Wrap Text
Information On Resolutions To Be Considered At The Annual General Meeting
Steinhoff International Holdings N.V.
(Incorporated in the Netherlands)
(Registration number: 63570173)
Share Code: SNH
ISIN: NL0011375019
Steinhoff – Information on resolutions to be considered at the Annual General Meeting
Steinhoff International Holdings N.V. (the “Company” and with its subsidiaries, the “Group”)
Introduction
Since publication of the notice of the annual general meeting (AGM) of the Company,
scheduled for 20 April 2018, the Company has had responses from stakeholders regarding the
proposed resolutions.
Following these interactions, this letter sets out to provide shareholders with additional
information regarding the motivation for Resolution 5 (appointment and reappointment of
Supervisory Board directors) and Resolution 7 (reappointment of Deloitte as statutory auditors).
The Supervisory Board has taken note of the concerns raised by stakeholders in connection
with the previously proposed remuneration of the Supervisory Board and as a result this letter
also explains deletions we intend to make to Resolution 6 (remuneration of Supervisory Board
directors).
Resolution 5 – Composition of the Supervisory Board
The resolution provides for shareholder approval of the appointment of five new members of
the Supervisory Board and the reappointment of four existing members. Details of the
qualifications and experience of all nine members are contained in an annexure to the AGM
notice.
The Supervisory Board believes it is essential for the recovery of the company and its future
restructuring that shareholders reappoint Dr Steve Booysen, Ms Angela Kruger-Steinhoff, Ms
Heather Sonn, and Dr Johan van Zyl as members of the Supervisory Board. These directors
provide continuity to the processes undertaken as well as to the efforts of the new Supervisory
Board nominees.
We believe a better understanding of the role that the Supervisory Board, and particularly its
Independent Committee, has played since the crisis broke in early December 2017 in helping
to stabilise the company, deal with creditors to ensure continued operations, to help uncover
wrongdoing and to identify and bring to account those responsible, will be helpful to
shareholders.
Dr Van Zyl, Ms Sonn and Dr Booysen were members of the Independent Committee appointed
in December 2017 to bolster independent governance of the group and to provide a centre
of leadership following the resignation of the CEO. The work of the Independent Committee
has included setting the PwC forensic audit off on the correct footing and to similarly ensure
the appropriate commencement of the 2017 financial year audit process, ensuring the
credibility of the processes.
The Independent Committee has also functioned as a link for quick and on-going decision-
making between the Supervisory Board and Management Board, as it simultaneously focused
on establishing a sound governance structure. They have interacted with regulators,
Parliament, shareholders and other stakeholders and with bankers and creditors to ensure
liquidity for the group and the continued trading of its underlying companies.
It is crucial for the company and its shareholders that there is continuity in these roles until such
time as the stability of the group is reasonably assured.
Resolution 6 – Remuneration of members of the Supervisory Board
This resolution contains three elements: (i) proposed remuneration for Supervisory Board
members until the 2019 AGM; (ii) additional one-off payments for the period up to the 2018
AGM for Supervisory Board members who have been involved in considerable additional work
since the crisis broke in late 2017; and (iii) proposed remuneration for additional meetings that
Supervisory Board members are likely to have to attend in addressing recovery and
restructuring of the company in the period between the 2018 and 2019 AGMs.
In light of the company’s interactions with certain stakeholders it is apparent the motivation
behind the proposals for additional one-off payments and for additional meetings has not
been fully communicated, leading to stakeholder concerns which the company believes must
be appropriately addressed.
The Supervisory Board members who were to receive these additional payments have
requested that such matters are not pursued at the coming AGM. They believe that these
matters should be left to a newly constituted Supervisory Board which will be appointed at the
AGM, and specifically its Remuneration Committee, to resolve at an appropriate time in the
future.
While matters relating to the one-off payments and additional meetings are no longer being
proposed at the AGM, by way of background it should be noted that the directors concerned
contributed significant time, in some cases on a daily basis for weeks on end up until the
present day. By way of illustration, since early December 2017, there have been a total of 69
meetings involving Supervisory Board members; 14 full Supervisory Board meetings (normally
four per year), 20 meetings of the Independent Committee of the Supervisory Board
(additional duties – this is a new committee), 22 Audit Committee meetings (normally four per
year), 6 Remuneration Committee meetings (normally 2 per year) and 2 Nomination
Committee meetings (normally one per year). These meetings often required a significant
amount of preparation time and follow-up work. Steve Booysen oversaw the Audit Committee
and its functions in initiating the forensic investigation and the 2017 audit processes as well as
stepping into the company for weeks at a time when it was needed. Len Konar and Theunie
Lategan contributed significant time and effort as members of various committees. As
members of the Independent committee Johan van Zyl and Heather Sonn engaged with
shareholders on concerns and drove the process to reconstitute the Supervisory Board. The
result is a new Supervisory Board of quality candidates with complementary skills which is up
for approval at the AGM.
Certain Supervisory Board members have also committed a material amount of time outside
of the formal meeting environment in order to support Steinhoff and the Management Board.
For example, Ms. Heather Sonn, Dr Johan van Zyl and Dr Steve Booysen have met with
regulators, shareholders and financial creditors, have conducted presentations to Steinhoff’s
stakeholders and in some cases have effectively been working on a full-time basis to respond
to ongoing developments.
This is far above what is normally expected of non-executive directors but is essential in steering
the company out of the current crisis. The focus however has to be on maintaining a stable
environment in which to take on the next challenge; that of a controlled restructuring process
in the interest of all stakeholders.
The Supervisory Board has therefore recommended that those parts of Resolution 6 relating to
the proposed additional one-off payments for additional work rendered and the proposed
payments for additional meetings after the 2018 AGM be deleted. A notice reflecting such
deletions is being published on the company’s website.
Resolution 6 will thus consist of only one element – standard payments for the Supervisory Board
members appointed and re-appointed at the AGM. This element, the company believes, has
the support of shareholders, and assists the company to attract and retain directors with the
skills and expertise needed to direct the company at this time. The company consulted
external consultants (PwC) and has followed their advice in determining the level of fees for
Supervisory Board members. The proposed remuneration was determined with reference to
competitors and peer companies as well as considering the need to retain and attract
Supervisory Board directors in light of the company’s situation. The levels of fees were set by
reference to the responsibilities assumed by the Supervisory Board directors, including in
chairing or being a member of the Supervisory Board’s committees. The proposed fees for
2018 include no increase on the fee level of 2017.
Resolution 7 – the reappointment of Deloitte Accountants B.V. as statutory auditor
The Supervisory and Management Boards believe it is in the best interests of the company and
its shareholders that Deloitte Accountants B.V. be appointed as statutory auditor for the
financial year ending on 30 September 2018 (which began in October 2017). Steinhoff is not
opposed to the rotation of auditors, but believes the continuation of Deloitte as auditor until
the end of the current financial year in September 2018 is essential.
One of the company’s main priorities is the expeditious finalisation of audited consolidated
financial statements for the 2017 financial year, and the revised statements for the 2015 and
2016 financial years. Deloitte is already involved in these matters, and the appointment of a
new auditor midway through a financial year will lead to unacceptable delays in the
completion of these statements. This in turn would affect the company’s dealings with all
stakeholders, who require the certainty of audited financial statements. The supervisory board
believes that Deloitte is best placed to apply the lessons of the 2017 audit and forensic
processes in completing the 2018 audit.
Audited financial statements are also essential for the group, as it considers its options for
restructuring and the potential retention or disposal of assets to secure its financial position.
Decision-making will be facilitated by early completion of the audited statements.
With a September financial year-end, the 2018 audit process will start in approximately two
months to ensure a timeous completion of the 2018 audit.
Subsequent to the 2018 audit, the appointment of an audit firm for the 2019 financial year will
be subject to a global tender process.
Given these considerations, Steinhoff believes it is in the best interests of the company and its
shareholders that Deloitte Accountants BV be appointed as statutory auditor for the financial
year ending on 30 September 2018.
Conclusion
There will be an opportunity going forward to review the performance and make-up of the
Supervisory Board, its remuneration and the appointment of Auditors. At this critical juncture,
a measure of continuity, stability of leadership and interaction between the Management
Board and the Supervisory Board with the inclusion of new skills and experience is what is being
recommended.
JSE Sponsor: PSG Capital
Stellenbosch, 5 April 2018
Date: 05/04/2018 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
