Directors' report

The directors have pleasure in presenting their report and audited financial statements for the year ended June 30 2010.

Nature of business

The Company is an investment holding company with subsidiaries operating in the services, trading and distribution industries. Details of the Group’s activities are included in Bidvest at a glance: our structure, and Operational review.

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 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 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 Company and of the Group as at June 30 2010 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.

Declaration by the audit committee

The audit committee has complied with its terms of reference as established by the board of directors and is satisfied that the external auditors, whose appointment it recommended to shareholders, were independent of the Group from July 1 2009 to the date of this report. The audit committee assisted the board in discharging its duties relating to the safeguarding of assets, accounting systems and practices, internal control processes and the preparation of accurate financial reports and statements and assisted the directors in ensuring that there is an adequate and effective system of internal control in place and supported the overall effectiveness of corporate governance processes. The audit committee determines the fees of and also sets the principles for recommending the use of the external auditors for non-audit services. To ensure that the committee can effectively comply with its terms of reference, the group financial director, the external auditors, and the head of internal audit attend the meetings as invitees. In addition, the audit committee holds separate meetings with management, external audit and the head of internal audit to ensure that all relevant matters have been identified and discussed without undue influence. Furthermore the audit committee has considered the expertise and experience of the group financial director and is satisfied to the appropriateness thereof.

Share capital

The Company issued a total of 3 889 939 (2009: 1 120 842) ordinary shares of 5 cents each at premiums of between R6,95 and R90,00 (2009: R32,00 and R71,99) per share, in terms of The Bidvest Share Incentive Scheme. The Company also issued a total of 9 555 865 ordinary shares of 5 cents each at premiums of between R98,41 and R115,21 per share, in order to facilitate the acquisition of Nowaco, and issued 414 375 ordinary shares of 5 cents each at a premium of R119,95 per share, for the acquisition of 29 250 000 ordinary shares in Amalgamated Appliances Limited.


The Group acquired 100% of the issued share capital of the Nowaco group (Nowaco) of companies with effect from July 1 2009 for an enterprise value of €250 million. Nowaco includes Nowaco Czech Republic s.r.o. which focuses on the Czech Republic and Slovakia and Farutex Sp.z.o.o. which serves the Polish market. The purchase consideration was settled with cash of €119 million and the assumption of debt equating to €131 million. The Group also undertook a number of smaller acquisitions during the year. Details of assets acquired and liabilities assumed are contained in note 11 to these financial statements.

Subsequent events

No reportable events took place subsequent to the year-end.

Results of operations

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

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 of shareholders held on November 17 2009, a maximum of 67 256 913 ordinary shares could be acquired by the Company of which 33 628 447 can be acquired by its subsidiaries. Subsidiaries acquired a total of 522 480 ordinary shares at an average price (including costs) of R47,80 per share. A total of 386 567 ordinary shares were disposed of at an average price of R42,33 per share in settlement of share options exercised.


A cash distribution out of share premium of 190,0 cents per share (2009: 190,0 cents per share), in lieu of a dividend, was awarded to shareholders recorded in the register at the close of business on March 26 2010.

Subsequent to year-end, a dividend of 225,0 cents per share (2009: refund of share premium in lieu of dividend 190,0 cents per share) was awarded to shareholders recorded In the register at the close of business on Thursday, September 23 2010. The salient dates are:

Distribution dates:  
Last day to trade cum-distribution Thursday, September 16 2010
Trading ex-distribution commences Friday, September 17 2010
Record date Thursday, September 23 2010
Payment date Monday, September 27 2010

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.

Special resolutions

A special resolution was passed at the annual general meeting of shareholders held on November 17 2009 in regard to a general authority to enable the Company to acquire its own shares.

Special resolutions were passed by certain subsidiaries to accommodate the acquisition of various businesses, to amend their articles of association and to change their names.


Mr FJ Barnes resigned as an executive director with effect from June 30 2010 but remains on the board as a non-executive director.

In terms of the Company’s articles of association the directors who retire by rotation at the forthcoming annual general meeting are CM Ramaphosa, FJ Barnes, LG Boyle, AA da Costa, MBN Dube, S Koseff, NG Payne and FDP Tlakula. All retiring directors are eligible and available for re-election.