Annual financial statements

Notice of AGM

Pick n Pay Stores Limited

Divisional directors
Pick n Pay Stores Limited –
- Notice of AGM
  Form of proxy
Pick n Pay Holdings Limited –
- Notice of AGM
  Form of proxy

6. SPECIAL RESOLUTION NUMBER 1

Directors’ fees for the year ending 28 February 2012

“RESOLVED AS A SPECIAL RESOLUTION that the directors’ fees, to be paid to the directors in their capacity as directors only, for the year ending 28 February 2012 be as follows:

Executive directors, unchanged at R1 500.
Chairman, unchanged at R3 000 000.
Lead non-executive director, unchanged at R95 000.
Non-executive directors, unchanged at R280 000.
Chairman of the Audit committee, unchanged at R235 000.
Chairman of the Remuneration committee, unchanged at R120 000.
Member of the Audit committee, unchanged at R95 000.
Member of the Remuneration committee, unchanged at R60 000.
Member of the Nominations committee, unchanged at R53 000.”

The reason for this special resolution is to obtain shareholder approval for the remuneration of each of the directors of the Company for the year ending 28 February 2012 in accordance with section 66(9) of the 2008 Companies Act. The passing of this special resolution will have the effect of approving the remuneration of each of the directors of the Company for the year ending 28 February 2012 in accordance with section 66(9) of the 2008 Companies Act.

The minimum percentage of voting rights that is required for this resolution to be adopted is 75% (seventy-five percent) of the voting rights to be cast on the resolution.

7. SPECIAL RESOLUTION NUMBER 2

Amendment to the Memorandum of Incorporation of the Company

The Board of directors of the Company believes that an amendment to the MOI of the Company is required for commercial reasons, so as to remove the existing limitation on the Company’s borrowing powers.

“RESOLVED AS A SPECIAL RESOLUTION that the Memorandum of Incorporation of the Company be and is hereby amended by the deletion of the existing article 101 and the replacement thereof with the following new article 101:

101	(a)	The Directors may exercise all the powers of the Company to borrow money and to mortgage or encumber its undertaking and property or any part thereof and to issue debentures or debenture stock (whether secured or unsecured and whether they are called bonds, notes or debentures or are otherwise described) and other securities whether outright or as security for any debt, liability or obligation of the Company or of any third party.
	(b)	For the purpose of the provisions of article 101(a) the borrowing powers of the Company shall be unlimited, provided that the total amount owing by the Company in respect of monies so borrowed shall not exceed the amount authorised by Pick n Pay Holdings Limited/the Company’s listed holding company from time to time.”

The borrowing powers of the Company are limited by the current article 101(a) of the Company’s MOI and by the MOI of the Company’s listed holding company, Pick n Pay Holdings Limited. The reason for this special resolution is to amend the MOI of the Company to remove the existing limitation on the directors’ rights to exercise the borrowing powers of the Company. It should be noted that the existing limitation on the Company’s borrowing powers is unusually restrictive. The passing and filing of this special resolution will have the effect of amending the MOI of the Company to remove the limitation on the directors’ rights to exercise the borrowing powers of the Company as set out in the terms of the special resolution. The passing of this special resolution is not intended to be and is not a harmonisation of any part of the Company’s MOI in accordance with the 2008 Companies Act, whether in terms of item 4(2)(a) of Schedule 5 of the 2008 Companies Act or otherwise and this special resolution is being proposed for commercial reasons only, to facilitate the Company being able to borrow money or issue debt instruments as and when the need arises. In this regard, the primary reason for the passing and filing of this special resolution now is to amend the MOI of the Company to enable the Company to implement and utilise the R2 billion Domestic Medium Term Note Programme that was listed on the JSE Securities Exchange on 11 March 2011 in terms of a Programme Memorandum dated 10 March 2011 (“the Note Programme”). The Company wishes to implement and utilise the Note Programme in order to raise finance on an ongoing basis It should be noted that the issuance of debt securities by a company, as the Company will do in terms of the Note Programme, is usual commercial practice. The directors, in the exercise of their duties, will only utilise those of their borrowing powers as are required to meet the needs of the Company. It should be noted that, because the MOI of Pick n Pay Holdings Limited has a similar restriction on its borrowing powers and on those of its subsidiaries, the amendment of the Company’s MOI, as set out in this special resolution, will only be of any real effect if at the annual general meeting of the shareholders of Pick n Pay Holdings Limited to be held on the same date as the Company’s annual general meeting, a special resolution is passed so as to remove the current limitation on borrowing powers contained in the MOI of Pick n Pay Holdings Limited. Pick n Pay Holdings Limited has not, as at the date of this notice of annual general meeting, imposed a limit on the total borrowings of the Company, should this special resolution be passed and should the special resolution to be proposed in this regard at the annual general meeting of Pick n Pay Holdings Limited also be passed. Assuming the passing of the necessary special resolutions at the relevant annual general meetings, Pick n Pay Holdings Limited will be entitled to impose, raise or lower a limit on the total borrowings of the Company at any time and from time to time.

The minimum percentage of voting rights that is required for this resolution to be adopted is 75% (seventy-five percent) of the voting rights to be cast on the resolution.

8. SPECIAL RESOLUTION NUMBER 3

General approval to repurchase Company shares

“RESOLVED AS A SPECIAL RESOLUTION that the Company hereby approves, as a general approval, the acquisition by the Company or any of its subsidiaries from time to time of the issued shares of the Company or its holding company, upon such terms and conditions and in such amounts as the directors of the Company may from time to time determine, but subject to the Memorandum of Incorporation of the Company, the provisions of the Companies Act, No 71 of 2008, as amended, and the JSE Limited (“JSE”) Listings Requirements (“JSE Listings Requirements”) as presently constituted and which may be amended from time to time, and provided that acquisitions by the Company and its subsidiaries of shares in the capital of the Company or its holding company may not, in the aggregate, exceed in any one financial year 5% (five percent) of the Company’s issued share capital of the class of repurchased shares from the date of the grant of this general approval.

Additional requirements imposed by the JSE Listings Requirements

It is recorded that the Company or its subsidiaries may only make a general acquisition of shares if the following JSE Listings Requirements are met:

a.	any such acquisition of shares shall be effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the Company or its subsidiaries and the counterparty or in any other manner approved by the JSE;
b.	the general approval shall only be valid until the Company’s next annual general meeting, or for 15 (fifteen) months from the date of passing of this special resolution, whichever period is shorter;
c.	a paid press announcement will be published as soon as the Company and/or its subsidiaries has/have acquired shares in terms of this authority constituting, on a cumulative basis, 3% (three percent) of the number of shares of the class of shares acquired in issue at the time of granting of this general approval and for each 3% (three percent) in aggregate of the initial number of that class of shares acquired thereafter, which announcement shall contain full details of such acquisitions as required by paragraph 11.27 of the JSE Listings Requirements;
d.	in determining the price at which shares are acquired by the Company or its subsidiaries in terms of this general approval, the maximum price at which such shares may be acquired may not be greater than 10% (ten percent) above the weighted average of the market value at which such shares are traded on the JSE, as determined over the 5 (five) business days immediately preceding the date of the acquisition of such shares by the Company or its subsidiaries;
e.	in the case of a derivative (as contemplated in the JSE Listings Requirements), the price of the derivative shall be subject to the limitations set out in paragraph 5.84(a) of the JSE Listings Requirements;
f.	a resolution by the Board of directors of the Company that they authorised the repurchase, that the Company passed the solvency and liquidity test and that since the test was done there have been no material changes to the financial position of the Group; and
g.	the Company and/or its subsidiaries may not repurchase any shares in terms of this authority during a prohibited period, as defined in the JSE Listings Requirements, unless there is in place a repurchase programme where dates and quantities of shares to be traded during the prohibited period are fixed and full details of the programme have been disclosed in an announcement over SENS prior to the commencement of the prohibited period.