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Report of the directors
for the year ended 31 March 2011
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INVICTA HOLDINGS LIMITED
The directors have pleasure in presenting their
annual
report, which forms part of the annual financial
statements and the 2011 Annual Report of the Group and of the
Company for the year ended 31 March 2011.
In the context
of the financial statements, the term “Group” refers to the
Company, its subsidiaries, associates and joint ventures.
Nature of business
The Company is an
investment holding and management company. The various
operations of the
Group are summarised below with an expanded
explanation of the various businesses detailed in the
review
of operations.
Humulani Investments (Humulani)
Operational holding company of all the Invicta Group
operations.
Humulani has 25% of its ordinary shares under
the
control of BEE parties.
20% of Humulani’s ordinary
shares are held by aloeCap Private Equity Investments 1 (Pty)
Limited, a
wholly-owned subsidiary of aloeCap (Pty) Limited.
aloeCap is a 100% black-owned and managed company.
5% of
Humulani’s ordinary shares are held by the Humulani Employee
Investment Trust. The beneficiaries of the trust are the black
employees of
the Group.
In terms of SIC 12, the 5% of
the ordinary issued share capital of Humulani Investments (Pty)
Limited owned by the Humulani Employee Investment Trust (“the
trust”) has been consolidated. Deconsolidation
thereof and
the recognition of the profit attributable
to the issue of
the shares to the trust will commence
once the residual risks
attributable to the loan finance
provided by Invicta to the
trust to acquire the shares
dissipate through repayment or
the investment value
increases.
BMG (Bearing
Man Group)
Southern Africa's leading distributor
of bearings, seals,
power transmission components, drives,
belting, fasteners, filtration and hydraulics. |
CEG (Capital Equipment Group)
Northmec
Distributor of a full range of
leading agricultural machinery, implements and related spares.
CSE
Wholesale and retail distributor
of light earthmoving
machinery, turf-grooming machinery, golf
cars, utility
vehicles and related spares.
New
Holland
Wholesale distributor of leading brand
agricultural
machinery, implements and related spares.
Doosan SA
Doosan SA supplies
predominately heavy earthmoving
machinery for construction
and mining applications.
Criterion
Importer and distributor of leading materials handling
equipment and related spares.
Tiletoria
A leading importer and distributor of tiles and
related
sanitary ware in the Western Cape, Gauteng and
KwaZulu- Natal.
Compliance with accounting
standards
The Group’s and the Company’s annual
financial
statements comply with International Financial
Reporting Standards, the South African Companies Act
and the
JSE Limited’s Listings Requirements (“JSE”).
Group Results
Management philosophy
Invicta adopts
a hands-on approach to managing its
subsidiaries. Each
subsidiary is self contained and has
its own managing
director and a complete complement of financial and
administration infrastructure. The Invicta Group chief executive
officer is, however, actively involved in the executive
committees of all operations, with executive directors
of the
Group actively controlling and participating on |
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the boards of subsidiaries. Cash flow
is always a major
focus of the Group. The Board aims to add
value by
providing expertise and guidance to subsidiary
management teams, where feasible, and by pooling
best
practices within the Group.
Share capital and
share premium
The authorised share capital of
the Company remained unchanged at 134 000 000 ordinary shares of
5 cents each.
During the year, the Company’s issued
ordinary share
capital and share premium remained unchanged.
Dematerialising of shares (Strate)
Shareholders are again requested to note that, as a
result of
clearing and settlement of trades through the
Strate system,
the Company’s share certificates are
no longer good for
delivery for trading. Dematerialisation of the Company’s share
certificates
is now a prerequisite when dealing in its
shares.
Auditors
Deloitte &
Touche continued in office as auditors of
the Company and its
subsidiaries for 2011.
At the annual general meeting,
shareholders will be
requested to reappoint Deloitte & Touche
as auditors
of Invicta Holdings Limited and to confirm that
SBF
Carter will be the designated auditor partner for the
2012 financial year.
Sponsor
Deloitte & Touche Sponsor Services (Pty) Limited acts
as
sponsor to the Company in terms of the requirement of the JSE
Limited.
Transfer secretaries
Computershare Investor Services (Pty) Limited serves as the
registrar and transfer secretaries of the Company.
Invicta Holdings long-term bonus and share incentive
scheme and Bonus Bank Scheme
In order to attract
and retain key staff the Group has
implemented a long-term
bonus and share incentive
scheme as well as a Bonus Bank
Scheme. The Remuneration Report contains details of the scheme.
Subsidiaries and associate
Details
of the Company’s interests in its material subsidiaries and
associate are set out in the attached
annual financial
statements in notes 16 and 17 on pages 68 to 71 of the 2011
Annual Report. |
Dividends
Details of the ordinary
dividends paid are reflected in
note 24 on page 73 of the
2011 Annual Report.
The Company’s current dividend policy
is to consider
an interim dividend at a 3,5 times dividend
cover ratio, with a final dividend being considered to bring the
annual dividend cover ratio to no less than 2,75 times.
Historically the dividend cover ratio has been 3,5 times at
interim stage and 3,0 times annual dividend cover ratio at the
final dividend stage.
Directors
Details of the directors and company secretary during
the
year and at the date of this report are reflected on
pages 4
and 5 and on the inside back cover of the 2011 Annual Report.
Directors’ contracts
No material
contracts have been entered into between
the Company and the
Group and the directors during
the year under review.
Directors’ fees
Directors’ payments for
services as directors and other
emoluments for the past year
are set out in note 36 on pages 79 and 80 of the 2011 Annual
Report. Members will be requested to consider an ordinary
resolution approving these emoluments at the annual general
meeting.
Members will further be requested to approve the
fees
for services as director for the forthcoming year as
required by the Companies Act.
Directors‘
interest in shares in the Company
The total
direct and indirect interest declared by the
directors in the
issued share capital of the Company at
31 March 2011 was 59%
(2010: 60%).
The details of the directors’ shareholding
are reflected
in note 40 on page 85 of the 2011 Annual
Report.
Unissued share capital
The unissued ordinary shares are the subject of a general
authority granted to the directors in terms of the Companies Act
and the JSE Listings Requirements.
As this general authority
remains valid only until the next annual general meeting, which
is to be held on 29 July 2011, members will be requested at the
meeting to consider an ordinary resolution placing the
said
ordinary shares under the control of the directors until the
2012 annual general meeting. |
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Repurchase of shares
It makes sound business sense for a Company to
acquire its own shares under certain circumstances. Thus, the
directors consider it appropriate to secure a general authority
for the Company to repurchase shares on the open market of the
JSE in order to provide the Company with maximum flexibility
regarding the repurchase of its own shares.
The Group has
over the years repurchased shares which are held at subsidiary
level. The treasury shares are eliminated on consolidation and
are thus treated as cancelled from a financial reporting
perspective. The directors consider it appropriate to secure a
general authority for the Company to repurchase its shares held
by its subsidiary.
The Company’s Articles of Association
allow the Company to purchase its own shares if shareholders
have, by way of special resolution, given the Company a general
authority to affect such purchase or a specific authority to
affect a specific purchase of its own shares, subject to the
requirements of the Companies Act and the JSE Listings
Requirements.
Shareholders will be required to consider
special resolutions at the annual general meeting giving the
directors general authority to permit the Company or a
subsidiary of the Company to acquire the Company’s shares and to
permit the Company to acquire its shares held by subsidiary
companies.
Notice of annual general meeting
Notice to shareholders detailing all necessary resolutions
relating to the Company affairs is set out on pages 89 to 96 of
the 2011 Annual Report. Signed on behalf of the Audit Committee
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