PEPKOR
Holdings Limited

PURPOSE-DRIVEN GROWTH

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PEPKOR HOLDINGS LIMITED
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Registration number: 2017/221869/06
JSE share code: PPH
JSE debt code: PPHI
ISIN: ZAE000259479
LEI: 3789006D677C34F69875

Notice of annual general meeting of shareholders for the year ended 30 September 2024

Notice is hereby given in terms of section 62(1) of the Companies Act, No. 71 of 2008, as amended (Companies Act) that the annual general meeting of shareholders of Pepkor will be held in electronic format as permitted by the JSE Limited (JSE) Listings Requirements (JSE Listings Requirements), and in terms of the provisions of the Companies Act and the company's memorandum of incorporation (MOI) at 09:00 on Monday, 24 February 2025 (the AGM), for the purpose of (i) considering and, if deemed fit, to pass and approve, with or without modification, the ordinary and special resolutions set out hereunder; and (ii) dealing with such other business as may be dealt with at the AGM, or at any adjournment or postponement thereof, in the manner required by the company's MOI, the Companies Act and subject to the JSE Listings Requirements.

Pepkor will conduct the AGM entirely by electronic communication. This allows more shareholders to attend and participate in the AGM. As a consequence, there will be no in-person registration for the AGM. Shareholders are encouraged to make use of the Form of Proxy to cast their votes if they do not wish to participate electronically.

This notice of AGM includes the attached Form of Proxy. Shareholders' attention is directed to the additional notes and instructions on the back of the Form of Proxy.

Notice of annual general meeting of shareholders continued for the year ended 30 September 2024

Purpose

The purpose of the AGM is to transact the business set out hereunder.

Agenda

Presentation of the annual financial statements and the social and ethics committee report

Presentation of the consolidated audited annual financial statements of Pepkor and its subsidiaries (group), and the report of the social and ethics committee, for the year ended 30 September 2024.

The full audited consolidated annual financial statements for the year ended 30 September 2024, including the reports of the directors, the audit and risk committee and the external auditor, are available on the company's website (www.pepkor.co.za) or can be requested and obtained in person, at no charge, from the company at its registered office during office hours.

A summarised version of the annual financial statements is provided with this notice of AGM. The report of the social and ethics committee is included as Annexure A.

To consider and, if deemed fit, approve, with or without modification, the following ordinary resolutions:

Note:

For ordinary resolution numbers 1 to 13 to be adopted, more than 50% of the voting rights exercised on the applicable ordinary resolution must be exercised in favour thereof.

Ordinary resolution numbers 14 and 15 are tabled for non-binding advisory votes. In the event that more than 25% of the voting rights exercised are against either resolution, or both resolutions, the company will initiate an engagement process with shareholders to ascertain the reasons for the dissenting votes and will give consideration to the reasons provided.

2.1 Re-election of directors who retire by rotation

The company's MOI states that one-third of the company's non-executive directors shall retire by rotation at each annual general meeting of shareholders. The directors whose names appear in ordinary resolution numbers 1 to 4 are the directors who will be retiring and are eligible to stand for re-election. The nomination committee has determined that they are available for re-election and supports their re-appointment. The summary curricula vitae of the directors standing for re-election in terms of ordinary resolution numbers 1, 2, 3 and 4 are included in Annexure B.

2.1.1 Ordinary resolution number 1

Resolved that Ms HH Hickey, who is required to retire as a director of the company at this AGM and who is eligible and available for re-election, is hereby re-elected as a director of the company.

2.1.2 Ordinary resolution number 2

Resolved that Mr SH Müller, who is required to retire as a director of the company at this AGM and who is eligible and available for re-election, is hereby re-elected as a director of the company.

2.1.3 Ordinary resolution number 3

Resolved that Ms P Disberry, who is required to retire as a director of the company at this AGM and who is eligible and is available for re-election, is hereby re-elected as a director of the company.

2.1.4 Ordinary resolution number 4

Resolved that Mr LI Mophatlane, who is required to retire as a director of the company at this AGM and who is eligible and available for re-election, is hereby re-elected as a director of the company.

2.2 Re-appointment of the members of the audit and risk committee of the company

The board has determined that the audit committee, established in terms of the Companies Act, be supplemented with the responsibility for the oversight of risk. The committee is accordingly called the audit and risk committee. In terms of section 94(2) of the Companies Act, the members of the committee are required to be appointed, or re-appointed, as the case may be, at each annual general meeting of shareholders of such company. It is proposed and recommended by the board that the persons mentioned in ordinary resolution numbers 5, 6, 7 and 8 be re-appointed as members of the audit and risk committee of the company. The summary curricula vitae of the members of the audit and risk committee are included in Annexure B.

Note:

For avoidance of doubt, all references to the audit and risk committee of the company refer to the audit committee as contemplated in the Companies Act

2.2.1 Ordinary resolution number 5

Resolved that, subject to the passing of ordinary resolution number 1, Ms HH Hickey, being eligible, be and is hereby re-appointed as a member of the audit and risk committee of the company, as recommended by the board, until the next annual general meeting of the company.

2.2.2 Ordinary resolution number 6

Resolved that Ms F Petersen-Cook, being eligible, be and is hereby re-appointed as a member of the audit and risk committee of the company, as recommended by the board, until the next annual general meeting of the company.

2.2.3 Ordinary resolution number 7

Resolved that Ms ZN Malinga, being eligible, be and is hereby re-appointed as a member of the audit and risk committee of the company, as recommended by the board, until the next annual general meeting of the company.

2.2.4 Ordinary resolution number 8

Resolved that, subject to the passing of ordinary resolution number 2, Mr SH Müller, being eligible, be and is hereby re-appointed as a member of the audit and risk committee of the company, as recommended by the board, until the next annual general meeting of the company.

Pepkor notice of annual general meeting for the year ended 30 September 2024

Notice of annual general meeting of shareholders continued for the year ended 30 September 2024

2.3 Re-appointment of auditor

In terms of section 90(1) of the Companies Act, the company is required to seek shareholder approval for the appointment or the re-appointment, as the case may be, of the auditor at each annual general meeting of shareholders of such company. The board supports the re-appointment of PricewaterhouseCoopers Inc.

2.3.1 Ordinary resolution number 9

Resolved that PricewaterhouseCoopers Inc. be and is hereby re-appointed as auditor of the company for the ensuing financial year or until the next annual general meeting of the company, whichever is the later, with the designated auditor being Mr A Hugo, as registered auditor and director in the firm, on the recommendation of the audit and risk committee of the company.

2.4 Appointment of the members of the social and ethics committee of the company

In terms of section 72 of the Companies Act, the members of the social and ethics committee are required to be appointed at each annual general meeting of the company. It is proposed and recommended by the board that the persons mentioned in ordinary resolution numbers 10, 11, 12 and 13 be appointed as members of the social and ethics committee of the company. The summary curricula vitae of these persons are included in Annexure B.

2.4.1 Ordinary resolution number 10

Resolved that Ms F Petersen-Cook, being eligible, be and is hereby appointed as a member of the social and ethics committee of the company, as recommended by the board, until the next annual general meeting of the company.

2.4.2 Ordinary resolution number 11

Resolved that Ms ZN Malinga, being eligible, be and is hereby appointed as a member of the social and ethics committee of the company, as recommended by the board, until the next annual general meeting of the company.

2.4.3 Ordinary resolution number 12

Resolved that, subject to the passing of ordinary resolution number 3, Ms P Disberry, being eligible, be and is hereby appointed as a member of the social and ethics committee of the company, as recommended by the board, until the next annual general meeting of the company.

2.4.4 Ordinary resolution number 13

Resolved that Mr RJ Erasmus, being eligible, be and is hereby appointed as a member of the social and ethics committee of the company, as recommended by the board, until the next annual general meeting of the company.

2.5 Non-binding advisory vote on Pepkor's remuneration policy

The reason for ordinary resolution number 14 is that the King IV Report on Corporate Governance™ for South Africa, 2016 (King IV™)* recommends, and the JSE Listings Requirements require, that the remuneration policy of a company be tabled for a non-binding advisory vote by shareholders at each annual general meeting of such company. This enables shareholders to express their views on the remuneration policy. The effect of ordinary resolution number 14, if passed, will be to endorse the company's remuneration policy. Ordinary resolution number 14 is of an advisory nature only. Failure to pass this resolution will therefore not have any legal consequences relating to existing remuneration agreements. However, the board will take the outcome of the vote into consideration and, if appropriate, will engage with shareholders when contemplating amendments to the company's remuneration policy.

2.5.1 Ordinary resolution number 14

Resolved that the company's remuneration policy, as set out in Annexure C of this notice of AGM, be and is hereby endorsed by way of a non-binding advisory vote.

2.6 Non-binding advisory vote on Pepkor's implementation report on the remuneration policy

The reason for ordinary resolution number 15 is that King IV™ recommends, and the JSE Listings Requirements require, that the implementation report on a company's remuneration policy be tabled for a non-binding advisory vote by shareholders at each annual general meeting of such company. This enables shareholders to express their views on the implementation of a company's remuneration policy. The effect of ordinary resolution number 15, if passed, will be to endorse the company's implementation report in respect of its remuneration policy. Ordinary resolution number 15 is of an advisory nature only. Failure to pass this resolution will therefore not have any legal consequences relating to existing remuneration agreements. However, the board will take the outcome of the vote into consideration when contemplating amendments to the implementation of the company's remuneration policy.

2.6.1 Ordinary resolution number 15

Resolved that the company's implementation report in respect of its remuneration policy, as set out in Annexure C of this notice of AGM, be and is hereby endorsed by way of a non-binding advisory vote.

3. To consider and, if deemed fit, approve, with or without modification, the following special resolutions:

Note:

For special resolution numbers 1 to 4 (inclusive) to be adopted, at least 75% of the voting rights exercised on the applicable special resolution must be exercised in favour thereof.

3.1 Remuneration of non-executive directors

The reasons for special resolution numbers 1.1 to 1.13 are for the company to obtain the approval of shareholders by way of special resolutions for the payment of remuneration to its non-executive directors in accordance with the requirements of the Companies Act. In terms of best practice, approvals are sought by way of separate resolutions.

Copyright and trade marks are owned by the Institute of Directors in South Africa NPC and all of its rights are reserved.

Pepkor notice of annual general meeting for the year ended 30 September 2024

Notice of annual general meeting of shareholders continued for the year ended 30 September 2024

The effect of special resolution numbers 1.1 to 1.13, if passed, is that the company will be able to pay its non-executive directors for the services they render to the company as non-executive directors, which includes serving on various committees, until the next annual general meeting of the company.

3.1.1 Special resolution number 1.1: Remuneration of the chair of the board
Resolved that the chair of the board be paid an annual fee of R2 393 300.

3.1.2 Special resolution number 1.2: Remuneration of the lead independent director
Resolved that a lead independent director of the board, if appointed, be paid an annual fee of R1 038 200.

3.1.3 Special resolution number 1.3: Remuneration of the board members
Resolved that each board member be paid an annual fee of R819 900.

3.1.4 Special resolution number 1.4: Remuneration of the audit and risk committee chair
Resolved that the audit and risk committee chair be paid an annual fee of R615 300.

3.1.5 Special resolution number 1.5: Remuneration of the audit and risk committee members
Resolved that each member of the audit and risk committee be paid an annual fee of R342 100.

3.1.6 Special resolution number 1.6: Remuneration of the human resources and remuneration committee chair
Resolved that the human resources and remuneration committee chair be paid an annual fee of R342 100.

3.1.7 Special resolution number 1.7: Remuneration of the human resources and remuneration committee members
Resolved that each human resources and remuneration committee member be paid an annual fee of R171 100.

3.1.8 Special resolution number 1.8: Remuneration of the social and ethics committee chair
Resolved that the social and ethics committee chair be paid an annual fee of R280 800.

3.1.9 Special resolution number 1.9: Remuneration of the social and ethics committee members
Resolved that each social and ethics committee member be paid an annual fee of R151 100.

3.1.10 Special resolution number 1.10: Remuneration of the nomination committee members
Resolved that each nominations committee member be paid an annual fee of R82 600.

3.1.11 Special resolution number 1.11: Remuneration of the investment committee chair
Resolved that the investment committee chair be paid an annual fee of R342 100.

3.1.12 Special resolution number 1.12: Remuneration of the investment committee members
Resolved that each investment committee member be paid an annual fee of R171 100.

3.1.13 Special resolution number 1.13: Remuneration paid to the director approved by the Prudential Authority who will oversee insurance compliance
Resolved that, in respect of services provided by the non-executive director approved by the Prudential Authority for ensuring insurance compliance, that director be paid an annual fee of R171 100.

Notes:
1. The fees are paid for services rendered as non-executive directors and are not based on meetings attended.
2. The fees are to be paid quarterly in arrears, effective 1 April 2025 and are exclusive of value-added tax (VAT). VAT is payable thereon if the non-executive director is registered for VAT.
3. The board chair does not receive any further payments for being a member of the board or for participation in committee meetings. The board chair currently also chairs the nomination committee.
4. The annual fee for the chairs of the committees includes the fee for being a member of the respective committee.
5. The lead independent director (if one is appointed) does not receive the fees proposed for members of the board in terms of special resolution number 1.3.

3.2 Financial assistance to subsidiary companies or corporations
The reason for and effect, if passed, of special resolution number 2 is to grant the board the authority, until the next annual general meeting of the company, to provide direct or indirect financial assistance to any subsidiary company or corporation. This means that the company is, inter alia, authorised to grant loans to its subsidiaries and to guarantee the debt of its subsidiaries.

The resolution specifically excludes financial assistance to its directors and prescribed officers and other related parties as is stipulated by the Companies Act.

3.2.1 Special resolution number 2: Intercompany financial assistance
Resolved in terms of section 45(3)(a)(ii) of the Companies Act, as a general approval, that the board be and is hereby authorised to approve that the company provides any direct or indirect financial assistance ('financial assistance' will herein have the meaning attributed to it in section 45(1) of the Companies Act) that the board may deem fit to any subsidiary company or corporation, on the terms and conditions and for amounts that the board may determine, provided that the aforementioned approval shall be valid until the date of the next annual general meeting of the company.

3.3 Financial assistance for subscription and/or purchase of securities in the company or in subsidiary companies
The reason and effect, if passed, of special resolution 3, is to grant the board the authority, until the next annual general meeting of the company, to provide financial assistance to its subsidiary companies and/or financiers of the company and its subsidiaries (group) for the

Pepkor notice of annual general meeting for the year ended 30 September 2024

Notice of annual general meeting of shareholders continued for the year ended 30 September 2024

purposes of the subscription for options and/or securities, issued or to be issued by the company or its subsidiary companies, or for the purchase of any securities of the company or its subsidiary companies, to fund the activities of the group.

3.3.1 Special resolution number 3: Financial assistance for subscription and/or purchase of securities in the company or in subsidiary companies

Resolved in terms of section 44(3)(a)(ii) of the Companies Act, as a general approval, that the board be and is hereby authorised to approve that the company provides financial assistance by way of a loan, guarantee, the provision of security or otherwise to any subsidiary company of the company and/or to any financier of the company or any subsidiary company of the company for the purpose of, or in connection with, the subscription of any option, or any securities, issued or to be issued by the company or a subsidiary company of the company, or for the purchase of any securities of the company or a subsidiary company of the company, on the terms and for the amounts that the board may determine, provided that the aforementioned approval shall be valid until the date of the next annual general meeting of the company.

In terms of and pursuant to the provisions of sections 44 and 45 of the Companies Act, the directors of the company confirm that the board will satisfy itself, after considering all reasonably foreseeable financial circumstances of the company, that immediately after providing any financial assistance as contemplated in special resolution numbers 2 and 3 above:

the assets of the company (fairly valued) will equal or exceed the liabilities of the company (fairly valued) (taking into consideration the reasonably foreseeable contingent assets and liabilities of the company); and
the company will be able to pay its debts as they become due in the ordinary course of business for a period of 12 months.

In addition, the board will only approve the provision of any financial assistance contemplated in special resolution numbers 2 and 3 above, where:

the board is satisfied that the terms under which any financial assistance is proposed to be provided will be fair and reasonable to the company; and
all relevant conditions and restrictions (if any) relating to the granting of financial assistance by the company as contained in the company's MOI have been met.

3.4 General authority to repurchase ordinary shares

The reason for and effect, if passed, of special resolution number 4 is to grant the directors a general authority in terms of the company's MOI and the JSE Listings Requirements for the acquisition by the company or by a subsidiary of the company of ordinary shares issued by the company on the basis reflected in special resolution number 4.

The board believes it to be in the best interests of the company to have authority to repurchase shares as and when appropriate opportunities arise. Should the company decide to repurchase shares, it will not do so unless, in the opinion of the directors, all the prescribed statutory, solvency, liquidity and capital adequacy requirements are capable of being fulfilled.

3.4.1 Special resolution number 4: General authority to repurchase ordinary shares issued by the company

Resolved that the repurchase by the company of ordinary shares issued by it, on such terms and conditions as may be determined by the board of the company, and the acquisition by any subsidiary of the company of ordinary shares issued by the company, on such terms and conditions as may be determined by the board of directors of any such subsidiary company, be and is hereby authorised as a general approval in terms of the JSE Listings Requirements, provided that:

such repurchase is permitted by and is in accordance with the provisions of the Companies Act, the JSE Listings Requirements and the company's MOI;
the general authority shall be valid until the next annual general meeting of the company or for a period of 15 (fifteen) months from the date of passing of this special resolution (whichever period is shorter);
this general authority shall be limited to a maximum of 5% (five per cent) in the aggregate in any one financial year of the company's issued ordinary share capital at the time the authority is granted;
repurchases shall not be made at a price more than 5% (five per cent) above the weighted average of the market value of the shares traded for the 5 (five) business days immediately preceding the date on which the transaction is effected. The JSE will be consulted for a ruling if the company's shares have not traded in such 5 (five) business day period;
the general repurchase of shares is implemented through the order book operated by the JSE trading system (open market) and done without any prior understanding or arrangement between the company and the counterparty;
the company will, at any point in time, appoint only one agent to effect the repurchase(s) on the company's behalf;
the company may not effect a repurchase during any prohibited period as defined in terms of the JSE Listings Requirements, unless

Pepkor notice of annual general meeting

for the year ended 30 September 2024

Notice of annual general meeting of shareholders continued for the year ended 30 September 2024

implemented in accordance with a repurchase programme which was in place prior to the prohibited period and which programme has been submitted to the JSE in writing and the terms of such repurchase programme have been determined prior to the commencement of the prohibited period, and the repurchase programme will be executed by an independent third party appointed by the company prior to the commencement of the prohibited period;

an announcement must be published as soon as the company has acquired ordinary shares constituting, on a cumulative basis, 3% (three per cent) of the number of ordinary shares in issue on the date that this authority is granted, containing full details thereof, as well as for each 3% (three per cent) in aggregate of the initial number of ordinary shares acquired thereafter; and
the directors shall have passed a resolution, authorising any repurchase and confirming that the group has satisfied the solvency and liquidity test as required by the Companies Act and that, since the test was performed, there have been no material changes to the financial position of the group.

In terms of section 48(2)(b)(i) of the Companies Act, subsidiaries may not hold more than 10% (ten per cent), in aggregate, of the number of the issued shares of any class of a company. For the avoidance of doubt, (i) a pro rata repurchase by the company from all its shareholders; and (ii) intra-group repurchases by the company of its shares from wholly owned subsidiaries, share incentive schemes pursuant to Schedule 14 of the JSE Listings Requirements and/or non-dilutive share incentive schemes controlled by the company, where such repurchased shares are to be cancelled, will not require shareholder approval, save to the extent as may be required by the Companies Act.

Information and statement relating to this special resolution

In accordance with paragraph 11.26 of the JSE Listings Requirements, the attention of shareholders is drawn to:

the importance of this resolution – should shareholders be in any doubt as to which action to take, they are advised to consult appropriate independent advisors; and
the following information, details of which are reflected in Annexure D to this notice of AGM regarding the:
major shareholders of the company; and
number of authorised and issued shares in the company.

Responsibility statement

The directors whose names are given in the Corporate information section to this notice of AGM collectively and individually accept full responsibility for the accuracy of the information given in this notice of AGM and certify that, to the best of their knowledge and belief:

there are no facts that have been omitted which would make any statement false or misleading and that all reasonable enquiries to ascertain such facts have been made;
this notice of AGM contains all information required by law and the JSE Listings Requirements;
confirm that there have been no material changes in the financial or trading position of the group since the publication of the financial results for the year ended 30 September 2024, and the date of this notice of AGM; and that,
after having considered the effect of a maximum repurchase of ordinary shares, for a period of 12 (twelve) months after the date of this notice of AGM, in their opinion:
the company and the group shall satisfy the solvency and liquidity test as contemplated in the Companies Act;
the company and the group will be able to pay its debts as they become due in the ordinary course of business;
the assets of the company and the group, fairly valued in accordance with International Financial Reporting Standards, will be equal to or in excess of the liabilities of the company and the group, fairly valued in accordance with International Financial Reporting Standards;
the share capital and reserves of the company and the group will be adequate for ordinary business purposes; and
the working capital of the company and the group will be adequate for ordinary business purposes.

Other business

To transact such other business as may be transacted at an AGM or raised by shareholders with or without advance notice to the company.

For and on behalf of the Pepkor board

M Allie

Masood Allie

Company secretary

17 January 2025

Pepkor notice of annual general meeting for the year ended 30 September 2024

Notice of annual general meeting of shareholders continued for the year ended 30 September 2024

Record dates and last day to trade

Record dates

The record date on which shareholders must be recorded in the securities register of the company for the purposes of receiving notice of this AGM is Friday, 10 January 2025.

The record date on which shareholders must be recorded in the securities register of the company for the purposes of being entitled to attend and vote at the AGM is Friday, 14 February 2025.

The last day to trade in ordinary shares of the company in order to be entitled to participate in and vote at the AGM is Tuesday, 11 February 2025.

Attendance, voting and proxies

Any shareholder entitled to participate in and vote at the AGM is entitled to appoint a proxy to participate, speak and vote on his/her behalf. The Form of Proxy attached to this notice of AGM should be completed by those shareholders who are:
holding shares in certificated form; or
own-name registered dematerialised shareholders.
All other shareholders who have dematerialised their shares through a central securities depository participant (CSDP) or broker and wish to attend the AGM, must instruct their CSDP or broker to provide them with a letter of representation, or they must provide the CSDP or broker with their voting instructions in terms of the relevant custody agreement entered into between them and the CSDP or broker.
Note that voting will be performed by way of a poll and, accordingly, each shareholder will have one vote in respect of each ordinary share held.
Attention is drawn to the notes attached to the Form of Proxy.
Forms of Proxy, together with proof of identification (i.e. identity document or smart card, driver's licence or passport) and authority to do so (where acting in a representative capacity) must either be lodged with the company's transfer secretary, Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank 2196 or posted to the transfer secretary at Private Bag X9000, Saxonwold 2132, South Africa or e-mailed to [email protected] so as to be received by no later than 09:00 on Thursday, 20 February 2025, provided that any Form of Proxy not delivered to the transfer secretary by this time may be sent to the chair of the AGM at any time before the appointed proxy exercises any shareholder rights at the AGM, subject to the transfer secretary verifying the Form of Proxy and proof of identification before shareholder rights are exercised.
The completion of a Form of Proxy will not preclude a shareholder from participating in the AGM.

Electronic registration and participation

The AGM will be conducted entirely by electronic communication (including voting) as contemplated by section 63(2)(a) of the Companies Act. The procedure for participation by electronic communication is set out hereunder.

Registration

Shareholders who wish to participate in the AGM should register online at www.smartagm.co.za by no later than 09:00 on Thursday, 20 February 2025. Shareholders may still register online to participate in and/or vote electronically at the AGM after this date and time provided that, for those shareholders to participate in and/or vote electronically at the AGM, they must be verified and registered prior to exercising any rights at the AGM. As part of the registration process, shareholders will be requested to upload proof of identification (i.e. identity document or smart card, driver's licence or passport) and authority to do so (where acting in a representative capacity) as well as to provide details, such as their name, surname, e-mail address, contact number and number of Pepkor shares held.

Following successful registration, the transfer secretary will provide shareholders with a username and a password in order to connect electronically to the AGM.

Participation

Participation in the AGM is through the Lumi website by following the steps set out at www.smartagm.co.za.

Once www.web.lumiagm.com has been entered into the web browser, the user will be prompted to enter the meeting ID followed by a requirement to enter the user's:

(a) username; and
(b) password.

The meeting ID is: 100-668-147-700.

To log in, users must have their username and password, which can be requested from [email protected] or by registering on www.smartagm.co.za.

The electronic communication employed will enable all persons participating in the AGM to communicate concurrently with one another without an intermediary and to participate effectively in the AGM. Voting of shares will be possible via electronic communication. Once the AGM has commenced, participants will be able to vote via the voting platform.

Although voting will be permitted by way of electronic communication, shareholders are encouraged to submit votes by proxy before the AGM.

Shareholders are further encouraged to submit any questions to the company secretary by e-mail to [email protected], by no later than 14:00 on Thursday, 20 February 2025. These questions may be addressed at the AGM or responded to by e-mail. A question facility will also be available on the Lumi platform.

Pepkor notice of annual general meeting for the year ended 30 September 2024

Notice of annual general meeting of shareholders continued for the year ended 30 September 2024

Shareholders should take note of the following:

Shareholders will be liable for their own network charges in relation to electronic participation in and/or voting at the AGM. Any such charges will not be for the account of the company or its service providers. In particular, but not exclusively, shareholders acknowledge that they will have no claim against the company and its directors, employees, company secretary, transfer secretary, service providers and advisors, whether for consequential damages or otherwise, arising from a loss of network connectivity or other network failures due to insufficient airtime or data, internet connectivity, internet bandwidth and/or power outages, which prevent any shareholder from participating in and/or voting at the AGM.

Company secretary

Masood Allie
36 Stellenberg Road, Parow Industria 7493
(PO Box 6100, Parow East 7501, South Africa)
Tel: +27 21 929 4800
E-mail: [email protected]

Transfer secretary

Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank 2196
(Private Bag X9000, Saxonwold 2132, South Africa)
Tel: +27 11 370 5000
E-mail: [email protected]

Pepkor notice of annual general meeting
for the year ended 30 September 2024

Annexure A

Social and ethics committee report

The group has significantly enhanced its sustainability endeavours.
- Environmental protection
- Social responsibility
- Governance

Our commitment to sustainability is central to Building Better Business and our purpose of providing affordable products and services to underserved communities.

Pepkor's ability to navigate a complex retail environment through innovation, customer focus and omnichannel strategies has positioned us to address sustainability challenges effectively.

The world we operate in

Our trading environment continued to present significant challenges, including high unemployment, port congestion, economic slowdowns and financial pressures on consumers. These economic conditions have increased demand for more affordable solutions. Amid competing geopolitical and economic priorities, sustainability remains a critical issue for both consumers and businesses. According to Bain & Company, 60% of global consumers are increasingly concerned about climate change and 36% of business-to-business buyers prioritise sustainable suppliers. Shifts in technology, consumer behaviour and policy continue to drive this trend globally.

The symbiotic nature of economic, social, and environmental systems presents both risks and opportunities. By focusing on resilience and purpose-driven growth, we can address customer needs while contributing to a more sustainable future.

Governance

The SEC is a statutory committee of the board and provides oversight of social, ethical and environmental matters within the group. We remain committed to ethical business practices aligned with the UN SDGs and our Building Better Business framework.

The committee, chaired by independent non-executive director Fagmeedah Petersen-Cook, consists of the CEO and independent non-executive directors Paula Disberry and Zola Malinga.

In line with the King IV Report on Corporate Governance™ for South Africa, 2016 (King IV™)* compliance, the committee is primarily composed of independent non-executive directors. Executives from HR, internal audit, compliance, investor relations and risk management are invited to committee meetings.

During FY24, the committee members maintained an attendance of at least 75% for all meetings and executives were present at all meetings. The chair also serves as a member of the audit and risk committee, ensuring efficient information flow and alignment of sustainability risks.

The human resources and remuneration committee (Remcom) and the board jointly (with recommendations made by the SEC) oversee sustainability incentives for senior executives and operational managers.

The committee has carried out its responsibilities as mandated by the Companies Act, our terms of reference and the King Codes on Corporate Governance. The committee met three times during the year to monitor key issues, including compliance and to discuss strategic activity.

The committee serves as the statutory SEC for the entire group, including subsidiaries.

Pepkor notice of annual general meeting
for the year ended 30 September 2024

Annexure A: Social and ethics committee report continued
for the year ended 30 September 2024

Committee members

Fagmeedah Petersen-Cook (49)

BBusSc (Act.Sc.), FIFoA, Certificate in Climate Change and Sustainability, FASSA, PGDip Global Business OXON, PGDip (MgtPrac) UCT GSB, CD(SA) IoDSA

Independent non-executive director

Chair of the social and ethics committee
Member of the audit and risk committee
Member of the investment committee

Fagmeedah was appointed as an independent non-executive director during April 2018 and is the designated insurance director for the group. She is an actuary with over 25 years' technical experience in the financial services sector and brings ERM skills to the boardroom. She previously served as the chief investment officer at the Eskom Pension and Provident Fund and an executive director of Prudential. Fagmeedah served on the board of Telkom SOC as a non-executive director, where she chaired the investment committee until retiring from that board in 2022. Fagmeedah champions ESG principles at the various companies where she is involved. She currently serves on the boards of, inter alia, Absa Pension Fund, Famous Brands, Africa Reinsurance SA, Capitalworks Fund III and Momentum Medical Scheme. Fagmeedah was also appointed as curator of 3sixty Life Limited during February 2023.

Paula Disberry (57)

BA (Hons), MA (Cambridge)

Independent non-executive director

Member of the investment committee
Member of the social and ethics committee

Paula was appointed as an independent non-executive director on 1 June 2021. She holds a BA (Hons) and MA in Natural Sciences (Neurophysiology) from Cambridge. She has considerable retail experience, covering fashion, general merchandise and grocery, having held senior executive management positions at Woolworths and Pick n Pay locally. Paula also has significant international experience through her former roles with Tesco, BP, Colgate-Palmolive and Woolworths. She has previously served on the boards of the Country Road Group and Woolworths (African subsidiary boards and risk committee) and currently serves on the boards of ADNOC Distribution (Abu Dhabi), Sefalana Holding Company (Botswana), Sundry Markets (Nigeria) and Banhoek Chilli Oil (UK). She is a managing partner at Retailigence (UK), an AI-based retail software provider, and is the retail/FMCG advisor with a number of African private equity companies.

Zola Malinga (46)

BAcc (Hons), CA(SA)

Independent non-executive director

Member of the audit and risk committee
Member of the social and ethics committee

Zola was appointed as an independent non-executive director on 1 June 2021. She is a CA(SA) and is the co-founder and executive director of Jade Capital Partners, an investment company with a portfolio in the real estate and industrial sectors. Zola has experience in investment banking, real estate, investment management and corporate governance, having held roles at Investec Bank and Standard Bank. She has previously served as a non-executive director on the boards of Hospitality Property Fund Limited, Grindrod Limited and Grindrod Bank (chair of the audit and compliance committee). She currently serves on the boards of SAPPI and Jade Capital Partners and chairs the St Mary's School Foundation.

How we performed

During the past year, we made significant progress in integrating our Building Better Business sustainability goals. These include enabling affordable living for customers, fostering inclusive growth and progressing along the road to greening our operations towards aligning with planetary limits.

The committee is pleased with the group's performance in context of the targets set out at the start of the year. We remain committed to advancing employment and economic growth in South Africa. We well-exceeded our learnership target and continue to offer the most among our retail peers in the country. We improved our B-BBEE score through supporting black-owned enterprises and helped communities through socio-economic development initiatives. The group completed its second CDP submission but unfortunately did not reach the targeted CDP score.

Area	Description	Target for FY24	Actual for FY24	Status
Social	Learnerships	2 700	4 143	Achieved
	ED target	1% of FY24 NPAT	1% of NPAT	Achieved
	SD target	2% of FY24 NPAT	2% of NPAT	Achieved
	SED target	1% of FY24 NPAT	1% of NPAT	Achieved
Env	Solar MWp added	2.5	2.5	Achieved
	Tonnes second-hand boxes reused	2 000	3 170	Achieved
Gov	CDP rating	B-rating	C-rating	Not Achieved
	FTSE score	3.6	3.7	Achieved

NPAT – Net profit after tax

Social and transformation

Inclusive growth is the way in which we believe we will achieve social transformation.

Employees

A key stakeholder is our group of employees. The committee maintains oversight around key initiatives which develop our employees.

I highlight the following:

The SEC maintains its oversight of targeted talent development programmes offered by the group through support from the relevant Sector Education and Training Authorities (SETAs).
We continue to invest in learnerships, graduate recruitment and internships to enhance the employability of South African youth, particularly in IT and accounting fields. These efforts are aimed at nurturing black talent within our operations. In FY24, the group extended support to 4 143 learners through learnerships, including 568 learners with disabilities.
Similarly, we offer funded bursaries for employees and their children to obtain qualifications.

Pepkor notice of annual general meeting
for the year ended 30 September 2024

Annexure A: Social and ethics committee report continued

for the year ended 30 September 2024

Sourcing and supplier compliance

Factory visibility and complex labour structures remain a challenge in managing supplier compliance across a large and diverse supply chain. The South African clothing manufacturing sector also faces pressure from global competition. Addressing these challenges requires collaboration among various stakeholders, including suppliers and government, to support local manufacturing and sourcing. The group is committed to participating in the revitalisation of the local industry and supports the Department of Trade and Industry's Retail Clothing, Textile, Footwear and Leather (R-CTFL) Master Plan. In FY24, 238 million units were sourced locally, demonstrating this commitment.

We made progress on supplier compliance and visibility. This includes centralised supplier mapping, enforcing the Pepkor SCOC and requiring a memorandum of acceptance (MoA) for future orders. Standards include upholding health and safety standards and procuring sustainable products and materials.

Enterprise and supplier development

Our other social initiatives focus on our suppliers and community. Our enterprise development (ED) injected R143 million into local black-owned ED initiatives, like the continued support we lend to our Flash traders. It is notable that ED has evolved into more strategic partnerships over the last two years, with PEP and Ackermans investing in suppliers such as Kelmik (a baby wear producer supplying PEP with three million units annually) and Ibhayi (a footwear producer supplying Ackermans with half a million units). The partnership with Taking Care of Business (TCB) is another ED initiative that not only supports local micro-enterprises but also the circular economy, diverting textile waste from landfill.

Socio-economic development remains a key focus. In FY24, the group invested R62.4 million, supporting social, education and health initiatives in communities in which we operate.

The committee liaised with the Remcom to ensure that B-BBEE continues to be a specific key performance indicator (KPI) to encourage behaviour that will serve to further improve the transformation of the group.

The overall B-BBEE rating shows good progress. In FY24, we improved our B-BBEE level from level seven to level four.

B-BBEE score improvement

Meet Ntombizethu (Zetu) Nombuso Sithole (31)

Together with the Do More Foundation and their Township Economy Programme, Zetu was part of Pepkor Speciality's 2022 intake of young female entrepreneurs in Hammarsdale. She was one of the top seven in the programme, and although she did not win, that has not dented her resilience and determination to make a difference in her community. Through her learnings on the programme she could then apply to become the official canteen chef and service provider for the canteen at our Hammarsdale DC and was appointed in April 2024.

ESG ratings

We are proud to have maintained our inclusion in the FTSE/JSE Responsible Investment (RI) Index, showing continued improvement. Our ESG ratings also improved with other rating agencies such as ISS, MSCI and S&P. While we did not achieve our targeted CDP Climate Change rating, improvement areas have been identified. This year's CDP submission incorporates and aligns with international disclosure frameworks and standards, such as the ISSB and TCFD.

FTSE/JSE Responsible Investment Index rating

The group's aim is to maintain our positions with all major rating agencies and to make incremental improvements in accordance with our strategic plans.

Environmental score
Social score
Governance score
Overall score

Pepkor notice of annual general meeting

for the year ended 30 September 2024

Annexure A: Social and ethics committee report continued for the year ended 30 September 2024

Environmental

Pepkor continues its commitment to reducing its environmental footprint. We achieved our solar PV expansion target, bringing our total installed capacity to 9.4 MWp. Limited rooftop space at leased facilities prompted us to explore additional renewable energy options, including virtual wheeling. Other energy-efficiency projects, such as LED lighting, continued to reduce electricity usage, cost and carbon emissions. Our next step is to explore energy-efficient air conditioning solutions, which account for 70% of our electricity usage.

Water conservation is receiving more attention. A World Wide Fund for Nature (WWF) water risk filter assessment was conducted across our stores and distribution centres (DCs) to understand physical, regulatory and reputational risks associated with water. Although we are not in direct control of our water sources, we are in control of how we use and protect water in water risk regions. Water-saving measures such as water harvesting, recycling systems and behaviour change continue and have been put in place where feasible.

We are focusing on new opportunities to optimise packaging and reduce cost as part of the EPR regulations. Efficiencies in transport and logistics in PKL group services further reduced carbon emissions by 10 963 tCO₂e since 2017.

Risk management

The CEO holds responsibility for managing group sustainability, particularly in relation to sustainability risks. Our sustainability risks are being integrated into the broader risk management processes through scenario analysis.

The group maintains a strict stance on regulatory compliance, with the committee overseeing policies and monitoring ethics, anti-fraud, bribery and corruption as well as human rights. In FY24, a centralised ethics and fraud hotline was established to enhance monitoring and reporting and no significant incidents were reported.

We are keeping abreast of changes in legislation, including the Climate Change Bill, EPR regulations and Employment Equity Amendment Act. This includes reviewing and aligning to local and international sustainability reporting regulations such as the ISSB and JSE Sustainability and Climate Change reporting guidelines.

Stakeholder reporting and engagement

The committee monitors that Pepkor maintains open lines of communication with all stakeholders. Regular updates, transparent reporting and detailed disclosure ensure that our stakeholders are informed of our progress and challenges in social and ethical matters.

In conclusion

We are confident that our unique position within communities allows us to make a substantial positive social impact and contribute to a better life for our customers and a more sustainable future.

We look forward to further progress in FY25 where we will focus on:

continuing integration of Building Better Business into operating businesses, leading with social impact through enabling affordable living and inclusive growth;
legal and regulatory developments and international sustainability reporting regulations, i.e. ISSB to ensure the group works towards alignment with best practice disclosure frameworks;
supply chain resilience; and
exploring opportunities in renewable energy and the circular economy, which is gaining more momentum.

I extend my thanks to the committee members, the board and Pepkor management for their dedication in furthering sustainability goals that align with our strategic imperatives. Together, we are Building Better Business.

Fagmeedah Petersen-Cook

Chair of the social and ethics committee

Pepkor notice of annual general meeting for the year ended 30 September 2024

Annexure B

Curricula vitae

Refer to agenda point 2.1 – Ordinary resolution numbers 1, 2, 3 and 4: Re-election of directors who retire by rotation

Hester Hickey (70)

BCompt (Hons), CA(SA)

Independent non-executive director

Hester was appointed as an independent non-executive director on 1 June 2021. She is a CA(SA) and holds a BCompt (Hons). Hester has held non-executive positions in several JSE-listed companies and has significant experience as a member and chair of audit committees. She was the former chair of the South African Institute of Chartered Accountants. Hester currently also serves on the board of Northam Platinum.

Steve Müller (63)

BAcc, BAcc (Hons), CA(SA), Sanlam EDP, IoDSA, SAICA (1991 – 2023)

Independent non-executive director

Steve was appointed as an independent non-executive director on 18 August 2017. He held roles at KPMG and Rand Merchant Bank Limited before joining Geribel Investments Limited, where he served as an executive director of Gensec Bank Limited, heading the Investment Banking division from 1998 to 2004. From 2004 to 2008, Steve managed various structured equity funds for Sanlam Capital Markets. Steve has served as a non-executive director on the boards of several companies over the last 28 years. He is currently also an independent non-executive director of KAP Limited and Phumelela Gaming and Leisure Limited.

Paula Disberry (57)

BA (Hons), MA (Cambridge)

Independent non-executive director

Isaac Mophatlane (51)

IT entrepreneur

Independent non-executive director

Isaac was appointed as an independent non-executive director on 1 June 2021. He is the co-founder, a shareholder and director of the Randvest Group, a private investment firm specialising in strategic investments in technology companies. Isaac co-founded BCX in 1996, which was sold to Telkom in 2016, thereby creating one of the leading African information and communications technology (ICT) companies. Isaac has extensive insight into the technological developments and challenges facing companies. He serves as an independent non-executive director of Mustek.

Pepkor notice of annual general meeting for the year ended 30 September 2024

Annexure B: Curricula vitae continued

for the year ended 30 September 2024

Refer to agenda point 2.2 – Ordinary resolution numbers 5, 6, 7 and 8: Re-appointment of the members of the audit and risk committee of the company

Hester Hickey (70)

For curricula vitae refer to point 1.

Fagmeedah Petersen-Cook (49)

BBusSc (Act.Sc.), FIFoA, Certificate in Climate Change and Sustainability, FASSA, PGDip Global Business OXON, PGDip (MgtPrac) UCT GSB, CD(SA) IoDSA

Independent non-executive director

Fagmeedah was appointed as an independent non-executive director during April 2018 and is the designated insurance director for the group. She is an actuary with over 25 years' technical experience in the financial services sector and brings enterprise risk management skills to the boardroom. She previously served as the chief investment officer at the Eskom Pension and Provident Fund and an executive director of Prudential. Fagmeedah served on the board of Telkom SOC as a non-executive director, where she chaired the investment committee until retiring from that board in 2022. Fagmeedah champions ESG principles at the various companies where she is involved. She currently serves on the boards of, inter alia, Absa Pension Fund, Famous Brands, Africa Reinsurance SA, Capitalworks Fund III and Momentum Medical Scheme. Fagmeedah was also appointed as curator of 3sixty Life Limited during February 2023.

Zola Malinga (46)

BAcc (Hons), CA(SA)

Independent non-executive director

Steve Müller (62)

For curricula vitae refer to point 1.

Refer to agenda point 2.4 – Ordinary resolution numbers 10, 11, 12 and 13: Appointment of the members of the social and ethics committee of the company

Fagmeedah Petersen-Cook (49)

For curricula vitae, please refer to point 2.

Zola Malinga (46)

For curricula vitae, please refer to point 2.

Paula Disberry (57)

For curricula vitae, please refer to point 1.

Pieter Erasmus (59)

BCom (Hons) RAU, CA(SA)

Chief executive officer

Pieter was appointed as a non-executive director on 12 January 2022 and as chief executive officer on 1 October 2022. He completed his articles at Coopers Theron Du Toit (now PwC) in 1990. Pieter spent his early career at Hewlett Packard and in the Remgro group before he joined PEP as financial director in 1998. He was appointed as group managing director of Pepkor Limited in 2001, a position he held for 16 years, until his resignation in 2017. Pieter also previously served as a non-executive director of the company from 1 October 2018 to 29 January 2019. He is currently a director of, inter alia, the Vista group, a multi-jurisdictional investment holding group, and serves on the board of Pepkor's major subsidiary.

Pepkor notice of annual general meeting

for the year ended 30 September 2024

Annexure C

Remuneration policy and implementation report

The scope and aim of the remuneration policy

The various operating businesses' remuneration policies that collectively constitute the group's remuneration policy have been developed systematically over several years. In some cases, they have been developed by the operating businesses before incorporation into the group. In all cases, policies have been adapted to support the performance-focused culture of the group. We continue to make progress to ensure greater alignment on remuneration, policies and practices across the group.

The policies in place apply to each of our operating businesses, which all need to attract, motivate and retain critical and specialist skills. Each operating business is also required to develop a robust recruitment strategy. The group's competitive advantage in these areas flows from an intricate and in-depth knowledge of the retail, financial services, telecommunications, digital capability and informal fintech market value chains. This includes supply chains and the nurturing of key supplier relationships, goal-orientated marketing strategies and development of customer value propositions, offering the right product at the right price and at the convenience of our customers. These relationships and capabilities are all people-driven and depend on good systems, practices and policies. To be successful, each operating business needs its own specialist management team, a support team to deliver on time, and systems that are robust and sustainable.

The remuneration philosophy

The Pepkor remuneration philosophy originates from our purpose to make a positive difference in the lives of our customers. When our customers are positively impacted, our people grow, our operating businesses grow and, ultimately, our group grows. The company remuneration philosophy also seeks to serve shareholder interests by supporting sustainable growth.

We aim to position ourselves in the market to ensure we attract, motivate and retain critical talent. We achieve this by applying appropriate remuneration structures across all employee levels, as well as within our various group-level entities, ensuring that the correct balance between guaranteed pay, and short- and long-term incentives is achieved.

Pepkor notice of annual general meeting for the year ended 30 September 2024

Annexure C: Remuneration policy and implementation report continued

for the year ended 30 September 2024

The remuneration framework

While different policies may develop in each operating business, these policies are required to conform to and fit within a fair and approved remuneration policy framework at all levels and across the whole group, differentiated by grade and level of responsibility.

Positions are graded according to the Paterson grading system, placing employees into groups based on their grade level, with specific remuneration policies applied to each group.

Responsibility level	Grade level	Guaranteed pay	Short-term incentives	Long-term incentives
Operational and logistics employees	D1 and below	Salaries are reviewed annually based on an assessment of the competence of the employee, the market position of the job or via a collective bargaining process.	A commission, gain-sharing or outcomes-based bonus may be awarded as an add-on to guaranteed pay. In some instances, a guaranteed thirteenth cheque applies.	Skills development is encouraged and subsidised, facilitating career advancement. Employment benefits may include retirement, medical, death and disability cover, as well as study funding. In addition, bursaries may also be provided to employees' children.
Administrative employees
Line managers (Heads of departments)	D2 to D5	Guaranteed pay is reviewed annually based on an assessment of the competence of the employee	A performance bonus may be earned, based on the performance of the department or operating business.	The incentives, as outlined above, apply to this group of employees. Additionally, some employees – who are identified by the CEO and his executive team through succession planning processes as having high potential or are key for retention – may be awarded LTIs.
Executive management (The members of the group and operating business executive committees)	E and F		A performance bonus may be earned based on the performance of the operating business. Financial and non-financial criteria are used as measures.	Employees participate in LTI schemes based on group and operating business performance.
Executive directors (Shouldering the responsibility for group strategy)	F		A performance bonus may be earned as above but calculated based on group performance. Financial and non-financial criteria are used as measures.

Remuneration governance

The policy governing terms of employment

Employment contracts are terminable on six months' notice for executive directors and between one and three months' notice for the executive management team.

Remuneration packages, including the entitlement to LTIs, are reviewed annually, aligning interests with shareholders.

A fixed-term employment contract has been agreed with the COO until December 2026. No other fixed-term employment contracts have been entered into with any other employees on the executive management team or executive directors. As confirmed in the previous year's report, the COO will receive incentives which aim to ensure that he remains in the employment of the group until December 2026. The COO, per his contract, is allocated 1 200 000 shares and a £250 000 retention bonus per annum from FY24 with the purpose of ensuring his employment until December 2026. The shares will vest in March 2027 if he remains in employment until the end of his contract. The retention bonus is only payable if he remains in employment until the end of December 2026.

The remuneration package

Remuneration is defined as a package containing three elements:

The guaranteed pay includes the costs of employee benefits such as travel allowances, and retirement and medical fund contributions. Guaranteed pay is reviewed annually.
An STI scheme is agreed in the form of an annual bonus, or a profit pool-funded bonus.
A long-term equity-based incentive is awarded.

Pepkor notice of annual general meeting

for the year ended 30 September 2024

Annexure C: Remuneration policy and implementation report continued

for the year ended 30 September 2024

The market positioning of guaranteed pay

The guaranteed packages of the executive management team and executive directors are reviewed annually. A detailed external benchmarking exercise is conducted every two years by Remcom, based on reputable salary surveys. The survey provider used for FY24 was REMchannel.

The following approach is observed in the annual review exercise:

The guaranteed pay of each executive director and executive management team member is reviewed relative to market comparisons. The 50th percentile of market comparison is used as the target.
The group CEO makes recommendations to Remcom concerning the pay level of each executive based on market comparisons and taking into account the competence and performance of the individual and the criticality of their contribution to the group.
The remuneration of the group CEO is proposed by the chair of the board and considered by Remcom.
An annual increase will be determined by Remcom based on the expected inflation, salary increase forecasts, internal and external equity, and peer benchmarks.
The succession risks concerning top management positions are considered by Remcom.

Peer comparison group (Retail)

The Pepkor group benchmarks against certain peers when remuneration and benefits are reviewed, as well as market practices. The following peers were confirmed at the time of benchmarking:

Retail sector
Clothing, footwear and homeware	Other retailers
Mr Price Group Limited	Shoprite Holdings Limited
The Foschini Group Limited	Clicks Group Limited
Truworths International Limited	Pick n Pay Holdings Limited
Woolworths Holdings Limited	The Spar Group Limited

Package structures

Guaranteed pay (GP) is contracted on the basis that the executive directors and executive management are required to put more of their remuneration at risk than other employees. They are, however, incentivised via their participation in an STI scheme. The total remuneration of these individuals will reach market level if the targeted score is obtained in terms of the STI scheme. To illustrate the above, the following package structuring policy is in place and will typically apply in FY25 to executive directors, executive management and line managers.

| Element of package
Percentages are of total cost of employment (TCOE) at target | Executive directors | Executive management at group level | Line managers |
| --- | --- | --- | --- |
| GP | 67% | 67% | 83% |
| STI at target | 33% | 33% | 17% |
| TCOE | 100% | 100% | 100% |
| Maximum bonus (% of GP) | 100% | 100% | 40% |

The form and scale of STIs

Each executive serving on an executive committee will qualify for an STI at the end of each financial year, based on targeted pay at risk, as reflected in the table above. Incentives are measured and determined as follows:

The executive concerned has a performance scorecard reflecting both financial and non-financial performance criteria. The criteria are weighted between 70% and 90% based on financial criteria, and between 10% and 30% based on non-financial criteria.
The financial criteria for executive management are tied to the financial performance of the operating business, where the target is equal to the approved budget for the operating business or a percentage of operating profit growth for the operating business or earnings growth of the group. The non-financial criteria include objectives based on set targets. The targets are reset annually. Non-financial performance criteria achievement will be proposed by the group CEO and approved by Remcom at the end of each year based on external verification results.
In the case of the executive directors and COO, the financial target is based on the growth in group earnings and the non-financial target is focused on reaching the B-BBEE goals agreed annually in advance with the committee.
The bonus will be provided and accounted for in the year to which it relates and paid in the following financial year after it has been approved. In the case of the component on B-BBEE, this will be accounted for and paid following the period to which it relates.

Pepkor notice of annual general meeting

for the year ended 30 September 2024

Annexure C: Remuneration policy and implementation report continued

for the year ended 30 September 2024

For FY25, Remcom has approved that earnings* growth between 10% and 30% will result in an STI of between 30% and 90% of the guaranteed package for the executive directors and COO.

Additionally, the STI component for B-BBEE was retained for FY25. Executive directors and the COO will be awarded an incentive of 10% of guaranteed pay upon achievement of a level 6 B-BBEE contributor status (not discounted) for FY25 as approved by Remcom. From FY24, a threshold has been introduced where earnings* growth of at least consumer price index (CPI) plus gross domestic product (GDP) needs to be achieved before payment of this element becomes due, thereby ensuring that all STIs are self-funded by profits generated during the relevant financial year.

Remcom believes structuring the STIs as financial criteria equalling 90% and non-financial criteria equalling 10% is appropriate for FY25. The above could result in a maximum STI of 100% for executive directors and executive management.

STI measure	Weighting %	Threshold (as a % of GP)	On-target (as a % of GP)	Maximum (as a % of GP)
Earnings* growth	90	30	40	90
B-BBEE	10	10	10	10
Total (as a % of GP)	100	40	50	100

Earnings are defined as 'profit' for the year from continuing operations as disclosed in the financial results of the group, excluding the effect for the implementation of new IFRS® Accounting Standards (IFRS) in the year of implementation – resulting in normalised earnings. Earnings further exclude abnormal one-off items outside management's control.

The form and scale of LTIs

The Pepkor Holdings Limited executive share rights scheme takes the form of full-value shares, subject to performance vesting conditions, either based wholly on Pepkor's performance or, in the case of executive management, based on Pepkor and/or applicable business performance criteria. The rights are granted annually with effect from the beginning of the financial year during which the grant was made. Grants are made annually in March. Each grant issued is subject to a three-year performance period.

Participants are awarded share rights in terms of the company's LTI plan based on the following guidelines:

Each designated employee will receive an allocation amount based on the approved levels determined annually by Remcom. This allocation value will be used to determine the number of share rights granted to each employee based on the 30-day volume-weighted average price (WWAP) on 30 September of each year. Guaranteed pay will be used to ensure that these allocations do not exceed the maximum allocation percentage allowed as per the rules of the scheme.
More share rights can be awarded to an employee if this is approved by Remcom on the recommendation of the CEO, on the grounds of the criticality of their skills and knowledge, or in relation to the operations or needs of the group. In the case of the CEO, the committee would make the recommendation.
In awarding share rights, the performance vesting conditions are sufficiently challenging, which, together with the requirement of continuous employment, evaluates them as being worth approximately 70% of their face value on the date of the grant, in Remcom's judgement.
An amount of 172 500 000 (one hundred and seventy-two million five hundred thousand) unissued ordinary shares of no par value in the company may be used for the implementation of the Pepkor Holdings Limited executive share rights scheme over the life of the scheme. This represents less than 5% of Pepkor's total issued share capital.

LTIs continue to be reviewed to ensure they sufficiently motivate and retain key talent in line with best market practices. Provisions are made in the scheme rules relating to resignation, dismissal, death, retrenchment, ill health, disability, injury and sale of employer company.

Pepkor notice of annual general meeting

for the year ended 30 September 2024

Annexure C: Remuneration policy and implementation report continued

for the year ended 30 September 2024

FY24 share grants were allocated based on the following performance criteria:

Key performance indicators and targets			Weighting
Growth	Statutory headline earnings* per share ➢ Threshold: CPI + GDP (50% vesting) ➢ On-target: CPI + GDP + 2% (100% vesting) ➢ Stretch: CPI + GDP + 4% (110% vesting) ➢ Super stretch: CPI + GDP + 6% (120% vesting)	140 120 100 80 60 40 20 0 Threshold On-target Stretch Super stretch Westing % Growth %	75%
Cash generation	Cash conversion^ ➢ Threshold: 70% (50% vesting) ➢ On-target: 80% (100% vesting) ➢ Stretch: 85% (110% vesting) ➢ Super stretch: 90% (120% vesting)	140 120 100 80 60 40 20 0 Threshold On-target Stretch Super stretch Westing % Target %	10%
Sustainability	B-BBEE compliance – Level 6 (not discounted) will result in a 100% vesting FTSE/JSE Responsible Investment Index – inclusion in the index will result in 100% vesting		10% 5%

Earnings are defined as 'headline earnings' from continuing operations as disclosed in the financial results of the group, excluding the effect for the implementation of new IFRS in the year of implementation – resulting in normalised earnings. Earnings further excludes abnormal one-off items outside management's control.
^ Cash generated by operations and divided by earnings before interest, taxation, depreciation and amortisation (EBITDA).

Vesting between threshold and on-target will be calculated on a pro-rata linear sliding scale basis and vesting of stretch and super stretch will be cliff vesting. CPI and GDP will be measured as per the official figures released by Stats SA.

In aggregate, performance over the three-year performance period will result in a 42.5% vesting for threshold performance, 100% for on-target and 117% at the maximum. For the FY24 share grant, the total number of participants were reviewed and reduced in comparison to the FY23 share grant.

Clawback and malus provision

Clawback and malus provisions were first incorporated in the letters of allocation in respect of the March 2018 grants and have been incorporated in all subsequent grants. The scheme rules were amended at the AGM in March 2020, specifically to include clawback and malus provisions.

The Remcom has the discretion to apply malus (the forfeiture or reduction of allocation(s) that are yet to vest) or clawback (the recoupment of the value of allocation(s) that already vested), in respect of any participant or all participants, on the occurrence of one or more of the following events:

a material misstatement resulting in an adjustment to the performance criteria in respect of a period for which the performance criteria applicable to an allocation have been assessed and resulted in an unfair benefit to the participant(s); and/or
action or conduct of an employee that amounts to fraud or dishonesty or a material breach of their obligations to the company.

Pepkor notice of annual general meeting

for the year ended 30 September 2024

Annexure C: Remuneration policy and implementation report continued

for the year ended 30 September 2024

NED fees

The proposed 2025 fees will be presented to shareholders for consideration at the AGM to be held in February 2025 and, if approved, will be effective from 1 April 2025 to 31 March 2026.

	2025	2024	% change
Board of directors
Chair	2 393 300	2 268 600	5.5
Lead independent*	1 038 200	984 100	5.5
Member	819 900	777 200	5.5
Audit and risk committee
Chair	615 300	583 200	5.5
Member	342 100	324 300	5.5
Human resources and remuneration committee
Chair	342 100	324 300	5.5
Member	171 100	162 200	5.5
Nomination committee
Member	82 600	78 300	5.5
Social and ethics committee
Chair	280 800	266 200	5.5
Member	151 100	143 200	5.5
Investment committee
Chair	342 100	266 200	28.5
Member	171 100	143 200	19.5
Insurance
Insurance director	171 100	162 200	5.5

Currently, no lead independent director has been appointed and the proposed fee is only to provide for the event of one being appointed in the future.

All fees listed above exclude VAT. The cycle for NED fees runs from April to March of each year after it has been approved at the AGM by shareholders.

Application of discretion

The group remuneration framework provides a clear guideline for remuneration practices. Although the basis for short- and long-term awards is rigid, Remcom has the discretion regarding who will participate in variable pay remuneration. Remcom determines the overall quantum of the STIs and has the discretion to exercise reasonability and to make recommendations for any ex gratia payments where extraordinary value has been created by the executive directors and executive management. If a material deviation from the remuneration policy occurs, this will be disclosed in the annual remuneration report. Discretion would include, but is not limited to:

ensure that Pepkor's employees are fairly rewarded for their individual and joint contributions to Pepkor's overall performance and that Pepkor remunerates fairly, responsibly and transparently to achieve its strategic objectives and secure positive outcomes in the short, medium and long term; and
ensure that the remuneration of executive directors, executives and managers is determined based on the remuneration philosophies applicable with due cognisance of operating business-specific past practices and successes.

Fair and responsible remuneration

The Remcom views fair and responsible remuneration as being internally equitable and externally competitive. The remuneration policy plays an important role in achieving this objective, as well as in ensuring that Pepkor meets its strategic goals over the short, medium and long term. Key features and functions of the policy include:

consulting with independent remuneration advisors affiliated with the South African Reward Association (SARA);
applying the principle of equal pay for work of equal value;
benchmarking the levels of roles, using a job grading system (REMeasure, Old Mutual);
using reputable salary survey providers REMchannel (Old Mutual) and Willis Towers Watson; and
providing Remcom with suitable market-related recommendations.

The Remcom understands the importance of ensuring executive directors and executive management are remunerated fairly, and in a manner aligned with shareholders' expectations. Within this context, Remcom will always strive to achieve a balance between the attraction, motivation and retention of key employees.

Pepkor notice of annual general meeting

for the year ended 30 September 2024

Annexure C: Remuneration policy and implementation report continued

for the year ended 30 September 2024

Pay policy mix

Below is a theoretical illustration of the potential consequences on the total remuneration for the current executive directors and COO, on a total single-figure basis, of applying the remuneration policy under the minimum, on-target and maximum performance outcomes. The total single-figure remuneration includes all remuneration elements receivable for a defined reporting period, each disclosed at fair value.

Minimum shareholding requirements

In line with good market practice, Remcom introduced MSR for the CEO and CFO in FY23. The aim is to ensure that the interests of executive directors, the COO and shareholders are aligned. From FY24 the MSR was expanded to include the COO and increased the requirement for the CEO to 150%.

The stipulated conditions for MSR are as follows:

Shareholding must be accumulated over five years from the introduction of the MSR policy on 1 October 2022 or five years from the appointment of an employee into the CEO, COO or CFO role.
The Remcom will regularly review the progress towards these requirements to ensure compliance with the policy.
All shares held on 30 September every year will be used to report in the annual remuneration report and reflected as a percentage of the annual guaranteed package.

The minimum shareholding requirement as a percentage of the annual guaranteed package is as follows:

CEO: 150%

CFO: 100%

COO: 100%

Pepkor notice of annual general meeting

for the year ended 30 September 2024

Annexure C: Remuneration policy and implementation report continued

for the year ended 30 September 2024

ESG responsibility and remuneration

Pepkor has incentivised ESG elements in its STI and LTIs for the past seven years. The main focus is on social transformation in terms of B-BBEE accreditation and improvement. Executive directors and executive management teams are provided with focused B-BBEE targets per operating business so that Pepkor achieves the overall target. Currently, 10% of STIs and 10% of LTIs are linked to reaching the targeted B-BBEE level.

In addition, a specific focus has been put on Pepkor's inclusion in the FTSE/JSE Responsible Investment Index which covers the ESG elements under LTI criteria. These elements are considered most appropriate as the group comprises several businesses operating across different sectors. FTSE/JSE Responsible Investment Index ESG rating covers human rights and communities, labour standards, climate change, supply chain visibility and compliance, anti-corruption and corporate governance. Yearly improvement on these themes, especially on the environmental pillar, has focused the group's attention on further progressing its Building Better Business sustainability framework, rooted in resource efficiencies as a low-cost retailer.

Leading with social while being more intentional with environmental initiatives has translated into strategic imperatives under the Building Better Business framework. The focus includes enabling affordable living, inclusive growth and environmental sustainability.

Sustainability report

Implementation of remuneration policy

This section discloses the details of the group's executive directors and COO's remuneration in terms of the policies set out in the remuneration policy section of the report, which is required to be disclosed in terms of the Companies Act, the JSE Equity and Debt Listings Requirements and King IV™. The section also discloses the details regarding NED fees.

The executive directors and COO are the prescribed officers of the group in terms of the Companies Act.

Compliance with the remuneration policy

The Remcom is satisfied that the remuneration policy summarised in this report achieved its primary objectives in FY24 and is expected to do so again in the next financial year. A deviation occurred concerning the STI of the CFO from the policy in FY24 and further details are provided under the STI outcomes for FY24.

In FY24 no circumstances warranted the application of any malus or clawback provisions.

Guaranteed pay benchmarking and increases for FY25

Benchmarking in the current year was undertaken based on salary information from REMchannel. The survey found that the guaranteed pay of the executive management team across the group was positioned at the 50th percentile of the market. This was compared to companies and roles of a similar size in South Africa. This is close to the expectation of the pay structuring target, explained in the policy section of this document, as there is a skew towards variable pay in the pay structure of executive management.

As communicated in the SENS announcement on 30 January 2024, the board and the CEO concluded a new employment agreement with the company in terms of which he continues to fulfil the role of Pepkor CEO with commensurate remuneration in line with the group's remuneration policy. Previously, the CEO received no remuneration from Pepkor for his role as CEO.

A salary increase of 0.0% was approved to be implemented in FY25 for the guaranteed package of the CEO and COO. A detailed benchmarking exercise was conducted for the CFO this year to ensure that his GP is market-related compared to the South African retail peers. Based on the outcome of this benchmark, Remcom approved an inflationary increase of 5.5% in addition to an adjustment of 34.1%, aligning the CFO's GP to about the 50th percentile in the market.

A general increase was approved for other employees (including bargaining unit employees) ranging between 5% and 6.5% and is linked to inflation. A differential of 0.5% to 1.0% more on average is added for employees on lower grade levels versus more senior roles in the group.

CFO GP benchmark FY25

Pepkor notice of annual general meeting

for the year ended 30 September 2024

Annexure C: Remuneration policy and implementation report continued

for the year ended 30 September 2024

STI outcomes in FY24

The following bonuses were awarded to the executive directors and COO in respect of the performance of the group for FY23 and FY24:

Executive director and COO	Bonus awarded FY24		Bonus awarded FY23
	R'000	% of GP	R'000	% of GP
PJ Erasmus^	6 840	36.0	-	-
RG Hanekom	6 024	105.4	514	10.0
SNN Cardinaal^	7 359	46.0	-	-

^ Appointed 1 October 2022

The Remcom approved the following STI categories for FY24:

Financial – earnings* growth (between 10% and 90% of GP)
Non-financial – B-BBEE targets (between 5% and 10% of GP)

Incentives were awarded in FY24 based on earnings.* The growth in earnings for FY24, based on this definition, was 12.8%, in terms of this category, translating into an STI award equal to 36% of GP. Additionally, a maximum incentive of 10% of guaranteed pay is applicable for the CFO and COO based on the achievement of Level 7 B-BBEE (not discounted). The B-BBEE outcome for the FY23 measurement period resulted in a 10% payment to the CFO and COO in FY24.

For FY24 it was agreed that the CFO's remuneration would be reviewed with changes effective for FY25. As an interim measure, the Remcom agreed to a higher STI percentage payout for FY24 to ensure he is fairly remunerated for his role compared to market peers. This resulted in the CFO being awarded an STI of 105.4% of GP, which comprises a financial component of 95.4% and B-BBEE component of 10% of GP. This arrangement is only in place for FY24.

Earnings are defined as 'profit' for the year from continuing operations as disclosed in the financial results of the group, excluding the effect for the implementation of new IFRS in the year of implementation – resulting in normalised earnings. Earnings further exclude abnormal one-off items outside management's control.

LTI scheme

FY21 share grants vesting

The performance criteria were measured over a three-year performance period, being FY21 to FY23. In year 1 (FY21), a performance score of 92.00% was achieved. In year 2 (FY22), a performance score of 104.80% was achieved. In year 3 (FY23), a performance score of 50.00% was achieved.

This resulted in a final vesting percentage of 82.3% of the total award. The following tables set out targeted performance compared to performance achieved per key performance criteria over the three years.

Years 1 (FY21)

Performance criteria	Description	Weighting %	Target	Result achieved	% of award vesting
Growth	Earnings	45.00	R3 650m	R4 147m	49.50
	Market share growth (RLC)*	10.00	3.00%	-0.75%	0.00
Cash generation	Cash conversion	25.00	80.00%	85.50%	27.50
Sustainability	B-BBEE rating	10.00	55.00 points	58.91 points	10.00
	Compliance and governance	5.00	Above 80.00%	Above 80.00%	5.00
	FTSE/JSE Responsible Investment Index	5.00	2.90 points	2.20 points	0.00
Total		100.00			92.00

RLC – Retailers' Liaison Committee

Year 2 (FY22)

Performance criteria	Description	Weighting %	Target	Result achieved	% of award vesting
Growth	Headline earnings per share	55.00	10.60%	15.70%	66.00
Cash generation	Cash conversion	25.00	80.00%	75.00%	18.80
Sustainability	B-BBEE rating	10.00	55.00 points	67.91 points	10.00
	Compliance and governance	5.00	Above 80%	Above 80%	5.00
	FTSE/JSE Responsible Investment Index	5.00	Inclusion	Inclusion	5.00
Total		100.00			104.80

Pepkor notice of annual general meeting

for the year ended 30 September 2024

Annexure C: Remuneration policy and implementation report continued

for the year ended 30 September 2024

Year 3 (FY23)

Performance criteria	Description	Weighting %	Target	Result achieved	% of award vesting
Growth	Headline earnings per share	55.00	8.80%	-6.70%	0.00
Cash generation	Cash conversion	25.00	80.00%	91.10%	30.00
Sustainability	B-BBEE rating	10.00	55.00 points	67.91 points	10.00
	Compliance and governance	5.00	Above 80%	Above 80%	5.00
	FTSE/JSE Responsible Investment Index	5.00	Inclusion	Inclusion	5.00
Total		100.00			50.00

Executive director and COO interests

The following table sets out grants of share rights made to the executive directors and COO in terms of the Pepkor Holdings Limited executive share rights scheme during FY24, including outstanding and unvested share rights as of the financial year-end. It also includes the current shareholding of the executive directors and COO as of 30 September 2024.

Executive director and COO	At the beginning of the year (FY21, FY22 and FY23 allocations)	Allocated during the year (FY24 allocation)	Vested and/or forfeited during the year (FY21 allocation)	At the end of the year (FY22, FY23 and FY24 allocations)	Actual number of shares held at 30 September 2024	Total value of shareholding at 30 September 2024 (VWAP R22.77)	Value as a % of FY24 annual GF
PJ Erasmus	–	1 405 943	–	1 405 943	–	–	N/A
RG Hanekom	2 015 201	657 126	(966 665)	1 705 662	1 207 933	27 504 634	479
SNN Cardinaal*	766 090	–	–	766 090	–	–	N/A
Total	2 781 291	2 063 069	(966 665)	3 877 695	1 207 933	27 504 634

The COO, per the agreement for FY24, was allocated 1 200 000 shares with the purpose of ensuring his employment until December 2026. These shares will vest in March 2027 if all conditions are met. This agreement does not form part of the Pepkor Holdings Limited executive share rights scheme.

LTI scheme grants in FY25

Share rights will be granted according to the remuneration policy and allocation levels. Performance vesting conditions are aligned with the policy as set out in the policy section and will be confirmed by Remcom.

Total remuneration in FY24

The following table offers a breakdown of the total single-figure remuneration earned by the executive directors and COO during FY24, reflected based on the cost to the group in terms of its accounting policies, which observe IFRS rules.

Remuneration of the executive directors	Basic remuneration R'000	Company contributions and benefits R'000	Short-term incentive R'000	Long-term incentive R'000	Total remuneration R'000
FY24
PJ Erasmus	18 851	149	6 840	–	25 840
RG Hanekom	4 771	972	6 024	14 695	26 462
SNN Cardinaal*	17 642	3 020	7 359	–	28 021
Total	41 264	4 141	20 223	14 695	80 323
FY23
PJ Erasmus	–	–	–	–	–
RG Hanekom	4 462	982	514	11 461	17 419
SNN Cardinaal	9 685	392	–	–	10 077
Total	14 147	1 374	514	11 461	27 496

Due to the COO being a non-South African resident, the company contributions and benefits amount includes expatriate allowances as part of his employment agreement. This amount includes taxable benefits such as, inter alia, travel expenses.

Pepkor notice of annual general meeting

for the year ended 30 September 2024

Annexure C: Remuneration policy and implementation report continued

for the year ended 30 September 2024

Actual remuneration outcomes

In the graph below, the actual remuneration outcomes for FY24 have been illustrated.

NED fees in 2024

The following is a summary of fees paid to NEDs for their services as directors.

	FY24 R'000	FY23 R'000
TL de Klerk*	378	848
P Disberry	896	848
LJ du Preez*	991	966
HH Hickey	1 325	1 385
IM Kirk	1 174	1 110
WYN Luhabe	2 209	2 089
ZN Malinga	1 212	1 146
LI Mophatlane	991	966
SH Muller	1 528	1 445
RN Ntshingila	804	-
F Petersen-Cook	1 629	1 541
Total	13 137	12 344

All fees listed above exclude VAT and VAT is added where directors are registered for VAT.
* Relates to remuneration received for services provided to Ibex Group. The fees to directors include fees paid as directors of the related company, Ibex Group, where directors serve on the board of the company and holding company. The amount payable to Ibex Group for the attendance of Pepkor board meetings, as well as being non-executive Pepkor board members amounts to R1.37 million (2023: R1.81 million).

Pepkor notice of annual general meeting

for the year ended 30 September 2024

Annexure D

Major shareholders of the company and number of authorised and issued shares in the company

Beneficial shareholders holding 1% or more	Number of shares	%
Ainsley Holdings Proprietary Limited	1 041 708 550	28.28
Government Employees Pension Fund	429 056 560	11.65
Titan Premier Investments Proprietary Limited	140 600 000	3.82
Government of Norway	104 736 745	2.84
Alexander Forbes Investments	78 841 451	2.14
Various retail investors	72 633 453	1.97
SAHPL Proprietary Limited	70 000 000	1.90
Titan FinCap Solutions RF Proprietary Limited	41 485 785	1.13
Coronation Top 20 Fund	41 913 278	1.14
Old Mutual Life Assurance Company Limited	41 377 546	1.12
Vanguard Total International Stock Index	38 392 152	1.04
Total	2 100 745 520	57.03
Fund managers holding 1% or more	Number of shares	%
---	---	---
Public Investment Corporation (PIC)	327 323 537	8.89
Coronation Asset Management Proprietary Limited	211 226 320	5.74
Titan Premier Investments Proprietary Limited	182 085 785	4.95
M&G Investment Managers Proprietary Limited	136 212 219	3.70
Sanlam Investment Management	118 947 067	3.23
Truffle Asset Management Proprietary Limited	113 038 664	3.07
The Vanguard Group Incorporated	102 713 271	2.79
Value Capital Partners	80 694 964	2.19
BlackRock Advisors LLC	75 246 833	2.04
Abax Investments	67 131 426	1.82
Allan Gray Proprietary Limited	66 799 774	1.81
Fidelity Management & Research Company	50 996 066	1.38
Camissa Asset Management	49 331 187	1.34
Fairtree Asset Management Proprietary Limited	49 050 410	1.34
Total	1 630 797 523	44.29
Number of authorised and issued shares in the company	Number of shares	Rm
---	---	---
Authorised share capital
Ordinary shares of no par value	20 000 000 000	–
Issued share capital
Stated capital – ordinary shares of no par value	3 683 655 024	67 161

Pepkor notice of annual general meeting
for the year ended 30 September 2024

Corporate information

PEPKOR HOLDINGS LIMITED
('Pepkor' or 'the company' or 'the group')
(Incorporated in the Republic of South Africa)

Executive directors
PJ Erasmus (Chief executive officer)
RG Hanekom (Chief financial officer)

Non-executive directors
WYN Luhabe (Chair)
P Disberry
LJ du Preez
HH Hickey
IM Kirk
ZN Malinga
LI Mophatlane
SH Müller
NS Ntshingila
F Petersen-Cook*

Independent

Registration number
2017/221869/06

Share code
PPH

Debt code
PPHI

ISIN
ZAE000259479

LEI
3789006D677C34F69875

Registered address
36 Stellenberg Road, Parow Industria 7493

Postal address
PO Box 6100, Parow East 7501

Telephone
021 929 4800

Contact
E-mail: [email protected]

Investor relations and debt officer
Ian Nel
E-mail: [email protected]

Press enquiries
E-mail: [email protected]

Company secretary
Masood Allie
E-mail: [email protected]

Auditor
PricewaterhouseCoopers Inc.
5 Silo Square, V&A Waterfront
Cape Town 8012
PO Box 2799, Cape Town 8000

Equity and debt sponsor
Investec Bank Limited
(Registration number 1969/004763/06)
100 Grayston Drive, Sandown
Sandton 2196
PO Box 78055, Sandton 2146

Corporate broker
Rand Merchant Bank
(A division of FirstRand Bank Limited)

Transfer secretary
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank 2196

Form of proxy

PEPKOR

Holdings Limited

PEPKOR HOLDINGS LIMITED

Proxy

To be completed by certificated shareholders and dematerialised shareholders with own-name registration only. For use at the annual general meeting of Pepkor to be held by electronic participation at 09:00 on Monday, 24 February 2025 (AGM), and at any adjournment thereof.

If shareholders have dematerialised shares with a central securities depository participant (CSDP) or broker, other than with own-name registration, they must arrange with such CSDP or broker to provide them with the necessary written authorisation to attend and vote at the AGM, or the shareholders concerned must instruct the CSDP or broker as to how they wish their votes to be recorded at the AGM. This must be done in terms of the custody agreement entered into between the shareholder and the CSDP or broker concerned.

I/We (Full name(s) in block letters)

of (address)

being the registered holder(s) of

ordinary shares (insert number of shares held), hereby appoint:

or failing him/her

the chair of the AGM, as my/our proxy, to vote for me/us and on my/our behalf at the AGM of Pepkor for purposes of considering and, if deemed fit, passing, with or without modification, the ordinary and special resolutions to be proposed thereat and at each adjournment thereof and to vote for and/or against the resolutions and/or abstain from voting in respect of the shares registered in my/our name(s) in accordance with the following instructions (see Notes on the reverse hereof):

	NUMBER OF VOTES (ONE VOTE PER SHARE)
		In favour	Against	Abstain
1.	Presentation of the annual financial statements and the report of the social and ethics committee	Non-voting
2.1	Re-election of directors who retire by rotation
2.1.1	Ordinary resolution number 1: Re-election of HH Hickey
2.1.2	Ordinary resolution number 2: Re-election of SH Müller
2.1.3	Ordinary resolution number 3: Re-election of P Disberry
2.1.4	Ordinary resolution number 4: Re-election of LI Mophatlane
2.2	Re-appointment of the audit and risk committee members
2.2.1	Ordinary resolution number 5: Re-appointment of HH Hickey
2.2.2	Ordinary resolution number 6: Re-appointment of F Petersen-Cook
2.2.3	Ordinary resolution number 7: Re-appointment of ZN Malinga
2.2.4	Ordinary resolution number 8: Re-appointment of SH Müller
2.3	Re-appointment of auditor
2.3.1	Ordinary resolution number 9: Re-appointment of PricewaterhouseCoopers Inc.
2.4	Appointment of the social and ethics committee members
2.4.1	Ordinary resolution number 10: Appointment of F Petersen-Cook
2.4.2	Ordinary resolution number 11: Appointment of ZN Malinga
2.4.3	Ordinary resolution number 12: Appointment of P Disberry
2.4.4	Ordinary resolution number 13: Appointment of PJ Erasmus
2.5	Non-binding advisory vote on Pepkor's remuneration policy
2.5.1	Ordinary resolution number 14: Approval of remuneration policy
2.6	Non-binding advisory vote on Pepkor's implementation report on the remuneration policy
2.6.1	Ordinary resolution number 15: Approval of implementation report on remuneration policy
3.1	Remuneration of non-executive directors
3.1.1	Special resolution number 1.1: Board chair
3.1.2	Special resolution number 1.2: Lead independent director
3.1.3	Special resolution number 1.3: Board members
3.1.4	Special resolution number 1.4: Audit and risk committee chair
3.1.5	Special resolution number 1.5: Audit and risk committee members
3.1.6	Special resolution number 1.6: Human resources and remuneration committee chair
3.1.7	Special resolution number 1.7: Human resources and remuneration committee members
3.1.8	Special resolution number 1.8: Social and ethics committee chair
3.1.9	Special resolution number 1.9: Social and ethics committee members
3.1.10	Special resolution number 1.10: Nomination committee members
3.1.11	Special resolution number 1.11: Investment committee chair
3.1.12	Special resolution number 1.12: Investment committee members
3.1.13	Special resolution number 1.13: Director approved by Prudential Authority
3.2	Financial assistance to subsidiary companies or corporations
3.2.1	Special resolution number 2: Intercompany financial assistance in terms of section 45 of the Companies Act
3.3	Financial assistance for subscription/purchase of securities
3.3.1	Special resolution number 3: Financial assistance for the subscription and/or purchase of securities in the company or in subsidiary companies in terms of section 44 of the Companies Act
3.4	General authority to repurchase shares
3.4.1	Special resolution number 4: General authority to repurchase shares issued by the company

Shareholders must indicate as follows how their votes must be exercised: Insert an 'X' in the appropriate block if you wish to vote all your shares in the same manner. If not, insert the number of votes in the appropriate block. The total number of votes may not exceed the total to which the shareholder is entitled. Unless otherwise instructed, a shareholder's proxy may vote as he/she thinks fit.

Signed at __ on this __ day of _____ 2025

Signature _________

Assisted by (where applicable) _________ (state capacity and full name)

Any power of attorney and any instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of the power of attorney, must be forwarded to the company's transfer secretary, Computershare Investor Services Proprietary Limited, at the address stated below so as to reach them before the time fixed for commencement of the AGM.

Notes to Form of Proxy:

30 This Form of Proxy should only be used by certificated shareholders or shareholders who have dematerialised their shares with own-name registration.

40 All other shareholders who have dematerialised their shares through a CSDP or a broker, and wish to attend the AGM, must arrange with such CSDP or broker to provide them with the necessary written authorisation to attend the AGM or, should they not wish to attend, the shareholders must provide the CSDP or broker with their voting instructions in terms of the relevant custody agreement entered into between them and the CSDP or broker.

50 A shareholder may insert the name(s) of one or more proxies, none of whom need to be a shareholder of the company, in the space provided, with or without deleting the phrase 'the chair of the AGM'. The person whose name appears first on the Form of Proxy and who is present at the AGM will be entitled to act as proxy to the exclusion of those whose names follow. In the event that no names are indicated, the proxy shall be exercised by the chair of the AGM.

60 A shareholder's instruction on the Form of Proxy must be indicated by the insertion of a number of shares in the appropriate space provided, or an 'X' if the shareholder wishes to vote all the shares. Failure to comply with the above will be deemed to authorise the chair of the AGM, if the chair is the authorised proxy, to vote in favour of the resolutions at the AGM, or any other proxy to vote or to abstain from voting at the AGM as he/she deems fit in respect of all of the shareholder's votes exercisable thereat. A shareholder or his/her proxy is not obliged to use all the votes exercisable, but the total of the votes cast, together with any abstentions recorded, may not exceed the total of the votes exercisable by the shareholder or by his/her proxy.

70 Forms of Proxy must be completed and lodged at or posted to the transfer secretary, Computershare Investor Services Proprietary Limited (Rosebank Towers, 15 Biermann Avenue, Rosebank 2196 or Private Bag X9000, Saxonwold 2132, South Africa), or e-mailed to [email protected] to be received by the transfer secretary by no later than 09:00 on Thursday, 20 February 2025, provided that any Form of Proxy not delivered to the transfer secretary by this time may be sent to the chair of the AGM at any time before the appointed proxy exercises any shareholder rights at the AGM, subject to the transfer secretary verifying the Form of Proxy and proof of identification before shareholder rights are exercised.

80 The completion and lodging of this Form of Proxy shall not preclude the shareholder from attending, speaking and voting at the AGM to the exclusion of any proxy appointed in terms thereof.

90 Should this Form of Proxy not be completed and/or received in accordance with these notes, the chair of the AGM may accept or reject it, provided that, in the case of acceptance, the chair is satisfied as to the manner in which the shareholder's votes are to be recorded.

10 Documentary evidence establishing the authority of the person signing this Form of Proxy in a representative or other legal capacity must be attached to this Form of Proxy unless previously recorded by the transfer secretary or waived by the chair of the AGM.

10 The chair shall be entitled to reject the authority of a person signing this Form of Proxy:

9.1. under a power of attorney; or
9.2. on behalf of a company or on behalf of another entity, unless that person's power of attorney or authority has been deposited and registered by the transfer secretary at the address stated herein before the time fixed for commencement of the AGM.

10 Where shares are held jointly, all joint holders are required to sign the Form of Proxy. When there are joint registered holders of any shares, any one of such persons may vote at the AGM in respect of such shares as if he/she is solely entitled thereto, but, if more than one of such joint holders be present or represented at any AGM, that one of the said persons whose name stands first in the register in respect of such shares or his/her proxy, as the case may be, shall alone be entitled to vote in respect thereof. Several executors or administrators of a deceased shareholder, in whose name any shares stand, shall be deemed joint holders thereof.

11 A minor must be assisted by his/her parent or guardian unless the relevant documents establishing his/her legal capacity are produced or have been registered by the transfer secretary.

12 Any alterations of or correction to this Form of Proxy must be initialled by the signatory(ies).

13 It is the intent that all voting at the AGM will take place by way of a poll.

14 On a poll, every shareholder participating electronically or represented by proxy shall have one vote for every share held by such shareholder.

PEPKOR
Holdings Limited
www.pepkor.co.za

PEPKOR
Holdings Limited

Reviewed annual results

for the year ended 30 September 2024

Consistent performance drives market share gains at improved margin while strategic execution in fintech yields tangible results

Performance highlights

+7.8% R85.1 billion revenue
+9.2% normalised and comparable²

+13.5% R32.6 billion gross profit, +190 bps gross profit margin expansion

+8.4% R9.8 billion operating profit
+17.4% normalised and comparable²

(0.4%) 140.2 cents HEPS
+10.3% normalised and comparable²

R11.9 billion cash generated

22.3% return on net assets

48.5 cents dividend declared

3 million customers added on A+, FoneYam and Abacus – meeting customer needs for affordability, connectivity and insurance

4 143 learnerships provided – the most of all SA retailers³

9.4MWp total solar capacity installed

Continuing operations
Normalised and comparable results reflect performance excluding non-recurring items in the prior year, and exclude the impact of the 53rd week of trading in the prior year. Refer to the pro forma financial information for further detail.
Based on available public information

Group performance – continuing operations

Overview

Pepkor's strategy to meet customer needs delivered a commendable performance in FY24, with strategic execution delivering tangible results.

The group captured additional market share and increased gross profit margin through improved full-price sales.

Pepkor's customer acquisition capability in its retail operations enabled rapid growth in fintech. Strategic execution in financial services and cellular connectivity added three million customers to the group's A+ retail credit base, FoneYarn and Abacus.

The group's participation and reach in the dynamic informal market through the Flash business further bolstered growth.

Operating environment showing signs of potential improvement

This performance was achieved despite a challenging operating environment, marked by high unemployment, financially constrained consumers and supply chain complexities. Lower inflation towards the end of the year, particularly in food prices, is expected to provide some relief to customers, while the suspension of electricity load shedding will enhance customers' ability to earn an income.

Pepkor again provided the highest number of learnership opportunities in the country this year, at 4 143, and strengthened operational resilience by further expanding solar capacity to 9.4 MWp, reducing its environmental impact.

Consistent and sustainable performance with margin expansion

For the year ended 30 September 2024 (FY24), group revenue increased by 7.8% to R85.1 billion. The prior year (FY23) included an additional 53rd trading week for South Africa-based clothing and general merchandise brands. On a comparable 52-week basis, group revenue increased by 9.2%.

Group gross profit margin increased by 190 basis points to 38.3%, benefiting from improved full-price sales and growth in fintech.

Ongoing revenue earned from mobile network operators increased by 4.1% to R2.0 billion.

Operating expenses (excluding debtors' costs, depreciation and amortisation, foreign exchange losses and IFRS 16 gains) increased by 8.4% and were well controlled in context of additional costs incurred to enable strategic execution. Excluding the Avenida business in Brazil, operating expenses increased by 7.1%.

Debtors' costs increased by 49.6% to R2.5 billion, driven by strategic execution in credit interoperability and connectivity.

Normalised and comparable operating profit (before capital items) increased by 17.4% to R9.8 billion.

Net finance costs increased by 16.3% to R3.2 billion due to high interest rates during the year.

Inventory levels increased by 3.2% to R17.5 billion. When excluding The Building Company, inventory increased by 14.3% as a result of growth in cellular and measures taken to buffer product inflows to compensate for supply chain disruption.

Strong and flexible balance sheet, continued cash generation and healthy returns

Gearing levels remain low with net debt (excluding IFRS 16 lease liabilities) decreasing to R7.3 billion (FY23: R7.6 billion), in line with the targeted range of between 0.5 times and 1 times net debt-to-EBITDA.

Cash generated from operations amounted to R11.9 billion and return on net assets, which excludes, among others, the impact of goodwill and intangibles, amounted to 22.3%.

HEPS increased by 10.3% to 140.2 cents on a normalised and comparable basis, reflecting a decrease of 0.4% on a statutory basis.

Normalised results¹

Normalised results exclude the following non-recurring items in the FY23 and FY24 results:

Non-recurring IFRS 16 lease modification gain pertaining to termination of lease – FY23

The termination of the PEP distribution centre lease in the KwaZulu-Natal province and commissioning of the newly constructed distribution centre in Hammarsdale (which is owner-occupied) resulted in a lease modification gain of R392 million. This non-recurring gain contributed c. 8 cents per share to earnings and headline earnings per share in FY23.

Non-recurring insurance recovery of capital items – FY23

Earnings benefited from insurance proceeds recovered for the damage sustained to fixture and fittings as a result of the KwaZulu-Natal floods reported in April 2022. Damaged fixtures and fittings were written off at net book value, after accumulated depreciation, while the full replacement value was recovered from insurance. These recoveries are included as capital items and benefited earnings per share by c.1 cent in FY23. Headline earnings, by definition, exclude capital items and are therefore not impacted by this insurance recovery.

Impairment of goodwill and trade and brand name intangible assets included as part of capital items – FY24 and FY23

Earnings were negatively impacted by the impairment of goodwill and the trade and brand names intangible assets. These impairments are included as capital items and impacted earnings negatively per share by c.69 cents (FY23: c.178 cents) for the goodwill impairment and c.4 cents (FY23: c.2 cents) for the trade and brand names intangible asset impairment. Headline earnings, by definition, exclude capital items and are therefore not impacted by these impairments.

Comparable 52-week basis

Comparable results exclude the impact of the 53rd week of trading in the prior year.

¹ The normalised and comparable results constitute pro forma financial information in terms of the JSE Limited Listings Requirements. For a full appreciation of this, please refer to pages 27 to 30.

Pepkor reviewed annual results
for the year ended 30 September 2024

2
Pepkor reviewed annual results
for the year ended 30 September 2024

Clothing and general merchandise segment

Furniture, appliances and electronics segment

Group revenue

Financial services

Informal market

Traditional Retail

The Clothing and general merchandise segment (CGM) increased revenue by 5.2% to R61.4 billion (7.0% on a 52-week basis) and the Furniture, appliances and electronics segment (FAE) increased revenue by 4.5% to R11.0 billion.

Group merchandise sales (sales) increased by 4.8% for the year (6.4% on a 52-week basis). Group like-for-like sales increased by 4.1%.

PEP and Ackermans delivered a stronger trading performance in the second half of the year, notwithstanding the late arrival of winter. Additionally, supply chain disruption affected product availability, negatively impacting performance in some clothing brands.

On a 52-week basis group cash sales increased by 2% and credit sales increased by 34%, driven by the implementation of the group's credit interoperability strategy which added 1.2 million A+ accounts in the South Africa-based CGM retail brands. The overall group credit sales mix increased to 14% from 11% in the prior year.

Retail selling price inflation in PEP, Ackermans and Speciality (in aggregate) amounted to 6.2% for the year.

Retail space increased by 2.0% during the year and included 256 new store openings (119 net), expanding the total store footprint to 5899 stores.

Gross profit margin in CGM expanded by 218 basis points to 38.1% and contracted to 28.4% in FAE. CGM operating profit increased by 12.0% (on a normalised and comparable basis) to R7.7 billion and FAE operating profit increased by 22.2% to R649 million.

Market share was expanded with the latest independent South African data showing that Pepkor accounts for:

nearly two out of every three baby wear sales;
one out of every two kids' wear sales;
more than three out of four school wear sales; and
7.5 out of 10 prepaid cellular handsets – an improvement from seven out of 10 in the previous year.

This underscores Pepkor's role in clothing families, improving people's homes, and connecting the South African nation.

PEP maintained its Best Price Leadership and expanded market share with a positive trajectory in like-for-like sales growth delivered throughout the year. Higher full-price sales improved gross profit margin.

Ackermans showed good progress in recovering like-for-like sales at substantially improved gross profit margins driven by higher full-price sales. Market share gains were achieved in the Babies, Kids and

School categories. The transition to the new Hagley distribution centre in Cape Town was completed seamlessly and the Ackermans team was further enhanced with additions in key functions to strengthen execution.

Speciality's clothing brands delivered consistent performance and expanded market share. Dunns performed well and Refinery reached record annual sales of R1 billion, expanding its store base to 154 stores with 36 new stores opened. The launch of Refinery Junior extended the Refinery brand's winning formula into the kids' wear market. The development of a new standalone women's retail format was completed and is set for launch in FY25. Speciality's footwear brands faced challenges due to a highly competitive footwear market.

The Avenida business accelerated expansion during the year, opening 42 new stores and a second distribution centre. Performance weakened in the second half, impacted by a late and unusually short winter season.

Peptor Lifestyle (previously JD Group) completed its rebranding and delivered a strong performance in Home. Performance in Tech had to contend with a high base in the prior year in addition to significant promotional activity by competitors in key categories. As announced on 3 September 2024, Peptor has entered into an agreement to acquire Shoprite's furniture business, which operates more than 400 stores. Peptor's Lifestyle business has developed strong capabilities in supply chain, logistics, and financial services, supported by scalable integrated systems and data-driven insights. By combining Shoprite Furniture with Peptor Lifestyle, key synergies and efficiencies will be realised through improved scale.

| Sales growth % | FY24
Total sales growth % | FY24
Total sales growth
52 weeks % | FY24
Like-for-like sales growth % |
| --- | --- | --- | --- |
| Traditional Retail segments | 4.8 | 6.4 | 4.1 |
| Clothing and general merchandise segment | 4.9 | 6.8 | 4.2 |
| PEP | 4.2 | 6.0 | 4.7 |
| Ackermans | 4.8 | 6.8 | 4.5 |
| Speciality | 5.7 | 8.1 | 3.6 |
| PEP Africa^ | 19.5 | 22.5 | 19.7 |
| Avenida^ | 20.1 | 20.1 | 5.5 |
| Furniture, appliances and electronics segment | 4.3 | 4.3 | 3.6 |
| Lifestyle | | | |

A Constant currency sales growth is reported for PEP Africa and Avenida.

Peptor reviewed annual results

for the year ended 30 September 2024

FinTech

The FinTech segment increased revenue by 26.8% to R12.7 billion. Gross profit margin expanded by 129 basis points to 48.0%. Operating profit increased by 55.2% to R1.4 billion.

FINANCIAL SERVICES

Revenue from financial services increased by 40.3% to R4.6 billion, driven by the group's credit interoperability and connectivity strategies.

Credit interoperability

The A+ credit base was expanded to 2.8 million accounts with a record 1.2 million new accounts opened during the year, benefiting sales through cross-shopping across the group's retail brands.

The group maintained its conservative approach to credit granting and collections, and non-performing loans and provision levels remain well within tolerable levels across all credit books. Approval rates decreased to 30% from 36% in the prior year, underscoring the reduced creditworthiness of consumers and the group's prudent credit granting approach.

Compared to peers, Pepkor's credit granting methodology is more conservative, and customers are not allowed to make further purchases when one payment is missed. Under this definition, 74% (FY23: 75%) of customers were able to make purchases at the end of September 2024.

The gross A+ credit book increased to R6.6 billion (FY23: R4.5 billion) and provision levels reduced to 19% (FY23: 21%) with stable non-performing loans.

Connectivity

The group sold 11.5 million cellular handsets this year, expanding market share to make the group the seller of 7.5 out of 10 prepaid smartphones in South Africa (GfK). Smartphones contributed 60% to handset sales and the active sim card base, underpinning ongoing revenue, increased to 29 million.

FoneYam, the newly developed cellular handset rental product designed to make smartphones affordable, has been highly successful, surpassing one million customers by November 2024, with monthly activations exceeding 120 000 by the end of September 2024. The FoneYam cellular rental book amounts to R932 million (gross) with an initial provision level of 20%.

Lending

Capfin's loan base reached 320 000 loans during the year and the gross unsecured credit loan book increased to R3.3 billion (FY23: R2.5 billion). Provisioning decreased to 17% (FY23: 18%) and non-performing loans reduced to 8% (FY23: 9%).

Insurance

The group leveraged its in-house insurance capability, rolling out Abacus insurance products across Capfin, PEP, Ackermans, Dunns, PAXI and most recently, FoneYam. As a result, more than one million customers were added through policies sold during the year.

INFORMAL MARKET

Flash increased revenue by 20.2% to R8.0 billion with operating profit increasing by 38.0% to R617 million – reflecting a seven-year CAGR of 22%.

Total throughput (virtual turnover based on face value of products sold) increased by 30.0% to R50 billion for the year. The average throughput across the informal market trader base of 165 000 increased by 21.7%. 1Voucher sales reached R15.7 billion for the year, growing by 36.8%.

OMNICHANNEL

The +more customer value platform was launched in March 2024 and now includes more than five million members. +more focuses on the creation of an engaging rewards programme and converting digital attention into a commercial relationship.

Pepkor reviewed annual results

for the year ended 30 September 2024

Pepkor reviewed annual results
for the year ended 30 September 2024

Outlook

An optimistic consumer outlook is supported by lower food inflation, the suspension of electricity load shedding and the two-pot retirement system reform. These factors should contribute to improved consumer confidence, lower indebtedness and enhanced spending power. Measures have also been put in place to improve stock inflows and supply chain resilience.

The seven weeks up to 16 November 2024 showed a strong improvement in sales. Sales in the CGM segment increased by 16%. In the FAE segment, sales increased by 6% with the Home division increasing sales by 12%.

Pepkor remains focused on delivering value to customers by expanding affordable product ranges and leveraging data-driven insights to enhance customer engagement. Plans are in place to open between 250 and 300 new stores in FY25.

As demonstrated by this year's results, fintech, financial services, connectivity solutions, and the informal market present valuable opportunities for expansion, while mergers and acquisitions continue to be considered to diversify and strengthen the group's portfolio.

Pepkor is well-positioned to capture additional market share with a robust foundation for continued growth across the retail and fintech sectors.

Dividend declaration

The board declared a cash dividend of 48.50525 cents per ordinary share payable to shareholders on Monday, 20 January 2025. The dividend has been declared out of income reserves.

The salient dates of the dividend declaration are:

Last date to trade cum dividend	Tuesday, 14 January 2025
Date trading commences ex-dividend	Wednesday, 15 January 2025
Record date	Friday, 17 January 2025
Payment date	Monday, 20 January 2025

Share certificates may not be dematerialised or rematerialised between Wednesday, 15 January 2025 and Friday, 17 January 2025, both days inclusive. The maximum local dividend tax rate is 20%. The net local dividend amounts to 38.80420 cents per share for shareholders liable to pay dividend tax at the maximum rate. The issued ordinary share capital of Pepkor Holdings Limited as at the date of this declaration is 3 684 million ordinary shares. Pepkor Holdings Limited's tax reference number is IT9542320180.

Investment case

Defensive, cash-generative group with a track record of healthy returns
Closest to customers with unparalleled scale and capabilities
Significant growth opportunities

Appreciation

The Pepkor board and management team appreciate the continued support from investors, customers, employees and suppliers and value their loyalty to the Pepkor group of businesses.

Wendy Luhabe
Independent non-executive chair

Pieter Erasmus
Chief executive officer

Riaan Hanekom
Chief financial officer

25 November 2024

Independent auditor's review report

on condensed consolidated financial statements

To the shareholders of Pepkor Holdings Limited

We have reviewed the condensed consolidated financial statements of Pepkor Holdings Limited, set out on pages 9 to 26, which comprise the condensed consolidated statement of financial position as at 30 September 2024 and the related condensed consolidated income statement and condensed consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and selected explanatory notes.

Directors' responsibility for the condensed consolidated financial statements

The directors are responsible for the preparation and presentation of these condensed consolidated financial statements in accordance with the requirements of the JSE Limited Listings Requirements for condensed financial statements, as set out in the basis of preparation paragraph to the financial statements, and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of condensed consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express a conclusion on these condensed consolidated financial statements. We conducted our review in accordance with International Standard on Review Engagements (ISRE) 2410, which applies to a review of historical financial information performed by the independent auditor of the entity. ISRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared in all material respects in accordance with the applicable financial reporting framework. This standard also requires us to comply with relevant ethical requirements.

A review of condensed consolidated financial statements in accordance with ISRE 2410 is a limited assurance engagement. We perform procedures, primarily consisting of making inquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluate the evidence obtained.

The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on these condensed consolidated financial statements.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements of Pepkor Holdings Limited for the year ended 30 September 2024 are not prepared, in all material respects, in accordance with the requirements of the JSE Limited Listings Requirements for condensed financial statements, as set out in the basis of preparation paragraph to the financial statements, and the requirements of the Companies Act of South Africa.

PricewaterhouseCoopers Inc.
PricewaterhouseCoopers Inc.
Director: D de Jager
Registered Auditor
Stellenbosch, South Africa
25 November 2024

Pepkor reviewed annual results
for the year ended 30 September 2024

Independent auditor's assurance report

on the compilation of pro forma financial information for the period ended 30 September 2024 included in the Pepkor reviewed annual results for the year ended 30 September 2024

To the directors of Pepkor Holdings Limited

We have completed our assurance engagement to report on the compilation of the pro forma financial information of Pepkor Holdings Limited (Pepkor or the company) and its subsidiaries (together the group) by the directors. The pro forma financial information, as set out on pages 27 to 30 of Pepkor's reviewed annual results for the year ended 30 September 2024 (the document), consists of non-IFRS measures/constant currency information/week 52/53 impact (the pro forma financial information). The applicable criteria on the basis of which the directors have compiled the pro forma financial information are specified in the Listings Requirements of the JSE Limited (the JSE Listings Requirements), including Guidance Letter: Presentation of constant currency information dated 16 August 2012 and described in the pro forma financial information section of the pro forma financial information (the applicable criteria).

The pro forma financial information has been compiled by the directors solely to illustrate the impact of removing the results of week 53 from the 30 September 2023 revenue and trading profit, the impact of constant currency disclosure and the impact of the goodwill and trade and brand name asset impairment as required by IFRS Accounting Standards on the 30 September 2024 results.

As part of this process, information about the group's consolidated financial position and financial performance has been extracted by the directors from the group's reviewed annual results for the year ended 30 September 2024, on which a review opinion was issued on 25 November 2024.

Directors' responsibility for the pro forma financial information

The directors are responsible for compiling the pro forma financial information on the basis of the applicable criteria.

Our independence and quality management

We have complied with the independence and other ethical requirements of the Code of Professional Conduct for Registered Auditors, issued by the Independent Regulatory Board for Auditors' (IRBA Code), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. The IRBA Code is consistent with the corresponding sections of the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards).

The firm applies International Standard on Quality Management 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements, which requires the firm to design, implement and operate a system of quality management, including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Pepkor reviewed annual results

for the year ended 30 September 2024

Independent auditor's assurance report continued

Auditor's responsibility

Our responsibility is to express an opinion, as required by the JSE Listings Requirements, about whether the pro forma financial information has been compiled, in all material respects, by the directors, on the basis of the applicable criteria, based on our procedures performed.

We conducted our engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus issued by the International Auditing and Assurance Standards Board. This standard requires that we plan and perform our procedures to obtain reasonable assurance about whether the pro forma financial information has been compiled, in all material respects, on the basis specified in the applicable criteria.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the pro forma financial information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the pro forma financial information.

The purpose of the pro forma financial information included in the document is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the company as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the event or transaction would have been as presented.

A reasonable assurance engagement to report on whether the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the directors in the compilation of the pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the events, and to obtain sufficient appropriate evidence about whether:

the related pro forma adjustments give appropriate effect to those criteria; and
the pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on our judgement, having regard to our understanding of the nature of the group, the events in respect of which the pro forma financial information has been compiled, and other relevant engagement circumstances.

Our engagement also involves evaluating the overall presentation of the pro forma financial information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria.

PricewaterhouseCoopers Inc.
PricewaterhouseCoopers Inc.
Director: D de Jager
Registered Auditor
Stellenbosch, South Africa
25 November 2024

Pepkor reviewed annual results
for the year ended 30 September 2024

Condensed consolidated financial statements

for the year ended 30 September 2024

Condensed consolidated income statement

	Notes	Year ended30 September2024ReviewedRm	Year ended30 September2023Restated1ReviewedRm	% change
Revenue	2	85 136	78 960	7.8
Retail revenue		80 714	75 788	6.5
Financial services revenue		3 957	2 801	41.3
Insurance revenue		465	371	25.3
Cost of sales		(52 527)	(50 226)	(4.6)
Cost of merchandise sold		(52 527)	(50 277)	(4.5)
Insurance claim recovery – floods		-	51	(100.0)
Gross profit		32 609	28 734	13.5
Other income		1 034	1 176	(12.1)
Other income excluding insurance claim recovery – floods		1 034	906	14.1
Insurance claim recovery – floods		-	270	(100.0)
Operating expenses		(16 718)	(14 810)	(12.9)
Debtors' costs		(2 527)	(1 689)	(49.6)
Operating profit before depreciation, amortisation and capital items		14 398	13 411	7.4
Depreciation and amortisation		(4 596)	(4 367)	(5.2)
Operating profit before capital items		9 802	9 044	8.4
Capital items	3	(2 908)	(6 828)	57.4
Capital items excluding insurance claim recovery – floods		(2 908)	(6 865)	57.6
Insurance claim recovery – floods		-	37	(100.0)
Operating profit		6 894	2 216	211.1
Finance costs	4	(3 447)	(2 997)	(15.0)
Finance income		279	272	2.6
Profit/(loss) before associated income		3 726	(509)	832.0
Share of net profit of associate		-	7	(100.0)
Profit/(loss) before taxation		3 726	(502)	842.2
Taxation	5	(1 386)	(1 083)	(28.0)
Profit/(loss) for the period from continuing operations		2 340	(1 585)	247.6
(Loss)/profit for the period from discontinued operations	7	(257)	295	(187.1)
Profit/(loss) for the year		2 083	(1 290)	261.5
Profit/(loss) attributable to:
Equity holders of the parent		2 072	(1 298)	259.6
Non-controlling interests		11	8	37.5
Profit/(loss) for the year		2 083	(1 290)	261.5
Earnings per share (cents)
Basic earnings per share from continuing operations		63.4	(43.4)	246.1
Basic earnings per share from discontinued operations		(7.0)	8.0	(187.5)
Total basic earnings per share	6	56.4	(35.4)	259.3
Diluted earnings per share from continuing operations		62.7	(42.8)	246.5
Diluted earnings per share from discontinued operations		(6.9)	7.9	(187.3)
Total diluted earnings per share	6	55.8	(34.9)	259.9

1 Prior year comparatives have been restated for the effect of the discontinued operation as detailed in note 7.

Pepkor reviewed annual results

for the year ended 30 September 2024

Condensed consolidated statement of comprehensive income

| | Notes | Year ended
30 September
2024
Reviewed
Rm | Year ended
30 September
2023
Restated¹
Reviewed
Rm |
| --- | --- | --- | --- |
| Profit/(loss) from continuing operations | | 2 340 | (1 585) |
| (Loss)/profit from discontinued operations | | (257) | 295 |
| Profit/(loss) for the year | | 2 083 | (1 290) |
| Other comprehensive (loss)/income from continuing operations | | | |
| Items that may be reclassified subsequently to profit or loss: | | | |
| Exchange differences on translation of foreign operations | | (794) | 188 |
| Net fair value (loss)/gain on cash flow hedges | | (340) | 666 |
| Deferred taxation on cash flow hedges | | 82 | 61 |
| Foreign currency translation reserve released to profit or loss on liquidation of foreign subsidiaries | 3 | (6) | (3) |
| Other comprehensive (loss)/income for the year, net of taxation | | (1 058) | 912 |
| Other comprehensive income/(loss) from discontinued operations | | | |
| Items that may be reclassified subsequently to profit or loss: | | | |
| Exchange differences on translation of foreign operations | | – | (34) |
| Foreign currency translation reserve released to profit or loss on sale of foreign subsidiary | | 7 | 32 |
| Other comprehensive income/(loss) for the year, net of taxation | | 7 | (2) |
| Total comprehensive income/(loss) for the year | | 1 032 | (380) |
| Total comprehensive income/(loss) attributable to: | | | |
| Equity holders of the parent | | 1 021 | (388) |
| Non-controlling interests | | 11 | 8 |
| Total comprehensive income/(loss) for the year | | 1 032 | (380) |
| Total comprehensive income/(loss) for the year attributable to equity holders of the parent arises from: | | | |
| Continuing operations | | 1 271 | (681) |
| Discontinued operations | | (250) | 293 |
| Total comprehensive income/(loss) for the year attributable to the equity holders of the parent | | 1 021 | (388) |

¹ Prior year comparatives have been restated for the effect of the discontinued operation as detailed in note 7.

10 | Pepkor reviewed annual results
for the year ended 30 September 2024

Condensed consolidated statement of changes in equity

| | Year ended
30 September
2024
Reviewed
Rm | Year ended
30 September
2023
Reviewed
Rm |
| --- | --- | --- |
| Balance at beginning of the year | 59 053 | 62 945 |
| Changes in reserves | | |
| Total comprehensive income for the year attributable to owners of the parent
Profit/(loss) for the year | 1 021 | (388) |
| Recognised in other comprehensive income from total operations | 2 072 | (1 298) |
| Shares issued under Pepkor Executive Share Rights Scheme | (1 051) | 910 |
| Share buy-back and cancellation | 247 | 226 |
| Treasury shares purchased by a subsidiary company of the group | (29) | (511) |
| Treasury shares disposed of by a subsidiary company of the group | (65) | (8) |
| Dividends paid | 8 | – |
| Net movement in share-based payment reserve | (1 763) | (2 025) |
| Transfers to retained earnings | (51) | (5) |
| Transfers from other reserves | 26 | (20) |
| Transfer to retained earnings due to ultimate holding company loss of control | (6) | – |
| Transfer from common control reserve due to ultimate holding company loss of control | – | (11 755) |
| Net fair value loss on cash flow hedges transferred to inventory | – | 11 755 |
| Movement in put option reserve | (295) | (1 007) |
| Changes in non-controlling interests | | |
| Transfer from other reserves on disposal of subsidiary | 589 | 2 |
| Total comprehensive income for the year attributable to non-controlling interests | 11 | 8 |
| Exchange differences on consolidation of foreign subsidiaries | 1 | 21 |
| Balance at end of the year | 58 749 | 59 053 |
| Comprising | | |
| Ordinary stated capital | 67 161 | 66 943 |
| Treasury shares | (74) | (17) |
| Retained earnings | (7 471) | (7 806) |
| Share-based payment reserve | 353 | 404 |
| Hedging reserve | (287) | 266 |
| Foreign currency translation reserve | (977) | (184) |
| Put option reserve | (200) | (789) |
| Other reserves | 18 | 24 |
| Non-controlling interests | 226 | 212 |
| | 58 749 | 59 053 |

Pepkor reviewed annual results
for the year ended 30 September 2024

Condensed consolidated statement of financial position

	30 September 2024 Reviewed Rm	30 September 2023 Reviewed Rm
ASSETS
Non-current assets
Goodwill	30 218	32 937
Intangible assets	18 973	19 104
Property, plant and equipment	9 384	9 329
Right-of-use assets	10 277	10 864
Interest in associate	–	71
Investments and loans	59	46
Trade and other receivables	103	–
Unsecured loans	602	298
Deferred taxation assets	2 444	2 835
	72 060	75 484
Current assets
Inventories	17 509	16 974
Trade and other receivables	10 987	9 242
Unsecured loans	2 153	1 792
Reinsurance contract assets	32	37
Current income taxation assets	164	284
Investments and loans	13	48
Cash and cash equivalents	4 793	4 879
	35 651	33 256
Total assets	107 711	108 740
EQUITY AND LIABILITIES
Capital and reserves
Ordinary stated capital	67 161	66 943
Reserves	(8 638)	(8 102)
Total equity attributable to equity holders of the parent	58 523	58 841
Non-controlling interests	226	212
Total equity	58 749	59 053
Non-current liabilities
Interest-bearing loans and borrowings	8 742	9 395
Lease liabilities	10 058	10 871
Employee benefits	462	388
Deferred taxation liabilities	3 803	4 277
Provisions	158	245
Put option liability	261	1 068
	23 484	26 244
Current liabilities
Trade and other payables	16 771	15 095
Insurance contract liabilities	42	73
Lease liabilities	2 682	3 078
Employee benefits	1 310	1 337
Provisions	106	112
Interest-bearing loans and borrowings	2 791	2 121
Put option liability	238	–
Current income taxation liabilities	1 012	693
Bank overdrafts	526	934
	25 478	23 443
Total equity and liabilities	107 711	108 740

Pepkor reviewed annual results

for the year ended 30 September 2024

Condensed consolidated statement of cash flows

| | Notes | Year ended
30 September
2024
Reviewed
Rm | Year ended
30 September
2023
Reviewed
Rm |
| --- | --- | --- | --- |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | |
| Operating profit from total operations | | 6 789 | 2 697 |
| Operating profit from continuing operations | | 6 894 | 2 216 |
| Operating (loss)/profit from discontinued operations (note 7.1, 7.2, 7.5 and 7.6) | | (105) | 481 |
| Adjusted for: | | | |
| Debtors' write offs and movement in provision | | 2 977 | 2 163 |
| Depreciation and amortisation | | 4 921 | 4 680 |
| Non-cash capital items | 3 | 3 459 | 6 830 |
| Inventories written down to net realisable value | | 782 | 603 |
| Profit on lease modification | | (478) | (789) |
| Share-based payment expense | | 197 | 221 |
| Non-working capital provisions releases and other non-cash adjustments | | 480 | 9 |
| | | 19 127 | 16 414 |
| Working capital changes | | | |
| Increase in inventories | | (3 384) | (1 529) |
| Increase in trade and other receivables | | (88) | (77) |
| Increase in instalment sale receivables and credit sales through store cards | | (4 593) | (2 442) |
| Increase in unsecured loans | | (1 439) | (918) |
| Increase in trade and other payables | | 2 297 | 1 514 |
| Net changes in working capital | | (7 207) | (3 452) |
| Cash generated from operations | | 11 920 | 12 962 |
| Dividends paid | | (1 763) | (2 025) |
| Finance cost paid | | (3 081) | (2 866) |
| Finance income received | | 272 | 252 |
| Taxation paid | | (1 181) | (2 537) |
| Net cash inflow from operating activities | | 6 167 | 5 786 |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | |
| Additions to property, plant and equipment and intangible assets | | (2 612) | (2 712) |
| Proceeds on disposal of property, plant and equipment and intangible assets | | 43 | 73 |
| Payment for acquisition of subsidiary, net of cash and cash equivalents acquired | | (73) | – |
| Disposal of business, net of cash and cash equivalents | | 313 | – |
| Decrease in investments and loans | | 37 | 151 |
| Increase in investments and loans | | (22) | (84) |
| Net cash outflow from investing activities | | (2 314) | (2 572) |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | |
| Amount paid on share buy-back | | (29) | (511) |
| Treasury shares purchased | | (65) | (8) |
| Amounts paid on long-term interest-bearing loans and borrowings | | (2 109) | (1 950) |
| Amounts received on long-term interest-bearing loans and borrowings | | 2 222 | 1 896 |
| Principal lease liability repayments | | (3 141) | (3 057) |
| Net cash outflow from financing activities | | (3 122) | (3 630) |
| NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | | 731 | (416) |
| Effects of exchange rate translations on cash and cash equivalents | | (409) | (8) |
| Cash and cash equivalents at beginning of the year | | 3 945 | 4 369 |
| CASH AND CASH EQUIVALENTS AT END OF THE YEAR | | 4 267 | 3 945 |
| Consisting of: | | | |
| Cash and cash equivalents | | 4 793 | 4 879 |
| Bank overdrafts | | (526) | (934) |
| | | 4 267 | 3 945 |

Pepkor reviewed annual results
for the year ended 30 September 2024

Notes to the condensed consolidated financial statements

for the year ended 30 September 2024

Basis of preparation

The condensed consolidated financial statements are prepared in accordance with the requirements of the JSE Limited Listings Requirements and Debt Listings Requirements (collectively, the Listings Requirements) for condensed financial statements and the requirements of the Companies Act of South Africa. The Listings Requirements require condensed financial statements to be prepared in accordance with the framework concepts and the measurement and recognition requirements of IFRS® Accounting Standards and Financial Pronouncements as issued by the Financial Reporting Standards Council and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and to also, as a minimum, contain the information required by IAS 34: Interim Financial Reporting.

The accounting policies applied in the preparation of the condensed consolidated financial statements are in terms of IFRS Accounting Standards and are consistent with those accounting policies applied in the preparation of the previous consolidated annual financial statements, except for the adoption of IFRS 17: Insurance Contracts. The adoption of IFRS 17 did not have a material impact on the group's results, and the group has not restated the prior year comparative results. The prior year cumulative equity impact of R14 million has been recognised in profit or loss in the current year.

New and revised accounting standards became effective during the year, but their implementation had no significant impact on the results of either the current or the previous financial year. The group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

The condensed consolidated financial statements are prepared in millions of South African rand (Rm) on the historical cost basis, except for certain assets and liabilities, which are carried at amortised cost, and derivative financial instruments, which are stated at their fair values. The preparation of the condensed consolidated financial statements for the year ended 30 September 2024 has been supervised by RG Hanekom CA(SA), the group's chief financial officer.

Any forward-looking and forecast information presented is the responsibility of the board and has not been reviewed or reported on by Pepkor's auditor.

Significant events

Share capital

The following movements in ordinary shares were recorded during the period:

The group issued 17.9 million ordinary shares during the current financial year for share rights that vested under the Pepkor Executive Share Rights Scheme.
The group repurchased and cancelled 1.7 million ordinary shares during the current financial year from the open market on the JSE.
A company within the group purchased 3.6 million ordinary shares during the current financial year from the open market on the JSE which is classified as treasury shares in the annual financial statements.

Significant shareholder

The Ibex Group, formerly Steinhoff International Holdings N.V. (Steinhoff Group), holds 30.18% of Pepkor Holdings as at 30 September 2024. In the prior year, Ibex reduced its shareholding in Pepkor to 43.90% and therefore no longer has control of Pepkor since 8 February 2023.

Discontinued operations in The Building Company

Interest-bearing loans and borrowings

Following an auction held on 4 March 2024, the group successfully raised R2.2 billion in the bond market at lower-than-expected margins. The new floating rate notes issued effective from 7 March 2024 are:

PEP07: three-year floating rate notes of R878 million at three-month Jibar plus 114 bps
PEP08: five-year floating rate notes of R1.29 billion issued at three-month Jibar plus 124 bps

The proceeds from the issuance replaces the floating rate notes of R1.435 billion (PEP03: three-year) due in May 2024, which carried interest at three-month Jibar plus 152 bps, and was further used to settle Term Loan E (three-year) of R500 million due in June 2024, which carried interest at three-month Jibar plus 120 bps.

Secondary listing on the A2X

The group listed its shares for trade on A2X effective 2 April 2024. The group retained its listing on the JSE Limited and its issued capital will be unaffected by this secondary listing.

Impairment of goodwill and trade and brand names

The outcome of the annual impairment assessment process on goodwill and trade and brand names with an opening carrying value of R51.2 billion, as required by IFRS Accounting Standards, resulted in a total impairment of R2.7 billion recognised in FY24 ('the impairment'). The impairment is allocated to the respective cash generating units (CGUs) as follows:

R2.4 billion of the impairment is attributable to the clothing and general merchandise CGU, which includes Ackermans, Dunns, PEP, PEP Africa, Refinery and Shoe City and R161 million relates to newly acquired S'Ya Phanda and Pepkor cellular sourcing CGUs. The key factors for the impairment include the continued uncertainty of trading in the retail market driven by performance in Ackermans, which continues to recover, and a challenging footwear market impacting performance in Tekkie Town and Shoe City, resulting in a cautious outlook.
An impairment of R200 million is attributable to the Tekkie Town CGU, which also suffered from the challenging footwear market.

The impairment impacted basic earnings from continuing operations but is excluded from headline earnings from continuing operations. Refer to note 3 and 11 for further details.

Event subsequent to reporting period

The board is not aware of any significant events after the reporting date that will have a material effect on the group's results or financial position as presented in these financial statements.

Pepkor reviewed annual results

for the year ended 30 September 2024

Notes to the condensed consolidated financial statements continued

for the year ended 30 September 2024

1. Segmental analysis

1.1 Basis of segmental presentation

The segmental information has been prepared in accordance with IFRS 8, which defines requirements for the disclosure of financial information of an entity's operating segments. IFRS 8 requires operating segments to be identified on the basis of internal reporting of group components that are regularly reviewed by the chief operating decision-maker (CODM) to allocate resources to segments and to assess their performance. The executive members of the Pepkor Holdings Limited board of directors have been identified as the CODM.

Identification of segments

The identification of segments is consistent with those identified in the annual consolidated financial statements for the year ended 30 September 2023. The executive members of the board of directors identified and monitor segments in relation to differences in products and services.

Geographical analysis

The CODM reviews revenue, operating profit and assets as one geographical region. However, due to South Africa being the group's primary country of operation, the geographical segments have been split between South Africa and other foreign countries. In presenting information on the basis of geographical segments, segment revenue is based on the location of the customers, while segment assets are based on the location of the asset.

Major customers

No single customer contributes 10% or more of the group's revenue.

1.2 Segmental analysis

	Clothing and general merchandise1,3 Reviewed Rm	Furniture, appliances and electronics Reviewed Rm	Building materials Reviewed Rm	FinTech4 Reviewed Rm	Total operations Reviewed Rm	Discontinued operations3 Reviewed Rm	Total from continuing operations Reviewed Rm
Year ended 30 September 2024
External revenue	61 437	11 017	8 445	12 682	93 581	(8 445)	85 136
Total revenue	61 437	11 017	8 445	14 647	95 546	(8 445)	87 101
Intersegmental revenue	-	-	-	(1 965)	(1 965)	-	(1 965)
Cost of sales	(38 035)	(7 893)	(6 183)	(6 599)	(58 710)	6 183	(52 527)
Gross profit	23 402	3 124	2 262	6 083	34 871	(2 262)	32 609
Other income	902	103	32	29	1 066	(32)	1 034
Operating expenses	(12 227)	(2 112)	(1 524)	(2 379)	(18 242)	1 524	(16 718)
Personnel expenses	(7 189)	(1 224)	(1 031)	(1 049)	(10 493)	1 031	(9 462)
Other operating expenses	(5 038)	(888)	(493)	(1 330)	(7 749)	493	(7 256)
Debtors' costs	(313)	-	1	(2 214)	(2 526)	(1)	(2 527)
Operating profit before depreciation, amortisation and capital items	11 764	1 115	771	1 519	15 169	(771)	14 398
Depreciation and amortisation	(4 031)	(466)	(325)	(99)	(4 921)	325	(4 596)
Operating profit before capital items	7 733	649	446	1 420	10 248	(446)	9 802
Reconciliation of operating profit
Operating profit per segmental analysis							9 802
Capital items (note 3)5							(2 908)
Operating profit per income statement							6 894
Finance costs (note 4)							(3 447)
Finance income							279
Profit before taxation per income statement							3 726
Geographical split of revenue	61 437	11 017	8 445	12 682	93 581	(8 445)	85 136
South Africa	49 427	10 243	7 968	12 468	80 106	(7 968)	72 138
Other foreign countries4	12 010	774	477	214	13 475	(477)	12 998
Geographical split of sale of goods and related revenue (note 2.1.1)	60 724	10 789	8 445	8 044	88 002	(8 445)	79 557
South Africa	49 354	10 024	7 968	7 950	75 296	(7 968)	67 328
Other foreign countries	11 370	765	477	94	12 706	(477)	12 229

Pepkor reviewed annual results

for the year ended 30 September 2024

Notes to the condensed consolidated financial statements continued

for the year ended 30 September 2024

1. Segmental analysis continued

1.2 Segmental analysis continued

	Clothing and general merchandise1,3 Reviewed Rm	Furniture, appliances and electronics Reviewed Rm	Building materials Reviewed Rm	FinTech1 Reviewed Rm	Total operations Reviewed Rm	Discontinued operations Restated2 Reviewed Rm	Total from continuing operations Restated2 Reviewed Rm
Year ended 30 September 20235
External revenue	58 663	10 541	8 448	9 998	87 650	(8 690)	78 960
Total revenue	58 663	10 541	8 448	11 896	89 548	(8 690)	80 858
Intersegmental revenue	-	-	-	(1 898)	(1 898)	-	(1 898)
Cost of sales6	(37 552)	(7 452)	(6 144)	(5 331)	(56 479)	6 253	(50 226)
Gross profit5	21 111	3 089	2 304	4 667	31 171	(2 437)	28 734
Other income5	1 068	67	49	41	1 225	(49)	1 176
Operating expenses5	(10 445)	(2 161)	(1 573)	(2 303)	(16 482)	1 672	(14 810)
Personnel expenses	(6 489)	(1 184)	(1 079)	(1 108)	(9 860)	1 101	(8 759)
Other operating expenses5	(3 956)	(977)	(494)	(1 195)	(6 622)	571	(6 051)
Debtors' costs	(276)	-	(18)	(1 413)	(1 707)	18	(1 689)
Operating profit before depreciation, amortisation and capital items5	11 458	995	762	992	14 207	(796)	13 411
Depreciation and amortisation	(3 845)	(464)	(294)	(77)	(4 680)	313	(4 367)
Operating profit before capital items	7 613	531	468	915	9 527	(483)	9 044
Reconciliation of operating profit
Operating profit per segmental analysis							9 044
Capital items (note 3)3							(6 828)
Operating profit per income statement							2 216
Share of net profit of associate							7
Finance costs (note 4)							(2 997)
Finance income							272
Profit before taxation per income statement							(502)
Geographical split of revenue	58 663	10 541	8 448	9 998	87 650	(8 690)	78 960
South Africa	47 370	9 847	8 134	9 800	75 151	(8 134)	67 017
Other foreign countries4	11 293	694	314	198	12 499	(556)	11 943
Geographical split of sale of goods and related revenue (note 2.1.1)	58 136	10 334	8 448	6 692	83 610	(8 690)	74 920
South Africa	47 370	9 648	8 134	6 596	71 748	(8 134)	63 614
Other foreign countries	10 766	686	314	96	11 862	(556)	11 306

FinTech segment revenue is disclosed net of intergroup revenue earned relating to the sale of virtual vouchers and airtime, and insurance cover provided on PAXI products, to the Clothing and general merchandise segment.
Prior year comparatives have been restated for the effect of the discontinued operation as detailed in note 7, which relates to the Building materials segment.
Capital items of R2.9 billion (2023: R6.8 billion) includes the impairment of goodwill of R2.5 billion (2023: R6.5 billion) and trade and brand names of R200 million (2023: R97 million) relating to the Clothing and general merchandise segment.
Revenue from other foreign countries includes the Brazilian market revenue from Avenida of R4.5 billion (2023: R3.8 billion), which was acquired during the 2022 financial year. The Brazilian contribution to total revenue is not deemed to be material and is therefore not separately disclosed.
The group previously accounted for specific items of material segmental income and expenses reviewed by the CODM. Following the IFRIC agenda decision in July 2024 relating to Disclosure of Revenues and Expenses for Reportable Segments (IFRS 8: Operating Segments), the group has disclosed all material items of income and expenses that are included in the segmental profit or loss reviewed by the CODM. This change in accounting treatment has been accounted for retrospectively and comparative information has been restated.

Pepkor reviewed annual results

for the year ended 30 September 2024

Notes to the condensed consolidated financial statements continued

for the year ended 30 September 2024

Segmental analysis continued

| | | Year ended
30 September
2024
Reviewed
Rm | Year ended
30 September
2023
Reviewed
Rm |
| --- | --- | --- | --- |
| 1.3 | Segmental assets | 102 846 | 103 767 |
| 1.3.1 | Reconciliation between total assets and segmental assets | | |
| | Total assets per statement of financial position | 107 111 | 108 740 |
| | Less: Cash and cash equivalents | (4 793) | (4 879) |
| | Less: Long-term investments and loans | (59) | (46) |
| | Less: Short-term investments and loans | (13) | (48) |
| | Segmental assets | 102 846 | 103 767 |
| 1.4 | Geographical split of non-current assets | | |
| | South Africa | 63 119 | 66 118 |
| | Other foreign countries | 5 733 | 6 116 |
| | Non-current assets | 68 852 | 72 234 |

Non-current assets consist of goodwill, intangible assets, property, plant and equipment and right-of-use assets.

| | | Year ended
30 September
2024
Reviewed
Rm | Year ended
30 September
2023
Restated¹
Reviewed
Rm |
| --- | --- | --- | --- |
| 2. | Revenue | | |
| | Revenue from contracts with customers | | |
| | Retail revenue | 80 714 | 75 788 |
| | Sale of goods and related revenue (note 2.1.1) | 79 557 | 74 920 |
| | Service fee income | 857 | 662 |
| | Other revenue | 300 | 206 |
| | Other sources of revenue | | |
| | Financial services revenue (note 2.1.2) | 3 957 | 2 801 |
| | Insurance revenue | 465 | 371 |
| | | 85 136 | 78 960 |
| 2.1 | Disaggregation of revenue | | |
| 2.1.1 | Sale of goods and related revenue | | |
| | Sale of goods and related revenue excluding ongoing revenue | 77 594 | 73 035 |
| | Ongoing revenue | 1 963 | 1 885 |
| | | 79 557 | 74 920 |
| 2.1.2 | Financial services revenue | | |
| | Finance income earned | 3 567 | 2 424 |
| | Loan origination fees | 390 | 377 |
| | | 3 957 | 2 801 |

¹ Prior year comparatives have been restated for the effect of the discontinued operation as detailed in note 7.

Pepkor reviewed annual results

for the year ended 30 September 2024

Notes to the condensed consolidated financial statements continued

for the year ended 30 September 2024

| | Year ended
30 September
2024
Reviewed
Rm | Year ended
30 September
2023
Restated¹
Reviewed
Rm |
| --- | --- | --- |
| 3. Capital items | | |
| The effect of capital items should be excluded from earnings when determining headline earnings per share. Refer to note 6.
Expenses of a capital nature are included in the 'capital items' line in the income statement. These expense items are: | | |
| From continuing operations: | | |
| Impairment/(impairment reversal) | 2 869 | 6 796 |
| Goodwill | 2 541 | 6 516 |
| Intangible assets – Trade and brand names | 200 | 97 |
| Intangible assets – excluding trade and brand names | 2 | 4 |
| Property, plant and equipment | 40 | (22) |
| Right-of-use assets | 86 | 201 |
| Loss on disposal of property, plant and equipment and intangible assets | 47 | 72 |
| Insurance claim received of property, plant and equipment – floods | – | (37) |
| Foreign currency translation reserve released to profit or loss on sale of foreign subsidiary | (6) | (3) |
| Profit on disposal of investments | (2) | – |
| | 2 908 | 6 828 |
| From discontinued operations: | | |
| (Impairment reversal)/impairment | (36) | 9 |
| Property, plant and equipment | (1) | (1) |
| Right-of-use assets | (35) | 10 |
| Loss on disposal of property, plant and equipment and intangible assets | (4) | (2) |
| Insurance claim received of property, plant and equipment – floods | – | (8) |
| Foreign currency translation reserve released to profit or loss on sale of foreign subsidiary | 7 | 32 |
| Loss/(profit) on sale of subsidiaries (note 7.2 and 7.6) | 584 | (29) |
| | 551 | 2 |
| Capital items from continuing operations | 2 908 | 6 828 |
| Capital items from discontinued operations | 551 | 2 |
| Total capital items | 3 459 | 6 830 |
| 4. Finance costs | | |
| 4.1 Finance costs expense | | |
| Interest-bearing loans and borrowings | 1 190 | 1 123 |
| Bank | 319 | 255 |
| Discounting of trade payables | 328 | 221 |
| Lease liability finance cost | 1 455 | 1 356 |
| Put option liability | 130 | 100 |
| Other | 25 | 29 |
| | 3 447 | 3 084 |
| Interest capitalised to property, plant and equipment | – | (87) |
| | 3 447 | 2 997 |
| 4.2 Finance costs cash flow reconciliation | | |
| Finance costs recognised in profit or loss | 3 447 | 2 997 |
| Amortisation of debt raising fees | – | (4) |
| Discounting of trade payables | (328) | (221) |
| Put option liability recognised at amortised cost | (130) | (100) |
| Interest capitalised to property, plant and equipment | – | 87 |
| Finance costs from discontinued operations (note 7.1 and 7.5) | 92 | 107 |
| Cash outflow per the consolidated statement of cash flows | 3 081 | 2 866 |

¹ Prior year comparatives have been restated for the effect of the discontinued operation as detailed in note 7.

Pepkor reviewed annual results

for the year ended 30 September 2024

Notes to the condensed consolidated financial statements continued

for the year ended 30 September 2024

| | | Year ended
30 September
2024
Reviewed
Rm | Year ended
30 September
2023
Restated¹
Reviewed
Rm |
| --- | --- | --- | --- |
| 5. | Taxation | | |
| 5.1 | Taxation charge | | |
| | Taxation from continuing operations | 1 386 | 1 083 |
| | Taxation from discontinued operations | 100 | 103 |
| | Total taxation for the year | 1 486 | 1 186 |
| 5.2 | Reconciliation of rate of taxation² | % | % |
| | South African standard rate of taxation | 27.0 | 27.0 |
| | Foreign taxation rate differential | (0.2) | (30.5) |
| | Irrecoverable foreign taxes | 1.4 | (51.3) |
| | Unrecognised taxation losses net of prior year unrecognised taxation losses utilised | (2.2) | 17.0 |
| | Prior year adjustments³ | (10.1) | 444.5 |
| | Tax-exempt income³ | (2.1) | 82.4 |
| | Non-deductible expenses⁵ | 5.3 | (90.6) |
| | Non-deductible loss on disposal of subsidiary | 4.5 | – |
| | Non-deductible expenses relating to the impairment of goodwill and trade and brand names | 19.5 | (1 697.9) |
| | Change in foreign corporate taxation rates | 0.1 | 2.3 |
| | Special allowances | (1.5) | 56.8 |
| | Foreign currency translation reserve release through profit and loss | – | (28.4) |
| | Previously unrecognised deferred taxation assets on timing differences⁶ | – | 117.6 |
| | Other | (0.1) | 6.9 |
| | Effective rate of taxation | 41.6 | (1 144.2) |
| 5.3 | Taxation paid cash flow reconciliation | | |
| | Opening balance of current taxation payable and receivable | 409 | 2 011 |
| | Opening balance of withholding taxation included in trade and other payables | 16 | 35 |
| | Normal taxation charge for the year recognised in profit or loss | 1 629 | 918 |
| | Acquisition of subsidiary | 1 | – |
| | Disposal of subsidiary | 8 | (1) |
| | Other taxation charges | (22) | – |
| | Exchange differences on consolidation of foreign subsidiaries | 11 | (1) |
| | Closing balance of current taxation payable and receivable | (848) | (409) |
| | Closing balance of withholding taxation included in trade and other payables | (23) | (16) |
| | Taxation paid | 1 181 | 2 537 |

1 Prior year comparatives have been restated for the effect of the discontinued operation as detailed in note 7.
2 The reconciliation of rate of taxation items are impacted by the goodwill impairment which has a nil taxation impact.
3 Prior year adjustments include a remeasurement of provisions raised for uncertain taxation positions in terms of IFRIC 23.
4 Tax-exempt income mainly relates to income of a capital nature and exempt tax incentives received.
5 Non-deductible expenses mainly relate to a one-off loan write-off in PEP Angola and recurring expenses of a capital nature, expenses not incurred in the production of income, and depreciation of leasehold improvements.
6 Deferred taxation assets recognised relate to the Pepkor Lifestyle (previously JD Group) business.

Pepkor reviewed annual results

for the year ended 30 September 2024

Notes to the condensed consolidated financial statements continued

for the year ended 30 September 2024

| | | | 30 September
2024
Reviewed
Million | 30 September
2023
Reviewed
Million |
| --- | --- | --- | --- | --- |
| 6. Earnings and headline earnings per share | | | | |
| 6.1. Weighted average number of ordinary shares | | | | |
| Issued ordinary shares at beginning of the period | | | 3 667 | 3 678 |
| Treasury shares | | | (4) | (1) |
| Shares vested under Pepkor Executive Share Rights Scheme | | | 10 | 9 |
| Share buy-back and cancellation of share | | | (1) | (17) |
| Weighted average number of ordinary shares at end of the period for the purpose of basic earnings per share and headline earnings per share | | | 3 672 | 3 669 |
| Effect of dilution due to share rights issues in terms of share scheme | | | 41 | 46 |
| Weighted average number of ordinary shares at end of the period for the purpose of diluted earnings per share and diluted headline earnings per share | | | 3 713 | 3 715 |
| Number of shares in issue | | | 3 684 | 3 667 |
| | Year ended 30 September 2024 | | Year ended 30 September 2023 | |
| | Continuing
Reviewed
Rm | Discontinued
Reviewed
Rm | Total
Reviewed
Rm | Continuing
Restated¹
Reviewed
Rm |
| 6.2. Earnings and headline earnings | | | | |
| Profit/(loss) for the year | 2 340 | (257) | 2 083 | (1 585) |
| Attributable to non-controlling interests | (11) | - | (11) | (8) |
| Earnings attributable to ordinary shareholders | 2 329 | (257) | 2 072 | (1 593) |
| Capital items (note 3) | 2 908 | 551 | 3 459 | 6 828 |
| Taxation effect of capital items | (89) | 10 | (79) | (69) |
| Headline earnings attributable to ordinary shareholders | 5 148 | 304 | 5 452 | 5 166 |
| 6.3 Diluted earnings and diluted headline earnings per share | | | | |
| Share rights issued to employees have been taken into account for diluted earnings and diluted headline earnings per share purposes. | | | | |
| 6.4 Earnings per share | Cents | Cents | Cents | Cents |
| | Basic | 63.4 | (7.0) | 56.4 |
| | Headline | 140.2 | 8.3 | 148.5 |
| | Diluted basic | 62.7 | (6.9) | 55.8 |
| | Diluted headline | 138.6 | 8.2 | 146.8 |
| 6.5 Net asset value per share | Cents | Cents | Cents | Cents |
| | Net asset value per ordinary share is calculated by dividing the ordinary shareholders' equity by the number of ordinary shares in issue at year-end. | | | |
| | Net asset value per share | 1 588.5 | - | 1 588.5 |

¹ Prior year comparatives have been restated for the effect of the discontinued operation as detailed in note 7.

Pepkor reviewed annual results

for the year ended 30 September 2024

Notes to the condensed consolidated financial statements continued

for the year ended 30 September 2024

7. Discontinued operations

Description

Pepkor disposed of The Building Company on 30 September 2024 in order to streamline Pepkor's portfolio of business, to enhance the group's return on capital and optimise shareholder returns. The agreed purchase consideration of R1 246 million was received in two transactions. A dividend of R466 million was declared from The Building Company to Pepkor Holdings prior to the sale, and the remaining R780 million was received in cash from Capitalworks, resulting in a net cash flow of R1 246 million to Pepkor Holdings.

The Building Company was previously included in the Building materials segment.

In the prior year, the board decided to exit the group's Nigerian business. The decision was driven mainly by the increasing difficulty of trading in Nigeria as a result of adverse macroeconomic conditions. The group disposed of its Nigerian business by 30 September 2023.

The Nigeria discontinued operation was previously included under the Clothing and general merchandise segment.

| | 30 September 2024
Reviewed Rm | 30 September 2023
Reviewed Rm |
| --- | --- | --- |
| 7.1 Sale of business – The Building Company
Income statement | | |
| Revenue | 8 445 | 8 448 |
| Retail revenue | 8 445 | 8 448 |
| Cost of sales | (6 183) | (6 144) |
| Cost of merchandise sold | (6 183) | (6 167) |
| Insurance claim recovery – floods | – | 23 |
| Gross profit | 2 262 | 2 304 |
| Other income | 32 | 49 |
| Other income excluding insurance claim recovery – floods | 32 | 44 |
| Insurance claim recovery – floods | – | 5 |
| Operating expenses | (1 524) | (1 573) |
| Debtors' costs | 1 | (18) |
| Operating profit before depreciation, amortisation and capital items | 771 | 762 |
| Depreciation and amortisation | (325) | (294) |
| Operating profit before capital items | 446 | 468 |
| Capital items | 40 | – |
| Capital items excluding insurance claim recovery – floods | 40 | (8) |
| Insurance claim recovery – floods | – | 8 |
| Operating profit | 486 | 468 |
| Finance costs | (92) | (98) |
| Finance income | 40 | 24 |
| Profit before taxation | 434 | 394 |
| Taxation | (100) | (89) |
| Profit for the year | 334 | 305 |
| 7.2 Details of the sale of the business | | |
| Agreed consideration, net of permitted leakages | 1 246 | – |
| Dividend declared prior to sale | (466) | – |
| Costs to sell | (31) | – |
| Net consideration received | 749 | – |
| Carrying amount of net assets sold | (1 333) | – |
| Loss on sale before taxation and reclassification of foreign currency translation reserve
(note 3) | (584) | – |
| Reclassification of foreign currency translation reserve | (7) | – |
| Loss on sale before taxation | (591) | – |
| Taxation | – | – |
| Loss on sale after taxation | (591) | – |

Pepkor reviewed annual results

for the year ended 30 September 2024

Notes to the condensed consolidated financial statements continued

for the year ended 30 September 2024

| | Year ended
30 September
2024
Reviewed
Rm | Year ended
30 September
2023
Reviewed
Rm |
| --- | --- | --- |
| 7. Discontinued operations continued | | |
| 7.3 Assets and liabilities of disposal group | | |
| Assets | | |
| Intangible assets | 1 | – |
| Property, plant and equipment | 324 | – |
| Right-of-use assets | 693 | – |
| Deferred tax assets | 371 | – |
| Inventories | 1 591 | – |
| Trade and other receivables | 616 | – |
| Current income taxation receivable | 8 | – |
| Cash and cash equivalents | 436 | – |
| Total assets | 4 040 | – |
| Liabilities | | |
| Interest-bearing loans and borrowings | 1 | – |
| Lease liabilities | 862 | – |
| Deferred tax liabilities | 246 | – |
| Trade and other payables | 1 410 | – |
| Provisions | 42 | – |
| Employee benefits | 146 | – |
| Total liabilities | 2 707 | – |
| Carrying amount of net assets sold | 1 333 | – |
| 7.4 Statement of cash flows | | |
| Net cash inflow from operating activities | 303 | 151 |
| Net cash (outflow)/inflow from investing activities | (71) | 328 |
| Net cash outflow from financing activities | (347) | (342) |
| Net (decrease)/increase in cash and cash equivalents | (115) | 137 |
| Effects of exchange rate translations on cash and cash equivalents | (23) | (16) |
| Cash and cash equivalents at beginning of the year | 574 | 453 |
| Cash and cash equivalents at end of the year | 436 | 574 |

The net cash inflow from the disposal of the business in the cash flow statement of R313 million consists of the R749 million net consideration received (note 7.2) less R436 million cash and cash equivalents (note 7.3) disposed.

Pepkor reviewed annual results

for the year ended 30 September 2024

Notes to the condensed consolidated financial statements continued

for the year ended 30 September 2024

	30 September 2024 Reviewed Rm	30 September 2023 Reviewed Rm
7. Discontinued operations continued
Sale of business – Nigeria
7.5 Income statement
Revenue	–	242
Retail revenue	–	242
Cost of sales	–	(109)
Cost of merchandise sold	–	(109)
Insurance claim recovery – floods	–	–
Gross profit	–	133
Operating expenses	–	(99)
Operating profit before depreciation, amortisation and capital items	–	34
Depreciation and amortisation	–	(19)
Operating profit before capital items	–	15
Capital items	–	1
Capital items excluding insurance claim recovery – floods	–	1
Insurance claim recovery – floods	–	–
Operating profit	–	16
Finance costs	–	(9)
Finance income	–	–
Profit before taxation	–	7
Taxation	–	(1)
Profit for the year	–	6
7.6 Details of the sale of the business
Consideration receivable	–	33
Carrying amount of net assets sold	–	(4)
Profit on sale before taxation and reclassification of foreign currency translation reserve (note 3)	–	29
Reclassification of foreign currency translation reserve	–	(32)
Loss on sale before taxation	–	(3)
Taxation	–	(13)
Loss on sale after taxation	–	(16)
Total (loss)/profit for the year from discontinued operations per the condensed consolidated income statement (total per note 7.1, 7.2, 7.5 and 7.6 above)	(257)	295

Pepkor reviewed annual results

for the year ended 30 September 2024

Notes to the condensed consolidated financial statements continued

for the year ended 30 September 2024

| | Year ended
30 September
2024
Reviewed
Rm | Year ended
30 September
2023
Reviewed
Rm |
| --- | --- | --- |
| 8. Financing | | |
| Unutilised banking and debt facilities consist of the following: | | |
| Short-term cash facilities | 8 891 | 7 041 |
| Letters of credit, forex facilities and asset-based finance facilities | 1 495 | 2 309 |
| Total | 10 386 | 9 350 |

PEP07: three-year floating rate notes of R878 million at three-month Jibar plus 114 bps
PEP08: five-year floating rate notes of R1.29 billion issued at three-month Jibar plus 124 bps

The group has sufficient headroom to enable it to conform to covenants on its existing borrowings and sufficient working capital and undrawn facilities to services its operating activities and ongoing investments.

The group has various debt covenants relating to its term loans and revolving credit facilities. The group is not at risk of breaching its covenants for the year ended September 2024.

9. Contingent assets and liabilities

The group has no significant contingent assets or liabilities except for the following:

The group is disputing and defending a claim from Cell C. The likelihood of success is currently unknown and dependent on future litigation.

10. Related parties

During the year, the group entered into related party transactions in the ordinary course of business, the substance of which are similar to those disclosed in the group's annual financial statements for the year ended 30 September 2023. There were no material movements in the balances and transactions for the year ended 30 September 2024.

Pepkor reviewed annual results

for the year ended 30 September 2024

Notes to the condensed consolidated financial statements continued

for the year ended 30 September 2024

| | Year ended
30 September
2024
Reviewed
Rm | Year ended
30 September
2023
Reviewed
Rm |
| --- | --- | --- |
| 11. Impairment of goodwill and trade and brand names | | |
| 11.1 Effect on goodwill | | |
| Carrying amount at beginning of the year | 32 937 | 39 204 |
| Arising on business combinations | 161 | – |
| Impairments (note 3) | (2 541) | (6 516) |
| Exchange differences on consolidation of foreign subsidiaries | (339) | 249 |
| | 30 218 | 32 937 |
| Cost | 43 987 | 44 837 |
| Accumulated impairment | (13 769) | (11 900) |
| Carrying amount at end of the year | 30 218 | 32 937 |
| Impairment tests for CGUs containing goodwill | | |
| Goodwill is monitored by management at the following group of CGUs, not greater than the three (2023: four) operating segments from continuing operations: | | |
| Clothing and general merchandise | | |
| Ackermans, Dunns, PEP, PEP Africa, Refinery, Shoe City | 28 011 | 30 391 |
| Tekkie Town | – | – |
| S.P.C.C, CODE | 24 | 24 |
| Avenida | 1 834 | 2 173 |
| S'Ya Phanda | – | – |
| Pepkor cellular sourcing | – | – |
| Furniture, appliances and electronics | | |
| Bradlows, Rochester, Russells, Sleepmasters | 12 | 12 |
| Building materials | | |
| BUCO, Hardware Warehouse, Timbercity | – | – |
| BSC | – | – |
| FinTech | | |
| Capfin | 282 | 282 |
| EeziGlobal | – | – |
| Abacus | 55 | 55 |
| | 30 218 | 32 937 |

When the group acquires a business that qualifies as a business combination in respect of IFRS 3: Business Combinations, the group determines the fair value of assets acquired, including identifiable intangible assets, and the liabilities assumed. Any excess of the aggregate of the consideration transferred, non-controlling interest in the acquiree and for a business combination achieved in stages, the acquisition date fair value of the acquirer's previously held equity interest in the acquiree, over the fair value of those net assets, is considered to be goodwill. The goodwill acquired in a business combination is allocated, at acquisition, to the group of CGUs that is expected to benefit from that business. Goodwill is assessed for impairment annually, irrespective of whether there is any indication of impairment.

The impairment test compares the carrying amount of the CGU, including goodwill to the higher of the value in use, or fair value less cost to sell of the unit. The recoverable amount of the group of CGUs is determined from the fair value less cost to sell calculation (fair value hierarchy level 3), using a discounted cash flow model. The key assumptions for the fair value less cost to sell calculation are those regarding the discount rates, growth rates, expected changes to the revenue growth during the forecast period and working capital requirements. The discount rates are based on the weighted average cost of capital, except for the FinTech CGU where cost of equity has been used, while growth rates are based on management's experience and expectations. Assumptions are based on past practices and expectations of future changes in the market, and are derived from the most recent financial budgets and forecasts that have been prepared by management for the next three years and extrapolated cash flows for the following years based on an estimated growth rate as set out below.

Pepkor reviewed annual results

for the year ended 30 September 2024

Notes to the condensed consolidated financial statements continued

for the year ended 30 September 2024

11. Impairment of goodwill and trade and brand names continued

11.1 Effect on goodwill continued

Management assessed the various CGUs for impairment based on the input factors above. The methodology applied in the impairment assessment is consistent with prior years. The key factors for the impairment include the continued uncertainty of trading in the retail market driven by performance in Ackermans, which continues to recover, and a challenging footwear market impacting performance in Tekkie Town and Shoe City, resulting in a cautious outlook. In the prior year, Tekkie Town was impacted by ongoing load shedding and weak projected macroeconomic activity, placing further pressure on customer disposable income and impacting the demand of products, resulting in a lower recoverable amount for Tekkie Town's group of CGUs. The macro market environment in the prior year resulted in an increase in the discount rates, which impacted the result of the clothing and general merchandise's group of CGUs negatively. This resulted in a lower recoverable amount for this group of CGUs in 2023.

An impairment charge has been recognised for both goodwill and indefinite useful life intangible assets when the carrying amount exceeds the recoverable amount. The recoverable amount of the group of CGUs reflected the fair value less cost to sell. During the year, an impairment charge of R2.4 billion (2023: R5.9 billion) was processed to impair the goodwill relating to Ackermans, Dunns, PEP, PEP Africa, Refinery, Shoe City group of CGUs, R18 million was processed to impair the S'Ya Phanda CGU and R143 million was processed to impair the Pepkor cellular sourcing CGU. In the prior year, R606 million was processed to impair the goodwill relating to the Tekkie Town CGU.

The following table sets out the key assumptions for the group of CGUs that have been impaired in the current year:

	Clothing and general merchandise (excluding Tekkie Town and Avenida)	Tekkie Town
2024
Post-taxation discount rate	14.7%	15.1%
Short- to medium-term revenue (compound annual growth rate)	9.5%	3.0%
Long-term growth rate	6.0%	3.0%
Forecasted cash flows	5 years	5 years
2023
Post-taxation discount rate	15.7%	15.7%
Short- to medium-term revenue (compound annual growth rate)	10.0%	5.0%
Long-term growth rate	6.0%	4.8%
Forecasted cash flows	5 years	5 years

11.2 Effect on intangible assets

As per note 11.1, the impairment test covered both the goodwill and the indefinite useful life intangible assets. As a result of the impairment assessment described in note 11.1, an impairment of the trade and brand name of R200 million (2023: R97 million) was recognised relating to Tekkie Town's group of CGUs within the Clothing and general merchandise segment.

Pepkor reviewed annual results

for the year ended 30 September 2024

Pro forma financial information

The pro forma financial information, which is the responsibility of the group's directors, is presented in accordance with the JSE Listings Requirements, including Guidance Letter: Presentation of constant currency information dated 16 August 2012, and the SAICA Guide on Pro Forma Financial Information. Certain financial information presented in these annual financial results constitutes pro forma financial information and is presented for illustrative purposes only. Because of its nature, the pro forma financial information may not fairly present the group's financial position, changes in equity, results of operations or cash flows. An assurance report (in terms of ISAE 3420: Assurance Engagements to Report on the Compilation of Pro Forma Financial Information included in a prospectus issued by the International Auditing and Assurance Standards Board) has been issued by the group's auditor, PricewaterhouseCoopers Inc., in respect of the pro forma financial information included in this announcement. The pro forma financial information should be read in conjunction with this assurance report.

Impact of week 53

The group's South Africa-based clothing retailers report on the retail calendar of trading weeks, which treats each calendar year as having a 52 trading week period, incorporating sales from Sunday to Saturday each week. This treatment effectively results in the loss of a day (or two in a leap year) per calendar year, which is not considered material for the group on an annual basis. However, these days are brought into account approximately every six years by including a 53rd week. Accordingly, the results for the prior year include 53 weeks of sales for the group's clothing retailers vs 52 weeks in the current financial year.

In order to provide a comparison between the current and previous financial year, the financial information has been presented below to exclude the impact of the extra week of trade in the prior financial year.

The group calculated the impact of the 53rd week as follows:

The sale of merchandise and the related cost is extracted from the group's accounting records.
Expenses have been included based on management's judgement and management information available.
Interest has been included based on actual interest (income and expense) extracted from the groups accounting records.
A South African statutory tax rate of 27% has been applied.

	52 weeks Year ended 30 September 2024 Reviewed^{1} Rm	As reported 53 weeks Year ended 30 September 2023 Restated^{2} Reviewed^{1} Rm	Week 53 Adjustment Year ended 30 September 2023 Reviewed Rm	Pro forma 52 weeks Year ended 30 September 2023 Restated^{2} Reviewed Rm	% change on prior year Rm
Revenue	85 136	78 960	(994)	77 966	9.2
Operating profit before capital items	9 802	9 044	(304)	8 740	12.2
Profit/(loss) for the year	2 083	(1 290)	(217)	(1 507)	238.2
Profit/(loss) attributable to:
Equity holders of the parent	2 072	(1 298)	(217)	(1 515)	236.8
Non-controlling interests	11	8	–	8	37.5
Profit/(loss) for the year	2 083	(1 290)	(217)	(1 507)	238.2
Total basic earnings per share	56.4	(35.4)	(5.9)	(41.3)	236.6
Total diluted earnings per share	55.8	(34.9)	(5.8)	(40.7)	237.1
Total headline earnings per share	148.5	149.2	(5.9)	143.3	3.6
Total diluted headline earnings per share	146.8	147.4	(5.8)	141.6	3.7

1 The current and prior year numbers were extracted without adjustments from the reviewed condensed consolidated financial statements of the group for the year ended 30 September 2024.
2 Prior year comparatives have been restated for the effect of the discontinued operation as detailed in note 6 and 7 in the reviewed condensed consolidated financial statements.

Normalised earnings, headline earnings, diluted earnings and diluted headline earnings per share (EPS, HEPS, DEPS and DHEPS)

The groups' reported EPS, HEPS, DEPS and DHEPS are adjusted for the impact of the goodwill and trade and brand name asset impairment in the current year.

Pepkor reviewed annual results
for the year ended 30 September 2024

Pro forma financial information continued

The table below presents the adjustments to the items reported:

	As reported	Goodwill and trade and brand names impairment	Pro forma after adjustments
	Year ended 30 September 2024 Reviewed^{1} Pm	Year ended 30 September 2024 Reviewed^{1} Pm	Year ended 30 September 2024 Reviewed Pm
Revenue	85 136	-	85 136
Cost of sales	(52 527)	-	(52 527)
Gross profit	32 609	-	32 609
Other income	1 034	-	1 034
Operating expenses	(16 718)	-	(16 718)
Debtors' costs	(2 527)	-	(2 527)
Operating profit before depreciation, amortisation and capital items	14 398	-	14 398
Depreciation and amortisation	(4 596)	-	(4 596)
Operating profit before capital items	9 802	-	9 802
Capital items	(2 908)	2 741	(167)
Operating profit	6 894	2 741	9 635
Finance costs	(3 447)	-	(3 447)
Finance income	279	-	279
Profit/(loss) before associated income	3 726	2 741	6 467
Share of net profit of associate	-	-	-
Profit/(loss) before taxation	3 726	2 741	6 467
Taxation	(1 386)	(43)	(1 429)
Profit/(loss) for the year from continuing operations	2 340	2 698	5 038
(Loss)/profit from discontinued operations	(257)	-	(257)
Profit/(loss) for the year	2 083	2 698	4 781
Profit/(loss) attributable to:
Equity holders of the parent	2 072	2 698	4 770
Non-controlling interests	11	-	11
Profit/(loss) for the year	2 083	2 698	4 781
Pro forma headline earnings are adjusted for the goodwill and trade and brand names impairment as follows:
Earnings attributable to ordinary shareholders	2 072	2 698	4 770
Capital items (note 3 in the reviewed condensed consolidated financial statements)	3 459	(2 741)	718
Taxation effect of pro forma information	(79)	43	(36)
Headline earnings attributable to ordinary shareholders	5 452	-	5 452
Earnings per share (cents)^{4}
Total basic earnings per share from continuing operations	63.4	73.5	136.9
Total basic earnings per share from discontinued operations	(7.0)	-	(7.0)
Total basic earnings per share^{4}	56.4	73.5	129.9
Total headline earnings per share from continuing operations	140.2	-	140.2
Total headline earnings per share from discontinued operations	8.3	-	8.3
Total headline earnings per share^{4}	148.5	-	148.5
Total diluted earnings per share from continuing operations	62.7	72.7	135.4
Total diluted earnings per share from discontinued operations	(6.9)	-	(6.9)
Total diluted earnings per share^{4}	55.8	72.7	128.5
Total diluted headline per share from continuing operations	138.6	-	138.6
Total diluted headline earning per share from discontinued operations	8.2	-	8.2
Total diluted headline earnings per share^{4}	146.8	-	146.8

Notes to the pro forma financial information

The current year numbers were extracted without adjustments from the reviewed condensed consolidated financial statements of the group for the year ended 30 September 2024.
The adjustments represents the impact of the goodwill and trade and brand names intangible asset impairment (2023: significant lease modification relating to the PEP Hammarsdale DC, the insurance claim received relating to the replacement of property, plant and equipment damaged as a result of the floods in KwaZulu-Natal and the impact of the goodwill and trade and brand names intangible asset impairment).
Prior year comparatives have been extracted from the pro forma financial information included in the Pepkor reviewed annual results for the year ended 30 September 2023 and have been restated for the effect of the discontinued operation as detailed in note 7 in the reviewed condensed consolidated financial statements.
Pro forma earnings and diluted earnings per share, headline earnings and diluted headline earnings per share are calculated on the same basis and using the same weighted average number of ordinary shares and weighted average number of dilutive ordinary shares as per note 6 of the notes to the reviewed condensed consolidated financial statements of the group for the year ended 30 September 2024.

Pepkor reviewed annual results

for the year ended 30 September 2024

Pepkor reviewed annual results
for the year ended 30 September 2024
29

As reported	IFRS 16 adjustment	Property insurance claim adjustment	Goodwill and trade and brand names impairment	Pro forma after adjustments	Pro forma % change on prior year
Year ended 30 September 2023	Year ended 30 September 2023	Year ended 30 September 2023	Year ended 30 September 2023	Year ended 30 September 2023
Restated^{3}	Reviewed^{3}	Restated^{3}	Reviewed^{3}	Restated^{3}
Reviewed^{3}	Rm	Reviewed^{3}	Rm	Reviewed^{3}
78 960	–	–	–	78 960	7.8
(50 226)	–	–	–	(50 226)	(4.6)
28 734	–	–	–	28 734	13.5
1 176	–	–	–	1 176	(12.1)
(14 810)	(392)	–	–	(15 202)	(10.0)
(1 689)	–	–	–	(1 689)	(49.6)
13 411	(392)	–	–	13 019	10.6
(4 367)	–	–	–	(4 367)	(5.2)
9 044	(392)	–	–	8 652	13.3
(6 828)	–	(37)	6 613	(252)	33.7
2 216	(392)	(37)	6 613	8 400	14.7
(2 997)	–	–	–	(2 997)	(15.0)
272	–	–	–	272	2.6
(509)	(392)	(37)	6 613	5 675	14.0
7	–	–	–	7	(100.0)
(502)	(392)	(37)	6 613	5 682	13.8
(1 083)	106	10	(26)	(993)	(43.9)
(1 585)	(286)	(27)	6 587	4 689	7.4
295	–	(6)	–	289	(188.9)
(1 290)	(286)	(33)	6 587	4 978	(4.0)
(1 298)	(286)	(33)	6 587	4 970	(4.0)
8	–	–	–	8	37.5
(1 290)	(286)	(33)	6 587	4 978	(4.0)
(1 298)	(286)	(33)	6 587	4 970	(4.0)
6 830	–	45	(6 613)	262	> 100
(56)	–	(12)	26	(42)	14.3
5 476	(286)	–	–	5 190	5.0
(43.4)	(7.8)	(0.7)	179.5	127.6	7.3
8.0	–	(0.2)	–	7.8	(189.7)
(35.4)	(7.8)	(0.9)	179.5	135.4	(4.1)
140.8	(7.8)	–	–	133.0	5.4
8.4	–	–	–	8.4	(1.2)
149.2	(7.8)	–	–	141.4	5.0
(42.8)	(7.7)	(0.7)	177.3	126.1	7.4
7.9	–	(0.2)	–	7.7	(189.6)
(34.9)	(7.7)	(0.9)	177.3	133.8	(4.0)
139.1	(7.7)	–	–	131.4	5.5
8.3	–	–	–	8.3	(1.2)
147.4	(7.7)	–	–	139.7	5.1

Pro forma financial information continued

Pro forma constant currency disclosure

The Pepkor group discloses unaudited constant currency information to indicate PEP Africa and Avenida's performance in terms of sales growth, excluding the effect of foreign currency fluctuations. To present this information, current year turnover for these businesses reported in currencies other than South African rand is converted from local currency actuals into South African rand at the prior period's actual average exchange rates per country. The table below sets out the approximate average rand cost for one unit as well as percentage change in sales, based on the actual continuing results for the period, in reported currency and constant currency, for the basket of currencies in which these businesses operate.

Change in sales on prior year (%)	Average exchange rate		Reported currency		Constant currency
	2024	2023	On the prior period 53 weeks	On the prior period 52 weeks	On the prior period 53 weeks	On the prior period 52 weeks
Angolan kwanza	0.0222	0.0320	(9.03)	(6.09)	30.87	35.11
Malawian kwacha	0.0116	0.0176	19.39	22.91	81.09	86.43
Mozambican metical	0.2869	0.2830	(5.84)	(4.25)	(7.09)	(5.52)
Zambian kwacha	0.7564	0.9960	(10.62)	(8.15)	17.69	20.94
Total PEP Africa			(6.14)	(3.73)	19.45	22.53
Brazilian real	3.6030	3.5877	20.58	20.58	20.06	20.06

Pepkor reviewed annual results

for the year ended 30 September 2024

Pepkor reviewed annual results
for the year ended 30 September 2024

Notes:

32
Pepkor reviewed annual results
for the year ended 30 September 2024

Notes:

Corporate information

PEPKOR HOLDINGS LIMITED

('Pepkor' or 'the company' or 'the group')
(Incorporated in the Republic of South Africa)

Executive directors

PJ Erasmus (Chief executive officer)
RG Hanekom (Chief financial officer)

Non-executive directors

WYN Luhabe (Chair)
P Disberry
LJ du Preez
HH Hickey
IM Kirk
ZN Malinga
LI Mophatlane
SH Müller
NS Ntshingila
F Petersen-Cook*

Independent

Registration number

2017/221869/06

Share code

PPH

Debt code

PPHI

ISIN

ZAE000259479

LEI

3789006D677C34F69875

Registered address

36 Stellenberg Road, Parow Industria 7493

Postal address

PO Box 6100, Parow East 7501

Telephone

021 929 4800

E-mail

[email protected]

Transfer secretary

Computershare Investor Services Proprietary Limited,
Rosebank Towers, 15 Biermann Avenue, Rosebank 2196

Company secretary

M Allie

Auditor

PricewaterhouseCoopers Inc.

Equity and debt sponsor

Investec Bank Limited

Corporate broker

Rand Merchant Bank (a division of FirstRand Bank Limited)

Announcement date

26 November 2024

PEPKOR
Holdings Limited
www.pepkor.co.za

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PEPKOR HOLDINGS LIMITED — Proxy Solicitation & Information Statement 2025

48788_rns_2025-01-17_0613aa4d-d422-4bf0-9e31-074924ead7ff.pdf

PURPOSE-DRIVEN GROWTH

Notice of annual general meeting of shareholders for the year ended 30 September 2024

Purpose

Agenda

2.3 Re-appointment of auditor

2.3.1 Ordinary resolution number 9

2.4 Appointment of the members of the social and ethics committee of the company

2.4.1 Ordinary resolution number 10

2.4.2 Ordinary resolution number 11

2.4.3 Ordinary resolution number 12

2.4.4 Ordinary resolution number 13

2.5 Non-binding advisory vote on Pepkor's remuneration policy

2.5.1 Ordinary resolution number 14

2.6 Non-binding advisory vote on Pepkor's implementation report on the remuneration policy

2.6.1 Ordinary resolution number 15

3. To consider and, if deemed fit, approve, with or without modification, the following special resolutions:

3.1 Remuneration of non-executive directors

3.3.1 Special resolution number 3: Financial assistance for subscription and/or purchase of securities in the company or in subsidiary companies

3.4 General authority to repurchase ordinary shares

3.4.1 Special resolution number 4: General authority to repurchase ordinary shares issued by the company

Information and statement relating to this special resolution

Responsibility statement

Other business

Record dates and last day to trade

Record dates

Attendance, voting and proxies

Electronic registration and participation

Registration

Participation

Company secretary

Transfer secretary

Annexure A

Social and ethics committee report

The world we operate in

Governance

Committee members

Fagmeedah Petersen-Cook (49)

Independent non-executive director

Paula Disberry (57)

Independent non-executive director

Zola Malinga (46)

Independent non-executive director

How we performed

Social and transformation

Employees

Sourcing and supplier compliance

Enterprise and supplier development

Meet Ntombizethu (Zetu) Nombuso Sithole (31)

ESG ratings

FTSE/JSE Responsible Investment Index rating

Environmental

Risk management

Stakeholder reporting and engagement

In conclusion

Fagmeedah Petersen-Cook

Annexure B

Hester Hickey (70)

Independent non-executive director

Steve Müller (63)

Independent non-executive director

Paula Disberry (57)

Independent non-executive director

Isaac Mophatlane (51)

Independent non-executive director

Hester Hickey (70)

Fagmeedah Petersen-Cook (49)

Independent non-executive director

Zola Malinga (46)

Independent non-executive director

Steve Müller (62)

Fagmeedah Petersen-Cook (49)

Zola Malinga (46)

Paula Disberry (57)

Pieter Erasmus (59)

Chief executive officer

Annexure C

Remuneration policy and implementation report

PEPKOR HOLDINGS LIMITED Proxy Solicitation & Information Statement 2025