Note 32

32.

Related-party transactions

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision-maker in order to allocate resources to the segments and to assess their performance. The chief operating decision-maker has been identified as the executive directors of the Group.

On this basis, the Group has six operating segments:

Segment	Nature of business
Retail	– Retailers of tiles, brassware, laminated flooring, bathroomware and accessories.
Franchising	– Bearer of South African and non-South African trademarks.
Properties	– Property investments.
Supply and Support Services	– Distributor of tiles, shower enclosures, brassware, laminated flooring, accessories, and tiling tools.
	– Group administration and management services.
	– Outsourced debtor solutions.
	– Procurement.
Franchise stores	– Franchisee retailers of tiles, brassware, laminated flooring, bathroomware and accessories.
Manufacturing	– Manufacturers of tiles, sanitaryware, baths, adhesive and related products.

All intersegmental transactions are concluded at arm’s length.

The following measures, as included in the quarterly management report reviewed by the chief operating decision-makers, are used to assess performance:

	Turnover			Gross margin			Net profit before tax
(Rand millions unless otherwise stated)	June 2018	June 2017	% change	June 2018	June 2017	% change	June 2018	June 2017	% change
Retail	5 828	5 714	2	1 160	1 099	6	325	256	27
– Group stores	3 213	3 174	1	1 160	1 099	6	325	256	27
– Franchise stores	2 615	2 540	3
Franchising							233	210	11
Properties							230	256	(10)
Supply and Support Services	1 871	1 966	(5)	179	183	(2)	289	366	(21)
Manufacturing	2 994	—	100	795	—	100	489	—	100
Associates							31	96	(68)
Total	10 693	7 680	39	2 134	1 282	66	1 597	1 184	35
Franchise stores	(2 615)	(2 540)	3
Consolidation entries	(2 014)	(1 470)	37	109	6	1 717	(22)	6	(500)
Total Group	6 064	3 670	65	2 243	1 288	74	1 575	1 190	32

Geographical analysis

(Rand millions unless otherwise stated)	South Africa	Rest of Africa	Australia	Intergroup entries	Group
Audited year to 30 June 2018
Turnover	7 284	445	349	(2 014)	6 064
Non-current assets	4 333	170	219	(865)	3 857
Audited year to 30 June 2017
Turnover	4 717	423	—	(1 470)	3 670
Non-current assets	3 166	148	—	(593)	2 721