Notice is hereby given that the Annual General Meeting of holders of all classes of shares of the Company will be held on Friday, 30 May 2014, at 09h00, at Massmart House, 16 Peltier Drive, Sunninghill Ext 6, Sandton, for purposes of:

1.    Transacting the following business:

1.1    to present the audited Annual Financial Statements of the Company and its subsidiaries (Group) for the year ended December 2013, and the associated Directors’ report and External Auditors’ report, the Audit Committee report and the Social and Ethics Committee report;
1.2    to elect Directors in the place of those resigning and retiring in accordance with the Company’s Memorandum of Incorporation; and
1.3    such other business as may be transacted at an Annual General Meeting.

2.    Considering and, if deemed fit, passing, with or without modification, the below mentioned ordinary and special resolutions.

The Board of Directors of the Company has determined, in accordance with section 59 of the Companies Act, 71 of 2008, as amended (Act), that the respective record dates for shareholders to be recorded as shareholders in the securities register of the Company in order to: (i) be entitled to receive this notice of Annual General Meeting is Thursday, 17 April 2014; and (ii) be entitled to attend, participate and vote at the Annual General Meeting is Friday, 23 May 2014. The last date to trade to be entitled to attend, participate and vote at the Annual General Meeting is Friday, 16 May 2014.

Ordinary business

The summarised audited Annual Financial Statements of the Company and the Group (as approved by the Directors of the Company), including the Directors’ report and External Auditors’ report, the Audit Committee report and the Social and Ethics Committee report for the year ended December 2013, circulated together with this notice, are presented to the shareholders for their consideration.

The summarised audited Annual Financial Statements for the year ended December 2013 are set out in the ‘Group Financial Director’s Review’ of the Massmart Integrated Annual Report. The complete audited financial statements for the year ended December 2013 can be found here.

Ordinary resolutions

Ordinary Resolution Number 1

“Resolved that Mr D Cheesewright, who retires by rotation and has offered himself for re-election, be and is hereby re-elected to the Board of Directors of the Company.”In terms of the Act, more than 50% of the voting rights exercised on this resolution must be cast in favour of ordinary resolution number 1 for it to be adopted.

Ordinary Resolution Number 2

“Resolved that Mr D Dlamini, who resigns as required by the Memorandum of Incorporation and has offered himself for re-election, be and is hereby re-elected to the Board of Directors of the Company.”

In terms of the Act, more than 50% of the voting rights exercised on this resolution must be cast in favour of ordinary resolution number 2 for it to be adopted.

Ordinary Resolution Number 3

“Resolved that Dr NN Gwagwa, who retires by rotation and has offered herself for re-election, be and is hereby re-elected to the Board of Directors of the Company.”

In terms of the Act, more than 50% of the voting rights exercised on this resolution must be cast in favour of ordinary resolution number 3 for it to be adopted.

Ordinary Resolution Number 4

“Resolved that Mr GRC Hayward, who retires by rotation and has offered himself for re-election, be and is hereby re-elected to the Board of Directors of the Company.”

In terms of the Act, more than 50% of the voting rights exercised on this resolution must be cast in favour of ordinary resolution number 4 for it to be adopted.

Ordinary Resolution Number 5

“Resolved that Mr CS Seabrooke, who retires by rotation and has offered himself for re-election, be and is hereby re-elected to the Board of Directors of the Company.”

In terms of the Act, more than 50% of the voting rights exercised on this resolution must be cast in favour of ordinary resolution number 5 for it to be adopted.

Ordinary Resolution Number 6

“Resolved that Ernst & Young Inc. (with Mr Allister Carshagen as the Audit Partner) be and are hereby elected as the Company’s auditors for the ensuing financial year to hold office until the Company’s next Annual General Meeting, as approved by the Audit Committee and recommended to shareholders.”

In terms of the Act, more than 50% of the voting rights exercised on this resolution must be cast in favour of ordinary resolution number 6 for it to be adopted.

Ordinary Resolution Number 7

“Resolved that the following persons be and are hereby appointed, each by way of a separate vote, as members of the Audit Committee:

7.1    CS Seabrooke (Chairman)1;
7.2    NN Gwagwa2; and
7.3    P Langeni”.
1    Subject to his re-election as a Director pursuant to ordinary resolution number 5
2    Subject to her re-election as a Director pursuant to ordinary resolution number 3

In terms of the Act, more than 50% of the voting rights exercised on each of these resolutions must be cast in favour of each of ordinary resolution numbers 7.1, 7.2 and 7.3 for such resolutions to be adopted.

Ordinary Resolution Number 8

“Resolved that, subject to the JSE Limited Listings Requirements (JSE Listings Requirements), the Directors be and are hereby authorised to issue the ordinary shares in the authorised but unissued shares of the Company (or to issue options or convertible securities convertible into ordinary shares) for cash to such person or persons on such terms and conditions as they may deem fit, subject to the following:

8.1    the securities shall be of a class already in issue, or convertible into a class already in issue;
8.2    the securities shall be issued to public shareholders (as defined in the JSE Listings Requirements) and not to related parties (as defined in the JSE Listings Requirements);
8.3    the issues of securities in the aggregate under the authority of this resolution during the period in 8.5 below shall not exceed 5% of the number of securities of that class already in issue as at the date of this notice of Annual General Meeting being 10,855,476 ordinary shares, determined in accordance with the relevant provisions of the JSE Listings Requirements, provided that:
8.3.1    any equity securities issued under the authority during the period contemplated in 8.5 below must be deducted from such number in 8.3 above; and
8.3.2    in the event of a sub-division or consolidation of the issued equity securities during the period contemplated in 8.5 below, the existing authority must be adjusted accordingly to represent the same allocation ratio;
8.4    the maximum discount at which the shares may be issued shall be 10% of the weighted average traded price of the shares of the Company measured over the 30 business days prior to the date that the price of the issue is agreed between the Company and the party subscribing for the shares;
8.5    the authority hereby granted will be valid until the Company’s next Annual General Meeting, provided that it will not extend beyond 15 months from the date on which this resolution is passed; and
8.6    once shares representing, on a cumulative basis within the period contemplated in 8.5 above, 5% or more of the Company’s issued ordinary and/or preference shares prior to that issue, have been issued, the Company shall publish an announcement in accordance with the JSE Listings Requirements.”

Pursuant to the JSE Listings Requirements, the Company will only be entitled to implement this general authority to allot and issue ordinary shares for cash if this ordinary resolution number 8 is passed by a majority of 75% or more of the votes cast by all shareholders present or represented by proxy at the Annual General Meeting, excluding any votes cast by the Massmart Holdings Limited Employee Share Trust.

Ordinary Resolution Number 9

“Resolved that, by way of a non-binding advisory vote, the remuneration policy of the Company, as outlined in the Remuneration report on pages 38 to 39 of the Integrated Annual Report, is endorsed.”

As this is a non-binding advisory vote, no minimum voting threshold is required. Nevertheless, for record purposes, in terms of King III, more than at least 50% of the voting rights exercised on this resolution must be cast in favour of ordinary resolution number 9 for it to be adopted. This non-binding advisory vote allows shareholders to express their views on the remuneration policies adopted by the Company and on their implementation.

Special resolutions

Special Resolution Number 1

“Resolved, as a special resolution, that the Company and/or its subsidiaries be and are hereby authorised to generally repurchase the ordinary and/or preference shares in the issued shares of the Company from such shareholder/s, at such price, in such manner and subject to such terms and conditions as the Directors may deem fit, but subject to the Memorandum of Incorporation of the Company, the Act and the JSE Listings Requirements, and provided that:

1.1    the authority hereby granted will be valid until the Company’s next Annual General Meeting or for 15 months from the date of this special resolution, whichever period is shorter;
1.2    repurchases may not be made at a price greater than 10% above the weighted average of the market value for the shares determined over the five business days immediately preceding the date that the repurchase is effected (or, if no shares of the Company have been traded in that period, subject to a ruling by the JSE);
1.3    repurchases in the aggregate in any one financial year shall not exceed 15% of that class of the Company’s issued shares;
1.4    the repurchase of shares will be effected through the order book operated by the JSE trading system and will be done without any prior understanding or arrangement between the Company and the counterparty;
1.5    the Company may only appoint one agent, at any point in time, to effect the repurchases on the Company’s behalf;
1.6    neither the Company nor its subsidiaries may repurchase shares during a prohibited period (as defined in the JSE Listings Requirements) unless a repurchase programme is in place where the dates and quantities of shares to be traded during the relevant period are fixed (not subject to any variation) and where full details of the programme have been disclosed in an announcement on the Stock Exchange News Service prior to the commencement of the prohibited period;
1.7    an announcement complying with paragraph 11.27 of the JSE Listings Requirements will be published by the Company when the Company and/or its subsidiaries have cumulatively repurchased 3% of the Company’s initial number of issued ordinary and/or preference shares at the time that the general authority from shareholders is granted and for each 3% in aggregate of the initial number of that class acquired thereafter; and
1.8    a resolution by the Board of Directors that it authorises such repurchase, that the Company and its subsidiaries have passed the solvency and liquidity test as set out in section 4 of the Act and that, since the application by the Board of Directors of the solvency and liquidity test, there have been no material changes to the financial position of the Group, has been passed.”

Statement by the Board of Directors

In accordance with the JSE Listings Requirements, the Directors state that:

(a)    the intention of the Directors is to utilise the authority given under special resolution number 1 at a future date, provided that the cash resources of the Company are in excess of its requirements. In this regard, the Directors will take into account, inter alia, an appropriate capitalisation structure for the Company and the long-term cash needs of the Company, and will ensure that any such utilisation is in the interests of the shareholders; and
(b)    having considered the effect of the maximum number of ordinary and preference shares that may be acquired pursuant to the authority given under special resolution number 1:

  • the Company and the Group will in the ordinary course of business be able to pay its debts for a period of 12 months after the date of this notice of Annual General Meeting;
  • the assets of the Company and the Group will be in excess of the liabilities of the Company and the Group for a period of 12 months after the date of this notice of Annual General Meeting, such assets and liabilities being recognised and measured in accordance with the accounting policies used in the Annual Financial Statements of the Company and the Group for the year ended December 2013;
  • the issued share capital and reserves of the Company and the Group will be adequate for ordinary business purposes for a period of 12 months after the date of this notice of Annual General Meeting; and
  • the working capital available to the Company and the Group will be adequate for ordinary business purposes for a period of 12 months after the date of this notice of Annual General Meeting.

The Company will ensure that its sponsor provides the necessary sponsor letter on the adequacy of the working capital in terms of the JSE Listings Requirements, prior to the commencement of any repurchase of the Company shares under the authority given in terms of special resolution number 1.

The following additional information, which appears in the Integrated Annual Report of which this notice forms part, is provided in terms of the JSE Listings Requirements for purposes of special resolution number 1:

  • Directors and management – p.89 to p.94;
  • Major shareholders – p.82;
  • Material changes – p.104;
  • Directors’ interests in shares – p.49;
  • Share capital of the Company – p.48;
  • Responsibility statement – p.104; and
  • Litigation – p.50.

The Directors, whose names are set out on pages 89 to 91 of the Integrated Annual Report, collectively and individually, accept responsibility for the accuracy of information contained in this statement and certify that, to the best of their knowledge and belief, there are no other facts, the omission of which would make any statement false or misleading and that they have made all reasonable enquiries in this regard.

Other than the facts and developments reported in the Integrated Annual Report, to which this notice of Annual General Meeting is attached, there have been no material changes in the financial or trading position of the Company and its subsidiaries since the publication of the Audited Financial Statements for the year ended December 2013.

In terms of the Act, at least 75% of the voting rights exercised on this resolution must be cast in favour of special resolution number 1 for it to be adopted.

Special Resolution Number 2

“Resolved, as a special resolution, that the following Directors’ remuneration (payable to the applicable Directors for services to be rendered by them in their capacities as such), be and is hereby approved, each by way of a separate vote, for the period commencing on 30 May 2014 to the date on which the Company’s Annual General Meeting in respect of its financial year ending December 2014 will be held:

2.1 Chairman of the Board R871,000
2.2 Deputy Chairman R625,000
2.3 Directors R259,000
2.4 Committee Chairmen R252,000
2.5 Committee Members R120,000

In terms of the Act, at least 75% of the voting rights exercised on each of these resolutions must be cast in favour of special resolution numbers 2.1, 2.2, 2.3, 2.4 and 2.5 for such resolutions to be adopted.

Special Resolution Number 3

“Resolved, as a special resolution, to the extent required in terms of, and subject to the provisions of, section 45 of the Act, that the shareholders hereby approve of the Company providing, at any time and from time to time during the period of two years commencing on the date of this special resolution, any direct or indirect financial assistance as contemplated in such section of the Act to any one or more related or inter-related companies or corporations (as defined in the Act) of the Company and/or to any one or more members of any such related or inter-related company or corporation and/or to any one or more persons related to any such company or corporation, on such terms and conditions as the Board of Directors of the Company, or any one or more persons authorised by the Board of Directors of the Company from time to time for such purpose, deems fit, provided that any such financial assistance shall not in the aggregate exceed an amount of R13 billion in any financial year.”

In terms of the Act, at least 75% of the voting rights exercised on this resolution must be cast in favour of special resolution number 3 for it to be adopted.

The following direct and/or indirect financial assistance was provided by the Company to related and/or inter-related companies and/or corporations of the Company as at the financial year ended December 2013:

Rbn
Cross Suretyships in respect of banking facilities 7.4
Loans to subsidiary companies 1.0
Total 8.4

It is anticipated that such financial assistance will increase during the period of two years commencing on the date of special resolution number 3, mainly as a result of the Group’s expansion and acquisition plans but that the total financial assistance after such anticipated increase will not exceed R13 billion.

In the event that the Company provides financial assistance to its subsidiary companies in the form of loans, the Company’s solvency and liquidity will not be impaired as the Company will raise an asset in its books for the equivalent amount then due by that subsidiary.

Notice to shareholders of the Company in terms of section 45(5) of the Act of a resolution adopted by the Board authorising the Company to provide direct or indirect financial assistance.

By the time this notice of Annual General Meeting is delivered to shareholders, the Board of Directors will have adopted a resolution (section 45 Board Resolution) authorising the Company to provide, at any time and from time to time during the period of two years commencing on the date on which special resolution number 3 is adopted, any direct or indirect financial assistance as contemplated in section 45 of the Act to any one or more related or inter-related companies or corporations of the Company and/or to any one or more members of any such related or inter-related company or corporation and/or to any one or more persons related to any such company or corporation, provided that any such financial assistance shall not in the aggregate exceed an amount of R13 billion in any financial year.

The section 45 Board Resolution will be effective only if and to the extent that special resolution number 3 is adopted by the shareholders, and the provision of any such direct or indirect financial assistance by the Company, pursuant to such resolution, will always be subject to the Board of Directors being satisfied that: (i) immediately after providing such financial assistance, the Company will satisfy the solvency and liquidity test as referred to in section 45(3)(b)(i) of the Act; and that (ii) the terms under which such financial assistance is to be given are fair and reasonable to the Company as referred to in section 45(3)(b)(ii) of the Act.

In as much as the section 45 Board Resolution contemplates that such financial assistance will in the aggregate exceed one–tenth of one percent of the Company’s net worth at the date of adoption of such resolution, the Company hereby provides notice of the section 45 Board Resolution to shareholders. Such notice will also be provided to any trade union representing any employees of the Company.

General

Identification, voting and proxies

Shareholders are entitled to attend, speak and vote at the Annual General Meeting.

In terms of section 63(1) of the Act, any person attending or participating in the Annual General Meeting must present reasonably satisfactory identification and the person presiding at the general meeting must be reasonably satisfied that the right of any person to participate in and vote (whether as a shareholder or as proxy for a shareholder) has been reasonably verified. Forms of identification include valid identity documents, driver’s licences or passports.

Shareholders holding dematerialised shares, but not in their own name, must furnish their Central Securities Depository Participant (CSDP) or broker with their instructions for voting at the Annual General Meeting. If your CSDP or broker, as the case may be, does not obtain instructions from you, it will be obliged to act in accordance with your mandate furnished to it, or if the mandate is silent in this regard, complete the form of proxy attached.

Unless you advise your CSDP or broker, in terms of the agreement between you and your CSDP or broker by the cut-off time stipulated therein, that you wish to attend the Annual General Meeting or send a proxy to represent you at the Annual General Meeting, your CSDP or broker will assume that you do not wish to attend the Annual General Meeting or send a proxy.

If you wish to attend the Annual General Meeting or send a proxy, you must request your CSDP or broker to issue the necessary letter of authority to you. Shareholders holding dematerialised shares, and who are unable to attend the Annual General Meeting and wish to be represented thereat, must complete the form of proxy attached in accordance with the instructions therein and lodge it with or mail it to the transfer secretaries, Computershare Investor Services Proprietary Limited (Computershare).

A form of proxy (which is attached) must be dated and signed by the shareholder appointing a proxy and should be forwarded to reach Computershare by no later than 09h00 on Wednesday, 28 May 2014. Before a proxy exercises any rights of a shareholder at the Annual General Meeting, such form of proxy must be so delivered.

In compliance with the provisions of section 58(8)(b)(i) of the Act, a summary of the rights of a shareholder to be represented by proxy, as set out in section 58 of the Act, is set out immediately hereunder:

  • A shareholder entitled to attend and vote at the Annual General Meeting may appoint any individual (or two or more individuals) as a proxy or as proxies to attend, participate in and vote at the Annual General Meeting in the place of the shareholder. A proxy need not be a shareholder of the Company.
  • A proxy appointment must be in writing, dated and signed by the shareholder appointing a proxy and, subject to the rights of a shareholder to revoke such appointment (as set out below), remains valid only until the end of the annual general meeting.
  • A proxy may delegate the proxy’s authority to act on behalf of a shareholder to another person, subject to any restrictions set out in the instrument appointing the proxy.
  • The appointment of a proxy is suspended at any time and to the extent that the shareholder who appointed such proxy chooses to act directly and in person in the exercise of any rights as a shareholder.
  • The appointment of a proxy is revocable by the shareholder in question cancelling it in writing, or making a later inconsistent appointment of a proxy, and delivering a copy of the revocation instrument to the proxy and to Computershare. The revocation of a proxy appointment constitutes a complete and final cancellation of the proxy’s authority to act on behalf of the shareholder as of the later of: (i) the date stated in the revocation instrument, if any; and (ii) the date on which the revocation instrument is delivered to Computershare as required in the first sentence of this paragraph.
  • If the instrument appointing the proxy or proxies has been delivered to Computershare, as long as that appointment remains in effect, any notice that is required by the Act or the Company’s Memorandum of Incorporation to be delivered by the Company to the shareholder, must be delivered by the Company to: (i) the shareholder; or (ii) the proxy or proxies, if the shareholder has: (a) directed the Company to do so in writing; and (b) paid any reasonable fee charged by the Company for doing so.
  • Attention is also drawn to the “Notes to the form of proxy”.
  • The completion of a form of proxy does not preclude any shareholder from attending the Annual General Meeting.

Shareholders may participate (but not vote) electronically in the Annual General Meeting. Shareholders wishing to participate in the Annual General Meeting electronically should contact the Assistant Company Secretary on info@massmart.co.za or +27 11 517 0000 not less than five business days prior to the Annual General Meeting. Access to the Annual General Meeting by way of electronic participation will be at the shareholder’s expense. Only persons physically present at the Annual General Meeting or represented by a valid proxy shall be entitled to cast a vote on any matter put to a vote of shareholders.

By order of the Board

_0007_Philip signature.tif
Philip Sigsworth
Company Secretary10 April 2014