DIRECTORS' STATUTORY REPORT
The directors have pleasure in submitting the annual financial statements for the year ended 31 March 2013.
NATURE OF BUSINESS
Tongaat Hulett is an agri-processing business that includes the integrated components of land management, property development and agriculture. The activities are dealt with in detail in this integrated annual report.
FINANCIAL RESULTS
The net profit attributable to shareholders for the year ended 31 March 2013 amounted to R1 070 million (2012: R889 million). This translates into a headline earnings per share of 959,9 cents (2012: 838,9 cents) based on the weighted average number of shares in issue during the year.
DIVIDENDS
An interim gross cash dividend number 170 of 150 cents per share was paid on 24 January 2013. A final gross cash dividend number 171 of 190 cents per share has been declared and is payable on 18 July 2013 to shareholders registered at the close of business on 12 July 2013.
The salient dates of the declaration and payment of this final dividend are as follows:
| Last date to trade ordinary shares “CUM” dividend | Friday | 5 July 2013 |
| Ordinary shares trade | ||
| “EX” dividend | Monday | 8 July 2013 |
| Record date | Friday | 12 July 2013 |
| Payment date | Thursday | 18 July 2013 |
Share certificates may not be dematerialised or re-materialised, nor may transfers between registers take place between Monday 8 July 2013 and Friday 12 July 2013, both days inclusive.
The dividend is declared in the currency of the Republic of South Africa. Dividends paid by United Kingdom transfer secretaries will be paid in British currency at the rate of exchange ruling at the close of business on Friday 5 July 2013.
The dividend has been declared from income reserves. There are no STC credits available for utilisation. A net dividend of 161,5 cents per share will apply to shareholders liable for the local 15% dividend withholding tax and 190 cents per share for shareholders exempt from paying the new dividend tax. Theissued ordinary share capital as at 23 May 2013 is 108 647 700 shares.
SHARE CAPITAL
There was no change in the listed authorised share capital of the company. The unlisted authorised B ordinary share capital has ceased to exist following the vesting of the employee share ownership plans, as explained below.
During the period, 146 894 shares were allotted (4 900 shares were allotted to executive directors) in respect of options exercised in terms of the company’s employee share incentive schemes for a total consideration of R5 million. Details of the unissued ordinary shares and the company’s share incentive schemes are set out in notes 11, 33 and 34.
The employee (ESOP) and management (MSOP) share ownership plans, which were created in 2007 through the issue of unlisted B ordinary shares, vested in the trusts during the current financial year, being the fifth anniversary of the issue and allotment of the B ordinary shares. The financial implications and impacts of the vesting are as follows:
- 9 740 908 B ordinary shares were originally issued in 2007.
- Tongaat Hulett repurchased from the ESOP and MSOP Trusts a total of 6 383 283 B ordinary shares, as determined in accordance with the repurchase formulae set out in the 2007 Circular to Shareholders, at an acquisition price of one cent per share, for a total amount of R63 833.
- The repurchased shares were cancelled immediately.
- The 3 357 625 remaining shares were converted into Tongaat Hulett ordinary shares of R1 each, ranking pari passu with the existing ordinary shares.
- These converted shares were listed on the Johannesburg Stock Exchange Limited on 25 September 2012.
- Set out below is a summary of the above:
| Shares issued |
Share buyback |
Remaining shares |
|
| B1 Ordinary shares | 5 422 829 | 4 293 825 | 1 129 004 |
| B2 Ordinary shares | 3 296 657 | 1 990 618 | 1 306 039 |
| B3 Ordinary shares | 1 021 422 | 98 840 | 922 582 |
| 9 740 908 | 6 383 283 | 3 357 625 |
At the previous AGM, 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 beadvantageous 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 shareholdersto 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 AGM 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 AGM 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 23 May 2013;
- 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 23 May 2013. For this purpose, the assets and liabilities will be recognised and measured in accordance with the accounting policies used in the company’s and the group’s latest audited 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 23 May 2013;
- the working capital of the company and the group for a period of 12 months from 23 May 2013 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
March 2013 is as follows:
| 2013 | 2012 | |
| In the aggregate amount: | ||
| Net losses (Rmillion) | 1 079 | 877 |
| Net losses (Rmillion) | 6 | 23 |
DIRECTORATE
During the period, M Mia retired from the Board at the AGM in July 2012. The composition of the Board at 31 March 2013 is as follows: J B Magwaza (Chairman), P H Staude (CEO), B G Dunlop, F Jakoet, J John, R P Kupara, A A Maleiane, T N Mgoduso, N Mjoli-Mncube, M H Munro, S G Pretorius and C B Sibisi.
Directors retiring by rotation at the AGM in accordance with article 61 of the memorandum of incorporation are J John, R P Kupara, A A Maleiane and M H Munro. These directors are eligible and offer themselves for re-election. Details of each of these retiring directors are set out here.
DIRECTORS’ SHAREHOLDINGS
At 31 March 2013, the present directors of the company beneficially held a total of 387 042 ordinary shares equivalent to0,36 percent in the ordinary listed share capital of the company (2012: 320 520 shares equivalent to 0,30 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 March 2013 and 23 May 2013.
AUDIT AND COMPLIANCE COMMITTEE
The Audit and Compliance committee has considered the provisions of the Companies Act 2008 and has taken the necessary steps to ensure compliance. The committee confirms that during the period under review it carried out its functions responsibly and in accordance with its terms of reference as detailed in its report contained in the Corporate Governance section of this integrated 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.
