DIRECTORS’ REPORT
The Directors present their report on the activities and the financial statements for Clover Industries Ltd (“CIL”) and the Group in respect of the year ended 30 June 2013.
Nature of business
The procurement, production, marketing, sales and distribution of branded consumer goods to customers on the African continent.
Group results
The Group’s results for the year are as follows:
| 2013 R’m |
2012 R’m |
|
| Revenue | 7 996,5 | 7 223,9 |
|---|---|---|
| Total comprehensive income attributable to shareholders of the parent Company | 238,4 | 204,4 |
More detailed financial information can be found in the Financial Report which forms part of the Integrated Annual Report.
Subsidiary companies and interests in joint ventures
Details of subsidiary companies are reflected in note 31 to the financial statements and business combinations and interests in joint ventures in notes 3 and 4 to the financial statements.
With effect from 1 October 2012 Clover SA acquired 100% of the shareholding in The Real Juice Co Holdings Proprietary Limited for a cash consideration of R73,7 million. This Company is now a wholly owned subsidiary of Clover SA. This Company, through its subsidiaries, manufactures and sells the Quali and Real Juice range of fruit juices.
On 1 November 2012, Clover acquired the remaining 49,9% interest in Clover Manhattan Proprietary Limited and the Unincorporated Joint Venture for a cash consideration of R24,7 million.
On 6 March 2013 Clover SA entered into an agreement with Nestle (South Africa) Proprietary Limited to form a new entity, Clover Waters Proprietary Limited, that acquired Nestle’s Gauteng based Doornkloof property, bottled water manufacturing facility and water rights. This newly formed entity will have the right by way of licence, to manufacture, distribute, market and sell bottled mineral water under Nestlés Pure Life®, Valvita® and Schoonspruit® brands as well as ice tea under the Nestea brand. These brands will complement Clover SA’s Aquartz bottled water and Manhattan ice tea brands which was also manufactured, distributed, marketed and sold by Clover Waters. Clover SA effectively holds 70% of the shares in Clover Waters and Nestle (South Africa) 30%.
The transaction was approved by the competition authorities on 24 May 2013. The newly-formed entity commenced business on 1 August 2013.
Share capital
Details of the authorised and issued share capital are disclosed in note 19 to the financial statements.
A general authority to repurchase ordinary shares of the Company was granted to the Directors by way of a special resolution adopted on 30 November 2012. Such authority is subject to the Companies Act and the Listings Requirements of the JSE. The Listings Requirements of the JSE limit repurchases during any one year to a maximum of 20% of the issued ordinary shares at the time.
On 3 June 2013 the company issued 2 106 282 ordinary Clover Industries shares to members of senior management to settle part of its obligation under the Clover Share Appreciation Rights Plan.
The Company’s 89 442 022 redeemable preference shares that matured on the 2nd of June 2013 were settled and cancelled on 3 June 2013.
Except for the above no shares were issued or repurchased during the year ending 30 June 2013.
Dividends
Dividends declared and paid by CIL during the year:
| 2013 R’000 |
2012 R’000 |
|
| Ordinary dividends | ||
| Declared | 41 912 | 53 734 |
| Paid | 41 912 | 53 734 |
| Preference dividends | ||
| Recognised as interest: | ||
| Declared | 20 346 | 22 007 |
| Paid | 26 106 | 16 117 |
The Board declared and paid an interim cash dividend of 10c per ordinary share during April 2013. It further declared a final dividend of R40,1 million or 22 cents per ordinary share, bringing the total dividend for the year to 32 cents (2012: 28,4 cents) per ordinary share.
Declaration of dividend number 7
Notice is hereby given that the directors have declared a final gross cash dividend of 22,0 cents (18,7 cents net of dividend withholding tax) per ordinary share for the year ended 30 June 2013.
The dividend has been declared from income reserves and no secondary tax on companies credits has been used.
A dividend withholding tax of 15% will be applicable to all shareholders who are not exempt.
The Company income tax number is 9657/002/71/4.
The issued share capital at the declaration date is 182 478 589 ordinary shares. The salient dates will be as follows:
| Last day to trade to receive a dividend | Friday, 4 October 2013 | |
| Shares commence trading “ex” dividend | Monday, 7 October 2013 | |
| Record date | Friday, 11 October 2013 | |
| Payment date | Monday, 14 October 2013 |
Share certificates may not be dematerialised or rematerialised between Monday, 7 October 2013 and Friday, 11 October 2013, both days inclusive.
Directors and Secretary
Particulars of the present Directors and Secretary are listed here and here.
Share-based compensation
During the current year a further 2 737 742 SAR were issued to executives at an issue price of R13,73. These SAR will vest three years after the issue date and are subject to vesting conditions. SAR not exercised will be cancelled seven years after the issue date.
On 1 October 2012, Marcelo Palmeiro was appointed to the Executive Committee and 925 500 SAR was issued to him on the same day at an issue price of R15,15. One third of these SAR will vest three years after the issue date and thereafter another third after four years and the last third after five years. There are no vesting conditions attached to these SAR. SAR not exercised will be cancelled seven years after the issue date.
On exercise Executives will be entitled to a payment equal to the increase in the CIL ordinary share price over the issue price of the SAR. Such payment can at the election of the Company be either in cash or by way of the issue to the member of a number of ordinary shares equal in value to such cash amount. Details of SAR issued and vested in terms of the plan are given in the Remuneration Policy and Remuneration Report contained in the Integrated Annual Report.
Insurance and risk management
The Group follows a policy of reviewing the risks relating to assets and commitments that might flow from the use thereof with its insurers on an annual basis. Wherever possible, assets are automatically included. There is also a continuous asset risk control programme, which is carried out in conjunction with the Group’s insurance brokers. For further information on the Group’s risk management process please refer to the Report on Corporate Governance, Risk and Compliance .
Property, plant and equipment
There was no change in the nature of the property, plant and equipment of the Group or in the policy regarding their use. Capital expenditure on tangible assets was R434,3 million (2012: R254,3 million) and R103,0 million (2012: R19,4 million) on intangible assets.
Events after the reporting period
On 1 August 2013 Clover Waters, in which Clover SA holds 70%, commenced with business.
Other than the above no significant events occurred subsequent to the year-end.
Special resolutions
The following special resolutions were adopted at the Annual General Meeting held on 30 November 2012:
- A general authority was given to the board to repurchase shares in the Company subject to the Companies Act and the JSE Listings Requirements.
- The remuneration of the Non-executive Directors with effect from 1 July 2012 was approved.
- An adoption of a new Memorandum of Incorporation in order to align the Company’s constitutional documents with the Company’s Act.
On 11 September 2013 the Company renewed the authority to the Board of Clover SA as required by sections 44 and 45 of the Companies Act to provide financial assistance to related and inter-related companies or to Directors and prescribed officers of the Company and Directors and prescribed officers of related and inter-related companies. This general authority is valid for two years from the date of the resolution.
Acknowledgements
We express our thanks and appreciation to:
- Our shareholders for their support during the year.
- Our staff for their dedication to the Clover brand.
- All our suppliers for their support in reducing the costs in the supply chain.
- The retail and wholesale trade for their support.
- The consumers who support the Clover brand.
Werner Büchner 11 September 2013 |
Johann Vorster |
