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WINHOLD LIMITEDIncorporated in the Republic of South AfricaRegistration number 1945/019679/06Share code: WNHISIN number: ZAE000033916
REgIsTERED OffIcEWinhold Limited884 Linton Jones StreetIndustries East, Germiston, 1401PO Box 5324, Johannesburg, 2000Telephone +27 11 345 9800Fax +27 11 345 9881/[email protected]
WEbsITEwww.winhold.co.za
sHaRE TRaNsfER REgIsTRaRsComputershare Investor Services (Pty) Limited9th Floor, 70 Marshall StreetJohannesburg, 2001PO Box 61051, Marshalltown, 2107Telephone +27 11 370 5000Fax +27 11 688 5248www.computershare.com
RETuRN ON EquITy:Headline earnings as a percentage of shareholders’ funds at year end.
RETuRN ON assETs:Profit after tax before associates and minorities as a percentage of total assets.
EbITDa:Earnings before interest, tax, depreciation and amortisation.
gEaRINg RaTIO:Interest bearing debt as a percentage of total shareholders’ funds.
INTEREsT cOvER:Number of times interest is covered by operating income.
cuRRENT RaTIO:Number of times current liabilities are covered by current assets.
EMPLOyEEs:Employees include temporary employees and contract workers
sPONsORArcay Moela Sponsors (Pty) Limited Arcay House, 3 Anerley Road Parktown, 2193PO Box 62397, Marshalltown, 2107Telephone +27 11 532 4105Fax +27 086 627 [email protected]
auDITORsBDO South Africa Inc.13 Wellington RoadParktown, 2193Private Bag X60500, Houghton, 2041Telephone +27 11 488 1700Fax +27 11 488 [email protected]
aTTORNEysFluxmans Inc.11 Bierman AvenueRosebank, 2196Private Bag X41, Saxonwold, 2132Telephone +27 11 328 1700Fax +27 11 880 [email protected]
dEfiNiTiONs:
cORPORATE iNfORmATiON:
CONTENTS PAGE
Chairmans report and a brief Group history 2
Financial performance and statistics 5
Group structure 6
Chief executives report 7
Business operational reviews 9
Business profiles 11
Value added statement 16
Corporate governance & sustainability report 17
Directors and company secretary 24
Stock exchange data 26
Statement by the directors and certificate by the company secretary 27
Report of the independent auditors to the members of Winhold limited 28
Report of the directors 29
Statements of comprehensive income 33
Statements of financial position 34
Statements of changes in equity 35
Statements of cash flows 36
Notes to the statements of cash flows 37
Accounting policies and presentation 38
Notes to the financial statements 45
Notice of the annual general meeting 70
Shareholders diary 74
Form of proxy 75
1W I N H O L D L I M I T E D
CHAIRMAN’S REPORT & BRIEF GROUP HISTORY
IntroductIon
The recessionary, negative economic climate worldwide, as well as in South Africa, caused a very difficult trading environment. Despite all these negative factors, the Group managed to achieve a record turnover. Good management, as well as capital investments at the right time, proved to have been strategically correct. The diversification of the Group also helped to achieve these results. The group managed to declare an unchanged dividend.
Management and all employees contributed to these achievements and I would like to congratulate and thank them all for their efforts.
Macro and MIcro envIronMentsMuch has been written in the press about this, but the challenge in the world lies in the fact that financial markets have to be stabilized, normality has to return, which means that easy credit has to be wiped out and a disciplined financial world is once again created with all the correct values in place.
the pastAs I retired during the year, and have been involved in much more of the “story” of the Group, over the last 24 years, I have been asked to give a brief overview of the very interesting and somewhat challenging history of the Group during my tenureship.
The Group has gone through very distinct periods the past 25 years. I would like to summarize some of these periods, together with some acknowledgements of people who played a very important role during these times, namely:
1982 to 1988During this time, two merchant bankers and a marketeer came together to form the Group which was called Danech Industrial Corporation. The three gentlemen were Dan Slabbert, Neville Parry and Charles Turner. So, the name Danech came from their first names. This was the holding company. Many deals were concluded to form this Group, which included Global Mining and Industrial Corporation, Danech Mining Supplies and Plastall Limited. Acquisitions and formations were funded by debt and issuing of shares to major financial institutions and convincing shareholders to back their vision. A whole contingent of dealmakers inclusive of lawyers worked for the Group full time. Entrepreneurial businesses were bought for inflated prices and once the entrepreneurs fulfilled their conditions of sale, inclusive of profit warranties, most of them lost their drive for success. This meant that there was a sizeable business without a corporate discipline, and drive for profitability.
The chairman at that stage was a well respected, level headed lawyer named Joe Rabinowitz, who led the Group through these turbulent times. I joined the Group as Group Managing Director of Global Mining and Industrial Corporation at the end of November 1987. During December it was quite clear to me that no proper financial controls existed, and that the group was in a financial crisis. Urgent board meetings were held in January 1988 and the controlling partners split up and divided their assets and liabilities. Many more details can be told but the fact was, that the debt became unmanageable and major changes had to be introduced.
The Group needed new a culture, new values and a new management.Mr Neville Parry gave me excellent support and gave me a free hand to achieve this. This was the “formation period” of massive growth of too much debt, no systems, no professional management and basically no hope of survival.
1988 – 1992All four of the major banks were involved in the funding, as well as Old Mutual and Sanlam as major shareholders. During this period the prime rate was well above 20%, and the Group basically found it impossible to even service the interest, as the profitability was not enough. Immense pressure was extended from the banks to secure their debt. At one stage, the Group was close to being technically insolvent and crisis management had to be implemented. Without going into all the details, a great number of successful businesses had to be sold in order to reduce the overdrafts, which meant that the best profit contributors were sold. Unprofitable businesses were either sold or merged, in order to reduce costs. Strict financial controls were introduced, together with strict guidelines to control costs. Weekly and monthly meetings were held with all the major shareholders, bank and suppliers in order to calm them and keep them aboard. Action plans and due dates were implemented and met.
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A N N U A L R E P O R T 2 0 1 0
The share prices of some of the four listed companies went as low as 2 cents per share. Global Mining and Industrial Corporation’s name was changed to Danglo in 1988. Danglo was the holding company of Danech Mining Supplies and increased its stake from 51% to 61% in 1990. Danglo also held about 95% of Plastall Limited.
Major restructuring continued during which Mr Colin Pallas (Managing Director of Plastall), Mr Roland Bettesworth, and the late Mr Chick Henderson played a major role. During 1989 Mr Wietsche Fourie joined the Group and assisted during these turbulent times. During critical discussions with the banks, our chairman, Mr Joe Rabinowitz passed away and I took over as Group chairman. A bank consortium agreement was reached during 1992 which gave the Group a chance to survive. This took about 3 years to achieve.
Restructuring continued in all the listed Groups and the Group’s name was changed to Winbel (Danech Industrial Corp. (Dicor)), Winhold (ex Danglo) and Inmins (ex Danech Mining Supplies).
Towards the end of 1990, the controlling shareholder Mr Neville Parry lost control to Trust Bank and a deal was concluded by myself and Mr Jan Silvis who took over the controlling shares in Dicor as from October 1990. The interest in Inmins was increased from 61% to 73% during 1991.
During 1990, the Gundle name and certain assets were purchased from Consol Ltd by Plastall Ltd, which included the trade names, patents, branch network, stock and debtors. This formed the base of the future plastics group.
As such, the Group had a period of formation up to 1987 whereby the head office was made up of merchant bankers and lawyers, who put the deals together. This left the Group with major debt and, it needed operational management disciplines and a new culture in order to survive. New management was appointed but, the Group continued to make losses due to the major debt in Inmins Ltd. The Group then consisted of a listed pyramid structure of Winbel Ltd, Winhold Ltd, Inmins Ltd and Plastall Ltd.
The net asset value per share during 1990 was Winbel R0,01; Winhold R0,03; Inmins R0,29 and Plastall R0,81.
The major task management now had was to build a sustainable Group. During this time major shareholders such as Old Mutual, suppliers and customers trusted the new management, supported our efforts and shared our vision.
A protracted strike of seven weeks during the year ended September 1992 in one of the Plastall divisions, led to a loss in Plastall as well.
1992 – 2000 Continued restructuring actions and the introduction of formal management systems continued and up to 1995 it was a question of whether the Group companies could survive. During 1995 Mr Paul Kruger was appointed Managing Director of Inmins Ltd. He brought a wealth of experience from Stewarts & Lloyds. Since 1993 Inmins has been profitable. The Group survived during times of high inflation and prime interest rates of over 25%, which in itself was, remarkable.
The next phase was to stabilize Inmins, as the overdraft made it impossible to reach an acceptable gearing level. After two years of negotiations, a major deal was reached in 1997 with the four major banks in which the major portion of the debt was capitalized and they became shareholders in Inmins Ltd. Inmins Ltd managed to meet the profit warranty within 1 year, and from 1998 they grew from strength to strength and became the major profit contributor to the Group.
During May 1997 Plastall had a rights issue and raised R25 million. The name was also changed to Gundle Ltd. Gundle was a well known trade name. It was now possible to modernize the plant in Germiston and Swaziland. Gundle Coplas was also started during 1998. All the facilities as well as the buildings were streamlined, which made it possible to implement proper product flow lines and improved production facilities. During May 1998 Amalgamated Plastic Industries (API) was acquired from Van Leer Industries. During November 1998 Gundle took over portions of Pacforce and later in 2000 it took over the personnel of Pacforce and Messrs. Mike Risely and Garth Remmington joined the Group. Together with Mr Hilbert Schroeder of API and Mr Marcus Zbinden of Swazi Plastic, they formed the nucleus of the Gundle management under Mr Colin Pallas as Group MD. Management changes were implemented at Coplas, which never met expectations and after 10 years it was closed down and incorporated into Gundle Germiston as from 2009.
3W I N H O L D L I M I T E D
CHAIRMAN’S REPORT & BRIEF GROUP HISTORY
1992 – 2000 During the years 2000 and 2001, Messrs Roland Bettesworth (the group financial director) and Colin Pallas emigrated to Canada and Australia respectively. During this time I took over as acting CEO of Gundle and Mr Wietsche Fourie was appointed as Group financial director.
The net asset value per share in 2000 improved to:Winbel R0,57; Winhold R0,76; Inmins R1,04 and Gundle R2,40.Now the group had to be built. The pyramid structure was a stumbling block which needed attention. Gundle was re-organized and started contributing positively. During this next phase Winbel was unbundled into Winhold during August 2001 and Winhold acquired all the Gundle shares. The Inmins shareholders declined the incorporation into Winhold.
The Winhold net asset value per share then grew over the next ten years to 189,4 cents per share.
During 2006 the Group concluded a significant BEE transaction in which Bravura played a major role. One can go on and on, but it was great to play a role to make a dream come true.
In the Inmins Group, some of their operating directors and managers played an important role during turbulent times, and I would like to pay tribute to them namely: the late Messrs Johan van der Walt, Johnny Dippenaar, and Dave Clarke; and the following retirees: Jack Siebert, Rudi van den Berg, Pat O’Connor and Brian Herbert, and the current executive directors, Paul van den Heever, Renier Kruger and Malcolm Jamie continue to play and important role in the Group.
I would like to convey my special thanks to the following people who played major roles during the formation of the group namely, Mr Neville Parry, the late Chick Henderson, the late Joe Rabinowitz, Roland Bettesworth, the late Jan Silvis, Mr Dawid Mostert, Mr Paul Kruger and the newly appointed CEO Mr Wietsche Fourie.
Finally, I wish the Group and all its people every success and hopefully I can still contribute to its success as a non-exectutive chairman.
executive chairman
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A N N U A L R E P O R T 2 0 1 0
FINANCIAL PERFORMANCE STATISTICS
2010 2009 2008 2007 2006 2005 FInancIaL hIGhLIGhts Revenue (R000) 1 030 918 994 947 991 915 917 220 863 385 833 448 Operating profit (R000) 51 227 50 470 55 411 41 060 37 756 34 576 Attributable profit (R000) 24 825 26 934 25 660 26 804 24 365 17 278 Earnings per share (cents) 19,8 21,5 20,4 20,4 19,4 16,0 Headline earnings per share (cents) 20,7 19,4 20,1 25,0 18,5 15,6 Dividends per share (cents) 10,0 10,0 9,0 7,5 7,0 7,0 Net asset value per share (cents) 199,0 188,3 175,8 171,9 157,7 146,0Net tangible asset value per share (cents) 177,8 167,2 152,9 149,7 135,5 124,4
suMMarIsed stateMents oF
FInancIaL posItIonProperty plant and equipment 149 490 139 864 134 448 123 394 98 426 106 007 Goodwill 26 541 26 541 26 541 26 541 26 541 26 541 Investments 168 103 160 788 160 788 160 788 160 788 -Current assets 354 444 321 487 360 600 338 491 301 815 246 822 Total assets 702 705 648 680 682 377 649 214 587 570 379 370 Ordinary shareholders’ funds 249 772 237 703 221 871 217 002 199 033 184 337 Non controlling interests 17 620 13 951 10 197 4 862 2 287 30 Interest bearing liabilities 225 475 235 178 236 175 237 296 221 387 72 044 Interest free liabilities 209 838 10 686 4 632 190 054 164 863 122 959 Total equity and liabilities 702 705 648 680 682 337 649 214 587 570 379 370 ratIos*Return on equity (%) 10,4 10,2 11,3 12,3 11,6 9,1 Return on assets (%) 4,6 4,7 4,5 5,0 4,5 5,3 Operating income to turnover (%) 5,0 5,1 5,6 4,6 4,3 4,1 EBITDA (R000’s) 64 865 65 287 68 712 53 802 47 702 44644 Gearing (%) 90,3 98,9 106,6 109,4 111,2 39,0 Interest cover (times) 1,6 1,6 1,6 1,3 1,9 6,6 Current ratio (times) 1,6 1,6 1,4 1,5 1,6 1,6 productIvIty Number of employees 916 851 909 976 969 951 Revenue per employee (year end) (R000) 1 125,4 1 169,1 1091,2 939,8 891,0 876,9Operating profit per employee (R000) 55,9 59,3 61,0 43,1 39,0 36,4
* Refer definitions on inside back cover
net asset vaLue per ordInary share (cents) ebItda (rand millions) headLIne eps & dIvIdends ps
0
20
40
100
80
60
140
160
120
2005 2006 2007 2008 2009 2010
180
190
200
2005 2006 2007 2008 2009 2010
60
70
50
40
30
20
10
02005 2006 2007 2008 2009 2010
30
25
20
15
10
5
0
cents per shareheps
cents per sharedps
5W I N H O L D L I M I T E D
GROUP STRUCTURE
WINHOLD LIMITED
GUNDLELIMITED
INMINS LIMITED
WINHOLDMANAGEMENT
COMPANY(PTY) LTD
NOVARAPROFILE
EXTRUSIONS(PTY) LTDGUNDLE
PLASTICSGROUP (PTY) LTD
Gundle plastall(Germiston, Bloemfontein, Port Elizabeth,
Cape Town, Durban)
Gundle apI
INMINSTRADING (PTY) LTD
• Belting & Sprockets SA• Chick Henderson• Conway Johnson
(Burgersfort, Klerksdorp, Kuruman, Rustenburg, Welkom, Witbank)
• Conveyor Hose (Evander, Witbank)• Highveld Hose
• Millennium Pipe & Steel•Valic Mining
& Industrial supplies•Vryheid Mining
supplies• T & E
GUNDLEPROPERTIES
(PTY) LTD
GUNDLEWOVEN(Pty) Ltd
INMINSPROPERTIES
(PTY) LTD
ZENZELEINDUSTRIAL
SUPPLIES(PTY) LTD
ZENZELEINDUSTRIAL
SUPPLIES(MPUMALANGA)
(PTY) LTD
GUNDLEMULTISACK
(Pty) Ltd
GUNDLE GEO
SyNThETICS(PTY) LTD
100%
100% 85%
100%
100%
74.9%
100%
100%
100%
74.9%
34%
39%
100%
50%
trading asSwazi Plastic
Industries
PLASTICSINTERNATIONAL
LIMITED
6
A N N U A L R E P O R T 2 0 1 0
CHIEF EXECUTIVES REPORT
headLIne nuMbersThe Group turnover exceeded R1 billion for the first time, an increase of 3,6%. This was achieved in a climate where the steel and polymer prices, both major inputs for the group reduced due to the recession. The operating income was negatively affected by the R2,0 million impairment of Novara assets. The 2009 operating profit included a profit on the sale of investment property of R3,9 million compared to R0,4 million in 2010.
As a result the headline earnings increased by 7,0%.
tradInG envIronMentThe physical output of mining production increased by 1,9% during the period under review. The mines ran down stocks of consumables and reclaimed consumables out of mined-out areas in order to reduce their costs.Capital expenditure by the mines was limited due to the uncertainty in the world economy. Some planned capital expenditure was postponed.The construction sector endured 18 months of falling demand, especially in the residential market, a large consumer of group products. The infrastructure development continued, albeit at a slower rate after the completion of the soccer world cup related investment.In line with suppressed consumer demand, the demand for consumer packaging was also affected. The demand for more sophisticated products by this market is growing.The Transnet strike resulted in stock outs of certain raw materials and production losses.
perForManceInminsTurnover declined by 4.6% but the division’s operating profit increased as a result of the strategic change in the product offering. The previous year’s results were boosted by a property sale.
The industrial consumables segment was adversely affected by the recession in the light industrial retail market, but the operating income increased as a result of the focus on higher margin products. The reduction in Mining Consumables turnover resulted in the reduced operating profit in this segment.
GundleThe South African Gundle divisions performed better than last year. In a market with deflationary raw material prices and increased competition, the product mix was changed to more sophisticated products utilising the new equipment. Careful pricing strategies ensured that margins were maintained. Costs were controlled and efficiencies improved. The investment in modernised plant and equipment showed benefits in raw material utilisation and power savings. Capacity was underutilised due to the recession.
The Swaziland operation produced disappointing results after a management change became necessary. New management is now in place and the business is performing better.
Two of the four trading branches returned record results with improved volumes. The trading branches remain key to the distribution of the products manufactured by the three factories. The global focus on water pollution and preservation created opportunities for Gundle GeoSynthetics, the dam lining installation business. It did particularly well by gaining work in Africa to offset lower levels of work in South Africa.
NovaraThis business was restructured and will in future concentrate on its contract compounding ability and the trade in colorants for the plastic bottle industry. Impairment of the assets of the discontinued operations was done.
prospectsManagement has taken corrective actions in both Novara and Swazi Plastics which should result in a significant profit improvement.
The share traded under cautionary during September and October as an interested party considered a large investment in the company. This transaction did not proceed and the Group intends to utilise its balance sheet and listing to grow the Group both organically and through strategic acquisitions in the years to come.
GundleThe modernisation program is now largely complete and the Group is well positioned with additional cost efficient capacity to benefit from increases in volumes as the recession recedes.
InminsNew product ranges and new service areas are being explored to capitalise on the existing brand name and strategically located network close to where major mines and industries are based. Growth will come from cross selling products to existing customers and introducing new specialised products to the more profitable industrial customer base.
7W I N H O L D L I M I T E D
apprecIatIonI have been privileged to work with Bob Wenteler and Paul Kruger, who have both retired from executive duty on 31 March 2010, for 21 and 15 years, respectively. Their contribution as mentors and colleagues cannot be exaggerated. On behalf of the other board members, the boards of the subsidiaries, senior management and the whole staff, I thank you for your contribution to the success of the group.
My thanks, also, to the other members of the board for your support of the management team and for the direction given. A business only continues to exist because of the dedicated people that make up the management and staff of each operation. Thank you to each of you.
The continued support of our customers, suppliers and service providers, without which we cannot go forward, is sincerely appreciated.
CHIEF EXECUTIVES REPORT
cheiF executive OFFicer
8
A N N U A L R E P O R T 2 0 1 0
BUSINESS OPERATIONAL REVIEWS
GundLe Group
Strategic positioningDuring the year under review, Gundle strengthened its position as a major manufacturer and supplier in carefully selected niches of the flexible film market. Value is added by ensuring quality expectations are met and where appropriate, SABS certification is obtained. The investment in modern technology over the last few years and the development of new products contributed to the group growing revenue by 10% in a deflationary market. Some capacity is still available for growth as the economy comes out of recession. Further investment will be considered should the demand justify it.
Industry dynamicsThe volatility of raw material prices due to oil price movements and the exchange rate fluctuations puts pressure on margins and complicates stocking policies. The inconsistency of supply of locally manufactured polymers adds to these challenges. The electricity price hikes expected for the next two years, industry wage negotiations and increased transport costs are issues that management will have to deal with.
Review of resultsRevenue increased in a market with reducing raw material prices and increased competition. Gundle increased its share of the construction and pallet stabilisation markets. In the second half of the year increased volumes of high quality printed work was obtained. After many years of good contributions to the group’s profits, Swazi Plastic Industries had disappointing results. Material provisions for bad debts and obsolete stock were necessary.
New initiativesNew products are being developed for roof insulation, waterproofing of buildings and the agricultural market to be launched in the second half of the 2011 financial year. Further capital expenditure is being considered to replace outdated equipment to service the heavy duty bag market as customers are modernising their packing equipment.
ForecastGundle is well positioned to grow as the recession recedes as well as capitalising on the new products that were developed. Management changes in Swaziland with intensive support from the South African management should see a return to profitability.
9W I N H O L D L I M I T E D
InMIns Group
Strategic positioningInmins trades in mining and industrial consumables. It operates a network of strategically placed branches to service the mining industry. The low cost infrastructure puts it in a position to distribute its supplier’s products to the mining industry efficiently and competitively. The trading names: Conway Johnson, Conveyor Hose, Vryheid Mining Supplies and Valic are well known and respected in the mining supplies sector. T & E, the high pressure pipe specialists, service the deep mines with their specialist knowledge and products. The fabrication infrastructure places it in a unique position.
The Chick Henderson (rubber and pvc hose) and Belting and Sprockets SA (chain and belting) businesses operate in specialist niche markets servicing a wide range of industrial customers and sub distributors.
The diversification of products and customers makes Inmins less vulnerable to fluctuations.
Industry dynamicsThe industry is very competitive and one has to differentiate one by service and efficiency. Margins are low and asset turn is vital to achieve a return on investment. Mining customers are continuously trying to reduce costs, applying pressure for reduced prices. Local manufacturers of specialist products are not competitive on quality and price, therefore imports are increasing.
Review of resultsTurnover declined, mainly due to the loss of high volume agencies where manufacturers decided to service the mines directly, reduction of stocks of mining consumables as well as the reclaiming of consumables from mined out areas. The loss of revenue was mitigated by a focus on higher margin products. The T & E division performed well as a result of a significant order for high pressure pipe.
New initiativesRenewed effort is being put in to find more products to distribute through the network. Programs to distribute certain of the specialised industrial products through the traditional mining supplies branches are being implemented.
ForecastAs the recession recedes and the global demand for commodities increases, the demand for mining supplies should also increase. The initiatives mentioned above should lead to increased revenue and profit.
BUSINESS OPERATIONAL REVIEWS
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A N N U A L R E P O R T 2 0 1 0
BUSINESS PROFILES
GundLe GroupGundle, through its three factories and four distribution centres, is one of the largest manufacturers of a diverse range of flexible plastics in the sub Saharan region. Their product lines include agricultural film, construction sheeting, consumer packaging, dam liningand industrial packaging. Focus is placed on applying the latest technology, on–going product innovation and development, and as well as quality production standards. Various ISO certifications, SABS marks and Agrement Certificates have been awarded to Gundle. A 25,1% Black Empowerment Shareholding has been in place since 2006. The various operations are described below:
GundLe pLastaLL (GerMIston)Gundle Plastall is a manufacturer of various forms of low and linear low density polyethylene flexible films, being heavy duty sacks, shrink and stretch hoods used for pallet stabilisation and printed films for the fast moving consumer goods industry. This division is one of the top three suppliers into the heavy duty sacks market, supplying the fertilizer and chemical industry. In the shrink and stretch hood market they have established themselves as market leaders, with their main customers being the cement and glass industries for pallet stabilisation to secure products for deliveries by their clients. Great strides have been made into the fast moving consumer goods market, and certain niche products are being successfully used by some of the larger food manufacturers throughout the country. In an attempt to assist in keeping the environment green, they have their own on–site recycling facility. This has enabled Gundle, as a group, to re–use 100% of the scrap generated in the manufacture of its products.
GundLe apI (sprInGs)This manufacturing plant extrudes wide width sheeting for the construction, agricultural and geosynthetic membrane markets. Products for the construction market are used mainly for damp and waterproofing. They are the market leader and the Gundle brand is widely specified by architects and quantity surveyors. Gundle is the only manufacturer in South Africa that can extrude film wider than 9 metres. Wide width sheeting in agriculture is used for covering greenhouses, silage and lining farm dams. The Gundle brand name is well known in the farming community and is associated with quality. Geosynthetic applications require a one to two millimeter membrane in widths in excess of 6 metres for lining of landfill sites, canals, tailings dams and waste disposal areas. Gundle API is the only South African manufacturer of these highly specialised membranes. They are suppliers to all the major hardware groups. Gundle API has developed a range of SABS mark bearing products, and has recently started manufacturing foil laminated membranes for industrial and domestic roofing applications.
GundLe pLastaLL dIstrIbutIonbranches
(BLOEMFONTEIN, CAPE TOWN, DURBAN and PORT ELIZABETH)
GundLe pLastaLL (bLoeMFonteIn)Services regions of the OFS , North West , Northern Cape, and Lesotho. The main focus of this branch is supplying flexible packaging material to the milling industry, sugar packers, meat packers and brick manufacturers. The biggest sellers being pallet wrap, shrink and printed bags. Gundle Bloemfontein also services the construction and agricultural markets through various national hardware stores and co–operatives.GundLe pLastaLL (cape toWn) Mainly distributes for the Gundle factories, with three major areas of focus being the construction, agricultural and packaging industries, servicing the Western Cape and West Coast areas. As the regional market leader in the construction field, the branch focuses on supplying the local merchant markets. In the agricultural industry they focus on supplying their Gundle branded products through the local agricultural co–operative networks in the Southern and West Coast areas where they enjoy the largest market share. Gundle products also cover the silage, fodder wrap, and mulch and tunnel markets, and a comprehensive backup for these agricultural co–operatives is offered directly to the local farming community. The packaging market is currently a growth area for Gundle Cape Town, with inroads being made in the bedding, bottling, food, transport and industrial and medical sectors. In this market focus products are shrink and stretch films, printed and unprinted bags, wide width sheeting, shrouds and bubble wrap films.
Garth Remmington (Sales Director Gundle)
Hilbert Schroeder (MD Gundle API)
Mike Risely (MD Gundle
Germiston)
11W I N H O L D L I M I T E D
BUSINESS PROFILES
GundLe pLastaLL (durban)Primarily distributes products on behalf of Gundle’s manufacturing plants. Such
products include SABS approved damp proof sheeting, dam lining membranes, roof insulation, printed packaging for food and juice industries, plus wide width
sheeting, shrouds, stretch hoods and stretch wrap to a diverse cross section of clients. This branch specialises in one–on–one selling and support to
the end user and has a proud history of supplying fertilizer bags, stretch hoods and sheeting to most of KZN’s largest manufacturers.
To supplement these product ranges, the branch also supplies a wide range of tapes, strapping, twine, bubble wrap and
ancillary sealing products.
GundLe pLastaLL (port eLIZabeth) A distribution point for the various factories in the
Gundle Group, the branch supplies an area stretching from George to East London. They distribute construction
film, agricultural membrane and flexible packaging. The Eastern Cape aquaculture industry has shown strong
growth, with prawn farming and fish hatchery ventures having been recently established. Aquaculture projects should utilise vast
quantities of wide width plastic membranes in the water storage systems as well as wide width greenhouse membranes to cover the hatcheries. The
PE branch has been involved in several such development projects and is ideally poised to supply and install membranes utilised in these projects.
sWaZI pLastIc IndustrIes (MATSAPHA, SWAZILAND)Established in 1986, this factory extrudes a wide range
of mono and co–extruded low and linear low density polyethylene films and polypropylene strapping and
twine.
They provide up to six colours of quality flexographic printing on a diverse range of
packaging, including side, bottom and spine seal bags punched or micro perforated with side and bottom gussets,
sheeting for automatic packaging and shrink wrap materials in sleeves, sheeting and shrouds.An experienced team with
technical know–how is able to design and advise on all packaging requirements. Products are manufactured to international standards
and distributed in Swaziland, South Africa and Mozambique, and include mono and multi–layer co–extruded films, shrink films / release shrink film,
specialised films, printed polyethylene bags, form fill and seal sheeting, liquid packaging, construction sheeting and agricultural sheeting,
polypropylene strapping and twine, packaging tapes, strapping tools and sealing equipment.
GundLe Geo-synthetIcs (SPRINGS)Gundle Geo-Synthetics was established in 2004,
and has built a reputation through efficient service, quality products and unbeatable workmanship.
In this relatively short space of time, they have completed more than 2 040 projects and installed over
11 million square metres of liner. Gundle Geo-Synthetics is technically focused and is able to design, supply and install
geo–membrane material in most lining applications. All materials and installation equipment strictly adhere to South African and
international standards. They specialise in the supply and installation of geosynthetic liners into the following applications : irrigation dams, leach
pads, tailings dams, landfills, canal linings, golf courses, aquaculture and cappings.
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A N N U A L R E P O R T 2 0 1 0
MInInG dIvIsIon:
CONWAY JOHNSON BRANCHESSTEELPOORT – KLERKSDORP – WELKOM – RUSTENBURG – KURUMAN – WITBANK
As one of the largest mining supply networks in the Republic of South Africa, the various branches have successfully implemented a “one stop shop” concept to the mining industry for its consumable products which is very cost effective, adding enormous value to the procurement of a number of products by the mines. The main products supplied to various coal, gold, platinum, iron ore, chrome, manganese and other types of mines are conveyor belting, hose and fittings, pipes and fittings (steel, pvc and HDPE), valves and idlers and a wide variety of related products.
All these operations are operated by dedicated managers that offer excellent service to their respective markets. The relationship between consumers and suppliers is excellent and contributes to achieving these goals.
vaLIc MInInG & IndustrIaL suppLIes –PHALABORWAOver the years the company has built up an excellent relationship with Phalaborwa Mining Company and Foskor. These relationships contribute to years of success marketing core products, being protective clothing, valves, pipes and fittings, pumps and spares and conveyor idlers. Valic Mining & Industrial Supplies is constantly striving to expand its service offerings to various markets.
MILLennIuM pIpe & steeLThe business was established in 1999 and there are two operations situated in Pretoria West and Pretoria North. These two operations have established themselves in the retail, DIY and light industrial manufacturing markets. Core products include tubing, expanded metal, palisade fencing, steel plates and profiles and a variety of hardware items. The business over the years has built an excellent relationship with suppliers and is continuing with its strategy of growing its product range.
Millennium Pipe & Steel has a unique approach to the steel industry. It provides high quality products at affordable prices. In the past decade the industry has become more dynamic and consumer focused.
InMIns Group
Inmins comprises nineteen operations which during the financial year were divided into 3 divisions, namely, mining, industrial and T&E. This has enabled the Group to present a more focused market orientated approach and to provide better service and delivery to our customers. Inmins operations are strategically situated across the country to service mainly the mining and industrial sectors on a decentralised basis.
The Group supplies a wide range of consumable products, locally manufactured and imported. The mining supplies divisions are proud of their “one-stop-shop” concept, which adds enormous value to the procurement of a number of products by the mines. The industrial divisions specialise in various niche markets on a selected range of products.
The Inmins operations also have a 25,1% Black Empowerment shareholding. The various operations are listed below:
Paul van den Heever (COO Inmins – Industrial)
Renier Kruger (COO Inmins - Mining)
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IndustrIaL dIvIsIon
beLtInG & sprocKets (INCORPORATING CONVEYOR RUBBER & HOSE) CAPE TOWN
This company is strategically placed to service the Eastern Cape, Western Cape and the West Coast.
Products and services are supplied to the fruit handling, packaging, beverage filling, industrial/automotive and
engineering industries.The core ranges of products are: roller and transmission chain, sprockets, bearing
units, PVC and rubber conveyor belts and heavy duty automotive drive belts. A very wide range of
hose - rubber, pvc, stainless steel hose and fittings are supplied to the mining, agricultural and general industry.
The operation has identified excellent opportunities for the supply of specialized conveyor chain, bearings, sprockets and
related products of a very high standard to Eskom and the cement industries through the group operations.
Exclusive supply and technical backup agreements are in place with principals in Europe.
chIcK henderson (JOHANNESBURG, BOKSBURG, PRETORIA AND HIGHVELD
HOSE VEREENIGING) This operation is successfully distributing a large variety
of mining and industrial hoses, fittings, valves, clamps and pumps locally and into Sub-Saharan Africa using 6 major distributors and more than 200
re-sellers. The operation has built up a very large customer base of end users in Gauteng.
Flexible stainless steel hose, manufactured to stringent engineering specifications is a fast growing product range.
A range of products are successfully supplied to the rest of the group with in-house technical expertise available. Products are sourced locally
and from overseas manufacturers with exclusive distribution agreements from manufacturers in Europe, Australia and India.
The company is ISO 9000 approved and all rubber and pvc hoses are produced to international standards.
conveyor hose operatIons (EVANDER AND WITBANK) AND VRYHEID
MINING SUPPLIESThese operations supply conveyor belt and
conveyor pulleys. A wide range of hose, steel and non-ferrous piping, valves and transmission products
are also core products.
Specialized conveyor chain, bearings and sprockets, as supplied by Belting & Sprockets (Cape Town), are products that have recently
been added to the standard product range.
Major customers are Eskom, Sasol, Coal and Gold mines and various contractors in the local industry.
BUSINESS PROFILES
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A N N U A L R E P O R T 2 0 1 0
INMINS JOINT VENTURES
As part of a black empowerment initiative, Inmins assisted in establishing two black owned companies, in which it holds minority shareholdings. Details of these businesses, which are performing exceptionally well, are as follows:
ZenZeLe IndustrIaL suppLIes (MPUMALANGA)Zenzele Mpumalanga operates as a BWO – Black Woman Owned company, in the Mpumalanga area. They supply a large range of consumable products, including valves and boiler tubes, to Eskom, coal mines and municipalities. They are a level 1 supplier to Eskom. Recently a new agency has been established for electrical sensors and vibration monitors. Zenzele is a vibrant young company with a strong drive for customer service.
ZenZeLe IndustrIaL suppLIes (PINETOWN)This is a dynamic company focusing essentially on “niche” markets such as building contracting, chemical manufacturing and the fluid transport industry. It is aggressive in its marketing strategy and technically strong in the sale and promotion of, among others, chemical and industrial pumps, hoses, valves and related products. The success of Zenzele Pinetown is due to its product availability, very high service levels and excellent customer relations.
t & e (KRUGERSDORP) Specialises in the manufacture and supply of pipe systems for the mining industry. Traditionally the business has concentrated on the gold mining sector and over time has created a niche market supplying high pressure backfill, hydropower and chilled water pipe systems to these mines, and supplies the leading gold mining groups. Most of the pipes used to create pipe systems are high pressure products of which the smaller sizes are purchased from a local manufacturer while the larger sizes are sourced from manufacturers in countries such as Germany and China. T & E has also developed over a period of time, a number of unique proprietary products that have become the benchmark products in specific applications.
novara proFILe eXtrusIons (pty) LIMIted Novara is in the process of being restructured and reconstituted. The compounding portion of the business has been sold to an industry participant. The Repi Liquid Colours Agency is being relocated to Germiston and the acquisition of a new plastics business is being investigated.
vryheId MInInG suppLIes staFFFrOm leFt tO right:
Standing:
rico (Storeman),
cornelia (International Sales),
Johnathan (Sales Representative),
natasha (Internal Sales),
Phillip (Branch Mananger),
hettie (Accounts)
Sitting:
Johannes (Driver),
Johan (Driver),
thulani (Store Assistant),
elliot (Store Assistant)
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PHOTOS
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A N N U A L R E P O R T 2 0 1 0
VALUE ADDED STATEMENT
for the year ended 30 September 2010
The amount of value added by the group’s manufacturing distribution and other businesses to the cost of raw material products and services purchased, reflects the wealth created by the group.
2010 2009 r000 r000
Revenue Less: Paid to suppliers for material and services Value added by operations Investment income
Total value added
Utilised as follows: Employee costs Net finance costs Government for taxes and levies Dividends
Re–invested for future growth – Depreciation (net of surplus on disposal) – Retained profit *
Total utilisation of value added
retained profit includes: Retained profits for the year Profit attributable to outside shareholders
1 030 918(819 086211 83215 536
227 368
145 61829 3029 301
12 756196 977
14 71415 67730 391
227 368
12 0693 608
15 677
994 947 (791 975202 972
15 536
218 508
137 06931 166 10 02711 498
189 760
9 55819 19028 748
218 508
15 4363 754
19 190
))
This statement shows the value created and how it was distributed.
% To Employees
% Re–invested
% To Government
% To Providers of funding
2010
64% 5%
13%
18%
2009
62% 5%
13%
20%
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The Group subscribes to effective corporate Governance and is committed to the implementation of the recommendations of King III to report on good Corporate Governance for South Africa (King III) as well as
the Listings Requirements of the JSE Limited (“the JSE”). The group endeavours to conduct its business in accordance with the principles of accountability, transparency and integrity.
These principles and standards are to ensure that shareholders and other stakeholders can obtain assurance that ethical management and prudent risk approaches are followed. To ensure that such principles and standards are maintained, the necessary structures have been set in place by the board, which retains full and effective control over the group and monitors the executive management.
The Board is satisfied that the group complies substantially with material aspects of King III Committee’s Code of Corporate Practices and Conduct. Ongoing attention is being given to matters of corporate governance and areas of non compliance are included below.
board oF dIrectors
The company is controlled by a unitary board consisting of two executive and five non-executive directors, two of whom are independent as defined by King III. The roles of chairman and chief executive officer are distinct. The board monitors management and key decisions. Strategic direction and policy are made or set by the board to ensure full executive control. Underlying non listed subsidiaries are controlled by executive directors who report to the company’s board.
The board includes a non-executive chairman and deputy chairman. Winhold Limited is a holding company with its two main investments being 100% of Inmins Limited and 100% of Gundle Limited. The operational control of these groups is through the group chief executive.
The executive directors implement strategy and operational decisions. The non-executive directors provide an independent perspective and compliment the skills and experience of the executive directors. They objectively assess strategy, budgets, performance, resources, transformation, diversity, employment equity and standards of conduct.
Non-executive directors are chosen with regard to their experience in the group’s industry sector or in general business and are required to provide a worthwhile contribution to the company. In addition to the scheduled board and committee meetings, there is also ongoing communication between the executive and non executive directors.
The appointment of executive and non-executive directors is made in terms of a formal policy and subject to shareholders’ confirmation at the annual general meeting. Rotation of the board occurs based on a third of the directorate being subject to re-election each year at the annual general meeting.
The chairman of the board is responsible for formally assessing the performance of the board as a team, the performance of the board sub-committees and the performance of the individual directors.
The board met four times during the past financial year.Attendance was as follows: Board audit and risk remuneration committeeWAR Wenteler 4/4 * 2/2W Fourie 4/4 * – PJ Kruger 4/4 * –NP Mnxasana 4/4 4/5 2/2DB Mostert 4/4 4/5 2/2PC Nash 4/4 4/5 2/2GM Scrutton 1/1 * –
* invitee only
board coMMItteesThere are two formal committees, being an audit and risk committee comprising of four non-executive directors and a remuneration committee comprising of four non-executive directors. In both cases the chairperson is an independant director. The directors are satisfied that these committees have discharged their responsibilities according to the relevant terms of reference for the year under review.
Audit and Risk CommitteeThe members during the past financial year were as follows: NP Mnxasana (Chairperson), DB Mostert and PC Nash. The committee normally meets three times per year and the meetings are also attended by the group financial director, other executive directors and representatives from the external auditors. Subsequent to the year end Mr PJ Kruger was also appointed to the audit committee. The committee has a written term of reference approved by the board which is reviewed annually.
CORPORATE GOVERNANCE STATEMENT & SUSTAINABILITY REPORT
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A N N U A L R E P O R T 2 0 1 0
The mandate of the committee includes:• Ensuringthegroupcompaniesoperateonasustainablegoingconcernbasis;• Therecommendationoftheappointmentoftheexternalauditors,includingtheirfeesandtermsofengagement;• Thereviewofthescopeoftheexternalaudittoensureiteffectivelyaddressesthecriticalareasofriskandthe principles for recommending the use of the external auditors for non-audit services;• Thereviewandevaluationoftheadequacyandeffectivenessoffinancialcontrolsandriskmanagementprocess;• Ensuringthesafeguardingofthegroupassets;• Ensuringcompliancewithlegislation,thegroupcodeofEthicsandInternationalFinancialReportingStatements(“IFRS”);• Ensuringthatnorestrictions,pressureorinterferenceisplacedontheauditorsandthattheyhaveunrestrictedaccesstothe Chairman and other members of the committee;• Consideringandreviewingmattersarisingfromtheexternalaudit;• Reviewingandapprovingthepublicationoftheinterimandyearendfinancialstatementsandtheannualreport/audited annual financial statements;• Ensuringthegrouphasaformalriskmanagementcharter,philosophydocumentandprogram;• Ensuringthattheriskmanagementprogramisbeingimplemented,updated,managed,progressisbeingmadeandexceptions are known;• Ensuringthatthegroup’s‘riskappetite’isimplemented,updated,measuredandmanaged;• Theboardisprovidedwithadetailedannual‘riskregister’.
During the financial year, in addition to the role set out above, the audit committee carried out the following functions:• Independenceofexternalauditor–duringtheyearunderreviewtheauditcommitteereviewedareportbytheexternal auditor and, after conducting its own review, confirmed the independence of the audit firm and the representative auditor;• Interestandexperienceoffinancialdirector–asrequiredbyJSEListingsRequirements384(h),theauditcommitteehas satisfied itself that the financial director has appropriate expertise and experience.
During the second half of the year, the chief executive officer also acted as the financial director, following the retirement of Mr Wenteler while a replacement financial director was being recruited. Mr G Scrutton took over as financial director with effect from 1 September 2010.
The group does not have a formal internal audit function as required by King III and the Audit Committee is investigating cost effective ways of conducting a formal internal audit function internally, with some of the specialist aspects only being outsourced.
The group risk management program has, historically, been informally managed by a “hands on” executive chairman. With the retirement of Mr Wenteler as executive director, the audit committee has tasked the financial team to formalise the risk management program as required by King lll.
No material fraudulent items were raised at group level. The only material issues are those surrounding taxation, litigation and bad debts in the Swazi Plastics Industries division of Gundle Limited, as a result of which a separation agreement was entered into with the previous divisional executive.
InternaL controLs and rIsK ManaGeMentThe directors are responsible for the group’s internal controls and risk management. Systems are in place for monitoring internal controls based on critical risk areas as identified by the executive directors and operational management. These systems provide reasonable assurance that assets are protected against loss, and that transactions are properly authorised, recorded and are within the parameters of the nature of group operations. An independent internal audit department is not in place due to the high cost of such a department relative to the size of the group, and thus reliance is placed on group directors’ and / or head office accountant’s visits and involvement at operational units. The directors are of the opinion that the current procedures for monitoring and reviewing of internal controls and risk exposure are adequate. Risk and internal control management are included in the functions of the audit and risk committee. accountInG and audItInGThe annual financial statements are prepared in accordance with IFRS. Adequate accounting records and an effective system of internal controls have been maintained during the year under review. The external auditors, who have had unrestricted access to information as well as, the chairman and the Audit and Risk committee members, are responsible for issuing an audit opinion for the year under review, and their report is set out on page 28. The external auditors, where requested, provide non audit services mainly relating to taxation matters, and the fees in respect thereof when applicable, are detailed in the notes to the financial statements. At no time will non-audit service fees exceed 10% of the statutory audit fee.
CORPORATE GOVERNANCE STATEMENT & SUSTAINABILITY REPORT
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sponsorArcay Moela Sponsors (Pty) Limited remains the appointed sponsor. The responsibilities of the sponsor include giving advice to the company on the interpretation of and compliance with the Listings Requirements of the JSE and the reviewing of notices and announcements that are required in terms of the Listing Requirements.
GoInG concernThe Audit and Risk Committee, the independent Auditors and the board are of the opinion that the group has adequate resources and facilities available to continue to operate for the foreseeable future and therefore has applied the going concern basis in preparing the annual financial statements.
reMuneratIon and noMInatIon coMMItteeThe members during the past financial year were as follows: DB Mostert (Chairman) , NP Mnxasana, P Nash and WAR Wenteler. The committee normally meets once or twice per year and has written terms of reference approved by the board. The role of committee is to:• Reviewandrecommendthegeneralremunerationpolicy,remunerationpercentageincreases,performancebonuses,share options and employee benefits;• Reviewandrecommendconditionsofemploymentandremunerationpackagesofdirectors;• Dealwiththeappointment,removalandresignationofdirectors,• Ensurethatsuccessionplanningisinplacefordirectorsandseniormanagementofthegroup;and• Settheremunerationoftheseniormanagersinthegroup.
coMpany secretarIaL and proFessIonaL advIceAll directors have unlimited access to the advice and services of the company secretary, who is responsible to the board for ensuring that JSE, SRP and board procedures are followed. All directors are entitled to seek independent professional advice, at the groups’ expense, concerning the affairs of the group after obtaining the approval of the Chairman.
prIce sensItIve InForMatIonThe company has a policy whereby only the Chairman and the Chief Executive Officer may comment on or discuss with third parties, matters relating to the financial affairs of the company or which may be price sensitive. Furthermore the company has closed periods during which the directors and officers are prohibited from dealing in company shares. These periods are from the end of the relevant reporting period for either the interim or annual results, to the date on which the results are published while the share is trading under cautionary and whilst in possession of price-sensitive information.
eMpLoyMent eQuIty and sKILLs deveLopMentThe board is committed to providing equal opportunities to all employees for reward and progress based on merit and ability, regardless of their ethnic origin or gender. Employment equity plans / reports are submitted to the Department of Labour as required.
The group is aware of the historical imbalance in respect of previously disadvantaged persons, and accordingly affirmative action strategies have been and continue to be implemented to achieve employee profiles more in line with the demographics in country. Emphasis is being placed on the provision of training either through in-house facilities, accredited training providers, or external courses over a wide range of subjects.
ethIcaL standards and socIaL responsIbILItIesA prime duty of the board, its committees, directors, officers and managers of the Group is to ensure our ethics policy and code of conduct is honoured.
ethIcaL LeadershIpAt Winhold, good corporate governance is a way of life rather than a set of rules. Stakeholders can only derive full, sustained value from a business founded on honesty, integrity accountability and transparency. Winhold is committed to applying good corporate governance principles in a manner that compliments its entrepreneurial flair.
CORPORATE VALUESOur value system promotes:•Accountabilitytocustomers,employeesandstakeholders•Businessgrowth•Decentralisation•Entrepreneurshipandinnovation•Non-discriminationandequalopportunity•Fairnessandhonestyinstakeholderinteraction•Respectforhumandignity,humanrights,socialjusticeandenvironment•Serviceexcellence,creatinganexceptionalplaceinwhichtoworkanddobusiness•Transparencyandopenlinesofcommunications
CORPORATE GOVERNANCE STATEMENT & SUSTAINABILITY REPORT
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A N N U A L R E P O R T 2 0 1 0
CODE OF CONDUCT:A prime duty of the board, its committees, directors, officers of the Group and managers is to ensure our code of conduct is honoured.
The code demands:•thehigheststandardsofintegrityandbehaviourindealingswithstakeholdersandwidersociety;•businessconductbasedonfaircommercialpractice;•non-discriminatoryemploymentpracticesandpromotion;•proactiveengagementonenvironmental,socialandsustainabilitymatters.•developmentandempowermentofallemployeesthroughtrainingandeducationinordertomeetthedemandsofthemarket and benefit from the growth of the Group.
CODE OF ETHICS:Our code fosters Group-wide business practice and requires:
•regularandformalidentificationofethicalriskareas;•developmentandstrengtheningofmonitoringandcompliancepolicies,proceduresandsystems;•easilyaccessible,confidentialandnon-discriminatoryreporting(whistle-blowing);•alignmentoftheGroup’sdisciplinarycodewithitscodeofethics;•integrationofintegrityassessmentwithselectionandpromotion;•inductionofnewappointees;•traininginethicalprinciples,standardsanddecisionmaking;•regularinternalauditmonitoringofcompliancewithethicalprinciplesandstandards;•reportingtostakeholdersoncompliance.
The board of directors supports King III Report recommendations relating to integrated sustainability including such areas as ethics, safety and health. The group recognises the potential adverse impact of HIV / AIDS on the group, its employees and provides counseling services.
dIrectors’ reMuneratIon phILosophyThe remuneration policy is to attract and retain suitably qualified and experienced executives and to motivate them to carry out their duties in the best interests of the shareholders whilst taking cognisance of the expectations of the other stakeholders.
dIrectors reMuneratIonDetails of the directors’ remuneration are set out on page 60.
dIrectors’ shares optIonsThere are no existing share options as at the date of this report.
dIrectors Interests In securItIesDetails of the directors’ interests in the shares of the company as at 30 September 2010 are set out on page 32.
Group sustaInabILIty report
Overview This sustainability report aims to present a balanced, transparent and reasonable account of the Groups’ sustainability performance for the year. The approach of the report is based on the principals of integrated sustainability reporting and focuses on the three main pillars of economic, social and environmental sustainability. This report has not been subject to external assurance process and is therefore a management account of sustainability performance and challenges for the year under review.
managing Sustainable developmentCreating a sustainable mindset into the way the group does business is more about understanding the links between our operations, finding new markets and products and less about drastically changing our methods of doing business.
To this end we began a process of formalizing our sustainable development performance by measuring our consumption of environmental resources like water and electricity, fossil fuels and paper and comparing the results to 2009. In the same vein, we have also measured various social indicators of our staff to get an idea of the man hours worked, any disabling injuries in terms of Section 24 of the Occupational Health and Safety Act occurring at work or outside of it and Safety, Health, Environment and Quality training of staff during the period under review. The table on Page 22 shows the results of this survey and the scope of the task we have set for ourselves.
21W I N H O L D L I M I T E D
SUSTAINABILITY INDICATORS
staKehoLders’ reLatIonsWinhold subscribes to the principles of objective, honest, timeous, balanced, relevant, and understandable communication of financial and non-financial information to stakeholders. The group acknowledges the task and responsibility of regulators, and our relationships with them are maintained in a business like manner – frank, open and with mutual respect.
2010 2009 % 2010 2009 % econoMIc IndIcators Profit for the year R000’s 14 011 14,958 –6 19 760 20 065 – 2 Cash Profit R000’s 14 799 12 632 +17 29 758 28 127 6 Operating profit margin % 4 4 – 6 7 –14 Return on operating equity % 11 10 +10 16 17 – 6 Interest cover Times 2 1,5 33 1,7 2 –15 socIaL IndIcators Employees at year end No. 289 291 – 604 536 +13Man hours worked 000’s 178 122 +45,3 231 210 0S24 disabling injuries No. 1 6 -80 20 10 +100Disabling injuries No. – 1 +100 – – –Man days lost to injuries No. – – – 137 124 +10No. disabling injuries No. – 1 +100 SHEQ training (People) No. – – – 24 – +100 eMpLoyMent Average No. of employees No. 294 298 – 566 560 –Employee turnover % – – – – – –Staff training cost R000’s 68,6 6 +60 436 297 +47Learnerships No. – – – 1 – 100
envIronMentaL Water consumed k/l 13 417 13 820 -3 21 585 20 992 +3Electricity consumed mw 544 176 +30,8 14 875 11 608 +28Fuel used company vehicles k/l – Petrol 109 615 82 673 +32 83 836 80 260 +4,4– Diesel 284 950 236 324 +20 160 930 156 384 +2,9Paper utilisation Kg 4 502 3 005 +50 5 879 4 297 +37
InMIns GundLe
distribution of WealthThe group created total wealth of R227 million in 2010. Our employees have consistently shared in over 64%
of this wealth through salaries, wages and other benefits over the past two years. Government has benefitted through taxes paid both directly and indirectly across the markets in which we operate. We continue to provide returns to our shareholders through dividends paid annually.
Black economic empowerment2010 was the second year in which our transformation process was measured against the Codes of Good Practice for BBBEE in terms of the BBBEE Act. In 2009 we achieved a Status Level 8 for Gundle Plastics and Status Level 6 for Inmins Trading. At the time of writing we were awaiting the results for 2010 and expect both of these figures to have improved. Once these results are received we will arrange workshops to best decide how to further improve the scorecard of the group.
The Operating divisions are also 25,1% owned by various black owned entities including a staff share incentive scheme.
Our PeopleOur long term sustainability is only dependent on meeting the aspirations and expectations of our employees around leadership, remuneration, stimulating work and career development, fair employment practices and lifestyle support. Meeting these expectations, we believe, is necessary to retain the skills necessary to grow the group organically.
Sustainability indicators (excluding novara)
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A N N U A L R E P O R T 2 0 1 0
SAfETY, HEAlTH AND ENVIRONMENTWinhold is committed to ensuring that employees work in a safe, healthy and clean environment. The group recognises that South Africa is facing an HIV / AIDS epidemic of considerable proportions. Although our healthcare system will bear (and is already bearing) the initial brunt of the epidemic, there is little doubt that it is affecting every aspect of our society. We encourage all people to act responsibly at all times.
socIaL responsIbILItyWinhold’s social responsibility area of endeavour are socio-economic, the youth and education in a wide sense. The long-term aim is to make a contribution to the advancement of stability in South Africa. Education is one of the most basic needs of society. We thoroughly believe that an educated community will sustainably improve the long-term well being of society. Winhold has therefore directed its Corporate Social Investment efforts at supporting education on various levels. Winhold also subscribes to social upliftment through Black Economic Empowerment (BEE) and supports this by investing in various BEE initiatives. Winhold furthermore pays all its taxes regularly and encourages government to spend its receipts responsibly.
huMan resourcesWinhold Group regards its people as the most important element of its business. It is therefore important to make the best use of human capital we have available.
All employees are encouraged and motivated to better themselves through training and study. Training programmes initiated by companies in the group are regarded as an essential element of Winhold’s investment in human capital.
eMpLoyee partIcIpatIonIn order to retain and attract entrepreneurs, the group has a philosophy of encouraging management and key employees in the group to acquire a meaningful interest in the group and / or in its underlying business. A significant number of employees are shareholders in the company, through the staff share trusts incorporated as part of the 2006 BEE Share Sale Scheme and shareholders in subsidiary and associated companies. Employees are co-owners of the business and are treated as such, with transparent communication a priority.
employee ParticipationThe group is a New South Africa company and is representative of all the people in South Africa. Winhold Group subscribes to the principal of equal opportunity. Group companies have set their own targets and specific action plans.
ethicsWinhold’s Group code of ethics commits the group to maintaining high ethical and moral codes of conduct in its professional and social dealings. This is ingrained in the culture of the group.
Products and Product developmentWinhold Group acts as investor for own account, as financier and finance conduit for the group. Group companies develop their own specialist product ranges.
The Group also provides legal, financial and regulatory support and advice to its subsidiaries.
distribution In the main, each company has its own distribution channel. These channels are based on one-to-one, one-to-many, product sale networks according to its product and client profile.
A limited volume of cross-selling into the various client bases is already taking place and continues to be a priority for growth.
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db Mostert*≈ (74) Independent Non–executive Deputy Chair-
man, B.Sc(Mech)Eng, MBA.
Dawid has 9 years service with the group as a Non-Executive Director. Chairman of the
Winhold Remuneration Commit-tee. Past Non-Executive Director of
Inmins Limited, prior to its de-listing. Experience and achievements include
Group Chief Executive of Dorbyl Limited for 9 years, Honorary President of SA Institute of
Mechanical Engineers for 2 years and past President of SEIFSA.
War WenteLer ≈ (66) Non-Executive Chairman, B.Sc., B.Sc.(Ind.Chem.) MBA.
Bob has 24 years with the group. Extensive experience in technical, operational, marketing, financial and corporate management in
different sectors of the market, namely chemical, engineering, packaging, rubber and consumer markets.
PJ KRUgER *(68) Non-executive Director.
Paul has 16 years service with the group. He was also Group Managing Director of Inmins Limited and a Director of Gundle Limited. Extensive experience in operational and executive management.
DIRECTORS AND COMPANY SECRETARY
W FourIe (55) CEO, B.Compt (Hon), CA(SA).
Wietsche has 22 years’ service with the group and previously the
Group financial director for 12 years until September 2010.
He is a Director of Inmins Limited and Gundle Limited. Extensive experi-
ence in financial management as well as experience in operational management
having served as CEO of Chick Henderson for 9 years.
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A N N U A L R E P O R T 2 0 1 0
np MnXasana*≈ (54) Independent Non–Executive Director, B. Compt (Hon), CA (SA).
Nomavuso has 4 years service with the group. Chairperson of the Winhold Audit and Risk committee. She held the position of group audit and risk executive with Imperial Holdings Limited. Other directorships include Nedbank Limited, Imperial Bank Limited, the Land Bank, AIH, and Optimum Coal Holdings Ltd, Schindler (Pty) Ltd and Downtown Music Hub, a Section 21 company.
g J O’CONNOR (53), Company Secretary, ACIBM.
John was appointed as company secretary in June 2009. He has extensive experience in company administration and company secre-tarial practice with Anglo American Corporation in their coal and finance divisions.
Addresses:884 Linton Jones Street, Industries East, Germiston, 1401.PO Box 5324, Johannesburg, [email protected]
GM scrutton(48) Financial Director, B Com (Hons), (Wits) CA (SA)Grant was appointed to the board on 1 September 2010 and has extensive experience in the listed and large corporate environment, being previously the financial director of the listed Voltex Holdings (now part of Bidvest), Powertech (Altron Group) and South African Coal Mine Holdings. Grant was also the Chief Executive Officer responsible for turning around this company for the Royal Bafokeng Holdings. Grant remains a non-executive director of SACMH.
* Member of audit and risk committee.≈ Member of remuneration committee
pc nash *≈ (44) Non–Executive DirectorM.BusScience
Peter was appointed to the board in January 2009. Completed his articles with Deloitte and Touche where he served on their Financial Institutions and Services Team. Served as a director of Standard Corporate and Merchant Bank for 8 years, where he was involved in all aspects of corporate finance. Thereafter, he joined the Astra Group, where he holds various directorships and is responsible for the financial and operational performance of the group.
25W I N H O L D L I M I T E D
STOCK EXCHANGE DATA
net asset vaLue per ordInary share (cents)
0
20
40
100
80
60
140
160
120
2005 2006 2007 2008 2009 2010
180
190
200voLuMes oF shares traded (volume in 000s)
0
5000
20 000
15 000
10 000
30 000
40 000
25 000
2005 2006 2007 2008 2009 2010
50 000
share prIces (cents)
0
30
60
150
120
90
210
240
180
2005 2006 2007 2008 2009
270
2010
Year high – cents
Year low – cents
year end close – cents
2010 2009 2008 2007 2006 2005
Share price (cents)
High 149 125 165 195 195 210
Low 118 70 92 130 112 132
Closing 140 122 107 156 130 135
Other data
Market capitalisation (Rm) at year end 176,7 154,8 135,1 196,9 164,1 170,3
Price earnings ratio at year end 7,1 4,6 4,6 7,9 9,8 6,5
Shares traded
Volume (R000) 26 280 44 309 26 760 26 746 23 761 21 395
Value (R000) 34 511 41 203 333 353 41 535 31 268 34 116
Number of transactions 884 969 1 129 1 803 1 283 1 836
Ordinary shares in issue at year end 126 215 131 126 215 131 126 215 131 126 215 131 126 215 131 126 215 131
26
A N N U A L R E P O R T 2 0 1 0
STATEMENT BY THE DIRECTORS
stateMent by the dIrectorsThe directors are responsible for the preparation of financial statements and ensuring that they fairly present the state of affairs of the group at the end of the financial year and the income and cash flow for that year, and other information contained in this annual report. The financial statements have been audited by BDO South Africa Incorporated who were given unrestricted access to all records of the group.
The directors responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of these financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The financial statements are prepared in accordance with the provisions of the Companies Act as well as with International Financial Reporting Standards (“IFRS”).
The directors’ responsibility also includes maintaining adequate accounting records and an effective system of risk control. The directors are of the opinion that the group will be a going concern in the year ahead and accordingly, the financial statements have been prepared on a going concern basis. The annual financial statements and group annual financial statements set out on pages 29 to 69 were approved by the board of directors on 22 February 2011 and are signed on its behalf.
War WenteLer db Mostert W FourIeExecutive Chairman Deputy Chairman Chief Executive Officer
22 February 2011
certIFIcate by the coMpany secretary
In terms of Section 268 G(d) of the Companies Act of 1973, as amended, I certify that the company has lodged with the Registrar all such returns as are required by the Companies Act, and all such returns, to the best of my knowledge and belief, are true, correct and up to date.
g J O’CONNORSecretary
22 February 2011
& certificate by the company Secretary
27W I N H O L D L I M I T E D
report oF the Independent audItors to the MeMbers oF WInhoLd LIMIted
report on the Financial statementsWe have audited the group annual financial statements and annual financial statements of Winhold Limited, which comprise the consolidated and separate statements of other comprehensive income, the consolidated and separate statements of financial position at 30 September 2010, the consolidated and separate statements of changes in equity and the consolidated and separate statements of cash flows for the year then ended, a summary of significant accounting policies and other explanatory notes, as set out on pages 29 to 69.
Directors’ Responsibility for the financial StatementsThe company’s directors are responsible for the preparation of these financial statements in accordance with International Financial Reporting Standards (“IFRS”), South African interpretations of statements of Generally Accepted Accounting Practices and in the manner required by the Companies Act of South Africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error: selecting and applying appropriate accounting policies: and making accounting estimates that are reasonable in circumstances.
Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of accounting estimates made by the managers, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
opinionIn our opinion, the financial statements present fairly, in all material respects, the consolidated and separate financial position of Winhold Limited as at 30 September 2010, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards AC 500 as issued by the Accounting Practice Board, and in the manner required by the Companies Act of South Africa.
Per Johann Lemmer – Director and Registered AuditorBDO South Africa IncorporatedChartered Accountants (SA)Registered Auditors(Registration Number 1995/002310/21)(Practice Number: 905526E)
Johannesburg22 February 2011
Riverwalk Office Park141 Maraisberg RoadAslea GardensPretoria0081
executive: OA Barbeau, AR Edge, GE Levick, JFK Munnik, JHM Spencer (Chief Executive), ME Stewart, A van der Hoek. A full list of partners and directors is available for inspection at the registered offices.
A part of the international BDO network of independent member firms.
INDEPENDANT AUDITORS REPORT
28
A N N U A L R E P O R T 2 0 1 0
REPORT OF THE DIRECTORS
The directors have pleasure in presenting the annual financial statements of the company and group for the year ended 30 September 2010.
Group structure and nature oF busIness The company is a holding company with its main investments being 100% stake in both Inmins Limited (“Inmins”) and Gundle Limited (“Gundle”), and a 50,1% investment in Novara Profile Extrusions (Proprietary) Limited (“Novara”).
The natures of the businesses of these subsidiaries are:
1. Inmins supplies capital and consumer goods to the mining, petrochemical and general industries. 2. Gundle manufactures and distributes polyethylene and polypropylene bags, sheeting and packaging to the agricultural, chemical, construction, food processing, industrial, and consumer markets. 3. Novara is a manufacturer of various products made out of recycled polyethylene terephthalate polymer (“PET”) plastic products. During the year a decision was made to discontinue the compounding and PET extrusion business of Novara.
FInancIaL resuLts The results of the company and its subsidiaries for the year under review and the state of their affairs are fully detailed in the financial statements starting on page 33. Further details on the activities and the performance of the group are contained in the statistics given on page 5 and in the Chairman’s, Chief Executive Officer and operational reports starting on page 2. A segmental analysis of the Group is shown in note 23, Page 58.
Group borroWInGs The borrowings in the Company and its subsidiaries are within the authorised level per the relevant articles of association. Interest bearing borrowings have reduced slightly to R 225 475 000 (2008: R235 178 000) . The high borrowings are due to loans obtained by the subsidiaries in 2006 to fund the restructuring, which facilitated the introduction of BEE shareholders in the subsidiaries.
subsIdIarIes and assocIate coMpanIes Details of the company’s holdings in material subsidiaries and the holding company’s interest in the aggregate income earned and losses incurred after tax and extraordinary items by subsidiaries and associates are set out on in notes 9 and 25.
authorIsed and Issued share capItaL Details of the share capital of the company at 30 September 2010 are set out in note 15 to the annual financial statements.
There were no changes to the authorised and issued share capital.
Members will be asked at the forthcoming Annual General Meeting to:
1. Place a portion of the unissued shares of the company under the control of the directors; and 2. Give the directors authority for the repurchase of shares.
Ordinary and special resolutions for these purposes are included in the notice of the meeting.
eMpLoyee share IncentIve scheMe Two employee share trusts exist which indirectly own respectively 12% in the two main operating companies in the group, namely Inmins Trading (Proprietary) Limited and Gundle Plastics Group (Proprietary) Limited.
dIvIdends A dividend of 10 cents (2009:10 cents) per ordinary share for the year ended 30 September 2010 was declared on 29 November 2010. Payment will be made on 21 February 2011.
29W I N H O L D L I M I T E D
post baLance sheet events The directors are not aware of any post balance sheet events since the financial year end and the date of the report.
dIrectors and secretary The details of the directors and the company secretary appear on pages 24 and 25. The following changes occurred since the previous financial year end. • MrWARWentelerresignedasExecutiveChairmanon31March2010andwasappointedNon-ExecutiveChairmanof the Group.• MrWFouriewasappointedasChiefExecutiveOfficeron1April2010butremainsthefinancialdirectorofthe group until 1 September 2010.• MrPKrugerretiredasanExecutiveon31March2010butremainsontheboardasanon-executivedirector.• MrGMScruttonwasappointedfinancialdirectorofthegroupon1September2010.
In terms of the articles of association, Ms NP Mnxasana and Mr DB Mostert retire, and being eligible, have offered themselves for re-election. Mr GM Scrutton who was appointed to the board since the last Annual General Meeting is required to retire at the forthcoming Annual General Meeting, and being eligible, offers himself for re-election.
specIaL resoLutIons The following were passed by the company or its subsidiaries since the last directors’ report.
Winhold limited • Generalauthorityforthecompanyoranysubsidiaryofthecompanytoacquiresharesofthecompany.
Subsidiaries in the group • None.
audItors The board of directors put the audit out to tender. BDO South Africa Inc. expressed their willingness to continue in office, and submitted a proposal which is accpetable to the directors A resolution for their re-appointment and to grant the directors authority to agree to their remuneration is proposed at the forthcoming Annual General Meeting.
REPORT OF THE DIRECTORS
30
A N N U A L R E P O R T 2 0 1 0
Number of % Number of % Shareholding shareholders shares
1 – 500 501 – 2 500 2 501 – 5 000 5 001 – 50 000 50 001 – 100 000 100 001 and over total
Shareholder type Banks Close corporations Endowment funds Individuals Insurance companies Investment companies Mutual funds Nominees and trusts Other corporations Private companies Public companies Retirement Fund Treasury Stock total
Non–public shareholders – Directors of the company – Associates of the company – Strategic & Company Related Holdings Public shareholders total
62,4616,875,98
10,791,63
2,278100,00
0.491.190.22
90.890.120.170.104.300.282.050.150.020.02
100.00
0.440.350.050.04
99.56100.00
259,605850,662930,409
7,394,3645,208,139
111,571,952126,215,131
685,4952,047,605
53,09338,635,587
426,751692,745
7,598,96626,131,973
201,12148,949,627
2,22380,600
709,345126,215,131
59,616,67617,796,0511,445,315
40,375,31066,598,455
126,215,131
0,210,670,745,854,13
88,40100,00
0.541.620.04
30.610.340.556.02
20.700.16
38,780.000.060.56
100.00
47.2314.10
1.1531.9852.77
100.00
anaLysIs oF sharehoLders as at 30 septeMber 2010
39,665,965
17,232,145
5,839,286
4,247,000
3,810,306
3,646,121
74,440,823
27,061,305
17,232,145
5,674,537
4,908,233
4,247,000
3,646,121
62,769,341
21,44
13,65
4,5
3,89
3,36
2,89
49.73
31.43
13.65
4.63
3.36
3.02
2.89
58,98
2,5296832424376692
4,049
20489
3,680574
1741183611
4,049
181422
4,0314,049
Number of % Number of %
shares shares
Beneficial Shareholders holding 2% or more 2010 2009
Astra Group Holdings (Pty) Limited WAR Wenteler Brits Engineering Industries (Proprietary) Limited Kendase Trust Heynen Family Trust The Retreat Trust
totaL
31W I N H O L D L I M I T E D
REPORT OF THE DIRECTORS
W FouriePJ KrugerDB MostertWAR WentelerP NashNP MnxasanaGM Scrutton
totaL
2010 2009 2010 2009 2010 2009 direct Indirect total
60 674574210
7 347 895–––
7 409 353
60 674574210
7 347 895–––
7 409 353
–50 000
452 4489 884 250
39 665 965––
50 052 663
–50 000
452 4489 884 250
27 061 305––
37 448 003
60 67450 574
452 65817 232 14527 061 305
––
44 857 356
None of the directors have non-beneficial interests. There have been no other changes since the financial year end. An analysis of shareholders is shown on the previous page.
GeneraL InForMatIonWinhold Limited is incorporated in the Republic of South Africa and its registered address is:884 Linton Jones Street P O Box 5324Industries East JohannesburgGermiston, 1401 2000
WinhOld’S PrinciPal BuSineSS PartnerS are:
Commercial Bankers Commercial BankersABSA First National BankBlock D, Eastgate Office Park c/o Pritchard & Simmonds StreetsSouth Boulevard Johannesburg, 2001Bruma, 2198
auditors sponsorBDO South Africa Inc. Arcay Moela Sponsors (Pty) Ltd Riverwalk Office Park Arcay House141 Maraisberg Road 3 Anerley RoadAslea Gardens, Parktown, 2193Pretoria 0081
Transfer Secretaries AttorneysComputershare Investor Services Fluxmans Inc.9th Floor 11 Bierman Street70 Marshall Street Rosebank, 2196Johannesburg, 2001
60 67450 574
452 65817 232 14539 665 965
––
57 462 016
The directors beneficial interests in the shares of the company as at 30 September 2010 were:
32
A N N U A L R E P O R T 2 0 1 0
The directors beneficial interests in the shares of the company as at 30 September 2010 were:
STATEMENTS OF COMPREHENSIVE INCOME
group Company
2010 2009 2010 2009
notes r000 r000 r000 r000
revenue- Continuing Operations- Discontinued Operations
Operating profit for the year- Continuing Operations- Discontinued Operations
investment incomeProfit on sale of investment propertyImpairment of assets (Discontinued ops)
Financing costs- Continuing Operations- Discontinued Operations
Financing income- Continuing Operations- Discontinued Operations
Profit before taxation- Continuing Operations- Discontinued Operations
taxation- Continuing Operations- Discontinued Operations
Share of after tax profit of associatesNet profit after taxationOther comprehensive incomeTotal comprehensive income for the yearAttributable to non controlling interestsAttributable to equity holders of the parent- Continuing Operations- Discontinued Operations
Basic and diluted earnings per share Earnings per share (cents) – Continuing Operations (cents) – Discontinued Operations (cents) Dividends per share (cents)
1
2
2
3
10
4
5
990 7104 237
994 947
50 47056 410(5 940
15 5363 948
–
(32 479)(30 256)(2 223)
1 3131 078
235
38 78846 951(8 163
(9 041)(9 041)
–
94130 688
–30 688(3 75426 93435 097(8 16326 934
21,528,0(6,510,0
–––
5 8815 881
––
(1 021)(1 021)
1 7981 798
6 6586 658
(365)(365)
–6 293
–6 293
–6 2936 293
6 293
–––
2 7012 701
––
(251)(251)
1 1991 199
3 6493 649
(275)(275)
–3 374
–3 374
–3 3743 374
3 374
1 022 2058 713
1 030 918
51 22755 029(3 802
15 556427
(2 000
(30 195(27 539(2 606
844840
4
35 90944 317(8 408
(8 233(6 874(1 359
75728 433
–28 433(3 60824 82534 588(9 76324 825
19,827,6(7,810,0
))
)
)))
) )
))
) )
))
)))
for the year ended 30 September 2010
33W I N H O L D L I M I T E D
STATEMENTS OF FINANCIAL POSITION
group Company
2010 2009 2010 2009
notes r000 r000 r000 r000
assets Non-current assets
Property, plant and equipment
Intangible assets
Goodwill
Investments in subsidiaries
Investments in associates
Investments
Deferred taxation
Total non-current assets
current assetsLoans to subsidiaries
Inventories
Trade and other receivables
Taxation overpaid
Cash and cash equivalents
Non-current assets held for sale
Total current assets
total assets
eQuIty and LIabILItIesCapital and reserves
Stated capital account
Retained earnings /(accumulated deficit)
Attributable to shareholders of the company
Attributable to non controlling interests
Total equity
Non-current liabilitiesInterest bearing borrowings
Other liabilities
Deferred investment revenue
Deferred taxation
Total non-current liabilities
Current liabilitiesTrade and other payables
Provisions
Interest bearing borrowings
Taxation payable
Loans from subsidiaries
Total current liabilities
Total equity and liabilities
7
8
8
9
10
11
3
9
13
14
3
Pg 37 (D)
12
15
Pg 35
Pg 35
17
18
19
3
16
20
17
3
9
149 441
29
26 541
2 265
168 103
1 882
348 261
148 247
186 256
1 425
12 815
5 701
354 444
702 705
122 793
126 979
249 772
17 620
267 392
187 976
1 083
14 824
6 895
210 778
183 401
3 635
37 499
–
–
224 535
702 705
135 897
153
26 541
1 979
160 788
1 835
327 193
147 714
163 349
–
10 424
–
321 487
648 680
122 793
114 910
237 703
13 951
251 654
179 563
1 193
9 493
7 789
198 038
136 183
3 991
55 615
3 199
–
198 988
648 680
–
–
–
87 494
–
–
–
87 494
–
–
47
44
104
–
195
87 689
123 627
(56 190
67 437
–
67 437
–
–
–
–
–
1 040
–
–
–
19 212
20 252
87 689
–
–
–
87 494
–
–
–
87 494
–
–
31
19
19
–
139
87 633
123 627
(49 861
73 766
–
73 766
–
–
–
–
–
814
–
2 000
–
11 053
13 867
87 633
))
aS at 30 September 2010
34
A N N U A L R E P O R T 2 0 1 0
revenue (rand Millions)
2005 2006 2007 2008 2009 2010
0
100
200
300
400
500
600
700
800
900
1000
operatInG proFIt (rand Millions)
2005 2006 2007 2008 2009 2010
0
5
10
15
20
25
30
35
40
45
50
55
ordInary sharehoLders proFIt beFore dIvIdends (rand Millions)
2005 2006 2007 2008 2009 2010
0
5
10
15
20
25
30
net asset vaLue (rand Millions)
2005 2006 2007 2008 2009 2010
0
50
100
150
200
250
current ratIo (times)
2005 2006 2007 2008 2009 2010
0
0,20
0,40
0,60
0,80
1,00
1,20
1,40
1,60
1,80
2,00
ordInary sharehoLder Funds and Interest bearInG debt (rand Millions)
2005 2006 2007 2008 2009 20100
20406080
100120140160180200220240250
for the year ended 30 September 2010
group Company
2010 2009 2010 2009
notes r000 r000 r000 r000
Stated capitalBalance at beginning and end of the year- Gross- (Less) treasury stock
Distributable reservesRetained earnings / (accumulated deficit)Balance at beginning of the yearComprehensive income- Total comprehensive income- Attributable to non controlling interestsOrdinary dividendsWrite back of unclaimed dividends
Balance at the end of the year
123 627(834
122 793
114 91024 82528 433(3 608
(12 756–
126 979
249 772
123 627(834
122 793
(99 07826 93430 688(3 754
(11 498396
114 910
237 703
123 627–
123 627
(49 8616 2936 293
–(12 622
–(56 190
67 437
123 627–
123 627
(41 9493 3743 374
–(11 359
73(49 861
73 766
) ) )
))))
)
) )
)
)
)
15
Pg 33
Pg 34
Pg 34
STATEMENT OF CHANGES IN EQUITY
35W I N H O L D L I M I T E D
for the year ended 30 September 2010
STATEMENTS OF CASHFLOWS (direct method)
group Company
2010 2009 2010 2009
notes r000 r000 r000 r000
Cash flow from operating activities
Cash receipts from customersCash paid to suppliers and employeesCash flow from operations
Finance costs paid Finance income received Share of results from associates Taxation (paid) Dividends paid
Net cash flow from operating activities
Cash flow from investing activities Investment in property, plant and equipment, trademarksand patentsProceeds on disposal of property, plant and equipmentNet cash outflow from investing activities
Cash flow from financing activities Interest bearing loans repaidLong–term loans raisedDefered investment revenue receivedIntergroup indebtednessInvestment in loans receivableNet cash outflow from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents
- At beginning of the year
- At end of the year
)) ) )
)) ) )
))
))
)) ) )
)
)
)
) )
)
)
)))
)) ) )
)) ) )
Pg 37 (A)
Pg 37 (B)
Pg 37 (C)
Pg 37 (E)
1 026 268(922 521103 747
(30 596844471
(13 79860 668
(12 756
47 912
(36 326
2 492(33 834
(19 96026 5455 331
–(7 3154 601
18 679
(24 341(5 662
1 035 438(977 021
58 417
(33 0001 313
402(8 13618 996
(11 498
7 498
(29 199
14 352(14 847
(22 12615 1615 944
––
(1 021
(8 370
(15 971(24 341
14 995(16
14 979
(1 0211 798
–(390
15 366(12 622
2 744
–
––
(2 000––
(729–
(2 729
15
89104
12 207(1 20511 002
(2511 199
–(412
11 538(11 359
179
–
––
(500––
402–
(98
81
889
36
A N N U A L R E P O R T 2 0 1 0
NOTES TO THE STATEMENTS OF CASH FLOWS
Reconciliation of net profit before tax to cash generated from operationsProfit before taxadjustmentsDepreciation and other non–cash itemsFinance costs/(income)
Changes in working capitalChanges in inventoriesChanges in trade and other receivablesChanges in trade and other payables
A. Cash generated by operations
Reconciliation of taxation (paid)/received during the yearIncome statement chargeAdjustment for deferred taxation Movement in taxation liabilityB. Payments made
Reconciliation of dividends paid during the yearDividends paidDividends paid to subsidiary minoritiesC. Payments made
Cash and Cash EquivalentsShort–term depositsCash at bank and on handD. Cash and cash equivalents The effective interest rate received is that applicable to deposits with commercial banks for this category of instrument.For purposes of the cash flow statement, the year end cash and cash equivalents comprised the following:Cash and cash equivalents (refer D above)Bank overdraftE. Cash and cash equivalents at the year end
35 909
14 21329 75243 965
(533(22 90747 31323 873
103 747
(8 233)(941)
(4 624)(13 798)
(12 622)(134)
(12 756)
3 0009 815
12 815
12 815(18 477(5 662
38 788
9 14731 68740 834
17 89418 817
(57 916(21 20558 417
(9 0412 066
(1 161(8 136
(11 359(139
(11 498
5 3745 050
10 424
10 424(34 765(24 341
6 658
8 888(777
8 111
–(16226210
14 979
(365–
(25(390
(12 622–
(12 622
–104104
104–
104
3 649
8 520(948
7 572
–707
(926(219
11 002
(275–
(137(412
(11 359–
(11 359
89–
89
89–
89
group Company
2010 2009 2010 2009
notes r000 r000 r000 r000
))
)))
)
))
)
)
))
)
)
)
)
)
)
)
)
))
)
)
)
))))
)
page 33
page 34Note 17
37W I N H O L D L I M I T E D
The annual consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). The consolidated financial statements are prepared under the historical cost convention,
except for certain financial instruments at fair value. This basis is consistent with that of the previous year, except for the adoption of new and amended IFRS and IFRIC interpretations effective 1 October 2009 which are set out in note 32. Note 33 sets out new and / or amended accounting standards and interpretations applicable to the Winhold Group which were issued before 30 September 2010, but were not effective at that date. The Group does not intend to adopt any of these standards or interpretations early. Management is of the opinion that the adoption of these standards and interpretations would not have a material impact on the consolidated financial results, but may result in additional disclosures.
ACCOUNTINg ESTIMATES AND CRITICAl JUDgEMENTSIn preparing the group financial statements, management is required to make estimates and assumptions that affect the amounts represented in the group annual financial statements and related disclosures. Use of available information and the application of judgment is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the group annual financial statements. Accounting estimates and areas of critical judgment are set out in note 30 below.
basIs oF consoLIdatIonThe group annual financial statements incorporate the financial position and operating results of the holding company and its subsidiaries. Subsidiaries are those companies in which the group, directly or indirectly, have an interest of more than one half of the voting rights or otherwise has the power to exercise control over the operations. Intergroup transactions, unrealised surpluses, deficits and balances are eliminated. The results of subsidiaries are included from the effective dates of acquisition up to the effective dates of sale. At date of acquisition, the assets, liabilities and contingent liabilities of the relevant subsidiaries are valued at fair value. A listing of principal subsidiaries is set out in the notes to the financial statements.
coMparatIve FIGuresWhen an accounting policy is changed, comparative figures for the previous period are restated in accordance with the new policy. Where necessary, comparative figures are stated to conform with changes in presentation in the current year. Other than the separate disclosure of the results of the discontinued operations, no changes in comparatives were made in the current year.
PROPERTY, PlANT AND EQUIPMENTProperty, plant and equipment is reflected as historical cost less accumulated depreciation and accumulated impairments. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is charged on the straight-line basis over the estimated useful lives of the assets after taking into consideration the assets’ residual values. Land is not depreciated. The estimated maximum useful lives of items of property, plant and equipment are:
• Buildings 50years• Plantandequipment 7–15years• Furniture,fittingsandofficeequipment 7-10years• Electronicequipment 3–5years• Motorvehicles 3–5years• Capitalisedleasedassets 7–15years• Leaseholdimprovements periodofthelease
The useful lives and residual values are assessed annually and adjusted if necessary.
Subsequent costs are included in the assets’ carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other maintenance and repairs are recognised in the income statement during the financial period in which they are incurred.
Profit and losses on the disposal of property, plant and equipment are determined by comparing the proceeds with the carrying amount. These are recognised in the income statement.
Carrying amounts of all items of property, plant and equipment are impaired to their recoverable amount, where this is lower than the carrying amount.
Where material components of an item of property, plant and equipment have materially different useful lives they are accounted for as separate items.
ACCOUNTING POLICIES AND PRESENTATION
38
A N N U A L R E P O R T 2 0 1 0
Specific software, which is an integral part of the related hardware, is treated as property, plant and equipment.
Leased assetsLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Assets acquired in terms of finance leases are recognised as assets of the group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The capital element of future obligations under the lease is included as a liability in the balance sheet. Each lease payment is allocated between the liability and the finance charges so as to achieve a constant rate of interest on the remaining balance of the liability. The interest element of the finance charge is charged against income over the period of the lease.
When a finance lease is terminated before the lease period has expired, any payment that is required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.
Leases of assets to the group under which the lessor effectively retains all the risks and rewards of ownership are classified as operating leases. Payments made under operating leases are charged against income on a straight-line basis over the period of the lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability. This asset or liability is not discounted.
IntanGIbLe assetsAn intangible asset is recognised when it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost, less any accumulated amortisation and impairment losses.
Development costs that are directly attributable to the design and testing of identifiable and unique products controlled by the group are recognised as intangible assets when the following criteria are met:• itistechnicallyfeasibletocompletetheproductsothatitwillbeavailableforuse;• managementintendstocompletetheproductanduseorsellit;• thereisanabilitytouseorselltheproduct;• itcanbedemonstratedhowtheproductwillgenerateprobablefutureeconomicbenefits;• adequatetechnical,financialandotherresourcestocompletethedevelopmentandtouseorselltheproductareavailable;• theexpenditureattributabletothesoftwareproductduringitsdevelopmentcanbereliablymeasured.
Directly attributable costs that are capitalised as part of the product include the material costs, outsourced costs, development employee costs and an appropriate portion of relevant overheads. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
amortisation is provided to write down intangible assets, on a straight line basis, to their residual values as follows:Trademarks and patents 5 yearsDevelopment costs 5 years
GoodWILLGoodwill may arise on the acquisition or change in the shareholding in a subsidiary company or the acquisition of a business. It represents the excess of the cost of an acquisition or adjustment over the group’s share of the fair value of the net identifiable assets and contingent liabilities of the subsidiary or business at the date of acquisition or adjustment.
For impairment purposes the carrying amount of goodwill is allocated to cash generating units, reviewed annually for impairment and written down where this is considered necessary. Impairment losses in respect of goodwill are not reversed. Where a number of related businesses are acquired in the same business combination, these businesses are combined for purposes of determining the recoverable amount of the related goodwill. The gain or loss on the disposal of a subsidiary or business includes the carrying amount of goodwill attributable to the entity or business sold.
IMpaIrMent oF assetsThe group assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset. Irrespective of whether there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined. The recoverable amount of an asset or a cash-generating unit is the higher of its “fair value” less costs to sell and its “value in use”.
39W I N H O L D L I M I T E D
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. Goodwill acquired in a
business combination is, from the acquisition date, allocated to each of the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash generating units (group of units) and then, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
An impairment loss recognised in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there has been a change in the estimate used to determine the recoverable amount.
InvestMents In subsIdIarIesInvestments in subsidiaries are carried at cost less any accumulated impairment. The cost of an acquisition is measured as the fair value of consideration transferred, equity instruments issued and liabilities assumed at the date of exchange. Costs directly attributable to an acquisition are included in the cost of acquisition. Identifiable assets (including intangible assets) and liabilities acquired and contingent liabilities assumed are recognised at fair value at acquisition date. The excess of the cost of an acquisition over the Group’s share of the fair value of the net identifiable assets and contingent liabilities represents goodwill and is accounted for in terms of the accounting policy note for goodwill. If the cost of an acquisition is less that the fair value of the net identifiable assets and contingent liabilities, the difference is recognised in the income statement.
InvestMents In assocIatesAssociates are those entities in which the group has significant influence, but not control, over the financial and operating policies. The consolidated financial statements include the group’s share of the total recognised gains and losses of associates on an equity accounted basis, from the date that the significant influence commences until the date that significant influence ceases. When the group’s share of losses exceeds its interest in an associate, the group’s carrying amount is reduced to nil and recognition of further losses are discontinued except to the extent that the group has incurred legal or constructive obligations or made payments on behalf of an associate.
InventorIesInventories are measured at the lower of cost and net realisable value.Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The cost of inventories comprise of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories are assigned using the first-in first-out or weighted-average cost methods. The same cost method is used for all inventories having a similar nature and use to the group.
When inventories are sold, the carrying amounts of those inventories are recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.
revenue recoGnItIonRevenue from sale of goods is recognised when delivery is made and significant risks and rewards of ownership are transferred to the buyer. Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax. Interest income is recognised on a time proportion basis that takes into account the effective yield on the asset and the principal outstanding. Dividend income is recognised where the shareholder’s right to receive payment is established.
cost oF saLesCost of sales includes the historical cost of merchandise and overheads appropriate to the distribution thereof.
taXatIonIncome tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profits differ from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductable in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
ACCOUNTING POLICIES AND PRESENTATION
40
A N N U A L R E P O R T 2 0 1 0
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductable temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated on the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
provIsIonsProvisions are recognised when the group has a present legal or constructive obligation as a result of past events, and it is probable that it will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Where the effect of discounting to present value is material, provisions are adjusted to reflect the time value of money.
eMpLoyee beneFItsRetirement fundsThe group’s policy is to provide retirement benefits for employees. For those employees not belonging to statutory or union retirement plan the group operates a separate trustee administered defined benefit fund. Payments to this defined benefit fund are made by employees and the company based on recommendations of independent qualified actuaries.
The contributions by group companies to fund obligations for the payment of retirement benefits are charged against income in the year using the projected unit credit method. Under this method the cost if providing retirement benefits is charged to the income statement to spread the regular cost over the service levels of employees, in accordance with the advice of qualified actuaries. In the event of the actuarial valuation revealing a deficit, past service cost are recognised immediately to the extent that benefits have already vested or on a straight line basis over the period until the benefits become vested.
To the extent that, at the beginning of the financial year, any cumulative unrecognised actuarial gain or loss exceeds ten percent of the greater of the present value of the projected benefit obligation and the fair value of the plan assets (corridor), that portion is recognised in the income statement over the expected average remaining service lives of the participating employees. Actuarial gains or losses within the corridor are not recognised.
The amount recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service cost, and reduces by the fair value of plan assets.
Any asset is limited to unrecognised actuarial losses, plus the present value of available refunds and reduction in future contributions to the plan.
Other post-retirement obligationsThe group’s policy is not to provide post-retirement health benefits to retirees. Where, due to acquisitions, such obligations do arise in respect of existing employees, the expected costs of these benefits are accrued over the period in a similar fashion to pension fund benefits. Valuations of these obligations are carried out by independent qualified actuaries. Any deficit on valuation is charged to the income statement in the year that the valuation is received.
Annual leaveEmployee entitlement to annual leave is recognised when it accrues to the employees. An accrual is made for the estimated liability for leave as a result of services rendered by the employees up to the balance sheet date.
41W I N H O L D L I M I T E D
ForeIGn currencIesA foreign currency transaction is recorded, on initial recognition in Rands, by applying to the foreign currency
amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.
At each balance sheet date:• Foreigncurrencymonetaryitemsaretranslatedusingtheclosingrate;• Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyaretranslatedusingtheexchangerate at the date of the transaction; and• Non-monetaryitemsthataremeasuredatfairvalueinaforeigncurrencyaretranslatedusingtheexchangeratesatthedate when the fair value was determined.
Exchange differences arising on the settlement of monetary items at rates different from those at which they were translated on initial recognition during the period or in previous annual financial statements are recognised in profit or loss in the period in which they arise.
borroWInG costsBorrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
FInancIaL InstruMentsThe group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.
Financial assets and financial liabilities are recognised on the group’s balance sheet when the group becomes party to the contractual provisions of the instrument. Financial assets and liabilities are initially recognised at fair value plus, in the case of financial assets or liabilities not classified at fair value through profit and loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.
An asset that is subsequently measured at cost or amortised is recognised initially at its fair value on the trade date. Subsequent to initial recognition these instruments are measured as set out below.
(i) Held-to-maturity investmentsInvestments with determinable returns and fixed maturity dates that the group has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are recorded at amortised cost using the effective interest rate method, less impairment.
(ii) Cash and cash equivalentsCash and cash equivalents comprise cash on hand, deposits held at call with banks and investment in money market instruments, net of bank overdraft where right of set-off exists, that are readily convertible (within 3 months) to a known amount of cash and are subject to an insignificant risk of change in value and bank overdrafts. Cash and cash equivalents are subsequently measured at amortised cost, and are treated as loans and receivables.
(iii) Trade and other receivablesTrade and other receivables originated by the enterprise are treated as loans and receivables. Trade and other receivables, less provision for doubtful debts, are carried at amortised cost using the effective interest rate method.
(iv) BorrowingsBorrowings are recognised initially at fair value, net of transactions costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.
(v) Trade and other payablesTrade and other payables are measured at amortised cost using the effective interest rate method.
ACCOUNTING POLICIES AND PRESENTATION
42
A N N U A L R E P O R T 2 0 1 0
(vi) Non -current receivablesNon -current receivables are measured at amortised cost using the effective interest rate method.
(vii) Foreign currency contractsThe company and group uses derivative financial instruments such as foreign currency contracts to hedge its risks associated with foreign currency transactions. Such derivative financial instruments are stated a fair value. The fair value of forward exchange contracts is calculated by reference to current forward exchange rate for contracts with similar maturity profiles. The movement in the fair values is accounted for through the income statement.
a gain or loss arising from a change in a financial assets or financial liability is recognised as follows:• Financialassetsandfinancialliabilitiescarriedatamortisedcost–againorlossisrecognisedinprofitorlosswhen the financial asset or financial liability is derecognised or impaired, and
• Wherealegallyenforceablerightofoff-setexistsforrecognisedfinancialassetsandfinancialliabilities,andthereisan intention to settle the liability and realise the asset simultaneously or to settle on a net basis, all related financial effects are offset.
FaIr vaLue MeasureMent hIerarchyIFRS 7 requires certain disclosures which require the classification of financial assets and financial liabilities measured at fair value using a fair value measurement hierarchy that reflects the significance of the inputs used in making the fair value measurement. (see note 24). The fair value hierarchy has the following levels:1. Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)(Level 2); and3. Inputs for the asset or liability that are not based on observable market data (unobservable inputs)(Level 3).
The level in the fair value hierarchy within which the financial asset or financial liability iscategorized is determined on the basis of the lowest level input that is significant to the fair valuemeasurement. Financial assets and financial liabilities are classified in their entirety into one ofthe three levels.
non-current assets heLd For saLe and dIsposaL GroupsNon-current assets and disposal groups are classified as held for sale when:• theyareavailableforimmediatesale;• managementiscommittedtoaplantosell;• itisunlikelythatsignificantchangestotheplanwillbemadeorthattheplanwillbewithdrawn;• anactiveprogrammetolocateabuyerhasbeeninitiated;• theassetordisposalgroupisbeingmarketedatareasonablepriceinrelationtoitsfairvalue;and• asaleisexpectedtocompletewithin12monthsfromthedateofclassification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of:• theircarryingamountimmediatelypriortobeingclassifiedasheldforsaleinaccordancewiththegroup’saccountingpolicy;• fairvaluelesscoststosell.
Following their classification as held for sale, non-current assets (including those in a disposal group) are not depreciated.
The results of operations disposed during the year are included in the consolidated statement of comprehensive income up to the date of disposal.
A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale, that has been disposed of, has been abandoned or that meets the criteria to be classified as “held for sale”.Discontinued operations are presented in the consolidated statement of comprehensive income (including the comparative period) as a single line which comprises the post tax profit or loss of the discontinued operation and the post-tax gain or loss recognised on the re-measurement to fair value less costs to sell or on disposal of the assets/disposal groups constituting discontinued operations.
43W I N H O L D L I M I T E D
ACCOUNTING POLICIES AND PRESENTATION
reLated partIesRelated parties are considered to be related if one party has the ability to control or jointly control the
other party or exercise significant influence over the party in making financial and operational decisions. Key management personnel are also regarded as related parties. Key management personnel are those persons having authority and responsibility for planning.
earnInGs per shareThe company presents basic earnings per share (EPS) for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the company by the weighted average number of ordinary shares outstanding during the period.
headLIne earnInGs per shareHeadline earnings per ordinary share are calculated using the weighted average number of ordinary shares in issue during the period and are based on the earnings attributable to ordinary shareholders, after excluding those items as required by Circular 3/2009 issued by the South African Institute of Chartered Accountants (“SAICA”).
seGMentaL reportInGSegment information is determined on the same basis as the information used by the chief operating decision maker for the purposes of allocating resources to segments and assessing segments’ performance. The chief operating decision maker has been identified as the chief operating executive officer in conjunction with the board of directors that makes strategic decisions. All intersegment transactions are eliminated.
dIvIdendsDividend distribution to the Group’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders.
44
A N N U A L R E P O R T 2 0 1 0
NOTES TO THE FINANCIAL STATEMENTS
15 000––
11–
73––––––––––
–
––
19170
8 888
group Company
2010 2009 2010 2009
r000 r000 r000 r000
1. OPERATINg PROfIT fOR THE YEAR
–498427
2 70115 556
2 194230110
13 6388 329
656219
2 1731 889
248124
2 000
731 465734
7 026(365767627
7 8121 087
–
–1 3113 9486 138
15 536
2 062320102
12 6777 919
578341
2 3141 273
20745
2 140
721 966(272
6 028(365769693
9 525347
–
11 500––––
91––––––––––
– –––
27174
8 447
Operating profit is stated after taking into account the items detailed below:
IncomeIncome from subsidiaries- Dividends receivedProfit on disposal of fixed assetsProfit on sale of investment propertyOther operating incomeInvestment income
ExpenditureAuditor’s remuneration- Current year audit fees- Additional payment for prior years- Travel and disbursementDepreciation and amortisation- Plant and equipment- Furniture, fittings and equipment - Electronic equipment- Motor vehicles- Capitalised leased assets- Leasehold improvements- TrademarksImpairment of assets- Write down to recoverable value from value in useOtherInventory costs expensesForeign exchange losses/ (income)Operating leases- Minimum lease payments- Sub-lease incomeManagement, technical and consultancy feesTotal listing costs (JSE)Director’s remuneration (refer to note 26)- Executive directors- Non executive directorsStaff costs (see note 6)Provision for subsidiary loan accounts
)
)
)
45W I N H O L D L I M I T E D
group Company
2010 2009 2010 2009
r000 r000 r000 r000
* Includes R11 138 312 (2009: R11 589 533) accrued and paid after year end.No borrowing costs were capitalized during the year (2009: R NIL)
Finance costs paidLess: Finance income received
(30 145844
(29 301
(2511 199
948
(32 479 313
(31 166
(1 0211 798
777
)*)* ) )
) )
2. NET fINANCINg (COSTS) / INCOME
–––
–
––––
–
365–––––
365
–
–––
group Company
2010 2009 2010 2009
r000 r000 r000 r000
3. INCOME TAXES
(10 6331 9941 744
(6 895
1 882(5 013
(5 954941
–(5 013
8 599
9 494(344(941(166
–90
8 233
–
–1 3591 359
(12 5591 5753 195
(7 789
1 835(5 954
(3 888(2 066
–(5 954
5 942
6 83746
2 066––
929 041
1 359
–––
–––
–
––––
–
275–––––
275
–
–––
Group:deferred taxation liabilityAccelerated tax depreciationPrepayments and provisionsTax loss carried forward
deferred taxation assetsTax losses carried forward Net deferred taxation
Balance at 1 SeptemberIncome statement (credit) / chargeDeferred tax arising at acquisition Balance at 30 September
deferred taxation assets for assessed losses not provided
income Statement credit / (charge)SA normal tax – current yearSA normal tax – prior year adjustmentDeferred taxation – current year Deferred taxation – prior year adjustment Deferred taxation – rate changeSecondary tax on companies
discontinued OperationsTax losses carried forwardIncome Statement charge- SA Normal Tax- Deferred Taxation
NOTES TO THE FINANCIAL STATEMENTS
))
)
)
)
)))
))
)
))
)
46
A N N U A L R E P O R T 2 0 1 0
6 6581 864
(4 2002 701
––––––
365
(19(390365(44
group Company
2010 2009 2010 2009
r000 r000 r000 r000
3. INCOME TAXES (continued)
38 78810 861(5 4432 175
43(1 296
7279246
–9 041
4 360(8 0446 8833 199
3 6491 022(747
–––––––
275
118(412275(19
tax rate reconciliationProfit before taxTax at 28%: (2009 :28% )Income not subject to taxExpenses not deductable for taxDifference in tax ratesNet utilisation of tax lossesTax losses not utilisedSecondary tax on companies (STR)Prior periods normal tax adjustmentsPrior periods deferred tax adjustmentsTax charge per income statement
Taxation due 1 OctoberTaxation paidCurrent year credittaxation (overpaid) / due 31 december
Deferred income tax assets and liabilities are offset when the income taxes relate to the same fiscal authority and legal entity.Deferred taxes are calculated on all temporary differences under the liability method using a principal tax rate of 28% for South African operations and the relevant tax jurisdiction for non-South African operations. Material deferred income tax assets are recognised when the realisation of the related tax benefit is probable. Deferred tax liabilities have not been established for unrealized withholding taxes on such unremitted reserves which are considered to be permanently reinvested.
No diluted earnings per share are presented as there are no current obligations or commitments to issue shares in the future.The calculation of headline earnings per ordinary share is based on the earnings attributable to ordinary shareholders after exceptional items and minority share and preference dividend but before extraordinary items, being R26 039 000 (2009: R24 341 000) and a weighted average number of shares in issue during the year of 125 505 786 (2009: 125 505 786), after deducting Treasury stock of 709 345 (2009: 709 345) shares. Headline earnings per share as detailed above is based on earnings adjusted for exceptional items together with goodwill written down, net profit on sale of assets, taxation effect thereon, and any income attributable to non controlling interests. Where acquisitions are financed by share issues, such shares are weighted from the date on which the attributable earnings are brought to account.
4. EARNINgS PER SHARE AND HEADlINE EARNINgS PER SHARE
group Company
2010 2009 2010 2009
r000 r000 r000 r000
)
)
)
)) ) )
))
))
))
) )
24 825–
(4981 573
13926 039
20,7
26 9341 576
(1 311(3 9481 090
24 341
19,4
6 293––––
6 293
3 374––––
3 374
))
)
35 90910 055(4 265
791 (75
–2 047
90(344(66
8 233
3 199(9 1504 526
(1 425)
reconciliation of headline earnings
Comprehensive income for the year
Impairment of development costs
Net profit on disposal of fixed assets
Impairment and (profit) on sale of plant and equipment
Taxation effect on disposal of fixed assets
headline earnings
headline earnings per share (cents)
47W I N H O L D L I M I T E D
NOTES TO THE FINANCIAL STATEMENTS
PropertyPlant and equipmentFurniture fittings and office equipmentElectronic equipmentMotor vehiclesCapitalised leased assetsLeasehold improvements
group net Book net Book
cost/Book value value cost at additions for disposals for cost at value
r000 30 Sept 09 30 Sept 09 the year reclassification the year 30 Sept ‘10 30 Sept ‘10
40 99680 721
1 787223
7 98616 805
923149 441
40 996137 369
10 7132 767
21 43019 9441 990
235 209
(563)(1 279)
(393)(15)
(2 234)–
(329)(4 813)
–(7 875)
(61)–
(615)(2 992)
–(11 543)
2 89529 089
1 05177
2 62036
55836 326
38 664117 434
10 1162 705
21 65922 9001 761
215 239
group Company
2010 2009 2010 2009
r000 r000 r000 r000
5. DIVIDENDS PROPOSED
Declared after the year end
Ordinary dividends of 10,0 cents (2009: 10,0) cents per share
The ordinary dividends as set out above were declared on 29 November 2010 and notice was given to shareholders in respect thereof on 7 December 2010. Payment will be made on 22 February 2010.No secondary tax is payable as the company has received more dividend income than the amount of dividend paid.
6. EMPlOYEE COSTS
Wages, salaries and reimbursive amountsSocial security costsPension, provident fund contributions– Defined benefits– Defined ContributionTermination benefits paidAverage number of persons employed by the group during the year– full time (number)– part time (number)
The above costs have been included in either manufacturing or other operating expenses as disclosed in note 1.
12 622
124 5373 939
6 2212 372
–
86427
12 622
–––
––
––
12 622
–––
––
––
12 622
7. PROPERTY PlANT AND EQUIPMENT
38 66466 721
1 468366
8 00320 062
613135 897
132 3354 563
6 2992 4212 275
83647
48
A N N U A L R E P O R T 2 0 1 0
PropertyPlant and equipmentFurniture fittings and office equipmentElectronic equipmentMotor vehiclesCapitalised leased assetsLeasehold improvements
group accumulated accumulated accumulated
cost/Book value amortisation charge for impairments re- disposals for amortisation
r000 30 Sept 09 the year classification the year 30 Sept ‘10
–50 7138 648
2 33913 6562 8381 148
79 342
–56 648
8 926
2 54413 444
3 1391 067
85 768
–(568)(329)
(14)(2 006)
–(329)
(3 246)
–(3 826)
(49)
–(379)
(1 588)–
(5 842)
–2 000
–
––––
2 000
–8 329
656
2192 1731 889
24813 514
Certain property, plant and equipment are encumbered as set out in note 11. Property comprises land and buildings. Land is not depreciated. Buildings have not been depreciated as the estimated residual value exceeds the cost. A register of properties is open for inspection at the registered office of the company. The net reclassifications of R 5 701 000 were transferred to “non-current assets held for sale”.The company had no property, plant and equipment during the year under review.
NOTES TO THE FINANCIAL STATEMENTS
Trademarks and patentsDevelopment costs
Net Book Net Book
Cost/Book value value Cost at Additions Disposals Cost at value
R000 30 Sept 09 30 Sept 09 for the year for the year 30 Sept 2010 30 Sept 2010
153–
153
29–
29
7752 8203 595
–––
–––
7752 8203 595
8. INTANgIBlE ASSETS
Trademarks and patentsDevelopment costs
accumulated accumulated
Amortisation Amortisation Charge for Disposals Amortisation
R000 at 30 Sept 09 the year for the year at 30 Sept 2010
7462 8203 566
–––
124–
124
6222 8203 442
Goodwill
Net Book Net Book
Cost/Book value value Cost at Cost at value
r000 30 sept 09 30 sept 09 30 sept ‘10 30 sept ‘10
26 541 26 54130 87230 872
Goodwill
Written off Written off
Impairment as at as at
r000 30 sept 09 30 sept ‘10
4 3314 331
7. PROPERTY PlANT AND EQUIPMENT (continued)
49W I N H O L D L I M I T E D
Held to maturity investmentsUnlisted investmentsSinking fund deposit
–––
160 7887 315
168 103
–––
Directors valuation of these investments is R 168,1 million (2009 : R160,8 million). These unlisted investments comprise compul-sory redeemable preference shares with an effective average yield of 9,6% per annum, secured by designated notes issued by the Standard Bank of South Africa Limited. These preference shares are redeemable over periods from 2012 to 2016, see note 27 for repayment terms. The unlisted investments, having a book value of R 160,8 million, are pledged as security for loans granted by a financial institution to operating subsidiaries. These investments can be called if the subsidiaries commit an act of insolvency, encumber or try to sell the whole or a substantial part of its assets or there is a material adverse change (in the opinion of the lender’s Auditors). Break fees also apply on a sliding scale from R550 000 at year end to nil in September 2016.
The sinking fund deposit has also been pledged to secure fixed asset funding loans.
11. INVESTMENTS
group Company 2010 2009 2010 2009 r000 r000 r000 r000
160 788–
160 788
10. INVESTMENTS AND lOANS IN ASSOCIATES
Beginning of the yearShare of after tax profitsDividends receivedEnd of the yearDirectors’ valuation
Zenzele 1 Zenzele 2 total total 2010 2009
Zenzele 1 – Zenzele Industrial Supplies (Pty) Limited: 34% shareholding Zenzele 2 – Zenzele Industrial Supplies (Mpumalanga) (Pty) Limited: 39% shareholdingTransactions with associated companies are disclosed in note 29 (related parties). Loans to the associates (R121 000) are unsecured, interest free and have no fixed terms of repayment.
1 440941
(4021 9791 979
525150
(113)562562
)
1 454607
(358)1 703
1 703
1 979757
(471)2 2652 265
NOTES TO THE FINANCIAL STATEMENTS
Investment in subsidiaries
Shares at costLess: Amounts written offInvestment in subsidiariesloans to / (from) subsidiariesLoans to subsidiariesLess amounts provided forNet loans to subsidiariesLoans from subsidiaries
Company
2010 2009
r000 r000
Refer to detailed analysis of interest in subsidiaries in note 25. Loans to and from subsidiaries bear interest at prime and have no fixed repayment terms.
9. INTEREST IN SUBSIDIARIES
)
)
)
87 495(1
87 494
25 368(25 368
––
(19 212)
87 495(1
87 494
16 480(16 480
––
(11 053
)
)
50
A N N U A L R E P O R T 2 0 1 0
In September 2010 the board announced its intention to dispose of the fabrication division of Novara in its entirety which they started to market in October 2010. Novara Fabrication was created in 2007 to focus on PET Plastics extrusion and the business could not achieve the critical mass required to cover its costs. This division was included in the segment “Other” (note 23) and included in the consolidated results are:
Group
2010 2009
r000 r000
Summarised statement of financial positionProperty, plant and equipment (non-current assets held for sale)Deferred tax assetInventoryTrade and other receivablesCash and cash equivalentTotal assetsShareholders’ fundsExternal borrowingsGroup loansTrade creditors and provisionsBank overdraft
Summarised statements of comprehensive incomeTurnoverOperating lossImpairmentsNet interest paidNet loss before taxationDeferred taxationNet loss after taxation
Summarised statement of cash flowsCash flow from operating activitiesCash flow from Investing activitiesCash flow from financing activitiesCash movementIntercompany cashflow transactionsOpening cash reservesClosing cash reserves
12. ASSETS HElD fOR SAlE
5 701–
1 3502 714
179 782
(24 0835 434
25 3683 057
69 782
8 713(3 802(2 000(2 602(8 404(1 359(9 763
(3 488)(24)
(2 547)(6 059)
6 867(797)
11
8 9161 359
979836
3912 129
(14 3157 981
16 4801 148
83512 129
4 237(5 940
–(2 223(8 163
–(8 163
(4 629)1
(2 437)(7 065)
7 170(902)(797)
) )
) ))) )) ))) )
51W I N H O L D L I M I T E D
NOTES TO THE FINANCIAL STATEMENTS
The table below illustrates the aging analysis of trade receivables, impaired and provided for and net trade receivables due and past due and not provided for:
Finished goods include an impairment provision of: R10 100 615 (2009: R6 776 737).
The table below reconciles the movement in the provisions for impairment of trade receivables
2010 2009 gross Provision gross Provision trade for Net trade trade for Net trade receivables impairment receivables receivables impairment receivablesGroup r’000 r’000 r’000 r’000 r’000 r’000
Current30 days60 days90 days120 days and overTotal
86 94933 2949 4062 695
15 734148 078
(16)(121)(177)(136)
(4 704)(5 154)
107 23039 3598 6104 380
23 447183 026
––
(437)(203)
(5 744)(6 384)
86 96533 4159 5832 831
20 438153 232
107 23039 3598 1734 177
17 703176 642
group Company
2010 2009 2010 2009
r000 r000 r000 r000
5 1543 029
(1 799)6 384
5 8941 763
(2 5035 154
––––
Balance at beginning of yearProvision for impairmentAmounts written off as uncollectableBalance at end of year
)
––––
group Company
2010 2009 2010 2009
r000 r000 r000 r000
14. TRADE AND OTHER RECEIVABlES
176 642924
1 3742 9304 386
186 256
148 078516
1 6123 6059 538
163 349
––––
4747
–––
247
31
Trade receivablesDeposits and advancesRebatesValue added taxOther
group Company
2010 2009 2010 2009
r000 r000 r000 r000
13. INVENTORIES
16 73916 270
115 238148 247
13 69412 619
121 401147 714
––––
––––
Inventories comprise:Raw materials and componentsWork in progressFinished goods and merchandise
52
A N N U A L R E P O R T 2 0 1 0
14. TRADE AND OTHER RECEIVABlES (continued)
• Credit quality of trade and other receivables The credit quality is assessed by reference to external credit ratings ( if available) or to historical information.• Trade receivables past due and not impaired Normal credit terms extended range from 30 – 60 days. Trade receivables which exceed 60 days are considered past due. Those considered impaired have been provided for as detailed in the table above.• fair value of trade receivables The fair value of trade receivables approximates their carrying value due to their current nature.• Cessionofbookdebtassecurityforbankoverdraftfacilities Receivables amounting to R74,7 million (2009: R69,9 million) have been ceded as security for banking and long term facilities. At year end the utilization of the bank facility amounted to R3,1 million (2009: R14,8 million), after the set off of positive bank balances of R29,5 million (2009: R28,9 million).• Maximumexposuretocreditrisk The group does not hold collateral security against any trade receivables, however , R28,7 million (2009:R20,6 million) of the debtors as at 30 September 2010 was covered under credit guarantee insurance policies.• Exposuretomajorcustomers The group exposure to major customers is limited to listed South African Mining groups and the largest 3 exposures at the year end were R23,2 million, R9,8 million and R4,1 million. (2009 R13,5 million, R7,0 million and R5,3 million). • Currencydenomination There are no material individual receivables denominated in foreign currency. Refer to note 27 for analysis of exposure to foreign debtors. Exposure to major customers.
The unissued ordinary shares are under the control of the directors subject to the provisions of section 221 of the Companies Act, until the forthcoming Annual General Meeting. Members will be asked at the forthcoming Annual General Meeting to place a general resolution to place the unissued shares under the control of the directors and a special resolution to give the directors the authority for the buy–back of ordinary shares.
133 0479 2966 402
11 1383 403
20 115183 401
93 42310 9385 798
11 5901 227
13 207136 183
Trade payablesAccrued bonusesAccrued leave payInterest payableValue added taxReceipts in advance, and accrued operating and other expenses
–––––
814814
–––––
1 0401 040
group Company 2010 2009 2010 2009 r000 r000 r000 r000
group Company 2010 2009 2010 2009 r000 r000 r000 r000
150
43
123 627–
123 627
150
43
123 627(834
122 793
150
43
123 627(834
122 793
authorised share capitalOrdinary202 847 596 (2009: 202 847 596) ordinary shares of no par valuePreference75 000 (2009: 75 000), 5% redeemablecumulative preference shares of R2 each4 288 101 (2009: 4 288 101) variable rate redeemablecumulative preference shares of 1 cent each
Issued Ordinary Share Capital126 215 131 (2009: 126 215 131) ordinary shares of no par valueShares in issue – 126 215 131Less: Adjustments for 709 345 shares held in group
Stated capital account
15. STATED CAPITAl ACCOUNT
))
150
43
123 627–
123 627
16. TRADE AND OTHER PAYABlES
53W I N H O L D L I M I T E D
The borrowings disclosed above include secured liabilities as follows:
• Thelongtermbankloans,bearinterestatafixedrateof10,55%perannum,aresecuredbyunlistedheld-to-maturityinvestments and are repayable in fixed annual installments of R 5 583 000 ending February 2016 (note 11). The amount paid in 2010 was R5 583 000 (2009: R5 583 000). • MortgagebondsaresecuredbylandandbuildingswithabookvalueofR29118886(2009:R25186424),bearinterestatrates linked within 1% of prime, repayable in present monthly installments of R249 188 (2009: R258 413). • Suspensivesalecontractsaresecuredbyplant,equipmentandvehicleswithabookvalueofR47177567(2009:R32250641), bear interest at rates generally linked within 1% below prime, and are repayable in monthly installments of R844 352 (2009: R898 943), inclusive of interest. • FinanceleasecontractsaresecuredbyequipmentandvehicleswithabookvalueofR16577524(2009:R18568939),are repayable in monthly installments of R311 851 (2009: 314 179) inclusive of interest at rates linked within 1% of prime. Further details with respect to these bank loans are available at the registered office of the company. • Thetermloanisanoffshorerandloansecuredbyabankguaranteefromalocalbank,bearinginterestatafixedrate2%per annum. The loan period was repaid during the 2010 year. • Bankoverdraftsbearinterestatcommercialbankprimerates. • Someoftheseoverdraftsaresecuredbyacessionofbookdebtsassetoutinnote14. • Intermsofthearticlesofassociationtheborrowingpowersofthedirectorsareunlimited.
group Company
2010 2009 2010 2009
r000 r000 r000 r000
––
–––––
–––
–––––––
non–current
Fixed interest ratesLong term bank loans
Variable interest ratesMortgage bondsSuspensive sale contractsFinance lease contracts
Total non–current
current
Fixed interest ratesCurrent portion of: long term bank loans term Loan
Variable interest ratesCurrent portion of: Mortgage bonds Suspensive sale contracts Finance lease contractsBank overdraft and cash reserve offset (net)
Total currentTotal interest bearing borrowings
138 456138 456
15 82115 23810 04841 107
179 563
5 5832 0007 583
1 5488 9332 786
34 76548 03255 615
235 178
132 873132 873
13 99334 1666 944
55 103187 976
5 583–
5 583
1 7688 5673 104
18 47731 91637 499
225 475
––
–––––
–2 0002 000
–––––
2 0002 000
17. INTEREST BEARINg BORROWINgS
NOTES TO THE FINANCIAL STATEMENTS
54
A N N U A L R E P O R T 2 0 1 0
2010Provisions for audit and other expenses2009Provisions for audit and other expenses
4 053
5 315
3 635
3 991
Opening Additional Used Closing
balance provision during year balance
r000 r000 r000 r000
(4 409)
(4 105)
3 991
2 781
20. PROVISIONS
The capital portion of the non–current interest bearing borrowings are repayable as follows:
group Company
2010 2009 2010 2009
r000 r000 r000 r000
17. INTEREST BEARINg BORROWINgS (continued)
Preference dividends received in advance
group Company
2010 2009 2010 2009
r000 r000 r000 r000
19. DEffERED INVESTMENT REVENUE
14 824 9 493 – –
Post retirement medical aid obligations
group Company
2010 2009 2010 2009
r000 r000 r000 r000
18. OTHER lIABIlITIES
1 083 1 193 – –
Post retirement medical aid obligations represent the present value of amounts payable to 3 pensioners and their dependants as a result of a past business acquisition. Where employees do exist with post-retirement medical aid benefits these are identified and actuarially valued on a regular basis. Liabilities based on these evaluations are recognised in the balance sheets and are not funded. Expenses relating to employee services rendered during the subsequent periods are expensed in the income statement, and the balance sheet liabilities are increased correspondingly.
Due to the application of the group policy (not to provide such post-retirement medical aid benefits), attrition of time will eventually expunge the liabilities for such benefits. Current group policy is not to provide post-retirement medical aid benefits, except in limited cases where a group of employees with such conditions of employment exist in new business as acquired. In future acquisitions where post-retirement medical aid benefits exist, adequate provision will be made for the existing liability in the transaction. In such cases new employees in the relevant operations will not be employed with such post-retirement medical aid benefits.
31 1496 350
33 724117 20337 049
225 475
49 2656 350
15 56191 15272 850
235 178
––––––
Between 0 to 6 monthsBetween 6 – 12 monthsBetween 1 and 2 yearsBetween 2 and 5 yearsOver 5 years
2 000––––
2 000
55W I N H O L D L I M I T E D
actuarial assumptions used
Discount rate per annumExpected return on plan assets per annum (based on R186 Government Bond)Future salary increases (varies, age related)Future pension increases per annumConsumer price inflation rate
2010 2009
7,98%7,98%
5,37 – 14,10%2,28%5,37%
The group provides retirement benefits through pension and / or provident funds. Post-retirement benefits for permanent employees are provided as follows: 34% (2009: 35%) of group employees are members of the Winhold Group Pension Fund and remaining employees belong to statutory or union retirement plans being the Industrial Council Pension / Provident Funds or the Chemical Industries National Provident Fund. In respect of remaining employees the group has no further material liability after payment of the required contributions to these funds. The Winhold Group Pension Fund is a defined benefit plan on an average of highest 3 years salary basis which is subject to the Pensions Funds Act. The assets of the fund are held separately from the group’s assets in a dedicated trustee administered fund which is valued by independent professionally qualified actuaries. IAS19 actuarial valuation for the year ended 30 September 2010, reflects the following:
21. PENSION fUND
30449,8
50 441
9763,432 271
Membership
Active members
NumberAverage age in yearsTotal annual pensionable salaries (R000)Beneficiaries of pensionsNumberAverage age in years Total annual pensions (R000)
10,15%10,15%9,32%4,41%5,88%
30148,6
50 751
9665,222 523
NOTES TO THE FINANCIAL STATEMENTS
2010 2009 2008 r000 r000 r000
(114 227)130 384(16 157)
–19 282
–19 282
–
(105 868121 970(16 102
–22 665
–22 665
–
(97 023121 762(18 008
6 73112 162
–18 893
–
)Defined benefit retirement plan reconciliationPresent value of obligationsFair value of plan assetsContingency reserveSurplus value of the planAdjustment for unrecognised actuarial loss included in the surplus value of the planUnrecognised past service costsBenefit asset per actuarial valuationBenefit asset recognised
movement in the benefit asset over the year is as follows:Balance at beginning of the yearTotal contributionsCurrent service costsCost of risk benefits and expensesBenefits madeInterest cost on benefit obligationAssumed return on plan assetsTransition asset recognisedBalance at end of the year
19 2829 839
(6 679(32 24030 946(9 00710 524
–22 665
18 8939 696
(6 265(5 385
–(9 58911 932
–19 282
)
)
))
)
))
)
12 7159 162
(8 385–
(7 83111 5921 640
18 893
)
) )
56
A N N U A L R E P O R T 2 0 1 0
21. PENSION fUND (continued)
2010 2009 2008 r000 r000 r000
The fund is fully funded. The actuarial (loss) / gain on return on plan assets was calculated as the difference between the actual net investment return and the assumed investment return. During the valuation period, the investment gain was R13 647 000, compared to the assumed investment return of R10 524 000. The R6 901 000 actuarial loss on pension obligations is the effect of the change in actuarial valuation assumptions over the previous valuation report. The combination of these resulted in a net actuarial loss of R3 778 000 which has been taken into consideration in the determination of the surplus value of the plan at 30 September 2010. The total number of beneficiaries includes children and spouses which reduce the average age significantly.
Plan assets are invested by Fund Multi Managers in terms of Regulation 38 and comprise approximately 55% of equity investments with the balance invested in bonds and cash as prescribed by regulation 38.
Contingent liabilities and other commitmentsThe Commissioner of Taxes in Swaziland has issued “estimated assessments” in March 2010 against Swazi Plastics Industries (Pty) Ltd of R8,1 million as a result of tax returns not being submitted and extensions not being applied for. Interest is being charged on these “estimated assessments” at the statutory (non deductable) rate of 18% since this date. The business of this company was sold to a new company as part of the 2006 BEE transaction and management is negotiating with the Commissioner to have these estimated assessments reversed.
Group capital commitments at year end amounted to R 4 700 000 (2009: R8 644 322) and relates to building upgrades and vehicles (2009: Plant and equipment) for existing operations. The group has distributable reserves of R126 979 000 (2009: R114 910 000) which if declared as a dividend would attract secondary tax on companies (excluding any STC credits available) of R115 424 000 (2009: R10 445 330) at current enacted rates.
The company has contingent liabilities in respect of guarantees amounting to R10 327 000 (2009: R14 984 295) for group facilities granted by banking institutions. No cash outflows are currently expected on these guarantees.
Operating lease commitments comprise mainly property rentals of the Inmins branches and rentals of photocopiers, faxes and officeequipment.Nomaterial‘contingent’leaseobligationsexistandnomaterialleaserestrictionshavebeenagreedto.
22. COMMITMENTS AND CONTINgENT lIABIlITIES
group Company 2010 2009 2010 2009 r000 r000 r000 r000
0 to 6 months
6 to 12 months
Between 2 and 5 years
Greater than 5 years
Total operating lease commitments
2 4722 473
11 667–
16 612
2 9972 8438 092
–13 932
–––––
–––––
(3 1236 901(395
3 38310 330
6 9522 020
(1 8527 1209 800
4 48518 123
–22 608
9 700
)
) )
Actuarial (loss) / gain on return on plan assets
Actuarial (gain) / loss on pension obligations
Adjustment experience gain on contingency reserve
Employers best estimate of next year contribution
57W I N H O L D L I M I T E D
The business segments of the Winhold Group are split as follows, based on the nature of the market being serviced and, therefore the risks associated with the business segment:
Mining consumables – predominantly consumable goods supplied mainly to the gold/coal/platinum mining industry, by the Inmins Group. Industrial consumables – consumable goods supplied to general industry by the Inmins Group. flexible plastics – consists of polyethylene and polypropylene bags, sheeting and packaging, manufactured and distributed by the Gundle Group to the agricultural, chemical, construction, food processing, industrial and consumer markets.other – includes recycled PET, rigid plastic products supplied to the general industry.
Geographical analysis has not been included as the group’s activities outside Southern Africa are not material. No material intersegment transactions occured between reportable segments.
23. SEgMENTAl INfORMATION
24. fINANCIAl INSTRUMENTS
The accounting policies for financial instruments have been applied to the line items below:
Group 2010
InvestmentsTrade and other receivablesCash and cash equivalents
Group 2009
InvestmentsTrade and other receivablesCash and cash equivalents
fair value fair value through through profit and profit and loans and loss held for loss Held to Available
(r000) Receivables trading designated maturity for sale Total
––––
––––
168 103186 25612 815
367 174
160 788163 34910 424
334 561
––––
––––
––––
––––
––––
––––
168 103186 25612 815
367 174
160 788163 34910 424
334 561
Financial Instrument assets
r000 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
Mining Industrial flexible Property Total
Business segments consumables consumables plastics and other
RevenueOperating profitInvestment incomeDepreciation andamortisationImpairmentsCapital expenditureTotal assetsTotal liabilities
338 24913 384
–
1 103–
477125 35660 864
327 83512 197
–
919–
800125 47154 251
140 1674 813
–
686–
44945 04717 174
152 4384 346
–
770–
29148 84019 081
554 20334 427
–
10 641–
34 783 313 010201 007
500 33236 636
–
9 481–
28 318250 660146 685
8 713(210
15 556
1 3922 000
2949 177
162 178
3 928(3 89615 536
1 3232 140
113222 824170 396
1 030 91851 22715 556
13 6382 000
36 326702 705435 313
994 94750 47015 536
12 6672 140
29 199648 680397 026
NOTES TO THE FINANCIAL STATEMENTS
))
58
A N N U A L R E P O R T 2 0 1 0
47104151
3189
120
–––
–––
–––
–––
financial Instrument liabilities
Group 2010Interest bearing borrowings(excluding bank overdraft)Other LiabilitiesTrade and other payablesBank overdraft
Group 2009Interest bearing borrowings (excluding bank overdraft)Other liabilitiesTrade and other payablesBank overdraft
Company 2010Interest bearing borrowingsLoans from subsidiariesTrade and other payables
Company 2009Interest bearing borrowingsLoans from subsidiariesTrade and other payables
206 9981 083
183 44118 477
409 999
200 4131 193
136 18334 765
372 554
–19 212
1 04020 252
2 00011 053
81413 867
fair value fair value through through liabilities at profit and profit and amortised loss – held for loss R000 cost trading designated Total
24. fINANCIAl INSTRUMENTS (continued)
–––––
–––––
––––
––––
–––––
–––––
––––
––––
206 9981 083
183 44118 477
409 999
200 4131 193
136 18334 765
372 554
–19 2121 040
20 252
2 00011 053
81413 867
47104151
3189
120
–––
–––
–––
–––
Financial Instrument assets (continued)
Fair valueThere is no material difference between the carrying value and the fair value of financial instruments.The fair value of the above assets and liabilities all fall within category 3 “not based on observable market data”.
fair value fair value through through profit and profit and loans and loss held for loss Held to Available Receivables trading designated maturity for sale Totalr000
Company 2010Trade and other receivablesCash and cash equivalents
Company 2009Trade and other receivablesCash and cash equivalents
59W I N H O L D L I M I T E D
Held by Company Inmins LimitedGundle LimitedNovara Profile ExtrusionsSecotrade 5Winhold Management CompanyTotal all Subsidiaries
Held by Subsidiaries
Inmins PropertiesInmins Trading (74.9%)Gundle Geo Synthetics (85%)Gundle PropertiesGundle Plastic Group (74.9%)Gundle WovenGundle Multi–SackPlastics International Limited #
20 056 07145 389 983
1 000100
5 000
4 0001 000
1002 8001 000
120100100
20 056 07145 389 983
1 000100
5 000
4 0001 000
1002 8001 000
120100100
68 64218 850
–2–
87 494
4–
171 505
1–
2 161–
68 64218 850
–2–
87 494
4–
171 505
1–
2 161–
(6 729)(8 754)
––
(3 729)(19 212)
1 13622 614(1 993(3 62419 991
–(1 59417 236
(3 009(4 101
––
(3 934(11 053
2 52423 1521 849
(3 64215 175
881871
17 781
2010 2009 2010 2009 2010 2009
r000 r000 r000 r000
Issued Shares Amounts owing
share capital at cost by/(to) subsidiaries
• Unless otherwise stated all companies above are unlisted, (Proprietary) Limited and 100% held. • # Incorporated in Swaziland.
Only details of those subsidiaries which are material in terms of the financial position or results of the company are disclosed. Dormant companies are excluded. Full details of all companies in the group may be obtained at the registered office.
25. ANAlYSIS Of INTEREST IN SUBSIDIARIES
))
))
))
)
)
1 4681 6072 9466 021
952344910
2 206
650600
1 2502 500
266113312691
209 211584
1 004
2 3272 4184 7809 525
* Retired 31 March 2010.Director’s remuneration is all for services as employees of the group and are paid by subsidiary companies. The company did not pay any remuneration to executive directors.
W FouriePJ Kruger *WAR Wenteler *totaL
2010 2009 2010 2009 2010 2009 2010 2009Executive Directors R000 R000 R000 R000 R000 R000 R000 R000
Contributions to fixed Performance retirement & other Total package bonus benefits remuneration
26. DIRECTORS’ REMUNERATION
Group profit attributable to shareholders includes:– Aggregate profits of subsidiaries– Aggregate losses of subsidiaries
2010 2009 r000 r000
47 180(13 649
43 470(8 409
NOTES TO THE FINANCIAL STATEMENTS
) )
1 7891 0921 9804 861
3 0071 5493 2027 758
60
A N N U A L R E P O R T 2 0 1 0
––
11.7115.5138.2
81.3346.7
fees benefits 2010 2009
Non–Executive Directors R000 R000 R000
Value of Total Total other fees fees
WAR Wenteler **PJ Kruger**N Fubu (resigned)NP MnxasanaDB MostertP NashtotaL
26. DIRECTORS’ REMUNERATION (continued)
)
27. RISK MANAgEMENT
The group’s activities expose it to a variety of risks, including liquidity risk, interest rate risk, credit risk, foreign exchange risk and supplier risk.
27.1) Interest Rate RiskThe group’s interest rate risk arises from borrowings and bank overdrafts. Due to the fact that certain borrowings are linked to the prime overdraft rate, changes in the interest rate could have a material effect. The group manages its interest rate exposure by ensuring all interest bearing borrowings are at or below market rates, or by fixing the rates at favourable terms. If interest rates on variable rate borrowings changed by 1% at the applicable rate at year end, with all other variables held constant, the impact on post tax profits would be R627 000 (2009: R642 000). Details and maturity profiles of the interest borrowings are detailed in note 17.
27.2) Credit RiskCredit risk arises on amounts receivable from trade and other debtors, investments, and cash equivalents deposited with banks. Credit facilities are given to a large number of customers, resulting in a spread of credit risk. Although in the Inmins Trading (Pty) Limited subsidiary the majority of debtors are in the mining industry, management is of the opinion that no material concentration of risk exists. Management evaluates credit risk relating to customers on an on-going basis, and if customers are independently rated, these ratings are used. If there is no independent rating, group businesses assess the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. The utilisation of credit is regularly monitored, and, in certain cases, credit guarantee policies are purchased.
The group only deposits funds with major banks with high quality credit standing and limits its exposure to any one bank, Investments compromise compulsory redeemable preference shares secured by designated notes issued by the Standard Bank of South Africa Limited, and is considered by management to be risk free. (refer to note 11).
27.3) liquidity RiskLiquidity risk is where the group has insufficient funds available to settle its liabilities and borrowings on due date. The group manages liquidity risk through an on-going review of its future commitments and of the facilities available from banking institutions. The following table analyses the group financial liabilities (including interest) into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date.
group Company
2010 2009 2010 2009
r000 r000 r000 r000
Financial assets exposed to credit risk at year end were as follows :
Cash and cash equivalentsTrade and other receivables
12 815186 256
10 424163 349
10447
8931
12675
––5–
206
324265
–91
141108929
450340
–91
146108
1 135
** Appointed April 2010. (6 months)No payments were made to any directors as a compensation for “loss of office”.
61W I N H O L D L I M I T E D
0 – 6 6 – 12 Between 1 & Between 2 & Over
months months 2 years 5 years 5 years
r000 r000 r000 r000 r000
1 8716 165
––
8 036–
8 036
1 8855 025
–3 199
–10 109
–10 109
––––
––––
Group 2010
Future lease paymentsOther borrowings (Capital & Interest)Trade and other payablesProvisionsGross Liquidity RiskPreference Share Investment
Group 2009 Future lease paymentsOther borrowings (Capital & Interest)Trade and other payablesCurrent tax payablesProvisionsGross Liquidity RiskPreference share investment
coMpany 2010 Borrowings (Capital and Interest)Trade and other payables Loans from subsidiaries coMpany 2009 Borrowings (Capital and Interest)Trade and other payablesLoans from subsidiaries
NOTES TO THE FINANCIAL STATEMENTS
27. RISK MANAgEMENT (continued)
27.4 Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and commodity input prices, will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
The Group has engaged an outsource Currency Risk Manager (AJ Renard) to manage its foreign exchange exposures on a risk versus time basis. AJ Renard buys foreign currency derivatives in order to manage foreign exchange risks when pre-set trigger levels are hit. Such transactions are carried out within the guidelines set by the Group treasury. Generally the Group seeks to, when preset trigger levels are hit, apply hedge accounting in order to manage volatility in profit or loss.
The Group does not enter into interest rate and fuel oil swaps to manage its exposure to fluctuations in interest rates and the oil price on diesel fuels.
The Group does not enter into commodity contracts other than to meet the Group’s expected usage requirements; such contracts are not settled net.
)
)
) )
3 74249 020
––
52 762(35 81416 948
3 770321 095
–––
35 875(34 602)
1 277
––––
––––
3 897158 921
––
162 818(105 093
57 725
7 698129 245
–––
136 943(106 493)
30 450
––––
––––
–43 888
––
43 888–
43 888
–96 6231 193
––
97 816(34 414)
63 402
––––
––––
1 87147 749
183 4413 595
236 656(34 602202 054
1 88565 425
136 183–
3 991207 484(19 532187 952
–1 040
19 21220 252
2 024814
11 05313 891
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A N N U A L R E P O R T 2 0 1 0
ForeIGn eXchanGe rIsK
The group is exposed to foreign exchange risk in purchases that are denominated in foreign currencies, mainly US Dollars and Euros, liabilities to be settled at year end in one of these foreign currencies and a US Dollar denominated bank account. Foreign currency denominated sales and receivables are not material. Management has set up policies and procedures to manage its foreign exchange risk. These include the use of forward exchange contracts and professional expert management of the group’s currency exposure by a third party.
At 30 September, the group had the following foreign currency denominated liabilities/assets:
Trade Receivables Trade Payables
2010 2009 2010 2009
000 000 000 000
1 863–
––
4861 353
51726
US DollarEuro
Strengthening Weakening
of the Rand by 10% of the Rand by 10%
r000 r000
Increase / (decrease) in post tax profits 1 053 1 053
The group’s commitment to open forward exchange contracts as at 30 September 2010, was as follows :
Amount Settlement dates Average exchange rates US Dollar 153 1 to 3 months 7.43 Euro 1 334 1 to 3 months 9.53
If foreign exchange rates change by 10% and were applied to the outstanding balances as at 30 September 2010, with all other variables held constant, the impact on post tax profits would be:
2010 2009
7,007,44
9,4410,10
7,379,00
10,7612,15
Foreign currency exchange ratesThe following exchange rates were used in the conversion of foreign interests and foreign transactions at 30 SeptemberRand / dollar– Closing rate– Average rateRand / Euro– Closing rate – Average rate
63W I N H O L D L I M I T E D
suppLIer rIsK Certain large local suppliers are of strategic importance, but can be replaced in the medium term if necessary.
28. CAPITAl MANAgEMENT
The board of director’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence while also being able to sustain future development of the businesses. The board of directors monitors both the demographic spread of shareholders, as well as the return capital, which the Group defines as total shareholders’ equity, excluding minority interests. The Group’s objective is to maintain a distribution cover of approximately two times headline earnings for the foreseeable future. The methods of distributions take into account prevailing market conditions, future cash requirements of the businesses, Group liquidity requirements, as well as capital adequacy ratios.
The board seeks to maintain a balance between the higher returns that might be possible with higher levels of gearing and the advantages and security afforded by a sound equity position. The Group’s target is to achieve a return on shareholders’ interest of between 12% and 20%. In 2010 the return was 10,4% (2009 :10,2%).
From time to time the Group purchases its own shares on the market.
There were no changes in the Group’s approach to capital management during the year. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. The Group has principally maintained a target debt/ equity ratio of 90,3%, however in a trading and services business, the debt / equity ratio is a poor measure of the funding capacity of the Group. In order to ensure a more reflective measure of debt capacity is utilised, the Group has adopted an interest cover target of five to six times. Interest cover for the year to 30 September 2010 was 1,6 times (2009 : 1,6 times).
29. RElATED PARTIES
identity of related partiesThe Group has a related party relationship with its subsidiaries, associates, joint ventures and key management. Key management personnel have been identified as the executive and non-executive directors of the Company. The definition of key management includes the close family members of key management personnel and any other entity over which key management exercises control. Close family members are those family members who may be expected to influence, or be influenced by that individual in their dealings with the Group. This may include the individual’s domestic partner and children, the children of the individual’s domestic partner, and dependents of the individual or the individual’s domestic partner.
Transactions with key management personnelDirectors of the Company and their immediate relatives beneficially control 45,5% of the voting shares of the Company.
Independent non-executive directors do not participate in the Group’s share option, share purchase schemes or conditional share awards.
Details pertaining to executive directors’ compensations are set out in the directors’ report. Directors’ remuneration is included in note 26.
The Group encourages its employees to purchase goods and services from Group companies. These transactions are generally conducted on terms no more favourable than those entered into with third parties on an arm’s length basis, although in some cases nominal discounts are granted. Transactions with key management personnel are conducted on similar terms. No abnormal or non-commercial credit terms are allowed, and no impairments were recognised in relation to any transactions with key management personnel during the year, nor have they resulted in any non-performing debts at year-end.
Similar policies are applied to key management personnel at subsidiary level who are not defined as key management personnel at Group level.
Certain of the directors of the Group are also non-executive directors of other public companies which may transact with the Group. The relevant directors do not believe they have significant influence over the financial or operational policies of those companies. Those companies are thus not regarded as related parties.
The following transactions were made on terms equivalent to those that prevail in arm’s-length transactions between subsidiaries of the Group and key management personnel (as defined above) and / or organisations in which key management personnel have significant influence.
NOTES TO THE FINANCIAL STATEMENTS
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A N N U A L R E P O R T 2 0 1 0
––––
7 581–
121––
386410211
(1 713
––––
8 019–
121––
Group 2010 2009 r000 r000
coMpany 2010 2009 r000 r000
transactions with key management personnel Sales and services provided by the GroupOutstanding amounts due to the Group at year-end included in trade receivablesOutstanding amounts due by the Group at year-end included in trade payables Guarantees issued
transactions with associatesThe following transactions were made on terms equivalent to those that prevail in arm’s-length transactions between subsidiaries and associates of the Group:- Sales and services provided by the Group- Purchases- Outstanding amounts due to the Group at year end included in advances to associates- Guarantees issuedDetails of effective interest, investments and loans to associates are disclosed in note 10.
related party transactions in the company during the year were:Interest paid to: Winhold Management Company (Pty) Limited Gundle Limited Gundle Plastics Group (Pty) LtdInterest received from: Novara Profile Extrusions (Pty) Limited
–162
–(1 067
30. ACCOUNTINg ESTIMATES AND JUDgEMENTS
The boards of directors has considered the Group’s critical accounting policies, key sources of uncertainty and where critical accounting judgements were required in applying the Group’s accounting policies.
Critical accounting policiesThe audit committee is satisfied that the critical accounting policies are appropriate to the Group.
Key source of uncertaintyKey sources of uncertainty relate to the liability to the defined benefit pension fund or related assets due to the surplus apportionment in terms of the Pensions Fund Act which have yet to be finalised and approved. Details relating to the current surplus and deficits are included in note 21.
critical accounting estimates in applying the group’s accounting policiesEstimates made in the application of IFRS that have a significant risk of causing a material estimate to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Trade receivables and loans receivableThe group assesses its trade receivables and loan receivable for impairment at each balance sheet date. In determining whether an impairment loss should be recorded in the income statement, the group makes a judgment as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.
) )
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The impairment of trade receivables is calculated on a portfolio basis, based on historic loss ratios, adjusted for national and industry specific conditions and the indicators present at the reporting date that correlate with defaults on the portfolio. These annual loss ratios are applied to loan balances in the portfolio and scaled to the
estimated loss emergence period. Management identifies impairment of trade receivables on an ongoing basis. An impairment allowance in respect of doubtful debts is raised against specific trade receivables when their collectability is considered to be doubtful. Management believes that the impairment adjustment is conservative and there are no significant trade receivables that are doubtful and have not been impaired or allowance provided for. In determining whether a particular receivable could be doubtful, the age, customer’s current financial status and disputes with the customer are taken into consideration. (Refer to note 14)
Allowance for slow moving, damaged and obsolete inventoriesInventories are assessed on a continuous basis in order to ensure that it is correctly valued at the lower of cost and net realisable value. A provision is made against inventories when it is determined to be incorrectly valued as a consequence of changes in market conditions or it is considered to be damaged or un-useable. Write downs are included in cost of sales. (Refer to note 13).
Impairment testingManagement used their judgment and applied the internal and external impairment indicators to investments and property, plant and equipment. No impairment indicators were identified and as such the recoverable amounts of the aforementioned assets were not calculated. The recoverable amounts of cash-generation units and individual assets have been determined based on the higher of value-in-use calculations and fair values. These calculations require the use of estimates and assumptions.
The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected cash flows for each group of assets. Expected future cash flows used to determine the value use of goodwill and tangible assets are inherently uncertain and could materially change over time. They are significantly affected by a number of factors including, but not limited to entity, specific variables, ie. Production estimates, supply and demand, together with economic factors such as exchange rates, inflation, interest and commodity prices.
Property, plant and equipmentThe group depreciates its assets over their estimated useful lives taking into account residual values, where appropriate. Following the adoption of IAS 16 – Property, Plant and equipment, the appropriateness of the group’s assets estimated useful lives is reassessed annually. The actual lives of these assets and their respective residual values may vary depending on a variety of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Future reviews of estimated useful lives are not expected to result in a significant adjustment to future depreciation charges and are limited to the extent of changes to the abovementioned factors, namely technological innovation, product life cycles and maintenance programmes. (Refer to note 7).
Deferred taxationDeferred tax is provided for on a basis that is reflective of management’s intention at year end relating to the expected manner of recovery of the carrying amount of the asset, ie. sale or use. This manner of recovery affects the rate used to determine the deferred tax liability. (Refer to note 3).
Income taxesJudgment is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. (Refer to note 3).
Impairment of goodwill The Group has assessed the carrying value of goodwill to determine whether any of the amounts have been impaired. The carrying values were assessed using a combination of discounted cash flow and price earnings methods and forecasts for future years. (Refer to note 8).
InvestmentsThe Group reflects its held-for-trade and available-for-sale investments at fair value. The directors’ value of unlisted investments was determined using a combination of discounted cash flow, net asset value and price earnings methods. (Refer to note 11).
Post-retirement obligationsThe Group provides retirement benefits for certain of its permanent employees through pension funds with defined benefit and defined contribution categories. Actuarial valuations are based on assumptions which include the discount rate, inflation rate, salary increase rate, expected return on plan assets and the pension increase allowance rate.
NOTES TO THE FINANCIAL STATEMENTS
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31. DETERMINATION Of fAIR VAlUE
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
Intangible assetsThe fair value of intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the assets. (Refer to note 8).
InvestmentsFair value of listed investments is calculated by reference to stock exchange quoted selling process at the close of business on the balance sheet date. Fair value of unlisted investments is determined by using appropriate valuation models. (Refer to note 11).
Forward exchange contractsThe fair value of forward exchange contracts is based on their listed market prices. (Refer to note 27.4).
BorrowingsFair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. For finance leases the market rate of interest is determined by reference to similar lease agreements. The carrying value of the bank overdrafts is the fair value. (Refer to note 17).
32. CHANgES IN ACCOUNTINg POlICY AND DISClOSURE
The accounting policies adopted are consistent with those of the previous financial year, except as follows:
The group has adopted the following new and amended IFRS and IFRIC as of 1 September 2009:• IFRS2Share-basedpayment:VestingconditionsandCancellationseffective1January2009;• IFRS3BusinessCombinations(Revised)andIAS27ConsolidatedandSeparateFinancialStatements(Amended)effective 1 July 2009;• IFRS7FinancialInstruments:Disclosureseffective1January2009;• IFRS8OperatingSegmentseffective1January2009;• IAS1PresentationofFinancialStatementseffective1January2009;• IAS23Borrowingcosts(Revised)effective1January2009;• IAS32FinancialInstruments:Presentationeffective1January2009;• ImprovementstoIFRS’s(May2008).
When the adoption of the standard or interpretation is deemed to have a material impact on the financial statements or performance of the group, its impact is described below:
IFRS 2 Share-based Payment (Revised)The IASB issued an amendment to IFRS 2 which clarifies the definition of vesting conditions and prescribes the treatment for an award that is cancelled. The group adopted this amendment as of 1 September 2009. It did not have an impact on the financial position or performance of the group.
IFRS 3 Business Combinations (Revised) and IAS 27 Consolidated and Separate Financial Statements (Amended)The group adopted the revised statements from 1 July 2009. IFRS 3 (Revised) introduces significant changes in the accounting for business combinations occurring after this date. Changes affect the valuation of non-controlling interests, the accounting for transaction costs, the initial recognition and subsequent measurement of a contingent consideration and business combination achieved in stages. These changes will impact the amount of goodwill recognised, the reported results in the period an acquisition occurred and future reported results.
IAS 27 (Amended)Requires that a change in the ownership interest of a subsidiary (without loss of control) is accounted for as a transaction with owners in their capacity as owners. Therefore, such transactions will no longer give rise to goodwill, nor will it give rise to a gain or loss. Furthermore, the amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of subsidiary. The changes of IFRS 3 (Revised) and IAS 27 (Amended) will affect future acquisitions or loss of control of subsidiaries and transactions with non-controlling interests.
The change in accounting policy was applied prospectively and did not impact the earnings per share due to the recognition of transactions costs in the statement of comprehensive income.
67W I N H O L D L I M I T E D
IFRS 7 Financial InstrumentsThe amended standard requires additional disclosures about fair value measurement and liquidity risk. Fair value measurements related to items recorded at fair value are to be disclosed by source of inputs using a
three level fair value hierarchy, by class, for all financial instruments recognised at fair value. In addition, reconciliation between the beginning and ending balance for level 3 fair value measurements is now required, as well as significant transfers between levels in the fair value hierarchy. The amendments also clarify the requirements for liquidity risk disclosures with respect to derivative transactions and assets used for liquidity management. The fair value measurement and the liquidity risk disclosures are presented in note 27.3. These annual loss ratios are applied to loan balances in the portfolio and scaled to the estimated loss emergence period.
IFRS 8 Operating segmentsIFRS 8 replaces IAS 14 Segment Reporting on its effective date. The group concluded that the operating segments determined in accordance with IFRS 8 are the same as the business segments previously identified under IAS 14. IFRS 8 disclosures are shown in note 23, including the related revised comparative information.
IAS 1 Presentation of Financial StatementsThe revised standard separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions with owners, with non-owner changes in equity presented in a reconciliation of each component of equity. In addition, the statement introduces the statement of comprehensive income: it presents all items of recognised income and expense, either in one single statement, or in two linked statements. The group has elected to present one statement.
33. STANDARDS AND INTERPRETATIONS NOT EffECTIVE AT 30 SEPTEMBER 2010
At the date of approval of the annual financial statements, the following new standards and interpretations that apply to the Group were in issue but not yet effective:
Standard / Description Effective dateinterpretation IFRS 2 Amendments to IFRS 2 Share-based Payment – vesting conditions and cancellations 1 July 2010IFRS 39 Financial Instruments 1 July 2010IAS 24 (revised) Related party: Disclosure 1 July 2010IAS 32 (revised) Financial Instruments 1 July 2010IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their interaction 1 July 2010IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments 1 July 2010
IFrs 2The amendment requires an entity that receives the goods or services (receiving entity) in either an equity or a cash settled share-based payment transaction to account for the transaction in its separate or individual financial statements. This applies even if another Group entity or shareholder settles the transaction (settling entity) and the receiving entity has no obligation to settle the payment. The entity that has the obligation to settle the transaction will account for the arrangement as equity-settled if it has to settle with its own equity instruments. Any other settlement arrangement will be accounted for as cash settled.The amendment is not expected to impact the Group’s results significantly; no restatement of comparatives is required.
IFrs 9IFRS 9 addresses the initial measurement and classification of financial assets and will replace the relevant sections IAS 39. Under IFRS 9 there are two options in respect of classification of financial assets, namely, financial assets measured at amortised cost or at fair value. Financial assets are measured at amortised cost when the business model is to hold assets in order to collect contractual cash flows and when they give rise to cash flows that are solely payments of principal and interest on the principal outstanding. All other financial assets are measured at fair value.The amendment is not expected to impact the Group’s results significantly.
IAS 24 (revised)IAS 24 addresses the disclosure requirements in respect of related parties, with the main changes relating to the definition of a related party. The definition of a related party has been amended with the result that a number of new related-party relationships have been identified.Management does not expect any significant impact on the financial results.
IAS 32 (revised)The amendment clarifies that rights, options, or warrants to acquire a fixed number of the entity’s own equity instruments for a fixed amount of any currency are equity instruments (and not financial liabilities) if the entity offers the rights, options, or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments.Management does not expect any significant impact on the financial results.
NOTES TO THE FINANCIAL STATEMENTS
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IFrIc 14The amendment applies in limited circumstances when an entity is subject to minimum funding requirements and makes an early payment of contributions to cover those requirements. The amendment permits such entity to treat the benefit of such early payment as an asset. Management does not expect any significant impact on the financial results.
IFrIc 19IFRIC 19 addresses the accounting treatment for the extinguishment of financial liabilities with equity instruments. Equity instruments issued to a creditor to extinguish all or part of a financial liability would represent “consideration paid”. The equity instruments will be measured on initial measurement at their fair value, unless such fair value cannot be reliably measured, in which case the fair value of the financial liability will be used. The difference between the carrying amount of the financial liability (or part thereof) extinguished and the initial measurement amount of the amount of the equity instruments shall be recognised in profit or loss.The interpretation is not expected to impact the Group’s results significantly.Additional guidance is provided on the inclusion of financial guarantee contracts in the liquidity maturity analysis.
IASB 2009 and 2010 annual improvements projectThe amendments embodied in the IFRIS 2009 improvement project are effective for the Group for the year ending September 30 2011. The amendments embodied in the IFRIS 2010 improvement project are effective for the Group for the year ending September 30 2012.
As part of its annual improvements project, the International Accounting Standards Board (IASB) made amendments to a number of accounting standards. These amendments were primarily made to resolve conflicts and remove inconsistencies between standards, clarify the status of application guidance in standards, clarify the status of application guidance in standards, clarify existing IFRS requirements, as well as conforming the terminology used in standards with that used in other standards and to those more widely used.
Management’s assessment of the improvements has not yet revealed any material impact on the Group’s results.
69W I N H O L D L I M I T E D
W I n h o L d L I M I t e d(Incorporated in the Republic of South Africa)
(Registration number 1945/019679/06)(“the company”)
JSE code: WNH ISIN number: ZAE000033916
Notice is hereby given that the Annual General Meeting of the company will be held in the boardroom, 1st Floor, Gundle Plastall Building, 884 Linton Jones Street, Industries East, Germiston on Wednesday, 30 March 2011 at 11h00, for the following purposes.
1. ORDINARY RESOlUTION NUMBER 1 – ADOPTION Of ANNUAl fINANCIAl STATEMENTSTo receive, consider and adopt the annual financial statements of the company and the group, together with the reports of the directors and auditors, for the year ended 30 September 2010.
2. ORDINARY RESOlUTION NUMBER 2 - PROPOSED REMUNERATION fOR NON EXECUTIVE DIRECTORSTo sanction proposed remuneration payable to non-executive director’s from 1 October 2010, until the next AGM, as set out in the table below:
Chairman R972 000 per annum (retainer)Deputy Chairman R103 680 per annum (retainer)Board Director R 64 800 per annum (retainer)Board Director R 7 650 per meetingAudit and Risk Committee Chair R 10 800 per meetingAudit and Risk Committee Member R 7 650 per meetingRemuneration and Nomination Committee Chairman R 10 800 per meetingRemuneration and Nomination Committee Member R 7 650 per meeting
The Chairman has committed to additional duties and responsibilities of at least 5 days per month and does not receive meeting fees, over and above board meetings and the traditional Chairman’s duties.
3. APPOINTMENT Of AUDIT AND RISK COMMITTEETo elect directors by separate resolutions to the group audit and risk committee.
ORDINARY RESOlUTION NUMBER 3.1To elect Ms NP Mnxasana who is eligible and is offering herself for re-election.
ORDINARY RESOlUTION NUMBER 3.2To elect Mr PJ Kruger who is eligible and is offering himself for re-election.
ORDINARY RESOlUTION NUMBER 3.3To elect Mr DB Mostert who is eligible and is offering himself for re-election.
ORDINARY RESOlUTION NUMBER 3.4To elect Mr PC Nash who is eligible and is offering himself for re-election.
4. ORDINARY RESOlUTION NUMBER 4 – ElECTION Of DIRECTORSTo elect directors by separate resolutions in place of the following directors, who retire in terms of the articles of association. All retiring directors are eligible and available for re-election.
MR GM Scrutton, having been appointed subsequent to the last Annual General Meeting is required to retire.
ORDINARY RESOlUTION 4.1:To elect Ms NP Mnxasana, who being eligible, is offering herself for re-election.
NOTICE OF THE ANNUAL GENERAL MEETING
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ORDINARY RESOlUTION 4.2:To re-elect Mr DB Mostert who, being eligible, is offering himself for re-election.
ORDINARY RESOlUTION 4.3:To re-elect Mr GM Scrutton who, being eligible, is offering himself for re-election.
(Summarised CV’s of the above directors can be seen on pages 24 and 25).
5. ORDINARY RESOlUTION NUMBER 5 – APPOINTMENT Of AUDITORS AND APPROVAl Of REMUNERATIONTo confirm the re-appointment of BDO South Africa Inc., as auditors, until the conclusion of the next annual general meeting, and to authorise the directors to approve their remuneration.
6. ORDINARY RESOlUTION NUMBER 6 – DIRECTOR’S REMUNERATIONTo approve the directors’ remuneration for the financial year ended 30 September 2010, as reflected in note 26 in the annual financial statements.
7. ORDINARY RESOlUTION NUMBER 7 – CONTROl Of PORTION Of AUTHORISED BUT UNISSUEDordInary share capItaLTo consider and, if deemed fit, to pass with or without modification, the following ordinary resolution:
That the unissued ordinary share capital of the company be placed under the control of the directors, who shall be authorised to allot these shares at such prices, on such terms and conditions and at such times as they deem fit, subject to the provisions of Section 221 of the Companies Act, 1973, as amended, and the Listings Requirements of the JSE Limited (“the JSE”) and subject to the limitation that this authority shall be restricted to 15% of the company’s issued ordinary share capital at the time of such issue.
The reason for this resolution is to give the directors the ability to fund small acquisitions by the issue of shares up to the limit indicated.
8. SPECIAl RESOlUTION NUMBER 1 – gENERAl AUTHORITY TO REPURCHASE SHARESTo consider, and if deemed fit, to pass with or without modification, the following special resolution:
That the directors be and are hereby authorised by way of a general authority, to acquire on behalf of the company or any subsidiary of the company, shares in the company, subject to the rules and Listings Requirements of the JSE and the relevant provisions of the Companies Act, 1973, as amended which general authority is subject to the following limitations:
• Suchauthorityistobeexercisedinaccordancewiththearticlesofassociationofthecompany,
• Suchauthorityshallnotextendbeyondtheearlierofthedateofthenextannualgeneralmeetingofthecompanyandfifteen (15) months from the date of passing this resolution;
• Anysuchacquisitions,bythecompanyoranysubsidiaryofthecompany,shallinanyonefinancialyearnotexceedinthe aggregate 20% of the company’s issued share capital of that class;
• SuchacquisitionsshallbeeffectedthroughtheorderbookoperatedbytheJSEtradingsystem,anddonewithoutprior understanding or arrangement between the company and the counterparty (reported trades are prohibited);
• Suchacquisitionsshallnotbemadeatapricegreaterthan10%abovetheweightedaveragepriceatwhichtheshareswere traded on the JSE for five business days preceding the transactions agreement date;
• Atanypointintime,thecompanymayonlyappointoneagenttoeffectanyrepurchase(s)onthecompany’sbehalf
• Thecompanymayonlyundertakearepurchaseofsecuritiesif,aftersuchrepurchaseofsecuritiesifitstillcomplieswiththe shareholder spread requirements of the JSE;
• Thecompanyoranysubsidiarymaynotrepurchasesecuritiesduringaprohibitedperiodasdefinedin theJSEListings Requirements save for the exemption that may be granted in terms of a published repurchase programme; and
• Apaidpressannouncementistobepublishedassoonasthecompanyhascumulativelyacquiredanaggregateof3%ofthe initial number of relevant class of shares at the time of passing of this special resolution, and for each 3% in aggregate thereafter, which announcements shall contain full details of such acquisitions.
71W I N H O L D L I M I T E D
conFIrMatIon oF dIrectorsAt the date of publication the directors have no specific intention to utilise this authority, which authority, if granted will only be used if circumstances arise whereby a repurchase of own shares would be of benefit to the company.
Assuming the general authority is granted and it is decided to repurchase its own shares the company will ensure that its sponsor, in terms of Section 2.12 of the JSE Listings Requirements, will provide to the JSE the necessary letter on adequacy of the working capital in terms of the JSE Listings Requirements, prior to the commencement of any such purchase.
The directors are of the opinion that, based on the current market price of the shares, after a repurchase to the maximum number allowed, the company and the group would for 12 months after the date of this notice be able in the ordinary course of business to repay its debts, the assets will exceed the liabilities, and that share capital, reserves and working capital will be adequate for ordinary business purposes.
The reason for the abovementioned special resolution is that it may from time to time be in the interests of the company or its subsidiaries to repurchase shares in the company.
The effect of the above special resolution is to grant to directors a general authority to repurchase ordinary shares of the company subject to the limitations set out above.
As per Section 11.26(b) of the JSE Listings Requirements shareholders are referred to the following sections in the annual report to which this notice of annual general meeting is attached:
• detailsofdirectorsonpages24and25;• directors’interestsinsecuritiesonpage32;• majorshareholdersonpage31;and• thestatedcapitalnoteonpage53.
There have been no material changes in the nature of the company’s trading or financial position since 30 September 2010.
Annual general Meeting NoticeIn the previous annual report mention was made of a summons for consequential loss in the amount of R10,6 million being received by a group subsidiary in the 2004 financial year from a company which is now in liquidation. The litigants have now withdrawn their action, and the case has now been settled at no cost to the group.
The company is not party to any material litigation nor is it aware of any pending material litigation against it.
The directors, whose names are given on pages xx and xx of this annual report, collectively and individually accept full responsibility for the accuracy of the information given, certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading and that all reasonable enquiries to ascertain such facts have been made and that the annual report contains all information required by the JSE Listings Requirements, have considered the general authority to repurchase securities resolution and are of the opinion that the shareholders should vote in favour of the resolution.
GeneraLTo transact such other business as may be transacted at an Annual General Meeting.
votInG and proXIesEvery shareholder present in person or by proxy at the Annual General Meeting is entitled to appoint a proxy (who need not be a shareholder of the company), to attend, speak and vote in his / her stead.
NOTICE OF THE ANNUAL GENERAL MEETING
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Shareholders which are companies or other bodies corporate may, in terms of Section 188 of the Act, by resolution of its directors or other governing body, authorise any person to act as its representative at the Annual General Meeting.Certificated shareholders and own name dematerialised shareholders who are unable to attend the Annual General Meeting but wish to be represented thereat must complete and return the attached form of proxy in accordance with the instructions contained therein so as to be received by the transfer secretaries at least 48 hours, excluding Saturdays, Sundays and public holidays, before the Annual General Meeting.
Dematerialised shareholders, other than those with own name registration, who wish to attend the Annual General Meeting must request their CSDP or broker to provide them with a letter of representation or must instruct their CSDP or broker to vote by proxy on their behalf in terms of the agreement entered into between the shareholder and their CSDP or broker.
By the order of the board
GJ O’ConnorCompany Secretary22 February 2011
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notes
SHAREHOLDERS DIARY
30 March 2011 23 May 2011 28 November 2011 february 2012
Annual General Meeting Interim group results Preliminary group results Dividend payment for the period ending and dividend announcement Annual report 31 March 2010 for the year ending 30 September 2010
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W I n h o L d L I M I t e d(Incorporated in the Republic of South Africa) (Registration number 1945/019679/06) (“the company”) JSE code: WNH ISIN number: ZAE000033916
For use by certificated shareholders and dematerialised shareholders with own name registration at the Annual General Meeting of the company to be held at the Gundle Plastall Building, 884 Linton Jones Street, Industries East, Germiston, on Tuesday 30 March 2011 at 11h00 (“the Annual General Meeting”).I/We __________________________________________________________________________________________________________ of______________________________________________________________________________________________________________being the holder of __________________________ ordinary shares in the company, do hereby appoint (see note 1):
1. ________________________________________________________________________________________________ or failing him,2. ________________________________________________________________________________________________ or failing him,3. the chairman of the Annual General Meeting
• asmy/ourproxytoactforme/usandonmy/ourbehalfattheAnnualGeneralMeetingwhichwillbeheldon30March2011 for the purpose of considering, and, if deemed fit, passing with or without modification, the resolutions to be proposed thereat and at any adjournment thereof; and• tovoteforand/oragainsttheresolutionsand/orabstainfromvotinginrespectofthesharesregisteredinmy/ourname/s,in accordance with the following instructions (see note 2 overleaf):
Number of shares (One vote per share) For Against Abstain
1. Adoption of annual financial statements for the year ended 20102. To approve non-executive directors remuneration for the year from 1 October 2010 to the next AGM3. Election of Audit and Risk commitee by separate resolutions 3.1 NP Mnxasana 3.2 PJ Kruger 3.3 DB Mostert 3.4 GM Scrutton4. Election of Directors by separate resolution 4.1 NP Mnxasana 4.2 DB Mostert 4.3 GM Scrutton5. Re-appointment of BDO South Africa Inc., as auditors and authority to directors to approve their remuneration6. Approve the directors’ remuneration for the financial year ended 30 September 20107. Place a portion of the unissued shares under control of the directors8. Special resolution number 1: Authorise the repurchase of own shares by the company or its subsidiaries Please read notes overleaf.
Signed at _______________________________________________on _________________________________________________2011
Signature/s ____________________________________________________________________________________________________ Assisted by me (where applicable) _______________________________________________________________________________
FORM OF PROXY
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1. A shareholder may insert the name of a proxy or the names of two alternative proxies of the shareholder’s choice in the spaces provided, with or without deleting “the chairman of the Annual General Meeting”. The person whose name stands first on the form of proxy and who is present at the Annual General Meeting will be entitled to act as proxy to the exclusion of those whose names that follow. Only registered certificated shareholders recorded in the main register of members of the company or under their own name in the dematerialised register may complete a proxy or alternatively attend the general meeting.
Those dematerialised shareholders, who are not registered under their own name, who wish to attend or vote by proxy must contact their CSDP or broker who will furnish them with the necessary authority to do so. This must be done in terms of the agreement between the member and his/her CSDP or broker.
2. A shareholder’s instructions to the proxy must be indicated by the insertion of the relevant number of shares to be voted on, on behalf of that shareholder, in the appropriate boxes provided. Failure to comply with the above will be deemed to be authority to the chairman of the Annual General Meeting, if he is the authorised proxy, to vote in favour of the resolutions at the Annual General Meeting, or any other proxy to vote or to abstain from voting at the general meeting as he deems fit, in respect of all the shares concerned.
3. Forms of proxy must be lodged at or posted to Computershare Investor Services (Proprietary) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) to be received not later than 11h00 on Friday, 25 March 2011.
4. The completion and lodging of this form of proxy will not preclude the relevant shareholder from attending the Annual General Meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms thereof, should such shareholder wish to do so.
5. Each shareholder is entitled to appoint one or more proxies (none of whom need be a member of the company) to attend, speak, and on a poll, vote in his stead at the general meeting.
6. The chairman of the meeting may reject or accept any form of proxy which is completed and/or received otherwise than in accordance with these notes.
7. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy unless previously recorded by the company’s transfer secretaries or waived by the chairman of the general meeting.
8. Any alteration or correction made to this form of proxy must be initialled by the signatory/ies.
NOTES
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www.winhold.co.za
