Pick n Pay Holdings Limited RF

audit and risk committee report

The audit and risk committee is a statutory committee, required by the Companies Act, and functions within a charter approved by the Board. The committee members were confirmed for appointment at the AGM on 2 June 2014.

ROLE OF THE COMMITTEE

The audit and risk 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, 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, members of the committee are appointed annually by the Board for the ensuing financial year and in compliance with King III and are appointed by shareholders at the annual general meeting.

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

MEETINGS AND ACTIVITIES

The committee’s main responsibilities are discharged by the audit and risk committee elected for Pick n Pay Stores Limited. Refer to here for this committee’s report.

INDEPENDENCE OF EXTERNAL AUDITORS

The audit and risk committee is satisfied as to the independence of the Group’s external auditors, KPMG Inc. and its respective audit partners.

TENDER

After finalisation of the 2015 financial result, the KPMG external audit partner rotated off the audit. It was decided that the timing was opportune to conduct a tender to establish which service provider should be appointed as external auditor. Six auditing firms, including existing auditors KPMG Inc., were approached to tender for appointment as the external auditor.

The outcome of the tender will be determined in mid-June 2015.

As shareholders are required to vote on the appointment of the external auditors of the Company , the notices and proxies of the 2015 annual general meetings will be published on our website, www.picknpayinvestor.co.za, and posted to shareholders and interested parties on Friday, 26 June 2015.

POLICY ON NON-AUDIT SERVICES

All non-audit services provided by the Company ’s external auditors are pre-approved by the audit and risk committee. The total fee for non-audit services provided should not exceed 50% of the total auditor’s remuneration.

EXPERTISE AND EXPERIENCE OF CHIEF FINANCE OFFICER AND FINANCE FUNCTION of Pick n Pay stores limited group

The audit and risk committee has considered and confirmed the composition, experience, resources and skills of the finance function of the Pick n Pay Stores Limited Group. The audit and risk committee is satisfied that Bakar Jakoet has the appropriate expertise and experience for his position of Chief Finance Officer of the Pick n Pay Stores Limited Group.

APPROVAL OF THE AUDIT and risk COMMITTEE REPORT

The committee confirms that it has functioned in accordance with its charter for the 2015 financial year and that its report to shareholders has been approved by the Board.

The committee confirmed its satisfaction with the performance and level of service rendered by the external auditor.

As stated above, the Board has, on the recommendation of the committee, initiated a tender process to establish who to recommend to shareholders as the external auditors of the Company . On completion of the tender process, the external auditors will be recommended for election by shareholders at the 2015 annual general meeting.

René de Wet

Chairman: audit and risk committee

Cape Town
20 April 2015