Pick n Pay Holdings Limited RF

corporate governance report

This report deals with the corporate governance of Pick n Pay Holdings Limited RF, the investment holding company of Pick n Pay Stores Limited. Pick n Pay Holdings Limited RF’s sole purpose is the holding of the controlling shareholding in Pick n Pay Stores Limited and the Company has minimal operating activities. Only principles specific to Pick n Pay Holdings Limited RF are included in this report as most principles have been addressed in the Pick n Pay Stores Limited corporate governance report (see here).

Directors

The Board comprises six non-executive directors of whom three are independent. In addition, there are three alternate directors who are available to step in for a non-executive director should the need arise. The alternate directors have a standing invitation to attend all Board meetings, but only vote in the absence of the director for whom they alternate. As the Chairman, Raymond Ackerman, is not independent, Hugh Herman has been appointed as the lead independent director (LID). All members of the Board have unfettered access to the LID when required. The Company has an exemption from the JSE Listings Requirement to have executive directors, as it has minimal operating activities.

Appointment of directors

The appointment of all directors and alternate directors to the Board requires shareholder approval at the annual general meeting (AGM). On appointment to the Board new directors are required to retire and offer themselves for re-election by shareholders at the first AGM following their original appointment. Directors are elected for three-year terms.

Independence of directors

Of the three independent non-executive directors, Hugh Herman and René de Wet have held their positions for longer than nine years. Their independence has been thoroughly scrutinised given their years of service on the Board. The Board is satisfied that, despite their length of service, they remain independent, tough-minded individuals with personal integrity, and they translate their experience in the Group into meaningful interrogation of the Group’s implementation of its strategy. All three independent directors meet the criteria for independence as established by King III, the Companies Act and the JSE Listings Requirements. Directors who are members of the Ackerman family are not independent given their indirect controlling shareholding of the Group.

Board sub-committees

Pick n Pay Holdings Limited RF has a separate audit and risk committee consisting of non-executive directors, but it does not have separate remuneration, risk, nomination, corporate governance and social and ethics committees as the tasks relating to these committees are undertaken by the Group as a whole.

Remuneration report

No separate remuneration report is presented as the only remuneration paid by the Company is non-executive directors’ remuneration which is approved by the Board as a whole.

Fees proposed for next year, for Board members not serving on the Pick n Pay Stores Board, are as follows:

Directors’ interest in shares – Pick n Pay Holdings Limited RF

Directors’ interest in shares – Pick n Pay Holdings Limited RF

ASPECTS OF King III

Dispensation by JSE

• The Pick n Pay Holdings Limited RF Board of directors currently does not comply with the King III requirement to have a minimum of two executive directors. The Company has been exempted by the JSE from the requirement to have executive directors, as it is acknowledged that the Company has no material operating activities other than the receipt of and payment of dividends, and the assessment of the carrying value of its only investment, being its shareholding in Pick n Pay Stores Limited.
• Pick n Pay Holdings Limited RF has been granted a dispensation from the JSE Listings Requirement that a listed company has a full-time finance director, given that the Company has no material operating activities, as set out above.
• Pick n Pay Holdings Limited RF has been granted an exemption by the Companies Tribunal from the need to appoint a social and ethics committee, as this function is fulfilled by the social and ethics committee formed by the Board of Pick n Pay Stores Limited.
• Pick n Pay Holdings Limited RF has been granted dispensation from the JSE Listings Requirements of having remuneration, risk, nomination and corporate governance committees, as these functions are fulfilled for the Group by the Board committees formed by Pick n Pay Stores Limited.

Aspects of King III reviewed

The Board comprises an equal number of independent and non-independent directors, while King III recommends that a Board comprises a majority of independent directors. No changes to the Board are anticipated at this time, given the minimal operating activities of the Company .

Directors’ attendance and activities at meetings

Board meetings

In addition to the annual general meeting, the Board convenes a minimum of three times per year for formal meetings, with additional meetings scheduled when necessary. The table below details each directors’ Board meeting attendance during the past financial period, as well as the activities undertaken by the Board during the period:

Raymond Ackerman

Cape Town
20 April 2015