Pick n Pay Stores Group

directors’ report

for the period ended 1 March 2015

Pick n Pay STORES LIMITED AND ITS SUBSIDIARIES

Nature of business

The Company, which is domiciled and incorporated in the Republic of South Africa and listed on the JSE, the recognised securities exchange in South Africa, is an investment holding company. The Group comprises trading subsidiaries that retail food, clothing, general merchandise, pharmaceuticals and liquor throughout southern Africa, both on an owned and franchise basis. The Group also acquires and develops strategic retail and distribution sites. Refer to here of the integrated annual report for an overview of the Group’s nature of business.

Overview of financial results, activities and borrowings

The reviews of financial results, activities and borrowings of the Group are contained in the Chief Finance Officer’s report.

Audit and risk committee

We draw your attention to the audit and risk committee report of the integrated annual report where we set out the responsibilities of the committee and how it has discharged these responsibilities during the period.

Dividends declared

The directors have declared a final dividend (dividend 94) of 98.50 cents per share out of income reserves. The dividend is subject to dividend withholding tax at 15%. The last day to trade in order to participate in the dividend (CUM dividend) will be Friday, 5 June 2015. The shares will trade EX dividend from the commencement of business on Monday, 8 June 2015 and the record date will be Friday, 12 June 2015. The dividends will be paid on Monday, 15 June 2015. Refer to here for a detailed analysis.

Share capital

The issued ordinary share capital increased by 6 925 000 shares during the period (refer to note 19) to 487 322 321 shares.

At period end, the Pick n Pay Employee Share Purchase Trust held 1 746 900 (2014: 1 974 500) shares in the Company and 9 257 784 (2014: 9 193 760) shares in Pick n Pay Holdings Limited RF and a subsidiary company held 1 848 703 (2014: 1 848 703) shares in Pick n Pay Holdings Limited RF. These shares are held to meet obligations of options granted.

As a result of the new share issue, subsidiary companies now also hold 6 925 000 Company shares to meet obligations under the Group’s new forfeitable share plan. Participants to the forfeitable share plan (FSP) have non-forfeitable rights to the dividends on these shares. Refer to the remuneration report for details on the FSP.

Going concern

These financial statements have been prepared on the going-concern basis.

The Board has performed a formal review of the Company and its subsidiaries’ ability to continue trading as going concerns in the foreseeable future and, based on this review, considers that the presentation of the financial statements on this basis is appropriate.

The Group ensures that it complies with the liquidity and solvency requirements for any dividend payment and provision of financial assistance as per the requirements of the Companies Act, 2008.

Legal proceedings

The Company and its subsidiaries are not involved, and have not in the 2015 financial period been involved, in any legal or arbitration proceedings which may have or have had a material effect on the financial position of the Pick n Pay Group of Companies, nor is the Company aware of any such proceedings that are pending or threatened. Refer to here of the integrated annual report for the legal report.

Special resolutions

On 2 June 2014 the Company’s shareholders approved the following special resolutions as tabled in the notice to the annual general meeting:

Directors’ fees for the 2016 financial period

Shareholders approved the directors’ fees.

Provision of financial assistance to related or inter-related companies and others

The shareholders resolved, in terms of the provisions of section 45 of the Companies Act, 2008, that the Company may from time to time provide direct or indirect financial assistance to any director, prescribed officer, related company, inter-related company or member of a related or inter-related company on such terms and conditions as determined by the Board.

General approval to repurchase Company shares

Shareholders resolved that the Company or any of its subsidiaries may acquire 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 determine from time to time.

Acquisition of such shares is subject to the Memorandum of Incorporation of the Company, the provisions of the Companies Act, 2008, and the Listings Requirements of the JSE, provided further that acquisitions by the Company and its subsidiaries in the Company or its holding company may not, in the aggregate, exceed in any one financial year 5% of the Company’s issued share capital, or its holding company’s issued share capital.

Directors and secretary

In terms of the Company’s Memorandum of Incorporation the directors listed below retire by rotation and they offer themselves for re-election.

David Robins
Hugh Herman
Jeff van Rooyen

Information pertaining to the directors and the Company Secretary appear here.

Holding company

The holding company is Pick n Pay Holdings Limited RF (listed on the JSE).

The directors’ interest in shares, which includes their FSP share allocations where applicable, is their effective direct shareholding in the Company (excluding treasury shares) and their effective indirect shareholding through Pick n Pay Holdings Limited RF (excluding treasury shares). For further details refer to the remuneration report.

Subsidiary companies

Details of subsidiary companies are presented in note 5 of the Company financial statements.