TASTE HOLDINGS LIMITED

Transcription

1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION The definitions and interpretations commencing on page 4 of this Circular apply, mutatis mutandis, throughout this Circular. If you are in any doubt as to the action you should take, please consult your broker, CSDP, attorney, accountant, banker or other professional adviser immediately. 1. If you have disposed of all of your Shares in Taste, then this Circular, together with the attached notice of General Meeting and form of proxy, should be forwarded to the purchaser to whom, or the broker, agent, CSDP or banker through whom you disposed of your Shares. 2. The General Meeting convened in terms of this Circular will be held at 12:30 (or immediately following the Annual General Meeting, whichever is later) on Tuesday, 30 June 2015 at Summer Place, 69 Melville Road, Hyde Park, Johannesburg. 3. Certificated Shareholders and Dematerialised Shareholders with own name registration, who are unable to attend the General Meeting and wish to be represented thereat, must complete and return the attached form of proxy in accordance with the instructions contained therein. Dematerialised Shareholders, other than Dematerialised Shareholders with own name registration, who: are unable to attend the General Meeting and wish to be represented thereat, must provide their CSDP or broker with their voting instructions, in terms of the Custody Agreement entered into between themselves and the CSDP or broker concerned, in the manner and within the time stipulated therein; or wish to attend the General Meeting, must instruct their CSDP or broker to issue them with the necessary letter of representation to attend, in the form of a letter of representation. 4. Taste does not accept any responsibility and will not be held liable for any failure on the part of any CSDP or broker of a Dematerialised Shareholder to notify such Shareholder of the General Meeting or any business to be concluded thereat. TASTE HOLDINGS LIMITED Incorporated in the Republic of South Africa (Registration number 2000/002239/06) Share code: TAS ISIN: ZAE ( Taste or the Company ) CIRCULAR TO TASTE SHAREHOLDERS regarding: the specific issue of new Taste Shares to Brimstone, at a price of R3.05 per Share for an aggregate amount of R25 million; and incorporating: a notice convening the General Meeting; and a form of proxy for use by Certificated Taste Shareholders and own name registered Dematerialised Shareholders only. Corporate Adviser and Sponsor to Taste Independent Expert Date of issue: 29 May 2015 Additional copies of this Circular, in its printed format, may be obtained from the Sponsor at the address set out in the Corporate information section o f this Circular during normal business hours from Friday, 29 May 2015 up to and including Tuesday, 30 June Copies of this Circular are available in the English language only.

2 CORPORATE INFORMATION Taste Holdings Limited Date of incorporation: 7 February 2000 Place of incorporation: South Africa Company Secretary and registered address of Taste ithemba Corporate Governance and Statutory Solutions Proprietary Limited (Registration number 2008/008745/07) 12 Gemini Street Linbro Business Park Sandton, Johannesburg, 2065 (PO Box 1125, Ferndale, Randburg, 2160) Transaction Sponsor to Taste Merchantec Capital (Registration number 2008/027362/07) 2nd Floor, North Block Hyde Park Office Towers Corner 6th Road and Jan Smuts Avenue Hyde Park, 2196 (PO Box 41480, Craighall, 2024) Independent Expert Nodus Capital Proprietary Limited (Registration number 2007/004535/07) 32 Fricker Road Illovo, 2146 (PO Box 55369, Northlands, 2116) Transfer Secretaries Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07) Ground Floor 70 Marshall Street Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)

3 FORWARD-LOOKING STATEMENT DISCLAIMER This Circular includes statements about Taste and/or the Taste Group that are, or may be deemed to be forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. These forward-looking statements are not based on historical facts, but rather reflect current expectations concerning future results and events and generally may be identified by the use of forward-looking words such as believe, aim, expect, project, anticipate, intend, foresee, forecast, likely, should, planned, may, will, estimated, potential or similar words and phrases. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Taste cautions that forward-looking statements are not guarantees of future performance. Actual results, financial and operating conditions, liquidity and the developments within the industry in which Taste operates may differ materially from those made in, or suggested by, the forward-looking statements contained in this Circular. All these forward-looking statements are based on estimates and assumptions made by Taste, as communicated in publicly available documents by Taste, all of which estimates and assumptions, although Taste believes them to be reasonable, are inherently uncertain. Such estimates, assumptions or statements may not eventuate. Factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in those statements or assumptions include other matters not yet known to Taste or not currently considered material by Taste. Shareholders should keep in mind that any forward-looking statement made in this Circular or elsewhere is applicable only at the date on which such forward-looking statement is made. New factors that could cause the business of Taste not to develop as expected may emerge from time to time and it is not possible to predict all of them. Further, the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statement are not known. Taste has no duty to, and does not intend to, update or revise the forward-looking statements contained in this Circular after the date of this Circular, except as may be required by law. 1

4 TABLE OF CONTENTS Page Corporate information Inside front cover Forward-looking statement disclaimer 1 Important dates and times 3 Definitions and interpretations 4 Circular to Taste Shareholders 1. Introduction 7 2. Nature of the business of Taste 7 3. The Specific Issue 8 4. Share capital of Taste Prospects Major Shareholders Directors Material changes Litigation statement Opinions and recommendations Directors responsibility statement Experts consents Costs Documents available for inspection General Meeting 20 Annexure 1 Fairness opinion 21 Annexure 2 Share trading history of Taste 27 Notice of General Meeting 29 Form of proxy Attached 2

5 IMPORTANT DATES AND TIMES Record date to determine which Taste Shareholders are entitled to receive the Circular Friday, 22 May 2015 Circular distributed to Taste Shareholders and notice convening the General Meeting released on SENS on Friday, 29 May 2015 Last day to trade in order to be eligible to vote at the General Meeting Thursday, 11 June 2015 General Meeting record date Friday, 19 June 2015 Last day to lodge forms of proxy for the General Meeting by 12:30 on Friday, 26 June 2015 General Meeting to be held at 12:30 (or immediately following the Annual General Meeting, whichever is later) on Tuesday, 30 June 2015 Results of General Meeting released on SENS on Tuesday, 30 June 2015 Results of General Meeting published in the press on Wednesday, 1 July 2015 Notes: 1. The above dates and times are subject to amendment. Any such amendment will be released on SENS. 2. Additional copies of this Circular in its printed format, may be obtained from the Sponsor at the address set out in the Corporate information section of this Circular during normal business hours from Friday, 29 May 2015 up to and including Tuesday, 30 June

6 DEFINITIONS AND INTERPRETATIONS In this Circular, the annexures hereto, the notice of General Meeting and form of proxy, unless the context otherwise indicates, references to the singular include the plural and vice versa, words denoting one gender include the others, expressions denoting natural persons include juristic persons and associations of persons and vice versa, and the words in the first column hereunder have the meaning stated opposite them in the second column, as follows: Annual General Meeting the annual general meeting of Taste Shareholders to be held at 12:00 on Tuesday, 30 June 2015 at Summer Place, 69 Melville Road, Hyde Park, Johannesburg, which meeting is convened in terms of the notice of Annual General Meeting as set out in the 2015 Integrated Annual Report of the Company; BEE Board or Directors Black Economic Empowerment; the board of directors of Taste at the Last Practicable Date whose details are set out in paragraph 7.1 of this Circular; Brimstone Brimstone Investment Corporation Limited (Registration number 1995/010442/06), a company duly incorporated in accordance with the laws of South Africa and currently listed on the JSE; Business Day Certificated Share Certificated Shareholder Circular Companies Act CSDP Custody Agreement Dematerialisation Dematerialised Shareholder Dematerialised Shares Documents of Title Financial Markets Act any day other than a Saturday, Sunday or a public holiday in South Africa; a Taste Share that has not been Dematerialised, title to which is evidenced by a Document of Title; a Taste Shareholder who holds Certificated Shares; this bound document, dated 29 May 2015, including the annexures hereto and incorporating a notice of General Meeting and a form of proxy; the Companies Act, 2008 (Act 71 of 2008), as amended; a Central Securities Depository Participant, accepted as a participant in terms of the Financial Markets Act, appointed by an individual Shareholder for the purposes of, and in regard to Dematerialisation; the agreement which regulates the relationship between the CSDP or broker and each beneficial holder of Dematerialised Shares; the process by which Certificated Shares are converted into electronic format as Dematerialised Shares and recorded in Taste s Uncertificated Securities Register; a Taste Shareholder who holds Dematerialised Shares; a Taste Share that has been Dematerialised or has been issued in Dematerialised form, and recorded in Taste s Uncertificated Securities Register; share certificates, certified transfer deeds, balance receipts and/or any other form of acceptable document of title acceptable to Taste in respect of Taste Shares; Financial Markets Act, 2012 (Act 19 of 2012), as amended; 4

7 General Issue General Meeting Group or Taste Group Independent Expert or Nodus Capital JSE Last Practicable Date Listings Requirements Rand or R Register SENS South Africa Specific Issue Strate Subscription Date Subscription Price Subscription Shares Subsidiary Taste or the Company the issue of Taste Shares at a price of R3.05 per Share on 24 April 2015 to various new and existing public investors in terms of a general issue for cash in accordance with the general authority granted by Shareholders at the Annual General Meeting of the Company on 29 July 2014, thereby raising R69.8 million; the General Meeting of Taste Shareholders to be held at 12:30 (or immediately following the Annual General Meeting, whichever is later) on Tuesday, 30 June 2015 at Summer Place, 69 Melville Road, Hyde Park, Johannesburg, which meeting is convened in terms of the notice of General Meeting attached to this Circular; Taste and its Subsidiaries; Nodus Capital Proprietary Limited (Registration number 2007/004535/07), a private company duly incorporated in accordance with the laws of South Africa and appointed by the Board to provide a fairness opinion in relation to the Specific Issue; JSE Limited (Registration number 2005/022939/06), a public company duly incorporated in accordance with the laws of South Africa and licensed as an exchange under the Financial Markets Act; Friday, 22 May 2015, being the last practicable date prior to the finalisation of this Circular; the Listings Requirements of the JSE, as amended from time to time by the JSE; South African Rand, the official currency of South Africa; Taste s securities register, including the Uncertificated Securities Register; the Stock Exchange News Service of the JSE; the Republic of South Africa; the issue of the Subscription Shares to Brimstone, or one of its whollyowned Subsidiaries, at the Subscription Price; the settlement and clearing system used by the JSE, managed by Strate Proprietary Limited (Registration number 1998/022242/07), a private company duly incorporated in accordance with the laws of South Africa and which company is a registered Central Securities Depository in terms of the Financial Markets Act; the first business day following the date on which the conditions precedent set out in paragraph 3.3 below are fulfilled; the aggregate subscription price payable by Brimstone to Taste for the Subscription Shares, being R25 million, calculated at R3.05 per Subscription Share; Taste Shares; a subsidiary as defined in the Companies Act; Taste Holdings Limited (Registration number 2000/002239/06), a public company duly registered and incorporated in accordance with the laws of South Africa and currently listed on the JSE; 5

8 Taste Shareholders or Shareholders Taste Shares or Shares Transfer Secretaries Uncertificated Securities Register VAT holders of Taste Shares; ordinary shares of R each in the authorised and issued share capital of Taste; Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07), a private company duly incorporated in accordance with the laws of South Africa; the record of Dematerialised Shares administered and maintained by a CSDP and which forms part of the Register; and value added tax, levied in terms of the provisions of the Value-Added Tax Act, 1991 (Act 89 of 1991), as amended. 6

9 TASTE HOLDINGS LIMITED Incorporated in the Republic of South Africa (Registration number 2000/002239/06) Share code: TAS ISIN: ZAE ( Taste or the Company ) Directors Executive C F Gonzaga (Chief Executive Officer) E Tsatsarolakis (Financial Director) D J Crosson (Executive Director) J B Currie (Executive Director) Non-executive R L Daly (Chairperson)* A Berman* H R Rabinowitz S Patel* G M Pattison* K Utian* W P van der Merwe* *Independent CIRCULAR TO TASTE SHAREHOLDERS 1. INTRODUCTION On 21 April 2015, it was announced on SENS that, inter alia, Taste had agreed, subject to the fulfilment of the conditions precedent set out in paragraph 3.3 below, to issue new Taste Shares (which represent 2.84% of the share capital of Taste before the Specific Issue and 2.76% of the share capital of Taste after the Specific Issue) to Brimstone, or one of its wholly-owned Subsidiaries, at R3.05 per Share, thereby raising R25 million. As Brimstone currently holds more than 10% of the issued share capital of Taste, it is considered a non-public Shareholder in terms of paragraph 4.25(e) of the Listings Requirements and is classified as a related party in terms of paragraph 10.1(b)(i) of the Listings Requirements. Accordingly, the Specific Issue is subject to approval by ordinary resolution achieving a 75% majority of the votes cast in favour of such resolution by Shareholders (excluding Brimstone and its associates) present or represented and voting at the General Meeting. As the Subscription Price represents a discount of 5.21% to the volume weighted average traded price of Taste Shares over the 30 Business Days prior to 17 April 2015, the date on which the Specific Issue was agreed to in writing by Taste and Brimstone, the Board has, in accordance with in paragraph 5.51(f) of the Listings Requirements, appointed the Independent Expert to provide a fairness opinion in relation to the Specific Issue. A copy of the fairness opinion is set out in Annexure 1 to this Circular. The purpose of this Circular is to provide Taste Shareholders with the information relating to the Specific Issue and to give notice of a General Meeting of Taste Shareholders in order to consider and, if deemed fit, to pass the resolutions necessary to approve and implement the Specific Issue in accordance with the Listings Requirements. A notice convening such meeting is attached to, and forms part of, this Circular. 2. NATURE OF THE BUSINESS OF TASTE Taste is a South African-based management group that is invested in a portfolio of mostly franchised, category specialist and formula driven Quick Service Restaurants and retail brands, both owned and licensed, currently represented in over 6 00 locations throughout Southern Africa. 7

10 Food division The food division consists of the Domino s Pizza, Maxi s, Scooters Pizza, St. Elmo s Woodfired Pizza, Zebro s Chicken and The Fish & Chip Co. brands, as well as Buon Gusto Food services. The latter manufactures sauces, spices, dough premixes and added value meat products for the Group s food brands and distributes the majority of products used by its food outlets. All six trading consumer brands are underpinned by strong value-for-money propositions within their target consumer market. Following the Group s announcement on SENS on 10 April 2014 that it had signed a 30-year Master Franchise Agreement to develop the global Domino s Pizza brand in South Africa and six other countries, the first four Domino s Pizza stores were officially opened on 30 October 2014 in South Africa in Johannesburg, Durban and Cape Town. There are currently 23 Domino s Pizza stores (all corporate owned), the majority of which are utilised as training springboards for the conversion of existing Scooters Pizza and St. Elmo s stores to Domino s Pizza stores. The first nine converted franchisee stores will trade under the Domino s Pizza brand by the end of May Jewellery division NWJ is the only vertically-integrated franchise jewellery chain in South Africa and owns and operates approximately 60% of the outlets. The franchise services are comparable to the Taste food franchise division in that they offer their franchisees operational and marketing support, project management, new site growth and development, and national brand-building strategies in return for a royalty. The distribution division distributes all of the goods sold through NWJ outlets. Of these, approximately 40% is manufactured by the manufacturing facility in Durban, 22% is imported, and the remaining 38% sourced locally. This model provides in-house innovation capacity, fast routes to market, and reduces input costs through purchasing economies of scale. A further benefit of owning the manufacturing facility is that slow-moving or returned stock can be either re-worked with negligible yield loss or transferred to another location where there is known demand for the item. Arthur Kaplan Jewellers is a leading luxury watch and jewellery retailer comprising ten Arthur Kaplan branded outlets and one World s Finest Watches outlet and is the leading retailer of Swiss watches in South Africa. Arthur Kaplan is a stockist of premium luxury brands including Rolex, Breitling, Omega, Tag Heuer and Longines and a number of other leading luxury and fashion watch brands. Arthur Kaplan also retails luxury fine jewellery within collections under the Arthur Kaplan brand name with a focus on bridal and engagement pieces. 3. THE SPECIFIC ISSUE 3.1 Introduction and rationale for the Specific Issue As announced on SENS on 21 April 2015, Taste has agreed, subject to the fulfilment of the conditions precedent set out in paragraph 3.3 below, to issue the Subscription Shares to Brimstone, or one of its wholly-owned Subsidiaries, who has agreed to subscribe for the Subscription Shares at the Subscription Price, thereby raising capital of approximately R25 million. Brimstone is a JSE-listed black-controlled and managed investment company with a market capitalisation of approximately R4.6 billion in South Africa, employing around employees in its Subsidiaries and in excess of employees in its associates and investments. Having initially acquired Shares in Taste in February 2012, Brimstone currently owns approximately 13.1% of the share capital of Taste, which Shareholding will increase to approximately 15.5% after the Specific Issue. The Specific Issue will therefore enhance Taste s BEE credentials and Shareholding, which is aligned with Taste s stated intent. Brimstone seeks to achieve above average returns for its shareholders by investing in wealth creating businesses and entering into strategic alliances to which it contributes capital, innovative ideas, management expertise, impeccable empowerment credentials and a values driven corporate identity. Brimstone is well capitalised, has access to further capital and has the team and experience to continue adding value to Taste. 8

11 3.2 Intended use of the funds The Group operates a central treasury, capital raising and capital allocation function which raises capital based on the overall Group requirements at the time, and not necessarily based on each individual investment opportunity. This allows the Group to utilise existing cash flows and to set gearing levels that are appropriate to the most recent investment/s combined with the existing businesses. Integral to this centralised function, in 2014 the Group restructured its access to debt through the registration of a R1 billion Domestic Medium Term Note ( DMTN ) programme with an initial successful issuance of R125 million. In April 2015 a further R75 million was issued under the DMTN programme. In order to achieve the appropriate level of gearing, the Company concluded a rights offer in September 2014, thereby raising R180 million. The capital to be raised from the Specific Issue, together with the capital raised from the General Issue, being an aggregate amount of R94.8 million ( the Funds ), will be housed in the Company s bank account and earn interest at a rate of 5.25% until being deployed. A portion of the Funds will be allocated to replenishing the majority of the total cash purchase consideration of R85.0 million used for the acquisition of Arthur Kaplan in November 2014, which acquisition was settled from cash reserves predominantly earmarked for the rollout of the conversion and consolidation of the Scooters Pizza and St Elmo s stores to Domino s Pizza stores. Additionally, the performance of Arthur Kaplan since the acquisition has exceeded expectations to the extent that the Group expects to pay an additional R10 million to R20 million in terms of the agreed earn out, as per the purchase and sale agreement (in terms of which, as set out in the announcement released on SENS on 21 October 2014, should the profit after tax for the period from 1 July 2014 to 30 June 2015 ( PAT ) exceed R million ( target amount ), the purchase consideration will be increased by R4.21 for every R1.00 with which the PAT exceeds the target amount, up to a total additional amount of R35 million). Since opening the first six Domino s Pizza outlets between October and December 2014, the Group has been encouraged by the positive customer reaction and sales. Consequently, whereas only six corporate owned stores were planned for the 2015 year, the Group now has plans to have approximately 25 corporate owned outlets by the end of August 2015, in addition to at least 30 franchised stores by the same date. A portion of the Funds will therefore be used to partly fund the additional corporate owned outlets. The better than expected sales from both new stores and converted stores have also resulted in the dough production facility in Cape Town being established earlier than originally planned. The production facility located in Midrand started producing Domino s Pizza dough balls in April 2015 and the Group expects that dough balls will be produced in the Cape Town facility by June This earlier than planned capital expenditure will also be partly funded from these Funds, as applicable. The General Issue and the Specific Issue is therefore a continuance of the periodic realignment of the Group s capital structure in light of the acquisition of Arthur Kaplan, the Cape Town commissary and the additional corporate owned outlets but also the financial position and outlook of the remainder of the Group. 3.3 Conditions precedent The Specific Issue is subject to the applicable regulatory approvals and the approval by ordinary resolution achieving a 75% majority of the votes cast in favour of such resolution by Shareholders (excluding Brimstone and its associates) present or represented and voting at the General Meeting in terms of the Listings Requirements. 9

12 4. SHARE CAPITAL OF TASTE The share capital of Taste before and after the Specific Issue is set out in the table below. 4.1 Share capital of Taste before and after the Specific Issue Before the Specific Issue R 000 Authorised ordinary Shares of R each Issued ordinary Shares of R each Share premium Taste has treasury Shares in issue which are held by the Taste Holdings Share Trust. After the Specific Issue R 000 Authorised ordinary Shares of R each Issued ordinary Shares of R each Share premium Share trading history of Taste Annexure 2 to this Circular contains the aggregate volume and the highest, lowest and closing prices of Taste Shares traded on the JSE: for each month over the previous 12 months; and for each trading day during the 30-day period ended Friday, 22 May 2015 being the Last Practicable Day before the finalisation of this Circular. 5. PROSPECTS The Group s exposure to a diversified customer base, combined with multiple sources of revenue and profit due to its extensive vertical integration, provides a balanced portfolio that is resilient to localised consumer contractions such as that currently being experienced among lower income consumers. Since opening the first six Domino s Pizza outlets between October and December 2014, the Group has been encouraged by the positive customer reaction and sales. The Group has plans to have approximately 63 corporate-owned and franchised stores by the end of August The Group has identified further opportunities in line with its strategic intent and is confident that the current year will see some of these materialise. 6. MAJOR SHAREHOLDERS There has been no change in controlling Shareholder in either Taste or any of its Subsidiaries and associates in the preceding five year period and there will be no controlling Shareholder in Taste as a result of the Specific Issue. Furthermore, there has been no change in trading objective or change in name. 10

13 6.1 Major Shareholders before the Specific Issue Those Shareholders (excluding Directors whose interests are detailed in paragraph 7.2 below) who, as at the Last Practicable Date insofar as is known to Taste, directly or indirectly, were beneficially interested in 5% or more of the issued share capital of Taste are listed below: Shareholder Number of Shares Direct Shareholding Indirect Shareholding Percentage Shareholding (%) Brimstone Investment Corporation Limited * Chickenland Proprietary Limited PSG Asset Management Proprietary Limited Pershing LLC Total * Through its wholly-owned subsidiaries, Newshelf 1168 Proprietary Limited and Brimstone Manco Proprietary Limited. Brimstone and its associates will be excluded from voting on the ordinary resolution which requires approval by 75% of the votes cast in favour of the Specific Issue by Shareholders present or represented and voting at the General Meeting. 6.2 Major Shareholders after the Specific Issue Shareholder Number of Shares Direct Shareholding Indirect Shareholding Percentage Shareholding (%) Brimstone Investment Corporation Limited * Chickenland Proprietary Limited PSG Asset Management Proprietary Limited Pershing LLC Total * Through its wholly-owned subsidiaries, Newshelf 1168 Proprietary Limited and Brimstone Manco Proprietary Limited. 7. DIRECTORS 7.1 Details and experience of Directors The full names, ages, qualifications, business addresses, functions in the Group and background of the executive and non-executive Directors of Taste at the Last Practicable Date are as follows: Executive Directors Carlo Ferdinando Gonzaga (40) Qualifications: BSocSci, LLB Business address: 12 Gemini Street, Linbro Business Park, Sandton, 2065 Function and committees: Background: Chief Executive Officer Chairman of the executive committee Carlo completed a postgraduate LLB degree at the University of Natal after which he and his father, Luigi, owned four franchised pizza outlets in the Durban region. In 1999, Carlo sold his interests and commenced the groundwork to create a new pizza delivery concept which became Scooters Pizza in September Since 2000, Carlo has headed up the team that has driven the Group to win many prestigious awards through its brands, the acquisition of a number of brands and businesses, licensing Domino s Pizza and the creation and listing of Taste in Carlo guides the strategic direction of the Company, its growth strategy and human capital development. He chairs the executive committee. 11

14 Evangelos (Evan) Tsatsarolakis (39) Qualifications: CA(SA) Business address: 12 Gemini Street, Linbro Business Park, Sandton, 2065 Function and committees: Background: Duncan John Crosson (48) Qualifications: Chief Financial Officer Member of the executive committee Evan qualified as a chartered accountant in 2001 after completing his articles with PricewaterhouseCoopers. He left PWC and spent seven years with the JSE-listed Spur Group where he gained extensive experience within the food franchising industry having been exposed to the financial, operational and supply chain aspects of the business. He then served as Financial Director within a logistics group of companies. Evan joined Taste in April 2009 and was appointed to the Board in September 2009 as Chief Financial Officer. Evan acts in a non-executive capacity to the management boards of the food and jewellery divisions and is a member of the executive committee. BCompt (Hons) Business address: 12 Gemini Street, Linbro Business Park, Sandton, 2065 Function and committees: Background: Chief Executive Officer Jewellery division Member of the executive committee Duncan obtained his BCompt (Hons) while serving articles with Morrison Murray in Durban. He gained valuable experience in a manufacturing and distribution environment servicing the retail and fast-moving consumer goods industry, progressing to Chief Financial Officer and shareholder of the group of companies. Duncan joined Scooters Pizza in 2000 and has been a member of the board of directors of Scooters Pizza since 2001 and a member of the Taste Board since inception. He was appointed Chief Operating Officer of NWJ Fine Jewellery in September 2009 and subsequently Chief Executive Officer in April Duncan was appointed to the board of the Jewellery Council of South Africa in April 2011 and has served on the Jewellery Council s executive committee since February Duncan has been instrumental in the successful management and control of the significant growth of the Group over the past 14 years. He is a member of the executive committee and chairs the jewellery division management committee. 12

15 Jay Bayne Currie (40) Qualifications: BSc Business address: 12 Gemini Street, Linbro Business Park, Sandton, 2065 Function and committees: Background: Non-executive Directors Ramsay L amy (Bill) Daly (71) Qualifications: Chief Executive Officer Food division Member of the executive committee Jay started with the Massdiscounters division of the listed South African retailer, Massmart, in He joined the holding company, Massmart Holdings Limited, as Group Commercial Executive in 2006 where he was responsible for all collaborative functions between the various subsidiaries of the group. In this position, he also held a non-executive position on each of the divisional boards of Game, Makro, Builders Warehouse and Massmart s food wholesale businesses, Masscash. In 2009, Jay took up the challenge of leading and building Cambridge Food, a national retail food business focused on low-income customers, for Massmart. In 2013, he changed roles and was responsible for facilitating and executing on an e-commerce strategy for the Massmart group. Jay was a member of the Massmart group executive committee which led the sale of a controlling stake in Massmart to the multinational giant Walmart. In 2013, Jay resigned from Massmart and joined the Taste executive team in September 2013 and remained on the Board of Taste. Jay s executive experience in a global, multi-branded, listed retailer is invaluable to the Group. BA, LLB Business address: 12 Gemini Street, Linbro Business Park, Sandton, 2065 Function and committees: Background: Independent Non-executive Chairman Member of the social, ethics and remuneration committee Bill is a BA, LLB graduate of Stellenbosch University. He was admitted as an attorney, notary and conveyancer and practised as the Chairman of RL Daly Incorporated, a firm of attorneys which specialises in the provision of call centre services to national corporates, retailers and banks. He was one of the founding shareholders and the Chairperson of Scooters Pizza Proprietary Limited and has, since inception, been the Chairperson of Taste. Bill is a director of a number of companies including a director and the Deputy Chairperson of HBZ Bank Limited, and brings a wealth of business experience to the Group which has proved invaluable, particularly in the last number of years. 13

16 Anthony Berman (71) Qualifications: CA(SA) Business address: 12 Gemini Street, Linbro Business Park, Sandton, 2065 Function and committees: Background: Sebastian Patel (33) Qualifications: Independent Non-executive Director Chairman of the audit and risk committee Chairman of the social, ethics and remuneration committee As a chartered accountant (SA), Tony practised in Durban within the auditing profession his entire working life. Tony is also an FSB qualified Financial Planner, and a director of and substantial shareholder in Plexus Wealth, a financial planning business operating in Durban, Stellenbosch, Johannesburg and Port Elizabeth. He served articles with G. Hackner, Benn & Co. After a few years on his own, Tony returned to G. Hackner, Benn & Co (now Grant Thornton) and remained with them until he retired as a partner on 1 March Tony was Managing Partner of the Durban office from 2003 for five years, and continues to consult for the firm when required. Tony has had extensive experience as Tax Partner, financial consulting, mergers and acquisitions, estate planning, valuations, exchange control and is an experienced consultant in corporate and general business. BBusSci (UCT) Business address: 12 Gemini Street, Linbro Business Park, Sandton, 2065 Function and committees: Background: Independent Non-executive Director Member of the audit and risk committee Sebastian is a Managing Executive at Brimstone Investment Corporation Limited, which position he took up in July Sebastian focuses on evaluating prospective investment opportunities for Brimstone as well as helping to manage Brimstone s current investments. Prior to joining Brimstone, Sebastian spent six and a half years at Nedbank Capital, primarily in the Corporate Finance division. Sebastian is a Fellow of the Institute of Actuaries. 14

17 Grant Michael Pattison (43) Qualifications: BSc Eng Elec Business address: 12 Gemini Street, Linbro Business Park, Sandton, 2065 Function and committees: Background: Hylton Roy Rabinowitz (65) Independent Non-executive Director Grant graduated from UCT in 1992 with a BSc degree in Electrical Engineering, after which he was employed by Anglo American Group as a management trainee. In 1993, Grant moved to Monitor Group as a consultant. A chance encounter with Massmart Chief Executive Officer, Mark Lamberti, in the reception at Massmart House paved Grant s route to a career in retail with Massmart in July He started his retail career in the role of Executive Assistant to the Chief Executive Officer, a position which he occupied for two years before being appointed Managing Director of Game Stores in October This was followed two years later with his appointment as Group Commercial Executive in Grant was appointed to the executive committee in 2000, to the board on 7 December 2004 and to the position of Deputy Chief Executive Officer on 1 July In July 2006, he became Chief Executive Officer Designate and was appointed Chief Executive Officer of Massmart Holdings on 1 July With 15 years experience working for Massmart, Grant has played an integral part in forming and leading its long-term strategy. This has included leading the Massmart-Walmart acquisition and integration, expanding growth into the African continent and introducing retail food into the Massmart business. Grant was appointed as Co-Chair of the Consumer Goods Council of South Africa in Business address: 12 Gemini Street, Linbro Business Park, Sandton, 2065 Function and committees: Background: Non-executive Director Hylton began his career in the jewellery industry when he first opened Hylton s Jewellers in The second store followed in the same year and the name changed to Natal Wholesale Jewellers. In 1988, Hylton went on to extend the brand when he purchased a share in one of the oldest jewellery manufacturers in Durban, Durban Manufacturing Jewellers, which supplied NWJ with the majority of its locally manufactured jewellery giving NWJ the ability to offer excellent quality jewellery at competitive prices. Hylton has played a significant role in influencing the jewellery industry in South Africa. He retired in November 2011, but still serves as a non-executive director and is focused on sharing his immeasurable wealth and experience with the team. 15

18 Kevin Utian (46) Qualifications: BCom, BAcc, CA(SA) Business address: 12 Gemini Street, Linbro Business Park, Sandton, 2065 Function and committees: Background: Wessel Petrus van der Merwe (45) Qualifications: Independent Non-executive Director Member of the social, ethics and remuneration committee Kevin is the Chief Executive Officer of Coricraft Proprietary Limited, having taken up this position in April Prior to this he spent 16 years at Nando s formatively as Managing Director of Nando s South Africa and thereafter as a director of the Nando s global group. Kevin is a chartered accountant by profession, and has been a board member from the inception of Scooters Pizza in Kevin s experience of the franchise model and exposure to international markets makes his contribution invaluable to the Group. CA(SA) Business address: 12 Gemini Street, Linbro Business Park, Sandton, 2065 Function and committees: Background: Independent non-executive Director Member of the audit and risk committee Before starting his own business in 1998, Wessel completed his articles in 1996 at Arthur Anderson and joined Gensec Investment Bank for a period of two years. He gained valuable experience in investment banking, deal structuring, private equity and underwriting. During 1998, he started a corporate finance business and built it into one of the biggest advisory businesses for small and medium companies. The business was ranked by dealmakers in the top 10 corporate advisory firms for more than five years. He was involved in more than 30 listings, various corporate finance transactions and private equity transactions. He participated actively in more than 22 boards as a Designated Adviser or sponsor over the last few years and gained valuable experience as an adviser to the various boards. He sold his business during 2008 to a black-owned financial services group where he headed up the corporate advisory business. Wessel is now actively involved as a non-executive member in five listed companies. 16

19 Director of major Subsidiary of Taste Arvid Smedsrud (53) Qualifications: MBA Business address: 12 Gemini Street, Linbro Business Park, Sandton, 2065 Function and principal activities: Executive director of Buon Gusto, a major subsidiary of Taste Background: Arvid obtained his MBA degree, specialising in vertical integration for food businesses in 2001, at the time when he was Managing Director of Bull Brand Foods. He has been involved in the food business for 30 years, initially in procurement and supply chain functions, followed by manufacturing environments. He has worked predominantly in the fast moving consumer goods environment servicing both retail and wholesale categories. Arvid joined Taste Holdings in March 2007 as Supply Chain Executive until April He now heads the recently formed Food Services division of Taste, with factories and depots in Cape Town and Pretoria. 7.2 Directors interests in securities Directors interests before the Specific Issue At the Last Practicable Date, the Directors held, directly or indirectly, beneficial interest in Shares in Taste, representing approximately 22.72% of the total issued share capital of Taste as set out in the table below: Beneficial Total Total Director Direct Indirect Shares % Executive H R Rabinowitz J B Currie C F Gonzaga and associates R L Daly and associates D J Crosson G Pattison A Berman W P van der Merwe K Utian and associates E Tsatsarolakis There has been no change to the aforementioned Directors interests, between the financial year ended 28 February 2015 and the Last Practicable Date (including those Directors who resigned within the past 18 months. As at 28 February 2015, L Gonzaga, who retired on 28 February 2014, and associates held Shares indirectly and beneficially, representing 0.72% of the share capital of Taste before the Specific Issue) Directors interests after the Specific Issue The Directors interests will not vary as a result of the Specific Issue. 17

20 7.3 Directors interests in transactions None of the Directors (including those Directors who resigned within the past 18 months) have had any beneficial interest, either directly or indirectly, in any transactions effected by Taste during the current or preceding financial year or during any earlier financial year which remains outstanding or unperformed in any respect. S Patel who is a Managing Executive at Brimstone is also a non-executive Director of Taste. 7.4 Directors emoluments The components of the Executive Directors emoluments in respect of the financial year ended 28 February 2015 are set out below: Basic R 000 Allowances and benefits R 000 Incentive bonus R 000 Long-term employee benefits R 000 Total R 000 C F Gonzaga E Tsatsarolakis D J Crosson J B Currie Total Note: 1. Paid by Subsidiary. The Non-executive Directors fees in respect of the financial year ended 28 February 2015 are set out below: 2015 R 000 R L Daly 249 A Berman 241 H R Rabinowitz 107 Brimstone Investment Corporation Limited S Patel 134 G M Pattison 120 K Utian 134 W P van der Merwe 134 Total The remuneration of the Directors will not be varied as a result of the Specific Issue as contained in this Circular. 7.5 Directors service contracts Each of the Executive Directors has concluded service contracts with terms and conditions that are standard for such appointments, which service contracts are available for inspection as set out in paragraph 14 below. 8. MATERIAL CHANGES There have been no material changes in the financial or trading position of the Company since the reported financial information of Taste for the year ended 28 February In addition, there have been no material changes to the business of Taste or its Subsidiaries or associates during the past five years. 9. LITIGATION STATEMENT Save as set out below, there are no legal or arbitration proceedings, pending or threatened, of which the Taste Group is aware, that may have or have had, in the 12 month period preceding the Last Practicable Date, a material effect on the financial position of the Taste Group. 18

21 Taste, through one of its wholly-owned Subsidiaries, Buon Gusto Cuisine Proprietary Limited ( Buon Gusto ), acquired The Fish & Chip Co. brand ( the Business ) operated by Traditional Fish & Chips Proprietary Limited and Praxia Nathanael ( the Sellers ). On 31 January 2012, Buon Gusto made a cash payment of R45 million directly to the Sellers, in accordance with the provisions of the sale of business agreement ( Agreement ). The Sellers handed over the Business, and full control thereof, to Buon Gusto on 1 February 2012 and the Business has since been fully integrated into the operations of Buon Gusto and continues to be fully operated by Buon Gusto. A dispute subsequently arose in regard to, inter alia, the implementation of the transaction. The Sellers thereafter purported to cancel the Agreement and have issued summons in this regard. Buon Gusto does not accept the purported cancellation and deems it to be entirely without foundation. It is defending the action and has issued a counterclaim against the Sellers. The matter is currently ongoing. On 20 May 2014, Shareholders were advised that certain parties who were unsuccessful in previous negotiations with Domino s Pizza International Franchising Inc had instituted an application in the High Court of South Africa against Taste contesting the validity of the Master Franchise Agreement concluded between Taste Food Franchising Proprietary Limited and Domino s Pizza International as announced by both Domino s Pizza International and Taste on 10 April The applicants have cited Domino s Pizza International as the first respondent and Taste as the second respondent in the application. The application, which was served on Taste on 19 May 2014, has been opposed by both Domino s Pizza International and Taste. The applicants have not disputed that there is no signed written agreement between any one or more of the applicants (or any combination of them) (on the one hand) and Domino s Pizza International (on the other). The Board nevertheless felt it prudent to inform Shareholders timeously of the application and will continue to update Shareholders of further developments from time to time. 10. OPINIONS AND RECOMMENDATIONS 10.1 Report of the Independent Expert Taking into consideration the terms and conditions of the Specific Issue, the Independent Expert is of the opinion that such terms and conditions are fair to Taste Shareholders. Shareholders are referred to Annexure 1 to this Circular which sets out the full text of the report of the Independent Expert regarding the Specific Issue View of the Board The Directors, after due consideration of the report of the Independent Expert regarding the Specific Issue, have considered the content thereof, and are of the opinion that the Specific Issue is fair to Taste Shareholders. The Directors recommend that Taste Shareholders vote in favour of the resolutions to be proposed at the General Meeting. 11. DIRECTORS RESPONSIBILITY STATEMENT The Directors, whose names are given in paragraph 7.1 above, collectively and individually accept full responsibility for the accuracy of the information given 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 and that the Circular contains all information required by law and the Listings Requirements. 12. EXPERTS CONSENTS The Corporate Adviser and Sponsor, Independent Expert, Company Secretary and the Transfer Secretaries have consented in writing to act in the capacities stated and to their names being stated in this Circular and, where applicable, to the inclusion of their report in the form and context in which it has been reproduced in Annexure 1 to this Circular, and have not, prior to the Last Practicable Date, withdrawn their consents prior to publication of this Circular. 19

22 13. COSTS The total estimated costs of the Specific Issue, which amount to approximately R excluding VAT, are detailed in the table below: Estimated amount (Rands) Corporate Adviser and Sponsor Merchantec Capital Independent Expert Nodus Capital JSE document inspection fees JSE listings fees Printing, publication and postage Ince Total DOCUMENTS AVAILABLE FOR INSPECTION The following documents, or copies thereof, will be available for inspection at the registered office of the Company, 12 Gemini Street, Linbro Business Park, Sandton, Johannesburg, 2065, and at the office of the Sponsor which address is set out in the Corporate Information section of the Circular, during normal business hours from Friday, 29 May 2015 up to and including Tuesday, 30 June 2015: the Memoranda of Incorporation of the Company and its Subsidiaries; the service contracts entered into between the executive Directors and the Company referred to in paragraph 7.5 above; a copy of the fairness opinion of the Independent Expert, the text of which is included as Annexure 1 to this Circular; copies of the audited annual financial results of Taste for the three financial years ended 28 February 2015; the written consent letters referred to in paragraph 12 above; and a signed copy of this Circular. 15. GENERAL MEETING A General Meeting of Taste Shareholders will be held at 12:30 (or immediately following the Annual General Meeting, whichever is later) on Tuesday, 30 June 2015 at Summer Place, 69 Melville Road, Hyde Park, Johannesburg, in order to consider and approve the resolutions set out in the notice of General Meeting included in this Circular. A notice convening the General Meeting and a form of proxy for use by Certificated Shareholders and Dematerialised Shareholders with own name registration who are unable to attend the General Meeting, form part of this Circular. Certificated Shareholders and Dematerialised Shareholders with own name registration, who are unable to attend the General Meeting and wish to be represented thereat, must complete and return the attached form of proxy in accordance with the instructions contained therein. Dematerialised Shareholders, other than Dematerialised Shareholders with own name registration, who: are unable to attend the General Meeting and wish to be represented thereat, must provide their CSDP or broker with their voting instructions, in terms of the custody agreement entered into between themselves and the CSDP or broker concerned, in the manner and within the time stipulated therein; wish to attend the General Meeting, must instruct their CSDP or broker to issue them with the necessary written letter of representation to attend. Signed on behalf of the Board Carlo Gonzaga Chief Executive Officer 29 May