Good morning, ladies and gentlemen. I welcome you to this annual general meeting of shareholders of Bid Corporation. I'm Stephen Koseff, the chairman of Bidcorp. As a consequence of the impact of the COVID-19 pandemic and the restrictions placed on public gatherings, the meeting will mostly be conducted through electronic participation as per the article by the JSE and in terms of the provisions of the Companies Act 71 of 2008 as amended, and the company's memorandum of incorporation. Just before we start, there are a few pointers on how to navigate the Zoom meeting platform. Shareholders who would like to pose questions, please click on the Q&A icon at the bottom of your screen. If you have a question on a particular resolution, please type your name, the resolution number, followed by your question, and press enter or send.
Or alternatively, if you'd like to address the meeting directly, please click on the raise your hand icon. Once the chairman has identified you, your microphone will be unmuted, and you will be able to address the meeting. All questions and comments will be addressed after all resolutions have been put to the meeting. The results of the poll will be announced before the close of the formal business of the meeting. The quorum requirements for this meeting are that at least three members entitled to vote are present in person or represented either by proxy or letter of representation. In terms of the Companies Act, that at least 25% of shares in issue are represented. I can inform you, a quorum of shareholders is personally present or represented at this meeting, and I accordingly declare the meeting properly constituted.
The notice convening this annual general meeting was sent to all shareholders during October 2020. The notice contains full details on the special and ordinary resolutions to be considered at this meeting. I propose that we be permitted to take the notice as read. Are there any objections to this procedure? Gentlemen, there's a raised hand. Some shareholder. Shareholder, please proceed.
Hi, Stephen. Can you hear me?
Yeah, we can hear you.
Hi, Stephen. Hope you're well, and good morning to all the attendees on the call. I wasn't sure if there was going to be a Q&A session and so forth, so I said, let me just raise my concerns right up front.
We are going to do Q&A at the end. That's why it is a concern about one of the resolutions. You're entitled to raise it at the end. All we're asking for is, are you happy that we conduct a poll?
Yeah. Look, this is part of that discussion as well. Stephen, this is Kavisharm Dheepnarayan speaking here from Benguela Global Fund Managers. We are deeply concerned with the LTI modifications in Bidcorp's trade transformation policy. To be more specific, there have been Bidcorp employee cuts in the wake of COVID-19, yet Bidcorp executives want to be protected from the impacts of the pandemic while employees and shareholders suffer the full burden. The modifications to the long-term incentive scheme mean that Bidcorp execs will be easily rewarded by just staying employed in the business. Bidcorp guarantee pay already addresses retaining executives through its objectives and practices. Between 2017 and 2020, the cumulative total single figure remuneration, less the LTI for Bidcorp's CFO and CEO, was such a ZAR 3 million and ZAR 114 million. This is a well-rewarded team in the good times.
The modifications are a cultural shift away from a performance-based focus to primarily a retention-based focus. Bidcorp's RemCom have chosen to ignore independent legal advice from Bowman Gilfillan regarding modifications to in-flight awards and in not being favored by shareholders. The law was not followed in making these changes. Modifications cannot be made retrospectively without the required notice. This is in contravention of the Companies Act in South Africa. RemCom directors could possibly be declared delinquent, and they may be held personally liable for this breach of the act. For any losses or costs to the company, this could be as much as ZAR 75.3 million by our estimates. We further believe that Bidcorp may be in breach of their JSE listing requirements as it pertains to retrospective changes to prior shareholder-approved remuneration policies. The modification to the remuneration policy are a clear indication of a lack of independence by RemCom.
The board has to take action. Performance measures must be included across all Bidcorp's long-term incentives, in flights and new. We simply don't want modifications to the scheme. Stephen, these are the concerns that we have. We felt that it was appropriate.
Okay. You've raised your concerns. You should have raised it at the end when we put the resolutions to the meeting. You have raised them now. They are noted. Now we'll carry on with the meeting. Thank you very much. I'm gonna move into the meeting now. Just want to get to my position before. It is our intention to conduct voting on all resolutions proposed at this meeting by way of a poll. The representatives from the meeting specialists, (Pty) Limited, will act as scrutineers. Please note that only shareholders in possession of a valid proxy which has been filed in accordance with the notice of meeting or shareholders are reflected in the share register who are in possession of a written letter of representation are entitled to speak and vote at this meeting.
Any person who is not so entitled may, however, pose questions after the conclusion of the meeting. A few pointers on how to cast your vote. All shareholders or their representatives who are registered to vote would have received a link to the voting platform to either their mobile phone or email address. Please click on the "Vote now" link and it will direct you to the voting platform. You will notice that the voting platform contains all the resolutions which have been published in the notice of meeting. With your vote, it automatically defaulted to abstain. You may vote on all the resolutions simultaneously by defaulting all your votes as either for or against, or keeping it as an abstaining vote, and then clicking on the Submit button on the bottom of the electronic ballot.
You may also indicate your votes individually per resolution by selecting the relevant option for, against, or abstain on a resolution by resolution basis. Once you have voted on all the resolutions, scroll down to the bottom of the page and click Submit. A message will pop up on your screen confirming that your votes have been received. Please note that once you click Submit, your votes cannot be retracted and reverted. As such, please ensure that you selected the correct option on your resolution, either for, against, or abstain. We will announce the results of the resolutions voted by way of poll. Are there any questions regarding this procedure?
Sir, there is a raise of hand from a shareholder.
Yeah.
Shareholder, please proceed. Okay, the shareholder has lowered his hand, sir. Shareholder?
Hi, Stephen.
Hi.
Hi, it's Vela Mngwengwe here from Egoli Gas. I just want to find out from you if you are going to put any legal resolution to shareholders to vote on those in-flight resolutions or on the modifications of the remuneration scheme. Is that what the chairman is going to do now to ask the shareholders? Thank you.
We are putting all the resolutions tabled in the notice of meeting to the shareholders. I note the inclusion of the annual financial statements for the year ended 30th June 2020, as included in the publication of Bidcorp 2020 annual report on October 21st, 2020. The annual integrated reporting includes the annual financial statements as well as a report of the auditors, the audit and risk committee, and of the directors, which fully covers the activities of the company for the year under review. Please use the Q&A button or raise your hand icon if you'd like to ask a question in relation to the information presented. As I said earlier, all questions will be taken once all resolutions have been put to this body of shareholders. We will now display the resolutions one by one.
Please be reminded that we'll respond to questions at the end of posing all resolutions. If you have any question pertaining to a particular resolution, please pose your question by clicking the Q&A or raise your hand. As I said, we will take the question after all the resolutions have been proposed, have been tabled. Not in the middle. I'll start off our ordinary resolution number one. I propose ordinary resolution number one regarding the reappointment of PricewaterhouseCoopers as independent and external auditors of the group for the audit of the year ended 30th June 2021 financial year, with Eben Gerryts as the individual registered auditor being the Designated Auditor as set out in the notice convening this meeting. Resolution two, re-election of the directors in terms of the company's memorandum of incorporation.
The board members to be re-elected are Stephen Koseff, Paul Baloyi, and Helen Wiseman, all being eligible at the time of posting the notice, have offered themselves for re-election. The board has reviewed its composition, has recommended the re-election of the forementioned directors who have offered themselves for re-election. It is the view of the board that the re-election of the nominees referred to above will enable the group to maintain a mix of business skills and experience relevant to the group and balance the requirements of diversity, continuity, and succession, as well as to comply with the corporate governance requirements in respected matters such as the balance of executive and independent non-executive directors on the board. The board has considered the proposal of the nomination committee and recommends the re-election of Stephen Koseff, Baloyi, and Wiseman by way of separate resolutions.
Briefly, curricula vitae in respect to the above-mentioned directors are set out on pages 80 and 81 of the 2020 annual integrated report. I propose ordinary resolutions number 2.1 to 2.3, that Stephen Koseff, Paul Baloyi, and Helen Wiseman be and are elected as independent direct, non-executive directors of the company as set out in the notice convening this meeting. Ordinary resolution number three. I propose ordinary resolutions number 3.1 to 3.4 that Mrs. Tasneem Abdool-Samad, Paul Baloyi, Nigel Payne, and Helen Wiseman as elected as members of the audit and risk committee as set out in the notice convening this meeting. The election of Mr. Baloyi and Mrs. Wiseman are subject to their re-election as directors. Ordinary resolution number four.
In accordance with recommendations of King IV, the company gives shareholders the right to express their views on the remuneration policy by cast a non-binding advisory vote on Bidcorp's remuneration policy and the implementation of the policy as set out in the notice convening this meeting. Voting by way of a non-binding vote on this resolution will be done in two sections as follows. Endorsement of the remuneration policy. I propose ordinary resolution four one, be adopt to adopt the Bidcorp remuneration policy. Four two, the implementation of remuneration policy. I propose ordinary resolution four two to implement the Bidcorp remuneration policy. Ordinary resolution number five. I propose ordinary resolution number five to grant authority for 16,750,000 of the unissued shares of the company to be placed under the control of directors as set out in the notice convening this meeting. Ordinary resolution number six.
I propose ordinary resolution number six to grant authority to directors to issue up to 16,750,000 shares for cash as set out in the notice convening this meeting. Ordinary resolution number seven. I propose ordinary resolution number seven granting directors authority to pay a dividend by way of a pro rata reduction of paid capital as set out in the notice convening this meeting. Ordinary resolution number eight. I propose ordinary resolution number eight granting directors authority to create and issue convertible debentures as set out in the notice to this meeting. Ordinary resolution number nine. I propose ordinary resolution number nine authorizing directors of the company to sign documentation to implement the various resolutions as set out in the notice convening this meeting. Ordinary resolution number 10, special resolution number one, sorry.
I now propose special resolution number one authorizing the repurchase of securities as set out in the notice convening this meeting. Special resolution number two. I now propose special resolution number two regarding approval of the 2020/2021 annual fees payable to the non-executive directors for their service as directors and members of various committees, as well as travel fees, which will be voted on separately as set out in the notice convening this meeting. Special resolution number three. I now propose special resolution number three authorizing the board of directors to provide financial assistance to related or interrelated companies as per Sections 44 and 45 of the Companies Act as set out in the notice convening this meeting. Ladies and gentlemen, we will now respond to all questions from shareholders on the special and ordinary resolutions contained in the notice.
Questions will be answered by a member of the board who may be best suited to answering the questions. Right.
Chairman, we have a raised hand. Please go ahead, Shareholder.
What?
Hi, Stephen. Can you hear me?
Yeah, we can hear you.
Yes. I've raised a number of concerns in my opening remarks. Just like a response, please, on those remarks, in terms of the stance Bidcorp going forward in for adjusting these long-term incentives, which we feel is incorrect and goes against the policies and the philosophies which are set out in Bidcorp's remuneration policy. I'm happy to go through the points again, if need be, but I would like a response.
I think you made the point earlier. You don't have to make the point again. We understand your point. I'm going to hand you over to Nigel Payne, the Chairman of the Remuneration Committee, to respond to your point. Nigel.
Thank you, Chairman. Firstly, the Bidcorp Remuneration Committee has spent an enormous amount of time considering how to address remuneration and the impact of COVID, which in the case of Bidcorp started with the requirement to close our operation in Wuhan, in China in January, and then rippled through Asia. Our various operations elsewhere in China, in Singapore, in Hong Kong, other Asian countries, southwards to Australia and New Zealand. The very significant impact in Europe. It progressed. During May this year, the Remuneration Committee applied our minds the enormous uncertainty that was being faced in our industry, the hospitality industry, cruise ships, airlines, restaurants. In almost all of the countries in which we operated in had already gone into some sort of lockdown restrictions. South Africa, ultimately South America as well.
We had an enormous amount of uncertainty and we asked our executives, and in fact, the board also volunteered to take fee cuts by the directors and guaranteed salary cuts by our two senior executives. We also determined that we would not be paying any short-term incentives in the current year, and that our focus, in fact, needed to change from all of the metrics that we had previously applied and in a context of an enormous amount of uncertainty. What would the impact be on our suppliers, and on our customers? Also, what would the impact be on our employees? Huge focus on the safety of our employees, huge focus on food quality and food safety, in that context. Then also on protect the company. Make sure that Bidcorp comes through this in the best position we possibly could.
We took significant advice from our independent remuneration advisors, and it is set out in the remuneration report, namely Martin Hopkins from Bowmans. We applied our minds as to what are the best options under the circumstances. We considered various options. We specifically wanted management to focus on assist Bidcorp and ultimately our people, and our business partners, being our customers and our suppliers, to navigate through this uncertainty, the depth and duration of which was unknown. The options that we considered in relation to long-term incentives were leave them as they were, and focus on the other levers of remuneration, which we had already cut, salaries and STI, as I had indicated. We also took into account the enormous stress that our executives were working under in the context of COVID. Things that we considered were change the metrics to non-financial metrics.
Bidcorp's Remco was one of the first to have to consider what to do in this context, given that COVID impacted us earlier than most other listed companies because of the global scale of our operations. We considered should we change the metrics. We've since seen a lot of other companies have done that. In fact, that is being supported by their shareholders. We note that. We also considered what we've also since seen other companies have done, is they issued a number of retention shares to executives with quite long vesting dates. Our concern in that regard was that, the time we considered these issues, global stock markets had crashed, share prices were at a particular low, and we didn't believe that it was appropriate to go and issue a bunch of retention shares at particularly low share prices.
We took the decision that we took namely to take a haircut off, and we took it with significant reluctance, but our conclusion was it was the best option available to us at the time to keep our executives focused on the things that will ensure that Bidcorp not only survives, but comes through the COVID uncertainty and challenges in the strongest possible position. Our conclusion was extend the vesting dates, apply a haircut of 30% to them, but turn them into retention shares as opposed to their performance-based conditions. We are very pleased, as has been reported, in the various reports that the company has given to the market since, I'm gonna say since May, or since the onset of COVID, that Bidcorp's resilience and agility is coming through. The Remco has, of course, taken on board. We've had communication from a number of shareholders.
Given that this AGM is electronic, we already see quite clearly the trend of shareholder voting. The Remco decided very early on, once we started getting feedback from shareholders and indeed once we saw what other remuneration committees and boards were doing. The Remco decided that post the AGM, we will engage with all shareholders. We will take their comments and concerns on board. One of the most significant being, what do we do in the future? We never believed in the Bidcorp Remuneration Committee that we would change the conditions of in-flight LTI. None of us have lived long enough to experience something as extreme, and as uncertain in terms of impact and duration, impact particularly on our customer base, of COVID. We have taken significant legal advice. I do note that the Benguela shareholders believe that there is illegality there.
We've taken legal advice, which is very different to the allegations of Benguela. I guess you must pursue those however you believe is appropriate. In terms of the Remuneration Committee, chairman, and to all of our shareholders, we've indicated it already to the shareholders who have communicated with us, that post this AGM, we will have a robust, and open interaction with all shareholders, as the Remuneration Committee, that will inform our actions going forward. Thank you, Chairman. I hope I've addressed the issue in sufficient granularity and with sufficient clarity.
Nigel, thanks for the response. Yes. Just to reiterate, again, the thinking that we have is that we fail to understand how executives are going to be rewarded or made whole again while us as shareholders had to bear the full brunt of the impact of COVID-19 in terms of devaluation that we're seeing, not just at Bidcorp, but across the market. Even more, sadly in this case, that we know that Bidcorp has actually let go staff, and there's been staff furloughs across different regions at Bidcorp. We feel that this is genuinely morally wrong, and that's at the heart of what we're really trying to communicate here. That changing and adjusting these performance measures does have moral implications in terms of management being made whole whereas shareholders as well as employees are faced with the full burden of the COVID-19 crisis.
Again, I think just want to re-highlight that we have actually submitted a letter to Bidcorp.
Yeah, about two weeks ago. We are happy to share that with other shareholders to highlight our concerns that we raised in that letter. We would appreciate a written response to those comments that we've made there, which was quite detailed in some of our analysis. Yeah, thanks for the response, and I'm going to leave it at that point.
Well, chairman, if you'll permit me, please. Thanks again for the comment. Just to say, yes, I have responded to you, and you acknowledged my response, thanks for that, indicating the Remco will engage with all shareholders. You made a point, and chairman, I just have to comment on this.
Yeah.
Committee is not independent on this matter. As is set out in the remuneration report, the non-executive directors, I'm going to use the correct term, the independent non-executive directors voluntarily took a pay cut. My best estimate is, and the time commitment that we have put in has increased three to five-fold. Notwithstanding in that context, we volunteered for a cut in our own remuneration. I'm just going to assert the remuneration committee is applying its mind as robustly as possible, is totally independent. Management are not members of the remuneration committee, and we take independent advice. Chairman, in conclusion, we will engage with all shareholders on this matter post the AGM. Thanks very much.
Right. Thank you very much, Nigel. Thanks for that feedback, I mean, that input. Thank you to the shareholder for raising an issue of concern. I think we're going to move forward now. I think that our obligation is to engage with shareholders, which we will do, and in the course of the next one. I think we're now ready. I just want you to remind shareholders who have not voted yet to please click on the voting link and pass your advice now if you're registered to vote. If you have not received your voting link via email, please inform the moderator. Mr. Pasqua, are there any shareholders who should still exercise their votes?
Sure. We're simply waiting on Ms. Gab. If Ms. Gab could please vote, then we have all the votes in.
Do you have all the votes in?
I'm not sure. We're just waiting on one shareholder, Ms. Gab-
Okay.
Who's present in the meeting. If we could just pause for a short period to let Ms. Gab vote.
Okay.
Ms. Gab, if you're experiencing any difficulties with the voting, please could you let us know. Otherwise, we will need to proceed with the meeting. Thank you, Ms. Gab. We've received your vote. Chairman, all the votes are in.
Okay. Can you display the results? Right. All resolutions were passed except the two resolutions relating to remuneration. I think, ladies and gentlemen, as all the business in the agenda has been dealt with, I now formally close the proceedings of the meeting. I'd like to take the opportunity of thanking all of you for your participation. Thank you very much.
Thank you, Chairman.