Gooderson stands for: G Great value for money O Opportunity to expand the business O Opportunity for employees to participate in the business D Diverse service offering in the leisure industry E Experienced management team R Return to shareholders S Strategically placed to take advantage of the growing tourism industry O Opportunity to form partnerships with National and Local Tourism Authorities will result in brand positioning N National presence 1
Transcript
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Gooderson stands for:
G Great value for money
O Opportunity to expand the business
O Opportunity for employees to participate in the business
D Diverse service offering in the leisure industry
E Experienced management team
R Return to shareholders
S Strategically placed to take advantage of the growing tourism industry
O Opportunity to form partnerships with National and Local Tourism Authorities will result in brand positioning
N National presence
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Contents Page number
Our Mission, Vision and Strategy Inside Cover Highlights 3 The Gooderson Business 4 Industry Overview 8 Board of Directors 9 Chairman and Chief Executive Officer’s Report 11 Corporate Governance Report 16 Empowerment and Transformation Report 21 Annual Financial Statements 23 Analysis of Shareholders 77 JSE Share Information 77 Shareholders’ Diary 77 Corporate Information 78 Notice of Annual General Meeting 80 Voting and proxies 84 Form of Proxy 85
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HIGHLIGHTS Revenue growth 39% Operating profit growth 59% Earnings per share (cents) 11.64 Headline earnings per share (cents) 11.74 Dividend 3.5 cents per share Revenue (Rm)
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THE GOODERSON BUSINESS History Gooderson Leisure Corporation (Gooderson) was established in 1957, when Mr R H Gooderson acquired the first of his hotels in Durban; the Lonsdale Hotel, one block from the beachfront. Through the acquisition of a number of hotels, the company grew from one hotel to thirteen hotels in 1970. The company listed on the Johannesburg Stock Exchange in 1968 as Gooderson Hotels Limited (Goodtel). When Alan Gooderson purchased the business from his family in 1979, he pursued a new strategy, which included delisting the company from the Johannesburg Stock Exchange, the sale of non-profitable hotels and entering into the timeshare industry.
The company entered into a partnership in the timeshare industry in 1981, which allowed its management team to gain extensive knowledge of timeshare development, sales and management. The success that the company achieved with the development, sale and management of timeshare properties resulted in the establishment of Goodfin, which offers finance to prospective timeshare owners.
Gooderson Vacation Sales (Pty) Ltd was formed in January 1996 to handle the in-house marketing, sales and letting of all the self-catering and timeshare properties. The ownership and management of these units, along with the three hotels under management provided the company with the infrastructure to not only survive the changing demographics but to accommodate for tourists’ demand for a variety of holiday destinations.
In March 2006, the shareholders of Gooderson proposed a listing of Gooderson on the Alternative Exchange (AltX) of the JSE Limited (JSE). The company converted to a public company and on 26 September 2006, Gooderson listed on AltX.
Nature of the company’s business Gooderson manages and provides accommodation, food and beverage and restaurant services to leisure, international and conference tourists in the KwaZulu–Natal province. The Gooderson family forms the majority of the company’s directors, and is the major shareholder of the company.
The company manages timeshare resorts and lodges that include “The Fairways”, “Riverbend Chalets” and “Mountain View” at Drakensberg Gardens, the Silversands I, II, III in Durban, Mtunzini Chalets at Mtunzini, on the north coast of KwaZulu-Natal, Bushlands Game Lodge and DumaZulu Traditional Village & Lodge near Hluhluwe. The Tropicana and Beach hotels in Durban the Drakensberg Gardens Resort & Natal Spa Hot Springs & Conference Centre provides three-star accommodation to the middle class and the conference markets.
More than 87% of the company’s staff complement of 457 people is black. Progress is being made in black representation in middle and senior management to meet the requirements of the Tourism Black Economic Empowerment (BEE) Charter.
The company’s audited revenues of R88.96 million for the year ended 28 February 2007 are derived from the management and letting of the hotels, lodges and from the sales and management of timeshare resorts.
The company’s business can be divided into the following areas:
Hotel and Lodge Management
The company’s core expertise is in the sales of accommodation to its own hotels, lodges and self-catering establishments. The company’s knowledge is also applied to the management and development of resorts as well as other resorts that it leases from third parties.
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Timeshare Sales and Management
This division of the company focuses on the sales of timeshare weeks. Services also include the letting of owners’ units as well as the management of the timeshare resorts. The company also specialises in the development and sale of new timeshare resorts. These Resorts are identified for acquisition, followed by the construction and/or renovation and conversion to timeshare units. Weeks are sold with the management of the various timeshare resorts contracted to the company.
Purchasers’ Finance
Goodfin provides capital to prospective timeshare owners. Purchases financed to date are in excess of R12 million.
Properties
The Group owns all its properties since 1969, with the exception of one, this being the Beach Hotel in Durban, which is on a lease basis.
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Gooderson in the market The tourism industry consists of many verticals that address the needs of its customers - tourists, either local or international. Gooderson focuses on the provision of accommodation to visitors to KwaZulu-Natal, as well as the management of a number of timeshare resorts in the province. From an accommodation perspective, factors influencing the following sub-sections of accommodation will influence the profitability of the company:
Accommodation. Increased demand for accommodation will result in an increase of occupancy rates for the company. Due to its geographical spread in the province, the company offers a variety to it customers, being either in the city, game parks or in the Drakensberg Mountains. Gooderson is known as a “Value for Money” Resort Chain.
Timeshare development and management. An increase in the demand for self-
catering holiday units provides the company with management opportunities. Gooderson seeks units at attractive holiday destinations to acquire, renovate, sell and manage on behalf of the unit owners.
Growth in the specific industry segment is currently influenced by the economic conditions of the country, the growing middle class and an increased demand for holiday properties, either on a fully owned or time-share basis. Customers The company’s customer list can be categorised as follows:
Tourists; Conference delegates; Corporate clients; Timeshare owners for which the company manages the resorts.
Tourists The tourist profile of the company varies according to the type of accommodation offered. More than 70% of the two beachfront hotels’ customers are Black, 50% are leisure guests. International visitors account for the remaining 30% occupancy. These hotels have been exposed to the growing black middle class over the years, resulting in a rise in room occupancy. Most of the company’s lodges and resorts are visited by international tourists whilst the Drakensberg hotel is very popular to all income groups. Conferences The hotels’ location and conference venues have positioned the group ideally for the conferencing circuit. Gooderson capitalises on its location and KwaZulu-Natal relations to host a number of local government conferences. Corporate Clients Statistics show that 20% of the company’s business in Durban is attributed to business people who are predominantly from Gauteng and KwaZulu-Natal. 6
Timeshare Owners The company’s hotel management experience has positioned it strategically to perform these services for self-catering lodges and timeshare units in addition to providing hotel management services for the timeshare owners. Managerial and secretarial services are also provided i.e. the replacement of assets, reservations, collection of levies and payment of creditors. The Managing Agent receives a percentage of the levies for these services.
Statistical information
HOTELS AND LODGES
Year Ended
2005
Year Ended
2006
Year Ended
2007 Group Average Room Rate 359 400 448 Room Occupancy % 57 58 59 Revpar 206 233 264
Prospects There are several factors that have enabled South Africa’s tourism industry to continue to grow, while the global tourist industry in general has experienced tough times.
South Africa has built up an image as a safe holiday destination (not influenced by international terrorism, SARS or bird flu), with government and industry leaders acting quickly to counterbalance negative reports that may influence tourist perceptions and particularly KwaZulu-Natal.
South Africa still represents good value for money, with the country ranked the world's second most affordable destination in 2005 by American Express.
KwaZulu-Natal has attractive tourism assets, including world-class beaches that enjoy year-round sunshine, vibrant and culturally diverse cities, game parks and other cultural attractions. World heritage sites Drakensberg and St Lucia.
Tourism in South Africa is expected to grow by almost 6% annually for the next ten years and currently contributes more than 9 % to Gross Domestic Product.
The company has experienced an average annual growth rate in revenue of more than 10% over the past three years. Its involvement in a number of projects, locally and nationally will ensure that it achieves a high revenue growth rate over the next three to five years.
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Industry Overview Industry Background South Africa South African tourism grew by almost 14% in 2006, three times the global tourism growth rate of 4.5% for the same period, Tourism in South Africa is regarded as the “new gold” of the South African economy with a contribution to Gross Domestic Product (direct and indirect) of R141.86 billion in 2006, an increase of 16% over 2005. Tourism continues to contribute to job creation, with a direct increase in employment in the tourism sector totaling 947,530 in 2006, up 9.6% from 2005. According to SA Tourism, South Africa recorded almost 8.4 million tourists in 2006, over a million more than in 2005, representing a 13.6% increase, with the country breaking its annual tourist arrivals record for the second year running. The boom in the tourism industry continues. This market segment has grown over the past 5 years during which the DeLoitte Hotel Benchmark™ Survey was conducted. During 2005, hoteliers saw RevPar (‘revenue per average room’) increase by 10% - the second highest growth posted in the last 5 years. This has been driven equally by increases in both occupancy and average room rates. The results showed that Durban hotels have reported the strongest growth of any of the cities tracked, with a RevPar increase of almost 16%. Statistics South Africa (Stats SA) reported a 6.4% increase in occupancy rates at the country’s hotels, guest houses and other forms of accommodation in 2006 compared to 2005. Income from accommodation totaled almost R1.3-billion in 2006, a 17.7% increase over 2005.
The top four most visited provinces retained their position in 2006, with KwaZulu-Natal continuing in third place recording 13.4% of total accommodation nights ‘viz-a-viz’ the Western Cape’s 29.5% total nights. More than 37 million domestic tourists visited the country’s tourism destinations in 2006 with the major beneficiaries being KwaZulu-Natal and Gauteng.
Market Forecast There are several factors that have enabled South Africa’s tourism industry to continue to grow, while the global industry in general has experienced tough times.
South Africa has attractive tourism assets, including world-class “Blue Flag” beaches that enjoy year-round sunshine. Its vibrant and culturally diverse cities provide excellent shopping and dining, with visitors from the United Kingdom (UK) rating Cape Town as the best city in the world for eating out, and their second favourite destination overall.
Tourism in South Africa is expected to grow by almost 6% for the next ten years.
The growth in local tourism can be contributed to favourable economic conditions, as well as the emergence of the black middle class.
Company Overview
The Gooderson Group has been able to survive trying economic conditions over the past years and to adapt their business model to increase market share, as the concept of ‘nature’ tourism has lured away people to alternative holiday destinations. The change in business strategy has positioned the company to offer tourists with such alternatives.
With a track record of more than 50 years in the leisure industry, the Gooderson group has shown the ability to survive tough economic conditions and changing tourist requirements. With the demographic profile of the Durban tourists changing through the years, the company succeeded in targeting the new middle class tourists in increasing numbers, whilst also positioning the hotels as conference venues. The opening of nature/wildlife resorts opened an alternative product line, which allows the company to offer its customers the three main attractive elements of KwaZulu-Natal: Beach, Berg and Bush.
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Board of Directors
Alan Gooderson (70) – Chairman / CEO Alan Gooderson has been involved in the leisure industry since 1957 when he emigrated from England to join the family business in Durban. Alan was appointed Operations Director of the newly listed public company Gooderson Hotels Limited (Goodtel) in 1968, becoming the Managing Director in 1975. After purchasing the business from his father and brothers in 1979, Alan became Chairman and CEO, and subsequently de-listed the company.
Alan Gooderson’s name is synonymous with the hospitality industry as he has been involved in tourism for more than 50 years. He has been Chairman and member of various tourism associated committees in Natal, having also been the Chairman of Fedhasa in KwaZulu Natal as well as Chairman of the Tourism KwaZulu-Natal Marketing Committee. Alan was awarded the RCI Hall of Fame, for his contribution to the Timeshare Industry. In 2000 he received the Hotelier of the year award from Fedhasa, as well as an award for Dedication and Loyalty Service to the Durban Hospitality Industry.
Cheryl joined the Gooderson Group in 1990 where, after working through various departments, she rose to the position of Timeshare Sales Manager by December 1996. In 1997 Cheryl diversified from sales into operations where she held the position of Timeshare Resort Operations Manager at Drakensberg Gardens until December 2004. She returned to Durban in
January 2005 to take up her appointment as Timeshare Director, her main focus being sales, marketing and operations. Cheryl is highly qualified in timeshare marketing having attended trade conferences and exhibitions in the USA and UK. She is also well connected in the industry.
Colleen de Klerk (45) – Director of Admin, Timeshare Division
Colleen’s career in the Gooderson Group started in 1983 as the liquor store manager of the Cumberland Hotel Off-Sales on the beachfront. This was followed by a spell as the conference coordinator for the Drakensberg Gardens Hotel until 1992. After a brief sojourn as the Stores Administration Manager at Clover Dairies, she rejoined the company in 1995 and took up the position of
General Manager of the Silver Sands timeshare resort. In 2004 Colleen, as a newly appointed director of the company, returned to Head Office to focus on the administration of the company’s timeshare and shareblock investments.
Rajen Nannoolal (43) – Group Financial Director (B.Comm)
Rajen began his career in the hospitality industry in 1989 when he joined the Silver Peacock Group as an Accountant. He then joined the Gooderson Leisure Group in 1992 as a Senior Accountant, being promoted to Financial Manager in 2001. Rajen is responsible for the Company’s accounting &
Secretarial Functions and was also involved in the restructuring of the accounting division. He is a member of the Employment Equity Committee and Black Economic Empowerment Committee.
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Gavin Castleman (43) – Operations Director – Hotels & Lodges (National Diploma in Hotel Management)
Gavin started his career in the hotel industry in 1985 as an in-service trainee at the Malibu Hotel in Durban. He then joined the Tropicana Hotel where he was steadily promoted. A brief sojourn at the Karridene Protea Hotel saw him promoted to Deputy General Manager, followed by a 5-year period with Fedics Food Services, where he was promoted to District Manager. He re-joined the
Tropicana Hotel in March 1996 to take up the position of General Manger. In February 2000 Gavin was promoted to General Manager-Operations. His current responsibilities include the day-to-day operations around general managers of the hotels and Lodges, plus all industrial relations issues.
Glynis Lello (47) – Sales & Marketing Director – Hotels & Lodges (Higher Diploma in Business Management)
Glynis started her career at the South African Consulate in Hamburg, Germany (1979-1982) and after various sales related positions joined the Gooderson Leisure Corporation in 1994 as an Executive Sales Consultant. She soon became the company’s Marketing Coordinator and was promoted to Marketing
Manager in 1996. Glynis relocated to Johannesburg in 2001 to join SATSA as the Communications Manager and upon returning to Gooderson Leisure Corporation in 2003, she was appointed General Manager of the Sales and Marketing Division. Glynis is responsible for all aspects of the sales and marketing functions for the hotels and lodges. She regularly attends trade fairs both nationally (Indaba - Durban) and internationally (the ITB in Germany and WTM in London), gaining considerable experience and accommodation contracts with overseas tour operators.
Michael Allan Pottier (45) – Non-executive Director (B. Admin)
Michael has approximately 22 years extensive expertise, knowledge and skills on a broad spectrum of specialized Human Resources / Industrial Relations-related matters. Michael previously worked for the public sector managing the
Human Resources Division for a number of years, where the experience gained was invaluable and now runs his own consulting company, HR Workplace Solutions which consults to a number of South African businesses on specialized Human Resources / Industrial Relations issues.
Brian Reynold Warmback (64) – Non executive Director Brian joined First National Bank (previously Barclays Bank) in 1960 and spent 42 years serving in a number of branches, both in the City and Country and in various positions. He retired from First National Bank in August 2002. He currently runs a successful consultancy business, assisting people with all their financial needs.
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Chairman and Chief Executive Officer’s Report This is our first report since listing on the AltX sector of the JSE. It is also the 50th anniversary of our company and we celebrate with good financial results for the year. Our organisation specialises in the management of hotels and lodges as well as the development, marketing and management of timeshare resorts. Although we are a KwaZulu-Natal based company we are currently building our portfolio of properties nationally. Revenue increased by a healthy 39% from R64.02 million in 2006 to R88.96 million as a result of expansions by the group. The revenue for 2007 also exceeded the revenue forecast for 2007 of R86.22 million by 3.17%. Gooderson added 11 more Timeshare rooms and also made a new acquisition of the Natal Spa Hot Springs Resort and Conference Centre in September 2006. Gooderson also purchased the remaining 50% of the Bushlands Group. Earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 47% from R15.27 million in 2006 to R22.41 million. The EBITDA margin increased from 23.9% (2006) to 25.2% (2007). The board has decided to declare a final dividend of 3.5 cents. The company showed strong cash flows throughout the year and cash from operating activities is up by 11% from R7.28 million (2006) to R8.05 million (2007). The net asset value and net tangible asset value per share have both increased by 31% and 32%, respectively, from 56.4 cents per share (2006) to 74.0 cents per share (2007) and 55.6 cents per share (2006) to 73.18 cents per share (2007), respectively. Our report is divided into two sections, namely hotels & lodges and timeshare. Hotels and Lodges The hotels and lodges division of the company achieved excellent results in that pre tax profits moved from R9.60 million to R13.05 million, an increase of 36%. The Drakensberg Gardens Golf & Leisure Resort has shown a tremendous improvement as it has moved from a loss situation to a positive one, with good profits. The hotel has shown growth in room occupancy and revpar (revenue per available room) since 2003, when it was rebuilt after the main complex was destroyed by fire. The Tropicana and Beach hotels in Durban had excellent growth with the result that profits increased favourably. Furthermore, the purchase of the Natal Spa Resort & Conference Centre in September (2006) has also made a positive contribution as it has achieved good profits for the six month period. The sale of the loss-making Nibela Lake Lodge and the conversion of Mtunzini Forest Lodge into a timeshare resort has also had a very positive impact. Timeshare division The timeshare division pre tax profit jumped from R2.04 million to R6.05 million, an increase of 197%. The conversion of Mtunzini Forest Lodge and the building of a further eleven units at Fairways improved revenue in the management and development companies. Construction of an additional ten units at Fairways and seven units at the Natal Spa will have a further favourable impact. Goodfin, a division that provides finance to prospective timeshare owners continues to show improvement. This is due to an increase in the number of weeks sold by the marketing agent as well as the rates being on a rising trend.
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Future developments We are currently in the process of a huge upgrade programme at the Natal Spa Resort & Conference Centre, however the benefits are expected to be realised only in the following two years. Room occupancies and revpar should continue to grow at the Drakensberg Gardens Golf & Leisure resort as a result of the many recent improvements that have been made. We are currently building a new restaurant and wellness centre which will enhance occupancies in the future. Bushlands Game Lodge and DumaZulu Traditional Village & Lodge will both be refurbished during the year and we will convert ten rooms in June at DumaZulu into self-catering units. Acquisitions The strategy of the company is to acquire at least one resort per year and it is our new policy to look not only in KwaZulu-Natal, but also nationally to achieve this goal. Several propositions are being considered by our board and we expect to make at least one acquisition during this calendar year. Furthermore, we will continue to upgrade existing products and build additional facilities at the resorts. This will ultimately improve room occupancies and help increase the rack rates at our hotels and resorts. Timeshare Resorts Twenty-six 6 bedder accommodation units are yet to be built at The Fairways, ten of which will be completed before the end of the current year. The Fairways is an RCI Gold Crown resort and the timeshare weeks are selling extremely well. In addition the company is also developing fifteen timeshare units at the Natal Spa resort, seven of which will be ready for occupation this year. The hot mineral springs on the property should be a unique selling feature and therefore it is anticipated that sales should be very good from the commencement date in October 2007. The management and finance divisions will continue to grow as more resorts are developed and existing timeshare units are sold. Land Claims Bushlands Group There have been no further developments on the land claims since the report in the Prospectus. J&M Stiebel (Pty) Ltd Correspondence between the The Mzimkulu Valley Land Claim Association and the Commission on Restitution of Land Rights is still ongoing. Black economic empowerment As our company has several hotel accommodation contracts that are government related, the main shareholders intend to sell an initial 15% of the total issued share capital to a black empowered company before December 2007. Negotiations with prospective BEE partners will then continue until the company meets the tourism charter expectations of a 25.1% black ownership shareholding by the year 2014. 12
Looking ahead The hotel and leisure industry has shown immense growth these last few years and we expect revenue to continue to increase in line with the growth expectations of the economy. This upswing should continue, particularly with the impending world cup soccer in 2010. The South African Tourism marketing campaign that is currently taking place can only intensify international awareness that South Africa is the perfect destination for tourists who require a diversified and unique holiday experience. Financial results Revenue increased by 39% from R64.02 million in 2006 to R88.96 million as a result of Revpar growth and expansion by adding 11 more timeshare rooms plus a new acquisition from 1 September 2006 and purchasing the remaining 50% of the Bushlands Group. Operating profit increased by 59% from R12.02 million in 2006 to R19.09 million. Appreciation I would like to thank my staff for their hard work in making Gooderson the company it is today. Thank you also to our shareholders for their support and we will strive to ensure solid shareholder value growth. Alan Gooderson Executive Chairman and Chief Executive Officer
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Shareholding of directors As at 28 February 2007, the directors of the company held shares as follows: 2007
2006
Direct Indirect
Direct Indirect
Executive directors
A W Gooderson 245,000 85,000,000 - 200
CM de Klerk 5,000,000 - - -
CL Gooderson 5,000,000 - - -
GM Castleman 330,000 - - -
GA Lello 330,000 - - -
R Nannoolal 330,000 - - -
11,235,000 85,000,000 - 200
Non-executive directors
BR Warmback 40,000 - - -
40,000 - - -
Total 11,275,000 85,000,000 - 200
The prior year amounts have been adjusted for the subdivision of the ordinary shares by 1000 to 1 and the rights offer of 20,000,000 shares made during the year. The company’s Designated Advisors held 330,000 shares directly in the ordinary share capital of the company as at year end. These shares were all beneficially held and no changes have taken place in these holdings between the year-end date and the date of this Annual Financial Statements. One-half of these shares are held in trust by the company’s auditors, as required by the regulations of the AltX of the JSE. Significant shareholders An analysis of the company’s shareholders is provided on page 76 of the Annual Financial Statements. At 28 February 2007 there were 198 public shareholders in the company, who held 98.02% of the ordinary shares.
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Those shareholders holding 3 percent or more of the company’s issued capital are as follows: Shareholder
Number of Shares held
%
Alju Family Trust
85,000,000
70.83
Investment Solutions
5,600,000
4.67
C M de Klerk
5,000,000
4.17
C L Gooderson
5,000,000
4.17
A D Gooderson
4,755,000
3.97
Peregrine
3,740,000
3.12
Interests of directors in contracts No director had any interest in any transactions of significance with the company or any of its subsidiaries.
Litigation There are no legal or arbitration proceedings, including any such proceedings that are pending or threatened of which Gooderson is aware that may have, or have had during the 12 months preceeding the date of the annual report a material effect on the financial position of the company. Subsidiary companies and special resolutions by subsidiary companies Gooderson has a number of subsidiary companies as listed below: Alawill Investments (Pty) Ltd Bushlands Game Lodge (Pty) Ltd Dumazulu Kraal (Pty) Ltd Gooderson Directorate Services (Pty) Ltd Gooderson Vacation Sales (Pty) Ltd J & M Stiebel (Pty) Ltd Durban Inn (Pty) Ltd M & D Robinson (Pty) Ltd Goodtime Developments (Pty) Ltd Drakensberg Gardens Hotel (Pty) Ltd Century Projects & Design (Pty) Ltd Zululand Tours & Safaris (Pty) Ltd Lowencamp Safaris (Pty) Ltd Natal Spa Investments (Pty) Ltd
Subsequent year end events Prior to the listing of the Company’s shares on AltX on 26 September 2006, an offer was made to its employees, with the approval of the JSE, to take up shares in the company at the listing price of 80 cents per share. Employees agreed to purchase 1 049 700 shares. Shortly before the end of the financial year an employee share trust, known as the Gooderson Leisure Corporation Share Incentive Scheme Trust was formed and 5 000 000 shares were allotted to the trust.
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CORPORATE GOVERNANCE REPORT
Introduction Gooderson is listed on the AltX Board of the JSE. The Board of Directors (the Board) is subject to and supports the principles contained in the Code of Corporate Practices and Conduct recommended by the 2002 King Report on Corporate Governance for South Africa (King II), as well as the Listings Requirements of the JSE.
Gooderson is committed to the principles of openness, integrity and accountability and adheres to King II
Statement of compliance The Listings Requirements of the JSE require that listed companies report on the extent to which they comply with the principles incorporated in King II.
As the Group is committed to the highest ethical standards of business conduct and to fully complying with all applicable laws and regulations, the Board will be adopting various policies and procedures during the new financial year.
Changes for the next financial period The Board regards Corporate Governance as vitally important to the success of the business of the company and are unreservedly committed to applying the principles necessary to ensure that good governance is practised in all of its business dealings in respect of its shareowners and relevant stakeholders. The Board will be ensuring that all the required policies and procedures are adopted by the Board, and that the Audit and Remuneration Committees will only comprise of non-executive directors in compliance with the Listings Requirements of the JSE and as recommended by King II .
Chairman and Chief Executive Officer The Chairman and Chief Executive Officer is Mr AW Gooderson. In terms of the Listings Requirements for AltX companies, the separation of the Chairman and the Chief Executive Officer is not required. Mr Gooderson leads the Board and is responsible for representing the Board to shareholders. He is further responsible for the running of the day-to-day business of the Group, for the implementation of policies and strategies adopted by the Board and takes full responsibility for all operations. Board
The Board comprises of six Executive Directors and two Independent Directors. The Independent Director ensures that no one individual has unfettered powers of decision-making and authority, so that shareowner interests are protected. The non-executive directors are fully independent of management and free to make their own decisions. They enjoy no benefits from the company for their services, other than their fees and potential capital gains and dividends on their interests in ordinary shares. The guidelines contained in the Listings Requirements of the JSE were used to test the independence of the directors. The primary responsibilities of the Board include regular review of the strategic direction of investment decisions and performance against approved plans, budgets and best practice
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standards. The Board retains full and effective control of the Group and decisions on material matters are reserved for the Board. The Board is also responsible for monitoring the activities of the executive management. The Board will meet at least quarterly, and more frequently if circumstances or decisions require. The Board met twice during the year. The attendance of the directors at these meetings are provided below:
Director 25 October
2006 31 July
2006 AW Gooderson Yes Yes CL Gooderson Yes Yes CM de Klerk Yes Yes R Nannoolal Yes Yes GM Castleman Yes Yes GA Lello Yes No MA Pottier* Yes No BR Warmback* Yes No
* Non-executive
One third of the Directors are subject, by rotation, to retirement and re-election at the annual general meeting in terms of the Company’s articles of association. In addition, all Directors are subject to election by shareholders at the first annual general meeting after their initial appointment. The biographical details for each of the Directors are set out on pages 9 & 10 of the annual financial statements. Board Committees While the Board remains accountable and responsible for the performance and affairs of the company, it delegates to management and Board Committees certain functions to assist it to properly discharge its duties. The Board currently has two Board Committees namely the Audit Committee and the Remuneration Committee. The Chairperson of these Committees will report at each scheduled meeting of the Board. Minutes of the Committee meetings will be provided to the Board. The Chairpersons of the committees are required to attend annual general meetings to answer questions raised by shareholders. Audit Committee The Audit Committee is chaired by a non-executive director Brian Warmback and the company’s Designated Advisor is a member thereof. The Committee is also attended by the Financial Director and the Internal Auditor on invite. The Committee has been formed for the purposes of monitoring and reviewing: the effectiveness of the company’s information systems and other systems of internal
control; the effectiveness of the internal audit function; the reports of both the external and internal auditors; the annual report and specifically the annual financial statements included therein; the accounting policies of the company and any proposed revisions thereto; the external audit findings, reports and fees and the approval thereof; ensuring that non-audit services will not be obtained from the external auditors where the
provisions of such services could impair audit independence; and compliance with applicable legislation and requirements of regulatory authorities. The Audit Committee met on 28 May 2007.
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Remuneration Committee The Remuneration Committee was chaired by Michael Pottier, an independent Director. The Remuneration Committee consists of two independent non-executive directors and two executive directors. The committee’s main objective is to provide the Chief Executive Officer and Executive Directors, with a competitive package including basic salary, performance-based incentives, annual bonuses, share-based incentives, pensions and other benefits, which will attract and retain executives of the highest calibre and encourage and reward superior performance. The Remuneration Committee’s principal function is to determine on behalf of the board, the senior executive remuneration policy and the remuneration as well as other terms and conditions of employment of the company’s executive directors and employees. External market surveys and other relevant industry reward benchmarks are considered in determining levels of remuneration that appropriately reward the Chief Executive Officer, Executive Directors and staff for their contribution to the group’s overall performance. The committee believes that short and long term performance-based incentives and bonus payments, which are linked to the achievement of the group’s objectives and the performance of the group’s share price, are sufficient to motivate both the Chief Executive Officer and Executive Directors and align their interests with those of the shareholders. The Chief Executive Officer may attend the meetings by invitation but does not participate in the committee’s deliberations. During this period, the committee has met two times and its members discussed all aspects of the remuneration of the group. The terms of reference of the committee were approved by the board and the board has determined that the remuneration committee has satisfied its mandate and responsibilities for the period under review in compliance with its terms of reference. The Remuneration committee met twice during the financial year:
Director 7 February
2007 31 January
2007 MA Pottier Yes Yes AW Gooderson Yes Yes CM de Klerk No Yes R Nannoolal Yes Yes GM Castleman ** Yes N/A
** Invited Executive Director’s Remuneration The remuneration of the executive director’s comprises a basic salary, an annual bonus, performance based incentives and participation in the share option scheme. The total Executive Director’s remuneration for the year ended 28 February 2007 was as follows: 1. Basic remuneration, benefits and bonuses paid to executive directors for the year
ended 28 February 2007. 2. Share Grants 3. Share incentive scheme: Share incentive scheme options were awarded to the Chief Executive Officer and
Executive Directors calculated at 40% and 25% respectively of their total annual basic salary and will be effective after publication of the audited financial statements.
Non-Executive Director’s Remuneration The committee also determines the Non-Executive Director’s remuneration, with reference to external benchmarks, and makes recommendations to the board regarding fees to be paid to each non-executive director for their services as a member of the board or for participation in the various sub-committees of the board. Non- Executive Directors
Name Fees Total R R
MA Pottier 10,000 10,000 BR Warmback 6,000 6,000 Total 16,000 16,000 Appointments to the Board Directors are appointed on the basis of skill, acumen, experience and level of contribution to and impact on the activities of the Group. Directors are invited to assist with the identification and nomination of potential candidates. The Independent members of the Board propose suitable candidates for consideration by the Board. Company secretary The appointment and removal of the company secretary is a matter for the Board as a whole. The company secretary advises the Board on the appropriate procedures for the management of meetings and the implementation of governance procedures, and is further responsible for providing the Board collectively, and each Director individually, with guidance on the discharge of their responsibilities in terms of the legislation and regulatory requirements applicable to South Africa. 19
Interests in contracts Directors will be required to inform the Board timeously of conflicts or potential conflicts of interests they may have in relation to particular items of business and recuse themselves from discussions or decisions on matters in which they have a conflicting interest. Relations with shareholders The company maintains dialogue with its key financial audiences, especially institutional shareholders and analysts. The management team manages the dialogue with these audiences at the time of publishing interim and final results The company’s website provides the latest and historical financial and other information, including the financial reports. The Board encourages shareholders to attend its annual general meeting, notice of which is contained in this annual report, where shareholders will have the opportunity to put questions to the Board, including the Chairman of the Audit Committee. Director’s share dealings Directors may not deal in the company’s shares without first advising and obtaining clearance from the Chairman and the Financial Director. The Chairman and Financial Director may not deal in the company’s shares without first advising and obtaining clearance from the Board. No Director or executive may trade in Gooderson shares during closed periods as defined in the JSE Listings Requirements. The Directors of the company keep the company secretary advised of all their dealings in securities. Going concern The annual financial statements contained in this annual report have been prepared on the going concern basis. The Directors report that, after making enquiries, they have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Group continues to adopt the going concern basis in preparing the annual financial statements.
20
EMPOWERMENT AND TRANSFORMATION REPORT Empowerdex Gooderson received a “C” rating from Empowerdex for the period 2005/2006 for unconstrained operational capacity and a limited broad based black economic empowerment (BBBEE) contributor. Gooderson acknowledges its shortcomings which need to be addressed and where achievements have been made. The Tourism Industry Charter was launched in May 2005 and its scorecard provides Gooderson with benchmarks and targets to achieve by 2009 and 2014. BBBEE Committee A committee has been established to drive the process as legislated by the Department of Trade and Industry and the Tourism Charter surrounding BBBEE transformation within Gooderson. BBBEE Procurement Gooderson recognises that procurement of goods and services from black owned and empowered enterprises is necessary to comply with BBBEE transformation. Employment Equity Plan and Policies The Gooderson workforce of black people and black women represent a percentage of 86.39% and 39.12%, respectively. An authorised employment equity plan and employment equity committee is in place. Training and Development Annually management identifies what skills are required and how these skills can support the company’s equity targets. Skills development is an ongoing process which aligns itself to the Workplace Skills Plan set out annually. The Group’s Operation Director is involved in Skills development. Remuneration, Benefits and Incentives In addition to market related salaries, employees benefit from retirement funding and annual bonuses/incentives. Long service awards are held annually and are presented at 10, 20, 25 and 30 year anniversaries. Employee and Industrial Relations Gooderson recognises and has relationships with South African Commercial Catering and Allied Workers Union (SACCAWU) which is representative of some of its employees. Health and Safety Training Health and Safety training is ongoing and is encouraged for all members of staff. The Group also complies with all issues as stated in the Occupational Health and Safety Act. Internal procedures are being developed to ensure compliance with all relevant legislation. HIV/AIDS Gooderson policy states that its environment is non-discriminatory towards and supportive of employees living with HIV/AIDS with easy and confidential access to counselling for all employees.
21
Certification by the Company Secretary In terms of Section 268 (G) of the Companies Act 61 of 1973 (Act), as amended, I certify that, to the best of my knowledge and belief, the company has, in respect of the financial year reported upon, lodged with the Registrar of Companies all returns required of a public company in terms of the Act and that and that all such returns are true, correct and up to date. R. Nannoolal Company Secretary 1 June 2007
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GOODERSON LEISURE CORPORATION LIMITED 54. and its subsidiaries NOTES TO THE FINANCIAL STATEMENTS – 28 FEBRUARY 2007 33. BUSINESS SEGMENTS Business segments During the year, management amended its primary reporting segments. The prior year financial statements presented three segments: Hotels and Lodges,
Timeshare, and Corporate Services and Property.
No comparative figures have been presented in the segment report, as the information would
not be comparable.
For management purposes, the group is currently organised into two segments, namely
Hotels and Lodges, and Timeshare. These segments are the basis on which the group reports to management.
Principal activities are as follows: Hotels and Lodges The company operates hotels, providing accommodation, food and sales and conference
facilities, also owning and maintaining hotel properties.
Timeshare The management, development and sales of its own resorts as well as other resorts that it
manages on behalf of third parties.
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GOODERSON LEISURE CORPORATION LIMITED 55. and its subsidiaries NOTES TO THE FINANCIAL STATEMENTS – 28 FEBRUARY 2007 33. BUSINESS SEGMENTS (continued)
203 100.00 120,000,000 100.00 DISTRIBUTION OF SHAREHOLDERS
No. of shareholdings
%
No. of Shares
%
Close Corporations 7 3.44 289,477 0.24 Individuals 160 78.82 14,697,031 12.25 Investment Companies 3 1.48 7,489,000 6.24 Mutual Funds 4 1.97 7,246,792 6.04 Nominees and Trusts 14 6.90 89,140,524 74.28 Other Corporations 4 1.97 97,941 0.08 Private Companies 11 5.42 1,039,235 0.87 203 100.00 120,000,000 100.00 PUBLIC / NON – PUBLIC SHAREHOLDERS
No. of shareholdings
%
No. of Shares
%
Non – Public Shareholders 4 1.97 95,285,000 79.41 Directors 4 1.97 95,285,000 79.41 Public Shareholders 199 98.03 24,715,000 20.59 203 100.00 120,000,000 100.00 Beneficial shareholders holding of 3% or more
JSE SHARE INFORMATION For the year ended 28 February 2007 At 28 February 2007 Closing price (cents) 95 High for the period (cents) 100 Low for the period (cents) 73 Volume of shares traded during the period 8 694 472 Value of shares traded during the period R7 372 399 Note: The JSE share information is for the period since listing, 26 September 2006 to 28 February 2007. SHAREHOLDERS’ DIARY Financial year end Announcement of preliminary reviewed financial results on SENS Annual financial statements Annual general meeting Interim report
28 February
30 May 2007 1 June 2007
8 August 2007 To be published in November 2007
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CORPORATE INFORMATION Full name Gooderson Leisure Corporation Limited Registration number 1972/004241/06 JSE abbreviated name Gooderson JSE code GDN ISIN ZAE000084984 Sector AltX Exchange Alternative Exchange Formed 1972 Listed JSE 26 September 2006 Website www.goodersonleisure.co.za Company secretary and registered office R. Nannoolal 2nd Floor, 4 Pencarrow Crescent La Lucia Ridge Office Estate La Lucia, 4019 (PO Box 752, Durban, 4000) Telephone: (031) 576 5500 Facsimile: (031) 576 5555 Transfer secretaries Computershare Investor Services 2004 (Pty) Limited (Registration number 2004/003647/07) Ground Floor 70 Marshall Street Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) Telephone: (011) 370 5000 Facsimile: (011) 688 5210 Attorneys Cox Yeats Attorneys 12th & 13th Floors, Victoria Maine 71 Victoria Embankment, Durban, 4001 (PO Box 3032, Durban, 4000) Telephone: (031) 3042851 Facsimile: (031) 3013540 Designated Advisor Exchange Sponsors (Pty) Limited (Registration number 1999/024433/07) 39 First Road Hyde Park, 2196 (PO Box 411216, Craighall, 2024) Telephone: (011) 447 2951 Facsimile: (011) 447 1929
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Auditors
Facsimile: (031) 576 5555 Commercial bankers First National Bank Limited (Registration number 1929/001225/06) Acacia House, 8 Rydall Vale Park, Douglas Saunders Drive, La Lucia Ridge, 4320 (PO Box 4130,The Square, Umhlanga Rocks, 4320) Telephone: (031) 580 6000 Facsimile: (031) 580 6045
Grant Thornton 2nd Floor, 4 Pencarrow Crescent La Lucia Ridge Office Estate La Lucia, 4019 (PO Box 752, Durban, 4000) Telephone: (031) 576 5500
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Notice of annual general meeting NOTICE is hereby given that the annual general meeting of shareholders of Gooderson Leisure Corporation Limited will be held at the offices of the company at the Tropicana Hotel, 85 Marine Parade, Durban on Wednesday, 8 August 2007 at 10:00 for the following purposes: 1. To consider the annual financial statements of the company for the year ended 28
February 2007. 2. To transact such other business as may be transacted at the annual general meeting of
the company including the re-appointment of the auditors and the re-election of retiring directors: and
3. To consider and, if deemed fit, to pass, with or without modification, the following
special and ordinary resolutions set out below, in the manner required by the South African Companies Act, 1973 as amended:
Special resolution Special resolution number 1: Share repurchases “Resolved, as a special resolution, that the directors be authorised pursuant inter alia to the company’s articles of association, until this authority lapses at the next annual general meeting of the company, unless it is then renewed at the next annual general meeting of the company and provided that this authority shall not extend beyond 15 months from date of passing this special resolution, for the company or any subsidiary of the company to acquire shares of the company, subject to the Listings Requirements of JSE Limited (“JSE”), provided that: 1. any repurchase of securities must be effected through the order book operated by the
JSE trading system and done without any prior understanding or arrangement between the company and the counter party;
2. the company may only appoint one agent to effect any repurchases on its behalf; 3. the company must be authorised thereto by its articles of association; 4. the number of shares which may be acquired pursuant to this authority in any
financial year (which commenced 1 March 2006) may not in the aggregate exceed 20% (twenty percent) of the company’s issued share capital as at the date of passing of this special resolution;
5. repurchases of shares may not be made at a price greater than 10% (ten percent)
above the weighted average of the market value of the securities for the five business days immediately preceding the date on which the transaction was effected;
6. repurchases may not be undertaken by the company or one of its wholly owned
subsidiaries during a prohibited period (as defined in paragraph 3.67 of the Listings Requirements of the JSE)
7. repurchases may only take place if, after such repurchase, the shareholder spread of
the company still complies with the Listings Requirements of the JSE; 8. after the company has acquired shares which constitute, on a cumulative basis, 3%
(three percent) of the number of shares in issue (at the time that authority from shareholders for the repurchase is granted), the company shall publish an announcement to such effect, or any other announcements that may be required in such regard in terms of the Listings Requirements of the JSE which may be applicable from time to time; and
9. the company’s Designated Advisor shall confirm the adequacy of the company’s
working capital for the purposes of undertaking the repurchase of shares in writing to the JSE prior to entering the market to proceed with the repurchase.
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In accordance with the Listings Requirements of the JSE, the directors record that: Although there is no immediate intention to effect a repurchase of securities of the company, the directors would utilise the general authority to repurchase securities as and when suitable opportunities present themselves, which opportunities may require expeditious and immediate action. The directors, after considering the maximum number of securities which may be purchased and the price at which the repurchases may take place pursuant to the buy-back general authority, are of the opinion that for a period of 12 months after the date of notice of this annual general meeting: - the company and the group will be able to pay their debts in the ordinary course of
business; - the assets of the company and of the group fairly valued in accordance with generally
accepted accounting practice, will exceed the liabilities of the company and of the group after the buy-back;
- the share capital and reserves of the company and of the group will be adequate for
the purposes of the business of the company and its subsidiaries; and - the working capital available to the company and its subsidiaries will be adequate for
the purpose of the business of the company and its subsidiaries; and The following additional information, some of which may appear elsewhere in the annual report of which this notice forms part, is provided in terms of paragraph 11.26 of the Listings Requirements of the JSE for purposes of this general authority: - Directors – page 29 - Major beneficial shareholders – page 77 - Directors’ interests in ordinary shares – page 67 - Share capital of the company – page 28 Litigation statement The directors, whose names appear on page 29 of the annual report of which this notice forms part, are not aware of any legal or arbitration proceedings including proceedings that are pending or threatened that may have or have had in the recent past (being at least the previous 12 (twelve) months) a material effect on the group’s financial position. Directors’ responsibility statement Directors whose names appear on page 29 of the annual report collectively and individually accept full responsibility for the accuracy of the information pertaining to this special resolution and 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, that all reasonable enquiries to ascertain such facts have been made and that the special resolution contains all information required in terms of the Listings Requirements of the JSE. Material changes Other than the facts and developments reported on in the annual report, there have been no material changes in the affairs or financial position of the company and its subsidiaries since the date of signature of the audit report for the year ended 28 February 2007 and up to the date of this notice. 81
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Reasons for and effects of Special Resolution number 1 The reason for Special Resolution number 1 is to afford directors of the company or a subsidiary of the company a general authority to effect a buy-back of the company’s shares on the JSE. The effect of the resolution will be that the directors will have the authority, subject to the Rules and Requirements of the JSE, to effect acquisitions of the company’s shares on the JSE. Ordinary resolutions Ordinary resolution number 1: Issue of shares for cash ”Resolved that the directors be authorised pursuant inter alia to the company’s articles of association, until this authority lapses at the next annual general meeting of the company, unless it is then renewed at the next annual general meeting of the company provided that it shall not extend beyond 15 months, to allot and issue any ordinary shares for cash subject to the Rules and Requirements of the JSE Limited (“JSE”) on the following bases: 1. the allotment and issue of the shares must be made to persons qualifying as public
shareholders as defined in the Listings Requirements of the JSE; 2. the shares which are the subject of the issue for cash must be of a class already in
issue, or where this is not the case, must be limited to such shares or rights that are convertible into a class already in issue;
3. the number of shares issued for cash shall not in the aggregate in any one financial year exceed 50 % (fifty percent) of the company’s issued share capital of ordinary shares. The number of ordinary shares which may be issued shall be based on the number of ordinary shares in issue at the date of such application less any ordinary shares issued during the current financial year, provided that any ordinary shares to be issued pursuant to a rights issued (announced, irrevocable and fully underwritten) or acquisition (concluded up to the date of application including announcement of the final terms) may be included as though they were shares in issue at the date of application;
4. the maximum discount at which ordinary shares may be issued is 10% (ten percent) of the weighted average traded price on the JSE of those shares over the 30 business days prior to the date that the price of the issue is determined or agreed by the directors of the company;
5. after the company has issued shares for cash which represent, on a cumulative basis within a financial year, 5% (five percent) or more of the number of shares in issue prior to that issue, the company shall publish an announcement containing full details of the issue (including the number of shares issued, the average discount to the weighted average traded price of the shares over the 30 days prior to the date that the price of the issue is determined or agreed to by the directors and the effect of the issue on net asset value and earnings per share), or any other announcements that may be acquired in such regard in terms of the Listings Requirements of the JSE which may be applicable from time to time.
In terms of the Listings Requirements of the JSE a 75% (seventy-five percent) majority of the votes cast by shareholders present or represented by proxy at the general meeting must be cast in favour of Ordinary Resolution number 1 for it to be approved. Ordinary resolution number 2: Unissued ordinary shares
“Resolved that the authorised and unissued ordinary share capital of the company be and is hereby placed under the control of the directors of the company which directors are, subject to the Rules and Regulations of the JSE Limited (“JSE”) and the provisions of section 221 and 222 of the Companies Act, 1973 as amended, authorised to allot and issued any of such shares at such time or times, to such person or persons, company or companies and upon such terms and conditions as they may determine, such authority to remain in force until the next annual general meeting of the company.” 82
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Ordinary resolution number 3: Re-election of directors
“Resolved that C M de Klerk, G M Castleman and M A Pottier be re-elected as directors of the company” Ordinary resolution number 4: Directors’ remuneration
“Resolved that the remuneration of the directors, as set out on pages 18 and 19 of the annual report of which this notice forms part, be and is hereby confirmed and ratified.” Ordinary resolution number 5: Signature of documentation
“Resolved that any director or the company secretary of the company be and is hereby authorised to sign all such documentation and do all such things as may be necessary for or incidental to the implementation of Special Resolutions number 1 and Ordinary Resolutions numbers 1, 2, 3, 4 and 6 which are passed by the members in accordance with and subject to the terms thereof”. Ordinary resolution number 6: Re-appointment of auditors
“Resolved that Grant Thornton be re-appointed as auditors of the company.”
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Voting and proxies A shareholder of the company entitled to attend and vote at the annual general meeting is entitled to appoint one or more proxies (who need not be a shareholder of the company) to attend, vote and speak in his/her stead. On a show of hands, every shareholder of the company present in person or represented by proxy shall have one vote only. On a poll, every shareholder of the company present in person or represented by proxy shall have one vote for every share held in the company by such shareholder. A form of proxy is attached for the convenience of any shareholder holding shares who cannot attend the annual general meeting. Forms of proxy may also be obtained on request from the company’s registered office. The completed forms of proxy must be deposited at or posted to the office of the transfer secretaries of the company, Computershare Invester Services 2004 (Proprietary) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (P O Box 61051, Marshalltown, 2107) to be received no later than 48 hours prior to the meeting. Any member who completes and lodges a form of proxy will nevertheless be entitled to attend and vote in person at the general meeting should the member subsequently decide to do so. Shareholders who have already dematerialized their shares though their Central Securities Depository Participant (“CSDP”) or broker rather than through own-name registration and who wish to attend the annual general meeting must instruct their CSDP or broker to issue them with the necessary authority to attend. Dematerialised shareholders, who have elected own-name registration in the sub-register through a CSDP and who are unable to attend but wish to vote at the annual general meeting should complete and lodge the attached form of proxy with the transfer secretaries of the company. Dematerialised shareholders, who have elected own-name registration in the sub-register through a CSDP and who are unable to attend but wish to vote at the annual general meeting, should timeously provide their CSDP or broker with their voting, instructions in terms of the custody agreement entered into between the shareholder and his CSDP or broker. By order of the board ___________________________ R. Nannoolal Company Secretary 1 June 2007 Registered Address Transfer Secretaries 4 Pencarrow Crescent Computershare Investor Services 2004 Pencarrow Park (Proprietary) Limited La Lucia Ridge Office Estate 70 Marshall Street La Lucia Johannesburg 4019 (PO Box 61051, Marshalltown, 2107) (PO Box 752, Durban, 4000)
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GOODERSON LEISURE CORPORATION LIMITED (Previously Alawill Investments (Pty) Limited) (Incorporated in the Republic of South Africa) (Registration number 1972/004241/06) JSE Share code: GDN ISIN: ZAE000084984 (the Company)
Form of proxy (for use by certificated shareholders and own name dematerialised shareholders) Form of proxy for the annual general meeting of the company to be held at 10:00 on Wednesday, 8 August 2007 at the company’s offices at the Tropicana Hotel, 85 Marine Parade, Durban (“the annual general meeting”). For use by certificated shareholders, nominee companies of Central Securities Depository Participants (“CSDP”), brokers’ nominee companies and shareholders who have dematerialised their shares and who have elected own-name registration, who wish to vote on the ordinary and special resolutions per the Notice of the Annual General Meeting to which this form is attached. Shareholders who have dematerialised their shares through a CSDP or broker must not complete this form of proxy and must provide their CSDP or broker with their voting instructions, except for shareholders who elected own-name registration in the sub-register through a CSDP, which shareholders must complete this form of proxy and lodge it with Computershare Investor Services 2004 (Proprietary) Limited. Holders of dematerialised shares other than with own name registration, wishing to attend the annual general meeting must inform their CSDP or broker of such intention and request their CSDP or broker to issue them with the necessary authorisation to attend. I/We (Name in block letters)
Of (Address) Being the holder/s of
Ordinary shares in the company, do hereby appoint.
1. or failing him/her 2. or failing him/her 3. The chairperson of the annual general meeting as my/our proxy to act for me/us and on my/our behalf at the annual general meeting of the company, or any adjournment thereof, which will be held for the purpose of considering and, if deemed fit, of passing, with or without modification, the ordinary and special resolutions as detailed in the Notice of Annual General Meeting, and to vote for and/or against the resolutions and/or abstain from voting in respect of the ordinary shares registered in my/our name/s, in accordance with the following instructions (refer notes): Number of votes on a poll (one vote per
ordinary share) In favour Against Abstain
To pass special resolution: 1. To effect share buy-backs To pass ordinary resolution: 1. To issue for cash the authorised but unissued
shares
2. To place the unissued shares under the control of the directors.
3. To re-elect the directors C M de Klerk G M Castleman
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M A Pottier 4. To ratify directors’ remuneration 5. To authorise the signature of documentation 6. To re-appoint Grant Thornton (Durban) as
auditors of the company.
Signature Signed at on 2007
Assisted by (if applicable)
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Notes 1. Each shareholder is entitled to appoint one or more proxies (none of whom need to
be a shareholder of the company) to attend, speak and vote in place of that shareholder at the annual general meeting.
2. Shareholder(s) that are certificated or own-name dematerialised shareholders may
insert the name of a proxy or the names of two alternative proxies of the member’s choice in the space/s provided, with or without deleting “the chairperson of the meeting”, but any such deletion must be initialed by the shareholder(s). 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 follow. If no proxy is named on a lodged form of proxy the chairperson shall be deemed to be appointed as the proxy.
3. A shareholder’s instructions to the proxy must be indicated by the insertion of the
relevant number of votes exercisable by the shareholder in the appropriate box provided. Failure to comply with the above will be deemed to authorise the proxy, in the case of any proxy other than the chairperson, to vote or abstain from voting as deemed fit and in the case of the chairperson to vote in favour of the resolution.
4. A shareholder or his/her proxy is not obliged to use all the votes exercisable by the
shareholders, but the total of the votes cast or abstained from may not exceed the total of the votes exercisable in respect of the shares held by the shareholder.
5. Forms of proxy must be lodged at or posted to Computershare Investor Services
2004 (Proprietary) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) to be received no later than 48 hours prior to the meeting.
6. 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 there at to the exclusion of any proxy appointed in terms hereof, should such shareholder wish to do so. Where there are joint holders of shares, the vote of the first joint holder who tenders a vote, as determined by the order in which the names stand in the register of members’, will be accepted.
7. The chairperson of the annual general meeting may reject or accept any form of
proxy which is completed and/or received otherwise than in accordance with these notes, provided that, in respect of acceptances, the chairperson is satisfied as to the manner in which the shareholder concerned wishes to vote.
8. 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 or Computershare Investor Services 2004 (Proprietary) Limited or waived by the chairperson of the annual general meeting.
9. Any alteration or correction made to this form of proxy must be initialed by the
signatory/ies. 10. A minor must be assisted by his/her parent guardian unless the relevant documents
establishing his/her legal capacity are produced or have been registered by Computershare Investor Services 2004 (Proprietary) Limited.
11. Where there are joint holders of any shares, only that holder whose name appears
first in the register in respect of such shares need sign this form of proxy.
