Annual Financial Statements


Financial Statements for the year ended 31 December 2006


Directors' Statutory Report

The directors have pleasure in submitting the annual financial statements of the company and of the Group for the year ended 31 December 2006.

HOLDING COMPANY

The company's holding company is Anglo South Africa Capital (Pty) Limited and its ultimate holding company is Anglo American plc, a company incorporated in England.

NATURE OF BUSINESS

The Group comprises four operations: African Products, Hulett Aluminium, Moreland and Tongaat-Hulett Sugar. Their activities are dealt with separately in the annual report.

FINANCIAL RESULTS

The net profit attributable to shareholders for the year ended 31 December 2006 amounted to R723 million (2005 - R472 million). This translates into a headline earnings per share of 666,4 cents (2005 - 452,4 cents) based on the weighted average number of shares in issue during the year.

DIVIDENDS

An interim dividend number 158 of 200 cents per share was paid on 31 August 2006 and a final dividend number 159 of 350 cents per share has been declared and is payable on 22 March 2007 to shareholders registered at the close of business on 16 March 2007.

The salient dates of the declaration and payment of
this final dividend are as follows:    
Last date to trade ordinary        
   shares "CUM" dividend   Friday   9 March 2007
Ordinary shares trade        
   "EX" dividend   Monday   12 March 2007
Record date   Friday   16 March 2007
Payment date   Thursday    22 March 2007

Share certificates may not be dematerialised or re-materialised, nor may transfers between registers take place between Monday 12 March 2007 and Friday 16 March 2007, 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 9 March 2007.

SHARE CAPITAL

There was no change in the authorised share capital of the company. During the year 2 695 623 shares were allotted (including 470 000 shares to directors) in respect of options exercised in terms of the Group's employee share incentive schemes for a total consideration of R106 million. Details of the unissued ordinary shares and the Group's share incentive schemes are set out in notes 11 and 31.

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 25 April 2007 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 16 February 2007;
  • 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 16 February 2007. 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 16 February 2007;
  • the working capital of the company and the Group for a period of 12 months from 16 February 2007 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 Group are reflected in note 24.

The attributable interest of the company in the results of its consolidated subsidiaries and joint ventures for the year ended 31 December 2006 is as follows: lows:

    2006 2005
In the aggregate amount of:    
   Net profit - (Rmillion) 421 329
   Net losses - (Rmillion) 45 47

DIRECTORATE

Directors retiring at the annual general meeting in accordance with the articles of association are: Mrs T H Nyasulu and Messrs D D Barber, I Botha, B G Dunlop, G P N Kruger, M H Munro and S J Saunders. These directors are all eligible and offer themselves for re-election. Details of each of these retiring directors are set out on pages 38 and 39. In addition to the above, shareholders are advised that Messrs M W King and L Boyd will retire from the board at the annual general meeting having reached the mandatory retirement age in terms of the articles of association of the company.

Further, shareholders are advised that the unbundling and listing of Hulett Aluminium and the introduction of BEE equity participation will result in further changes to the composition of the Tongaat-Hulett and Hulett Aluminium boards and these will be communicated in the documents to be sent to shareholders in advance of these transactions being considered at a future special general meeting.

DIRECTORS' SHAREHOLDINGS

At 31 December 2006, the present directors of the company beneficially held a total of 1 077 970 ordinary shares equivalent to one percent in the company (2005 - 1 072 139 shares equivalent to one percent). They also held, in a non-beneficial capacity, a total of 508 310 ordinary shares equivalent to 0,5 percent in the company (2005 - 508 310 shares equivalent to 0,5 percent). Details of the directors' shareholdings and interests in the share incentive schemes are provided in notes 30 and 31. There has been no change in these holdings between 31 December 2006 and 16 February 2007.

POST BALANCE SHEET EVENTS

A detailed cautionary announcement was made on 14 December 2006, which provided the proposed transaction framework to further enhance shareholder value, leading towards the creation in 2007 of two separately listed, focused companies:

  • Tongaat-Hulett, an agri-processing business which includes integrated components of land management, property development and agriculture; and
  • Hulett Aluminium (Hulamin), an independent niche producer of aluminium rolled, extruded and other semi-fabricated and finished products.

This will be achieved by the listing of Hulamin on the JSE followed immediately by the unbundling of Hulamin by Tongaat-Hulett to its shareholders. It will be accompanied by the simultaneous introduction of broad based Black Economic Empowerment (BEE) equity participation in both Tongaat-Hulett and Hulamin. The capital structures of both businesses will be optimised, including facilitating the BEE equity participation, a R500 million share buy-back and retaining the balance sheet capacity to undertake meaningful growth projects. Once the requisite agreements have been signed, the financial effects have been finalised and the date of unbundling and listing Hulamin established, a final announcement will be made and the circular and pre-listing documents posted to shareholders, which is anticipated to be in May 2007.

There were no other material events between the balance sheet date and the date of this report.