Integrated

Annual Report

2018


NAVIGATING OUR REPORTING SUITE

NAVIGATING OUR REPORTING SUITE

Our six capitals

Our ability to create long-term sustainable value for stakeholders depends on the use of various capitals within our business. The International Integrated Reporting <IR> Framework supports integrated financial reporting, and, in particular, the reporting of the Group's business model across these six forms of capital. Refer to "Our business model" on pages 20 to 21 for more information.

Financial

Human

Manufactured

Social and relationship

Intellectual

Natural


Our key stakeholders

The Group is committed to open and constructive engagement with all our stakeholders. Our business model and strategy are designed to consider and address the issues and concerns most relevant to our key stakeholders. Refer to the "Engaging with our stakeholders" section on pages 38 to 41 for more information.

Customers

Community

Employees

Suppliers

Franchisees

Shareholders


Our business acceleration pillars

The second stage of our strategic long-term plan is organised around seven business acceleration pillars. These pillars represent the material growth opportunities that can materially affect our ability to create value over the short, medium and long term. Refer to our "Strategic focus" section on pages 44 to 51 for more information.

Better for customers

A flexible and winning estate

Efficient and effective operations

Every product, every day

A winning team

Boxer–
a national brand

Rest of Africa – a second engine of growth


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MATERIAL ISSUES,
RISKS AND OPPORTUNITIES


OUR PROCESS FOR DETERMINING MATERIALITY, MATERIAL ISSUES, RISKS AND OPPORTUNITIES

OUR PROCESS FOR DETERMINING MATERIALITY, MATERIAL ISSUES, RISKS AND OPPORTUNITIES

OUR MATERIAL ISSUES

The Group agreed that all material matters identified in 2017 remained relevant for the 2018 financial year. The opportunities identified per material matter demonstrate how the risks are being mitigated, and where possible, are viewed as growth opportunities for the Group through its strategic long-term plan.

In the 2018 financial period, the following matters were considered to be material for the Group:

  • Consumer environment
  • Competitive environment
  • Effectiveness of procurement and distribution channel
  • Food and other health and safety standards
  • Effective execution of strategy and long-term sustainable value creation
  • Effectiveness of our information systems and technology
  • Building and retaining a talented and diverse retail team
  • Volatility of the Group’s Rest of Africa division

These material matters are discussed in more detail below of this report.

For more information on the capitals, key stakeholders and business acceleration pillars impacted or informed by our material issues, risks and opportunities, please refer to page 5 of this report.

CONSUMER ENVIRONMENT

COMPETITIVE ENVIRONMENT

EFFECTIVENESS OF PROCUREMENT AND DISTRIBUTION CHANNEL

FOOD AND OTHER HEALTH AND SAFETY STANDARDS

EFFECTIVE EXECUTION OF OUR STRATEGY AND LONG-TERM SUSTAINABLE VALUE CREATION

EFFECTIVENESS OF OUR INFORMATION SYSTEMS AND TECHNOLOGY

BUILDING AND RETAINING A TALENTED AND DIVERSE RETAIL TEAM

VOLATILITY OF THE GROUP’S REST OF AFRICA DIVISION

Pick n Pay was proud to be recognised by The Institute for Risk Management South Africa (IRMSA) for its outstanding contribution to risk management.

Our group risk and assurance services team – which reports directly to the audit, risk and compliance committee – scooped the award in the wholesale and retail category for its role in developing, implementing and driving an integrated combined assurance programme across the Group. The programme has improved the visibility, transparency and reporting of all material risks, developed appropriate action plans for effective risk mitigation and risk monitoring, and improved operational efficiency through the management of interdependencies and the realignment of resources.