Basil Read Annual Report 2008
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Commentary
 
Directors’ responsibility statement Certificate by company secretary Report of the independent auditors Directors’ report Consolidated income statement Consolidated balance sheet Consolidated statement of changes in equity Consolidated cash flow statement Notes to the consolidated financial statements Company income statement Company balance sheet Company statement of changes in equity Company cash flow statement Notes to the company financial statements Shareholder information Notice to shareholders Shareholders’ diary Administration Form of proxy PDF [43kb]
  
 
Directors’ report
for the year ended 31 December 2008
 
 

The directors present their 24th annual report, which forms part of the audited financial statements of the company and of the group for the year ended 31 December 2008.

NATURE OF BUSINESS

Basil Read is one of the top five construction companies in South Africa. The company is listed on the JSE Limited and its subsidiary companies are active in the areas of civil engineering, road construction, building, mixed integrated housing developments, property development, stone crushing, bitumen distribution, opencast mining and blasting. These subsidiaries operate throughout Africa.

DIVIDENDS

A dividend of 50 cents per share was declared and paid during the year under review, in respect of the year ended 31 December 2007. On 26 February 2009, the directors declared a final dividend of 58 cents per share in respect of the year ended 31 December 2008.

SHARE CAPITAL

During the year under review, the company issued 1 762 700 shares at R29,85 per share, to the shareholders of Roadcrete Africa (Pty) Limited as part of the purchase consideration for the acquisition of the company.

The company issued 9 090 909 shares in a private placement for cash with the Industrial Development Corporation, for a consideration of R19,76 per share, before costs.

OPERATING RESULTS

The financial position, results of operations and cash flows of the company and that of the group for the year ended 31 December 2008 are set out here.

The group made a profit after taxation of R206 million (2007: R118 million) during the year under review.

AUDITORS

PricewaterhouseCoopers Inc will continue in office in accordance with section 270(2) of the Companies Act, 1973.

PROPERTY, PLANT AND EQUIPMENT

The group acquired property, plant and equipment to the amount of R388 million (2007: R288 million) during the year.

SUBSIDIARIES AND JOINT VENTURES

On 1 July 2008, the group increased its shareholding in Newport Construction (Pty) Limited to 55% (2007: 51%) for R4,00. These shares were acquired from a management consortium at par value. The company is a roads and civil engineering construction company.

On 1 July 2008, the group increased its shareholding in BR-Tsima Construction (Pty) Limited to 100% (2007: 51%) for R49,00. The company was dormant at the time of acquisition. The company is a roads and civil engineering construction company.

On 1 September 2008, the group acquired 100% of the share capital of Roadcrete Africa (Pty) Limited for R125 million. The group also purchased a shareholders’ loan account at par value for R33,6 million. The company is a roads and civil engineering construction company.

The information relating to the company’s financial interest in its subsidiaries and joint ventures are set out in notes 16, 37, 39, 40 and 43 to the financial statements.

INVESTMENTS IN ASSOCIATES

No associates were acquired or disposed of during the year. For more information on the group’s investments in associates refer to notes 17 and 38 to the financial statements.

OTHER INVESTMENTS

Stone and Allied Industries Limited disposed of its investment in Investec Limited during the year under review. The company received proceeds of R0,2 million, recognising a loss of R0,1 million.

BORROWINGS

Interest-bearing borrowings comprise bank borrowings and instalment sale agreements. Other borrowings comprise the amount due to former shareholders relating to companies the group has acquired over the last three years. During the year borrowings increased due to banking loans and new instalment sale agreements entered into to fund capital expenditure and the acquisition of Roadcrete Africa (Pty) Limited, partly offset by the repayment of banking loans and other instalment sale agreements.

EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

Debswana's announcement during February 2009 that it was cancelling mining activities in Botswana has impacted on the group's order book by R235 million with the cancellation of the Damtshaa contract. Mutually acceptable termination conditions and compensation have been agreed upon.

No other material events have occurred between the balance sheet date and the date of these results that would have a material effect on the financial statements of the group.

SHAREHOLDER SPREAD

Details of shareholder categories are set out here.

DIRECTORATE

The following were directors of the company during the year under review:

Bulelani Thandabantu Ngcuka
Marius Lodewucus Heyns
Lungisa Brian Dyosi
Sango Siviwe Ntsaluba
Alexander Thabiso Tlelai
Charles Peter Davies
Sindile Lester Leslie Peteni
Ntombekaya Yvonne September

  

Non-executive Director, Chairman
Chief Executive Officer, Managing Director
Non-executive Director
Non-executive Director
Non-executive Director
Independent Non-executive Director
Independent Non-executive Director
Independent Non-executive Director

DIRECTORS’ EMOLUMENTS
  Cash portion
of package
R 		Benefits#
R 		 Incentive
bonus
R 		Gain on
share options
exercised
R 		Total  
R  
Executive directors          
2008          
Paid by Basil Read (Pty) Limited          
Marius Lodewucus Heyns 2 685 945 334 217  8 333 333 – 11 353 495  
2007          
Paid by Basil Read (Pty) Limited          
Marius Lodewucus Heyns 1 708 014 253 140  5 000 000 4 324 000 11 285 154  
#Benefits include the group’s contribution towards medical aid and provident fund.
  Services
as director
R 		Total  
R  
Non-executive directors    
2008    
Bulelani Thandabantu Ngcuka* 540 000 540 000  
Lungisa Brian Dyosi* 215 000 215 000  
Sango Siviwe Ntsaluba* 257 000 257 000  
Alexander Thabiso Tlelai* 239 000 239 000  
Charles Peter Davies 424 750 424 750  
Sindile Lester Leslie Peteni 252 750 252 750  
Ntombekaya Yvonne September* 248 000 248 000  
  2 176 500 2 176 500  
2007    
Bulelani Thandabantu Ngcuka* 447 500 447 500  
Lungisa Brian Dyosi* 137 500 137 500  
Sango Siviwe Ntsaluba* 270 000 270 000  
Alexander Thabiso Tlelai* 175 000 175 000  
Charles Peter Davies 290 000 290 000  
Sindile Lester Leslie Peteni 175 000 175 000  
Ntombekaya Yvonne September* – –  
  1 495 000 1 495 000  
*Paid to the companies that these directors represent.    
 

DIRECTORS’ EQUITY SETTLED INSTRUMENTS
  Number  Average
strike price
R 		Average  
exercise price  
R  
The directors held the following equity settled instruments at 31 December 2008:      
Marius Lodewucus Heyns      
Equity settled instruments at 1 January 2008 250 000  13,95 –  
Equity settled instruments granted during the year –  – –  
Equity settled instruments exercised during the year –  – –  
Equity settled instruments at 31 December 2008 250 000  13,95  
The directors held the following equity settled instruments at 31 December 2007:      
Marius Lodewucus Heyns      
Equity settled instruments at 1 January 2007 –  – –  
Equity settled instruments granted during the year – second grant 230 000  5,26 –  
Equity settled instruments granted during the year – third grant 250 000  13,95 –  
Equity settled instruments exercised during the year (230 000) 5,26 24,06  
Equity settled instruments at 31 December 2007 250 000  13,95  

The equity settled instruments’ terms are detailed in note 34 to the financial statements.


INTERESTS OF DIRECTORS AND OFFICERS IN SHARE CAPITAL

The interests, direct and indirect, of the directors and officers at the date of this report are as follows:
  Number of
shares held 		% of  
shares held  
2008    
Direct and indirect    
Bulelani Thandabantu Ngcuka 500 978 0,58  
Sango Siviwe Ntsaluba 3 678 803 4,25  
Alexander Thabiso Tlelai 3 673 803 4,25  
Lungisa Brian Dyosi 166 993 0,19  
2007    
Direct and indirect    
Bulelani Thandabantu Ngcuka 500 978 0,66  
Sango Siviwe Ntsaluba 3 682 382 4,87  
Alexander Thabiso Tlelai 3 672 425 4,86  
Lungisa Brian Dyosi 166 993 0,22  

The company’s directors did not trade in shares between year-end and the date the financial statements were authorised for issue.


INTERESTS OF DIRECTORS AND OFFICERS IN SHARE INCENTIVE SCHEME

The interests, direct and indirect, of the directors and officers at the date of this report are as follows:
  Number of
unissued shares 		% of unissued
shares 		% held once  
shares issued  
2008      
Direct and indirect      
Marius Lodewucus Heyns 250 000 11,32 0,29  
Enna Kruger (Company secretary) 10 000 0,45 0,01  
2007      
Direct and indirect      
Marius Lodewucus Heyns 250 000 10,86 0,33  
Enna Kruger (Company secretary) 10 000 0,43 0,01  

The right to the unissued shares are in terms of the Basil Read Share Incentive Scheme. For further details,
refer to note 34(e).

COMPANY SECRETARY

The Company Secretary is Enna Kruger.

REGISTERED OFFICE

7 Brook Road
Lilianton
Boksburg
1459

POSTAL ADDRESS

Private Bag X170
Bedfordview
2008
 
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