DIRECTORS' STATUTORY REPORT
The directors have pleasure in submitting the consolidated annual financial statements of the company for the year ended 31 December 2007.
NATURE OF BUSINESS
Tongaat Hulett is an agri-processing business which includes the integrated components of land management, property development and agriculture. The activities are dealt with in detail in the annual report.
FINANCIAL RESULTS
The net profit attributable to shareholders for the year ended 31 December 2007 amounted to R 3,457 billion (2006 - R723 million). This translates into a headline earnings per share of 58,1 cents (2006 - 666,4 cents) based on the weighted average number of shares in issue during the year.
DIVIDENDS
An interim dividend number 160 of 150 cents per share was paid on 30 August 2007 and a final dividend number 161 of 160 cents per share has been declared and is payable on 27 March 2008 to shareholders registered at the close of business on 20 March 2008.
The salient dates of the declaration and payment of this final dividend are as follows:
| Last date to trade ordinary | ||
| shares “CUM” dividend | Thursday | 13 March 2008 |
| Ordinary shares trade | ||
| “EX” dividend | Friday | 14 March 2008 |
| Record date | Thursday | 20 March 2008 |
| Payment date | Thursday | 27 March 2008 |
Share certificates may not be dematerialised or rematerialised, nor may transfers between registers take place between Friday 14 March 2008 and Thursday 20 March 2008, both days inclusive.
The dividend is declared in the currency of the Republic of South Africa. Dividends paid by the United Kingdom transfer secretaries will be paid in British currency at the rate of exchange ruling at the close of business on Thursday 13 March 2008.
SHARE CAPITAL
Following the unbundling and listing of Hulamin and the introduction of BEE equity participation in Tongaat Hulett and Hulamin, Tongaat Hulett’s authorised share capital of R150 000 000, comprising of 150 000 000 ordinary par value shares of R1,00 (one Rand) each, was increased by way of a special resolution in a general meeting, to R199 700 010,
through the creation of:
- 30 000 000 A preferred ordinary par value shares of R1,00 (one Rand) each;
- 6 000 000 B1 ordinary par value shares of R1,00 (one Rand) each;
- 10 500 000 B2 ordinary par value shares of R1,00 (one Rand) each;
- 3 200 000 B3 ordinary par value shares of R1,00 (one Rand) each; and
- 10 redeemable preference shares of R1,00 (one Rand) each.
During the year 1 265 571 shares were allotted (including 150 900 shares to directors) in respect of options exercised in terms of the company’s employee share incentive schemes for a total consideration of R49 million. Details of the unissued ordinary shares and the company’s share incentive schemes are set out in notes 11, 33 and 34.
Shareholders will be asked to consider an ordinary resolution at the forthcoming annual general meeting to place unissued shares of the company up to five percent of the number of shares in issue at 23 April 2008 under the control of the directors until the following annual general meeting.
At the previous annual general meeting, a general authority was granted by shareholders for the company to acquire its own shares in terms of the Companies Act. The directors consider that it will be advantageous for the company were this general authority to continue. Such authority will be used if the directors consider that it is in the best interests of the company and shareholders to effect any such acquisitions having regard to prevailing circumstances and the cash resources of the company at the relevant time. Shareholders will be asked to consider a special resolution to this effect at the forthcoming annual general meeting with the proviso that the number of ordinary shares acquired in any one financial year may not exceed five percent of the ordinary shares in issue at the date on which this resolution is passed.
In compliance with the Listings Requirements of the JSE Limited ("JSE"), the acquisition of shares or debentures ("securities") pursuant to a general authority may only be made by a company subject to such acquisitions:
- being effected through the order book operated by the JSE trading system;
- being authorised thereto by the company's articles of association;
- being authorised by the shareholders of the company in terms of a special resolution of the company in general meeting which will be valid only until the next annual general meeting of the company; provided that such authority will not extend beyond 15 months from the date of the resolution;
- not being made at a price greater than ten percent above the weighted average of the market value for the securities for the five business days immediately preceding the date on which the transaction is effected. The JSE should be consulted for a ruling if the company's securities have not traded in such five business day period.
Further, in terms of the Listings Requirements of the JSE, the directors consider that in their opinion, taking into account the effect of the maximum acquisition by the company of shares issued by it as referred to above:
- the company and its subsidiaries (together "the group") will be able, in the ordinary course of business, to pay its debts for a period of 12 months from 21 February 2008;
- the assets of the company and of the group will be in excess of the liabilities of the company and the group for a period of 12 months from 21 February 2008. For this purpose, the assets and liabilities will be recognised and measured in accordance with the accounting policies used in the company's latest audited group annual financial statements;
- the ordinary capital and reserves of the company and the group will be sufficient for the company's and the group's present requirements for 12 months from 21 February 2008;
- the working capital of the company and the group for a period of 12 months from 21 February 2008 will be adequate for the company's and the group's requirements.
SUBSIDIARY COMPANIES AND JOINT VENTURES
The principal subsidiaries and joint ventures of the company are reflected in note 26.
The attributable interest of the company in the results of its consolidated subsidiaries and joint ventures for the year ended 31 December 2007 is as follows:
| 2007 | 2006 | |
| In the aggregate amount of: | ||
| Net profit - (R million) | 565 | 421 |
| Net losses - (R million) | 12 | 45 |
DIRECTORATE
The unbundling and listing of Hulamin and the introduction of BEE equity participation in Tongaat Hulett and Hulamin, necessitated changes to the composition of the Tongaat Hulett board, as detailed in the corporate governance report. The composition of the Board, at 31 December 2007, is as follows: C M L Savage (Chairman), P H Staude (CEO), P M Baum, E le R Bradley, B G Dunlop, J John, J B Magwaza, M Mia, M H Munro, T H Nyasulu, C B Sibisi, R H J Stevens and J G Williams.
Directors retiring by rotation at the annual general meeting in accordance with article 61 of the articles of association are Messrs P M Baum, J B Magwaza and R H J Stevens. Mrs J John and Messrs C B Sibisi and J G Williams were appointed during the course of the last financial year and are required to retire and be re-elected at the annual general meeting in accordance with article 59 of the articles of association. These directors are all eligible and offer themselves for re-election. Details of each of these retiring directors are set out here.
DIRECTORS’ SHAREHOLDINGS
At 31 December 2007, the present directors of the company beneficially held a total of 276 484 ordinary shares equivalent to 0,27 percent in the company (2006 - 1 077 970 shares equivalent to one percent and which included directors who resigned from the Board following the corporate restructuring transactions and the change in the composition of the Board in 2007). They also held, in a non-beneficial capacity, a total of 24 647 ordinary shares equivalent to 0,02 percent in the company (2006 – 508 310 shares equivalent to 0,5 percent). Details of the directors' shareholdings and interests in the share incentive schemes are provided in notes 32 and 33. There has been no change in these holdings between 31 December 2007 and 21 February 2008.
AUDIT AND COMPLIANCE COMMITTEE
The Corporate Laws Amendment Act No 24 of 2006 (the Act) came into effect on 14 December 2007. The Tongaat Hulett Audit and Compliance Committee has considered the provisions of the Act and has taken the necessary steps to ensure compliance. The committee confirms that during 2007 it carried out its functions responsibly and in accordance with its terms of reference as detailed in the Corporate Governance section of the Annual Report. In addition, the committee is satisfied that the designated auditors of the company are independent of the company.
POST BALANCE SHEET EVENTS
There were no material events between the balance sheet date and the date of this report.
