Executive chairmanís address to shareholders at the 110th annual general meeting, Amanzimnyama, Tongaat

Ladies and gentlemen.
The Group's annual report for the year ended 31 December 2001 was circulated to the shareholders some six weeks ago and gives full details of the Group's performance and activities over that period. I would like to take the Executive Chairman's review as read.

On the financial results, it was pleasing to report that notwithstanding the slowing world economy and softer domestic trading conditions, the performance of the Group was ahead of expectations and better than the previous year. In that environment I believe the divisions did well to increase revenue from continuing operations by 12 percent to R5,1 billion and operating earnings by 14 percent to R584 million. The overall results were boosted by translation gains of R255 million, offset partially by net interest payable of R75 million - all of which culminated in headline earnings per share of 598,4 cents being up by 20%. Taking into consideration the Group's low gearing and ability to generate cash in the year ahead, dividends were increased by 27 percent to 270 cents per share.

With respect to our business strategy, over the past few years we have consistently invested in production capacity, which together with enhanced technological and human resource skills, has improved our international competitiveness and created the potential for the Group to grow earnings in real terms. The improved performance and earnings growth has been largely influenced by this strategy, and where exports have played an increasing role, and now account for some 35 percent of total revenue. The balance sheet is sound with capacity to take up investment opportunities. 

In the first quarter, all divisions performed well, with continuing strong growth in revenues and operating earnings and we expect this trend to continue for the remainder of the year.However, the level of headline earnings for the half year, and year itself, will depend on the strength of the Rand, e.g. should the current exchange rates prevail, translation losses will offset the growth in operating earnings. 

While the prime objective of the Group remains the achievement of real growth in earnings per share, management has been equally committed to the issues of social investment, employment equity, training and development and black economic empowerment. In addition the Group considers good corporate governance as essential, and the recently published King II report is receiving attention with a view to appropriate compliance in due course.

At the end of January this year I had the pleasure of announcing that Peter Staude would take over as Chief Executive Officer of the Group with effect from today when I retire from executive duties.Peter, who until today was managing director of Hulett Aluminium, will now become chairman of that division. I would like to take this opportunity of congratulating him and wishing him the greatest success in his well-deserved appointments. He has played a crucial role in the management and expansion of Hulett Aluminium and has contributed to the Group's activities, as a director on the Board since 1996, and on the Board's executive committee since 1997. In turn, congratulations are extended to Alan Fourie, who has been appointed to succeed Peter as managing director of that division.

With regard to the chairmanship of the Group, the board has elected me as non-executive chairman for the year ahead.

Ladies and gentlemen, in conclusion: I would like to take this opportunity to thank the members of our board and express my sincere appreciation for their advice and wise counsel. My thanks are also extended to an excellent executive team together with all employees for their loyalty, effectiveness and dedication to duty. 

It is now my pleasure to propose the adoption of the directors' report and annual financial statements for the year ended 31 December 2001.

C M L Savage