DIRECTORS' STATUTORY REPORT
The directors have pleasure in submitting the consolidated annual financial statements of the company for the year ended 31 December 2008.
NATURE OF BUSINESS
Tongaat Hulett is an agri-processing business which includes the integrated components of land management, property development and agriculture. The activities, including the Mozambique expansion, are dealt with in detail in the Annual Report.
FINANCIAL RESULTS
The net profit attributable to shareholders for the year ended 31 December 2008 amounted to R649 million (2007 -R3,457 billion). This translates into headline earnings per share of 565,6 cents (2007 -58,1 cents) based on the weighted average number of shares in issue during the year.
DIVIDENDS
An interim dividend number 162 of 160 cents per share was paid on 4 September 2008 and a final dividend number 163 of 150 cents per share has been declared and is payable on 26 March 2009 to shareholders registered at the close of business on 20 March 2009.
The salient dates of the declaration and payment of this final dividend are as follows:
| Last date to trade ordinary shares “CUM” dividend | Friday | 13 March 2009 | |
| Ordinary shares trade “EX” dividend | Monday | 16 March 2009 | |
| Record date | Friday | 20 March 2009 | |
| Payment date | Thursday | 26 March 2009 |
Share certificates may not be dematerialised or re-materialised, nor may transfers between registers take place between Monday 16 March 2009 and Friday 20 March 2009, 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 Friday 13 March 2009.
SHARE CAPITAL
There was no change in the authorised capital of the company.
During the year 241 528 shares were allotted (including 60 000 shares to directors) in respect of options exercised in terms of the company’s employee share incentive schemes for a total consideration of R7 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 29 April 2009 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; and
- 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 are of the opinion that after considering 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 19 February 2009;
- 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 19 February 2009. 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 share 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 19 February 2009; and
- the working capital of the company and the group for a period of 12 months from 19 February 2009 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 2008 is as follows:
| 2008 | 2007 | ||
| In the aggregate amount of: | |||
| Net profit - (R million) | 506 | 565 | |
| Net losses - (R million) | 5 | 12 |
DIRECTORATE
During the year, three new independent non-executive directors were appointed to the Tongaat Hulett Board. The composition of the Board, at 31 December 2008, is as follows:CMLSavage(Chairman),PHStaude(ChiefExecutive Officer), P M Baum, E le R Bradley, B G Dunlop, F Jakoet, J John, J B Magwaza, T V Maphai, M Mia, N Mjoli-Mncube, 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 Mrs T H Nyasulu, Messrs B G Dunlop, M Mia and M H Munro. Mrs F Jakoet, Mrs N Mjoli-Mncube and Mr T V Maphai 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 on pages 53 to 55.
In addition to the above, shareholders are advised that Mr C M L Savage and Mrs E le R Bradley will retire from the Board at the close of business of the annual general meeting having reached the mandatory retirement age in terms of the articles of association of the company.
DIRECTORS' SHAREHOLDINGS
At 31 December 2008, the present directors of the company beneficially held a total of 308 629 ordinary shares equivalent to 0,3 percent in the company (2007 – 276 484 shares equivalent to 0,27 percent). They also held, in a non-beneficial capacity, a total of 12 710 ordinary shares equivalent to 0,01 percent in the company (2007 – 24 647 shares equivalent to 0,02 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 2008 and 19 February 2009.
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 2008 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.
