Remgro invests in businesses that can deliver superior earnings, cash flow generation and dividends over the long term. OVERVIEW OF BUSINESS
4 REMGRO’S APPROACH TO REPORTING
7 SALIENT FEATURES
8 GROUP PROFILE
10 COMPANY HISTORY
12 OUR BUSINESS MODEL
14 UNDERSTANDING THE BUSINESS OF AN INVESTMENT HOLDING COMPANY
16 KEY OBJECTIVES AND PRINCIPAL INTEGRATED RISKS
18 DIRECTORATE AND MEMBERS OF COMMITTEES
20 EXECUTIVE MANAGEMENT STRUCTURE
21 SHAREHOLDERS’ DIARY AND COMPANY INFORMATION 4 OVERVIEW OF BUSINESS | Remgro’s approach to reporting
REMGRO’S APPROACH TO REPORTING
The 2019 Integrated Annual Report provides a holistic view of In order to ensure that we address all the material issues that Remgro’s business model, how the Company is managed and matter to us, our shareholders and other stakeholders, we also also how it manages its investments. In this regard our main report on matters such as: focus is to provide a complete analysis of our business to • Our business model; satisfy the information needs of key stakeholders that use the Integrated Annual Report. • Our most significant business risks and opportunities, as identified through our integrated risk management process; The information presented thus aims to provide our and stakeholders with a good understanding of the financial, social, • Governance processes. environmental and economic impacts of the Group to enable them to evaluate the ability of Remgro to create sustainable value for our stakeholders.
REPORTING SUITE The table below contains the Remgro reporting suite information detailing the assurances obtained and frameworks applied to each report.
SUITE APPLIED PRINCIPLES AND ASSURANCE OBTAINED FRAMEWORKS
Integrated Report • IIRC
Consolidated Annual Financial • International Financial Reporting Independent audit opinion by Statements Standards (IFRS) PricewaterhouseCoopers Inc. • Companies Act • JSE Listings Requirements
Sustainable development report No specific framework applied • Reviewed by: –– Management –– Internal audit/Finance –– Social and Ethics Committee and Audit and Risk Committee –– Board • Carbon Disclosure Project (CDP) verification of certain non-financial indicators
Annual results presentation Not applicable • Reviewed by: –– Management –– Finance –– Executive directors –– Investor Relations
BBBEE certificate Department of Trade and Industry’s AQRate Proprietary Limited generic Code of Good Practice www.remgro.com | Remgro Limited | Integrated Annual Report 2019 5
King IV, which was published on 1 November 2016, contains mandatory in respect of companies listed on the JSE (such as a set of principles that are fundamental to good governance, Remgro). The Board is satisfied that the Company has applied as well as related leading recommended practices. The the principles contained in King IV during the year under review. JSE Limited has incorporated certain of King IV’s recommended The Corporate Governance Report on page 66 explains how practices in the JSE Listings Requirements, with the effect Remgro has applied the principles enumerated in King IV with that some of King IV’s recommended practices are in fact reference to the practices applied by Remgro.
Remgro is an investment holding company and accordingly all references to “the Group“ in this context denote the Company and its subsidiaries.
INTEGRATED REPORTING BOUNDARY Includes the financial and non-financial boundaries as explained below. Furthermore, material matters as they relate to stakeholder concerns, risks and opportunities and 1 governance matters, are included in the disclosures of this report. FINANCIAL BOUNDARY Remgro is an investment holding company and accordingly all financial data in the summarised financial statements includes associates and joint ventures on an equity REPORTING accounted basis and subsidiaries on a consolidated basis. BOUNDARY The intrinsic net asset value of the Group includes valuations of all investments, 2 incorporating subsidiaries and associates and joint ventures, either at listed market value or, in the case of unlisted investments, at IFRS 13 “Fair Value” valuation. Refer to page 25.
NON-FINANCIAL INFORMATION BOUNDARY Data relating to the social and environmental performance of subsidiaries, associates and joint ventures, over which Remgro does not exercise operational control, are not covered in detail in this report. 3 Except where otherwise indicated, all disclosures relating to social and environmental performance thus only relate to Remgro’s activities at its head office in Stellenbosch.
SCOPE AND BOUNDARIES OF OUR REPORT Remgro has four main operating subsidiaries, i.e. RCL Foods Remgro is an investment holding company and accordingly all Limited (RCL Foods), Distell Group Holdings Limited (Distell), references to “the Group“ in this context denote the Company Siqalo Foods Proprietary Limited (Siqalo Foods) and Wispeco and its subsidiaries. Disclosure is therefore limited to those Holdings Proprietary Limited (Wispeco). As RCL Foods and entities where the Group exercises control over the financial Distell are listed on the JSE, detailed information regarding and operating policies of such entities, save where those their financial, sustainability and social performance is available entities disclose the relevant information in their own publicised on their websites at www.rclfoods.com and www.distell.co.za annual reports. respectively. 6 OVERVIEW OF BUSINESS | Remgro’s approach to reporting
Siqalo Foods and Wispeco are unlisted wholly owned subsidiaries The Unilever Spreads business was transferred to Siqalo which are operated and managed on a decentralised basis as Foods, which became a wholly owned subsidiary of Remgro on independent entities with autonomous Boards of Directors. 2 July 2018. Based on the above, as well as the fact that Siqalo Foods and Wispeco represent only 4.5% and 0.6% of Remgro’s intrinsic During the year under review, Remgro invested a further net asset value, respectively, only summarised “non-financial“ R2 855 million in Community Investment Ventures Holdings disclosure relating to social and environmental performance will Proprietary Limited (CIVH), in terms of CIVH rights issues. These be provided for Siqalo Foods and Wispeco. This is in line with share subscriptions did not alter Remgro’s interest in CIVH. Remgro’s reporting on the financial performance of its investee Remgro also advanced a loan of R100 million to CIVH, which will companies. be converted into CIVH shares subsequent to 30 June 2019.
Following on the philosophy outlined above, Remgro manages Refer to the reports of the Chief Executive Officer and Chief all investee companies on the same decentralised basis, Financial Officer on pages 25 and 32 respectively for a brief irrespective of whether they are subsidiaries, associates or joint summary of these transactions. Besides the transaction above, ventures. Therefore data relating to the social and environmental no significant events occurred during the reporting period or performance of subsidiaries, associates and joint ventures, after the end of the reporting period, which may have a material over which Remgro does not exercise operational control, are impact on the size, structure or ownership of the Group. not covered in detail in this report. However, information is provided in instances where material sustainable development BOARD APPROVAL STATEMENT issues are at stake. The Board, supported by the Audit and Risk Committee, acknowledges its responsibility to ensure the integrity and SIGNIFICANT EVENTS DURING AND AFTER completeness of the report. The Board applied its collective THE END OF THE REPORTING PERIOD mind to the preparation and presentation of the report. We On 2 July 2018 Unilever South Africa Holdings Proprietary believe that the report has been prepared in accordance with Limited (Unilever) acquired Remgro’s 25.75% shareholding the
SALIENT FEATURES R233.03 +6.0% INTRINSIC NET ASSET ORDINARY DIVIDEND VALUE PER SHARE PER SHARE
-2.6% -4.2% HEADLINE EARNINGS HEADLINE EARNINGS PER SHARE, EXCLUDING OPTION PER SHARE REMEASUREMENT
FINANCIAL NON-FINANCIAL
Year Year Year Year ended ended ended ended 30 June 30 June % 30 June 30 June 2019 2018 change 2019 2018
Headline earnings Spent on corporate social (R million) 8 195 8 573 (4.4) investment (CSI) at the centre – per share (cents) 1 448.9 1 512.6 (4.2) (R million) 24 27
Headline earnings, excluding BBBEE scorecard contributor level 7 8 option remeasurement (R million) 8 083 8 312 (2.8) Continued participation in carbon – per share (cents) 1 429.1 1 466.5 (2.6) disclosure project Yes Yes
Dividends per share Inclusion in FTSE/JSE Responsible Ordinary (cents) 564.00 532.00 6.0 Investment Index Yes Yes – Interim (cents) 215.00 204.00 5.4 – Final (cents) 349.00 328.00 6.4
Intrinsic net asset value per share (R) 233.03 256.97 (9.3)
Remgro share price at 30 June (R) 187.90 204.29 (8.0)
Percentage discount to intrinsic net asset value (%) 19.4 20.5 (5.4) 8 OVERVIEW OF BUSINESS | Group profile
GROUP PROFILE REMGRO IS A DIVERSIFIED INVESTMENT HOLDING COMPANY
Originally established in the 1940s by the late Dr Anton Rupert, Remgro’s investment portfolio has evolved substantially and currently includes more than 30 investee companies. The Company is listed on the Johannesburg Securities Exchange (JSE), operated by the JSE Limited in South Africa under the “Industrial – Diversified Industrial” sector (as at 19 September 2019), with the share code “REM”. Our interests consist mainly of investments in the banking, healthcare, consumer products, insurance, industrial, infrastructure and media and sport industries.
Our interests consist mainly of investments in the following industries:
p.42 BANKING BANKING
p.44 HEALTHCARE HEALTHCARE
p.45 CONSUMER PRODUCTS CONSUMER PRODUCTS
p.48 INSURANCE INSURANCE
p.49 INDUSTRIAL INDUSTRIAL
p.54 INFRASTRUCTURE INFRASTRUCTURE
p.58 MEDIA AND SPORT MEDIA & SPORTS
p.60 OTHER INVESTMENTS OTHER INVESTMENTS
p.62 TREASURY AND MANAGEMENT SERVICES TREASURY & MANAGEMENT
Equity accounted investment
Subsidiary
Listed entity
Number of Remgro nominated director/s; alternates excluded
(1) Voting rights in Distell equal 56.5%. (2) Effective 2 July 2018, Remgro disposed of its investment in Unilever in exchange for Unilever’s Spreads business (Siqalo Foods) in Southern Africa for R7 000 million, as well as a cash consideration of R4 900 million. www.remgro.com | Remgro Limited | Integrated Annual Report 2019 9
GROUP STRUCTURE AT 30 JUNE 2019 Remgro Limited principal investments – equity interest held
RMH 28.2%
FirstRand 3.9%
Mediclinic 44.6%
Distell(1) 31.8%
RCL Foods 77.5%
Siqalo Foods(2) 100%
RMI Holdings 30.6%
Air Products 50.0%
Kagiso Tiso Holdings 36.3%
Total 24.9%
PGSI 37.7%
Wispeco 100%
Grindrod 23.3%
Grindrod Shipping 22.7%
CIVH 54.4%
SEACOM 30.0%
eMedia Investments 32.3%
Blue Bulls 50.0%
Stellenbosch Academy of Sport 100%
Business Partners 42.8%
Millennia Jersey – Jersey 100%
Remgro Finance Corporation 100%
Remgro Healthcare Holdings 100%
Remgro International – Jersey 100%
Remgro Jersey GBP – Jersey 100%
Remgro Management Services (FSP 30 549) 100%
V&R Management Services – Switzerland 100% 10 OVERVIEW OF BUSINESS | Company history
71 YEARS OF DOING BUSINESS 1990s During 1993, Rembrandt co- founded South Africa’s first 1940s cellular telephony company, Vodacom, which was eventually Remgro’s founding history disposed of in 2006 by VenFin goes back to the forties of Limited (VenFin). In 1995, the previous century when Rembrandt and Richemont the founder of the Group, consolidated their respective Dr Anton Rupert, established, tobacco interests in Rothmans the tobacco company Voorbrand, 1970s International, at the time the forerunner of Rembrandt world’s fourth largest cigarette Group Limited (Rembrandt) in In 1972, the overseas tobacco manufacturer, which was Johannesburg, South Africa. interests of Rembrandt were then delisted, and then in Rembrandt was incorporated consolidated in Rothmans 1999 merged these interests in 1948. International, which was listed on with those of British American the London Stock Exchange. Rembrandt thus entered the Tobacco plc (BAT), the world’s South African cigarette and Since the 1970s Rembrandt second largest cigarette tobacco industry in 1948 and expanded its interests outside producer. Since then the in the fifties expanded abroad tobacco, wine and spirits with investment in BAT was held through the establishment of investments in various other through a joint holding company various international partnerships. economic sectors in South Africa, in which Rembrandt (Remgro’s amongst which were banking and predecessor) and Richemont Rembrandt’s interests in the wine financial services, mining, printing held 33¹/ % and 66²/ % and spirits industry also date ³ ³ and packaging, medical services, respectively. Following the back to the 1940s when Dr Rupert engineering and food interests. above restructuring, Rembrandt and Mr D W R Hertzog founded became a pure investment Distillers Corporation. holding company.
1980s The separation of local and overseas interests was effected in 1988 with the HISTORY1950s founding of Compagnie Financière Richemont AG Rembrandt was listed on the (Richemont) – a Swiss- Johannesburg Stock Exchange listed luxury goods group in 1956. that included brands such as Cartier, Dunhill and Mont Blanc which then also acquired a share in Rothmans International. www.remgro.com | Remgro Limited | Integrated Annual Report 2019 11
2017 2000 During October 2016 Remgro completed a rights issue The restructuring of Rembrandt for a total consideration of was advanced a step further R9 945 million, in order to have in September 2000 when the cash resources and flexibility South African holding structure, 2009 to capitalise on investment consisting of four listed During November 2009 opportunities. companies, was collapsed into Remgro and VenFin merged two listed companies, namely again, adding media and Remgro and VenFin. Following the technology interests to the restructuring, Remgro represented Group’s investments. Rembrandt’s established tobacco, financial services, mining and industrial interests, while the telecommunication and technology interests were housed in VenFin.
2008 During November 2008, Remgro unbundled its investment in BAT to its shareholders by way of an interim dividend in specie 2018 amounting to R55.2 billion. Following the BAT unbundling In July 2018, Remgro HISTORYthe Group’s remaining interests disposed of its 25.75% consisted mainly of investments shareholding in Unilever in banking and financial services, South Africa Proprietary printing and packaging, motor Limited (Unilever) in components, glass products, exchange for Unilever’s medical services, mining, Spreads business in petroleum products, food, wine Southern Africa, now and spirits and various other trade Siqalo Foods, for mark products. R7 000 million, as well as a cash consideration At 30 June 2019, the value of of R4 900 million. the unbundled BAT shares has increased to R102.2 billion. 2016 The combination of Mediclinic International Limited (Mediclinic) and Al Noor Hospitals Group plc. Remgro facilitated Mediclinic’s acquisition of a 29.9% stake in Spire Healthcare Group plc and subsequently participated in a Mediclinic rights issue. 12 OVERVIEW OF BUSINESS | Our business model
OUR BUSINESS MODEL HOW THE INVESTMENTS ARE MANAGED
Remgro has a few operating subsidiaries of which the material companies are RCL Foods (listed), Distell (listed), Siqalo Foods (unlisted) and Wispeco (unlisted). Due to its philosophy of decentralised management, these companies have autonomous boards of directors and management structures and Remgro only exerts its influence through non-executive representation on the boards of these companies.
Remgro’s other investments comprise both listed and unlisted companies that are not controlled by Remgro and which are mostly associates and joint ventures due to the significant influence or joint control exercised by Remgro through its board representation in those investee companies. Where Remgro does not have board representation such investments are treated as portfolio investments.
Remgro manages its investments on a decentralised basis and its involvement is mainly focused on the provision of support rather than on being involved in the day-to-day management of business units of investees. The Remgro Limited Board considers it in the best interest of all the parties concerned to respect the decentralised business model and the fact that these businesses are conducted in separate legal entities. The support provided to the investee companies can either be in the form of strategic, financial and managerial support, or the creating of an environment for corporate transactions.
It should be emphasised that the above management philosophy is applied to all investee companies, irrespective of the level of influence that can be exercised.
Shareholder agreements are in place for Remgro’s associates and joint ventures where there are also other major shareholders involved. These agreements protect its rights as shareholder and manage risks. In terms of these agreements Remgro has decision-making involvement for a defined list of material matters of the businesses of these entities, such as the appointment or removal of directors, capital structure, business strategy, large capital expenditure and mergers, acquisitions and disposals.
As a responsible shareholder of the investee companies, Remgro also exercises its shareholder rights to ensure, as far as possible, that the entities concerned adhere to its requirements in respect of matters such as governance, internal controls, financial management, risk management, legal compliance, safety, health and environmental management, internal audit, ethics management, information management, stakeholder relationships, succession planning and sustainability.
OWNERSHIP STRUCTURE
Remgro’s issued share capital consists of two classes of shares, as follows:
ORDINARY SHARES OF NO PAR VALUE LISTED ON THE JSE
529 217 007 ordinary shares of no par value Each ordinary share has one vote
B ORDINARY SHARES OF NO PAR VALUE UNLISTED
39 056 987 B ordinary shares of no par value Each B ordinary share has ten votes
All of the unlisted B ordinary shares are held by Rupert Beleggings Proprietary Limited, a company incorporated in South Africa which is the holding vehicle for the Rupert family interests in Remgro. As at 30 June 2019, the unlisted B ordinary shares were entitled to 42.62% (2018: 42.53%) of the total votes of shareholders of the Company.
An analysis of major shareholders appears on pages 148 and 149. www.remgro.com | Remgro Limited | Integrated Annual Report 2019 13
INVESTMENT PHILOSOPHY
Remgro invests in businesses that can deliver superior earnings, cash flow generation and dividend growth over the long term. This involves the acquisition of meaningful interests in companies in order to have significant influence. Sound management is an important investment criterion. Remgro focuses on the Southern African market but international opportunities will be considered with reputable partners. Remgro forges strategic alliances on a partnership basis and endeavours to add value where possible. The purpose is to ensure superior returns to shareholders by way of sustainable dividend and capital growth.
REMGRO’S INVESTMENT STRATEGY
• Emphasis on investments that will make a significant contribution to Remgro’s earnings • Significant influence and board representation are integral • Preference for unlisted investments • Investments in entities where Remgro can identify sustainable value over the long term • Focus on South African investments and other African countries through investee companies • Will consider investments in other countries on an opportunistic basis • Primary sector focus: –– Consumer products –– Infrastructure –– Healthcare –– Financial services
INVESTMENT CRITERIA (inter alia)
• Prevailing culture and ethics of the Board and management team • Expected return on investment in excess of Remgro’s internal hurdle rate • Environmental footprint of the enterprise • Viability of products and services and their life cycles • Social responsibility awareness of the enterprise • Barriers to entry 14 OVERVIEW OF BUSINESS | Understanding the business of an investment holding company
UNDERSTANDING THE BUSINESS OF AN INVESTMENT HOLDING COMPANY UNDERSTANDING REMGRO’S STATUTORY REPORTING ON NET PROFIT
In order to understand how Remgro makes its money, one first needs to understand its reported results. Remgro’s statutory reported net profit consists primarily of the following: • Consolidated results of its operating subsidiaries, i.e. RCL Foods, Distell, Wispeco and Siqalo Foods; • Equity accounted results of its investments in associates and joint ventures, e.g. Mediclinic, FirstRand, RMH and RMI, which are the four biggest contributors towards net profit; • Profit/loss on the realisation of investments; • Net impairment of investments; • Dividends received from investee companies not classified as subsidiaries, associates and joint ventures, e.g. the Milestone China Funds and the Pembani Remgro Infrastructure Fund; • Interest received; • Interest paid; • Net corporate costs, including remuneration and other benefits paid to employees; and • Taxation.
CAPITAL ALLOCATION – THE MOST IMPORTANT FUNCTION OF AN INVESTMENT HOLDING COMPANY Capital is expensive and not infinite. As we deal with an uncertain future, and inevitably base capital allocation models on certain assumptions about the future, we need a margin of safety in our investment decisions. We need to be disciplined in our allocation of capital and, if we are wrong, we should act quickly and decisively.
INVESTMENT HOLDING COMPANY WHAT WE BRING TO THE INVESTEE COMPANIES, IRRESPECTIVE OF OUR LEVEL OF INFLUENCE: • Strategic input • Capital allocation –– Financial capital to further growth –– Manufactured capital –– Human capital in management support –– Relationship capital in identification of opportunity –– Intellectual capital –– Environmental capital • Treasury services (as required) • Dealmaking ability (environment for corporate transactions) • Decentralised management approach • Internal audit and risk services (as required)
INVESTMENTS
The value and performance of the underlying investments, rather than the activities at holding company level, will determine to a large extent the value created for an investment holding company’s shareholders, although dealmaking at holding company level can also add significant value. www.remgro.com | Remgro Limited | Integrated Annual Report 2019 15
THE BEST APPROXIMATION OF REMGRO’S PROFIT AT HOLDING COMPANY LEVEL (AT THE CENTRE) COMPRISES:
• Dividends received from • Net impairment of • Profit/loss on the investee companies investments realisation of investments • Interest received • Net corporate costs, • Foreign exchange rate including remuneration movements and other benefits paid to employees HOW WE • Interest paid MAKE OUR • Taxation paid MONEY
CAPITAL DISTRIBUTION TO ALLOCATION SHAREHOLDERS AND HOW WE IN NEW AND DISTRIBUTE IT EXISTING AGAIN INVESTMENTS
Given its nature as an investment holding company and the substantial amount of cash held and managed, the control of treasury risks are regarded as very important. This includes the management of movements in foreign exchange rates, which is covered in the Chief Financial Officer’s (CFO) Report on page 32.
DISTRIBUTION TO SHAREHOLDERS Distribution is funded from dividend income and interest received at the centre. Our normal dividend objective is to provide shareholders with a consistent annual dividend flow which at least protects them against inflation. As in the past, in special circumstances, Remgro will consider other distributions in the form of special dividends, share buy-backs or the unbundling of investments to shareholders.
MEASURING SUCCESS THROUGH INTRINSIC VALUE Remgro further measures its performance in terms of the increase in its intrinsic net asset value. This measures the growth in the underlying value of the various investee companies, measured by listed market value or, in the case of unlisted investments, applying the principles of IFRS 13. Refer to the Chief Executive Officer’s Report on page 25 for a detailed analysis of Remgro’s intrinsic net asset value. 16 OVERVIEW OF BUSINESS | Key objectives and principal integrated risks
KEY OBJECTIVES AND PRINCIPAL INTEGRATED RISKS ManagingREMGRO’S KEY OBJECTIVES with a view to maximising value creation and sustainable growth
Remgro focuses on the This objective is These risks and creation of shareholder underpinned by opportunities value and sustainable Remgro’s investment are continuously growth by investing philosophy and measured in businesses that strategy and also its against the risk can deliver superior understanding of all appetite and risk- 1 earnings and dividend 2 risks and opportunities 3 bearing capacity growth over the associated with the determined by long term. Group’s investment the Board. portfolio and target markets, whilst seeking appropriate investment opportunities.
PRINCIPAL INTEGRATED RISKS Remgro’s three principal risks are summarised below. A more comprehensive analysis of our risk management process is provided in the Risk Management Report, while our main financial risks, including those relating to the global economy and currencies, are disclosed in the CFO’s Report.
RISK CONTEXT
South African country risk due to sustained social The boards of investee companies are increasingly unrest, low economic growth, the increasing current directing focus to addressing pressing issues such account and budget deficits and the resultant impact as foreign currency risk, social instability, power of lowering sovereign credit ratings. supply risk, water scarcity, legislation and regulatory aspects and increased crime, by means of strategic 1 and/or control processes. Inability of boards of investee companies to The sustainability of investee companies is identify: disruptive technology risks timeously and dependent upon their ability to identify market opportunities or similar political, environmental, trends and other disruptive impacts in the markets social, regulatory or economic developments in or their business model which can materially impact their markets. their businesses.
Inadequate capacity to innovate can impede Optimising the utilisation of human, intellectual, 2 competitive ability. manufactured and relationship capital.
The destruction of value due to poor management The successful management of investments is of existing investments, including management at dependent upon a proper understanding of the investee company level. businesses of the investee companies and also on identifying the appropriate Remgro executives Non-identification and assessment of suitable that will represent it on the boards of the investee investment opportunities. companies. 3 Creating “Alpha” requires effective organic growth and judicious corporate investments. www.remgro.com | Remgro Limited | Integrated Annual Report 2019 17
Doing business ethically
By always considering Leadership based on Thereby the impact of the ethical foundations positioning the Company’s strategy results in a culture Company as on its commercial of ethical and moral an investment sustainability, the behaviour and partner of choice. indirect impacts on compliance with laws, 1the society in which it 2 rules, codes and 3 operates, as well as the standards. Consistent environment, results achievement of in being a responsible objectives creates corporate citizen and trust, whilst ethical investor. environments also foster high staff morale.
PRINCIPAL INTEGRATED SUSTAINABILITY DRIVERS
The following aspects are considered fundamental to the sustainability of growth and wealth creation:
Remgro’s size and A strong low-geared The ability to add influence enables it statement of financial value to investee to acquire significant position enables companies by stakes in entities that Remgro to make new means of skilled are big enough to investments or to and experienced have a material effect increase its stake in well- executives. 1 on Remgro’s results. 2 performing investments, 3 Remgro’s standing or fund growth as a responsible opportunities by means investor of choice of shareholder loans. facilitates investment opportunities. 18 OVERVIEW OF BUSINESS | Directorate and members of committees
DIRECTORATE AND MEMBERS OF COMMITTEES
J P RUPERT E DE LA H HERTZOG J MALHERBE A E RUPERT J J DURAND M LUBBE N J WILLIAMS
DIRECTORSNON-EXECUTIVE DIRECTORS MEMBERS OF COMMITTEES
J P RUPERT (69) E DE LA H HERTZOG (69) A E RUPERT (31) AUDIT AND RISK COMMITTEE APPOINTED: 18 August 2000 APPOINTED: 18 August 2000 APPOINTED: 29 November 2018 S E N De Bruyn (Chairman) CHAIRMAN DEPUTY CHAIRMAN Directorships: Mr Anton Rupert N P Mageza Directorships: Mr Rupert is the Directorships: Non-executive was appointed as a non- P J Moleketi Chairman of Compagnie Financière Chairman of Mediclinic executive Director of Remgro in F Robertson Richemont SA and the Chairman of November 2018. He serves as International plc. He obtained INVESTMENT COMMITTEE Reinet Investments Manager SA, the a Master of Medicine degree, non-executive Director on the management company of Reinet a Fellowship of the College of Board of Compagnie Financière J P Rupert (Chairman) Investments S.C.A. He studied Anaesthesiologists and a PhD Richemont SA since 2017, is a J J Durand economics and company law at (honoris causa). He is a past member of their Strategic Security G T Ferreira Stellenbosch University and has had Chairman of the Council of and Nominations Committee, and P K Harris an extensive career in international Stellenbosch University and a director of Watchfinder.co.uk. J Malherbe business, banking and finance. has served as non-executive He brings valuable insight into N J Williams After working for Chase Manhattan changing consumer behaviour in Deputy Chairman of Remgro MANAGEMENT BOARD Bank and Lazard Frères in New since June 2005. digital marketing and web-based York he founded Rand Merchant commerce and since 2009, had J J Durand (Chairman) Bank Limited in 1979. In 1985 he J MALHERBE (63) extensive exposure to all of the P R Louw Group’s businesses. joined the Rembrandt Group. APPOINTED: 11 October 2006 M Lubbe He holds honorary doctorates in R S M Ndlovu Law, Economics and Commerce, DEPUTY CHAIRMAN P J Uys is the Chancellor of Stellenbosch Directorships: Compagnie N J Williams University and Chairman of the Financière Richemont SA, Pension REMUNERATION AND Peace Parks Foundation. Insurance Corporation Group Limited and Reinet Investments NOMINATION COMMITTEE Manager SA. He qualified as J P Rupert (Chairman) a Chartered Accountant and G T Ferreira worked with a predecessor firm of P K Harris PricewaterhouseCoopers before F Robertson joining Rand Merchant Bank Limited in 1985. He joined the SOCIAL AND ETHICS Rembrandt Group in 1990 and COMMITTEE was appointed as non-executive M Morobe (Chairman) Co-Deputy Chairman of Remgro S E N De Bruyn in November 2014. P R Louw N P Mageza P J Uys EXECUTIVE DIRECTORS
J J DURAND (52) M LUBBE (49) N J WILLIAMS (54) CHIEF EXECUTIVE OFFICER COMPLIANCE AND CORPORATE CHIEF FINANCIAL OFFICER BAcc (Hons), MPhil (Oxon), CA(SA) SOCIAL INVESTMENTS BComm (Hons), CA(SA) Years of service with the Group: 23 BA Years of service with the Group: 25 Directorships: Distell Group Years of service with the Group: 25 Directorships: Air Products Holdings Limited, Mediclinic Directorships: Mrs Lubbe was South Africa Proprietary Limited, International plc, RCL Foods appointed as executive director of Business Partners Limited, Limited, RMB Holdings Limited Remgro in September 2016 and is eMedia Investments Proprietary and RMI Holdings Limited. responsible for Compliance and Limited and Total South Africa Corporate Social Investments of Proprietary Limited. the Company. She acts as Board member of Remgro Limited’s wholly owned subsidiaries as well as the board of Historical Homes of SA Limited. She serves as a non- executive Director on the board of Business Partners Limited. www.remgro.com | Remgro Limited | Integrated Annual Report 2019 19
S E N DE BRUYN G T FERREIRA P K HARRIS N P MAGEZA P J MOLEKETI M MOROBE F ROBERTSON
DIRECTORSINDEPENDENT NON-EXECUTIVE DIRECTORS S E N DE BRUYN (47) P K HARRIS (69) P J MOLEKETI (62) M MOROBE (62) APPOINTED: 16 March 2015 APPOINTED: 28 November 2001 APPOINTED: 4 November 2009 APPOINTED: 18 June 2007 Directorships: Co-founder Directorships: Non-executive Directorships: A former Deputy Directorships: He is currently the of Identity Capital Partners Director of RMB Holdings Limited Minister of Finance of the Republic National Director of the Programme Proprietary Limited in 2008. She and RMI Holdings Limited. He of South Africa and Gauteng to Improve Learner Outcomes has 17 years’ experience as a graduated from Stellenbosch Province MEC of Finance and (PILO), a position he assumed in director of companies having University with an MComm in Economic Affairs as well as a 2013 after seven years as CEO served on the boards of FirstRand Economics and Finance. He director of several companies of then JSE listed Kagiso Media Limited, Anglo American Platinum co-founded Rand Consolidated listed on the JSE Limited. He is Limited. He has a 47 year career Limited, Mr Price Group Limited Investments, which merged with non-executive Chairman of Brait spanning the worlds of student and Dimension Data (South Africa) Rand Merchant Bank Limited in South Africa, Vodacom Group activism, trade unionism, work in the Proprietary Limited. She is currently 1985. He was a founding board Limited and PPC Limited. He non-governmental sector, politics, a non-executive Director of RMB member of FirstRand Limited holds postgraduate economics the public sector, conservation and Holdings Limited, RMI Holdings after the merger of the financial and management qualifications the corporate sector. Always seeking Limited and Discovery Limited. services interests of Anglo American from the University of London and fresh challenges, Mr Morobe was Ms De Bruyn is also Chairman of Corporation of South Africa Harvard Business School and has in 1994 appointed as the first CEO the Ethos Mid Market Fund. She and RMB Holdings Limited and extensive international exposure, and Chairman of the Financial and was previously a Trustee of the CEO until his retirement in 2009. extensive strategic leadership skills Fiscal Commission established in National Empowerment Fund Mr Harris is a member of the and in-depth corporate governance terms of the Constitution of South and a member of the Presidential Investment Committee and experience in both the public and Africa to make recommendations to Working Group on BEE. Sonja Remuneration and Nomination private sectors. He is a member of Parliament regarding the equitable has contributed to the debate Committee. the Audit and Risk Committee. sharing of nationally collected on women’s empowerment, BEE, revenue between national, provincial transformation, privatisations and N P MAGEZA (64) F ROBERTSON (64) and local government. He remained the economy through publications, in the post until 2004 when he APPOINTED: 4 November 2009 APPOINTED: 28 March 2001 articles and interviews. She is the joined the Presidency as Head of Chairman of the Audit and Risk Directorships: Previously the Directorships: Executive Communications, a role he played Committee and a member of the Chief Operations Officer of the Chairman of Brimstone Investment until 2006 when he took up an Social and Ethics Committee. Absa Group. He is a Chartered Corporation Limited. Mr Robertson opportunity to join Kagiso Media Certified Accountant and a Fellow and his business partner formed Limited as CEO. In-between his Brimstone Investment Corporation G T FERREIRA (71) of The Association of Chartered formal employment roles, he also Certified Accountants (ACCA) UK, Limited, which is now listed APPOINTED: 4 November 2009 served in various board capacities, as well as a director of a number on the JSE Limited. He is also both in the non-governmental and LEAD INDEPENDENT DIRECTOR of companies including Anglo Chairman of Sea Harvest Group private sectors, inter alia, the Council Directorships: He has been American Platinum Limited, MTN Limited, Lion of Africa Insurance on Higher Education (1999–2000); involved in the financial services Group Limited, RCL Foods Limited Company Limited, Lion of Africa Chairman South African National sector since graduating with and Sappi Limited. He has gained Life Assurance Company Limited Parks Board (1999–2005); Chairman commerce degrees from extensive experience through and House of Monatic. He serves Ernst & Young (SA) (2001–2005); Stellenbosch University. Previous holding various executive positions as non-executive Director on the Chairman Johannesburg Housing chairmanships include AIG (SA) in the audit, financial services and boards of Aon Re Africa Proprietary Company (2003–2006). Currently, Proprietary Limited, FirstRand the transport and logistics sectors. Limited, Swiss Re Life and Health Mr Morobe serves as a non-executive Limited, FirstRand Bank Limited, He is a member of the Audit and Africa Limited. He also serves as Director of RMB Holdings Limited Rand Merchant Bank Limited, RMB Risk Committee and the Social and Chairman of the Board of Trustees and RMI Holdings Limited, and Holdings Limited, the Merchant Ethics Committee. of the University of the Western serves on the boards of the Bankers Association of South Cape Foundation. Mr Robertson DG Murray Trust and WWF-South Africa and RMI Holdings Limited. is the recipient of an Honorary Africa. He is Chairman of the Previous directorships include Doctorate in Philosophy from the Social and Ethics Committee. Anglo American Corporation University of the Western Cape. He Limited, FirstRand Limited, First is a member of the Audit and Risk National Bank Limited, GlenRand Committee and the Remuneration MIB Limited, the Industrial and Nomination Committee. Development Corporation, Lenco Limited, Malbak Limited and Momentum Life Limited. He is a member of the Investment Committee and the Remuneration and Nomination Committee. 20 OVERVIEW OF BUSINESS | Executive management structure
EXECUTIVE MANAGEMENT STRUCTURE
HOW REMGRO IS MANAGED The Management Board, together with senior management, The Remgro Limited Board of Directors ultimately leads also aims to instil a culture of ethical behaviour and good and controls the Group in all issues of a material or strategic governance throughout the Remgro Group. As at 30 June 2019 nature, which can impact the reputation and performance the Management Board comprised six members, being all of the Group. The Management Board is a subcommittee of three executive directors as well as Messrs Pieter Louw, the Remgro Board that is mainly responsible for determining Raymond Ndlovu and Pieter Uys. policies, monitoring and managing existing investments, The schematic presentation presented below in Figure 1 identifying and recommending new investment opportunities provides more detail on the day-to-day responsibilities and executing the decisions and strategy of the Board. and delegated authorities of the individual members of the Other issues, as mandated by the Board, are dealt with at Management Board. senior management level as permitted in terms of a formal delegation of authority that directs limits of delegation and approval mandates.
COMMITTEE STRUCTURE
REMUNERATION AND SOCIAL AND NOMINATION COMMITTEE REMGRO BOARD ETHICS COMMITTEE
INVESTMENT COMMITTEE MANAGEMENT BOARD AUDIT AND RISK COMMITTEE
RISK, OPPORTUNITIES, INVESTMENTS LINE MANAGEMENT TECHNOLOGY AND INFORMATION GOVERNANCE COMMITTEE
SAFETY, HEALTH AND ENVIRONMENTAL COMMITTEE
FIGURE 1
BOARD OF DIRECTORS CHIEF EXECUTIVE OFFICER J J Durand
SECRETARIAL D I Heynes MANAGEMENT BOARD National Diploma: Legal Secretary Years of service with the Group: 10
COMPLIANCE AND CORPORATE D I HEYNES P J UYS CHIEF FINANCIAL OFFICER INVESTMENTS N J Williams SOCIAL INVESTMENTS M Lubbe
STRATEGIC INVESTMENTS P J Uys FINANCE MEng (Electrical), MBA Years of service with the Group: 6 R S M Ndlovu B Business Studies (Hons) Years of service with the Group: 6 TREASURY R S M NDLOVU P R LOUW CORPORATE FINANCE P R Louw CA(SA) TECHNOLOGY AND Years of service with the Group: 18 INFORMATION NEW INVESTMENTS AND VENTURE CAPITAL J J du Toit HUMAN RESOURCES CA(SA) PgDip Advance Tax Years of service with the Group: 17 J J DU TOIT www.remgro.com | Remgro Limited | Integrated Annual Report 2019 21
SHAREHOLDERS’ DIARY AND COMPANY INFORMATION
DATES OF IMPORTANCE TO SHAREHOLDERS Financial year-end 30 June Annual General Meeting Thursday, 28 November 2019
Financial reports Announcement of interim results March Interim report March Announcement of annual results September Annual Financial Statements October
Dividends Interim dividend – declared March – paid April Final dividend – declared September – paid November
Final dividend No. 38 Ordinary dividend per share 349 cents Last day to trade in order to participate in the dividend Tuesday, 12 November 2019 Shares trade ex dividend Wednesday, 13 November 2019 Record date Friday, 15 November 2019 Payment date Monday, 18 November 2019
COMPANY INFORMATION Company Secretary Auditors D I Heynes PricewaterhouseCoopers Inc. Stellenbosch Business address and registered office Millennia Park Listing 16 Stellentia Avenue JSE Limited Stellenbosch Sector: Industrial – Diversified Industrial 7600 (As at 19 September 2019)
PO Box 456 Sponsor Stellenbosch Rand Merchant Bank 7599 (A division of FirstRand Bank Limited)
Transfer Secretaries Website Computershare Investor Services Proprietary Limited www.remgro.com Rosebank Towers 15 Biermann Avenue Rosebank 2196
PO Box 61051 Marshalltown 2107