OVERVIEW OF BUSINESS
Remgro invests in reputable businesses
that are aligned with its values and purpose, with sound management teams that have the potential to deliver superior earnings, sustainable cash flow generation and dividend growth over the long term.
The 2022 Integrated Annual Report provides a holistic view of Remgro’s business model, how the Company is managed, its approach to Environmental, Social and Governance (ESG) matters and the stewardship of its investments. In this regard our main focus is to provide a complete analysis of our business to satisfy the information needs of key stakeholders that use the Integrated Annual Report.
The information presented thus aims to provide our stakeholders with a good understanding of the financial, social, environmental and economic impacts of the Group to enable them to evaluate our ability to create sustainable value for our stakeholders. This includes Remgro’s drive to ensure that ESG and sustainability considerations are integral to how we manage the Company and its investee companies’ business.
In order to ensure that we address all the material issues that matter to us, our shareholders and other stakeholders, we report on matters such as:
Remgro’s reporting suite information is set out below, detailing the assurances obtained and frameworks applied to each report.
Remgro is an investment holding company and accordingly all references to “the Group“ in this context denote the Company and its subsidiaries.
The King IV Report on Corporate Governance for South Africa (King IV), which was published on 1 November 2016, contains a set of principles that are fundamental to good governance, as well as related leading recommended practices. The JSE Limited has incorporated certain of King IV’s recommended practices in the JSE Listings Requirements, with the effect that some of King IV’s recommended practices are in fact mandatory in respect of companies listed on the JSE (such as Remgro). The Board is satisfied that the Company has applied the principles contained in King IV during the year under review. The Corporate Governance Report explains how Remgro has applied the principles enumerated in King IV with reference to Remgro’s own practices.
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Integrated reporting boundaryIncludes the financial and non-financial boundaries as explained below. Furthermore, material matters as they relate to stakeholder concerns, risks and opportunities and governance matters are included in the disclosures of this report. |
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Financial boundaryRemgro is an investment holding company and accordingly all financial data in the summarised financial statements includes associates and joint ventures on an equity accounted basis and subsidiaries on a consolidated basis. The intrinsic net asset value of the Group includes valuations of all investments, incorporating subsidiaries and associates and joint ventures, either at listed market value or, in the case of unlisted investments, at IFRS 13: Fair Value Measurement valuation. Refer here. |
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Non-financial information boundaryData relating to the social and environmental performance of subsidiaries, associates and joint ventures, over which Remgro does not exercise operational control, are not covered in detail in this report. Except where otherwise indicated, all disclosures relating to social and environmental performance thus only relate to Remgro’s activities at its head office in Stellenbosch. |
Remgro is an investment holding company and accordingly all references to “the Group“ in this context denote the Company and its subsidiaries. Disclosure is therefore limited to those entities where Remgro exercises control over the financial and operating policies of such entities, save where those entities disclose the relevant information in their own publicised annual reports.
Remgro has four main operating subsidiaries, i.e. Distell Group Holdings Limited (Distell), RCL Foods Limited (RCL Foods), Siqalo Foods Proprietary Limited (Siqalo Foods) and Wispeco Holdings Proprietary Limited (Wispeco). As Distell and RCL Foods are listed on the JSE, detailed information regarding their financial and non-financial performance is available on their websites at www.distell.co.za and www.rclfoods.com respectively.
Siqalo Foods and Wispeco are unlisted wholly owned subsidiaries which are operated and managed on a decentralised basis as independent entities with autonomous boards of directors. Based on the above, as well as the fact that Siqalo Foods and Wispeco represent only 5.3% and 1.2% of Remgro’s intrinsic net asset value, respectively, only summarised “non-financial“ disclosure relating to social and environmental performance will be provided for Siqalo Foods and Wispeco. This is in line with Remgro’s reporting on the financial performance of its investee companies.
In its last Integrated Annual Report, Remgro announced its goal to be a leader in the development of ESG and corporate sustainability in a South African context.
A key component of Remgro’s ESG and sustainability strategy is to provide transparent and accurate disclosures on its metrics and the improvements made against internationally recognised standards.
Over recent months, Remgro has implemented an ESG charter and governance structure that provides strategic direction and oversight in support of Remgro’s commitment and that of its investee companies to ESG. Remgro’s ESG performance will therefore be monitored by the Strategic ESG Committee of the Board.
Remgro’s commitment to stewardship of ESG best practice includes the development of a schedule to measure ESG progress, reporting against defined targets and metrics.
On 4 August 2022 Remgro announced that an agreement has been reached on the terms of a recommended cash offer by Manta Bidco Limited (a newly formed company, which is jointly owned by Remgro and MSC Mediterranean Shipping Company SA (MSC)) to acquire the entire issued ordinary share capital of Mediclinic International plc (Mediclinic), other than the 44.6% interest in Mediclinic Remgro already owns, for 504 pence per Mediclinic share. Remgro will contribute its existing interest in Mediclinic and cash of approximately £201 million, which represents an additional interest in Mediclinic of 5.4%. MSC will contribute cash, representing the other 50.0% interest in Mediclinic. The proposed transaction is still subject to various conditions precedent.
During April 2022, Rand Merchant Investment Holdings Limited (RMI) unbundled its two life insurance-focused assets, Discovery Limited (Discovery) and Momentum Metropolitan Holdings Limited (Momentum Metropolitan), and Remgro received direct stakes in Discovery (7.7%) and Momentum Metropolitan (8.6%).
On 15 November 2021, Distell Group Holdings Limited (Distell) and Heineken International B.V. (Heineken) announced their intention to combine the Heineken Southern African business, including an interest in Namibia Breweries Limited, with the bulk of the Distell business (consisting of its cider, other RTDs and spirits and wine business) in a new unlisted entity controlled by Heineken and referred to as Newco. The proposed transaction will also include an offer by Newco to Distell shareholders to acquire their Distell shares for R165 per share and/or unlisted shares in Newco, or a combination thereof. Remgro intends to elect to receive Newco shares for its Distell shares. The proposed transaction is still subject to conditions precedent.
Refer to the report of the Chief Executive Officer for a brief summary of these transactions. Besides the transactions above, no other significant events occurred during the reporting period or after the end of the reporting period, which may have a material impact on the size, structure or ownership of the Group.
The Board, supported by the Audit and Risk Committee, acknowledges its responsibility to ensure the integrity and completeness of the report. The Board applied its collective mind to the preparation and presentation of the report. We believe that the report has been prepared in accordance with the <IR> Framework and it provides a balanced and appropriate representation of the Company.
The Board approved the 2022 Integrated Annual Report on 26 September 2022.
A key component of Remgro’s ESG and sustainability strategy is to provide transparent and accurate disclosures on its metrics.
The 2022 Annual General Meeting of Remgro will be held by way of electronic participation only (refer to the Notice of Shareholders regarding the electronic participation process).