Bidvest Namibia Highlights and challenges Turnover rises 10,7% to R4,0 billion despite pressure on fishing volumes Namsov investigation of refrigerated seawater (RSW) technology confirms potential for stepped-up onshore operations Bidfish remains a significant contributor to Africa’s food security Bidcom shows improvement, with good contributions from Freight and Logistics and Commercial and Industrial SMEs emerge as fast-growing segment of Bidcom’s customer base Caterplus returns to profitability but stevedoring hit by rising costs Manica Business Centre launched and preparations made to enter bunkering services Material issues and risks Management of commercial fish stocks remains central to longterm growth Reliance on a relatively narrow profit base became a critical issue as lower direct allocations of fishing quotas impacted results Policy interventions had material effects on both the fishing and foodservice businesses Currency effects positive, but foreign exchange risks remain Worker safety a focus area, with zero fatalities reported

Back from left: Hans-Werner Timke, Managing director of Freight and Logistics; Theo Mberirua, Commercial director of Bidcom; Werner Schuckmann, Managing director of Commercial and Industrial Products and Services and Quentin King, Managing director of Food and Distribution. Front from left: Jan Arnold, Managing director of Bidvest Namibia Fisheries Holdings; Theresa Weitz, Group financial director and Sebulon Inotila Kankondi, Chief executive officer Bidvest Namibia Limited is listed on the Namibian Stock Exchange. Bidvest Namibia’s operating divisions are under two holding companies namely Bidvest Namibia Fisheries Holdings (Bidfish) which is focused on the fishing industry in Namibia and Angola and Bidvest Namibia Commercial Holdings (Bidcom). Bidcom is divided into three divisions, namely Freight, Logistics, Marine Services and Material Handling; Food and Distribution; and Commercial and Industrial Services. Bidfish operates one of Africa’s most efficient fishing fleets and has a high reputation for quality delivery into Namibian and African markets. Horsemackerel is the core activity, but Bidfish’s product range also includes canned fish, oysters and other products. Operating companies within Bidcom have a broad spectrum of well-recognised brands and an extended distribution network throughout Namibia QUICK LINK: Bidvest Namibia Annual Report QUICK LINK: Bidvest Namibia Notice of Annual General Meeting

Performance   Turnover (R’billion)   Trading profit (R’billion) People   People 2012   2013   2014   Total people 3 110   3 203   3 239   Training spend R’m (excluding bursaries and learnerships) 2,5   2,5   2,7   CSI spend R’m (including bursaries) 8,7   20,2   26,2   Community interaction is built into the way Bidvest works Sebulon Kankondi Planet   Carbon emissions 2012   2013   2014   Total Tonnes of CO2 108 646   103 173   101 814   Emission per FTE (for Bidvest Namibia) 34,93   32,21   31,43   Fisheries contribution to carbon 103 547   95 653   98 297   Emission per FTE (for fisheries) 57,94   53,83   55,22   Diesel usage ((Mℓ) 36,4   35,4   36,0   Electricity usage (GJ) 22 729   31 153   32 407   Responsible environmental practice is crucial to the proper commercial management of our business. Our fishing operations are dependent on effective long-term fish biomass and cooperate fully with the Ministry of Fisheries to assure the recovery of fish stock . QUICK LINK: Comparative sustainability data http://www.bidvest.com/ar/bidvest_ar2014/sus-com-data.php QUICK LINK: Bidvest greenhouse gas inventory http://overendstudio.com/online_reports/bidvest_ar2014/pdf/greenhouse-carbon-footprint.pdf

Future

Results in the year ahead will be influenced by the total allowable catch (TAC) available to our fleet and the quotas granted to Bidfish. Increases in our quota allocation cannot be assumed and maintaining high levels of fleet utilisation is a strategic imperative.

If appropriate, our fleet may explore opportunities in new fishing grounds. Cost containment is also critical and early in the new period, preliminary arrangements were made to lay up two vessels.

Bidfish will further explore opportunities for onshore processing while looking to expand and diversify its range. Prospects in Angola look promising and a positive contribution is expected from Pesca Fresca following the resolution of legal issues.

Product innovation and the exploration of new opportunities will be the main areas of focus for all our businesses.

Bidcom will continue to expand its infrastructure while seeking operational efficiencies. Manica’s new bunkering services business was launched at the beginning of the new year. Bunkering is a growth area and the new operation will further diversify income streams.

Major investment in the mining industry creates growth opportunities for several Bidcom operations. The level of activity in the oil and gas exploration sector seems to have reached a plateau. However, these activities will continue to create opportunities for Freight and Logistics.

Diversification of the business base remains a priority and opportunities for acquisitive growth outside the fishing industry will be closely scrutinised.

Material issues and business risks

The availability of commercial fish stocks remains the key underlying factor governing the sustainable operation of Bidfish, the principal profit generator at Bidvest Namibia. This is addressed by ongoing cooperation with the Ministry of Fisheries and Marine Resources to assure responsible biomass management. Results have largely been satisfactory as the key horse-mackerel resource has recovered strongly.

This issue remains a priority for management. However, in 2014 another strategic concern came into sharp focus – reliance on a relatively narrow profit base.

Historically, Bidvest Namibia has been largely reliant on income from its fishing businesses. Lower volumes and higher costs within Bidfish have highlighted the need for further diversification of income streams. Pressure is attributable to lower direct allocation of fishing quotas.

Bidcom operations are responding to the diversification challenge by seeking continued growth in the freight, foodservice, distribution, commercial and industrial sectors. Acquisitive opportunities will continue to be explored to bring improved balance to the overall business.

Policy matters and the prospect of various forms of official intervention constitute a related risk. Restrictions on fishing quotas for major industry players are the result of policies in favour of community-based entrants to the fishing industry.

The year was also notable for other state interventions. The Nigerian authorities banned some fish imports. The DRC imposed a price cap on some fish products. To protect local producers, the Namibian government has restricted some imports of poultry and dairy products.

All interventions had a material impact on our business. For example, T&C lost 60% of its dairy volumes, though it reacted promptly by successfully marketing alternative products.

We address these risks by staying as close as possible to policymakers. In addition, the breadth of our product and service offering and our extensive supply arrangements enable us to counteract lost volumes in one area by finding replacement volumes in another.

We study policy guidelines closely. A further challenge arises when government agencies appear to make changes to policy at operational level or fail to adhere to parameters that had previously been agreed.

Currency risk is ever present as prices for our major product line – seafood – are denominated in US dollars. In addition, many inputs have to be imported and foreign exchange is needed for the remuneration of foreign personnel in our fishing fleet.

On balance, the effects of currency weakness were beneficial in 2014, but a strengthening Namibian dollar can have material impact on our businesses. Our operations continually seek efficiencies (eg to limit fuel usage) and forward cover is taken where appropriate.

Major infrastructure projects create opportunities for growth. For example, major investment in the mining industry created opportunities for some of our businesses in 2014. However, management vigilance is necessary as reliance on major project work can create risks. For instance, the development of the Kudu gas field led to much excitement, only for further work on the project to stall.

In Namibia, skills shortages have long created a national challenge. We address the issue through constant and growing investment in training. We seek to retain talent by offering opportunities for advancement within the business and by providing opportunities for continued training.

Commercial risk in the business-to-business environment is addressed by increased focus of debtors management.

Performance and trading conditions

Performance was mixed. Our fishing operations came under pressure as quotas were 30% lower than traditional levels, impacting fleet utilisation. Bidcom showed some significant improvements, with good contributions from Freight and Logistics and Commercial and Industrial Services.

Turnover rose 10,7% to R4,0 billion (2013: R3,6 billion). However, trading profit fell to R493,7 million (2013: R592,2 million).

Exchange rate weakness was beneficial but was not enough to compensate for rising costs – including the cost of quota acquisition from third parties – and lower selling prices.

Lower prices were attributable to several factors and highlight the influence of global events on trading conditions in our market. One effect of upheavals in Ukraine was depressed prices in some African fish markets. As east European demand for affordable fish fell away, suppliers brought these products into African markets. Price softness was the result.

Margins tightened further to 17,4% (2013: 16,5%). Strong focus was maintained on expense management and debtors controls improved overall. The incidence of accounts outstanding for more than 60 days fell from 7,2% to 6,1%. However, areas for improvement have been identified in some businesses.

Return on funds employed fell from 51,5% to 37,7%.

Capital expenditure fell to R82,3 million (2013: R117,3 million) as last year’s expenditure was inflated by exceptional spend late in the period, while in 2014 annual expenditure on new units for the rental fleet fell away following the disposal of our Budget Rent a Car business.

We sold the operation to Bid Services Division (Pty) Limited for R3,2 million.

Highs and lows

Namsov, our horse-mackerel fishing business, bore the brunt of lower quotas, but our sardine businesses performed well. Performance by Bidfish’s Angolan subsidiary, Pesca Fresca, remained unsatisfactory, though improvements were evident by year-end. Bidfish remains a major contributor to food security across many African markets.

Namsov investigated the application of new technology through the R20 million charter of a refrigerated seawater (RSW) trawler. Namsov’s pelagic trawlers currently freeze, store and pack fish on board. The RSW system brings the catch to harbour for onshore processing. Success of the RSM initiative may pave the way for a new approach, with greater reliance on shore-based operations.

Restructure at Steiner led to improved results and the Waltons turnaround gained traction. Kolok did especially well. Caterplus benefited from management and distribution changes, gained market share and returned to profit. It has established a national network of branches, part of the retail infrastructure expansion and modernisation strategy at Food and Distribution.

Voltex showed improvement late in the period, though 12-month results remained disappointing. Stevedoring was impacted by cost pressures and the operation was downsized. Unfortunately, 60 jobs were lost.

Government’s policy of support for small and medium business created challenges for several of our operations. However, SMEs rapidly emerged as a fast-growing element of our customer base as they came to the market leaders to meet orders placed by government departments. To support these SME customers, we set up an in-house credit facility. Access to credit lines was well received by SME customers of Minolta, Waltons, Cecil Nurse and Voltex.

Expenditure on trucks and side-loaders was maintained to further strengthen materials handling operations within Freight and Logistics.

Manica launched its Manica Business Centre, a business focused on the supply of offices, office equipment and office support services.

A bunkering services operation was set up at year-end to serve shipping lines, fishing vessels and support vessels for companies engaged in oil and gas exploration

A sustainable business

Bidvest Namibia has long been committed to sustainable business principles.

Responsible environmental practice is crucial to the proper commercial management of our business. Our fishing operations are dependent on effective long-term fish biomass management and we cooperate fully with the Ministry of Fisheries and Marine Resources to assure the recovery of fish stocks.

Responsible operational practice is highlighted by issues such as the Bidfish approach to by-catch reduction. Our on-board controls exceed minimum legal requirements. As a result, our fishmeal production again accounted for less than 5% of total wet landings. By-catch is less than 1% of total catches – testimony to the skill of our captains and crews and our support for sustainable fishing practice.

Strict procedures govern the responsible treatment of waste material while vessels are at sea. Back in port, waste is stored prior to recycling.

Sustainability champions – active in every business – are tasked with reducing the usage of material while ensuring used paper, plastics and ink cartridges are collected for recycling.

Water conservation is a focus area. Namibia is water-stressed and Namibians are well aware of the need to conserve water. Responsible usage is built into standard operating practice on all vessels as they generate fresh water from sea water. Fresh water is purchased only when in port.

The efficient use of fuel and energy and responsible waste management are good business practice, as well as good environmental practice. Similarly, the proper monitoring and control of cold storage systems and air conditioning are critical to the performance of our food and commercial businesses. Food safety is a strategic priority for our food and foodservice businesses.

Stakeholders

Bidvest Namibia is active in all parts of Namibia and engages with a wide variety of stakeholders, including government and government agencies, shareholders, employees, unions, customers, suppliers, international brand principals, industry organisations, communities, NGOs and environmental groups.

Communication is open and continuous.

Clearly, our people form a crucially important stakeholder group. We are an equal opportunity employer and invest in the continued training and development of our staff.

We take pride in our efforts to Namibianise operations that were historically reliant on foreign expertise. For example, our training scheme to develop Namibian officers for Namibian vessels continues to achieve good results while our Namibianisation development programmes promote the recruitment and advancement of Namibians.

All companies comply with the Affirmative Action (Employment) Act and we submit annual affirmative action plans and reports to the Employment Equity Commissioner.

Training including learnerships and bursaries is a focus area and in 2014 training budgets rose from R5,8 million to R7,6 million.

Safety training is especially important as some of our activities are inherently dangerous. No fatalities were reported in 2014.

Our workforce is heavily unionised and the business has recognition agreements with unions in various operations. Management maintains strong lines of communication with worker representatives. No strikes occurred in 2014.

The health of our people is a key concern. In 2014, we ascertained that more than half the workforce was not covered by medical aid. To provide health services to these workers, we partnered with an NGO, the Mister Sister Mobile Health Service. Mobile clinics from the service now regularly visit our operations to provide basic health care to employees in low-income groups.

Our divisional staff resignation rate in 2014 was 2,7%.

Community interaction is built into the way Bidvest works. Our decentralised business model keeps us close to local communities. The Pandula Trust, supported by staff in all operations, ensures local interventions focus on areas of real need.

At company level, the Namsov Community Trust (a Namsov shareholder) is a major driver of CSI efforts. Focus areas include health, education, ICT, enterprise development, job creation, the environment and community upliftment.

In 2014, corporate social investment totalled R26,2 million (2013: R20,2 million).

IT progression

At Freight and Logistics, Manica further improved its service to customers by introducing a web-based track and trace system, while at Food and Distribution, the T&C IT system was rolled out to all parts of the operation.

Waltons completed the upgrade of its accounting system.