Corporate governance

Pick n Pay Holdings Limited

Audit committee report

The audit committee is pleased to present this report as required by the Companies Act, 2008. The audit committee is a formal committee of the Board and functions within an approved charter and complies with all relevant legislation, regulation and governance codes.

Role of the committee

The audit committee has an independent role with accountability to both the Board and to shareholders. The committee's responsibilities include the statutory duties prescribed by the Companies Act 2008, activities recommended by King III and the responsibilities assigned by the Board.

Composition of the committee

This committee is chaired by and comprises only independent non-executive directors. In accordance with the requirements of the Companies Act 2008, members of the committee are appointed annually by the Board for the ensuing financial period and in compliance with King III are appointed by shareholders at the annual general meeting.

The committee has a charter which is reviewed and approved by the Board annually.

The composition of the committee and meeting attendance is as follows:

• Meeting at least twice a year to review the Group's financial results;
• Receiving and reviewing reports from the Pick n Pay Stores audit committee;
• Reviewing the carrying value of its investment in Pick n Pay Stores Limited; and
• Reporting to the Board at the next meeting.

The committee's main responsibilities are discharged by the audit committee elected for Pick n Pay Stores Limited. The Pick n Pay Holdings audit committee reviews the report of the Pick n Pay Stores Limited audit committee and assesses the carrying value of its investment in Pick n Pay Stores Limited.

Independence of external auditors

The audit committee is satisfied as to the independence of the Group's external auditors, KPMG Inc., and its respective audit partners. The committee nominates KPMG as external auditor for the appointment by shareholders at the annual general meeting.

POLICY ON NON-AUDIT SERVICES

All non-audit services provided by the Group's external auditors are pre-approved by the audit committee. The total fee for non-audit services provided should not, under normal circumstances, exceed 50% of the total auditor's remuneration.

Expertise and experience of Chief Finance Officer and finance function

The audit committee is satisfied that Bakar Jakoet has the appropriate expertise and experience for his position of Chief Finance Officer of the Group. In addition, the committee is also satisfied that the composition, experience and skills of the finance function meet the Group's requirements.

Approval of the audit committee report

The committee confirms that it has functioned in accordance with its charter for the 2013 annual financial period and that its report to shareholders has been approved by the Board.

René de Wet
Chairman: Audit committee

22 April 2013