Steinhoff International Holdings N.V.

STEINHOFF

INTERNATIONAL HOLDINGS N.V.

ANNUAL REPORT

2021

AUDITED

TABLE OF

CONTENTS

RESULTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

INTRODUCTION

We maintained our focus throughout the year

ended 30 September 2021 and delivered

another year of solid progress and strong

operational performance. Our priorities

throughout the Reporting Period were and

remain clear – drive performance across

the Operating Companies (“OpCos”) and

progress the Litigation Settlement Proposal,

in an environment with many complexities,

including COVID-19.

Message from the Management Board

Message from the Supervisory Board

Timeline of key events

Summarised Group structure

PART I

REPORT OF THE MANAGEMENT BOARD

FINANCIAL AND BUSINESS REVIEW

Introduction

Overview

Current trading performance

Reportable segment information

Presentation of discontinued operations

Key accounting judgements and estimates

The Group’s results improved as the OpCos

beneﬁtted from the hard work done on

strategic alignment and performance

improvement initiatives over the last four

years as well as fewer COVID-19 restrictions

affecting trading. The OpCos demonstrated

their resilience during the period of peak

pandemic impact. They remain well positioned

in their respective markets.

Net debt and cash flow

Geographic context and impact of foreign currencies

Non-operational expenses

Finance costs

Tax

Related party and intragroup transactions

Governance and leadership

Sustainability (ESG) and corporate social investments (CSI)

Corporate activity during the Reporting Period

Corporate activity after the Reporting Date

Group debt restructure

Litigation

Litigation settlement proposal

Internal group restructure

We continued to simplify the business as

well as the group structure and took further

steps to deleverage the balance sheet while

progressing our transition to a global holding

company focused on retail sector investments.

Regulatory engagement and listing

Shareholder meetings

Operational impact COVID-19

Going concern

Conclusion

The Company’s dividends on Ordinary Shares

Events after the Reporting Date

External audit

Most crucially, major headway was made

with step two of the strategic plan, ﬁnding

a solution to the litigation faced by entities

within the Group. The Group’s objective has

always been to achieve a comprehensive

global litigation settlement and with the

required approvals being received can now be

implemented.

OPERATIONAL REVIEW

Introduction

Pepco Group

Pepkor Holdings

Greenlit Brands

Steinhoff corporate and treasury services

Mattress Firm – equity accounted

Annexures to operational review

RISK MANAGEMENT

Introduction

PART IV

REMUNERATION REPORT

Internal risk management and control environment

Principal risks

Introduction

Part 1: Summarising overview

Principal risk comparison to the 2020 report

Principal risks: OpCos

Part 2: Description of the current remuneration policy

(approved 1 December 2015)

Financial risk management

Part 3: Application of the current remuneration policy during

ﬁnancial year 2021

MANAGEMENT BOARD STATEMENTS

Responsibility statements

Part 4: Highlights from the proposed modiﬁcation of the

remuneration policy from 2022 onward

In-control statement

Forward looking

Non-ﬁnancial statement

Provision in the Articles regarding the allocation of proﬁts

PART V

ANNEXURES

PART II

Annexure A – Investor information

CORPORATE GOVERNANCE REPORT

FINANCIAL STATEMENTS FOR THE PERIOD ENDED

30 SEPTEMBER 2021

Introduction

Dutch SoP

241

242

251

252

OTHER INFORMATION

Independent Auditor's Report

List of branches

Management Board

Supervisory Board

General Meeting

Dutch Corporate Governance compliance

Diversity

Statutory list of all subsidiaries

268

GLOSSARY OF TERMS

Code of conduct

Disclosures pursuant to Dutch Decree

implementing article 10 EU Takeover Directive

PART III

REPORT OF THE SUPERVISORY BOARD

Composition of the Supervisory Board

Independence

Continuing education

Supervisory Board meetings, attendance, involvement with strategy,

activities report and evaluations

Committees of the Supervisory Board

Report of the Audit and Risk Committee

Report of the Human Resources and Remuneration Committee

Report of the Nomination Committee

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

INTRODUCTION

MESSAGE FROM

THE MANAGEMENT BOARD

Dear Stakeholders,

We maintained our focus throughout the year ended 30 September 2021 and

delivered another year of solid progress and strong operational performance.

Our priorities throughout the Reporting Period were and remain clear – drive

performance across the Operating Companies (“OpCos”) and progress the

Litigation Settlement Proposal, in an environment with many complexities, including

COVID-19.

The Group’s results improved as the OpCos beneﬁtted from the hard work done

on strategic alignment and performance improvement initiatives over the last

four years as well as fewer COVID-19 restrictions affecting trading. The OpCos

demonstrated their resilience during the period of peak pandemic impact. They

remain well positioned in their respective markets.

We continued to simplify the business as well as the group structure and took

further steps to deleverage the balance sheet while progressing our transition to a

global holding company focused on retail sector investments.

Most crucially, major headway was made with step two of the strategic plan, ﬁnding

a solution to the litigation faced by entities within the Group. The Group’s objective

has always been to achieve a comprehensive global litigation settlement and with

the required approvals being received can now be implemented.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

INTRODUCTION//message from the management board continued

STRATEGIC SUMMARY

The primary focus of the Group remains the successful completion of steps two and three of the three-step strategic plan.

Steinhoff N.V.’s strategy is to transition to a global holding company with investments in retail businesses through a 3-step process

Step 1: Completed

Step 2: Completed

Step 3: In progress

Creditor arrangements

Manage litigation risk

Restructure Group with a view to reducing

debt and ﬁnancing costs

(CVAs implemented on

13 August 2019)

(Dutch SoP implemented and completed,

Composition Plan approved; Court Order

approving and sanctioning the S155

Scheme granted; distributions to be paid to

all claimants post SED.)

(Pepco Group IPO completed, Mattress

Firm distribution to shareholders; sale of

the Plush business; all proceeds used to

reduce debt.)

Signiﬁcant further progress was also

made with the Group’s strategy of

simplifying its portfolio and deleveraging

its balance sheet.

Finally, on 11 August 2021, the Steinhoff

Group obtained conﬁrmation that the

necessary approvals had been granted

by the ﬁnancial creditors to extend

the maturity date of the Group’s debt

by 12 months, until 31 December

2022. The extension grants the Group

additional time in which to progress the

remaining elements of its three-step

strategic plan. In addition, subject to

the successful implementation of the

Litigation Settlement Proposal, a further

debt extension to June 2023 has been

approved by the ﬁnancial creditors.

MANAGEMENT BOARD PRIORITIES

IN THE YEAR

1. Business optimisation and balance sheet

restructuring

During May 2021, Pepco Group was

Steinhoff N.V. is managed as a global

holding company with investments in the

retail sector. These underlying businesses

operate a number of strong local brands

and are well diversiﬁed by geography and

business line.

successfully listed on the Warsaw Stock

Exchange, reducing the Steinhoff Group’s

holding to 78.9% and raising proceeds of

approximately €1 billion for the Group,

most of which were used to reduce debt.

Working with the operational boards and

management teams, over the past four

years the Management Board has helped

to identify, support and facilitate a range

of business improvement initiatives

in individual operating businesses.

Management teams were strengthened,

new debt was introduced at OpCo

level to fund operational requirements,

the strategic focus was reviewed, and

improved governance measures adopted.

The results from these initiatives

In August 2021 Mattress Firm announced

that it was considering a return of share

capital and evaluating a range of strategic

options, including a potential public

listing, and subsequently submitted

a registration statement to the US

2. Litigation Settlement Proposal

Implementation of the Litigation

Settlement Proposal has been a complex

and lengthy process. With the Dutch SoP

process now ﬁnal, claimant support and

a court order approving and sanctioning

the S155 Scheme in South Africa and

the required approvals granted by the

Group’s ﬁnancial creditors and FinSurv,

the process is in its ﬁnal stages.

Securities and Exchange Commission.

The process remains ongoing. During

the 2021 Reporting Period Mattress Firm

successfully reﬁnanced its debt and made

a distribution to shareholders, with the

payment received by the Steinhoff Group

(€520 million) being applied to further

reduce debt after the Reporting Date.

were, and continue to be, encouraging.

The strength of the bounce-back in

performance as lock downs were lifted

also highlights their enduring impact.

On 16 July 2021 and again on

Total Group Services debt at the

Reporting Date was €9 835 million (2020:

€9 873 million) with the funds received

during the year helping to mitigate the

interest charge and marginally reduce the

total year-on-year.

11 August 2021 the Steinhoff Group

announced that the resilience of its

performance since the proposal was ﬁrst

announced in July 2020 had allowed it to

materially increase the settlement offer.

The Steinhoff Group ﬁrmly believes that

the revised proposal offers claimants a

fair outcome, and the best opportunity to

recover amounts in respect of any claims

in the near term and with certainty.

Operating within the varying COVID-19

related constraints applicable to each

region, all of the OpCos have continued

to trade well, with the breadth of their

operations, and their customer focus,

enabling them to perform strongly.

Revenue at Pepco Group was +18%,

Pepkor Holdings +12% and Greenlit

Brands +12%. Mattress Firm, an associate

business, grew revenue by 24%.

During the Reporting Period the total staff

headcount in the Steinhoff Group reduced

from 91 519 to 90 731. To the extent

that we continue to realise assets, the

headcount is expected to decrease further.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

INTRODUCTION//message from the management board continued

The Litigation Settlement Proposal

received overwhelming support from a

substantial number of parties. In the Dutch

SoP the Committee of Representation

voted unanimously in favour of the

Composition Plan. This plan was then

approved by the Dutch Court and has

become ﬁnal and unappealable (in kracht

van gewijsde gegaan). In the South

African S155 Scheme the three claimant

meetings were successfully held with no

votes recorded against the scheme. More

recently, in December 2021, Steinhoff N.V.

announced that agreements had ﬁnally

been reached with the last outstanding

parties to the settlement. The Court

process to sanction the scheme was

held on 24 January 2022 with the Court

Order approving and sanctioning the S155

Scheme being granted.

3. Stakeholder interaction – including

Enhancing the terms of the Litigation

Regulators

The Group remains committed to

co-operating and maintaining open

Settlement Proposal was an important

development, strengthening the appeal and

demonstrating the commitment of the Group

communication lines with all stakeholders to treating all stakeholders fairly as it sought

to address its legacy issues.

and to regular and co-operative dialogue

with regulators and enforcement

agencies, as required.

Subsequent to receiving all the relevant

approvals, management has initiated

processes to ensure the effective

The 2022 AGM has been scheduled for

25 March 2022 and we look forward to

engaging directly once again with the

company’s shareholders.

implementation of the Litigation Settlement

Proposal, in order to effect the payments as

stated in the Dutch SoP and S155 Scheme,

allowing us to focus exclusively on Step 3 of

the strategic plan – simplifying the portfolio

and deleveraging the balance sheet by

reducing debt and ﬁnancing costs through

inter alia further asset disposals. At the

same time, it will allow the OpCos to run and

build their businesses free from any external

distractions.

OUTLOOK

Trading conditions in the second half of the

ﬁnancial year were more encouraging as

the impact of COVID-19 broadly continued

to reduce. The progress of vaccination roll-

outs, behavioural change, and the lifting of

restrictions impacting on Steinhoff Group

businesses in most of our major markets have

all had a positive effect. The OpCos continue

to perform robustly and are well positioned for

future growth, however, uncertainty over the

future impact of the pandemic persists and

trade will continue to be subject to any related

restrictions.

As we stay focused on this task, we continue

to beneﬁt from the breadth and geographic

diversity of our retail investments which have

proved their resilience through the worst of the

pandemic and remain well positioned to thrive

in the recovery.

In order to assist in the funding of the

litigation settlement, in September

2021 the Steinhoff Group sold 370

million shares in Pepkor Holdings in

an accelerated bookbuild, which raised

€400 million. The disposal reduced the

Steinhoff Group’s shareholding in Pepkor

Holdings to 58.9%.

APPRECIATION

We continue to owe our thanks to many organisations, teams and individuals for their continued hard work and commitment to the Steinhoff

Group.

We are particularly proud of the way the businesses and staff continue to respond to the multiple challenges, including the litigation

uncertainty, COVID-19 and the civil unrest in South Africa, and thank all colleagues for their unwavering support through another testing

period.

We are also sincerely grateful for the continuing support of our ﬁnancial creditors, shareholders, and the Supervisory Board.

Louis du Preez

Theodore de Klerk

Chief executive ofﬁcer

Chief ﬁnancial ofﬁcer

28 January 2022

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

INTRODUCTION

MESSAGE FROM

THE SUPERVISORY BOARD

Dear Stakeholder,

Steinhoff N.V. has made signiﬁcant and pleasing progress this past year. The Group

now has strong governance structures in place and an appropriately robust set

of checks and controls across its businesses. The new initiatives have brought

stability and clarity to the Group and helped create an environment in which the

Management Board and operating companies can focus on improving operational

performance. The beneﬁts of this approach can be seen in the robust trading result

for the year.

COVID-19 continues to provide many challenges to the business and as the

Supervisory Board we focused on ensuring that the unique circumstances of the

pandemic and, in particular the dynamic impact of the speciﬁc restrictions on

each of our operations and employees, did not compromise the Group’s ability to

continue delivering as needed. The scope of measures taken to protect the health

and wellbeing of colleagues and customers was also an important component of

our discussions with the Management Board throughout the year.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

INTRODUCTION//message from the supervisory board continued

have been subject to an unusual level of

uncertainty and complexity in the past few

years which resulted in the Company receiving

a disclaimer of opinion from its auditor for

those years. The executive team has been

working hard to resolve these uncertainties

and their impact on the ﬁnancial statements.

The Supervisory Board is therefore delighted

to note that there has been a signiﬁcant

reduction in the uncertainties and that this has

resulted in an unqualiﬁed audit opinion.

ACHIEVEMENTS

GOVERNANCE & LEADERSHIP

We can identify four signiﬁcant achievements

over the Reporting Period.

The Supervisory Board continued to oversee

the operations of the Management Board. In

Louis du Preez, CEO, Theodore de Klerk, CFO,

and their executives, we have a strong and

capable management team.

First, the quality and transparency of our

Corporate and Financial reporting has

improved greatly and despite COVID-19

restrictions requiring remote working, we were

able to ﬁnalise the 2020 Annual Report in

February 2021. For a large and geographically

diverse business, we believe this was a

notable achievement in what were difﬁcult

circumstances. This progress has once again

been conﬁrmed, after the Reporting Period,

with an unqualiﬁed audit opinion included in

the 2021 Annual Report.

The broad range of experience and skills

currently at the disposal of the Supervisory

Board are all highly relevant to the challenges

faced by the Group.

In terms of the remuneration report and policy,

the Board was ﬁrmly of the view that in a

situation where the Company remained in

an uncertain position, faced with signiﬁcant

litigation challenges and engaged in an

elevated level of corporate and regulatory

activity, standard remuneration structures

and policies would not be effective. The

Supervisory Board has taken a constructive

approach to the feedback received and having

assessed the progress made in terms of the

restructuring plan, believes that changes which

include an element of equity-based incentives

and better alignment with the suggestions

received from stakeholders, would be

appropriate to implement as we move towards

the ﬁnal step of the plan. A revised policy,

including an equity-based element, will be

presented to the 2022 General Meeting for

approval.

Each of the committees saw full and

busy agendas throughout the year with all

necessary duties satisfactorily attended to.

Having concluded its work as mandated by the

Supervisory Board, the Forensic Investigation

Committee was dissolved during the year.

Second, the successful listing of Pepco Group

on the Warsaw Stock Exchange in May 2021.

This was a noteworthy achievement as it

unlocked considerable value for stakeholders

and raised €1 billion in proceeds for the Group.

The litigation working group made good

progress in resolving the various claims

against the Group, and evaluated further

potential claims the Group may have against

third parties.

Third, the strong operational performance by

the OpCos as they adapted to the new trading

environment that emerged following the

COVID-19 restrictions and related changes in

consumer behaviour.

Steinhoff N.V. is co-operating with the various

prosecution authorities and regulators in South

Africa and other jurisdictions as they continue

their investigations into individuals and entities

implicated in relation to the past events.

Fourth, and ﬁnally, the material progress made

with resolving the legal claims arising from the

legacy accounting issues. Implementation of

a litigation settlement proposal remained the

clear priority for both the Supervisory Board

and the Management Board during the year.

As the Supervisory Board, we were pleased

to note the overwhelming support recorded

in favour of the settlement by the various

claimants. We fully support the Litigation

Settlement Proposal, ﬁrst announced in July

2020 and subsequently enhanced, and look

forward to its successful implementation once

the ﬁnal outstanding steps are completed.

AGM

The AGM was held as a hybrid meeting on 30

April 2021. While the majority of the business

put before the meeting was concluded

successfully, a number of the resolutions

proposed to shareholders were not passed,

namely:

2021 ANNUAL REPORT

The Supervisory Board acknowledges its

responsibility to oversee the integrity and

quality of the ﬁnancial reporting process.

This Annual Report, including the 2021

Consolidated Financial Statements and

the 2021 Separate Financial Statements as

well as the audit report, has been presented

to the Supervisory Board. The Financial

Statements were discussed with the Audit

and Risk Committee in the presence of

the Management Board and the external

auditor. The Supervisory Board reviewed and

discussed this Annual Report, approved the

2021 Consolidated Financial Statements and

the 2021 Separate Financial Statements, and

recommends that the General Meeting adopts

the Financial Statements included in this

Annual Report.

•

The 2020 Financial Statements were not

adopted,

The advisory vote in respect of the

remuneration report was not passed, and

The proposal to amend the remuneration

policy applicable to Managing Directors

was voted down.

In respect of the Group’s Financial Statements,

the Supervisory Board recognises that these

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

INTRODUCTION//message from the supervisory board continued

OUTLOOK

APPRECIATION

As the Supervisory Board, we fully recognise

the importance of implementing the Litigation

Settlement Proposal and we are encouraged

by the progress made. With this step

completed, fuller focus and effort can be

employed towards strategies of reducing the

Company's debt and ﬁnancing costs.

We would like to thank the ﬁnancial creditors

and their advisors with whom we have been

able to build a constructive and collaborative

working relationship. Similarly, we would like

to thank all of the claimants who backed

the Steinhoff Group and voted in favour of

the Litigation Settlement Proposal. To our

shareholders, thank you for your continued

support.

We are cognizant that the trading environment

in many of our markets remains challenging

in these anomalous times and we will remain

fully committed to supporting the good work

being done by the Management Board and

OpCo teams across the business.

Finally, I thank my fellow Supervisory

Board members, the Management Board

members and the executive team who have

all continued to demonstrate an exceptional

level of commitment to providing Steinhoff

N.V. with the stability, good governance and

robust controls needed to support its ongoing

business.

Thank you all for your continuing interest in the

Steinhoff Group.

Moira Moses

Chairperson

28 January 2022

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

INTRODUCTION

TIMELINE OF

KEY EVENTS

2020 2021

For more detail

please refer to

the Financial and

Business Review.

NOVEMBER

JANUARY

FEBRUARY

4 NOVEMBER 2020

18 JANUARY 2021

5 FEBRUARY 2021

Update on lender consent

request in respect of Litigation

Settlement Proposal and

proposed launch of English

law scheme of arrangement.

Suspension lifted and trading

in SIHL preference shares

resumed on the JSE.

High Court of England grants

order, sanctioning the SEAG

CPU schemes.

15 FEBRUARY 2021

The Amsterdam District Court

approved the application for a

Dutch SoP procedure.

25 NOVEMBER 2020

FinSurv approval received

for the Litigation Settlement

Proposal.

Steinhoff launched a

Litigation Settlement

Proposal.

DECEMBER

26 FEBRUARY 2021

Steinhoff N.V. published the

2020 Annual Report, including

the 2020 Consolidated

Financial Statements.

15 DECEMBER 2020

Resolutions put to relevant

classes of creditors at SEAG

English law scheme meetings

approved by requisite

majorities.

Release of Steinhoff N.V.

unaudited trading update for

the three-month period ended

31 December 2020.

18 DECEMBER 2020

Concluded a framework

agreement to sell various

African properties to Pepkor

Holdings.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

INTRODUCTION//timeline of key events continued

2021

continued

APRIL

JUNE

AUGUST

SEPTEMBER

30 APRIL 2021

25 JUNE 2021

11 AUGUST 2021

6 SEPTEMBER 2021

AGM held and voting results

published.

Steinhoff N.V. published the

unaudited 2021 Half-year

results for the six-month

period ended 31 March 2021.

Litigation Settlement Proposal

increased further.

SIHPL ﬁnancial creditors and

the SIHPL Market Purchase

Claimants vote in favour

of the South African S155

Scheme proposal with no

dissenting votes.

12 AUGUST 2021

MAY

Interim Debt Extension

approved resulting in debt

extensions by 12 months

until 31 December 2022 to

the ﬁnal “Maturity Date” and/

or “Termination Date” under

the Steinhoff N.V. ﬁnance

documents.

JULY

12 MAY 2021

The Western Cape High Court

ruled that it had jurisdiction

to consider a liquidation

application against

Application for the provisional

liquidation of Steinhoff N.V.

ﬁled in the South African

courts and opposed by the

Company.

16 JULY 2021

Increased Litigation

Settlement Proposal

announced.

Steinhoff N.V. in South Africa.

The parties subsequently

agreed to withdraw this

application as part of their

settlement announced on

15 December 2021.

8 SEPTEMBER 2021

27 AUGUST 2021

Committee of Representatives

votes unanimously in favour

of the Composition Plan in the

Dutch SoP.

Released the Steinhoff N.V.

unaudited trading update for

the nine-month period ended

30 June 2021.

26 MAY 2021

10 SEPTEMBER 2021

31 AUGUST 2021

Pepco Group lists on the

Warsaw Stock Exchange.

SIHPL Contractual Claimants

vote overwhelmingly in favour

of the South African S155

Scheme proposal.

Announced that Mattress Firm

was considering a return of

share capital and evaluating

a range of strategic options

including a potential IPO.

13 SEPTEMBER 2021

370 million Pepkor Holdings

shares successfully placed

raising total gross proceeds

of ZAR7.3 billion

(c. €409 million) reducing the

Group's holding from 68.2%

to 58.9%.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

INTRODUCTION//timeline of key events continued

2021

2022

JANUARY

continued

SEPTEMBER

OCTOBER

NOVEMBER

16 SEPTEMBER 2021

5 OCTOBER 2021

18 NOVEMBER 2021

7 JANUARY 2022

At the conﬁrmation hearing

in the District Court of

Conﬁrmation that Steinhoff

N.V.’s Composition Plan

Greenlit Brands announced

that they had closed the sale

of the Plush business for an

enterprise value of

Mattress Firm announced that

they had ﬁled a registration

statement on Form S-1 for

a proposed IPO with the

Securities and Exchange

Commission in the United

States.

Amsterdam, the Composition

Plan was recommended by

the supervisory judges and

the Dutch Administrators

and was supported by the

Company and the attending

SoP creditors.

became ﬁnal and unappealable

(in kracht van gewijsde) as of

2 October 2021, resulting in the

termination of the Dutch SoP

proceedings.

AUD110 million.

18 OCTOBER 2021

Further FinSurv approval

received for the increased

Litigation Settlement

Proposal.

24 JANUARY 2022

Western Cape High Court

granted SIHPL’s request and

granted an order approving

and sanctioning the S155

Scheme.

20 SEPTEMBER 2021

Mattress Firm announced that

they had submitted a draft

registration statement on

Form S-1 with the Securities

and Exchange Commission in

the United States.

28 OCTOBER 2021

Leave to appeal to the

Supreme Court of Appeal

granted to Steinhoff N.V. with

respect to the jurisdictional

issue against the Court

order of 6 September 2021

in relation to the liquidation

application.

28 JANUARY 2022

Steinhoff N.V. published the

2021 Annual Report, including

the 2021 Consolidated

Financial Statements.

22 SEPTEMBER 2021

Mattress Firm successfully

reﬁnanced their outstanding

debt and made a payment to

shareholders of USD1.2 billion.

The sale of Conforama

Balkans closed and the cash

proceeds were used to pay

down Conforama group debt.

23 SEPTEMBER 2021

The District Court of

Amsterdam issued an order

conﬁrming Steinhoff N.V.’s

Composition Plan.

30 SEPTEMBER 2021

Sanction hearing in the

South African S155 Scheme

deferred by the Western Cape

High Court to January 2022.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

INTRODUCTION

Refer to note 17 to the 2021

Consolidated Financial Statements for

a breakdown of the Group's loans and

borrowings as at 30 September 2021.

SUMMARISED GROUP STRUCTURE

AS AT 3O SEPTEMBER 2021

Sample of OpCo brands

Held through IEP. IEP owns 80% of BUD Group

Subject to future dilution by a management

incentive plan

Warrants over 49.9% of the economic rights

to the future returns of Conforama issued, but

not exercised

Excluding France, Switzerland and Balkans

operations that were sold

During May 2021 Pepco Group was listed

on the Warsaw Stock Exchange resulting in

Steinhoff N.V.'s holding reducing to 78.9%

STEINHOFF INTERNATIONAL HOLDINGS N.V.

(NL)

⁷The Group has signiﬁcant influence over

these companies without the power to

control, as such these entities are equity

accounted, and not consolidated.

100%

STEINHOFF INVESTMENT

HOLDINGS LIMITED (SA)

100%

STEINHOFF FINANCE

HOLDING GMBH (AT)

100%

STEENBOK NEWCO 1 LTD

(JEY) ("NEWCO 1")

50.1%

HEMISPHERE INTERNATIONAL

PROPERTIES B.V. (NL)

99.01%

STEENBOK NEWCO 2A LTD (JEY)

("NEWCO 2A")

100%

49.9%

0.99%

STEENBOK LUX FINCO 1 SARL

SOUTH AFRICA

(LUX) ("LUX FINCO 1")

European Real Estate

Portfolio

100%

STEENBOK NEWCO 3 LTD (UK)

("NEWCO 3")

58.9% STAKE

2, 7

99%

100%

26% STAKE

SA Real Estate Portfolio

100%

IBEX RETAIL INVESTMENTS LTD

(JEY) (“IBEX”)

STEENBOK LUX FINCO 2 SARL

(LUX) ("LUX FINCO 2")

3, 7

50.1%

100%

78.9%

100%

GREENLIT BRANDS

PEPCO GROUP

MATTRESS FIRM

CONFORAMA

LIPO

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

PART I

REPORT OF THE

MANAGEMENT BOARD

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

FINANCIAL AND

BUSINESS REVIEW

INTRODUCTION

Steinhoff International Holdings N.V. is a public limited liability company (naamloze vennootschap)

incorporated under the laws of the Netherlands, has its corporate seat in Amsterdam, the Netherlands,

and its principal place of business at Building B2, Vineyard Ofﬁce Park, Cnr Adam Tas & Devon Valley Road,

Stellenbosch 7600, South Africa. The Company is registered with the Trade Register in the Netherlands under

number 63570173, with tax residency in South Africa. The Company has a primary listing on the FSE in

Germany and a secondary listing on the JSE in South Africa.

Steinhoff N.V. is primarily a global holding company with current investments in retail businesses in Africa,

Australasia, Europe, the United Kingdom and the United States of America. Each of these operations

procures product direct from a wide range of suppliers for onward sales through an extensive retail footprint.

As such, the Group does not make material direct investments into new product research and development.

This Financial and Business Review covers the ﬁnancial year from 1 October 2020 to 30 September 2021

and addresses the material events subsequent to 30 September 2021 up to the date of this Annual Report.

exchange channels. All announcements can be

found on the Steinhoff N.V. website:

www.steinhofﬁnternational.com/sens.php.

accompanying Operational Report deals with

their performance in more detail.

OVERVIEW

In line with the strategy of longer-term value

preservation for stakeholders, the Steinhoff

Group continues to engage in a complex

restructuring and recovery process. During

the Reporting Period, the Management

Board focused on continued operational

improvements within the Group’s businesses;

further improvements to governance at all

levels; ﬁnalising and releasing the audited

ﬁnancial statements for 2020; and dealing with

the impact of COVID-19. In parallel, the Group

continued to dispose of non-core businesses

and made signiﬁcant progress towards resolving

its ongoing litigation challenges through the

Litigation Settlement Proposal.

REPORTABLE SEGMENT INFORMATION

In compliance with IFRS the Group is reporting

on four continuing business segments.

One segment from the prior year has been

discontinued, as detailed in note 1 to the 2021

Consolidated Financial Statements, and as

a result the comparative ﬁgures have been

CURRENT TRADING PERFORMANCE

The underlying businesses operate a

number of strong local brands and are well

diversiﬁed by geography and business line.

While COVID-19 constraints affected the

performance of all businesses during the

current and prior year, the extent of the impact restated. This presentation is aligned with how

varied according to their geographic exposure, the Management Board views the business

business mix, and severity and duration of lock and with historical operational reports.

down restrictions at a local level. Individual

businesses, such as Pepkor Holdings and

Pepco Group, with their everyday value focus,

performed robustly, while others, such as

Mattress Firm and Greenlit Brands reported

strong trade as restrictions moderated and

Further details are provided throughout this

Annual Report.

the operations focused strategically on

consumers investing in their homes. The

Stakeholders have been kept informed by regular

announcements released through formal stock

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

FINANCIAL AND BUSINESS REVIEW//continued

received from Mattress Firm and a dividend

from Greenlit Brands, as detailed below.

PRESENTATION OF DISCONTINUED

Key estimates

OPERATIONS

1. Estimation of uncertain tax positions

For further details please refer to note 17 to

the 2021 Consolidated Financial Statements.

Intercompany transactions and balances

between continuing and discontinued

operations are eliminated within both

continuing and discontinued operations.

The intercompany eliminations are added

back as reconciling items for segmental and

operational reporting as this more closely

reflects the trading conditions within each

segment.

2. Estimation of future taxable proﬁts in

support of recognition of deferred tax

assets

The cash generated from operations was

€1 352 million for the Reporting Period (2020:

generated €1 171 million). Ordinary and

preference dividends of €5 million (2020:

€20 million) were paid to non-controlling

interest, the Group received dividends from

investments of €524 million (2020: nil), and

net interest and tax of €447 million was paid

(2020: €344 million). This resulted in a cash

inflow from operations of €1 424 million (2020:

inflow of €807 million).

3. Estimations of inputs into discounted

cash flow models relating to the

impairment of goodwill

4. Estimations of inputs into discounted

cash flow models relating to the

impairment of intangible assets

KEY ACCOUNTING JUDGEMENTS AND

ESTIMATES

5. Estimation of the useful life of

intangible assets

The preparation of consolidated ﬁnancial

statements requires management to make

judgements and estimates that affect the

application of accounting policies and the

reported values of assets, liabilities, income

and expenses. Actual results may differ from

these estimates. Judgements have been

made after taking into account all currently

available information, but these could

change if additional relevant information

comes to light. Key accounting estimates

are those that involve complex or subjective

judgements or assessments. The details of

such judgements and estimates are included

as part of the “Basis of Preparation” of the

2021 Consolidated Financial Statements,

and readers should take note of the following

items:

6. Estimation of the recoverable amount

and fair value of properties

The cash flows due to investing activities were

as follows:

7. Estimation of the useful life and

residual values of buildings

(i) €167 million net capital expenditure;

8. Estimation of the fair value less cost

of disposal for non-current assets

held-for-sale of disposal groups

(ii) Net proceeds from disposals of

businesses of €60 million (which mainly

relate to the sale of Conforama Balkans);

and

9. Estimation of the provision to be

raised for the Litigation Settlement

Proposal

(iii) Proceeds from the disposal of investments

in equity accounted companies of

10. Estimation of the fair value of

identiﬁable assets and liabilities

impacting the measurement of

goodwill in a business combination

€10 million (Properties - Africa).

In the 2020 Reporting Period, the cash flows

due to investing activities were:

11. Estimation of vesting conditions

relating to share-based payments

(i) €31 million net capital proceeds;

(ii) Net proceeds from disposals of

businesses of €543 million (Conforama

€314 million; Unitrans €181 million;

Sherwood €44 million; Greenlit Brands

€19 million; Blue Group €13 million; Abra

€2 million); and

12. Estimation in determining the lease

terms and discount rates applicable to

lease agreements

Key judgements

1. Going concern assumption

2. Consolidation decisions

NET DEBT AND CASH FLOW

3. Recoverability of ﬁnancial and other

The net debt for the Group at the Reporting

Date was €8 117 million (2020: €9 438 million),

calculated as total debt less cash and cash

equivalents. The Group Services cash includes

the amounts held to cover the Litigation

Settlement Provision.

assets

(iii) Proceeds from the disposal of

investments in equity accounted

companies of €19 million (Cofel SAS

€19 million).

4. Recognition and derecognition of

liabilities

5. Recognition and measurement

of provisions (including Litigation

Settlement Proposal provision)

GEOGRAPHIC CONTEXT AND IMPACT OF

FOREIGN CURRENCIES

The OpCos have all raised their own external

debt and do not rely on the Group for funding.

At operational level the total debt decreased

from €1 580 million to €1 433 million over the

Reporting Period.

6. Correct classiﬁcation and

The Group earned c. 84% (2020: c. 84%) of its

revenue from continuing operations outside

of the eurozone area. The Group’s assets

are spread around the globe and the non-

Euro assets are subject to various currency

fluctuations including changes in the value of

the South African rand, the Australian dollar,

the US dollar, the UK pound sterling, the Swiss

franc and the Polish zloty.

completeness of contingent liabilities

7. Correct classiﬁcation of disposal

groups and non-current assets held-

for-sale

Total Group Services debt similarly reduced

from €9 873 million to €9 835 million as debt

repayments, mainly from the successful IPO of

Pepco Group, exceeded the interest accrued.

Subsequent to the Reporting Date the debt has

been paid down further as a result of a payment

8. Correct classiﬁcation and

completeness of liabilities and events

occurring after the Reporting Period

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

FINANCIAL AND BUSINESS REVIEW//continued

IMPAIRMENTS

NON-OPERATIONAL EXPENSES

RELATED PARTY AND INTRAGROUP

There were no signiﬁcant impairments of

intangibles for the Reporting Period (2021:

€1 million; 2020: €306 million). The

impairments in the prior year were mainly

recognised in Pepkor Holdings and Pepco

Group and were driven by challenging

trading and economic conditions created

by COVID-19 and the related effect on the

economic outlook, which resulted in lower

than previously anticipated projected cash

flows. Please refer to note 8 to the 2021

Consolidated Financial Statements for further

information.

The Group has identiﬁed a number of non-

operational expenses which are material

due to the signiﬁcance of their nature and/or

amount. These expenses are not included in

the segmental results and are listed separately

in note 4.2 to the 2021 Consolidated Financial

Statements to provide a better understanding

of the ﬁnancial performance of the Group. The

more material items are as follows:

TRANSACTIONS

During the Reporting Period, related party

relationships existed between certain

shareholders, subsidiaries, joint-venture

companies and associate companies within

the Group, and its company directors and

Group key management personnel. All known

material intragroup transactions are eliminated

on consolidation.

For further details please refer to note 31 to

the 2021 Consolidated Financial Statements.

LITIGATION SETTLEMENT PROPOSAL

PROVISION

A provision of €943 million was raised for the

Litigation Settlement Proposal in the 2020

Reporting Period. This provision was increased

to €1 573 million in the Reporting Period as

explained below and detailed in note 23.4 to

the 2021 Consolidated Financial Statements.

GOVERNANCE AND LEADERSHIP

There were no changes to the composition of

the Management Board during the Reporting

Period.

EXPECTED CREDIT LOSS (“ECL”)

An ECL of €98 million (2020: €13 million)

was recognised on the Titan loan receivable

as detailed in note 12.1.2 to the 2021

Consolidated Financial Statements.

Ms. Khanyisile Kweyama resigned from the

Supervisory Board on 19 April 2021.

In addition, costs of €19 million in relation to

a forward exchange agreement, a provision

of €30 million for ACG lawyers’ fees and a

provision of €17 million for the SRF cost

contribution were all raised in connection

with the Litigation Settlement Proposal, as

detailed in note 4.2.7 to the 2021 Consolidated

Financial Statements.

FINANCE COSTS

SUSTAINABILITY (ESG) AND CORPORATE

SOCIAL INVESTMENTS (CSI)

The total ﬁnance costs for the Reporting

Period reduced marginally to €1 190 million

(2020: €1 195 million).

As a global holding company with investments

in a range of retail businesses, good corporate

citizenship, including a focus on diversity

and equality, sustainability and social and

community engagement, is important to

the Group. Responsibility for operational

implementation is devolved to each

independent operating subsidiary where action

can be carried out directly ensuring it has the

most impact.

Within the OpCos total ﬁnance costs on loans,

from continued operations, decreased from

€109 million in the prior year to €80 million in

the Reporting Period as a result of reduced

average debt levels.

ADVISORY FEES

As a consequence of the continued extensive

litigation processes, the work in trying to

secure the Litigation Settlement Proposal

and the restructuring activities, it has been

necessary for the Steinhoff Group to engage a

wide range of professional advisors to assist

it with its investigative, legal, ﬁnancial and

regulatory requirements as it continues its

efforts to stabilise and restructure the Group.

In addition, the Group is required to pay the

advisor costs of each of the respective creditor

groupings. The scale and complexity of these

tasks has meant that the aggregate advisor

costs have continued to be signiﬁcant.

The ﬁnance costs relating to Group Services

debt increased from €923 million to

€978 million.

For further details please refer to note 5 and

note 17 to the 2021 Consolidated Financial

Statements.

Key areas of focus include the promotion of

ethical trading policies and practices within

our supply chains, compliance with modern

slavery principles, energy consumption,

waste, carbon emissions, the development

and well-being of our people and the role the

businesses play in their wider communities.

Steinhoff N.V. uses its influence, as

appropriate, to help ensure that each operating

business takes these aspects properly into

account and is able to show consistent

attention to and progress towards these

objectives.

TAX

Tax remains an area of focus for management.

Signiﬁcant work has been done in collating

information, completing entity stand-alone

ﬁnancial statements and ﬁling of tax returns.

Advisory fees for the Reporting Period

amounted to €57 million (2020: €58 million),

as disclosed in note 4.2.5 of the 2021

Consolidated Financial Statements.

Our aim is to work with the OpCos to

operate and maintain a modern and efﬁcient

infrastructure in respect of their stores,

distribution centres and logistics operations,

as part of our combined commitment to

improving sustainability and ensuring that our

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

FINANCIAL AND BUSINESS REVIEW//continued

workplaces are well-designed and safe for

colleagues, and, where necessary, that they are Holdings issued 68.7 million ordinary shares,

the transaction have been fulﬁlled. Pepkor

In line with its strategy of longer-term value

preservation for all stakeholders, the Group

continues to explore and evaluate a range of

strategic options for its subsidiary businesses.

These options included a potential public

listing of the Fantastic Group, Australia’s

leading, value-focused furniture and bedding

retailer. During the Reporting Period all

decisions relating to the IPO process were

postponed to a later date when it is expected

that COVID-19 related uncertainty should

reduce, making it easier for investors to

assess growth prospects for the business. No

deﬁnitive decision has been taken with respect

to any speciﬁc course of action or timing at

this point.

of the transaction total of 70 million, from the

end of July 2021 up until September 2021 as

purchase consideration for various properties

acquired from the Steinhoff Group.

adapted to address any challenges created by

climate change. During the Reporting Period

the OpCos also began to formalise plans to

reduce carbon emissions from their operations

over the coming years, in line with national

and global plans to limit the rise in global

temperatures. The Group also recognises

the important role the OpCos play in the

communities they serve, with investment in

new stores and related infrastructure creating

employment and providing value for money

products and services to customers.

As these properties remain within the Group

after the transaction, they no longer met the

criteria to be classiﬁed as held-for-sale and

have been reclassiﬁed to Property, Plant and

Equipment.

As at 30 September 2021 the portfolio has been

materially disposed of. Management believes

that the remaining properties will be disposed

of within the next 12 months as agreements

have already been entered into for all but one

property. The portfolio therefore still meets the

criteria to be classiﬁed as held-for-sale.

In addition, the Company manages the

various aspects directly under its control,

looking continuously for opportunities to

reduce or minimise consumption and waste.

During the Reporting Period the Group

LEGAL PROVISION – SEIFERT

The litigation with Seifert relating to the

Conforama Group is ongoing and still

reduced international and local travel, and the

associated emissions, signiﬁcantly by holding

almost all of the Supervisory and Management

Board meetings virtually rather than in

PEPKOR HOLDINGS

subject to uncertainty. On the basis of

In August 2020, the Pepkor Holdings Group

entered into a sale and purchase agreement

for the disposal of the entire issued share

capital of The Building Company. Completion

of the transaction was subject to approval

by the Competition Commission in South

Africa. The Competition Commission

recommended on 28 May 2021 that the

transaction be prohibited. On 12 August 2021

Pepkor Holdings announced that the sale had

been terminated and the business has been

reclassiﬁed out of discontinued operations.

information available and actions taken to

date, management concluded that a liability

should be attributed to Seifert from the date

of termination. A payment of €147 million

was made by the Group for Seifert’s interest in

December 2016. During November 2020, the

parties entered into negotiations wherein an

additional settlement amount of €100 million

was discussed. A settlement was not ﬁnalised

as the parties could not reach agreement with

respect to certain contractual terms. In light of

these negotiations, management decided to

maintain the settlement provision raised in the

2020 Reporting Period, representing the best

estimate for settlement of the claim.

person. Although this was initially driven by

the COVID-19 restrictions, it is the Company’s

intention to continue holding board and other

meetings virtually where possible.

The Company intends to ensure readiness of

its organisation to provide the disclosures on

sustainability that are required by the European

Corporate Sustainability Reporting Directive

(CSRD) as of 1 January 2023.

CONFORAMA IBERIA, ITALY AND

BALKANS

CORPORATE ACTIVITY DURING THE

REPORTING PERIOD

During the 2020 Reporting Period the

Group decided to dispose of its remaining

investments in the Conforama businesses and

embarked on a process to identify potential

buyers. The disposal of the Balkans business

closed in September 2021. The remaining

businesses met the criteria to be classiﬁed as

held-for-sale on 30 September 2021.

PROPERTIES – AFRICA

REDUCTION OF SHARE CAPITAL

Effective as of 3 November 2020 the issued

share capital of the Company was reduced

to 4 269 609 051 Ordinary Shares of €0.01

each, following the cancellation of 40 118 093

Ordinary Shares of €0.01 each.

The Group commenced a process, post March

2019, to dispose of the remaining property

portfolio within the property division in Africa.

Management considered various disposal

options in order to optimise the balance

sheet and unlock value for shareholders. The

portfolio consisted of retail outlets, ofﬁces,

warehouses, dealerships, truck shops, vacant

land and residential properties, and included

properties tenanted by the Group and third

parties.

The resolution to reduce the capital of

the Company by cancelling 40 118 093

Ordinary Shares, that were held by the

Company (the “Cancelled Shares” and the

cancellation of these Cancelled Shares,

the “Capital Reduction”) was adopted by

the General Meeting on 28 August 2020.

The Company deposited the resolution to

cancel the Cancelled Shares with the Dutch

Trade Register and announced the Capital

Reduction in a daily nationally distributed

GREENLIT BRANDS

On 21 February 2021, Greenlit Brands

completed a restructure of the ownership of

the Fantastic business resulting in Greenlit

Brands, shareholder, APAC HoldCo Ltd, a

subsidiary of the Group, having a direct

interest in Fantastic. This restructure has

resulted in Greenlit Brands repaying in full

the outstanding secured loans payable to the

parent group lenders.

Twelve of the remaining properties were

leased by Pepkor Holdings. As announced on

14 April 2021 Pepkor Holdings received the

approvals necessary to acquire these twelve

properties and all conditions precedent of

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

FINANCIAL AND BUSINESS REVIEW//continued

newspaper on 2 September 2020. As from

the date of the announcement the statutory

waiting period of two months for creditors to

oppose the Capital Reduction commenced.

On 4 November 2020, the District Court of

Amsterdam conﬁrmed that no creditors had

opposed the Capital Reduction during this

period. Therefore, the resolution took effect on

3 November 2020, two months having passed

since the announcement had been made. The

Capital Reduction was aimed at optimising the

Company’s equity structure.

PEPKOR HOLDINGS

LIPO

Pepkor Holdings successfully raised ZAR2.2

billion in the South African bond market in an

auction held on 30 April 2021. Strong demand

from institutional investors resulted in an

oversubscription of 2.8 times.

Subsequent to the 2021 Reporting Period

the Group entered into a contract to sell the

LIPO business. The disposal is subject to

anti-trust approval and the terms of the sale

remain conﬁdential at this stage. LIPO was

therefore classiﬁed as held-for-sale on

30 September 2021.

The Domestic Medium Term Note Programme

(“Programme”) is part of Pepkor Holding’s

strategy to diversify its sources of funding and

to reduce its ﬁnancing costs. Proceeds from

the notes issued were used to replace existing

term debt due for repayment in 2022 – thereby

strengthening Pepkor Holding’s liquidity and

debt repayment proﬁle.

CORPORATE ACTIVITY AFTER

THE REPORTING DATE

GREENLIT BRANDS

IBERIAN PROPERTIES

In line with its strategy of longer-term value

preservation for all stakeholders, the Group

continues to explore and evaluate a range of

strategic options for its subsidiary businesses.

During November 2021 Greenlit Brands closed

the sale of the Plush business for an enterprise

value of AUD110 million. The proceeds were

utilised to reduce Group debt.

During February 2021, Conforama Espana S.A.

and Conforama Portugal (jointly “Conforama

Iberia”) entered into a binding offer for a sale

and leaseback of their real estate properties

for a consideration of €107 million, with

certain conditions precedent. Some of these

conditions were not met and the deal was

terminated during the Reporting Period.

Pepkor Holdings further notiﬁed shareholders

and noteholders that the JSE had granted

the listing of the PEP03 and PEP04 Senior

Unsecured Floating Rate Notes effective

5 May 2021, in terms of its Programme dated

2 March 2020 and guaranteed by Pepkor

Trading Proprietary Limited.

PEPKOR HOLDINGS – DIVIDEND

DECLARATION

The board of directors of Pepkor Holdings

declared a dividend of 44.2 South African

cents per ordinary share, payable to

shareholders on 24 January 2022, in respect of

the twelve months ended 30 September 2021.

During September 2021 the Steinhoff Group

successfully placed 370 million Pepkor

Holdings shares in the market raising total

gross proceeds of ZAR7.3 billion

(c. €409 million) and reducing the holding

from 68.2% to 58.9% (including the effect

of the Pepkor Holdings share buy-back in

September 2021).

PEPCO GROUP

On 25 January 2021 Steinhoff N.V. announced

that the Group had resumed its evaluation

of a range of strategic options for the Pepco

Group. Following receipt of the necessary

consents from its ﬁnancial creditors and after

consultation with the ﬁnancial institutions

advising on a possible IPO of Pepco Group, on

26 April 2021 the Group decided to proceed

further with an IPO of Pepco Group on the

Warsaw Stock Exchange and the Intention To

Float announcement was made available on

the Pepco Group website.

SETTLEMENT WITH THE FORMER

TEKKIE TOWN OWNERS

MATTRESS FIRM

Certain former owners of the Tekkie Town

business instituted claims against the Steinhoff

Group (together the “Former Tekkie Town

Owner Claimants”). In addition, the Former

Tekkie Town Owner Claimants instituted

liquidation proceedings (the “Liquidation

Application”) against Steinhoff N.V. on

12 May 2021. One of those claimants, AJVH

Holdings Proprietary Limited, and a related

party, Sport City Trust, also attempted to

oppose the application for the sanction of the

S155 Scheme by arguing that they have SIHPL

Market Purchase Claims (as deﬁned in the

S155 Scheme).

In line with the Group strategy of simplifying

its portfolio and deleveraging its balance sheet

the Company announced on 31 August 2021

that Mattress Firm was considering a return of

share capital and had commenced evaluating

a range of strategic options, including a

potential public listing. The conﬁdential draft

registration statement on Form S-1 was

submitted to the Securities and Exchange

Commission in the United States in

On 5 May 2021 Steinhoff N.V. launched the

IPO of Pepco Group on the Warsaw Stock

Exchange. The IPO included a public offering

of up to 101 343 568 existing Pepco Group

shares to retail investors and institutional

investors in Poland and an offering to

institutional investors in selected other

September 2021.

countries. The ﬁnal number of shares, and the

offer price, were determined and published on

14 May 2021 and the ﬁrst day of trading on the

Warsaw Stock Exchange was 26 May 2021.

During the 2021 Reporting Period Mattress

Firm successfully reﬁnanced its outstanding

debt. In addition, Mattress Firm made a

payment to shareholders of USD1.2 billion

(€1.0 billion) with the Steinhoff Group receiving

USD609 million (€520 million).

On 15 December 2021, the Steinhoff Group

and the Former Tekkie Town Owner Claimants

(including associated parties who have joined

or supported their Liquidation Application and

S155 Scheme opposition) have agreed that

the Former Tekkie Town Owner Claimants will

(i) support, and withdraw their opposition to,

the S155 Scheme with immediate effect and

The Group received proceeds of approximately

€1 billion from the IPO, most of which was

used to reduce debt. The Group’s shareholding

in the Pepco Group reduced to 78.9% following

the full exercise of the over-allotment option.

On 7 January 2022 Mattress Firm announced

that they had ﬁled a registration statement

on Form S-1 for a proposed IPO with the

Securities and Exchange Commission in the

United States. The process remains ongoing.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

FINANCIAL AND BUSINESS REVIEW//continued

(ii) withdraw the Liquidation Application (and

their opposition to the appeal pending before

the South African Supreme Court of Appeal),

subject to implementation of the Litigation

Settlement Proposal by 30 June 2022.

GROUP DEBT RESTRUCTURE

LITIGATION SETTLEMENT PROPOSAL

As part of the Litigation Settlement Proposal

and related lender consent requests, the

Group proposed that the ﬁnancial creditors

extend the common maturity date of the

debt. An interim extension of 12 months to 31

December 2022 was approved by the lenders

as announced on 12 August 2021. If the

Proposed Litigation Settlement is successful,

the due date of the debt will be extended

further to 30 June 2023 with an option for

a further six-month extension subject to a

simple majority approval by the lenders.

On 27 July 2020, the Group released a

detailed update on its efforts to resolve the

ongoing complex legal claims and litigation

proceedings against it, including details of

a proposed settlement in respect of these

claims. The Group formulated proposed

settlement amounts for various claimant

groups in light of the characteristics of, and

risks affecting, their claims, the Group’s ability

to continue trading and to maximise the asset

values available to it, and the likely outcomes

for claimants if the Group was unable to

do so and liquidation ensued. The Group’s

settlement proposal was made on the basis

that it does not represent an admission of any

liability in respect of any of the various claims

made against any member of the Group or any

directors, ofﬁcers, employees or advisors, past

or present.

This settlement is viewed as an adjusting

event for the 2021 Reporting Period and

an additional €42 million was raised as part of

the Litigation Settlement Proposal provision,

representing the best estimate for settlement

of the claim. Refer to Note 23.4.

SETTLEMENT WITH TREVO

CAPITAL LIMITED

Steinhoff N.V.’s announcement on

LITIGATION

11 August 2021 conﬁrmed the treatment

of Trevo Capital Limited (“Trevo”) as a

Non-Qualifying Claimant (being a class of

claimants to whom an offer of compromise

is not made under the terms of the S155

Scheme). Trevo (supported by others) has

opposed the sanction application for the S155

Scheme the hearing of which was scheduled

to commence from the 24th of January 2022,

notwithstanding that they are not a scheme

creditor.

Litigation remained a signiﬁcant outstanding

challenge for the Group during the Reporting

Period. In parallel with these various court

processes, the Management Board, assisted

by the Litigation Working Group and the

Group’s legal advisors, continued to work

towards the implementation of the Litigation

Settlement Proposal as explained below.

Steinhoff N.V. announced on 15 February

2021 that it was beginning the implementation

of its global settlement and had resolved

to commence a Dutch SoP to implement a

proposal to settle certain multi- jurisdictional

legacy litigation and various claims against

the Group including those against the former

holding company, SIHPL. The District Court of

Amsterdam approved the application by the

Company for the Dutch SoP and appointed two

administrators.

On 12 May 2021, a provisional liquidation

application was ﬁled by entities afﬁliated

with the former shareholders of Tekkie Town

Proprietary Limited in the Western Cape

Division of the High Court of South Africa (the

Liquidation Application referenced above).

Steinhoff N.V., together with a number of other

interested parties, opposed the application.

No judgements have been delivered on the

underlying merits of the case and the parties

have subsequently agreed to withdraw the

application as well as their opposition to the

appeal. Refer to the settlement with the former

Tekkie Town owners during December 2021,

as discussed above.

On 15 December 2021, the Company

announced that Trevo had agreed to a

settlement in which Trevo conﬁrmed its

conditional support for the S155 Scheme

subject to the satisfaction of suspensive

conditions on or before 11 January 2022

unless waived or extended by the parties.

Settlement was also reached with other

NQCs who had supported Trevo's opposition

to the sanction application. On 7 January

2022 Steinhoff N.V. announced that these

conditions had all been achieved and that

the settlement had become binding. This

settlement is viewed as an adjusting event

for the 2021 Reporting Period and €28 million

was raised as part of the Litigation Settlement

Proposal provision, representing the best

estimate for settlement of the claim. Refer to

Note 23.4.

In parallel, the board of SIHPL resolved to

commence a S155 Scheme in South Africa,

also as part of the implementation of the

Litigation Settlement Proposal.

Steinhoff N.V., together with SIHPL,

subsequently reached a bilateral conditional

agreement with Deloitte pursuant to which

Deloitte agreed to support the proposed

Steinhoff N.V. global settlement as announced

on 27 July 2020 (and as subsequently revised).

Please refer to note 23.4 to the 2021

Consolidated Financial Statements for further

details.

The Group is also evaluating potential claims it

may have against third parties, and recoveries

against implicated entities and individuals are

being initiated where appropriate.

Steinhoff N.V. further announced that, together

with SIHPL, it had also reached an agreement

with certain insurance companies underwriting

Steinhoff N.V.’s (primary and excess) Directors

and Ofﬁcers insurance policy (the “D&O

Insurers”) and certain former directors and

ofﬁcers who have worked for or been associated

with a Steinhoff Group company (the “Settling

D&Os”). As a result, the bilateral agreement

with Deloitte was replaced by a comprehensive

Steinhoff Settlement Support Agreement entered

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

FINANCIAL AND BUSINESS REVIEW//continued

into by inter alia Steinhoff N.V., SIHPL, Deloitte,

the D&O Insurers and the Settling D&Os. In

addition to the compensation made available to N.V. will occur immediately following

certain claimants by Steinhoff N.V., Deloitte (up Settlement Effective Date. Occurrence of

has been settled, including the withdrawal of

the Liquidation Application against Steinhoff

liquidating companies no longer required and

restructuring the remaining companies more

efﬁciently, all in order to reduce operating

costs and streamline the Group going forward.

Some of the steps in this project were

completed before the end of the ﬁnancial

year, being 30 September 2021, while others

will be ongoing as part of normal business

operations.

to €77.94 million) and the D&O Insurers (up to

€78.1 million), on behalf of the Settling D&Os,

are making additional compensation available

to certain Steinhoff N.V. claimants, including the

Market Purchase Claimants and Contractual

Claimants, in exchange for certain waivers

and releases, provided that Steinhoff N.V.

successfully completes the Dutch SoP process

commenced on 15 February 2021 and SIHPL

successfully implements the S155 Scheme and

certain other conditions are fulﬁlled. Deloitte,

the D&O Insurers and the Settling D&Os do not

in any way admit liability for the losses incurred

by Steinhoff N.V. and its stakeholders as a

result of the alleged accounting irregularities.

Settlement Effective Date is the remaining

condition under the Composition Plan.

For more information, please refer to note 24.3

to the 2021 Consolidated Financial Statements

or the various announcements which can be

found at www.steinhofﬁnternational.com/

settlement-litigation-claims.php (not audited

by Mazars).

REGULATORY ENGAGEMENT AND LISTING

The Company remains in contact with its

principal stock-market regulators regarding

its listings: the AFM in the Netherlands, the

FSE and the Federal Financial Supervisory

Authority of Germany (Bundesanstalt für

Finanzdienstleistungsaufsicht), and the JSE

and the Financial Sector Conduct Authority

(FSCA) in South Africa.

INTERNAL GROUP RESTRUCTURE

The Group owns a number of valuable

businesses, most of which were held under a

common holding structure comprising mostly

of UK and Austrian companies. The holding

structure had however become complex

and unwieldy, since it comprised both of

companies which pre-date the 2019 CVA

restructuring, and some which were inserted

as part of the CVAs to provide security to the

Steinhoff Group’s external lenders, the Lux

Finco 1 lenders and the Lux Finco 2 lenders

The Litigation Settlement Proposal required

and received the approval of Steinhoff N.V.’s

ﬁnancial creditors as well as the approval of

FinSurv.

Steinhoff N.V. has co-operated and / or is

co-operating with the various prosecution

authorities and regulators in South Africa and

other jurisdictions as they investigate various

individuals and entities implicated in relation

to the events uncovered in December 2017.

Following a unanimous vote (15/15) in favour

of the Composition Plan by the Committee

of Representation on 8 September 2021 the

District Court of Amsterdam issued an order on

23 September 2021 conﬁrming Steinhoff N.V.’s

Composition Plan. On 5 October 2021 the

Company announced that the Composition

Plan had become ﬁnal and unappealable (in

kracht van gewijsde gegaan) resulting in the

termination of the Dutch SoP proceedings

effective as of 2 October 2021.

(together the “CVA Creditors”) and to facilitate The South African authorities approached

the restructuring.

PwC and engaged them to perform additional

expert forensic work to assist in the criminal

investigation. Steinhoff N.V. supported this

initiative and is contributing funds to cover

a substantial portion of the costs, due to

the size and complexity of the investigation

required. Steinhoff N.V.’s role is limited to co-

operation and providing a portion of funding

for the project. The funding is provided on an

arms-length basis, with Steinhoff N.V. having

no ongoing involvement in the investigation,

the extent thereof and report-back process.

The total costs contribution commitment from

Steinhoff N.V. was €1.6 million (ZAR30 million)

(plus VAT) and the Group has honoured the

agreement to date and intends to continue

doing so going forward.

As the CVA restructuring has now been

completed the Group is in the process of

divesting various interests in some of its

valuable assets, in order to generate cash to

repay the CVA Creditors and is also seeking

to wind up surplus companies which are no

longer required.

In the S155 Scheme in South Africa the

Financial Creditors and the Market Purchase

Claimants voted in favour of the Scheme

on 6 September 2021 while the Contractual

Creditors voted in favour on 10 September

2021. No votes against the Scheme were

recorded.

To facilitate the disposal of assets, repatriation

of cash and the eventual wind up of surplus

companies, the Group and its advisors

reviewed the corporate structure and found a

number of inefﬁciencies which needed to be

addressed over time.

The Group’s valuable assets are held far down

the corporate structure, whilst the ﬁnancing

provided by the CVA Creditors’ debt is held at a

higher level in the corporate structure. Moving

any disposal proceeds through the structure to

the CVA creditors could have taken a number

of months and, in the previous structure may

have resulted in cash being trapped in speciﬁc

subsidiaries.

SIHPL’s application for the approval and

sanction of the S155 Scheme was heard on

24 January 2022, by the Western Cape High

Court. At the close of the hearing the Court

granted SIHPL’s request and granted an order

approving and sanctioning the S155 Scheme.

Following receipt of the Order, “Settlement

Effective Date” (referred to under the

S155 Scheme and the Composition Plan)

is expected to occur on or about

15 February 2022. As disclosed in Steinhoff

N.V.’s announcement of 15 December 2021,

formal withdrawal of the various litigation that

On 20 October 2020, the JSE issued Steinhoff

N.V and SIHPL, jointly, with a public censure

and a ﬁne of ZAR13.5 million in respect of

alleged disclosure irregularities that occurred

prior to December 2017.

On 21 October 2020 under docket number

E 6-2020 the FSE imposed a ﬁne of €19 800,

which included €17 800 in ﬁnes and €2 000 in

fees for the administrative proceeding, for late

submission of the Company’s Half-year Report

for the six-month period ending 31 March

To address these issues and to facilitate

smooth payments to the CVA Creditors, the

Group undertook a project which broadly

involved simplifying the Group structure by

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

FINANCIAL AND BUSINESS REVIEW//continued

2020. On 10 September 2021 under docket

number E 1-2021 the FSE imposed a ﬁne of

€134 000, which included €124 000 in ﬁnes

and €10 000 in fees for the administrative

proceeding, for late submission of the

Company’s Annual Report for the ﬁnancial year

ending 30 September 2020.

In doing so the Board has prepared and

assessed the Group's and the Company's

cashflow forecasts in order to substantiate

the going concern assumption, and has

considered the impact of the provision for the

Litigation Settlement Proposal, the extension

of the maturity date of the debt, and assessed

the impacts of the COVID-19 global pandemic

on the going concern position.

approving and sanctioning the S155 Scheme.

Following receipt of the Order, “Settlement

Effective Date” (referred to under the

S155 Scheme and the Composition Plan)

is expected to occur on or about

15 February 2022. As disclosed in Steinhoff

N.V.’s announcement of 15 December 2021,

formal withdrawal of the various litigation that

has been settled, including the withdrawal of

the Liquidation Application against Steinhoff

N.V. will occur immediately following

Settlement Effective Date. Occurrence of

Settlement Effective Date is the remaining

condition under the Composition Plan.

The Group remains committed to co-operating

and maintaining open communication lines

with all regulators.

The Management Board draws stakeholders’

attention to the following assumptions that are

key in arriving at the forecast cash flows, namely:

SHAREHOLDER MEETINGS

A hybrid annual meeting of shareholders was

held on 30 April 2021.

LITIGATION

On 15 February 2021 the Company applied for

the opening of Dutch SoP proceedings and

offered the Steinhoff N.V. Composition Plan

to its Dutch SoP creditors. The Dutch Court

conﬁrmed the Steinhoff N.V. Composition Plan

on 23 September 2021. No appeal was lodged

to the Dutch Court’s decision and accordingly

the order became ﬁnal and binding and by

consequence the Steinhoff N.V. Composition

Plan became binding on all Dutch SoP

The following key considerations were taken

into account by the Management Board:

OPERATIONAL IMPACT COVID-19

With COVID-19 constraints remaining in place,

keeping colleagues and customers safe

and adhering to all government guidance,

while maximising the trading opportunities,

remained the primary focus for the operating

businesses during the Reporting Period. The

impact of the pandemic was in gradual retreat

in many of our markets, although the pace

at which restrictions were being lifted or re-

imposed varied depending on local conditions.

•

The maturity date of the Steinhoff N.V. CPU

will be extended to June 2023, subject to

the Settlement Effective Date; and

•

The Litigation Settlement Proposal has

reached signiﬁcant positive milestones,

including the adoption and conﬁrmation

of the Steinhoff N.V. Composition Plan,

the almost unanimous adoption of the

SIHPL S155 Scheme by relevant classes of

SIHPL creditors, the Court Order approving

and sanctioning the S155 Scheme on

24 January 2022 as well as regulatory

approval by FinSurv.

creditors in accordance with its terms. The

Steinhoff N.V. Composition Plan was proposed

in parallel with the SIHPL S155 Scheme. Both

proposals, which are inter-conditional, form

part of the Litigation Settlement Proposal to

resolve the legacy claims arising from the

announcement of accounting irregularities.

Trading conditions have been more

encouraging as the impact of COVID-19

has broadly continued to reduce. While

the situation remains far from normal, the

progress of vaccination roll-outs, behavioural

change, and the lifting of restrictions

impacting on Steinhoff Group businesses

in most of our major markets are having a

positive effect. However, uncertainty over the

future impact of the pandemic persists and

trade is subject to this volatility.

At 30 September 2021 the Group’s obligation

has been classiﬁed as a provision and

measured as per the Steinhoff N.V.’s

The sanctioning of the SIHPL S155 Scheme on

24 January 2022 has resulted in a compromise

of claims against SIHPL in accordance

Composition Plan as well as the SIHPL S155

Scheme term sheet, which represents the best

estimate of the total amount to be incurred

to settle the present obligation. In light of

the key considerations taking into account

by the Management Board as set out above,

the obligation is no longer disclosed as a

contingent liability.

with the terms of the SIHPL S155 Scheme.

The SIHPL S155 Scheme commenced in

February 2021 and has been adopted by all

three classes of the scheme creditors during

September 2021. Pursuant to the SIHPL S155

Scheme having been adopted by the SIHPL

scheme creditors with overwhelming support,

SIHPL brought the sanction application.

GOING CONCERN

In determining the appropriate basis of

preparation of the 2021 Consolidated Financial

Statements and the 2021 Separate Financial

Statements of the Company, the Management

Board is required to consider whether the

Group and the Company can continue in

operational existence for the foreseeable

future.

The Group and the Company’s cashflow

forecasts are adjusted for the impact of the

Litigation Settlement Proposal as detailed

in note 23.4 of these 2021 Consolidated

Financial Statements.

SIHPL’s application for the approval and

sanction of the S155 Scheme was heard on

24 January 2022, by the Western Cape High

Court. At the close of the hearing the Court

granted SIHPL’s request and granted an order

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

FINANCIAL AND BUSINESS REVIEW//continued

CLASSIFICATION OF DEBT

CONCLUSION

THE COMPANY’S DIVIDENDS ON ORDINARY

As part of the implementation steps of the

Litigation Settlement Proposal, the Group

delivered the Interim Debt Extension request

to its lenders on 6 August 2021 requesting

consent to extend the maturity date of the

Group’s outstanding corporate debt from

31 December 2021 to 31 December 2022.

In determining the appropriate basis of

preparation of these 2021 Consolidated

Financial Statements and the 2021 Separate

Financial Statements of the Company, the

Management Board has considered whether

the Group and the Company can continue

in operational existence for the foreseeable

future. The Management Board draws

attention to the following facts:

Given the Group’s ongoing liquidity constraints

the Management Board, with the approval

of the Supervisory Board, has resolved not

to propose dividends on the Ordinary Shares

until further notice. On the Reporting Date and

at the date of publication of this report, the

Ordinary Shares remain listed and traded on

the FSE and the JSE.

On 11 August 2021, consent for the Interim

Debt Extension was granted by those lenders.

Consequently, the maturity date of the

Steinhoff N.V. CPU and facility agreements

entered into pursuant to the CVA, was

extended from 31 December 2021 to

31 December 2022. As a result, in accordance

with IAS 1 – Presentation of Financial

Statements, the debt is classiﬁed as non-

current as at 30 September 2021. Refer to

note 17. A further term extension will be

granted initially to 30 June 2023 on the

Settlement Effective Date of the global

Litigation Settlement Proposal and such

maturity date is capable of further extension

to 31 December 2023 with further simple

majority lender approval.

•

At 30 September 2021, the Group’s current

assets exceed its current liabilities;

EVENTS AFTER THE REPORTING DATE

Aside from progress with the Litigation

Settlement Proposal, the court processes in

connection with the liquidation hearing and

the corporate activity, all as set out above, no

other material events have occurred after the

Reporting Date. For full details please refer to

note 36 to the 2021 Consolidated Financial

Statements.

•

At 30 September 2021, the Group’s total

liabilities exceed its total assets. However,

management draws the user of these

ﬁnancial statements’ attention to the 2021

Consolidated Financial Statements’ basis

of preparation, which is the historical cost

convention and therefore the majority

of the assets are recognised at book

value and not fair value. The fair value

of the assets held by the Group, as at

30 September 2021, has been taken

into account in the calculation of the

Steinhoff N.V. CPU in the separate ﬁnancial

statements of Steinhoff N.V. (Refer to note

9 in the separate ﬁnancial statements of

Steinhoff N.V. for more detail); and

EXTERNAL AUDIT

The 2021 Consolidated Financial Statements

and separate ﬁnancial statements of the

Company have been audited by the external

auditor, Mazars and their opinion is set out in

the 2021 Consolidated Financial Statements.

COVID-19

The underlying businesses operate a

number of strong local brands and are well

diversiﬁed by geography and business line.

While COVID-19 constraints affected the

performance of all businesses during the

current and prior year, the extent of the impact

varied according to their geographic exposure,

business mix, and severity and duration of

lockdown restrictions at a local level. The

Group’s unparalleled position in the discount

and value retail market segments continues

to be increasingly relevant in addressing

consumer needs. While the Group is conﬁdent

that the actions it has taken, and continues to

take, to address the impacts of COVID-19 are

appropriate and timely, the situation remains

fluid. The developments and the mitigating

actions are being kept under constant review.

The Group has assessed its ECL calculations

as well as the impairment of goodwill and

intangible assets taking into consideration

the constrained retail environment and

has concluded that its ECL provisions are

reasonable and that no further impairment of

goodwill and intangible assets are necessary

as at 30 September 2021.

•

The Management Board does not intend to

liquidate the Company and the underlying

boards still plan to recover the assets and

settle the debt in the normal course of

business. The resolution of the litigation,

following the court sanction on

24 January 2022, through the

implementation of the Dutch SOP and the

S155 scheme will enable management to

actively pursue the next step of its strategic

plan, being the restructure of the Group

with the view to reduce debt and ﬁnance

costs.

At the time of signing these ﬁnancial

statements, the Management Board has a

reasonable expectation that the Group has

sufﬁcient resources to continue in operation

for the foreseeable future, which is not

less than twelve months from the date of

authorisation of these 2021 Consolidated

Financial Statements. The Management

Board has adopted the going concern basis in

preparing these 2021 Consolidated Financial

Statements.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OPERATIONAL REVIEW//for the period ended 30 September 2020

STEINHOFF N.V.

INTERNATIONAL HOLDINGS N.V.

EUROPE

79%

100%

ownership

is a global holding company with

Separately listed on the

Warsaw Stock Exchange

Sample of Pepco brands

investments in retail businesses

AUSTRALIA AND NEW ZEALAND

100%

ownership

Sample of brands

in Australasia

UNITED STATES OF AMERICA

50%*

ownership

AFRICA

* Subject to future dilution by a management

incentive plan

59%

ownership

Separately listed on the JSE

Sample of Pepkor Holdings brands

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OPERATIONAL

REVIEW

FOR THE YEAR ENDED 30 SEPTEMBER 2021

INTRODUCTION

The Group reported a signiﬁcantly improved performance for the year ended 30 September 2021 with a 14%

increase in revenue from continuing operations to €9 193 million (2020: €8 034 million; 2019: €8 388 million;

both comparatives have been restated for discontinued operations; 2019 revenue included to illustrate the

impact of the COVID-19 trading restrictions on the operations). COVID-19 restrictions, while still in place at

various times in almost all of the trading operations, generally eased up throughout the Reporting Period.

EBITDA from continuing operations increased

by 29% to €1 336 million (2020: €1 033 million), proﬁtability. The businesses in Europe and

flow and liquidity, expense management and

LIPO and Plush (part of Greenlit Brands), have

been classiﬁed as discontinued following

a decision to sell them. The comparative

ﬁgures have been restated accordingly as all

discontinued operations are excluded from

this operational review. For full details please

refer to note 1 to the 2021 Consolidated

Financial Statements.

reflecting the improved sales as well as good

expense management. Similarly operating

proﬁt adjusted for material non-operational

items (“EBIT”) increased by 57% to €728 million

(2020: €463 million).

Africa continue to expand their footprints

signiﬁcantly during the year.

The Building Company, part of Pepkor

Holdings, has been reclassiﬁed as a continuing

operation following the termination of the

transaction to dispose of the business while

Management within the various businesses

focused on operational improvements, cash

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OPERATIONAL REVIEW//for the period ended 30 September 2021 continued

Constant

currency %

REVENUE FROM CONTINUING OPERATIONS (€M)

2021

2020

change

2019^*

Pepco Group

4 122

4 357

714

–

3 506

3 892

636

–

3 420

4 307

658

Pepkor Holdings

Greenlit Brands

Corporate and treasury services

–

Total Group revenue from continuing operations

9 193

8 034

8 388

^*2019 revenue included, on a consistent basis, to illustrate the impact of the COVID-19 trading restrictions on the operations.

Constant

currency %

EBITDA FROM CONTINUING OPERATIONS (€M)

2021

2020

change

Pepco Group

636

714

411

580

Pepkor Holdings

Greenlit Brands

Corporate and treasury services

(110)

(47)

Total segmental EBITDA from continuing operations

1 336

1 033

OPERATING PROFIT / (LOSS) ADJUSTED FOR MATERIAL

NON-OPERATIONAL ITEMS (“EBIT”) FROM CONTINUING OPERATIONS

(€M)

Constant

currency %

2021

2020

change

Pepco Group

307

503

112

370

174

–

Pepkor Holdings

Greenlit Brands

(4)

Corporate and treasury services

(110)

(47)

Total segmental EBIT from continuing operations

728

463

MATERIAL ASSOCIATE – MATTRESS FIRM (€M)

2021

2020

change

Revenue

3 676

237

2 975

Proﬁt / (loss) for the period

(4)

>100

These results are presented on an IFRS basis, represent 100% of Mattress Firm’s results and are included for information purposes only. Mattress

Firm is considered to be an associated company as the Steinhoff Group owns 50.1% (before management incentive share dilution) and as such it

is equity accounted, and not consolidated, into results of Steinhoff N.V.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OPERATIONAL REVIEW//for the period ended 30 September 2021 continued

PEPCO GROUP

Pepco Group, the fast-growing pan-European discount variety retailer, trading from over 3 000 stores in 17 territories across Europe. Pepco Group

owns the PEPCO and Dealz brands in Europe and the Poundland brand in the United Kingdom (“UK”) and has a clear vision to become Europe’s

pre-eminent discount variety retailer.

Further information regarding Pepco Group can be found online at www.pepcogroup.eu.

Constant

currency %

PEPCO GROUP (€M)

2021

2020

change

2019

Total revenue

4 122

2 165

1 957

636

3 506

1 732

1 774

411

3 420

PEPCO

Poundland (including Dealz)

EBITDA

EBIT

307

112

>100

Total revenue increased by 18% to

programme the proposition transformation

continues to drive the multi-price participation

to 36% of sales (2020: 26%).

Following sustained improving performances,

Pepco Group continued the roll-out of the

Dealz format across Poland and Spain with

65 stores opened in the year and 14 in the

quarter, with over 100 stores now trading in

Poland.

€4 122 million (19% in constant currency) led

by PEPCO with 25% growth. PEPCO’s like-

for-like (LFL) growth was +10% for the full

year, including the impacts of COVID-related

store closures. The growth was driven by the

strength of the proposition, including store

and proposition renewal programmes and

higher levels of customer demand. Poundland

Group’s full year LFL growth of 3%, provides

a clearer indication of the strengthened

customer offer and, in particular, the strong

performances across the recently extended

categories in clothing and homewares and

the introduction of a new frozen and chilled

offer in 35 stores in the ﬁnal quarter (127 in

the full ﬁnancial year). Alongside the renewal

Recognising the signiﬁcant future store

capacity in all of the territories that it operates

in, PEPCO expanded its store portfolio in

the full year by 364 stores (+17%) which

included its ﬁrst stores in Austria, Spain

and Serbia. In addition, PEPCO continued to

upsize or relocate stores, numbering 60 in

the year-to-date and began the ﬁrst steps in

updating branding in stores to reflect a new,

contemporary design. The store renewal

programme continues in both PEPCO and

Poundland updating nearly 1,000 stores in the

year which will deliver sustainable LFL growth.

Closing net debt of €108 million, (€220 million

reduction) reflects management’s action to

reduce stock and optimise working capital

across the year. On an IFRS16 basis net debt

was €1 207 million (2020: €1 239 million).

EBITDA for the year increased 55% to

€636 million while EBIT rose 174% to

€307 million.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OPERATIONAL REVIEW//for the period ended 30 September 2021 continued

PEPKOR HOLDINGS

Pepkor Holdings has the largest retail store footprint in southern Africa, with more than 5 400 stores operating across 10 African countries. The

majority of its retail brands operate in the discount and value segment of the market.

The Building Company, part of Pepkor Holdings, has been reclassiﬁed as a continuing operation following the termination of the transaction to

dispose of the business. The comparative ﬁgures have been restated accordingly.

For more information visit: www.pepkor.co.za.

Constant

currency %

PEPKOR HOLDINGS (€M)

2021

2020

change

2019

Total revenue

EBITDA

4 357

714

3 892

580

4 307

EBIT

503

370

Pepkor Holdings reported strong results for

the year ended 30 September 2021. The group with strong sales growth and continued to

entrenched its position as the leading discount deliver on its compelling value proposition

Ackermans reported a stellar set of results

of the group’s total retail store base). One of

the JD Group’s distribution centres was also

looted. Trading was disrupted, with a number

of stores intermittently closed in the affected

areas as a precautionary measure to ensure

the safety of employees and customers.

By the end of December 2021, the group

reopened 82% of the looted stores with the

remainder delayed due to infrastructure rebuild

or shopping complexes that have not yet

reopened. As previously reported, the group

carries insurance cover in terms of material

damage and business interruption.

and value retailer in South Africa. Pepkor

Holdings’ ambition to restore proﬁtability to

2019 levels following the impact of COVID-19

was not only achieved but surpassed. From

an operating environment perspective, the

discount and value retail sectors continue

to be favoured by customers, with reduced

consumer spending as a result of increased

unemployment and the effects of a poor

performing economy.

to appeal to ‘women with kids in their lives’.

PEP and Ackermans in aggregate increased

sales by 10% with LFL sales 8% higher for the

year. Compared to the 2019 ﬁnancial year,

sales in constant currency increased by 13%.

PEP Africa’s contribution to the total Pepkor

Holdings revenue reduced to 2% for the year

as operations were consolidated, including

the exit from Uganda. The Speciality business

beneﬁted from consumer demand for value

casual wear and branded footwear in the value

market segment. Sales in constant currency

increased by 14% and LFL sales increased by

11%. The furniture, appliances and electronics

segment increased revenue by 14% for

Pepkor Holdings’ revenue increased by 12%

(9% in constant currency) to €4 357 million.

The prior year was disrupted due to COVID-19

related lockdowns.

The retail market remains constrained as

South Africa is confronted with record levels

of unemployment. The full effect of COVID-19

is still playing out and having a major impact

on consumers in the lower end of the

market. Despite this challenging operating

environment, Pepkor Holdings is ideally

positioned in the discount and value segment

of the market to serve its customers with

affordable products and services.

EBITDA increased by 23% to €714 million while

EBIT increased 36% to €503 million.

the year. An operating proﬁt was recorded

compared to an operating loss in the prior

year. The Building Company increased sales by

18% with LFL sales growth of 21%.

PEP received the Ask Afrika Orange Index

award for the South African business providing

the best customer experience in 2021. The

brand remains the leading discount retailer in

South Africa and provides the lowest prices to

customers on basic and essential products.

The civil unrest that erupted in the KwaZulu-

Natal and Gauteng provinces of South Africa

during July 2021 resulted in the looting of 549

stores across the group (approximately 10%

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OPERATIONAL REVIEW//for the period ended 30 September 2021 continued

GREENLIT BRANDS

Greenlit Brands is an integrated retailer and manufacturer of household goods, with retail stores throughout Australia and New Zealand.

Plush, part of Greenlit Brands, has been classiﬁed as discontinued following the decision to dispose of it. The comparative ﬁgures have been

restated accordingly.

For further information regarding Greenlit Brands refer to: www.greenlitbrands.com.au.

Constant

currency %

GREENLIT BRANDS (€M)

2021

2020

change

2019

Total revenue

EBITDA

714

636

658

EBIT

–

(4)

The Greenlit Brands group ﬁnished the

year with record sales and EBITDA despite

COVID-19 closures and supply chain

performance in the current year was a result of €28 million). The increased sea freight costs

the strong execution of brand strategies which were mitigated by a greater share of sales in

allowed each to capitalise on the investment

in the digital space. Online trading for the

higher margin brands and a favourable USD/

AUD hedge rate.

disruptions during the Reporting Period. All of

the brands demonstrated an agile approach to Greenlit Brands group, driven in part by COVID-

After the Reporting Date Greenlit Brands

entered into a share sale agreement with ASX

listed retailer Nick Scali for the divestment

of the Plush business. The transaction was

ﬁnalised in November 2021 subject to further

customary working capital adjustments.

cost saving strategies and drove online sales

growth during the volatile trading periods.

19-related lockdowns, was up 18% on the

prior period, delivering 20% of gross sales and

providing a strong foundation for continued

trade during any potential further COVID-19

interruptions.

Revenue in the fourth quarter was severely

curtailed by COVID-19 lock-downs in Sydney,

Melbourne and Auckland after strong trading

during the ﬁrst three quarters of the year.

Overall revenue was up 12% (8% in constant

currency) for the Reporting Period. The record

Overall EBITDA increased 8% to €96 million

(2020: €89 million – restated) while EBIT

remained flat at €28 million (2020:

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OPERATIONAL REVIEW//for the period ended 30 September 2021 continued

STEINHOFF CORPORATE AND TREASURY SERVICES

Segmental information for corporate and treasury services excludes certain one-off or exceptional items (largely consisting of advisory fees and

impairments) that are described in note 4 of the 2021 Consolidated Financial Statements.

CORPORATE AND TREASURY SERVICES (€M)

2021

2020

change

Total EBIT

(110)

(27)

(22)

(26)

(7)

(47)

(20)

–

>(100)

Head ofﬁce costs

Insurance costs

Corporate closure costs

Audit fees

–

(9)

(18)

(11)

(56)

Forex losses

(28)

HEAD OFFICE COSTS

AUDIT FEES

FOREX LOSSES

This total includes costs such as salaries,

running costs including rent, travel and

consultancy fees.

The Group operates in a number of different

currencies and as such, intragroup loans

between Group companies are often

denominated in a currency different to the

functional currency of the entity granting or

receiving the loan. These intragroup loans

result in foreign exchange proﬁts or losses on

revaluation to spot rate at reporting dates.

In terms of accounting principles expenses

can only be recognised once incurred. The

audit of the annual results is only ﬁnalised

after the conclusion of the Reporting Period.

The costs incurred after the Reporting Date are

expensed in the following Reporting Period.

CORPORATE CLOSURE COSTS

Corporate closure cost relate to the

cancellation of lease guarantees and other

costs of historic UK operations that have been

discontinued.

MATTRESS FIRM – EQUITY ACCOUNTED

Mattress Firm is the leading speciality bed retailer in the United States, with its 2 353 retail stores nationwide. For more information refer to:

www.mattressﬁrm.com.

Mattress Firm is considered to be an

as well as temporary store closures as a result During the 2021 Reporting Period Mattress

of COVID-19 in the third quarter. The increase Firm successfully reﬁnanced its outstanding

in average order value was driven by consumer debt. In addition, Mattress Firm made a

associated company as the Steinhoff Group

owns 50.1% (before management incentive

share dilution) and as such it is equity

shift to luxury products.

payment to shareholders of USD1.2 billion with

the Steinhoff Group receiving USD609 million.

accounted, and not consolidated, into results

of Steinhoff N.V. The operating commentary

below refers to the entire business (100%) and

is included for information purposes only.

E-commerce sales increased 16% year-on-year

contributing 7% of the total sales for the year,

which was primarily driven by Mattress Firm’s

ongoing efforts and investments to improve

customers’ experience in e-commerce over

the past several years, in addition to a general

Mattress Firm’s results are prepared under US

GAAP whereas the Steinhoff Group reports

under IFRS. Mattress Firm adopted the new

leasing standard, ASC 842 (the US GAAP

equivalent of IFRS 16) during the Reporting

Revenue for the Reporting Period increased

24% to €3 676 million primarily due to an

increase in like-for-like (LFL) sales which was

driven by an increase in number of customer

transactions and increase in average order

value. Measured in local currency (USD)

the increase was 32% with LFL 36% higher

reflecting the continued improvement in

store productivity. The increase in number of

transactions is due to trafﬁc and conversions,

shift in customer spending patterns due to the Period. For further information please refer to

COVID-19 pandemic.

note 11.6 to the 2021 Consolidated Financial

Statements, including adjustments made to

bring Mattress Firm’s ﬁnancial results in line

with IFRS.

While COVID-19 restrictions continued to

inhibit the operations to varying degrees,

they were much reduced compared with

the prior year. The sales momentum since

the relaxation of the lockdowns has been

maintained resulting in positive net cashflows.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OPERATIONAL REVIEW//annexures continued

LIST OF

BRANCHES

The table below lists all branches of the Company (if any) as well as all branches of its Subsidiaries whose results were consolidated

during the Reporting Period.

Place of

branch

Country

of branch

Country of

origin entity

Valid for

FY2020

Valid for

FY2021

Branch

Origin Entity

GROUP: SISL

Steinhoff International Sourcing and Trading Ltd.

Hong Kong

China (Hong Kong)

2461089

644662

Steinhoff International Sourcing and Trading Ltd.

China (Hong Kong)

Blue Rock Sourcing Solution Ltd. (formerly: Steinhoff

International Sourcing Ltd.)

Steinhoff International Trading Services Ltd.

Steinhoff International Investment HK Ltd

Hong Kong

China (Hong Kong)

2463978

2584507

Steinhoff International Sourcing and Trading Ltd.

Steinhoff International Investment HK Ltd

China (Hong Kong)

(closed in Sept 2021)

Steinhoff International Sourcing Ltd – Indonesia RO

Jakarta

Karachi

Indonesia

Pakistan

28/1/IUP3A-T/P-4/Nas/2017

Steinhoff International Sourcing and Trading Ltd.

China (Hong Kong)

Blue Rock Sourcing Solution Ltd – Pakistan RO

(formerly: Steinhoff International Sourcing Ltd –

Pakistan RO)

0073941

Ho Chi Minh City

Vietnam

79-02944-01

Steinhoff International Sourcing and Trading Ltd.

China (Hong Kong)

Blue Rock Sourcing Solution Ltd - Vietnam RO

(formerly: Steinhoff International Sourcing Ltd –

Vietnam RO)

Steinhoff International Sourcing (Shenzhen) Ltd.

Steinhoff International Sourcing (Shanghai) Ltd.

Shenzhen

China

914403000589890340

Steinhoff International Sourcing and Trading Ltd.

China (Hong Kong)

Shanghai

Gurgaon

China

India

91310000MA1GBH5W31

U74999HR2019FTC081761

Steinhoff International Sourcing and Trading Ltd.

China (Hong Kong)

Blue Rock Sourcing Solution India Private Limited

(formerly: Steinhoff International Sourcing India

Private Limited)

GROUP: STEINHOFF UK

Steinhoff Europe AG

London

Zug

BR020565

BR020564

BR021702

BR021700

BR022038

BR021701

BR021703

CHE-110.261.548

Steinhoff Europe AG

Austria

Steinhoff Finance Holding GmbH

Steenbok Newco 5 Limited

Steenbok Newco 1 Limited

Steenbok Newco 10 Sarl

Steenbok Newco 2A Limited

Ibex Retail Investments Limited

Retail Holdings Sarl

Steinhoff Finance Holding GmbH

Steenbok Newco 5 Limited

Steenbok Newco 1 Limited

Steenbok Newco 10 Sarl

Steenbok Newco 2A Limited

Ibex Retail Investments Limited

Retail Holdings Sarl

Austria

Jersey

Luxembourg

Jersey

Switzerland

Luxembourg

GROUP: PEPCO

Fully Sun China Limited – Bangladesh

Fully Sun China Limited – Taiwan

Poundland Limited – Isle of Man

Poundland Limited – Ireland

Bangladesh

Taiwan

Bangladesh

China

TIN- 4404-3933-6667

Fully Sun China Limited (HK)

Poundland Limited

China (Hong Kong)

Reg no 53665194

China (Hong Kong)

Isle of Man

Republic of Ireland

Isle of Man

Republic of Ireland

Tax reference No: C145894-73

Tax reference: 9798866A

Poundland Limited

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

RISK

MANAGEMENT

The Management Board manages the risk associated with the Group’s activities in consultation with the

operational management teams and reports to the Audit and Risk Committee and the Supervisory Board.

The Group internal risk management and

INTRODUCTION

INTERNAL RISK MANAGEMENT AND CONTROL

control systems allow each OpCo to set its

own risk tolerance levels through analyses

and adherence to Group operational, ﬁnancial

and strategic objectives. The internal risk

management objective is to ensure that

uncertainties are responsibly managed with

consideration of stakeholder interests and to

ensure that risks are optimally addressed.

The Management Board has an established

risk management framework with clear

accountabilities to counter risks at Group

Services and OpCo level. The implementation

of the framework enables the Management

Board to identify and analyse risks associated

with the strategy, objectives and activities

of the Group. This organisational structure

and attribution of accountabilities place

the responsibility for the processes of risk

review and risk mitigation with the operational

subsidiaries’ management, who own the risks.

Risks are identiﬁed, monitored and mitigated

on an ongoing basis.

ENVIRONMENT

An overview of the internal risk management

and control environment is set out below.

INTERNAL CONTROL FRAMEWORK

The Group draws on global standard ISO

31000 – Risk management and the DCGC

to formulate its risk management policy

and framework, and to facilitate the timely

identiﬁcation, measurement, analysis,

evaluation and treatment of risk.

Quarterly reports are presented to the Audit

and Risk Committee, which reports to the

Supervisory Board, after due consideration by

the Management Board during which follow-up

measures are considered and reviewed.

Risk management and control systems

established by the risk management

framework have been designed to allow each

OpCo to own, identify, evaluate and treat

risk appropriately, and to ensure effective

risk control mechanisms are implemented

to mitigate residual risk exposure. The

risk management and control systems are

reviewed, assessed and monitored by the

Management Board with the assistance

of the Group Risk function. It remains the

responsibility of each OpCo to apply risk

management and control systems based on

their own unique lines of business. These

systems include a risk register detailing,

quantifying, classifying and prioritising risks

and action plans for mitigation.

RISK MANAGEMENT FRAMEWORK

The Audit and Risk Committee, which reports

to the Supervisory Board, oversees among

other aspects, the Management Board’s

activities with respect to the operation of

the Group’s risk management and control

systems. The risk management framework

of responsibility for the Reporting Period is

presented on the following page.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

RISK MANAGEMENT// continued

Supervisory Board

Audit and Risk Committee

Management Board

Group Risk and Internal Audit Function

Operational Management Board

Local Governance Committee

Operating Company

Operational Internal

Audit and Risk

Group Risk and

Internal Audit Function

Operational Management Board

The Management Board both appoints and

dismisses the chief internal auditor. Both

the appointment and the dismissal of the

chief internal auditor is submitted to the

Supervisory Board for approval, along with the are included in the internal audit reporting.

recommendation issued by the Audit and Risk

No major failings in the internal risk

Committee.

evaluations and recommendations relating

to Group Services. The adequacy and

effectiveness of risk management and internal

control systems in respect of Group Services

RISK APPETITE AND RISK TOLERANCE

Risk appetite is the level of risk that the

Company is prepared to accept in pursuit of its

strategic objectives, before action is deemed

necessary to reduce the risk. It represents

a balance between the potential beneﬁts

of innovation and the threats that change

inevitably brings. Risk appetite levels differ

between OpCos based on their speciﬁc lines

of business, sector, culture and objectives.

Operational management, with guidance from

the Group, is responsible for assessing its

own risk appetite and tolerance as part of the

Group’s risk management methodology. The

Group’s risk appetite varies per objective area

and type of risk.

management and control systems were

Internal audit provides independent assurance brought to the attention of the Management

and operates under the responsibility of

operational management to examine, evaluate,

report and make recommendations. The

operational internal audit functions report

these evaluations and recommendations

to operational management and Group

Risk. The Group Risk function reports to

the Management Board and the Audit and

Risk Committee on the information received

from the operational internal audit functions.

The adequacy and effectiveness of the risk

management and internal control systems are

included in the internal audit reporting.

Board during the Reporting Period.

The Management Board is constantly striving

to improve the internal risk and control

systems. Any improvements or changes to

these systems are discussed with the Audit

and Risk Committee and the Supervisory

Board.

RISK MANAGEMENT ASSURANCE

Operational management, as the risk owner,

is responsible for managing risk and ensuring

that effective internal control systems are in

place. Group Risk facilitates and supports

the Management Board in the design and

operation of internal risk management

and control systems. It also supports the

Management Board by providing a level of

assurance on risk management and internal

control practices throughout the OpCos.

PRINCIPAL RISKS

The Management Board has identiﬁed

the following principal risks. These risks,

applicable to the business strategy, should

not be regarded as exhaustive and do evolve

over time due to internal and external factors.

There may be additional risks of which the

Management Board is unaware.

The Group Risk and Internal Audit function

provides independent assurance and operates

under the responsibility of the Management

Board to examine, evaluate, report and make

recommendations. The Group Risk and Internal

Audit function reports to the Management

Board and the Audit and Risk Committee on

Most of the principal risks have remained

unchanged from the 2020 Risk Management

Report.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

RISK MANAGEMENT// continued

The risk ratings that were applied are deﬁned as follows:

RISK RATING

DEFINITION

High

A major event that can cause reputational and economic/ﬁnancial damage that will result in signiﬁcant or material

business losses. The likelihood of occurrence is likely or frequent.

Medium

Low

An event that would result in risks that can cause an impact but not as serious as high. The likelihood of occurrence is

either considered to be likely, frequent or possible.

A low rated risk/event is one with little / no impact on the business activities and the reputation of the group and that the

likelihood of occurrence is unlikely or even rare.

LITIGATION

FINANCIAL STABILITY

GROUP

RISK RATING: Medium

2.1

The uncertainty relating to legal actions against the Group has

reduced signiﬁcantly with the enormous progress made in the

global litigation settlement.

RISK RATING: Medium

Going concern remains a risk to the Company. The risk has

reduced due to the enormous progress made in the global

litigation settlement which is subject to implementation by

30 June 2022 and the restructured debt maturing on

31 December 2022.

In terms of the Litigation Settlement Proposal, claims against

Directors and Ofﬁcers ("D&O") insurance are released.

HOW WE ARE MITIGATING THE RISK

A litigation working group oversees and provides guidance to the

Management Board on inbound and outbound litigation.

A provisional liquidation application brought before the court In

South Africa on an urgent basis for hearing on 24 May 2021 by

entities afﬁliated with the former shareholders and owners of the

business known as Tekkie Town against Steinhoff N.V. has been

withdrawn in early January 2022 as part of the litigation settlement.

Close monitoring of all outstanding legal matters by the Management

Board, the Audit and Risk Committee and the Supervisory Board.

ReedSmith (London) has been appointed to assist with the D&O

HOW WE ARE MITIGATING THE RISK

insurance matters.

Given the progress of the Litigation Settlement Proposal, its (near)

unanimous approval in the Netherlands and South Africa and the

binding effect of the Steinhoff N.V. Composition Plan, there are

indications for further support of Steinhoff N.V.’s going concern

assumption and grounds to conclude that the uncertainties

surrounding the going concern previously reported are considerably

mitigated.

The Group has ﬁnalised settlement agreements with the major

litigants. Several market announcements have been made in this

regard since July 2020.

The Steinhoff N.V. Composition Plan was conﬁrmed by the District

Court of Amsterdam on 23 September 2021 following the unanimous

approval by the committee of representation. Three meetings of

SIHPL's creditors were successfully held in respect of the S155

Scheme proposed by it in September 2021 with the proposal

receiving overwhelming support.

Growth in underlying assets and repayment of debt during the 2021

Reporting Period.

Detailed ﬁnancial reporting on operational results to ﬁnancial

creditors.

SIHPL’s application for the approval and sanction of the S155

Scheme was heard on 24 January 2022, by the Western Cape High

Court. At the close of the hearing the Court granted SIHPL’s request

and granted an order approving and sanctioning the S155 Scheme.

Following receipt of the Order, “Settlement Effective Date” (referred

to under the S155 Scheme and the Composition Plan) is expected

to occur on or about 15 February 2022. As disclosed in Steinhoff

N.V.’s announcement of 15 December 2021, formal withdrawal of

the various litigation that has been settled, including the withdrawal

of the Liquidation Application against Steinhoff N.V. will occur

immediately following Settlement Effective Date. Occurrence of

Settlement Effective Date is the remaining condition under the

Composition Plan.

The introduction of detailed cash management procedures.

Continuous engagement with all stakeholders, including providing

market information in the form of quarterly updates.

Ongoing investigations including the PwC forensic investigation

(Phase 2) have been completed and draft reports have been

considered. The instituting of outbound claims against previous

directors and associated entities is in process.

The accelerated book build of Pepkor Holdings shares was

successfully implemented in anticipation of the settlement effective

date.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

RISK MANAGEMENT// continued

As part of the Litigation Settlement Proposal and related lender

consent requests, the Group proposed that the ﬁnancial creditors

extend the common maturity date. An interim extension of 12

months to 31 December 2022 was approved by the lenders as

announced on 12 August 2021.

Subject to the successful implementation of the Litigation

Settlement Proposal, a further payment extension will be granted to

30 June 2023, with the option to seek a further 6 months extension

to 31 December 2023 subject to the approval of a simple majority

ﬁnancial creditor consent.

Subject to the successful implementation of the Litigation

Settlement Proposal, a further payment extension will be granted to

30 June 2023, with the option to seek a further 6 months extension

to 31 December 2023 subject to the approval of a simple majority

ﬁnancial creditor consent.

Consent of the Group’s ﬁnancial creditors as well as SIHPL

ﬁnancial creditors, under the terms of the Group’s restructured

debt ﬁnancings. The outcome of this request for consent has been

communicated to stakeholders during October and November

2020. Steinhoff N.V. has received the judgement rendered by the

court in February 2021 sanctioning two English law scheme of

arrangements to obtain the necessary approval of its creditors

under the Steinhoff N.V./SEAG CPU.

Appropriate resources, including the appointment of legal

liquidation experts have been allocated to respond to the liquidation

application.

Continue the disposal process of identiﬁed non-core/non-

performing assets to reduce debt and support liquidity.

Publication of the 2020 Consolidated Financial Statements.

2.2

DEBT RESTRUCTURING

With the assistance of our advisors, developed restructuring plans

and engaged with ﬁnancial creditors in this regard.

RISK RATING: High

Full implementation of strategic options (including IPO processes)

in respect of certain operational businesses further mitigates the

risk of not being able to service the restructured debt.

As at 30 September 2021, the Group’s debt under Corporate and

treasury services, the CVA debt, amounts to €9.7 billion (before

Mattress Firm repayment of c. €453 million in October 2021) and

currently has a maturity date of 31 December 2022. The debt will

therefore be classiﬁed as non-current liabilities as at

During the 2021 Reporting Period Mattress Firm successfully

reﬁnanced its outstanding debt. In addition, Mattress Firm paid a

dividend to shareholders of USD1.2 billion, of which the Steinhoff

portion was utilised to repay debt.

30 September 2021, as required by IFRS.

At 30 September 2021, under the application of IFRS standards, the

Group’s total liabilities exceed its total assets.

As announced on 28 December 2021, Steinhoff obtained the

requisite level of support from its ﬁnancial creditors for the Tekkie

Town and Trevo settlements. Both settlements are subject to the

Litigation Settlement Proposal being implemented by 30 June 2022.

HOW WE ARE MITIGATING THE RISK

The implementation of the CVA in terms of which the ﬁnancial

indebtedness of SEAG and SFHG was restructured effective

13 August 2019, with a maturity date of 31 December 2021. An

interim extension of 12 months to 31 December 2022 was approved

by the lenders as announced on 12 August 2021.

Entered into a Lock-Up agreement and a Three-year agreement with

the Hemisphere ﬁnancial creditors.

The appointment by the Company of ﬁnancial creditor nominated

experienced Directors as part of the restructuring.

The IPO of circa 21% (Steinhoff still holds 78.89%) of Pepco Group

N.V. on 26 May 2021 was successfully implemented with the listing

on the Warsaw Stock Exchange. €1 billion was raised through the

offering, most of which was utilised to service the restructured debt.

As part of the Litigation Settlement Proposal and related lender

consent requests, the Group proposed that the ﬁnancial creditors

extend the common maturity date. An interim extension of 12

months to 31 December 2022 was approved by the lenders as

announced on 12 August 2021.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

RISK MANAGEMENT// continued

TAX RISKS

3.2

SOUTH AFRICAN CONTROLLED FOREIGN COMPANY

RISK DUE TO STEINHOFF N.V. BEING A SOUTH

AFRICAN TAX RESIDENT

3.1

TAX RISKS RELATING TO HISTORICAL TRANSACTIONS

RISK RATING: High

RISK RATING: Medium

Due to, inter alia, the restatement of the Group’s 2017

Consolidated Financial Statements, various historical transactions

in multiple jurisdictions are being investigated by various

regulators and stakeholders.

Due to Steinhoff N.V. being the ultimate holding company of

the Group, South African Controlled Foreign Company (“CFC”)

legislation is applicable to all international transactions executed

in the Group.

Although the investigations are being managed on a constant

basis, the outcome thereof remains uncertain and could lead

to cash outflows in order to pay tax. In certain jurisdictions,

backlogs exist with respect to the completion and audit of ﬁnancial

statements which will delay the outcome of the investigations

by revenue authorities. The impact of potential tax adjustments,

ﬁnes, penalties and/or refunds is therefore unknown. Loss of

people in key business areas and the loss of corporate knowledge

further increase the risk, as the rationale for past decisions and

transactions may be lost. This may result in Group companies

being unable to provide detailed responses to enquiries from tax

authorities. Current and future tax audits may give rise to further

risks regarding tax positions taken by the Group in the past.

Additional tax liabilities may arise in the case of adverse outcomes

in any settlement negotiations, which could have an effect on the

Group’s ﬁnancial position and liquidity.

The Group Services tax team must be made aware of all relevant/

material transactions in order to identify and mitigate CFC risks. In

the event of the miscalculations regarding the amounts this could

lead to signiﬁcant ﬁnancial exposure for the Company.

HOW WE ARE MITIGATING THE RISK

Timely involvement of the Group Services tax team, with the

assistance of South African tax advisors, to monitor transactions,

identify where tax consequences may arise, quantify potential tax

exposure and propose alternative solutions.

3.3 TAX RISK AS A RESULT OF TRANSFER PRICING

RISK RATING: Medium

As a multi-national group, there are a number of cross-border

related party transactions in place in all spheres of the Group’s

business.

The risk would not lead to the ultimate liquidation of the Group.

Once the full tax exposure is known a solution would have to be

found together with the Group’s ﬁnancial creditors.

Due to the increased focus of revenue authorities on transfer pricing

arrangements, the Group faces potential risks in this context. If

a tax authority concludes that the transactions under review are

not at arm’s length, the Group’s tax liability would increase. Due

to the bilateral nature of transfer pricing, there is a constant need

to harmonise and balance transfer pricing arrangements across

jurisdictions, to result in an equitable position for both jurisdictions

involved. Furthermore, the Group may incur signiﬁcant legal

expenses and devote substantial time to addressing queries and

audits from revenue authorities.

HOW WE ARE MITIGATING THE RISK

Group Services monitoring and reporting of tax matters have been

implemented and continues, which includes close involvement of

the Chief Financial Ofﬁcer and the Head of Steinhoff International

Tax.

Appropriate provisions are created for potential tax liabilities.

Appointment of appropriate tax specialists in the relevant

jurisdictions to help advise on strategies and management of

positions in those jurisdictions.

HOW WE ARE MITIGATING THE RISK

Transfer pricing considerations must be taken into account in all

transactions planned as well as monitored on an ongoing basis.

A transfer pricing specialist is appointed as part of the Group tax

team and is available to provide guidance to all jurisdictions where

required.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

RISK MANAGEMENT// continued

3.4 ONGOING TAX COMPLIANCE

REGULATORY COMPLIANCE

RISK RATING: Medium

4.1 REGULATORY COMPLIANCE

Due to a backlog in audited and signed off ﬁnancial statements

in certain jurisdictions, tax compliance is not up to date in all

jurisdictions.

RISK RATING: Medium

Certain European Group companies have not been or are not

compliant with speciﬁc laws and regulations as a result of the late

completion of annual ﬁnancial statements due to delays caused by

the events of December 2017, the high level of corporate activity

within the Group and the COVID-19 pandemic.

HOW WE ARE MITIGATING THE RISK

Regular communication with appropriate tax specialists / advisors

in jurisdictions, and regular contact between such advisors

and the tax authorities to limit unexpected events (tax audits /

assessments).

The risk of failure to comply with applicable laws and regulations

extends across several jurisdictions, is signiﬁcant and could result

in liability, including, but not limited to criminal prosecutions,

ﬁnancial ﬁnes and penalties.

Signiﬁcant progress has been made in the South African historical

tax compliance backlog and very few tax returns are now overdue.

3.5

TAX RISK RELATING TO COMPLEXITY IN

TAX MATTERS DUE TO THE MULTIPICITY OF

JURISDICTIONS

HOW WE ARE MITIGATING THE RISK

Completion of the relevant annual ﬁnancial statements is a key

focus of the ﬁnance functions across the Group in conjunction with

the external statutory auditors.

RISK RATING: Medium

The African Group Companies have submitted all outstanding

ﬁnancial statements up to the year ending 30 September 2020.

The large number of jurisdictions in which the group operates

creates complexity with regard to ongoing tax compliance. In-

depth jurisdictional tax knowledge is required to ensure ongoing

compliance.

SIHL has published annual ﬁnancial statements for all outstanding

periods, including timeous publication of the company’s annual

ﬁnancial statements for the ﬁnancial year ending 30 September

2020. The JSE has accordingly resumed trade of SIHL’s previously

suspended preference shares with effect from 18 January 2021.

HOW WE ARE MITIGATING THE RISK

Appointment of appropriate in-country tax specialists / advisors

in the relevant affected jurisdictions to help advise on the current

position in each jurisdiction.

The compliance of local laws and regulations by all OpCos remains

a priority.

The Group is continuously engaging with the relevant regulators.

External legal specialists are engaged to provide regulatory support

where required.

4.2

BUNDESANSTALT FÜR

FINANZDIENSTLEISTUNGSAUFSICHT (“BAFIN”)

RISK RATING: Medium

In February 2021 the BaFin initiated administrative ﬁne

proceedings for late submission of the 2017 annual ﬁnancial

statements of Steinhoff N.V. It is expected that the BaFin will also

initiate proceedings for subsequent similar late submissions in

due course.

In that same month the BaFin has initiated administrative ﬁne

proceedings for late publication of certain voting rights notiﬁcations

in November 2018.

HOW WE ARE MITIGATING THE RISK

The internal processes surrounding the making of notiﬁcations

and ﬁlings with the regulatory authorities in the Netherlands and

Germany were improved.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

RISK MANAGEMENT// continued

COVID-19

OPCOS

TALENT MANAGEMENT AND RETENTION

RISK RATING: High

5.1

A contributing factor to the Group’s future success is dependent

on its ability to retain and attract skilled and qualiﬁed human

capital.

RISK RATING: Medium

As a pro-longed result of the pandemic, the Group faces signiﬁcant

risk in respect of major supply chain issues.

The loss of key individuals could result in short term instability.

The cost of logistics continues to increase signiﬁcantly, a reduction

in the availability of inventory and an upward trend in price inflation

are all factors which are placing pressure on margins. This will

be continuously monitored in conjunction with the OpCos. The

unpredictability of Governmental actions in the various geographies

differ and as a result may have an adverse impact on risk.

The service term of both Managing Directors and a majority of

the Supervisory Directors ends at the close of the 2022 AGM. The

continuity and stability risks of the term of both current Managing

Directors not being extended are considered signiﬁcant as well as

the risk that a majority of the Supervisory Directors may not be re-

elected by the shareholders at the next AGM.

HOW WE ARE MITIGATING THE RISK

The Human Resources and Remuneration Committee plays an

active role in remuneration and employee retention measures.

Continuous monitoring of a resurgence in positive cases in

geographic areas and imposition of national lockdowns.

Alternative supply channels are being explored on a continuous

basis.

Opco’s endeavour to retain the required skills in order to execute the

Opco strategy. Group Services continue to focus on retaining key

critical skills required to implement the Corporate Scorecard and

the Company’s strategy.

Continuous Management Board interaction with the OpCo

management teams.

Rigorous focus on the end-to-end supply chain process.

Focus on liquidity and preservation of cash.

The Employer owned Provident Fund and the Balanced Future Fund

(“BFF”) are being closed. All Employee Provident Fund credits were

transferred to the Acumen umbrella fund as approved by the Board

of Steinhoff Africa. The BFF Trustees have commenced with an

application for liquidation of the fund to the FSCA.

Sourcing of alternative ﬁnancing and renegotiating supplier credit

terms.

Effective health and safety protocols were instituted to protect

employees and customers.

The restructuring of Group Services staff both in Germany, South

Africa and the UK has been completed or are in progress.

Pertinence of business continuity plans.

All of the HR Policies have been redrafted and approved.

Improving and readiness for online selling platform demands.

Reprioritising strategic objectives.

A new long-term incentive (“LTI”) scheme has been implemented to

replace the previous scheme.

A short-term incentive scheme conditional to achieving key

performance targets is in effect.

Close information technology vulnerability monitoring.

Counter measures to discount market flooding and the impact on

retail product lines.

An interim succession plan has been approved by the Management

Board.

Re-engineering of sales mix aligned with consumer purchasing

habits.

The Managing Directors have a 6-month notice period. All LTI

Scheme participants have a 3-month notice period.

Considering forex cover options due to volatile currency markets.

The Company intends to proactively engage with key stakeholders

on any proposals for (re-)appointment of Managing Directors and

Supervisory Directors.

Interacting with Governments to ensure that subsidies and relief aid

are utilised.

Cash flow forecasts for the next 6 months have been predicted to

be positive.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

RISK MANAGEMENT// continued

PRINCIPAL RISK COMPARISON TO THE 2020 REPORT

In order to provide additional details of the principal risks to our stakeholders, certain principal risks were sub-categorised in comparison to the

principal risks disclosed in the 2020 Risk Management Report.

The table below illustrates the changes in the principal risks in comparison to the 2020 Risk Management Report.

2020 Risk

Management

Report

Current Risk

Rating

No.

Risk

Justiﬁcation for movement

Litigation

High

Medium

The Dutch court conﬁrmed the Steinhoff N.V. Composition Plan following

the unanimous approval by the committee of representation. All of SIHPL’s

participating creditors have approved the S155 Scheme.

SIHPL’s application for the approval and sanction of the S155 Scheme was

heard on 24 January 2022, by the Western Cape High Court. At the close

of the hearing the Court granted SIHPL’s request and granted an order

approving and sanctioning the S155 Scheme. Following receipt of the

Order, “Settlement Effective Date” (referred to under the S155 Scheme

and the Composition Plan) is expected to occur on or about

15 February 2022. As disclosed in Steinhoff N.V’s announcement of

15 December 2021, formal withdrawal of the various litigation that has

been settled, including the withdrawal of the Liquidation Application

against Steinhoff N.V. will occur immediately following Settlement

Effective Date. Occurrence of Settlement Effective Date is the remaining

condition under the Composition Plan.

2.1

Financial Stability –

Group

High

Medium

Recent court ﬁndings in respect of the application for the liquidation of

Steinhoff N.V. in South Africa, together with the conditional settlement

referenced above, have reduced the ﬁnancial stability risk. Creditor

support for the Dutch SoP and S155 Scheme has further mitigated the

ﬁnancial stability risk.

Subject to the successful implementation of the Litigation Settlement

Proposal, a further payment extension will be granted to 30 June 2023,

with the option to seek a further 6 months extension to 31 December 2023

subject to the approval of a simple majority ﬁnancial creditor consent.

2.3

3.2

Financial Stability –

OpCos

Medium

High

Low

The reduction in the risk rating is due to the OpCos reﬁnancing existing

borrowings using independent ﬁnance facilities debt positions, positive

cash flow positions and excellent trading results experienced during

FY2020 and FY2021 and the dividends paid by the OpCos.

South African

Medium

Taking into consideration the potential frequency of occurrence and

quantum of a potential loss, the likelihood of the occurrence is not

considered to be signiﬁcant anymore and therefore the risk rating has

reduced.

Controlled Foreign

Company Risk due to

Steinhoff N.V. being

a South African tax

resident

3.3

3.4

5.2

Tax Risk as a result of

Transfer Pricing

High

Medium

Low

The decrease in the risk rating is due to the likelihood of these risks

occurring having reduced signiﬁcantly.

Ongoing Tax

Compliance

High

The risk rating has decreased due to the reduction in the backlog of

audited ﬁnancial statements.

COVID-19 – Group

Services

Medium

The COVID-19 risk at a Group Services level has reduced to “low” due to

the strict health and safety protocols and the work-from-home policy in

addition to the fact that Group Services is a non-trading business unit.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

RISK MANAGEMENT// continued

2020 Risk

Management

Report

Current Risk

Rating

No.

Risk

Justiﬁcation for movement

Talent Management

and Retention

Medium

High

The service term of both Managing Directors and a majority of the

Supervisory Directors ends at the close the 2022 AGM and have to be re-

elected by the shareholders at the AGM.

Directors and Ofﬁcers

Insurance

Medium

Low

As a result of obtaining higher coverage, €45.25 million versus

€32.9 million, and the removal of insolvency exclusions at all layers this

risk’s rating has now decreased to “low”.

and monitors the ﬁnancial risks relating to

the operations of the Group. These risks

include liquidity risk and market risk. The

central treasury function is responsible for

considering and managing, at Group Services

level, the Group’s day-to-day ﬁnancial market

risks by adopting strategies within the

LIQUIDITY RISK MANAGEMENT

PRINCIPAL RISKS: OPCOS

Liquidity risk is the risk that the Group may

suffer ﬁnancial loss through liquid funds not

being available or that excessive ﬁnance costs

must be paid to obtain funds to meet payment

requirements. The ultimate responsibility

for liquidity risk rests with the Management

Board. The Group manages liquidity risk

through forecasting and monitoring cash

flow requirements on a daily basis, and by

maintaining sufﬁcient undrawn facilities.

The principal risks identiﬁed by operational

management for reporting, evaluation and

consideration by the Management Board

include the following non-exhaustive list of

risks and are not ranked in a critical order of

signiﬁcance:

guidelines set by the Management Board.

(i) COVID-19-related operational and

business risks;

Where relevant, selected derivative and non-

derivative hedging instruments are used

to mitigate risks. Speculative hedging is

prohibited. The Group’s ﬁnancial instruments

are listed in the 2021 Consolidated Financial

Statements. The Group entered into currency

hedges, with speciﬁc reference to known

liabilities, in order to protect against adverse

movements in the exchange rate relating to

foreign currency payments.

(ii) Long-term expansion;

(iii) Supply chain failures;

(iv) Business interruption;

The Group’s central treasury function arranges

the investment of Group Services net cash

reserves excluding OpCo level cash managed

operationally, in the ﬁnancial markets, mainly

in short-term instruments linked to variable

interest rates. The Group weighs up and seeks

to ﬁnd the optimal balance between return

and liquidity when investing those net cash

reserves.

(v) Technology infrastructure failure and

cyber security

(vi) Currency volatility;

(vii) Legal and regulatory compliance,

including health and safety;

CAPITAL RISK MANAGEMENT

Capital within the Group is managed at each

Opco’s board level to ensure that entities

in the Group will be able to continue as a

going concern while maximising the return to

stakeholders through the optimisation of the

debt and equity balances.

(viii) Competition;

CURRENCY VOLATILITY RISK

MANAGEMENT

(ix) Talent management and retention; and

(x) Failure to meet customer needs.

Currency risk is the possibility that the Group

may suffer ﬁnancial loss as a consequence

of the depreciation in the measurement

currency relative to the foreign currency prior

to payment of a commitment in that foreign

currency or the measurement currency

strengthening prior to receiving payment

in that foreign currency. Risks from foreign

currencies for trading purposes are hedged to

the extent that they influence the Group’s cash

flows. Each OpCo has its own hedging policy

applicable to its own trading and supply chain

requirements which is reviewed and approved

by the underlying boards.

In order to assess the risks of each of the

OpCos, it is important to understand that

these businesses operate in different markets

across multiple jurisdictions, cultures and

geographies.

The capital structure of the Group consists

of debt, which includes the borrowings, and

equity attributable to equity holders of the

parent, comprising issued capital, reserves and

retained earnings.

FINANCIAL RISK MANAGEMENT

The Group’s objectives when managing

capital are to provide an adequate return

to shareholders, to appropriately gear the

business, to safeguard the ability of the Group

to continue as a going concern and to take

advantage of opportunities that are expected

to provide an adequate return to stakeholders.

The principal ﬁnancial risks to which the

Group is exposed include capital risk, liquidity

risk, market risk (relating to interest rate and

currency volatility) and credit risk. Financial

risks are managed at operational level with

guidance from the Management Board to

ensure optimal risk mitigation.

The Group uses forward exchange contracts

(FECs), to manage transactional currency

risks. During the 2021 Reporting Period and

in accordance with FinSurv's approval relating

to the Group’s euro-denominated payment

commitments, the Group entered into FECs to

In order to optimise cost of capital, the Group

may adjust the capital structure by selling

assets to reduce debt.

The Group’s central treasury function reports

to the CFO and coordinates access to

domestic and international ﬁnancial markets

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

RISK MANAGEMENT// continued

mitigate the risk of depreciation of the rand

against the Euro.

in the ﬁnance documents, which resulted

in a substantial modiﬁcation of the old

debt instruments. PIK interest on these

facilities accrued from 14 December 2018

at a ﬁxed rate of 10% on all SFHG debt,

and a ﬁxed rate of 7.875% to 10.25% on all

SEAG debt, compounded semi-annually. The

implementation of the CVAs have enabled

the Group to focus on improved interest rate

management. As the majority of the Group’s

borrowings are PIK interest the cash flow risk

is limited.

CREDIT RISK MANAGEMENT

Credit risk refers to the risk that a counterparty

will default on its contractual obligations

resulting in ﬁnancial loss for the Group. Given

the diverse nature of the Group’s operations,

it does not have signiﬁcant concentration

of credit risk in respect of trade receivables,

because exposure is spread over a large

number of customers. The trade and other

receivables, other than derivative ﬁnancial

assets, are denominated in the functional

currency of the various OpCos. The total

exposure to credit risk is therefore limited to

the carrying value of the receivables.

Speciﬁc translation risks are managed through

the selective use of hedge positions. These

hedges are tested for hedge effectiveness

on a regular basis. When risks and rewards

of ownership transfer to the Group, a basis

adjustment will be made against the assets.

There were no adjustments against the cost of

assets during the Reporting Period.

INTEREST RATE RISK MANAGEMENT

Interest rate risk is the probability that the

Group may suffer ﬁnancial loss due to adverse

movements in interest rates. The Group is

exposed to interest rate risks mainly in South

Africa and Europe.

The Group is sensitive to movements in the

EURIBOR, JIBAR, SA Prime rates and LIBOR

rates, which are the primary interest rates

to which the Group is exposed on banking

institutional investments. The Group is

monitoring developments relating to “LIBOR

and reference rate reform” but it does not

believe that these reforms will have any

material impact on the Group’s interest rate

exposure.

In addition, the Group does not consider there

to be any signiﬁcant concentration of credit

risk which has not been adequately provided

for at the year-end.

On 14 December 2018, being the CVAs

approval date, the lenders agreed to start

implementing the restructuring plan once

certain conditions precedent had been

fulﬁlled. From this date interest accrued at

the newly agreed interest rates as stipulated

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

MANAGEMENT BOARD

STATEMENTS

The Management Board has prepared this Annual Report in accordance with IFRS as adopted by the EU and

additional Dutch disclosure requirements for annual reports.

on governance, including a code of conduct and

a whistle-blower policy.

accounting functions under the existing

Stellenbosch team;

RESPONSIBILITY STATEMENTS

As required pursuant to section 5:25c

paragraph 2(c) of the Dutch Financial

Supervision Act, each of the Managing

Directors hereby conﬁrms that as far as each

of them is aware:

These processes and procedures are aimed

at providing the Management Board with

a reasonable level of assurance that the

signiﬁcant risks of the Company and the

Group have been identiﬁed and managed,

and that the Company meets its operational

and ﬁnancial objectives in compliance with

applicable laws and regulations.

(iv) concluding the outstanding ﬁnancial

statements of certain South African

Group entities and clearing the backlog in

related tax returns;

(i) subject to the judgements and estimates

set out in the Basis of Preparation, the

2021 Consolidated Financial Statements

give a true and fair view of the assets,

liabilities, ﬁnancial position and proﬁt or

loss of the Company and the enterprises

jointly included in the consolidation; and

(v) making further enhancements and

improvements to the newly implemented

global consolidation system to allow for

full integration, which resulted in quicker

processing and ease of auditing;

The Group Risk and Internal Audit function

assesses the design and the operation of the

internal risk management, governance and

control systems and reports (i) any flaws in the

effectiveness of the internal risk management,

governance and control systems, (ii) any

ﬁndings and observations with a material

impact on the risk proﬁle of the Company and

its afﬁliated enterprise, and (iii) any failings in

the follow-up of recommendations made by the

Group Risk and Internal Audit function and the

Internal Audit functions of the OpCos. In doing

so, these functions provide assurance to the

Management Board and the Supervisory Board

that these systems are adequate and effective.

(vi) implementing a new accounting system

for the holding company (Steinhoff N.V.),

which will also be rolled out to other

South African Group entities during the

2022 ﬁnancial year;

(ii) the Management Report gives a true

and fair view of the position as at the

Reporting Date, the state of affairs during

the Reporting Period of the Company

and of the enterprises connected with

it whose data are included in the 2021

Consolidated Financial Statements and

the Management Report describes the

substantial risks with which the Company

is being confronted.

(vii) preparing management accounts for all

material Group Services entities on a

monthly basis;

(viii) implementing various clean-up actions

within the corporate structure to reduce

the number of entities within corporate

structure; and

IN-CONTROL STATEMENT

(ix) implementing a SAP system change for

all European Group Services entities,

The Management Board has worked at

continuing to improve the processes and

procedures regarding ﬁnancial reporting by

means of:

The Management Board is responsible for the

establishment and adequate functioning of a

system of governance, risk management and

internal controls in the Company. Consequently,

the Management Board has implemented a

range of processes and procedures designed to

improve control by the Management Board over

the Company’s operations. These processes

and procedures include measures regarding the

general risk monitoring and management, and

the control environment and speciﬁc guidelines

and it is of the opinion that:

(i) the Management Report provides

sufﬁcient insights into any failings in

the effectiveness of the internal risk

management and control systems;

(i) disbanding the remote European

Consolidation team during December 2021;

(ii) closing the South African head-ofﬁce

(ii) the aforementioned systems provide

reasonable assurance that the ﬁnancial

reporting does not contain any material

inaccuracies; and

structures in Johannesburg;

(iii) closing the remote South African

accounting teams and consolidating the

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

MANAGEMENT BOARD STATEMENTS// continued

(iii) the Management Report states those

material risks and uncertainties that

are relevant to the expectation of the

Company’s continuity for the period of

twelve months after the preparation of

this Management Report.

For an overview of the Group’s decentralised

operational model, reference is made to the

Operational Review in this Management

Report.

(iv) with respect to gender, the Supervisory

Board shall strive for a composition

of both the Supervisory Board and the

Management Board of not less than 30%

male and not less than 30% female; and

The Group has implemented a number of

policies relating to environmental, social,

employee-related matters, respect for human

rights, and ﬁghting corruption and bribery.

The Company’s Code of Conduct provides a

framework for the aforementioned subjects

and the employees, ofﬁcers and directors of

the Company are expected to safeguard the

values embodied therein. The Management

Board has recommended that management

of each operational company in the Group

endorse those compliance principles and

incorporate the same in its own company

policies and guidelines. In view of the

markets the Group operates in, and the

types of products and services it delivers,

the risks associated with these subjects are

appropriately addressed given the varying risk

proﬁles of each operating entity. For further

information concerning the Code of Conduct,

reference is made to the section Code of

Conduct in the Corporate Governance Report.

(v) with respect to age, the Supervisory Board

shall strive to ensure an appropriate age

diversity within the Supervisory Board and

the Management Board,

The Management Board draws speciﬁc

attention to the going concern statement

included in the Basis of Preparation of the

2021 Consolidated Financial Statements and

the 2021 separate Financial Statements of the

Company in which a number of assumptions

and uncertainties have been detailed. Based

on these assumptions and uncertainties, the

ﬁnancial reporting is prepared on a going

concern basis. The Management Board has

discussed the above opinion and conclusions

with the Audit and Risk Committee and the

Supervisory Board.

it being understood that, in the selection of a

candidate on the basis of the above criteria,

the rules and generally accepted principles of

non-discrimination (on grounds such as ethnic

origin, race, disability or sexual orientation) will

be taken into account.

Both Managing Directors who held ofﬁce

during the Reporting Period were male and

to the extent applicable Managing Directors

appointed have been nominated based

on the above criteria, taking into account

the qualiﬁcations required in view of the

challenges faced by the Group. Within the

context of the nomination and appointment

of Managing Directors, the Supervisory

Board selects candidates based on such

qualiﬁcations and regardless of gender which

is in accordance with the Diversity Policy.

Due to the resignations of three Managing

Directors during the 2019 Reporting Period, on

the Reporting Date both remaining Managing

Directors had South African nationality

(100%) and lived in South Africa. If and when

selecting and nominating candidates for the

Management Board, the Supervisory Board will

take the Diversity Policy into consideration to

safeguard a balanced apportionment of the

seats of the Management Board, including

objective (ii) above.

It should be noted that the foregoing does

not imply that these systems and procedures

provide absolute assurance as to the

realisation of operational and strategic

business objectives, or that they can prevent

all misstatements, inaccuracies, errors, fraud

and non-compliance with applicable laws and

regulations.

DIVERSITY

The Company’s Diversity Policy identiﬁes the

following objectives to further improve the

diversity within the Supervisory Board and the

Management Board:

For a detailed description of the risk

management system and the principal risks

identiﬁed, reference is made to the Risk

Report.

(i) qualiﬁcations and previous experience,

particularly in the ﬁelds required to

ensure balanced boards, shall be key

considerations for nominations to

both the Supervisory Board and the

Management Board;

NON-FINANCIAL STATEMENT

GENERAL

In view of the accounting irregularities, which

were uncovered in December 2017 and the

consequences thereof for the Group, the

Company’s primary objective continues to

revolve around achieving longer-term value

preservation for the Company and its afﬁliated

enterprise.

(ii) with respect to nationality, subject

to and taking into account the South

African Reserve Bank requirement that

the Company be managed from South

Africa, the Supervisory Board shall strive

to nominate Managing Directors from

the regions where the Group Companies

operate, and that no nationality should

count for more than 75% of the Managing

Directors;

On the Reporting Date, two out of six

Supervisory Directors were female (33.33%)

and four out of six Supervisory Directors were

male (66.67%). Three out of six Supervisory

Directors had South African nationality (50%)

and lived in South Africa, one out of six

Supervisory Directors had Dutch nationality

(16.66%) and lived in the Netherlands, one

out of six Supervisory Directors had British

nationality (16.66%) and lived in the United

Kingdom, and one out of six Supervisory

Directors had United States nationality

The Company aims to achieve this ﬁnancial

objective as well as its non-ﬁnancial objectives

by means of the decentralised business

model of the Group, which allows for a tailor-

made governance on an operational level

complemented by the Management Board

exercising its rights at operational level where

appropriate and maintaining regular contact

with local management. The decentralised

business model includes sourcing where each

operating entity is responsible for the supply

chain applicable to its market and customers.

(iii) further with respect to nationality, the

Supervisory Board shall strive to nominate

Supervisory Directors from the regions

where the Group Companies operate, and

that no nationality should count for more

than 75% of the Supervisory Directors;

(16.66%) and lived in the United States of

America. Hugo Nelson, who lives in South

Africa and has both South African and Maltese

nationality, is counted as having South African

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

MANAGEMENT BOARD STATEMENTS// continued

nationality for this purpose. Due to the fact

that two Supervisory Directors, who were

female and had South African nationality,

resigned during the 2020 and the 2021

Reporting Periods and were not replaced, the

relevant diversity rates have declined.

Aids or where the child was removed from an

abusive environment by a court judgement. In

some instances, they live with another family

member or grandparent as part of an already

extended family where resources are severely

under pressure. The services rendered to these

beneﬁciaries through the partnership include

the following:

to contribute towards the capital outlay to

initiate the project. The project will roll out over

a period of three years expanding the student

accommodation from 60 to 300 students by

January 2024.

The ﬁnancial contribution from Steinhoff for

the 2021 Reporting Period amounts to

ZAR6.3 million. As part of the CVA

If and when selecting and nominating

candidates for the Supervisory Board,

the proﬁle of the Supervisory Board and

the Diversity Policy will be taken into

consideration.

•

Provision of food.

arrangement of 2018, a Netherlands court

appointed entity called ‘Steenbok Stichting

CVA’ that is responsible for the sale of

unclaimed debt under the CVA arrangement,

has elected Abraham Kriel Bambanani as a

beneﬁciary to some of the proceeds from

the sale of unclaimed debt. Abraham Kriel

Bambanani remains Steinhoff’s corporate

social responsibility partner.

Enrolment of the children into school.

Attention to health issues, bereavement

counselling, facilitation with proper

registrations with government departments

and applications for grants to further

support the family.

The Diversity Policy and the proﬁle of

the Supervisory Board can be viewed

on the Company’s website www.

steinhofﬁnternational.com.

BLACK ECONOMIC EMPOWERMENT

Steinhoff supports the aims of the Broad-

Based Black Economic Empowerment

legislation in South Africa and focuses

on enhancing the South African operating

companies’ compliance with the relevant laws

and scorecards.

•

Regular visits to their homes by the

caregivers.

Knysna Initiative for Learning and

Teaching

Where relevant, younger children are

Recognising the need for improved access to

quality education in South Africa, Steinhoff

had a desire to contribute to the advancement

of learning and teaching in under-resourced

schools. Steinhoff partnered with Knysna

Initiative for Learning and Teaching (KILT) in

April 2017 to provide support to certain under-

resourced and non-fee-paying schools in the

Knysna municipal area by way of sponsorship

in the form of providing funding for speciﬁc

needs which include funding for:

enrolled in school after-care programmes.

In addition, with the help of Steinhoff, AKB

runs a training facility that equips young

adult learners with a skill, i.e. tiling and

painting, assistant chef, end-user computing,

hydroponic cultivation of food, etc. which

they can use to earn an income and break the

poverty cycle.

SOCIAL RESPONSIBILITY AND

SUSTAINABILITY

During the Reporting Period, the Company

supported the following two causes.

Extended Family

The Steinhoff commitment gave AKB a high

level of ﬁnancial sustainability that allowed

for long-term planning to ensure that a real

impact could be made. It also allowed for

the promise that children could be given the

gift to grow and develop so that their dreams

have a chance of becoming a reality. Unlike

a one-off charity donation, the Steinhoff

Extended Family programme is an example of

a long-term investment where time and trust

are key to its success. This partnership and

its extended investment give the programme

the time it requires to accomplish what is

necessary, especially for raising children.

Steinhoff has been the key ﬁnancial partner

of the Steinhoff Extended Family programme

since its ofﬁcial inception in March 2003

when Steinhoff partnered with Abraham Kriel

Bambanani (AKB) to provide essential services

to orphaned children affected by severe

trauma, HIV/Aids and who are not housed

in a formal institution like a children’s home.

To reach more children and have a greater

impact Steinhoff and AKB introduced the

Steinhoff Extended Family home-based care

programme. It started with an initial group of

ﬁfteen children, who are called beneﬁciaries,

which gradually expanded to 492 beneﬁciaries

in 2020/2021. Steinhoff’s ﬁnancial contribution

is the primary funds used for the programme.

The aim of Steinhoff’s involvement in this

initiative is to provide children who are

affected by HIV/Aids and severe trauma with

protection from harm, which involves the

provision of shelter, physical care, emotional

care and development. Beneﬁciaries are

included in the programme on a ‘needs

only’ basis, and the recipients are mostly

individuals from child-headed families where

the parents have passed away due to HIV/

•

equipment and learning material;

teacher development;

additional teachers in order to reduce class

sizes;

•

the repair of school infrastructure with

speciﬁc focus on ablution facilities; and

the establishment of after school study

clubs and psycho-social and remedial

programmes for both primary and

secondary school learners.

The Soweto Family Care programme has

received the support from Steinhoff up to

December 2021, as committed previously.

KILT is an NGO that works with 17 government

schools in the Knysna District of the southern

Cape. Four of the schools are high schools,

ﬁve are rural or farm schools and in total, they

serve 13 214 children and 870 school staff.

Many of these schools serve communities that

are particularly under resourced.

The expansion of the student accommodation

at the Langlaagte property in Johannesburg,

South Africa, was approved in March 2021.

The provision of student accommodation

is a commercial activity carried out by AKB

to augment revenue from donors and the

state, in order to attain higher levels of

KILT has developed a unique and responsive

systems approach to providing support. Each

of the 20 KILT projects is designed to enhance

the education system in a sustainable and

sustainability and growth. Steinhoff agreed

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

MANAGEMENT BOARD STATEMENTS// continued

connected way. These projects are developed

in partnership with experts and all 20 projects

are professionally monitored and evaluated for teacher assistants and safety patrol ofﬁcers.

The above outline indicates a remarkable

growth from the ﬁrst introduction of the

Please refer to the Financial and Business

Review section of this annual report for our

policy on sustainability (ESG).

efﬁcacy, reach and impact.

Since 2017, the partnership with Steinhoff

has enabled KILT to substantially improve

the learning and teaching environment in one

South African town and to create a sense of

hope and a striving for excellence in Knysna

that would not have been possible without the

assured and dedicated funding and interest

from Steinhoff.

PROVISION IN THE ARTICLES REGARDING THE

KILT’s initial focus was to provide assistant

teachers in key classrooms in order to reduce

the learner to teacher ratio. In addition,

the safety and hygiene of the children was

considered with the introduction of safety

patrol ofﬁcers and upgraded security.

Thereafter, projects were introduced that

focused on leadership development, capacity

building for teachers, remedial and reading

support for learners, afternoon study clubs,

scholarship support and e-learning to name

just a few.

ALLOCATION OF PROFITS

Pursuant to section 35 of the Articles, a

dividend may be declared out of net income

after appropriation to increase and/or from

reserves. The allocation of proﬁt remaining

after reservations deemed necessary by the

Management Board, with the approval of

the Supervisory Board, will then be available

for distribution to the ordinary shareholders

subject to approval at the General Meeting.

The ﬁnancial contribution from Steinhoff for

the 2021 Reporting Period amounts to

ZAR14 million. The sponsorship with KILT

amounts up to ZAR15 million in donation per

calendar year for a period of ﬁve years starting

from 2017.

The Management Board, with the approval of

the Supervisory Board, may propose that the

General Meeting make distributions wholly or

partly in the form of ordinary shares.

These last 20 months have put extreme

pressure on teachers, learners and their

families, and the functioning of the schools

has been severely impacted. This has been

felt particularly in learner attendance at

school which has been on a rotational basis

because of overcrowding and the imperative

of Covid protocols such as social distancing.

Classrooms and schools have been closed

regularly for several reasons: Covid infections;

teachers staying home with co-morbidities

which in turn further exacerbated the teacher

shortages; a decline in the availability of

school nutrition programmes and lack of

resources to implement on-line learning.

Severe illness and death among teachers and

school principals, as well as learner infections,

have taken a serious toll on both physical and

mental well-being.

Environmental sustainability

Under Regulation (EU) 2020/852 on the

establishment of a framework to facilitate

sustainable investment, and amending

Regulation (EU) 2019/2088 (Taxonomy

Regulation), with effect from 2022 the

Company is obliged to make certain

disclosures on the Group’s economic activities

to the extent such economic activities are

serving the environmental objectives of (a)

climate change mitigation, and (b) climate

change adaptation.

Distributions on shares may be made only

up to an amount which does not exceed the

amount of the distributable equity.

The Management Board, with the approval of

the Supervisory Board, may declare an interim

dividend which does not exceed the amount of

the distributable equity.

The Management Board

28 January 2022

Steinhoff N.V. is primarily a global holding

company with current investments in retail

businesses in Africa, Australasia, Europe,

the United Kingdom and the United States of

America. Each of these operations procures

product directly from a wide range of suppliers

for onward sales through an extensive retail

footprint. Responsibility for operational

implementation of ESG matters is devolved to

each independent operating subsidiary where

action can be carried out directly ensuring

it has the most impact. Steinhoff N.V. uses

its influence, as appropriate, to ensure that

each operating business takes these aspects

properly into account and is able to show

consistent attention to and progress towards

these objectives. A number of initiatives

have been planned across the Group with the

aim to reliably and accurately report on ESG

indicators and measurements.

L.J. (Louis) du Preez

Chief Executive Ofﬁcer

T.L. (Theodore) de Klerk

Chief Financial Ofﬁcer

There is no quick ﬁx to the challenges the

children, teachers and schools face. KILT sees

school principals, school management teams

and teachers as key to improving education.

Despite these challenges and set-backs, KILT’s

strategy – a systemic locally driven, network

supported (LDNS) model – is sound. KILT

has forged strong, committed and trusting

relationships with its proximate partners

(beneﬁciaries) as well as its delivery partners,

the town of Knysna and repeat funders and a

growing public following.

KILT’s monitoring and evaluation reports

demonstrate a signiﬁcant impact in the areas

identiﬁed and targeted despite the desperately

difﬁcult circumstances facing KILT teams and

school staff at schools.

The Company intends to ensure readiness of

its organisation to provide the disclosures on

sustainability that are required by the European

Corporate Sustainability Reporting Directive

(CSRD) as of 1 January 2023.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

PART II

CORPORATE GOVERNANCE

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE

REPORT

Corporate governance in Steinhoff N.V. involves the set of relationships that have been established between

the Management Board, the Supervisory Board, shareholders and other stakeholders. Corporate governance

also provides the structure through which the Company’s objectives are set, and through which the means of

attaining those objectives and the processes of monitoring performance are determined.

The full text of the DCGC is available at

www.mccg.nl.

The Company could not take procedural actions

in legal proceedings (insofar they relate to the

Company’s estate) without the co-operation,

authorisation or support of the administrators.

INTRODUCTION

This report provides an outline of the corporate

governance structure of the Company and

covers corporate governance matters relevant

to the Company during the Reporting Period.

Pursuant to the DCGC, the Management Board

and the Supervisory Board are responsible for

the corporate governance of the Company.

DUTCH SOP

On 15 February 2021 the Company ﬁled an

application to the District Court of Amsterdam

for a Dutch suspension of payments procedure

(surseance van betaling) (Dutch SoP)

together with the submission of a proposed

composition plan (ontwerp van akkoord)

(Dutch SoP Scheme Proposal). The District

Court of Amsterdam granted the application

and opened the Dutch SoP in respect of the

Company also on 15 February 2021.

The tasks and ﬁduciary duties of the

Management Board and the Supervisory

Board were in principle not affected by

the Dutch SoP. The Management Board

continued to be required to conduct the day-

to-day management of the Company and the

enterprise connected with it. When doing so,

the Management Board was required to act in

the interest of the Company and its afﬁliated

enterprise, taking into account the interests

of all its stakeholders. The Supervisory Board

continued to be required to supervise and

monitor the actions of the Management

Board, to advise the Management Board in

connection therewith and, if needed, assist

the Management Board in its conduct with

external stakeholders.

Steinhoff International Holdings N.V. is a

public limited liability company (naamloze

vennootschap) incorporated under the laws

of the Netherlands, has its corporate seat in

Amsterdam, the Netherlands, and its principal

place of business at Building B2, Vineyard

Ofﬁce Park, Cnr Adam Tas & Devon Valley

Road, Stellenbosch 7600, South Africa, and

is registered with the Dutch Trade Register

under number 63570173. The Company has

a primary listing on the FSE in Germany and a

secondary listing on the JSE in South Africa.

The District Court of Amsterdam appointed

two administrators (bewindvoerders) and two

supervisory judges (rechters-commissaris).

The task of the administrators was to,

jointly with the Company’s management

team, administer the Company’s affairs. The

administrators would fulﬁl their task through,

among other things, periodically reporting on

the state of the Company’s estate, reporting on

the state of the Dutch SoP Scheme Proposal

and advising the Company’s management

team on how to conduct its affairs.

The Company has a two-tier board structure,

consisting of the Management Board and the

Supervisory Board. The Management Board

and the Supervisory Board are accountable to

the General Meeting. The Company’s corporate

governance structure is based on the Articles,

the Regulations of the Management Board, the

Regulations of the Supervisory Board and its

committees, as well as applicable laws and

regulations, including the DCGC. The Articles,

the Regulations of the Management Board,

the Regulations of the Supervisory Board and

its committees, together with the Supervisory

Board’s rotation schedule and the Supervisory

Board proﬁle, can be viewed on the Company’s

website at www.steinhofﬁnternational.com.

On 2 October 2021 the appeal period in

respect of the order by the District Court

of Amsterdam conﬁrming the Company’s

composition plan has lapsed. No party had

lodged an appeal against this conﬁrmation

order. Therefore, the conﬁrmation of the

Company’s composition plan has become

ﬁnal and unappealable (in kracht van gewijsde

gegaan), resulting in the termination of the

Dutch SoP pursuant to Section 276 of the

Dutch Bankruptcy Act.

During the Dutch SoP, the Company required

the co-operation, authorisation or support

of the administrators for the administration

and disposal (beheer en beschikking) of

assets comprised in its estate (boedel).

The Company’s estate was not bound by

obligations the Company entered into without

the co-operation, authorisation or support of

the administrators, except to the extent those

obligations would beneﬁt the Company’s estate.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

Pursuant to the Regulations of the

amongst executive and non-executive

MANAGEMENT BOARD

Management Board, certain signiﬁcant

resolutions of the Management Board are

subject to the approval of the Supervisory

Board and the General Meeting. These

resolutions are detailed in schedules 2 and 3

of the Regulations of Management Board.

directors) may not be appointed as a director

of a company insofar that company has not

met at least two of the criteria referred to in

Section 2:397, paragraphs 1 and 2 of the DCC

(which is the case for Steinhoff N.V.). During

the Reporting Period, none of the Managing

Directors held positions which would

GENERAL

The role of the Management Board is to

manage the Company and its afﬁliated

enterprise. Pursuant to the DCGC, the

Management Board is responsible for the

continuity of the Company and focuses on

longer-term value creation for the Company,

and takes into account all the various

stakeholder interests that are relevant in this

context. The Supervisory Board monitors the

Management Board in this. The Management

Board is responsible for identifying and

managing the risks associated with the

Company’s strategy and activities.

COMPOSITION, APPOINTMENT,

REMOVAL, SUSPENSION AND OTHER

POSITIONS OF MANAGING DIRECTORS

constitute a breach of this requirement.

Composition of the Management Board

As at the Reporting Date and as at the date of

this Annual Report, the Management Board

consisted and consists of Louis du Preez and

Theodore de Klerk.

General

Pursuant to the Articles, the Management

Board shall consist of at least two Managing

Directors, with the number of Managing

Directors to be determined by the Supervisory

Board. Following a non-binding nomination by

the Supervisory Board, with due observance

of the provisions of the Articles, the Managing

Directors are appointed by the General

Meeting. If and when selecting and nominating

candidates for the Management Board, the

diversity policy is taken into consideration.

Biographies of both Managing Directors who

have held ofﬁce during the Reporting Period

are given below.

DUTIES AND POWERS OF THE

MANAGEMENT BOARD

The Management Board derives its powers and

duties from Dutch law and the Articles. When

discharging its duties, the Management Board

shall act in accordance with the interests of the

Company and its afﬁliated enterprise, taking into

consideration the interests of the Company’s

stakeholders. The Management Board shall

develop a view on longer-term value creation by

the Company and its afﬁliated enterprise and

shall formulate a strategy in line with this.

Louis Jacobus (Louis) du Preez

South African, Male

(date of birth: 2 May 1969)

BCom, LLB

Pursuant to the DCGC, a Managing Director

is appointed for a maximum period of four

years and a Managing Director may be

The Supervisory Board nominated Louis du

Preez as Commercial Director and Managing

Director on 19 December 2017. He acted in

such capacity until his appointment to the

Management Board by the General Meeting on

20 April 2018. Louis du Preez was appointed

for a period that runs with effect from the

conclusion of the AGM on 20 April 2018 until

the close of the Company’s annual General

Meeting to be held in 2022.

reappointed for a term of not more than four

years at a time, which reappointment should

be prepared in a timely fashion and take the

diversity policy into account. A Managing

Director may be suspended or removed by the

General Meeting at any time. Suspension or

removal shall be made upon a proposal by the

Supervisory Board. A Managing Director may

also be suspended by the Supervisory Board at

any time. A resolution by the General Meeting

to remove or suspend a Managing Director

not proposed by the Supervisory Board

may only be adopted by at least two-thirds

majority of the votes cast, provided that such

majority represents more than one-third of the

Company’s issued capital. If that quorum is

not met, a second General Meeting as referred

to in Section 2:120, paragraph 3 of the DCC

cannot be convened. Any suspension may be

extended one or more times, but may not last

longer than three months in the aggregate. If,

at the end of that period, no decision has been

taken on termination of the suspension or on

removal, the suspension shall end.

The Management Board is primarily

responsible for:

(i) formulating, communicating and

executing the Company’s ﬁnancial

strategy;

Effective 1 January 2019, the Supervisory

Board designated Louis du Preez as CEO.

(ii) drafting the annual budget of the

Company, as well as the implementation

thereof;

Louis du Preez obtained his bachelor’s degree

from the University of Stellenbosch and went

on to qualify as an attorney of the High Court

of South Africa in 1997 after completing his

articles. He joined Jan S de Villiers and was

appointed a partner of the ﬁrm in 1998. With

the merger of Werksmans Attorneys in 2009,

he became a member of the national executive

committee of the combined ﬁrm and served

as such until early 2017. While practising as

an attorney, he advised clients on a variety of

corporate and commercial matters. He joined

the Group as General Counsel in mid-2017.

(iii) the appointment and dismissal of

members of its Committees and Senior

Managers;

(iv) overseeing and ensuring the integrity of

the Company’s ﬁnancial statements; and

(v) the ﬁnancial reporting of the Company.

The Regulations of the Management Board

describe the powers, duties, as well as working

methods and the decision-making process of

the Management Board. The latest version of

the Regulations of the Management Board can

be viewed on the Company’s website

Louis du Preez has served as a non-executive

director of Pepkor Holdings Limited since

January 2018. He currently continues to

serve as a director of several other Group

companies, including but not limited to

Steinhoff Investment Holdings Limited.

Persons who are (i) a supervisory board

member (or non-executive director) of more

than two legal persons; and (ii) chairman of

the supervisory board of a legal person (or of

the board if management duties are allocated

www.steinhofﬁnternational.com.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

The Company is represented by the

MANAGEMENT BOARD MEETINGS,

ATTENDANCE, RESOLUTIONS,

AUTHORITY TO REPRESENT AND

COMMITTEES

Theodore Le Roux (Theodore) de Klerk

South African, Male

(date of birth: 30 October 1969)

Management Board and each Managing

Director also has the individual authority to

represent the Company. The Management

Board may appoint ofﬁcers with general or

limited power to represent the Company. Each

ofﬁcer shall be authorised to represent the

Company, subject to the restrictions imposed

on him or her.

(BCom (Hons), CTA, HDip (Tax), CFM)

Pursuant to the Articles, the Management

Board shall meet as often as a Managing

Director deems necessary. Meetings of the

Management Board are in principle called by

the Chief Executive Ofﬁcer or the Company

Secretary in consultation with the Chief

Executive Ofﬁcer. With due observance of the

Regulations of the Management Board, each

Managing Director has the right to request

that a meeting of the Management Board be

called and/or that an item be placed on the

agenda for a Management Board meeting.

The Company Secretary shall assist in

relation thereto. A Managing Director may be

represented at Management Board meetings

by another Managing Director holding a proxy

in writing.

The Supervisory Board nominated Theodore

de Klerk as Operational Director and Managing

Director on 28 February 2018. He acted in

such capacity until his appointment to the

Management Board by the General Meeting

on 20 April 2018. Theodore de Klerk was

appointed for a period that runs with effect

from the conclusion of the AGM on

Pursuant to the Articles, the Management

Board may, as it deems necessary, establish

committees pertaining to the Management

Board and the performance of its duties. The

Management Board appoints the members

of each committee and determines the tasks

of each committee and may establish rules

regarding its working methods and decision-

making process. Such rules shall then be put

in writing. The Management Board may, at any

time, change the duties and the composition

of each committee. The Management Board

remains collectively responsible for decisions

prepared and/or taken by such committee.

20 April 2018 until the close of the Company’s

annual General Meeting to be held in 2022.

Effective 1 September 2019, the Supervisory

Board designated Theodore de Klerk as CFO.

Theodore de Klerk completed his articles with

Ernst & Young and worked for four years as

a corporate tax consultant. He joined Murray

& Roberts as ﬁnancial director of its marine

construction operation and spent ﬁve years

with Gensec Investment Bank as part of its

corporate ﬁnance advisory unit, focusing

on mergers & acquisitions, capital raisings

and related structuring functions. In 2003,

he joined Steinhoff as a senior executive

with responsibility for corporate advisory

services and investor relations. In 2008 he

was appointed Chief Executive Ofﬁcer of the

Group’s Southern African building materials

retail division, a position he held until 2015.

Pursuant to the Articles, each Managing

Director has the right to cast one vote. Under

the Regulations of the Management Board, the

Managing Directors shall endeavour to achieve

that resolutions are, as much as possible,

adopted unanimously.

REMUNERATION OF MANAGING

DIRECTORS

The General Meeting approved the

Remuneration Policy for the Management

Board on 1 December 2015. A description

of the Remuneration Policy and its

implementation during the Reporting Period

are included in the Remuneration Report. The

Remuneration Policy can be viewed on the

Company’s website

When determining how many votes

are cast by Managing Directors or how

many Managing Directors are present or

represented, no account shall be taken of

Managing Directors that are not allowed to

take part in the discussions and decision-

making by the Management Board pursuant

to the laws of the Netherlands, the Articles

or the Regulations of the Management

Board. Management Board resolutions may

at all times be adopted in writing, provided

the proposal concerned is submitted to all

Managing Directors then in ofﬁce in respect of

whom no conflict of interest exists and none

of them objects to this manner of adopting

resolutions, evidenced by written statements

from all relevant Managing Directors then in

ofﬁce.

Theodore de Klerk serves as a non-executive

director of Pepkor Holdings Limited and IEP

Group. He currently also continues to serve as

a director of several other Group companies,

including but not limited to Steinhoff

www.steinhofﬁnternational.com.

At the AGM 2020 a proposal to amend the

remuneration policy applicable to managing

directors to align such current policy with

Section 2:135a of the DCC, which became

effective on 1 December 2019 to implement

the revised EU Shareholders Rights Directive,

and taking into account the Company’s

current circumstances, its challenges and

its strategic direction, was tabled as a voting

item. The proposal was rejected by the General

Meeting. As required by Dutch law, a new

draft of the Remuneration Policy applicable

to Managing Directors was submitted to the

General Meeting at the AGM 2021, where

the proposal to amend such Remuneration

Policy applicable to Managing Directors was

again rejected. Another new draft policy will

be submitted to the General Meeting in 2022.

Upon resubmission to the General Meeting, a

description with explanation of how the voting

Investment Holdings Limited.

Positions of Managing Directors on

boards of listed companies which are

considered Afﬁliated Companies

As at the date of this Annual Report, both

Louis du Preez and Theodore de Klerk are

executive directors of Steinhoff Investment

Holdings Limited, and non-executive directors

of Pepkor Holdings Limited.

The Management Board follows a regular

meeting schedule with meetings held

approximately every other week. Towards the

end of the Reporting Period the Management

Board decided to change the number of formal

meetings to once every month going forward.

The main elements of the contracts with the

Managing Directors, who were appointed

on 20 April 2018, as at the date of their

appointment are available on the Company’s

website www.steinhofﬁnternational.com.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

results and views of the General Meeting

were taken into account since the last time

the Remuneration Policy was submitted for

adoption, shall be made available.

Director Ms Alexandra Watson in relation to

her new position as chairman of the board

of Coronation Fund Managers Limited

(“Coronation”) since August 2021. She

declared this new position to the chairperson

of the Supervisory Board prior to her

DUTIES AND POWERS OF THE

SUPERVISORY BOARD

The Supervisory Board established the

Regulations of the Supervisory Board, which

govern its working methods and decision-

making process (including its duties). The

latest version of the Regulations of the

Supervisory Board can be viewed on the

Company’s website

COMPANY SECRETARY

The Company’s Secretary is appointed and

replaced by the Management Board, subject

to the approval of the Supervisory Board. All

Managing Directors, Supervisory Directors

and committees have access to the advice

and services of the Company Secretary.

The Company Secretary sees to it that

correct Supervisory Board and Management

Board procedures are followed and that the

obligations of the Supervisory Board and the

Management Board under applicable laws,

as well as the Regulations of the Supervisory

Board, the Regulations of the Management

Board and/or the Articles are complied

with. The Company Secretary assists the

chairperson of the Supervisory Board and the

Chief Executive Ofﬁcer of the Management

Board in the organisation of the affairs of the

Supervisory Board and the Management Board,

respectively. During the Reporting Period, Sarah

Radema acted as the Company Secretary of

Steinhoff International Holdings N.V.

appointment and to the other Supervisory

Directors once appointed with a view to the

fact that active claimant group Hamilton/CFE

in litigation against the Company submitted

alleged Market Purchase Claims it had

acquired from Coronation. Ms Watson further

provided all other relevant information in

respect of this (potential) conflict of interest

to the chairperson of the Supervisory Board

and to the other Supervisory Directors. The

Supervisory Board, excluding Ms Watson,

decided that the aforementioned situation

could constitute a (potential) conflict of

interest or the appearance thereof. Ms

Watson has refrained from participating in

any deliberations or decision-making at the

Supervisory Board meetings regarding such

litigation. As such, best practice provisions

2.7.3 and 2.7.4 of the DCGC have been

complied with.

www.steinhofﬁnternational.com.

The supervision of the Management Board by

the Supervisory Board includes monitoring:

(i) the strategy relating to long-term value

creation of Company and its afﬁliated

enterprise;

(ii) the activities of the Management Board

regarding the creation of a culture

aimed at long-term value creation of the

Company and its afﬁliated enterprise;

(iii) the Internal Audit function;

(iv) the effectiveness of the internal risk

management and control systems;

(v) the integrity and quality of the ﬁnancial

reporting process;

COMPOSITION, APPOINTMENT,

REMOVAL AND SUSPENSION OF

SUPERVISORY DIRECTORS

(vi) the information- and communication

technology (ICT) systems of the Company

and the managing of the risks associated

with cybersecurity;

CHIEF COMPLIANCE AND RISK

OFFICER

General

Louis Strydom CA(SA) is the Chief Compliance

and Risk Ofﬁcer of Steinhoff International

Holdings N.V. His duties and responsibilities

inter alia include internal audit and risk

management. He reports directly to the CEO

and has a reporting responsibility to the Audit

and Risk Committee.

Pursuant to the Articles, the Supervisory

Board shall consist of at least ﬁve Supervisory

Directors. Only individuals can be Supervisory

Directors. If the number of Supervisory

Directors in ofﬁce is less than ﬁve, the

authorities of the Supervisory Board and

of the remaining Supervisory Directors or

Supervisory Director shall continue to apply in

full. The Supervisory Board will then forthwith

take measures to increase the number of

Supervisory Directors. The Supervisory

Board shall determine the exact number

of Supervisory Directors. Pursuant to the

DCGC, a Supervisory Director is appointed

for a period of four years and may then

be reappointed once for another four-year

period. The Supervisory Director may then

subsequently be reappointed again for a

period of two years, which appointment may

be extended by at most two years. In the event

of a reappointment after an eight-year period,

reasons should be given in the report of the

Supervisory Board. In any appointment or

reappointment, the proﬁle of the Supervisory

Board should be observed.

(vii) the safeguarding of the Management

Board’s responsibilities and process of

providing information to the Supervisory

Board;

(viii) compliance with applicable laws and

regulations;

SUPERVISORY BOARD

GENERAL

(ix) the relations with the shareholders;

(x) the risks associated with the

The role of the Supervisory Board is to

supervise the policies of the Management

Board and the general affairs of the Company

and the business connected with it, as well as

to assist the Management Board by providing

advice. In discharging its role, the Supervisory

Board shall be guided by the interests of the

Company and the business connected with

it and shall take into account the relevant

interests of the Company’s stakeholders.

remuneration structure for employees of

the Company and its afﬁliated enterprise;

(xi) the corporate social responsibility issues

that are relevant to the Company; and

(xii) handling and deciding on reported

(potential) conflicts of interests.

There were no conflicts of interest or

transactions which have given rise thereto

involving any Managing Directors or

Supervisory Directors reported during the

Reporting Period, other than a (potential)

conflict of interest or the appearance thereof

between the Company and Supervisory

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

Supervisory Directors are appointed by the

General Meeting. Appointments shall be

made upon a non-binding nomination by the

Supervisory Board. The Supervisory Board

shall take the proﬁle of the Supervisory Board,

the Supervisory Board rotation schedule and

the diversity policy into consideration when

it makes its non-binding nomination. A non-

binding nomination shall be included as an

item in the notice of the General Meeting at

which the appointment shall be considered.

At the General Meeting only candidates

whose names are stated on the agenda of the

meeting can be voted on for appointment as

Supervisory Director.

Group. He was also appointed as a member

of the Human Resources and Remuneration

Committee on 24 June 2021.

M.A. (Moira) Moses

(South African) (Female)

(date of birth: 27 January 1965)

He earned a master’s degree in law from the

University of Utrecht in 1972. He then joined the

Dutch law ﬁrm De Brauw Blackstone Westbroek

specialising in mergers and acquisitions and

corporate litigation and served as the ﬁrm’s

Managing Partner from 1997 to 2001. He then

became a founding partner of the ﬁrm Spinath

& Wakkie B.V. in 2010 (renamed Wakkie &

Perrick B.V.). He served as a member of the

Executive Board of Royal Ahold N.V. from 2003

to 2009 where he also held the position of

Chief Corporate Governance Counsel. He was

heavily involved in Royal Ahold’s restructuring

and divestment program and became chief

architect of its corporate responsibility strategy.

Peter Wakkie has held numerous roles on

supervisory boards throughout his career. He

was deputy chairman of the supervisory board

of ABN AMRO Bank N.V. from 2009 to 2015 and

chairman of the supervisory board of Wolters

Kluwer N.V. until 2017. He also served as the

chairman of the supervisory board of TomTom

N.V. until April 2019.

Moira Moses was appointed to the Supervisory

Board on 20 April 2018, for a period that runs

with effect from the conclusion of the AGM on

20 April 2018 until the close of the Company’s

annual General Meeting to be held in 2022.

Since 22 May 2020, Moira Moses has been the

Chairperson of the Supervisory Board and the

chairperson of the Nomination Committee.

She graduated from the University of the

Witwatersrand in 1987 and completed a

Management Advancement Programme

at the Business School of the University of

the Witwatersrand in 1995. She enjoyed a

successful career in the motor industry holding

the position of Managing Director of Land

Rover, Volvo and Jaguar in Southern Africa from

2000 to 2004. Ms Moses was with Transnet

Limited from 2005 to 2012 and held the

position of Group Executive, Capital Projects.

She has held a number of Non-Executive Board

positions including Transnet Limited, Viamax

(Pty) Ltd, Afrisam Group and MTN Group

Limited. From 2007 to 2015 she served on the

Board of the Public Investment Corporation,

and from 2009 to 2018 at the Government

Employees Pension Fund. She is currently on

the Board of Kansai Plascon Africa Limited.

A resolution by the General Meeting to appoint

a Supervisory Director not nominated by the

Supervisory Board shall be adopted by at least

two-thirds majority of the votes cast, if such

majority represents more than one-third of the

Company’s issued capital. A second General

Meeting may not be convened.

A resolution by the General Meeting to remove

or suspend a Supervisory Director not proposed

by the Supervisory Board shall be adopted

by at least two-thirds majority of the votes

cast, provided that such majority represents

more than one-third of the Company’s issued

capital. A second General Meeting may not be

convened. Any suspension may be extended

one or more times but may not last longer than

three months in the aggregate. If, at the end

of that period, no decision has been taken on

termination of the suspension or on removal,

the suspension shall end.

He is currently chairman of the supervisory

board of BCD Holdings N.V. Peter further serves

as court appointed liquidator of ZED+ B.V.

P.D. (Paul) Copley

(British) (Male)

(date of birth: 4 May 1975)

With effect from 29 October 2018, she was

appointed as non-executive director of

BA Hons (English Language & Literature),

Chartered Accountant (ICAEW), Insolvency

Practitioner (JIEB)

Steinhoff Investment Holdings Limited and is

a member of the audit and risk committee of

Steinhoff Investment Holdings Limited. Since

22 May 2020 Moira has been the chairperson

of Steinhoff Investment Holdings Limited.

Composition of the Supervisory Board

Following the resignation of Khanyisile Kweyama

on 19 April 2021, the Supervisory Board as at the

Reporting Date and as at the date of this Annual

Report consists of the following six members:

Moira Moses (chairperson), Peter Wakkie

(deputy-chairperson), Paul Copley, Hugo Nelson,

David Pauker and Alexandra Watson.

Paul Copley was appointed as Supervisory

Director on 30 August 2019, for a period that

runs with effect from the conclusion of the

AGM on 30 August 2019 until the close of the

Company’s annual General Meeting to be held

in 2022.

P.N. (Peter) Wakkie

(Dutch) (Male)

(date of birth: 22 June 1948)

He is a member of the Audit and Risk

Committee, and the Litigation Working Group.

Biographies of all the Supervisory Directors who

have at any time held ofﬁce during the Reporting

Period, are given below.

LLM

Paul Copley is a UK chartered accountant and

licensed insolvency practitioner. He spent 20

years at PwC, working principally in Business

Recovery Services, in both formal insolvency

and restructuring roles. Most notably, he was

appointed Joint Administrator of Lehman

Brothers International (Europe), where he

worked full-time from 2008 to 2014. Whilst

at PwC, Paul was also Joint Receiver of OW

Peter Wakkie was re-appointed to the

Supervisory Board on 30 April 2021, for

a period that runs with effect from the

conclusion of the AGM on 30 April 2021 until

the close of the Company’s annual General

Meeting to be held in 2023.

He is Deputy-Chairperson of the Supervisory

Board and a member of the Litigation Working

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

Bunker, the world’s largest independent marine Commission in South Africa from 2008 to 2012

D.I. (David) Pauker

(United States) (Male)

(date of birth: 21 March 1959)

fuel distributor. Paul left PwC in 2016 to

take up the role of CEO of Kaupthing ehf. He

and elected Vice President of the Chamber of

Mines in South Africa in 2013 and 2014. She

currently also serves as the Managing Director is a member of both the National Planning

of Aldan Management and is Concurrent

Administrator of Phones 4U Limited. In

October 2019, he reprised his role as Joint

Receiver of OW Bunker. Paul further serves on

the board of Noble Group Holdings Limited as

a non-executive director.

Commission and Gauteng Eminent Persons

Group, and previously also was Chairperson of

the Interim Board of the SABC and she served

as chairperson of the board of Passenger Rail

Agency of SA (PRASA) from 2018 to 2020.

B.S. (Industrial and Labor Relations)

David Pauker was appointed as Supervisory

Director on 30 August 2019, for a period that

runs with effect from the conclusion of the

AGM on 30 August 2019 until the close of the

Company’s annual General Meeting to be held

in 2023.

Dr. H.A. (Hugo) Nelson

(South African and Maltese) (Male)

(date of birth: 3 June 1970)

K.T. (Khanyisile) Kweyama

(South African) (Female)

(date of birth: 28 November 1964)

He is a member of the Nomination Committee,

the Litigation Working Group, and the Human

Resources and Remuneration Committee.

MBChB, MBA (Oxon), CFA

PDM

Hugo Nelson was appointed to the Supervisory

Board on 20 April 2018, for a period that runs

with effect from the conclusion of the AGM on

20 April 2018 until the close of the Company’s

annual General Meeting to be held in 2022.

David Pauker earned a bachelor’s degree in

Industrial and Labor Relations in 1981 and

in 1984 he obtained a degree in law from the

Columbia Law School. He spent 25 years

at Goldin Associates, a turnaround and

restructuring advisory ﬁrm based in New

York, retiring in 2015 as the ﬁrm’s Executive

Managing Director and practice leader. At

Goldin, he was senior advisor to companies

and institutional investors and oversaw

independent investigations of corporate

affairs. He has acted as C-suite ofﬁcer for

many companies undergoing reorganisation.

Khanyisile Kweyama was appointed to

the Supervisory Board on 20 April 2018,

for a period that runs with effect from the

conclusion of the AGM on 20 April 2018 until

the close of the Company’s annual General

Meeting to be held in 2022.

He is the chairperson of the Human Resources

and Remuneration Committee and a member

of the Audit and Risk Committee.

On 19 April 2021 Khanyisile Kweyama

tendered her resignation from her functions at

the Company.

He was a medical doctor before earning an

MBA from the University of Oxford. He is also

a chartered ﬁnancial analyst. He has a wealth

of experience in the South African asset

management industry. He joined Coronation

Fund Managers Limited in 1999 as part of the

investment team, initially as an Equity Analyst,

then as Portfolio Manager, responsible for

both institutional and retail assets. He served

as the Chief Executive Ofﬁcer at Coronation

Fund Managers Limited from November

2007 to January 2013. He has also served

as the Chief Executive Ofﬁcer of Coronation

Asset Management Proprietary Ltd, as a

Non-Executive Director of Namibia Asset

Management Ltd. (from May 2008 to January

2013) and as a Director of Coronation Global

Fund Managers (Ireland) Limited. He currently

serves as an Independent Non-Executive

Director of Coronation Fund Managers Limited,

Until her resignation she was a member of

the Human Resources and Remuneration

Committee.

In 2016, he was appointed as Chief

Restructuring Ofﬁcer for Essar Steel

Khanyisile Kweyama obtained a Postgraduate

Diploma in Management from the University

of Witwatersrand in 1999. She has extensive

commercial experience working in a number of

international companies. She served as Group

Executive of Human Resources & Industrial

Relations at Allied Technologies from 2003

to 2008. She served as Group Executive of

Global HR, Transformation and Sustainability

at Barloworld Ltd from 2008 to 2011. She

also served as Executive Head of Human

Resources at Anglo American Platinum

Minnesota; the company emerged from

bankruptcy and was reorganised as Mesabi

Metallics. He has held numerous roles on

boards throughout his career and is currently

Chairman the Board of the Government

Development Bank Debt Recovery Authority

of Puerto Rico. He also serves on the boards

of Lehman Brothers (post-reorganisation),

Social Accountability International and the

Residential Capital Trust.

Limited from 2011 to 2012 and Executive

Director of Anglo American Southern Africa

With effect from 14 August 2019 David was

appointed as non-executive director of Steinhoff

International Holdings Proprietary Limited.

Limited from 2012 to 2015. More recently, she is the founding partner of Fortitudine Vincimus

Capital Advisors (Pty) Ltd. He is also a trustee

of the DG Murray Trust and a patron of George

Whiteﬁeld College.

served as Chief Executive Ofﬁcer of Business

Unity SA from 2015 to 2017. She has won

a number of awards throughout her career.

For example, she was selected as the “Most

Influential Woman in the Mining, Resources

and Extractive Sector” from 2012 to 2015

and was recognised as one of the “100 Most

Inspiring Women in Mining” in 2014 and 2015.

A. (Alexandra) Watson

(South African) (Female)

(date of birth: 13 June 1956)

With effect from 30 August 2019, he was

appointed as non-executive director of

Steinhoff Investment Holdings Limited and is

a member of the audit and risk committee of

Steinhoff Investment Holdings Limited.

BCom (Hons) UCT, CA(SA)

Alexandra Watson was appointed to the

Supervisory Board on 20 April 2018, for

a period that runs with effect from the

conclusion of the AGM on 20 April 2018 until

the close of the Company’s annual General

Meeting to be held in 2022.

She has also been appointed to various

ofﬁces at national and statutory bodies. She

was appointed to the Employment Equity

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

She is the chairperson of the Audit and Risk

Committee, and a member of the Nomination

Committee.

SUPERVISORY BOARD MEETINGS,

ATTENDANCE AND DECISION MAKING SUPERVISORY BOARD

Pursuant to the Articles, meetings of the

COMMITTEES OF THE

Standing committees

Supervisory Board shall be held as often as a

Supervisory Director or the Management Board

deems necessary. Under the Regulations

of the Supervisory Board, the Supervisory

Board shall meet at least four times each

ﬁnancial year. A Supervisory Director may be

represented at Supervisory Board meetings by

another Supervisory Director holding a proxy

in writing. Each Supervisory Director may cast

one vote. All resolutions of the Supervisory

Board shall be adopted by a simple majority of

the votes cast. The Supervisory Board can only

adopt valid resolutions in a meeting where the

majority of the Supervisory Directors then in

ofﬁce is present or represented.

In compliance with the DCGC, the Supervisory

Board has an Audit and Risk Committee,

a Human Resources and Remuneration

Committee, and a Nomination Committee.

The function of the committees is to prepare

the decision-making of the Supervisory Board.

The Supervisory Board may, as it may deem

necessary, establish such other committees

pertaining to the Supervisory Board and the

performance of its duties. The Supervisory

Board appoints the members of each

committee, its chairperson and determines

the tasks of each committee as well as the

rules regarding its working methods and

decision-making process. The Supervisory

Board may, at any time, change the duties

and the composition of each committee. Only

Supervisory Directors can be a member of the

committees. The Supervisory Board remains

collectively responsible for decisions prepared

by its committees. The Company Secretary

acts as secretary to the Supervisory Board’s

committees. The Supervisory Board had a

voluntary committee, namely the Forensic

Investigation Committee, which was dissolved

on 24 June 2021.

She served as a Professor in the College

of Accounting at the University of Cape

Town until March 2018, where her area of

expertise was ﬁnancial reporting and other

forms of corporate reporting. She is also a

former Chairman of the Accounting Practices

Committee (Technical Accounting Committee

of the South African Institute of Chartered

Accountants) and is currently the Chairman

of the South African Financial Reporting

Investigations Panel. She was appointed

chairman of Coronation Fund Managers

Limited in August 2021. She is a director of

WWF – SA, and until December 2019 she was

a board member and vice-chairman of the

Global Reporting Initiative, an Amsterdam-

based organisation promoting understanding

and communication of sustainability issues.

On 1 July 2021 she joined the board of Petra

Diamonds Limited as a non-executive director.

When determining how many votes are

cast by Supervisory Directors or how

many Supervisory Directors are present or

represented, no account shall be taken of

Supervisory Directors that are not allowed

to take part in the discussions and decision-

making by the Supervisory Board pursuant

to the laws of the Netherlands, the Articles

or the Regulations of the Supervisory Board.

Supervisory Board resolutions may at all times

be adopted in writing, provided the proposal

concerned is submitted to all Supervisory

Directors then in ofﬁce in respect of whom no

conflict of interest exists and none of them

objects to this manner of adopting resolutions,

evidenced by written statements from all

relevant Supervisory Directors then in ofﬁce.

With effect from 29 October 2018, she was

appointed as non-executive director of

Steinhoff Investment Holdings Limited, and is

currently the deputy chairperson of the board

of the same company. She is also chairperson

of the audit and risk committee of Steinhoff

Investment Holdings Limited.

The Regulations of the Supervisory Board

and its standing committees can be viewed

on the Company’s website

www.steinhofﬁnternational.com.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

AUDIT AND RISK COMMITTEE

At least one member of the Audit and Risk Committee must have

relevant knowledge of ﬁnancial reporting and the audit of ﬁnancial

statements. The Audit and Risk Committee may not be chaired by the

chairman of the Supervisory Board or by a former Managing Director.

The Audit and Risk Committee meets at least four times each ﬁnancial

year and meets at least once each ﬁnancial year with the External

Auditor without the Managing Directors being present.

(ii) the ﬁnancing of the Company;

(iii) the application of information and communication technology,

including risks related to cybersecurity and information at third

parties;

(iv) the Company’s tax and regulatory compliance policies; and

(v) the role and functioning of the Chief Financial Ofﬁcer.

The Audit and Risk Committee undertakes preparatory work for the

Supervisory Board’s decision-making regarding the supervision of

the integrity and quality of the Company’s ﬁnancial reporting and the

effectiveness of the Company’s internal risk management and control

systems. In carrying out this duty, the Audit and Risk Committee shall

focus, among other things, on monitoring the Management Board

with regard to:

The Supervisory Board established regulations for the Audit and Risk

Committee. The regulations describe the powers, duties, as well as

working methods and the decision-making process of the Audit and

Risk Committee. The most recent version of the regulations of the

Audit and Risk Committee can be viewed on the Company’s website

www.steinhofﬁnternational.com.

(i) relations with, and compliance with recommendations and

observations and follow up of comments of the internal audit

department and the External Auditor;

HUMAN RESOURCES AND REMUNERATION COMMITTEE

The Human Resources and Remuneration Committee may not be

chaired by the chairman of the Supervisory Board or by a former

Managing Director of the Company. The Human Resources and

Remuneration Committee meets at least twice each ﬁnancial year.

The Human Resources and Remuneration Committee has the

following main duties:

proper fulﬁlment of duties by Supervisory Directors, the

effective performance by the Supervisory Directors of their

role, the reflection of the time spent, the risk proﬁle and the

responsibilities of the role of Supervisory Directors, the strategic

view of options available to the Company in the short and

medium term, the external governance environment and the

interests of all stakeholders, no dependency on the results of the

Company, and no granting of any form of variable remuneration;

(i) to submit, at least once every four years, a clear and

understandable proposal to the Supervisory Board concerning

the remuneration policy to be pursued with regard to the

Management Board, which policy shall in any event take into

consideration the requirements of the Dutch Civil Code, the

objectives for the strategy for the implementation of longer-term

value creation, scenario analyses, pay ratios, the development of

the market price of the Shares (if applicable) and an appropriate

ratio between the variable and ﬁxed remuneration components;

(iii) to draft proposals for consideration by the Supervisory Board for

the remuneration of the individual Managing Directors; and

(iv) to prepare the remuneration report.

The Supervisory Board established regulations for the Human

Resources and Remuneration Committee. The regulations describe

the powers, duties, as well as working methods and the decision-

making process of the Human Resources and Remuneration

Committee. The most recent version of the regulations of the Human

Resources and Remuneration Committee can be viewed on the

Company’s website www.steinhofﬁnternational.com.

(ii) to submit, at least once every four years, a clear and

understandable proposal to the Supervisory Board concerning

the remuneration policy to be pursued with regard to the

Supervisory Board, which policy shall in any event take into

consideration the requirements of the Dutch Civil Code, the

appropriate composition of the Supervisory Board and the

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

NOMINATION COMMITTEE

Pursuant to the regulations of the Nomination Committee, the

Nomination Committee meets at least once each ﬁnancial year. The

Nomination Committee has the following main duties:

(vii) to make proposals for appointments and reappointments, taking

into account the diversity policy of the Supervisory Board and the

proﬁle of the Supervisory Board; and

(i) to draw up selection criteria and appointment procedures for

Supervisory Directors and Managing Directors;

(viii)to supervise the policy of the Management Board regarding the

selection criteria and appointment procedures for the Senior

Managers.

(ii) to assess periodically the size and composition of the

Supervisory Board and the Management Board, and to

make proposals for the proﬁle of the Supervisory Board and

Supervisory Board Rotation Schedule;

The Supervisory Board established regulations for the Nomination

Committee. The regulations describe the powers, duties, as well

as working methods and the decision-making process of the

Nomination Committee. The most recent version of the regulations of

the Nomination Committee can be viewed on the Company’s website

www.steinhofﬁnternational.com.

(iii) to review the Diversity Policy;

(iv) to assess periodically the functioning of individual Supervisory

Directors and individual Managing Directors, and to report its

ﬁndings to the Supervisory Board;

(v) to assess periodically the size and composition of each

Committee, and to make any recommendations to the

Supervisory Board;

(vi) to draw up a plan for the succession of Managing Directors and

Supervisory Directors, taking into account the diversity policy of

the Supervisory Board and the proﬁle of the Supervisory Board;

Voluntary committee

FORENSIC INVESTIGATION COMMITTEE

This voluntary committee engaged with PwC in respect of their forensic investigation. The committee consisted of the following members:

Peter Wakkie (chairman), Moira Moses, Alexandra Watson, Paul Copley and Managing Director Louis du Preez. On 24 June 2021 the

committee was dissolved because the forensic investigation by PwC had been completed.

Supervisory Board. The Company remains

mindful of its obligations to ensure required

gender representation in both the Management Supervisory Directors had Dutch nationality

Board and the Supervisory Board. Both

Managing Directors who held ofﬁce during

the Reporting Period were male. If and when

selecting and nominating candidates for the

Management Board, the diversity policy is

taken into consideration.

Directors had South African nationality (50%)

and lived in South Africa, one out of six

Litigation Working Group

The joint working group, established by the

Supervisory Board and the Management

Board, enables the Supervisory Board

to oversee and to provide advice to the

Management Board on inbound and outbound

litigation. The working group consisted of the

following members: Louis du Preez, Peter

Wakkie, Paul Copley and David Pauker.

(16.66%) and lived in the Netherlands, one

out of six Supervisory Directors had British

nationality (16.66%) and lived in the United

Kingdom, and one out of six Supervisory

Directors had United States nationality

(16.66%) and lived in the United States of

America. Hugo Nelson, who lives in South

Africa and has both South African and Maltese

nationality, is counted as having South African

nationality for this purpose. Due to the fact

that two Supervisory Directors, who were

female and had South African nationality,

resigned during the 2020 and the 2021

Reporting Periods and were not replaced, the

relevant diversity rates have declined.

The Diversity Policy and the proﬁle of the

Supervisory Board can be viewed on the

Company’s website

www.steinhofﬁnternational.com. The Diversity

Policy has formed part of the deliberations of

the Supervisory Board within the context of

nominating and appointing Managing Directors,

taking into account the qualiﬁcations required

in view of the challenges faced by the Group.

DIVERSITY POLICY AND DUTCH

GENDER DIVERSITY REQUIREMENT

In accordance with the Dutch Act on

Management and Supervision (Wet bestuur

en toezicht), the proﬁle of the Supervisory

Board states that the Supervisory Board

shall strive to ensure that at least 30% of the

seats shall be held by men and at least 30%

by women. With respect to appointments

and nominations, the Company is obliged to

take into account, to the extent practicable,

a balanced composition of male and female

members of the Management Board and

If and when selecting and nominating

On the Reporting Date, two out of six

candidates for the Supervisory Board, the

proﬁle of the Supervisory Board and the

diversity policy will be taken into consideration.

Supervisory Directors were female (33.33%)

and four out of six Supervisory Directors were

male (66.67%). Three out of six Supervisory

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

ADOPTION OF RESOLUTIONS

DISTRIBUTIONS

GENERAL MEETING

Subject to certain exceptions provided by

Dutch law or the Articles, resolutions of the

General Meeting are passed by a simple

majority of the votes cast without a quorum

Distribution of proﬁt shall be made after

adoption of the annual ﬁnancial statements,

subject to compliance with Dutch law and the

determination of the allocation of proﬁts by

AMENDMENT OF THE ARTICLES

The General Meeting may resolve to amend

the Articles, provided that such resolution

can only be adopted on a proposal by the

Management Board, with the approval of

the Supervisory Board. When a proposal

to amend the Articles is to be made to the

General Meeting, the notice convening the

General Meeting must state so and a copy

of the proposal, including the verbatim text

thereof, shall be deposited and kept available

at the Company’s ofﬁce for inspection by

the shareholders and the other persons

with Meeting Rights, until the conclusion of

the meeting. From the day of deposit until

the day of the meeting, a shareholder or

another person with Meeting Rights shall, on

application, be provided with a copy of the

proposal free of charge. An amendment of the

Articles shall be laid down in a notarial deed.

being required. Management Board resolutions the General Meeting, on recommendation by

on a major change in the identity or character

of the Company or the Group shall be subject

to the approval of the General Meeting.

the Management Board and with the approval

of the Supervisory Board. The Management

Board may resolve, with the approval of the

Supervisory Board, that the proﬁt realised

during a ﬁnancial year may be fully or partially

appropriated to increase reserves, with the

allocation of proﬁt then remaining to be at the

disposal of the General Meeting. Proposals

for the distribution of proﬁt are shown on the

General Meeting agenda as items for separate

consideration.

The convening of a General Meeting must

be published through an announcement by

electronic means. The notice must state the

business to be discussed, the time and venue

of the meeting, the record date, the manner in

which persons entitled to attend the General

Meeting may register and exercise their rights,

the time by which registration for the meeting

must have occurred as well as the place where Dividends on Preference Shares, as and

meeting documents may be obtained. The

notice must be given by at least the number

of days prior to the day of the meeting as

required by Dutch law, which is currently 42

days.

when such Shares are issued, will be paid

in accordance with the relevant provisions

contained in the Articles.

The Articles were last amended on

28 August 2020.

ISSUANCE OF SHARES AND

ACQUISITION OF OWN SHARES

Shareholders are entitled to propose items for

the agenda of the General Meeting provided

that they hold at least 3% of the issued share

capital or the Shares that they hold represent

a market value of at least 3%. Proposals for

agenda items for the General Meeting must be

submitted at least 60 days prior to the date of

the meeting.

Under the Articles, and with due observance

of Dutch law, Shares may be issued pursuant

to a resolution of the General Meeting or of

the Management Board, if and insofar the

Management Board has been designated for

that purpose pursuant to a resolution of the

General Meeting for a ﬁxed period (this period

may not exceed ﬁve years). A resolution by

the General Meeting to issue Shares or to

designate the Management Board as the body

of the Company authorised to issue Shares

may only be taken at the proposal of the

Management Board, which proposal requires

the approval of the Supervisory Board. On such

designation, the number of Shares of each

class which may be issued must be speciﬁed.

The designation may be extended, each time

for a period not exceeding ﬁve years. Unless

the designation provides otherwise, it may not

be withdrawn. The authority of the General

Meeting to issue Shares shall be without

prejudice to the authority of the Management

Board to determine, with the approval of the

Supervisory Board, the percentage of premium

per Preference Share. The same applies by

analogy to the granting of rights to subscribe

for Shares, but does not apply to the issuance

of Shares to a person exercising a right to

subscribe for Shares previously granted.

GENERAL MEETINGS

The Company’s shareholders exercise their

rights through annual and extraordinary

General Meetings, held in the Netherlands

and conducted in the English language. The

Company is required to convene an annual

General Meeting each year, no later than

six months after the end of the Company’s

ﬁnancial year, which is 30 September of any

calendar year. Additional General Meetings

may be convened at any time by the

Resolutions for approval or authorisation to

be passed by the General Meeting shall be

explained in writing.

Supervisory Board or the Management Board,

without prejudice to the provisions of Dutch

law concerning convening General Meetings.

VOTING RIGHTS

Each Ordinary Share confers the right to cast

one vote at a General Meeting, unless and for

as long as Preference Shares are in issue, in

which case each Ordinary Share confers the

right to cast ﬁfty votes and each Preference

Share confers the right to cast one vote at a

General Meeting. As at the date of this Annual

Report, no Preference Shares are outstanding.

The AGM 2021 was held in Amsterdam,

the Netherlands, and was also accessible

via webcast on the Company’s website.

Because of the ongoing global COVID-19

pandemic the Company had accommodated

its shareholders, other persons with Meeting

Rights or their proxies in attending the AGM

2021 virtually through electronic means,

without the need to physically attend the AGM.

Participating virtually in the AGM was subject

to the Company’s Hybrid Meeting Policy which

was published on the Company’s website

simultaneously with the AGM notice.

Dutch law prescribes a record date to be

set 28 days prior to the date of the General

Meeting to determine whether a person may

attend and exercise the rights relating to the

General meeting. Shareholders registered at

that date are entitled to attend and exercise

their votes.

Prior to (and in anticipation of) the Company’s

listing on the FSE, in December 2015,

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

certain authorisations were granted to the

Management Board, details of which rights

to issue Shares, to grant rights to subscribe

for Shares and to limit or exclude pre-emption

rights in relation thereto are contained in

the prospectus to shareholders dated 19

November 2015 (available on the Company’s

website at www.steinhofﬁnternational.com).

limited to the number of Shares authorised

under the Share Issue Authorisations and to

the 18-month period from 14 March 2017.

Shares from certain subsidiaries of the

Company and other afﬁliated companies.

The authority conferred by this resolution will

expire at the earlier of the conclusion of next

year’s AGM or the date which falls eighteen

months from the date of the AGM 2021.

Ordinary Shares may be acquired at the stock

exchange or otherwise, at a price for Ordinary

Shares between the nominal value of €0.01

and a price equal to the highest price at which

Ordinary Shares traded on the FSE or the JSE

on the preceding trading day of the relevant

acquisition. Ordinary Shares may be acquired

from certain subsidiaries of the Company

and other afﬁliated companies only and up to

a maximum of 54,723,959 Ordinary Shares.

Due to the fact that the 2020 Consolidated

Financial Statements were not adopted by the

General Meeting, the Management Board has

to date not been able to act on the basis of the

authority granted.

In addition, in accordance with Section 2:98,

paragraph 4 of the DCC, the General Meeting

authorised the Management Board, for a period

of eighteen months from 14 March 2017, to

acquire fully paid-up Shares in the capital of the

Company. Under this authority, Shares could be

acquired at the stock exchange or otherwise,

at a price per Ordinary Share between nominal

value and 110% of the opening price on the FSE

at the date of the acquisition, up to 20% of the

issued share capital at the date of acquisition.

At the General Meeting held on 14 March

2017, without prejudice to any of the other

authorisations previously granted to the

Management Board by the General Meeting,

as referred to above, the General Meeting

granted the Management Board the authority

to issue Ordinary Shares and to grant rights to

subscribe for Ordinary Shares:

This authority, which replaced the authority

to acquire Shares previously granted to the

Management Board on 1 December 2015,

afforded the Management Board the flexibility

up to 10% of the total nominal issued

share capital of the Company as at 14

March 2017 for all purposes including the to repurchase Shares in the Company, to

granting of stock options, the ﬁnancing of service share options granted or to cover

mergers and acquisitions and the issue of obligations under share-based compensation

new convertible bonds; plus

plans or for other purposes.

DUTCH CORPORATE GOVERNANCE

COMPLIANCE

(ii) issue up to an additional 10% of the

total nominal issued share capital of the

No extension or further authorisations to issue

or to grant rights to subscribe for Ordinary

The Company is required to report on its

compliance with the DCGC. Pursuant to the

DCGC, any deviations from it require explanation

in accordance with the DCGC’s ‘comply or

explain’ principle. During the Reporting Period,

the Company was compliant with the relevant

principles and best practice provisions of the

DCGC, with the exception of the following:

Company as at 14 March 2017 to be used Shares have since been proposed.

only in connection with or on the occasion

At the AGM 2020 it was resolved to authorise

of mergers and acquisitions and strategic

the Management Board to acquire fully paid-up

alliances.

Ordinary Shares from certain Subsidiaries. The

Each of the foregoing authorisations were

valid for a period of up to eighteen months

from 14 March 2017. If the Share Issue

authority conferred by that resolution would

expire at the earlier of the conclusion of the

following year’s AGM or the date which fell

3.4.1 (iv) This best practice provision provides

that the remuneration report should – inter alia

– describe the pay ratios within the company

and its afﬁliated enterprise and, if applicable,

any changes in these ratios in comparison with

the previous ﬁnancial year.

Authorisations were used during this 18-month eighteen months from the date of the AGM

period, then the Management Board, subject

to the approval of the Supervisory Board,

could propose to the General Meeting that

the authorisations granted be restored back

up to the 10% level for each of the approved

purposes, as set out above.

2020. Ordinary Shares might be acquired at

the stock exchange or otherwise, at a price for

Ordinary Shares between the nominal value

and a price equal to the highest price at which

Ordinary Shares traded on the FSE or the JSE

on the preceding trading day of the relevant

acquisition. Ordinary Shares might be acquired

from Subsidiaries only and up to a maximum

of 121,267,595 Ordinary Shares. Due to the

fact that the 2019 Consolidated Financial

Statements were not adopted by the General

Meeting, the Management Board has not been

able to act on the basis of the authority granted,

because according to Dutch law repurchase of

shares is not permitted if more than six months

have passed since the end of a certain ﬁnancial

year without the annual ﬁnancial statements

having been adopted. The authorisation expired

at the date of the AGM 2021.

In deviation from this best practice provision,

the Remuneration Report, however, does

not contain a description of the pay ratios

within the whole Group because, due to the

sale of a number of Group companies and

the reorganisation within a number of Group

companies during the Reporting Period,

and in light of the intended sale of further

Group companies and/or the reorganisation

within Group companies, no representative

reference group could be determined that

would allow consistency and comparison in

subsequent years. It is expected that after the

3-step strategy is implemented, the Company

shall be able to describe pay ratios within

a wider representative reference group. To

provide as much transparency as possible,

The authorities granted by the General

Meeting enabled the Company to comply

with its obligations to issue Ordinary Shares

and grant rights under the Group’s various

share incentive schemes and afforded the

Management Board the flexibility to pursue

commercial opportunities such as mergers,

acquisitions and strategic partnerships.

The General Meeting on 14 March 2017

also authorised the Management Board, in

accordance with Section 2:96a, paragraph 6

of the DCC, to limit or exclude any pre-emption

rights in relation to the issue of Ordinary

Shares or the granting of rights to subscribe

for Ordinary Shares; such authority being

At the AGM 2021 it was resolved to authorise

the Management Board in order for the

Company to acquire fully paid-up Ordinary

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

the Remuneration Report contains pay ratios

within Group Services.

the Company be managed from South

Africa, the Supervisory Board shall strive

to nominate Managing Directors from

the regions where the Group companies

operate, and that no nationality should

male (66.67%). Three out of six Supervisory

Directors had South African nationality (50%)

and lived in South Africa, one out of six

Supervisory Directors had Dutch nationality

(16.66%) and lived in the Netherlands, one

4.1.3 (iv) This best practice provision provides

that any proposal to pay out dividends should

be dealt with as a separate agenda item of the

General Meeting.

count for more than 75% of the Managing out of six Supervisory Directors had British

Directors;

nationality (16.66%) and lived in the United

Kingdom, and one out of six Supervisory

Directors had United States nationality

(16.66%) and lived in the United States of

America. Hugo Nelson, who lives in South

Africa and has both South African and Maltese

nationality, is counted as having South African

nationality for this purpose. Due to the fact

that two Supervisory Directors, who were

female and had South African nationality,

resigned during the 2020 and the 2021

Reporting Periods and were not replaced, the

relevant diversity rates have declined.

In deviation from this best practice provision,

the agenda of the AGM 2021 did not include

such item, because the Company did not

realise proﬁts in the ﬁnancial year ended 30

September 2020. As a consequence thereof,

and in accordance with Dutch law, the Articles

and the Company’s policy on distributions

and reserves, no proﬁts could be added to the

reserves of the Company and no distributions

of proﬁts could be made to Shareholders.

(iii) further with respect to nationality, the

Supervisory Board shall strive to nominate

Supervisory Directors from the regions

where the Group companies operate, and

that no nationality should count for more

than 75% of the Supervisory Directors;

(iv) with respect to gender, the Supervisory

Board shall strive for a composition

of both the Supervisory Board and the

Management Board of not less than 30%

male and not less than 30% female; and

4.1.3 (v) and 4.1.3 (vi) These best practice

provisions provide that resolutions to

approve the management conducted by

the management board (discharge of

management board members from liability)

and the supervision exercised by the

supervisory board (discharge of supervisory

board members from liability), respectively,

should be dealt with as separate agenda items

of the General Meeting.

(v) with respect to age, the Supervisory Board

shall strive to ensure an appropriate age

diversity within the Supervisory Board and

the Management Board,

If and when selecting and nominating

candidates for the Supervisory Board,

the proﬁle of the Supervisory Board and

the Diversity Policy will be taken into

consideration.

it being understood that, in the selection of a

candidate on the basis of the above criteria,

the rules and generally accepted principles of

non-discrimination (on grounds such as ethnic

origin, race, disability or sexual orientation) will

be taken into account.

The Diversity Policy and the proﬁle of the

Supervisory Board can be viewed on the

Company’s website

In deviation from those two best practice

provisions, the agenda of the AGM 2021 did

not include such items, because given the

circumstances the Company has found itself

in since the accounting irregularities had been

uncovered in December 2017, the Management

Board and the Supervisory Board deemed it

inappropriate to propose to the General Meeting

that discharge be granted to the Managing

Directors and the Supervisory Directors.

www.steinhofﬁnternational.com.

CODE OF CONDUCT

Both Managing Directors who held ofﬁce during

the Reporting Period were male and to the

extent applicable Managing Directors appointed

have been nominated based on the above

criteria, taking into account the qualiﬁcations

required in view of the challenges faced by the

Group. Within the context of the nomination

and appointment of Managing Directors, the

Supervisory Board selects candidates based on

such qualiﬁcations and regardless of gender

which is in accordance with the Diversity Policy.

Due to the resignations of three Managing

Directors during the 2019 Reporting Period, on

the Reporting Date both remaining Managing

Directors had South African nationality

(100%) and lived in South Africa. If and when

selecting and nominating candidates for the

Management Board, the Supervisory Board will

take the Diversity Policy into consideration to

safeguard a balanced apportionment of the

seats of the Management Board, including

objective (ii) above.

The Management Board is responsible

for ensuring that adequate frameworks

and control systems are in place at OpCos

to detect fraud and irregularities. The

responsibility to detect and prevent fraud

remains with management at an operational

level. This is emphasised through continuous

sensitisation of operational internal audit

functions as well as inclusion of such focus

in internal audit processes. The operational

internal audit function reports fraud and ethics

violations to operational management. These

reports are escalated to the Management

Board and to the Audit and Risk Committee.

Such reports include associated remedial

actions.

DIVERSITY

The Company’s Diversity Policy was adopted

by the Supervisory Board on 30 August 2018.

The policy identiﬁes the following objectives

to further improve the diversity within the

Supervisory Board and the Management

Board:

(i) qualiﬁcations and previous experience,

particularly in the ﬁelds required to

ensure balanced boards, shall be key

considerations for nominations to

both the Supervisory Board and the

Management Board;

The Management Board has resolved that the

Group operates in an open and transparent

manner with a view to ensure that information

is provided to all stakeholders within the legal

parameters.

On the Reporting Date, two out of six

Supervisory Directors were female (33.33%)

and four out of six Supervisory Directors were

(ii) with respect to nationality, subject

to and taking into account the South

African Reserve Bank requirement that

The Company has adopted a Code of Conduct

that sets out general policies and guidance

as to how all its temporary and permanent

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

employees, ofﬁcers, and directors (including

the Managing Directors and Supervisory

Directors) should conduct business. The

Management Board encourages conduct of

Compliance reports are reviewed by the Group As such, only Ordinary Shares were issued. No

Risk function and reported to the Management differentiation in class exists between Ordinary

Board and the Audit and Risk Committee on

a quarterly basis. The Company has detailed

Shares. Therefore, the percentage of this

issued ordinary share capital represented by

each class of shares was 100%.

business that is in keeping with the Company’s policies in place governing ownership of,

core values of transparency, fairness, honesty,

integrity and good corporate citizenship.

and transactions in, securities by Managing

Directors, Supervisory Directors, closely

associated persons and employees.

No Preference Shares were issued during the

Reporting Period or in issue on the date of this

Annual Report.

In view of the decentralised business model

of the Group, the compliance principles are

implemented at OpCo level by operational

management. The Management Board

has recommended that management of

each OpCo endorse those principles and

incorporate the same in its own company

policies and guidelines. Although the

compliance principles are therefore a matter

of operational responsibility, the application

thereof is monitored by the Management

Board at Group level by means of attendance

at the local governance committee meetings

as members and/or invitees. The Management

Board and the Group Risk function have insight

into the pack content which is submitted

at these meetings which would deal with

instances of non-compliance with the

Company’s and/or OpCo’s codes of conduct.

In addition, the employees at Group Services

have all conﬁrmed their compliance with

the Steinhoff Code of Conduct via the online

reporting tool. Based on this it appears that

there were no incidences of substantial non-

compliance with the codes of conduct during

the Reporting Period.

The Code of Conduct, the whistle-blower

policy and the policy on inside information,

managers’ transactions and insider lists are all

available on the Company’s website

RESTRICTIONS ON TRANSFER OF

Pursuant to article 12 of the Articles, for as

long as Shares (or depositary receipts thereof)

are admitted to a listing on a regulated stock

exchange, as referred to in Section 2:86c of

the DCC, the transfer of a Share shall require

a private deed to that effect unless the

Company itself is a party to such legal act,

and the transfer is acknowledged in writing

by the Company. The acknowledgement shall

be made in the private deed or in a dated

statement of acknowledgement on the private

deed or on a true copy or extract thereof duly

authenticated by a civil law notary or by the

transferor. Ofﬁcial service of such private

deed, true copy or extract on the Company is

considered to have the same effects as an

acknowledgement.

www.steinhofﬁnternational.com.

DISCLOSURES PURSUANT TO DUTCH DECREE

IMPLEMENTING ARTICLE 10 EU TAKEOVER

DIRECTIVE

Pursuant to the Dutch Decree implementing

article 10 EU Takeover Directive, the Company

is required to report on the following:

SHARE CAPITAL STRUCTURE

As at the Reporting Date, the structure of the

Company’s share capital was as follows:

Authorised share capital

The authorised share capital of the

Company amounted to:

SUBSTANTIAL NOTIFIABLE

SHAREHOLDINGS

16 000 000 000 Ordinary Shares with a

nominal value of €0.01 each

Pursuant to the Dutch Financial Supervision

Act, any person who, directly or indirectly,

acquires or disposes of an actual or potential

interest in the capital or voting rights of the

Company must immediately notify the AFM

by means of a standard form, if, as a result of

such acquisition or disposal, the percentage

of capital interest or voting rights held by such

person in the Company reaches, exceeds or

falls below any of the following thresholds: 3%,

5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%,

75% and 95%.

4 000 000 000 Preference Shares with a

nominal value of €0.01 each

Furthermore, the Group has a whistle-blower

policy, which establishes the procedure for

handling reportable concerns of suspected

criminal or unethical conduct by, or within, the

Group. The scope of this policy extends not

only to concerns involving Managing Directors,

Supervisory Directors, ofﬁcers and employees,

but also to matters involving shareholders,

consultants, vendors, contractors, outside

agencies and/or any other parties in a

Issued share capital

The issued share capital of the Company

amounted to:

4 269 609 051 Ordinary Shares with a

nominal value of €0.01 each

Effective as of 3 November 2020, the issued

share capital of the Company was reduced

from 4 309 727 144 to 4 269 609 051 Ordinary

Shares, following the cancellation of

40 118 093 Ordinary Shares.

Shareholders, holding 3% or more in the issued

share capital or voting rights of the Company

as at 30 September 2021, as disclosed in the

AFM register are set out in the following table:

business relationship with the Group.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

Date notiﬁcation requirement

7 December 2015

Party obliged to notify

Share capital interest/ Voting right

Share capital interest

Voting right

Percentage

1.77%

M.J. Jooste

7 December 2015

M.J. Jooste*

32.50%

9.91%

14 December 2017

Public Investment Corporation SOC Ltd

Share capital interest

Voting right

9.91%

* Mr. Jooste was party to the Voting Pool Arrangements, as a result of which he had a combined voting right (reference is made to the Restrictions on voting rights

section below).

The holdings reflected above indicate the

percentages of issued share capital and the

respective voting rights notiﬁed as held by

these major shareholders as at the Reporting

Date based on the register maintained by

the AFM. This overview has been exclusively

based on the contents of the public register

of substantial notiﬁable shareholdings of

the AFM, which is considered to be correct

under Dutch law. However, it is noted that

the overview of substantial notiﬁable

shareholdings as at 30 September 2021,

as shown above, may not be complete or

accurate as the onus to submit updates rests

with the investors. According to information

provided independently to the Company the

Voting Pool Arrangements were terminated in

December 2017. Mr. Jooste was part of that

voting pool and has not yet notiﬁed the AFM of

the fact that as a result of its termination his

voting right fell below the reporting threshold.

The Company is not aware of any restrictions

on voting rights.

SPECIAL VOTING ATTACHING TO

Each Ordinary Share confers the right to cast

one vote at a General Meeting, unless and for

so long as Preference Shares are in issue, in

which case each Ordinary Share confers the

right to cast ﬁfty votes and each Preference

Shares confers the right to cast one vote at a

General Meeting. No Preference Shares were

outstanding during the Reporting Period and

none are outstanding as at the date of this

Annual Report. As such, no Shares with special

voting rights were outstanding at the time of

this Annual Report.

The Company has no anti-takeover measures

in place.

AGREEMENTS BETWEEN

SHAREHOLDERS WHICH MAY RESULT

IN RESTRICTIONS OF THE TRANSFER

OF SECURITIES OR VOTING RIGHTS

The Company is not aware of any agreements

between shareholders which may result in

restrictions of the transfer of securities or

voting rights.

RULES GOVERNING THE

THE SYSTEM OF CONTROL OF AN

EMPLOYEE SHARE SCHEME

APPOINTMENT AND REMOVAL

OF MANAGING DIRECTORS AND

SUPERVISORY DIRECTORS, AND THE

AMENDMENT OF THE ARTICLES

Reference is made to the relevant sections in

this Corporate Governance Report, which are

incorporated by reference.

Share rights under the ESRS do not confer

on participants any shareholder rights, until

Shares are issued or delivered to participants,

whereupon they will rank pari passu with the

other issued Shares. Since March 2017, no

rights under the ESRS have been granted and

at this time the Company has no intention to

grant any further rights under the ESRS.

Steinhoff International Holdings N.V. is

not responsible for listing the substantial

notiﬁable shareholdings and has replicated

the information contained in the AFM public

website www.afm.nl.

THE POWERS OF THE MANAGEMENT

BOARD, IN PARTICULAR THE POWER

TO ISSUE AND BUY BACK SHARES

Reference is made to the relevant sections in

this Corporate Governance Report, which are

incorporated by reference.

RESTRICTIONS ON VOTING RIGHTS

Neither the Company nor any of its

There were no transactions concluded

between the Company and legal or natural

persons who hold at least ten per cent of the

Shares during the Reporting Period.

Subsidiaries may cast a vote on any Share

they hold in the Company. Such Shares are

not taken into account for the purpose of

determining how many shareholders are

represented or how much of the share capital

is represented at any General Meeting.

Pursuant to the Articles, for each General

Meeting a statutory record date will be

applied, in order to determine in which persons

voting rights and meetings rights are vested.

The record date and the manner in which

shareholders and other persons holding

Meeting Rights can register and exercise their

rights will be set out in the notice convening

the meeting.

ANY SIGNIFICANT AGREEMENTS TO

WHICH THE COMPANY IS A PARTY,

AND WHICH TAKE EFFECT, ALTER

OR TERMINATE UPON A CHANGE

OF CONTROL OF THE COMPANY

FOLLOWING A TAKEOVER BID

The ESRS provides that if the Company or the

company which employs the participant is

taken over, delisted or becomes the subject

of a merger which results in the listing of

the Shares being suspended or terminated

during a measurement period and/or prior

to a measurement date, the vesting date

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT// continued

will then automatically coincide with the

effective date of the relevant corporate

action. The Share rights will be adjusted on

a time weighted basis and exchanged for

equivalent valued rights in the Company’s

successor (as determined and approved by the

Supervisory Board or the Management Board

(as applicable) where necessary), provided

however that all the measurement criteria

have been met up to the effective date of the

relevant corporate action.

ANY AGREEMENT BETWEEN THE

COMPANY AND ITS MANAGING

DIRECTORS OR EMPLOYEES

PROVIDING FOR COMPENSATION

IF THEIR EMPLOYMENT CEASES

BECAUSE OF A TAKEOVER BID

There are no agreements with Managing

Directors or employees which entitle any of

them to compensation if their employment

ceases because of a takeover bid, other than

Managing Directors becoming contractually

entitled to receiving a severance payment at

a maximum equal to their total annual ﬁxed

compensation upon termination for reasons

other than cause or retirement and in line

with the Company’s remuneration policy. This

severance payment includes any severance

payments flowing from the Managing

Directors’ local employment agreements,

insofar as permissible under local law.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

PART III

REPORT OF THE

SUPERVISORY BOARD

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REPORT OF THE

SUPERVISORY BOARD

The role of the Supervisory Board is to supervise the policies of the Management Board and the general

affairs of the Company and the business connected with it, as well as to assist the Management Board

by providing advice. In discharging its role, the Supervisory Board shall be guided by the interests of the

Company and the business connected with it and shall take into account the relevant interests of the

Company’s stakeholders.

COMPOSITION OF THE SUPERVISORY BOARD

As at the Reporting Date, the Supervisory Board consisted of the following six members:

Date of initial

appointment

Date of

resignation

Name

Age

Position

Current term

2018–2022

2018–2023

Independent

Yes

Committee member

Moira Moses

Peter Wakkie

Chairperson

20-04-2018

N/A

Nomination Committee

Deputy

Chairperson

Yes

Human Resources and

Remuneration Committee,

Litigation Working Group

Paul Copley

Member

30-08-2019

20-04-2018

N/A

2019-2022

2018–2022

Yes

Audit and Risk Committee,

Litigation Working Group

Hugo Nelson

Audit and Risk Committee,

Human Resources and

Remuneration Committee

David Pauker

Member

30-08-2019

20-04-2018

N/A

2019-2023

2018–2022

Yes

Nomination Committee,

Human Resources and

Remuneration Committee,

Litigation Working Group

Alexandra Watson

Audit and Risk Committee,

Nomination Committee

INDEPENDENCE

In the opinion of the Supervisory Board, the independence requirements referred to in best practice provisions 2.1.7 to 2.1.9 inclusive of the DCGC

were fulﬁlled.

CONTINUING EDUCATION

As part of the continuing education programme, the Supervisory Directors received presentations on the Dutch proceedings of a conﬁrmation of

private restructuring plans (WHOA), suspension of payments and bankruptcy, on judgements and estimates in ﬁnancial reporting, on conflicts of

interest, insider trading and related party transactions as well as on other relevant Dutch legal and corporate governance matters.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REPORT OF THE SUPERVISORY BOARD// continued

SUPERVISORY BOARD MEETINGS, ATTENDANCE, INVOLVEMENT WITH STRATEGY, ACTIVITIES REPORT AND EVALUATIONS

During the Reporting Period, quarterly Supervisory Board meetings were held on 26 November 2020, 25 February 2021, 24 June 2021 and 26

August 2021, where both Managing Directors who were in ofﬁce during the Reporting Period attended the meetings. In addition, eleven special

meetings were held, thus totaling to ﬁfteen meetings.

During the period from 15 February until 2 October 2021 when the Company was subject to the Dutch SoP, both court-appointed administrators

(bewindvoerders) were invited to all meetings of the Audit and Risk Committee and the Supervisory Board, except for meetings related to Human

Resources matters. At most meetings at least one of the administrators was in attendance.

The table below provides the attendance by each Supervisory Director at both the quarterly and special meetings.

Attendance at Supervisory Board meetings during the Reporting Period

Date First

Meeting

Date Last

Meeting

Total

Meetings

Missed

meetings

Attendance

Percentage

Name

M.A. Moses

P.N. Wakkie

P.D. Copley

K.T. Kweyama^**

H.A. Nelson

D.I. Pauker

A. Watson

12 October 2020

26 August 2021

12 March 2021

26 August 2021

4^*

73%

93%

100%

93%

100%

93%

Ms Moses took a short leave of absence because of family circumstances

^**Resigned on 19 April 2021

During the Reporting Period, the Supervisory

Board, amongst other matters:

(x) reviewed the Regulations of the

Supervisory Board and of all its

committees;

EVALUATIONS

Management Board evaluation

The Nomination Committee initiated the

Supervisory Board’s evaluation of the

(i) discussed the Group strategy, the

implementation of this strategy by the

Management Board and the principal

risks associated with this strategy;

(xi) nominated Mr. Peter Wakkie for re-

appointment as Supervisory Director until

the close of the AGM to be held in 2023;

functioning of the Management Board as

a whole and of the individual Managing

Directors. The Nomination Committee, through

its Chairperson, held various consultations

throughout the year with Supervisory Directors

and with other key stakeholders to establish a

view of the performance of the Management

Board through targeted questioning and

an observation of performance, results

and stakeholder feedback. In addition, a

panel consisting of all members of the

Nomination Committee and the Chairperson

of the Human Resources and Remuneration

Committee conducted performance reviews

with each of the Managing Directors to

establish their opinions on the functioning

of the Management Board as well as the

Managing Directors during the Reporting

Period. The Management Board also

(ii) was advised on all major sale

(xii) adopted selection criteria and

appointment procedures, and a

succession plan for Managing Directors

and Supervisory Directors;

transactions undertaken by the Group;

(iii) received high-level reports on the

performance of the Company’s major

subsidiaries;

(xiii) discussed the acceleration and forfeiture

of certain tranches under the LTI scheme;

(iv) received reports on progress with the

litigation strategy;

(xiv) performed an evaluation of the

functioning of the Management Board as

a whole and of the individual Managing

Directors; and

(v) received reports on the impact of the

COVID-19 pandemic on the Group;

(vi) approved the Steinhoff Governance,

Risk, Compliance and Internal Audit

Framework, the Internal Audit Charter and

the annual internal audit plan;

(xv) performed an evaluation of its own

functioning and of all its committees.

STRATEGY

Throughout the Reporting Period, the

Management Board and the Supervisory Board completed a self-evaluation questionnaire,

(vii) resolved to dissolve the Forensic

Investigation Committee;

had multiple discussions concerning the

ﬁnancial, business and litigation strategy of

which covered substantive aspects,

interaction between Managing Directors,

the Group, the implementation thereof and the interaction with the Supervisory Board, time

associated risks.

management, information provision and

(viii) reviewed the proﬁle and the rotation

schedule of the Supervisory Board;

(ix) reviewed the diversity policy;

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REPORT OF THE SUPERVISORY BOARD// continued

support to the Supervisory Board , as well

as the composition, size, competencies and

expertise of the Management Board, and

any recommendations for improvement. The

results of the questionnaires were summarised

by the Company Secretary in anonymous form

and the conclusions and recommendations

subsequently discussed by the Nomination

Committee.

with the appropriate governance structures

in place. The quality of the relationship

between the Management Board and the

Supervisory Board was highly rated and the

oversight provided by the Supervisory Board is presence of the Management Board. The

considered appropriate.

summarised by the Company Secretary in

anonymous form and the conclusions and

recommendations subsequently discussed

by the Supervisory Board, outside the

Chairperson discussed with each of the

Supervisory Directors their roles within the

Supervisory Board and their functioning. The

Chairperson’s functioning was evaluated in the

questionnaires.

Supervisory Board evaluation

The Nomination Committee initiated the

Supervisory Board’s evaluation of its own

functioning, the functioning of the Audit and

Risk Committee, the Nomination Committee,

and the Human Resources and Remuneration

Committee during the Reporting Period. The

evaluations were conducted through the

completion of questionnaires, which covered

substantive aspects, interaction between

Supervisory Directors, interaction with the

Management Board, time management,

information provision and support to the

Supervisory Board, as well as the composition,

size, competencies and expertise of the

Supervisory Board, the effectiveness of the

committees of the Supervisory Board, and

any recommendations for improvement.

The results of the questionnaires were

The Managing Directors agreed that the

Management Board was functioning well, was

appropriately sized and had the necessary

expertise and composition to undertake all

tasks and perform all duties expected of

it. Responsibilities are clearly deﬁned and

there is a strong and constructive working

relationship between the two Managing

Directors. Both are independently minded and

comfortable to challenge each other when

it is necessary to do so. There is a mutual

respect and trust between the CEO and CFO,

and they work in a transparent and honest

manner. Communication is effective between

the Management Board and their respective

support teams. Formal meetings take place

The Supervisory Directors agreed that the

ratings of the Supervisory Board were good

to excellent, and the Supervisory Board was

satisﬁed that it has been able to continue

to operate effectively during the Covid-19

pandemic. There was consensus that

the current size and composition of the

Supervisory Board is effective but that in

future, once the restructuring is completed,

consideration may be given to the nomination

of a director with more global retail experience

who could add value to the deliberations of the

Supervisory Board.

COMMITTEES OF THE SUPERVISORY BOARD

REPORT OF THE AUDIT AND RISK COMMITTEE

Composition

Meetings

As at the date of this Annual Report, the committee consists of

Alexandra Watson (chairperson), Paul Copley and Hugo Nelson.

Pursuant to the Regulations of the committee, the committee meets

as often as deemed necessary for the proper functioning of the

committee and meets at least four times each ﬁnancial year. During

the Reporting Period, the committee held ﬁve meetings.

Meeting attendance

Attendance of members of the Audit and Risk Committee during the Reporting Period

Date First

Meeting

Date Last

Meeting

Total

Meetings

Missed

meetings

Attendance

Percentage

Name

A. Watson

P.D. Copley

H.A. Nelson

20 October 2020

25 August 2021

100%

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REPORT OF THE SUPERVISORY BOARD// continued

Activities of the Audit and Risk Committee

During the Reporting Period, the Audit and Risk Committee, amongst

other matters:

(ix) met with the Head of Internal Audit outside the presence of the

Management Board;

(i) reviewed the quarterly ﬁnancial results;

(x) reviewed the effectiveness of the design and operation of

the internal risk management, governance, ethics and control

systems;

(ii) reviewed reports on compliance with laws and regulations by the

Company and its Subsidiaries, regulatory compliance, litigation,

treasury, tax, internal control, whistle-blowing and cyber security

risks;

(xi) assessed the absence of a separate internal audit function at

the Company;

(iii) reviewed reports from Social & Ethics Committees of Pepkor

Holdings and SIHL, the internal reporting lines within the Group

and compliance with the code of conduct;

(xii) reviewed and recommended that the Supervisory Board approve

the Steinhoff Governance, Risk, Compliance and Internal Audit

Framework, the Internal Audit Charter and the annual internal

audit plan;

(iv) received updates from Mazars with respect to the external audit

of the 2020 Consolidated Financial Statements, as well as the

separate ﬁnancial statements;

(xiii) assessed the role and functioning of the CFO;

(xiv) assessed the independence and functioning of Mazars and its

lead partner;

(v) received a presentation from Mazars in respect of their audit of

the 2020 Consolidated Financial Statements;

(xv) (re-)assessed any Related Party Transactions as per the relevant

policy;

(vi) reviewed Mazars’ draft audit report in respect of the 2020

Consolidated Financial Statements;

(xvi) considered a selection and tender process for the statutory

(vii) discussed the Management Board’s in-control statement with the

Management Board and with Mazars;

External Auditor for the ﬁnancial year 2022; and

(xvii) performed an evaluation of its own functioning.

(viii) met with Mazars outside the presence of the Management

Board;

REPORT OF THE HUMAN RESOURCES AND REMUNERATION COMMITTEE

Composition

Meetings

As at the date of this Annual Report, the committee consists of Hugo

Nelson (chairperson), David Pauker and Peter Wakkie. On 19 April

2021 Khanyisile Kweyama resigned from the Supervisory Board and

also as member of the committee. On 24 June 2021 Peter Wakkie

was appointed as member of the committee.

Pursuant to the Regulations of the committee, the committee meets

as often as deemed necessary for the proper functioning of the

committee and meets at least twice each ﬁnancial year. During the

Reporting Period, the committee held ﬁve meetings.

Meeting attendance

Attendance of members of the Human Resources and Remuneration Committee during the

Reporting Period

Date First

Meeting

Date Last

Meeting

Total

Meetings

Missed

meetings

Attendance

Percentage

Name

H.A. Nelson

K.T. Kweyama*

D.I. Pauker

P.N. Wakkie**

9 October 2020

21 May 2021

100%

67%

9 October 2020 24 February 2021

9 October 2020

21 May 2021

100%

N/A

Resigned on 19 April 2021

Joined the committee on 24 June 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REPORT OF THE SUPERVISORY BOARD// continued

Activities of the Human Resources and Remuneration Committee

During the Reporting Period, the Human Resources and Remuneration (iii) considered the consequences of the acceleration and forfeiture

Committee, amongst other matters:

of certain tranches under the LTI scheme;

(i) performed a review of the performance conditions and prepared

a proposal for the payment of the annual bonus and the vested

tranche of the cash-based long-term incentive in respect of each

of the Managing Directors for the 2020 Reporting Period;

(iv) performed a review of the Supervisory Directors’ fees;

(v) discussed whether a meaningful reference group could be

determined to establish a pay ratio within the Group;

(vi) prepared a Remuneration Report in respect of the 2020

Reporting Period;

(ii) prepared a proposal for a conditional annual bonus award and a

cash-based long-term incentive award in respect of each of the

Managing Directors for the ﬁnancial year ending 30 September

2021;

(vii) prepared an amended Remuneration Policy of the Management

Board; and

(viii) performed an evaluation of its own functioning.

REPORT OF THE NOMINATION COMMITTEE

Composition

Meetings

As at the date of this Annual Report, the committee consists of Moira

Moses (chairperson), David Pauker and Alexandra Watson.

Pursuant to the Regulations of the committee, the committee meets

as often as deemed necessary for the proper functioning of the

committee and meets at least once each ﬁnancial year. During the

Reporting Period, the committee held ﬁve meetings.

Meeting attendance

Attendance of members of the Nomination Committee during the Reporting Period

Date First

Meeting

Date Last

Meeting

Total

Meetings

Missed

meetings

Attendance

Percentage

Name

M.A. Moses

D.I. Pauker

A. Watson

9 October 2020

23 June 2021

80%

100%

Activities of the Nomination Committee

During the Reporting Period, the Nomination Committee, amongst

other matters:

(v) reviewed the Supervisory Board proﬁle, the Supervisory Board

rotation schedule and the Diversity Policy;

(i) prepared selection criteria and appointment procedures, and

a succession plan for Managing Directors and Supervisory

Directors;

(vi) initiated the evaluation of the functioning of individual Managing

Directors and Supervisory Directors;

(vii) initiated the evaluation of the functioning of the Management

Board as well as the Supervisory Board, the Audit and

Risk Committee, the Human Resources and Remuneration

Committee, and the Nomination Committee; and

(ii) recommended Mr. Peter Wakkie for re-appointment as

Supervisory Director until the close of the AGM to be held in

2023;

(iii) reviewed the size and composition of the Management Board

and the required expertise of the Managing Directors;

(viii) performed an evaluation of its own functioning.

(iv) reviewed the size and composition of the Supervisory Board and

the required expertise of the Supervisory Directors;

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

PART IV

REMUNERATION REPORT

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION

REPORT

Our remuneration philosophy dictates that all employees are fairly rewarded for their individual and joint

contributions to the execution of the Steinhoff strategy and delivery of the Group’s performance.

The journey to achieve the 3-step strategy

consists of a multiple of deliverables and

processes that must be carefully balanced

and executed at the right time for the desired

result. The milestones reached were in many

instances groundbreaking and signiﬁcant over

the past ﬁnancial year and can be summarised

as follows:

•

Steinhoff received approval from FinSurv

for one of the largest ever foreign exchange

transactions as part of the settlement, and

INTRODUCTION

The main differentiating factor between

companies is the calibre of human capital and

a company’s ability to attract and retain the

skill and institutional knowledge of its human

capital for the beneﬁt and the achievement of

the company’s strategy. Despite the challenges

the Company is facing and the extraordinary

circumstances Steinhoff is currently in, the

Management Board, supported by its senior

management and other Group Services

employees, remains determined to achieve the

Company’s 3-step strategy.

Steinhoff successfully placed €409 million

worth of Pepkor Holdings shares overnight.

In 2018 the Supervisory Board implemented

a cash-based remuneration framework that

would serve best to attract and retain the

talent required to reach the above challenging

milestones, and implement the 3-step

strategy ensuring business continuation

and optionality. In this context, a revised

remuneration policy for the Management

Board was proposed at the AGM 2020 and

another new draft remuneration policy at the

•

The Litigation Settlement Proposal is one

of, if not the largest, settlement ever offered

by a company in distress.

•

A signiﬁcant number of competing

interests, including competing interests

within each different category (three

separate stock exchange listings, more

The 3-step strategy, explained in more detail

in the Management Board Report, can be

summarised as follows:

than 100 000 shareholders, €10 billion debt AGM 2021. However, since those proposals

held in different instruments by more than

250 investors, more than 100 litigation

cases involving the Group) of which all

interests were appropriately balanced over

the past four years.

were rejected at both AGMs, the current

remuneration policy (from 1 December 2015)

has remained the policy applicable during

the year under review. An overview of the

remuneration policy as well as a description

of how this policy was applied during the

2021 Reporting Period is provided in this

Remuneration Report.

Step 1 – Creditors arrangement (CVAs

implemented on 13 August 2019),

Step 2 – Manage litigation risk (Dutch

SoP implemented and completed,

Composition Plan approved, Court Order

approving and sanctioning the S155

Scheme granted; distributions to be paid

to all claimants post SED); and

•

In the Dutch SoP process, the voting by a

Committee of Representation was used for

the ﬁrst time in 60 years.

It is the ambition of the Supervisory Board,

the Management Board as well as all Group

Services employees, to complete the 3-step

strategy as successfully and timeously as

possible. Since the successful sanctioning of

the Composition Plan and the termination of

the Dutch SoP, and a (near) unanimous vote in

favour of the Litigation Settlement Proposal,

the Human Resources and Remuneration

Committee (the “Remuneration Committee”)

and the Supervisory Board have been engaged

The Committee of Representation voted

unanimously in favour of the Composition

Plan, in three separate S155 Scheme

claimant meetings that were successfully

held with no votes registered against the

scheme.

Step 3 – Restructure the Group, with a

view to reducing debt and ﬁnancing costs

(Pepco Group IPO completed, Mattress

Firm distribution to shareholders; sale of

the Plush business; all proceeds used to

reduce debt).

•

Steinhoff continued to address the

liquidation and litigation challenges while

remaining listed on two international stock

exchanges.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

in redesigning the remuneration framework,

year, being 1 October 2021. With this proposed 2. Further changes relate to reﬁnements

which resulted in a revised remuneration policy remuneration policy, the Remuneration

which ensure alignment with new legal

requirements due to the implementation

of the revised Shareholders Rights

Directive (2017/828/EU (SRD II)).

for the Management Board to align it with

the Company’s retention and incentivisation

strategy and milestones reached thus far,

while taking into consideration the criticism

Committee has found a balance between

the desire to more clearly align the interests

of the Management Board with those of our

stakeholders and to hold the Management

Moreover, to further enhance transparency,

the Remuneration Committee has included a

section (Part 4 of this remuneration report)

in which it outlines its anticipated changes to

the Remuneration Policy as it would become

applicable once further milestones have been

achieved and the 3-step strategy has been

completed.

received from shareholders. The Remuneration Board and Senior Managers accountable

Committee, with the assistance of a reputable

external service provider, has considered the

organisational size and structure and took

into account the Dutch Corporate Governance

Code, the Dutch Civil Code and market best

practices. The Supervisory Board intends

to submit the revised remuneration policy

to the General Meeting for approval at the

AGM to be held in 2022 to demonstrate to

the shareholders the Company’s continued

commitment to shareholder alignment

appropriate for the circumstances.

for the successful delivery of the strategic

plan versus its key responsibility to attract

and retain high calibre Managing Directors

and Senior Managers who are willing to bear

the personal reputational and other risk and

extreme workload necessary to achieve the

3-step strategy. The Remuneration Committee

and the Supervisory Board deem it essential

to ensure that Managing Directors and Senior

Managers – of whom the majority took up

their current roles during or after 2018 – are

retained and remunerated adequately for the

personal sacriﬁces and personal risk taken

on by committing to the achievement of the

3-step strategy.

The remainder of this report consists of

the following parts:

Part 1: Summarising overview

Part 2: Description of the current

Remuneration Policy

The Remuneration Committee considered

the voting results of the AGM 2020 and AGM

2021 and engaged in constructive dialogues

with (representatives of) investors as well as

proxy advisors in preparation of the agenda of

the AGM to be held in 2022. Overall, feedback

focused primarily on the lack of an equity-

based compensation component with a

sufﬁcient long-term character, and the limited

level of share ownership amongst executives.

Finally, the level of transparency regarding the

implementation of the policy was regarded as

insufﬁcient, and especially in relation to the

disclosure of STIP/ LTIP targets (short-term

incentive plan and long-term incentive plan)

(ex-post).

Part 3: Application of the current

Remuneration Policy during the 2021

Reporting Period

The highlights of the newly proposed

remuneration policy are included in the

last section of this Remuneration Report.

The complete version of the proposed

remuneration policy will be included in the

annexes to the agenda of the AGM to be held

in 2022. Compared to the 2015 Remuneration

Policy as currently implemented, the proposed

remuneration policy includes the following

main changes:

Part 4: Highlights from the proposed

modiﬁcation of the Remuneration Policy

from 2022 onward

This report is prepared in accordance with the

relevant provisions of the Dutch Civil Code and

the Dutch Corporate Governance Code.

1. In light of the milestone achievements

over the Reporting Period, the LTI plan

is foreseen to become a combination

of cash-based and equity-based

Based on this, the Company will submit a

revised remuneration policy to the AGM to be

held in 2022, which will – once adopted – be

applicable from the start of the 2022 ﬁnancial

components. The underlying rationale is

explained in more detail in the relevant

section of this report; and

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

PART 1: SUMMARISING OVERVIEW

The current Remuneration Policy was approved by the General Meeting on 1 December 2015. This policy applies to both Managing Directors

and members of the Executive Committee. The Executive Committee has been dissolved in December 2017 and no new Executive Committee

has been established since then. The core components of the Remuneration Policy as well as the application thereof for the Managing Directors

during the 2021 Reporting Period are summarised below. The full Remuneration Policy can be viewed on the Company’s website

www.steinhofﬁnternational.com.

Element and link to

strategy

Description and 2021 opportunity

Realisation 2021

Fixed pay: base salary

Fixed cash compensation paid monthly, based on the role and responsibilities

of the position, internal pay differentials and external market data. The

remuneration benchmark for the 2021 Reporting Period, performed by a

reputable external service provider, conﬁrmed that the annual salary for

Managing Directors was appropriate, given the unique circumstances

surrounding the Company. More detail on the remuneration benchmark is

presented in part 4 of this report.

CEO: €1 384 000

CFO: €1 200 000

Provides a fair and

competitive basis for

the total compensation

package to attract and

retain the right calibre of

executives.

The CEO and CFO did not

receive a salary increase for the

2021 Reporting Period.

Fixed pay: pension and

other beneﬁts

Membership of an approved retirement fund, life and medical disability

insurance and medical aid schemes. These beneﬁts form part of the base

salary and are not paid in addition to the base salary.

CEO: €63 000

CFO: €68 000

Provides for the

employee’s health and

retirement welfare.

Annual bonus (short-

term incentive, or “STI”)

A variable pay opportunity, paid out in cash based on the achievement of

annual performance targets, of which 100% relate to ﬁnancial, operational

and transformational measures to ensure the operational continuity of the

Company.

CEO: €1 037 812 (based on

performance for the 2021

Reporting Period)

Drives and rewards

the continuation of the

Company.

CFO: €900 000 (based on

performance for the 2021

Reporting Period)

The target bonus and maximum opportunity equals 75% of base salary for

both the CEO and CFO. For threshold performance, a pay-out of 50% of base

salary will occur, while for below threshold performance there will be no pay-

out.

Drives and rewards sound

business decisions for

possible longer-term

value preservation for

stakeholders.

Based on the realisation of the

various objectives, which was

on average 100% of the stated

target, the resulting pay-out

over the 2021 Reporting Period

equals 75% of the annual base

salary.

Opportunity in the 2021 Reporting Period

•

At target/maximum performance (80% to 100% of all targets): 75% of base

Aligns Management

Board and stakeholders’

interests.

salary

•

Medium performance (70% to 79.99% of all targets): 65% of base salary

Threshold performance (60% to 69.99% of all targets): 50% of base salary

Below threshold performance: no pay-out

Achievements include, but are

not limited to:

For the 2021 Reporting Period, objectives were deﬁned for each of the

following Key Performance Indicators (“KPIs”) which were applied for both the

CEO and CFO with individual weightings:

•

Mattress Firm re-ﬁnance of

debt,

The proportional equity sale

of Pepco Group,

CEO KPI weightings

•

Business optimisation and balance sheet restructuring (40% of total

opportunity)

The successful restructure

of Freedom (part of Greenlit

Brands),

•

Financial reporting (10%)

Group litigation (40%)

•

Repayment of debt,

Stakeholder interaction (10%)

•

Simpliﬁcation of European

Group structure,

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

Element and link to

strategy

Description and 2021 opportunity

CFO KPI weightings

Realisation 2021

•

The preparation and

announcement of a

Litigation Settlement

Proposal,

•

Business optimisation and balance sheet restructuring (35% of total

opportunity)

•

Financial reporting (40%)

Group litigation (15%)

•

Cashflow management,

Manage tax audits and

Stakeholder interaction (10%)

securing material refunds,

•

Implementation of

ﬁnancial steps to enable

implementation of the

Litigation Settlement

Proposal.

Long-term incentive (or

“LTI”)

Under normal circumstances, a variable pay opportunity consisting of a

conditional award in Company shares that might vest after 3 years, based on

a combination of ﬁnancial KPIs such as Headline Earnings per Share (“HEPS”),

Operating Proﬁt and return on equity measured during a 3-year period.

CEO: €1 372 500 (based on

performance in the 2021

Reporting Period)

Drives and rewards

both retention and

performance over the

longer-term considering

the extraordinary

CFO: €1 133 333 (based on

However, in the context of the extraordinary circumstances and the continuous performance in the 2021

focus on normalising the Company’s situation, the Supervisory Board decided

to deviate from the policy as follows:

Reporting Period)

Based on the realisation of

the various objectives, as

highlighted above, which was

on average 100% of the stated

target, the resulting pay-out

over the 2021 Reporting Period

equals 99% of the annual base

salary for the CEO and 94% of

the annual base salary for the

CFO.

circumstances the

Company is in.

•

A cash-settled LTI allocation is awarded annually and paid out in three

equal tranches over three years on the anniversary of the award, subject to

the following conditions:

Aligns Management

Board and stakeholders’

interests.

–

50% of the pay-out is for retention purposes and as such is linked to

continuous employment, which requires the Managing Director to be

employed by the Company at the moment of pay-out, and

Supports Managing

Director retention over the

longer-term.

–

50% of the pay-out is linked to performance and the achievement of all

the KPIs that are also used for the Annual Bonus Scheme.

The share-based LTI

scheme was replaced by

a cash-based LTI scheme.

This deviation from the policy ensures that the Company will be able to attract

and retain the Managing Directors and Senior Managers and remunerate

them adequately for the personal sacriﬁces and personal risk taken on by

committing to the achievement of the 3-step strategy.

No new share-based awards

were made during the 2021

Reporting Period.

The target and maximum LTI opportunity are equal to 100% of base salary for

both the CEO and CFO, payable over a 3-year period in three equal tranches.

For threshold performance, a pay-out of 50% of base salary will occur for the

performance portion, while for below threshold performance there will be no

pay-out. These thresholds do not affect the retention portion.

Finally, it should be noted that the Supervisory Board intends to submit a fully

revised remuneration policy (outlining an LTI plan with a combined cash and

equity component) to the General Meeting to be held in 2022 for approval, to

demonstrate shareholder alignment and due to the achievement of certain key

milestones in completing the 3-step strategy and the gradual normalisation

of the Company’s situation. The proposed revised remuneration framework is

presented in part 4 of this report.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

ﬁnancial and non-ﬁnancial indicators

relevant for the Company’s value creation

on the longer-term;

BASE SALARY

PART 2: DESCRIPTION OF THE CURRENT

REMUNERATION POLICY (APPROVED

The ﬁxed or guaranteed element of

remuneration is referred to as the base salary.

In determining fair and competitive base

salaries that enable the Company to attract

and retain the right calibre of executives, the

Supervisory Board takes into consideration

the individual’s responsibilities, Company

and individual performance as well as

the pay differentials within the Company.

Finally, the external perspective is taken into

account by using data issued by independent

remuneration experts.

1 DECEMBER 2015)

(iii) Incentive-based awards are earned

through achieving demanding

The current Remuneration Policy dates from

1 December 2015, making it the only Company

policy currently in place that was established

by the previous Supervisory Board who was

in service in December 2017. The Company

wishes to move forward from the events of

December 2017 and away from the policy that

links the current newly restructured business

with the old legacy. To move forward, the

Supervisory Board, upon the recommendation

of the Remuneration Committee, will propose

a revised remuneration policy for Managing

Directors to the shareholders for approval at

the AGM to be held in 2022. An outline of the

proposed new remuneration policy can be

viewed in Part 4 of this report.

performance measures and targets with

due regard for the sustainable wellbeing

of all stakeholders over the short-,

medium- and longer-term;

(iv) Incentive plans, performance measures

and targets are structured to operate

effectively throughout the business cycle;

and

ANNUAL BONUS

Managing Directors and other Senior

Managers are entitled to an annual

(v) The design of long-term incentives

is prudent and does not expose

stakeholders to a position where the

sustainability of the Group is placed at

risk.

performance related bonus payment. The

objective of the annual performance related

bonus is to incentivise and reward strong

short-term operational, ﬁnancial and personal

performance, the implementation of strategic

initiatives, such as meeting growth targets,

while continuing to be focused on sustainable

results which are aligned with the longer-term

strategy of the Group. The Remuneration

Policy requires the Supervisory Board to set

performance conditions on an individual basis

at or before the beginning of the relevant

ﬁnancial year. The annual bonus is based on a

percentage of the annual base salary.

In accordance with the Remuneration Policy,

the Supervisory Board seeks to ensure an

appropriate balance between the ﬁxed,

variable and performance-related elements of

the remuneration of the Managing Directors

and other Senior Managers. According to the

Remuneration Policy, the Supervisory Board

should seek to ensure an appropriate balance

between those aspects of the package linked

to short-term ﬁnancial performance and those

linked to longer-term sustainable stakeholder

value creation.

KEY PRINCIPLES AND REMUNERATION

ELEMENTS

The Group is an international business with

revenue earned in many countries and expects

its Managing Directors and other Senior

Managers to be internationally mobile and

to have knowledge and experience across

borders. As a result, the Group competes for

skills and talent in a global marketplace and its

approach to remuneration needs to be flexible

and competitive in all countries in which it

operates.

Performance conditions include ﬁnancial,

operational and transformation targets,

representing in excess of 80% of the potential

annual bonus. Where performance conditions

are supplemented by personal performance

objectives, such personal performance

objectives represent on average less than 20%

of the potential bonus that can be achieved.

The Supervisory Board shall review the

performance conditions annually to ensure

that these are appropriate, given the economic

context and the performance expectations for

the Company or relevant division.

The four elements of remuneration consist of

a base salary, annual bonus, LTIs, and beneﬁts.

The Supervisory Board has the discretionary

power to adjust any variable remuneration

component awarded to a Managing Director

and a Senior Manager, with respect to a

previous ﬁnancial year, if the Supervisory

Board feels that the outcome is unreasonable

due to exceptional circumstances during

the relevant performance period. In addition,

the Supervisory Board shall have the right to

recover any bonus awarded to a Managing

Director or a Senior Manager on the basis

of incorrect information on whether or not

the ﬁnancial performance targets or other

qualifying criteria have been met or any other

circumstances the bonus was dependent on.

The objective of the Remuneration Policy

is therefore to provide remuneration in a

form which will attract, retain and motivate

Managing Directors and other Senior

Managers, while protecting and promoting the

objectives of the Group. The Remuneration

Policy caters for a variable component, which

is linked to pre-determined, assessable and

influenceable targets, which are predominantly

structured to incentivise Managing Directors

and other Senior Managers throughout the

business cycle and drive the longer-term

sustainability of the business.

The Supervisory Board has the discretion to

defer all or part of the annual bonus payment

on terms to be agreed on an annual basis,

dependent on the performance conditions

applicable to such bonuses and the longer-

term measurement that could be implied by

such performance conditions.

The Remuneration Policy is based on the

following ﬁve key principles:

(i) Remuneration is aligned with the

corporate strategy of the Company;

Deviations of the remuneration elements in

the Remuneration Policy is permitted only in

extraordinary circumstances, when deemed

necessary in the interests of the Company. Any

deviations from the Remuneration Policy will

be disclosed in the Annual Report.

(ii) Total rewards are set at levels that

are competitive and relative within the

speciﬁc market and industry, taking into

account the Company’s results, including

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

from conventional retention mechanisms.

In 2018 the Supervisory Board replaced the

share-based LTI scheme with a cash-based

LTI scheme with shorter vesting periods in

order to remain relevant to the Company’s

extraordinary circumstances. This deviation

from the Remuneration Policy ensures

that the Company will be able to retain the

Managing Directors and Senior Managers and

remunerate them adequately for the personal

sacriﬁces and personal risk taken on by

committing to the achievement of the 3-step

strategy. In addition, it prevented windfall gains

from potential future share price increase,

since providing for a fair and competitive LTI

award (to attract and retain the right calibre of

executives) would result in the allocation of an

undesired large amount of Company shares.

LONG-TERM INCENTIVE

PART 3: APPLICATION OF THE CURRENT

Pursuant to the Remuneration Policy,

the Managing Directors and other Senior

Managers participated in the ESRS, which

was approved by the general meeting of

the Company’s legal predecessor, Steinhoff

International Holdings Limited, on 6 December

2010 and amended and approved by the

General Meeting on 1 December 2015.

REMUNERATION POLICY DURING FINANCIAL

YEAR 2021

With the application of the Remuneration

Policy during the 2021 Reporting Period, due

cognisance was given to the continuous

challenges the Company is facing while it

seeks to successfully complete Steps 2 and 3

of its strategy, which contributes to the longer-

term value preservation for stakeholders.

These circumstances include the following:

The allocation of LTls is based on the following

key eligibility criteria: (i) individuals who are

key to driving the Group’s longer-term business

strategy; (ii) retention of key talent/scarce

skills; and (iii) talent management strategy and

succession plans.

•

Finding a solution to the ongoing litigation

against the Steinhoff Group where the

scope of claimants was wide ranging,

complex and highly technical, involving

thousands of claimants, specialist legal

and ﬁnancial advice and parallel processes

across multiple jurisdictions;

The Remuneration Policy provides that the

targets for LTls are set with reference to

industry and market benchmark performance.

Such benchmarks are determined annually by

measuring operational performance against

those of peer group companies (in comparable

industries and markets) in local currencies.

The Remuneration Committee remains vigilant

to ensure that Managing Director remuneration

remains fair and in line with the extraordinary

personal risk and deliverables required to

achieve the 3-step strategy successfully. The

Supervisory Board intends to submit a fully

revised remuneration policy to the AGM to be

held in 2022 for approval, since certain key

milestones from the 3-step strategy have been

completed. The most important change being

the introduction of an equity component in the

LTI with a vesting period stretching beyond the

CEO’s and the CFO’s appointment terms. The

detail of the equity-settled plan is presented in

Part 4 of this report.

•

Implementing the Litigation Settlement

Proposal and dealing with the many related

complexities and challenges;

The sheer volume of announcements made

by the Group demonstrates the scale of

the activities carried out during the 2021

Reporting Period;

BENEFITS

Beneﬁts include membership of retirement

funds and medical aid schemes, to which

contributions are made by a Managing Director

or other Senior Managers and the relevant

Group Company where such individual is

employed. In addition, Managing Directors

or other Senior Managers are entitled to

expense allowances required for the proper

performance of their duties. The contracts with

Managing Directors do not contain any ‘golden

parachute’ provisions. There are no Managing

Directors with a notice period of more than one

(1) year and none of their contracts include

predetermined compensation as a result of

termination exceeding eighteen (18) month’s

salary and beneﬁts.

•

Ongoing disposal of businesses to reduce

debt levels;

Ongoing management of operations that

were impacted by COVID-19 and other

disruptions;

•

The volume of inbound and outbound

litigation activity that continued throughout

the 2021 Reporting Period;

2021 REMUNERATION OUTCOME FOR

THE MANAGING DIRECTORS

Upon the proposal of the Remuneration

Committee, the Supervisory Board approved

the remuneration for the Managing Directors,

which comprised of no increase to their

respective base salaries, an STI and the

vested portion of their cash-based LTI, with

both variable components being conditional

upon achievement of speciﬁc performance

conditions.

Ongoing engagements with various

regulatory bodies as required.

TALENT MANAGEMENT AND

RETENTION CHALLENGES

The individual may elect how much the

retirement savings portion should be and

the relevant contributions, based on his/her

election, are paid by the individual. Depending

on the terms of the particular medical aid

schemes, the member can elect the level of

medical cover of their choice and the same

is paid by the individual. Due to the individual

choices in the level of retirement and medical

beneﬁts, the Company has no liability in this

regard.

The Company employs a small team of

executives with demanding short-term

performance horizons to serve the needs

of the Company and to complete the

3-step strategy. As such, to attract, retain

and reward high calibre executives who

have to endure continuously high levels of

workload, personal sacriﬁce and risk, it is

deemed imperative to ensure the reward

and retention structures are aligned with

the extraordinary work expectations. The

Supervisory Board, upon the recommendation

of the Remuneration Committee, thus had to,

under the LTI remuneration element, deviate

The following table provides an overview of

the remuneration elements paid to each of

the Managing Directors, during the 2020 and

2021 Reporting Periods, in accordance with the

currently applicable Remuneration Policy (i.e.

approved in 2015). Thereafter, these elements

are discussed in more detail. Managing Directors

are not paid any additional remuneration by

subsidiary or other company’s whose ﬁnancials

are consolidated by the Company.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

Amounts in thousands of euro (€’000).

Bonusses

STI

IFRS 2³

share-

based

payment

expense

Other

Pension company

Strategic/

retention

bonus

Total

remu-

neration

and fees

Basic

remu-

neration²

Deferred

bonus Severance

paid payments

Annual

leave

paid out

contri-

butions¹

butions

paid

LTI

€’000

2021

Louis du Preez

1 321

1 132

–

1 038

900

1 373

1 133

–

3 871

3 306

Theodore de

Klerk

Subtotal

Management

Board

2 453

4 045

131

134

–

1 938

2 492

2 506

597

–

149

–

7 177

Key management

personnel

225

900

1 765

840

11 001

Total

Management

Board and other

key management

6 498

265

225

4 430

3 103

900

1 765

–

152

840

18 178

2020

Louis du Preez

1 330

1 141

–

1 038

900

911

733

–

116

–

3 449

2 876

Theodore de

Klerk

Subtotal

Management

Board

2 471

4 244

113

270

–

1 938

748

1 644

227

–

159

–

6 325

Key management

personnel

657

3 137

614

346

624

10 887

Total

Management

Board and other

key management

6 715

383

657

2 686

1 871

3 137

614

346

179

624

17 212

¹Other contributions mainly include company contributions to medical aid, expense allowances and social taxes.

²Directors’ fees were paid with basic remuneration.

³Refer to note 33 in the 2021 Consolidated Financial Statements for details regarding the Pepkor Holdings ESRS and cash-settled scheme applicable to certain key

management members.

BASE SALARY

The base salaries of the Managing Directors were applicable as per the beginning of the 2021 Reporting Period and remained unchanged. Despite

Louis du Preez (CEO) and Theodore de Klerk (CFO) having a contractual right to an inflationary increase annually, both Managing Directors elected

not to receive an inflationary increase for the 2021 Reporting Period.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

ANNUAL BONUS

The table below provides insight into the KPIs that were applicable for the STI during the 2021 Reporting Period, as well as how the Managing

Directors scored on each of these elements.

CEO

CFO

2021

KPI

Weightings

Illustration of deliverables

performance

Sale of certain South African and European assets. South African

Properties sale process nearly completed.

Sale of Pepkor Holdings’ logistical portfolio was a major milestone

achieved.

Signiﬁcant progress has been made on the simpliﬁcation of the

South African structure.

IPO of Pepco successfully completed and exceeded expectations.

Proceeds from the Pepco IPO were used to repay approximately

€1 billion of debt.

Business

Mattress Firm re-capitalisation payment of USD1.2 billion exceeded

expectations. Mattress Firm proceeds were used to repay debt

after the 2021 Reporting Period. As announced, IPO readiness

assessment commenced as planned and is on track.

optimisation and

balance sheet

restructuring

40%

35%

At target

COVID-19 management throughout the business has remained

excellent. Cash and cost management remain key priorities. Strong

OpCo performance reflects this.

Sale of Plush to Nick Scali.

French real estate sales completed. Conforama Balkans business

sold. Last remaining Conforama Holding debt repaid.

Five new Pepkor Holdings board appointments, exceeding

transformation targets with three women and conﬁrmed

chairperson.

Delivery of more than 500 sets of annual ﬁnancial statements with

most companies now up to date. Half-year and quarterly reporting

released as required.

Submission of South African tax returns have caught up with annual

ﬁnancial statements being ﬁnalised.

Delivery of various tax submissions and refunds received to the

value of ZAR360 million.

Funds flow project prepared and ready to implement upon Litigation

Settlement Proposal implementation.

Successfully placed 370 million Pepkor Holdings shares in the

market raising total gross proceeds of ZAR7.3 billion

(c. €409 million) and reducing the holding from 68.2% to 58.9%

(including the effect of the Pepkor Holdings share buy-back in

September 2021).

Financial reporting

10%

40%

At target

Contribution from Deloitte (up to €77.94 million) and the D&O

Insurers (up to €78.1 million), as part of the Litigation Settlement

Proposal.

Strong operating performance and very strong cash generation at all

OpCos.

Continued cost reduction.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

CEO

CFO

2021

KPI

Weightings

Illustration of deliverables

performance

More than 100 litigation processes managed on a daily basis.

No judgements granted or any merit court dates on class actions set

to date.

Launched Litigation Settlement Proposal.

Launched lender consents, as required.

Launched UK schemes to extend debt.

Group litigation

40%

15%

At target

PwC forensic investigation phase 2 completed. Remuneration claims

amended and instituted.

Claims against Formal Holdings Limited as well as Malcolm and

Nicholas King in process of being instituted.

Positive Dutch SoP (the Netherlands) and S155 Scheme (South

Africa) claimant votes in support of the Litigation Settlement

Proposal.

Regular interaction, local and abroad, in accordance with

requirements.

Hybrid AGM held to comply with COVID-19 restrictions. Substantial

shareholder communication.

Interaction with creditors remains very positive as is evident from

overall creditor support.

Stakeholder

interaction

10%

At target

Interactions with regulators (AFM, FSE, BaFin, the South African

Reserve Bank, the Companies and Intellectual Property Commission,

FSCA, South African Parliament, JSE, criminal authorities in South

Africa (including the National Prosecuting Authority and the Hawks)

take a signiﬁcant amount of time. Will remain part of ongoing

functions.

The target and maximum opportunity for

the 2021 Reporting Period was 75% of base

salary for both the CEO and CFO. Based on the

realisation of the various objectives, which was executives) would result in an undesired large

on average 100% of target, the resulting pay-out amount of Company shares to be allocated.

gains from potential future share price increase,

since providing for a fair and competitive LTI

award (to attract and retain the right calibre of

separate legal proceedings against the

Company claiming in excess of ZAR 1.85 billion

in damages, ﬁled in the Western Cape Division

of the High Court of South Africa an application

for the provisional liquidation of the Company

(the “Liquidation Application”). In effect, the

over the 2021 Reporting Period equals 75% of

The variable remuneration operates as a strong

the annual base salary. The amounts were paid motivator to achieve performance conditions and consequence of the Liquidation Application

out in cash.

to retain the individual, which ensures continuity,

stability, and assurance that the individual’s

focus is directly aligned to the business needs

as articulated in the 3-step strategy at all times.

As such, to preserve longer-term value and

potential business continuation for stakeholders,

alignment between employee performance

achievements and strategy is imperative.

was as follows (the “Acceleration”):

•

Each Managing Directors’ (as well as other

LTI scheme participant’s) participation

in the LTI scheme was automatically

terminated as at the date of the Liquidation

Application.

LONG-TERM INCENTIVE

As indicated above, the Supervisory Board

decided to deviate from the Remuneration Policy

by replacing the share-based LTI scheme with

a cash-based LTI scheme with shorter vesting

periods. This deviation from the Remuneration

Policy ensured that the Company was able

to retain the Managing Directors and Senior

Managers and remunerate them adequately for

the personal sacriﬁces and personal risk taken

on by committing to the achievement of the

3-step strategy. In addition, it prevented windfall

•

The accrual date (usually the end of the

reporting period) for tranches otherwise

payable at the end of the prevailing

IMPACT OF SPECIAL CIRCUMSTANCES

ON LTI SCHEME

On 12 May 2021, entities afﬁliated with the

former shareholders and owners of the

business known as Tekkie Town initiated

assessment period (usually the end of

the reporting period) was brought forward

and deemed to be one day prior to the

happening of the Liquidation Application.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

•

The latest performance assessment

(otherwise required to determine the

October 2022 and October 2023, subject

to the achievement of pre-determined

performance conditions.

CEO Pay mix for 2021

percentage of a tranche payable to the

scheme participant) undertaken in respect of

each Managing Director, irrespective of the

date thereof, would automatically be deemed

to apply for the purpose of determining the

percentage of the tranche payable.

The pay-out of each tranche is conditional

upon the achievement of the KPIs that are also

used for the Annual Bonus Scheme.

Considering the change in the LTI scheme for

the 2022 Reporting Period, by converting and

allocating an equity-settled portion to the total

LTI percentage quantum, the 2021 cash-settled

LTI scheme will run its course and Managing

Director participation in the scheme will come

to an end with the payout of the two open

replacement grants.

•

The tranches payable in relation to the

prevailing assessment period (usually the

prevailing reporting period) were payable

immediately.

Base pay

STI

35.8%

26.8%

35.4%

2.0%

LTI

As described above, the consequences of the

Acceleration were substantively two-fold, being

(i) that payments which would otherwise have

been due to the Managing Directors at the end

of the reporting period were brought forward

and paid immediately in May 2021; and

(ii) that the Managing Directors’ participation

in the LTI scheme was terminated. Because of

the termination of participation, the portions

of grants that were only due for payment

in subsequent assessment periods (future

reporting periods) were forfeited by the Managing

Directors. They therefore forfeited up to three

tranches in total payable in October 2022 (two

tranches) and October 2023 (one tranche),

respectively.

Leave

The Supervisory Board also changed the

rules of the scheme to withstand any future

application for liquidation and to only

terminate upon the court order of liquidation

after a successful provisional liquidation

application.

CFO Pay mix for 2021

BENEFITS

As part of the base salary, Managing

Directors contribute to a company approved

retirement fund monthly and in addition

also contribute to risk beneﬁts such as life

insurance and medical disability insurance.

Because Managing Directors contribute to

these beneﬁts themselves, they can elect the

level of contributions within the minimum and

maximum limits of the risk beneﬁt framework.

During the 2021 Reporting Period the CEO

contributed 5% of base salary, and the CFO

contributed 6% of base salary.

Base pay

STI

36.3%

27.2%

34.3%

2.2%

LTI

Leave

On 26 May 2021 the Supervisory Board,

upon recommendation of the Remuneration

Committee, approved a cash-settled LTI

replacement scheme to replace the scheme

that was terminated as a consequence of the

Liquidation Application.

SCENARIO ANALYSIS

The Supervisory Board performed a scenario

analysis for each individual Managing Director.

In doing so, the Remuneration Committee

presented to the Supervisory Board the following

scenarios for the variable pay opportunity:

The Managing Directors (as well as the other

former LTI scheme participants) joined the

2021 cash-settled replacement LTI scheme

and were allocated replacement grants

to place the participant in a position no

less favourable than immediately prior to

termination of the old scheme.

PAY MIX

The total remuneration for Louis du Preez for

the 2021 Reporting Period consists of 35.8%

base salary and 62.2% variable pay and 2%

annual leave pay-out. The total remuneration

for Theodore de Klerk for the 2021 Reporting

Period consists of 36.3% base salary and

61.5% variable pay and 2.2% annual leave

pay-out. The ﬁxed and variable apportionment

of Managing Director remuneration fulﬁl the

purpose of attracting high calibre individuals

during extraordinary circumstances and

rewarding challenging performance

achievements.

a) The “On target” 80% – 100% performance

achievement remuneration opportunity

based on a maximum annual bonus

allocation of 75% of base salary, should

the Managing Director achieve all the

performance conditions; and

The LTI awards that have been conditionally

made during the 2021 Reporting Period in

replacement of forfeited tranches and its

vesting conditions were as follows:

b) The “Medium performance target” 70%

– 79.99% performance achievement

remuneration opportunity based on

an annual bonus allocation of 65% of

the base salary for the performance

conditions achieved in accordance with

their weightings;

•

replacement grant 1: Equal to 1/3rd of the

Managing Directors’ base salary, payable

in one extraordinary tranche in October

2022, subject to the achievement of pre-

determined performance conditions.

c) The “Threshold performance” 60%

– 69.99% performance achievement

remuneration opportunity based on an

annual bonus allocation of 50% of base

•

replacement grant 2: Equal to 2/3rd of the

Managing Directors’ base salary, payable

in two equal extraordinary tranches in

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

salary for the performance conditions

achieved in accordance with their

weightings;

with the Corporate Scorecard development

and what is required to ensure the continuation

of operations. A major hurdle in normalising

the Group balance sheet structure relates to

the resolution of litigation challenges, step

2 of the 3-step strategy and therefore the

emphasis has been on establishing clear KPIs

for the Managing Directors and executives and

rewarding appropriate performance in relation

thereto. The development of the performance

of the Company and the development of

average remuneration on a full time equivalent

basis of employees are aligned with the

diminution in enterprise value, and the sale

and reorganisation of a number of Group

companies.

CLAW BACKS

On 14 June 2019, claw back proceedings were

instituted before the South Africa High Court

against two former managing directors for the

repayment of annual bonuses, special project

bonuses, irregular payments and the value of

shares awarded to them for the period 2009

to the date of their termination. These matters

are pending.

d) The “below threshold performance” no

annual bonus allocation and only the

retention portion from the cash-based LTI.

The variable pay consists of an STI and LTI

that are made up of three tranches (i.e. third

tranche of the 2019 LTI plus the second

tranche of the 2020 LTI plus the ﬁrst tranche of

the 2021 LTI). The performance measurement

applied to determine the LTI tranche payments

was the outcome of the interim performance

review held in March 2021. As described

above, the consequences of the termination

of the LTI scheme were that payments

The Company has not instituted any claw back

claims against any of the current Managing

Directors or Supervisory Directors.

FIVE-YEAR OVERVIEW

The table below summarises the Managing

Directors’ total remuneration for the Reporting

Period and also provides an overview of total

remuneration for the CEO and CFO over the

past ﬁve years. Remuneration for the CEO and

CFO positions have signiﬁcantly reduced in

comparison to ﬁve years ago. The remuneration

development over the past ﬁve years is in line

Remuneration structure and incentives will be

regularly reviewed as the Company’s situation

develops.

which would otherwise have been due to the

Managing Directors in October 2021 were

brought forward and paid immediately, and the

Managing Directors’ participation in that LTI

scheme was terminated.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

Amounts in thousands of euro.

2021

Current CEO

1 384

2020

Current CEO

1 384

2019

Current CEO

1 262

2018

Former CEO

1 028

2017

Former CEO

2 493

Remuneration CEO position

Base Salary (Basic plus Beneﬁts)

STI

1 038

1 012

600

2 700

LTI (Including retention & strategic bonuses)¹

Other (Leave etc.)

1 373

911

450

536

3 279

116

Year on Year Total Remuneration

3 871

3 449

2 724

2 164

8 472

•

Year on Year Total Remuneration

Year on Year difference

3 871

422

3 449

725

2 724

560

2 164

6 308

(74%)

Former CFO

1 267

1 200

8 472

N/A

Year on Year difference (%)²

12%

27%

26%

N/A

Remuneration CFO position

Base Salary (Basic plus Beneﬁts)

STI

Current CFO

1 200

Current CFO

1 200

900

Current CFO

1 017

750

Former CFO

1 000

850

900

LTI (Including retention & strategic bonuses)¹

Other (Leave etc.)

1 133

733

333

1 533

Year on Year Total Remuneration

3 306

2 876

2 100

2 467

3 383

•

Year on Year Total Remuneration

Year on Year difference

3 306

430

2 876

776

2 100

(367)

(15%)

N/A

2 467

(916)

(27%)

N/A

3 383

N/A

Year on Year difference (%)²

15%

145

37%

123

Remuneration Group Services Employees³

Pay Ratios⁴

•

CEO compared to Group Services Employees

CFO compared to Group Services Employees

26.7

22.8

28.0

23.3

N/A

¹The 2019 to 2021 variances relate to the number of cash-settled LTI vested tranche payment (2019 – one tranche, 2020 – two tranches, 2021 – three tranches).

²The variance in total remuneration from 2019 to 2021 is a combined effect from vested LTI tranche payments and an increase in base salary upon appointment as CEO

and CFO, respectively.

³Total remuneration consists of basic salary plus company contributions to beneﬁts and bonusses paid during the Reporting Period (excludes the CEO and CFO). Group

Services employee data for the period 2017 to 2019 did not produce a meaningful comparison and therefore was excluded.

⁴A meaningful pay ratio for prior years could not be performed due to extraordinary circumstances the Group is in, the diminution in enterprise value, and the sale and

reorganisation of a number of Group companies.

Group companies and/or the reorganisation

within Group companies, no representative

reference group could be determined that

would allow consistency and comparison in

subsequent years. It is expected that after the

3-step strategy is implemented, the Company

shall be able to describe pay ratios within

a wider representative reference group. To

provide as much transparency as possible,

the Remuneration Report contains pay ratios

within Group Services.

Together they are referred to as Group

Services employees and are responsible for

deliverables, in support to the Management

Board, that are directly linked to the Corporate

Scorecard. Group Services employees have

reached stability with low staff turnover

since 2019. Group Services are responsible

for central services that include Finance,

Treasury, Tax, Human Resources, Legal,

Company Secretarial, Compliance, Risk,

Internal Audit and IT services to the Company.

Group Services employees have the same

remuneration elements as Managing Directors

and therefore display a meaningful pay ratio

against Managing Directors.

Pay ratios

Pursuant to best practice provision 3.4.1

(iv) of the Dutch Corporate Governance

Code, the remuneration report should – inter

alia – describe the pay ratios within the

company and its afﬁliated enterprise and,

if applicable, any changes in these ratios in

comparison with the previous ﬁnancial year.

This Remuneration Report, however, does

not contain a description of the pay ratios

within the whole Group because, due to the

sale of a number of Group companies and

the reorganisation within a number of Group

companies during the Reporting Period,

and in light of the intended sale of further

In this instance, the representative reference

group consists of less than 58 employees

who are each a specialist in their ﬁeld.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

LOANS, ADVANCE PAYMENTS OR GUARANTEES TO MANAGING DIRECTORS

No loans, advance payments or guarantees were made to Managing Directors (or entities controlled by any of them) during the Reporting Period.

CLOSING OUT THE ESRS SCHEME

The ESRS was discontinued during the 2018 Reporting Period. The ESRS remained active for historically allocated open grants to be measured

and for the scheme to run its course. The 2017 ﬁnancial year grant remained the last open grant in the ESRS. No further grants have been

awarded since March 2017.

No grants were made under the ESRS in the Reporting Period.

In relation to the below overview, no shares were repurchased or issued in relation to the ESRS during the Reporting Period. Supervisory Directors

did not participate in the ESRS and therefore this section does not apply to Supervisory Directors.

Total shares

30 September 30 September

2021

2020

Management Board

Louis du Preez*

5 165

194 270

199 435

5 165

194 270

199 435

Theodore de Klerk*

^*No change in shareholding from the previous Reporting Date.

promotes the proper fulﬁlment of duties by

Supervisory Directors, being independent

and fostering critical discussion with each

other, the Management Board and in any

other respect;

and/or rights to subscribe for shares, by

way of remuneration.

AMOUNTS CHARGED TO

SUBSIDIARIES

There were no remuneration amounts, paid to

any current or former Managing Directors or

Supervisory Directors, charged to any Group

Upon the recommendation of the

Remuneration Committee, the Supervisory

Board resolved to maintain the same fee

structure with no increase in membership fees.

company included in the 2021 Consolidated

Financial Statements.

•

the remuneration promotes effective

performance by the Supervisory Directors

of their role, which contributes to the

business strategy, longer-term interests and

sustainability of the Company (as deﬁned

hereinabove);

The remuneration of the Supervisory

Board is in line with the Supervisory Board

Remuneration Policy. The Supervisory Board

Remuneration Policy is reviewed and evaluated

by the Supervisory Board annually. The

Supervisory Board Remuneration Policy shall

be submitted by the Supervisory Board to the

General Meeting for adoption to implement

every change to the Supervisory Board

Remuneration Policy and in any case at least

every four years.

2021 SUPERVISORY DIRECTORS’

REMUNERATION

Supervisory Board Remuneration

Pursuant to the Dutch Corporate Governance

Code, remuneration for the Supervisory Board

members should reflect the time spent and the

responsibilities of their role. The remuneration

structure of the Supervisory Board contributed

to the long-term performance of the Company

by contributing to the successful completion

of critical milestones and making progress in

achieving the 3-step strategy. The Supervisory

Board remuneration structure is based on the

following principles:

•

the remuneration reflects the time spent,

the risk proﬁle and the responsibilities

of the role of Supervisory Directors, the

strategic view of options available to the

Company in the short and medium term,

the external governance environment and

the interests of all stakeholders;

The Supervisory Board fees have remained

unchanged since the AGM 2020.

•

the remuneration is not dependent on the

results of the Company; and

Supervisory Directors were not granted any

form of variable remuneration, or shares

•

the remuneration supports the appropriate

composition of the Supervisory Board and

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

The table below outlines the Supervisory Board fees in comparison to the previous year.

AGM

Approved

2021

AGM

Approved

2020

Remuneration of the Supervisory Board

€’000

Supervisory Board member fees

Chairperson of the Supervisory Board

300

220

130

300

220

130

Deputy-Chairperson of the Supervisory Board

Any other member of the Supervisory Board

Additional committee fees

Chairperson of the Audit and Risk Committee

Member of the Audit and Risk Committee

Chairperson of the Nomination Committee

Member of the Nomination Committee

Chairperson of the Human Resources and Remuneration Committee

Member of the Human Resources and Remunerations Committee

Chairperson of the Governance, Social and Ethics Committee

Member of the Governance, Social and Ethics Committee

N/A¹

Member of the Group Litigation Working Group

¹The Governance, Social and Ethics Committee was merged into the Audit and Risk Committee on 25 June 2020.

The remuneration paid to each of the Supervisory Directors during the 2021 Reporting Period in comparison to the 2020 Reporting Period, is set

out in the table below. Remuneration paid by other Group entities consists of fees received for serving on the boards of Steinhoff Investment

Holdings Limited and Steinhoff International Holdings Proprietary Limited.

Other Group entities

2021

Steinhoff N.V.

2021

2020

€’000

2020

€’000

Supervisory Board members who are in ofﬁce

Paul Copley

–

190

320

190

185

190

243

179

174

Moira Moses

Hugo Nelson

David Pauker

150

Peter Wakkie

–

254

190

265

197

Alexandra Watson

Supervisory Board members who resigned during the 2020 and 2021

Reporting Periods

Heather Sonn¹

–

202

152

Khanyisile Kweyama ²

Total remuneration

227

236

1 409

1 602

¹Resigned on 18 May 2020.

²Resigned on 19 April 2021.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

The remuneration paid to each of the current and former Supervisory Directors during the past ﬁve years, is set out in the table below.

2021

€’000

2020

€’000

2019

€’000

2018

€’000

2017

€’000

Supervisory Directors

Steve Booysen¹

– Steinhoff International Holdings N.V.

– Other Group entities

Paul Copley²

–

155

113

–

175

170

–

190

–

190

–

Claas Daun³

110

100

200

–

Thierry Guibert⁴

Len Konar³

Khanyisile Kweyama⁵

Theunie Lategan³

Moira Moses⁶

–

152

–

143

–

155

– Steinhoff International Holdings N.V.

– Other Group entities

Jayendra Naidoo⁷

320

–

243

–

162

–

Hugo Nelson⁶

– Steinhoff International Holdings N.V.

– Other Group entities

David Pauker⁸

190

179

155

–

– Steinhoff International Holdings N.V.

– Other Group entities

Heather Sonn⁹

184

150

174

150

–

163

– Steinhoff International Holdings N.V.

– Other Group entities

Angela Krüger-Steinhoff¹

Bruno Steinhoff^{3, 10}

–

202

–

337

285

100

–

107

–

111

338

100

450

100

–

Johan van Zyl¹¹

–

Peter Wakkie⁶

Alexandra Watson⁶

254

265

168

– Steinhoff International Holdings N.V.

– Other Group entities

Christo Wiese^{12, 13}

190

197

157

–

257

1 764

100

Jacob Wiese¹²

1 636

1 838

1 901

1 935

3 403

Resigned on 30 August 2019.

Paul Copley was nominated to the Supervisory Board in August 2018. Because his appointment did not become ﬁnal until the AGM held on 30 August 2019, he received

fees for his services provided to the Group during that period as a consultant.

Retired on 28 February 2018.

Resigned on 2 February 2018.

Appointed on 20 April 2018 and resigned 19 April 2021.

Appointed on 20 April 2018.

Appointed on 14 March 2017 and resigned on 18 January 2018.

David Pauker was nominated to the Supervisory Board in February 2019. Because his appointment did not become ﬁnal until the AGM held on 30 August 2019, he

received fees for his services provided to the Group during that period as a consultant.

Resigned on 18 May 2020.

¹⁰Paid to Bruno Steinhoff Beratungs-und Verwaltungs GmbH as management fees.

¹¹Resigned on 18 April 2018.

¹²Resigned on 14 December 2017.

¹³Paid to various entities as management fees. These entities are Grene Properties Proprietary Limited, Chaircorp Proprietary Limited, Titan Financial Services Proprietary

Limited and Toerama Proprietary Limited.

There were no rights to acquire shares in the capital of the Company nor any Subsidiary granted to any Supervisory Directors.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

Considering the conﬁrmation of the Dutch

SoP process by the Court in the Netherlands,

the sanctioning of the S155 Scheme in South

Africa, and a possible successful litigation

settlement implementation on the horizon,

the Remuneration Committee partnered with

the remuneration expert division of PwC to

conduct a remuneration benchmarking in

respect of the Managing Director remuneration

and remuneration structure, and requested

PwC to guide and advise the committee on:

remuneration elements into an annual base

salary (also referred to as Total Guaranteed

Pay or “TGP”), a cash-settled variable incentive

and an equity-settled variable incentive.

LOANS, ADVANCE PAYMENTS OR

GUARANTEES TO SUPERVISORY

DIRECTORS

No loans, advance payments or guarantees

were made to Supervisory Directors (or

entities controlled by any of them) during the

Reporting Period.

The complete version of the proposed

remuneration policy will be included in the

annexes to the agenda of the AGM to be

held in 2022. The highlights of the proposed

remuneration policy are provided below.

CONTRACTS WITH ENTITIES UNDER

THE CONTROL OF SUPERVISORY

DIRECTORS

There were no contracts with entities under

the control of Supervisory Directors during the

Reporting Period.

PURPOSE OF THE NEW

REMUNERATION POLICY

(i) how each remuneration element

benchmarks against suitable comparators

in the market, and

Taking into consideration the feedback

received in constructive dialogues with

(representatives of) investors as well as proxy

advisors and the voting results of the AGM

2020 and AGM 2021, the Supervisory Board

believes it is in the best interest of the various

stakeholders to ensure that the Company

will be able to retain the Managing Directors

and Senior Managers by remunerating them

adequately for the personal sacriﬁces and

personal risk taken on by committing to the

achievement of the 3-step strategy.

(ii) given the possible change in the

Company’s circumstances, to make a

recommendation on a remuneration

structure to commence from

PART 4: HIGHLIGHTS FROM THE PROPOSED

MODIFICATION OF THE REMUNERATION

POLICY FROM 2022 ONWARD

As stated in the introduction of this

Remuneration Report, the Company will submit

a revised remuneration policy to the AGM to be

held in 2022, which will – once adopted – be

applicable as per the start of ﬁnancial year

2022.

1 October 2021 for the 2022 performance

period onward, that would speak to the

shareholders’ interests in the form of

equity-based rewards.

The comparator group was determined

by considering companies with similar

governance structures, foreign listed large

retailers, investment holding companies,

companies experiencing close to similar

extraordinary circumstances as Steinhoff

N.V. and companies where the CEO and CFO

perform a similar role to that of Steinhoff

N.V.’s Managing Directors. This process

was complex and difﬁcult as there are very

few companies in the world that have had

the same extraordinary circumstances as

Steinhoff N.V. The Company’s positioning

relative to the median of the comparator

group, was 92% for turnover and 107% for

total assets. PwC also provided a second-tier

comparator by using a remuneration survey

well-known in the international market by

ﬁnancial restructuring specialists. Benchmark

results of the second-tier comparator had

the same benchmark results as the elected

comparator group.

In this context, the most signiﬁcant change in

the proposed policy will be the replacement

of the current 2021 cash-settled LTI with a

combined cash- and equity-settled LTI scheme.

By doing this, and retaining the Managing

Directors the longer-term opportunities for

the Company will be optimised. Moreover,

it creates direct alignment with shareholder

interests, and future business continuation and

optionality.

The Management Board Remuneration Policy

is reviewed and evaluated by the Supervisory

Board annually. The Management Board

Remuneration Policy shall be submitted by the

Supervisory Board to the General Meeting for

adoption to implement every change to the

Management Board Remuneration Policy and

in any case at least every four years.

With this proposed remuneration policy,

the Remuneration Committee has found a

balance between the desire to more clearly

align the interests of the Management

Board with those of our shareholders and

to hold the Management Board and Senior

Managers accountable for the successful

delivery of the strategic plan versus its key

responsibility to attract and retain high calibre

Managing Directors and Senior Managers

who are willing to bear the personal risk and

extreme workload in the current extraordinary

circumstances. The Remuneration Committee

and the Supervisory Board deem it essential

to ensure that Managing Directors, who took

up their current roles during or after 2018, are

retained and remunerated adequately for the

personal sacriﬁces and personal risk taken

on by committing to the achievement of the

3-step strategy.

BASE SALARY

In determining fair and competitive base

salaries that enable the Company to attract

and retain the right calibre of executives, the

Supervisory Board takes into consideration

the individual’s responsibilities, Company

and individual performance as well as

the pay differentials within the Company.

Finally, the external perspective is taken into

account by using data issued by independent

remuneration experts.

The PwC benchmark results showed that

the CEO and CFO were positioned above the

median on annual base salary but signiﬁcantly

below the median compared to market on

STI and LTI respectively. Overall, the CEO and

CFO’s total remuneration is positioned under

the market median. Based on the benchmark

results as well as the progress made to date

on the 3-step strategy of the Company, PwC

ANNUAL BONUS

The Annual Bonus Scheme, or STI, will

continue to be a performance related

cash award. The objective of the annual

performance related bonus is to incentivise

and reward strong short-term operational,

ﬁnancial and personal performance as well as

the implementation of the 3-step strategy. The

recommended that the Company structure the Remuneration Policy requires the Supervisory

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

Board to set performance conditions that will ensure the realisation of the 3-step strategy at or before the beginning of the relevant ﬁnancial year.

Over the past three years, no level of discretion has been exercised by the Supervisory Board in the award of incentives. Each award that has been

made was made in relation to speciﬁc outcomes that enabled the business to progress towards the achievement of the 3-step strategy.

The annual bonus is based on a percentage of the annual base salary. For 2022, the target and maximum bonus opportunity will remain at 75% of

base salary for both the CEO and CFO. It is important to note that the performance zone is the average achievement of all performance indicators.

Therefore, the Managing Directors are expected to achieve at least 80% of the complete corporate performance scorecard to be awarded an ‘At

Target’ allocation. There are no additional STI awards for exceeding expectations. For threshold performance, a pay-out of 50% of base salary will

occur, while for below threshold performance there will be no pay-out.

The Supervisory Board establishes performance criteria for each ﬁnancial period, which are documented in a corporate scorecard. For the period

during which the 3-step strategy is being completed, the corporate scorecard for the annual bonus will predominantly be focusing on critical

deliverables to enable the Company to have business continuation with the preservation of shareholder value. The corporate performance targets

for 2022 include the following:

CORPORATE SCORECARD AND KEY PERFORMANCE INDICATORS FOR 2022

General note: each of the deliverables described below is outlined in detail in the Corporate Scorecard that was set and approved by the

Supervisory Board. Considering the circumstances the Company is in, some of these deliverables are commercially sensitive and will, in the

interest of the Company, have to remain conﬁdential until successfully achieved and publicly announced. Furthermore, for the avoidance

of doubt, the Corporate Scorecard is the document that outlines what deliverables need to be achieved by the Management Board. It is

important to note that the CEO and CFO have individualised weightings relevant to their roles.

No.

Weighting

Business optimisation and value maximisation

This performance indicator consists of more than 10 deliverables that are important milestones for progression

with the achievement of the 3-step strategy and is focused on optimisation, including but not limited to further cost

reduction and potential value realisation, of the Group’s businesses and group structures in Africa, Australasia,

Europe and the United States of America that will ensure protection and maximisation of stakeholder value.

32.5%

Financial reporting controls and administration

This performance indicator consists of eight deliverables that are important to manage and control all the ﬁnancial

aspects of the Company. This indicator is focused on:

1. Managing the annual audit and publication of the annual ﬁnancial statements of the Company and its

subsidiaries at Group level. In addition, the backlog with certain historical ﬁnancial statements needs to be

addressed.

12.5%

2. Implementation and alignment of accounting and reporting principles, controls and risk management in all

subsidiaries.

Group restructure

This performance indicator consists of four deliverables that are key to the restructuring of the Group and are

focused on evaluating underlying current or potential shareholder value with a view to preserving and enhancing

embedded shareholder options, and taking a debt restructuring and/or reduction as contemplated by step 3 of the

3-step strategy forward.

17.5%

12.5%

Stakeholder interaction

This performance indicator consists of four deliverables that are directly linked to the Company’s standing with

regulatory authorities. These deliverables are focused on progression and/or the conclusion of several open

investigations and continued interactions with these authorities. The deliverables further relate to interaction with

other stakeholders, such as ﬁnancial creditors, shareholders and investors.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

REMUNERATION REPORT// continued

No.

Weighting

Litigation settlement proposal

This performance indicator consists of seven deliverables that are important to achieve the successful

implementation of the Litigation Settlement Proposal. It is focused on:

15%

1. The implementation of the ﬁnancial steps once the global settlement proposal is approved and implemented.

2. The progression on outstanding approvals from the courts and any other authorities.

No.

Weighting

Litigation management

This performance indicator consists of ﬁve speciﬁc deliverables that are important in taking the Company forward

towards a normalised course of business. It is focused on the management of all inbound and outbound litigation

and the conclusion of current tax investigations in certain jurisdictions.

10%

•

Vested shares are subject to a forced sale

immediately on receipt.

the Supervisory Board will submit such a

revised Remuneration Policy to the General

Meeting for approval.

LONG-TERM INCENTIVE

As indicated above, the proposed

remuneration policy will incorporate an LTI

component paying out partially in equity and

partially in cash, whereas the current LTI

Scheme is fully cash-settled. By doing this,

retaining the Managing Directors will optimise

the longer-term opportunities for the Company.

Moreover, it creates direct alignment with

shareholder interest, and future business

continuation and optionality.

The LTI award will be based on a percentage

of the annual base salary. For 2022, the target

and maximum LTI opportunity will be 150% of

base salary for both the CEO and CFO.

The main characteristics of such a

Remuneration Policy will likely be:

•

A market competitive remuneration

package aligned with the size and scope of

the Company at that point in time.

The outlined LTI design provides for a

balanced proposal considering the need to

retain the Managing Directors in order to

optimise longer-term opportunities for the

Company, the intention to limit signiﬁcant

windfall gains from potential future share

price increases (by not fully paying out in

shares) as well as the desire to reflect the

preferences and align with the interests of our

shareholders.

•

A rebalanced remuneration mix, focusing

on (longer-term) variable remuneration.

In summary, the main features of the proposed

LTI plan are:

A long-term incentive plan consisting of a

proportionate conditional share award that

may vest on the basis of one or more KPIs

measured over a multiyear performance

period.

•

An initial conditional allocation partially in

cash (2/3rd) and partially in shares (1/3rd).

•

The pay-out will be based on realised

•

In order to further enhance share ownership

amongst Management Board members

(and potentially senior executives),

share ownership requirements might be

introduced and/ or holding periods for

vested shares might be incorporated.

performance for the full LTI award, applying

a one-year performance period and the

same performance scorecard as for the STI.

FORWARD LOOKING

It is the ambition of the Supervisory Board, the

Management Board as well as all the other

employees, to complete the 3-step strategy as

successfully and timeously as possible. Once

this has been done, the Supervisory Board

intends to revise the Remuneration Policy of

the Management Board and optimally align

it with the Company's future strategy and

organisational size and structure, taking into

consideration market best practices. Naturally,

•

The cash component will be paid out in

part (50%) one year after the performance

period and the remainder after two years.

A policy that is in alignment with best

practice.

The equity component will be converted

into restricted shares after the one-year

performance period and will vest in four

equal installments over the subsequent two

years, and

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

PART V

ANNEXURES

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

ANNEXURE A//investor information

STATISTICS

STOCK EXCHANGE

FSE

SNH Xetra

Primary

NL0011375019

Dec 2015

€0.04

JSE

SNH SJ

Secondary

NL0011375019

Sep 1998

R0.70

Stock symbol

Listing type

ISIN

Initial listing

Opening share price

Closing share price

€0.18

R3.20

Highest share price during period

Lowest share price during period

Volume traded during period (million)

Value traded during period (million)

Market capitalisation (million)

Number of shares in issue (million)¹

¹As at 30 September 2021, net of treasury shares.

€0.23

R3.98

€0.04

R0.68

4 312

1 661

€487

R3 335

€752

R13 223

4 132

EXCHANGE

RATES

AVERAGE TRANSLATION RATE

CLOSING TRANSLATION RATE

30 September

2020

FY21

FY20

18.1836

4.3883

0.8790

1.6522

1.1206

1.0751

% change

(2.5)

3.4

2021

17.5629

4.6197

0.8605

1.6095

1.1579

1.0830

% change

(10.9)

1.6

EUR:ZAR

EUR:PLN

EUR:GBP

EUR:AUD

EUR:USD

EUR:CHF

17.7294

19.7092

4.5462

0.9124

1.6438

1.1708

1.0804

4.5366

0.8737

1.5909

1.1954

1.0873

(0.6)

(3.7)

6.7

(5.7)

(2.1)

(1.1)

0.2

1.1

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

ANNEXURE A//investor information continued

FINANCIAL

CALENDAR

Q1 Trading update – quarter ended 31 December 2021

Friday, 25 February 2022

Friday, 25 March 2022

Friday, 24 June 2022

Friday, 26 August 2022

2022 Annual general meeting

2022 Half-year results

Q3 Trading update – quarter ended 30 June 2022

CORPORATE AND

CONTACT INFORMATION

Registration number

South African sponsor

63570173

PSG Capital Proprietary Limited

(Registration number 2006/015817/07)

1st Floor, Ou Kollege Building

35 Kerk Street

Registered ofﬁce

Building B2

Stellenbosch 7600

(PO Box 7403, Stellenbosch 7599)

Vineyard Ofﬁce Park

Cnr Adam Tas & Devon Valley Road

Stellenbosch 7600

South Africa

South African transfer secretaries

Computershare Investor Services Proprietary Limited

(Registration number 2004/003647/07)

Rosebank Towers, 15 Biermann Avenue

Rosebank 2196

Website

www.steinhofﬁnternational.com

Auditors

(Private Bag X9000, Saxonwold 2132)

Mazars Accountants N.V.

(License number 13000408)

Watermanweg 80

3067 GG Rotterdam

The Netherlands

Commercial banks

Standard Corporate and Merchant Bank

(A division of The Standard Bank of South Africa Limited)

(Registration number 1962/000738/06)

Ground Floor, 3 Simmonds Street

(PO Box 23123, 3001 KC Rotterdam, The Netherlands)

Johannesburg 2001

Company secretary

(PO Box 61150, Marshalltown 2107)

Sarah Radema

In addition, the group has commercial facilities with various other banking

and ﬁnancial institutions worldwide.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

ANNEXURE A//investor information continued

CAUTIONARY

NOTICE

This Annual Report contains forward-looking

statements, which do not refer to historical

facts but refer to expectations based on

management’s current views and assumptions

and involve known and unknown risks and

uncertainties that could cause actual results,

performance, or events to differ materially

from those included in such statements.

the beneﬁts from Steinhoff N.V.’s plans

and strategies being less than anticipated,

the effect of general economic or political

conditions, Steinhoff N.V.’s ability to retain

and attract employees who are integral

to the success of the business, business

and IT continuity, collective bargaining,

distinctiveness, competitive advantage and

economic conditions, information security,

legislative and regulatory environment and

litigation risks, product safety, pension plan

funding, strategic initiatives, responsible

retailing, insurance, other ﬁnancial risks,

unforeseen tax liabilities and other factors

discussed in this Annual Report, in particular

the paragraphs on how we manage risk and

in Steinhoff N.V.’s other public ﬁlings and

disclosures.

Readers are cautioned not to place undue

reliance on these forward-looking statements,

which speak only as of the date of this Annual

Report. Steinhoff N.V. does not assume any

obligation to update any public information

or forward-looking statement in this Annual

Report to reflect events or circumstances after

the date of this Annual Report, except as may

be required by applicable laws.

Many of these risks and uncertainties relate to

factors that are beyond Steinhoff N.V.’s ability

to control or estimate precisely, including

but not limited to, Steinhoff N.V.’s ability to

successfully implement and complete its

plans and strategies and to meet its targets,

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF

INTERNATIONAL HOLDINGS N.V.

FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER 2021

TABLE OF

CONTENTS

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Proﬁt or Loss

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Basis of Preparation

Notes to the Consolidated Financial Statements

for the period ended 30 September 2021

104

215

Separate Financial Statements

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

FOR THE PERIOD ENDED 30 SEPTEMBER 2021

Restated¹

2020

2021

€m

Notes

€m

Continuing operations

Revenue

9 193

(5 450)

3 743

8 034

(4 888)

3 146

Cost of sales

4.4

)TQUUꢀRTQƒV

Other income

4.1

4.3

4.2

Distribution expenses

Administration expenses

Other expenses

(812)

(2 265)

(827)

(85)

(1 190)

(682)

(2 030)

(1 399)

(916)

(1 195)

Operating loss

Finance costs

Income from investments

Share in result of equity accounted companies

Impairment of equity accounted companies

Loss before taxation

Taxation

11.2

519

(7)

–

(18)

(684)

(187)

(871)

(2 060)

(116)

(2 176)

6.1

Loss from continuing operations

Discontinued operations

Profit/(loss) from discontinued operations

Loss for the period

1.2

(179)

(850)

(2 355)

Loss attributable to:

Owners of Steinhoff N.V.

Non-controlling interests

Loss for the period

(974)

124

(2 264)

(91)

30.1

(850)

(2 355)

Basic and diluted loss per share (cents)

From continuing operations

(22.9)

(0.1)

(51.2)

(3.3)

From discontinued operations

(23.0)

(54.5)

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as the effect

of the reclassification of The Building Company from a discontinued operation to a continuing operation.

The accompanying notes form an integral part of the 2021 Consolidated Financial Statements.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 SEPTEMBER 2021

Restated¹

2020

2021

€m

Notes

€m

Loss for the period

(850)

(2 355)

Other comprehensive (loss)/income

+VGOUꢀVJCVꢀYKNNꢀPQVꢀDGꢀTGENCUUKƒGFꢀUWDUGSWGPVN[ꢀVQꢀRTQƒVꢀQTꢀNQUUꢀꢁPGVꢀQHꢀVCZꢂꢃ

0GVꢀTGOGCUWTGOGPVꢀCFLWUVOGPVUꢀQPꢀFGƒPGFꢀDGPGƒVꢀRNCPUꢀ

–

(37)

+VGOUꢀVJCVꢀOC[ꢀDGꢀTGENCUUKƒGFꢀUWDUGSWGPVN[ꢀVQꢀRTQƒVꢀQTꢀNQUUꢀꢁPGVꢀQHꢀVCZꢂꢃ

Net exchange gains/(losses) on translation of foreign operations and translation of net investment in

foreign operations²

449

(41)

(791)

(1)

Foreign currency translation reserve reclassified to profit or loss on disposal of investment –

Continuing operations

4.2.2

1.2.3

Foreign currency translation reserve reclassified to profit or loss on disposal of investment –

Discontinued operations

Net fair value gain on cash flow hedges and other assets and liabilities measured at fair value through

other comprehensive income

440

(410)

(735)

(772)

(3 127)

Total other comprehensive income/(loss) for the period

Total comprehensive loss for the period

Total comprehensive loss attributable to:

Owners of Steinhoff N.V.

(639)

229

(2 875)

(252)

Non-controlling interests

Total comprehensive loss for the period

(410)

(3 127)

Total comprehensive loss attributable to owners of Steinhoff N.V. arises from:

Continuing operations

(633)

(6)

(2 786)

(89)

Discontinued operations

Total comprehensive loss for the period

(639)

(2 875)

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as the effect

of the reclassification of The Building Company from a discontinued operation to a continuing operation.

²The net exchange gains recognised in Comprehensive Income during the 2021 Reporting Period resulted mostly from the translation of the Group’s investment in its

South African operations where there was a significant strengthening of the South African rand to the euro.

The accompanying notes form an integral part of the 2021 Consolidated Financial Statements.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2021

Restated¹

30 September 30 September

2021

€m

2020

€m

Notes

ASSETS

Non-current assets

Goodwill

Intangible assets

6.3

3 826

1 431

857

1 760

151

373

240

3 555

1 312

701

1 716

136

425

224

Property, plant and equipment

Right-of-use assets

Investments in equity accounted companies

1VJGTꢀƒPCPEKCNꢀCUUGVU

Deferred tax assets

Trade and other receivables

8 647

8 073

Current assets

Inventories

13.2

1 465

733

150

1 314

567

146

Trade and other receivables

Taxation receivable

1VJGTꢀƒPCPEKCNꢀCUUGVU

Cash and cash equivalents

3 151

5 501

936

2 015

4 042

986

#UUGVUꢀENCUUKƒGFꢀCUꢀJGNFꢁHQTꢁUCNGꢀCPFꢀFKURQUCNꢀITQWRU

6 437

15 084

5 028

13 101

Total assets

EQUITY AND LIABILITIES

Capital and reserves

Ordinary share capital (net of treasury shares)

Share premium (net of treasury shares)

Other reserves

Accumulated losses

Total equity attributable to owners of Steinhoff N.V.

Non-controlling interests

10 605

(704)

(15 125)

(5 183)

2 022

10 538

(1 856)

(13 991)

(5 268)

1 087

Total equity

(3 161)

(4 181)

Non-current liabilities

Borrowings

'ORNQ[GGꢀDGPGƒVU

Deferred tax liabilities

Provisions

17.2

6.3

10 869

10 744

276

255

Lease liabilities

Trade and other payables

19.1

1 728

1 657

12 982

12 746

Current liabilities

Trade and other payables

Taxation payable

'ORNQ[GGꢀDGPGƒVU

Provisions

19.1

19.2

1 611

312

106

1 734

443

399

1 450

295

1 082

422

Lease liabilities

Borrowings

17.2

709

4 605

658

4 045

491

.KCDKNKVKGUꢀFKTGEVN[ꢀCUUQEKCVGFꢀYKVJꢀCUUGVUꢀENCUUKƒGFꢀCUꢀJGNFꢁHQTꢁUCNGꢀCPFꢀFKURQUCNꢀITQWRUꢀ

5 263

15 084

4 536

13 101

Total equity and liabilities

¹Prior year comparatives have been restated for the effect of the reclassification of The Building Company from a discontinued operation to a continuing operation

The accompanying notes form an integral part of the 2021 Consolidated Financial Statements.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 SEPTEMBER 2021

Ordinary share

capital

Share Treasury share

premium

capital

€m

Notes

€m

Total equity at 1 October 2019

–

11 020

(2)

Effect of adopting IFRIC 23

–

Effect of adopting IFRS 16

–

Restated balance as at 1 October 2019

Loss for the period

–

11 020

(2)

–

Other comprehensive loss for the period

Total comprehensive loss for the period

Transactions with the owners in their capacity as owners

Dividends

–

(2)

–

Preference dividends

–

Ordinary dividends

–

Transactions with non-controlling interests without change in control

Pepkor Holdings

–

30.2

–

IEP Interest

–

Net treasury shares sold

–

Attributable share of other reserves relating to equity accounting

Share-based payments – Pepkor Holdings ESRS

Total equity at 30 September 2020¹

Loss for the period

–

33.1.1

–

11 020

–

Other comprehensive income for the period

Total comprehensive (loss)/income for the period

Transactions with the owners in their capacity as owners

Dividends

–

(2)

Preference dividends

–

Ordinary dividends

–

Transactions with non-controlling interests without change in control

Pepkor Holdings

–

30.2

–

Pepco Group

–

Net treasury shares sold

28.5

28.2

11.2

–

Treasury shares cancelled

–

(139)

Attributable share of other reserves relating to equity accounting

Share-based payments

–

Share-based payments – Pepkor Holdings ESRS exercised

Share-based payments – Pepco Group Value Creation Plan

Share-based payments – Pepkor Holdings ESRS expense

Net fair value gain on cash flow hedges transferred to inventory

Transfers to other reserves²

33.1.1

33.1.3

33.1.1

–

Total equity at 30 September 2021

10 881

¹ Prior year comparatives have been restated for the effect of the reclassification of The Building Company from a discontinued operation to a continuing operation.

²The transfers from other reserves to retained earnings relate to the release of reserves, specifically cash flow hedging reserve, share-based payment reserves,

post-employment benefits and capital redemption reserve fund.

Refer to note 27 for a description of nature and purpose of each reserve.

The accompanying notes form an integral part of the 2021 Consolidated Financial Statements.

100

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Excess of

consideration

Total ordinary

equity

Foreign

currency

translation

reserve

€m

(paid to)/

Share-based received from

payment non-controlling

attributable to

Treasury share

premium

€m

Accumulated

losses

Sundry

reserves

€m

owners of Non-controlling

Steinhoff N.V.

€m

reserve

€m

interest

€m

interests

€m

Total

€m

(483)

(11 719)

(1 025)

–

(166)

(47)

–

(2 371)

1 273

–

(1 098)

–

(78)

–

(78)

(46)

(124)

(483)

–

(11 699)

(2 264)

–

(1 025)

–

(166)

–

(47)

–

(2 351)

(2 264)

(611)

(2 875)

1 227

(91)

(1 124)

(2 355)

(772)

–

(584)

–

(27)

(161)

(252)

–

(2 264)

–

(3 127)

–

(27)

(6)

(27)

(6)

–

(7)

–

(21)

139

147

(8)

(21)

104

108

(4)

–

(28)

–

(35)

(39)

–

(32)

(7)

–

(15)

–

(15)

–

(15)

–

(482)

–

(13 991)

(974)

–

(1 616)

–

(166)

–

(89)

–

(5 268)

(974)

335

(639)

1 087

124

105

229

(4 181)

(850)

440

(410)

–

322

–

(974)

–

(5)

(4)

(1)

703

291

412

–

(5)

(4)

–

(1)

–

(62)

–

682

607

–

(2)

–

679

604

1 382

366

1 016

–

(62)

–

(2)

–

139

–

(59)

–

(4)

–

(7)

–

(19)

–

(39)

–

(276)

(15 125)

(1 244)

519

(5 183)

2 022

(3 161)

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

101

Restated¹

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 30 SEPTEMBER 2021

2021

€m

2020

€m

Notes

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations

Dividends received

25.1

11.2

1 352

524

1 171

–

Ordinary dividends paid

(1)

(14)

(6)

Preference dividends paid

(4)

Interest received

Interest relating to leases – continued operations

Interest relating to leases – discontinued operations

(121)

(55)

(133)

–

Interest paid

5 & 17.2

(130)

(197)

1 424

(139)

(116)

807

Tax paid

Net cash inflow from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Additions to property, plant and equipment and investment property

Proceeds on disposal of property, plant and equipment and intangible assets

Additions to property, plant and equipment and investment property included under held-for-sale

Proceeds on disposal of property, plant and equipment included under held-for-sale

Additions to intangible assets

(271)

(239)

(14)

152

(42)

(6)

(69)

310

(64)

(3)

Acquisition of subsidiaries and businesses, net of cash on hand at acquisition

Disposal of businesses net of cash

1.4

543

11.5

4.2.4 & 35

Proceeds from the disposal of investments in equity accounted companies

Payments for investments in equity accounted companies

Net cash (outflow)/inflow from investing activities

–

(1)

11.2

(97)

589

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from sale of treasury shares, net of transaction costs

Transaction with non-controlling interest

Pepkor Holdings – bookbuild

1 342

409

104

–

30.2

Pepkor Holdings – share buyback

Pepco Group – IPO

Net shares bought from non-controlling interests

Payment of lease commitments

(43)

976

–

30.2

18.1

17.2

(4)

(425)

(2 158)

838

(428)

(1 196)

426

–

Repayments of borrowings

Proceeds from borrowings

Continued operations

17.2

828

Discontinued operations

0GVꢀECUJꢀQWVHNQYꢀHTQOꢀƒPCPEKPIꢀCEVKXKVKGU

(402)

(1 096)

NET INCREASE IN CASH AND CASH EQUIVALENTS

Effects of exchange rate translations on cash and cash equivalents

Cash and cash equivalents at beginning of the period

CASH AND CASH EQUIVALENTS AT END OF PERIOD

925

154

300

(85)

2 166

3 245

1 951

2 166

Reconciliation of Cash and Cash Equivalents at end of period

Cash and cash equivalents

3 151

2 015

151

Cash and cash equivalents held-for-sale

CASH AND CASH EQUIVALENTS AT END OF PERIOD

3 245

2 166

¹ Prior year comparatives have been restated for the effect of the reclassification of The Building Company from a discontinued operation to a continuing operation.

The accompanying notes form an integral part of the 2021 Consolidated Financial Statements.

102

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

BASIS OF

PREPARATION

FOR THE PERIOD ENDED 30 SEPTEMBER 2021

REPORTING ENTITY

Steinhoff N.V. is a public limited liability company ( naamloze vennootschap ) incorporated under the laws of the Netherlands , has its corporate

seat in Amsterdam , the Netherlands, and its principal place of business at Building B2, Vineyard Ofﬁce Park, Cnr Adam Tas & Devon Valley

Road, Stellenbosch 7600, South Africa . The Company is registered with the Trade Register in the Netherlands under number 63570173, with

tax residency in South Africa. The Company has a primary listing on the FSE in Germany and a secondary listing on the JSE in South Africa.

The Consolidated Financial Statements of Steinhoff N.V. for the period ended 30 September 2021 comprise the Group and the Group’s interest

in equity accounted companies. The Group is primarily a global holding company with investments in retail businesses. The Group operates in

Africa, Australasia, Europe, the United Kingdom and the United States of America.

Refer to the Annexure 1: Glossary of Terms applicable to this report.

BASIS OF PREPARATION

Statement of compliance

The 2021 Consolidated Financial Statements and 2021 Separate Financial Statements have been prepared in accordance with IFRS, as adopted

by the EU, and also comply with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code. All standards and interpretations issued by the

IASB and the IFRIC, effective for periods starting on 1 October 2020, have been endorsed by the EU. Where necessary, adjustments have been

made to the ﬁnancial results of all Group entities to ensure compliance with Group accounting policies.

Accounting policies set out here have been applied consistently to all periods presented and are consistent with policies applied in the 2020

Reporting Period, except for the adoption of new or amended standards during the Reporting Period (refer to note 37). The adoption of these

amendments did not have any impact on the amounts recognised in the 2020 Reporting Period.

All new accounting standards that became effective in the 2021 Reporting Period have been applied.

Historical cost convention

The 2021 Consolidated Financial Statements and 2021 Separate Financial Statements are prepared under the historical cost convention adjusted for

the effects of inflation where entities operate in hyperinflationary economies and for the revaluation of certain ﬁnancial instruments to fair value.

Presentation and functional currency

Unless otherwise indicated, the 2021 Consolidated and Separate Financial Statements are prepared on the accrual basis in millions of euro (€m).

The euro is the Group’s presentation currency and the Company’s functional currency.

Going concern

In determining the appropriate basis of preparation of the 2021 Consolidated Financial Statements and the 2021 Separate Financial Statements

of the Company, the Management Board is required to consider whether the Group and the Company can continue in operational existence for the

foreseeable future.

In doing so the Board has prepared and assessed the Group's and the Company's cashflow forecasts in order to substantiate the going concern

assumption, and has considered the impact of the provision for the Litigation Settlement Proposal, the extension of the maturity date of the debt,

and assessed the impacts of the COVID-19 global pandemic on the going concern position.

The Management Board draws stakeholders’ attention to the following assumptions that are key in arriving at the forecast cash flows, namely:

Litigation

On 15 February 2021, Steinhoff N.V. announced that it was beginning the implementation of its Litigation Settlement Proposal and applied for

the opening of a Dutch SoP proceedings and offered the Steinhoff N.V. Composition Plan to its Dutch SoP creditors. The Dutch Court conﬁrmed

the Steinhoff N.V. Composition Plan on 23 September 2021. Following expiry of a prescribed 8-day period wherein the court’s decision is open to

appeal, during which no appeal was lodged, the Dutch Court order became ﬁnal and binding and by consequence the Steinhoff N.V. Composition

Plan became binding on all Dutch SoP creditors in accordance with its terms. The Steinhoff N.V. Composition Plan was proposed in parallel with

the proposal by SIHPL in terms of the SIHPL S155 Scheme. Both proposals, which are inter-conditional, form part of the Litigation Settlement

Proposal to resolve the legacy claims arising from the announcement of accounting irregularities.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Basis of preparation for the period ended 30 September 2021 continued

Going concern (continued)

Litigation (continued)

The sanctioning of the SIHPL S155 Scheme on 24 January 2022 has resulted in a compromise of any, and all, claims against SIHPL (whether or not

legally established and whether or not admitted or disputed by SIHPL and to substitute all such claims with the rights arising under the terms of the

SIHPL S155 Scheme). Pursuant to the SIHPL S155 Scheme having been adopted overwhelmingly by the SIHPL scheme creditors, SIHPL brought a

sanction application.

SIHPL’s application for the approval and sanction of the S155 Scheme was heard on 24 January 2022, by the Western Cape High Court. At the

close of the hearing the Court granted SIHPL’s request and granted an order approving and sanctioning the S155 Scheme. Following receipt of the

Order, “Settlement Effective Date” (referred to under the S155 Scheme and the Composition Plan) is expected to occur on or about

15 February 2022. As disclosed in Steinhoff N.V.’s announcement of 15 December 2021, formal withdrawal of the various litigation that has been

settled, including the withdrawal of the Liquidation Application against Steinhoff N.V. will occur immediately following Settlement Effective Date.

Occurrence of Settlement Effective Date is the remaining condition under the Composition Plan.

The following key considerations were taken into account by the Management Board:

•

The maturity date of the Steinhoff N.V. CPUs will be extended to June 2023, subject to the Settlement Effective Date; and

•

The Litigation Settlement Proposal has reached signiﬁcant positive milestones, including the adoption and conﬁrmation of the Steinhoff N.V.

Composition Plan, the almost unanimous adoption of the SIHPL S155 Scheme by relevant classes of SIHPL creditors, the Court Order approving

and sanctioning the S155 Scheme on 24 January 2022 as well as regulatory approval by FinSurv.

At 30 September 2021, the Group’s obligation in respect of the Litigation Settlement Proposal has been classiﬁed as a provision and measured as

per the Steinhoff N.V.’s Composition Plan as well as the SIHPL S155 Scheme term sheet, which represent the best estimate of the total amount

to be incurred to settle the obligation. In light of the key considerations taking into account by the Management Board as set out above, the

obligation is no longer disclosed as a contingent liability.

The Group and the Company’s cash flow forecasts are adjusted for the impact of the Litigation Settlement Proposal as detailed in note 23.4 of

these 2021 Consolidated Financial Statements.

Classiﬁcation of Debt

As part of the implementation steps of the Litigation Settlement Proposal, the Group delivered the Interim Debt Extension request to its lenders on

6 August 2021 requesting consent to extend the maturity date of the Group’s outstanding corporate debt from 31 December 2021 to 31 December 2022.

On 11 August 2021, consent for the Interim Debt Extension was granted by those lenders. Consequently, the maturity date of the Steinhoff N.V.

CPU and facility agreements entered into pursuant to the CVA, was extended from 31 December 2021 to 31 December 2022. As a result, the debt

is classiﬁed as non-current as at 30 September 2021. Refer to note 17.

A further term extension will be granted initially to 30 June 2023 on the Settlement Effective Date of the global Litigation Settlement Proposal and

such maturity date is capable of further extension to 31 December 2023 with further simple majority lender approval.

COVID-19

The underlying businesses operate a number of strong local brands and are well diversiﬁed by geography and business line. While COVID-19

constraints affected the performance of all businesses during the 2021 and 2020 Reporting Periods, the extent of the impact varied according to

their geographic exposure, business mix, and severity and duration of lock down restrictions at a local level. The Group’s unparalleled position in

the discount and value retail market segments continues to be increasingly relevant in addressing consumer needs. While the Group is conﬁdent

that the actions it has taken, and continues to take, to address the impacts of COVID-19 are appropriate and timely. The developments and the

mitigating actions are being kept under constant review. The Group has assessed its ECL calculations as well as the impairment of goodwill and

intangible assets taking into consideration the constrained retail environment and has concluded that its ECL provisions are reasonable and that

no impairment of goodwill and intangible assets were necessary as at 30 September 2021.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Basis of preparation for the period ended 30 September 2021 continued

Going concern (continued)

Conclusion

In determining the appropriate basis of preparation of these 2021 Consolidated Financial Statements and the 2021 Separate Financial Statements

of the Company, the Management Board has considered whether the Group and the Company can continue in operational existence for the

foreseeable future. The Management Board draws attention to the following facts:

•

At 30 September 2021, the Group’s current assets exceed its current liabilities;

•

At 30 September 2021, the Group’s total liabilities exceed its total assets. However, management draws the user of these ﬁnancial statements’

attention to the 2021 Consolidated Financial Statements’ basis of preparation, which is the historical cost convention and therefore the

majority of the assets are recognised at book value and not fair value. The fair value of the assets held by the Group, as at 30 September 2021,

has been taken into account in the calculation of the Steinhoff N.V. CPUs in the 2021 Separate Financial Statements of Steinhoff N.V. (Refer to

note 11 in the 2021 Separate Financial Statements of Steinhoff N.V. for more detail); and

•

The Management Board does not intend to liquidate the Company and the underlying boards still plan to recover their assets and settle

their debts in the normal course of business. The resolution of the litigation, following the court sanction on 24 January 2022, through the

implementation of the Dutch SOP and the S155 scheme will enable management to actively pursue the next step of its strategic plan, being

the restructure of the Group with the view to reduce debt and ﬁnance costs.

At the time of signing these 2021 Consolidated and Separate Financial Statements, the Management Board has a reasonable expectation that

the Group has sufﬁcient resources to continue in operation for the foreseeable future, which is not less than twelve months from the date of

authorisation of these 2021 Consolidated and Separate Financial Statements. The Management Board has adopted the going concern basis in

preparing these 2021 Consolidated and Separate Financial Statements.

Further information regarding the Group’s business activities, together with the factors likely to affect its future development, performance and

position including the response to COVID-19, is set out throughout the Management Report.

AREAS OF KEY JUDGEMENTS AND ESTIMATES

The preparation of Consolidated Financial Statements requires management to make judgements and estimates that affect the application

of accounting policies and the reported values of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Judgements have been made after taking into account all known information, but these could change if additional relevant information comes to

light.

Key accounting estimates are those that involve complex or subjective judgements or assumptions.

Key judgements

Note reference

1. Going concern assumption

Basis of preparation

2. Consolidation decisions

Management's assessment of whether the Group controls/controlled the following entities required key judgements.

Main Group

Entities related to subsidiaries of the Main Group Treated as controlled

Note reference

SRF

No (unconsolidated

structured entity)

Basis of preparation

In order to give effect to the Composition Plan and the S155 Scheme upon the Settlement Effective Date, the SRF was incorporated on

24 August 2021. The objectives of the SRF are to become a party to the Litigation Settlement Proposal and fulﬁl its duties as per the S155

Scheme, Composition Plan and various Steinhoff global settlement agreements (together the “Agreements”), which is mainly to distribute

the settlement funds it will receive to the relevant Market Purchase Claimants and Contractual Claimants. Therefore, the SRF has restricted

activities with narrow and well-deﬁned objectives and its activities will be funded mainly through the Group. This arrangement falls within the

deﬁnition of a "structured entity" in terms of IFRS.

The Group has taken the below considerations into account to establish whether the Group controls this structured entity.

SRF is governed by a board of three directors, of which two directors are independent from the Group. The chairperson is independent and has a

casting vote in the event of a deadlock in decision making. The SRF is required to fulﬁl its duties as set out in the Agreements. The SRF board of

directors is bound by the Composition Plan as approved through the Dutch SoP and the objectives as set out in the deed of incorporation.

The Group does not have the ability to direct the relevant activities and has no exposure to variable returns. The Group does not control the

SRF and therefore its results are not consolidated.

The SRF will receive the total estimated settlement amount to be paid to the Steinhoff N.V. and SIHPL Market Purchase Claimants, the

Steinhoff N.V. Contractual Claimants (together the “SoP Settlement Fund”) and to the SIHPL Market Purchase Claimants (the “S155

Settlement Fund”).

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Basis of preparation for the period ended 30 September 2021 continued

AREAS OF KEY JUDGEMENTS AND ESTIMATES (CONTINUED)

Key judgements (continued)

2. Consolidation decisions (continued)

In the execution of the Composition Plan, the SRF will distribute the SoP Settlement Fund, S155 Settlement Fund and the additional

contributions by the Deloitte ﬁrms and the D&O insurers as announced to the Steinhoff N.V. Market Purchase Claimants, the SIHPL Market

Purchase Claimants and certain Steinhoff N.V. Contractual Claimants. The SRF will do so pursuant to the SRF and claims administration

conditions in the Composition Plan. The SRF will become bound to the Composition Plan as of the Settlement Effective Date by

countersigning the Composition Plan, which will occur close to Settlement Effective Date.

In order to fund its operations, the SRF will receive a cost contribution of €16.5 million from Steinhoff Africa, €1.1 million from Deloitte and

€1.1 million from the D&O insurers. For the 2021 Reporting Period a total of €2 million has been spent by Steinhoff Africa on SRF costs and

will be deducted from the committed €16.5 million, once Settlement Effective Date occurs.

On 15 September 2021, Steinhoff Africa ceded and pledged bank accounts to the value of ZAR6.2 billion (€351 million) to the SRF and

Ainsley Holdings ceded 283 million Pepkor Holdings shares, in order to prove to the District Court of Amsterdam that the Group will be able

to perform under the Composition Plan when Settlement Effective Date occurs.

Main Group

Entities related to subsidiaries of the Main Group

Treated as controlled

Note reference

Newco 3 group

Yes

Basis of preparation

Refer below

Pepco Group

APAC Holdco Limited and its subsidiaries

Conforama Group*

Principal subsidiaries are those identiﬁed by management as contributing materially to the consolidated results or ﬁnancial position of the Group.

In preparing these Consolidated Financial Statements, Steinhoff N.V. had to conclude whether or not it had control over certain entities

following various governance structure changes resulting from the restructuring transactions. Concluding that the Group controls Newco 3,

resulted in the full consolidation and disclosure of its debt, assets, cash flow and operating results.

Prior to the implementation of the CVA, management had two options, either to place the Group into liquidation, which would have been

value destructive and would not have provided the optimal value preservation in the circumstances for all stakeholders, or to pursue a debt

and business restructuring process by entering into agreements with its lenders to ensure that value preservation and maximisation in the

underlying assets is achieved as a common objective for all stakeholders.

The Group engaged in lengthy negotiations with its lenders, bondholders and other ﬁnancial creditors to restructure its ﬁnances. These

rigorously negotiated agreements resulted in extensive protective rights being provided to the creditors to address historical shortcomings in

governance and to improve standards of independence and disclosure. These protective rights are not in the normal course of business and

are due to historical extraordinary circumstances.

The Company has setup intermediate holding companies whose purpose, design and relevant activities will include acting as an intermediate

holding company for the Newco 3 group in the management of its investments, the resolution of the legacy issues within the Newco 3 group, the

repayment of the restructured ﬁnancial debt and the selection of assets for disposal on appropriate terms. As part of the nomination rights that

the creditors have agreed with the Company, the creditors have nominated certain individuals to be considered for appointment by Steinhoff N.V.

as directors. These individuals are considered to have the skillset to help oversee the restructure and pay down the debt in an orderly manner

thereby extracting greater value out of the assets. The assets and liabilities within Newco 3 represent a substantial portion of the Group.

Although the independent directors represent a majority of the board of Newco 3, being a key body in determining the path to repaying the

Group’s debt (which is the purpose with which they have been tasked), the Management Board, in concluding that the Group controls Newco

3, has considered various factors surrounding the shareholding and governance structures of Newco 3 and determined that:

•

The Company, in consultation with its creditors, has designed the purpose of the entity;

The Company has oversight, involvement, and the ability to affect change in the course of this intermediate holding company;

The creditor nominated directors are independent professionals and have no obligation to act in accordance with instructions from

creditors and have been nominated based on their skillset relevant to the purpose of the Newco 3 group; and their independence from the

legacy issues of Steinhoff N.V.;

•

Steinhoff N.V. has the appointment right of the directors on the newly constituted boards;

Steinhoff N.V. has the legal right to remove these directors. Where a creditor nominated director is removed as a director by the

shareholder, the consequences are governed by protective rights included in the facilities agreements.

•

These protective rights allows Steinhoff N.V. to dismiss the creditor nominated director with cause, if dismissed without cause then it creates

a potential event of default. This leaves a broad discretion with Steinhoff N.V. in exercising its power of dismissal. This includes the ability to

dismiss a director who does not act with regard to the interests of the company and its stakeholders generally. Legally the dismissal rights are

not diminished due to potential consequences.

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Basis of preparation for the period ended 30 September 2021 continued

AREAS OF KEY JUDGEMENTS AND ESTIMATES (CONTINUED)

Key judgements (continued):

2. Consolidation decisions (continued)

•

The debt is the Company’s and the debt has not been extinguished;

The Company has an overall guarantee for the Newco 3 group of entities, refer to the 2021 Separate Financial Statements and the

accounting treatment of the underlying CPUs;

•

The Company still holds 100% of Newco 3’s ordinary shares;

The Company is accountable for the success of the overall restructuring and therefore has built-in additional ways to influence the

outcome despite the design of the entity and the assignment of directors.

•

The composition of the body of creditors shifts over time and the creditors do not operate as a single block;

The relevant board of directors do not act on their own behalf and neither do they act only on behalf of the lenders who nominated them. They

act on behalf of the company and therefore need to act on behalf of all stakeholders of the company irrespective of who nominated them;

•

The governance rights agreed to by the Group are to ensure that the creditors’ interests are protected. Given the signiﬁcant level of debt,

the creditors have been given signiﬁcantly more protection rights than usual;

•

The Group has the power to direct the relevant activities through the strategic roadmap provided to these boards as part of the restructure

process, in a way that is consistent with the wider Group strategy.

The Group is fully exposed to the losses of this group of companies and the Group is directing the group wide process of recovering the

maximum value for all stakeholders across the whole group. The Management Board has weighed the facts and circumstances as set out

above and believes that the Company maintains control of Newco 3 and should therefore continue to consolidate Newco 3, resulting in the

debt and underlying assets remaining on its balance sheet.

Main Group

Entities related to subsidiaries of the Main Group

Treated as controlled

Note reference

Conforama Group

Yes

Basis of preparation

Conforama Investissement SNC

Conforama Développement SASU

Conforama Holding SA

The French Commercial Court of Meaux, on 11 April 2019, approved an amicable restructuring agreement entered into between Conforama

Group and its creditors, as part of a French law “conciliation” process which provided the framework for the reﬁnancing negotiations. This

ruling allowed Conforama Group to implement its ﬁnancial restructuring. The Conforama Group restructuring resulted in a governance

structure being set up in a way that supported the Group’s objective of maximizing the recovery for all stakeholders and were instituted with

agreement of the Group (via Newco 3) and in a way that was consistent with the objective of the entire Group. At the Reporting Date, the

Group has retained its indirect equity ownership of 99.99% of the ordinary shares although the group structure has changed.

The key terms of the ﬁnancial restructuring included:

•

A total nominal value of €316 million new money ﬁnancing consisting of Tranche A Bonds to the amount of €205 million, which was

issued on 15 April 2019, and 111 million Tranche B Bonds at a nominal value of €1 per bond which remain unissued;

•

One golden share named “Class 1 Preference Share” (the “Golden Share”) was created on 3 April 2019. It was initially owned by

Conforama Investissement and was transferred on 15 April 2019 to Equities Gestion acting as trustee under a trust agreement in relation

to the Golden Share, also dated 15 April 2019. Pursuant to the terms and conditions of the Golden Share, the speciﬁc rights attached

to it (including veto rights and the right to direct the appointment of more than half of the board members) are conditional upon the

occurrence of a “Triggering Event”, i.e., the opening of insolvency/pre-insolvency proceedings and/or an event of default under the

Conforama Group ﬁnance documents. The Triggering Event would ultimately lead to the activation of a new governance structure. During

the 2021 Reporting Period the senior bonds were fully repaid, the Golden Share was automatically converted in one ordinary share, and

therefore lost all its speciﬁc rights, meaning the Golden Share can no longer be activated to trigger a new governance structure; and

•

On 29 May 2019, Conforma Holding SA issued a total of 205 242 947 warrants (the “Warrants”) which, if and when exercised, are “convertible”

into 205 242 947 Class 2 Preference Shares. Pursuant to their terms and conditions, the Warrants may only be exercised within a certain period

of time before the occurrence of an “Exercise Event”. An Exercise Event is the occurrence of any of the following:

(i) any distribution of any nature whatsoever made from time to time by Conforama Holding SA for the beneﬁt of its shareholders;

(ii) a listing, partial exit or change of control within the meaning given to these terms on the terms and conditions;

(iii) any voluntary or judicial liquidation of Conforama Holding SA; or

(iv) the date which is six months prior to 29 May 2029.

100

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Basis of preparation for the period ended 30 September 2021 continued

AREAS OF KEY JUDGEMENTS AND ESTIMATES (CONTINUED)

Key judgements (continued):

2. Consolidation decisions (continued)

If all the Warrants were to be exercised (which is an individual decision to be made by each holder of Warrants during the relevant Exercise

Period), they are “convertible” into 205 242 947 Class 2 Preference Shares. Class 2 Preference Shares bear signiﬁcant ﬁnancial rights, as

they together give right by priority to 49.90% of all shareholders’ proceeds in case of a distribution, exit or liquidation. However, each Class

2 Preference Share bears only one voting right, and therefore the potential exercise of all Warrants would have little impact per se on the

allocation of voting powers within the company. In particular, Conforama Développement SASU would continue holding more than 99% of the

ordinary shares issued by Conforama Holding SA.

At the 2021 Reporting Date the Golden Share (and the rights attached thereto) can no longer be triggered as it has been converted into an

ordinary share and therefore was disregarded for control assessment purposes. Similarly, the Warrants, even though issued, are neither

exercised nor exercisable; therefore, the Warrants and the rights attached thereto, were also disregarded for control assessment purposes.

The triggering of the Golden Share and the exercise of the Warrants are not linked. The conversion of the Warrants into Class 2 Preference

Shares would not result in the loss of control but only provide a ﬁnancial right to the warrant holder to 49.90% of all shareholders’ proceeds in

case of a distribution, exit or liquidation.

The Group has the ability to appoint all the directors through Newco 3, with the CEO of the Conforama Group being appointed by the other

four Conforama board members. Two of the directors are nominated by the creditors who hold the Warrants.

The creditor nominated directors must be independent from the creditors and are only appointed with the support of the Group. The Group

has the right to dismiss all the directors without cause, although there may be repercussions unless there is evidence that the directors were

not fulﬁlling their ﬁduciary duty to act in the best interest of Conforama Group and they would have to be replaced with creditor nominated

directors if applicable.

In reaching the abovementioned conclusion, it is based on the key judgement that the Group controls Newco 3.

Further consideration was given on whether the Warrants issued on 29 May 2019 should be recognised as a non-controlling interest in the

Group’s Consolidated Financial Statements.

The Class 2 Preference Shares provide the holders thereof the right to 49.9% of dividends (declared at Conforama Group’s discretion) as

well as to a proportion of the net liquidation proceeds in the event that Conforama Group is liquidated. The Class 2 Preference Shareholders’

right to net liquidation proceeds is on substantially the same terms as the ordinary shareholders (i.e. net liquidation proceeds will ﬁrst

be employed to settle the par value of the shares held by all the shareholders pro-rata to their stake in Conforama Group’s share capital,

following which the remainder will be settled to the ordinary and the Class 2 Preference Shareholders based on the dividend portion formula).

The Class 2 Preference Shares will therefore be classiﬁed as a non-controlling interest in the Group’s Consolidated Financial Statements as it

provides the holders thereof the right to the equity of Conforama Group.

As it has been determined that the Class 2 Preference Shares will be classiﬁed as a non-controlling interest in the Consolidated Financial

Statements, consideration should be given to whether the unexercised Warrants will also be classiﬁed as a non-controlling interest.

Based on the terms governing the exercise of the Warrants, the Warrants will be exercised once any form of equity return is provided to the

ordinary shareholders (i.e. a dividend distribution of any form and/or net liquidation proceeds from a liquidation event) and mandatorily by

29 May 2029 if not yet exercised by such date. The Warrants therefore provide the holders thereof with the right to equity returns from

issuance date and not only from the date that the Warrants are exercised. This would therefore result in the issued Warrants being classiﬁed

as a non-controlling interest from issuance date.

Management has therefore determined that 49.9% of Conforama Group’s equity should be attributed to non-controlling interest.

The non-controlling interest of the Conforama Group is still the subject of lawsuits. Management has therefore considered the information

available, despite ongoing uncertainty in speciﬁc areas, and determined that no percentage should be attributed to non-controlling interest

relating to the lawsuits. Nevertheless, a litigation provision has been raised for €100 million.

It is management’s assessment that Conforama met the classiﬁcation of held-for-sale during the 2020 Reporting Period. At the Reporting

Date all the Conforama businesses have been sold, except for Conforama Iberia and Coforama Italy. These businesses still met the

classiﬁcation as held-for-sale. Refer to note 1.

Entity

Note reference

Conforama: non-controlling interest attributable to Seifert entities

Notes 30 & 23.5

101

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Basis of preparation for the period ended 30 September 2021 continued

AREAS OF KEY JUDGEMENTS AND ESTIMATES (CONTINUED)

Key judgements (continued):

Note reference

3. Recoverability of ﬁnancial and other assets

Financial assets

The recoverability of loans and assets with counterparties have been assessed for impairment as required under IFRS 9 – Financial Instruments.

4. Recognition and derecognition of liabilities

Note 17

Note 23

5. Recognition and measurement of provisions (including Litigation Settlement Proposal)

6. Correct classiﬁcation and completeness of contingent liabilities

Note 24

7. Correct classiﬁcation of disposal groups and non-current assets held-for-sale

8. Correct classiﬁcation and completeness of liabilities and events occurring after the Reporting Period

Note 35

Notes 24 & 36

Key estimates

Note reference

Note 6

1. Estimation of uncertain tax positions

2. Estimation of future taxable proﬁts in support of recognition of deferred tax assets

3. Estimation of inputs into discounted cash flow models relating to the impairment of goodwill

4. Estimation of inputs into discounted cash flow models relating to the impairment of intangible assets

5. Estimation of the useful life of intangible assets

Note 6

Note 8

6. Estimation of the recoverable amount and fair value of properties

7. Estimation of the useful life and residual values of buildings

Note 9

8. Estimation of the fair value less cost of disposal for non-current assets held-for-sale of disposal groups

Notes 1 & 35

Note 23.4

Estimation of provision to be raised for the Litigation Settlement Proposal

10. Estimation of fair value of identiﬁable assets and liabilities impacting the measurement of goodwill in a

business combination

Note 26

Note 33

11. Estimation of vesting conditions relating to share-based payments

12. Estimation in determining the lease terms and discount rates applicable to lease agreements

Notes 10 & 18

102

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Basis of preparation for the period ended 30 September 2021 continued

AREAS OF KEY JUDGEMENTS AND ESTIMATES (CONTINUED)

Accounting policy elections

The following signiﬁcant accounting policy elections have been made by the Group:

Area

Details

Transitions

IFRS 16: Leases

The Group has elected to apply IFRS 16 using the modiﬁed retrospective approach by

recognising the cumulative effect, if any, of initially applying IFRS 16 as an adjustment to

opening balance of equity at 1 October 2019.

IFRIC 23: Uncertainty over Income Tax

Treatments

The Group has elected to apply IFRIC 23 retrospectively with the cumulative effect of initially

applying IFRIC 23 recognised as an adjustment to opening accumulated losses on

1 October 2019.

Statement of proﬁt or loss

Income from investments

The Group has elected to present income from investments separately on the face of the statement

of proﬁt or loss. Income from investments comprise ﬁnance income and dividend income.

Discontinued operations

The Group has elected to present the detail of the proﬁt or loss of discontinued operations in a

separate note instead of on the face of the statement of proﬁt or loss.

Intercompany transactions between continuing and discontinued operations

Intercompany transactions and balances between continuing and discontinued operations are

eliminated within both continuing and discontinued operations. The intercompany eliminations

are added back as reconciling items for segmental reporting to present the reportable

segments prior to the intercompany eliminations as this more closely reflects the trading

conditions within each reportable segment.

Statement of ﬁnancial position

Investment properties

The Group has elected to measure all investment properties using the cost model.

The Group has elected to measure all owner-occupied properties using the cost model.

Owner-occupied properties

Statement of cash flows

Interest paid and received

The Group views interest paid and received as operating activities as these are largely incurred

in the funding of operations.

Dividends paid and received

Discontinued operations

The Group discloses dividends paid and received as operating activities as this demonstrates

the Group’s ability to pay dividends out of operating cash flows.

The Group has elected not to disaggregate all the cash flows from discontinued operations

in the statement of cash flows. The detail of the main components of cash flow from

discontinued operations are disclosed in the notes to the 2021 Consolidated Financial

Statements.

Basis of preparation – Cash flows

The Group has elected to present the cash flows using the indirect method. The indirect

method adjusts accrual basis net proﬁt or loss for the effects of non-cash transactions.

Exchange rates

The following table presents the exchange rates used by the Group.

30 September 2021

30 September 2020

Average annual rate

1 euro =

Spot rate

1 euro =

Spot rate

1 euro =

AUD – Australian Dollar

GBP – Pound Sterling

PLN – Polish Zloty

1.5909

0.8737

4.5366

1.1954

17.7294

1.6095

0.8605

4.6197

1.1579

17.5629

1.6522

0.879

1.6438

0.9124

4.5462

1.1708

19.7092

4.3883

1.1206

18.1836

USD – US Dollar

ZAR – South African Rand

Authorisation

The 2021 Consolidated Financial Statements were prepared by the Management Board and were authorised for issue on 28 January 2022. The

2021 Consolidated Financial Statements are subject to adoption by the General Meeting.

103

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER 2021

DISCONTINUED OPERATIONS

In order to fund operations, repay debt and support the Group’s short-term liquidity, management decided to dispose of certain non-core

assets or assets requiring signiﬁcant cash commitments.

The majority of the businesses included in the following former reportable segments were disposed of or classiﬁed as held-for-sale

during the 2020 and 2021 Reporting Periods. These businesses have been presented as discontinued operations:

Identiﬁed for inclusion in 2021 Reporting Period:

Segment

Businesses

Greenlit Brands

Greenlit Brands – Plush

All Other segment

European Manufacturing, Sourcing and Logistics

LIPO

Identiﬁed for exclusion in 2021 Reporting Period:

Segment

Business

Pepkor Holdings

The Building Company

Identiﬁed for inclusion in 2020 Reporting Period:

Segment

Business

Conforama

Identiﬁed for inclusion prior to the 2020 Reporting Period:

Segment

Businesses

European Properties

Greenlit Brands

Automotive

Hemisphere properties

Greenlit Brands – General Merchandise

Unitrans

All Other segment

Abra

Blue Group

Properties – Africa

Sherwood

These disposals have also necessitated a restatement of segmental reporting (refer to note 2).

Refer to note 35 for more information on the held-for-sale assets and liabilities.

104

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

DISCONTINUED OPERATIONS (CONTINUED)

Identiﬁed for inclusion/exclusion in 2021 Reporting Period:

Pepkor Holdings – The Building Company

During the 2020 Reporting Period, Pepkor Holdings entered into a sale and purchase agreement for the disposal of the entire issued share

capital of The Building Company. The approval of the transaction by the Competition Authorities was not fulﬁlled by the transaction long

stop date of 16 August 2021. As a result, the parties have accordingly agreed to terminate the transaction.

The Building Company has performed well and has made substantial progress to restructure and consolidate the business while

improving its strategic alignment, performance and proﬁtability. Prior year comparatives have been restated, to account for The Building

Company as a continuing operation, where it was previously classiﬁed as a discontinued operation.

All Other segment

LIPO

Subsequent to the 2021 Reporting Period the Group entered into a contract to sell the LIPO business. The disposal is subject to anti-trust

approval and the terms of the sale remain conﬁdential at this stage.

LIPO was therefore classiﬁed as held-for-sale on 30 September 2021.

European Manufacturing, Sourcing and Logistics

The remaining companies in this segment historically supported the operating companies within the Group. A project was undertaken to

either merge these entities or to sell them. Management is of the view that these entities will be either deregistered or sold within the next

12 months and has therefore classiﬁed these entities as held-for-sale as at 30 September 2021.

Greenlit Brands – Plush

Greenlit Brands conducted a competitive process to sell the Plush business. Bi-lateral negotiations ensued with Nick Scali and a share

sale agreement was signed on 2 October 2021 for an enterprise value of AUD110 million.

Greenlit Brands – Plush was therefore classiﬁed as held-for-sale on 30 September 2021.

Identiﬁed for inclusion in 2020 Reporting Period:

Conforama Group

Conforama France

Conforama France SA (“Conforama France”), the Group’s French retail subsidiary, has been in turnaround since the 2019 Reporting Period.

In its 2019 Annual Report Steinhoff N.V. conﬁrmed that, following the COVID-19 outbreak in early 2020, the position of Conforama France

was uncertain and that the Group had been unable to secure the state-guaranteed loan, for which it was eligible, to support the business

through this difﬁcult period. At that point the Group also conﬁrmed that Conforama France was exploring near term options, including a

potential sale of the business.

On 8 July 2020, the Group announced the disposal of Conforama France to Mobilux, the parent company of BUT, the leading French

retailer of furniture, appliances and consumer electronics. Following the disposal, Conforama France received €500 million of new

ﬁnancing in a combination of state-guaranteed loans and funding from Mobilux.

The disposal secured the future of Conforama France, released the Group from its liabilities in respect of that business and allowed

the Group to exit from the French market. The transaction was closed on 21 September 2020 for a purchase price of €1 for 100% of the

issued share capital Conforama France, Confo! and Conforama Développement 7 and for the French Conforama trademarks and domain

names.

Mobilux also acquired 18 real estate properties owned by Conforama Holding SA and operated by Conforama France for €70 million.

These properties were transferred during the 2021 Reporting Period.

Conforama Switzerland

In a separate transaction, on 13 July 2020 Conforama Holding SA concluded an agreement to dispose of Conforama Suisse SA to a Swiss

group of private investors for an agreed price of eight times EBITDA, €229 million. The proceeds were used to reduce debt at Conforama.

The sale was closed at the end of July 2020.

Conforama Balkans

The businesses in the Balkans were disposed of on 22 September 2021 for €81 million. The proceeds from sale were used to fully repay

the Tranche A Bond debt.

Conforama Iberia and Italy

Management has been actively marketing these businesses and the process remains ongoing. These businesses still met the

classiﬁcation as held-for-sale at the Reporting Date. Management remains committed to sell these businesses within the next 12 months.

105

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

DISCONTINUED OPERATIONS (CONTINUED)

Identiﬁed for inclusion prior to the 2020 Reporting Period (continued):

European Properties

Hemisphere properties

Hemisphere is an indirect wholly owned subsidiary of Steinhoff N.V. and held a portfolio of European properties. The European property

portfolio comprised ofﬁce, retail and warehouse space. The majority of the properties were occupied by Group companies.

The Hemisphere property disposal processes have been affected by the COVID-19 outbreak to varying extents. As at 30 September 2021

there is only one property left in the Hemisphere property portfolio. The Group remains committed to a sale of this property and the

Management Board continues to believe that the held-for-sale classiﬁcation remains appropriate for this asset.

Hemisphere property portfolio met the criteria to be classiﬁed as held-for-sale on 30 June 2019.

Greenlit Brands – General Merchandise

On 18 November 2019, Greenlit Brands announced its agreement to divest its General Merchandise division to Allegro Funds for

approximately €39 million. The brands being disposed include Best & Less, Harris Scarfe, Postie and Debenhams Australia. This

transaction was completed in early December 2019. The remaining Household Goods division is recognised as a continuing operation in

the Greenlit Brands segment, with the exception of Plush.

At 30 September 2019, Greenlit Brands – General Merchandise met the criteria to be classiﬁed as held-for-sale.

Automotive

On 28 March 2019 the Company announced that, it had reached in-principle agreement to dispose of 74.9% of Steinhoff Africa’s shares

in Unitrans (and its subsidiaries), and 100% of the loan claims against Unitrans held by Steinhoff Africa, to CFAO Holdings South Africa

Proprietary Limited. From 30 September 2018, the Automotive business met the criteria to be classiﬁed as held-for-sale.

The effective date of sale was 27 November 2019. Unitrans was fully consolidated up to this date.

The remaining 25.1% of the shares were sold to Kapela Holdings, a black-owned investment holding company, on 19 December 2019.

The Automotive business was a separate reportable segment and has therefore been disclosed as a discontinued operation in the 2020

Reporting Period.

All Other Segment

Abra

The Group concluded the sale of Abra during October 2019. Abra was included as a discontinued operation in the 2020 Reporting Period.

Blue Group

On 15 November 2019 the Group announced that, in line with the strategy of simplifying its portfolio and deleveraging the balance sheet,

it had reached agreement to sell the Blue Group’s household goods division, Blue Group Holdco Limited to Alteri Investors for purchase

price of £8.85 million (€9.984 million). The effective date of the sale was 26 February 2020.

Blue Group was included as a discontinued operation in the 2020 Reporting Period.

Properties – Africa

The Group commenced a process post March 2019 to dispose of the remaining African property portfolio. As at the 30 September 2021,

the portfolio has been materially disposed of. Management believes that the remaining properties will be disposed of within the next

12 months as agreements have already been entered into for all but one property. The portfolio therefore still meets the criteria to be

classiﬁed as held-for-sale.

Sherwood

The Group disposed of its 80% interest in Sherwood during January 2020 to Tempur Sealy for approximately €45 million. Sherwood was

included as a discontinued operation in the 2020 Reporting Period.

The businesses discussed above are presented as discontinued operations in the consolidated statement of proﬁt or loss, consolidated

statement of comprehensive income and consolidated statement of cash flows for the period ended 30 September 2021. Comparative

information has been restated accordingly.

The detail of assets and liabilities classiﬁed as held-for-sale is presented in note 35.

106

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

DISCONTINUED OPERATIONS (CONTINUED)

1.1

Adjustment of the prior period statement of proﬁt or loss for discontinued operations

2020

Adjustment for

discontinued

operations

€m

Continuing

operations

presented

€m

Previously

reported

€m

Continuing operations

Revenue

Cost of sales

Gross proﬁt

Other income

7 899

(4 779)

3 120

135

(109)

–

8 034

(4 888)

3 146

Distribution expenses

Administration expenses

Other expenses

Operating loss

Finance costs

Income from investments

Share of result in equity accounted companies

Impairment of equity accounted companies

Loss before taxation

Taxation

(665)

(2 030)

(1 401)

(927)

(1 191)

(7)

(18)

(2 069)

(123)

(2 192)

(17)

–

(4)

–

(682)

(2 030)

(1 399)

(916)

(1 195)

(7)

(18)

(2 060)

(116)

(2 176)

Loss for the period

Loss attributable to:

Owners of Steinhoff N.V.

Non-controlling interests

Loss from continuing operations

(2 141)

(51)

(2 192)

–

(2 125)

(51)

(2 176)

Basic loss per share (cents)

(51.5)

0.3

(51.2)

1.2

Statement of proﬁt or loss for discontinued operations

Restated¹

2020

2021

€m

Notes

€m

Revenue

1 022

(660)

362

3 548

(2 312)

1 236

(130)

Cost of sales

Gross proﬁt

Other income

(10)

Distribution expenses

Administration expenses

Other expenses

Impairments

Loss on remeasurement of ﬁnancial liability and penalties

Proﬁt on disposal of property, plant and equipment and intangible assets

Cumulative other comprehensive income reclassiﬁed to proﬁt or loss on

disposal or derecognition of investment

(35)

(268)

–

(22)

(173)

(1 054)

(175)

(69)

(140)

1.2.1

1.2.4

1.2.2

1.2.3 & 1.4

(47)

Operating proﬁt/(loss)

Finance costs

Income from investments

Gain on disposal of discontinued operations/disposal group

Proﬁt/(loss) before taxation

Taxation²

101

(92)

–

(296)

(211)

241

(264)

1.4

6.1

(26)

Proﬁt/(loss) for the period

(179)

Proﬁt/(loss) attributable to:

Owners of Steinhoff N.V.

Non-controlling interests

Proﬁt/(loss) for the period

(6)

(139)

(40)

(179)

¹Comparative numbers have been restated as a result of classifying certain segments as discontinued operations as well as the effect of the

reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

²Taxation during the 2020 Reporting Period relates mostly to Conforama, where a deferred tax liability was reversed due to brand names included in

the sale of Conforama France and Switzerland and other taxes that will no longer become due.

107

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

DISCONTINUED OPERATIONS (CONTINUED)

1.2

Statement of proﬁt or loss for discontinued operations

Restated¹

2020

2021

€m

Notes

€m

1.2.1 Impairment/(reversal of impairment)

Property, plant and equipment

Assets held-for-sale

–

(9)

Other

1.2.2 Proﬁt on disposal of property, plant and equipment and intangible

assets

(33)

(81)

The proﬁt during the Reporting Period relates mostly to the 18 properties sold

by Conforama France to Mobilux. The 2020 Reporting Period proﬁt relates

mostly to the Hemisphere's property sales.

1.2.3 Cumulative other comprehensive income reclassiﬁed to proﬁt or

loss on disposal or derecognition of investment

Reclassiﬁcation of FCTR

(41)

1.2.4 Loss on remeasurement of ﬁnancial liability and penalties

Remeasurement of ﬁnancial liability

17.2

–

Prepayment premiums and commitment fees

Release of the prepayment on Tranche B bonds

(52)

140

175

TOTAL OTHER EXPENSES FROM DISCONTINUED OPERATIONS

1.3

Presentation of discontinued operations in the statement of cash flows

Restated¹

2020

2021

€m

Cash flows from discontinued operations

Net cash (outflow)/inflow from operating activities

Net cash inflow from investing activities

Net cash outflow from ﬁnancing activities

Net cash (outflow)/inflow

(43)

262

329

314

(597)

(365)

(146)

¹Comparative numbers have been restated as a result of classifying certain segments as discontinued operations as well as the effect of the

reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

108

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

DISCONTINUED OPERATIONS (CONTINUED)

1.4

Details of the disposal of subsidiaries and equity investments classiﬁed as discontinued operations

Conforama-

Balkans

€m

Other¹

€m

Total

€m

30 September 2021

Carrying value of assets and liabilities at date of disposal

Assets

Right-of-use asset

–

Property, plant and equipment

Inventories

Trade and other receivables

Cash and cash equivalents

Liabilities

Trade and other payables

(64)

–

(64)

Carrying value of assets and liabilities at date of disposal

Gain on disposal

Total consideration

Net cash inflow arising on disposals

Total consideration

(10)

–

(10)

Less cash on hand at date of disposal

Net cash inflow

Gain on sale before reclassiﬁcation of FCTR

Reclassiﬁcation of FCTR

(2)

(1)

Gain/(loss) on sale after FCTR reclassiﬁcation

¹Other relate to the sale of businesses within the Africa Properties segment.

Greenlit

Brands

€m

Sherwood Automotive Blue Group Conforama²

Other¹

Total

€m

30 September 2020

€m

Carrying value of assets and

liabilities at date of disposal

Gain/(loss) on disposal

Total consideration

230

(23)

252

229

295

241

536

(3)

(4)

(9)

(2)

227

–

Net cash inflow arising on

disposals

Total consideration

Less cash on hand at date of

disposal

227

229

–

536

(1)

(46)

181

(23)

(13)

(6)

(2)

Net cash inflow/(outflow)

314

543

Gain/(loss) on sale before

reclassiﬁcation of FCTR

Reclassiﬁcation of FCTR

Gain/(loss) on sale after FCTR

reclassiﬁcation

(3)

(4)

252

(24)

(9)

(2)

(9)

241

(47)

–

(17)

(20)

228

(18)

(11)

194

¹Other consists of Pritex and Steinhoff Risk Solutions Proprietary Limited.

²Relates to Conforama France and Conforama Switzerland

109

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

DISCONTINUED OPERATIONS (CONTINUED)

1.5

Segmental information relating to discontinued operations

2021

2020

Adjustment for

discontinued

operations

€m

Discontinued

operations

presented

€m

Discontinued

operations

€m

Previously

reported

€m

Segmental revenue from discontinued operations

European Properties

–

282

107

–

282

107

Automotive

Greenlit Brands – General Merchandise

–

Greenlit Brands – Plush

–

Pepkor Holdings – The Building Company

399

2 695

(394)

–

Conforama

723

2 695

All Other

European Manufacturing, Sourcing and Logistics

–

143

–

143

Blue Group

Properties – Africa

–

LIPO

187

–

172

–

172

Sherwood

Net external revenue from discontinued operations^*

1 022

3 683

(135)

3 548

Revenue between discontinued operations have been eliminated.

110

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

DISCONTINUED OPERATIONS (CONTINUED)

1.5

Segmental information relating to discontinued operations (continued)

Operating loss before depreciation and amortisation adjusted for material non-operational items (“EBITDA”)

Restated¹

2021

€m

2020

€m

Notes

EBITDA reconciles to the operating loss per statement of proﬁt or loss from

discontinued operations as follows:

Operating gain/(loss) from discontinued operations

Depreciation and amortisation

1.2

101

(296)

137

175

Other (income)/expenses considered material non-operational items

Intercompany elimination with continuing operations

EBITDA per segment reporting from discontinued operations

(52)

European Properties

(20)

–

(45)

Automotive

Greenlit Brands – General Merchandise

Greenlit Brands – Plush

–

(5)

Pepkor Holdings – The Building Company

Conforama

All Other

EBITDA from discontinued operations as presented

Operating loss adjusted for material non-operational items (“EBIT”)

Restated¹

2020

2021

€m

Notes

€m

EBIT reconciles to the operating loss per statement of proﬁt or loss from

discontinued operations as follows:

Operating gain/(loss) from discontinued operations

1.2

101

(52)

(296)

175

Other (income)/expenses considered material non-operational items

Intercompany eliminations with continuing operations

EBIT per segment reporting from discontinued operations

(101)

European Properties

(20)

–

(45)

Automotive

Greenlit Brands – General Merchandise

Greenlit Brands – Plush

Pepkor Holdings – The Building Company

Conforama

–

(5)

(89)

All Other

EBIT from discontinued operations as presented

(101)

¹Comparative numbers have been restated as a result of classifying certain segments as discontinued operations as well as the effect of the

reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

111

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

SEGMENT INFORMATION

The Group determined the Management Board to be the chief operating decision maker (“CODM”) for all periods under review.

The Group has disclosed the following reportable segments in respect of the 2021 Reporting Period and has restated the segment

disclosures of the 2020 Reporting Period accordingly.

The CODM examines the Group’s performance both from a product and geographical perspective and has identiﬁed the following six

reportable segments of its business based on how information is accumulated and reported to the CODM:

•

Pepco Group

Pepco Group is listed on the Warsaw Stock Exchange since May 2021. This segment comprises the general merchandise retail

business of Pepco (operating in Poland and central, western and eastern Europe) and Poundland (operating mostly in the United

Kingdom and Republic of Ireland). The CODM monitors the performance of this listed group on a consolidated basis.

•

Greenlit Brands

The Greenlit Brands segment comprises the household goods retailers based in Australasia (majority of the retail stores are in

Australia). The General Merchandise and Plush segments have been classiﬁed as a discontinued operation. The General Merchandise

division was disposed of in December 2019 and Plush was disposed during November 2021. Refer to note 1. Major brands include

Fantastic, Freedom and Best & Less. The CODM monitors the performance of Greenlit Brands on a consolidated basis.

•

Pepkor Holdings

Pepkor Holdings is listed on the JSE. Revenue in Pepkor Holdings is derived from a portfolio of retail chains focused on selling

predominantly clothing, footwear, textiles, cell phones, airtime and fast moving consumer goods. Pepkor Holdings also operates in

the furniture divisions where revenue is derived from sales of furniture and appliances. The Pepkor Holdings Group operates within

Africa and the majority of its revenue is derived from South Africa. The CODM monitors the performance of this listed group on a

consolidated basis.

•

Corporate and treasury services

Steinhoff N.V.’s various global corporate ofﬁces provide strategic direction and services to the decentralised operations globally.

Activities include management of regulator and stakeholder engagement processes, negotiating funding and identifying and

implementing corporate activities.

All other segment

Included in “All Other” were operating segments that did not meet the requirements of a reportable segment per IFRS 8 – Operating

Segments. These segments are neither sufﬁciently material in size nor unique in their geography to warrant separate disclosure.

Included in this category in the 2020 Reporting Period were the businesses of LIPO (operating from Switzerland) and the remaining

European Logistics and Sourcing businesses. Both of these businesses were classiﬁed as discontinued in the Reporting Period.

Measures reported to the CODM

Revenue

Segment revenue excludes Value Added Tax. Intersegment revenue is eliminated in the segment from which it was sold.

Refer to the Basis of Preparation for the accounting policy on the elimination of intercompany transactions between continuing and

discontinued operations.

No single customer contributes 10% or more of the Group’s revenue.

Segment revenue from continuing operations

Restated¹

2021

2020

Revenue from

external Total segment

Revenue from

external

Total segment

revenue

€m

Intersegment

revenue

€m

Intersegment

revenue

€m

customers

€m

revenue

€m

customers

€m

Pepco Group

4 127

714

–

4 122

714

3 529

636

–

3 506

636

Greenlit Brands

Pepkor Holdings

4 361

–

4 357

–

3 894

–

3 892

–

Corporate and treasury services

–

9 202

9 193

8 059

8 034

Intercompany revenue from

discontinued operations *

–

9 202

9 193

8 059

8 034

The intercompany revenue from discontinued operations has already been eliminated from ‘Revenue from external customers’.

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as

the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

112

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

SEGMENT INFORMATION (CONTINUED)

Revenues from external customers – by geography from continuing operations

Restated¹

2020

2021

€m

The Company is domiciled in the Netherlands. Negligible revenues are generated by the Group’s

Netherlands operations and therefore none are disclosed. The Group is primarily a global holding

company with investments in retail businesses. The amount of its revenue from external customers is

presented below based on the geographies that contribute materially to the Group’s revenue.

Australasia

714

1 060

441

636

880

Poland

Rest of Africa

Rest of Europe

South Africa

United Kingdom

551

1 470

3 917

1 591

9 193

1 303

3 341

1 323

8 034

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as

the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

Operating performance measures – from continuing operations

The Group’s share of equity accounted earnings, ﬁnance costs, investment income and income tax expenses are not monitored on a

segmental level by the CODM and are therefore not allocated to the segments.

Operating proﬁt or loss before depreciation and amortisation adjusted for material non-operational items (“EBITDA”)

Segment performance is measured on continuing operations’ EBITDA and represents segment revenue less segment expenses, excluding

depreciation, amortisation and other expenses considered material non-operational items as included in note 4.2.

Segment expenses include distribution expenses and administration expenses.

Refer to the Basis of Preparation for the accounting policy on the elimination of intercompany transactions between continuing and

discontinued operations.

EBITDA reconciles to the operating loss per statement of proﬁt or loss as follows:

2020

Adjustment for

discontinued

operations¹

€m

Continuing

operations

presented

€m

Previously

reported

€m

2021

€m

Notes

Operating loss per statement of proﬁt or loss

Depreciation and amortisation

(85)

608

(927)

581

(916)

570

4.3.1

4.2

(11)

(2)

Other expenses considered material non-operational items

Intercompany eliminations (discontinued operations)

EBITDA per segment reporting

827

1 401

–

1 399

(20)

(14)

(20)

(22)

1 336

1 055

1 033

EBITDA per segment:

Pepco Group

636

411

110

–

(21)

411

Greenlit Brands

Pepkor Holdings

Corporate and treasury services

All Other

714

(110)

–

558

580

(47)

–

(47)

–

(23)

(22)

1 336

1 055

1 033

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as

the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

113

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

SEGMENT INFORMATION (CONTINUED)

Operating proﬁt or loss adjusted for material non-operational items (“EBIT”)

Segment performance is measured on continuing operations’ EBIT and represents segment revenue less segment expenses, excluding

material non-operational items included in note 4.2.

Depreciation and amortisation have been allocated to the segments to which they relate.

Refer to the Basis of Preparation for the accounting policy on the elimination of intercompany transactions between continuing and

discontinued operations.

EBIT reconciles to the operating loss per statement of proﬁt or loss as follows:

2020

Adjusted for

discontinued

operations¹

€m

Continuing

operations

presented

€m

Previously

reported

€m

2021

€m

Notes

Operating loss per statement of proﬁt or loss

Other expenses considered material non-operational items

Intercompany eliminations (discontinued operations)

EBIT per segment reporting

(85)

827

(14)

728

(927)

1 401

–

(2)

(916)

1 399

(20)

4.2

(20)

(11)

474

463

EBIT per segment:

Pepco Group

307

112

–

(14)

112

Greenlit Brands

Pepkor Holdings

Corporate and treasury services

All Other

503

(110)

–

361

(47)

370

(47)

–

(6)

(11)

728

474

463

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as

the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

Segmental assets

Segment assets are measured in the same way as in the 2020 Consolidated Financial Statements. Assets that are not considered to

be segment assets such as cash and cash equivalents, investments in equity accounted companies and current and non-current other

ﬁnancial assets are excluded from the allocation of assets to segments.

Investment in equity accounted companies and current and non-current other ﬁnancial assets are monitored by the CODM on a Group

level as these assets are not related to the underlying operations or impact their performance. Such assets are not allocated to segments.

The segmental assets (both current and non-current) below are presented on a consolidated basis and all intercompany balances and

investments in subsidiary companies have been disregarded for purposes of presenting segmental assets.

Reconciliation between total assets per statement of ﬁnancial position and segmental assets

Restated¹

30 September 30 September

2021

€m

2020

€m

Total assets per statement of ﬁnancial position

Less: Cash and cash equivalents

15 084

(3 151)

(151)

(373)

(2)

13 101

(2 015)

(136)

(425)

–

Less: Investments in equity accounted companies

Less: Non-current other ﬁnancial assets

Less: Current other ﬁnancial assets

Less: Assets classiﬁed as held-for-sale

Segmental assets

(936)

10 471

(986)

9 539

Segmental assets:

Pepco Group

3 879

607

3 660

684

Greenlit Brands – Household Goods

Pepkor Holdings

5 543

442

4 809

191

Corporate and treasury services

All Other

–

195

10 471

9 539

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as

the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

114

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

SEGMENT INFORMATION (CONTINUED)

Segmental non-current assets

The Group operates in a number of countries and the total non-current assets are presented on a geographical aggregation basis as this

is more representative of the various factors taken into consideration when allocating resources as well as factors impacting impairment

testing such as WACC, peer groups and operating environments.

The total of non-current assets other than ﬁnancial instruments and deferred tax assets is presented based on the geographies that

materially contribute to the Group’s non-current assets.

Reconciliation between non-current assets per statement of ﬁnancial position and segmental assets

Restated¹

30 September

2020

30 September

2021

€m

Total non-current assets per statement of ﬁnancial position

Less: Deferred tax assets

8 647

(240)

(373)

8 034

8 073

(224)

(425)

7 424

Less: Non-current other ﬁnancial assets

Segmental non-current assets

Africa

4 279

3 311

444

3 749

3 167

508

Europe (including the United Kingdom)

Australasia

8 034

7 424

Segmental net debt

The purpose of the debt or the company in which the debt is raised determines the debt cluster to which the debt, cash and cash

equivalents and related ﬁnance costs and investment income is allocated. These debt clusters are then reviewed by the CODM. Refer to

note 16 (Cash and cash equivalents) and note 17 (Borrowings) for further details.

Current and

Cash and cash

equivalents

€m

non-current

borrowings

€m

Net Debt

€m

30 September 2021

Pepco Group

508

114

(619)

–

(111)

114

Greenlit Brands

Pepkor Holdings

Corporate and treasury services²

European Properties

All Other

352

(636)

(9 835)

(178)

–

(284)

(7 718)

(141)

2 117

3 151

(11 268)

(8 117)

Current and

non-current

borrowings

€m

Cash and cash

equivalents

€m

Net Debt

€m

30 September 2020 - Restated¹

Conforama

–

424

(188)

(494)

(24)

(188)

(70)

Pepco Group

Greenlit Brands

Pepkor Holdings

Corporate and treasury services

European Properties

All Other

119

298

(656)

(9 873)

(218)

–

(358)

(8 867)

(97)

1 006

121

2 015

(11 453)

(9 438)

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as

the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

²The estimated cash to be utilised on SED for the Litigation Settlement Proposal amounts to c. €1 180 million, which includes the €351 million already ceded to

the SRF. Refer to note 16 and note 23.4. The cash and cash equivalent value includes €520 million repayment received from Mattress Firm, which was used to

repay corporate debt subsequent to the 2021 Reporting Period.

115

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

REVENUE

Restated¹

2020

2021

€m

Revenue from contracts with customers

Sale of goods and related revenue

Other revenue²

9 051

7 866

Other sources of revenue

Financial services income³

122

146

Total revenue from continuing operations (note 2)

9 193

8 034

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as

the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

²Other revenue mainly relates to rental income.

³Financial services income relates mainly to Capﬁn SA, a subsidiary of Pepkor Holdings, which provides unsecured credit to customers under the Capﬁn brand.

ACCOUNTING POLICY

Revenue from contracts with customers

Revenue is recognised when the Group satisﬁes performance obligations and transfers control of goods or services to its customers

at an amount that reflects the consideration the Group expects to be entitled to in exchange for these goods or services, allocated to

each speciﬁc performance obligation.

Revenue is not recognised if there are signiﬁcant uncertainties regarding recovery of the consideration due, associated costs or the

possible return of goods as well as continuing management involvement with goods to a degree usually associated with ownership.

Where the Group acts as agent and is remunerated on a commission basis, only the commission income, and not the value of the

business transaction, is included in revenue.

Discounts

Different discounts are recognised depending on the nature of the customer. Some discounts are unconditional, such as cash discounts

and early payment discounts. Unconditional discounts are recognised as a reduction in revenue at the same moment as the related sales

transaction. Conditional discounts to customers such as volume and promotional rebates are recognised based on estimated target

realisation. The estimation is based on accumulated experience supported by historical and current sales information.

Right of return

The Group estimates variable consideration to be included in the transaction price for the sale of goods where customers are entitled

to a right of return within a speciﬁed time frame. The Group uses projection methods to forecast sales returns that are based on

historical return data. Any signiﬁcant changes in experience as compared to historical return patterns will impact the expected return

percentages estimated by the Group. Estimated return percentages are updated regularly and the refund liability adjusted accordingly.

Revenue is recognised for the major business activities using the methods outlined below:

Sale of goods and related revenue

The Group operates retail stores selling general merchandise and household goods. Revenue from the sale of goods is recognised at a point

in time once control of goods transfers to customers (performance obligation is met).

Payment is usually received via cash, debit card or credit card. Related card transaction costs are recognised in the statement

of comprehensive income as other expenses. When goods are sold under instalment sale agreements, the present value of the

instalment sale payments is recognised as a receivable using the effective interest rate computed at initial recognition.

Lay-by revenue is recognised on the initiation of the contract with the customer for the clothing and general merchandise segment, as

this is deemed to be when control of the goods passes to the customer. The Group recognises revenue at the amount of consideration

to which they expect to be entitled and for which a signiﬁcant reversal of revenue is not considered probable. A contract liability for

the expected possible unsuccessful lay-bys is recognised as an adjustment to revenue as well as an asset (with a corresponding

adjustment to cost of sales) representing its right to recover the products from the customer. The Group uses projection methods

to forecast unsuccessful lay-bys that are based on historical data. Any signiﬁcant changes in experiences compared to historical

patterns will impact the percentages estimated by the Group. Estimated percentages are updated regularly and the contract liability for

unsuccessful lay-bys is adjusted accordingly.

Lay-by revenue is recognised when the ﬁnal payment for the goods is received from the customer for the furniture, appliances and

electronics and building materials segments as this is deemed to be when control of the goods passes to the customer and all

performance obligations are met. Proceeds from these lay-by sales are recognised as contract liabilities, and the revenue is deferred

until all the performance obligations are met.

Deposits received from customers are recognised as deferred revenue. These balances are considered contract liabilities, as they are

received prior to the satisfaction of performance obligations.

116

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

REVENUE (CONTINUED)

ACCOUNTING POLICY (continued)

Financial services revenue

Effective interest income

Financial services revenue comprises mainly of interest income and ﬁnancial service fee revenue.

Interest earned is recognised on a time-proportion basis. The Group calculates interest income by applying the effective interest rate

to the gross carrying amount of the ﬁnancial assets other than credit-impaired assets. When ﬁnancial assets become credit-impaired,

the Group calculates interest income by applying the effective interest rate to the net amortised cost (gross carrying amount less the

allowance for expected credit losses) of the ﬁnancial asset. If the ﬁnancial asset is no longer deemed to be credit-impaired, the Group

reverts to calculating interest income on a gross basis.

Collection revenue

Service fee revenue is earned based on a ﬁxed percentage of outstanding debtor balances collected on behalf of third parties.

Performance obligations are deemed to be met once the Group recovers the outstanding balance from a debtor or portion thereof, at

which point the revenue is recognised.

Refund obligations and warranties

Return obligations generally include obligations for refunds and assurance type warrantee obligations and are accounted for as

provisions in accordance with IAS 37 – Provisions, Contingent Liabilities and Contingent Assets.

117

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

MATERIAL ITEMS INCLUDED IN PROFIT OR LOSS AND BREAKDOWN OF EXPENSES BY NATURE

Restated¹

2020

2021

€m

Notes

€m

4.1

Other income

Commission received²

Marketing and advertising income

Cancelled lay-bys and proﬁt on factoring of debtors

Waste and carrier bag income

Business interruption insurance claim recovery – civil unrest

Other income

–

²Relates mainly to commissions received on ancillary services provided by Pepkor Holdings.

4.2

Other expenses

4.2.1 Impairment

Goodwill

–

300

Intangible assets

Property, plant and equipment

Right-of-use assets

321

4.2.2 Cumulative other comprehensive income reclassiﬁed to proﬁt or

loss on disposal or derecognition of investment

Reclassiﬁcation of FCTR

–

(1)

(6)

FCTR reclassiﬁed to proﬁt on liquidation of a foreign subsidiary

4.2.3 Proﬁt on disposal of property, plant and equipment and intangible

assets

4.2.4 Proﬁt on sale and partial sale of investments

Material equity accounted investments

Proﬁt on disposal of Cofel SAS

11.5

–

(14)

–

Other

(2)

(14)

4.2.5 Fees relating to forensic investigation, advisory and restructure of

the businesses

It has been necessary for the Group to engage a wide range of professional

advisers to assist the Group with its legal, ﬁnancial and regulatory

requirements. The scale and complexity of this task has meant that the

aggregate adviser costs for the Reporting Period have continued to be

signiﬁcant. The principal adviser relationships included legal advisors and

corporate advisory functions that support the Group on discussions and

engagement with its litigants, creditors, forensic investigation services and

regulatory and taxation advisory services.

4.2.6 Litigation Settlement Proposal provision raised

23.4

574

943

On 15 February 2021, the Company applied for the opening of a Dutch SoP

proceedings and offered the Steinhoff N.V. Composition Plan to its Dutch

SoP creditors. The Dutch Court conﬁrmed the Steinhoff N.V. Composition

Plan on 23 September 2021. Following the expiry of a prescribed 8-day period

wherein the court’s decision is open to appeal, during which no appeal was

lodged, the Dutch Court order became ﬁnal and binding on 2 October 2021

and by consequence the Steinhoff N.V. Composition Plan became binding on

all Dutch SoP creditors in accordance with its terms on 2 October 2021. The

Steinhoff N.V. Composition Plan was proposed in parallel with the proposal

by SIHPL in terms of the SIHPL S155 Scheme which was sanctioned on

24 January 2022. Both proposals, which are inter-conditional, form part

of the Litigation Settlement Proposal to resolve the legacy claims arising

from the announcement of accounting irregularities. Refer to note 23.4 –

Litigation Settlement Proposal for relevant changes made to the provision, as

announced throughout the 2021 Reporting Period.

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued

operations as well as the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

118

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

MATERIAL ITEMS INCLUDED IN PROFIT OR LOSS AND BREAKDOWN OF EXPENSES BY NATURE (CONTINUED)

Restated¹

2020

2021

€m

Notes

€m

4.2

Other expenses (continued)

4.2.7 Costs associated with the Litigation Settlement Proposal provision

Provision – Active claimants groups (“ACG”) lawyer fees

–

In order to improve recoveries to Market Purchase Claimants, the Group

will be making available an amount of up to €30 million, subject to the

implementation of the Litigation Settlement Proposal, to pay in respect of

certain fees, costs and work undertaken by the ACGs on the terms to be

speciﬁed in the settlement documents.

Provision – SRF cost contribution

–

The Group established a new Dutch foundation, the SRF, on 24 August

2021, together with supporting arrangements in South Africa (for South

African claimants). The purpose of the SRF is to administer and distribute

the settlement consideration paid by, or on behalf of, the Group and other

contributing parties. It is governed by a board of newly appointed directors

with majority independence from the Group. Claimants are required to submit

their claims for veriﬁcation prior to receiving settlement payments. The SRF

has retained Computershare to assist it to administer and verify claims prior

to payment of the settlement consideration. The Group will contribute up to

€16.5 million to cover the costs of the SRF. This value excludes any additional

cost contributions to be made by other parties (i.e. Deloitte ﬁrms and D&O

insurers) as disclosed in the Steinhoff N.V. Composition Plan. Any costs

incurred by the SRF in excess of the cost contributions, will be deducted

from the settlement fund, and any surplus cost contribution amount will

revert to the parties that have paid such amounts to SRF, pro rata to the cost

contribution of each such party. During the 2021 Reporting Period the Group

contributed c. €2 million towards costs incurred by the SRF, which amount will

be deducted from the anticipated cost contribution, as provided.

Fair value adjustment – Synthetic Forward

–

Steinhoff Africa agreed to pay a portion of the Litigation Settlement Proposal

provision on behalf of Steinhoff N.V. As a result, Steinhoff Africa has during

the 2021 Reporting Period entered into forward exchange agreements with

multiple banks in order to hedge against the foreign currency risk.

–

4.2.8 Seifert legal provision

23.5

4.2.9 ECL recognised on Titan loan receivable

TOTAL OTHER EXPENSES

12.1.2

827

1 399

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations

as well as the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

4.3

Operating expenses by nature

Distribution expenses relates to selling activities which mainly include delivery costs, rent paid on warehouses and distribution

centres and salaries and wages relating to logistics staff.

Other distribution and administrative expenses include general administration expenses such as electricity, cleaning, stationery,

repairs and other general operating costs.

The material items included in distribution and administration expenses are set out below:

119

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

MATERIAL ITEMS INCLUDED IN PROFIT OR LOSS AND BREAKDOWN OF EXPENSES BY NATURE (CONTINUED)

Restated¹

2020

2021

€m

Notes

€m

4.3.1 Depreciation and amortisation

Depreciation – Property, plant and equipment

Depreciation – Right-of-use assets

Amortisation

179

409

155

399

608

570

Included in distribution and administration expenses

Included in cost of sales

607

561

608

570

4.3.2 Employee beneﬁt expenses

Salaries and wages

1 272

1 124

Share-based payments Pepkor Holdings ESRS – equity-settled

Share-based payments Pepco Group Value Creation Plan – equity-settled

Share-based payments – cash-settled

–

33.1.2

–

Contributions to deﬁned beneﬁt plans (post-retirement beneﬁt expenses)

Contributions to deﬁned contribution plans (post-retirement beneﬁt expenses)

1 340

1 170

The Groups manufacturing entities do not comprise a material part of the

business and any employee beneﬁt expense included in cost of sales is not

considered material.

4.3.3 Net foreign exchange gains

Net gain on forward exchange contracts

Net loss/(gain) on conversion of monetary assets

(5)

(20)

(28)

(48)

(4)

4.3.4 Operating lease charges – properties

Short-term rentals

Low value asset rentals

Variable lease payments not included in the measurement of lease liabilities

4.3.5 Operating lease charges – other

Leases of plant, equipment, vehicles and other

–

10 &

18.1

4.3.6 Lease modiﬁcation cost

4.3.7 Provision for inventory write downs

4.3.8 Transport cost

(12)

(37)

268

136

234

121

4.3.9 Advertising and promotion cost

4.3.10 COVID-19 related (income)/expenses

Government grants received for COVID-19 pandemic recognised as income

(30)

(1)

(39)

Expenditure incurred to implement COVID-19 regulations (e.g. screening tools)

(31)

(34)

4.3.11 Other distribution and administration expenses

TOTAL DISTRIBUTION AND ADMINISTRATION EXPENSES

649

637

3 077

2 712

Distribution expenses

812

682

Administration expenses

2 265

2 030

TOTAL DISTRIBUTION AND ADMINISTRATION EXPENSES

3 077

2 712

Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations

as well as the effect of the reclassification of The Building Company from a discontinued operation to a continuing operation.

120

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

MATERIAL ITEMS INCLUDED IN PROFIT OR LOSS AND BREAKDOWN OF EXPENSES BY NATURE (CONTINUED)

4.3

Operating expenses by nature (continued)

4.3.12 Audit fees

At the annual General Meeting of the Company held on 28 August 2020, Mazars Accountants N.V. was appointed as the

Company’s statutory audit ﬁrm for the periods ending 30 September 2020 and 30 September 2021, respectively.

The budgeted audit fees for the audit of the 2021 ﬁnancial statements of Steinhoff N.V. and its subsidiaries (continuing

and discontinued operations) are as follows:

Mazars

Other Mazars

Accountants member ﬁrms

N.V.

€m

and afﬁliates

Total

€m

2021

Audit of the ﬁnancial statements of Steinhoff N.V. and its subsidiaries

–

Other audit services

Tax services

Other non-audit services

2020

Audit of the ﬁnancial statements of Steinhoff N.V. and its subsidiaries

–

Other audit services

Tax services

Other non-audit services

Audit fees expensed – continuing operations

Restated¹

2020

2021

€m

Audit of the ﬁnancial statements of Steinhoff N.V. and its subsidiaries

–

Other audit services

Tax services

–

Other non-audit services

–

Fees for audit services include the audit of the ﬁnancial statements of the Company and its subsidiaries. Fees for other

audit services include review of interim ﬁnancial statements, sustainability, subsidy and other audits. Fees for tax services

include tax compliance and tax advice. Fees for other non-audit services include agreed-upon procedures and advisory

services.

Restated¹

2021

€m

2020

€m

4.4

Cost of sales

Sale of inventory

5 224

209

4 819

Import, customs and excise duties

Personnel cost

Depreciation and amortisation

Other

–

(1)

4 888

5 450

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as

the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

121

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

FINANCE COSTS AND INCOME FROM INVESTMENTS

Finance

Costs

€m

Income from

Investments

€m

Net income

/(cost)

€m

Notes

2021

Dividends received*

–

Finance costs and income from investments

(Bank overdrafts)/cash and cash equivalents

(9)

–

(1 058)

Loans

17.2

(1 058)

Transaction costs accrued and amortised

5.1 & 17.2

–

Lease liability

Other

(121)

(10)

–

(121)

(1)

(1 190)

(1 118)

2020 - Restated¹

Dividends received*

–

Finance costs and income from investments

(Bank overdrafts)/cash and cash equivalents

Loans

(28)

(1 032)

(135)

(1 030)

(135)

17.2

Lease liability

–

(1 195)

(1 119)

The majority of the dividends received relates to accrued dividends on the investment in preference shares of Lancaster 102. Refer to note 12 for terms of the

preference share investment.

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as

the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

5.1 Transaction costs accrued and amortised

2021

€m

2020

€m

Pepco Group

–

Pepco Group obtained loans from credit institutions to the value of €589 million. Costs incurred in obtaining the loans from credit

institutions have been capitalised and are allocated to the Consolidated Statement of Proﬁt or Loss over the life of the debt facility.

At 30 September 2021, borrowings are stated net of unamortised issue costs of €7.4 million.

ACCOUNTING POLICY

Interest income, ﬁnance costs and other ﬁnance income and costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in

proﬁt or loss using the effective interest method.

Dividend income is recognised in the statement of proﬁt or loss on the date that the Group’s right to receive payment is established.

Other net ﬁnance income and expenses comprise unwinding of the discount on provisions recognised on investments and interest on

the net deﬁned beneﬁt obligation.

Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a ﬁnancial asset or

ﬁnancial liability. An incremental cost is one that would not have been incurred if the entity had not acquired, issued or disposed of the

ﬁnancial instrument.

122

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

TAXATION

Steinhoff N.V. is a South African tax resident.

For periods ending 30 September 2021 and 30 September 2020 the corporate taxation rate in South Africa is 28%. Capital gains are taxed

at 22.4%.

ACCOUNTING POLICY

Current taxation

Included within the tax charge are charges relating to:

•

Normal corporate taxation;

Capital gains taxation;

Dividends withholding taxation

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at the

Reporting Date, and any adjustment to tax payable in respect of previous periods.

The Group is subject to income taxes in numerous jurisdictions and the calculation of the Group’s tax charge and worldwide provisions

for income tax necessarily involves a substantial degree of estimation and judgement. At any given time, the Group typically has a

number of open tax returns with various tax authorities and engages in active dialogue to resolve these. The Group measures its tax

balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of

the resolution of the uncertainty, after taking into account external advice where appropriate. As per IFRIC 23, in preparing estimates

of current and deferred tax assets and liabilities, management considers whether it is probable that a taxation authority will accept

an uncertain tax treatment. If it is considered probable that an uncertain tax treatment will be accepted, tax estimates are determined

in accordance with the tax treatment used or planned to be used in the company’s income tax ﬁllings. If it is not considered probable

that an uncertain tax treatment will be accepted, tax estimates are made based on the most likely outcome or the expected value,

depending on which method best reflects the uncertainty.

Where the ﬁnal tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact

proﬁt or loss, current and deferred income tax assets and liabilities in the period such determination is made.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for ﬁnancial

reporting purposes and the amounts used for taxation purposes.

The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets

and liabilities using tax rates enacted or substantively enacted at the Reporting Date.

Deferred tax assets are recognised for tax losses carried forward only to the extent that realisation of the related tax beneﬁt is

probable, on the basis of all available evidence it is considered more likely than not, that there will be suitable taxable proﬁts against

which the reversal of the deferred tax asset can be deducted.

Temporary differences have arisen as a result of the translation of the ﬁnancial statements of the Group’s subsidiaries.

Certain subsidiaries in the Group have undistributed earnings which, if paid out as dividends, would be subject to tax in the hands of the

recipient. An assessable temporary difference exists, but in most cases no deferred tax liability has been recognised as the parent entity is

able to control the timing of distributions from these subsidiaries and is not expected to distribute these proﬁts in the foreseeable future.

Signiﬁcant accounting estimate and judgements

Uncertain tax positions

Tax remains an area of focus for management as the tax impact of the accounting irregularities are complex. Signiﬁcant work has been

done in collating information, completing entity stand-alone ﬁnancial statements, ﬁling of tax returns and constructive progress made

with the tax authorities in various jurisdictions.

Appropriate tax specialists and advisors were appointed by the Group in the relevant jurisdictions to advise on positions in such jurisdictions.

Although the investigations are being managed on a continuous basis, the outcome thereof remains uncertain and could lead to material

cash outflows. In a singular jurisdiction, a backlog exist with respect to the completion and audit of ﬁnancial statements which will delay

the outcome of the investigations by revenue authorities. The impact of potential tax adjustments, ﬁnes, penalties and/or refunds is

therefore unknown.

Management did consider the potential tax risks and cash outflow that may result therefrom in its going concern assessment. It is

management’s view that the tax risk would not lead to the ultimate liquidation of the Group and therefore is no longer considered a

material uncertainty in relation to the going concern assessment. Once the full tax exposure is known, a solution will be found together

with the Group’s stakeholders.

Management has estimated the tax consequences associated with the alleged accounting irregularities. Where speciﬁc items were identiﬁed

that probably would result in an increase or decrease in taxable proﬁt, they were recognised.

The tax position of the single entities impacted by the restatement of the Group’s ﬁnancial statements may give rise to both short- and

long-term tax related consequences. Due to backlogs experienced by local tax authorities, the restated ﬁnancial results would not have

been considered by the local tax authorities in all jurisdictions as yet and as a result the impact of potential tax adjustments, ﬁnes,

penalties and/or refunds is unknown at present. Due to the uncertainty associated with such tax items, there is a possibility that the ﬁnal

outcome may differ from the current estimates.

123

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

TAXATION (CONTINUED)

Signiﬁcant accounting estimate and judgments (continued)

Uncertain tax positions (continued)

Furthermore, as a multi-national group, there are a number of cross-border related party transactions in place in all spheres of the Group’s

business. In light of the revenue authorities’ increased focus on transfer pricing matters the Group faces potential risks as its related party

transactions may be challenged by the relevant tax authorities.

The steps required to complete the CVA were complex and multi-jurisdictional, which gave rise to an element of risk regarding the tax

consequences thereof. The Group engaged with professional tax advisors in the different jurisdictions to mitigate the associated risks.

Investigations are still in progress by the German Tax authorities in respect of certain German legal entities which investigations include

the review of Corporate tax, Trade tax, Withholding tax and VAT. Primarily, the tax risk relates to withholding tax (“WHT”) on deemed

hidden proﬁt distributions, on which German Tax authorities aim to raise assessments. The deemed hidden proﬁt distributions arose due

to flows of funds amongst Group companies as a result of transactions which have been identiﬁed as sham transactions and restated as

part of the Group’s restatement process in the 2017 and 2018 Reporting Periods. The potential WHT cash outflow for all German entities

could amount to €519 million which excludes the likely amounts that would be available to be reclaimed by another Group subsidiary.

Management has applied judgement based on advice received from its tax advisors and concluded that it is of the view that the most

likely outcome is that if any WHT should be payable, that the amount would not be material.

It is management's stated intention to reach agreement with the German Tax authorities to collectively settle all uncertain tax positions.

These uncertain tax positions are included in the amount provided in terms of IFRIC 23 disclosed in note 19.2. In order to avoid lengthy

and costly legal proceedings, it is preferable for a pragmatic solution to be reached with the relevant tax authorities. Management is in

active discussions with the German Tax authorities to conclude on the taxes payable.

The Group is addressing the risks identiﬁed above. Central Group monitoring and reporting of tax matters have been implemented and

continues, which includes close involvement of the Chief Financial Ofﬁcer together with the appointment of appropriate tax specialists in

the relevant affected jurisdictions to help advise on the current position in each jurisdiction.

Recoverability of deferred tax assets

Deferred tax assets have been recognised for the carry forward amount of unused tax losses relating to the Group’s operations where

there is compelling evidence that it is probable that sufﬁcient taxable proﬁts will be available in the future to utilise the tax losses carried

forward, either by the speciﬁc company to which it relates or the wider Group. Management has carefully assessed the entities’ ability to

generate future taxable proﬁts against which the recognised tax losses can be utilised. Such assessments are based on the approved

budgets and the forecasts of the entities including their ability to raise funding to maintain and support their operations.

6.1

Income tax expense recognised in proﬁt or loss

Restated¹

2020

2021

€m

Current tax

Income tax

Current period

Prior period adjustments

Withholding tax

160

177

(19)

200

162

Deferred tax

Originating and reversing temporary differences – current period

Utilisation of previously unrecognised tax losses and temporary differences

Adjustments relating to prior period

(15)

(48)

–

(13)

187

(46)

116

Total tax from continuing operations

Components of the tax expense from discontinued operations:

Current tax

(133)

(85)

Deferred tax

Total taxation expense recognised in proﬁt or loss

213

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations

as well as the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

124

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

TAXATION (CONTINUED)

6.1

Income tax expense recognised in proﬁt or loss (continued)

Restated⁶

2020

2021

€m

Reconciliation of rate of taxation

Loss before income tax from continuing operations

Proﬁt/(loss) before income tax from discontinued operations

(684)

(2 060)

(264)

(637)

(2 324)

South African standard rate of taxation at 28%

Effect of different statutory taxation rates of subsidiaries in other jurisdictions and capital

gains tax in South Africa¹

Effect of non-deductible expenses and tax exempt income²

Unrecognised tax losses³

178

651

(62)

(189)

(251)

145

(6)

(566)

(157)

(2)

Effect of equity accounting⁴

Prior period adjustments

Withholding taxes⁵

(33)

(2)

(6)

Utilisation of previously unrecognised tax losses and temporary differences

Previously unrecognised tax losses raised

Other reconciling items

–

(2)

(1)

Total taxation expense recognised in proﬁt or loss

(213)

(31)

¹The foreign tax rate differential relates predominantly to the European entities with a tax rate of 19% (2020: The foreign tax rate differential relates

predominantly to the European entities with a tax rate of 19%).

²The effect of non-deductible expenses and tax exempt income mainly relates to non-deductible expenses within the European Corporate and Treasury

services companies. (2020: The effect of non-deductible expenses and tax exempt income mainly relates to provisions raised, impairment of goodwill

and non-deductible expenses within the Conforama Group).

³The unrecognised tax losses related predominantly to Corporate and Treasury services companies. (2020: The unrecognised tax losses related

predominantly to Pepco Group and other Corporate and Treasury services companies and the Conforama Group).

⁴Equity accounting relating to the Mattress Firm income received.

⁵Withholding taxes arising from distributions made relating to the IPO of the Pepco Group.

⁶Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations

as well as the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

6.2

6.3

Tax payable and receivable

Tax payable balances are disclosed in note 19.2 which includes uncertain tax positions in terms of IFRIC 23. Taxation receivable

balances are disclosed in note 13.

Deferred tax assets and liabilities

Recognised deferred tax assets and liabilities attributable to the following categories:

Assets

Liabilities

Net

Restated¹

30 September 30 September 30 September 30 September 30 September 30 September

2021

€m

2020

€m

2021

€m

2020

€m

2021

€m

2020

€m

Intangible assets and

goodwill

(22)

(21)

(263)

(243)

(285)

(264)

Property, plant and

equipment

(269)

353

(284)

361

(2)

–

(2)

–

(269)

353

(284)

361

Right-of-use assets

Lease liability

–

Provisions

(1)

–

(2)

–

Share-based payments

Taxation losses

Other

–

(10)

(276)

(8)

(255)

Balance at end of the period

240

224

(36)

(31)

Included in Other are deferred taxes attributable to prepayments, operating leases and unrealised foreign currency gains.

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing

operation.

125

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

TAXATION (CONTINUED)

6.3

Deferred tax assets and liabilities (continued)

Reconciliation of movement in deferred tax (liability)/asset

Net

Restated¹

30 September 30 September

2021

€m

2020

€m

Notes

Balance at beginning of period

(31)

–

(235)

Effect of adopting IFRS 16

Balance restated

(31)

–

(170)

(39)

–

Deferred tax of subsidiaries derecognised

Cash flow hedging reserve and fair value reserves

Current period charge

(9)

From continuing operations

6.1

(15)

133

(17)

From discontinued operations

Transferred to held-for-sale assets or liabilities

Exchange differences on translation of foreign operations

Balance at end of the period

(1)

(36)

(31)

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

30 September 30 September

2021

€m

2020

€m

Unrecognised tax losses

Deferred tax assets have not been recognised in respect of the following items:

Unrecognised taxation losses

18 107

9 113

In order to recognise a deferred tax asset, there must be an expectation of sufﬁcient future

taxable proﬁts to utilise the tax losses. Deferred tax assets have not been recognised as this

balance comprises predominantly of losses which can only be used for potential historic tax

adjustments in Austria; further the balance comprises of losses existing in European holding

companies which are either dormant entities or companies that are not likely to generate

signiﬁcant taxable income in the foreseeable future.

The Group has accumulated unused tax losses of €18 107 million. This balance is made up of

€1 025 million relating to operational entities, €9 134 million is restricted to historic tax

adjustments that could arise within Austria and €7 948 million for predominantly dormant holding

companies. The movement from the 2020 Reporting Period, principally relates to certainty

obtained regarding the calculation of these dormant and holding company historic tax losses and

does not relate to the trading results of these entities in the 2021 Reporting Period. Due to the

historic restructuring, the Austrian tax losses cannot be utilised for future taxable proﬁts. It is not

expected that the holding companies will become proﬁtable in the foreseeable future and thus

limit the use of the accumulated unused tax losses. These holding companies' tax losses carried

forward relates to the ﬁnancial years pre-2017 and are based on preliminary tax calculations and

unaudited ﬁnancial statements. Tax reviews by tax authorities and ﬁnalisation of the ﬁnancial

statements of these holding companies could result in changes of unrecognised tax losses.

The remaining unused tax losses relating to operational entities are not subject to any expiry

date and can be carried forward indeﬁnitely.

Recognised tax losses

Estimated recognised taxation losses available for offset against future taxable income

The Group reviewed previously unrecognised tax losses and where relevant, determined that

if it was probable that taxable proﬁts will be available against which the tax losses can be

utilised, these have been recognised.

Total recognised and unrecognised tax losses

18 134

9 188

6.4

Expiry proﬁle of taxation losses

Unrecognised tax losses amounting to €9 134 million relate to the Austrian jurisdictions, which due to the restructuring, can only

be utilised for taxes before the 2019 ﬁnancial period and do not expire. €14 million of the tax losses expires over the next 5 years

with the remaining balance of €8 959 million not subject to any expiration.

126

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

LOSS PER SHARE

Restated¹

2020

2021

Cents

For the calculation of the loss per share, the exact unrounded numbers are used. This may result in

differences when compared to calculating the numbers using the rounded number of shares and loss

as disclosed below.

Basic and diluted loss per share

From continuing operations

(22.9)

(0.1)

(51.2)

(3.3)

From discontinued operations

Basic and diluted loss per share

(23.0)

(54.5)

Headline loss per share

Headline loss is an additional loss number that is permitted by IAS 33: Earnings per Share (“IAS 33”).

The starting point is loss as determined in IAS 33, excluding separately identiﬁable remeasurements,

net of related taxation (both current and deferred) and related non-controlling interests other than

remeasurements speciﬁcally included in headline loss. This number is required to be reported to the

JSE, where the Group has a secondary listing, and is deﬁned by Circular 1/2021 Headline Earnings.

Separately identiﬁable remeasurements are those where the applicable IFRS explicitly requires

separate disclosure of the operating and/or the platform remeasurement in the Consolidated

Financial Statements. No adjustments would be permitted on the basis of voluntary disclosure of

gains or losses (or components of these).

From continuing operations

From discontinued operations

Headline loss per share

(22.2)

(2.2)

(43.7)

(8.1)

(24.4)

(51.8)

Adjusted Headline loss per share (non-IFRS)

Adjusted Headline loss takes the starting point as the headline loss as calculated above and exclude

the Litigation Settlement Proposal provision recognised in the 2021 Reporting Period and the 2020

Reporting Period. This is a proforma disclosure item only and does not comply with IAS 33.

From continuing operations

From discontinued operations

Headline loss per share

(7.5)

(2.2)

(9.7)

(21.0)

(8.1)

(29.1)

All potential ordinary shares were anti-dilutive and therefore diluted per share numbers are the same as basic or headline per share

numbers.

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as

the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

127

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

LOSS PER SHARE (CONTINUED)

Reconciliations of denominator and numerator

7.1

Weighted average number of ordinary shares

2021

Million

2020

Million

Notes

Issued ordinary shares at beginning of the period

28.2

4 310

(68)

4 310

(157)

Effect of treasury shares held (weighted average)

Weighted average number of ordinary shares at end of the period for the purpose

of basic and dilutive loss per share and headline loss per share

4 242

4 153

7.2

Basic loss and headline loss attributable to owners of Steinhoff N.V.

Continuing

operations

€m

Discontinued

operations

€m

Total

€m

Notes

2021

Basic loss for the period attributable to owners of Steinhoff N.V.

(968)

(6)

(89)

(95)

(974)

(60)

Adjusted for remeasurement items

7.3

Headline loss attributable to owners of Steinhoff N.V.

(939)

(1 034)

Restated2020¹

Basic loss for the period attributable to owners of Steinhoff N.V.

Adjusted for remeasurement items

(2 125)

311

(139)

(199)

(338)

(2 264)

112

Headline loss attributable to owners of Steinhoff N.V.

(1 814)

(2 152)

7.2.1 Adjusted headline loss attributable to owners of Steinhoff N.V.

Continuing

operations

€m

Discontinued

operations

€m

Total

€m

Notes

2021

Headline loss attributable to owners of Steinhoff N.V.

4.2.6

(939)

621

(95)

–

(1 034)

621

Adjusted for proposed settlement provision

Adjusted Headline loss attributable to owners of

Steinhoff N.V. (Non-IFRS)

& 4.2.7

(318)

(95)

(413)

Restated 2020¹

Headline loss attributable to owners of Steinhoff N.V.

Adjusted for proposed settlement provision

Adjusted Headline loss attributable to owners of

Steinhoff N.V. (Non-IFRS)

(1 814)

943

(338)

–

(2 152)

943

4.2.6

(871)

(338)

(1 209)

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as

the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

128

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

LOSS PER SHARE (CONTINUED)

Reconciliations of denominator and numerator (continued)

7.3

Remeasurement items as deﬁned by the JSE

The presentation of headline earnings per share, as an alternative measure of earnings per share, is mandated under JSE Listing

Requirements. It is calculated in accordance with Circular 1/2019 “Headline Earnings” as issued by the South African Institute of

Chartered Accountants.

Restated¹

2020

2021

Gross of

taxation

and non-

controlling

interests

€m

Net of

taxation

and non-

controlling

interests

€m

Gross of

Net of

taxation

and non-

controlling

interests

€m

taxation

and non-

controlling

interests

€m

Notes

Remeasurement items reflect and affect the resources

committed in producing operating/trading performance and

are not the performance itself. These items deal with the

platform/capital base of the entity.

Refer to note 4 for further details regarding the nature of the

remeasurement items.

Continuing operations

Impairment

339

300

328

300

Goodwill

4.2.1

Intangible assets

–

Property, plant and equipment

Right-of-use asset

–

Investments in equity accounted companies

–

FCTR reclassiﬁed to proﬁt or loss on disposal of

investment

4.2.2

–

(1)

Proﬁt on disposal of property, plant and equipment and

intangible assets

4.2.3

4.2.4

(6)

(5)

Proﬁt on sale and partial sale of investments

(2)

(1)

(14)

318

(11)

311

Discontinued operations

Impairment/(reversal of impairment)

Property, plant and equipment

Financial instruments

–

(9)

(6)

1.2.1

Assets held-for-sale

35 & 1.2.1

FCTR reclassiﬁed to proﬁt

or loss on disposal of investment

1.2.3 & 1.4

1.2.2

(41)

(33)

(41)

(23)

Proﬁt on disposal of property, plant and equipment,

intangible assets and scrapping of vehicle rental fleet

(81)

(48)

Proﬁt on disposal of discontinued operations/disposal

group

1.4

(38)

(25)

(89)

(241)

(206)

(241)

(199)

(112)

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations

as well as the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

129

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

INTANGIBLE ASSETS

ACCOUNTING POLICY

Goodwill

Goodwill recognised as the excess of the:

•

consideration transferred, plus

the amount of any non-controlling interest in the acquired entity, and

acquisition-date fair value of any previous equity interest in the acquired entity

over the fair value of the net assets acquired in a business combination.

Refer to note 26 for the accounting policy applied to business combinations.

Goodwill is not amortised, but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate

that it might be impaired, and is carried at cost less accumulated impairment losses. Calculation of proﬁts and losses on the disposal

of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to CGUs for the purpose of impairment testing. The allocation is made to those CGUs or groups of CGUs that are

expected to beneﬁt from the business combination in which the goodwill arose. The units or groups of units are identiﬁed at the lowest

level at which goodwill is monitored for internal management purposes.

Other intangible assets

Trade and brand names

Separately acquired trade and brand names are shown at historical cost. Trade and brand names acquired in a business combination

are recognised at fair value at the acquisition date. The Group’s trade and brand names have indeﬁnite useful lives and are

subsequently carried at cost less accumulated impairment losses. Internally generated trade and brand names are not recognised in

the Statement of Financial Position.

Software and ERP systems

Purchased software is measured at cost less accumulated amortisation and impairment losses. Expenditure on internally developed

software is capitalised when the expenditure qualiﬁes as development activities, otherwise it is recognised in proﬁt or loss when

incurred.

Other intangible assets

Included in other intangible assets are patents, licenses and other contract-related intangible assets.

Amortisation of intangible assets with ﬁnite useful lives

Amortisation of intangible assets is recognised in proﬁt or loss on a straight-line basis over the assets’ estimated useful lives, unless

such lives are indeﬁnite.

Impairment of intangible assets

Intangible assets that have an indeﬁnite useful life are not subject to amortisation and are tested annually for impairment, or more

frequently if events or changes in circumstances indicate that they might be impaired. Intangible assets with ﬁnite useful lives are

tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An

impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable

amount is the higher of an asset’s fair value less costs of disposal and value-in-use. For the purposes of assessing impairment, assets

are grouped at the lowest levels for which there are separately identiﬁable cash inflows which are largely independent of the cash

inflows from other assets or groups of assets (CGUs). Intangible assets that suffered an impairment are reviewed for possible reversal

of the impairment at the end of each reporting period.

Signiﬁcant accounting estimates

Useful life of intangible assets

Software and ERP systems

The Group amortises software and ERP systems over their useful lives ranging between one and eight years using the straight-line method.

Indeﬁnite useful life intangible assets

An indeﬁnite life does not mean an inﬁnite useful life, but rather that there is no foreseeable limit to the period over which the asset can be

expected to generate cash flows for the entity.

130

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

INTANGIBLE ASSETS (CONTINUED)

Trade and brand names

The Group’s trade and brand names have been assessed as having indeﬁnite useful lives. These trade names and brand names were

assessed independently at the time of the acquisitions, and the indeﬁnite useful life assumptions were supported by the following

evidence:

•

The industry is a mature, well-established industry.

The trade and brand names are long established, relative to the market, and have been in existence for a long time.

The trade and brand names are therefore not vulnerable to typical product lifecycles or to the technical, technological, commercial or

other types of obsolescence that can be seen to limit the useful lives of other trade names and brand names.

•

There is a relatively low turnover of comparable intangible assets, implying stability within the industry.

Trade and

brand

names⁴

€m

Software and

ERP systems

€m

Other

intangibles

€m

Goodwill

€m

Total

€m

Notes

Balance at 1 October 2019

Additions

4 295

1 585

–

5 971

–

Amortisation

–

(26)

(15)

(11)

(21)

–

(1)

(27)

(16)

(11)

(29)

From continuing operations

From discontinued operations

Disposals

4.3.1

26.1

–

(1)

–

(8)

–

Acquired on acquisition of businesses

Eliminated on disposal of subsidiaries²

Impairment

–

(106)

(6)

–

(24)

–

(3)

–

(133)

(306)

–

8.1

(300)

–

From continuing operations

From discontinued operations

Transfer from property, plant and

equipment

4.2.1

–

(42)

–

(7)

–

(2)

(51)

–

Transferred to assets held-for-sale

Reclassiﬁcation

(16)

Exchange differences on translation of

foreign operations

Balance at 30 September 2020¹

(446)

(182)

(5)

(20)

–

(629)

4 867

3 555

1 241

Additions

–

Amortisation

(20)

–

From continuing operations

From discontinued operations

Acquired on acquisition of businesses

Impairment

4.3.1

–

26.1

8.1

–

(1)

–

(1)

Transfer from property, plant and

equipment

–

(1)

(2)

–

(1)

Transferred to assets held-for-sale

Exchange differences on translation of

foreign operations³

(20)

(22)

263

114

–

383

Balance at 30 September 2021

3 826

1 335

5 257

Cost

5 218

1 447

179

6 859

Accumulated amortisation and

impairment

(1 392)

3 826

(112)

1 335

(95)

(3)

(1 602)

5 257

Net book value at 30 September 2021

Cost

4 905

1 412

142

6 470

Accumulated amortisation and

impairment

(1 350)

3 555

(171)

1 241

(79)

(3)

(1 603)

4 867

Net book value at 30 September 2020

¹Refer to note 1 for details regarding the restatement of comparative numbers as a result of classifying certain segments as discontinued operations as well as

the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

²Relates to the sale of Conforama France and Switzerland (refer to note 1).

³The net exchange gains recognised during the 2021 Reporting Period resulted mostly from the translation of the Group’s investment in its South African

operations where there was a signiﬁcant strengthening of the South African rand to the euro.

⁴Indeﬁnite useful life

131

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

INTANGIBLE ASSETS (CONTINUED)

Summary of net carrying value:

30 September 30 September

2021

€m

2020

€m

Goodwill

3 826

1 335

3 555

1 241

Indeﬁnite useful life trade and brand names

Other intangible assets

5 257

4 867

Management has identiﬁed the following CGUs to which goodwill and trade and brand names have been allocated. These CGUs do not

represent a level higher than the operating segments identiﬁed in note 2.

The carrying amount per CGU is presented below:

Goodwill

Trade and brand names

30 September 30 September 30 September 30 September

2021

€m

2020

€m

2021

€m

2020

€m

Goodwill and trade and brand names are considered a signiﬁcant

class of intangible assets to the Group.

Greenlit Brands – Household Goods

Pepco Group

141

1 562

700

138

1 527

651

264

257

114

143

891

Poundland

124

Pepco Poland

862

876

140

Pepkor Holdings

All Other

2 123

–

1 890

–

1 000

–

3 826

3 555

1 335

1 241

The 2020 Reporting Period carrying amount per segment which

was transferred to disposal groups or assets held-for-sale during

2021 Reporting Period is presented below:

Greenlit – Plush

–

LIPO

Total carrying amount of disposal groups

8.1

Impairment tests

Key accounting estimates and judgements

The Group tests whether goodwill and indeﬁnite life trade and brand names have suffered any impairment at least on an annual

basis. The recoverable amount of the CGU is determined based on either a value-in-use calculation or a fair value less cost of

disposal which require the use of assumptions.

The value-in-use calculations use discounted cash flow projections based on ﬁnancial budgets approved by management. Models

were built over a ﬁve year period with terminal growth thereafter.

The approved budgets covered a three or ﬁve year period. The cash flows that covered a three year period were extrapolated

using estimated medium-term growth rates for year four and ﬁve. These growth rates are consistent with the industry and

geographic location in which the CGU operates.

CGU speciﬁc WACC has been calculated as the product of the CGU’s cost of debt and cost of equity and weighted in accordance

with the CGU’s target capital structure.

The cost of equity has also been adjusted with size premiums, where applicable, to take into account the restated size of each CGU.

This is consistent with methods applied to the 2020 Consolidated Financial Statements.

The additional key assumptions relating to the impairment testing of the trade names and brands are based on royalty rates

applicable to the speciﬁc brand based on the industry in which the brand operates and the proﬁtability of the unit.

132

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

INTANGIBLE ASSETS (CONTINUED)

8.1

Impairment tests (continued)

Key accounting estimates and judgements (continued)

The following table sets out the key assumptions for those CGU’s that have signiﬁcant goodwill and/or trade and brand names

allocated to them:

Pepco Group – Pepco Group –

Pepco Poland

Pepkor

Poundland²

Holdings¹

2021

Pre-tax discount rate

10.3%

8.4% 17.5% to 21.2%

Short- to medium-term growth rate (compound annual growth rate (“CAGR”)

over the period)

6.2%

1.9%

2.9%

1.2%

10 years²

3% to 10.4%

4.5% to 6.0%

5 years

Long-term growth rate

Forecasted cash flows – Approved budget

5 years

2020

Pre-tax discount rate

10.2%

5.7%

8.8% 16.9% to 19.2%

Short- to medium-term growth rate (CAGR over the period)

Long-term growth rate

3.5%

1.2%

0.2% to 7.4%

4.5% to 5.5%

5 years

2.1%

Forecasted cash flows – Approved budget

3 years

10 years²

¹Abovementioned disclosure represents a summary of disclosures made by Pepkor Holdings, as part of their published 2021 annual ﬁnancial

statements.

²Approved 5 year budget extrapolated to 10 years to account for normalisation of depreciation.

Management has determined the values assigned to each of the above key assumptions as follows:

Pre-tax discount rate

CGU speciﬁc WACC has been calculated as the product of the CGU’s cost of debt and cost of

equity and weighted in accordance with the CGU’s target capital structure.

Approved budget

The forecasted cash flow periods take into account management’s assumptions of the sales

volume, sales price and cost increases expected over the next three to ﬁve years. A medium-

term growth rate applicable to the industry and geographic location is applied to approved

budgets covering a 3-year period for forecast years 4 and 5.

Long term growth rate

This is the weighted average growth rate used to extrapolate cash flows beyond the budget and

forecast periods. The rates are consistent with the long term inflation outlook for the countries

where the underlying businesses operate or with forecasts included in industry reports.

Material impairment charges

Indeﬁnite useful life trade and

Goodwill

brand names

30 September 30 September 30 September 30 September

2021

€m

2020

€m

2021

€m

2020

€m

The impairment charge during the period relates to the

following CGUs:

Continuing operations

Pepkor Holdings¹

Pepco Group²

(1)

(258)

(42)

–

(6)

–

(1)

(300)

(6)

¹The impairment during the 2021 Reporting Period relates to the acquisition of Eezi Global Limited (“Eezi”), refer to note 26.3. Goodwill was recognised

on acquisition and immediately impaired. The impairment recognised in Pepkor Holdings during the 2020 Reporting Period included the uncertainty

around the COVID-19 impact on the businesses and relates to its clothing and general merchandise segment. Pepkor Holdings expect a constrained

retail environment going forward as a result of the longer term impact of COVID-19 on the South African economy however the unparalleled position

in the discount and value retail market segments continues to be increasingly relevant in addressing consumer needs and all these segments

have performed signiﬁcantly better than expected during the 2021 Reporting Period. No impairments were recognised based on the value in use

calculations and these impairment models were not sensitive to reasonable changes in the assumptions.

²The impairment recognised in Pepco Group in the 2020 Reporting Period related to the Poundland CGU and was also driven by challenging trading

and economic conditions created by the COVID-19 crisis. Whilst COVID-19 continues to cause disruption across some of the markets the Pepco

Group operates in, it is expected that the impact will be lessened given the consumer behaviour adaption and vaccine rollout. Refer to note 8.1 for a

sensitivity analysis.

133

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

INTANGIBLE ASSETS (CONTINUED)

8.1

Impairment tests (continued)

Material impairment charges(continued)

Management has adjusted the cash flows of the group of CGUs for entity-speciﬁc risk factors to arrive at the future cash flows

expected to be generated from the group of CGUs. There is no indication based on a reasonable fluctuation in those risk factors

that the goodwill is further impaired.

The below table illustrates how the recoverable amount would increase / decrease if the following key assumptions were to

change for CGUs that have signiﬁcant goodwill and/or trade and brand names allocated to them.

Sensitivity analysis – Recoverable amount (€m)

Long-term growth

rate

Projected adjusted

EBITDA³

Goodwill

30 September

2021

Carrying

Pre-tax discount rate

value Recoverable

of CGU

€m

amount Increase Decrease Decrease Increase Decrease Increase

€m

Greenlit Brands²

Pepco Group

Poundland

Pepco Poland¹

Pepkor Holdings¹

141

1 562

700

n/a

904

1 330

3 278

1 246

3 457

5 126

1 092

n/a

1 450

n/a

1 105

n/a

1 446

n/a

1 121

n/a

1 363

n/a

862

2 123

3 826

n/a

¹The recoverable amount of Pepco Poland and Pepkor Holdings substantially exceeds the carrying amount of the CGU. No sensitivity analysis is

therefore presented in relation to changes in assumptions underpinning the impairment test performed as the impairment models are not sensitive to

reasonable changes in the assumptions.

²No signiﬁcant goodwill or trade names are allocated to this CGU.

³Projected adjusted EBITDA is expressed as the compound annual growth rates (“CAGR”) in the cash-generating units of the plans used for impairment

testing. The CAGR is calculated from period ending 30 September 2022 to the terminal year, the CAGR is then increased and decreased by 1% by

adjusting the terminal value.

PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTY

ACCOUNTING POLICY

Owned assets

Property, plant and equipment are stated at cost to the Group, less accumulated depreciation and impairment losses.

Subsequent costs

The cost is recognised in the carrying amount of an item of property, plant and equipment at the cost of replacing part of such an item

when the cost is incurred, if it is probable that additional future economic beneﬁts embodied within the item will flow to the Group and

the cost of such item can be measured reliably. Costs of the day-to-day servicing of property, plant and equipment are recognised in

proﬁt or loss as an expense when incurred.

Depreciation

Depreciation is calculated using the straight-line method to allocate the cost of the assets, net of their residual values, over the

estimated useful lives or in the case of leasehold improvements or other leased assets, the shorter lease term as follows:

•

Investment property

Buildings

15 – 40 years

15 – 50 years

3 – 10 years

4 – 10 years

3 –16 years

2 – 4 years

Plant and machinery

Vehicles

Ofﬁce equipment and furniture

Computer equipment

Investment property

Investment property is land and buildings that are held to earn rental income or for capital appreciation, or both.

The Group has elected to measure all investment properties using the cost model.

134

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTY (CONTINUED)

Investment

property

€m

Land and

buildings

€m

Plant and

machinery improvements

Leasehold

Furniture and

ﬁttings

Other

assets

€m

Total

€m

Notes

€m

Balance at 1 October 2019

Additions

Depreciation²

–

622

225

132

(67)

(3)

–

246

147

–

112

(32)

(1)

–

1 352

239

(162)

(58)

(59)

(4)

(7)

(23)

(21)

(18)

(1)

(17)

(52)

(33)

(6)

(7)

–

Disposals

(27)

(31)

–

Impairment

From continuing operations

From discontinued operations

Eliminated on disposal of subsidiaries³

Reclassiﬁcation

4.2.1

1.2.1

–

(31)

(267)

(6)

–

(7)

(15)

–

(55)

(342)

–

(8)

–

(3)

Transfer to intangible assets

Transfer to right-of-use assets

Transfer to assets held-for-sale

Exchange differences on consolidation of foreign operations

Balance at 30 September 2020¹

Additions

–

(6)

(30)

(5)

(21)

(1)

–

(1)

(116)

(19)

184

(15)

(1)

–

(53)

(11)

121

(41)

(3)

–

(199)

(70)

701

271

(182)

(8)

(32)

250

(82)

(2)

(3)

–

(3)

(23)

(1)

–

Depreciation²

–

Disposals

Impairment

(4)

From continuing operations

From discontinued operations

Reclassiﬁcation

4.2.1

1.2.1

–

(4)

–

(6)

–

Transfer to intangible assets

Transfer from assets held-for-sale⁴

Transfer to assets held-for-sale

Exchange differences on consolidation of foreign operations

Balance at 30 September 2021

–

(7)

–

(11)

(1)

106

(2)

(21)

–

242

304

131

857

Cost

(16)

–

351

(47)

304

556

(314)

242

337

(206)

131

203

(97)

106

185

(111)

1 648

(791)

857

Accumulated depreciation and impairment

Net book value at 30 September 2021

Cost¹

(16)

–

213

(29)

184

507

(257)

250

317

(196)

121

172

(87)

172

(111)

1 397

(696)

701

Accumulated depreciation and impairment¹

Net book value at 30 September 2020

Carrying values of the main components of the other assets per category are; Capital-work-in-progress (2021: €19 million; 2020: €9 million), vehicles (2021: €19 million; 2020: €13 million) and computer equipment (2021: €35 million; 2020: €32 million).

Leasehold improvements, land and buildings, and plant and machinery are reclassiﬁed from capital-work-in-progress when the asset is ﬁnished and available for use.

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

²Depreciation includes depreciation of continuing operations of €174 million (2020: €161 million) and discontinued operations of €3 million (2020: €1 million).

³Relates to the sale of Conforama France and Conforama Switzerland, refer to note 1.

⁴The properties disposed of by Africa Properties to Pepkor Holdings Group were reclassiﬁed from held-for-sale to property, plant and equipment during the Reporting Period as these properties will remain within the Group.

2021 Reporting Period

The Reporting Period’s impairment losses mainly relate to Pepkor Holdings where stores were looted during the civil unrest and riots in South Africa during July 2021. A total of 549 stores across the Pepkor Holdings Group were impacted by the unrest

and subsequent looting in July 2021. Stores were burnt, looted or damaged to varying degrees. In addition one of the distribution centres in Cato Ridge, KwaZulu-Natal, was looted. This led to the impairment and scrapping of various categories of

property, plant and equipment to the value of ZAR76 million (€4 million). The Pepkor Holdings Group submitted a claim from its insurers on the replacement value of the covered property, plant and equipment, for which the outcome of the claim and

subsequent payment is only expected to be received subsequent to the ﬁnancial year-end.

2020 Reporting Period

Impairment in the 2020 Reporting Period relates to Conforama Italy stores that were written down to its net realisable value based on fair value less cost of disposal.

135

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

10. RIGHT-OF-USE ASSETS

ACCOUNTING POLICY

Leases

The Group’s main leasing activities relates to that of retail stores, ofﬁce space and distribution centres. On entering a contract, the

Group assesses whether a contract is, or contains, a lease based on the deﬁnition of a lease as per IFRS 16. The criteria to assess a

contract includes whether a contract involves the use of an identiﬁed asset, the Group has the right to obtain substantially all of the

economic beneﬁts from the use of the asset throughout the period in use and the Group has the right to direct the use of the asset.

The Group then allocates the consideration in the contract to each lease component on the basis of their stand-alone prices.

If a contract is assessed to be, or contains, a lease the Group recognises a right-of-use asset and corresponding lease liability at

the lease commencement date over the lease term. The Group determines the lease term as the non-cancellable period of a lease,

including any beneﬁcial occupation periods, together with assessing if the lessee is reasonably certain to exercise an option available

on a lease to extend or terminate the lease.

In assessing whether a lessee is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a

lease, management exercises judgement to assess the likelihood thereof. The lease term will not include any renewal options where

there is no reasonable certainty that the lease will be renewed until the option is exercised.

Right-of-use asset

Initial and subsequent measurement

Right-of-use assets are initially measured at cost, which is made up of the initial measurement of the lease liabilities, any initial direct

costs incurred by the Group, and any lease payments made in advance of the lease commencement date, less any lease incentives

received. Right-of-use assets are subsequently measured at cost, less accumulated depreciation and impairment losses, and adjusted

for any remeasurement of the relating lease liabilities. The recognised right-of-use assets are depreciated on a straight-line basis over

the shorter of the useful life or lease term as noted above. Right-of-use assets are tested for impairment as part of the CGU it relates

to (i.e. retail store) when indicators of impairment are identiﬁed and periodically reduced by the impairment losses, if required.

Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a

straight-line basis as an expense in proﬁt or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value

assets comprise IT equipment and small items of ofﬁce furniture.

Refer to note 18 for initial and subsequent measurement of lease liabilities.

136

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

10. RIGHT-OF-USE ASSETS (CONTINUED)

Land and

buildings

€m

Plant and

machinery

€m

Motor

vehicles

€m

Other

assets

€m

Total

€m

Opening Balance on adoption of IFRS 16

(1 October 2019)

2 505

424

–

2 530

437

Additions

Remeasurement due to lease modiﬁcations

Eliminated on disposal of subsidiaries

Derecognition on end of lease term

Depreciation

–

(358)

(25)

(506)

(391)

(115)

(11)

(7)

(365)

(25)

(518)

(399)

(119)

(11)

–

(4)

–

(3)

(5)

From continuing operations

From discontinued operations

Impairment

(3)

–

(5)

–

(4)

–

Acquisition of businesses

Transfer to assets classiﬁed as held-for-sale

(note 35)

–

(191)

–

(2)

(193)

Exchange differences on consolidation of foreign

subsidiaries

Balance at 30 September 2020¹

(139)

1 701

624

(1)

–

(141)

1 716

632

Additions

Remeasurement due to lease modiﬁcations

Derecognition on end of lease term

Depreciation

(45)

–

(45)

(17)

–

(17)

(427)

(404)

(23)

(3)

–

(2)

–

(432)

(409)

(23)

From continuing operations

From discontinued operations

Impairment

(10)

–

(10)

Transfer to assets classiﬁed as held-for-sale

(note 35)

(168)

–

(168)

Exchange differences on consolidation of foreign

subsidiaries

–

Balance at 30 September 2021

1 742

1 760

Cost

2 111

(410)

1 701

(3)

(5)

–

2 134

(418)

1 716

Accumulated depreciation and impairment

Net book value at 1 October 2019

Cost

2 448

(706)

1 742

(6)

(8)

–

2 480

(720)

1 760

Accumulated depreciation and impairment

Net book value at 30 September 2021

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing

operation.

137

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

10. RIGHT-OF-USE ASSETS (CONTINUED)

Impairment

Pepkor Holdings

The right-of-use assets relating to retail stores, ofﬁce space and distribution centres are each seen as an individual CGU. The Group

assesses each of these CGU’s when indicators of impairment are identiﬁed, these mainly include loss-making stores and stores marked

for closure. The impairment test compares the carrying amount of the CGU to the higher of the value-in-use, or fair value of the unit. For

retail stores the recoverable amount of the CGU is determined from the value-in-use calculation, whereas ofﬁce space and distribution

centres CGU’s are determined from its fair value. The key assumptions for the value-in-use calculation are those regarding the discount

rates and growth rates. The discount rates are based on the pre-taxation weighted average cost of capital of 12.9% (2020: 12.7%) relating

to South Africa (other African countries use different weighted average cost of capital rates, but the effect thereof is immaterial), while

growth rates are based on management’s experience and expectations which are in line with the growth rates used for the goodwill

impairment assessment. Growth rates used do not exceed the long-term average growth rate for the area in which the CGU operates.

Lease term

Right-of-use assets are written off over the shorter of the useful life or the lease term of the speciﬁc right-of-use asset. The lease term of

the Group is generally between 3 to 5 years and if a lease contains an option to renew, the option period also ranges between 3 – 5 years.

The following considerations were given to whether a termination and/or extension options should be included in the lease term:

•

Contractual terms and conditions for optional periods compared with market rates is more favourable.

Signiﬁcant leasehold improvements have been undertaken (or expected to be undertaken).

Costs relating to the termination of the lease/signing of a replacement lease is less than cost which will be avoid if the option is not

taken.

•

If the underlying asset is a specialised asset or if suitable alternatives are not available.

Remeasurement due to lease modiﬁcations

The remeasurement of the right-of-use assets and relating lease liability remeasurement mainly relates to the following:

•

Favourable lease renewals

•

Retail footprint consolidation in speciﬁc retail brands

138

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

11. INVESTMENTS IN EQUITY ACCOUNTED COMPANIES

ACCOUNTING POLICY

Principles of equity accounting

Associates

Associates are entities over which the Group has signiﬁcant influence but not control or joint control. This is generally the case where

the Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of

accounting, after initially being recognised at cost.

Joint arrangements

Investments in joint arrangements are classiﬁed as either joint operations or joint ventures. The classiﬁcation depends on the contractual

rights and obligations of each investor, rather than the legal structure of the joint arrangement. The Group only has joint ventures.

Joint ventures

Interests in joint ventures are accounted for using the equity method, after initially being recognised at cost.

Long-term interests

The Group’s interest in an associate or joint venture includes long-term interests that form part of the Group’s net investment. Such long-term

interests include ordinary and preference shares and long-term receivables or loans. The long-term interests are akin to an equity investment.

Goodwill arising on the acquisition of associates and joint ventures is included in the carrying amount of the associates and joint ventures.

Equity method

Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the Group’s

share of the post-acquisition proﬁts or losses of the investee in proﬁt or loss, and the Group’s share of movements in other comprehensive

income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognised

as a reduction in the carrying amount of the investment.

When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other

unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf

of the other entity.

Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest

in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

If a gain or loss previously recognised in other comprehensive income by the investee would be reclassiﬁed to proﬁt or loss on disposal of

the related assets or liabilities, the entity reclassiﬁes the gain or loss from equity to proﬁt or loss when the equity method is discontinued.

When there is a dilution in the Group’s shareholding in an investment in equity accounted company, the dilution ratio is applied to the Group’s

share of other reserves of the equity accounted company and are released through other comprehensive income or proﬁt or loss depending

on the allowable treatment per the IFRS applicable to the transactions that built up in that reserve.

Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by

the Group.

Where the ﬁnancial year-end of the equity accounted entity differs by more than three months from the Group year-end, the Group will adjust

the equity accounted carrying value by any known material transactions that took place between the Group year-end and that of the ﬁnancial

year-end of the equity accounted company.

Changes in ownership interests

When the Group ceases to equity account for an investment because of a loss of joint control or signiﬁcant influence, any retained

interest in the entity is remeasured to its fair value, with the change in carrying amount recognised in proﬁt or loss. This fair value

becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint

venture or ﬁnancial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity

are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously

recognised in other comprehensive income are reclassiﬁed to proﬁt or loss.

When the Group loses control of a subsidiary, the gain or loss on disposal recognised in proﬁt or loss is calculated as the difference

between the aggregate of the fair value of the consideration received and the fair value of any retained interest and the previous

carrying amount of the assets (including goodwill), less liabilities of the subsidiary and any non-controlling interests. All amounts

previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly

disposed of the related assets or liabilities of the subsidiary. The fair value of any investment retained in the former subsidiary at the

date when control is lost is regarded as the cost on initial recognition of an investment in an associate or a joint venture.

Impairment of investments in equity accounted companies

Investments in equity accounted companies are tested for impairment whenever events or changes in circumstances indicate that

the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount

exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use.

Losses in an equity accounted investment are only recognised to the extent of the carrying amount. Excess losses are tracked and any

subsequent share in proﬁt of the equity accounted investment will ﬁrst reduce the excess loss.

The carrying amount of equity-accounted investments is tested for impairment when impairment indicators are present.

139

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

11. INVESTMENTS IN EQUITY ACCOUNTED COMPANIES (CONTINUED)

Set out below are the associates and joint ventures of the Group. The country of incorporation or registration is also their principal

place of business, and the proportion of ownership interest is the same as the proportion of voting rights held, except where indicated

otherwise.

11.1 Detail of the equity accounted investments of the Group

Place of

% holding

Carrying value

business/

country of

incorpora- Nature of

tion business

Nature of

relation-

ship

Name of

business

30 September 30 September 30 September 30 September

Notes

2021

2020

2021

2020

Unlisted^*

Investment

South Africa company

United

IEP

Associate

26.0

50.1

26.0

50.1

148

–

125

States of Speciality bed

America retailer

11.3 &

Mattress Firm

Various other

immaterial

equity

Associate 11.6

accounted

companies

Consulting and

other services

Associates

24.5 – 50.0

151

136

Associate and joint venture entities are owned by private equity – no quoted prices are available.

11.2 Reconciliation of the aggregate carrying values of equity accounted companies

30 September 30 September

2021

€m

2020

€m

Notes

Balance at the beginning of the period

136

–

208

Additions

Impairments

From continuing operations

11.4

–

(18)

(5)

Disposals

Share in result of equity accounted companies

Proﬁt or loss from continuing operations

Dividend received recognised through proﬁt and loss

Sundry reserves

519

124

395

(7)

11.3

–

(15)

–

Dividends received

(524)

Exchange differences on translation of investments in equity accounted investments

Carrying values of equity accounted companies at the end of the period

(28)

136

151

140

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

11. INVESTMENTS IN EQUITY ACCOUNTED COMPANIES (CONTINUED)

11.3 Material transactions with equity accounted investments

Mattress Firm

Mattress Firm carrying value is based on the equity method of accounting. The equity method is where the Group recognises

its share of post-acquisition proﬁts or losses of the investee as an increase or decrease respectively of the carrying value of the

associate. Dividends received from the associate are recognised as a reduction in the carrying amount of the investment. Where

an associate pays a dividend that is greater than the carrying amount of the investment in the investor’s books, the carrying

amount is reduced to nil, a gain is recognised in proﬁt or loss for the remaining dividend.

The equity accounted carrying value of an associate is not a representation of the fair value of the associate.

During the Reporting Period, Mattress Firm issued an USD550 million (€475 million) new senior secured term loan due 2027.

Proceeds from the senior secured term loan, along with USD184 million (€159 million) of balance sheet cash, was used to repay

the existing loans, pay for loan prepayment premiums and transaction fees and expenses. The new ﬁnancing also includes a

proposed USD125 million (€108 million) asset-based revolving credit facility (unrated).

During the 2021 Reporting Period Mattress Firm again successfully reﬁnanced its outstanding debt. In addition, Mattress Firm

made a payment to shareholders of USD1.2 billion (€1.0 billion) with the Steinhoff Group receiving USD609 million (€520 million).

Mattress Firm announced that it is exploring a potential public offering of its common stock by its shareholders. Immediately

following the pricing of an IPO, certain outstanding restricted stock units (“RSUs”) and performance stock units (“PSUs”) held

by current and former members of management and certain non-employee directors will vest, and options held by certain non-

employee directors will become exercisable. Pursuant to the agreement among stockholders at the time of Mattress Firm’s

emergence from bankruptcy, (i) the RSUs and PSUs held by the current and former members of management will be dilutive to all

stockholders, and (ii) the RSUs and options held by certain non-employee directors will be dilutive only to the lender stockholders,

excluding the Group.

The number of shares outstanding immediately following the pricing of a possible IPO will reflect the issuance of the

318.7960000 shares underlying the RSUs and options held by certain non-employee directors. The RSUs will vest immediately

following the pricing of an IPO. Additionally, the options will be exercised pursuant to their terms immediately following the pricing

of an IPO.

The Group’s shareholding will be diluted from 50.1% to 44.96% following the exercise of these options.

11.4 Key accounting judgements relating to impairment of equity accounted investments

During the 2020 Reporting Period, the outbreak of COVID-19 and the impact on the wider economy is placing unprecedented

pressure on businesses and has resulted in signiﬁcant decline across global economies. The COVID-19 pandemic was an

impairment indicator and management did a review on the expected recoverable amount for the Group’s investment in equity

accounted companies. Based on the revaluation an impairment was recognised for the investment in IEP during the 2020

Reporting Period. There were no impairment indicators for the 2021 Reporting Period, therefore no impairment was recognised

during the Reporting Period.

11.5 Disposals

During the 2020 Reporting Period the Group disposed of its 50% share in Cofel SAS for a purchase price of €18.7 million. A proﬁt

of €14 million was recognised on the disposal.

141

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

11. INVESTMENTS IN EQUITY ACCOUNTED COMPANIES (CONTINUED)

11.6 Summarised information in respect of material equity accounted companies

The table below provides summarised ﬁnancial information for those equity accounted investments that are material to the

Group. The information disclosed reflects the amounts presented in the most recent ﬁnancial statements of the relevant equity

accounted companies and not the Group’s share of those amounts.

Adjustments are made for material transactions occurring between equity accounted company’s reporting date and Steinhoff

N.V.’s Reporting Date (where necessary).

Where relevant, the statements of ﬁnancial positions of the associates were translated to euro at spot conversion rate at the end

of the Group’s Reporting Period and the income statements were translated to euro at the average conversion rate applicable to

the Group’s Reporting Period.

The Group has compared the accounting policies of these companies to those of the Group. Mattress Firm’s results are prepared

under US GAAP whereas the Steinhoff Group reports under IFRS. Mattress Firm adopted the new leasing standard, ASC 842 (the

US GAAP equivalent of IFRS 16) during the 2021 Reporting Period where the Group adopted the IFRS 16 standard during the 2020

Reporting Period.

The Group has made the following adjustments for Mattress Firm to bring its ﬁnancial statements in line with IFRS and the

unwinding of fair value adjustments at acquisition date.

Mattress Firm

Period ended 30 September 2021

Adjusted for

accounting

IFRS

adjustments and

fair value

at acquisition

unwinding

policies

changes and

fair value at

acquisition

unwinding

€m

Mattress Firm

under

US GAAP

€m

Revenue

3 676

1 558

(1 011)

(48)

–

3 676

1 558

(694)

(245)

(156)

(78)

(127)

(6)

Gross margin

Other operating cost

Depreciation and amortisation¹

Interest expense¹

Loss on early debt retirement³

Stock based award expense

Goodwill and other impairments

Income tax expense

317

(197)

(110)

332

–

(46)

(410)

(127)

(39)

(15)

–

(15)

237

(Loss)/proﬁt for the period

Other comprehensive income for the period

Total comprehensive (loss)/income for the period

(138)

–

375

–

(138)

375

237

Non-current assets²

Current assets

2 582

474

(864)

–

1 718

474

Non-current liabilities

Current liabilities

Net assets

(2 133)

(856)

–

(2 133)

(856)

(864)

(797)

¹Under ASC 842, lease expenses are recognised as part of operating expenses where under IFRS 16 it is accounted for as amortisation and interest

expense, the adjustment is just an allocation between other operating cost, amortisation and interest expense.

²Non-current assets relates to Goodwill that was not recognised on the initial recognition of the associate.

³Mattress Firm recorded a loss from debt extinguishments of USD490 million (€410 million) during the Reporting Period which related to the

extinguishment of the 2018 Term Loan and 2018 payment-in-kind (“PIK”) Loan. Part of the loss is reversed by the Group as it did not recognise the

embedded derivative on initial recognition. This loss included USD63.7 million (€53 million) for prepayment penalties, USD379.1 million (€317 million)

for the write-off of unamortized discounts, USD9.3 million (€8 million) for the write-off of unamortized deferred ﬁnancing fees and USD18.3 million

(€15 million) for the reversal of the embedded derivative related to the 2018 PIK Loan.

142

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

11. INVESTMENTS IN EQUITY ACCOUNTED COMPANIES (CONTINUED)

11.6 Summarised information in respect of material equity accounted companies (continued)

The table below provides summarised ﬁnancial information on those associates that are material to the Group. The information

disclosed reflects the amounts presented in the ﬁnancial statements of the relevant associate and not the Group‘s share of those

amounts. They have been amended to reflect adjustments made by the entity when using the equity method, including fair value

adjustments and modiﬁcations for differences in accounting policy.

Mattress Firm

IEP

9 months¹

ended

9 months¹

ended

31 December

2020

Period ended Period ended

30 September 30 September 30 September

2021

€m

2020

€m

2021

€m

Revenue

3 676

2 976

657

506

Investment income

–

(245)

(155)

(15)

–

(270)

(234)

(32)

(39)

(22)

(3)

Depreciation and amortisation

Interest expense

(41)

(17)

(10)

Income tax expense

Proﬁt/(loss) for the period from continuing operations

Loss for the period from discontinued operations

Proﬁt/(loss) for the period

237

–

(4)

–

237

–

(4)

–

Other comprehensive loss for the period

Total comprehensive income/(loss) for the period

(1)

237

(4)

As at

31 December

2020

30 September 30 September 30 September

2021

€m

2020

€m

2021

€m

Note

€m

Non-current assets

1 718

1 619

1 123

1 013

Current assets

Cash and cash equivalents

Other current assets

Total current assets

181

293

474

431

278

709

287

351

228

278

Non-current liabilities

Non-current ﬁnancial liabilities (excluding trade

payables)

(1 036)

(539)

(336)

(305)

Other non-current liabilities

Total non-current liabilities

Current liabilities

(1 097)

(2 133)

(957)

(161)

(497)

(167)

(472)

(1 496)

Current ﬁnancial liabilities

Other current liabilities

Total current liabilities

Non-controlling interests

Net assets

(242)

(614)

(856)

–

(318)

(496)

(814)

–

(4)

(169)

(173)

(161)

643

(3)

(126)

(129)

(142)

548

(797)

Share-based payment expense and other expenses

credited to equity

(9)

–

Net equity

(793)

643

548

% ownership by Group

50.1%

(397)

50.1%

26.0%

167

26.0%

142

Group’s share of net equity

Adjustment for material transactions and foreign

currency differences

11.2

395

–

(19)

–

(17)

–

Goodwill

Carrying amount of the Group’s interest

–

148

125

¹The ﬁnancial year-end for IEP is 31 December. At the date of publishing this report management has not yet received the 12 month period ending

31 December 2021 ﬁnancial information from IEP. However, for the purpose of including the Group’s share of associate’s results, management uses

the 12 month period that coincides with the Group’s ﬁnancial year. The 9 month period information is only for disclosure purposes on what is reflected

by the associate in its ﬁnancial statements or management accounts.

143

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

12. OTHER FINANCIAL ASSETS

30 September 30 September

2021

€m

2020

€m

Notes

Non-current other ﬁnancial assets

At amortised cost

12.1

373

425

Current other ﬁnancial assets

At amortised cost

12.1

–

Total other ﬁnancial assets

375

425

The fair value of ﬁnancial instruments that are not traded in an active market is determined using valuation techniques. The Group uses its

judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each

reporting period.

12.1 At amortised cost

The Group classiﬁes its ﬁnancial assets as at amortised cost only if both of the following criteria are met:

•

the asset is held within a business model whose objective is to collect the contractual cash flows, and

the contractual terms give rise to cash flows that are solely payments of principal and interest.

The ﬁnancial assets are presented as non-current assets unless they mature, or management intends to dispose of them within

12 months of the end of the Reporting Period.

Financial assets at amortised cost including the following debt instruments:

30 September 30 September

2021

€m

2020

€m

Notes

Unlisted preference shares – Lancaster 102

Interest-bearing loans

12.1.1

12.1.2

12.1.3

301

253

168

Unlisted bonds

Non-interest bearing loans

–

375

425

12.1.1 Unlisted preference shares

The unlisted preference shares increased with €16 million as a result of additional accrued dividends on the investment in

preference shares issued by Lancaster 102, however due to the strengthening of the South African rand during the 2021

Reporting Period a foreign exchange gain of €32 million was recognised. At the beginning of the 2018 Reporting Period,

Steinhoff Africa subscribed for 1 000 preference shares to the value of ZAR4 billion in Lancaster 102. The preference

shares accrue dividends at 80% of the SA prime lending rate as quoted by Standard Bank Group Limited or its successor

in title in South Africa. The preference shares are redeemable after 5 years from issue with the option to extend for a

further 2 years. As part of the transaction, Steinhoff Africa also obtained a liability to the value of ZAR4 billion from

Lancaster 102. Refer to note 17.

Expected credit losses with regard to the investment have been assessed. The assessment included consideration of the

net asset value of Lancaster 102, the fact that the investment is, in essence, supported by the liability owed to Lancaster

(refer note 17) and no default on payment has occurred. Based on the assessment it was determined that any provision

for expected credit losses on the investment is immaterial.

Interconnected to the aforesaid transaction between Steinhoff Africa and Lancaster 102, Lancaster 102 subscribed for ordinary

shares in Thibault for a total subscription amount of ZAR4 billion, and Thibault purported to subscribe for preference shares

in Steinhoff Africa for a total subscription amount of ZAR4 billion. In doing so, the Thibault shares held by Lancaster 102 were

ceded to Steinhoff Africa by Lancaster 102, as security for Lancaster 102’s obligations to Steinhoff Africa under and in terms

of the preference shares subscription agreement between Steinhoff Africa and Lancaster 102. Thereafter, Lancaster 102

purported to transfer to Lancaster 102 the Steinhoff Africa preference shares, and Lancaster 102 transferred to Thibault the

aforesaid ordinary shares in Thibault, which Thibault subsequently cancelled, notwithstanding the aforesaid security cession.

As set out in note 17.6, Steinhoff Africa contends that the preference shares issued by it were and are void and invalid,

and on that basis, has instituted proceedings in the Western Cape Division of the High Court, seeking a declaration that all

of the aforesaid agreements between Steinhoff Africa, Lancaster 102 and Thibault, are invalid.

Thibault disputes that the Steinhoff Africa preference shares were and are void and invalid and has opposed Steinhoff

Africa’s application (as has Lancaster 102), whilst Lancaster 102 relies upon such invalidity in advancing a claim against

Thibault, which it has done so in arbitration proceedings between Lancaster 102 and Thibault, which Thibault is opposing.

Steinhoff Africa has indemniﬁed Thibault from liability that it might be found to owe to Lancaster 102. Thibault has

instituted proceedings in the Western Cape Division of the High Court, seeking an order that all of the disputes between

Steinhoff Africa, Lancaster 102 and Thibault be determined by the Court, and not in terms of arbitration proceedings.

144

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

12. OTHER FINANCIAL ASSETS (CONTINUED)

12.1 At amortised cost (continued)

12.1.1 Unlisted preference shares (continued)

If it transpires that Lancaster 102 has no such claim against Thibault, it will follow that Steinhoff Africa will not owe any

corresponding liability to Thibault. This would constitute a beneﬁt to Steinhoff Africa that can be offset against any credit

losses that may result.

Arbitration proceedings were commenced by Lancaster 102 against Thibault, to which Steinhoff Africa is not a party (the

“Arbitration Proceedings”). In response, on 28 April 2021, Thibault applied to the High Court for a declaratory order that

(i) the Arbitration be referred to and determined by the High Court; and (ii) that Steinhoff Africa be joined as a party (the

“Override Application”). Steinhoff Africa initiated separate proceedings seeking to declare all of the agreements in the

loop transaction invalid, alternatively void (the “Invalidity Application”). The Override Application was heard on

8 September 2021 and the Invalidity Application was enrolled for hearing on 11 November 2021.

Shortly after the hearing of the Invalidity Application, all of the parties in all of the Lancaster-related matters (including

the Override Application, the Invalidity Application and the Arbitration Proceedings) agreed to suspend the process in

all of the Lancaster-related litigation, save for the handing down of pending Judgments by the Court (the “Suspension

Agreement”). The Invalidity Application was accordingly removed from the roll of 11 November 2021. On

1 December 2021, the Court handed down its ruling in the Override Application, dismissing the application with costs.

Thibault intended to appeal the Court’s Judgment in respect of the Override Application, however such appeal is not

necessary at this stage in light of the Suspension Agreement.

In management’s view, Lancaster 102’s contentions do not give rise to a liability owed by Steinhoff Africa to Lancaster

102, but potentially give rise to a liability owed by Steinhoff Africa to Thibault. If Lancaster 102 is able to establish a claim

against Thibault, Steinhoff Africa will assert a claim against Lancaster 102 that will fall within the scope of the indemnity

that Steinhoff Africa has provided in that respect.

12.1.2 Interest bearing loans

Loan to Titan

Included in the balance of interest-bearing loans is a loan receivable from Titan of €67 million as at 30 September 2021

(30 September 2020: €165 million) after recognising a credit loss of €98 million (2020: €13 million on adoption of IFRS 9).

The loan receivable originated when a prepayment of €200 million was made by the Group in November 2017 to an entity

related to Christo Wiese (a Steinhoff Supervisory Board member at the time) as part of the planned Shoprite transaction.

Subsequent to the aborted Shoprite transaction following the events of December 2017, a settlement was concluded in

early 2018, pursuant to which Titan owed SFHG an amount of €200 million plus interest. In accordance with the Group’s

2019 ﬁnancial restructuring arrangements, the Titan loan receivable was transferred from SFHG to Newco 2A.

A key consideration/assumption in the assessment below is that management has assessed that it is highly probable

that the Litigation Settlement Proposal will be implemented following the S155 Scheme sanctioning on 24 January 2022.

Due to this probability assessment, the new terms attached to the Titan Loan (once the Litigation Settlement Proposal is

implemented) have been applied for IFRS 9 purposes. The credit loss of €98 million is based on a weighted average multi-

scenario taking into account the time value of money. The changes compared to the 2020 Reporting Period in the new

terms of the Titan loan are the main drivers for the credit loss.

Conditional upon and subject to the occurrence of the Settlement Effective Date, SIHPL will acquire the Titan Loan from

Newco 2A for an amount to be determined subject to an agreed mechanism linked to the prevailing EUR:ZAR exchange

rate upon Settlement Effective Date. Payment of the consideration will be deferred resulting in an amount owed by SIHPL

to Newco 2A (“Newco 2A Loan Note”). The new terms of the Titan loan will be:

•

following implementation, SIHPL will acquire the rights under the legacy loan receivable owed by Titan to Newco 2A

(formerly owed to SFHG) for deferred cash consideration of ZAR3.4 billion (€192 million based on the 30 September

2021 spot rate) principal outstanding;

•

zero coupon;

repayment date of 10 years plus one day from the Settlement Effective Date and voluntarily repayable without penalty

at any time; and

•

secured in favour of SIHPL over 14 813 923 ordinary shares in Shoprite.

It is management’s view that the Titan loan receivable remains recoverable based on the key considerations above.

12.1.3 Unlisted bonds

30 September 30 September

2021

€m

2020

€m

Unlisted bonds held by Pepkor Holdings consist of:

Standard Bank bond: issued by Standard Bank Angola¹

¹Angola government bonds held by Pepkor Holdings are denominated in Angola Kwanza, with a coupon interest rate of 17% and maturity date

of 2021/12/11.

145

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

13. RECEIVABLES

13.1 Trade and other receivables

Restated¹

30 September 30 September

2021

€m

2020

€m

Notes

Financial assets

Non-current trade and other receivables

Instalment sale and loan receivables

13.1.3

Current trade and other receivables

Trade receivables

122

375

(24)

(87)

386

118

123

328

(24)

(94)

333

102

Instalment sale and loan receivables

Less: Provision for impairments – Trade receivables

Less: Provision for impairments – Instalment sale and loan receivables

Net trade, instalment sale and loan receivables

Other amounts due

13.1.3

21.3

13.1.2

21.1

Derivative ﬁnancial assets

584

474

Non-ﬁnancial assets

Current trade and other receivables

Prepayments

137

Value Added Tax receivable

149

Total

Non-current trade and other receivables

Current trade and other receivables

733

742

567

571

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

13.1.1 Classiﬁcation of trade and other receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of

business. Instalment sale and loan receivables are non-derivative ﬁnancial assets with ﬁxed or determinable payments

that are not quoted in an active market. If collection of the amounts is expected in one year or less they are classiﬁed as

current assets. If not, they are presented as non-current assets. Trade receivables are generally due for settlement within

30 to 90 days and therefore are all classiﬁed as current.

13.1.2 Other amounts due

Included in other amounts due are creditors with debit balances, insurance receivables and various other receivables.

13.1.3 Instalment sale and loan receivables

Instalment sale and loan receivables relate mainly to the credit books in Pepkor Holdings.

146

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

13. RECEIVABLES (CONTINUED)

13.1 Trade and other receivables (continued)

13.1.4 Fair values of trade and other receivables

Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest

rate method, less provision for impairment.

Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair

value. For the majority of the non-current receivables, the fair values are also not signiﬁcantly different to their carrying

amounts.

13.1.5 Derivatives

Refer to notes 20 and 21 for details regarding the determination of their fair values and the types of derivatives,

respectively.

13.1.6 Impairment and risk exposure

Information about the impairment of trade and other receivables, the calculation of the loss allowance, their credit quality

and the Group’s exposure to credit risk, foreign currency risk and interest rate risk can be found in note 21.

13.1.7 Translation of foreign operations

During the 2021 Reporting Period there was a signiﬁcant strengthening of the South African rand to the euro, refer to

Basis of preparation for the exchange rates. This had a signiﬁcant impact on the translation of assets and liabilities of the

Group’s South African operations in the current period compared to the previous period. The Group had trade and other

receivables to the value of ZAR8.3 billion (€472 million) as at 30 September 2021 (2020: ZAR7.8 billion (€396 million)).

13.2 Taxation receivable

Restated¹

30 September 30 September

2021

€m

2020

€m

Note

Taxation receivable

13.2.1

150

146

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

13.2.1 Taxation receivable

On 1 October 2019, the Group adopted IFRIC 23, effective for ﬁnancial years beginning on or after 1 January 2019. On

adoption of the standard a taxation receivable of €98 million was recognised in the 2020 Reporting Period and a total of

€104 million is included in the receivable balance for the 2021 Reporting Period.

147

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

14. FINANCIAL ASSETS AND FINANCIAL LIABILITIES

The Group holds the following ﬁnancial assets and ﬁnancial liabilities:

14.1 Total ﬁnancial assets and liabilities

At fair value

through proﬁt

or loss

At amortised

cost

Total carrying

values

Notes

€m

30 September 2021

Trade and other receivables

Other ﬁnancial assets

Non-current ﬁnancial assets

13.1

–

373

382

373

382

Trade and other receivables

Other ﬁnancial assets

13.1

–

504

584

Cash and cash equivalents

Current ﬁnancial assets

–

3 151

3 657

3 151

3 737

Borrowings

Non-current ﬁnancial liabilities

17.2

–

(10 869)

Borrowings

Trade and other payables

Current ﬁnancial liabilities

17.2

19.1

–

(39)

(399)

(1 420)

(1 819)

(8 649)

(399)

(1 459)

(1 858)

(8 608)

30 September 2020¹

Trade and other receivables

Other ﬁnancial assets

Non-current ﬁnancial assets

13.1

–

425

429

425

429

Trade and other receivables

Cash and cash equivalents

Current ﬁnancial assets

13.1

–

435

2 015

2 450

474

2 015

2 489

Borrowings

Non-current ﬁnancial liabilities

–

(10 744)

Borrowings

Trade and other payables

Current ﬁnancial liabilities

17.2

19.1

–

(11)

(709)

(1 325)

(2 034)

(9 899)

(709)

(1 336)

(2 045)

(9 871)

The Group’s exposure to various risks associated with the ﬁnancial instruments is discussed in note 21. The maximum exposure

to credit risk at the end of each reporting period is the carrying amount of each class of ﬁnancial assets mentioned above.

There were no transfers between categories of ﬁnancial instruments during either period presented.

15. INVENTORIES

Restated¹

30 September 30 September

2021

€m

2020

€m

15.1 Inventory

Merchandise and ﬁnished goods

Goods in transit

1 285

270

1 159

Raw materials and other inventories

Inventory before provision

Less: provision for inventory write downs^*

Net Inventories

146

1 403

(89)

1 568

(103)

1 465

1 314

Comprises mainly provision against ﬁnished goods and merchandise

15.2 Amount of write-down of inventories to net realisable value recognised in proﬁt

or loss as an expense during the period

(52)

(57)

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

148

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

15. INVENTORIES (CONTINUED)

Inventory pledged as security

No inventory has been pledged as security over borrowings in the 2021 and 2020 Reporting Periods.

Merchandise and ﬁnished goods

Merchandise and ﬁnished goods are stated at the lower of cost and net realisable value. Cost includes the reclassiﬁcation

from equity of any gains or losses on qualifying cash flow hedges relating to purchases of raw material and ﬁnished goods but

excludes borrowing costs.

Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling

price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the

sale.

Amounts recognised in proﬁt or loss

Write-downs of inventories to net realisable value were recognised as an expense during the period and included in ‘cost of sales’

in the statement of proﬁt or loss.

Translation of foreign operations

During the 2021 Reporting Period there was a signiﬁcant strengthening of the South African rand to the euro. Refer to Basis of

preparation for the exchange rates. This had a signiﬁcant impact on the translation of assets and liabilities of the Group’s South

African operations in the current period compared to the previous period. The Group’s South African operations had inventory to

the value of ZAR13.4 billion (€760 million) as at 30 September 2021 (2020: ZAR12.0 billion (€608 million)).

16. CASH AND CASH EQUIVALENTS

Restated¹

30 September 30 September

2021

€m

2020

€m

Current assets

Cash at bank and on hand

Funds and deposits on call

1 884

1 267

3 151

1 357

658

2 015

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing

operation.

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call

with ﬁnancial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily

convertible to known amounts of cash and which are subject to an insigniﬁcant risk of changes in value.

Term deposits are presented as cash equivalents if they have maturity of three months or less from the date of acquisition and are

repayable within 24 hour notice with no loss of interest.

Restricted cash

Total restricted cash balances on a Group level amounted to €158.8 million (2020: €140.0 million).

The Group has restricted cash balances of €38.3 million (2020: €12.7 million Escrow arrangement on the Unitrans sale was released on

30 September 2021) held by Steinhoff Africa relating to Pepco IPO proceeds currently withheld by Standard Bank South Africa pending

FinSurv approval for release and €108.5 million (2020: €112.3 million) commercially restricted cash held by Steenbok Newco 10 SARL to

be used to settle historic German Tax liabilities.

Local currency cash and short-term deposits of €12 million (2020: €15 million) are held in Angola and Nigeria and are subject to onerous

local exchange control regulations. These local exchange control regulations impose restrictions on exporting capital from these

countries, other than through normal dividend. These restricted cash balances held by the respective subsidiaries are not available for

general use by Steinhoff N.V. or other subsidiaries in the Group.

Cash under cession

In anticipation of the implementation of the Litigation Settlement Proposal on SED, the Group has cash under a security cession in favour

of the SRF, amounting to €351 million.

Litigation Settlement Proposal

The estimated cash to be utilised on SED for the Litigation Settlement Proposal amounts to c. €1 180 million, which includes the

€351 million already ceded to the SRF.

149

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

17. BORROWINGS

ACCOUNTING POLICY

Principles of borrowings

Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised

cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in proﬁt or loss over

the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as

transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is

deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn

down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

The fair value of the liability portion of a convertible bond is determined using a market interest rate for an equivalent non-convertible

bond. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the bonds. The

remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders’ equity, net of income

tax effects.

Borrowings are removed from the balance sheet when the obligation speciﬁed in the contract is discharged, cancelled or expired.

The difference between the carrying amount of a ﬁnancial liability that has been extinguished or transferred to another party and the

consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in proﬁt or loss as other income or

ﬁnance costs.

An exchange between an existing borrower and lender of debt instruments with substantially different terms should be accounted for

as an extinguishment of the original ﬁnancial liability and the recognition of a new ﬁnancial liability.

Substantially different is if the discounted present value of the cash flows under the new terms, including any fees paid (net of any

fees received and discounted using the original effective interest rate), is at least 10% different from the discounted present value of

the remaining cash flows of the original ﬁnancial liability.

Borrowings are classiﬁed as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least

12 months after the reporting period.

150

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

17. BORROWINGS (CONTINUED)

17.1 Analysis of closing balance

Restated¹

30 September 2020

30 September 2021

Current Non-current

Total

€m

Current Non-current

Total

€m

Notes

€m

Operating companies

European Properties –

Hemisphere

Term loan facility ²

17.5

–

178

218

–

218

Pepco Group

Term loans and facilities

Capitalised ﬁnance lease

Conforama

17.5

545

614

485

486

Syndicated loan facilities

and term loans

17.5

–

188

–

188

Greenlit Brands

Term loans and facilities

Pepkor Holdings

Term loans and facilities¹

Preference shares

Instalment sale

17.5

29.2

–

610

–

635

–

533

101

554

101

agreements

17.5

–

1 335

1 433

456

1 124

1 580

Corporate and treasury

services

Steenbok Lux Finco 1 SARL

21/22 Term loan facility²

23 Term loan facility²

Steenbok Lux Finco 2 SARL

17.4

–

2 165

1 480

2 165

1 480

–

1 961

1 340

1 961

1 340

First lien term loan facility²17.4

–

1 177

4 712

1 177

4 712

–

2 081

4 238

2 081

4 238

Second lien term loan

facility²

17.4

17.6

Africa Group (excl. Pepkor

Holdings)

Lancaster Liability

301

399

–

9 534

301

9 835

253

709

–

9 620

253

9 873

Total borrowings

10 869

11 268

10 744

11 453

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

²Certain tranches are guaranteed by Steinhoff N.V. through the issuance of the CPU. Refer to the Steinhoff N.V. 2021 Separate Financial Statements.

151

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

17. BORROWINGS (CONTINUED)

17.2 Reconciliation of borrowings balances

Corporate European

and Properties

treasury

services

€m

– Hemis-

phere

€m

Pepkor

Holdings

€m

Pepco

Group Conforama

Greenlit

Brands

€m

Total

€m

Notes

€m

Opening balance –

1 October 2019

Repayable within one year

Repayable after one year

9 187

477

8 710

361

–

1 049

113

936

484

483

256

209

–

11 370

999

10 371

Repayment of debt

Repayment of interest

Partial settlement of preference

Additional ﬁnancing

Interest accrued

Continuing – Loans

Discontinued – Loans

Foreign exchange gains or

losses

Prepayment premiums²

Commitment fees²

Remeasurement of ﬁnancial

liability

(188)

–

(144)

(26)

(358)

(70)

(57)

(16)

(220)

–

(9)

(1)

(976)

(113)

–

923

–

(220)

364

–

(220)

426

1 111

1 032

(49)

–

(179)

(15)

–

(1)

–

(244)

–

(1)

–

Closing balance –

30 September 2020¹

Repayable within one year

Repayable after one year

9 873

253

9 620

218

–

656

635

494

489

188

–

11 453

709

10 744

Opening balance –

1 October 2020¹

Repayable within one year

Repayable after one year

9 873

253

9 620

218

–

656

635

494

489

188

–

11 453

709

10 744

Repayment of debt

Repayment of interest

Settlement of preference

Additional ﬁnancing

Interest accrued

Continuing – Loans

Discontinued – Loans

Transaction fees (additional

ﬁnancing)

Foreign exchange gains or

losses

(1 011)

(36)

(53)

(6)

(254)

(42)

(493)

(23)

(210)

(13)

(24)

(1)

(2 045)

(121)

–

978

–

(113)

238

–

589

–

(113)

828

1 089

1 058

–

105

–

(8)

–

(8)

163

Prepayment premiums and

fees²

Closing balance –

30 September 2021

9 835

301

178

–

636

619

–

11 268

399

Repayable within one year

Repayable after one year

9 534

178

611

546

10 869

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

²Prepayment premiums relates to the 10% prepayment premium computed on the principal amount that was repaid for the Senior secured bonds of

Conforama. The fees relate to the Tranche B bonds that were due by Conforama but were not issued.

152

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

17. BORROWINGS (CONTINUED)

17.3 Contractual maturities of borrowings

The following are the remaining contractual maturities of borrowings at the Reporting Date. The amounts are gross and

undiscounted, and include contractual interest payments.

Contractual maturities of borrowings

1 – 12

months

€m

Between 1

and 2 years

€m

Between 2

and 5 years Over 5 years

Carrying

amount

€m

Total

€m

At 30 September 2021

Operating companies

Pepkor Holdings

–

659

658

–

684

683

636

635

Term loans and facilities

Instalment sale agreements

Pepco Group

566

–

657

652

619

614

Term loans and facilities

Capitalised ﬁnance lease

European Properties –

Hemisphere

–

200

209

–

200

178

Term loan facility

107

1 225

1 541

1 433

Corporate and treasury services

21/22 Term loan facility

23 Term loan facility

–

2 219

1 517

2 295

4 838

–

2 219

1 517

2 295

4 838

2 165

1 480

1 177

4 712

First lien term loan facility

Second lien term loan facility

Africa Group (excl. Pepkor

Holdings)

301

408

–

301

Lancaster Liability

10 869

11 078

–

11 170

12 711

9 835

11 268

Total borrowings

1 225

At 30 September 2020

Operating companies

Pepkor Holdings

–

634

533

101

–

635

533

101

656

554

101

Term loans and facilities

Preference shares

Instalment sale agreements

Conforama

–

188

–

188

Syndicated loan facilities and

term loans

188

–

490

–

188

504

496

188

494

486

Pepco Group

Term loans and facilities

Capitalised ﬁnance lease

Greenlit Brands

–

Term loans and facilities

European Properties –

Hemisphere

–

220

440

–

226

218

Term loan facility

1 130

1 577

1 580

Corporate and treasury services

21/22 Term loan facility

23 Term loan facility

–

2 219

1 517

2 295

4 838

–

2 219

1 517

2 295

4 838

1 961

1 340

2 081

4 238

First lien term loan facility

Second lien term loan facility

Africa Group (excl. Pepkor

Holdings)

253

693

–

253

Lancaster Liability

10 869

11 999

11 122

12 699

9 873

11 453

Total borrowings

153

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

17. BORROWINGS (CONTINUED)

17.4 Impact of implementation of CVAs

The Group has been engaged in substantial and complex debt restructuring processes since December 2017. Financial

restructuring activity completed in the 2019 Reporting Period is summarised below.

Company Voluntary Arrangements (CVAs)

As part of the proposed European ﬁnancial restructuring detailed in the Lock-Up Agreement, on 30 November 2018, the SEAG

CVA and the SFHG CVA were ﬁled with the English court. The SEAG CVA and the SFHG CVA implemented the restructuring plan

outlined in the Lock-Up Agreement. The CVA proposals, together with certain supporting documentation, can be downloaded from

www.steinhofﬁnternational.com.

The ﬁnancial restructuring of the Group became effective on 13 August 2019, when the SEAG and SFHG CVAs were successfully

implemented. Under the terms of the CVAs, the existing debt instruments in SEAG and SFHG were reissued for accounting

purposes effective as of 14 December 2018, which was the date the SEAG CVA and the SFHG CVA were approved by the requisite

majorities of the creditors, with a common maturity date of 31 December 2021. No cash interest is payable in this period, as

interest will accrue and is only payable when the debt matures, providing the Group with a period in which it can concentrate on

reducing debt and restoring value.

The Group has announced it intends to implement a number of steps to reduce its debt burden. Within this, the Steenbok Group in

particular is now required to be run for the beneﬁt of its creditors (including those under the Facilities Agreements) ahead of the

beneﬁt of its shareholders (which are ultimately controlled by the Company). Planned steps include the managed realisation of

investments and assets.

The lenders have additional rights pursuant to the terms of the Facilities Agreements which require their consent ahead of an IPO

and the right of certain lenders to participate in the IPO as cornerstone investors.

The implementation of the CVAs resulted in the original SEAG and SFHG debt being replaced by new term loan facilities entered

into between the lenders and Steenbok Lux Finco 1 SARL and Steenbok Lux Finco 2 SARL, two newly incorporated entities within

the Europe Group. The new facilities have new terms and conditions in terms of the ﬁnance documents.

New facility

Facilities replaced

21/22 Term loan facility

23 Term loan facility

2021 and 2022 convertible bonds

2023 convertible bonds

SEAG debt

First lien term loan facility

Second lien term loan facility

SEAG debt

Classiﬁcation of debt

As part of the implementation steps of the Litigation Settlement Proposal, the Steinhoff N.V. Group delivered the Interim Debt

Extension request to its lenders on 6 August 2021 requesting consent to extend the maturity date of the Steinhoff N.V. Group’s

outstanding debt from December 2021 to December 2022 (“Interim Debt Extension”).

On 11 August 2021, consent for the Interim Debt Extension was granted by its lenders. Consequently, the maturity date of the

Steinhoff N.V. CPU and facility agreements entered into pursuant to the CVA, was extended from 31 December 2021 to

31 December 2022. As a result, in accordance with IAS 1 – Presentation of Financial Statements, the debt is classiﬁed as non-

current as at 30 September 2021. Refer to note 17. A further term extension will be granted initially to 30 June 2023 on the

Settlement Effective Date of the global Litigation Settlement Proposal and such maturity date is capable of further extension to 31

December 2023 with further simple majority lender approval.

154

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

17. BORROWINGS (CONTINUED)

17.4 Impact of implementation of CVAs (continued)

Corporate and treasury services

30 September 30 September

2021 2020

Interest Carrying value Carrying value

Facility

Tranche

Maturity date

rate %

€m

21/22 Term loan facility

Super senior

31 December 2022

10%

2 135

1 934

23 Term loan facility

Super senior

10%

1 462

1 130

1 324

1 998

First lien term loan facility

7.875%

Second lien term loan

facility

31 December 2022

10.75%

4 521

191

4 066

172

9 534

–

9 620

–

Portion payable within 12 months included in current liabilities

Total non-current borrowings

9 534

9 620

No part of the term loan facilities which is repaid may be drawn down again.

Under the term loan facilities, Newco 3 and SFHG have an obligation to provide the lenders with certain monthly, quarterly and

annual ﬁnancial information.

Steinhoff N.V. and SIHPL entered into CPUs with the lenders whereby each of Steinhoff N.V. and SIHPL undertook to repay up to

the following amounts for each facility in the event of a default:

Steinhoff N.V.

€m

SIHPL

€m

Subsidiary

Facility

Agreement date

Steenbok Lux Finco 1 SARL

21/22 Term loan facility

23 Term loan facility

First lien term loan facility

Second lien term loan facility

Term loan facility

13 August 2019

5 September 2018

1 723

1 180

1 913

3 591

775

1 581

–

Steenbok Lux Finco 2 SARL

Hemisphere

Trevo instituted motion proceedings in the Western Cape High Court on 15 February 2021, seeking a declaratory order that the

Guarantee issued by Steinhoff Investments in 2014 be declared void in terms of Section 45 of the South African Companies Act,

71 of 2008. On 1 July 2021, Judge Bozelak handed down his decision in which he conﬁrmed the validity of the 2014 guarantee,

but in relation to the SIHPL CPU found, inter alia, that the ﬁnancial assistance provisions of section 45 of the South African

Companies Act, 71 of 2008, had been breached, and held that the resolution of the SIHPL board authorising entry into the SIHPL

CPU and the SIHPL CPU was void (the “Section 45 Judgement”).

On 12 July 2021, the ﬁnancial creditors of SIHPL ﬁled their Notice of Application for leave to appeal to the Supreme Court of

Appeal against the orders and those parts of the judgment of Judge Bozelak in support thereof, followed by SIHPL on

19 July 2021. On 16 August 2021 Judge Bozelak handed down his judgment in which he granted leave to appeal to SIHPL and the

ﬁnancial creditors. The ﬁnancial creditor's notice of appeal was served on 9 September 2021. SIHPL's notice of appeal was served

on 14 September 2021.

The appealing ﬁnancial creditors notiﬁed SIHPL that, if their appeal of the Section 45 Judgement proved to be unsuccessful, in

their opinion they would be entitled to the beneﬁt of the continuing debt claims or restitutionary claims against SIHPL which fall

outside the scope of the Section 45 Judgement. The ﬁnancial creditors contend that SIHPL will owe an English law debt to them

either under the original guarantees or on similar terms by way of restitution for unjust enrichment suffered as a result of the

loss of the beneﬁt of those guarantees in circumstances where both parties had intended that SIHPL would remain liable to the

ﬁnancial creditors under the SIHPL CPU following the 2019 ﬁnancial restructuring.

On 15 December 2021, Steinhoff N.V. announced that Trevo had agreed to a settlement in which Trevo conﬁrmed its support for

the S155 Scheme. It is viewed as an adjusting event for the 2021 Reporting Period and ZAR500 million (€28 million) was raised as

part of the Litigation Settlement Proposal provision, representing the best estimate for settlement of the claim.

On and from Settlement Effective Date, Trevo will withdraw all litigation between them and Steinhoff N.V. Group in full and ﬁnal

settlement of claims against the Steinhoff N.V. Group, directors and ofﬁcers and auditors.

Refer to note 23.4 for further detail.

155

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

17. BORROWINGS (CONTINUED)

17.5 Operating companies debt

Hemisphere

30 September 30 September

2021 2020

rate Carrying value Carrying value

Interest

Maturity date

31 December 2022

€m

Term loan facility

10%

178

–

218

(218)

–

Portion payable within 12 months included in current liabilities

Total non-current borrowings

178

Under the term loan facility, Hemisphere has an obligation to provide the lenders with certain monthly, quarterly and annual

ﬁnancial information.

On 15 October 2019, Hemisphere and its lenders entered into an amendment and restatement deed which amended the term loan

agreement and intercreditor agreement in order to incorporate guarantee obligations (between Hemisphere and its subsidiaries in

respect of the debt under the term loan facility agreement) and conﬁrm the remaining security to be provided to the lenders.

On 11 August 2021, consent for the Interim Debt Extension was granted by its lenders. Consequently, the maturity date of the

Hemisphere term loan facility was extended from 31 December 2021 to 31 December 2022. However, on Settlement Effective

Date, the Hemisphere lenders are entitled to an early payment of €66 million (payable in cash) by Steinhoff N.V. under the

Hemisphere CPU. From Settlement Effective Date following accession by the Hemisphere Agent to the Umbrella Agreement, the

maturity date under the Hemisphere CPU and the Term Loan Facility will be extended to

30 June 2023 with the possible extension to 31 December 2023 with the further consent of the lenders.

Pepco Group

30 September 30 September

Interest

2021

2020

Facility

€m

rate Carrying value Carrying value

Maturity date

February 2022

21 May 2024

21 May 2026

5.85%

1.70%

€m

–

€m

482

–

Term loan facility

Term loan facility 1

Term loan facility 2

475

300

250

190

300

248

–

Revolving Credit Facility

Mortgage loan

–

31 December 2025 WIBOR 1M

Instalment sale agreements

Capitalised ﬁnance lease and instalment sale

agreements

–

Various

619

(73)

546

494

Portion payable within 12 months included in current liabilities

(5)

489

Total non-current borrowings

No part of the term loan facility which is repaid may be drawn down again.

During the Reporting Period, Pepco Group renegotiated new Term Loans with credit institutions. Costs incurred in obtaining the

loans from credit institutions have been capitalised and are allocated to the Consolidated Statement of Proﬁt or Loss over the life

of the debt facility. At 30 September 2021, borrowings are stated net of unamortised issue costs of €7.4 million.

In March 2020 a rolling credit facility of €65 million was negotiated of which €53 million has been drawn down as a contingency

for the effect of the COVID-19 pandemic.

As a condition of the CVAs, Pepco Group is bound to additional monthly and quarterly information undertakings.

This term loan facility contains ﬁnancial covenants which are typical for this type of facility and include minimum EBITDA and

minimum cash measured at quarterly intervals. The Pepco Group was compliant with these covenants for the Reporting Period.

The loans from credit institutions are secured over amounts owed by the Group to related party Steinhoff entities, share pledges

over the shares of material overseas subsidiaries and debentures over other assets of the Group.

Based on discussions with lenders and advisors, and taking into account the Pepco Group’s expected leverage ratios, the

directors of the Pepco Group believe that they will be able to reﬁnance their debt on acceptable terms before the repayment of the

debt becomes due.

156

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

17. BORROWINGS (CONTINUED)

17.5 Operating companies debt (continued)

Conforama

30 September 30 September

2021 2020

Carrying value Carrying value

€m

Senior secured bonds

–

188

(188)

–

Portion payable within 12 months included in current liabilities

Total non-current borrowings

On 15 April 2019, Conforama issued senior secured bonds to the amount of €205 million (“Tranche A Bonds”) of which the

proceeds were used to repay certain intercompany loans and tax liabilities, to ﬁnance the turnaround plan and to ﬁnance working

capital needs of the Conforama group.

As additional consideration for the senior secured bonds, the creditors were granted warrants (“Warrants”) that effectively granted

them 49.9% of the economic rights to the future returns of Conforama (i.e. 49.9% right to returns arising from distributions, exit

and/or a liquidation event) through the right to ownership of Class 2 Preference Shares in the future.

On 8 July 2020 the Group announced the disposal of Conforama France and 18 properties to Mobilux for €70 million. Following

the sale of Conforama France it was no longer required to issue the Tranche B Bonds. Fees were due by Conforama Holding

SA in connection with these bonds including commitment fee as compensation for Bondholders’ commitment to make

available Tranche B Bonds between April 2019 and 28 February 2020, and extension fee and backstop fee as compensation for

Bondholders’ acceptance to extend the availability period of Tranche B Bonds until 30 June 2020 totalling approximately

€11.5 million.

In a separate and unrelated transaction on 13 July 2020, the Group concluded an agreement to dispose of Conforama Suisse

SA to a Swiss group of private investors for an agreed price of eight times EBITDA. These proceeds were used to fully repay the

Tikehau loans and part of the senior secured bonds.

During the 2021 Reporting Period, proceeds from the sale of properties and the sale of the Balkans business on

22 September 2021 were used to repay the senior secured bonds in full.

Greenlit Brands

30 September 30 September

2021

2020

Carrying value Carrying value

€m

Greenlit Brands – Household Goods

Term loans and facilities

–

Portion payable within 12 months included in current liabilities

(24)

–

Total non-current borrowings

Greenlit Brands has fully repaid its external debt during December 2020.

157

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

17. BORROWINGS (CONTINUED)

17.5 Operating companies debt (continued)

Pepkor Holdings

30 September 30 September

2021 2020

Facility

Interest rate Carrying value Carrying value

€m

Maturity date

€m

Term loans and facilities

Term loan B

–

18 May 2022 Three-month JIBAR

plus 215bps

18 May 2023 Three-month JIBAR

plus 225bps

–

101

127

–

Term loan C¹

Term loan D

142

30 September 2023 Three-month JIBAR

plus 205bps

142

–

Term loan E¹

30 June 2024 Three-month JIBAR

plus 159bps

30 June 2025 Three-month JIBAR

plus 168bps

30 June 2026 Three-month JIBAR

plus 174bps

Term loan F¹

–

Term loan G¹

–

Revolving credit facility

Bridge facility

30 September 2023 Three-month JIBAR

plus 210bps

30 September 2023 Three-month JIBAR

plus 205 bps

127

–

Floating rate notes – PEP01

Floating rate notes – PEP02

Floating rate notes – PEP03

Floating rate notes – PEP04

10 March 2023 Three-month JIBAR

plus 159 bps

10 March 2025 Three-month JIBAR

plus 174 bps

–

5 May 2024 Three-month JIBAR

plus 152 bps

5 May 2026 Three-month JIBAR

plus 170 bps

–

Bank overdrafts and short-term

facilities

–

114

–

Various

–

101

Preference shares

Class A cumulative redeemable

preference shares

23 May 2022

74% of South

African prime rate

Instalment sale agreements

Capitalised ﬁnance lease and

instalment sale agreements

Various

Total borrowings

Portion payable within 12 months included in current liabilities

Total non-current borrowings

636

(25)

611

656

(12)

644

Term loans

¹ The Pepkor Holdings Group settled Term loan C which was due in the 2023 ﬁnancial year during June 2021, and was replaced by Term loans E, F and

Class A cumulative redeemable preference shares

During the Reporting Period, the Pepkor Holdings Group settled its debt relating to the Class A Cumulative redeemable preference

shares to the value of ZAR2 billion (€113 million).

Floating rate notes

On 5 May 2021, notes to the value of ZAR2.200 billion (10 March 2020: ZAR1.006 billion) were issued under the Domestic

Medium-Term Note (“DMTN”) programme, which is a further source of funding to the Pepkor Holdings Group. The DMTN is

guaranteed by Pepkor Trading Proprietary Limited.

Interest-bearing borrowings bear interest at variable, market-determined rates. These borrowings are measured at amortised cost,

which approximates their fair value. Interest on external borrowings are payable quarterly in arrears.

158

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

17. BORROWINGS (CONTINUED)

17.5 Operating companies debt (continued)

Pepkor Holdings (continued)

The funding facilities is subject to the following loan covenants:

30 September

2021

Covenant

Actual

Net debt: EBITDA cover

Interest cover

<3.00

>3.50

0.58

13.47

17.6 Lancaster liability

The reconstituted board of Steinhoff Africa (appointed on 2 February 2018 and 8 July 2019, respectively) mandated an

investigation into the process followed with regard to the issue of the preference shares.

On 28 October 2019, the Steinhoff Africa board concluded that the issue of the preference shares was neither authorised nor

permitted in terms of its Memorandum of Incorporation and was therefore void.

Although the cancellation of the Steinhoff Africa preference shares occurred during the 2020 Reporting Period, management

believes that the conditions causing them to be void already existed at the date of ‘issue’ and as a result, the issued preference

share capital as well as any accrued dividends were retrospectively adjusted affecting the opening balances in the 2020 Reporting

Period.

Notwithstanding management’s view that the preference shares are void, Steinhoff Africa received ZAR4 billion at the time, for

which a liability has been raised equal to the preference share investments disclosed in note 12.1 reflecting management’s view

that they are directly related.

The increase in the liability is as a result of additional accrued ﬁnance costs on the preference share liability.

Arbitration proceedings were commenced by Lancaster 102 against Thibault, to which Steinhoff Africa is not a party (the

“Arbitration Proceedings”). In response, on 28 April 2021, Thibault applied to the High Court for a declaratory order that (i) the

Arbitration be referred to and determined by the High Court; and (ii) that Steinhoff Africa be joined as a party (the “Override

Application”). Steinhoff Africa initiated separate proceedings seeking to declare all of the agreements in the loop transaction

invalid, alternatively void (the “Invalidity Application”). The Override Application was heard on 8 September 2021 and the Invalidity

Application was enrolled for hearing on 11 November 2021.

Shortly after the hearing of the Invalidity Application, all of the parties in all of the Lancaster-related matters (including the

Override Application, the Invalidity Application and the Arbitration Proceedings) agreed to suspend the process in all of the

Lancaster-related litigation, save for the handing down of pending Judgments by the Court (the “Suspension Agreement”). The

Invalidity Application was accordingly removed from the roll of 11 November 2021. On 1 December 2021, the Court handed down

its ruling in the Override Application, dismissing the application with costs. Thibault intended to appeal the Court’s Judgment in

respect of the Override Application, however such appeal is not necessary at this stage in light of the Suspension Agreement.

17.7 Fair value

The majority of the debt classiﬁed as non-current was renegotiated during the 2019 and 2020 Reporting Periods, taking into

account current market conditions and are therefore expected to approximate fair value.

17.8 Risk exposures

Details of the Group’s exposure to risks arising from borrowings are set out in note 21.

159

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

18. LEASE LIABILITIES

ACCOUNTING POLICY

Refer to note 10 for the accounting policy on determination of whether a lease should be recognised in terms of IFRS 16.

Lease liabilities

Initial and subsequent measurement

Lease liabilities are initially measured at the present value of future lease payments discounted using the discount rate implicit in

the lease or, where this has not been stipulated, the Group’s incremental borrowing rate. The lease payments include ﬁxed payments

less any lease incentives receivable, variable lease payments that are based on an index or rate, and amounts expected to be paid

under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be

exercised by the Group and payments of penalties for terminating a lease, if the Group exercises the option to terminate. Variable lease

payments, that do not depend on an index or a rate, are recognised as an expense in the period in which the event or condition that

triggers the payment occurs.

The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar

security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.

Lease liabilities are subsequently measured at amortised cost using the effective interest method and reduced by future lease

payments net of interest charged. It is remeasured, with a corresponding adjustment to right-of-use assets, when there is a change

in future lease payments resulting from a rent review, change in relevant index or rate, such as inflation, or change in the Group’s

assessment of whether it is reasonably certain to exercise a renewal or termination option and thus a change in lease term. The lease

liability is remeasured by discounting the revised lease payments using a revised discount rate when there is a change in the lease

terms. The remeasurement results in a corresponding adjustment to the carrying amount of right-of-use assets, with the difference

recorded in proﬁt or loss if the carrying amount of right-of-use assets has been reduced to zero.

18.1 Reconciliation of lease liability

Restated¹

30 September 30 September

2021

€m

2020

€m

Opening Balance

Additions

2 079

647

2 895

453

Interest cost

121

133

Lease liability repayments

Remeasurement on modiﬁcation of leases

Acquisition of businesses

(546)

(74)

–

(561)

(61)

Transfer to liabilities classiﬁed as held-for-sale

Eliminated on disposal of subsidiaries

Exchange differences on consolidation of foreign subsidiaries

Closing balance

Less: repayable in the next 12 months included in short-term liabilities

Non-current liabilities: Lease liability

(180)

–

124

2 171

(443)

1 728

(209)

(392)

(180)

2 079

(422)

1 657

18.2 Analysis of repayments

Restated¹

30 September 30 September

2021

€m

2020

€m

Repayable within the next year and thereafter – current and non-current split

Next year

443

1 654

437

422

1 636

466

Within two to ﬁve years

Thereafter

2 534

2 524

18.3 The Group is exposed to the following potential future undiscounted cash outflows which are not included in the

measurement of lease liabilities:

Restated¹

30 September 30 September

2021

€m

2020

€m

Expense relating to variable lease payments not included in the measurement of lease

liabilities

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

160

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

18. LEASE LIABILITIES (CONTINUED)

18.4 Short-term and low-value leases

Restated¹

30 September 30 September

2021

€m

2020

€m

Short-term or low-value leases not recognised as a liability and included in proﬁt and loss in

the current period

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

19. PAYABLES

19.1 Trade And Other Payables

Restated¹

30 September 30 September

2021

€m

2020

€m

Notes

Financial liabilities

Current trade and other payables

Trade payables

762

374

646

403

Accruals

Other payables and amounts due

Derivative ﬁnancial liabilities

19.1.3

284

276

21.1 & 19.1.1

1 459

1 336

Non-ﬁnancial liabilities

Non-current trade and other payables

Equalisation of operating lease payments

Current trade and other payables

Equalisation of operating lease payments

Deferred income

–

104

19.1.2

19.1.4

Value Added Tax payable

152

114

Total

Non-current trade and other payables

Current trade and other payables

1 611

1 613

1 450

1 452

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

Trade payables are unsecured and are usually paid within 30 to 90 days of recognition.

The carrying amounts of trade and other payables are considered to be the same as their fair values due to their short term

nature.

19.1.1 Derivatives

Refer to note 20 and 21 for details regarding the determination of their fair values and the types of derivatives,

respectively.

19.1.2 Deferred income

The majority of the deferred income relates to prepayments made by customers to secure their orders. Revenue is

recognised with a corresponding decrease in the liability when the goods are delivered to the customer.

19.1.3 Other payables and amounts due

The other payables and amounts due include payables raised by Greenlit Brands and payables raised by Pepco Group for the

settlements of employee related costs and stores.

19.1.4 Value Added Tax payable

The Value Added Tax payable relates mostly to the Pepco Group and Pepkor Holdings.

161

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

19. PAYABLES (CONTINUED)

19.1 Trade And Other Payables

19.1.5 Contractual maturities of trade and other payables

0 – 3

months

€m

4 – 12

months

€m

After

5 years

€m

Year 2

€m

Year 3 – 5

€m

Total

€m

At 30 September 2021

Trade and other payables

(ﬁnancial liabilities)

1 440

–

1 459

At 30 September 2020

Trade and other payables

(ﬁnancial liabilities)

1 240

–

1 336

19.2 Taxation payable

30 September 30 September

2021

€m

2020

€m

Taxation payable

312

295

Taxation payable

The taxation payable represents Trade tax, Corporate tax, Income tax and €160 million provided for in terms of IFRIC 23. The

taxation payable relates mainly to Pepkor Holdings and Steenbok Newco 10 SARL.

162

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

20. RECOGNISED FAIR VALUE MEASUREMENTS

This section explains the judgements and estimates made in determining the fair values of the ﬁnancial instruments that are recognised

and measured at fair value in the Consolidated Financial Statements. To provide an indication about the reliability of the inputs used in

determining fair value, the Group has classiﬁed its ﬁnancial instruments into the three levels prescribed under the applicable accounting

standards.

Level 1:

Level 2:

Level 3:

The fair value of ﬁnancial instruments traded in active markets (such as publicly traded derivatives, and listed equities and

available-for-sale securities) is based on quoted market prices at the end of the Reporting Period. The quoted market price

used for ﬁnancial assets held by the Group is a 30-day volume weighted average price. These instruments are included in

level 1.

The fair value of ﬁnancial instruments that are not traded in an active market (for example, over-the-counter derivatives) is

determined using valuation techniques which maximise the use of observable market data and relies as little as possible

on entity-speciﬁc estimates. If all signiﬁcant inputs required to fair value an instrument are observable, the instrument is

included in level 2.

If one or more of the signiﬁcant inputs is not based on observable market data, the instrument is included in level 3. This is

the case for unlisted equity securities.

20.1 Fair value hierarchy

Level 2

€m

Level 3

€m

Total

€m

Notes

30 September 2021

Assets measured at fair value

Financial assets

Trade and other receivables

Derivative – foreign currency forward contracts

Assets held-for-sale²

21.1

–

936

Liabilities measured at fair value

Financial liabilities

Trade and other payables

Derivative – foreign currency forward contracts

Liabilities held-for-sale²

21.1

(39)

–

(39)

(658)

30 September 2020¹

Assets measured at fair value

Financial assets

Trade and other receivables

Derivative – foreign currency forward contracts

Assets held-for-sale²

21.1

–

986

Financial liabilities

Trade and other payables

Derivative – foreign currency forward contracts

Liabilities held-for-sale²

21.1

(11)

–

(11)

(491)

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

²Assets and liabilities classiﬁed as held-for-sale during the Reporting Period was measured at the lower of its carrying amount and fair value less

costs of disposal at the time of the reclassiﬁcation, resulting in impairments recognised through proﬁt and loss as disclosed above. The fair value,

of the disposal groups that were impaired, was determined using signed sales agreements or signed offers. Refer to note 1 for information about the

sales agreements and the counterparties to these agreements.

There were no Level 1 ﬁnancial instruments identiﬁed during either the 2021 Reporting Period or the 2020 Reporting Period.

163

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

21. FINANCIAL RISK MANAGEMENT

During both periods under review, the Group had various committees and departments that were tasked with the ﬁnancial risk

management of the Group. In most instances this was successfully managed at the various operating company levels.

This note explains the Group’s exposure to ﬁnancial risks and how these risks could affect the Group’s future ﬁnancial performance where

this remains relevant as at the end of each reporting period. The processes outlined in this note are the risk management strategies that

were in place during the Reporting Period regardless of their effectiveness in addressing the risks faced by the Group. Current proﬁt and

loss information has been included where relevant to add further context.

Risk

Exposure arising from

Measurement

Management

Market risk – foreign exchange

•

Future commercial

transactions

Cash flow forecasting

Forward foreign exchange

and foreign currency option

contracts

Sensitivity analysis

•

Recognised ﬁnancial

assets and liabilities

not denominated in the

operating company’s

functional currency

Market risk – interest rate

Market risk – security prices

Borrowings at variable rates

Sensitivity analysis

Interest rate swaps

Investments in equity

securities

Portfolio diversiﬁcation

Credit risk

Cash and cash equivalents,

trade receivables and

instalment sales, derivative

ﬁnancial instruments, loans

receivable at amortised cost

Aging analysis

Credit rating

Diversiﬁcation of bank

deposits

Credit score card

implementation and

monitoring

Liquidity risk

Borrowings and other liabilities

Rolling cash flow forecasts

Availability of committed credit

lines and borrowing facilities

The Management Board was responsible for implementing the risk management strategy to ensure that an appropriate risk management

framework was operating effectively across the Group. The Supervisory Board and the Audit and Risk Committee were provided with a

consolidated view of the risk proﬁle of the Group, and any major exposures and relevant mitigating actions identiﬁed.

The system of risk management was designed so that the different business units are able to tailor and adapt their risk management

processes to suit their speciﬁc circumstances.

21.1 Derivatives

30 September 30 September

2021

€m

2020

€m

The Group used forward exchange contracts to hedge its foreign currency risk against the

functional currency of its various global operations. Most of the forward exchange contracts

had maturities of less than one year after the Reporting Date. The Group did not enter into

derivative contracts for speculative purposes. The fair values of such contracts at the

reporting dates were:

Current assets

Trade and other receivables

Foreign exchange forward contracts

Total current derivative ﬁnancial instrument assets

Current liabilities

Trade and other payables

Foreign exchange forward contracts

Total current derivative ﬁnancial instrument liabilities

164

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

21.1 Derivatives (continued)

21.2.1 Foreign currency risk

The Group’s manufacturing and sourcing operating costs and expenses are principally incurred in Chinese yuan,

Hungarian forint, Polish zloty, South African rand, UK pounds and US dollars. Its revenue is principally in Australian dollars,

euros, Polish zloty, South African rand, Swiss franc, UK pounds and US dollars. The Group’s business model is based on

the strategy of locating production in, and sourcing materials from, emerging low-cost economies and supplying ﬁnished

products into developed economies.

It is Group policy to hedge exposure to cash and future contracted transactions in foreign currencies for a range of

forward periods, but not to hedge exposure for the translation of reported proﬁts or reported assets and liabilities.

Differences resulting from the translation of subsidiary ﬁnancial statements into the Group’s presentation currency are not

taken into consideration.

The carrying amounts of the Group’s material foreign currency denominated monetary assets and liabilities (excluding

intragroup loan balances) that will have an impact on proﬁt or loss when exchange rates change, at Reporting Date, are as

follows:

Euros

€m

US dollars

€m

30 September 2021

Trade and other receivables (ﬁnancial assets excluding ﬁnancial derivatives)

Cash and cash equivalents

532

–

Current borrowings

(66)

(18)

Trade and other payables (ﬁnancial liabilities excluding ﬁnancial derivatives)

(11)

Non-current borrowings¹

Pre-derivative position

Derivative effect

(545)

(578)

(19)

–

522

Open position

(597)

550

30 September 2020

Trade and other receivables (ﬁnancial assets excluding ﬁnancial derivatives)

Cash and cash equivalents

–

Current borrowings

(25)

(27)

Trade and other payables (ﬁnancial liabilities excluding ﬁnancial derivatives)

(5)

Non-current borrowings¹

Pre-derivative position

Derivative effect

(486)

(428)

–

(8)

Open position

(428)

(3)

¹The euro denominated non-current borrowings relate to the Pepco Group facility which was reﬁnanced in December 2018 with a new term

loan facility, refer to note 17.5 Pepco Group’s functional currency is Poland zloty.

The following signiﬁcant exchange rates were applied during the Reporting Period and were used in calculating

sensitivities:

Reporting

date spot

rate

Reporting

date spot

rate

Forecast

rate¹

Forecast

rate¹

30 September 30 September 30 September 30 September

2022

2021

2020

Euro

US dollar

Poland zloty

1.2000

4.5000

1.1200

4.4400

1.1579

4.6197

1.1708

4.5462

¹The forecast rates represent a weighting of foreign currency rates forecasted by the major banks that the Group transacts with regularly.

These rates are not necessarily management’s expectations of currency movements.

165

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

21.1 Derivatives (continued)

21.2.1 Foreign currency risk (continued)

Sensitivity analysis

The table below indicates the Group’s sensitivity at year-end to the movements in the major currencies that the Group

is exposed to on its ﬁnancial instruments. The percentages given below represent a weighting of foreign currency rates

forecasted by the major banks that the Group transacts with regularly. This analysis assumes that all other variables, in

particular interest rates, remain constant. The analysis was performed on the same basis for 2020.

The impact on the reported numbers, using the forecast rates as opposed to the Reporting Date spot rates, is set out

below.

30 September 30 September

2021

€m

2020

€m

Through proﬁt/(loss)

US dollar weakening by 3.6% (2020: strengthening by 4.3%) to the euro

(20)

–

If the foreign currencies were to weaken/strengthen against the euro, by the same percentages as set out in the table

above, it would have an equal, but opposite, effect on proﬁt or loss.

Changes in the fair value of forward exchange contracts of economically hedged monetary assets and liabilities in foreign

currencies and for which no hedge accounting is applied, are recognised in proﬁt or loss.

21.2.2 Cash flow and fair value interest rate risk

Given the Group’s global footprint and its strategy of low-cost manufacturing and sourcing in emerging markets and

sales in developed countries, the Group follows a policy of maintaining a balance between ﬁxed and variable rate loans

to reflect, as accurately as possible, different interest rate environments, the stability of the relevant currencies, the effect

which the relevant interest rates have on Group operations and consumer spending within these environments. These

variables are taken into account in structuring the Group’s borrowings to achieve a reasonable, competitive, market-

related cost of funding.

As part of the process of managing the Group’s borrowings mix, the interest rate characteristics of new borrowings and

the reﬁnancing of existing borrowings are positioned according to expected movements in interest rates. Interest rate

exposure is managed within limits agreed by the Management Board.

The interest and related terms of the Group’s borrowings are disclosed in note 17. As the majority of the Group’s

borrowings are at a ﬁxed interest rate the cash flow risk is limited. The Group’s borrowings are carried at amortised cost

and therefore there is no fair value risk.

166

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

21.2 Market Risk (continued)

21.2.2 Cash flow and fair value interest rate risk (continued)

As at the Reporting Date the interest rate proﬁle of the Group’s ﬁnancial instruments were:

Subject to interest rate movement

Variable

JIBAR

and SA

prime

€m

Variable

EURIBOR

€m

Variable

LIBOR

€m

Variable

other

€m

Fixed Non-interest

rate

€m

bearing

€m

Total

€m

30 September 2021

Non-current ﬁnancial

assets

–

301

–

382

Current ﬁnancial assets

Non-current ﬁnancial

liabilities

1 702

161

782

890

3 657

–

(610)

–

(10 258)

(1)

(10 869)

Current ﬁnancial liabilities

–

(507)

886

–

(23)

138

(69)

(1 220)

(321)

(1 819)

(8 649)

(9 474)

30 September 2020¹

Non-current ﬁnancial

assets

–

255

–

168

275

429

Current ﬁnancial assets

Non-current ﬁnancial

liabilities

1 012

172

921

2 450

(482)

(635)

–

(3)

(9 624)

–

(10 744)

Current ﬁnancial liabilities

–

(426)

206

(25)

(9)

(231)

(1 343)

(416)

(2 034)

(9 899)

(480)

160

(9 412)

From continuing operations

Interest

income

€m

Interest

expense

€m

30 September 2021

Financial assets at amortised cost

–

1 190

Financial liabilities not at fair value through proﬁt or loss

30 September 2020¹

Financial assets at amortised cost

Financial liabilities not at fair value through proﬁt or loss

–

1 195

Amounts recognised in proﬁt or loss and other comprehensive income

No material gains/(losses) were recognised in proﬁt or loss and other comprehensive income in relation to interest rate

swaps.

Sensitivity analysis

The Group is sensitive to movements in the EURIBOR, JIBAR, SA prime rate and LIBOR, which are the primary interest

rates to which the Group is exposed.

The sensitivities calculated below are based on an increase of 100 basis points for each interest category.

30 September 30 September

2021

€m

2020

€m

Through proﬁt/(loss)

EURIBOR – 100 basis point increase

JIBAR and SA prime rate – 100 basis point increase

LIBOR – 100 basis point increase

–

(5)

–

A 100 basis point decrease in the above rates would have had an equal, but opposite, effect on proﬁt or loss.

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

167

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

21.3 Credit risk

The Group’s concentration of credit risk is assessed as low as its underlying investments are predominantly cash retailers.

Potential concentration of credit risk consists principally of short-term cash and cash equivalent investments, trade and other

receivables, instalment sale receivables, credit sales through store cards, loans to customers as well as related-party receivables

and ﬁnancial guarantees. The Group deposits short-term cash surpluses with major banks of quality credit standing. Instalment

sale receivables, credit sales through store cards and loans to customers comprise a large and widespread customer base and

Group companies perform ongoing credit evaluations on the ﬁnancial condition of their customers. At 30 September 2021, the

Group did not consider there to be any signiﬁcant concentration of credit risk that had not been adequately provided for. The

amounts presented in the statement of ﬁnancial position are net of provisions for expected credit losses, estimated by the Group

companies’ management based on past events, current conditions and supportable forecasts and economic conditions.

The carrying amounts of ﬁnancial assets represent the maximum credit exposure.

The maximum exposure to credit risk at the Reporting Date without taking account of the value of any collateral obtained was:

Restated¹

30 September 30 September

2021

€m

2020

€m

Notes

Non-current ﬁnancial assets

Trade and other receivables²

Other ﬁnancial assets

13.1

373

425

Current ﬁnancial assets

Trade and other receivables²

Other ﬁnancial assets

13.1

504

435

–

Cash and cash equivalents

3 151

4 039

2 015

2 879

Instalment sale and loan receivables²

13.1

288

234

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

²Included in the trade and other receivables balance are instalment sale and loan receivables. These have been analysed separately, due to the

different credit risk relating to these books.

21.3.1 Credit risk modelling applied to ﬁnancial assets at amortised cost

The Group’s ﬁnancial assets measured at amortised cost are subject to impairment under the ECL model. The inputs,

assumptions and estimation techniques used in measuring ECL are explained below.

Measurement of ECL in terms of the general model for impairment

ECLs are measured on either a 12-month or lifetime basis depending on whether a signiﬁcant increase in credit risk

has occurred since initial recognition or whether an asset is considered to be credit-impaired. ECLs are the discounted

value of the Probability of Default (“PD”) and Exposure at Default (“EAD”), of which PD represents the likelihood of a

counterparty defaulting on its ﬁnancial obligation, either over 12 months (“12-month PD”) or over the remaining lifetime

(“lifetime PD”) of the obligation. EAD is based on the amounts the Group expects to be owed at the time of default over

the next 12 months (“12-month EAD”) or over the remaining lifetime (“lifetime EAD”). The Group calculates Loss Given

Default (“LGD”) as discounted EAD.

These three components are multiplied together, which effectively calculates the ECL. The ECL is then discounted back to

the reporting date, using the original effective interest rate, and aggregated. ECL is a probability weighted outcome.

The 12-month and lifetime EADs are determined based on the probability of default, which varies by type of ﬁnancial

asset.

The Group considers the probability of default on initial recognition of its ﬁnancial asset measured at amortised cost and

whether there has been a Signiﬁcant Increase in Risk (“SICR”) on an ongoing basis throughout each reporting period.

To assess whether there is a SICR, the Group compares the risk of a default occurring on these asset as at the reporting

date with the risk of default as at the date of initial recognition. The criteria used to identify an SICR are monitored and

reviewed periodically for appropriateness by the credit risk team (refer to key judgements and estimates for the Group’s

key judgement exercised in assessing the SICR). Receivables with a signiﬁcant ﬁnancing component are grouped into

stage 1, 2 and 3 as described below:

Stage 1: On recognition of ﬁnancial assets, the Group recognises a loss allowance based on 12-month ECLs. For

disclosure purposes the stage 1 ECLs are split between performing and in arrears, where performing represents up to

date debt outstanding and its corresponding ECL provision and in arrears represents debt outstanding where debt is

outstanding for more than 30 days and its corresponding ECL provision.

Stage 2: When there is an indication that the ﬁnancial assets have an SICR since origination, the Group records a loss

allowance for the lifetime ECLs.

168

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

21.3 Credit risk (continued)

21.3.1 Credit risk modelling applied to ﬁnancial assets at amortised cost (continued)

Stage 3: Financial assets are considered to be credit-impaired. Financial assets are considered to be credit-impaired

when one of more events that have an unfavourable impact on its estimated future cash flows have occurred. The Group

records a loss allowance for the lifetime ECLs.

Regardless of the analysis above, a signiﬁcant increase in credit risk is presumed if a debtor is more than 30 days past

due in making a contractual payment.

Impairment of ﬁnancial assets judgements

Signiﬁcant increases in credit risk

In terms of IFRS 9: Financial Instruments, all loans and other receivables are assessed at each reporting date to determine

whether there has been a SICR. In cases where SICR has occurred, an impairment equal to the lifetime ECL is recognised.

If, at reporting date, the credit risk has not signiﬁcantly increased, the Group recognises a 12-month ECL. The Group

identiﬁes SICR on clients that are up to date on their loans and other receivables, but who have been subject to SICR

events of which the most signiﬁcant are detailed below:

Credit sales through store

cards

Event trigger

Loans to customers

Instalment sale agreements

Change in customer

behaviour

Triggers includes a

Application and behavioural

scorecards are segmented

into ratings. For each

application rating, an

appropriate notch

deterioration in behavioural

scorecard will result in SICR.

In the event no application

rating is available, the loan

will be classiﬁed as SICR.

Not deemed to be SICR

event

customer entering into debt

review or rescheduling an

existing loan or a customer

that is in arrears as deﬁned

below.

Customer defaulting

on repayments

A customer’s loan is in

default when 90% of an

instalment is not paid or

the account is 30 days in

arrears.

A customer is in default

when their account is 30

days in arrears. All debt

counselling accounts that

are less than 90 days in

arrears will be classiﬁed as

SICR.

A customer is in default

when their account is

30 days in arrears.

Loan write-off policy

Five consecutive

Nine consecutive

Eight instalments in arrears

with no payment in the

previous three months.

instalments in arrears

and three consecutive

instalments in arrears on

rescheduled accounts.

instalments in arrears with

no qualifying payments

made in the last 90 days.

169

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

21.3 Credit risk (continued)

21.3.1 Credit risk modelling applied to ﬁnancial assets at amortised cost (continued)

Impairment of ﬁnancial assets estimates

Forward-looking information

The Group further considers available, reasonable and supportive forwarding-looking information without undue cost

or effort and for which key judgements and estimates are applied. The following forward-looking information was

incorporated in the determination of ECLs:

It is one of the fundamental principles of IFRS 9 that the ECL impairment provision that the Group holds against potential

future losses takes into account changes in the economic environment in the future.

In order to quantify the effects of changes to the economic environment, the Group utilises the Bureau of Economic

Research’s (BER) macroeconomic outlook for the country over a planning horizon of ﬁve years. Three economic scenarios

(negative, baseline and positive scenario) are taken into account when calculating future expected credit losses. The

probability of each scenario is determined by management estimation.

The relevance of the Group’s loan and other receivables is proven by the following linear relationship between the change

in the following basket of macroeconomic variables for the prior year:

Credit sales through store

cards

Loans to customers

Instalment sale agreements

Electricity price index

SARB repo rate

Macroeconomic

variables

No signiﬁcant variables

identiﬁed

No signiﬁcant variables

identiﬁed

Real disposable wages

Household debt vs

disposable income

Gross domestic expenditure

Unemployment rate

House price index

Household debt service cost

ratio

Forward-looking information of the scenarios considered in determining the Group’s forward-looking assumptions for the

purposes of its ECL calculation has been applied to each type of credit granted by the Group. Noting the wide range of

possible scenarios and macroeconomic outcomes and the relative uncertainty of the social and economic consequences

of COVID-19, the forward-looking scenarios analysed and applied represent reasonable and supportable forward-looking

views as at the Reporting Date. The Group further raised additional provisions via post-model adjustments (COVID-19

overlays).

170

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

21.3 Credit risk (continued)

21.3 Credit risk modelling applied to ﬁnancial assets at amortised cost (continued)

Impairment of ﬁnancial assets estimates (continued)

COVID-19 overlays

During the 2021 and 2020 Reporting Periods, the Group applied additional COVID-19 overlays in order to derive the ECLs.

The COVID-19 overlays assumptions for each major type of credit granted by the Group were as follows:

Credit sales through store

cards

Loans to customers

Instalment sale agreement

Macroeconomic

variables

Bad debts written off show

improvement from the

beginning of the current

ﬁnancial year against

Economic data, as obtained

from the BER, was used

as forward-looking factors

in calculating the ECL

The current model predicts

an improvement in ECLs

relative to the prior year

due to a tightening in

historic levels due to

provision. These factors

include various data

credit granting criteria and

increasing yields from

collections. Given the

restricted credit granting

between November 2019

and October 2020. Since

May 2021, the Company

has been on boarding in

line with pre-COVID-19

risk appetite. The credit

risk of these populations

recently on boarded (in the

last six months) will not be

accurately reflected in the

base model coverage ratios.

An additional amount of

€1.1 million was therefore

included in the ECL.

points (i.e. real disposable

wages, household debt

versus disposable income,

unemployment rate, etc.)

which inherently includes

the impact of COVID-19 on

the economy.

signiﬁcant instability in the

economy (COVID-19, unrest,

continued impact of load

shedding, rising cost of

living, etc.), management

has applied prudent

overlays using a weighted

approach of four scenarios

to calculate the ﬁnal ECL

allowance. The overlays

indicates the level of

uncertainty that exists in the

economic environment.

Management has assigned a probability of 55% (2020: 59%) to the baseline scenario, 23% (2020: 21%) to the negative

scenario and 22% (2020: 20%) to the positive scenario for the 12-month forecast. The impact of incorporating forward-

looking information to ECL for instalment sale agreements granted by the Group is as follows:

Probability-weighted impact of all three scenarios

100% negative scenario

% change in ECL

Instalment sale agreements

0.11%

100% baseline scenario

% change in ECL

0.00%

100% positive scenario

% change in ECL

(0.82%)

171

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

21.3 Credit risk (continued)

21.3.1 Credit risk modelling applied to ﬁnancial assets at amortised cost (continued)

Impairment of ﬁnancial assets estimates (continued)

Event-driven management credit estimates

Certain events or risks arise from time to time that may not be incorporated into the statistical forward-looking model. In

such instances, the additional inclusions into the ECL are reviewed and approved by management.

These events, for which an amount was included in ECL, include the introduction of DebiCheck (debit order mandate

authentication by client to conﬁrm a debit order with the bank when entering into a contract with a service or credit

provider) from October 2019 and the draft new legislation relating to the Debt Relief Bill.

DebiCheck will have an impact on the collection of cash flows on loans and other receivables with customers, change

debit order dates or where changes in the rescheduled contractual cash flows are greater than 1.5 times the original debit

order. If the client fails to conﬁrm electronically the updated debit order, the Group could fail to collect the agreed upon

instalment from the client on the agreed upon loan date.

The Debt Relief Bill is not expected to have a material effect on ECLs as it does not entail a blanket amnesty of debt, but

rather a rigorous process to assess a customer’s ability to service unsecured debt.

Impact of the implementation of DebiCheck

Loans to customers

From 1 November 2021, 100% of the loans to customers will be collected

using the DebiCheck platform, as non-authenticated early debit orders (Naedo)

collections are no longer allowed from this date. For DebiCheck, early tracking is

limited to 10 days as at year-end. The Group is concerned on the impact this will

have on collections, since the majority of customers get paid early over the festive

season. Taking the above into account, the Group is of the view that a percentage

of customers will roll from Stage 1 to Stage 2 during this period, increasing the

ECL on these accounts. An amount of €1.1 million was therefore included in the

ECL to account for the above.

Instalment sale agreements

An additional provision was raised for the potential adverse effects of the ﬁnal

migration from Naedo to DebiCheck. The South African Reserve Bank’s second

Amended Directive 1 of 2017 will be put into effect where all authenticated early

debit orders (AEDO) and Naedo, will be sunset on 31 October 2021. There is a

relatively high risk of adverse effects which could cause a deterioration in the

quality of the loan book performance due to technical challenges in the current

collection systems.

Credit sales through store cards

No signiﬁcant impact

Default and credit-impaired assets

A default on a ﬁnancial asset is when the counterparty fails to make contractual payments within 90 days of when they

fall due.

Criteria used for credit-impaired accounts

Loans to customers

Debt review accounts and non-performing accounts. As a backstop for all other

customers, customers with three consecutive unpaid instalments.

Instalment sale agreements

Credit sales through store cards

Suspected fraud on a loan and loans exceeding maturity date. As a backstop for

all other customers, customers with three consecutive unpaid instalments.

Three consecutive unpaid instalments/90 days in arrears.

172

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

21.3 Credit risk (continued)

21.3.1 Credit risk modelling applied to ﬁnancial assets at amortised cost (continued

Default and credit-impaired assets (continued)

A credit-impaired account will cure when the customer does not meet the criteria for being a credit-impaired account. For

a customer to cure, a signiﬁcant improvement in the customer’s payment behaviour is required.

Curing occurs in the following instances

Loans to customers

Customers with rescheduled loans are deemed to be rehabilitated once they have

made contractual payments for 12 months post rescheduling and are up to date

with their amended contractual obligations. For all other customers to cure, the

customer is required to make 12 months of clean payments.

Instalment sale agreements

Customers where the facility is 90 days in arrears will cure after the customer has

settled arrears causing the 90 days arrears and have maintained less than 90 days

arrears for three consecutive months.

Credit sales through store cards

Customer accounts will cure when three consecutive instalments are paid.

Accounts in debt counselling will cure when the customer is deemed to no longer

be under debt counselling in terms of the National Credit Act.

Measurement of ECL in terms of the provision matrix

For short-term trade receivables, e.g. trade receivables without a signiﬁcant ﬁnancing component, the determination of

forward-looking economic scenarios may be less signiﬁcant given that over the credit risk exposure period a signiﬁcant

change in economic conditions may be unlikely, and historical loss rates might be an appropriate basis for the estimate

of expected future losses. The Group has elected to apply the provision matrix for trade receivables without a signiﬁcant

ﬁnancing component and measures the impairment allowance at an amount equal to lifetime ECL. Lifetime ECL is

assessed by applying the relevant loss rates to the trade receivable balance outstanding (i.e. a trade receivable age

analysis). Due to the diversity of the Group’s customer base, the Group used appropriate groupings if the historical credit

loss experience showed signiﬁcantly different loss patterns for different customer segments.

Write-off policy

Financial assets are written off when there is no reasonable expectation of recovery of the receivable or part thereof. The

write-off periods differ for each type of ﬁnancing the Group offers to their respective clients and are detailed in the key

judgements and estimates sections above. Where these ﬁnancial assets have been written off, the Group continues to

engage in enforcement activity to attempt to recover the receivable due. Subsequent recoveries made are recognised in

proﬁt or loss. Write-offs are included in the “ECL on debtors” line item in the statement of proﬁt or loss.

ECLs for the different ﬁnancial assets at amortised cost within the Group

Other ﬁnancial assets

Other ﬁnancial assets consist of unlisted bonds, unlisted preference shares and interest-bearing and non-interest-bearing

loans receivable (refer note 12). The ECL is measured using the general model based on 12-month ECLs as there was

no signiﬁcant increase in credit risk from initial recognition of these other ﬁnancial assets. There has been no default in

payments based on historical information and no signiﬁcant decrease in credit ratings since initial recognition.

The Group has assessed ECLs based on past events, current conditions and supportable forecasts, and economic

conditions that affect the expected collectability of future cash flows at reporting date and has deemed the ECLs to be

insigniﬁcant.

Refer to note 12 for further considerations on the investment in unlisted preference shares.

Instalment sale agreements

Instalment sale agreements relate to the credit purchases of goods by customers within the furniture, appliances and

electronics operating segment (the majority of these borrowings are deemed to be secured by the product purchased by

the customer). The Group applies the general approach to calculating the ECL allowance for these balances as they are

deemed to have a signiﬁcant ﬁnancing component.

173

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

21.3 Credit risk (continued)

21.3.1 Credit risk modelling applied to ﬁnancial assets at amortised cost (continued)

Loans to customers

Loans to customers relates to unsecured loans granted to customers in South Africa for a period of three to 24 months

up to the value of ZAR50 000 per loan granted. The Group applies the general approach to calculating the ECL allowance

for these balances as they are deemed to have a signiﬁcant ﬁnancing component.

The loss allowance provision for the Group as at the Reporting Date is determined as follows:

Under-

performing

(stage 2)

€m

Non-

performing

(stage 3)

€m

Performing

(stage 1)

€m

Total

€m

Notes

30 September 2021

Expected credit loss rate

8.49%

259

18.33%

83.08%

22.66%

384

Estimated gross carrying amount of default

13.1

12-month ECL

Lifetime ECL

Total ECL

(20)

(2)

–

(20)

(67)

(87)

(11)

(54)

13.1

(22)

Net carrying amount

237

297

30 September 2020

Expected credit loss rate

8.25%

206

33.96%

80.82%

28.31%

332

Estimated gross carrying amount of default

13.1

12-month ECL

Lifetime ECL

Total ECL

(17)

–

(17)

(77)

(94)

(18)

(59)

(17)

Net carrying amount

189

238

The loss allowance provision for instalment sale agreements is reconciled to the opening loss allowance as follows:

Under-

performing

(stage 2)

€m

Non-

performing

(stage 3)

€m

Performing

(stage 1)

€m

Total

€m

Balance at 1 October 2019

(35)

–

(21)

–

(23)

(2)

(79)

(2)

Acquisition of businesses (note 26)

Allowance on credit granted during the period

Derecognition of allowance due to settlement of

outstanding debt

(21)

(11)

(29)

(61)

Amounts written off

Amounts recovered

Net remeasurement of loss allowances

(10)

(68)

(62)

Balance at 30 September 2020

Allowance on credit granted during the period

Derecognition of allowance due to settlement of

outstanding debt

(17)

(41)

(18)

(7)

(59)

(30)

(94)

(78)

–

Amounts written off

Amounts recovered

Net remeasurement of loss allowances

Balance at 30 September 2021

(22)

(4)

(11)

(44)

(54)

(33)

(87)

174

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

21.3 Credit risk (continued)

21.3.1 Credit risk modelling applied to ﬁnancial assets at amortised cost (continued)

Trade receivables and other amounts due

The Group applies the simpliﬁed approach to calculating the ECL allowance for trade receivables that do not have a

signiﬁcant ﬁnancing component. Balance of trade receivables with a signiﬁcant ﬁnancing component is immaterial. This

approach permits the use of the lifetime ECL regardless of stage classiﬁcation and is based on a provision matrix that

incorporates historical credit losses as well as forward-looking information as detailed above.

Trade receivables are written off when the customer’s outstanding balance has been outstanding for more than 120 days

or 30 days in the case of cash on delivery customers.

The loss allowance provision for trade receivables is reconciled to the opening loss allowance as follows:

30 September 30 September

2021

€m

2020

€m

Note

Balance at beginning of the period (calculated under IFRS 9)

Provision raised

(24)

(4)

(22)

(21)

Amounts unused reversed

Amounts used during the period

–

Net acquisition of subsidiaries and businesses

Disposal of subsidiaries

(2)

–

(1)

Exchange differences on consolidation of foreign operations

Balance at end of the period

(2)

(24)

13.1

(24)

Provision matrix used in the calculation of ECL allowances:

Loss

allowance

provision

€m

Expected Gross carrying

loss rate

amount

€m

2021

Current

15.6%

20.0%

0.0%

109

(17)

(1)

–

More than 30 days past due

More than 60 days past due

More than 90 days past due

85.7%

19.67%

(6)

(24)

122

2020¹

Current

16.2%

11.1%

0.0%

(16)

(1)

–

More than 30 days past due

More than 60 days past due

More than 90 days past due

58.3%

19.51%

123

(7)

(24)

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

175

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

21.4 Liquidity risk

Liquidity risk is the risk that the Group may suffer ﬁnancial loss through liquid funds not being available or that excessive ﬁnance

costs must be paid to obtain funds to meet payment requirements. The ultimate responsibility for liquidity risk rests with the

Management Board. The Group manages liquidity risk through forecasting and monitoring cash flow requirements on a daily

basis, and by maintaining sufﬁcient undrawn facilities.

The Group’s central treasury function arranges the investment of net cash reserves on the ﬁnancial markets, mainly in short-term

instruments linked to variable interest rates.

As part of the implementation steps of the Litigation Settlement Proposal, the Steinhoff N.V. Group delivered the interim extension

option request to its lenders on 6 August 2021, requesting consent to extend the maturity date of the Steinhoff N.V. Group’s

outstanding debt from December 2021 to December 2022 (“Interim Debt Extension”).

On 11 August 2021, consent for the Interim Debt Extension was granted by its lenders. Consequently, the maturity date of the

Steinhoff N.V. CPU and facility agreements entered into pursuant to the CVA, was extended from 31 December 2021 to

31 December 2022. As a result, the debt is classiﬁed as non-current as at 30 September 2021. Refer to note 17. A further term

extension will be granted initially to 30 June 2023 on the Settlement Effective Date of the global Litigation Settlement Proposal and

such maturity date is capable of further extension to 31 December 2023 with further simple majority lender approval.

21.5 Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising

the return to stakeholders through the optimisation of the debt and equity balances.

The capital structure of the Group consists of debt, which includes the borrowings (note 17), cash and cash equivalents (note 16),

and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings.

The Group’s objectives when managing capital are to provide an adequate return to shareholders, to appropriately gear the

business, to safeguard the ability of the Group to continue as a going concern and to take advantage of opportunities that are

expected to provide an adequate return to stakeholders.

In order to optimise the capital structure, the Group may adjust cost of capital, dividends paid to shareholders or sell assets to

reduce debt.

Distribution to shareholders

30 September 30 September

2021

Euro Cents

2020

Euro Cents

Cash dividend to ordinary shareholders

No dividends were declared for the period ended 30 September 2021 (2020: Nil).

–

Distribution to SIHL preference shareholders

A preference dividend of 292.43 South African rand cents per share (2020: 416.91 South

African rand cents per share) in respect of the period 1 July 2020 to 31 December 2020

(2020: 1 July 2019 to 31 December 2019) was paid on 26 April 2021 (2020: 30 March 2020)

to those preference shareholders recorded in the books of SIHL at the close of business on 23

April 2021 (2020: 27 March 2020).

16.5

16.2

22.9

19.6

A preference dividend of 286.38 South African rand cents per share (2020: 356.78 South

African rand cents per share) in respect of the period 1 January 2021 to 30 June 2021 (2020:

1 January 2020 to 30 June 2020) was paid on 25 October 2021 (2020: 21 September 2020)

to those preference shareholders recorded in the books of SIHL at the close of business on

22 October 2021 (2020: 18 September 2020).

A solvency and liquidity test was performed by the board of directors of SIHL prior to the declaration of all distributions based on

information known and available at that time. The liquidity impact of the Litigation Settlement Proposal has been considered in

the SIHL group liquidity calculations. Refer to note 24.3 for details of the Litigation Settlement Proposal.

176

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

22. EMPLOYEE BENEFITS

30 September 2021

30 September 2020¹

Current

€m

Non-current

€m

Total

€m

Current

€m

Non-current

€m

Total

€m

Notes

Leave obligations

Post-retirement medical

beneﬁts

22.1

–

Performance-based

bonus accrual

Other²

22.3

107

Deﬁned pension

beneﬁts

22.2

34.1

Homestyle Pension

Fund

–

Other³

Total liability

106

169

151

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing

operation.

²Included in other are provisions relating to 13th cheque or holiday pay and severance pay.

³Other deﬁned pension beneﬁts comprises immaterial pension funds within the Group.

22.1 Leave obligations

The leave obligations cover the Group’s liability for annual leave.

The leave obligations relate to vesting leave pay to which employees may become entitled on leaving the employment of the

Group. The accrual arises as employees render a service that increases their entitlement to future compensated leave and is

calculated based on an employee’s total cost of employment. The accrual is utilised when employees become entitled to and are

paid for the accumulated leave or utilise compensated leave due to them. The majority of the provision is presented as current,

since the Group does not have an unconditional right to defer settlement for any of these obligations. However, based on past

experience, the Group does not expect all employees to take the full amount of accrued leave or require payment within the next

12 months.

22.2 Pension plans

Deﬁned pension beneﬁts

Various deﬁned beneﬁt plans are in operation throughout the Group with the Homestyle Pension Fund comprising the most

material plan assets and liabilities. The plan assets of the various deﬁned beneﬁt plans throughout the Group are held in

administered trust funds separate from the Group’s assets. Certain funds have surpluses, which have not been recognised as the

employer is not entitled to any of the surpluses or unutilised reserves.

Homestyle Pension Fund

Under the scheme, the employees are entitled to retirement beneﬁts based on ﬁnal salary on attainment of retirement age (or

earlier withdrawal or death) and the number of years worked for Homestyle. No other post-retirement beneﬁts are provided.

The present value of funded obligations at the Reporting Date amounted to €87 million (2020: €86 million) and the fair value of

the plan asset amounted to €85 million (2020: €84 million).

The fund was valued on 30 September 2021, which is in line with Group policies. The scheme was closed to new entrants.

Refer to note 34 for more detail regarding the present value of the pension fund.

Deﬁned contribution plans

The Group also operates a number of deﬁned contribution plans which receive ﬁxed contributions from Group companies.

The Group’s legal or constructive obligation for these plans is limited to the contributions. The expense recognised in the 2021

Reporting Period in relation to these contributions was €29 million (2020: €25 million).

22.3 Performance-based bonus accrual

The performance bonus payable is calculated by applying a speciﬁc formula based on the employee’s achievement of performance

targets. The Group has a constructive obligation to pay the performance bonus once the performance bonuses have been approved

by management. As the approval by management takes place after each Reporting Period, an amount is accrued based on a

probability of the employee having achieved their performance targets and the amount is estimated based on the relative bonus

structures in place. The payment of such performance bonus is conditional upon the continuing employment of the employee. Any

amounts not approved by management or upon termination of employment are reversed in the subsequent periods.

177

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

22. EMPLOYEE BENEFITS (CONTINUED)

22.3 Performance-based bonus accrual (continued)

30 September 30 September

2021

€m

2020

€m

Balance at the beginning of the period

Accrual raised

118

Amounts unused reversed

(1)

(4)

Amounts utilised

(29)

–

(61)

Derecognition of subsidiaries

Exchange differences on consolidation of foreign operations

Reclassiﬁcation to assets held-for-sale

Provisions released on restructuring

Balance at the end of the period

(6)

–

(1)

(38)

107

–

23.

PROVISIONS

ACCOUNTING POLICY

Provisions

Provisions (except for contingent liabilities recognised in terms of IFRS 3 – Business Combinations) are recognised when the Group

has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to

settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Where there is a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by

considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one

item included in the same class of obligations may be small.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present

obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects

current market assessments of the time value of money and the risks speciﬁc to the liability. The increase in the provision due to the

passage of time is recognised as interest expense.

30 September 2021

30 September 2020

Current Non-current

Total

€m

Current Non-current

Total

€m

Notes

€m

Dilapidation, onerous lease and

onerous contract provisions

Provision for ACG lawyer fees and

SRF cost contribution

23.1

23.3

23.2

23.5

23.4

–

Warranty provisions

Legal provision – Seifert claim

Litigation Settlement Proposal

Other

101

1 573

–

101

1 573

101

943

–

101

943

–

Total Provisions

1 734

1 778

1 082

1 106

Other provisions include all amounts where there is a present obligation as a result of a past event and it is probable that an outflow of

economic beneﬁts will be required to settle the obligation. Provisions are measured at the present value of the expenditures expected to

be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks

speciﬁc to the obligation.

178

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

23. PROVISIONS (CONTINUED)

Movement in provisions

Provision

for ACG

lawyer

fees

Dilapi-

dation,

onerous

lease and

Litigation and SRF

onerous

contract Restruc-

provision

€m

Warranty

provi-

sions

€m

Legal

provi-

Settle-

ment

cost

contri-

bution

€m¹

Contin-

gent

liability

€m

turing

€m

sion Proposal¹

Other

€m

Total

€m

Note

€m

Balance at

1 October 2019

Provision raised

133

–

185

–

943

–

408

1 062

Onerous provision

released to retained

earnings on adoption of

IFRS 16

Amounts unused reversed

Amounts utilised

Derecognition of

subsidiaries

Reclassiﬁcation to

liabilities held-for-sale

Exchange differences on

consolidation of foreign

operations

(109)

–

(58)

–

(2)

(10)

–

(21)

(2)

–

(15)

(109)

(23)

(85)

–

1.4

–

(127)

–

(127)

(19)

(7)

–

(2)

–

(2)

(1)

Balance at

30 September 2020

Provision raised

Amounts unused reversed

Amounts utilised

Reclassiﬁcations between

provisions

(2)

–

(1)

(3)

101

–

943

574

–

(4)

1 106

638

(7)

–

(2)

(11)

–

(1)

–

(8)

–

Exchange differences on

consolidation of foreign

operations

–

(2)

–

(3)

Balance at

30 September 2021

101

1 573

1 778

23.1 Dilapidation, onerous lease and onerous contract provisions

A contract is considered onerous when the unavoidable costs of meeting the obligations under the contract exceed the economic

beneﬁts expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the

contract, which is the lower of the cost of fulﬁlling it and any compensation or penalties arising from failure to fulﬁl it. Before a

separate provision for an onerous contract is established, any impairment loss that has occurred on assets dedicated to that

contract is recognised.

The provision for dilapidation of buildings occupied by the Group and in the prior ﬁnancial year provision for long-term leases

containing onerous provisions or terms in comparison with average terms and conditions of leases which was set off against the

right-of-use asset in the 2020 Reporting Period due to the adoption of IFRS 16.

23.2 Warranty provisions

The warranty provisions represent management’s best estimate, based on past experience, of the Group’s liability under

warranties granted on products sold. These claims are expected to be settled within the next 12 months.

23.3 Provision for ACG lawyer fees and SRF cost contribution

ACG lawyer fees

In order to improve recoveries to market purchase claimants, the Group will be making available an amount of up to €30 million,

subject to the implementation of the Litigation Settlement Proposal, to pay in respect of certain fees, costs and work undertaken

by the ACGs.

179

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

23. PROVISIONS (CONTINUED)

23.3 Provision for ACG lawyer fees and SRF cost contribution (continued)

SRF cost contribution

The Group established a new Dutch foundation on 24 August 2021, the SRF, together with supporting arrangements in South

Africa (for South African claimants) to act as the SRF. The purpose of the SRF is to administer and distribute the settlement

consideration paid by, or on behalf of, the Group and other contributing parties. It is governed by a board of newly appointed

directors with majority independence from the Group. Claimants are required to submit their claims for veriﬁcation prior to

receiving settlement payments. SRF has retained Computershare to assist it to administer and verify claims prior to payment of

the settlement consideration. The Group will contribute up to €16.5 million to cover the costs of the SRF. This value excludes any

additional cost contributions to be made by other parties (i.e. Deloitte ﬁrms and D&O insurers) as disclosed in the Composition

Plan. Any costs incurred by the SRF in excess of the cost contributions, will be deducted from the settlement fund, and any

surplus cost contribution amount will revert to the parties that have paid such amounts to SRF, pro rata to the cost contribution of

each such party. During the 2021 Reporting Period, the Group contributed c. €2 million towards costs incurred by the SRF, which

amount will be deducted from the anticipated cost contribution, as provided.

23.4 Provision – Litigation Settlement Proposal

On 27 July 2020, the Group released a detailed update on its efforts to resolve the ongoing complex legal claims and litigation

proceedings, including details of a proposed Global Settlement in respect of these claims. The Group formulated proposed Global

Settlement amounts for various claimant groups in light of the characteristics of, and risks affecting, their claims, the Group’s

ability to continue trading and to maximise the asset values available to it.

On 15 February 2021, Steinhoff N.V. announced that it was beginning the implementation of its Litigation Settlement Proposal and

applied for the opening of a Dutch SoP proceedings and offered the Steinhoff N.V. Composition Plan to its Dutch SoP creditors.

The Dutch Court conﬁrmed the Steinhoff N.V. Composition Plan on 23 September 2021. Following expiry of a prescribed 8-day

period wherein the court’s decision is open to appeal, during which no appeal was lodged, the Dutch Court order became ﬁnal

and binding and by consequence the Steinhoff N.V. Composition Plan became binding on all Dutch SoP creditors in accordance

with its terms. The Steinhoff N.V. Composition Plan was proposed in parallel with the proposal by SIHPL in terms of the SIHPL

S155 Scheme which was sanctioned on 24 January 2022. Both proposals, which are inter-conditional, form part of the Litigation

Settlement Proposal to resolve the legacy claims arising from the announcement of accounting irregularities.

On 15 February 2021, Steinhoff N.V., together with SIHPL, also reached a bilateral conditional agreement with Deloitte

Accountants B.V. and Deloitte & Touche South Africa (together “Deloitte”) pursuant to which Deloitte agreed to support the

Litigation Settlement Proposal as announced on 27 July 2020 (and as subsequently revised).

Steinhoff N.V. further announced on 23 March 2021 that, together with SIHPL, it had also reached an agreement with certain

insurance companies underwriting Steinhoff N.V.’s (primary and excess) Directors and Ofﬁcers insurance policy (the “D&O

Insurers”) and certain former directors and ofﬁcers who have worked for or been associated with a Steinhoff N.V. Group company

(the “Settling D&Os”). As a result, the bilateral agreement with Deloitte was replaced by a comprehensive Steinhoff Settlement

Support Agreement entered into by inter alia Steinhoff N.V., SIHPL, Deloitte, the D&O Insurers and the Settling D&Os. In addition to

the compensation made available to certain claimants by Steinhoff N.V., Deloitte (up to €77.94 million) and the D&O Insurers (up

to €78.1 million), on behalf of the Settling D&Os, are making additional compensation available to certain Steinhoff N.V. claimants,

including the Market Purchase Claimants and certain Contractual Claimants, in exchange for certain waivers and releases,

provided that Steinhoff N.V. successfully completes the Dutch SoP process commenced on 15 February 2021 and SIHPL

successfully implements the SIHPL S155 Scheme and certain other conditions are fulﬁlled.

Below is a summary of the main substantive approvals obtained and still required for the Litigation Settlement Proposal to be

implemented on the Settlement Effective Date (“SED”). The SED is the date on which the Steinhoff N.V. Composition Plan and the

SIHPL S155 Scheme have each become effective.

•

Financial Creditor consent

Various creditor consent requests were launched from October 2020 to obtain the formal support of the ﬁnancial creditors to

the terms and proposed implementation of the Litigation Settlement Proposal which were obtained when the High Court of

England sanctioned the terms of the SEAG CPU Scheme on 5 February 2021. As reported in its announcements on

16 July 2021 and 11 August 2021, Steinhoff N.V. required further consents under the existing ﬁnance documents for the

revised terms to the Litigation Settlement Proposal set out in those announcements. To this end, on 20 August 2021, Steinhoff

distributed “Consent Request No.3” to the facility agents under the relevant Steinhoff ﬁnance documents. In summary,

Consent Request No.3 sought consents from lenders for the following:

a) Approval of amendments to the terms of the Litigation Settlement Proposal to include the terms as announced by

Steinhoff N.V. on 16 July 2021 and 11 August 2021;

b) Approval of the SIHPL ﬁnance documents required to be entered into as part of the SIHPL settlement terms to have

effect following SED, including the new Section 155 Settlement Note to be issued by SIHPL and the SIHPL Intercreditor

Agreement both as described in the SIHPL S155 Scheme;

c) Approval of an outline of the steps to be taken in connection with the SED; and

d) Approval of the amendments required to the Steinhoff N.V. CPU to support the establishment of the Committee of

Representation appointed under the Dutch SoP proceedings (as to which, see the 28 May 2021 Steinhoff press release).

180

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

23. PROVISIONS (CONTINUED)

23.4 Provision – Litigation Settlement Proposal (continued)

Steinhoff N.V. has obtained the necessary approvals and conﬁrms that Consent Request No.3 has been approved by the

requisite majorities of ﬁnancial creditors in respect of each of the consents requested.

The consent request dated 25 November 2021 “Consent Request No.4”, for the approval of the extension of the “Long Stop

Date” of the Litigation Settlement Proposal to 30 June 2022 and the amendment to the Titan payment agreement (refer to note

12.1.2) as deﬁned in Consent Request No.4, was obtained on or about 15 December 2021.

As announced on 28 December 2021, Steinhoff obtained the requisite level of support from its ﬁnancial creditors for the SIHPL

NQC and Tekkie Town settlements “Consent Request No. 5”.

•

Regulatory consent from FinSurv

Steinhoff N.V. required approval from FinSurv. Steinhoff N.V. received approval on 25 November 2020, valid for 12 months, for

the original proposed settlement amount.

On 11 August 2021 Steinhoff N.V. announced an increased offer, following this announcement the Steinhoff Group had to seek

further approval from FinSurv. Steinhoff N.V. announced on 18 October 2021 that it has received approval from FinSurv for the

cross-border transfers contemplated by the revised Litigation Settlement Proposal. The approval is valid until 31 May 2022.

Eligible claimants’ consent of Steinhoff N.V.

The Dutch SoP administrators, in consultation with Steinhoff N.V., and in accordance with the relevant provisions in the

Dutch Bankruptcy Act, requested the Amsterdam District court to appoint a Committee of Representation consisting

of representatives of the most important creditors and categories of creditors at Steinhoff N.V. level. On 28 May 2021,

the Amsterdam District Court granted the request. The Committee of Representation members have cast a vote on the

Composition Plan instead of individual creditors at the voting hearing.

On 3 September 2021, the supervisory judges in the Dutch SoP proceedings opened the creditors’ meeting to discuss

the claims as submitted in the procedures. The creditors’ meeting was reopened on 8 September 2021 to consider the

Composition Plan. Following these discussions, the members of the Committee of Representation were asked to cast

their votes on the Composition Plan. The supervisory judges conﬁrmed that there was a positive decision supporting the

Composition Plan with all ﬁfteen members voting in favour. Accordingly, the Composition Plan was adopted unanimously.

On 16 September 2021, the Dutch court held the Conﬁrmation hearing. On 23 September 2021, the Dutch court conﬁrmed the

Composition Plan.

On 2 October 2021, following an eight-day appeal period where no appeals were received, the Dutch SoP proceedings

terminated, and the Composition Plan became binding on all Dutch SoP creditors in accordance with its terms. The

Composition Plan differentiates various groups of Dutch SoP unsecured creditors, including litigation claimants and ﬁnancial

creditors, and is subject to certain conditions precedent. In short:

a) Litigation claimants are offered partial payment on their claims against full and ﬁnal release of all claims against Steinhoff

N.V. and without any further recourse right against Steinhoff N.V.;

b) Financial creditors retain their contractual rights under the Steinhoff N.V. CPU, which will be extended to 30 June 2023 on

Settlement Effective Date with the ability to obtain a further 6 months’ extension;

c) All Dutch SoP creditors grant certain further releases against, amongst others, Steinhoff Group companies, auditors,

D&O Insurers and (former) directors and ofﬁcers. The release means that the claimants agree that they will suspend, or

procure the suspension of, the proceedings vis-a-vis any Steinhoff party and that it will not, and will procure that none

of its afﬁliates will, continue or commence any legal process against any Steinhoff Group company in relation to or in

connection with the released claims, the Market Purchase Claims or any of them; and

d) It is essential to note, that the Composition Plan is inter-conditional with, and dependent on the success of, a proposal

by SIHPL for the settlement and compromise of its litigation and ﬁnancial liabilities in accordance with the terms of the

SIHPL S155 Scheme. SIHPL's application for the approval and sanction of the S155 Scheme was heard on 24 January

2022, by the Western Cape High Court. At the close of the hearing the Court granted SIHPL's request and granted an order

approving and sanctioning the S155 Scheme.

181

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

23. PROVISIONS (CONTINUED)

23.4 Provision – Litigation Settlement Proposal (continued)

•

Eligible claimants’ consent of SIHPL

Creditors’ meetings in terms of the SIHPL S155 Scheme, were held on 6 and 10 September 2021 in which over 8 500 claimants

representing approximately ZAR91.7 billion of claims voted in favour of the SIHPL S155 Scheme, with no votes against.

The SIHPL S155 Scheme was accordingly adopted by all three classes of the SIHPL scheme creditors. During September

2021, and pursuant to the SIHPL S155 Scheme having been adopted by the SIHPL scheme creditors with overwhelming

support, SIHPL made an application in the Western Cape High Court for the approval and sanction of the SIHPL S155 Scheme.

The sanctioning of the SIHPL S155 Scheme on 24 January 2022 has resulted in a compromise of any, and all, claims against

SIHPL (whether or not legally established and whether or not admitted or disputed by SIHPL and to substitute all such claims

with the rights arising under the terms of the SIHPL S155 Scheme).

Subsequently the Court received intervention applications to the sanction application from the following:

a) a party who under the SIHPL S155 Scheme is a Non-Qualifying Claimant being: Trevo, a Mauritian entity associated

with the former CEO of Pepkor Holdings Limited, Mr Erasmus; with the support of six individuals (who are also all Non-

Qualifying Claimants); and

b) parties purporting to be Market Purchase Claimants under the Proposal, being: (i) the trustees of Sport City Trust, (ii) AJVH

Holdings Proprietary Limited, both of which are associated with the former owners of Tekkie Town, and (iii) an individual,

Mr Lamprecht.

In support of SIHPL’s sanction application, Deloitte submitted an intervention application.

SIHPL ﬁled papers in opposition to the intervention of Trevo and all of the opposing parties, as it continues to work towards

implementing the SIHPL S155 Scheme that has achieved the overwhelming support of so many claimants and so that those

claimants can receive the settlement consideration as soon as possible under the terms of the SIHPL S155 Scheme. Refer

below on the settlement reached with Trevo during December 2021. Refer below to the settlements reached with the objecting

parties referenced above during December 2021.

SIHPL’s application for the approval and sanction of the S155 Scheme was heard on 24 January 2022, by the Western Cape

High Court. At the close of the hearing the Court granted SIHPL’s request and granted an order approving and sanctioning

the S155 Scheme. Following receipt of the Order, “Settlement Effective Date” (referred to under the S155 Scheme and the

Composition Plan) is expected to occur on or about 15 February 2022. As disclosed in Steinhoff N.V.’s announcement of 15

December 2021, formal withdrawal of the various litigation that has been settled, including the withdrawal of the Liquidation

Application against Steinhoff N.V. will occur immediately following Settlement Effective Date. Occurrence of Settlement

Effective Date is the remaining condition under the Composition Plan.

•

Settlement with Trevo and others

Steinhoff N.V.’s announcement on 11 August 2021 conﬁrmed the treatment of Trevo as a Non-Qualifying Claimant (being a

class of claimants to whom an offer of compromise is not made under the terms of the S155 Scheme). Trevo, supported by

others, has opposed the sanction application for the S155 Scheme the hearing of which was scheduled to commence from the

24th of January 2022, notwithstanding that they are not a S155 Scheme creditor.

On 15 December 2021, Steinhoff N.V. announced that Trevo had agreed to a settlement in which they conﬁrmed their support

for the S155 Scheme (“SIHPL NQC Settlements”). It is viewed as an adjusting event for the 2021 Reporting Period and

ZAR500 million (€28 million) was raised as part of the Litigation Settlement Proposal provision, representing the best estimate

for settlement of the claim.

The key commercial terms of the settlement will have effect from the implementation of the Settlement Effective Date, and are

as follows:

a) Ainsley Holdings will grant to Trevo call options to purchase 120 million Pepkor Holdings shares exercisable in three years’

time at an exercise price of ZAR24.9215 per share. Ainsley Holdings will also grant to the other Non-Qualifying Claimants

that were supporting Trevo’s opposition call options to purchase 5 million Pepkor Holdings shares; and

b) following satisfaction of the suspensive conditions but prior to the Settlement Effective Date, SIHPL NQCs will support the

Litigation Settlement Proposal. On and from Settlement Effective Date, Trevo will withdraw all litigation between them and

Steinhoff N.V. Group in full and ﬁnal settlement of claims against the Steinhoff N.V. Group, directors and ofﬁcers and auditors.

The settlement of the SIHPL NQCs’ alleged claims will not impact the recoveries of other scheme creditors under the

S155 Scheme other than the ﬁnancial creditors. As announced on 28 December 2021, Steinhoff obtained the requisite level of

support from its ﬁnancial creditors for the SIHPL NQC Settlement.

The Group further reported on 7 January 2022, that all the suspensive conditions set out in the SIHPL NQC Settlements have

been fully satisﬁed.

Under the SIHPL NQC Settlements, the SIHPL NQCs agreed to withdraw their opposition to the S155 Scheme, to support the

sanction application and implementation of the Litigation Settlement Proposal.

Both the Trevo settlement and the Tekkie Town settlement are subject to the Litigation Settlement Proposal being

implemented by 30 June 2022.

182

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

23. PROVISIONS (CONTINUED)

23.4 Provision – Litigation Settlement Proposal (continued)

•

Settlement with the former Tekkie Town owners

Certain former owners of the Tekkie Town business instituted claims against the Steinhoff N.V. Group (together the “Former

Tekkie Town Owner Claimants”). In addition, the Former Tekkie Town Owner Claimants instituted liquidation proceedings (the

“Liquidation Application”) against Steinhoff N.V. on 12 May 2021. One of those claimants, AJVH Holdings Proprietary Limited,

and a related party, Sport City Trust, also attempted to oppose the application for the sanction of the S155 Scheme by arguing

that they have SIHPL Market Purchase Claims (as deﬁned in the S155 Scheme).

On 15 December 2021, the Steinhoff N.V. Group and the Former Tekkie Town Owner Claimants (including associated parties

who have joined or supported their Liquidation Application and S155 Scheme opposition) have agreed that the Former

Tekkie Town Owner Claimants will (i) support, and withdraw their opposition to, the S155 Scheme with immediate effect and

(ii) withdraw the Liquidation Application (and their opposition to the appeal pending before the South African Supreme Court

of Appeal), subject to implementation of the Litigation Settlement Proposal. It is viewed as an adjusting event for the 2021

Reporting Period and an additional ZAR741 million (€42 million) was raised as part of the Litigation Settlement Proposal

provision, representing the best estimate for settlement of the claim.

The key commercial terms of the settlement will take effect from and subject to the Settlement Effective Date, and are as

follows:

a) Steinhoff Africa will pay the Former Tekkie Town Owner Claimants ZAR500 million (€28 million) in aggregate, and Ainsley

Holdings will transfer 29.5 million Pepkor Holdings shares subject to a lock-up of 180 calendar days following transfer,

in order to acquire control of all Steinhoff-related claims alleged by the Former Tekkie Town Owner Claimants and their

related parties; and

b) the Former Tekkie Town Owner Claimants will accordingly transfer control of all their Steinhoff-related claims to Steinhoff

Africa, so that the claims between them, Steinhoff, Pepkor Holdings, directors and ofﬁcers and auditors (including the

Liquidation Application) will be settled and withdrawn on terms that enable Steinhoff Africa and Steinhoff to beneﬁt from

the compensation allocated to the Former Tekkie Town Owner Claimants under the Steinhoff N.V. Composition Plan.

As announced on 28 December 2021, Steinhoff obtained the requisite level of support from its ﬁnancial creditors for the

Tekkie Town settlement. Both the Trevo settlement (refer above) and the Tekkie Town settlement are subject to the Litigation

Settlement Proposal being implemented by 30 June 2022. No other suspensive conditions are pending.

Considerations by management for the measurement of the Litigation Settlement Proposal provision for the 2021 Reporting

Period:

Since the announcement of the original Steinhoff Litigation Settlement Proposal in July 2020, the Steinhoff Group’s underlying

businesses have shown resilient ﬁnancial and operational performance and there have been increases in the value of a

number of its investments. As a direct consequence of these developments, positive currency movements and improved

outlook, Steinhoff N.V. and SIHPL announced on 16 July 2021 an increase in the settlement offer under the Litigation

Settlement Proposal. As a result, the amount of the provision for the Litigation Settlement Proposal has been increased from

c. €943 million to c. €1 573 million during the 2021 Reporting Period.

During the 2020 Reporting Period, the Group’s obligation was classiﬁed as a provision to the value of the settlement amount

(as expected outflow), in addition the full claim amounts were disclosed as contingent liability.

During the 2021 Reporting Period, there has been signiﬁcant progress on the Litigation Settlement Proposal. The Composition

Plan was conﬁrmed by the Dutch Court on 23 September 2021, the SIHPL S155 Scheme was adopted by the eligible claimants

and SIHPL's application for the approval and sanction of the S155 Scheme was heard and approved on 24 January 2022.

Therefore, a much less uncertain obligation exists for Steinhoff N.V. and SIHPL towards their Dutch SoP creditors and the

eligible claimants for SIHPL, respectively, to deliver a speciﬁed amount cash or Pepkor Holdings shares as speciﬁed in the

Composition Plan and SIHPL S155 Scheme.

In the 2020 Reporting Period there was a higher amount of uncertainty related to the likelihood of outflow for legal claims

included in the Litigation Settlement Proposal provision. Management, therefore, chose to include both a provision and more

elaborate disclosure as part of the contingent liabilities. For the 2021 Reporting Period management is of the view that the

uncertainty has decreased and therefore chose to only include a provision for the legal claims included in the Litigation

Settlement Proposal.

The legal provision was reviewed at the end of the Reporting Period and adjusted to reflect the current best estimate to settle

the obligation. Based on the current status of the Litigation Settlement Proposal, the expected outflow of economic beneﬁt

will be the value as included under the Composition Plan and the SIHPL S155 Scheme which will be settled in cash and Pepkor

Holdings shares.

183

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

23. PROVISIONS (CONTINUED)

23.4 Provision – Litigation Settlement Proposal (continued)

The Litigation Settlement Proposal provision is set out below:

30 September 30 September

2021

€m

2020

€m

Market Purchase Claimants – SIHPL

183

436

–

266

543

104

Market Purchase Claimants – Steinhoff N.V.

Contractual Claimants – SIHPL

659

Contractual Claimants – Steinhoff N.V.

169

Other (Non-qualifying claimants i.e. SIHPL NQCs and Tekkie Town)

Total Litigation Settlement Proposal provision

126

1 573

943

The increased settlement offer and several other amendments to the Litigation Settlement Proposal are set out in a summary

term sheet dated July 2021 available at www.steinhoffsettlement.com (not audited by Mazars).

After the implementation of the Litigation Settlement Proposal the percentage ownership held in Pepkor Holdings will reduce to

50.6%. The likelihood of exercising the call option provided to Trevo will be re-assessed at each reporting period.

23.5 Seifert claim

HLSW GmbH (“HLSW”) an entity owned and/or controlled by Seifert, ﬁled a complaint in March 2015 in terms of which HLSW

requested the transfer of a 50% shareholding in AIH Investment Holding GmbH (“AIH”) to it. On 1 April 2021, HLSW withdrew this

claim with prejudice. Steinhoff was awarded procedural costs of €33,065, which HLSW paid to it in July of 2021.

LSW GmbH (“LSW”), owned and/or controlled by Seifert, ﬁled a further complaint against AIH and SEAG in October 2015 with

LSW requesting the repayment of an alleged loan granted to SEAG and AIH in the amount of €299.9 million and interest in the

amount of approximately €29.4 million (“the Loan Proceedings”). SEAG and AIH have ﬁled an answer to the complaint and

contested the relief requested by LSW in its entirety. In addition, LSW requested solely from SEAG ﬁnancing costs and default

interest in the amount of €58.93 million as of October 2015 as well as default interest on the amount of €388.3 million at a rate

of 5.14% per annum above the 6-months-EURIBOR since 12 October 2015. Thus LSW initially demanded approximately

€388.3 million plus default interest since October 2015 and the costs of the proceedings from SEAG and approximately

€329.33 million plus costs of the proceedings from SEAG and AIH.

On 21 December 2016, SEAG paid LSW an amount of €146.7 million. LSW reduced its claim on 17 February 2017 to approximately

€265.4 million (plus interest at a rate of 5.14% per annum above the 6-months-EURIBOR from 22 December 2016) vis-à-vis SEAG

and approximately €249.2 million vis-à-vis AIH, plus costs of the proceedings from both parties. On 20 July 2018 (rejected on

formal grounds) and again on 20 September 2018, LSW ﬁled for a preliminary injunction against SEAG and AIH in order to secure

its claim arising from the Loan Proceedings. The competent judge of the Loan Proceedings rejected LSW’s 20 September 2018

application for a preliminary injunction on all alleged grounds with his decision dated 1 October 2018. LSW did not ﬁle an appeal

against the court order of 1 October 2018.

During November 2020, the parties entered into negotiations wherein a settlement amount of €100 million was discussed. A

settlement was not ﬁnalized as the parties could not reach an agreement with respect to certain contractual terms. Considering

these negotiations management decided to increase the settlement provision relating to Seifert in the 2020 Reporting Period.

Management has considered other possible outcomes of the legal proceedings but it remains management’s view that the

current provision remains the best estimate to settle the current obligation and therefore retains the provision at €100 million as

at 30 September 2021. The next court hearings are scheduled to take place on 3 and 4 March 2022. Testimony in the matter is

ongoing.

184

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

24. COMMITMENTS AND CONTINGENCIES

30 September 30 September

2021

€m

2020

€m

24.1 Capital expenditure

Signiﬁcant capital expenditure contracted for at the end of the Reporting Period but not

recognised as liabilities is as follows:

Contracts for capital expenditure authorised

Capital expenditure authorised but not contracted for

Capital expenditure will be ﬁnanced from cash and existing loan facilities.

24.2 Contingent assets

106

Loss adjustors were appointed by SASRIA to assess the material damage loss due to the political and social unrest, and by

Emerald for the quantiﬁcation of the business interruption loss. Initial estimates have been submitted to the insurers. Indicative

values show that material damage estimates are within policy limits for both SASRIA and business interruption losses.

24.3 Contingent liabilities

•

Competition Commission vs SIHPL and Other

This matter involves two referrals issued by the Competition Commission during the 2019 Reporting Period. Under the ﬁrst

referral, the Commission has charged a previous subsidiary of SIHPL, namely KAP Diversiﬁed Industrial Proprietary Limited

(“KAP”) of having colluded during the period 2009 to 2014 with its sole local competitor, namely Sonae Arauco South Africa

Proprietary Limited (“Sonae”) in that they allegedly ﬁxed prices of certain timber products which they both manufactured and

sold to merchants.

In the second (related) referral, the Commission has charged SIHPL itself with having committed the same offence during that

period. The Commission contends that the actual perpetration of the transgressions occurred between representatives of the

sale staff of a subsidiary of KAP and their colleagues employed by Sonae. It is not alleged that any SIHPL employee participated

in the alleged price ﬁxing or that SIHPL knew or ought to have known that the transgressions were being perpetrated.

The Commission seeks a conviction against SIHPL exclusively on a contention that by virtue of its shareholding in the KAP

Group it controlled the business and affairs of KAP and its subsidiaries.

Werksmans attorneys has been appointed to represent SIHPL in these proceedings. SIHPL has initiated a review application

with the aim of setting aside the Competition Commission’s decision to refer the complaint against SIHPL to the Tribunal. The

matter was heard on an opposed basis on 10 August 2021.

On 26 January 2022 the Court has set aside the Competition Commission's decision to refer the complaint against SIHPL to

the Tribunal.

•

Geros Financial Services Proprietary Limited v Steinhoff at Work

On 2 November 2021, Geros Financial Services Proprietary Limited (“Geros”) served a simple summons against Steinhoff

at Work claiming an aggregate of c. R64 million which was allegedly loaned by Geros to Steinhoff at Work and which is now

due for repayment (plus interest at a rate of the prime lending rate less 3.5% per annum from the date that the amount was

advanced to the date of ﬁnal payment). Steinhoff at Work’s legal representatives are in the process of preparing replying

papers that will be served in accordance with the rules of Court. Management’s view is that the claim holds no merit.

•

Access to a copy of the overview of the forensic investigation published in March 2019 (“PwC Report”)

Application brought by Tiso Blackstar and others (owners of prominent South African media outlets) vs Steinhoff N.V. on

23 October 2019 on a public interest basis (as well as separate applications by Jooste) for access to a copy of the PwC

Report. Exchange of pleadings ongoing. Damages are not sought in this matter and accordingly there can be no economic

outflow arising from these proceedings. Matter is being heard on the 28 January 2022.

•

Late submission of the 2016 and 2017 annual ﬁnancial statements of Steinhoff N.V.

On 8 February 2021, Steinhoff N.V. received a letter from the Bundesanstalt für Finanzdienstleistungsaufsicht (“BaFin”) stating

that they had initiated administrative ﬁne proceedings concerning the late submission of the 2016/2017 annual ﬁnancial

statements of Steinhoff N.V. and the missing announcements of certain voting rights notiﬁcations, which Steinhoff N.V. tried

to rectify by publishing a catch-up announcement on 20 November 2018. The Company responded to BaFin on 8 March 2021.

To date no reaction from BaFin has been received.

185

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

25. CASH FLOW INFORMATION

25.1 Cash generated from operations

Restated¹

2020

2021

€m

Notes

€m

Operating (loss)/proﬁt from:

Continuing operations

(85)

139

(916)

(55)

Discontinued operations

Adjusted for non-cash adjustments included in continuing and discontinued

operations:

Proﬁt or loss movement in provision for doubtful debt

Depreciation and amortisation

Depreciation of right-of-use asset

Unrealised foreign exchange losses/(gains)

Impairments – Continuing operations:

Goodwill

202

432

189

518

(10)

8 & 9

–

300

Intangible assets

Property, plant and equipment

Right-of-use asset

–

Other ﬁnancial assets

Titan receivable ECL

4.2.9

Impairments – Discontinued operations:

Property, plant and equipment

1.2.1

–

(9)

Held-for-sale assets

Other ﬁnancial assets

Inventories written down to net realisable value and movement in provision

for inventories

Net gain on disposal and scrapping of property, plant and equipment and

intangible assets

1.2.2 & 4.2.3

(33)

(87)

Net loss on sale of treasury shares

(40)

–

(255)

Gain on disposal, part disposal and bargain purchase of investments

Share-based payment expense

4.2.4 & 1.4

4.3.2

Cumulative other comprehensive income reclassiﬁed to proﬁt or loss on

disposal or derecognition of investment

Lease modiﬁcation cost – continued operations

Derecognition on end of lease term on right-of-use asset – discontinued

operations

1.2.3 & 4.2.2

(41)

(12)

4.3.6

(37)

574

–

943

Litigation Settlement Proposal provision

Seifert legal provision

4.2.8

17.2

Transactions, prepayment and commitment fees

Revaluation of ﬁnancial liability

(8)

–

Other non-cash adjustments

(40)

1 055

Cash generated before working capital changes

1 432

Working capital changes

(Increase)/decrease in inventories

(146)

(171)

205

(Increase)/decrease in trade and other receivables

Movement in net derivative ﬁnancial liabilities/assets

Increase/(decrease) in non-current and current provisions

Increase/(decrease) in non-current and current employee beneﬁts

Increase in trade and other payables

(164)

(50)

Net changes in working capital

(80)

1 352

116

1 171

Cash generated from operations

¹Comparative numbers have been restated as a result of classifying certain segments as discontinued operations as well as for the effect of the

reclassiﬁcation of The Building Company from a discontinued operation to a continuing operation.

186

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

26. BUSINESS COMBINATIONS

ACCOUNTING POLICY:

Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or

other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

•

fair values of the assets transferred,

liabilities incurred to the former owners of the acquired business,

equity interests issued by the Group,

fair value of any asset or liability resulting from a contingent consideration arrangement, and

fair value of any pre-existing equity interest in the acquired entity.

Identiﬁable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions,

measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquired entity

on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s

net identiﬁable assets.

Acquisition-related costs are expensed as incurred in terms of IFRS 3 – Business Combinations.

The excess of the:

•

consideration transferred,

amount of any non-controlling interest in the acquired entity, and

acquisition-date fair value of any previous equity interest in the acquired entity

over the fair value of the net identiﬁable assets acquired is recognised as goodwill. If those amounts are less than the fair value of the

net identiﬁable assets of the business acquired, the difference is recognised directly in proﬁt or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present

value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar

borrowing could be obtained from an independent ﬁnancier under comparable terms and conditions.

Contingent consideration is classiﬁed either as equity or as a ﬁnancial liability. Amounts classiﬁed as a ﬁnancial liability are

subsequently remeasured to fair value with changes in fair value recognised in proﬁt or loss. Contingent consideration classiﬁed as

equity shall not be remeasured and its subsequent settlement shall be accounted for within equity.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in

the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised

in proﬁt or loss.

187

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

26. BUSINESS COMBINATIONS (CONTINUED)

26.1 The fair value of assets and liabilities assumed at date of acquisition

Total

30 September 30 September

2021

€m

2020

€m

Notes

Group’s share of total assets and liabilities acquired

Goodwill attributable to acquisition

Total consideration

(3)

–

Cash on hand at date of acquisition

Net cash outflow on acquisition of subsidiaries

(9)

The goodwill arising on the acquisition of these companies is attributable to the strategic business advantages acquired, principal

retail locations and leases, as well as knowledgeable employees and management strategies that did not meet the criteria for

recognition as other intangible assets on the date of acquisition.

2021 Reporting Period

26.2 Acquisition of Fulton

On 8 October 2020 the Group acquired 100% of the share capital of Viewtone Trading Group Limited, the parent company of a

group (Fulton’s Group) for €5.5 million. Fulton’s principal activity is the sale of food on a retail basis. The strategic reason for the

acquisition was to secure supply chain knowledge to accelerate the roll out of the chilled and frozen offering within Pepco Group.

26.3 Acquisition of Eezi Poland

Effective 22 December 2020, Pepkor Holdings purchased 100% of the issued share capital of Eezi Poland for a purchase price of

€0.6 million. Eezi offers similar products and services to FLASH in the Polish market and is included in the FinTech segment as

part of the FLASH business.

2020 Reporting Period

26.4 Acquisition of Abacus

Effective 1 December 2019, Pepkor Holdings acquired 100% of the issued share capital of Abacus Holdco Proprietary Limited

and its subsidiaries (“Abacus”) for a purchase price of ZAR183 million (€10 million). The acquisition has been approved by the

relevant regulatory authorities. The Abacus product offering includes life- and short-term insurance. Abacus provides insurance

products via its subsidiaries to customers of JD Group and other Group businesses.

26.5 Acquisition of S.P.C.C. and CODE

Effective 1 June 2020 and 1 September 2020 respectively, Pepkor Holdings acquired S.P.C.C. and CODE for a combined purchase

price of ZAR46 million (€2 million). Both entities are retailers of clothing and general merchandise.

188

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

27. NATURE AND PURPOSE OF RESERVES

Ordinary share capital and share premium

The share capital and share premium reserve records the movements in the issued share capital of the Company.

Treasury share capital and share premium

Treasury shares are recognised as equity when Group companies (including employee share trusts) purchase Steinhoff shares, when the

Company reacquires its own shares, or when the Company shares are under the control of the Group through unconsolidated structured

entities. The amount of the consideration paid, including directly attributable costs, is recognised as a change in equity. When treasury

shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deﬁcit

on the transaction is transferred to/from share premium or accumulated losses.

Accumulated losses

Retained earnings/accumulated losses comprise distributable reserves accumulated through the consolidation of the proﬁt or loss of

consolidated companies and the share of proﬁt or loss of equity accounted companies. Reclassiﬁcations and transfers to and from

other reserves are also accumulated in this reserve. Ordinary dividends declared reduce this reserve. Preference dividends on preference

shares, classiﬁed as equity, also reduce this reserve.

Foreign currency translation reserve

Foreign operation deﬁnition

A foreign operation is either a subsidiary, associate, joint venture or an intermediate parent where the intermediate parent’s subsidiaries

on its own is immaterial and form an integral part of the intermediate parent’s reporting structure. An intermediate parent will not be

larger than an operating segment.

Translation method

The Group’s foreign translation is done by electing the step-by-step method. This is where the ﬁnancial statements of a foreign operation

are translated into the functional currency of any intermediate parent. If the functional currency of the intermediate parent is different to

the Group's presentation currency, then the intermediate parent's ﬁnancial statements, which includes the foreign operation, are translated

into euro.

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition are translated to

euro at exchange rates at the Reporting Date. The income and expenses of foreign operations are translated to euro at exchange rates

approximating to the exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on translation are

recognised in other comprehensive income and aggregated within equity in the FCTR. However, if the operation is not a wholly owned

subsidiary, the relevant proportionate share of the translation difference is allocated to the non-controlling interests.

Reclassiﬁcation of FCTR to proﬁt or loss

•

Disposal of foreign operation

When a foreign operation is disposed of such that control, signiﬁcant influence or joint control is lost, the cumulative amount in

the translation reserve related to that foreign operation is reclassiﬁed to proﬁt or loss as part of the gain or loss on disposal. When

the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, while retaining control, the relevant

proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its

investment in an associate or joint venture that includes a foreign operation while retaining signiﬁcant influence or joint control, the

relevant proportion of the cumulative amount is reclassiﬁed to proﬁt or loss.

•

Intercompany loans forming part of net investment in foreign operations

Foreign exchange gains and losses arising from an intercompany loan balance of which settlement is neither planned nor likely in the

foreseeable future, are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive

income, and are presented within equity in the FCTR. They are released to proﬁt or loss upon disposal of that foreign operation.

Impairment

In the event of a write-down of the carrying amount of a foreign operation, either because of its own losses or because of an

impairment recognised by the investor, it does not constitute a partial disposal. Consequently, no amount of the FCTR is reclassiﬁed to

proﬁt or loss.

Restructuring

The sale of immaterial subsidiaries below an intermediate parent designated as a foreign operation is viewed as a restructure and not

a partial disposal and therefore no realisation through proﬁt and loss. It is only on the sale or partial sale of the Intermediate parent

which will be viewed as a realisation of its investment in foreign operation.

Liquidation

A complete liquidation of a foreign operation where all assets are disposed, and all liabilities and contingent liabilities are settled, and

the business is no longer active and the entity has no immediate plan to recommence activities this will be treated as a disposal.

189

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

27. NATURE AND PURPOSE OF RESERVES (CONTINUED)

Equity component of convertible bonds

Bonds which are convertible to share capital, where the number of shares to be issued does not vary with changes in their fair value, are

accounted for as compound ﬁnancial instruments. Transaction costs that relate to the issue of a compound ﬁnancial instrument are

allocated to the liability and equity components in proportion to the allocation of the proceeds. The equity component of the convertible

bonds is calculated as the excess of the issue proceeds over the present value of the future interest and principal payments, discounted

at the market rate of interest applicable to similar liabilities that do not have a conversion option. The interest expense recognised in proﬁt

or loss is calculated using the effective-interest method.

Share-based payment reserve relating to equity-settled share based payment scheme

The fair value of the deferred delivery shares and the share rights granted to employees is recognised as an employee expense with a

corresponding increase in equity. Refer to note 33. Once the share rights in a share scheme vests or becomes highly unlikely to vest, the

relevant portion of the share-based payment reserve is transferred to accumulated losses.

Excess of consideration (paid to)/received from non-controlling interest

Any increases or decreases in ownership interest in subsidiaries without a change in control are recognised as equity transactions. The

carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests

in the subsidiaries. Any differences between the amount by which the non-controlling interests are adjusted and the fair value of the

consideration paid or received are recognised directly in equity and attributed to owners of the company.

Sundry reserves

Sundry reserves comprise fair valuations of available-for-sale ﬁnancial assets, cash flow hedge reserves and actuarial gains or losses

recognised on the measurement of the deﬁned beneﬁt plans.

28. ORDINARY SHARE CAPITAL

30 September 30 September

2021

2020

Number of

Note

28.1 Authorised

Balance at beginning of the period

16 000 000 000 17 500 000 000

Decrease in authorised ordinary shares¹

Cancellation of shares

–

(1 500 000 000)

–

28.2

(40 118 093)

Total authorised ordinary shares of €0.01 each

15 959 881 907 16 000 000 000

¹By amendment to the Articles of Association on 28 August 2020, the aggregate number of

authorised ordinary shares was decreased from 17 500 000 000 to 16 000 000 000.

28.2 Issued

Balance at beginning of the period

4 309 727 144 4 309 727 144

Cancellation of shares

(40 118 093)

–

Balance at the end of the period

4 269 609 051 4 309 727 144

Cancellation of shares

Effective as of 3 November 2020, the issued share capital of Steinhoff N.V. was

reduced by 40 118 093 ordinary shares.

The resolution to reduce the capital of the Company by cancelling 40 118 093 Ordinary

Shares, that were held by the Company (the “Cancelled Shares” and the cancellation

of these Cancelled Shares, the “Capital Reduction”) was adopted by the General

Meeting on 28 August 2020. The Company deposited the resolution to cancel the

Cancelled Shares with the Dutch Trade Register and announced the Capital Reduction

in a daily nationally distributed newspaper on 2 September 2020. As from the date of

the announcement the statutory waiting period of two months for creditors to oppose

the Capital Reduction commenced. On 4 November 2020, the Court of Amsterdam

conﬁrmed that no creditors had opposed to the Capital Reduction during this period.

Therefore, the resolution took effect after two months having passed since the

announcement had been made. The Capital Reduction was aimed at optimising the

Company’s equity structure.

28.3 Treasury shares

Balance at beginning of the period

Cancellation of shares

(137 564 468)

40 118 093

(161 385 688)

–

Disposal of Steinhoff shares by a subsidiary company

Treasury shares held by subsidiaries of the Group

Balance at the end of the period

45 873 096

(51 573 279)

23 821 220

(137 564 468)

Total issued ordinary share capital

4 218 035 772 4 172 162 676

190

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

28. ORDINARY SHARE CAPITAL (CONTINUED)

30 September 30 September 30 September 30 September

2021

2020

2021

2020

Share capital

€m

Share capital Share premium Share premium

Notes

€m

28.4 Issued

Balance at beginning of the period

–

11 020

(139)

11 020

–

Cancellation of shares

28.2

Balance at the end of the period

10 881

11 020

28.5 Treasury shares

Balance at beginning of the period

(2)

(482)

139

(483)

–

Cancellation of shares

28.2

–

Shares sold during the period

Balance at the end of the period

Total issued ordinary share capital and share

premium

(2)

(276)

(482)

10 605

10 538

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per

share at the General Meetings of the Company.

Sale of treasury shares

During the 2021 Reporting Period, subsidiary companies of the Group sold 42 722 416 shares it held in the Company. The number

of treasury shares were further reduced by 3 150 680 on disposal of a subsidiary.

All issued ordinary shares have been fully paid-up.

30 September

2021

30 September

2020

Number of

28.6 Unissued shares

Shares reserved for future participation in share scheme

105 831 130

11 584 441 726

11 690 272 856

105 831 130

11 584 441 726

11 690 272 856

Unissued shares

Total unissued shares

191

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

29. PREFERENCE SHARE CAPITAL

29.1 Authorised

30 September

2021

30 September

2020

30 September

2021

30 September

2020

Classiﬁcation of preference shares

Payment of

dividends

Classiﬁcation of

Number of

Redemption

instrument

€m

–

€m

–

Steinhoff N.V.

Non-cumulative ﬁnancing preference shares of €0.01 each

Non-redeemable

Discretionary

Equity

4 000 000 000

1 000 000 000

4 000 000 000

1 000 000 000

SIHPL

Cumulative, non-participating preference shares of no par value

Equity

SIHL

Variable rate, cumulative, non-participating preference shares

of ZAR0.0001 each

Non-redeemable

Discretionary

Equity

495 000 000

Steinhoff Africa

Class A perpetual preference shares (par value ZAR0.01)

Class B perpetual preference shares of no par value

Cumulative redeemable preference shares

(par value ZAR0.01)

Non-redeemable

Redeemable

Discretionary

Equity

Compound

2 000

–

Determined upon

Financial liability/

Redeemable

issue compound instrument

2 000

Pepkor Holdings

Non-redeemable, non-cumulative, non-participating preference

shares of no par value

Non-redeemable

Redeemable

Discretionary

Equity

5 000 000

2 500 000

10 000 000

5 000 000

2 500 000

10 000 000

Non-redeemable, cumulative, non-participating preference

shares of no par value

Discretionary

Redeemable, non-cumulative, non-participating preference

shares of no par value

Financial liability

Class A1 redeemable, cumulative, non-participating preference

shares of no par value

Class A2 redeemable, cumulative, non-participating preference

shares of no par value

Class A3 redeemable, cumulative, non-participating preference

shares of no par value

Class A4 redeemable, cumulative, non-participating preference

shares of no par value

Class A5 redeemable, cumulative, non-participating preference

shares of no par value

BVI

Cumulative, redeemable, no par value preference shares

Redeemable

Non-discretionary

Financial liability

7 850

Amount less than €500 000.

192

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

29. PREFERENCE SHARE CAPITAL (CONTINUED)

29.2 Issued

30 September 30 September 30 September 30 September

2021

2020

2021

2020

Number of

€m

Classiﬁed as equity

SIHL¹

In issue at the beginning and end of the period

15 000 000

134

Total issued preference share capital classiﬁed as equity

Classiﬁed as liabilities

BVI²

In issue at the beginning of the period

Shares redeemed during the period

In issue at the end of the period

–

3 550

(3 550)

–

(28)

–

Pepkor Holdings (class A cumulative redeemable

preference shares)³

In issue at the beginning of the period

Shares redeemed during the period

2 000

6 000

101

(113)

365

(220)

(44)

101

(2 000)

(4 000)

Exchange differences on consolidation of foreign operations

In issue at the end of the period

–

2 000

–

Summary of preference shares in issue

Non-controlling interest (note 28)

Liability

134

–

134

101

235

134

¹Terms of issued SIHL preference shares

The preference shares earn dividends on the issue price at the rate of 82.5% of the SA prime lending rate quoted by Absa Bank Limited or its

successor in title in South Africa. Although the rights to receive dividends are cumulative, declaration of such dividends is at the discretion of the

board of directors of SIHL.

²Term of issued BVI preference shares

The preference shares were issued during the 2012 ﬁnancial year and earn dividends on the aggregate of the issue price and accumulated dividends

which remain unpaid at the rate of 83.5% of the SA prime lending rate. Various subsidiaries of the Pepkor Holdings Group were guarantors of the debt

until June 2020 when the shares were redeemed.

³Term of issued Pepkor Holdings preference shares

During the 2018 Reporting Period, Pepkor Holdings issued 6 000 cumulative redeemable preference shares. The preference shares earn dividends on

the issue price at the rate of 74% of the SA prime lending rate. The preference shares are redeemable in May 2022. ZAR4 billion (€220 million) of the

total ZAR6 billion preference shares were settled early during the 2020 Reporting Period and the remaining ZAR2 billion (€113 million) was settled

during the ﬁrst half of the 2021 Reporting Period.

Accrued dividends relating to preference shares classiﬁed as equity are presented as part of the proﬁt or loss attributable to

non-controlling interest in the period to which the accrual relates, regardless of whether these dividends have been declared. Any

preference dividends actually paid have been presented as dividends paid to non-controlling interests.

193

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

30. NON-CONTROLLING INTERESTS

ACCOUNTING POLICY

Non-controlling interest

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no

goodwill is recognised as a result.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the Consolidated Statement of Proﬁt or Loss,

Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Financial Position respectively.

Subsequently, any losses applicable to the non-controlling interests are allocated to the non-controlling interests even if this results in

the non-controlling interests having deﬁcit balances.

Initial measurement of non-controlling interests

The Group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at

the non-controlling interest’s proportionate share of the acquired entity’s net identiﬁable assets.

Treatment of non-controlling interest upon loss of control

When the Group ceases to consolidate an investment because of a loss of control, any retained interest in the entity is remeasured

to its fair value with the change in carrying amount recognised in proﬁt or loss. This fair value becomes the initial carrying amount

for the purposes of subsequently accounting for the retained interest as an associate, joint venture or ﬁnancial asset. In addition, any

amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly

disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are

reclassiﬁed to proﬁt or loss.

If the Group retains no interest, the carrying value of the non-controlling interest is disposed of and forms part of the net asset value of the

investment upon disposal. The difference between the proceeds received and the net asset value disposed is recognised in proﬁt or loss.

Changes in ownership interests

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of

the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling

interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling

interests and any consideration paid or received is recognised in a separate reserve within equity attributable to owners of the Group.

Non-controlling interest: Preference shares

Preference shares classiﬁed as equity are attributable to shareholders other than the Company’s shareholders. These preference shares

are therefore attributable to non-controlling interests of the Group and are classiﬁed as a component of equity attributable to non-

controlling interests.

The voting and participation rights of preference shareholders differ to those of non-controlling ordinary equity shareholders. Preference

shareholders do not share in the underlying net asset value of the various businesses and have no voting rights except in certain instances.

Preference shares are therefore presented as a separate component of non-controlling interests within equity.

194

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

30. NON-CONTROLLING INTERESTS (CONTINUED)

30.1 Details of material non-controlling interests:

Proportion of ownership interests

and voting rights held by

non-controlling interests

Proﬁt/(loss) allocated

to non-controlling interests

Accumulated non-controlling

interests

Restated¹

30 September 30 September

30 September 30 September 30 September 30 September

2021

2020

2021

€m

2020

€m

2021

€m

2020

€m

Pepkor Holdings²

Pepco Group

Conforama³

41.07

21.11

–

32.25

(54)

–

1 361

424

869

–

(40)

103

Individually immaterial

subsidiaries with non-

controlling interests

–

(3)

–

120

(97)

1 888

134

953

134

Preference shares classiﬁed as equity (note 29.2)

Total non-controlling interests

124

(91)

2 022

1 087

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

²On 15 September 2021, Ainsley Holdings ceded 283 million Pepkor Holdings shares to the SRF in order to prove to the District Court of Amsterdam

that Steinhoff will be able to perform under the Composition Plan when the Settlement Effective Date occurs.

³The Group owns more than 99.99% of the 98 billion ordinary shares of Conforama Holding SA, however warrants were issued to senior secured bond

holders that effectively grant them 49.9% of the economic rights to the future returns of Conforama. Refer to note 30.2.

Any non-controlling interests recognised by the subsidiaries are included in the balances above.

30.2 Material transactions with non-controlling interests

Pepkor Holdings

2021 Reporting Period

In March 2021, Pepkor Holdings issued 6 234 974 of its shares to qualifying employees under the Pepkor Holdings ESRS. This

diluted the Group’s shareholding in Pepkor Holdings from 67.8% to 67.6%.

As announced on 14 April 2021, the transaction for Pepkor Holdings to acquire twelve properties included in the Africa Properties

portfolio currently leased from the Group, received the necessary approvals and all conditions precedent were fulﬁlled. The total

consideration for the properties consist of a total of 70 million new Pepkor Holdings shares. These shares were issued with the

transfer of each property which occurred between July and September 2021. As at the Reporting Date, 68 720 747 shares have

been issued resulting in an increase in the Group’s shareholding in Pepkor Holdings to 68.2%.

On 13 September 2021, the Group announced the successful completion of a bookbuild, having placed 370 million Pepkor

Holdings shares at ZAR19.75 per share, representing a discount of 9% and raising ZAR7.3 billion (€409 million). This diluted the

Group’s shareholding in Pepkor Holdings to 58.3%.

During September 2021, Pepkor Holdings repurchased 38 million shares on the open market on the JSE for €43 million. This

increased the Group's shareholding to 58.9%.

After the implementation of the Litigation Settlement Proposal the percentage ownership held in Pepkor Holdings will reduce to

50.6%. The likelihood of exercising the call option provided to Trevo will be re-assessed at each reporting period.

2020 Reporting Period

On 23 June 2020, Pepkor Holdings announced a non-pre-emptive placement of up to 172.5 million ordinary shares in the

authorised but unissued share capital of Pepkor Holdings to certain institutional investors, representing up to 4.95% of Pepkor

Holdings existing issued ordinary shares.

On 24 June 2020, Pepkor Holdings announced the successful completion of this bookbuild, having placed the full

172.5 million shares at ZAR11.00 per share, representing a discount of 6%, and raising ZAR1.898 billion (€105 million). The

Group did not participate in this transaction, reducing its effective shareholding in Pepkor Holdings from c.71% to c.68%. The

script dividend to non-controlling interest was where shareholders did not elect the alternative cash dividend and were entitled to

1.22426 shares for every 100 Pepkor Holdings shares held.

195

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

30. NON-CONTROLLING INTERESTS (CONTINUED)

30.2 Material transactions with non-controlling interests (continued)

Pepco Group

2021 Reporting Period

On 26 May 2021, following a successful IPO process, shares in Pepco Group began trading on the Warsaw Stock Exchange with

the ticker symbol “PCO”. The ﬁnal offer price of shares in the IPO was PLN40 per share, giving Pepco Group an implied market

capitalisation of approximately PLN23 billion (€5 billion).

Steinhoff received proceeds of approximately €1 billion from the sale of shares in the IPO, which together with the intercompany

loan repayments, was applied to reduce the Group’s outstanding debt.

IEP interest

2020 Reporting Period

During May 2020, Steinhoff Finance Investments Proprietary Limited, the registered beneﬁcial holder of 92% of the issued share

capital in Mons Bella Private Partner Investment Proprietary Limited, holder of the IEP interest, has acquired the remaining 8%

of Mons Bella Private Partner Investment Proprietary Limited’s issued shares from Chestnut Hill Investments 288 Proprietary

Limited (an entity otherwise unrelated to the Group) for ZAR72 million (€4 million). The purchase also concluded all legal disputes

between the parties. This transaction closed on 15 May 2020.

Conforama Warrants issued to senior bond holders

2020 Reporting Period

On 15 April 2019, Conforama issued senior secured bonds to the amount of €205 million (“Tranche A Bonds”) .

As additional consideration for the senior secured bonds, the creditors were granted warrants (“Warrants”) that effectively

granted them 49.9% of the economic rights to the future returns of Conforama (i.e. 49.9% right to returns arising from

distributions, exit and / or a liquidation event) through the right to ownership of Class 2 Preference Shares in the future.

The Warrant agreement came into effect on 15 April 2019, with 205,242,947 Warrants issued to bondholders on 29 May 2019.

An Exercise Event, that would trigger the conversion of the warrants into Class 2 Preference Shares, includes any of the following

events:

•

Listing, partial exit or change in control of Conforama;

Voluntary or involuntary liquidation of Conforama;

Any distribution by any nature whatsoever by Conforama for the beneﬁt of shareholders; or

Six months prior to 29 May 2029.

The Class 2 Preference Shares will therefore be classiﬁed as a non-controlling interest in the Consolidated Financial Statements

of Steinhoff N.V. as it provides the holders thereof the right to the equity (i.e. dividends and a portion of net liquidation proceeds)

of Conforama.

The Warrants therefore provide the holders thereof with the right to equity returns from issuance date and not only from the date

that the Warrants are exercised. This would therefore result in the issued Warrants being classiﬁed as a non-controlling interest

from issuance date, at a consolidated Steinhoff N.V. level.

The Warrants carry no voting rights. In the case that all the Warrants were to be exercised (which is an individual decision to be

made by each holder of Warrants during the relevant Exercise Period), they would “convert” into 205,242,947 Class 2 Preference

Shares. Class 2 Preference Shares bear signiﬁcant ﬁnancial rights, as they together give right by priority to 49.90% of all

shareholders’ proceeds. However, Class 2 Preference Shares do not carry any particular voting rights, such as any right to change

the governance structure at the level of Conforama Holding SA.

In particular, each Class 2 Preference Share will only bear one voting right, and therefore exercise of all Warrants (if and when it

happens) will have little impact per se on the allocation of voting powers within the Company: Conforama Développement would

continue holding more than 99% of the ordinary shares (98 billion) issued by the Company.

Dividends

2020 Reporting Period

Ordinary dividends to non-controlling interest during the 2020 Reporting Period relate to Pepkor Holdings ZAR209 million

(€11.5 million) of which ZAR75 million (€4 million) was paid in cash and ZAR134 million (€7.5 million) was a script dividend and

Sherwood USD11 million (€10 million).

196

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

30. NON-CONTROLLING INTERESTS (CONTINUED)

30.3 Summarised ﬁnancial information in respect of the Group’s subsidiaries that have material non-controlling interests:

30 September 2021

30 September 2020

Restated¹

Pepkor

Holding

€m

Pepco

Group Conforama

Pepkor

Holdings

€m

Pepco

Group Conforama

€m

The summarised ﬁnancial information

below represents amounts before

intragroup eliminations and consolidation

entries.

Summarised Statement of Financial

Position

Non-current assets

Current assets

2 349

1 232

398

215

4 291

1 612

2 050

1 020

(1 434)

(883)

532

323

3 821

1 352

(1 558)

(906)

Non-current liabilities

Current liabilities

(1 460)

(1 114)

(170)

(225)

(1 541)

(1 050)

(89)

(564)

Summarised Statement of Proﬁt or Loss

and Other Comprehensive Income

Revenue

4 122

155

723

(49)

4 362

275

3 518

(1)

2 695

(163)

3 895

(157)

Proﬁt/(Loss) for the period

Proﬁt/(Loss) attributable to owners of the

parent

155

(49)

275

(1)

(163)

(157)

Proﬁt attributable to the non-controlling

interests²

–

Proﬁt/(Loss) for the period

155

(49)

275

(1)

(163)

(157)

Total comprehensive income attributable

to owners of the parent

242

(49)

227

(53)

(134)

(97)

Total comprehensive income attributable

to the non-controlling interests²

Total comprehensive income/(loss) for the

period

–

242

(49)

227

(53)

(616)

(97)

Summarised Statement of Cash Flows

Net inflow from operating activities

Net (outflow)/inflow from investing

activities

702

401

579

242

477

(183)

(415)

104

202

(202)

(99)

(281)

(165)

(243)

171

(167)

(120)

(254)

103

Net outflow from ﬁnancing activities

Net cash inflow

Dividends paid to the non-controlling

interests²

–

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a

continuing operation.

²This relates to non-controlling interest at the subsidiary level and not at the Group’s level.

197

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

31. RELATED-PARTY TRANSACTIONS

Key judgements

Key Management Personnel

The Group considered the various entities related and afﬁliated with certain key management personnel during the periods presented, to

determine whether any material transactions were concluded between the Group and these entities.

The Group’s considerations are explained in this note.

Jayendra Naidoo related and afﬁliated entities

Jayendra Naidoo was a Supervisory Board member from March 2017 until January 2018. Jayendra Naidoo was also the Chairman of

Pepkor Holdings, a material subsidiary, until 30 November 2020. Jayendra Naidoo was therefore considered a related party to the Group

in the 2020 Reporting Period. On 18 November 2020, Pepkor Holdings announced that Jayendra Naidoo, who had been in ofﬁce since

August 2017, would not make himself available for re-election as chairman of the Pepkor Holdings board of directors when his term

ended on 30 November 2020. On 20 January 2021, Pepkor Holdings announced that Jayendra Naidoo had resigned as a director effective

1 February 2021.

The following were identiﬁed by the Group as being material related parties to the Group as a result of the transactions between the Group

and these entities related or afﬁliated to Jayendra Naidoo during the periods presented:

•

Lancaster 101 and Lancaster 102

Lancaster Electricity Solutions Proprietary Limited

Other

Related-party relationships also exist between shareholders, subsidiaries, joint-venture companies and associate companies within the

Group and its company directors and Group key management personnel.

All material intragroup transactions are eliminated on consolidation.

31.1 Directorate

The directorate below reflects the Management and Supervisory Board members as at the date this report was approved.

Management Board

Louis du Preez

Appointed:

20 April 2018

Theodore de Klerk

Supervisory Board

Moira Moses

Appointed:

Reappointed:

Appointed:

20 April 2018

30 April 2021

20 April 2018

30 August 2019

Hugo Nelson

Peter Wakkie

Alexandra Watson

Paul Copley

David Pauker

Supervisory Board members that resigned during the 2020 and 2021 Reporting Periods

Heather Sonn

Resigned:

18 May 2020

19 April 2021

Khanyisile Kweyama

Details relating to directors’ emoluments, shareholding in the Company and interest of directors and ofﬁcers are disclosed in note

32.

31.2 Key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the

activities of the Company as a whole. In the current period the following groups were considered to be key management:

•

Management Board

Supervisory Board

CEOs of signiﬁcant OpCos

Group Services employees

The number of key management members as at 30 September 2021 is 18 (2020: 20).

198

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

31. RELATED-PARTY TRANSACTIONS (CONTINUED)

31.2 Key management personnel (continued)

Compensation of key management personnel

2021

€m

2020

€m

Short-term employee beneﬁts

Accrued short-term and long-term bonus

Share-based payments – related expense

Total compensation for the period

Refer to note 32 for detailed remuneration disclosures.

31.3 Interest of key management personnel in contracts

During the periods presented, the following contracts related to key management personnel of the Group were concluded with the

Group:

2021 Reporting Period

No material transactions occurred during the 2021 Reporting Period.

2020 Reporting Period

No material transactions occurred during the 2020 Reporting Period.

199

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31. RELATED-PARTY TRANSACTIONS (CONTINUED)

31.4 Principal subsidiaries

The Group’s principal subsidiaries as at 30 September 2021 are set out below in a simpliﬁed group structure. Unless otherwise

stated, they have share capital consisting solely of ordinary shares that are held directly by the Group, as at 30 September

2021, and the proportion of ownership interests held equals the voting rights held by the Group. The country of incorporation or

registration is also their principal place of business.

Principal subsidiaries are those identiﬁed by management as contributing materially to the consolidated results or ﬁnancial

position of the Group.

The statutory list of all subsidiaries and afﬁliated companies, prepared in accordance with the relevant legal requirements (Dutch

Civil Code, Book 2, section 379), forms part of the notes to the 2021 Separate Financial Statements and is included herein as an

Annexure included under Other Information: Statutory List of all Subsidiaries.

Holding company

Furniture retailer

General merchandise retailer

Furniture and general merchandise retailer

Property investment

Finance SPV

Steinhoff N.V.

(The Netherlands)

Steinhoff Investment Holdings

Limited

Steinhoff Finance Holdings GmbH

(Austria)

Steenbok Newco 1 Limited

(Jersey)

(South Africa)

Steinhoff Africa Holdings

Proprietary Limited

(South Africa)

Steinhoff International Holdings

Proprietary Limited

Hemisphere International

Properties BV⁴

Steenbok Newco 2A Limited

(Jersey)

Steenbok Lux Finco 1 SARL

(Luxembourg)

(South Africa)

(The Netherlands)

Steenbok Newco 3 Limited⁵

(United Kingdom)

Ainsley Holdings

Proprietary Limited

(South Africa)

Pepkor Holdings Limited¹

(South Africa)

Ibex Retail Investments Limited

(Jersey)

Steenbok Lux Finco 2 SARL

(Luxembourg)

Steinhoff Africa Property Services

Proprietary Limited⁴

(South Africa)

Mattress Firm Holding Corp³

(USA)

Greenlit Brands Pty Limited⁴

(Australia)

Pepco Group N.V.

(The Netherlands)

Conforama Developpement SASU

(France)

Conforama Holdings SA⁴

(France)

¹Non-controlling interest of 41.07% (2020: 32.25%)

²Non-controlling interest of 21.11% (2020: 2.12%)

³As from 21 November 2018, the Group owns 50.1% of Mattress Firm and recognised the investment as an equity accounted investment from this date.

⁴Classiﬁed as held for sale at 30 September 2020.

⁵Certain companies were incorporated within the Group to create a new intermediate holding structure below the Company but above the key no-South African

businesses and assets of the Steinhoff Group (the “Steenbok Group”).

200

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31. RELATED-PARTY TRANSACTIONS (CONTINUED)

31.5 Trading transactions

The following is a summary of material trading transactions and balances outstanding at year-end in relation to transactions with

investments in equity accounted companies:

30 September 2021

Dividends

received by

Group

Note

€m

Equity Accounted Companies

Mattress Firm

IEP

520

524

During the 2021 Reporting Period Mattress Firm again successfully reﬁnanced its outstanding debt. In addition, Mattress Firm

made a payment to its shareholders of USD1.2 billion (€1.0 billion) with the Steinhoff Group receiving USD609 million

(€520 million).

30 September 2020

During the 2020 Reporting Period, Sherwood sold €23 million of inventory to Mattress Firm prior to the disposal of Sherwood by

the Group.

31.6 Elimination of transactions with equity accounted companies

Management assessed the upstream and downstream transactions between Group companies and equity accounted companies.

Inventory turnover of stock items purchased is relatively fast and therefore no material inventory is on hand at period-end that

should be eliminated. The remaining transactions are related to services which are recognised as they are delivered and therefore

no further eliminations are required.

201

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32. REMUNERATION REPORT

32.1 Remuneration

32.1.1 Remuneration of the Management Board and key management personnel

Annual bonus

IFRS 2 ³

share-based

payment

Other

Strategic/

retention

bonus paid

€’000

Total

remuneration

and fees

Basic

Pension

company

Deferred

bonus paid

€’000

Severance

payments

€’000

Annual

leave paid out

€’000

remuneration²

€’000

contributions contributions¹

STI

€’000

LTI

€’000

expense

€’000

2021

Louis du Preez

1 321

1 132

2 453

4 045

6 498

–

1 038

900

1 373

1 133

2 506

597

–

3 871

3 306

Theodore de Klerk

Subtotal Management Board

Key management personnel⁴

Total Management Board and other key management

131

134

265

–

1 938

2 492

4 430

–

149

–

7 177

225

900

1 765

840

11 001

18 178

3 103

152

2020

Louis du Preez

1 330

1 141

2 471

4 244

6 715

–

1 038

900

911

733

–

116

–

3 449

2 876

Theodore de Klerk

Subtotal Management Board

Key management personnel

Total Management Board and other key management

113

270

383

–

1 938

748

1 644

227

–

159

–

6 325

657

3 137

614

346

624

10 887

17 212

2 686

1 871

179

¹Other contributions mainly include company contributions to the medical aid, expense allowances and social taxes.

²Directors’ fees were paid with basic remuneration.

³Refer to note 33 for details regarding the Pepkor Holdings ESRS and cash-settled scheme applicable to certain key management members.

⁴With the key management personnel of one of the subsidiaries, additional fee schedules were agreed on for achieving deﬁned benchmarks. As at

the Reporting Date, these benchmarks have not been met and therefore no accrual is recorded for the additional fees.

There are numerous incentive plans for the Management Board based on future key performance indicators on which

fulﬁlment and subsequent approval by the Human Resources and Remuneration Committee will result in performance

bonuses. Performance bonusses are only recognised once it is probable that the key performance indicators will be achieved.

202

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

32. REMUNERATION REPORT (CONTINUED)

32.1 Remuneration (continued)

32.1.2 Remuneration of the Supervisory Board members

Other Group entities

Steinhoff N.V.

2021

€’000

2020

€’000

2021

€’000

2020

€’000

Supervisory Board members that are in ofﬁce

Paul Copley

–

150

–

150

–

190

320

190

185

254

190

243

179

174

265

197

Moira Moses

Hugo Nelson

David Pauker

Peter Wakkie

Alexandra Watson

Supervisory Board members that resigned/retired

during the 2020 and 2021 Reporting Periods

Khanyisile Kweyama¹

–

152

202

Heather Sonn²

227

236

1 409

1 602

¹Resigned on 19 April 2021.

²Resigned on 18 May 2020.

32.2 Interest in Steinhoff N.V. share capital based on active Management Board members as at 30 September 2021

Total shares

30 September 30 September

2021

2020

Management Board

Louis du Preez^**

Theodore de Klerk^**

5 165

194 270

199 435

5 165

194 270

199 435

^**No change in shareholding from the previous Reporting Date.

The shares disclosed above are the number of shares as declared by the Management Board members.

203

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

33. SHARE-BASED PAYMENTS

33.1 Employee share scheme

33.1.1 Pepkor Holdings Executive Share Rights Scheme

Pepkor Holdings grants share rights to share scheme participants under the Pepkor Holdings ESRS. The grants remain

subject to meeting certain performance conditions (vesting conditions) over the vesting period.

The Pepkor Holdings ESRS is subject to the following conditions:

a) Rights are granted to qualifying senior executives on an annual basis.

b) Vesting of rights occur on the third anniversary of grant date, provided performance criteria, as set by the Pepkor

Holdings remuneration committee at or about the time of the grant date, have been achieved.

c) In the event of performance criteria not being satisﬁed by the third anniversary of the relevant annual grant, all rights

attaching to the particular grant will lapse.

Refer to note 4.3.2 for the share-based payment expense.

2021

Number

Of rights

2020

Number

Of rights

The number of Pepkor Holdings share rights outstanding is:

Outstanding at the beginning of the period

Granted during the year

37 237 358

26 408 733

(3 590 162)

(6 234 794)

53 821 135

22 473 038

15 904 961

(1 140 641)

–

Forfeited during the period¹

Vested during the period

Outstanding at the end of the period

37 237 358

Forfeited share rights consist of certain individuals who left the group and therefore forfeited their share rights relating to the initial grants

made as well as share rights that did not vest in the current year relating to the 2018 grant.

Assumptions

The fair value of services received in return for share rights granted is measured by reference to the fair value of the share

rights granted. The estimated fair value of the services received is measured based on the assumption that all vesting

conditions are met and all employees remain in service. The pricing model used was the Monte Carlo simulation. The

equity volatility was determined using an exponentially weighted average of Pepkor Holdings’ historical daily share price.

2021 grant

2020 grant

2019 grant

Fair value of share rights and assumptions:

Fair value at grant date

Share price at grant date

Strike price

R13.56

R14.64

nil

R13.03

R13.96

nil

R19.51

R20.50

nil

Expected volatility

41.20%

2.50%

4.80%

3 years

28.20%

2.30%

6.50%

3 years

35.90%

1.70%

7.20%

3 years

Dividend yield

Risk-free interest rate

Option life

33.1.2 Pepco Group Cash-settled scheme

The Group has one cash-settled share scheme at a Pepco Group level. During the Reporting Period it was replaced with

the equity-settled Value Creation Plan, refer to note 33.1.3. The total expense arising from the cash-settled share-based

payment of €nil million (2020: €6 million), was recognised in the statement of proﬁt or loss as part of the employee

beneﬁt expense. The liability was released during the Reporting Period and a share-based payment reserve was

recognised.

33.1.3 Pepco Group Value Creation Plan

The Pepco Group put in place a Value Creation Plan (“VCP”) that was adopted on 3 March 2020 (the “Grant Date”). The

scheme aligns the remuneration of Executive Directors with the value generated for shareholders. The VCP scheme was

originally granted by Pepco Group Limited, which was acquired by Pepco Group N.V on 13 May 2021. On acquisition the

VCP plan was novated up from Pepco Group Limited to Pepco Group N.V..

Nature of conditional award

Under the VCP, participants are granted a conditional award giving the potential right to earn nil-cost options based on the

absolute total shareholder return generated above a hurdle (the “Threshold Total Shareholder Return”) at the end of each

plan year (the “Measurement Date”) over a ﬁve-year VCP period.

204

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

33. SHARE-BASED PAYMENTS (CONTINUED)

33.1 Employee share scheme (continued)

33.1.3 Pepco Group Value Creation Plan (continued)

At each Measurement Date, up to 6.9% of the value created above the hurdle will be “banked” in the form of share

awards. The initial price for the VCP was the average valuation for the Group available on the grant date. Participants will

receive the right at the end of each year of the performance period to share awards with a value representing the level

of the Company’s total shareholder return ("TSR"), measured using the 30-day average market capitalisation, above the

Threshold Total Shareholder Return at the relevant Measurement Date.

The Threshold Total Shareholder Return or hurdle which has to be exceeded before share awards can be earned by

participants is the higher of:

•

the highest previous measurement of Total Shareholder Return; and

the initial price compounded by 10% p.a.

If the value created at the end of a given plan year does not exceed the Threshold Total Shareholder Return, nothing will

accrue in that year under the VCP.

The ﬁrst Measurement Date was in January 2021, 30 days after publication of the 2020 full year results.

Vesting conditions

The vesting schedule provides that 50% of the cumulative number of share awards will vest following the third

Measurement Date and 50% of the cumulative balance following the fourth Measurement Date, with 100% of the

cumulative number of share awards vesting following the ﬁfth Measurement Date. At each vesting date, vesting of

awards is subject to:

a. a minimum TSR performance level of 10% Compound Annual Growth Rate being maintained:

•

where the TSR underpin has been achieved at the third Measurement Date, 50% of the cumulative balance will vest.

If the underpin has not been achieved no share awards will vest at this point but they will not lapse;

where the TSR underpin has been achieved at the fourth Measurement Date, 50% of the cumulative balance will

vest. If the underpin has not been achieved no share awards will vest at this point but they will not lapse; and

where the TSR underpin has been achieved at the ﬁfth Measurement Date, 100% of the cumulative balance will

vest. If the underpin has not been achieved no share awards will vest at this point and the remaining cumulative

balance will lapse;

b. any shares vesting cannot be sold prior to the ﬁfth anniversary of the date of the implementation of the VCP; and

c. an annual cap on vesting of €20.0m for the CEO and a proportionate limit for other participants:

•

in the event that in any year vesting as described above would exceed the annual cap, any share awards above

the cap will be rolled forward and allowed to vest in subsequent years provided the cap is not exceeded in those

years, until the VCP is fully paid out or after ﬁve years after the ﬁfth Measurement Date when any unvested share

awards will automatically vest. Rolled forward share awards will not be subject to further underpins, performance

conditions or service conditions.

Valuation of awards

The fair value of awards granted under the VCP is €45.3m and employer’s National Insurance liability of €9.7m spread

over the ﬁve-year period. An expense of €15.4m was recognised during the period (2020: €13.3m). The expense

recognised consisted of €12.0m in relation to share awards and €3.4m for employer’s National Insurance liability. In

determining the fair value of the VCP awards granted during the period, a Monte Carlo model was used.

205

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

34. DEFINED PENSION BENEFITS

34.1 The ﬁnancial details of the different funds and the effect on the Group’s Consolidated Financial Statements are:

Homestyle Pension Fund

30 September 30 September

2021

€m

2020

€m

The amount included in the consolidated statement of ﬁnancial position arising from the

entity’s obligation in respect of its deﬁned beneﬁt plans are as follows:

Present value of funded deﬁned beneﬁt obligations

Fair value of plan asset

(87)

(86)

Net liability arising from deﬁned beneﬁt obligations

(2)

Components of deﬁned beneﬁt cost recognised in total comprehensive income

Remeasurement on the net deﬁned beneﬁt liability:

Return on plan assets (excluding amounts included in net interest expense)

Remeasurement gains/(losses) arising from changes in:

Demographic assumptions

–

(32)

(2)

(1)

–

Financial assumptions

Experience adjustments

–

(5)

Components of deﬁned beneﬁt cost recognised in other comprehensive income

–

(38)

Movements in the present value of the deﬁned beneﬁt obligations

Opening deﬁned beneﬁt obligations

Net interest expense

(86)

(1)

(85)

(1)

Remeasurement losses arising from changes in:

Demographic assumptions

–

(1)

(5)

Experience adjustments

Beneﬁts paid

Exchange differences on consolidation of foreign operations

Closing deﬁned beneﬁt obligations

(6)

(87)

(86)

Movements in the fair value of the plan assets

Opening fair value of plan assets

Interest income

Return on plan assets (excluding amounts included in net interest expense)

Employer contributions

–

(32)

(4)

(2)

–

Beneﬁts paid

(6)

Exchange differences on consolidation of foreign operations

Closing fair value of plan assets

206

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

34. DEFINED PENSION BENEFITS (CONTINUED)

34.1 The ﬁnancial details of the different funds and the effect on the Group’s Consolidated Financial Statements are:

Homestyle Pension Fund

30 September 30 September

2021

€m

2020

€m

The major categories of plan assets are:

Insurance policy^*

Cash

Total market value of assets

The principal assumptions used for the purposes of the actuarial

valuations are:

Discount rate

2.0%

n/a

1.5%

n/a

Expected rates of salary increase

Inflation

2.7%

2.0%

The trustees entered into a buy-in contract with Aviva on 28 August 2020, meaning from this date, Aviva pay the majority of members’ beneﬁts

(although the legal obligation to pay beneﬁts remains with the trustees). A premium was paid by the trustees to Aviva of GBP103.3 million on

28 August 2020 and from this date, the scheme has held an asset in respect of the buy-in policy. As per the requirements of IAS19 – Employee

Beneﬁts, the value of the buy-in contract (asset) is set equal to the present value of the related obligations on an IAS 19 basis at the balance sheet

date.

207

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

35. ASSETS AND LIABILITIES CLASSIFIED AS HELD-FOR-SALE

The following table presents detail of the assets and liabilities that have been classiﬁed as held-for-sale as at 30 September 2021. The

balances disclosed below include impairments recognised on the date of classiﬁcation as held-for-sale.

Greenlit

European

Properties Properties

Africa

Brands –

Plush

€m

LIPO Conforama

Other

€m

Total

€m

Notes

€m

Balance at 30 September 2021

Assets

Intangible assets

–

157

–

167

133

–

184

305

Property, plant and equipment

Right-of-use assets

Investment properties

Other ﬁnancial assets

Deferred tax assets

Inventories

–

113

–

157

Trade receivables

Other receivables

–

Cash and cash equivalents

Total assets

–

227

616

–

936

Liabilities

Borrowings

–

(16)

(5)

–

(160)

(4)

(9)

–

(9)

Lease liabilities

Provisions

(145)

(40)

(5)

(321)

(51)

(2)

Deferred tax liabilities

Trade payables

Other payables

Total liabilities

(1)

(8)

(4)

–

(18)

(1)

(2)

(1)

(4)

(19)

–

(27)

–

(201)

(4)

(3)

(1)

(6)

(253)

(6)

–

(1)

(48)

(195)

(404)

(658)

Net assets after impairments

Non-controlling interest

–

212

103

278

103

–

Impairments recognised through

proﬁt or loss

–

Reserves relating to assets held-

for-sale and disposal groups

(24)

Fair values of assets and liabilities classiﬁed as held-for-sale

Assets and liabilities classiﬁed as held-for-sale during the Reporting Period were measured at the lower of its carrying amount and fair

value less cost of disposal at the time of the reclassiﬁcation, resulting in impairments recognised through proﬁt and loss as disclosed

above. The fair value of the disposal groups that were impaired were determined using signed sales agreements. Refer to note 1 for

information about the sales agreements and the counterparties to these agreements.

208

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

35. ASSETS AND LIABILITIES CLASSIFIED AS HELD-FOR-SALE (CONTINUED)

The following table presents detail of the assets and liabilities that have been classiﬁed as held-for-sale as at 30 September 2020. The

balances disclosed below include impairments recognised on the date of classiﬁcation as held-for-sale.

European

Properties

€m

Africa

Properties

€m

Conforama

€m

Total

€m

Notes

Balance at 30 September 2020¹

Assets

Intangible assets

–

258

190

–

338

190

Property, plant and equipment

Right-of-use assets

Investment properties

Investment in equity accounted companies

Other ﬁnancial assets

Deferred tax assets

Inventories

–

6.3

–

158

159

Trade receivables

Other receivables

–

Cash and cash equivalents

Total assets

–

151

855

151

986

103

Liabilities

Lease liabilities

Provisions

–

(200)

(16)

(200)

(16)

Trade payables

Total liabilities

(23)

(2)

(250)

(466)

(275)

(491)

Net assets after impairments

–

101

389

–

495

–

Non-controlling interest

–

Impairments recognised through proﬁt or loss

–

Reserves relating to assets held-for-sale and disposal

groups

–

(4)

¹Prior year comparatives have been restated for the effect of the reclassiﬁcation of The Building Company from a discontinued operation to a continuing

operation.

Fair values of assets and liabilities classiﬁed as held-for-sale

Assets and liabilities classiﬁed as held-for-sale during the Reporting Period were measured at the lower of its carrying amount and fair

value less cost of disposal at the time of the reclassiﬁcation, resulting in impairments recognised through proﬁt and loss as disclosed

above. The fair value of the disposal groups that were impaired were determined using signed sales agreements. Refer to note 1 for

information about the sales agreements and the counterparties to these agreements.

209

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

35. ASSETS AND LIABILITIES CLASSIFIED AS HELD-FOR-SALE (CONTINUED)

The following table present a roll-forward of certain non-current assets transferred to held-for-sale during the 2021 Reporting Period

Property, plant

Other and equipment

intangible and Investment

Right-of-use

Goodwill

€m

assets

€m

property

€m

asset

€m

Notes

Balance at 30 September 2019

Transfer to assets held-for-sale

Disposal of subsidiary

–

(70)

–

612

199

–

190

–

8 & 9

1.4

(24)

–

(217)

Additions

–

Disposals

–

(229)

(23)

–

Impairments in accordance with IFRS 5

Exchange differences on consolidation of foreign

operations

1.2.1

–

(5)

(42)

–

Balance at 30 September 2020

–

369

190

8, 9 &

Transfer to assets held-for-sale

Transfer to continued operations

Disposal of subsidiary

–

(60)

(25)

–

168

–

1.4

–

(33)

(37)

Amortisation/lease modiﬁcation

Additions

–

Disposals

(4)

(119)

–

Exchange differences on consolidation of foreign

operations

–

Balance at 30 September 2021

203

305

210

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

36. EVENTS OCCURRING AFTER THE REPORTING PERIOD

•

Dividend to Preference Shareholders

The board of directors of SIHL declared a gross dividend of 286.37671 South African cents per share in respect of the period

1 January 2021 to 30 June 2021, payable to the shareholders of the 15 000 000 cumulative, non-redeemable, non-participating,

variable rate preference shares issued by SIHL. The dividend was paid on 25 October 2021.

Termination of the Dutch SoP proceedings for Steinhoff N.V.

On 2 October 2021, the appeal period in respect of the order by the District Court of Amsterdam conﬁrming Steinhoff N.V.’s

Composition Plan lapsed. No party lodged an appeal against this conﬁrmation order. Thus the conﬁrmation of Steinhoff N.V.’s

Composition Plan become ﬁnal and unappealable (in kracht van gewijsde), resulting in the termination of the Dutch SoP proceedings of

Steinhoff N.V. pursuant to Section 276 of the Dutch Bankruptcy Act.

•

Litigation Settlement Proposal – FinSurv Approval

Steinhoff N.V. and SIHPL received the necessary approvals from FinSurv on 18 October 2021, for the implementation of the cross-

border transfers contemplated by the revised Litigation Settlement Proposal. The approval is valid until 31 May 2022.

Pepkor Holdings – Dividend declaration

The board of directors of Pepkor Holdings, declared a dividend of 44.2 South African cents per ordinary share, which is payable to

shareholders on 24 January 2022 in respect of the twelve months ended 30 September 2021.

Greenlit Brands – Sale of Plush

In line with its strategy of longer-term value preservation for all stakeholders, the Group continues to explore and evaluate a range of

strategic options for its subsidiary businesses. During November 2021 Greenlit Brands closed the sale of the Plush business for an

enterprise value of AUD110 million.

•

Settlement with Trevo and others

Steinhoff N.V.’s announcement on 11 August 2021 conﬁrmed the treatment of Trevo as a Non-Qualifying Claimant (being a class

of claimants to whom an offer of compromise is not made under the terms of the S155 Scheme). Trevo, supported by others, has

opposed the sanction application for the S155 Scheme the hearing of which was scheduled to commence from the 24th of January

2022, notwithstanding that they are not a S155 Scheme creditor.

On 15 December 2021, Steinhoff N.V. announced that Trevo had agreed to a settlement in which Trevo conﬁrmed its conditional support

for the S155 Scheme subject to the satisfaction of suspensive conditions on or before 11 January 2022 unless waived or extended by the

parties. Settlement was also reached with the other Non-Qualifying Claimants who were supporting Trevo’s opposition to the sanction

application. On 7 January 2022 Steinhoff N.V. announced that these conditions had all been achieved and that the settlements had

become binding. It is viewed as an adjusting event for the 2021 Reporting Period and R500 million (€28 million) was raised as part of the

Litigation Settlement Proposal provision, representing the best estimate for settlement of the claim.

The Group further reported on 7 January 2022, that all the suspensive conditions set out in the SIHPL NQC Settlements have been fully

satisﬁed.

Under the SIHPL NQC Settlements, the SIHPL NQCs agreed to withdraw their opposition to the S155 Scheme, to support the sanction

application and implementation of the Litigation Settlement Proposal. On 24 January 2022 the Western Cape High Court granted an order

approving and sanctioning SIHPL's S155 Scheme. Refer to note 23.4.

•

Tekkie Town Settlement and Liquidation Application Proceedings

On 6 September 2021, the Court granted an Order (“the 6 September Order”) in terms of which it dismissed the preliminary argument

raised by inter alia Steinhoff N.V. that a South African Court does not have jurisdiction to wind up Steinhoff N.V. by virtue of the fact

that Steinhoff N.V. is an external foreign company (“the jurisdictional issue”). On 10 September 2021, the Court gave a

further Order, amongst other things, refusing a postponement of the liquidation application (“the 10 September Order”). On

28 October 2021, the Court granted Steinhoff N.V., and its ﬁnancial creditors, leave to appeal to the Supreme Court of Appeal with

respect to the jurisdictional issue, the ﬁnancial creditors’ intervention application and also granted the appeals against the

10 September Order. The Court also granted Steinhoff N.V. applications for postponement of the liquidation application. The

liquidation application is pending the outcome of those appeals.

Certain former owners of the Tekkie Town business instituted claims against the Steinhoff N.V. Group (together the “Former Tekkie

Town Owner Claimants”). In addition, the Former Tekkie Town Owner Claimants instituted liquidation proceedings (the “Liquidation

Application”) against Steinhoff N.V. on 12 May 2021. One of those claimants, AJVH Holdings Proprietary Limited, and a related party,

Sport City Trust, also attempted to oppose the application for the sanction of the S155 Scheme by arguing that they have SIHPL

Market Purchase Claims (as deﬁned in the S155 Scheme).

On 15 December 2021, the Steinhoff N.V. Group and the Former Tekkie Town Owner Claimants (including associated parties who have joined

or supported their Liquidation Application and S155 Scheme opposition) have agreed that the Former Tekkie Town Owner Claimants will

(i) support, and withdraw their opposition to, the S155 Scheme with immediate effect and (ii) withdraw the Liquidation Application (and their

opposition to the appeal pending before the South African Supreme Court of Appeal), subject to implementation of the Litigation Settlement

Proposal. It is viewed as an adjusting event for the 2021 Reporting Period and an additional ZAR741 million (€42 million) was raised as part

of the Litigation Settlement Proposal provision, representing the best estimate for settlement of the claim. On 24 January 2022 the Western

Cape High Court granted an order approving and sanctioning SIHPL's S155 Scheme. Refer to Note 23.4.

211

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. // Financial statements //

Notes to the consolidated financial statements for the period ended 30 September 2021 continued

36. EVENTS OCCURRING AFTER THE REPORTING PERIOD

•

Mattress Firm – Proposed IPO

On 7 January 2022, Mattress Firm announced that they had ﬁled a registration statement on Form S-1 for a proposed IPO with the

Securities and Exchange Commission in the United States. The process remains ongoing.

•

Litigation Settlement Proposal – S155 Scheme sanctioning

SIHPL’s application for the approval and sanction of the S155 Scheme was heard on 24 January 2022, by the Western Cape High Court.

At the close of the hearing the Court granted SIHPL’s request and granted an order approving and sanctioning the S155 Scheme. This

is a non-adjusting subsequent event.

Following receipt of the Order, “Settlement Effective Date” (referred to under the S155 Scheme and the Composition Plan) is expected

to occur on or about 15 February 2022. As disclosed in Steinhoff N.V.’s announcement of 15 December 2021, formal withdrawal of

the various litigation that has been settled, including the withdrawal of the Liquidation Application against Steinhoff N.V. will occur

immediately following Settlement Effective Date. Occurrence of Settlement Effective Date is the remaining condition under the

Composition Plan.

212

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

37. OTHER INFORMATION

New and amended standards adopted by the Group

The Group has applied the following relevant standards and amendments for the ﬁrst time for their annual reporting period commencing

1 October 2020. The adoption of these amendments did not have any impact on the amounts recognised in the 2020 Reporting Period.

Most of the amendments will also not affect the 2021 Reporting Period or future periods.

•

Amendment to IFRS 16 Leases Covid 19-Related Rent Concessions (issued on 28 May 2020)

Amendments to IFRS 3 Business Combinations (issued on 22 October 2018)

Amendments to IFRS 9, IAS 39 and IFRS7: Interest Rate Benchmark Reform (issued on 26 September 2019)

Amendments to References to the Conceptual Framework in IFRS Standards (issued on 29 March 2018)

Amendments to IAS 1 and IAS 8: Deﬁnition of Material

New and amended standards and interpretations not yet effective

Certain new accounting standards and interpretations have been published that are not mandatory for the 2021 Reporting Period and

have not been early adopted by the Group. The Group’s assessment of the impact of these new standards and interpretations is set out

below.

Date required to be adopted

by the Group

Amended standards not yet effective for the 2021 Reporting Period

•

IFRS 17 Insurance Contracts (issued on 18 May 2017); including Amendments to IFRS 17 (issued on

25 June 2020)

1 January 2023*

1 October 2021*

Amendments to IFRS 16 Leases: Covid-19-Related Rent Concessions beyond 30 June 2021 (issued

on 31 March 2021)

Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37

Provisions, Contingent Liabilities and Contingent Assets; and Annual Improvements 2018-2020

(All issued 14 May 2020)

1 January 2022*

•

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase

2 (issued on 27 August 2020)

1 October 2021*

Amendments to IFRS 4 Insurance Contracts – deferral of IFRS19 (issued on 25 June 2020)

Amended standards not yet endorsed

•

Amendments to IAS 1 Presentation of Financial Statements: Classiﬁcation of liabilities as current or

non-current

1 January 2023

•

Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2:

Disclosure of Accounting Policies

1 January 2023

Amendment to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Deﬁnition of

Accounting Estimates

Amendment to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a

Single Transaction

Amendment to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 - Comparative

Information

These amendments are not expected to have a signiﬁcant impact on the Group upon adoption.

There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or

future reporting periods and on foreseeable future transactions.

Number of full-time equivalent employees from continuing operations

30 September 30 September

2021

2020

Pepco Group

42 045

1 925

46 697

38 770

3 115

48 725

Greenlit Brands

Pepkor Holdings

Corporate and treasury services

All Other^*

–

820

90 731

91 519

This includes LIPO and the remaining European Logistics and Sourcing businesses at the 2020 Reporting Date.

The prior period has not been restated for discontinued operations.

213

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Notes to the consolidated financial statements for the period ended 30 September 2021 continued

37. OTHER INFORMATION (CONTINUED)

ALLOCATION OF PROFITS

Articles of Association provisions governing the allocation of proﬁts

The holders of Ordinary Shares are entitled to one vote per share and to participate in the distribution of (interim) dividends and

liquidation proceeds.

Pursuant to section 35 of the Articles, a dividend may be declared out of net income after appropriation to increase and/or from reserves.

The allocation of proﬁt remaining after reservations deemed necessary by the Management Board, with the approval of the Supervisory

Board, will then be available for distribution to the ordinary shareholders subject to approval at the General Meeting.

The Management Board, with the approval of the Supervisory Board, may propose that the General Meeting make distributions wholly or

partly in the form of ordinary shares.

Distributions on shares may be made only up to an amount which does not exceed the amount of the distributable equity.

The Management Board, with the approval of the Supervisory Board, may declare an interim dividend which does not exceed the amount

of the distributable equity.

Distribution of proﬁts

Given the Group's ongoing liquidity constraints, the Management Board, with the approval of the Supervisory Board, has resolved not to

propose dividends on the Ordinary Shares for the 2021 Reporting Period.

APPROVAL AND SIGNATORIES

Stellenbosch (South Africa), 28 January 2022

Management Board

Louis du Preez, Chief Executive Ofﬁcer and Managing Director

Theodore de Klerk, Chief Financial Ofﬁcer and Managing Director

Supervisory Board

Moira Moses, Chairperson and Supervisory Director

Peter Wakkie, Deputy-Chairperson and Supervisory Director

Paul Copley, Supervisory Director

Hugo Nelson, Supervisory Director

David Pauker, Supervisory Director

Alexandra Watson, Supervisory Director

214

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF

INTERNATIONAL HOLDINGS N.V.

SEPARATE FINANCIAL

STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. //

Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

SEPARATE STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 SEPTEMBER 2021

Restated¹

2020

2021

€’000

Notes

€’000

Interest income

379

230

Total income

Other income

6 721

7 841

Administrative expenses

(46 040)

2 824 104

2 785 164

(9 329)

2 775 835

–

(34 356)

(1 716 681)

(1 742 966)

(9 353)

Other gains/(losses) – net

Operating proﬁt/(loss) for the period before ﬁnance cost and tax

Finance cost

Operating proﬁt/(loss) for the period before tax

Taxation

(1 752 319)

8 307

Net proﬁt/(loss) for the period attributable to Steinhoff N.V. shareholders

Other comprehensive income

2 775 835

–

(1 744 012)

–

Total comprehensive income/(loss) for the period attributable to Steinhoff N.V. shareholders

2 775 835

(1 744 012)

The accompanying notes form an integral part of the ﬁnancial statements.

¹Refer to note 17 for details of the restatement to the 2020 Reporting Period.

216

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

SEPARATE STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2021

Restated¹

30 September 30 September

2021

€’000

2020

€’000

Notes

ASSETS

Non-current assets

Investment in subsidiary companies

2 745 075

1 064 983

Current assets

Cash and cash equivalents

Trade and other receivables

Taxation receivable

4 346

30 932

2 429

–

4 942

Related party loans receivable

175 078

179 442

2 924 517

156 117

194 420

1 259 403

Total assets

EQUITY AND LIABILITIES

Capital and reserves

Ordinary share capital

Share premium reserve

Treasury shares

42 697

7 385 398

–

43 098

7 522 465

(137 468)

Accumulated losses

(7 306 955)

121 140

(10 082 790)

(2 654 695)

Non-current liabilities

Borrowings

1 204 777

941 353

2 598 503

905 501

Related party loans payable

2 146 130

3 504 004

Current liabilities

Other payables and accruals

Provision – Litigation Settlement Proposal

Related party loans payable

9 634

641 646

5 967

10 494

399 600

–

657 247

2 924 517

410 094

1 259 403

Total equity and liabilities

The accompanying notes form an integral part of the ﬁnancial statements.

¹Refer to note 17 for details of the restatement to the 2020 Reporting Period.

217

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

SEPARATE STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 SEPTEMBER 2021

Ordinary

stated

share capital

premium

€’000

Treasury Accumulated

€’000

losses

€’000

Total

€’000

Notes

€’000

Total equity at 1 October 2019

43 098

7 522 465

(137 468)

(8 338 778)

(1 489 355)

(9 828 133)

(254 657)

(910 683)

(1 489 355)

(2 400 038)

(254 657)

Total comprehensive loss for the year before restatements

Balance at 30 September 2020 as previously reported

Restatements

–

43 098

–

7 522 465

–

(137 468)

–

Balance at 30 September 2020 – Restated

Total comprehensive income for the year

Transactions with owners in their capacity as owners

Cancellation of treasury shares

43 098

–

7 522 465

–

(137 468) (10 082 790)

(2 654 695)

2 775 835

–

2 775 835

10.3

(401)

(137 067)

7 385 398

137 468

–

Balance at 30 September 2021

42 697

(7 306 955)

121 140

Ordinary stated capital and reserves

The ordinary stated share capital and share premium reserve records the movements in the issued share capital of the Company.

218

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

SEPARATE STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 30 SEPTEMBER 2021

2021

€’000

2020

€’000

Note

CASH FLOWS FROM OPERATING ACTIVITIES

Cash utilised in operations

(38 130)

4 942

(28 156)

(36)

Tax received/(paid)

Net cash outflow from operating activities

(33 188)

(28 192)

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds received on repayments of related party loans receivable

Net cash inflow from investing activities

–

2 893

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds received from related party loans payable

Repayments of related party loans payable

5 814

(31)

–

(140)

Net cash inflow/(outflow) from ﬁnancing activities

5 783

NET INCREASE IN CASH AND CASH EQUIVALENTS

Cash and cash equivalents at beginning of the period

Effects of exchange rate changes on cash and cash equivalents

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD

(27 405)

30 932

819

(25 439)

58 736

(2 365)

30 932

4 346

219

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

BASIS OF

PREPARATION

FOR THE PERIOD ENDED 30 SEPTEMBER 2021

REPORTING ENTITY

The 2021 Separate Financial Statements of the Company are included as part of the Consolidated Financial Statements of Steinhoff N.V.

The Company is a South African tax resident.

BASIS OF PREPARATION

Statement of compliance

The 2021 Separate Financial Statements have been prepared in accordance with IFRS as adopted by the EU and Part 9 of Book 2 of the Dutch

Civil Code.

Unless otherwise indicated, these ﬁnancial statements are prepared on the accrual basis in thousands of euro (€’000). The euro is the Company’s

presentation and functional currency.

Historical cost convention

The 2021 Separate Financial Statements have been prepared on a historical cost basis.

Going-concern assessment

The 2021 Separate Financial Statements have been prepared on a going concern basis.

In the 2021 Reporting Period, the Company’s current liabilities exceed the current assets.

Refer to the basis of preparation section of the 2021 Consolidated Financial Statements for a detailed going concern assessment of the Group,

including the Company.

KEY ACCOUNTING POLICIES

If not stated otherwise, the accounting policies applied are the same as those in the Consolidated Financial Statements.

Shareholders’ equity

The reserves were previously formed under, and are still recognised in accordance with, the Dutch Civil Code.

Statement of cash flows

The statement of cash flows is prepared using the indirect method. Assets and liabilities acquired as part of a business combination are included

in investing activities (net of cash acquired). Dividends paid to shareholders are included in operating activities. Dividends received are classiﬁed

as operating activities, as well as interest received and paid.

Contingent payment undertakings (“CPUs”)

The CPUs were classiﬁed as ﬁnancial liabilities with the adoption of IFRS 9 during the 2019 Reporting Period.

The CPU contracts, excluding the contingent component, are initially and subsequently measured as the amount that Steinhoff N.V. expects to

settle under these contracts (‘the shortfall’). The shortfall is calculated as the excess of the carrying amount of the debt at year-end in relation

to the estimated value of the subsidiaries by whom these debts are owed. In determining these estimated values for continued operations,

management utilised the same information that was applied for impairment testing and in the case of discontinued operations, the fair value less

cost to sell. For listed entities, the closing share price on the Reporting Date was used in the valuations. The contingent liability component is

accounted for in accordance with IAS 37.

220

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

KEY ACCOUNTING POLICIES (CONTINUED)

Contingent payment undertakings (“CPUs”) (continued)

IAS 37, Provisions, Contingent Liabilities and Contingent Assets, requires an entity to treat the part of a joint and several liability that is expected

to be met by other parties as a contingent liability. The guidance in IAS 37 is applicable to contingent liabilities. However, the measurement

approach in IAS 37 for joint and several liabilities is generally consistent with the measurement approach for the CPUs. In accordance with IAS 37,

it may be possible that under extremely rare circumstances, no reliable estimate of a liability can be made, and as a consequence that contingent

liability component may not be recognised, but disclosed.

The impact of IFRIC 23 Uncertain tax positions was taken into account. A liability was also recognised in SIHPL and the Company for the

Litigation Settlement Proposal and is taken into account in the measurement of the CPUs shortfall. The best estimate of the Litigation

Settlement Proposal, as provided for in the Consolidated Financial Statements, was used in the valuation of the CPUs. The Litigation Settlement

Proposal provision raised in the Company is not taken into account in the CPU shortfall due to it being recognised in these ﬁnancial statements.

Withholding and dividend taxes that may be payable upon disposal of the underlying business were not included in the valuation of the CPUs

as these taxes will be influenced by the outcome of the speciﬁcs surrounding the disposal in question and the jurisdiction in which the buyer is

domiciled. As such, it is considered impracticable to quantify the taxes that may have to be paid.

Subsequently the CPUs are measured at amortised cost by adjusting the gross carrying amount of the ﬁnancial liability to reflect the actual and

revised shortfall as at the end of the Reporting Period. Any adjustments are recognised in proﬁt or loss.

CHANGES IN ACCOUNTING POLICIES

Refer to note 37 of the Consolidated Financial Statements for disclosure regarding new accounting standards adopted by the Company and the

Group.

AREAS OF KEY JUDGEMENTS AND ESTIMATES

Key judgements and estimates used for the value-in-use calculations used in CPU valuations

The estimated disposal values of the underlying businesses are key estimates in determining the value of the CPUs. Apart from the fact that the

valuation techniques used are inherently subject to estimation uncertainty, the following items may also result in material differences between the

actual and estimated disposal values:

•

the potential impact of legal claims, should the Litigation Settlement Proposal not be implemented;

future performance of the underlying businesses and the markets in which they operate;

potential discounts on the sale of the underlying businesses that may be required in order to dispose of these businesses within the required

time frame;

•

withholding and dividend taxes that may be payable upon disposal of the underlying business were included in the valuation of the CPUs;

key sources of estimation uncertainty as disclosed in note 8 of the Consolidated Financial Statements;

the assumptions applied in the value-in-use calculations take into account the COVID-19 impact; and

litigation claims are included in the valuation of the CPUs to the extent that a liability has been recognised in the Consolidated Financial

Statements.

Refer to note 6 (Taxation), note 23 (Provisions), note 24 (Contingent liabilities) and note 36 (Events occurring after the Reporting Period) of the

Consolidated Financial Statements for more details of pending litigation and tax uncertainties.

The calculation of the CPUs is subject to signiﬁcant judgements which include the following:

•

The ability of the Group to utilise loans owed to SIHPL by South African entities in order to settle European debts and the recoverability of

these loans. Management considers that these loans could be called on to service the European debts and that they are fully recoverable.

221

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

INTEREST INCOME

2021

€’000

2020

€’000

Notes

Cash and cash equivalents

216

163

379

230

–

South African Revenue Services

230

OTHER INCOME

2021

€’000

2020

€’000

Notes

Recovery of legal fees from insurance

Recovery of Directors & Ofﬁcers insurance expenses

Recovery of legal expenses

1 700

3 905

2 185

3 398

–

15.2

Recovery of German real estate transfer tax

Other

1 076

–

2 258

7 841

6 721

ADMINISTRATIVE EXPENSES

2021

€’000

2020

€’000

Administration expenses consists of the following:

Appointed Dutch Administrators’ fees

Audit fees

(2 361)

(5 575)

–

(7 332)

(2 811)

(3 850)

(1 825)

(3 341)

(13 521)

203

Bad debts

Consulting fees

(3 026)

(1 613)

(20 867)

(12 156)

–

Supervisory Board fees

Directors and ofﬁcers insurance

Legal fees

Reversal of penalty fees

Other administrative expenses

(442)

(1 879)

(34 356)

(46 040)

Refer to note 4 in the Consolidated Financial Statements for the Group’s salary, wage and contribution to pension schemes as well as note

37 for employee numbers. No employees are employed by the Company.

Refer to note 32.1 in the Consolidated Financial Statements for the remuneration of the Management Board and Supervisory Board.

222

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

OTHER GAINS/(LOSSES)

Restated¹

2020

2021

€’000

Notes

€’000

4.1

4.2

Net foreign exchange (losses)/gains

(7 668)

9 321

Foreign exchange gains and losses are recognised in proﬁt or loss on foreign

denominated loans and bank accounts in the separate ﬁnancial statements.

Reversal of impairment/(impairment) of investment in subsidiary companies

a) In the 2020 Reporting Period an impairment of €18 million was recognised on the

investment in Steinhoff US Holdings I Inc after the underlying operating activities

were sold.

7.1

1 680 092

(708 707)

b) An impairment reversal of €1.7 billion (2020: impairment of €688 million) has been

recognised on the SIHL investment due to an increase in the fair values of the

remaining underlying assets and the appreciation of the ZAR:EUR exchange rate.

c) In the 2021 Reporting Period, an additional impairment of €5.9 million (2020:

€2.4 million) was recognised on the investment in SUKGS.

4.3

4.4

4.5

Reversal of impairment provision of receivables from related parties

The SUKGS loan was repaid during the 2020 Reporting Period, resulting in the reversal

of the impairment of €1.3 million recognised previously.

–

1 393 726

(242 046)

1 295

(618 990)

(399 600)

Financial liabilities remeasured by the Company in proﬁt or loss

11.2

The amount that the Company is expected to pay under the various CPUs decreased

by €1.4 billion (2020: increased by €619 million) in the 2021 Reporting Period.

Litigation Settlement Proposal provision raised

Refer to notes 23, 24 and 36 of the Consolidated Financial Statements for a detailed

overview of these proceedings and the Litigation Settlement Proposal provision that

has been raised.

TOTAL OTHER GAINS/(LOSSES)

2 824 104

(1 716 681)

¹Refer to note 17 for details of the restatement to the 2020 Reporting Period.

FINANCE COST

2021

€’000

2020

€’000

Note

Cash and cash equivalents

Related parties

Other

9 285

–

157

9 186

15.2

9 329

9 353

223

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

TAXATION

Restated¹

2020

2021

€’000

Major components of the tax expense:

Current tax (2020: overprovision of prior year tax)

–

(8 307)

Reconciliation of the tax expense

Net proﬁt/(loss) before taxation

2 775 835

777 234

(1 752 319)

(490 649)

Tax at the applicable rate of 28% (South African corporate taxation rate)

Tax effect of adjustments on taxable income

Impact of not recognising deferred tax assets for losses as recoverability is not assured

Overprovision of prior year tax

(777 234)

490 649

(8 307)

–

Taxation expense during the period

No tax liability has been recognised, as the Company has no taxable income for the year.

Unrecognised tax losses

150 492

26 759

Assessed tax losses have not been recognised due to it not being probable that the Company will

utilise these losses against future taxable income. These losses have no expiration date.

¹Refer to note 17 for details of the restatement to the 2020 Reporting Period.

INVESTMENT IN SUBSIDIARY COMPANIES

ACCOUNTING POLICY

Investments in subsidiaries

Investments in subsidiaries are carried at cost less impairment provisions as per IAS 27. Investments in subsidiaries are impaired to

their recoverable amount.

SFHG, Genesis Investments Gamma GmbH and Steinhoff US Holdings I Inc

At the end of the 2021 Reporting Period, management considered whether any events or circumstances have occurred that would justify

the reversal of the impairments accounted for in the prior reporting periods. It was concluded that a reversal of impairment was not

justiﬁed as no expectation of future dividends could be reasonably supported due to the high debt levels in its subsidiaries and facility

agreements with Group creditors preventing dividends from flowing to the Company.

SIHL

As at 30 September 2021, management has determined that the recoverable amount of this investment exceeds its carrying amount.

However, legal claims not included in the Litigation Settlement Proposal and the value of the claims, should the settlement be unsuccessful

(refer to note 23 and 24 of the Consolidated Financial Statements for details) were not considered in determining the recoverable amount of

this investment as a reliable estimate of these matters cannot be made.

The recoverability of the investment in SIHL was determined in terms of a sum-of-the parts calculation performed on a SIHL group level. The

increase in the recoverable amount is mainly due to the increase of the share price of Pepkor Holdings from a closing price of R11.14 on

30 September 2020 to a closing price of R21.57 on 30 September 2021 and the appreciation of the rand against the euro from R19.7092 per

euro on 30 September 2020 to R17.5629 per euro on 30 September 2021. An impairment reversal of €1.7 billion (2020: impairment of

€709 million) has therefore been raised against the investment.

224

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. //

Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

INVESTMENT IN SUBSIDIARY COMPANIES (CONTINUED)

Total carrying

value

Country of

incorporation

Issued

share capital

Shareholding

€’000

30 September 2021

Genesis Investments Gamma GmbH

Austria

€35 000

€100 000

100

–

SFHG

SIHL

–

2 745 075

–

South Africa

United Kingdom

ZAR275 000

GBP200 000

SUKGS

United States

of America

Steinhoff US Holdings I Inc

Steenbok Newco 1 Limited

USD1

100

–

Jersey

GBP100

2 745 075

30 September 2020 – Restated

Genesis Investments Gamma GmbH

Austria

€35 000

€100 000

100

–

SFHG

SIHL

South Africa

United Kingdom

ZAR275 000

GBP200 000

1 059 217

5 766

SUKGS

United States

of America

Steinhoff US Holdings I Inc

Steenbok Newco 1 Limited

USD1

100

–

Jersey

GBP100

£100

1 064 983

Less than €500.

30 September 30 September

2021

€’000

2020

€’000

Note

Shares at cost

4 640 986

(1 895 911)

2 745 075

4 747 680

(3 682 697)

1 064 983

Less: Impairment provision

Shares at carrying value

7.1

Reconciliation of cost of investment and related impairment provisions per subsidiary

Steinhoff US

Holdings I Inc

€’000

SIHL

€’000

SUKGS

€’000

Total

€’000

Notes

Carrying value of investment in subsidiaries –

1 October 2019

1 747 368

(688 151)

1 059 217

1 685 858

2 745 075

18 144

8 178

(2 412)

5 766

(5 766)

–

1 773 690

(708 707)

1 064 983

1 680 092

2 745 075

Additional impairment of investment in

subsidiaries through proﬁt or loss

Carrying value of investment in subsidiaries –

30 September 2020 – Restated

4.2

(18 144)

–

Reversal of/(additional) impairment of investment

in subsidiaries through proﬁt or loss

Carrying value of investment in subsidiaries –

30 September 2021

225

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. //

Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

CASH AND CASH EQUIVALENTS

30 September 30 September

2021

€’000

2020

€’000

Cash at bank and on hand

4 346

30 932

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call

with ﬁnancial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily

convertible to known amounts of cash and which are subject to an insigniﬁcant risk of changes in value.

Restricted cash

The Company does not have cash and cash equivalents that are restricted.

RECEIVABLES

30 September 30 September

2021

€’000

2020

€’000

Note

9.1 Trade receivables

Related party receivables

15.3

–

2 420

Other receivables – accrued interest

2 429

The 2020 Reporting Date related party receivables relate to directors and ofﬁcer

insurance paid by the Company on behalf of subsidiaries that have been on-charged.

9.2 Tax receivable

Current tax receivable

–

4 942

226

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. //

Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

10. SHARE CAPITAL

10.1 Authorised – ordinary

30 September 30 September

2021

2020

Number of

Ordinary shares of €0.01 each

15 959 881 907 16 000 000 000

10.2 Issued – ordinary

30 September 30 September

2021

2020

Number of

Balance at beginning of the period

Cancellation of shares

4 309 727 144 4 309 727 144

(40 118 093)

4 269 609 051 4 309 727 144

–

Total issued ordinary stated share capital

30 September 30 September 30 September 30 September

2021

2020

2021

2020

Share capital

€’000

Share capital Share premium Share premium

€’000

Balance at beginning of the period

Cancellation of shares

43 098

(401)

43 098

7 522 465

(137 067)

7 385 398

7 522 465

Total issued ordinary stated share capital

42 697

43 098

7 522 465

All issued ordinary shares have been fully paid-up.

10.3 Treasury shares

30 September 30 September

2021

2020

Number of

Balance at beginning of the period

Cancellation of shares

40 118 093

(40 118 093)

–

40 118 093

–

Balance at the end of the period

40 118 093

Effective as of 3 November 2020 the issued share capital of the Company was reduced to 4 269 609 051 Ordinary Shares of €0.01

each, following the cancellation of 40 118 093 Ordinary Shares of €0.01 each.

The resolution to reduce the capital of the Company by cancelling 40 118 093 Ordinary Shares, that were held by the Company

(the “Cancelled Shares” and the cancellation of these Cancelled Shares, the “Capital Reduction”) was adopted by the General

Meeting on 28 August 2020. The Company deposited the resolution to cancel the Cancelled Shares with the Dutch Trade Register

and announced the Capital Reduction in a daily nationally distributed newspaper on 2 September 2020. As from the date of the

announcement the statutory waiting period of two months for creditors to oppose the Capital Reduction commenced. On

4 November 2020, the Court of Amsterdam conﬁrmed that no creditors had opposed the Capital Reduction during this period.

Therefore, the resolution took effect after two months having passed since the announcement had been made. The Capital

Reduction was aimed at optimising the Company’s equity structure.

30 September 30 September 30 September 30 September

2021

2020

2021

2020

Share capital

€’000

Share capital Share premium Share premium

€’000

Balance at beginning of the year

Cancellation of shares

(401)

401

–

(401)

–

(137 067)

137 067

–

(137 067)

–

Balance at the end of the period

(401)

(137 067)

227

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. //

Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

10. SHARE CAPITAL (CONTINUED)

10.4 Unissued shares

30 September 30 September

2021

2020

Number of

Shares reserved for future participation in share schemes

Unissued shares

105 831 130

13 084 441 726 13 084 441 726

13 190 272 856 13 190 272 856

Total unissued shares

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per

share at the general meetings of the Company.

10.5 Authorised – Preference

30 September 30 September 30 September 30 September

2021

2020

2021

2020

Number of

€’000

Non-cumulative ﬁnancing preference shares of €0.01

4 000 000 000 4 000 000 000

40 000

No preference shares were issued during either period presented.

228

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. //

Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

11. BORROWINGS

11.1 Financial liabilities

30 September 30 September

2021

€’000

2020

€’000

Notes

Recognised ﬁnancial liabilities:

Hemisphere CPU

SEAG CPU

11.3.1

11.3.2

11.3.3

11.3.4

85 607

–

89 695

1 209 974

104 840

1 193 994

2 598 503

–

SFHG 21/22 CPU

SFHG 23 CPU

262 941

856 229

1 204 777

–

Portion payable within 12 months included in current liabilities

Non-current borrowings

1 204 777

2 598 503

11.2 Reconciliation of ﬁnancial liabilities

Hemisphere

CPU

SEAG

CPU

€’000

SFHG 21/22

CPU

SFHG 23

CPU

Total

€’000

30 September 2021

Opening balance

89 695

(4 088)

85 607

1 209 974

(1 209 974)

–

104 840

158 101

262 941

1 193 994

(337 765)

856 229

2 598 503

(1 393 726)

1 204 777

Remeasurement of CPUs

Closing balance

30 September 2020

Opening balance

8 825

80 870

89 695

1 282 099

(72 125)

–

104 840

688 589

505 405

1 979 513

618 990

Remeasurement of CPUs

Closing balance

1 209 974

1 193 994

2 598 503

11.3 Information regarding CPUs

Initial Outstanding Outstanding

payment

facility

2021

€’000

facility

2020

€’000

amount^*

€’000

CPU

Maturity date

Facility guaranteed

Tranche

Borrower

Hemisphere

CPU

Hemisphere Term Loan

31 December 2022 Facility

First Lien Term Loan

31 December 2022 Facility

Second Lien Term Loan

Hemisphere

Lux Finco 2

772 500

1 913 419

3 591 040

177 919

1 130 675

4 520 828

220 395

1 998 457

4 065 629

SEAG CPU

Facility

SFHG 21/22

21/22 Term Loan

CPU

31 December 2022 Facility

Lux Finco 1

1 722 596

1 179 806

9 179 361

2 134 809

1 462 131

9 426 362

1 933 776

1 324 443

9 542 700

SFHG 23 CPU 31 December 2022 23 Term Loan Facility

In terms of the CPU agreements, the maximum amount that may be recovered from Steinhoff N.V. is limited to the initial payment amount.

The CPUs all rank pari passu with each other.

229

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. //

Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

11.

BORROWINGS (CONTINUED)

11.3 Information regarding CPUs (continued)

11.3.1 Hemisphere CPU

On 5 September 2018, the Company was released as guarantor of the Hemisphere group’s syndicated rolling credit

facility, which was replaced with a new Term Loan Facility agreement. The Hemisphere CPU was entered into between

the Company and the lender group which had the effect of replacing the Steinhoff N.V. parent guarantee provided on the

previous syndicated rolling credit facility.

The value of the ﬁnancial liability to be recognised by the Company is based on the estimated fair value of the remaining

properties within the Hemisphere group.

On 11 August 2021, consent for the Interim Debt Extension was granted by its lenders. Consequently, the maturity date of

the Hemisphere term loan facility was extended from 31 December 2021 to 31 December 2022. However, on Settlement

Effective Date, the Hemisphere lenders are entitled to an early payment of €66 million (payable in cash) by Steinhoff N.V.

under the Hemisphere CPU. From Settlement Effective Date following accession by the Hemisphere Agent to the Umbrella

Agreement, the maturity date under the Hemisphere CPU and the Term Loan Facility will be extended to 30 June 2023 with

the possible extension to 31 December 2023 with the further consent of the lenders.

11.3.2 SEAG CPU

The SEAG CPU was entered into between Steinhoff N.V. and the lender group whereby Steinhoff N.V. is the sole guarantor

to the First Lien Term Loan Facility and the Second Lien Term Loan Facility.

Due to a material improvement in the underlying ﬁnancial and operational performance of the Steinhoff Europe Group

in the Reporting Period and the listing of the Pepco Group, it is expected that the full First Lien Term Loan Facility and

Second Lien Term Loan Facility will be paid, resulting in a decrease in the ﬁnancial liability to €nil.

The SEAG CPU valuation is based on the assumption that the Litigation Settlement Proposal will be implemented. Should

the Litigation Settlement Proposal not be implemented, underlying assets may need to be sold at lower values in order to

raise cash to settle potential legal claims.

11.3.3 SFHG 21/22 CPU

The SFHG 21/22 CPU was entered into between Steinhoff N.V. and the lender group, whereby Steinhoff N.V. is the co-

guarantor of the 21/22 Term Loan Facility.

The 21/22 facility is co-guaranteed by SIHPL in terms of the SIHPL CPU, whereby SIHPL guarantees €1.6 billion. Refer to

note 17.4 of the Consolidated Financial Statements for the court ruling on the validity of the SIHPL CPU. While the SIHPL

CPU may have been declared null and void, the ﬁnancial creditors have an equitable legal claim under the terms of the

2019 ﬁnancial restructuring for a similar amount to what is due under the SIHPL CPU. This obligation arises under the

provisions of the existing contracts and SIHPL has little to no ability to avoid settlement of such obligation.

In the case where the Company is a co-guarantor, and its co-guarantor and subsidiary have sufﬁcient value to carry the

obligation of the guarantee, such guarantee is recognised directly by the co-guarantor. The amount that SIHPL will have

available to repay, is dependent on SIHL and Steinhoff Africa repaying intercompany loans to the value of €1.1 billion to

SIHPL. In terms of a sum-of-the parts calculation performed on the SIHL Group, the Steinhoff Africa and SIHL loans are

considered to be recoverable.

The disposal value of the assets under the SIHPL CPU have been reduced by the Litigation Settlement Proposal that

SIHPL is expected to pay.

The SFHG 21/22 CPU valuation is based on the assumption that the Litigation Settlement Proposal will be implemented.

Should the Litigation Settlement Proposal not be implemented, underlying assets may need to be sold at lower values in

order to raise cash to settle potential legal claims.

11.3.4 SFHG 23 CPU

The SFHG 23 CPU was entered into between Steinhoff N.V. and the lender group, whereby Steinhoff N.V. is the sole

guarantor of the 23 Term Loan Facility. The 21/22 Term Loan Facility, the 23 Term Loan Facility and the SIHPL-Newco 2A

intercompany loan rank pari-passu to each other and is repaid on a pro rata basis. Funds received by SIHPL will ultimately

be used by SIHPL to perform against the SIHPL CPU, therefore distributing the funds to the 21/22 Term Loan Facility

lenders.

The SFHG 23 CPU valuation is based on the assumption that the Litigation Settlement Proposal will be implemented.

Should the Litigation Settlement Proposal not be implemented, underlying assets may need to be sold at lower values in

order to raise cash to settle potential legal claims.

230

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. //

Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

11.

BORROWINGS (CONTINUED)

11.3 Information regarding CPUs (continued)

Extension of facility maturity dates as part of the Litigation Settlement Proposal

On 11 August 2021, consent for the Interim Debt Extension was granted by its lenders. Consequently, the maturity date of the

Steinhoff N.V. CPU and facility agreements entered into pursuant to the CVA, was extended from 31 December 2021 to

31 December 2022. As a result, the debt is classiﬁed as non-current as at 30 September 2021. A further term extension will be

granted initially to 30 June 2023 on the Settlement Effective Date of the global Litigation Settlement Proposal and such maturity

date is capable of further extension to 31 December 2023 with further simple majority lender approval.

12. OTHER PAYABLES AND ACCRUALS

30 September 30 September

2021

€’000

2020

€’000

Other payables and accruals

9 634

10 494

The majority of the amounts accrued in the 2021 Reporting Period relates to advisory and consulting fees payable at period-end, which

include an outstanding balance of €1.9 million (2020: €2.6 million) of the administrative penalty of €3.2 million imposed by the FSCA in

the 2019 Reporting Period.

The fair values of other payables and accruals are disclosed in note 16.

13. PROVISIONS – LITIGATION SETTLEMENT PROPOSAL AND CONTINGENT LIABILITIES

Provision – Litigation Settlement Proposal

The Company is engaged in a number of legal proceedings. Refer to notes 23.4, 24 and 36 of the 2021 Consolidated Financial Statements

for a detailed overview of these proceedings and the Litigation Settlement Proposal provision that has been raised.

The Litigation Settlement Proposal provision raised by the Company is set out below:

30 September 30 September

2021

€’000

2020

€’000

Market Purchase Claimants – Steinhoff N.V.

436 393

169 406

35 847

266 070

103 530

30 000

Contractual Claimants – Steinhoff N.V.

Other (Non-qualifying claimants i.e. Trevo and others and Tekkie Town)

641 646

399 600

The increased settlement offer and several other amendments to the Litigation Settlement Proposal are set out in a summary term sheet

dated July 2021 available at www.steinhoffsettlement.com (not audited by Mazars).

Contingent Liabilities

•

Access to a copy of the overview of the forensic investigation published in March 2019 (“PwC Report”)

Application brought by Tiso Blackstar and others (owners of prominent South African media outlets) vs Steinhoff N.V. on 23 October

2019 on a public interest basis (as well as separate applications by Jooste) for access to a copy of the PwC Report. Exchange of

pleadings ongoing. Damages are not sought in this matter and accordingly there can be no economic outflow arising from these

proceedings.

•

Late submission of the 2016 and 2017 annual ﬁnancial statements of Steinhoff N.V.

On 8 February 2021, Steinhoff N.V. received a letter from the Bundesanstalt für Finanzdienstleistungsaufsicht (“BaFin”) stating that

they had initiated administrative ﬁne proceedings concerning the late submission of the 2016/2017 annual ﬁnancial statements of

Steinhoff N.V. and the missing announcements of certain voting rights notiﬁcations, which Steinhoff N.V. tried to rectify by publishing

a catch-up announcement on 20 November 2018. The Company responded to BaFin on 8 March 2021. To date no reaction from BaFin

has been received.

231

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. //

Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

14. CASH FLOW INFORMATION

14.1 Cash generated from operations

30 September 30 September

2021

€’000

2020

€’000

Notes

Proﬁt/(loss) before tax

2 775 835

(1 752 319)

Adjusted for:

Net foreign exchange losses/(gains)

(Reversal of impairment)/impairment of investments in subsidiaries

Reversal of impairment provision of receivables from related parties

Bad debts

4.1

4.2

4.3

7 115

(1 680 092)

(3 880)

(9 321)

708 707

(1 295)

2 550

3 880

Remeasurement/recognition of ﬁnancial liabilities

Litigation Settlement Proposal provision raised

Finance cost accrued

4.4

4.5

(1 393 726)

242 046

9 285

618 990

399 600

9 186

Other non-cash expenses

(37)

–

Cash utilised in operations before other payables and accruals changes

(39 574)

(23 902)

Changes in working capital

Decrease/(Increase) in trade receivables

Decrease in other payables and accruals

Net changes in working capital

Cash utilised in operations

2 411

(967)

(2 429)

(1 825)

(4 254)

(28 156)

1 444

(38 130)

14.2 Net debt reconciliation

30 September 30 September

2021

€’000

2020

€’000

Cash and cash equivalents

4 346

(5 967)

30 932

–

Related party loans payable – repayable within one year

Related party loans payable – repayable after one year

Borrowings – ﬁnancial liabilities – repayable after one year

(941 353)

(1 204 777)

(2 147 751)

(905 501)

(2 598 503)

(3 473 072)

14.3 Reconciliation of liabilities arising from ﬁnancing activities

Foreign

Other

non-cash

movements

€’000

Opening Remeasurement

exchange

movements

€’000

Cash

flows

€’000

Closing

balance

€’000

balance

€’000

of CPUs

€’000

30 September 2021

Borrowings

2 598 503

(1 393 726)

–

1 204 777

Loans from related

parties

905 501

3 504 004

–

26 788

9 248

5 783

947 320

2 152 097

(1 393 726)

30 September 2020

Borrowings

1 979 513

618 990

–

2 598 503

Loans from related

parties

937 193

2 916 706

–

(41 754)

10 202

(140)

905 501

3 504 004

618 990

232

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. //

Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

15. RELATED PARTY TRANSACTIONS

Related party relationships exist between the Company, its subsidiaries and key management personnel.

15.1 Subsidiaries

Details of investments in direct subsidiaries are disclosed in note 5.

15.2 Trading transactions

The following is a summary of transactions with subsidiary companies during the period and balances at the end of the period:

30 September 30 September

2021

€’000

2020

€’000

Notes

Finance cost:

Newco 2A (note 15.4)

9 285

9 186

Recovery of Directors & Ofﬁcers insurance expense:

SIHL

347

335

405

236

740

268

261

315

183

514

SIHPL

Newco 2A

Steenbok Newco 10 SARL

Ibex Retail Investments Limited

Steinhoff Properties Proprietary Limited

Conforama Holding S.A.

334

101

290

260

Steinhoff International Sourcing and Trading Limited

Hemisphere

226

SUKGS

Steinhoff UK Holdings Limited

Steinhoff Services Proprietary Limited

Steinhoff Möbel Holding GmbH

AIH Investment Holding AG

Steinhoff Europe AG (Switzerland)

Steinhoff US Holdings I Inc.

Blue Group Hold Co Limited

200

110

198

296

190

–

156

154

230

148

–

290

3 398

3 905

Recovery of legal expense:

SIHPL

–

233

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

15. RELATED PARTY TRANSACTIONS (CONTINUED)

15.3 Loans and receivables

30 September 30 September

2021

€’000

2020

€’000

Notes

Loans

Current

SIHL

175 078

3 576

156 117

3 188

SIHPL

Steinhoff Europe AG (Switzerland)¹

Ibex Retail Investments Limited¹

–

3 880

26 500

205 154

(30 076)

175 078

20 778

183 963

(27 846)

156 117

Less: Impairment provision

Receivables

Newco 2A

–

315

183

514

260

Steenbok Newco 10 SARL

Ibex Retail Investments Limited

Conforama Holding S.A.

Steinhoff International Sourcing and Trading Limited

Hemisphere

226

SUKGS

Steinhoff UK Holdings Ltd

Steinhoff Möbel Holding GmbH

AIH Investment Holding AG

Steinhoff Europe AG (Switzerland)

Steinhoff US Holdings I Inc.

156

154

230

148

2 420

¹The loans receivable from companies within the European Group were deemed irrecoverable. The recoverability of these loans was assessed on the

basis of the European Group’s inability to repay the loans based on debt levels within the European Group exceeding the European Group’s liquid or

realisable assets post restatements. A forex adjustment of €0.4 million was recognised in the 2021 Reporting Period as well as an impairment reversal of

€3.8 million.

Notes

The loan to SIHL is unsecured, interest-free and is repayable on demand.

All other loans bear no interest and have no ﬁxed terms of repayment.

The loan to Ibex Retail Investments Limited is unsecured, carries interest at JIBAR plus 1.5% and is repayable on demand. Due

to the loan being fully impaired, no interest was recognised.

These amounts relate to insurance expenses paid on behalf of subsidiaries which has been recharged.

234

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

15. RELATED PARTY TRANSACTIONS (CONTINUED)

15.3 Loans and receivables (continued)

Credit loss allowances

Gross

carrying

amount

€’000

Loss

Allowance

€’000

Amortised

cost

Internal credit

rating

Basis of

allowance

€’000

30 September 2021

SIHL

Performing

12-month ECL

Lifetime ECL

175 078

3 576

–

175 078

–

SIHPL

Non-performing

(3 576)

Ibex Retail Investments

Limited

Non-performing

Lifetime ECL

26 500

(26 500)

(30 076)

–

205 154

175 078

Gross

carrying

amount

€’000

Loss

Allowance

€’000

Amortised

cost

Internal credit

rating

Basis of

allowance

€’000

30 September 2021

SIHL

Performing

12-month ECL

Lifetime ECL

156 117

3 188

–

156 117

–

SIHPL

Non-performing

(3 188)

Steinhoff Europe AG

(Switzerland)

Ibex Retail Investments

Limited

Non-performing

Lifetime ECL

3 880

(3 880)

–

20 778

(20 778)

(27 846)

–

183 963

156 117

15.4 Loans payable

30 September 30 September

2021

€’000

2020

€’000

Notes

Non-current

Steenbok Lux Finco 1 SARL

Steinhoff Africa

Newco 2A

–

(245 801)

(695 552)

(941 353)

(12)

(219 222)

(686 267)

(905 501)

Current

SUKGS

(5 967)

–

(947 320)

(905 501)

Notes

The loan from Steenbok Lux Finco 1 SARL is unsecured, interest-free and was repaid in January 2021.

The loan from Steinhoff Africa is unsecured, interest-free and is repayable on 31 December 2022.

The loan from Newco 2A is unsecured, accrues payment-in-kind interest at EURIBOR +1.33% per annum, with a minimum

interest rate of 1.33% per annum, and is repayable on 31 December 2022.

The loans is unsecured, bears no interest and has no ﬁxed terms of repayment.

15.5 Management Board members and Supervisory Board members

For details of the Management Board members and Supervisory Board members, remuneration, share rights, interests of key

management personnel in contracts and interest in Steinhoff N.V.’s ordinary share capital, please refer to notes 31 and 32 of the

Consolidated Financial Statements.

235

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

16. FINANCIAL RISK MANAGEMENT

The Management Board is responsible for implementing the risk management strategy to ensure that an appropriate risk management

framework is operating effectively within the Company. The Company does not speculate in the trading of derivative or other ﬁnancial

instruments.

16.1 Total ﬁnancial assets and liabilities

Loans and receivables and other

ﬁnancial liabilities at carrying and

fair value

30 September 30 September

2021

€’000

2020

€’000

Notes

Related party loans receivable

Trade receivables

15.3

9.1

175 078

156 117

2 429

Cash and cash equivalents

Current ﬁnancial assets

4 346

179 442

30 932

189 478

Borrowings

(1 204 777)

(941 353)

(2 598 503)

(905 501)

Related party loans payable

Non-current ﬁnancial liabilities

15.4

(2 146 130)

(3 504 004)

Other payables

(9 634)

(5 967)

(10 494)

–

Related party loans payable

Current ﬁnancial liabilities

15.4

(15 601)

(10 494)

Realised and unrealised foreign exchange (losses)/gains

4.1

(7 668)

216

9 321

230

Interest income

No items were classiﬁed as “at fair value through proﬁt or loss” or “at fair value through other comprehensive income” during the

2021 Reporting Period.

The carrying amount of ﬁnancial assets and liabilities approximates its fair value.

The fair value calculation of the ﬁnancial assets and liabilities was performed at the Reporting Date. Between the Reporting Date

and the date of this report, the fair values reported may have fluctuated with changing market conditions and therefore the fair

values are not necessarily indicative of the amounts the Company could realise in the normal course of business subsequent to

the Reporting Date.

16.2 Market risk

16.2.1 Foreign currency risk

The ﬁnancial assets and liabilities of the Company are denominated in the functional currency except for the following

South African rand and British pounds denominated related party loans receivable, related party loans payable, other

payables and accruals and cash and cash equivalents.

British Pound

€’000

SA Rand

Notes

€’000

30 September 2021

Related party loans receivable

Cash and cash equivalents

Other payables and accruals

Related party loans payable

15.3

–

175 078

4 317

(2 941)

–

(1 923)

15.4

15.3

15.4

(245 801)

(68 329)

(2 933)

30 September 2020

Related party loans receivable

Cash and cash equivalents

Other payables and accruals

Related party loans payable

–

3 831

(1 342)

–

156 117

4 239

(125)

(219 222)

(58 991)

2 489

236

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STEINHOFF INTERNATIONAL HOLDINGS N.V. //

Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

16. FINANCIAL RISK MANAGEMENT (CONTINUED)

16.2 Market risk (continued)

16.2.1 Foreign currency risk (continued)

The following signiﬁcant exchange rates applied during the period and were used in calculating sensitivities:

Reporting Date Reporting Date

Forecast rate¹

spot rate spot rate

30 September 30 September

2022

2021

2020

South African rand: euro

British pound: euro

17.8400

0.8600

19.8900

0.8700

17.5629

0.8605

19.7092

0.9124

¹The forecast rates represent a weighting of foreign currency rates forecasted by the major banks that the Company transacts with regularly.

These rates are not necessarily management’s expectations of currency movements.

Sensitivity analysis

The table below indicates the Company’s sensitivity at the Reporting Date to the movements in the rand and the British

pound that the Company is exposed to on its ﬁnancial instruments. The percentage given below represents a weighting of

foreign currency rates forecasted by the major banks that the Company transacts with regularly. This analysis assumes

that all other variables, in particular interest rates, remain constant.

The impact on the reported numbers, using the forecast rates as opposed to the Reporting Date spot rates is set out

below.

30 September 30 September

2021

€’000

2020

€’000

Through proﬁt/(loss)

Rand weakening by 1.58% (2020: weakening by 0.9%) to the euro

British pound strengthening by 0.1% (2020: strengthening by 4.7%) to the euro

1 078

541

116

(2)

If the foreign currencies were to weaken/strengthen against the euro, by the same percentages as set out in the table

above, it would have an equal, but opposite, effect on proﬁt or loss.

16.2.2 Interest rate risk

At the Reporting Date the interest rate proﬁle of the Company’s ﬁnancial instruments was:

Subject to interest rate

movement

Variable

South African

(SA)

prime

€’000

Variable

EURIBOR

€’000

Fixed Non-interest

rate

bearing

€’000

Total

€’000

30 September 2021

Current ﬁnancial assets

Non-current ﬁnancial liabilities

Current ﬁnancial liabilities

4 317

–

(695 552)

–

175 096

(1 450 578)

(15 601)

179 442

(2 146 130)

(15 601)

–

4 317

(695 552)

(1 291 083)

(1 982 289)

30 September 2020

Current ﬁnancial assets

Non-current ﬁnancial liabilities

Current ﬁnancial liabilities

4 239

–

(686 267)

–

26 693

–

158 546

(2 817 737)

(10 494)

189 478

(3 504 004)

(10 494)

–

4 239

(686 267)

26 693

(2 669 685)

(3 325 020)

Sensitivity analysis

The Company is sensitive to movements in the SA prime rate, EURIBOR and LIBOR.

The sensitivities calculated are based on an increase of 100 basis points for each interest category. These rates are also

used when reporting sensitivities internally to key management personnel.

237

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

16. FINANCIAL RISK MANAGEMENT (CONTINUED)

16.2 Market risk (continued)

16.2.2 Interest rate risk (continued)

30 September 30 September

2021

€’000

2020

€’000

Increase/(decrease) in pre-tax proﬁt

SA prime – 100 basis point increase

EURIBOR – 100 basis point increase

(6 956)

(6 913)

(6 863)

(6 821)

A 100 basis point decrease in the above rates would have had an equal, but opposite, effect on proﬁt or loss before tax.

16.3 Credit risk

30 September 30 September

2021

€’000

2020

€’000

Potential concentration of credit risk consists principally of cash and cash equivalents,

trade receivables and related party loans receivable. The Company deposits short-term cash

surpluses with major banks of quality credit standing. At 30 September 2021, the Company

did not consider there to be any signiﬁcant concentration of credit risk which had not been

adequately provided for.

The carrying amounts of ﬁnancial assets represent the maximum credit exposure.

The maximum remaining exposure to credit risk at the Reporting Date, without taking account

of the value of any collateral obtained was:

Current ﬁnancial assets (notes 8, 9.1 and 15.3)

179 442

189 478

The maximum exposure to credit risk at the Reporting Date by geographical region was

(carrying amounts):

Continental Europe

Southern Africa

United Kingdom

179 413

25 291

160 356

3 831

179 442

189 478

Refer to note 14.2 for impairment provisions relating to irrecoverable or past due loans.

16.4 Liquidity risk

Liquidity risk is the risk that an entity will encounter difﬁculty in meeting its obligations associated with ﬁnancial liabilities.

Liquidity risk arises because of the possibility that the entity could be required to pay its liabilities earlier than expected.

The Company manages liquidity risk by monitoring forecast cash flows and by ensuring that adequate borrowing facilities are

available.

The following table details the Company’s remaining contractual maturity for its ﬁnancial liabilities. The table has been drawn up

on the undiscounted cash flows of ﬁnancial liabilities based on the earliest date on which the Company can be required to pay.

The table includes both interest and principal cash flows:

Within 1 year

€’000

Years 2 – 5

€’000

Notes

30 September 2021

Other payables and accruals

Related party loans payable

Borrowings

15.4

(9 634)

(5 967)

–

(941 353)

(1 204 777)

(2 146 130)

(15 601)

30 September 2019

Other payables and accruals

Related party loans payable

Borrowings

15.4

(10 494)

–

(905 501)

–

(2 598 503)

(3 504 004)

(10 494)

16.5 Capital risk management

The capital structure of the Company consists of cash and cash equivalents and equity, comprising issued ordinary stated capital

and accumulated losses as disclosed in the statement of changes in equity.

238

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

17. RESTATEMENTS

While performing the calculation of the 2021 recoverable amount for Steinhoff N.V.’s investment in its subsidiary, SIHL, management

noticed that the Lancaster liability of €255 million was not included as part of the calculation for the estimate of the 2020 recoverable

amount due to a mathematical error in the underlying calculation not linking to the correct supporting ﬁle.

The opening balance of the 2020 Reporting Period has not changed, and therefore, a third period has not been presented in these ﬁnancial

statements.

The result of this error is that the investment in subsidiary was overstated by €255 million.

30 September 2020

Statement of Financial Position (extract)

Previously

reported

€’000

Adjustment

€’000

Restated

€’000

Investment in subsidiary companies

Accumulated losses

1 319 640

(254 657)

1 064 983

(9 828 133)

(10 082 790)

30 September 2020

Statement of Proﬁt or Loss and Other Comprehensive Income

Previously

reported

€’000

Adjustment

€’000

Restated

€’000

Interest income

230

–

230

Total income

–

Other income

7 841

–

7 841

Administrative expenses

(34 356)

(1 462 024)

(1 488 309)

(9 353)

(34 356)

(1 716 681)

(1 742 966)

(9 353)

Other gains/(losses) – net

(254 657)

–

Operating loss for the period before ﬁnance cost and tax

Finance cost

Operating loss for the period before tax

Taxation

(1 497 662)

8 307

(254 657)

–

(1 752 319)

8 307

Net loss for the period attributable to Steinhoff N.V. shareholders

Other comprehensive income

(1 489 355)

–

(254 657)

–

(1 744 012)

–

Total comprehensive loss for the period attributable to Steinhoff N.V. shareholders

(1 489 355)

(254 657)

(1 744 012)

239

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

18. RECONCILIATION OF THE NET PROFIT AND SHAREHOLDERS’ EQUITY OF THE COMPANY WITH THE CONSOLIDATED RESULTS

AS AT 30 SEPTEMBER 2021

30 September 2021

30 September 2020

Total

equity

€’000

Net loss

for the period

€’000

Total

equity

€’000

Net loss

for the period

€’000

Notes

Company equity and net loss for the period

Adjusted for:

121 140

2 775 835

(2 654 695)

(2 613 305)

(1 744 012)

(519 988)

(5 304 140)

(3 749 835)

Elimination of intragroup transactions:

Elimination of (reversal of impairment)/impairment of

investment in subsidiary companies

Elimination of impairment reversal of intragroup loans

receivable

4.2

(1 680 092)

708 707

4.3

4.4

–

(1 393 726)

(676 017)

–

(1 393 726)

(676 017)

(1 295)

618 990

(1 295)

618 990

Elimination of remeasurement of ﬁnancial liabilities

Share of subsidiaries consolidated loss for the period

Share of subsidiaries consolidated other comprehensive

income for the period

(1 846 390)

335 000

–

(611 000)

(42 000)

(78 000)

98 000

–

Other reserve movements

724 000

Effect of adopting IFRS 16

–

Effect of adopting IFRIC 23

Cumulative prior periods consolidated total

comprehensive loss/(income) and other reserve

movements

(2 613 305)

(5 183 000)

–

(1 460 317)

(5 268 000)

–

Group equity and loss after tax for the period attributable

to owners of Steinhoff N.V.

(974 000)

(2 264 000)

19. EVENTS OCCURRING AFTER THE REPORTING PERIOD

The Company is engaged in a number of legal proceedings. Refer to notes 23, 24 and 36 of the 2021 Consolidated Financial Statements

for a detailed overview of these proceedings.

Refer to note 36 of the 2021 Consolidated Financial Statements for other events occurring after the Reporting Period.

20. PRINCIPAL SUBSIDIARIES

The statutory list of all subsidiaries and afﬁliated companies, prepared in accordance with the relevant legal requirements (Dutch Civil

Code, Book 2, section 379), forms part of the notes to the 2021 Separate Financial Statements and is included herein as an Annexure

included under Other Information: Statutory List of all Subsidiaries.

APPROVAL AND SIGNATORIES

Stellenbosch (South Africa), 28 January 2022

Management Board

Louis du Preez, Chief Executive Ofﬁcer and Managing Director

Theodore de Klerk, Chief Financial Ofﬁcer and Managing Director

Supervisory Board

Moira Moses, Chairperson and Supervisory Director

Peter Wakkie, Deputy-Chairperson and Supervisory Director

Paul Copley, Supervisory Director

Hugo Nelson, Supervisory Director

David Pauker, Supervisory Director

Alexandra Watson, Supervisory Director

240

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Notes to the separate ﬁnancial statements for the period ended 30 September 2021 continued

OTHER INFORMATION

241

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

INDEPENDENT

AUDITOR’S REPORT

FOR THE PERIOD ENDED 30 SEPTEMBER 2021

To the Annual General Meeting and Supervisory Board of Steinhoff International Holdings N.V.

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 INCLUDED IN THE ANNUAL REPORT

OUR UNQUALIFIED OPINION

We have audited the accompanying ﬁnancial statements for the year ended 30 September 2021 (hereafter “ﬁnancial statements”) of Steinhoff

International Holdings N.V. (the “Company” or “Group”), based in Amsterdam, the Netherlands. The Company is at the head of a group of entities

(“components”). The ﬁnancial information of this Group is included in the 2021 Consolidated Financial Statements of the Group. The ﬁnancial

statements include the 2021 Consolidated Financial Statements and the 2021 Separate Financial Statements.

In our opinion:

•

the accompanying 2021 Consolidated Financial Statements give a true and fair view of the ﬁnancial position of the Group as at 30 September

2021 and of its result and its cash flows for the year ended 30 September 2021 in accordance with International Financial Reporting Standards

as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.

the accompanying 2021 Separate Financial Statements give a true and fair view of the ﬁnancial position of the Company as at 30 September

2021 and of its results for the year ended 30 September 2021 in accordance with International Financial Reporting Standards as adopted by

the EU and with Part 9 of Book 2 of the Dutch Civil Code.

The 2021 Consolidated Financial Statements comprise:

•

the consolidated statement of ﬁnancial position as at 30 September 2021;

the following statements for the year ended 30 September 2021: the consolidated statement of proﬁt or loss, the consolidated statement of

comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows; and

•

the notes comprising a summary of the key accounting policies and other explanatory information.

The 2021 Separate Financial Statements comprise:

•

the separate statement of ﬁnancial position as at 30 September 2021;

the following statements for the year ended 30 September 2021: the separate statement of proﬁt or loss and other comprehensive income, the

separate statement of changes in equity and the separate statement of cash flows; and

•

the notes comprising a summary of the key accounting policies and other explanatory information.

BASIS FOR OUR OPINION

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are

further described in the “Our responsibilities for the audit of the ﬁnancial statements” section of our report.

We are independent of the Company in accordance with the EU Regulation on speciﬁc requirements regarding statutory audit of public-interest

entities, the Wet toezicht accountantsorganisaties (Wta, Audit ﬁrms supervision act), the Verordering inzake de onafhankelijkheid van accountants

bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant

independence regulations in the Netherlands. Furthermore, we have complied with the Verordening gedrags- en beroepsregels accountants

(VGBA, Dutch Code of Ethics).

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

242

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OTHER INFORMATION // Independent Auditor’s report continued

MATERIALITY

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together

with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the

individual ﬁnancial statement line items and disclosures and in evaluating the effect of misstatements, both individually and on the ﬁnancial

statements as a whole.

Based on our professional judgement we determined the materiality for the ﬁnancial statements as a whole at €92 million (prior year €79 million).

The materiality is based on approximately 1% of the total revenues of continuing operations. ꢀ

We communicated with the Supervisory Board that misstatements in excess of €2.8 million, which are identiﬁed during the audit, have been

reported to them, as well as smaller misstatements that, in our view, must be reported on qualitive grounds.

SCOPE OF THE GROUP AUDIT

As part of designing our audit, we assessed the risk of material misstatement in the ﬁnancial statements whether due to fraud or error, and then

designed and performed audit procedures responsive to those risks. In particular, we looked at where management made subjective judgements

such as making assumptions on key accounting estimates.

We tailored the scope of our audit to ensure that we performed sufﬁcient work to be able to give an opinion on the ﬁnancial statements as a

whole. We used the outputs of a risk assessment, our understanding of the Group, its environment, controls and critical processes, to consider

qualitative factors in order to ensure that we obtained sufﬁcient coverage across all ﬁnancial statement line items.

The Company is at the head of a group of entities (“components”). The ﬁnancial information of this Group is included in the 2021 Consolidated

Financial Statements of the Group.

Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this

respect we have determined the nature and extent of the audit procedures to be carried out for the components. We considered the size and/or

ﬁnancial interest or where signiﬁcant risks or complex activities, were present when deciding (or in making those decisions). On this basis, we

selected components for which an audit or review had to be carried out and whether the complete set of ﬁnancial information or speciﬁc items

were required.

We performed audit procedures at group level on areas such as consolidation, disposals, ﬁnancial statement disclosures, impairment testing for

goodwill and brands, litigation and claims, contingent payment undertakings (“CPU”), investments in equity accounted companies and uncertain

tax positions.

We also involved component auditors from the Mazars network and other audit ﬁrms, who are familiar with local laws and regulations.

For these component auditors, the group audit team provided detailed written instructions, which included the requirements of component audit

teams and audit approach for signiﬁcant audit areas, information obtained centrally and the need for awareness for risk related to management

override of controls.

Our oversight procedures also included (remote-) working paper reviews for the components in South Africa, United Kingdom, France, Australia,

Poland and USA, virtual meetings with the component auditor and component management and reviewing component audit team deliverables to

gain sufﬁcient understanding of the work performed. We varied the nature, timing and extent of these procedures based on both quantitative and

qualitative considerations.

For smaller components we have performed desktop and analytical reviews, review procedures or speciﬁc audit procedures.

By performing the procedures mentioned above at components, together with the additional audit procedures at group level, we have been able to

obtain sufﬁcient and appropriate audit evidence about the consolidated ﬁnancial information and to provide an opinion on the 2021 Consolidated

Financial Statements as a whole.

We ensured that the audit teams both at group and at component levels have the appropriate skills and competences which are needed for the

audit of a listed international retail company. Specialists were involved, amongst others, in the areas of litigation and claims, fraud, forensic,

information technology, tax, accounting, valuations and going concern.

SCOPE OF FRAUD AND NON-COMPLIANCE WITH LAWS AND REGULATIONS

In accordance with Dutch Standards on Auditing, we are responsible for obtaining reasonable assurance that the ﬁnancial statements taken as a

whole are free from material misstatements, whether due to fraud or error. Inherent to our responsibilities for the audit of the ﬁnancial statements,

there is an unavoidable risk that material misstatements are undetected, even though the audit is planned and performed in accordance with

Dutch law. The risk of undetected material misstatements due to fraud is even higher, as fraud may involve collusion, forgery, intentional

omissions, misrepresentations, or the override of internal controls. Also, we are not responsible for the prevention and detection of fraud and

non-compliance with all laws and regulations. Our audit procedures differ from a forensic or legal investigation, which often has a more in-depth

character and conducted to resolve speciﬁc allegations.

243

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OTHER INFORMATION // Independent Auditor’s report continued

SCOPE OF FRAUD AND NON-COMPLIANCE WITH LAWS AND REGULATIONS (CONTINUED)

AUDIT APPROACH FRAUD RISKS AND RISK OF NON-COMPLIANCE OF LAWS AND REGULATIONS

Observation

In conclusion, our procedures did not identify any fraudulent misstatements as a result of management override in the ﬁnancial statement closing

and consolidation process. Our risk assessments and audit procedures are further described below.

Our risk assessment

We have identiﬁed and assessed the risks of material misstatements due to fraud in accordance with the Dutch Standards on Auditing. During

our audit we obtained an understanding of the entity and its environment and the components of the system of internal control, including the risk

assessment process and management’s process for responding to the risks of fraud and monitoring the system of internal control and how the

Supervisory Board exercises oversight, as well as the outcomes. We refer to the risk Management Report for management’s risk assessment and

the Supervisory Board report in which the Supervisory Board reflects on this risk assessment.

It is standard practise to assume there is an inherent risk of fraud relating to revenue recognition. This risk should be considered together with

the potential risk of management override of controls that could result in a misstatement of the ﬁnancial accounts. The risk of management

override is related to the areas of key judgement and estimates made by management included in the notes to the 2021 Consolidated Financial

Statements. Therefore, it is assumed by the auditing standards that Management is in an unique position to manipulate accounting records. In

addition, fraudulent manual journal entries could result in revenue being either under or overstated.

Our response to the identiﬁed and assessed fraud risks

We performed the following speciﬁc procedures:

•

We evaluated the design and implementation of relevant internal controls in the ﬁnancial statement and consolidation process, such as

segregation of duties and systems of authorisations.

We used data analytics, including analyses off high risk journals within the consolidation with a pre assessed risk of material misstatements,

as part of our audit approach to address fraud risks which could have a risk of material misstatement on the ﬁnancial statements.

We made inquiries of individuals involved in the ﬁnancial reporting process about inappropriate or unusual activity relating to the processing of

journal entries and other adjustments.

We selected journal entries and other adjustments made at the end of the reporting period relating both to areas of key judgments and

estimates made by management and revenue.

•

We reviewed the underlying audit documentation off the selected journal entries.

We performed supplementary substantive audit procedures via detailed testing of journal entries to underlying audit documentation.

We assessed the accounting estimates and evaluated whether the circumstance producing the bias, if any, represent a risk of material

misstatement due to fraud. Reference is made to the key audit matters, which are all subject to management estimates.

In addition, we also performed the following more general procedures:

•

We assessed whether the ﬁndings of the forensic investigations (as a result of the accounting irregularities uncovered in December 2017 and

the consequences thereof for the Group) have an impact on the current year fraud risk assessment and ﬁnancial statements.

•

We assessed the whistleblowing and complaints matters followed up by management and internal audit.

We evaluated whether (unusual) transactions with related parties have been identiﬁed and appropriately disclosed.

We performed a sourcing analysis in order to determine the risk associated with the selection of vendors and use of agents.

We have incorporated an element of unpredictability in the selection of the nature, timing and extent of our audit procedures. We will not

disclose these audit procedures here in detail, because we do not want that individuals within the entity become familiar with these audit

procedures, because they can exploit this knowledge to conceal fraudulent ﬁnancial reporting in the future.

Our response to the risk of non-compliance of laws and regulations

Resulting from our risk assessment procedures, and whilst considering that effects from non-compliance could vary considerably, we considered

adherence to (corporate) tax law and ﬁnancial reporting requirements with a direct effect on the ﬁnancial statements as an integrated part of our

audit procedures to the extent material for the related ﬁnancial statements. Apart from these, the Group is subject to other laws and regulations

where the consequences of non-compliance could have a material effect on amounts and/or disclosures in the ﬁnancial statements, for instance

through imposing ﬁnes or litigation. Examples of such other laws and regulations are those relating to anti-bribery and corruption, competition

and data privacy laws, and human rights. As required by auditing standards, we performed audit procedures to identify non-compliance with these

laws and regulations through inquiries with management, those charged with governance and others within the group and inspection of relevant

correspondence with regulatory authorities. We also inspected lawyers’ letters and remained alert to indications of (suspected) non-compliance

throughout the audit, held inquiries with group legal counsel and internal audit, and obtained a written representation from management that all

known instances of (suspected) non-compliance with laws and regulations were disclosed to us.

244

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OTHER INFORMATION // Independent Auditor’s report continued

OUR KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgement, were of most signiﬁcance in our audit of the ﬁnancial statements. We

have communicated the key audit matters to the Supervisory Board. The key audit matters are not a comprehensive reflection of all matters

discussed.

The matters were addressed in the context of our audit of the ﬁnancial statements as a whole and in forming our opinion thereon, and we do not

provide a separate opinion on these matters.

Key Audit Matter 1

Our audit work

In order to audit the recognition, measurement and presentation

of the provision for the Litigation Settlement Proposal, our work

included the following:

Accounting treatment of the provision for the Litigation

Settlement Proposal

Refer to note 23.4 to the 2021 Consolidated Financial Statements

•

Gaining an understanding of the processes put in place by the

Group to make substantive preparations for the legal proceedings,

and assessing the progress made in implementing the multiple

steps of the settlement proposal process.

Following the accounting irregularities uncovered in December 2017,

various entities within the Group are subject to multiple legal claims

and regulatory investigations. On 27 July 2020, the Group announced

the terms of a proposed settlement to conclude the ongoing and

disputed legal claims and pending litigation proceedings arising from

the legacy accounting irregularities ﬁrst announced in December

2017. The Litigation Settlement Proposal was subsequently revised

during the ﬁnancial year 2021.

•

Comparing this knowledge with the legal substantiation of

independent experts engaged by management.

Using substantive procedures in order to verify the completeness

of the claimants and further assessing of the inputs to the

calculation of the provision.

The Company reported a Litigation Settlement Proposal provision of

€0.9 billion as at 30 September 2020. The €0.7 billion increase in the

2021 Reporting Period of the provision and the costs associated with

the Litigation Settlement Proposal provision were recognised in other

expenses.

•

Using the latter as a basis to evaluate the likelihood of the outflow

of economic resources and to evaluate the calculation of the

provision.

As part of a targeted selection of key procedures, we inspected

the correspondence relating to the litigation and, with the

assistance of our legal experts, we challenged the assessments

made.

As a result, a total amount of €1.6 billion is reported as a provision as

at 30 September 2021.

The reported provision is exposed to the jurisdictional legal

proceedings as initiated in the Netherlands and South Africa. This

matter was of particular signiﬁcance for our audit due to the material

amounts of the provision as well as underlying assumptions.

Observation

Applying materiality and taking into consideration the information provided and statements made in the section entitled "Litigation" in the

Basis of Preparation and in the section entitled “Provisions” in note 23.4 to the 2021 Consolidated Financial Statements and in the section

entitled "Litigation" in the Group management report, we believe that, overall, the assessment on the likelihood of the outflow of economic

resources and assumptions and inputs underlying the calculation are appropriate to properly recognize, measure and disclose the Litigation

Settlement Proposal provision.

Key Audit Matter 2

Our audit work

For our audit we used, amongst others, valuation specialists to

assist us in evaluating the assumptions and methodologies used by

management.

Contingent payment undertakings (“CPU”) valuation in the

2021 Separate Financial Statements

Refer to note 11 to the 2021 Separate Financial Statements

Our audit procedures relating to the measurement of the CPU

included the following:

In the 2019 Reporting Period, the original parent guarantees related

to the debt were cancelled and replaced by the CPU’s. The Company

recognised a ﬁnancial liability equal to the shortfall, being the

difference of the outstanding external debt and the fair value of the

underlying investments and assets. The ﬁnancial liability amounts to

€1.2 billion as at 30 September 2021 (€2.6 billion as at 30 September

2020). Due to a signiﬁcant improvement in the underlying value of

its subsidiaries in the 2021 Reporting Period the ﬁnancial liability

decreased by €1.4 billion in the 2021 Reporting Period.

•

Obtaining an understanding of management’s process for the

determination of the values and the allocation to the individual

CPU’s.

•

Evaluating sensitivities in management’s projections that could

cause a substantial change to the values of the underlying assets.

Involving our valuation experts to validate the weighted average

cost of capital as applied by the Group and the appropriateness

of certain assumptions and possible management bias in the

fair value calculations of the underlying businesses, or when

applicable, assessing the external valuations or used listed share

prices.

The estimated fair value of the underlying businesses include

signiﬁcant estimates in determining the value of the CPU’s shortfall.

Valuation techniques used in the calculation are inherently subject to

estimation uncertainty, which predominantly focuses on future cash

flows, which are, amongst other, dependent on economic conditions

(including the impact of COVID-19). The CPU valuation is based

on the assumption that the Litigation Settlement Proposal will be

implemented.

245

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Independent Auditor’s report continued

Key Audit Matter 2 (continued)

Our audit work

•

Testing the mathematical accuracy of the CPU calculation,

including testing the source information underlying the

determination of the CPU.

Evaluating whether the main assumptions and related

uncertainties are appropriately reflected in the disclosures in the

separate ﬁnancial statements.

Observation

Applying materiality and taking into consideration the information provided, we believe that management’s basis of determining the ﬁnancial

liability and the corresponding disclosures in note 11 in the 2021 Separate Financial Statements is appropriate. By nature, the assumptions

applied in measuring the fair value of the underlying businesses are subject to developments and changes in later periods. This could

potentially lead to changes in the fair value of the underlying businesses going forward and therefore the measurement.

Key Audit Matter 3

Our audit work

Determining the amount that should be recognised for uncertain

tax positions for the Group was considered to be a matter of

most signiﬁcance to our current year’s audit due to the signiﬁcant

judgement applied by management in each jurisdiction. As a result,

our audit procedures included using our tax specialists to assist

us in evaluating the assumptions and methodologies applied by

management.

Uncertain tax positions

Refer to note 6 and note 19.2 to the 2021 Consolidated Financial

Statements

The Group operates across numerous jurisdictions which have

differing tax legislation. Also as a result of the accounting

irregularities, material restatements were recognised in the restated

2017 Consolidated Financial Statements of the Group, affecting

multiple years and multiple tax-jurisdictions. The Group is in the

process of restating the local statutory ﬁnancial statements

and corresponding tax returns for the effected ﬁnancial years.

Furthermore, several tax audits/investigations by local tax authorities

for prior ﬁnancial years are ongoing and the outcome is uncertain.

The tax liability recognised for uncertain tax positions amount to

€160 million as at 30 September 2021.

Our audit procedures relating to uncertain tax positions included the

following:

•

Obtaining an understanding of management’s process over the

assessment of the uncertain tax positions.

•

Challenging management’s judgement of the most probable

outcome by considering alternative views and probability factors

in terms of assessing tax risks, legislative developments, tax

regulations, contingencies and the recognition thereof.

Determination of the amounts which should be recognised for

uncertain tax positions is subject to management’s judgement,

including consideration of law and regulations of various tax

authorities.

•

Performing sensitivity analyses around the key assumptions,

such as probability, used in management’s assessments and the

calculation of the tax positions.

The uncertain tax positions are provided for based on either the most

probable outcome method or the expected value of the taxation

position for each type of taxation exposure.

•

Using the information obtained as referred to above to challenge

Group’s tax liability.

Assessing and evaluating the presentation and disclosure

of the risks related to the uncertain tax positions in the 2021

Consolidated Financial Statements of the Group.

Observation

Applying materiality, we believe that management’s basis of determining the provisions and disclosures for uncertain tax positions is

appropriate.

246

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Independent Auditor’s report continued

Key Audit Matter 4

Our audit work

We involved our valuation specialists during our audit procedures.

Our audit procedures included the following:

Impairment testing of intangible assets

Refer to note 8 to the 2021 Consolidated Financial Statements

Intangible assets (including goodwill and brands) amounted to € 5.3

billion at 30 September 2021 (€ 4.9 billion at 30 September 2020) and

represented 35% (37%) of the consolidated total assets. For purposes

of impairment testing, intangibles (including goodwill and brands) are

allocated and monitored on a Cash Generating Unit (“CGU”) basis.

For goodwill and brands with an indeﬁnite lifetime, management is

required to assess the recoverable amount of the respective CGUs

annually or when there is a triggering event. Management has

assessed all CGUs containing goodwill or brands, or where there was

a triggering event for property plant and equipment, for impairment

at the Reporting Date. The estimated sales volumes and gross proﬁt

margins used in management’s impairment tests involved a high

degree of uncertainty due to the current market circumstances.

Management made signiﬁcant judgements to estimate the

recoverable amounts in the current economic climate, procedures to

evaluate the reasonableness of estimated sales volumes and gross

proﬁt margins used in management’s impairment tests of intangible

assets (including goodwill and brands) and property, plant and

equipment.

•

Obtaining an understanding of management’s process for

impairment testing of the CGUs.

•

Evaluating management’s ability to accurately forecast by

comparing actual results to management’s historical forecasts (so

called “backtesting”).

•

Evaluating sensitivities in management’s projections that could

cause a substantial change to the impairments recorded, and

cause headroom to change in an impairment.

Evaluating projected cash flows and review of management’s

scenario-analyses by:

–

comparing the projections (and scenarios) to historical

forecasts and information included in internal communications

to the component management and the Management Board.

–

challenging and comparing the estimated sales volumes

and gross proﬁt margins to, for example, external economic

outlook data, external market data on the retail market and

expected inflation rates.

–

evaluating the reasonableness of discount rates, including

testing the source information underlying the determination of

the discount rates, testing the mathematical accuracy of the

calculation, and developing a range of independent estimates

and comparing those to the discount rates selected by

management.

Observation

Applying materiality, we believe that management’s assessment of the recoverability of intangible assets (including goodwill and brands) and

the disclosures on key uncertainties and scenarios assumed in management impairment testing are appropriate.

EMPHASES OF MATTERS

Going concern assessment

We draw your attention to the “Basis of preparation” section on the going concern assessment in the 2021 Consolidated Financial Statements,

where it is conﬁrmed that these ﬁnancial statements are based on the going concern assumption. As described, the going concern assessment

involved numerous complex and subjective judgements.

In determining the appropriate basis of preparation of the ﬁnancial statements of the Group, the Management Board is required to consider

whether the Group can continue in operational existence for the foreseeable future. In doing so the Management Board has considered the impact

of the provision for the Litigation Settlement Proposal, the extension of the maturity date of the debt, and assessed the impacts of COVID-19

on the going concern position. At the time of signing these 2021 Consolidated Financial Statements, the Management Board has a reasonable

expectation that the Group has sufﬁcient resources to continue in operation for the foreseeable future, which is not less than twelve months from

the date of signing of the 2021 Consolidated Financial Statements and the 2021 Separate Financial Statements. The Management Board has

adopted the going concern basis in preparing these Financial Statements.

Control conclusions on certain entities

We draw your attention to the “Basis of preparation” section in the areas of key judgements and estimates in the 2021 Consolidated Financial

Statements (consolidation decisions), which describes the conclusion from management’s assessment that the Group has control over Newco 3.

As described, the control assessment involved numerous complex and subjective judgements.

In preparing these Financial Statements the Management Board had to conclude whether or not it had control over certain entities following

various governance structure changes resulting from restructuring transactions in prior reporting periods. Concluding that the Group controls

Newco 3 resulted in the full consolidation and disclosure of debts, assets, cash flow and operation results of Newco 3 and its subsidiaries.

Notiﬁcation

Our audit opinion is not modiﬁed in respect to these matters.

247

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Independent Auditor’s report continued

REPORT ON THE OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT 2021

In addition to the ﬁnancial statements and our auditor’s report thereon, the Annual Report 2021 contains other information that consists of:

•

Introduction;

Report of the Management Board;

Corporate governance report;

Report of the Supervisory Board;

Remuneration report;

Annexures – Other information.

Based on the following procedures performed, we conclude that the other information:

•

is consistent with the ﬁnancial statements and does not contain material misstatements; and

•

contains all the information regarding the management report and the other information as required by Part 9 Book 2 of the Dutch Civil Code.

We have read the other information. Based on our knowledge and understanding obtained through our audit of the ﬁnancial statements or

otherwise, we have considered whether the other information contains material misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The

scope of the procedures performed is substantially less than the scope of those performed in our audit of the ﬁnancial statements.

Management is responsible for the preparation of other information, including the Report of the Management Board in accordance with Part 9 of

Book 2 of the Dutch Civil Code and other information as required by Part 9 of Book 2 of the Dutch Civil Code.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Engagement

We were engaged by the Supervisory Board as auditor of the Company on 12 November 2019 for the audit for the year ended 30 September 2019

and have operated as statutory auditor ever since that ﬁnancial year.

No Prohibited non-audit services

We have not provided prohibited non-audit services as referred to in Article 5 (1) of the EU Regulation on speciﬁc requirements regarding statutory

audit of public-interest entities.

EUROPEAN SINGLE ELECTRONIC FORMAT (“ESEF”)

The Company has prepared its Annual Report in ESEF. The requirements for this are set out in the Delegated Regulation (EU) 2019/815 with

regard to regulatory technical standards on the speciﬁcation of a single electronic reporting format (hereinafter: the RTS on ESEF).

In our opinion, the Annual Report prepared in XHTML-format, including the partially marked-up Consolidated Financial Statements as included in

the reporting package by the Group, complies in all material respects with the RTS on ESEF.

Management is responsible for preparing the Annual Report including the ﬁnancial statements in accordance with the RTS on ESEF, whereby

management combines the various components into a single reporting package.

Our responsibility is to obtain reasonable assurance for our opinion whether the Annual Report in this reporting package complies with the RTS on

ESEF.

Our procedures, taking into account Alert 43 of NBA (the Netherlands Institute of Chartered Accountants), included amongst others:

•

Obtaining an understanding of the Group's ﬁnancial reporting process, including the preparation of the reporting package.

•

Obtaining the reporting package and performing validations to determine whether the reporting package containing the Inline XBRL instance

document and the XBRL extension taxonomy ﬁles have been prepared in accordance with the technical speciﬁcations as included in the RTS

on ESEF.

•

Examining the information related to the 2021 Consolidated Financial Statements in the reporting package to determine whether all required

mark-ups have been applied and whether these are in accordance with the RTS on ESEF.

248

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Independent Auditor’s report continued

DESCRIPTION OF RESPONSIBILITIES REGARDING THE FINANCIAL STATEMENTS

Responsibilities of the Management Board and the Supervisory Board for the ﬁnancial statements

The Management Board is responsible for the preparation and fair presentation of the ﬁnancial statements in accordance with IFRS-EU and Part 9

of Book 2 of the Dutch Civil Code. Furthermore, the Management Board is responsible for such internal controls as management determines are

necessary to enable the preparation of the ﬁnancial statements that are free from material misstatement, whether due to fraud or error.

As part of the preparation of the ﬁnancial statements, management is responsible for assessing the Group’s ability to continue as a going

concern. Based on the ﬁnancial reporting frameworks mentioned, the Management Board should prepare the ﬁnancial statements using the going

concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative

but to do so.

The Management Board should disclose events and circumstances that may cast signiﬁcant doubt on the Group’s ability to continue as a going

concern in the ﬁnancial statements.

The Supervisory Board is responsible for overseeing the Group’s ﬁnancial reporting process.

Our responsibilities for the audit of the ﬁnancial statements

Our responsibility is to plan and perform the audit assignment in a manner that allows us to obtain sufﬁcient and appropriate audit evidence for

our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud

during our audit.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to

influence the economic decisions of users taken on the basis of these ﬁnancial statements. The materiality affects the nature, timing and extent

of our audit procedures and the evaluation of the effect of identiﬁed misstatements on our opinion.

We have exercised professional judgement and have maintained professional scepticism throughout the audit, in accordance with Dutch

Standards on Auditing, ethical requirements and independence requirements.

Our audit consisted of, among other things, the following:

•

identifying and assessing the risks of material misstatements of the ﬁnancial statements, whether due to fraud or error, designing and

performing audit procedures responsive to those risks, and obtaining audit evidence that is sufﬁcient and appropriate to provide a basis for our

opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve

collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

•

obtaining an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal controls;

evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by

management;

concluding on the appropriateness of management’s use of the going concern basis of accounting, and based on the audit evidence obtained,

whether a material uncertainty exists related to events or conditions that may cast signiﬁcant doubt on the Group’s ability to continue as

a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related

disclosures in the ﬁnancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit

evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company to cease to continue as a

going concern;

•

evaluating the overall presentation, structure and content of the ﬁnancial statements, including the disclosures; and

evaluating whether the ﬁnancial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicated with the Supervisory Board regarding, amongst other matters, the planned scope and timing of the audit and signiﬁcant audit

ﬁndings, including any signiﬁcant ﬁndings in internal control that we identify during our audit. In this respect we also submitted an additional

report to the audit committee in accordance with Article 11 of the EU Regulation on speciﬁc requirements regarding statutory audit of public-

interest entities. The information included in this additional report is consistent with our audit opinion in this auditor’s report.

We provided the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding independence, and to

communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,

related safeguards.

From the matters communicated with the Supervisory Board, we determine the key audit matters being: those matters that were of most

signiﬁcance in the audit of the ﬁnancial statements. We describe these matters in our auditor’s report unless law or regulation precludes public

disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.

Rotterdam, 28 January 2022

MAZARS ACCOUNTANTS N.V.

Original has been signed by: O. Opzitter RA

249

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Allocation of proﬁts

ARTICLES OF ASSOCIATION PROVISIONS GOVERNING THE ALLOCATION OF PROFITS

The holders of Ordinary Shares are entitled to one vote per share and to participate in the distribution of (interim) dividends and liquidation

proceeds.

Pursuant to section 35 of the Articles, a dividend may be declared out of net income after appropriation to increase and/or from reserves. The

allocation of proﬁt remaining after reservations deemed necessary by the Management Board, with the approval of the Supervisory Board, will

then be available for distribution to the ordinary shareholders subject to approval at the General Meeting.

The Management Board, with the approval of the Supervisory Board, may propose that the General Meeting make distributions wholly or partly in

the form of ordinary shares.

Distributions on shares may be made only up to an amount which does not exceed the amount of the distributable equity.

The Management Board, with the approval of the Supervisory Board, may declare an interim dividend which does not exceed the amount of the

distributable equity.

DISTRIBUTION OF PROFITS

Given the Group’s ongoing liquidity constraints, the Management Board, with the approval of the Supervisory Board, has resolved not to propose

dividends on the Ordinary Shares for the 2021 Reporting Period.

250

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

LIST OF

BRANCHES

The table below lists all branches of the Company (if any) as well as all branches of its Subsidiaries whose results were consolidated

during the Reporting Period.

Place of

branch

Country

of branch

Country of

origin entity

Valid for

FY2020

Valid for

FY2021

Branch

Origin Entity

GROUP: SISL

Steinhoff International Sourcing and Trading Ltd.

Hong Kong

China (Hong Kong)

2461089

644662

Steinhoff International Sourcing and Trading Ltd.

China (Hong Kong)

Blue Rock Sourcing Solution Ltd. (formerly: Steinhoff

International Sourcing Ltd.)

Steinhoff International Trading Services Ltd.

Steinhoff International Investment HK Ltd

Hong Kong

China (Hong Kong)

2463978

2584507

Steinhoff International Sourcing and Trading Ltd.

Steinhoff International Investment HK Ltd

China (Hong Kong)

(closed in Sept 2021)

Steinhoff International Sourcing Ltd – Indonesia RO

Jakarta

Karachi

Indonesia

Pakistan

28/1/IUP3A-T/P-4/Nas/2017

Steinhoff International Sourcing and Trading Ltd.

China (Hong Kong)

Blue Rock Sourcing Solution Ltd – Pakistan RO

(formerly: Steinhoff International Sourcing Ltd –

Pakistan RO)

0073941

Ho Chi Minh City

Vietnam

79-02944-01

Steinhoff International Sourcing and Trading Ltd.

China (Hong Kong)

Blue Rock Sourcing Solution Ltd - Vietnam RO

(formerly: Steinhoff International Sourcing Ltd –

Vietnam RO)

Steinhoff International Sourcing (Shenzhen) Ltd.

Steinhoff International Sourcing (Shanghai) Ltd.

Shenzhen

China

914403000589890340

Steinhoff International Sourcing and Trading Ltd.

China (Hong Kong)

Shanghai

Gurgaon

China

India

91310000MA1GBH5W31

U74999HR2019FTC081761

Steinhoff International Sourcing and Trading Ltd.

China (Hong Kong)

Blue Rock Sourcing Solution India Private Limited

(formerly: Steinhoff International Sourcing India

Private Limited)

GROUP: STEINHOFF UK

Steinhoff Europe AG

London

Zug

BR020565

BR020564

BR021702

BR021700

BR022038

BR021701

BR021703

CHE-110.261.548

Steinhoff Europe AG

Austria

Steinhoff Finance Holding GmbH

Steenbok Newco 5 Limited

Steenbok Newco 1 Limited

Steenbok Newco 10 Sarl

Steenbok Newco 2A Limited

Ibex Retail Investments Limited

Retail Holdings Sarl

Steinhoff Finance Holding GmbH

Steenbok Newco 5 Limited

Steenbok Newco 1 Limited

Steenbok Newco 10 Sarl

Steenbok Newco 2A Limited

Ibex Retail Investments Limited

Retail Holdings Sarl

Austria

Jersey

Luxembourg

Jersey

Switzerland

Luxembourg

GROUP: PEPCO

Fully Sun China Limited – Bangladesh

Fully Sun China Limited – Taiwan

Poundland Limited – Isle of Man

Poundland Limited – Ireland

Bangladesh

Taiwan

Bangladesh

China

TIN- 4404-3933-6667

Fully Sun China Limited (HK)

Poundland Limited

China (Hong Kong)

Reg no 53665194

China (Hong Kong)

Isle of Man

Republic of Ireland

Isle of Man

Republic of Ireland

Tax reference No: C145894-73

Tax reference: 9798866A

Poundland Limited

251

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

STATUTORY LIST OF ALL SUBSIDIARIES

AND AFFILIATED COMPANIES as at 30 September 2021

FY2020 FY2021

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

100%

Principal place of Business

Genesis Investment Gamma GmbH

Steenbok Newco 1 Ltd (Jersey)

Steenbok Newco 2A Ltd (Jersey)

Steenbok Newco 2B Ltd (UK)

AUT

JEY

GBR

FN 381969 w

2345 Brunn am Gebirge, Rennweg 77

127918

100%

3rd Floor, 44 Esplanade, St Helier, JE4 9WG

127926

11728129

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

Steenbok Newco 3 Ltd (UK)

Steenbok Newco 4 Ltd (UK)

GBR

11728460

11728633

100%

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

Steinhoff Möbel Holding Alpha GmbH

GT Branding Holding SA (in liquidation)

GT Global Trademarks SA (in liquidation)

Steinhoff Europe AG

AUT

CHE

AUT

FN 202439 f

100%

2345 Brunn am Gebirge, Rennweg 77

46b Avenue de la Gare, 1920 Martigny

CHE-250.489.667

CHE-112.398.098

FN 38031 d

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

Steenbok Newco 10 SARL (LUX)

Steinhoff Service GmbH

LUX

DEU

POL

JEY

LUX

JEY

B 235 929

HR B 121300

KRS 0000013715

127924

100%

56 rue Charles Martel, L2134

Zum Stadtpark 2, Westerstede, 26655

ul. Ruska 37/38, 50-079 Wroclaw

3rd Floor, 44 Esplanade, St Helier, JE4 9WG

56 rue Charles Martel, 230883

Steinhoff Europe Consult Sp. z o.o.

Steenbok Newco 5 Ltd (Jersey)

Steenbok Lux Finco 2 SARL (LUX)

B 230 871

127930

Ibex Retail Investments Limited (previously

Steenbok Newco 6A Ltd (Jersey))

3rd Floor, 44 Esplanade, St Helier, JE4 9WG

Ibex Retail Investments (Europe) Limited

(previously Pepco Holdco Limited)

GBR

12899084

100%

4th Floor Pall Mall Works, 17 – 19 Cockspur

Street, London, SW1Y 5BL

Flow Newco Limited (to be struck off)

Steenbok Newco 7 Ltd (UK)

GBR

12638560

11729104

100%

Suite 1, London, SW1Y 4LB

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

Steinhoff UK Holdings Ltd.

GBR

03738136

12035045

100%

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

Homestyle Pension Company Ltd (previously

Homestyle 2007 Scheme Pension Company

Ltd)

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

Homestyle 2007 Pension Scheme Trustee

Ltd.

GBR

06364468

11729128

100%

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

Steenbok Newco 8 Ltd (UK)

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

Steinhoff Holding Beta GmbH

AIH Investment Holding AG

Laguna Holdings B.V.

AUT

NLD

FRA

FN 360096d

100%

2345 Brunn am Gebirge, Rennweg 77

FN 360230 a

2345 Brunn am Gebirge, Rennweg 77

KvK 52198588

KvK 52199258

KvK 52199061

RCS 530 636 695

Noord Brabantlaan 265, 5652 LD Eindhoven

Laguna Investments Beta B.V.

Laguna Investments Alpha B.V.

Conforama Investissement SNC

80 Boulevard du Mandinet, Lognes 77432

Marne la Vallee Cedex 2

Conforama Developpement SASU

Maison Depot SASU

FRA

RCS 530 637 149

RCS 823 272 752

RCS 582 014 445

RCS 842 434 821

RCS 830 937 389

100%

80 Boulevard du Mandinet, Lognes 77432

Marne la Vallee Cedex 2

80 Boulevard du Mandinet, Lognes 77432

Marne la Vallee Cedex 2

Conforama Holding SA

80 Boulevard du Mandinet, Lognes 77432

Marne la Vallee Cedex 2

Conforama Developpement 18 SASU

Conforama Developpement 15 SASU

80 Boulevard du Mandinet, Lognes 77432

Marne la Vallee Cedex 2

80 Boulevard du Mandinet, Lognes 77432

Marne la Vallee Cedex 2

252

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

100%

Principal place of Business

FY2020 FY2021

SNC Baptiste

FRA

PRT

RCS 837 559 525

80 Boulevard du Mandinet, Lognes 77432

Marne la Vallee Cedex 2

Alpha I Beta Omega SNC

SCI Manda

RCS 750 366 213

RCS 791 955 396

RCS 384 699 864

RCS 518 495 619

NIF 513596275

100%

80 Boulevard du Mandinet, Lognes 77432

Marne la Vallee Cedex 2

80 Boulevard du Mandinet, Lognes 77432

Marne la Vallee Cedex 2

Adour Expansion (ADEX) SA

100%

80 Boulevard du Mandinet, Lognes 77432

Marne la Vallee Cedex 2

Steinhoff International Sourcing and

Logistics SASU

99.99%

100%

80 Boulevard du Mandinet, Lognes 77432

Marne la Vallee Cedex 2

Immoconfo 2 SA

Cascais Shopping – E.N. 9, Freguesia de

Alcabideche, Concelho de Cascais, Distrito

de Lisboa, 2645 543 Alcabideche

Immoconfo 1 SA

PRT

NIF 513596259

100%

Cascais Shopping – E.N. 9, Freguesia de

Alcabideche, Concelho de Cascais, Distrito

de Lisboa, 2645 543 Alcabideche

Conforama Luxemburg SA

Conforama Espana SA

LUX

ESP

RCS B48369

100%

1 Rue Jean Piret, L-2350

CIF A-79103222

Av Baix Llobregat, 1-3 Modulo B. Polg. Blau,

El Prat de Llobregat

Realinvest Conforama SL

Conforama Portugal SA

ESP

PRT

CIF B-64762354

NIPC 500625980

100%

Centro Comercial la Laguna, Autopsita

Santa Cruz la Laguna – 38205, Santa Cruz

de Tenerife

Cascais Shopping – E.N. 9, Freguesia de

Alcabideche, Concelho de Cascais, Distrito

de Lisboa, 2645 543 Alcabideche

Conforama Italy SpA

ITA

REA 1646414

REA 7776860

RCS 814 646 550

100%

Viale Alcide de gasperi 2, 20151 Milano

Emmezeta Moda Srl

Conforama Developpement 6 SASU

FRA

80 Boulevard du Mandinet, Lognes 77432

Marne la Vallee Cedex 2

SICA International Services SARL (in process

of liquidation)

CHE

CHE-429.218.390

50%

C/O Interexperts SA, Quai du Seujet 30,

1201 Geneve

LIPO Beteiligungen AG

LIPO Service AG

CHE

NLD

CH-270.3.001.910-6

CH-320.3.007.687-9

CH-270.3.001.072-7

CCI 81928491

100%

Eichenstrasse 6, 8808 Pfäfﬁkon

Rütiweg 7, 4133 Pratteln

LIPO Einrichtungsmärkte AG

100%

Pepco Group N.V. (previously Albion Newco

B.V.)

78.88%

Unit B, 120 Weston Street, London, SE1 4GS

Pepco Group Limited (previously Pepkor

Europe Ltd)

GBR

09127609

100%

Unit B, 120 Weston Street, London, SE1 4GS

PEU (Fin) Ltd

GBR

HKG

11808114

11808312

CR 1075298

100%

Unit B, 120 Weston Street, London, SE1 4GS

PEU (Tre) Ltd

Fully Sun China Ltd

19/F, Seaview Commercial Building, 21-24

Connaught Road West

Pepkor GPS (Shanghai) Co Ltd.

PGS Partner India (Private) Ltd

CHN

IND

310104000350743

100%

8th Floor, H Zone (East), 666 Beijing East

Road, Huangpu District, Shanghai

U74999HR2018FTC073537

Unit No-128, Suncity Success Tower

Sector-65, Golf Course Extn Road,

Gurugram, Gurgaon, HR 122005

Dealz Poland Sp. z o.o.

POL

KRS 0000692949

100%

Budynek Biurowy OMEGA, ul. J.H.

Dabrowskiego 79A p.4, Poznan, 60-529

Dealz Espana SL

ESP

GBR

B86867512

09127615

100%

C/Bravo Murillo 192, Madrid

Poundland UK and Europe Ltd.

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Stores Ltd.

Poundland Group Ltd.

Poundland Group Holdings Ltd.

Poundland Holdings Ltd.

Poundland Trustee Ltd.

M&O Business Systems Ltd.

Homes & More Ltd.

GBR

02376949

08861243

07036164

04386329

05018557

01317353

03501298

07248690

541977

100%

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Family Bargains (Retail) Ltd.

Dealz Retailing Ireland Ltd.

Bargain Ltd.

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Unit 3 Westend Retail Park, Blanchardstown,

Dublin 15

03856013

Poundland Csc, Midland Road, Walsall,

WS1 3TX

253

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

100%

Principal place of Business

FY2020 FY2021

Sheptonview Ltd.

GBR

01721545

07115506

07115540

04386315

02495645

12111238

09288913

09015100

07398652

03271182

01003192

02317009

04560070

09151610

03484379

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Value Retailing Ltd.

Poundland Retail Ltd.

Poundland Willenhall Ltd.

Poundland Ltd.

100%

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Elgin Limited

Pepkor UK Retail Ltd.

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Pepkor Europe Ltd (previously GHM Stores

Ltd)

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Viewtone Trading Group Limited

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Viewtone Limited

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Frozen Value Limited

Jack Fulton Limited

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Viewtone Trustees Limited

Minaldi Limited

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Poundland International Ltd.

Poundland Csc, Midland Road, Walsall,

WS1 3TX

Vaucluse Diffusion SASU

Pepkor Import B.V.

FRA

NLD

FRA

CHE

RCS 306 487 075

KvK 61649112

100%

19 Rue du Musee, 13001 Marseille

Noord Brabantlaan 265, 5652 LD Eindhoven

1 Place Boieldieu, Paris, 75002

Pepkor France SASU

Pepkor Europe GmbH

RCS 805 402 104

CH-194.732.602

c/o Kanzlei Pilatushof, Hirschmattstrasse

15, 6003 Luzern

Pepco, trogvina na drono, d.o.o. (Pepco

Slovenia d.o.o.)

SVN

SRB

7176457000

21457345

100%

Trzaska cesta 515, Brezovica pri Ljubljani,

1351

Pepco d.o.o. Beograd-Novi Beograd

(previously Pepco d.o.o. (Beograd-Stari Grad,

SRB))

Bulevar Mihaila Pupina 10L, 11070 Novi

Beograd

Pepco Slovakia s.r.o.

Pepco Retail s.a.

SVK

ROU

84895/B

100%

Nevadzova 6, Ruzinov, Bratislava, 821 01

J40/4655/2013

3rd Floor, District 1, 17 Ceasornicului Street,

Bucharest

Pepco Lithuania UAB

Pepco Latvia SIA

LTU

LVA

304488450

100%

Virsuliskiu skg. 34-1, Vilniaus, 05131

Strelnieku iela 9-7, Riga, LV-1010

Vaci ut 187, H-1138 Budapest

40203062113

Cg. 01-09-192750

Pepco Hungary Kft (previously Pepkor

Hungary Kft)

HUN

Pepco Estonia OÜ

EST

CZE

HRV

BGR

ESP

14249111

100%

Sopruse Pst 145, Kristiine District , Tallinn,

13417

Pepco Czech Republic s.r.o.

Pepco Croatia d.o.o.

Pepco Bulgaria EOOD

IƒåO 24294420

MBS 081038164

205119149

Prague 4 – Nusle, Hvezdova 1716/2b, PSC

14078

Zagreb (Grad Zagreb), Damira Tomljanovica

Gavrana 11

Fl. 4 Building BSR 2, Nikola Tesla No.5 Str.,

Soﬁa 1574

Pepco Retail Espana S.L. (previously Pepkor

Retail Espana S.L.)

B66809526

Avda. Baix Llobregat, 1-3 Modulo A, Planta

Baja Par No., Esc. P, El Prat de Llobregat

Pepco Holdings sp. Z.o.o. (PL)

Pepco Germany GmbH

Pepco Espana SL

POL

DEU

ESP

791461

100%

ul. Strzeszynska 73A, 60-479 Poznan

Markgrafenstr. 33, Berlin, 10117

HRB 224064 B

B01963644

Number 58, 5th Floor, Avenida Cortes

Valencianas, 46015 Valencia

Pepco Austria GmbH

AUT

POL

FN 534293 a

100%

Porzellangasse 51, 1090 Vienna

Pepco Properties sp. z o.o. (previously

Pepkor Properties sp. z o.o.)

KRS 0000356422

ul. Strzeszynska 73A, 60-479 Poznan

Pepco Poland sp. z o.o.

POL

NLD

POL

HUN

KRS 0000111962

853214219

100%

ul. Strzeszynska 73A, 60-479 Poznan

Noord Brabantlaan 265, 5652 LD Eindhoven

ul. Strzeszynska 73B lok. 5, 60-479 Poznan

ul. Strzeszynska 73B lok. 4, 60-479 Poznan

Vaci ut 187, H-1138 Budapest

Konopacka Holdings B.V.

Evarts Investments sp. z o.o.

Cardina Investments sp. z o.o.

KRS 0000471011

KRS 0000424893

Cg. 01-09-300734

Pepco Ingatlan Kft (previously Pepkor

Ingatlan Kft)

Rawska Holdings B.V.

NLD

853214153

100%

Noord Brabantlaan 265, 5652 LD Eindhoven

254

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

100%

Principal place of Business

FY2020 FY2021

Pepco Italy S.r.l.

ITA

GBR

AUS

10941920968

Via Michelangelo Buonarroti 39, 20145

Milano

Pepco Group Services Ltd (previously Pepkor

Marketing Ltd)

10972213

100%

Unit B, Weston Street, London, SE1 4GS

European Furniture New Holdco Limited

12899076

4th Floor Pall Mall Works, 17 – 19 Cockspur

Street, London, SW1Y 5BL

APAC Holdco Limited

12899054

4th Floor Pall Mall Works, 17-19 Cockspur

Street, London, SW1Y 5BL

Greenlit Brands Pty Ltd. (formerly Steinhoff

Asia Paciﬁc Group Holdings Pty Ltd.)

612 890 874 (ACN)

105 828 957 (ACN)

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Greenlit Brands Household Goods Pty Ltd

(previously Steinhoff Asia Paciﬁc Holding

Pty Ltd)

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Greenlit Brands Corporate Solutions Pty Ltd

AUS

NZL

AUS

108395651 (ACN)

080461338 (ACN)

092 130 688 (ACN)

602775959 (ACN)

051 493 764 (ACN)

096 249 393 (ACN)

1334871

100%

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

GLB Household Good IP Company Pty Ltd

(previously Asteria Australia Pty Ltd)

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

G&G Furniture Imports Pty Ltd

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Futuresleep Pty Ltd (previously Steinhoff

Bedding Australia Pty Ltd)

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Freedom Furniture Australia Pty Ltd

(previously Steinhoff Asia Paciﬁc Pty Ltd)

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Unitrans Asia Paciﬁc Pty Ltd

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Freedom Furniture New Zealand Ltd

18-26 Amelia Earhart Avenue, Mangere,

Auckland, 2022

Fantastic Holdings Pty Limited (previously

Fantastic Holdings Limited)

004 000 075 (ACN)

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Fantastic Holdings Performance Hurdle

Employee Share Trust

n/a

Fantastic Furniture Share Plan Pty Limited

094 240 874 (ACN)

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Fantastic Dandenong Property Trust

White Label Investments Pty Ltd

AUS

ABN 15 782 170 944

129 690 160 (ACN)

100%

n/a

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

White Label Innovations Pty Ltd

AUS

VNM

129 691 443 (ACN)

129 691 158 (ACN)

120 315 068 (ACN)

080 012 595 (ACN)

116 339 470 (ACN)

109 359 122 (ACN)

080 586 983 (ACN)

502043000224

100%

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

State Marketing and Innovation Corporation

Pty Ltd

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Royal Comfort Bedding Pty Ltd

Plush – Think Sofas Pty Limited

Original Mattress Factory Pty Limited

Fantastic Property Pty Limited

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Fantastic Metal Furniture Manufacturers Pty

Limited

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Fantastic Manufacturing Vietnam Company

Ltd (previously Cong Ty Tnhh Fantastic

Manufacturing (VN)) (in process of

deregistration)

Cantavil Hoan Cau Apartment, Room 503,

600A Dien Bien Phu Street, Ward 22, Binh

Thanh District, Ho Chi Minh City

Bravoscar Wholesaling Pty Ltd

AUS

108395633 (ACN)

060569593 (ACN)

104 924 129 (ACN)

086409869 (ACN)

003323117 (ACN)

075854572 (ACN)

064817223 (ACN)

070951343 (ACN)

068270575 (ACN)

099 553 036 (ACN)

100%

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Bossanenja Pty Ltd

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Big Brand Outlet Pty Ltd

Bayswiss Pty Ltd

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Swiss Delicatessen & Restaurant Pty Ltd

Swiss Deli Retail Pty Ltd

Reconquista Pty Ltd

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Beyond the Square Promotions Pty Ltd

Bayteak Pty Ltd

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Bay Leather Republic Pty Ltd

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

255

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

100%

Principal place of Business

FY2020 FY2021

Aigls Pty Ltd

AUS

079371654 (ACN)

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

A.C.N. 115 732 315 Pty Ltd (previously

Freedom Furniture Australia Pty Ltd)

115 732 315 (ACN)

097 115 369 (ACN)

080 752 807

100%

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Steinhoff Paciﬁc Pty Ltd

Steinhoff Australia Pty Ltd

Prosequi Pty Ltd

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

055371625 (ACN)

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Freedom Unit Trust

Panda Sofa Pty Ltd

AUS

59620954087 (ABN)

081 479 656 (ACN)

100%

n/a

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Lonaka Manufacturing Pty Ltd

Freedom Properties Holding Ltd

Moore Park Bedding Pty Ltd

Freedom Property WA No.2 Pty Ltd

Freedom Home & Cafe Pty Ltd

Freedom Brands Pty Ltd

AUS

051752124 (ACN)

103605474 (ACN)

103605456 (ACN)

103605349 (ACN)

124 661 409 (ACN)

105100525 (ACN)

055781069 (ACN)

111 023 299 (ACN)

107 085 325 (ACN)

100%

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Freedom Bedroom Pty Ltd

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

F.G.L. Property Tee Pty Ltd

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Bravoscar Finance Company Pty Ltd

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Unitrans Unit Trust

AUS

100%

n/a

Unitrans Property Pty Ltd

611000321 (ACN)

108481821 (ACN)

006 298 755 (ACN)

006 232 720 (ACN)

109 214 495 (ACN)

085825912 (ACN)

074 780 555 (ACN)

158 159 230 (ACN)

003 688 855 (ACN)

1015180

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Steinhoff Commercial Holdings Pty Ltd

Snooze Sleep Well Pty Ltd

AUS

NZL

AUS

GBR

100%

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Snooze Management Pty Ltd

POCO Australia Pty Ltd

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

FF HoldCo Pty Ltd (previously The Package

Deal Kings Pty Ltd)

62 Hume Highway, Chullora, New South

Wales, 2190

FF Brands Pty Ltd (previously Fantastic

Furniture (Licensing) Pty Limited)

62 Hume Highway, Chullora, New South

Wales, 2190

Fantastic Manufacturing Pty Ltd (previously

Best Buy Furniture Pty Limited)

62 Hume Highway, Chullora, New South

Wales, 2190

Fantastic Furniture Pty Limited

62 Hume Highway, Chullora, New South

Wales, 2190

Fantastic Furniture Limited

Freedom Furniture NZ, 18-26 Amelia Earhart

Avenue, Mangere, Auckland, 2022

Fantastic Furniture – The Package Deal

Kings Limited

1015185

Freedom Furniture NZ, 18-26 Amelia Earhart

Avenue, Mangere, Auckland, 2022

FHL Distribution Centre Pty Limited

114 853 315 (ACN)

11728916

62 Hume Highway, Chullora, New South

Wales, 2190

Steenbok Newco 6 Ltd (UK)

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

Norfolk Reinsurance Company Ltd

Lidstone Investments SA

BMU

BEL

26416

100%

19 Hidden Cove, Smiths, HS01

BE.0477.506.650

Avenue Jules Bordet 160, 1140 Brussels

(Evere)

LiVest Management GmbH & Co. KG

LiVest GmbH

DEU

AUT

GIB

HR A 3438

HR B 5991

HR B 6479

FN 392734 a

FN 381078 i

FN 359664 v

FN 328490 z

83887

100%

99.99%

100%

Zum Stadtpark 2, Westerstede, 26655

2345 Brunn am Gebirge, Rennweg 77

Suite 913 Europort, 1st Floor , GX11 1AA

2345 Brunn am Gebirge, Rennweg 77

Noord Brabantlaan 265, 5652 LD Eindhoven

LiVest Management Verwaltungs GmbH

Genesis Investment Holding GmbH

Genesis Branding Holding AG

Steinhoff Global Investments GmbH

Steinhoff Retail GmbH

White Rock Insurance (Gibraltar) PCC Ltd.

Steinhoff Möbel Holding GmbH

Pat Cornick International B.V.

AUT

NLD

FN 216023 g

KvK 33238663

256

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

100%

Principal place of Business

FY2020 FY2021

Global Warehouse and Logistics AG

CHE

DEU

CH-170.3.039.166-1

Fabrikstrasse 18, 4552 Derendingen

Zum Stadtpark 2, Westerstede, 26655

Westersteder ST GmbH (previously Bruno

Steinhoff Trading GmbH)

HR B 120856

100%

Steinhoff Schweiz AG

CHE

POL

HKG

CH-170.3.026.394-1

KRS 0000163475

CR 2461089

c/o Swiss Reliance AG, Zugerstrasse 76B,

6340 Baar

Steinhoff International Sourcing and

Logistics Poland Sp. z o.o.

Ul. Poleczki 23H, 02-822 Warszawa

Steinhoff International Sourcing and Trading

Ltd.

19/F, Seaview Commercial Building, 21-24

Connaught Road West

Blue Rock Sourcing Solution Limited

(previously Steinhoff International Sourcing

Ltd)

CR 0644662

19/F, Seaview Commercial Building, 21-24

Connaught Road West

Blue Rock Sourcing Solution India Private

Limited (previously Steinhoff International

Sourcing India Private Limited)

IND

CHN

VNM

PAK

U74999HR2019FTC081761

440301503446654

91310000MA1GBH5W31

79-02944-01

100%

Suncity Success Tower, Unit No.124, 1st

Floor, Golf Course Extension Road, Sector

65, Gurgaon, 122005, Haryana

Steinhoff International Sourcing (Shenzhen)

Ltd.

3/F Tower 2,Shenzhen Beihang Mansion,

No.53, Gaoxin South 9th Road, Nanshan

District, Shenzhen

Steinhoff International Sourcing (Shanghai)

Ltd.

Room 710,Block T1,Venke Zone One, No

168 Tai Hong Road, Minhang District,

Shanghai,P.R

Blue Rock Sourcing Solutions Limited

– Vietnam RO (previously Steinhoff

International Sourcing Limited – Vietnam RO)

5A Tong Huu Dinh Street, Thao Dien Ward,

Dist. 2, Ho Chi Minh City

Blue Rock Sourcing Solutions Limited

– Pakistan LO (previously Steinhoff

International Sourcing Limited – Pakistan

RO)

0073941

Cavish Court, A-35, Block 7 & 8, KCHSU,

Shahrah-e-Faisal, Karachi

Steinhoff Europe AG (Switzerland)

Retail Interests Ltd (in liquidation)

JWC (Int) Ltd (in liquidation)

Steenbok Newco 9 Ltd (UK)

CHE

GBR

USA

CH-130.0.009.701-2

00054380

100%

50.1%

c/o Swiss Reliance AG, Zugerstrasse 76B,

6340 Baar

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

05468786

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

11729105

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

Mattress Firm Group Inc. (previously Stripes

US Holding, Inc.)

6114835

10201 S Main Street, Houston, TX 77025

Mattress Firm Holding Corp.

Mattress Holdco, Inc.

USA

4280344

4277595

3580672

3577556

L-1077824-3

S354948-4

5106196

5111362

4840559

3777268

3777266

2594196

2341422

2785428

2441495

2959805

605162

100%

10201 S Main Street, Houston, TX 77025

Mattress Holding Corp.

Mattress Firm, Inc.

Mattress Firm – Arizona, LLC

Maggies Enterprises, LLC

HMK Mattress Holdings, LLC

HMK Intermediate Holdings, LLC

Dial Operations, LLC

1800mattress.com, LLC

1800mattress.com IP, LLC

Acker Realty Holdings, LLC

669 Sunrise Realty, LLC

45 South York Associates, LLC

1520 Sunrise Highway, LLC

Whitehall Management Partners, LLC

Viewmont Drive Realty, LLC

South Oyster Bay Realty, LLC

Scranton Avenue Associates, LLC

Route 352 Management Partners, LLC

Robbinsville 7A Warehouse Group, LLC

Maple Shade Partners, LLC

Hazlet Partners, LLC

3389116

3434068

569704

0600160138

0600086359

0600106166

0766481

3076997

2785430

4327760

4327737

5237507

5241000

5239543

S2754036

Craftsman Realty, LLC

Bethlehem Pike Realty, LLC

Aramingo Avenue Associates, LLC

Sleepys, LLC

SINT, LLC

MD Acquisition, LLC

Mattress Discounters Operations, LLC

Mattress Discounters IP, LLC

Mattress Discounters Group, LLC

257

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

100%

Principal place of Business

FY2020 FY2021

Custom Fundraising Solutions, LLC

American Internet Sales, LLC

The Sleep Train, Inc.

USA

LUX

AUT

NLD

AUT

POL

HUN

HRV

DEU

HRV

BHS

1769508

10201 S Main Street, Houston, TX 77025

56 rue Charles Martel, 230883

5319077

100%

C1277162

ST San Diego, LLC

200136210056

1785936

Sleep Country USA, LLC

The Mattress Venture, LLC

800930049

Mattress Giant Corporation

Steenbok Lux Finco 1 SARL (LUX)

Steinhoff Finance Holding GmbH

Hemisphere International Properties B.V.

HIP DutchCo 1 B.V.

122977500

B 230 883

FN 345159m

KvK 17228592

74299611

Rennweg 77, 2345 Brunn am Gebirge

Noord Brabantlaan 265, 5652 LD Eindhoven

Rennweg 77, 2345 Brunn am Gebirge

Ruska 37/38, 50-079 Wroclaw

HIP DutchCo 2 B.V.

74299484

Genesis Properties Investment GmbH

Standard Properties Sp. z o.o.

Nova Properties Kft.

FN 265906 p

KRS 0000011112

Cg. 20-09-068522

MBS 080769092

MBS 030098550

HR B 120873

HR B 200922

080170626

8800 Nagykanizsa, Szemere utca 4

Velimira Skorpika 25, Zagreb

MIVG Upravljanjenekretninama d.o.o.

Kika Upravljanjenekretninama d.o.o.

Kappa Immobilien Investment GmbH

Gamma Enterprises GmbH

Velimira Skorpika 25, Zagreb

Zum Stadtpark 2, Westerstede, 26655

Velimira Skorpika 25, Zagreb

Hemisphere Zagreb Properties d.o.o.

Alvaglen Estates Ltd (in liquidation)

IBC 84615 B

West Bay Street & Blake Road 3, Bayside

Executive Park, Nassua

Steinhoff Properties AG

Standard France SARL

CHE

FRA

CH-170.3.038.665-0

RCS 821 510 427

100%

Sihlbruggstrasse 105, Baar, CH-6340

80 Boulevard du Mandinet, 77432 Marne La

Vallee Cedex 02

Relyon Holland B.V.

NLD

ZAF

KvK 16081779

100%

Noord Brabantlaan 265, 5652 LD Eindhoven

Steinhoff Investment Holdings Limited

1954/001893/06

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Taycol Investments Proprietary Limited

ZAF

1973/007137/07

1998/003951/07

1969/015042/07

100%

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Steinhoff International Holdings Proprietary

Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Steinhoff Africa Holdings Proprietary Limited

Building B2, Vineyard Ofﬁce Park, Cnr Devon

Valley and Adam Tas Roads, Devon Park,

Stellenbosch, 7600

Phahamiso Trading and Investments

Proprietary Limited

ZAF

2010/003510/07

2010/018630/07

2015/363987/07

1996/001546/07

2017/227519/07

1964/010191/07

2017/221869/06

2003/020009/07

100%

70%

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Newshelf 1093 Proprietary Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Mons Bella Private Partner Investments

Proprietary Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Loungefoam Proprietary Limited (Dormant)

Boundary Terraces No 012 (RF) (Pty) Limited

Ainsley Holdings Proprietary Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

7th Floor Letterstedt House, Cnr Main and

Campground Roads, Newlands, 7700

100%

58.3%

100%

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Pepkor Holdings Limited (previously

Steinhoff Africa Retail Limited)

36 Stellenberg Road, Parow Industria, 7493

Pepkor Holdco Proprietary Limited

(previously Pepkor Holdings Proprietary

Limited)

Pepkor Capital (RF) Proprietary Limited

Pepkor Proprietary Limited

ZAF

2017/515996/07

1965/007765/07

2004/014533/07

100%

36 Stellenberg Road, Parow Industria, 7493

Pepkor IP Proprietary Limited (in process of

deregistration)

Pep Proprietary Limited

ZAF

1945/018945/07

1980/000294/07

1969/004549/07

100%

36 Stellenberg Road, Parow Industria, 7493

Ultimo Holdings Proprietary Limited

Pep Beleggings Proprietary Limited (Pep

Investments)

Pep Angola Wholesale Limitada

AGO

BWA

ZMB

LUX

3.656/2010

3.667/2010

1988/892

48312/01

B92931

100%

Angola

Pep Angola Retail Limitada

Angola

Harties Stores Botswana Proprietary Limited

At the Ready Wholesalers Limited (Zambia)

Botswana

Zambia

Translink Services S.a.r.l (Luxemburg) (in

voluntary liquidation)

Luxembourg

Tendril S.a.r.l. (Luxemburg)

LUX

MWI

CHN

B149493

4717

100%

Luxembourg

Malawi

Pep Africa Limited (Malawi)

Pepkor Sourcing (Shanghai) Co. Ltd

China

258

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

100%

Principal place of Business

FY2020 FY2021

Pepkor Africa Proprietary Limited

Pep Vervaardiging Proprietary Limited

Printkor Proprietary Limited

ZAF

MWI

ZMB

UGA

LSO

SWZ

NGA

ZAF

1983/010915/07

36 Stellenberg Road, Parow Industria, 7493

1985/005679/07

1974/003641/07

1953/001317/07

100%

Radnor Road, Parow Industria, 6270

Radnor Road, Parow Industria, 7493

Pepclo Proprietary Limited

Radnor Road, Parow Industria, 7500

Mfumu Clothing Proprietary Limited Malawi

Pep Stores Zambia Limited

Malawi

31470

Zambia

Pep Stores Uganda Limited

206990

Uganda

Pep Stores Proprietary Limited (Lesotho)

Pep Stores Proprietary Limited (Swaziland)

Pep Stores Proprietary Limited (Nigeria)

Pep Retail Proprietary Limited

72/15

Lesotho

77/72

Swaziland

969937

Nigeria

1984/002042/07

1973/012536/07

Radnor Road, Parow Industria, 6270

Pep Stores Peninsula Holdings Proprietary

Limited

Pepprop Mitchells Plain Proprietary Limited

Pep Stores (Pvt) Ltd Zimbabwe

Pep SA Limited

ZAF

ZWE

ZAF

1985/000662/07

93/72

100%

Radnor Road, Parow Industria, 6270

Zimbabwe

1972/010710/06

6th Floor Alris Building, 3 Rissik Street,

Johannesburg, 2198

Pep Mozambique Limitada

MOZ

BWA

ZAF

7205

100%

Mozambique

Pep Botswana Holdings Limited

Odvest 155 Proprietary Limited

1151/72

Botswana

2011/001544/07

36 Stellenberg Road, Parow Industria, 7493

South Africa

N Jacobs and Company (Pty) Ltd t/a Pepkor

Installations

Manrotrade Four Proprietary Limited (in

process of deregistration)

ZAF

2001/004514/07

100%

36 Stellenberg Road, Parow Industria, 7493

John Craig Proprietary Limited

ZAF

1950/036084/07

2011/0678/07

100%

36 Stellenberg Road, Parow Industria, 7493

Namibia

John Craig Namibia Proprietary Limited

(dormant)

NAM

Metrotoy Proprietary Limited

Jofander Proprietary Limited

Capﬁn Proprietary Limited

ZAF

ZMB

ZAF

1924/008058/07

1984/002078/07

1980/005783/07

2010/002397/07

100%

50%

36 Stellenberg Road, Parow Industria, 7493

323 Lynnwood Road, Menlo Park, 0081

Zambia

Zamori 339 Proprietary Limited

Africa Retail Properties Limited

100%

Formatix Ten Proprietary Limited (in process

of deregistration)

2001/021137/07

2008/026096/07

36 Stellenberg Road, Parow Industria, 7493

Flat Rock Mobility Solutions Proprietary

Limited

ZAF

15%

101 Rubicor House, 17 Old Stanhope Road,

Claremont, 7708

Flash Mobile Vending Proprietary Limited

ZAF

GBR

2010/000777/07

100%

36 Stellenberg Road, Parow Industria, 7493

United Kingdom

Eezi Global Limited (previously Sapphire

117 Ltd)

09000588

Eezi Czechia

CZE

GBR

USA

GBR

ZAF

100%

26%

Czechia

1Voucher Limited

Sedloc LLC

12505099

Unit B, 120 Weston Street, London, SE1 4GS

United States of America

Jump Topup Limited

Eezi Limited

12860643

Unit B, 120 Weston Street, London, SE1 4GS

78 Rooiberg Street, Willow Park Manor, 0184

36 Stellenberg Road, Parow Industria, 7493

1 Industrie Street, Kuils River, 7580

13188577

Go 121 Proprietary Limited

Flash IP Proprietary Limited

2019/552514/07

2010/001879/07

2011/126985/07

100%

Capﬁn SA Proprietary Limited (previously

Southern View Finance SA Proprietary

Limited)

Ackermans Proprietary Limited

ZAF

1921/002170/07

90/393

100%

Production Street, Kuils River, 7580

South Africa

Ackermans Namibia Proprietary Limited

Ackermans Lesotho Proprietary Limited

Ackermans Botswana Proprietary Limited

88/229

South Africa

95/1379

South Africa

Ackermans Bophuthatswana Proprietary

Limited

1991/070355/07

Kelgor House, 14 Tillard Street, Mahikeng,

2745

ACKERX (Pty) Ltd (previously Ackermans

Transvaal Proprietary Limited)

ZAF

1926/008492/07

100%

36 Stellenberg Road, Parow Industria, 7493

Tots n Teens Clothing Proprietary Limited

ZAF

NAM

ZAF

1981/003196/07

2010/0416/07

100%

36 Stellenberg Road, Parow Industria, 7493

Namibia

Reﬁnery Stores (Namibia) Proprietary Limited

K Fashion Group Proprietary Limited

(Previously Justcor Fashion Group (Pty) Ltd)

(in process of deregistration)

2006/015570/07

36 Stellenberg Road, Parow Industria, 7493

Ackermans Zambia Proprietary Limited

Ackermans Transkei Proprietary Limited

Ackermans Swaziland Proprietary Limited

ZMB

ZAF

SWZ

ZAF

100%

Zambia

1990/060196/07

32/1972

Production Street, Kuils River, 7580

Swaziland

Van As and Associates Recoveries

Proprietary Limited (dormant)

2014/074508/07

1 Industrie Street, Kuils River, 7580

Ultimo Properties Proprietary Limited

ZAF

1960/003498/07

100%

36 Stellenberg Road, Parow Industria, 7493

259

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

100%

Principal place of Business

FY2020 FY2021

Sim Dynamix Proprietary Limited

Sim Dynamix IP Proprietary Limited

S Ya Phanda (Pty) Ltd

ZAF

2011/008149/07

36 Stellenberg Road, Parow Industria, 7493

2012/025212/07

2019/431627/07

2013/155357/07

100%

46%

Maplewave Holdings (Pty) Ltd

76.5%

12 Platinum Drive Longmeadow Business

Estate, Hereford Road, Modderfontein, 1645

Bradian Logistics (Pty) Ltd

ZAF

1999/009646/07

1984/010534/07

100%

12 Platinum Drive Longmeadow Business

Estate, Hereford Road, Modderfontein, 1645

S Ya Phanda Trading (Pty) Ltd (previously

Ackermans Management Services (Pty) Ltd)

36 Stellenberg Road, Parow Industria, 7493

Pepkorﬁn Proprietary Limited

ZAF

1980/003231/07

1958/003362/07

1987/004969/07

100%

36 Stellenberg Road, Parow Industria, 7493

Stellenberg Road, Parow Industria, 7493

Pepkor Trading Proprietary Limited

Moreprop Property Holdings Cape

Proprietary Limited (in process of

deregistration)

6 Eastern Service Road, Eastgate, Sandton,

2090

JD Group Botswana t/a Hi – Finance

ZAF

88/220

100%

South Africa

JD Group (Swaziland) Proprietary Limited t/a

181/1972

Bradlows

JD Group (Namibia) Proprietary Limited t/a

Morkels and Joshua Doore (Dormant)

ZAF

93/208

100%

South Africa

JD Financial Services Proprietary Limited (in

Namibia)

2008/0148

Cloverpark Investments Proprietary Limited

(to be deregistered)

ZAF

2001/000108/07

2011/112932/07

1968/015363/07

89/166

11th Floor JD House, 27 Stiemens Street,

27 Stiemens Street, Johannesburg, 2001

Sleepmasters Proprietary Limited

ZAF

1st Floor , 6 Eastern Service Road, 6 Eastern

Service Road, 2090

Profurn Proprietary Limited

ZAF

1st Floor , 6 Eastern Service Road, Eastgate

Sandton, 2090

Joshua Doore Russells (Botswana)

Proprietary Limited

BWA

ZAF

Botswana

Sovereign Proprietary Limited (Botswana) (in

process of deregistration)

99/4755

Botswana

JD Consumer Electronics and Appliances

Proprietary Limited

1963/002315/07

2001/475

1st Floor , 6 Eastern Service Road, Eastgate,

Sandton, 2090

Incredible Connection (Namibia) Proprietary

Limited

NAM

BWA

Namibia

Incredible Connection (Botswana)

Proprietary Limited

2001/2501

Botswana

HiFi Corp Zambia Limited

ZMB

BWA

97974

100%

Zambia

Hi – Fi and Electric Warehouse Proprietary

99/1776

Botswana

Limited (Botswana) t/a Hi – Fi Corp

Furniture Traders (Botswana) Proprietary

Limited (Dormant)

BWA

ZAF

89/1217

100%

Botswana

Connect Financial Solutions Proprietary

Limited

2018/431596/07

98/497

Marlboro House, 6 Eastern Service Road,

6 Eastern Service Road, 2090

Aazad Electrical Construction (Botswana)

Proprietary Limited t/a Morkels

BWA

NAM

ZAF

Botswana

Supreme Furnishers (Namibia) Proprietary

Limited

93/451

Namibia

Protea Furnishers (Namibia) Proprietary

Limited t/a Hi – Finance

93/450

Namibia

Pepkor Speciality Proprietary Limited

(previously Steinhoff Speciality Fashion and

Footwear Proprietary Limited)

1998/007991/07

36 Stellenberg Road, Parow Industria, 7493

New Dunns Proprietary Limited

ZAF

BWA

ZAF

SWZ

1972/013426/07

87/840

100%

36 Stellenberg Road, Parow Industria, 7493

Botswana

Dunns Stores Botswana Proprietary Limited

Shoe City Holdings Proprietary Limited

Shoe City Proprietary Limited

1996/008674/07

1995/010615/07

2018/590277/07

65/1972

36 Stellenberg Road, Parow Industria, 7493

Swaziland

SPCC Clothing Company (Pty) Ltd

Pepkor Speciality Stores Swaziland

Proprietary Limited

Pepkor Speciality Stores Proprietary Limited

(Namibia)

NAM

LSO

79/064

73/21

100%

Namibia

Lesotho

Pepkor Speciality Stores Lesotho Proprietary

Limited

Pepkor Retail Proprietary Limited

ZAF

1986/003435/07

1998/025853/07

100%

36 Stellenberg Road, Parow Industria, 7493

Pepkor Retail Learning Academy (previously

D and A Timbers (Pty) Ltd)

JD Group Proprietary Limited (to be

deregistered)

ZAF

1981/009108/07

2008/004217/07

100%

2nd Floor Execujet Building Tower R, Cape

Town International Airport, Cape Town, 7525

Abacus Holdco Proprietary Limited

Building 3, 171 Katherine Street, Sandown,

2196

260

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

100%

Principal place of Business

FY2020 FY2021

Abacus Resources Proprietary Limited

ZAF

2018/280731/07

Building 3, 171 Katherine Street, Sandown,

2196

Abacus Life Limited

2007/032597/06

2007/035136/06

1972/004708/07

100%

Building 3, 171 Katherine Street, Sandown,

2196

Abacus Insurance Limited

Building 3, 171 Katherine Street, Sandown,

2196

The Building Company Proprietary Limited

(previously Steinhoff Doors and Building

Materials Proprietary Limited)

2nd Floor Execujet Building, Tower Road

Cape Town International, Cape Town, 7525

Swish Global Trading (Mauritius)

MUS

ZAF

100%

Mauritius

Sean Gannon Building Materials Trust

RG Williams Buildings Materials Trust

IT3560/2004

South Africa

IT1865/2004

Pennypinchers Trusses Western Cape

Proprietary Limited

2011/127617/07

Pennypinchers Sand and Stone Proprietary

Limited

ZAF

2007/027317/07

IT584/2007

100%

South Africa

Pennypinchers Port Alfred Building Materials

Trust

Pennypinchers George Trust

ZAF

IT1184/96

100%

South Africa

Pennypinchers East London Building

Materials Trust

IT604/2004

Matola Buildware Limitada (Mozambique)

Marais Schonfeldt Building Materials Trust

John Mager Timbercity East London Trust

Johann van Schalkwyk Boards Trust

MOZ

ZAF

100%

Mozambique

South Africa

IT3691/97

IT1461/2006

James Bruce Sholto Douglas Building

Materials Trust

IT413/2006

Iliad Africa Limited

ZAF

1997/011938/06

1999/010559/07

1997/010059/07

2002/019276/07

1997/013442/07

100%

South Africa

Iliad Africa Investments (Pty) Ltd

Iliad Africa Trading (Pty) Ltd

D and A Truss Company (Pty) Ltd

Cachet International Holdings (Pty) Ltd

(trading as Cachet)

CMG Holdings (Pty) Ltd

ZAF

1999/004206/07

1995/003883/07

2006/016431/07

100%

South Africa

BYM Building Supplies (Pty) Ltd

BUCO Western Cape Proprietary Limited

(previously Campwell Hardware (Pty) Ltd)

Patin Trading 222 Proprietary Limited

B One Holdings (Pty) Ltd (trading as B One)

United Steel and Pipe Supplies (Pty) Ltd

Henk Louwrens Building Materials Trust

Hardware Warehouse Limited

ZAF

NAM

2007/020531/07

1988/006069/07

1994/003538/07

IT3788/99

100%

South Africa

Namibia

2007/004302/06

2005/034562/07

2003/011574/07

T130/05

Golden Dividend 235 Proprietary Limited

In line Trading 142 Proprietary Limited

Gunnar Jensen Building Materials Trust

(Namibia)

Frans Loots Building Materials Trust

Chris Eloff Building Material Trust (Namibia)

Building Supply Group Proprietary Limited

Tiletoria Cape Proprietary Limited

ZAF

NAM

ZAF

IT3317/96

100%

South Africa

Namibia

T2/07

2010/008725/07

2007/002174/07

2013/058548/07

South Africa

Namibia

ZAF

Floormark Proprietary Limited

ZAF

Tiletoria Supplies Western Africa (Pty)

Limited (Namibia)

NAM

Tiletoria Spec Studio Proprietary Limited

MacNeil Proprietary Limited

ZAF

1996/017299/07

1985/005691/07

1998/012832/07

2005/036944/07

100%

South Africa

MacNeil JHB Proprietary Limited

Brands 4 Africa Distribution and Logistics

Proprietary Limited

One Owl Enterprises Proprietary Limited

Lodge Stock and Barrel Proprietary Limited

MacNeil George Proprietary Limited

MacNeil Eastern Cape Proprietary Limited

DCLSA Proprietary Limited

ZAF

1999/014348/07

2005/011901/07

MacNeil George

2002/010074/07

2005/041644/07

2006/026347/07

100%

South Africa

Citiwood Holdings (Pty) Ltd (previously

MacNeil Durban Proprietary Limited)

Erf 117746 Nourse Avenue Proprietary

Limited

ZAF

2012/203652/07

100%

South Africa

261

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

100%

Principal place of Business

FY2020 FY2021

BUCO Buildware and Hardware (Pty)¬†Ltd

(Namibia)

NAM

Namibia

Anthony Wentworth Building Materials Trust

Wayne Gerber Building Materials Trust

Warren Collier Building Materials Trust

Timbercity Witbank Trust

ZAF

IT5717/96

100%

50%

South Africa

IT1456/98

IT1305/98

100%

IT4540/2007

IT8273/2005

2001/008196/07

1944/016830/07

Timbercity Roodepoort Boards Trust

Timbercity Lowveld Proprietary Limited

Timbercity Inland Proprietary Limited

(previously KH International Proprietary

Limited)

Timbercity Alberton Trust

The Unitraco Trust

ZAF

IT3754/2007

IT1028/2000

IT1758/2008

IT1119/2006

100%

South Africa

The Timbercity Potchefstroom Trust

The Steinbuild Port Elizabeth Trust

(previously The Steinbuild William Moffett

Trust)

The Pennypinchers Uitenhage Building

Materials Trust

ZAF

IT2397/2007

100%

South Africa

The Pennypinchers Longbeach Trust

The Pennypinchers Knysna Trust

The Pennypinchers Kimberley Trust

The Pennypinchers Hermanus Trust

The Pennypinchers Claremont Trust

The Pennypinchers City Trust

ZAF

LSO

NAM

IT1868/2004

IT2472/2000

IT1757/2008

IT1983/98

100%

South Africa

IT5/97

South Africa

IT3789/99

South Africa

The Pennypinchers Brackenfell Trust

The I-Glaze Trust

IT40/99

South Africa

IT4242/2007

2007/020629/07

South Africa

Tekkie Town Proprietary Limited

Tekkie Town Lesotho Proprietary Limited

36 Stellenberg Road, Parow Industria, 7493

Lesotho

Tekkie Town Footwear Namibia Proprietary

Limited

Namibia

SA POCO Retail Proprietary Limited

(dormant)

ZAF

1996/011622/07

100%

28 6th Street, Wynberg, Sandton, 2090

Roadway Properties Proprietary Limited

Town Investments Proprietary Limited

ZAF

1997/008647/07

2016/159084/07

100%

36 Stellenberg Road, Parow Industria, 7493

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Steinhoff Services Proprietary Limited

ZAF

NAM

ZAF

1983/006201/07

1992/004646/07

1968/007966/07

2002/010738/07

2001/210

100%

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Steinhoff Secretarial Services Proprietary

Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Steinhoff Manufacturing Proprietary Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Steinhoff Finance Investments Proprietary

Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Steinhoff Bedding (Namibia) Proprietary

Limited – Namibia (Dormant)

24 Orban Street, Klein Windhoek, Windhoek

Steinhoff At Work Proprietary Limited

1950/037849/07

1997/007703/07

1971/003354/07

1962/004286/07

2011/006582/07

2011/006996/07

2011/006981/07

2011/007487/07

2011/006190/07

2008/018137/07

1966/009368/07

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Steinhoff Africa Property Services

Proprietary Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Makhutzi Wild Ondernemings Eiendoms

Beperk

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Lurand Investments Proprietary Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

JD Group Property Holdings Proprietary

Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Edidor 197 Proprietary Limited (in process of

deregistration)

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Copperzone 185 Proprietary Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Ansec 223 Proprietary Limited (Dormant) (in

process of deregistration)

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Tanzanite Treasure Trading 7 Proprietary

Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Showboat Trade and Invest 17 Proprietary

Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Dhlamini 2389 Proprietary Limited

(previously Bisonbord Properties Proprietary

Limited)

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Adoscore Proprietary Limited

ZAF

2016/003567/07

50%

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

262

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

100%

Principal place of Business

FY2020 FY2021

263 Oxford Road Proprietary Limited

ZAF

GBR

USA

1959/001962/07

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Valuline 203 Proprietary Limited

2011/010601/07

2001/005911/07

2008/010249/07

10068169

100%

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Steinhoff Properties Proprietary Limited

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

EastWest Real Estate Investments

Proprietary Limited (previously Greggaleighk)

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Steinhoff UK Group Services Ltd (in

liquidation)

Pall Mall Works, 17 – 19 Cockspur Street,

London, SW1Y 5BL

Steinhoff US Holdings I, Inc (previously

Sherwood Group Holdings, Inc)

6454341

c/o The Corporation Trust Company, 1209

Orange Street, Wilmington, Delaware 19801,

New Castle County

Steinhoff US Holdings II, LLC (previously

Sherwood Acquisition Holdings LLC)

USA

POL

6438336

80%

c/o The Corporation Trust Company, 1209

Orange Street, Wilmington, Delaware 19801,

New Castle County

Pada Sp. z o.o. (in process of liquidation)

KRS 0000020830

Company

liquidated on

06/11/2020

ul. Ruska 37/38, 50-079 Wroclaw, Poland

FGL Property Discretionary Trust

Freedom Furniture Partnership

AUS

Trust dissolved

on 02/07/2021

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Partnership

dissolved on

25/04/2021

Level 4, 1 Epping Road, North Ryde, New

South Wales, 2037

Genesis Investments Beta GmbH (in

liquidation)

AUT

DEU

FN 373249 x

FN 373251 z

HR B 121276

Company

liquidated on

24/09/2019

2345 Brunn am Gebirge, Rennweg 77

26655 Westerstede, Zum Stadtpark 2

Genesis Investments Alpha GmbH (in

liquidation)

Company

liquidated on

24/09/2019

Steinhoff Eta GmbH

SBG Service GmbH

Merged with

Westersteder

ST GmbH

(German

merger) on

24/06/2021

DEU

HR B 229923

Company

deregistered

and merged

with

26655 Westerstede, Zum Stadtpark 2

Westersteder

ST GmbH on

01/05/2021

Pike Sp. z o.o. (previously Global Warehouse

and Logistics Sp. z o.o.)

POL

DEU

KRS 0000492122

HR B 121277

Company

liquidated on

05/01/2021

ul. Ruska 37/38, 50-079 Wroclaw, Poland

26655 Westerstede, Zum Stadtpark 2

Nova Engineering sp. z o.o

LTW Transport GmbH

Company

liquidated on

11/01/2021

Company

deregistered

and merged

with

Westersteder

ST on

01/05/2021

Global Warehouse and Logistics West GmbH

DEU

HR B 14908

HR B 209015

HR B 405797

Company

deregistered

and merged

with

Westersteder

ST on

26655 Westerstede, Zum Stadtpark 2

01/05/2021

Global Warehouse and Logistics Service

GmbH

Company

deregistered

and merged

with

Westersteder

ST on

01/05/2021

Global Warehouse and Logistics GmbH

Company

merged with

Westersteder

ST GmbH

(German

merger) on

07/06/2021

263

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

Principal place of Business

FY2020 FY2021

WL Westersteder Lagerhaus GmbH

DEU

HR B 201637

Company

deregistered

and merged

with

26655 Westerstede, Zum Stadtpark 2

Westersteder

ST on

01/05/2021

Steinhoff International Trading Services Ltd

Steinhoff Digital GmbH

HKG

DEU

CR 2463978

HR B 225441

Company

dissolved on

27/02/2021

China (Hong Kong)

Company

deregistered

and merged

with

26655 Westerstede, Zum Stadtpark 2

Westersteder

ST on

01/05/2021

CXV Holdings, LLC

USA

5122848

5122844

5122846

Company

merged with

and into

Mattress

Firm Inc on

23/09/2021

c/o The Corporation Trust Company, 1209

Orange Street, Wilmington, Delaware 19801,

New Castle County

CCP IV SBS Holdings, LLC

CCP IV Holdings, LLC

Retail Holdings Sarl

Company

merged with

and into

Mattress

Firm Inc on

23/09/2021

c/o The Corporation Trust Company, 1209

Orange Street, Wilmington, Delaware 19801,

New Castle County

Company

merged with

and into

Mattress

Firm Inc on

23/09/2021

c/o The Corporation Trust Company, 1209

Orange Street, Wilmington, Delaware 19801,

New Castle County

LUX

GGY

FRA

B94093

Company

dissolved on

30/09/2021

56 rue Charles Martel, Luxembourg, 230883

Universal Insurances PCC Ltd (in process of

liquidation)

32243

Company

liquidated on

01/07/2021

PO Box 313 Lefebvre House Lefebvre Street

St Peter Port GUERNSEY GY1 3TF

Tulo France SASU

RCS 823 294 681

Merged into

Conforama

80 Boulevard du Mandinet, 77185 Lognes,

France

Developpement

SASU (Q1:

31/03/2021)

Digital Inv SASU

FRA

RCS 800 321 382

80220197

Merged into

Conforama

Developpement

SASU (Q1:

80 Boulevard du Mandinet, 77185 Lognes,

France

31/03/2021)

Fliba doo

HRV

SRB

FRA

Company sold

to a third party

on 22/09/2021

Croatia

Serbia

Emmezeta Srbija d.o.o.

Emma Real Estate d.o.o.

SCI Stella

Company sold

to a third party

on 22/09/2021

Company sold

to a third party

on 22/09/2021

RCS 800 540 304

RCS 819 922 733

RCS 819 941 691

RCS 750 787 459

Company

merged into

SNC Baptiste

on 28/09/2021

80 Boulevard du Mandinet, 77185 Lognes,

France

SCI Ophelia

SCI Chloe

FRA

Company

merged into

SNC Baptiste

on 28/09/2021

80 Boulevard du Mandinet, 77185 Lognes,

France

Company

merged into

SNC Baptiste

on 28/09/2021

80 Boulevard du Mandinet, 77185 Lognes,

France

SCI La Vallee

Company

merged into

80 Boulevard du Mandinet, 77185 Lognes,

France

SNC Alpha I

Beta Omega on

28/09/2021

264

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

Principal place of Business

FY2020 FY2021

SCI EVA

FRA

RCS 750 790 628

Company

merged into

SNC Alpha I

Beta Omega on

28/09/2021

80 Boulevard du Mandinet, 77185 Lognes,

France

SCI Dina

RCS 791 955 537

RCS 750 366 346

Company

merged into

SNC Alpha I

Beta Omega on

28/09/2021

80 Boulevard du Mandinet, 77185 Lognes,

France

Alpha II Beta Omega SCI

Company

merged into

80 Boulevard du Mandinet, 77185 Lognes,

France

SNC Alpha I

Beta Omega on

28/09/2021

Conforama-Casino-Achats SARL (MANO)

Conforama Developpement 14 SASU

FRA

RCS 823 395 686

RCS 831 498 787

Company

sold to a third

party (Q1:

80 Boulevard du Mandinet, 77185 Lognes,

France

31/03/2021)

Merged into

Conforama

80 Boulevard du Mandinet, 77185 Lognes,

France

Developpement

SASU (Q1:

31/03/2021)

Steinhoff International Investment HK Ltd

(previously Steinhoff Global Sourcing Ltd)

HKG

ZAF

CR 2584507

Company

dissolved on

29/09/2021

19/F, Seaview Commercial Building, 21-24

Connaught Road West

Steinbuild Holdings Proprietary Limited

1995/008188/07

1994/003585/07

1969/009505/07

1965/005478/07

Company

deregistered on

09/09/2021

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

IB Investment Holdings Proprietary Limited

(Dormant) (in process of deregistration)

Company

deregistered on

11/11/2020

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Pepkor Manufacturing Proprietary Limited

Company

deregistered on

17/06/2021

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Pepkor Clothing Industries Proprietary

Limited

Company

deregistered on

17/06/2021

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Beneﬁciary of: Pep Limited Share Incentive

Trust No. 2

ZAF

Dormant Trust

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Beneﬁciary of: Pep Limited Share Incentive

Trust

Dormant Trust

36 Stellenberg Road, Parow Industria, 7493,

South Africa

IL Black Properties Aandeleblokmaatskappy

Proprietary Limited

1958/002836/07

79/073

Company

deregistered on

17/06/2021

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Pep Limited (Ghana)

GHA

ZAF

Company

deregistered on

17/06/2020

Ghana

Pep Reef Properties Proprietary Limited

Pep Namibia Holdings Limited

Pepkor IT Proprietary Limited

W M Twee Proprietary Limited

1989/004910/07

1987/086

Company

deregistered on

15/02/2021

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Company

deregistered on

24/05/2021

Namibia

1946/022121/07

1986/000789/07

2007/003071/07

1998/023066/07

1965/004413/07

1985/11/01

Company

deregistered on

17/06/2021

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Company

deregistered on

17/06/2021

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Tenacity Financial Services Proprietary

Limited

Company

deregistered on

17/06/2021

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Maravedi Group Proprietary Limited

Company

deregistered on

19/11/2020

36 Stellenberg Road, Parow Industria, 7493,

South Africa

JD Group International Proprietary Limited

Company

deregistered on

11/11/2020

36 Stellenberg Road, Parow Industria, 7493,

South Africa

JD Group (Lesotho) Proprietary Limited

(Dormant)

Company

deregistered on

24/06/2020

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Secureco Three Proprietary Limited (in

Namibia) (Dormant)

2001/090

Company

deregistered on

03/07/2020

36 Stellenberg Road, Parow Industria, 7493,

South Africa

265

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

Principal place of Business

FY2020 FY2021

Connection Group Holdings Proprietary

Limited

ZAF

MOZ

MUS

ZAF

1997/005390/07

Company

deregistered on

02/09/2020

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Profurn (Mozambique) Limitada

Finserve Mauritius Limited

Company

dissolved on

28/08/2019

Mozambique

Mauritius

19561/3643

19548/3639

1961/001935/07

1992/002839/10

84/4992

Company

deregistered on

30/04/2021

Prosure Insurance Limited

Company

deregistered on

07/09/2020

Mauritius

Supreme Furnishers Proprietary Limited

Company

deregistered on

19/11/2020

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Supreme Furnishers (Lesotho) Proprietary

Limited

LSO

Company

deregistered on

23/06/2020

Lesotho

Protea Furnishers (Botswana) Proprietary

Limited

BWA

NAM

BWA

Company

deregistered on

03/12/2020

Botswana

Namibia

Botswana

Hi – Fi and Electric City (Namibia) Proprietary

Limited

98/339

Company

deregistered on

03/07/2020

Gomotsa Proprietary Limited

99/4849

Company

deregistered

(effective date

unknown)

Barnetts (Swaziland) Proprietary Limited

SWZ

NAM

ZAF

778/9/1966

Company

deregistered on

31/05/2021

Swaziland

Namibia

The Tax Free Warehouse Proprietary Limited

Namibia

97/427

Company

deregistered on

23/07/2020

Pefki Wood Products Proprietary Limited

1993/004401/07

2009/012785/07

Company

deregistered on

11/11/2020

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Next SA Trading Proprietary Limited

Link International (L) BHD (Malaysia)

Link Quality Control and Services Co (China)

Link International KL Limited (Malaysia)

Yebomanzi Proprietary Limited

ZAF

MYS

CHN

MYS

ZAF

Company sold

on 01/06/2021

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Company sold

on 01/06/2021

Malaysia

Company sold

on 01/06/2021

China

Company sold

on 01/06/2021

Malaysia

2005/038950/07

1973/016301/07

Company sold

on 30/06/2021

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Victoria Lewis Furniture Manufacturers

Proprietary Limited (Dormant)

Company

deregistered on

11/10/2021

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Steinhoff Africa Internal Audit Services

Proprietary Limited

ZAF

1988/000809/07

1994/004899/07

Company

deregistered on

11/10/2021

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Rainford Aviation Investments Proprietary

Limited

Company

deregistered on

09/09/2021

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Oshikango Foam and Mattress Company

Proprietary Limited – Namibia

NAM

ZAF

1997162

Company sold

on 31/10/2020

Windhoek, Namibia

Hallie Investments Number Three Thousand

And Fifty One Proprietary Limited Namibia

2011/0811

Company sold

on 31/10/2020

Steinhoff Group Services Proprietary Limited

(Dormant)

1988/000802/07

Company

deregistered on

09/09/2021

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Attstein Proprietary Limited

ZAF

IMN

2005/028978/07

2004/027788/07

2006/029967/07

014512V

Company sold

on 13/04/2021

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Nulane Investments 40 Proprietary Limited

Company sold

on 13/04/2021

Die Klubhuis, Cnr 18th Street and Pi,

Hazelwood, 0081, South Africa

Broadway Business Centre Proprietary

Limited

Company sold

on 09/02/2021

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Rainford Isle of Man Ltd (IoM)

Liquidation

ﬁnalised on

09/03/2021

Douglas Chamers, North Quay, Douglas,

IM1 4LA, Isle of Man

Steinhoff Sikhulasonke Investments (RF)

Proprietary Limited

ZAF

1971/008683/07

Shares in the

company sold

on 21/07/2021

28 6th Street, Wynberg, Sandton, 2090

266

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

OTHER INFORMATION // Statutory list of all subsidiaries and afﬁliated companies as at 30 September 2021 continued

This list forms part of the notes to the 2021 Separate Financial Statements and has been referenced therein.

Entity Name

Incorp. Reg. No.

Shareholding

25.99%

Principal place of Business

FY2020 FY2021

IEP Group Proprietary Limited

ZAF

2015/173069/07

15 Chaplin Road, 3rd Floor Illovo, Gauteng,

2196, South Africa

Business Venture Investments No 1499 (RF)

Proprietary Limited

2011/002155/07

T9633/98

Deemed

control

36 Stellenberg Road, Parow Industria, 7493,

South Africa

Beneﬁciary of Steinhoff International Share

Trust

Deemed

control

Building B2, Cnr Adam Tas & Devon Valley

Road, Stellenbosch, 7600

Aru Game Lodges Proprietary Limited

Aru Hunting Proprietary Limited

NAM

ZAF

CY/2005/0072

CY/1998/0383

CY/1970/4770

M2005036683

49%

Namibia

Veronica Farming Proprietary Limited

Micawber 455 Proprietary Limited

Deemed

control

Silver Stream Business Park, 10 Muswell

Road, Bryanston, 2060, South Africa

267

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

GLOSSARY OF TERMS

APPLIED TO THE ANNUAL REPORT

The capitalised words and expressions used herein shall have the respective meanings attributed thereto below:

2019 Consolidated Financial

Statements

Consolidated Financial Statements of the Group for the ﬁnancial year ended 30 September 2019.

Consolidated Financial Statements of the Group for the ﬁnancial year ended 30 September 2020.

Consolidated Financial Statements of the Group for the ﬁnancial year ended 30 September 2021.

2020 Consolidated Financial

Statements

2021 Consolidated Financial

Statements

2019 Reporting Date

2020 Reporting Date

30 September 2019.

30 September 2020.

30 September 2021.

2021 Reporting Date or

Reporting Date

2019 Reporting Period

2020 Reporting Period

Period starting on 1 October 2018 up to and including 30 September 2019.

Period starting on 1 October 2019 up to and including 30 September 2020.

Period starting on 1 October 2020 up to and including 30 September 2021.

2021 Reporting Period or

Reporting Period

Afﬁliated Company

Each legal entity belonging to the same group as the Company or in which the Company has a direct or

indirect equity interest of more than ten per cent. (10%).

AFM

Dutch Authority for the Financial Markets (Autoriteit Financiële Markten).

African Group

SIHL, together with its subsidiaries, amongst others Pepkor Holdings Group, IEP and the African property

portfolio.

AGM

Annual General Meeting.

AGM 2020

AGM 2021

Ainsley Holdings

The annual general meeting of the Company held on 28 August 2020.

The annual general meeting of the Company held on 30 April 2021.

Ainsley Holdings Proprietary Limited, a company incorporated under the laws of the Republic of South Africa,

registered under number 1964/010191/07.

Articles

Articles of association of the Company, as amended from time to time.

Audit and risk committee established by the Supervisory Board.

Audit and Risk Committee

BSG

Building Supply Group Proprietary Limited, a company incorporated under the laws of the Republic of South

Africa and registered under number 2010/008725/07, which is a subsidiary of Pepkor Holdings.

BVI

Business Venture Investments 1449 (RF) Proprietary Limited, a company incorporated under the laws of the

Republic of South Africa and registered under number 2011/002155/07.

CEO

Chief executive ofﬁcer of the Company.

Chief ﬁnancial ofﬁcer of the Company.

Cash-generating unit.

CFO

CGU

CCRO

Chief compliance and risk ofﬁcer of the Company.

268

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

GLOSSARY OF TERMS APPLIED TO THE ANNUAL REPORT continued

Christo Wiese

Christo Wiese, former member and Chairman of Supervisory Board.

Code of Conduct

Code of conduct as referred to in best practice provision 2.5.2 of the DCGC.

Committee of Representation

The committee of representation appointed pursuant to the Dutch SoP, comprised of ﬁfteen members,

including four independent members, seven members on behalf of the SIHNV Market Purchase Claimants

(as deﬁned in the Dutch SoP) and four members on behalf of the SIHNV Contractual Claimants (as deﬁned

in the Dutch SoP), who voted on the Composition Plan as proposed by Steinhoff N.V. instead of the individual

creditors.

Company or Steinhoff N.V.

Steinhoff International Holdings N.V., a public limited liability company (naamloze vennootschap)

incorporated under the laws of the Netherlands, having its corporate seat in Amsterdam, the Netherlands,

and its principal place of business at Building B2, Vineyard Ofﬁce Park, Cnr Adam Tas & Devon Valley Road,

Stellenbosch 7600, South Africa, and registered with the Dutch Trade Register under number 63570173, and,

where appropriate, the Subsidiaries and possible other Group companies, whose ﬁnancial information is

incorporated in the consolidated ﬁnancial statements of the Company.

Company Secretary

Composition Plan

Company secretary of the Company or, in absence of the Company Secretary, his or her deputy designated by

the Management Board in the manner provided for in the Articles.

The composition plan proposed pursuant to the Dutch SoP.

Conforama and/or Conforama Conforama Investissement SNC, the holding company of Conforama Holding SA, a company incorporated

Group

under the laws of France and registered under number RCS 582 014445, together with its subsidiaries.

Contractual Claims

Claims by those claimants who, in accordance with the terms of their respective contractual arrangements

involving the Company, sold businesses, shares or otherwise.

Corporate Scorecard

COVID-19

A list of performance conditions that sets out the deliverables by Managing Directors in order to achieve the

Company’s short- to medium-term strategy.

An ongoing pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome

coronavirus 2 (SARS-CoV-2).

CPU

Contingent Payment Undertaking.

CVA

Company Voluntary Arrangements, in respect of SEAG CVA and/or the SFHG CVA (as applicable).

DCC

Dutch Civil Code.

DCGC

Decree

Dutch Corporate Governance Code.

Decree Additional Requirements Annual Report (Vaststellingsbesluit nadere voorschriften inhoud

bestuursverslag).

Deloitte

Deloitte Accountants B.V. and Deloitte & Touche South Africa.

Dutch Administrators

F. Verhoeven and C.R. Zijderveld, the administrators appointed pursuant to the Dutch SoP.

Dutch Financial Supervision Act (Wet op het ﬁnancieel toezicht).

Dutch Financial Supervision

Act

Dutch SoP

Dutch Suspension of Payments procedure (surseance van betaling).

Operating proﬁt or loss adjusted for capital and reclassiﬁcation items.

Operating proﬁt or loss before depreciation and amortisation adjusted for capital and reclassiﬁcation items.

Expected credit losses.

EBIT

EBITDA

ECL

Enterprise Chamber

ESRS

Enterprise Chamber of the Amsterdam Court of Appeal.

Employee Share Right Scheme of the Company

European Union.

European Group

Newco 3, together with its subsidiaries, amongst others Pepco Group, Greenlit Brands, European Properties

and Conforama.

European Properties

Executive Committee

External Auditor

European properties and property companies held by Hemisphere.

Executive committee designated as such in clause 6 of the Regulations of the Management Board.

Organisation in which certiﬁed public accountants cooperate, as referred to in section 2:393 paragraph 1,

of the Dutch Civil Code, that is charged with the audit of the ﬁnancial statements (jaarrekening).

269

STEINHOFF INTERNATIONAL HOLDINGS N.V. • ANNUAL REPORT 2021

GLOSSARY OF TERMS APPLIED TO THE ANNUAL REPORT continued

Fantastic

Fantastic Holdings Limited, a company incorporated under the laws of Australia and registered under

number 004 000 075 (ACN).

FCTR

Foreign currency translation reserve.

FinSurv

The Financial Surveillance Department of the South African Reserve Bank responsible for the administration

of exchange control on behalf of the South African Minister of Finance.

FSCA

Financial Sector Conduct Authority.

FSE

Frankfurt Stock Exchange (Frankfurter Wertpapierbörse).

General Meeting

The body of the Company consisting of the person or persons to whom as a Shareholder or otherwise, voting

rights attached to Steinhoff shares accrue, or (as the case may be) a meeting of such persons (or their

representatives) and other persons with Meeting Rights.

Greenlit Brands

Greenlit Brands Pty Limited, a company incorporated under the laws of Australia and registered under

number 612890874, together with its subsidiaries, including Fantastic.

Group or Steinhoff Group

Group Company

The group of companies consisting of Steinhoff International Holdings N.V. together with its subsidiaries.

Group company of the Company as referred to in section 2:24b of the Dutch Civil Code.

The Group Risk and Internal Audit function of the Company headed by the CCRO.

Group Risk function

Group Services

Group functions outside of OpCos and Subsidiaries, including the following functions: Finance, Treasury, Tax,

Human Resources, Legal, Company Secretarial, Compliance, Risk, Internal Audit and IT.

Hemisphere

Hemisphere International Properties B.V., a private company with limited liability incorporated under the

laws of the Netherlands and registered with the Dutch Trade Register under number 17228592, which is an

indirect wholly owned subsidiary of Steinhoff N.V. and holds a portfolio of European properties and property

companies.

Human Resources and

Human resources and remuneration committee established by the Supervisory Board.

Remuneration Committee or

Remuneration Committee

IAS

IEP

International Accounting Standards.

IEP Group Proprietary Limited, a South African investment holding company with controlling and scalable

strategic interests in a number of select investment platforms, including the Bud Group

IFRS

International Financial Reporting Standards.

IFRS 5: Non-current Assets Held-for-Sale and Discontinued Operations.

IFRS 9: Financial Instruments.

IFRS 5

IFRS 9

IFRS 16

IFRS 16: Leases.

Interim Debt Extension

The amendment of the deﬁnition of the “Maturity Date” in each of the Steinhoff N.V. CPU, the SIHPL CPU and

the deﬁnition of “Termination Date” under (and as deﬁned in) each of the facility agreements entered into

pursuant to the CVA, each extended by 12 months to, 31 December 2022.

Internal Auditor

Internal auditor as referred to in principle 1.3 of the DCGC.

Initial public offering.

IPO

Information technology.

JD Group

JD Group Proprietary Limited, a company incorporated under the laws of the Republic of South Africa and

registered under number 1981/009108/07.

JSE

The stock exchange operated by JSE Limited in the Republic of South Africa.

Key Performance Indicator

KPI

Lancaster 101

Lancaster 101 (RF) Proprietary Limited, a company incorporated under the laws of the Republic of South

Africa and registered under number 2016/272750/07.

Lancaster 102

Lancaster 102 Proprietary Limited, a company incorporated under the laws of the Republic of South Africa

and registered under number 2017/277500/07.

Lancaster Group

Lancaster Group Proprietary Limited, a company incorporated under the laws of the Republic of South Africa

and registered under number 2012/065956/07, together with its subsidiaries.

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LIPO

LIPO Beteiligungen AG, a company incorporated under the laws of Switzerland together with its subsidiaries

and registered under number CH- 040.3.001.910-6.

Litigation Settlement

Proposal

A proposal for the settlement of the outstanding litigation announced on 27 July 2020, as amended from

time to time, and detailed in the Settlement Term Sheet.

LTIs

Long-term incentive schemes awarded with the primary aim of promoting the sustainability of the Company

through business cycles, aligning performance of key management with the interests of investors and

retaining key management, all over the longer term. The LTIs can comprise of a share rights scheme and/or a

cash settled scheme.

Management Board

Management Report

Managing Director

Management board of the Company.

Management report (bestuursverslag) as referred to in section 2:391 of the Dutch Civil Code.

Member of the Management Board.

Market Purchase Claimants

Market purchase claims arisen in respect of market traded securities. In respect of the period prior to the

Company’s Frankfurt Stock Exchange listing becoming effective on 7 December 2015, any such claims are

in respect of shares acquired in SIHPL (the former holding company of the Group) and thereafter, any such

claims are in respect of shares acquired in the Company.

Mattress Firm

Mazars

Mattress Firm Holding Corp, a company incorporated under the laws of the United States of America and

registered under number EIN – 20-8185960, together with its subsidiaries, including Mattress Firm Inc.

Mazars Accountants N.V., the Company’s External Auditor appointed for the ﬁnancial years 2019, 2020 and

2021.

Meeting Rights

Newco 2A

Newco 3

Right to be invited to General Meetings and to speak at such meetings, as a Shareholder or as a person to

whom these rights have been attributed in accordance with the Articles.

Steenbok Newco 2A Limited, a company incorporated and registered under the laws of Jersey with

registered number 127926 and with its registered address at 3rd Floor, 44 Esplanade, St Hellier, Jersey.

Steenbok Newco 3 Limited, a private limited company incorporated under the laws of England and Wales,

having its registered ofﬁce at Pall Mall Works, 17-19 Cockspur Street, London, SW1Y 5BL and company

number 11728460.

Nomination Committee

OpCos

Nomination committee established by the Supervisory Board.

The Steinhoff Group’s operating companies, amongst others Pepkor Holdings, Conforama, Hemisphere,

Greenlit Brands, Mattress Firm and Pepco Group.

Ordinary Share or Steinhoff

Ordinary share in the capital of the Company.

Pepkor Holdings

Pepkor Holdings Limited, a public company incorporated under the laws of the Republic of South Africa and

registered under number 2017/221869/06, which is an indirect subsidiary of Steinhoff N.V.

Pepkor Holdings ESRS

Pepkor Holdings Group

Pepco

The Executive Share Right Scheme of Pepkor Holdings

Pepkor Holdings, together with its subsidiaries.

Pepco Group N.V., a public limited liability company (naamloze vennootschap) incorporated under the laws of

the Netherlands and registered with the Dutch Trade Register under number 81928491, which is an indirect

subsidiary of Steinhoff N.V.

Pepco Group

Poundland

The pan-European discount variety retailer that includes the brands PEPCO, Poundland and Dealz.

Poundland Group Limited, a private limited company incorporated under the laws of the United Kingdom,

registered under number 08861243.

Preference Share

PwC

Non-cumulative ﬁnancing preference share in the capital of the Company.

PricewaterhouseCoopers.

Regulations of the

Management Board

Rules effective as at 17 December 2020 regarding the working methods and decision-making process of the

Management Board, in addition to the relevant provisions of the Articles.

Regulations of the

Supervisory Board

Rules effective as at 11 July 2019 regarding the working methods and decision-making process of the

Supervisory Board, in addition to the relevant provisions of the Articles.

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Remediation Plan

Plan of the Management Board – forming part of its duty to monitor the operation of the internal

risk management and control systems and to carry out a systematic assessment of their design and

effectiveness – containing appropriate measures to prevent any reoccurrence of the irregularities and non-

compliance with laws and regulations in the future.

Remuneration Policy

S155 Scheme

SEAG

Policy as referred to in article 15.11 of the Articles and as adopted by the General Meeting on

1 December 2015.

A statutory compromise with creditors proposed in terms of section 155 of the South African Companies

Act, 71 of 2008.

Steinhoff Europe AG, a company incorporated under the laws of Austria and registered under number FN

38031d, which is a wholly owned subsidiary of the Company.

SEAG CVA

English law company voluntary arrangement proposed by SEAG, approved on 15 December 2018 and

implemented on 13 August 2019.

Segmental EBITDA

Seifert

EBITDA adjusted to exclude exceptional expenses incurred.

Dr. Andreas Seifert and entities afﬁliated to Seifert.

Senior Managers

Employees with a direct reporting line to the Management Board as a whole or to a Managing Director.

Settlement Effective Date or

SED

The date on which all suspensive conditions and conditions precedent (as deﬁned in the Steinhoff N.V.

Composition Plan and the S155 Scheme) are fulﬁlled.

Settlement Term Sheet

A document detailing the terms of the global Litigation Settlement Proposal and placed on the Steinhoff N.V.

website.

SFHG

Steinhoff Finance Holdings GmbH, a company incorporated under the laws of Austria, registered under

number FN345159m.

SFHG CVA

English law company voluntary arrangement proposed by SFHG, approved on 15 December 2018 and

implemented on 13 August 2019.

A share in the capital of the Company. Unless the contrary is apparent, this shall include each Ordinary Share

and each Preference Share.

Shareholder

Holder of one or more Shares.

Share Issue Authorisation

Authorisation of the Management Board granted by the General Meeting to issue Ordinary Shares and to

grant rights to subscribe for Ordinary Shares.

Sherwood

SIHL

Steinhoff US Holdings I Inc. (formerly: Sherwood Group Holdings Inc), a company incorporated under the

laws of the United States of America, registered under number 6454341.

Steinhoff Investment Holdings Limited, a public company incorporated under the laws of the Republic of

South Africa, registered under number 1954/001893/06.

SIHPL

Steinhoff International Holdings Proprietary Limited, a company incorporated under the laws of the Republic

of South Africa, registered under number 1998/003951/06, previously listed on the JSE and formerly known

as Steinhoff International Holdings Limited.

SIHPL Contractual Claimants

SIHPL Financial Creditors

SIHPL MPCs

Persons holding alleged Contractual Claims against SIHPL.

The beneﬁciaries or alleged beneﬁciaries of the SIHPL CPU.

Persons holding alleged Market Purchase Claims against SIHPL.

SRF

Stichting Steinhoff Recovery Foundation, a Dutch foundation (stichting) incorporated under the laws of the

Netherlands, registered under number 83737065.

Steinhoff Africa

Steinhoff Africa Holdings Proprietary Limited, a company incorporated under the laws of the Republic of

South Africa, registered under number 1969/015042/07.

Steinhoff at Work

Steinhoff N.V. Scheme

Steinhoff at Work Proprietary Limited, a company incorporated under the laws of the Republic of South

Africa, registered under number 1950/037849/07.

English law scheme of arrangement that Steinhoff N.V. launched in November 2020 and approved on

5 February 2021, to implement the consents required from certain ﬁnancial creditors to pursue the proposed

global settlement of contingent and litigation claims against the Group arising from legacy accounting

issues ﬁrst announced in December 2017.

STI/Annual Bonus Scheme

Short-term incentive scheme. Similar to an annual performance bonus.

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Subsidiary

SUKGS

Subsidiary of the Company as referred to in section 2:24a of the Dutch Civil Code.

Steinhoff Group Services Limited, a company incorporated under the laws of the United Kingdom, registered

under number 10068169.

Supervisory Board

Supervisory board of the Company.

Supervisory Board

Remuneration Policy

Policy as referred to in article 24.12 of the Articles and as adopted by the General Meeting on

28 August 2020.

Supervisory Director

SUSHI

Member of the Supervisory Board.

Stripes US Holding Inc., a company incorporated under the laws of the United States of America, registered

under number EIN-38-4012800, which is the holding company of Mattress Firm.

Steenbok Group

Tekkie Town

Newco 3, together with its subsidiaries, which holds the Steinhoff Group’s non-South African businesses.

Tekkie Town Proprietary Limited, a company incorporated under the laws of the Republic of South Africa,

registered under number 2007/020629/07.

Thibault

Titan

Thibault Square Financial Services Proprietary Limited, a company incorporated under the laws of the

Republic of South Africa, registration number 1992/004170/07.

Titan Premier Investments Proprietary Limited, a company incorporated under the laws of the Republic of

South Africa, registration number 1979/000776/07.

Trevo

Trevo Capital Limited, a Mauritian entity associated with the former CEO of Pepkor Holdings Limited,

Mr Pieter Erasmus.

Unitrans

Unitrans Motor Holdings Proprietary Limited, a company incorporated under the laws of the Republic of

South Africa, registered under number 1997/017428/07.

WACC

Weighted average cost of capital.

Warrants

A total of 205 242 947 warrants issued by Conforama Holding SA on 29 May 2019 which, if and when

exercised, are “convertible” into 205 242 947 Class 2 Preference Shares.

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