DIRECTORS' STATUTORY REPORT
The directors have pleasure in submitting the annual financial statements for the year ended 31 March 2014.
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 2014 amounted to R1 155 million (2013: R1 079 million). This translates into a headline earnings per share of 990,5 cents (2013: 968,0 cents) based on the weighted average number of shares in issue during the year.
DIVIDENDS
An interim distribution (number 172) was declared by way of the issue of fully paid ordinary shares of R1,00 each as a scrip distribution with a gross cash alternative of 150 cents per share, which was paid on 6 February 2014. A final gross cash dividend number 173 of 210 cents per share has been declared and is payable on 26 June 2014 to shareholders registered at the close of business on 20 June 2014.
The salient dates of the declaration and payment of this final dividend are as follows:
| Last date to trade ordinary shares “CUM” dividend | Thursday | 12 June 2014 |
| Ordinary shares trade “EX” dividend | Friday | 13 June 2014 |
| Record date | Friday | 20 June 2014 |
| Payment date | Thursday | 26 June 2014 |
Share certificates may not be dematerialised or re-materialised, nor may transfers between registers take place between Friday 13 June 2014 and Friday 20 June 2014, 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 Thursday 12 June 2014.
The dividend has been declared from income reserves. A net dividend of 178,5 cents per share will apply to shareholders liable for the local 15% dividend withholding tax and 210 cents per share for shareholders exempt from paying the dividend tax. There are no STC credits available for utilisation. The issued ordinary share capital as at 22 May 2014 is 109 967 030 shares. The company’s income tax reference number is 9306/101/20/6.
SHARE CAPITAL
There was no change in the authorised capital of the company.
In February 2014, 1 167 930 fully paid up ordinary shares were issued to ordinary shareholders by way of scrip distribution.
During the period, 151 400 shares were allotted (62 000 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 the Remuneration Report and in notes 11 and 34.
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 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 AGM 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 MOI;
- 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 22 May 2014;
- 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 22 May 2014. 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 22 May 2014;
- The working capital of the company and the group for a period of 12 months from 22 May 2014 will be adequate for the company’s and the group’s requirements.
SUBSIDIARY COMPANIES AND JOINT VENTURES
The principal subsidiaries and joint operations of the company are reflected in note 26.
The attributable interest of the company in the results of its consolidated subsidiaries and joint operations for the year ended 31 March 2014 is as follows:
| 2014 | 2013 | |
| In the aggregate amount: | ||
| Net profit (Rmillion) | 1 277 | 1 079 |
| Net losses (Rmillion) | 92 | 6 |
DIRECTORATE
The composition of the Board, at 31 March 2014, is as follows: J B Magwaza (Chairman), P H Staude (CEO), F Jakoet, J John, R P Kupara, A A Maleiane, T N Mgoduso, N Mjoli-Mncube, M H Munro, S G Pretorius, C B Sibisi. During the period, B G Dunlop retired from the Board as an executive director on 31 August 2013.
Directors retiring by rotation at the AGM in accordance with article 61 of the memorandum of incorporation are Fatima Jakoet, Nhlanhla Mjoli-Mncube and Thandeka Mgoduso. These directors are eligible and offer themselves for re-election. Details of each of these retiring directors are set out here.
In addition to the above, shareholders are advised that J B Magwaza 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 memorandum of incorporation of the company. The Board appointed Bahle Sibisi as a Non-executive Chairman of the Board with effect from the conclusion of the annual general meeting on 30 July 2014. The Board appointed Jenitha John as Lead Independent Director as required by the JSE Listings Requirements and King III in situations where the Chairman of the Board is not independent, also with effect from 30 July 2014.
DIRECTORS’ SHAREHOLDINGS
At 31 March 2014, the present directors of the company beneficially held a total of 374 200 ordinary shares equivalent to 0,34 percent in the ordinary listed share capital of the company (2013: 387 042 ordinary shares equivalent to 0,36 percent). Details of the directors’ shareholdings and interests in the share incentive schemes are provided here of the Remuneration Report. There has been no change in these holdings between 31 March and 22 May 2014.
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.
