Directors' report |
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NATURE OF BUSINESS
Assore Limited, which was incorporated in 1950, is a mining holding company principally engaged in ventures involving base minerals and metals.The company’s shares are listed on the JSE Limited (the JSE) under “Assore” in the general mining sector and its ultimate holding company is Oresteel Investments (Proprietary) Limited. |
Year ended 30 June |
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2009 | 2008 | ||
R’000 | R’000 | ||
Turnover | 8 818 655 | 9 158 937 | |
Profit for the year | 3 267 387 | 3 178 365 | |
Attributable to: | |||
Shareholders of the holding company | 3 241 452 | 3 069 522 | |
Minority shareholders | 25 935 | 108 843 | |
3 267 387 | 3 178 365 | ||
Profit attributable to the shareholders of the holding company as above | 3 241 452 | 3 069 522 | |
Dividends relating to the group’s activities for the year under review | |||
(refer to dividends below) | 478 687 | 307 408 | |
Interim dividend No 104 of 1 000 cents (2008: 250 cents) per share | |||
– declared on 19 February 2009 | 275 717 | 70 000 | |
Final dividend No 105 of 1 000 cents (2008: 1 000 cents) per share | |||
– declared on 26 August 2009 | 275 717 | 280 000 | |
Less: dividends attributable to treasury shares | (72 747) | (42 592) | |
Profit for the year after dividends | 2 762 765 | 2 762 114 | |
The attributable interest of the company in the aggregate net profit | |||
and losses after taxation of group companies was as follows: | |||
Jointly controlled entity – 50% (2008: 50%) share | |||
– Profit for the year | 995 740 | 2 515 968 | |
Subsidiary companies | |||
– Profit | 1 040 116 | 347 918 | |
– Losses | 115 504 | 28 190 | |
CONTROL OVER FINANCIAL REPORTING
The directors of the company are responsible for the preparation and fair presentation of the financial statements and related financial information included in this report.The external auditors, Ernst & Young Inc. whose report appears within this report, are responsible for expressing an opinion on the financial statements based on their audit. The financial statements included in this report are based on judgements and estimates which are intended to be both reasonable and prudent and have been prepared by management in accordance with International Financial Reporting Standards (IFRS) based on appropriate accounting policies which, unless otherwise indicated, have been applied consistently with the previous year.
The financial statements have been prepared on a going-concern basis and the directors have no reason to believe that any of the
businesses in the group will not be a going concern in the year ahead. With regard to the valuation of assets, the directors are of the
opinion that the carrying amount of all assets included on the balance sheet is reasonably stated.
In order to discharge their responsibilities with regard to the financial statements, the directors ensure, through the group’s duly appointed Audit Committee, that management maintains adequate accounting records and systems of internal control which are developed and reviewed for effectiveness on an ongoing basis.The systems of internal control are based on established organisational structures, policies and procedures, including budgeting and forecasting disciplines and are managed and controlled by suitably trained personnel who are organised in structures with appropriate segregation of authorities and duties. While internal controls are intended to adequately safeguard the group’s assets and prevent and detect material misstatement and loss, these systems can only be expected to provide reasonable, and not absolute, assurance as to the reliability of the financial information included in this report.
JOINTLY CONTROLLED ENTITY
The group owns 50% (2008: 50%) of the ordinary share capital of Assmang. In accordance with IFRS, the results of Assmang are accounted for by Assore using the proportionate consolidation method and the financial information set out below has been extracted from the audited financial statements of Assmang and its subsidiary companies for the year ended 30 June 2009.
The calculation of profit for consolidation purposes was based on the profit of Assmang for the year ended 30 June 2009 and dividends declared during that period.
Year ended 30 June |
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2009 | 2008 | |||
R’000 | R’000 | |||
Abridged consolidated income statement of Assmang | ||||
Turnover | 15 263 603 | 14 835 456 | ||
Profit before taxation and State’s share of profit | 9 923 181 | 8 227 883 | ||
Taxation and State’s share of profit | 3 604 023 | 2 691 992 | ||
Earnings | 6 319 158 | 5 535 891 | ||
Dividends declared during the year | 4 302 732 | 479 008 | ||
Profit for the year after dividends paid | 2 016 426 | 5 056 883 | ||
Earnings per share (rands) | ||||
– attributable | 1 780,94 | 1 560,19 | ||
– headline | 1 775,59 | 1 564,13 | ||
Dividends paid per share (rands) | ||||
– final | 563,65 | 35,00 | ||
– interim | 649,00 | 100,00 | ||
1 212,65 | 135,00 | |||
At 30 June |
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2009 | 2008 | |||
R’000 | R’000 | |||
Abridged consolidated balance sheet of Assmang | ||||
Assets | ||||
Non-current assets | 9 265 451 | 7 196 333 | ||
Current assets | 7 627 763 | 8 561 439 | ||
Total assets | 16 893 214 | 15 757 772 | ||
Equity and liabilities | ||||
Total equity | 11 988 594 | 9 972 168 | ||
Non-current liabilities | 2 816 757 | 1 782 717 | ||
Current liabilities | ||||
– interest-bearing | 14 807 | 511 829 | ||
– non-interest-bearing | 2 073 056 | 3 491 058 | ||
Total equity and liabilities | 16 893 214 | 15 757 772 | ||
Capital expenditure (Rm) | 2 780 | 2 900 | ||
Capital commitments (Rm) | 7 175 | 1 473 |
DIRECTORS’ EMOLUMENTS |
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Emoluments paid to the directors for the year under review are as follows: | ||||||||||||
Directors’ | Contributions | Other fringe | ||||||||||
fees | Bonuses | to pension | benefits | |||||||||
(refer note 1) | Salary | (refer note 2) | scheme | (refer note 3) | Total | |||||||
R’000 | R’000 | R’000 | R’000 | R’000 | R’000 | |||||||
2009 | ||||||||||||
Executive | ||||||||||||
Desmond Sacco (Chairman) | 110 | 3 806 | 317 | – | 463 | 4 696 | ||||||
R J Carpenter (Deputy Chairman) | 96 | 3 619 | 11 636 | 822 | 233 | 16 406 | ||||||
C J Cory (Chief Executive Officer) | 96 | 3 305 | 11 494 | 750 | 251 | 15 896 | ||||||
P C Crous (Technical and Operations) | 96 | 2 904 | 11 313 | 659 | 211 | 15 183 | ||||||
Non-executive | ||||||||||||
P N Boynton* (resigned 2 January 2009) | 60 | 60 | ||||||||||
B M Hawksworth | 150 | 150 | ||||||||||
M C Ramaphosa* | 120 | 120 | ||||||||||
E M Southey (appointed 2 January 2009) | 60 | 60 | ||||||||||
J C van der Horst | 120 | 120 | ||||||||||
Alternate | ||||||||||||
J W Lewis (resigned 31 August 2009) | – | 1 321 | 5 597 | 300 | 223 | 7 441 | ||||||
N G Sacco | – | 1 338 | 72 | 84 | 34 | 1 528 | ||||||
P E Sacco | 36 | 432 | 72 | 88 | 118 | 746 | ||||||
R Smith | – | – | – | – | – | – | ||||||
944 | 16 725 | 40 501 | 2 703 | 1 533 | 62 406 | |||||||
2008 | ||||||||||||
Executive | ||||||||||||
Desmond Sacco (Chairman) | 110 | 3 398 | 283 | – | 419 | 4 210 | ||||||
R J Carpenter (Deputy Chairman) | 96 | 3 232 | 11 843 | 734 | 243 | 16 148 | ||||||
C J Cory (Chief Executive Officer) | 96 | 2 950 | 11 682 | 671 | 249 | 15 648 | ||||||
P C Crous (Technical and Operations) | 96 | 2 592 | 11 478 | 600 | 211 | 14 977 | ||||||
Non-executive | ||||||||||||
P N Boynton* | 120 | 120 | ||||||||||
B M Hawksworth | 150 | 150 | ||||||||||
M C Ramaphosa* | 120 | 120 | ||||||||||
J C van der Horst | 120 | 120 | ||||||||||
Alternate | ||||||||||||
J W Lewis | – | 1 180 | 5 673 | 272 | 218 | 7 343 | ||||||
N G Sacco | – | 439 | 28 | 24 | 13 | 504 | ||||||
P E Sacco | 15 | 360 | 114 | 72 | 127 | 688 | ||||||
R Smith | – | – | – | – | – | – | ||||||
923 | 14 151 | 41 101 | 2 373 | 1 480 | 60 028 | |||||||
*Fees paid to employer |
Notes
- Directors’ fees for executives include fees received from Assmang Limited.
- Due to the shareholding structure the company is unable to offer directors’ remuneration by way of share incentive or option arrangements and bonuses are determined based on results for the year. Directors owning shares in the group do so in their own right and disclosure thereof is made in this report (refer to page 54).
- Other fringe benefits include medical aid contributions, car scheme allowances, life insurance contributions, leave paid out, study loan benefits, use of assets and unemployment insurance fund contributions.
- None of the directors or their immediate families hold any options to acquire shares in the company nor are they entitled to any gains by way of commissions, profit-sharing arrangements or contracts entered into with group companies.
DIRECTORS’ INTERESTS IN SHARES OF THE COMPANY
Interests of the directors in the ordinary shares of the company at 30 June 2009 were as follows, and the company is unaware of any material change in these interests between year-end and the date of this report.
Direct beneficiall | Indirect beneficial
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Number of shares | Number of shares
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2009 | 2008 | 2009 | 2008 | |||||
Executive directors | ||||||||
Desmond Sacco | 167 500 | 65 000 | 6 486 098 | 6 486 098 | ||||
R J Carpenter | 22 400 | 22 400 | – | – | ||||
C J Cory | 10 000 | 10 000 | – | – | ||||
P C Crous | 3 000 | 3 000 | – | – | ||||
Non-executive directors | ||||||||
P N Boynton (resigned 2 January 2009) | – | – | – | – | ||||
B M Hawksworth | 1 000 | – | – | – | ||||
M C Ramaphosa | – | – | 1 106 000 | 1 106 000 | ||||
E M Southey (appointed 2 January 2009) | – | – | – | – | ||||
Dr J C van der Horst | – | – | – | – | ||||
Alternate directors | ||||||||
J W Lewis (resigned 31 August 2009) | 2 500 | 2 500 | – | – | ||||
N G Sacco | 34 050 | 34 050 | – | – | ||||
P E Sacco | 35 350 | 35 050 | – | – | ||||
R Smith | – | – | – | – | ||||
275 800 | 172 000 | 7 592 098 | 7 592 098 | |||||
ANALYSIS OF SHAREHOLDING
The following analysis of shareholders, in accordance with the JSE Listings Requirements, has been established, based on an examination of the company’s share register at 30 June 2009.The directors are not aware of any material changes to this analysis between the year-end and the date of this report.
2009 | 2008 | |||
% | % | |||
Shareholder spread | ||||
Shares held by the public/non-public | ||||
Non-public* | ||||
– Holders in excess of 10% of the share capital | 74,91 | 74,51 | ||
– Directors of the company | 1,00 | 0,61 | ||
75,91 | 75,12 | |||
Public (677 shareholders 2008: 637) | 24,09 | 24,88 | ||
100,00 | 100,00 | |||
*As defined by Rule 4.25 of the JSE Listings Requirements | ||||
Major shareholders | ||||
Oresteel Investments (Proprietary) Limited | 53,09 | 52,28 | ||
Main Street 343 (Proprietary) Limited (a wholly owned subsidiary | ||||
of Shanduka Resources (Proprietary) Limited) | 11,94 | 11,76 | ||
Main Street 460 (Proprietary) Limited (a wholly owned subsidiary | ||||
of Assore Limited) | 9,88 | – | ||
The Standard Bank of South Africa Limited | – | 10,47 | ||
Old Mutual Life Assurance Company (South Africa) Limited | – | 4,57 | ||
74,91 | 79,08 | |||
Others – less than 5% | 25,09 | 20,92 | ||
100,00 | 100,00 |
SPECIAL RESOLUTION
On 26 February 2009, amendments were made to the rights and privileges attached to the 220 variable rate cumulative redeemable preference shares (shares) pursuant to the voluntary redemption of 75 shares redeemed prior to the original specified redemption date.
DIVIDENDS
In accordance with the group’s accounting policy for dividends, only dividends which are declared during the financial year are recorded in the financial statements and are summarised as follows:
2009 | 2008 | |||
R’000 | R’000 | |||
Final dividend No 103 of 1 000 cents (2008: 200 cents) per share | ||||
– declared on 27 August 2008 | 280 000 | 56 000 | ||
Interim dividend No 104 of 1 000 cents (2008: 250 cents) per share | ||||
– declared on 19 February 2009 | 275 717 | 70 000 | ||
Less: dividends attributable to treasury shares | (76 311) | (4 392) | ||
479 406 | 121 608 | |||
Dividends which relate to the group’s activities for the year under review | ||||
are summarised as follows: | ||||
Interim dividend No 104 of 1 000 cents (2008: 250 cents) per share | ||||
– declared on 19 February 2009 | 275 717 | 70 000 | ||
Final dividend No 105 of 1 000 cents (2008: 1 000 cents) per share | ||||
– declared on 26 August 2009 | 275 717 | 280 000 | ||
Less: dividends attributable to treasury shares | (72 747) | (42 592) | ||
478 687 | 307 408 | |||
POST-BALANCE SHEET EVENT |
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Besides the declaration of the final dividend on 26 August 2009 referred to above, no other events have occurred that would have had a material impact on the results and financial position of the group and company for the financial year.
HOLDING COMPANY
The company’s holding company is Oresteel Investments (Proprietary) Limited.
DIRECTORATE AND SECRETARY
The names of the directors at the date of this report and the name of the company secretary, including its business and postal addresses, are set out on this page of this report.
On 2 January 2009, Mr P N Boynton resigned as director, and Mr E M Southey was appointed as an independent non-executive director on the same date. On 31 August 2009, Mr J W Lewis resigned as alternate director to Mr R J Carpenter. In terms of the company’s Articles of Association, Messrs B M Hawksworth, M C Ramaphosa, E M Southey and Dr J C van der Horst are required to retire by rotation at the forthcoming Annual General Meeting. All of the abovementioned directors, being eligible, offer themselves for re-election. (Refer to pages 8 and 9 for a short curriculum vitae for these and the other directors of the company.
Johannesburg
28 October 2009