinancialyear:2018 249238 420134 538940 1308096 N/A - - 25164082019 205283 223871 554421 299749 N/A 416647 78209 17781802020 165827 215473 398959 5473 N/A 23657 69324 8787132021 190691 250977 469764 736318 N/A 46199 80896 17748452022 637166 806299 1026487 1193854 N/A - 137598 3801404

1448205 1916754 2988571 3543490 - 486503 366027 10749550

Weightedaveragepricebyfinancialyear:2018 R133.67 R108.99 R126.76 R133.66 N/A N/A N/A2019 R151.94 R151.94 R146.85 R146.64 N/A N/A N/A2020 R222.60 R222.77 R220.60 R116.01 N/A N/A N/A2021 R200.01 R200.01 R199.24 R193.11 N/A N/A N/A2022 R138.00 R139.30 R138.92 R149.72 N/A N/A N/A

SharesareexpectedtovestunconditionallyintheMrPricePartnersShareTrustin39years.

9. Share capital (continued)9.4.2 Share Trusts and Share Purchase Schemes (continued)



102


9.6 The Mr Price Group Employees Share Investment Trust

Thecompanyadministersastaffsharepurchaseschemewhichfacilitatesthepurchaseofsharesinthecompanyforthebenefitofemployees,includingexecutivedirectors,employedbythecompanyanditsconsolidatedentities.Theacquisitionof shares is fundedbycontributions fromparticipants (employees)whilethecompanyisauthorisedtoprovideadditionalfundingofupto15%ofthecontributionsmade,whichisexpensedasanassociatecostintheyearincurred.

IntermsofguidanceissuedbytheJSELimited,thecompanyhasconsolidatedthetrustasitwascreatedtoincentiviseandrewardtheemployeesofthegroup.Inthetrust’sannualfinancialstatementsithasassetsbeingMrPriceGroupLimited shares tobedelivered to theparticipants in the future. These sharesareregisteredinthenameofthetrustandnottheemployees.Inaddition,thefinancialstatementsshowaliabilityforthesharestobetransferredtoemployeesupontheirrequest.InthegroupfinancialstatementstheMrPriceGroupLimitedsharesarereflectedastreasurysharesastheyhavenotyetbeentransferredtotheemployees,whiletheamountsreceivedforthesharestobetransferredtoemployeesaretreatedasequitytransactionsintermsofparagraphs16and22ofIAS32.

9.7 Unissued share capital

Theunissuedsharecapitalrequiredforthepurposesofcarryingoutthetermsofthevarioussharetrustsandschemesisunderthecontrolofthedirectorsuntiltheconclusionoftheforthcomingannualgeneralmeeting.

9.5 Share-based payments (continued)

TheassumptionssupportinginputsintothemodelfortheForfeitableSharePlan’swhichhaveanexpectedoptionlifeoffiveyearsareasfollows:

9.5 Share-based payments

Group Company

R’m 2017 2016 2017 2016

Share-basedpaymentsrelatingtoequity-settledshare-basedpaymenttransactionsintermsofthevariouslong-termshareincentiveschemes(refernotes9.4.2to9.4.3) 112 105 112 105

Share-basedpaymentsaremeasuredatfairvalue(excludingtheimpactofanynon-marketvestingconditions)atthedateofthegrant,whichisexpensedovertheperiodofvesting.Thefairvalueofeachoptiongrantedisestimatedatthedateofthegrantusinganactuarialbinomialoptionpricingmodel.

Theassumptionssupportinginputsintothemodelforoptionsgrantedduringtheyearareasfollows:

Theexpectedvolatilitywasdeterminedbasedonthehistoricalvolatilityofthecompany’ssharepriceovertheexpectedlifetimeofeachgrant.Theexpectedlifeoftheoptionshasbeendeterminedtakingintoaccounttherestrictionsonnon-transferabilityandexerciseandmanagement’sbestestimateofprobableexercisebehaviour.

Therisk-freerateused is theyieldonzero-couponSouthAfricangovernmentbondswhichhavea termconsistentwiththeexpectedoptionlife.

Inthecalculationofthefairvalueoftheoptions,allowance isnotmadefornon-marketconditions(suchasforfeituresandleavers)duringthevestingperiod.Adjustmentfortheseconditionsismadeintheannualexpensecharge,withanallowanceforforfeituresbeingmadeinthevestingperiodatratesvaryingbetween0%and15%compoundedperannum.

MrPriceExecutiveDirector

Share Trust

MrPriceExecutive

Share Trust

MrPriceSenior

ManagementShare Trust

MrPriceGeneral

StaffShareTrust

MrPricePartners

StaffShareTrust

Weightedaveragestrikeprice R138.00 R139.30 R138.80 R151.26 R0.00

Expectedvolatility(%) 30.21 30.19-30.46 29.61-30.70 29.79-30.40 N/A

Expectedoptionlife 5years 5years 5years 5years 39years

Risk-freeinterestrate(%) 8.50 8.08-8.73 8.08-8.87 8.33-8.79 6.00-10.74

Expecteddividendyield(%) 4.30 4.30 4.30 4.30 N/A

Probability % shares retained

Participantsstillemployedafteroneyear 100% 10%Participantsstillemployedaftertwoyears 92% 20%Participantsstillemployedafterthreeyears 85% 30%Participantsstillemployedafterfouryears 85% 40%Participantsstillemployedafterfiveyears 85% 100%

9. Share capital (continued)


103

10. Capital reserves

Group Company

R’m 2017 2016 2017 2016

10.1 Share premium account 12 12 -* -*

10.2 Participants in staff share investment trust(note 9.6) 38 45

Beginningoftheyear 45 32 Netmovementfortheyear (7) 13

10.3 Share-based payments reserve 267 241 267 241

Beginningoftheyear 241 219 241 219Recognitionofshare-basedpaymentsfortheyear 26 22 26 22 Share-basedpaymentsforoptions/sharesgrantedinprioryears 99 94 99 94

Share-basedpaymentsforoptions/sharesgrantedincurrentyear 12 7 12 7

Adjustmentforforfeitures 1 4 1 4

Share-basedpaymentsreservetransferredtoretainedincomeforoptionsthathavevestedfrominceptiontodate

(86) (83) (86) (83)

Theaboveequityaccountrepresentscumulativeshare-basedpaymentchargesthathavebeencreditedtoequitynetoftransferstoretainedincomeforoptionsthat have vested

Total capital reserves 317 298 267 241*lessthanR1million

Theaboveequityaccountrepresentscumulativesharebasedpaymentchargesthathavebeencreditedtoequitynetoftransferstoretainedincomeforoptionsthathavevested.


103


104

11. Treasury share transactions

The foreigncurrency translation reservecomprises thecumulative translationadjustmentsarisingon theconsolidationoftheforeignsubsidiariesinBotswana,Nigeria,Ghana,ZambiaandAustralia.

Refertonote28fordetailsoftherecognitionofdefinedbenefitfundactuarialgainsandlosses.

12. Foreign currency translation reserve

13. Defined benefit fund actuarial gains and losses

Group Company

R’m 2017 2016 2017 2016

6351679(2016:11098802)ordinarysharesinMrPriceGroupLimitedheldbystaffsharetrusts (371) (1017)

-Balanceatbeginningoftheyear (1 017) (583)-Treasurysharesacquired (422) (789)-Treasurysharessold 1 061 368-MrPriceGroupEmployeesShareInvestmentTrust(note9.6) 7 (13)

Deficitontreasurysharetransactions (1 262) (958) (272) (221)

-Balanceatbeginningoftheyear (958) (826) (221) (214)

-Currentyearmovementarisingfromthetake-upofvestedoptions (304) (132) (51) (7)

Taxationrelatingtograntstosharetrusts 327 227 327 227 -Balanceatbeginningoftheyear 227 174 227 174-Currentyearmovement 100 53 100 53

Grantsbycompanytostaffsharetrusts (2 189) (1767)-Balanceatbeginningoftheyear (1 767) (1402)-Grantsmadeduringtheyear (422) (365)

(1 306) (1748) (2 134) (1761)

Group

R’m 2017 2016

Beginningoftheyear (12) (43)Currencytranslationadjustmentsfortheyear (83) 31

Endoftheyear (95) (12)

Group Company

R’m 2017 2016 2017 2016

Beginningoftheyear (5) (3) (5) (3)Currentyearactuarialgains/(losses) 3 (3) 3 (3)Deferredtaxationthereon (1) 1 (1) 1

Endoftheyear (3) (5) (3) (5)


TherewasanallotmentandissueinMay2016of2312013sharesatR174.25persharetovariousshareoptionsschemes.

2000000sharesatR227.19persharewererepurchasedintermsofaspecialresolutionapprovedbyshareholdersattheannualgeneralmeetingon31August2016.Thesesharesweresubsequentlycancelledandreturnedtothestatusofauthorisedandunissued.


105

Themainrisksthattheinsurancecellsareexposedtoareasfollows:

-Mortalityrisk:theriskoflossarisingduetopolicyholderdeathexperiencedifferingfromthatexpected;-Morbidityrisk:theriskoflossarisingduetopolicyholderhealthexperiencedifferingfromthatexpected;-Expenserisk:theriskoflossarisingfromexpenseexperiencedifferingfromthatexpected;and-Policyholderdecisionrisk:theriskoflossarisingduetopolicyholderexperiences(lapsesandsurrenders)differingfromthatexpected.

Theriskstructureperproductisasfollows:

Guardrisk Insurance Company Limited (Cell number 136)

Mr Price Group Limited bears 100% of the risk for all insurance products which consist of: Lost cardprotection,IdentityTheftandthegroup’smotorvehiclecell.

Thereinsuranceassetsandliabilitiesaremadeupofthefollowingcomponents:

Receivablesaremeasuredatamortisedcostandthecarryingamountsapproximatetheirfairvalueandallbalancesareconsideredcurrent.

Guardrisk Life Limited (Cell number 048)

Mr Price Group Limited bears 100% of the risk for all insurance products which consist of: CustomerProtection,360DegreesProtection,MedinetCriticalIllness,A2BCommuterPersonalAccident,HerHealth,GroupFuneral.

Guardrisk Insurance Company Limited (Cell number 316)

MRP Mobile (Pty) Ltd bears 100% of the risk for all insurance products which consists of: CustomerProtectionandMobileDeviceProtection.

Group and Company

R’m 2017 2016

Reinsurance assetInsurancefloat - 2Cashandcashequivalents 129 97

129 99

Group and Company

R’m 2017 2016

Reinsurance liabilitiesUnearned premium provision 1 1Outstandingclaims 3 2IBNR(incurredbutnotreported)reserve 16 13Taxationliability 21 14

41 30

Movement in reinsurance liabilitiesBalanceatbeginningoftheyear 29 45

Outstandingclaims 2 4IBNR(incurredbutnotreported)reserve 13 12Taxationliability 14 29

(Decrease)/increaseduringtheyear 11 (16)

Balance at end of the year 40 29

Outstandingclaims 3 2IBNR(incurredbutnotreported)reserve 16 13Taxationliability 21 14

Unearned premium provision

Balanceatbeginningoftheyear 1 1Premiumreceived 222 198Premiumrecognised (222) (198)

Balance at end of the year 1 1

14. Reinsurance

Thecompanyretailsinsuranceproductstocustomers.Theprincipalriskthattheinsurancecellsfaceisthattheactualclaimsandbenefitpayments,orthetimingthereof,differfromexpectations.Thisisinfluencedbythefrequencyofclaims,severityofclaims,actualbenefitspaidandsubsequentdevelopmentoflong-termclaims.Therefore,theobjectiveofthecellsistoensurethatsufficientreservesareavailabletocoverthesepotential liabilities.



106

15. Lease obligations

Group Company

R’m 2017 2016 2017 2016

Straight-lineoperatingleaseliability 203 217 196 205Less:amountsdueforsettlementwithin12months (11) (48) (9) (44)

Total long-term portion of lease obligations 192 169 187 161Group and Company

R’m 2017 2016

ImpactonIBNR (5) (4)

R’m

ImpactonIBNR 5 4

2017 2016 2015 2014

Premiumincome(R'm) 225 199 177 147Numberofclaims 2 775 3535 3709 3769Claimcosts(R'm) 17 15 15 12Claimcostsasapercentageofpremiumincome 7.6% 7.5% 8.3% 8.2%

14. Reinsurance (continued)

Sensitivity analysis

Reinsuranceliabilitiesaresubjecttochangesinvariablesthatcouldaffectthevalueoftheliabilitydue.Theeffectofanysensitivityisconsideredimmaterial.Outstandingclaims,unearnedpremiumprovisionandthetaxationliabilityaremeasuredatamortisedcostandarebasedonactualamountsduetothirdparties.TheIncurredButNotReported(IBNR)reserveismaintainedinaccordancewithlegislationgoverningfinancialserviceproviders.The long-termcellsmaintainan IBNR reserveequal toaclaim factor (minimum33%)appliedtothreemonthsofnetpremuims(i.e.grosspremuimslesscommissionsandadministrationfees).Theshort-termscellsarerequiredtomaintainasolvencyratioequalto25.0%ofnetpremiumsasasolvencyreserveandanIBNRreserveequalto7.0%oftheannualriskpremium.Asthesereservesaregovernedbylegislationonlychangesinsuchlegislationwouldleadtothechangesinthereserve.Atyear-endnosuchchangeswereproposedbythefinancialservicesboard,howeverthefollowingsensitivtyhasbeenperformedontheIBNRreserve:

Long-term cell reserve adjusted to be a claims factor (minimum 32.0%) applied to twomonths of netpremiums.Short-termcellsolvencyreserveadjustedtoequal24.0%ofnetpremuimsandanIBNRequalto6.0%oftheannualriskpremuim.

Long-termcellreserveadjustedtobeaclaimsfactor(minimum34.0%)appliedtofourmonthsofnetpremiums.Short-termcellsolvencyreserveadjustedtoequal26.0%ofnetpremiumsandanIBNRequalto8.0%oftheannualriskpremium.

DuringtheyearadividendofR106m(2016:R120m)waspaidbythecellstotheCompany.

Premiumincomeandclaimshistory:

Operating lease commitments

R’m

Futureminimumrentalspayableundernon- cancellableleaseswhichpredominantlyrelatetolandandbuildingsareasfollows:

Withinoneyear 1 373 1310 1 158 1073Afteroneyearbutlessthanfiveyears 2 326 2145 2 142 1899Morethanfiveyears 111 345 99 285

3 810 3800 3 399 3257


Thegrouphasenteredintooperatingleasesonstorespace,withleasetermsbetweenoneand10years.Thegrouphastheoption,undersomeofitsleases,toleasetheassetsforadditionaltermofoneto10years.


107

16. Deferred taxation 17. Provisions

18. Trade and other payables

Group Company

R’m 2017 2016 2017 2016

Attributableto:Post-retirementmedicalaid (3) (3) (3) (3)Fairvalueadjustmentsonfinancialinstruments (5) (33) (5) (33)Prepayments 45 41 45 41Provisions (133) (145) (133) (145)Property,plantandequipment 77 - 77 -Othertemporarydifferences 31 15 48 26Share-basedpayments (176) (145) (176) (145)Definedbenefitfundasset 14 12 14 12Grantstostaffsharetrusts 246 189 246 189Straight-lineoperatingleaseliability (57) (60) (55) (57)

39 (129) 58 (115)

Beginningoftheyear (129) (148) (115) (138)

Movementsduringtheyear 168 19 173 23Prepayments 4 39 4 39Provisions 12 6 12 6Property,plantandequipment 77 - 77 -Othertemporarydifferences 16 (8) 22 (4)Share-basedpayments (31) (30) (31) (30)Definedbenefitfundactuarialgains 2 - 2 -Grantstostaffsharetrusts 57 43 57 43Straightlineoperatingleaseliability 3 1 2 1Fairvalueadjustmentsonfinancialstatements 28 (33) 28 (33)

Post-retirementmedicalaid - 1 - 1

End of the year 39 (129) 58 (115)

Deferredtaxationliabilities 59 8 58 -Deferredtaxationassets (20) (137) - (115)

39 (129) 58 (115)

Group Company

R’m 2017 2016 2017 2016

OnerousleasecontractsBalanceatbeginningoftheyear 17 13 2 13Provision raised during the period - 4 4 (11)Balance at end of the year 17 17 6 2

Long-term 7 5 2 1Current 10 12 4 1

17 17 6 2

Group Company

R’m 2017 2016 2017 2016

Tradepayables 760 777 784 795Otherpayables 953 1210 851 1108

1 713 1987 1 635 1903

Theprovisionforonerousleasecontractsrepresentsthepresentvalueofthefutureleasepaymentsthatthegroupispresentlyobligatedtomakeundernon-cancellableonerousoperatingleasecontracts,lessprofitsexpectedtobeearnedonthelease,includingestimatedrevenue(includingrevenuefromsub-leases).Theestimatemayvaryasaresultofchangesintheutilisationoftheleasedpremisesandsub-leasearrangementswhereapplicable.Theunexpiredtermsoftheleasesrangefromonetofouryears.

Termsandconditionsoftheabovefinancialliabilities:Tradepayablesarenon-interestbearingandaresettledontermsthatvarybetweendateofownershipplus10daysand30daysfromstatement,dependingontheprocurementsource.Otherpayablesarenon-interestbearingandaresettledonaverage30daysfromstatement.



108

19. Profit from operating activities

Group Company

R’m 2017 2016 2017 2016

Arrived at after (crediting)/charging the following:

Incomefromconsolidatedentities (725) (185)Dividendincome (632) (73)Fees (93) (112)

Amortisationofintangibleassets(note4) 43 38 42 37

Associatecosts 1 996 1979 1 884 1878Salaries,wagesandotherbenefits 1 747 1750 1 641 1655Share-basedpayments(note9.5) 112 105 112 105Definedcontributionpensionfundexpense 138 123 132 116Definedbenefitpensionfundnetexpense (1) 1 (1) 1Currentservicecost 3 4 3 4Interestcost 7 6 7 6Expectedreturnonfundassets (11) (9) (11) (9)

Auditor’sremuneration 8 6 6 6Auditfees 7 6 6 6Otherservices 1 - - -

Consultingfees 27 20 21 16Technicalservices 23 17 21 16Administrativeandotherservices 4 3 - -

Depreciationofproperty,plantandequipment(note3) 215 190 194 173

Writeoff/impairmentofintangibleassets 74 32 73 32Writeoff/impairmentofproperty,plantandequipment 11 (4) 2 (4)Movementinonerousleaseprovisions(note17) - 4 4 (11)Netlossondisposalandscrappingofproperty,plantandequipment 10 12 10 9

Netloss/(gain)onforeignexchange 50 (128) 50 (128)Forwardexchangecontracts - 6 - 6Transactions 50 (134) 50 (134)

Operating lease rentals 1 424 1390 1 266 1232Land and buildings 1 391 1362 1 233 1204Equipment 23 18 23 18Motorvehicles 10 10 10 10

20. Taxation

20.1 South African and foreign taxation

20.1.1 South African taxation

Group Company

R’m 2017 2016 2017 2016

Thisyear 841 998 830 997CurrentNormaltaxation 907 992 898 983Securitiestransfertax 1 - 1 -DeferredCurrentyeartemporarydifferences (67) 14 (69) 14Previouslyunrecogniseddeferredtaxassets - (8) - -

Prioryears (15) - (15) -Current (93) - (93) -Deferred 78 - 78 -

20.1.2 Foreign taxationThisyear 41 43 22 15Current 47 41 22 15Deferred (6) 2 - -

Prioryears - 1 - (1)Current - (1) - (1)Deferred - 2 - -

Total taxation 867 1042 837 1011

In addition to the above, current normal taxation and deferred taxation amounting to R157.4m (2016:R96.2mcharged)andR56.9m(2016:R43.1mcredited) respectivelyhavebeenchargedandcreditedtoequityrelatingtothegrantstostaffsharetrusts(referNote11).DeferredincometaxationofR29.0m(2016:R34.0mcharged)hasbeencreditedtothestatementofcomprehensiveincome.



109

Shares2017 2016

Numberofsharesperbasicearningspersharecalculation 255 792 780 252785945Weightedaveragenumberofordinarysharesunderoptiondeemedtohavebeenissuedfornoconsideration 6 751 138 11210891

Number of shares for calculation of dilutedearnings per share 262 543 918 263996836

21. Earnings per ordinary and B ordinary share

21.1 Reconciliation of earnings

Thecalculationofbasicandheadlineearninigspershareisbasedon:

20.2 Reconciliation of taxation rate

21.2 Number of shares

Theweightedaveragenumberofsharesinissueamountto255792780(2016:252785945).

21.3 Dilution impact

Dilutedearningspershareiscalculatedbyadjustingtheweightedaveragenumberofsharesoutstandingtoassumeconversionofallpotentialdilutiveshares,whichcurrentlycompriseshareoptionsandshares.Acalculationismadetodeterminethenumberofsharesthatcouldhavebeenissuedatfairvalue(determinedastheaverageannualmarketpriceoftheshares)basedonthemonetaryvalueofthesubscriptionrightsattachedtooutstandingoptions.

Group

R’m 2017 2016

Basic earnings-profitattributabletoshareholders 2 263 2645Lossondisposal,scrappingandimpairmentofproperty,plantandequipmentandintangibleassets 95 40Taxation (27) (11)Headline earnings 2 331 2674

Group Company

% 2017 2016 2017 2016

Standard rate 28.0 28.0 28.0 28.0Adjustedfor:Exemptincome (0.7) (0.4) (5.4) (0.9)Prioryearoverprovision (0.5) - - -Unrecogniseddeferredtaxassets 0.8 0.5 - -Other 0.1 0.2 (0.1) -Effective tax rate 27.7 28.3 22.5 27.1

Theestimatedtaxationlossesofconsolidatedentitiesavailableforset-offagainstfuturetaxableincomeare(R’m)

160.8 95.6

20. Taxation (continued)



110

24. Notes to the statements of cash flows

24.1 Operating profit before working capital changes

Group Company

R’m2017 2016 2017 2016

Profitbeforetaxation 3 130 3684 3 722 3737Adjustmentsfor:Depreciationofproperty,plantandequipment 215 190 194 172Amortisationofintangibleassets 43 38 42 37Lossondisposalandscrappingofproperty,plantandequipment 13 10 9 10

Writeoff/impairmentofproperty,plantandequipment 11 (4) 2 (4)Writeoff/impairmentofintangibleassets 74 32 73 32Movementinre-insuranceassets (30) 25 (29) 25Movementinre-insuranceliabilities 11 (16) 11 (16)Netfinanceincome (82) (81) (76) (73)Interestontradereceivables (351) (384) (351) (382)Othernon-cashitems 50 99 46 63

Straight-lineoperatingleaseliabilitymovement (14) (3) (9) (5)Shareoptionexpenses 112 105 112 105Other (48) (3) (57) (37)

3 081 3596 3 644 360023. Directors’ emoluments

Company

R’m 2017 2016

Executive directorsSalaries 11 11Bonusesandperformancerelatedpayments -* 14Vehicleallowancesandexpenses 1 1Pensioncontributions 2 2 Othermaterialbenefits 2 1

16 29Non-executive directorsSalaries - -Fees 5 5

5 5

Theemolumentsreceivedbythedirectorsfromthecompanywere:

22. Dividends to shareholdersGroup Company

R’m 2017 2016 2017 2016

OrdinaryandBordinaryshares 1 089 948 1 118 975

Prioryearfinaldividend:419.0centspershare(2016:368.5centspershare) 1 118 975 1 118 975DividendpaidbyPartnersShareTrust 15 12 - -

Less:dividendreceivedonsharesheldbystaffsharetrusts (44) (39) - -

599 644 605 656

Currentyearinterimdividend:228.2centspershare(2016:248.0centspershare) 605 656 605 656DividendpaidbyPartnersShareTrust 7 9 - -

Less:dividendreceivedonsharesheldbystaffsharetrusts (13) (21) - -

Total net dividend to shareholders 1 688 1592 1 723 1631


Detailsofindividualdirector'semolumentsandshareincentiveschemetransactionsaredisclosedintheremunerationreportonpages57to74.

*lessthanR1million

Inrespectofthecurrentyear,theboardofdirectorsproposethatonthe26June2017,acashdividendof438.8centspersharebepaidtoshareholderswhoareregisteredontheRecorddateof23June2017.Thisdividendhasnotbeenreflectedasaliabilityinthesefinancialstatements.ThetotalestimateddividendtobepaidbythecompanyisR1.1bn.

24.2 Working capital changes

R’mIncreaseintradeandotherreceivables (54) (288) (49) (237)Decrease/(increase)ininventories 103 (394) 96 (378)Increaseintradeandotherpayables (300) (131) (295) (150)

(251) (813) (248) (765)


111

24.4 Net inflows in respect of long-term receivables

24.5 Amounts owing by consolidated entities

Group Company

R’m 2017 2016 2017 2016

Amountsunpaidatbeginningoftheyear (125) 260 (109) 259Taxation 4 408 6 397Deferred (129) (148) (115) (138)

Amountschargedtotheincomestatements 867 1042 837 1011Taxation 862 1032 828 997Deferred 5 10 9 (14)

Amountschargedtoequity (71) (87) (71) (87)Taxation (100) (53) (100) (53)Deferredtaxation 29 (34) 29 (34)

Amountsunpaidatendoftheyear 18 125 (3) 109Taxation 57 (4) 55 (6)Deferredtaxation (39) 129 (58) 115

Amounts paid 689 1340 654 1292

Company

R’m 2017 2016

Increaseincurrentamountsowingtoconsolidatedentities 11 2Increaseincurrentamountsowingbyconsolidatedentities (89) (79)

(78) (77)

24.6 Dividends to shareholdersGroup Company

R’m 2017 2016 2017 2016

DividendstoordinaryandBordinaryshareholders 1 723 1631 1 723 1631Less:dividendsonsharesheldbystaffsharetrusts (57) (60)Add:dividendspaidbyPartnersShareTrust 22 21

1 688 1592 1 723 1631

24.7 Cash and cash equivalents

R’m

Bankbalancesandothercash 1 823 1419 1 102 940Bankoverdraft (39) - (39) -

Cashandcashequivalents 1 784 1419 1 063 940

R’m

Loantoaccreditedsupplier 2 1 2 1IncreaseinmrpMobilelong-termreceivables (6) (13)

Net amounts paid (4) (12) 2 1

24. Notes to the statements of cash flows (continued)

24.3 Taxation paid

25. Capital expenditure

R’m

Thecapitalexpenditureauthorisedbythedirectorsofthecompanyoritsconsolidatedentitiesbutnotprovidedforinthefinancialstatementsamountsto 526 859 501 859

ofwhichcontractshavebeenplacedfor 170 408 170 408

Theabovecapitalexpenditureisexpectedtobefinancedfromcashresourcesandfuturecashflows.



112

26. Contingencies and commitments26.1 Contingencies

Duringthe2009financialyear,thecompanywasadvisedbySouthAfricanRevenueService(SARS)thatitintendedholdingthecompanyaccountableasthedeemedimporterinrelationtotheunderpaymentofimportdutiesin2005and2006byoneofitsprevioussupplierstothevalueofR43.6m.ThecompanysubmittedaformalresponsetoSARS’sletteron18September2009.SARSrespondedtothecompany’sdenialofliabilityon24April2015,more thanfiveyears later,anddemanded that thecompanysettle theallegedliability,thevalueofwhichhadbeenrevisedtoR74.4m.On13October2015thecompanyfiledaformalappealagainstSARS’sletterofdemand.SARSCustomsNationalAppealsCommittee(CNAC)respondedon24May2016andadvisedthatduetothecomplexityofthematter,ameetingwasrequiredtoascertaintheissuesthatareagreeduponbythepartiesandtheissuesthatarestillindispute.On14June2016,thecompanyadvised that ithadpreviouslyprovidedat least twodetailed responseswhichhavespecificallyhighlightedwhere itdiffers fromSARS’sassertions.Thecompany isnowawaitingcorrespondence fromSARSdetailingalistofthefactsorissueswhichSARSdeemstobeindispute.Ameetingdatewillbesetoncethisresponsehasbeenreceived.

On19May2017 thecompany receivednotification from theNationalCreditRegulator that it hasbeenreferredtotheNationalConsumerTribunalasaconsequenceofallegedlycontraveningsections90,100,101(1)(a)and102(1)oftheNationalCreditAct,2005.Anindependentauditisrequiredofallcustomerswhowerechargedclubfeesaspartofacreditagreementsince2007.Fortheyearended1April2017,clubfeeschargedbyMiladysrepresented0.1%ofgroupturnover.Thereliefsoughtfurtherincludestheimpositionofafineintheamountof10%ofannualturnover.InitiallegaladviceisthattheNCRhasnorationalbasisforthereliefsought.Accordinglytheapplicationwillbeopposedandanopposingaffidavitwillbefiledbythedeadlineof8June2017.

26.2 Commitments

FortheperiodfromMay2017–April2018theGrouphasacommitmenttotheSustainableCottonClustertopurchase2800tonsoflocallyproducedcottontothevalueofapproximatelyR64m.

27. Financial risk management

Thegroupisexposed,directlyandindirectly,tomarketrisk, including,primarily,changesin interestratesandcurrencyexchangeratesandusesderivativesandotherfinancialinstrumentsinconnectionwithitsriskmanagementactivities.Theboardofdirectorscarriestheultimateresponsibility for theoverseeingof thegroup’s riskmanagement frameworkand isaccountable fordesigning, implementingandmonitoring theprocessofriskmanagementandintegratingitintothedailyactivitiesofthegroup.

27.1 Capital and treasury risk management

Thegroup,whichisaprimarilycash-basedbusiness,monitorscapitalthroughaprocessofanalysingtheunderlyingcashflows,whichinturndrivestheresidualcapitalstructure,consistingofsharecapital,sharepremium, reserves and retained income as quantified in the statement of changes in equity. The groupmanagesitscapitaltoensurethatitwillbeabletomaintainhealthycapitalratiostosustainitsbusinessandmaximiseshareholdervalue.Anyadjustmentsaremade in lightofeconomicconditionsandmay includeadjustingdividendcoverorreturningcapitaltoshareholders.

27.2 Interest rate risk management

Thegroupisexposedtointerestrateriskfromthevariablerateapplicabletoitscashandcashequivalents.Interestrateriskismanagedbythroughtheinvestmentofcashandcashequivalentsintheappropiatemixofshort-terminstrumentswithcounterpartieswhopossessahighqualitycreditstanding.

Aninterestsensitivityanalysisdetailinga50basispointsadjustmenttotheeffectiveinterestforcashandcashequivalentshasbeensetoutbelow:

Theapplicableinterestratesduringtheperiodwereasfollows:


Group Company

R’m 2017 2016 2017 2016

Ratevariance-US$ +0.5% 6 7 5 5-0.5% (6) (7) (5) (5)

%Average Repo interest rate 7.00 6.08 7.00 6.08 Prime interest rate 10.50 9.58 10.50 9.58

Closing Repo interest rate 7.00 7.00 7.00 7.00 Prime interest rate 10.50 10.50 10.50 10.50

Duetoitslevelofnetcashresources,thegrouphasnomaterialborrowings.Cashreservesareavailabletomeetcurrentworkingcapitalandcapitalinvestmentrequirements.

The treasury function is administered at group levelwhere strategies for the funding ofworking capitalrequirementsandcapitalexpenditureprojectsareimplemented,takingintoaccountcashflowprojectionsandexpectedmovementsin interestrates.Thegrouphasapolicyofremaininghighly liquidtohavetheavailablecashflowtofundexpansionofexistingbusinessesandanypossiblenewventures.

Aninterestsensitivityanalysisforcashandcashequivalentshasnotbeendisclosedastheamountsinvolvedareconsideredimmaterial.


113

*lessthanR1million

Group

R’m 2017 2016

Ratevariance-pula +10% 3 8 -10% (3) (8)

Ratevariance-naira +10% (3) 3-10% 3 (3)

Ratevariance-cedi +10% (5) (2)-10% 5 2

Ratevariance-kwacha +10% 1 2 -10% (1) (2)

Ratevariance-Australiandollar +10% (14) -*-10% 14 -*

Group-totalforeignexchangeexposure +10% (18) 11-10% 18 (11)

27.3.2 Transactions in foreign currencies

Thegroupmanagesitsforeigncurrencyriskbyhedgingtransactionsthatareexpectedtooccurwithinamaximum12-monthperiodforhedgesofforecastedpurchases.

Whenaderivativeisenteredintoforthepurposeofbeingahedge,thegroupnegotiatesthetermsofthederivativetomatchthetermsofthehedgedexposure.Forhedgesofforecasttransactions,thederivativecoverstheperiodofexposurefromthepointthecashflowsofthetransactionsareforecasteduptothepointofsettlementoftheresultingreceivableorpayablethatisdenominatedintheforeigncurrency.

ForeignexchangeforwardcontractsaremeasuredatfairvaluethroughOCI.ThesearedesignatedashedginginstrumentsincashflowhedgesofforecastpurchasesofinventoryinUSD.Theseforecasttransactionsarehighlyprobable.Thetermsoftheforeigncurrencyforwardcontractsapproximatethetermsoftheexpectedhighlyprobableforecasttransactions.

Atyear-endforwardexchangecontractcommitmentsaccountedforashedgesunderIAS39were:


27. Financial risk management (continued)

27.3 Foreign exchange risk management

Thetreasuryfunction,administeredcentrally,isresponsiblefortheoverallreviewandmanagementofthegroup’sforeignexchangerisk.Foreigncurrencyriskistheriskthatthefairvalueorfuturecashflowsofanexposurewillfluctuatebecauseofchangesinforeignexchangerates.Thegroup’sexposuretotheriskofchangesinforeignexchangeratesrelatesprimarilytothegroup’soperatingactivitiesandthegroup’snetinvestmentsinforeignsubsidiaries.Foreignexchangeriskismanagedthroughtheadoptionofaframeworkwhichgoverns,amongotherthings;thecurrentexposure,thedecisiontohedgeanexposure,identificationofthehedgeditem,assessingeffectivenessofhedgeandtheapplicablehedgeratio. 27.3.1 Investment in foreign operations

ThegroupisdirectlyexposedtoexchangeratefluctuationsthroughitsinvestmentsinoperationsoutsideSouth Africa. All amounts lent to consolidated entities are rand denominated. The group’s investmentexposuretocurrencyfluctuationsislimitedtotheAustralian,Botswanan,Nigerian,GhanainandZambiansubsidiariesastheothercountriesinwhichthegroupisinvestedhavecurrenciesthatarepeggedtotherand.Theanalysisbelowdetailsthegroup’ssensitivitytoa10%increaseanddecreaseintherandagainstthepula,naira,cedi,Australiandollarandkwacharespectivelyanditseffectonequityfortheyear.

Group and Company

Currentcommitment

US$’m

ExchangerateR/US$-averagecontract

rate

Rand equivalentatcontract

rateR’m

ExchangerateR/US$-year-endrevaluation

rate

Fairvalueadjustment

R’m2017-Asset 30 13.10 393 13.58 14 -Liability 43 14.26 613 13.53 (31)

73 13.78 1 006 13.55 (17)

2016-Liability 117 16.20 1897 15.19 (118)

117 16.20 1897 15.19 (118)


114


Group and Company

Currentcommitment

US$’m

ExchangerateR/US$-average

contractrate

Rand equivalentatcontractrate

R’m

ExchangerateR/US$-year-endrevaluation

rate

Fairvalueadjustment

R’m2017-Asset 17 12.90 227 13.58 12 -Liability 1 14.32 5 13.58 -*

18 12.93 232 13.58 12

2016-Asset 1 14.17 4 14.81 -*-Liability 16 15.42 251 14.81 (10)

17 15.40 255 14.81 (10)*lessthanR1million

Group and Company

2017 2016

USD-Average 14.05 13.77USD-Closing 13.46 14.75

Group and Company

R’m 2017 2016

Openingbalance 85 -Mark-to-marketadjustments 225 118Amountsreclassifiedtotheincomestatementontheineffectiveportionofopen hedges (14) -

Amountsreclassifiedtothecostofthenon-financialassetrecognised (307) -Deferredtax 28 (33)Closingbalance 17 85

Theapplicablespotratesofexchangeduringtheperiodwereasfollows:

Atyear-endoutstandingforeigncreditorswere:

DuringtheyearanamountofR14m(2016:Rnil)wasreclassifedfromOCItotheincomestatementrelatingtotheportionofhedinginstrumentsthatwasconsideredineffective.Allothercashflowhedgesoftheexpectedfuturepurchasesin2017wereassessedtobeeffective.Atthereportingdatenohedgeorportionthereofwereconsideredtobeineffectiveandasaresultasat1April2017,anetunrealisedlossofR22m(2016:R118m),witharelateddeferredtaxassetofR5m(2016:R33m)was included inOCI inrespectofthesecontracts.

ThegroupvoluntarilyelectedtochangeitsaccountingpolicywithregardstothesubsequenttreatmentofamountsaccumulatedtoOCIoncethehedgeditemhasbeenrecognised.Thegroupelectedtoadoptthebasisadjustmentapproachandasaresult,amountswerereclassifiedfromOCItothecarryingvalueofthehedgeditem.FurtherdetailsontheimpactofthechangeinaccountingpolicycanbefoundonNote1.2onpage92.

TheamountsretainedinOCIat1April2017areexpectedtomatureandaffectthestatementofprofitorlossin2018.Theexpectedmaturityofthegroupsforeigncurrencycommitmentsareasfollows:

Presentedbelowisthereconciliationoftheamountsaddedto/(subtractedfrom)thehedgingreservelossasdisclosedunderothercomprehensiveincome:


27.3.2 Transactions in foreign currencies (continued)

Group and Company (US$’m) On

demand

Less than three

months

Three months to oneyear

One tofiveyears Total

2017ForwardexchangecontractsaccountedforashedgesunderIAS39 - 58 15 - 73Foreigntradecreditorsatyear-end 1 17 - - 18

1 75 15 - 91

2016ForwardexchangecontractsaccountedforashedgesunderIAS39 - 66 51 - 117Foreigntradecreditorsatyear-end 1 17 - - 17

1 83 51 - 134


115



27.3.2 Transactions in foreign currencies (continued)

27.4 Credit risk management

Credit risk isconcentratedprincipally inperiodicshort-termcash investments, in tradereceivables, long-termreceivablesandloanstoconsolidatedentities.Thegroupdepositsshort-termcashsurplusesonlywithmajorbanksofhighqualitycreditstanding.Thegrantingofcredittotradedebtorsiscontrolledwithstatisticalscoringmodelsandperformanceparameterswhicharereviewedonaregularbasis.Themaximumexposureinrespectof tradereceivablesandthegroup’sriskmanagementpoliciesregardingtradereceivablesaredisclosedinnote8.

Thecreditriskassessmentoffinancialassetsthatareneitherpastduenorimpairedisperformedregularlywithreferencetoexternalcreditratings(whereavailable)orbasedonthehistoricaldefaultratesrelatedtothespecificcounterparty.Thetablebelowsummarisesthegroup’sinternalratingoffinancialassets,aswellasthekeyinputsintotheratingselection.

Financial assets Credit risk assessment Key considerations

Long-termreceivablesandother investments

Low Long-termreceivablesconsistofanenterprisedevelopmentloan(EDL)andlong-termtradereceivables(LTR).TheEDLhasbeenassessedaslowcreditriskbasedonthegroup'shistorywiththecounterpartywhoisalsoatrustedtradepartnerandhasnotdefaulted/delayedanypaymentsinceinceptionoftheloan.TheLTRhasbeenassessedaslowcreditriskasthegrouphasawellestablishedcreditpolicyunderwhicheachindividualisassessedforcreditworthinessbasedoninformationprovided(bothbytheapplicantandcreditbureaudata),statisticalscoringmodels,performancedataandanassessmentofaffordability.Creditexposureperindividualisreviewedregularlyandadjustedaccordingly,ifrequired.

Tradeandotherreceivables Low RefertoNote8.1

Derivativefinancialinstruments Low Thegrouplimitsitsexposuretocreditriskthroughdealingwithwell-establishedfinancialinstitutionswithhighcreditstandings,andthusmanagementdoesnotexpectanycounterpartytofailtomeetitsobligations.Cashandcashequivalents Low

Group and Company Group and Company

(Decrease)/increase

Profitbefore

tax

Other comprehensive

income

Profitbefore

tax

Other comprehensive

income

R’m 2017 2017 2016 2016

Ratevariance-US$ForwardexchangecontractsaccountedforashedgesunderIAS39 +10% - (101) - (190)

-10% - 101 - 190

Foreigntrade creditors

+10% (23) - (26)-10% 23 - 26

Total +10% (23) (101) (26) (190)-10% 23 101 26 190

Thegroup’ssensitivitytoamovementinexchangeratesrelatingtoforwardexchangecontractsheldandoutstandingforeigncreditors,anditsrelatedimpactonprofitandequityispresentedinthetablebelow:


116



27.4 Credit risk management (continued)

Theanalysisbelowdetailsthegroup’ssensitivitytoa1%increaseanddecreaseintheinterestratechargedtodebtorsanditseffectonincomefortheyear.

At1April2017thegroupdidnotconsidertheretobeanysignificantconcentrationofcreditriskforwhichithadnotadequatelyprovided.

Group Company

R’m 2017 2016 2017 2016

Ratevariance +1% 20 18 20 18-1% (20) (18) (20) (18)

Basedonthegroup’sexistingcashresourcesandexpectedfuturecashflows,thereisnoforeseeableneedtoenterintoborrowings.Furthermore,duetothegroup’sstrongfinancialposition,shouldfurtherborrowingsberequired,thegroupshouldbeabletoobtainanynecessaryfundingwithinashortperiod,subjecttobankapproval.

Thetablebelowdetailsthegroup’sexpectedmaturityforitsnon-derivativefinancialliabilities:

27.5 Liquidity management

R’m

Totalfacilities 445 445 445 445Less:drawndownportionrelatingtobankoverdraftatyear-end (39) - (39) -

Total undrawn banking facilities 406 445 406 445

Group Company

R’m 2017 2016 2017 2016

Actualborrowingsoutsidethegroupatyear-endwere (90) (36)

Atyear-endbankbalanceswere 1 823 1416 1 063 937

Net cash resources were 1 733 1380 1 063 937

Group(R’m)

On demand

Less than three

months

Three months to oneyear

One to fiveyears Total

2017Tradeandotherpayables 394 1 094 224 - 1 712

394 1 094 224 - 1 712

2016Tradeandotherpayables 429 1414 144 - 1987

429 1414 144 - 1987Company(R’m)2017Tradeandotherpayables 331 1 094 210 - 1 635

331 1 094 210 - 1 635

2016Tradeandotherpayables 410 1355 138 - 1903

410 1355 138 - 1903

Thegroupexpectstomeetitsobligationsfromexistingcashreservesandfromoperatingcashflows.

Thegroupmanagesliquidityriskbymaintainingadequatereserves,bankingfacilitiesandbycontinuouslymonitoringforecastandactualcashflows.Thegrouphassignificantcashreservesandminimalborrowingswhichenablesittoborrowfundsexternallyshoulditrequiretodosotomeetanyworkingcapitalorpossibleexpansionrequirements.Asaconsequencebankinglegislationwhichrequiresfeestobepaidrelativetothesizeofthefacility,thegrouphasonlyenteredintolimitedloanfacilityarrangementstotheextentthatfeesarenotpayable.Theyear-endpositionwasasfollows:


117



27.6 Category and fair value of financial instruments (continued)

Financialinstrumentsasdisclosedonthestatementoffinancialpostionareaccountedforusingthepoliciesapplicableandarecategorisedbelow.Allassetsandliabilitiesforwhichfairvalueismeasuredordisclosedinthefinancialstatementsarecategorisedwithinthefairvaluehierarchy,describedasfollows,basedonthelowestlevelinputthatissignificanttothefairvaluemeasurementasawhole:

-Level1-Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsorliabilities;-Level2-Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvalue measurementisdirectlyorindirectlyobservable;and-Level3-Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvalue measurement is unobservable.

Thefairvalueoftradeandotherreceivables,re-insuranceassetsandliabilitiesandtradeandotherpayables,isconsideredtoapproximatethecarryingvalueduetotheirshort-termnature.

Group2017R’m

Fair value measurement

usingLoans and

receivables

Derivatives accounted

for as hedges

Amortised cost Total

Financial assets 23 14 - 37Long-termreceivablesandother investments Level 2 23 - - 23

Derivativefinancialinstruments Level 2 - 14 - 14

Financial liabilities - (31) (51) (82)Long-termliabilities Level 2 - - (51) (51) Derivativefinancialinstruments Level 2 - (31) - (31)

Total 23 (17) (51) (45)

Group2016R’m

Fairvaluemeasurement

usingLoans and receivables

Derivativesaccounted

forashedges

Amortisedcost Total

Financial assets 18 - - 18Long-termreceivablesandother investments Level 2 18 - - 18

Derivativefinancialinstruments Level 2 - - - -

Financial liabilities - (118) (36) (154)Long-termliabilities Level 2 - - (36) (36)Derivativefinancialinstruments Level 2 - (118) - (118)

Total 18 (118) (36) (136)


118



27.6 Category and fair value of financial instruments (continued)

Company2016R’m



Derivativesaccountedfor

as hedges Total

Financial assets 5 - 5Long-termreceivablesandother investments Level 2 5 - 5

Derivativefinancialinstruments Level 2 - - -

Financial liabilities - (118) (118)Long-termliabilities Level 2 - - -Derivativefinancialinstruments Level 2 - (118) (118)

Total 5 (118) (113)

Therehavebeennotransfersbetweenthelevelsduringtheyear(refernote28.2.2).

Derivativefinancialinstrumentsarefairvalueusingaforwardpricingmodel.Long-termreceivablesandlong-termliabilitiesarefairvaluedusingadiscountedcashflowmethod.

Company2017R’m



Derivativesaccountedfor

as hedges Total

Financial assets 4 14 18Long-termreceivablesandother investments Level 2 4 - 4

Derivativefinancialinstruments Level 2 - 14 14

Financial liabilities - (31) (31) Long-termliabilities Level 2 - - - Derivativefinancialinstruments Level 2 - (31) (31)

Total 4 (17) (13)


using Keyinputs

Financial assetsLong-termreceivablesandother investments

Level 2 Signedagreements,withagreedinterestrateyields

Derivativefinancialinstruments Level 2 Yieldcurves,interestrateandforeignexchangerates

Financial liabilitiesLong-termliabilities Level 2 Signedagreements,withagreedmarketrelatedinterest

rateyieldsDerivativefinancialinstruments Level 2 Yieldcurves,interestrateandforeignexchangerates


119

Theamountsrecognisedintheincomestatementaredetailedinnote19.Thefollowingmainassumptionswereusedinperformingthecalculation:•Discountrate-11.10%perannum(2016:10.20%perannum)•Inflation-8.60%perannum(2016:7.80%perannum) •Futuresalaryincreases-9.60%perannum(2016:8.80%perannum)

Movementsinthepresentvalueofthedefinedbenefitobligationinthecurrentperiodwereasfollows: Definedbenefitobligationatbeginningoftheyear 68 92Currentservicecost 3 4Membercontributions 1 1Interestcost 7 6Actuarialgain (6) (2)Benefitspaid (5) (32)Riskpremiums (1) (1)Defined benefit obligation at end of the year 67 68

Group and Company

R’m 2017 2016

Thefundedstatusofthedefinedbenefitretirementfund,actuariallycalculatedannuallyatreportingdateintermsofIAS19,isasfollows:Benefitobligation (67) (68)Plan assets 115 109Net benefit plan asset 48 41

28. Retirement benefits

28.1 Pension schemes

28.1.1 Membership

ThefundsareregisteredintermsofthePensionFundsActandprovideforpensionsandrelatedbenefitsforallpermanentemployees.Membershipiscompulsoryafterthefirstyearofservice.Membershipdetailsaredisclosedintheremunerationreportonpages57to74.

28.1.2 Contributions

Group defined benefit fund Pensionsarebasedonlengthofserviceandhighestaverageannualsalaryearnedovertwoyearsduringthelast10yearsofemployment.Themembersarerequiredtocontributetothefundsmainlyattherateof7.0%oftheirpensionableremunerationwhiletheemployerisrequiredtocontributemainlyattherateof7.0%.

Group defined contribution fundThemembersarerequiredtocontributetothefundsmainlyattherateof7.5%ofpensionableremunerationandtheemployerisrequiredtocontributemainlyattherateof11.0%.


28.1.3 Valuations

Defined benefit pension fundIntermsofthePensionFundsActthedefinedbenefitfundshouldbeactuariallyvaluedeverythreeyears.Inthestatutoryvaluationasat31December2014,pastserviceliabilitiesweredeterminedbyvaluingallfuturepaymentsexpectedtobemadeoutofthefundinrespectofbenefitsaccrueduptothevaluationdate.TheactuarialvaluationofassetswasR132.3mandtheliabilityforaccruedbenefits,includingasolvencyreserveofR23.7m,wasR125.6m,resultinginafundinglevelof105.3%andadistributablesurplusofR6.7m.Thepossibleconversionofthefund’sbenefitstructurefromdefinedbenefittodefinedcontributioniscurrentlybeingconsidered.Itisexpectedthatthedistributablesurpluscouldberequiredtofundsuchaconversionand accordingly it has been retained in the employer surplus account. The valuation took into account theminimumbenefits payable on amember’s exit from the fund after 1 January 2004, in terms of thePensionFundsSecondAmendmentActof2001. In theopinionof theactuary the fundwas inasoundfinancialposition.


120

Duetothevaluationabovebeingbasedonanumberofassumptions,thedefinedbenefitobligationcouldvary from the amounts disclosed, depending on the extent towhich actual experience differs from theassumptions adopted.

Theestimateddefinedbenefitcostforthe2018financialyearisasfollows;acurrentservicecostofR146.9m(2017:R130.3m),anexpectedreturnonplanassetsofR13.0m(2017:R11.3m)andaninterestcostofR7.7m(2017:R7.2m).

Group and Company

R’m 2017 2016

Movementsinthepresentvalueoftheplanassetsinthecurrentperiodwereasfollows: Fairvalueofplanassetsatbeginningoftheyear 109 132Expectedreturnonassets 11 9Contributions 3 4Riskpremiums (1) (1)Benefitspaid (5) (32)Actuarialgain (2) (3)Fair value of plan assets at end of the year 115 109

%

Theestimatedassetcompositionofthefairvalueoftotalplanassetsisasfollows: Cash 8.3 12.4SouthAfricanequities 42.0 39.6SouthAfricanbonds 14.4 11.8SouthAfricanpropertyandother 9.0 8.1International assets 26.3 28.1

100.0 100.0

Thefollowingsensitivitiesrelatetotheimpactonthedefinedbenefitobligationfor2017:

+1% -1%Theeffectofanincreaseordecreaseof1%intheassumeddiscountrateasfollows: (19.4%) 23.9%

+1% -1%Theeffectofanincreaseordecreaseof1%intheassumedinflationratefollows: 20.5% (17.6%)

Defined contribution fundsThedefinedcontribution fundsare valuation exempt. Theactuarial function remainspresent throughanEnhancedFinancialAssessment(EFA)process,whichisaquarterlyactuarialassessmentthatlooksatthefinancialsoundnessofthefund;andsetsouttheallocationsofcontributionstothefund.Thereportincludesacomparisonofthetotalassetstothetotalliabilitiesofthefundtodeterminethefundinglevel.ThemostrecentEFAreportsasat31December2016concludedthatthefundinglevelofthefundswaswithinthetolerancelevelssetbytheadministrators.

28.2 Post-retirement medical benefits

Theobligationofthegrouptopaymedicalaidcontributionsformemberswhohaveretiredisnolongerpartoftheconditionsofemploymentfornewassociates.Alimitednumberofpensionersandcurrentassociateswhoremainmembersofthedefinedbenefitpensionfundareentitledtothisbenefit.Theentitlementtothebenefitforcurrentassociatesisdependentupontheassociateremaininginserviceuntilretirementage.Anactuarialvaluation,intermsofIAS19,ofthegroup’sliabilityat31March2017forthisfuturebenefitwasundertaken.Valuationsareundertakeneverythreeyears.Themainassumptionsusedinperformingthesevaluationsarereviewedannually.Anydetectionofamaterialvariationinamainassumptionwouldgiverisetoanewvaluation.Theobligationforpost-retirementmedicalaidbenefitsisunfunded.Thefollowingmainassumptionswereusedinperformingthevaluationat31March2017: LiabilitywasbasedoncurrentmembershipHealthcarecostinflation-9.2%perannum(2016:9.0%perannum)Discountrate-9.8%perannum(2016:10.0%perannum)Averageretirementage-62years(2016:62years)Continuationatretirement-100%(2016:100%)

28.1.3 Valuations (continued)

28. Retirement benefits (continued) Theamountsforthecurrentandpreviousfourperiodsareasfollows:

2017 2016 2015 2014 2013Definedbenefitobligation (67) (68) (92) (78) (85)Plan assets 115 109 132 123 105Net plan asset 48 41 40 45 20

R’m



121


29. Related party transactions

29.1 Directors

Refertothereportofthedirectorsonpage78inrespectoftransactionswithdirectors.

29.2 Compensation of key management personnel

Theabovecompensationincludesamountspaidtoexecutiveseniormanagementpersonnelandexcludesamountspaidtodirectorsasdisclosedintheremunerationreport.

Group Company

R’m 2017 2016 2017 2016

Short-termemployeebenefits 79 72 79 72Post-employmentpensionbenefits 10 9 10 9Share-basedpayments 27 25 27 25

116 106 116 106

29.3 Transactions with related parties

The following transactions were entered into with individuals, who meet the definition of close familymembers to keymanagementpersonnel, or entities overwhich such individuals aredeemed to have acontrollinginfluence:

Relatedparty-BVPG,firmofattorneysofwhichMrKGetz,anon-executivedirector,isapartner.

LegalfeesofR1.1m(2016:R4.1m).

29.4 Participants in staff share trusts

Refertonotes9and11inrespectoftransactionswithparticipantsinthestaffsharetrusts.

29.5 Post-retirement benefit funds

Refertonotes28.1and28.2inrespectoftransactionswithpost-retirementbenefitfunds.

29.6 Inter-group transactions

Thefollowingtransactionsoccurredbetweenthecompanyanditsconsolidatedentities:

Refertonote19forincomereceivedfromconsolidatedentities.

Company

R’m 2017 2016

Sales 810 881

Group and Company

R’m 2017 2016

Benefitobligationatbeginningoftheyear 26 24Netincreaseinprovisionduringtheyear - 2 Benefit obligation at end of the year 26 26

+1% -1%Benefitobligationatbeginningoftheyear(R’m) 19.5 (15.5)Netincreaseinprovisionduringtheyear(R’m) 18.0 (14.4)

Theeffectofanincreaseofdecreaseof1%intheassumeddiscountrateisasfollows:Accruedliabilityatyearend(R’m) (14.3) 18.3

Theeffectofanincreaseofdecreaseof1yearintheassumedexpectedretirementageisasfollows:

1 year older

1 year younger

Accruedliabilityatyear-end(R’m) (3.8) 3.6

Theamountsforthecurrentandpreviousfourperiodsareasfollows(R’000):

Theeffectofanincreaseofdecreaseof1%intheassumedhealthcarecostinflationfor2017isasfollows:

2017 2016 2015 2014 2013Definedbenefitobligation 26 26 24 22 16

Activityduringtheyearwasasfollows:

28.2 Post-retirement medical benefits (continued)

28. Retirement benefits (continued)


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Apparel Home Financial servicesand mobile Central services Eliminations Total

R’m 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016

Revenue 13 685 14139 4 914 4922 1 064 854 571 116 (555) (108) 19 679 19923External 13 685 14139 4 914 4922 1 064 854 16 8 - - 19 679 19923Internal - - - - - - 555 108 (555) (108) - -

Profitfromoperatingactivities 1 994 2630 822 793 387 345 (155) (165) - - 3 048 3603Netfinanceincome 82 81Profitbeforetaxation 3 130 3684Taxation 867 1042Profit after taxation 2 263 2642

Divisionalassets 2 371 2424 771 696 2 120 2001 3 653 2942 - - 8 915 8063Divisionalliabilities 1 244 1478 518 607 159 143 271 223 (7) (8) 2 185 2443Capitalexpenditure 190 186 82 46 11 16 523 896 - - 806 1144Depreciationandamortisation 127 111 44 42 7 3 79 72 - - 257 228

South Africa International Total

R’m 2017 2016 2017 2017 2017 2016

Revenue 18 381 18537 1 298 1386 19 679 19923Assets 8 228 7332 687 731 8 915 8063Capitalexpenditure 787 1104 19 40 806 1144

30. Segmental reporting

Business segments

IFRS8requiresoperatingsegmentstobeidentifiedonthebasisofinternalreportingaboutcomponentsofthegroupthatareregularlyreviewedbythechiefoperatingdecision-makers(CODM)toallocateresourcestothesegmentsandtoassesstheirperformance.TheCODMhasbeenidentifiedasthegroup’sexecutives.

Formanagementpurposes,thegroupisorganisedintobusinessunitsbasedontheirproductsandservices,andhasfourreportablesegmentsasfollows:

-TheApparelsegmentretailsclothing,sportswear,footwear,sportingequipmentandaccessories; -TheHomesegmentretailshomewares;-TheFinancialServicesandCellularsegmentmanagesthegroup’stradereceivablesandallfinancialservicesandmobileproducts;and-TheCentralServicessegmentprovidesservicestothetradingsegmentsincludinginformationtechnology,internalaudit,humanresources,grouprealestateandfinance.

Segmentperformanceisevaluatedbasedonoperatingprofitorloss.Netfinanceincomeandincometaxesaremanagedonagroupbasisandarenotallocatedtooperatingsegments.

31. Geographical segments


123

financial interest in consolidated entities for the year ended 1 April 2017

Issued capital Carrying value of shares Indebtedness lessimpairment provisions

Notes 2017Shares

2016Shares

2017R’m

2016R’m

2017R’m

2016R’m

Operating subsidiaries SpecialtyStores(Botswana)(Pty)Limited 1 100 100 - - 47 67MrPrice(Lesotho)(Pty)Limited 2 1 000 1000 - - 10 10MrPriceGroup(Namibia)(Pty)Limited 3 100 100 - - 33 57MrPriceChainStoresInternationalLimited(Nigeria) 4 500 000 500000 2 2 132 88 MrPriceChainStoresInternationalLimited(Ghana) 5 480 000 480000 2 2 71 71MRPZambiaLimited 6 5 000 5000 - - 67 73MillewsFashions(Johannesburg)(Pty)Limited 7 28 000 28 000 - - 4 1AssociatedCreditSpecialists(Pty)Limited 8 100 100 - - 3 12MRPMobile(Pty)Limited 9 100 100 - - 79 45MRPRetailAustralia(Pty)Limited 10 100 100 - - 178 105

Share Trusts MrPriceGroupStaffShareTrustandSharePurchaseScheme - -MrPriceGroupEmployeesShareInvestmentTrust -* -*MrPriceExecutiveDirectorShareTrust 2 1MrPriceExecutiveShareTrust 2 1MrPriceSeniorManagementShareTrust 1 -MrPriceGeneralStaffShareTrust 6 4MrPricePartnersShareTrust -* -*

Dormant subsidiariesRaavaJewellers(Namibia)(Pty)Limited 100 100 1 1 - -HughesExtension17Township(Pty)Limited 100 100 - - - -

Total 5 5 635 535*lessthanR1million

Notes: 1. Operatesmrp,mrpHome,mrpSport,MiladysandSheetStreetstoresinBotswana. 2. Operatesmrp,mrpHome,MiladysandSheetStreetstoresinLesotho. 3. Operatesmrp,mrpHome,Miladys,SheetStreetandmrpSportstoresinNamibia. 4. OperatesmrpstoresinNigeria. 5. Operatesmrp,mrpHomestoresinGhana.

6. Operatesmrp,mrpHomestoresinZambia. 7. Developsandleasespremisestogroupoperations. 8. Recoversoverduedebtsfromcreditcustomers. 9. OperatesasacelluarMVNO(mobilevirtualnetworkoperator)onlyinSouthAfrica.10. OperatesmrpandmrpHomestoresinAustralia.

Thecompanyowns100%oftheequityandpreferencesharecapital(whereapplicable)ofallsubsidiariesandcellcaptives,exceptforMRPMobile(Pty)Ltdinwhichitholds55%oftheissuedsharecapitalwiththeremaining45%beingheldbynon-controllinginterests.


124

company secretary and registered officeMrsJPCheadleUpperLevel,NorthConcourse,65MasabalalaYengwaAvenue,Durban,4001.POBox912,Durban,4000.Tel:0313108000

transfer secretariesComputershareInvestorServices(Pty)Ltd,RosebankTowers,16BiermannAvenue,2196,Rosebank,Johannesburg.POBox61051,Marshalltown,2107.Tel:0113705000

domicile and country of incorporationRepublicofSouthAfrica

sponsorRandMerchantBank

registration number1933/004418/06

independent auditorErnst&YoungInc.

address phone fax websites

mrp Upper Level, NorthConcourse,65MasabalalaYengwaAvenue,Durban,4001PrivateBagX04,Snell Parade,Durban,4074

0313108638 0313043358 mrp.commrp.com/ngmrp.com/au

mrpHome 0313108809 0313284138 mrphome.com

mrpSport 0313108545 0313069347 mrpricesport.com

Sheet Street 0313108300 0313108317 sheetstreet.co.za

mrpFoundation 0313108242 0313284609 mrpfoundation.org

Corporate 0313108000 0313043725 mrpricegroup.com

Miladys 30StationDrive,Durban,4001POBox3562,Durban,4000

0313135500 0313135620 miladys.co.za

mrpMoney

mrpMobile

380DrPixleyKaSemeStreet,Durban,4001POBox4996,Durban,4000

0313673311

0800000430

0313060164 mrpmoney.co.za

mrpmobile.com

WhistleBlowers POBox51006,Musgrave,4062

0860005111 whistleblowing.co.za

CustomerCare 0800212535

AccountServices 0861066639

administration and contact details

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annual financial statements - mr price group corporate - mr price … · 2017-07-19 · nnul innil...

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