Directors' report

for the year ended 30 September 2010

 
 

AUTHORISED AND ISSUED CAPITAL

The authorised capital of the company remained unchanged.

During the year 51 900 (2009: 74 000) ordinary shares were issued at R15,99 per share, 92 000 (2009: nil) at R39,30 per share, 10 000 (2009: nil) at R17,70 per share and 485 400 (2009: 189 100) at R41,90 per share. Options exercised in terms of the Reunert 1985 and 2006 Share Option Schemes accounted for this increase.

Commencing in August 2010, a group subsidiary purchased Reunert shares on the open market. Up to the beginning of the closed period, on 30 September 2010, 2 123 372 shares had been bought at an average price of R59,18 per share.

REVIEW OF OPERATIONS AND RESULTS

The group’s results are reviewed from here.

CASH DIVIDENDS

An interim ordinary dividend No 168 of 67 cents (2009: No 166 of 65 cents) per share was declared on 12 May 2010, and a final ordinary dividend No 169 of 220 cents (2009: No 167 of 188 cents) per share was declared on 16 November 2010.

A total distribution of 287 cents (2009: 253 cents) per ordinary share was declared relating to the 2010 financial year.

An interim 5,5% cumulative preference dividend No 50 was declared on 12 May 2010 and a final dividend No 51 will be declared on 31 December 2010.

SUBSIDIARY COMPANIES

The directors are of the opinion that the publication of information on all the company’s subsidiaries in this report would entail expense out of proportion to the value to shareholders.

Annexure B to this report, however, sets out the principal subsidiaries of the company.

SPECIAL RESOLUTIONS OF SUBSIDIARIES

During this financial year the following special resolutions were passed by subsidiaries of Reunert: Vaxisolve (Pty) Limited changed its name to Moshate Technology Holdings (Pty) Limited and increased its share capital. Blue Lake Investments (Pty) Limited changed its name to Blue Lake Telecoms (Pty) Limited, RC & C Finance Company (Pty) Limited changed its name to Quince Capital (Pty) Limited, Siemens Enterprise Communications (Pty) Limited changed its name to Nashua Communications (Pty) Limited and Tupelofon (Pty) Limited changed its name to Digital Vision Technologies (Pty) Limited. Bargenel Investments Limited amended its articles of association. Reunert had acquisitions by the company or its subsidiaries in terms of sections 85(2) and 85(3). Full details of these resolutions may be viewed at the company’s registered office.

DIRECTORATE AND COMPANY SECRETARY

Directors are subject to retirement by rotation and re-election by shareholders at an annual general meeting at least once every three years in terms of the company’s articles of association. The board charter is an integral part of the conditions of appointment of all directors. Procedures for appointments are formal and transparent and a matter for the board as a whole to consider.

With effect from 2 August 2010, Mr G Pretorius retired from the board of directors after 37 years of service. The company thanks him for his enormous contribution to the group and wishes him well for the future.

Non-executive directors retire after reaching the age of 70 at the next annual general meeting. Executive directors retire from the board at 63 years of age.

Mr NC Wentzel, having been appointed to the board on 1 August 2010, is required to retire at the next annual general meeting, but being eligible, offers himself for re-election. Ms YZ Cuba, who has been appointed to the board effective
1 January 2011, is required to retire at the next annual general meeting, but being eligible, offers herself for re-election. Messrs BP Gallagher and SD Jagoe and Ms NDB Orleyn retire by rotation at the next annual general meeting. The nomination committee, at its meeting held on 16 November 2010, has recommended that they be re-elected and they have offered themselves for re-election.

Since Messrs BP Connellan and KJ Makwetla have reached retirement age, they will retire at the forthcoming annual general meeting.

The names of the directors in office at 30 September 2010 and to the date of this report, are set out here.

The name and address of the company secretaries are set out on the inside back cover.

INTERESTS OF DIRECTORS

At the reporting date, fully paid ordinary Reunert shares were held directly and indirectly by the directors as indicated in the table below:

  Direct beneficial Indirect beneficial Held by associates Total
  2010   2009   2010   2009   2010   2009   2010   2009  
BP Connellan   30 523   30 523   9 000   9 000   —   —   39 523   39 523  
BP Gallagher   331 713   331 713   —   —   —   —   331 713   331 713  
KJ Makwetla   —   —   —   —   150   150   150   150  
TS Munday   —   —   —   4 700   —   —   —   4 700  
GJ Oosthuizen   66 700   66 700   —   —   —   —   66 700   66 700  
NDB Orleyn1   —   —   —   —   1 554 000   1 554 000   1 554 000   1 554 000  
G Pretorius2 —   133 400   —   —   —   —   —   133 400  
DJ Rawlinson   358 520   358 520   —   —   —   —   358 520   358 520  
NC Wentzel   —   —   7 500   —   —   —   7 500   —  
  787 456   920 856   16 500   13 700   1 554 150   1 554 150   2 358 106   2 488 706  
1  These shares are held indirectly through Bargenel’s investment in Reunert which relates to the BEE deal concluded in 2007.
 Mr G Pretorius retired from the board on 2 August 2010.  

These holdings remained unchanged from 30 September 2010 up to 16 November 2010.

Executive directors of the company held unexercised options to subscribe for 160 000 (2009: 280 000) ordinary shares in terms of the Reunert 1985 Share Option Scheme. These options are due to expire on 29 August 2015. Executive directors of the company held unexercised options to subscribe for 350 000 (2009: 250 000) ordinary shares in terms of the Reunert 2006 Share Option Scheme. Altogether 150 000 of these options are due to expire on 18 June 2019 and 200 000 of these options are due to expire on 2 August 2020.

The directors have no financial interest in contracts entered into by the group during the year. For further information on directors’ share options, refer to note 24 of the annual financial statements.

SUBSEQUENT EVENTS

The directors are not aware of any matters or circumstances arising between the end of the financial year and the date of these financial statements which materially affect the financial position or results of the company or group.

ATTRIBUTABLE INTEREST

The attributable interest of the company in the profits and losses of its consolidated subsidiaries for the year ended
30 September 2010 is:

  2010  
Rm  
2009  
Rm  
In the aggregate net income   638,2   698,9  
In the aggregate net losses   (8,6)  (42,2) 
  629,6   656,7  


GOING CONCERN

The directors confirm that the group and company have adequate resources to operate for the foreseeable future and will remain a viable going concern in the year ahead.