Directors' report

The directors have pleasure in presenting their report for the year ended June 30 2015.

Nature of business

The Company is an investment holding company with subsidiaries operating in the services, trading and distribution industries.

Financial reporting

The directors are required by the Companies Act of South Africa (the Act), to produce financial statements, which fairly present the state of affairs of the Company and the Group as at the end of the financial year and the profit or loss for that financial year, in conformity with International Financial Reporting Standards (IFRS) and the Act.

The financial statements as set out in this report have been prepared by management in accordance with IFRS and the Act and are based on appropriate accounting policies 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 Company and of the Group as at June 30 2015 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 directors continue to adopt the going-concern basis in preparing the financial statements.

Share capital

During the year, the Company issued:

	3 576 797 (2014: 3 281 838) shares of 5 cents each pursuant to an issue of capitalisation shares from share premium to shareholders on the basis of 1,55 shares for every 100 held; and
	349 135 (2014: 220 452) shares of 5 cents each at a premium of R299,89 per share in settlement of conditional share plan awards.

Acquisitions and disposals

The Group acquired 60% of the issued share capital of Gruppo DAC (DAC) for a consideration of EUR75 million, and 75% of the issued share capital of PCL 24/7 Transport Limited (PCL), for a consideration of £37 million, with effect from July 1 2014. The remaining 25% of the issued share capital of PCL was acquired during the year for £15 million. These acquisitions form part of the Group’s strategic expansion plans in the international foodservice industry.

In February 2015 the Group made an offer to the shareholders of Adcock Ingram Holdings Limited (Adcock) to acquire up to 100% of the shares in Adcock at a price of R52,00 per share. As a result of this offer, and the acquisition of shares in the market at this time, the Group acquired a further 8,4% of the net issued capital in Adcock for a consideration of R737 million.

The Group also made a number of less significant acquisitions and disposals during the year.

Subsequent events

The Group acquired 100% of the share capital of Plumblink SA Proprietary Limited (Plumblink), with effect from July 1 2015 for an enterprise value of R446 million. Plumblink is a specialist plumbing and bathroom merchant currently operating from 61 branches strategically situated throughout South Africa.

Subsequent to year-end, the Group acquired 2,6 million Adcock ordinary shares from Adcock’s black economic empowerment (BEE) partners, Blue Falcon Trading 69 Proprietary Limited and the Mpho ea Bophelo Trust for a cash consideration of R52,00 per Adcock ordinary share. In addition, the Group supported the new Adcock BEE scheme (Scheme) and sold 15% of its Adcock shareholding to Ad-izinyosi, a new broad-based empowerment entity, for a minimum price of R52,00 and a maximum price of R72,00 per Adcock ordinary share, to be settled on the fourth anniversary of the date that the Scheme became operative. Following these transactions, the Group holds 37,7% of the net ordinary shares in issue in Adcock.

Results of operations

The results of operations are dealt with in the consolidated and separate income statement, segmental analysis and commentary.

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 annual general meeting (AGM) of shareholders held on November 24 2014, a maximum of 65 546 986 ordinary shares may be acquired by the Company, of which 32 773 493 may be acquired by its subsidiaries. No shares were acquired during the year (2014: Nil).

A total of 2 210 046 ordinary shares were disposed of at an average price of R244,51 per share in settlement of share options exercised by staff.

Dividends

The directors declared an interim gross cash dividend of 426,0 cents (362,1 cents net of dividend withholding tax, where applicable) per ordinary shares of 5 cents payable to ordinary shareholders recorded in the register on the record date, being Friday, April 17 2015. The dividend was declared from income reserves.

Subsequent to year-end the board has declared a final gross cash dividend of 483,0 cents (410,6 cents net of dividend withholding tax, where applicable) per ordinary share for the year ended June 30 2015 to those shareholders recorded in the register on the record date, being Friday, September 25 2015. The salient dates are:

Declaration date	Monday, August 31 2015
Last day to trade cum dividend	Thursday, September 17 2015
First day to trade ex dividend	Friday, September 18 2015
Record date	Friday, September 25 2015
Payment date	Monday, September 28 2015

The dividend will be paid out of income reserves. A dividend withholding tax of 15% will be applicable to all shareholders who are not exempt.

Payments to shareholders

Approval was obtained at the last AGM for the Company to make payments which would reduce its share capital, share premium, and or reserves in terms of the Act.

Special resolutions

Special resolutions were passed at the AGM of shareholders held on Monday, November 24 2014 in regard to a general authority to enable the Company to acquire its own shares, approval of non-executive directors’ remuneration for the 2015 financial year and general authority to provide financial assistance to related or inter-related companies and corporations in terms of sections 44 and 45 of the Act.

Special resolutions were passed by certain subsidiaries to accommodate the acquisition of various businesses, to change their names and the general authority to provide financial assistance to related or inter-related companies and corporations in terms of sections 44 and 45 of the Act. A number of subsidiaries passed special resolutions for the adoption of a new Memorandum of Incorporation (MoI) and amendments to the MoI.

Directorate

Adv Pansy Tlakula retired from the board at the date of the AGM being November 24 2014. Mrs Gillian Claire McMahon was appointed as an executive director with effect from May 27 2015.

In terms of the Company’s MoI, the directors who retire by rotation at the forthcoming AGM are Messrs Paul Cambo Baloyi, Alfred Anthony da Costa, Eric Kevin Diack, Alexander Komape Maditsi, Nigel George Payne and Mrs Cecilia Wendy Lorato Phalatse.

Attendance

The names of the directors who were in office during the period August 30  2014 to August 28  2015, and the details of board meetings attended by each of the directors are as follows:

Director	Date of appointment	November 24 2014	February 27 2015	May 27 2015	August 28 2015
Independent non-executive chairman
CWL Phalatse	April 20  2012	^	^	^	^
Independent non-executive directors
PC Baloyi	April 20  2012	A	^	^	^
DDB Band	October 27  2003	^	^	^	^
AA da Costa	December 8  2003	^	^	^	^
EK Diack	April 20  2012	^	^	A	^
AK Maditsi	April 20  2012	^	^	^	^
FN Mantashe	December 4  2013	^	^	^	^
S Masinga	December 4  2013	^	^	^	^
D Masson	March 10  1992	^	^	^	^
NG Payne	June 30  2006	^	^	^	^
T Slabbert	August 20  2007	^	^	^	^
Executive directors
B Joffe	March 1  1989	^	^	^	^
BL Berson	October 27  2003	^	^	^	^
DE Cleasby	July 9  2007	^	^	^	^
AW Dawe	June 30  2006	^	^	^	^
NT Madisa	December 4  2013	^	^	^	^
GC McMahon*	May 27  2015			^	^
LP Ralphs	May 19  1992	^	^	^	^

^	Attended in person, by video-conference or tele-conference.
A	Apologies tendered.
*	Appointed executive director May 27 2015.

Directors’ interests

The aggregate interests of the directors in the share capital of the Company at June 30  2015 were:

	Number of shares
	2015			2014
Beneficial	404 108			462 834
Non-beneficial	1 551 596			5 518 914
Held in terms of the Bidvest Incentive Scheme
Options	365 632			222 000
Shares	246 648			246 648

Directors’ shareholdings

Beneficial

The individual beneficial interests declared by the current directors and officers in the Company’s share capital at June 30  2015, held directly or indirectly, were:

	2015 Number of shares			2014 Number of shares
Director	Direct	Indirect		Direct	Indirect
BL Berson	8	38 313		8	38 313
DE Cleasby	80 746	–		52 433	–
AW Dawe	38 044	–		20 329	–
AA da Costa	–	24 957		–	145 158
B Joffe	75 794	–		62 579	–
D Masson	8	7 347		8	7 235
LP Ralphs	138 891	–		136 771	–
Total	333 491	70 617		272 128	190 706

Held in terms of the Bidvest Incentive Scheme

The Bidvest Incentive Scheme grants loans to staff and executive directors for the acquisition of shares in the Company. The number of shares and carrying values of the loans issued to directors and officers as at June 30  2015 were:

	2015 Number of shares			2014 Number of shares
Director	Direct	Indirect		Direct	Indirect
BL Berson	49 581	4 669		49 581	4 669
B Joffe	48 324	4 689		48 324	4 689
LP Ralphs	148 743	14 945		148 743	14 945
Total	246 648	24 303		246 648	24 303

Non-beneficial

In addition to the aforementioned holdings:

	B Joffe is a trustee and potential beneficiary of a discretionary trust holding 1 009 960 (2014: 1 009 960) shares.
	DE Cleasby and CA Brighten (company secretary) are trustees of the Group’s retirement funds which hold 541 636 (2014: 621 157) shares.

The interests of the directors remained unchanged from the end of the financial year to the date of this report.

Directors’ remuneration

The remuneration paid to executive directors, while in office of the Company during the year ended June 30  2015, is analysed as follows:

Director	Basic remuneration R’000	Other benefits and costs R’000	Retirement/ medical benefits R’000	Cash incentives R’000	Total emoluments R’000
BL Berson	9 675	244	239	10 637	20 795
DE Cleasby	3 662	428	414	4 500	9 004
AW Dawe	3 884	159	416	2 800	7 259
B Joffe	14 858	1 253	903	15 730	32 744
NT Madisa	1 833	66	165	1 500	3 564
GC McMahon*	87	10	13	1 000	1 110
LP Ralphs	8 370	740	728	8 000	17 838
2015 total	42 369	2 900	2 878	44 167	92 314

*	Appointed executive director May 27 2015.

Certain executive directors serve as non-executive directors of companies outside of the Group. Directors’ fees in this regard are paid to the Group.

For comparative purposes the remuneration paid to executive directors, while in office of the Company during the year ended June 30 2014, is analysed as follows:

Director	Basic remuneration R’000	Other benefits and costs R’000	Retirement/ medical benefits R’000	Cash incentives R’000	Total emoluments R’000
BL Berson	9 354	243	238	8 583	18 418
DE Cleasby	3 429	412	387	4 000	8 228
AW Dawe	3 614	110	386	3 600	7 710
B Joffe	13 762	1 009	842	12 340	27 953
NT Madisa*	802	35	72	1 000	1 909
LP Ralphs	7 789	886	680	7 200	16 555
2014 total	38 750	2 695	2 605	36 723	80 773

*	Appointed executive director December 4 2013.

The remuneration paid to non-executive directors, while in office of the Company during the year ended June 30 2015, is analysed as follows:

	2015
Director	Directors’ fees R’000	As directors of subsidiary companies R’000	Total emoluments R’000		2014 Total R’000
DDB Band	693	–	693		783
PC Baloyi	357	324	681		669
AA da Costa	208	–	208		163
EK Diack	517	551	1 068		1 220
AK Maditsi	259	–	259		297
S Masinga	315	–	349		98
FN Mantashe	349	–	315		98
D Masson	629	363	992		958
NG Payne	1 153	753	1 906		1 667
CWL Phalatse	1 065	–	1 065		1 000
T Slabbert	420	–	420		305
	5 965	1 991	7 956		7 258
Former directors	20	–	20		197
2015 total	5 985	1 991	7 976		7 455
2014 total	5 691	1 764	7 455

Prescribed officers

Due to the nature and structure of the Group and the number of executive directors on the board of the Company, the directors have concluded that there are no prescribed officers of the Company.

Directors’ long-term incentives

Details of the directors’ and officers’ outstanding share options are as follows:

	Share options at June 30 2014		Share options granted during the year		Share options granted during the year		Share options at June 30 2015
Director	Number	Average price R	Number	Average price R	Number	Market price R	Number	Average price R
AW Dawe	50 000	237,54	43 066	269,95	–	–	93 066	252,54
NT Madisa	52 000	205,52	43 066	269,95	–	–	95 066	234,71
GC McMahon*	45 000	193,67	20 000	250,73	7 500	287,33	57 500	201,30
LP Ralphs	120 000	61,75	–	–	–	–	120 000	61,75
	267 000	144,90	106 132	266,33	7 500	287,33	365 632	177,23
Officer
CA Brighten (company secretary)	20 000	222,90	8 078	269,95	–	–	28 078	236,44
	287 000	150,34	114 210	266,59	7 500	287,33	393 710	181,45

*	Appointed executive director May 27 2015.

These options are exercisable over the period July 1 2015 to November 30 2019. A detailed register of options outstanding by tranche is available for inspection at the Company’s registered office.

Share-based payment expense

Director	2015 R’000			2014 R’000
BL Berson	5 791			8 505
DE Cleasby	3 397			5 673
AW Dawe	2 815			2 346
B Joffe	11 723			15 378
NT Madisa	1 662			222
GC McMahon*	88			–
LP Ralphs	6 137			8 908
	31 613			41 032

*	Appointed executive director May 27 2015.

Details of directors’ and officers’ outstanding conditional share plan (CSP)

A conditional award is a conditional right to a share, which is awarded subject to performance and vesting conditions.

Director/officer	Balance at June 30 2014 Number	New awards Number	Forfeited Number*	Shares awarded Number	Closing balance June 30 2015 Number
BL Berson	190 000	37 500	(5 348)	(70 989)	151 163
DE Cleasby	125 000	20 000	(4 011)	(53 242)	87 747
AW Dawe	80 000	–	(21 257)	(29 057)	29 686
B Joffe	350 000	75 000	(8 021)	(106 484)	310 495
LP Ralphs	200 000	37 500	(5 348)	(70 989)	161 163
CA Brighten (company secretary)	7 500	–	(401)	(5 324)	1 775
Total	952 500	170 000	(44 386)	(336 085)	742 029

*	Forfeited as a result of targets not being met.

During 2015, the shares were awarded at R299,94 per share.

Summary of executive directors’ long-term incentives (LTI) including CSPs

Director	Share- based payment expense R’000	Benefit arising from the exercise of options* R’000	Benefit arising from award of CSP R’000	Gross benefits R’000	Previous share-based payment expense in respect of awards R’000	Actual LTI benefit R’000
2015
BL Berson	5 791	–	21 292	27 083	(11 605)	15 478
DE Cleasby	3 397	–	15 969	19 366	(8 704)	10 662
AW Dawe	2 815	–	8 715	11 530	(4 730)	6 800
B Joffe	11 723	–	31 939	43 662	(17 407)	26 255
NT Madisa	1 662	–	–	1 662	–	1 662
GC McMahon**	88	–	–	88	–	88
LP Ralphs	6 137	–	21 292	27 429	(11 605)	15 824
2015 total	31 613	–	99 207	130 820	(54 051)	76 769
2014
BL Berson	8 505	6 952	6 128	21 585	(5 235)	16 350
DE Cleasby	5 673	9 699	4 661	20 033	(5 449)	14 584
AW Dawe	2 346	–	4 661	7 007	(3 982)	3 025
B Joffe	15 378	–	9 324	24 702	(7 965)	16 737
NT Madisa	222	_	_	222	_	222
LP Ralphs	8 908	30 349	6 216	45 473	(5 310)	40 163
2014 total	41 032	47 000	30 990	119 022	(27 941)	91 081

*	Includes taxable benefits arising on the sale of shares and settlement of the Bidvest Incentive Scheme loans.
**	Appointed as executive director on May 27 2015.

Directors’ service contracts

Directors do not have fixed-term contracts.

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.

Secretary

During the year under review, and in compliance with paragraph 3.84(i) and (j) of the JSE Listings Requirements, the board evaluated Mr CA Brighten, the company secretary, and is satisfied that he is competent, suitably qualified and experienced. Furthermore, since he is not a director, nor is he related to or connected to any of the directors, thereby negating a potential conflict of interest, it was agreed that he maintains an arm’s-length relationship with the board.

The business and postal addresses of the secretary, which are also the registered addresses of the Company, are Bidvest House, 18 Crescent Drive, Melrose Arch, Melrose, Johannesburg, 2196 and PO Box 87274, Houghton, 2041, respectively.