Acquisitions committee report

This is the report of the Bidcorp acquisitions committee (committee) appointed for the financial year ended June 30 2019 in compliance with principles of good governance, the Companies Act and in terms of the JSE Listings Requirements.

The committee has a board approved charter that is annually reviewed and adopted, most recently approved at the board meeting held on November 27 2018. The charter complies with the Companies Act and King IV guidance for good governance. Copies are available either from the company secretary on request or can be downloaded from the group website.

Membership

This committee was constituted by the board on June 1 2016. The committee was appointed by the board and in line with its charter requires a minimum of three (3) independent non-executive directors. The committee members comprise Messrs DDB Band (chairman), PC Baloyi, BL Berson (CEO), DE Cleasby (CFO), B Joffe and NG Payne. Committee membership therefore includes three independent non-executive directors, two executive directors and an additional non-executive director thus exceeding the minimum charter requirements.

The board considers the membership of the committee adequate and the members are adequately experienced to perform the duties in line with the charter requirements.

Purpose

The primary purpose of the acquisitions committee is to:

  • review any significant acquisitions as determined by the group delegated levels of authority for an in-principle decision as to whether the acquisition should be investigated and pursued;
  • recommend to the board planned acquisitions that have been approved to be in the best interest of shareholders and to the future growth of the group; and
  • inform the board of acquisitions which were not recommended for consideration.

Attendance

The names of the members who were in office during the period under review and the committee meetings attended by each of the members are:

Members August 20
2018
February 11
2019
February 19
2019
April 11
2019
August 26
2019
 
DDB Band (Chairman) ^ ^ ^ ^  
PC Baloyi ^ A  ^  ^ ^  
BL Berson ^ ^ ^ ^  
DE Cleasby ^ ^  ^  ^ ^  
B Joffe ^ ^  ^  ^ ^  
NG Payne ^ ^ ^ ^  

^ Attended in person, by video-conference or tele-conference.
A Apologies.

Duties carried out

The committee met five times over the period under review, as well as ongoing engagement throughout the period under review to discuss and consider acquisition prospects as identified by management. The meetings constituted over the review period focused on the following significant acquisitions and/or disposals:

  • an update on the steps taken in relation to the UK Discontinued Operations;
  • the acquisition of the remaining minority of the D&D bolt-on acquisition in Italy;
  • the acquisition of Punjab Kitchen, a food preparation entity in the UK; and
  • strategic discussions around the group approach in structuring of acquisitions, both past and future.

Acquisition cash spend for the year ended June 30 2019 amounted to R449 million (F2018: R966 million). These acquisitions included the acquisition of the Punjab Kitchen.

Several small bolt-on acquisitions, that were not within the delegated authority requirements for the committee included acquisitions in South Africa, Chile, Australia, as well as the acquisition of Igartza in Spain.

Conclusion

The committee has considered its performance over the period under review and is comfortable that it has met its duties and responsibilities as set out in the board approved acquisitions committee charter.

Signed on behalf of the acquisitions committee by:

Doug Band
Chairman