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| The Bidvest Group Limited 129 Annual report 2007 Directors’ report The directors have pleasure in presenting their report and audited financial statements for the year ended June 30 2007. |
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| Nature of business |
| The Company is an investment holding company with subsidiaries operating in services, trading and distribution. Details of the Group’s activities are included in the review of operations. |
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| Financial reporting |
The directors are required by the Companies Act of South Africa to produce financial statements which fairly present the state of affairs of the Group and the Company as at the end of the financial year and the profit or loss for that year, in conformity with International Financial Reporting Standards (IFRS) and the Companies Act of South Africa.
The financial statements as set out in this report have been prepared by management in accordance with IFRS and the Companies Act of South Africa and are based on appropriate accounting policies, which are supported by reasonable and prudent judgements and estimates.
The directors are of the opinion that the financial statements fairly present the financial position of the Group and of the Company as at June 30 2007 and the results of their operations and cash flows for the year then ended.
The directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Group continues to adopt the going-concern basis in preparing the financial statements. |
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| Acquisitions and disposals |
| Total acquisitions amounted to R908,3 million during the year, including the acquisition of the Angliss Asia Group (refer note 11 of the Group financial statements). |
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| The only disposals during the year were disposals of interests in associates and reductions of shareholdings in subsidiaries. |
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| Results of operations |
| The results of operations are dealt with in the consolidated income statement, segmental analysis and review of operations. |
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| Share capital |
| The Company issued a total of 5 575 569 ordinary shares of 5 cents each at premiums of between R17,50 and R108,49 per share, in terms of The Bidvest Incentive Scheme. Of these ordinary shares, 3 923 000 were in respect of the share purchase scheme and the balance in respect of the share option scheme (refer note 26 of the Group financial statements). |
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| Movement in treasury shares |
| In terms of general authorities granted to the Company to repurchase its ordinary shares, the latest being shareholder authority obtained at the last annual general meeting, a maximum of 66 150 793 ordinary shares could be acquired by the Company of which 33 075 397 can be acquired by its subsidiaries. A subsidiary and The Bidvest Incentive Scheme acquired a total of 21 923 798 ordinary shares at an average price of R86,12 per share. Included in the total acquisitions are 18 000 000 ordinary shares acquired by a subsidiary from Dinatla Investment Holdings (Pty) Limited (“Dinatla”) in terms of a special resolution passed at the last annual general meeting. A total of 20 045 632 ordinary shares was disposed of by a subsidiary at an average price of R59,29 per share, of which 17 928 046 shares were issued in terms of the Group’s obligation to the Bidvest option holders, with the balance being issued to staff members on exercise of their share options. |
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| Distributions out of share premium in lieu of dividends |
| A cash distribution out of share premium of 207,0 cents per share, in lieu of a dividend, was paid to shareholders on October 2 2006. |
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| A cash distribution out of share premium of 198,0 cents per share, in lieu of a dividend, was paid to shareholders on April 2 2007. |
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| Subsequent to year end a distribution out of share premium of 248,4 cents per share, in lieu of a dividend, was awarded. The salient dates are: |
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| Distribution dates: |
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| Last day to trade cum-distribution |
Friday, September 14 2007 |
| Trading ex-distribution commences |
Monday, September 17 2007 |
| Record date |
Friday, September 21 2007 |
| Payment date |
Tuesday, September 25 2007 |
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| Payments to shareholders |
Approval was obtained at the last annual general meeting for the Company to make payments which would reduce its share capital, share premium, reserves and/or any capital redemption reserve fund in terms of section 90 of the Companies Act of South Africa.
Shareholders will be requested at the forthcoming annual general meeting of the Company to be held on November 7 2007 to consider the ordinary resolution to pay by way of a reduction of share capital or share premium, in lieu of a dividend, an amount equal to the amount which directors of the Company would have declared and paid out of profits in respect of the Company’s interim and final dividends for the financial year ending June 30 2008. |
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| Special resolutions |
| Special resolutions were passed at the annual general meeting of shareholders held on October 31 2006 in regard to: |
| – |
a general authority to enable the Company to acquire its own shares; |
| – |
the cancellation of the articles of association and adoption of new articles in order to incorporate amendments to the Companies Act, including the electronic transmission of documents and to take into account special resolutions passed since 1990, previously approved by shareholders; and |
| – |
authorisation to repurchase 18 000 000 ordinary shares in the Company, being a specific repurchase from Dinatla by BB Investment Holdings (Pty) Limited, a wholly owned subsidiary of the Company. |
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| Special resolutions were passed by certain subsidiaries to accommodate the acquisition of various businesses, to amend articles of associations and to change their names. |
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| Directorate |
| The following changes to the board were recorded: |
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| MBN Dube resigned as an executive director on September 1 2006 but retains her position on the board as a non-executive director; CH Kretzmann retired on June 26 2007; DE Cleasby, formerly an alternate director to P Nyman, was appointed as financial director on July 9 2007; G Marcus and BE Moffat resigned on August 21 2007; and T Slabbert, previously an alternate director, was appointed as a non-executive director on August 21 2007. |
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| In terms of the Company’s articles of association the following directors retire at the forthcoming annual general meeting: |
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| FJ Barnes, MC Berzack, B Joffe, S Koseff, P Nyman, JL Pamensky, MC Ramaphosa and AC Salomon retire by rotation. DE Cleasby and T Slabbert retire in terms of article 53.3 of the articles of association. All retiring directors are eligible and available for re-election. |
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| The names of the directors who were in office during the period September 2 2006 to August 24 2007 and the number of meetings attended by each of the directors is: |
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| Director |
Board |
Acquisition
committee |
Audit
committee |
Nomination
committee |
Remuneration
committee |
Risk
committee |
Transformation
committee |
| Non-executive |
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| MC Ramaphosa |
5/5 |
|
|
0/1 |
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| DDB Band |
4/5 |
1/1 |
5/5 |
1/1 |
2/2 |
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| LG Boyle (A) |
5/5 |
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| AA Da Costa |
5/5 |
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| MBN Dube (A) |
5/5 |
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|
0/2 |
| S Koseff |
4/5 |
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| RM Kunene |
3/5 |
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| D Masson |
4/5 |
1/1 |
2/5 |
|
0/2 |
4/4 |
|
| JL Pamensky |
5/5 |
1/1 |
5/5 |
1/1 |
2/2 |
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| NG Payne |
4/5 |
|
5/5 |
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4/4 |
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| T Slabbert (B) |
3/3(C) |
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0/1 |
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1/2 |
| FDP Tlakula |
2/5 |
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0/2 |
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| Executive |
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| B Joffe |
5/5 |
1/1 |
|
1/1 |
2/2(E) |
4/4 |
2/2 |
| FJ Barnes |
5/5 |
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| BL Berson |
4/5 |
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| MC Berzack |
5/5 |
1/1 |
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4/4 |
2/2 |
| DE Cleasby (B) |
5/5(D) |
1/1 |
5/5(D) |
|
2/2 |
4/4(D) |
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| AW Dawe |
5/5 |
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4/4 |
1/2 |
| LI Jacobs |
5/5 |
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2/2 |
| P Nyman |
5/5 |
|
5/5 |
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2/2 |
4/4 |
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| SG Pretorius |
5/5 |
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4/4 |
1/2 |
| LP Ralphs |
5/5 |
1/1 |
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3/4 |
1/2 |
| AC Salomon |
5/5 |
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5/5 |
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3/4 |
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| Alternates |
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| LJ Mokoena |
n/a |
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| Former directors |
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| CH Kretzmann |
4/4 |
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3/3 |
1/1 |
| G Marcus |
4/4 |
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| BE Moffat |
0/2 |
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0/3 |
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| (A) |
formerly an executive director. |
| (B) |
formerly an alternate director. |
| (C) |
two meetings representing BE Moffat. |
| (D) |
four board meetings, four audit committee meetings and three risk committee meetings by invitation. |
| (E) |
by invitation. |
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| Directors’ interests |
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| The aggregate interests of the directors in the capital of the Company at June 30 2007 were: |
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Number of shares |
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2007 |
2006 |
| Beneficial |
4 963 022 |
6 853 281 |
| Non-beneficial |
28 073 469 |
43 381 528 |
| Held in terms of The Bidvest Incentive Scheme |
|
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| Options |
2 990 282 |
3 837 283 |
| Shares |
1 160 000 |
– |
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| Directors’ shareholdings |
| The individual interests declared by the current directors and officers in the Company’s share capital at June 30 2007 held directly or indirectly were: |
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| Beneficial |
2007 |
2006 |
| Director |
Direct |
Indirect |
Direct |
Indirect |
| BL Berson |
8 |
|
8 |
|
| MC Berzack |
44 386 |
|
41 456 |
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| AA Da Costa |
|
144 771 |
|
241 209 |
| LI Jacobs |
|
1 858 396 |
|
1 841 471 |
| B Joffe |
129 068 |
|
449 032 |
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| S Koseff |
8 |
|
8 |
|
| RM Kunene |
|
442 289 |
|
737 129 |
| D Masson |
8 |
3 242 |
8 |
3 028 |
| LJ Mokoena |
|
220 860 |
|
368 114 |
| P Nyman |
93 528 |
|
87 761 |
|
| JL Pamensky |
8 |
|
8 |
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| SG Pretorius |
25 000 |
|
25 000 |
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| LP Ralphs |
242 657 |
|
274 986 |
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| MC Ramaphosa |
|
1 558 741 |
|
2 597 501 |
| AC Salomon |
189 321 |
|
175 831 |
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| Former directors |
10 731 |
|
10 731 |
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| Total |
734 723 |
4 228 299 |
1 064 829 |
5 788 452 |
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Held in terms of The Bidvest Incentive Scheme
The Bidvest Incentive Scheme grants loans to staff and directors for the acquisition of shares in the Company. The numbers of shares and carrying values of the loans issued to directors as at June 30 2007 were: |
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2007 |
|
2006 |
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| Director |
Number
of shares |
Carrying
value of loan
R’000 |
Number
of shares |
Carrying
value of loan
R’000 |
| FJ Barnes |
100 000 |
12 600 |
|
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| BL Berson |
50 000 |
6 300 |
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| MC Berzack |
150 000 |
16 205 |
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| DE Cleasby |
75 000 |
8 102 |
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| AW Dawe |
100 000 |
10 803 |
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| LI Jacobs |
50 000 |
5 402 |
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| B Joffe |
200 000 |
21 607 |
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| P Nyman |
50 000 |
5 402 |
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| SG Pretorius |
150 000 |
16 205 |
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| LP Ralphs |
150 000 |
16 205 |
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| AC Salomon |
75 000 |
8 102 |
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| MA David (Secretary) |
10 000 |
1 080 |
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| Total |
1 160 000 |
128 013 |
– |
– |
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| Non-beneficial |
| In addition to the aforementioned holdings: |
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| – |
B Joffe is a trustee and potential beneficiary of a discretionary trust holding 3 363 488 (2006: 3 363 484) shares; |
| – |
P Nyman is a trustee of various trusts holding 5 357 049 (2006: 5 046 549) shares but has no beneficial interest in these shares; |
| – |
D Masson and P Nyman are trustees of the Group’s retirement funds which hold 938 798 (2006: 783 724) shares. P Nyman is also a trustee of a Group medical aid society which holds 29 825 (2006: 30 175) shares; and |
| – |
AA Da Costa, LI Jacobs, RM Kunene and LJ Mokoena are directors and shareholders of Dinatla and their indirect beneficial holdings have been included in the table of holdings. P Nyman and T Slabbert are also directors of Dinatla but have no beneficial interest in Dinatla’s shares. Dinatla holds 27 001 744 (2006: 45 001 744) shares. |
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| The only director who was directly or indirectly interested in excess of 1% of the Company’s issued share capital was B Joffe. |
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Number of shares |
| |
2007 |
2006 |
| Beneficial |
129 068 |
449 032 |
| Held in terms of The Bidvest Incentive Scheme |
200 000 |
– |
| Non-beneficial |
3 363 488 |
3 363 484 |
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3 692 556 |
3 812 516 |
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| The interests of the directors remained unchanged from the end of the financial year to the date of this report. |
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Directors’ remuneration
The remuneration paid to directors while in office of the Company during the year ended June 30 2007 can be analysed as follows: |
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Basic
remuneration
R’000 |
Other
benefits
R’000 |
Retire-
ment/
medical
benefits
R’000 |
Cash
incentives
R’000 |
Total
emoluments
R’000 |
Share-
based
payment
expense
R’000 |
2007
Total
R’000 |
2006
Total
R’000 |
| Executive |
|
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| FJ Barnes |
4 184 |
237 |
240 |
2 092 |
6 753 |
183 |
6 936 |
6 042 |
| BL Berson |
2 050 |
145 |
445 |
2 042 |
4 682 |
156 |
4 838 |
3 668 |
| MC Berzack |
2 413 |
320 |
419 |
2 800 |
5 952 |
1 443 |
7 395 |
5 869 |
| DE Cleasby |
1 185 |
207 |
134 |
1 000 |
2 526 |
545 |
3 071 |
|
| AW Dawe |
1 920 |
89 |
289 |
1 800 |
4 098 |
723 |
4 821 |
|
| LI Jacobs |
892 |
122 |
129 |
600 |
1 743 |
576 |
2 319 |
1 752 |
| B Joffe |
5 836 |
586 |
372 |
7 422 |
14 216 |
2 033 |
16 249 |
13 528 |
| P Nyman |
1 303 |
79 |
117 |
1 000 |
2 499 |
731 |
3 230 |
2 781 |
| SG Pretorius |
2 366 |
180 |
483 |
3 000 |
6 029 |
1 249 |
7 278 |
6 146 |
| LP Ralphs |
2 388 |
365 |
283 |
2 500 |
5 536 |
1 443 |
6 979 |
5 190 |
| AC Salomon |
1 820 |
187 |
206 |
1 800 |
4 013 |
1 023 |
5 036 |
4 075 |
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| Former directors |
|
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| LG Boyle |
|
3 196 |
|
|
3 196 |
|
3 196 |
2 512 |
| MBN Dube |
212 |
|
22 |
|
234 |
51 |
285 |
1 550 |
| CH Kretzmann |
1 856 |
91 |
175 |
600 |
2 722 |
783 |
3 505 |
3 727 |
| Directors who resigned in 2006 |
|
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16 493 |
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| 2007 Total |
28 425 |
5 804 |
3 314 |
26 656 |
64 199 |
10 939 |
75 138 |
73 333 |
| 2006 Total |
30 650 |
3 365 |
3 793 |
23 010 |
60 818 |
12 515 |
73 333 |
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Directors’
fees
R’000 |
Other
services
R’000 |
Total
emoluments
R’000 |
Share-
based
payment
expense
R’000 |
2007
Total
R’000 |
2006
Total
R’000 |
| Non-executive |
|
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|
| DDB Band |
223 |
|
223 |
|
223 |
128 |
| LG Boyle † |
72 |
|
72 |
662 |
734 |
|
| AA Da Costa |
72 |
|
72 |
|
72 |
39 |
| MBN Dube † |
56 |
|
56 |
257 |
313 |
|
| S Koseff |
54 |
|
54 |
|
54 |
33 |
| RM Kunene |
54 |
|
54 |
|
54 |
33 |
| D Masson |
207 |
153 |
360 |
|
360 |
278 |
| LJ Mokoena |
14 |
|
14 |
|
14 |
17 |
| JL Pamensky |
214 |
83 |
297 |
|
297 |
137 |
| NG Payne |
198 |
|
198 |
|
198 |
|
| MC Ramaphosa |
400 |
|
400 |
|
400 |
360 |
| T Slabbert |
32 |
|
32 |
|
32 |
34 |
| FDP Tlakula |
45 |
|
45 |
|
45 |
|
| |
|
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| Former directors |
|
|
|
|
|
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| G Marcus |
72 |
|
72 |
|
72 |
33 |
| BE Moffat |
81 |
|
81 |
|
81 |
82 |
| |
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| Directors who resigned in 2006 |
|
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|
|
|
508 |
| |
|
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|
|
|
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| 2007 Total |
1 794 |
236 |
2 030 |
919 |
2 949 |
1 682 |
| 2006 Total |
1 226 |
170 |
1 396 |
286 |
1 682 |
|
† formerly an executive director.
Directors’ service contracts
Directors do not have fixed-term contracts. |
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| Directors’ and officers’ disclosure of interest in contracts |
| During the financial year no contracts were entered into in which directors and officers of the Company had an interest and which significantly affected the business of the Group. The directors had no interest in any third party or company responsible for managing any of the business activities of the Group. |
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| Secretary |
| Ms MA David is the company secretary. The business and postal addresses of the secretary, which are also the registered addresses of the Company, are reflected in the administration. |
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| Details of the directors’ and officers’ outstanding share options |
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Share options at
June 30 2006 |
Share options exercised |
Share options at
June 30 2007 |
| Director |
Number |
Average
price
R |
Number |
Average
price
R |
Benefit
arising on
exercise
of options
R’000 |
Number |
Average
price
R |
| FJ Barnes |
55 000 |
47,64 |
18 750 |
43,00 |
1 866 |
36 250 |
50,04 |
| BL Berson |
42 000 |
48,56 |
|
|
|
42 000 |
48,56 |
| MC Berzack |
296 252 |
44,89 |
20 000 |
17,55 |
2 078 |
276 252 |
46,86 |
| DE Cleasby |
78 250 |
53,95 |
8 250 |
39,29 |
840 |
70 000 |
55,68 |
| AW Dawe |
124 250 |
48,86 |
30 000 |
39,10 |
3 061 |
94 250 |
51,96 |
| LI Jacobs |
80 000 |
57,97 |
|
|
|
80 000 |
57,97 |
| B Joffe |
474 080 |
47,71 |
150 000 |
35,32 |
12 687 |
324 080 |
53,45 |
| P Nyman |
526 200 |
41,68 |
|
|
|
526 200 |
41,68 |
| SG Pretorius |
135 000 |
58,11 |
|
|
|
135 000 |
58,11 |
| LP Ralphs |
615 000 |
43,99 |
|
|
|
615 000 |
43,99 |
| AC Salomon |
460 000 |
45,29 |
|
|
|
460 000 |
45,29 |
| MA David (Secretary) |
36 250 |
53,67 |
15 000 |
46,19 |
1 399 |
21 250 |
58,96 |
| |
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| Former executive |
|
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|
|
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| directors |
|
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| LG Boyle |
355 000 |
46,20 |
130 000 |
42,65 |
11 634 |
225 000 |
48,26 |
| MBN Dube |
85 000 |
55,35 |
|
|
|
85 000 |
55,35 |
| |
3 362 282 |
46,46 |
372 000 |
38,14 |
33 565 |
2 990 282 |
42,22 |
| Former director |
|
|
|
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|
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| CH Kretzmann |
475 001 |
46,13 |
50 000 |
40,20 |
5 046 |
|
|
| Total |
3 837 283 |
46,21 |
422 000 |
38,39 |
38 611 |
2 990 282 |
42,22 |
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| These options are exercisable over the period July 1 2007 to May 31 2015. A detailed register of options outstanding by tranche is available for
inspection at the Company’s registered office. |
| |
| Secretary |
| Ms MA David is the company secretary. The business and postal addresses of the secretary, which are also the registered addresses of the
Company, are reflected in the administration. |
| |
Subsidiaries and joint ventures
The attributable interest of the Company in the aggregate net profits and losses for the year of its subsidiaries and joint ventures was: |
| |
2007 |
2006 |
| |
|
|
| Profits |
2 840 163 |
2 421 210 |
| Losses |
(33 257) |
(32 493) |
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