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Review of operations
Dynamic Cables is a group's excellent empowerment credentials and to expand
its range of service and product offerings to various IT and
Telecom companies, including the parastatals.wholesale distributor of telecommunications
SUSPENSION OF LISTING
With the exception of two vendors, the group has settledinfrastructure and cabling. with all other vendors relating to the tainted share issue and
we are hoping to finally resolve this issue in the near future
to restore the listing of the company.
On behalf of the board
The year ended 31 December 2003 was the turnaround year
for the group. Turnover levels were dramatically down as a
result of the loss-making Dynatech having been liquidated
and the discontinuing of many unprofitable lines. The effects
thereof are fully reflected in the financial statements.
Notwithstanding the drop in turnover, the results from Shaun Rai
operating activities indicated that the group is now Acting chairman
trading profitably with the resultant turnaround being some
R21 million.
We are pleased to report that all subsidiaries are now
trading profitably and that plans are under way to exploit the
DYNAMIC CABLES RSA LTD — ANNUAL REPORT 1
Directorate As at 31 December 2003 the board comprised:
Shaun Louis Rai * (43) Haroon Takolia (53) CA(SA) BComm (Hons), BCompt CA(SA), MBA (Wits) (UCT) Deputy chairman Non-executive director Appointed 10 May 2000
COMPANY SECRETARY Allen Frederick Pheiffer * (41) Rorden John McGregor CA(SA), CAIB (SA), AIAC Appointed 12 October 2001 Non-executive director Appointed 10 May 2000
Michael Joseph Ignatius Brown * (60) Dip Ed Non-executive director Appointed 1 October 2000
Theodore Dominic Rai (45) MBChB (UCT) Executive director Appointed 1 March 2001 * non-executive
2 DYNAMIC CABLES RSA LTD — ANNUAL REPORT
Directors' responsibilities and approval of the
annual financial statements
The annual financial statements set out on pages 5 to 28 are foreseeable future and have continued to adopt the going
the responsibility of the directors. concern basis in preparing the financial statements.
The directors are responsible for selecting and adopting The annual financial statements were approved by the
sound accounting practices, for maintaining an adequate and directors on 18 June 2004 and are signed on their behalf by:
effective system of accounting records, for the safeguarding
of assets, and for developing and maintaining a system of
internal control that, among other things, will ensure the
preparation of financial statements that achieve fair
presentation.
After conducting appropriate procedures the directors are MJI Brown SL Rai
satisfied that the company will be a going concern for the
Certificate by the company secretary
In terms of Section 268G(d) of the Companies Act 1973, as amended, I certify that the company has lodged with the Registrar
all such returns as are required by the Companies Act and all such returns are true, correct and up-to-date.
RJ McGregor
DYNAMIC CABLES RSA LTD — ANNUAL REPORT 3
Report of the independent auditorsAs at 31 December 2003
TO THE MEMBERS OF DYNAMIC CABLES RSA LIMITED
AND ITS SUBSIDIARIES
We have audited the annual financial statements and group
annual financial statements of Dynamic Cables RSA Limited
set out on pages 5 to 28 for the year ended 31 December
2003. These financial statements are the responsibility of the
group's directors. Our responsibility is to express an opinion
on these financial statements based on our audit.
Scope
Except as discussed in the following paragraphs, we
conducted our audit in accordance with Statements of South
African Auditing Standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
that the financial statements are free of material
misstatement. An audit includes:
• examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements,
• assessing the accounting principles used and significant
estimates made by management, and
• evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for
our opinion.
Qualification
An uncertainty exists in respect of the financial effects of the
"tainted" shares referred to in note 9. No adjustment has
been made to the consolidated balance sheet and related
statements of income and cash flows for the year ended
31 December 2003, to reflect the possible financial impact
thereof.
The results of Dynatech Telecoms (Proprietary) Limited
(in liquidation) to the date of liquidation have not been
audited. The effect of the liquidation on the group has been
reflected, as shown in note 20, as a composite item. This
represents a departure from the South African Statements of
Generally Accepted Accounting Practice. It is impracticable to
quantify the possible effects of this departure in the annual
financial statements.
As stated in note 5, the company has a loan to Dynatech
Telecoms (Proprietary) Limited (in liquidation). The recover-
able amount of this loan has been ascertained by the directors
to be eight million rand. We have been unable to verify this
amount.
Qualified audit opinion
In our opinion, except for the possible effects on the financial
statements of the matters referred to in the preceding
paragraph, the financial statements fairly present, in all
material respects, the financial position of the group at
31 December 2003 and the results of their operations and
cash flows for the year then ended in accordance with South
African Statements of Generally Accepted Accounting
Practice, and in the manner required by the Companies Act in
South Africa.
Grant Thornton
Registered Accountants and Auditors
Chartered Accountants (SA)
Durban
18 June 2004
DYNAMIC CABLES RSA LTD - ANNUAL REPORT4
Corporate governance For the year ended 31 December 2003
CODE OF CORPORATE PRACTICES AND CONDUCT
The directors fully support the principles of good corporate
governance established by the Code of Corporate Practices
and Conduct ("the Code") of the King Report. The group
complies with the major requirements of the Code. Its
position on various aspects of corporate governance is
summarised below.
FINANCIAL STATEMENTS
The directors are responsible for the preparation of annual
financial statements that fairly present the financial position
of the company and the group as at the end of the financial
year and their profit or loss and cash flow information for
the period then ended. The auditors, Grant Thornton are
responsible for independently auditing and reporting on these
financial statements.
In preparing financial statements, the directors, in their
opinion, consistently applied appropriate accounting policies,
supported by reasonable and prudent judgement and
estimates, and adhered to generally accepted accounting
practice, except as described in note 32.
The directors have no reason to believe that the company
and the group will not be going concerns in the year ahead.
Accordingly, they continue to adopt the going concern basis
in preparing the financial statements.
FINANCIAL CONTROL
The group has an established system of controls and
procedures to ensure the accuracy and integrity of the
accounting records and to effectively monitor the group's
business and performance. The system encompasses
checks and balances, which include:
• A detailed budgeting system
• The preparation of forecasts which are regularly reviewed
and updated
• Regular reporting of income statements and balance
sheets together with regular written reports
The following committees have been established under
the Code:
Board structure
Dynamic Cables RSA Limited's board currently comprises
two executive and three non-executive directors in a unitary
board structure. During the last year the board met regularly
to review strategy and significant group operational matters
and to monitor group performance against predetermined
goals.
Remuneration committee
The group has a remuneration committee comprising one
executive and two non-executive directors. This committee
reviews and approves the remuneration and terms of
employment of the executive directors and senior
employees.
Audit committee
The audit committee is chaired by a non-executive director
and has one other non-executive and an executive director as
members. It meets to discuss financial information which
is to be published. The external auditors have unrestricted
access to these committee meetings.
Employment equity committee
The group is committed to providing equal opportunities to all
its employees regardless of their ethnic origin or gender.
DYNAMIC CABLES RSA LTD – ANNUAL REPORT 5
Balance sheet As at 31 December 2003
Note
2003
R
Group
2002
R
2003
Company
R
2002
R
ASSETS
Non-current assets 26 416 391 26 184 388 24 907 854 30 374 611
Property, plant and equipment
Intangible assets
Investment in subsidiaries
Other financial assets
Deferred taxation
2
3
4, 5
6
7
4 101 666
10 618 584
8 000 000
3 696 141
-
9 365 484
11 610 699
727 396
3 696 141
784 668
-
-
24 180 758
727 096
-
-
-
29 647 515
727 096
-
Current assets 28 060 097 34 820 186 5 511 231 213 251
Inventory
Trade and other receivables
Short-term loans
Prepayments
Cash and cash equivalents
8 7 065 479
13 899 105
583 130
139 353
6 373 030
13 725 284
13 284 538
-
135 864
7 674 500
-
1 800 563
583 130
-
3 127 538
-
-
-
-
213 251
Total assets 54 476 488 61 004 574 30 419 085 30 587 862
EQUITY AND LIABILITIES
Equity capital and reserves 9 584 925 7 112 035 8 320 629 8 532 329
Share capital and premium
Accumulated loss
9
10
92 198 803
(82 613 878)
92 198 803
(85 086 768)
109 132 803
(100 812 174)
109 132 803
(100 600 474)
Non-current liabilities 23 445 465 22 311 989 20 545 879 20 545 879
Long-term borrowings
Vendor loan
Deferred taxation
11
12
13
1 336 420
20 545 879
1 563 166
1 766 110
20 545 879
-
-
20 545 879
-
-
20 545 879
-
Current liabilities 21 446 098 31 580 550 1 552 577 1 509 654
Trade and other payables
Short-term borrowings
Taxation
Bank overdraft
Other financial liabilities 14
12 273 868
736 882
8 209 431
203 830
22 087
22 261 788
1 008 466
7 830 570
126 834
352 892
862 992
-
689 585
-
-
850 135
-
659 519
-
-
Total equity and liabilities 54 476 488 61 004 574 30 419 085 30 587 862
6 DYNAMIC CABLES RSA LTD - ANNUAL REPORT
Income statementFor the year ended 31 December 2003
Group Company
2003 2002 2003 2002
Note R R R R
Turnover 17 65 628 459 101 094 696 - -
Cost of sales (44 471 539) (75 837 946) - -
Gross profit 21 156 920 25 256 750 - -
Other operating costs (16 604 403) (18 994 173) 753 460 867 520
Operating profit 18 4 552 517 6 262 577 753 460 867 520
Net gain on liquidation of subsidiary 20 1 553 929 - 133 535 -
Fair value adjustment of investments 21 (1 758 498) (23 369 814) (1 069 130) (18 013 316)
Results from operating activities 4 347 948 (17 107 237) (182 135) (17 145 796)
Income from investments 22 244 573 483 382 501 47 394
Finance charges 23 (1 198 139) (1 597 564) - -
Profit/(loss) before taxation 3 394 382 (18 221 419) (181 634) (17 098 402)
Taxation 24 (921 492) (2 124 194) (30 066) (745 155)
Net profit/floss) for the year 2 472 890 (20 345 613) (211 700) (17 843 557)
Basic earnings/(loss) per share 25 5,3 (43,5) - -
Headline earnings/(loss) per share 26 6,2 (8,8) - -
Fully diluted earnings/(loss) per share 27 3,4 (29,8) - -
Fully diluted headline earnings/(loss) per share 27 4,0 (6,0) - -
DYNAMIC CABLES RSA LTD — ANNUAL REPORT 7
Statement of changes in equity For the year ended 31 December 2003
Share
capital
R
Share
premium
R
Accumulated
loss
R
Total
R
GROUP
Balance at 1 January 2002
Net loss for the year
2 336 712 89 862 091 (64 741 155)
(20 345 613)
27 457 648
(20 345 613)
Balance at 1 January 2003
Net profit for the year
2 336 712 89 862 091 (85 086 768)
2 472 890
7 112 035
2 472 890
Balance at 31 December 2003 2 336 712 89 862 091 (82 613 878) 9 584 925
COMPANY
Balance at 1 January 2002
Net loss for the year
2 336 712 106 796 091 (82 756 917)
(17 843 557)
26 375 886
(17 843 557)
Balance at 1 January 2003
Net loss for the year
2 336 712 106 796 091 (100 600 474)
(211 700)
8 532 329
(211 700)
Balance at 31 December 2003 2 336 712 106 796 091 (100 812 174) 8 320 629
DYNAMIC CABLES RSA LTD - ANNUAL REPORT8
Cash flow statementFor the year ended 31 December 2003
2003
Group
2002
Company
2003 2002
Note R R R R
Cash flows from operating activities 2 204 515 5 234 716 (1 616 875) (5 979 315)
Cash receipts from customers
Cash paid to suppliers and employees
71 730 755
(68 572 674)
99 447 000
(93 098 102)
-
(1 617 376)
-
(6 026 709)
Cash operations
Interest received
Finance charges
33.2 3 158 081
244 573
(1 198 139)
6 348 898
483 382
(1 597 564)
(1 617 376)
501
-
(6 026 709)
47 394
-
Cash flows from investing activities (3 153 291) (5 416 649) 4 531 162 2 829 000
Purchase of property, plant and equipment
Additions:
Proceeds on disposal of property,
plant and equipment
Purchase of intangible assets
Purchase of financial assets
Proceeds on disposal of financial assets
Proceeds on disposal of investments
Loans to subsidiary
33.4
(1 968 905)
1 620 192
(11 448)
-
-
(2 793 130)
-
(4 615 843)
1 055 014
(39 820)
(1 816 000)
-
-
-
-
-
-
-
4 531 162
-
-
-
-
-
(965 317)
-
-
3 794 317
Cash flows from financing activities (429 690) (584 512) - 965 096
Proceeds from long-term borrowings
Payment of long-term borrowings
-
(429 690)
-
(584 512)
-
-
965 096
-
Net increase/Idecrease) in cash and
cash equivalents
Cash and cash equivalents at the beginning
of the year 33.5
(1 378 466)
7 547 666
(766 445)
8 314 111
2 914 287
213 251
(2 185 219)
2 398 470
Cash and cash equivalents at the end
of the year 33.5 6 169 200 7 547 666 3 127 538 213 251
DYNAMIC CABLES RSA LTD — ANNUAL REPORT 9
Notes to the financial statements For the year ended 31 December 2003
1. ACCOUNTING POLICIES
The financial statements are prepared on the historic
cost basis and incorporate the principal accounting
policies, set out below, which are consistent with those
of the previous year. These policies comply with South
African Statements of Generally Accepted Accounting
Practice. The financial statements are prepared on a
going concern basis.
1.1 Consolidation
The group financial statements include those of the
holding company and its subsidiaries. The results of
subsidiaries are included from the effective dates of their
acquisition until the effective dates of their disposal.
Intergroup balances and intergroup transactions and
resulting profits are eliminated in full.
1.2 Property, plant and equipment
Property, plant and equipment are stated at cost less
depreciation and any accumulated impairment losses.
Property, plant and equipment held under instalment
sales and finance leases are capitalised. At the
commencement of the leases these assets are reflected
at the lower of fair value and the present value of the
minimum lease payments. The related liability is
recognised at an equivalent amount. Finance charges are
allocated to periods during the lease term so as to
produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
Depreciation is provided on all property, plant and
equipment other than freehold land, to write down the
cost by equal instalments over their useful lives as
follows:
Plant and equipment 4 – 6 years
Motor vehicles 4 – 5 years
Furniture and fittings 6 – 10 years
Office equipment 5 – 6 years
Computer hardware 2 – 3 years
Fibre lab equipment 5 years
Improvements to leased premises are written off
over the period of the lease.
1.3 Intangible assets
Intangible assets are recognised only when the cost can
be measured reliably and the future expected benefits
attributable to the asset are assured.
Intangible assets are carried at cost less amortisation
and any accumulated impairment losses.
Amortisation is provided on all intangible assets to
write down the cost on the straight-line basis over their
estimated economic lives as follows:
10 DYNAMIC CABLES RSA LTD — ANNUAL REPORT
Goodwill 10 years
Trademarks 10 years
Other intangible assets 2 years
Intangible assets are further written down to the
extent that the unamortised balances will in all
probability no longer be recovered from expected future
economic benefits.
Negative goodwill is recognised as income on a
systematic basis over the remaining weighted average
useful life of the identifiable acquired depreciable
assets.
1.4 Investments
Non-trading investments are classified as financial
assets and stated at fair value (cost, except where there
is a decline in value that is other than temporary, in
which case they are written down to fair value).
1.5 Inventory
Inventory is valued at the lower of cost and estimated
net realisable value. Cost is determined on the following
bases:
Raw materials and consumable stores are valued at
average cost.
Finished goods and work in progress are valued at
raw material cost plus labour cost and a proportion of
manufacturing overhead expenses based on normal
capacity.
Merchandise is valued at invoice cost on the
weighted average cost basis.
1.6 Manufacturing contracts
Where the outcome of a manufacturing contract can be
estimated reliably, revenue and costs are recognised by
reference to the stage of completion of the contract
activity at the balance sheet date, as measured by the
percentage of services performed to date to the
estimated total services for each contract. Variations in
contract work, claims and incentive payments are
included to the extent that they have been agreed with
the customer.
Where the outcome of a manufacturing contract
cannot be estimated reliably, contract revenue is
recognised to the extent of contract costs incurred that
it is probable will be recoverable. Contract costs are
recognised as expenses in the period in which they are
incurred.
When it is probable that total contract costs will
exceed total contract revenue, the expected loss is
recognised as an expense immediately.
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1.7 Taxation taxation authority and the group intends to settle its
The charge for current tax is based on the results for the current tax assets and liabilities on a net basis).
year as adjusted for items which are non-assessable or A deferred taxation asset is recognised for all
disallowed. It is calculated using tax rates that have deductible temporary differences arising from invest-
been enacted or substantively enacted by the balance ments in subsidiaries, joint ventures and associates, only
sheet date. to the extent that it is probable that:
Deferred tax is accounted for using the balance – the temporary difference will reverse in the foreseeable
sheet liability method in respect of temporary future; and
differences arising from differences between the – taxable profit will be available against which the
carrying amount of assets and liabilities in the financial temporary difference can be utilised.
statements and the corresponding tax basis used in the
computation of taxable profit. In principle, deferred tax 1.8 Provisions
assets are recognised to the extent that it is probable Provisions are recognised when the group has a present
that taxable profits will be available against which obligation as a result of a past event which it is probable
deductible temporary differences can be utilised. Such will result in an outflow of economic benefits that can be
assets and liabilities are not recognised if the temporary reasonably estimated.
difference arises from goodwill (or negative goodwill) or
from the initial recognition (other than in a business 1.9 Turnover
combination) of other assets and liabilities in a Turnover comprises revenue from the sale of goods and
transaction which affects neither the tax profit nor the excludes value added taxation.
accounting profit.
Deferred tax liabilities are recognised for taxable 1.10 Cost of sales
temporary differences arising on investments in Cost of sales consists of the cost of inventories sold
subsidiaries and associates, and interest in joint ventures, during the period, including costs of conversion and
except where the group is able to control the reversal of other costs incurred in bringing the inventories to their
the temporary difference and it is probable that the present location and condition.
temporary difference will not reverse in the foreseeable
future. 1.11 Employee benefits
Deferred taxation assets are the amounts of income Contributions to a defined contribution plan in respect of
taxes recoverable in future periods in respect of: service in a particular period are recognised as an
• deductible temporary differences; or expense in that period.
• the carry forward of unused tax losses.
A deferred taxation liability is recognised for all taxable 1.12 Cash and cash equivalents
temporary differences, unless the deferred taxation Cash and cash equivalents consist of cash on hand and
liability arises from: balances with banks and other financial institutions.
• goodwill for which amortisation is not deductible for tax
purposes; or 1.13 Impairment
• the initial recognition of an asset or liability in a At each balance sheet date, the group reviews the
transaction which: carrying amounts of its tangible and intangible assets to
– is not a business combination; and determine whether there is any indication that those
– at the time of the transaction, affects neither assets have suffered an impairment loss. If any such
accounting profit nor taxable profit. indication exists, the recoverable amount of the asset is
A deferred taxation asset is recognised to the extent estimated in order to determine the extent of
that it is probable that future taxable profit will be available impairment loss. Where it is not possible to estimate
against which the unused tax losses (and unused tax the recoverable amount of an individual asset, the group
credits) can be utilised. estimates the recoverable amount of the cash-
Deferred tax is calculated at the tax rates that are generating unit to which the asset belongs.
expected to apply to the period when the asset is realised
or the liability is settled. Deferred tax is charged or credited 1.14 Foreign exchange contracts
in the income statement, except when it relates to items Foreign exchange contracts are revalued to fair value at
credited or charged directly to equity, in which case the the balance sheet date and both realised and unrealised
deferred tax is also dealt with in equity. profits and losses are accounted for in the income
Deferred tax assets and liabilities are not offset (except statement for the period.
when they relate to income taxes levied by the same
DYNAMIC CABLES RSA LTD — ANNUAL REPORT 11
Notes to the financial statementsFor the year ended 31 December 2003
2. PROPERTY, PLANT AND EQUIPMENT
Cost
Leasehold improvements
Plant and equipment
- Owned
- Leased
Motor vehicles - owned
Furniture and fittings - owned
Small tools - owned
Office equipment - owned
Computer hardware - owned
Fibre lab equipment - owned
Accumulated depreciation
Leasehold improvements
- Historic cost
Plant and equipment
- Owned
- Leased
Motor vehicles - owned
Furniture and fittings - owned
Small tools - owned
Office equipment - owned
Computer hardware - owned
Fibre lab equipment - owned
Carrying amount
Leasehold improvements
Plant and equipment
- Owned
- Leased
Motor vehicles - owned
Furniture and fittings - owned
Office equipment - owned
Computer hardware - owned
Fibre lab equipment - owned
Group Company
2003 2002 2003 2002
R R R R
39 374 170 786 - -
2 701 628 9 438 168 - -
970 368 9 438 168 - -
1 731 260 - - -
1 254 335 2 278 188 - -
110 226 172 238 - -
100 100 - -
256 077 380 409 - -
319 241 571 878 - -
1 587 850 1 544 880 - -
6 268 831 14 556 647 - -
11 421 4 859 - -
721 274 3 339 975 - -
524 390 3 339 975 - -
196 884 - - -
552 112 999 256 - -
43 361 53 954 - -
100 100 - -
124 298 154 116 - -
240 329 479 128 - -
474 270 159 775 - -
2 167 165 5 191 163 - -
27 953 165 927 - -
1 980 354 6 098 193 - -
445 978 6 098 193 - -
1 534 376 - - -
702 223 1 278 932 - -
66 865 118 284 - -
131 779 226 293 - -
78 912 92 750 - -
1 113 580 1 385 105 - -
4 101 666 9 365 484 - -
12 DYNAMIC CABLES RSA LTD — ANNUAL REPORT
Group Company
2003 2002 2003 2002
13
2.
2.1
2.2
PROPERTY, PLANT AND EQUIPMENT (continued)
Movement for the year
At beginning of year
Additions
- Leasehold improvements
- Plant and equipment
- Motor vehicles
- Furniture and fittings
- Office equipment
- Computer hardware
- Fibre lab equipment
Disposed of on liquidation of subsidiary
- Plant and equipment
- Motor vehicles
- Furniture and fittings
- Office equipment
- Computer hardware
Disposals
At end of year
Movement for the year
Depreciation
At beginning of year
- Charge for year
- Eliminated on disposals
- Eliminated on liquidation of subsidiary
At end of year
R R R R
14 556 647 10 547 278 - -
1 968 905 4 615 843 - -
- 170 786 - -
1 731 260 2 166 289 - -
128 532 485 100 - -
- 84 259 - -
19 558 87 926 - -
46 585 76 603 - -
42 970 1 544 880 - -
(7 918 005) - - -
(6 334 056) - - -
(1 078 825) - - -
(62 012) - - -
(143 889) - - -
(299 223) - - -
(2 338 716) (606 474) - -
6 268 831 14 556 647 - -
5 191 163 3 080 754 - -
1 043 639 2 595 469 - -
(718 524) (485 060) - -
(3 349 113) - - -
2 167 165 5 191 163 - -
DYNAMIC CABLES RSA LTD — ANNUAL REPORT
- -
-
-
-
-
-
-
-
-
-
-
- -
- -
-
-
-
-
-
-
-
-
-
-
- -
- -
-
-
-
-
-
-
-
-
-
-
- -
Notes to the financial statementsFor the year ended 31 December 2003
3. INTANGIBLE ASSETS
Cost
Goodwill
- Cost
-Impairment
Patents and trademarks
Computer software
Other intangible asset
Accumulated amortisation
Goodwill
- Accumulated amortisation
- Impairment
Patents and trademarks
Computer software
Other intangible asset
Carrying amount
Goodwill
- Carrying amount
- Impairment
Patents and trademarks
Computer software
Other intangible asset
2003
R
3 273 157
3 273 157
-
22 163 000
119 816
240 000
25 795 973
1 909 341
1 909 341
-
12 928 418
99 630
240 000
15 177 389
1 363 816
3 273 157
-
9 234 582
20 186
-
10 618 584
Group
2002
R
1
3 273 157
(3 273 156)
22 163 000
108 368
240 000
22 511 369
-
1 582 025
(1 582 025)
10 712 118
68 552
120 000
10 900 670
1
1 691 132
(1 691 131)
11 450 882
39 816
120 000
11 610 699
Company
2003 2002
R R
14 DYNAMIC CABLES RSA LTD - ANNUAL REPORT
Group Company
2003 2002 2003 2002
R R R R
3. INTANGIBLE ASSETS (continued)
3.1 Movement for the year
Cost
At beginning of year 22 511 369 25 745 251 - -
Additions
- Computer software 12 530 39 275 - -
Eliminated on liquidation of subsidiary
- Computer software (1 083) - - -
Impairment 3 273 157 (3 273 157) - -
At end of year 25 795 973 22 511 369 - -
3.2 Movement for the year
Amortisation
At beginning of year 10 900 670 9 778 799 - -
Charge for year 2 693 617 2 376 581 - -
Impairment/reversal of impairment 1 583 102 (1 254 710) - -
At end of year 15 177 389 10 900 670 - -
The goodwill was impaired on consolidation in the prior year owing to zoning problems with the occupied premises
which resulted in lower margins due to greater levels of outsourcing and a forced relocation of the plant during the
company's busiest period. The maintainability of service level agreements with a major customer came under
question. Therefore the directors took a conservative approach by impairing the goodwill. The subsequent
relocation proved positive and previous productivity levels and margins were soon reached. As the impairment in
the prior year was the result of an "external event", the original write-off period has been reverted to and the
impairment has been reversed in the current year in terms of AC 128.
DYNAMIC CABLES RSA LTD — ANNUAL REPORT 15
Notes to the financial statementsFor the year ended 31 December 2003
16
4. INVESTMENT IN SUBSIDIARIES
Book value of
holding company's
Issued Company's interest
share effective Shares
Nature of capital holding at cost Indebtedness Impairment Total
Name of company business 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002
R'000 R'000 % % R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Dynamic Cables Distributor
SA (Pty) Ltd of cable 0,001 0,001 100 100 27 832 27 832 3 016 10 885 (17 432) (17 432) 13 416 21 285
H Investments Manufacturer
No 220 (Pty) Ltd of engineered
products for the
communications
industry 1 1 100 100 - - 3 346 4 073 (581) (581) 2 765 3 492
Dynatech Telecom In
(Pty) Ltd liquidation
(note 5) 0,1 0,1 100 100 - - 13 881 10 158 (5 881) 6 015 8 000 4 143
Capital Options In
(Pty) Ltd liquidation 1 000 1 000 100 100 10 10 4 363 4 363 (4 373) (4 373) - -
H Investments
No 197 (Pty) Ltd Liquidated - - - - - - - 727 - - - 727
Utility Vending
Systems (Pty) Ltd Dormant 0,1 0,1 100 100 - - - - - - - -
27 842 27 842 24 606 30 206 (28 267) (28 401) 24 181 29 648
5. INVESTMENT IN SUBSIDIARY IN LIQUIDATION
At the date that Dynatech Telecoms (Proprietary) Limited was placed in liquidation, the loan to the subsidiary from
the company was R13 881 057. This loan had been impaired by R6 014 592 in the prior year. In order to protect the
company's claim with the liquidator, the directors negotiated with the liquidator to purchase the assets (over which
the company held a notarial bond) and contractual rights of Dynatech Telecoms (Proprietary) Limited (in liquidation)
from the liquidator. The transaction was approved by the master of the high court shortly after year end. As the
directors are currently negotiating the sale of this operation, they estimate the likely recovery of the investment to
be R8 000 000 and have therefore adjusted the impairment accordingly (refer note 20).
DYNAMIC CABLES RSA LTD — ANNUAL REPORT
2003
Group
2002 2003
Company
2003
R R R R
6. OTHER FINANCIAL ASSETS
Loans to directors and managers
At beginning of year 727 096 727 096 727 096 727 096
The loan is unsecured, interest-free and
repayable by mutual arrangement. The loan
was made to the trust to purchase shares
in the company on behalf of the directors
and employees.
Loans to companies and close corporations
controlled by directors 2 969 045 2 969 045 - -
At beginning of year
Advances
2 969 045
-
2 118 040
851 005
-
-
-
-
At end of year 3 696 141 3 696 141 727 096 727 096
The loan is unsecured, interest-free and
repayable by mutual arrangement.
7. DEFERRED TAXATION
Accelerated capital allowances
for tax purposes
Provision for bad debts
Other
Tax losses available for set-off
against future taxable income
-
-
-
-
(1 377 272)
120 110
40 759
2 001 071
-
-
-
-
-
-
-
-
Deferred taxation asset - 784 668 - -
DYNAMIC CABLES RSA LTD — ANNUAL REPORT 17
Notes to the financial statements For the year ended 31 December 2003
Group Company
2003 2002 2003 2002
R R R R
7. DEFERRED TAXATION (continued)
Reconciliation of deferred taxation asset
At beginning of year 784 668 1 612 803 - -
Increase/(decrease) in tax losses available
for set-off against future taxable income - (575 533) - -
Originating temporary difference on
intangible assets - (284 953) - -
Originating temporary difference on
tangible fixed assets - 1 780 - -
Reversing temporary difference on
provisions - (10 188) - -
Reversing temporary difference on
prepayments - 40 759 - -
Transferred to deferred tax liability (784 668) - - -
At end of the year - 784 668 - -
8. INVENTORY
Raw materials 1 096 311 3 010 208 - -
Work in progress 772 754 4 721 088 - -
Merchandise 5 196 414 5 993 988 - -
7 065 479 13 725 284 - -
Manufacturing contracts in progress, included
in work in progress, comprise:
- Costs incurred 337 711 2 161 460 - -
- Recognised profits less recognised losses 238 008 876 000 - -
575 719 3 037 460 - -
- Progress billings - (1 490 503) - -
575 719 1 546 957 - -
18 DYNAMIC CABLES RSA LTD — ANNUAL REPORT
9. SHARE CAPITAL AND PREMIUM
Authorised
66 800 000 ordinary shares of R0,05 each
Issued
46 734 249 ordinary shares
Share premium
Group Company
2003 2002 2003 2002
R R R R
3 340 000 3 340 000 3 340 000 3 340 000
2 336 712 2 336 712 2 336 712 2 336 712
89 862 091 89 862 091 106 796 091 106 796 091
92 198 803 92 198 803 109 132 803 109 132 803
During the 2002 year 990 000 ordinary shares of 1 000 000 issued share capital of Capital Options (Proprietary)
Limited (in liquidation), formerly known as Conlog (Proprietary) Limited, were cancelled as the directors believe that
the shares had been unlawfully allotted and issued. The entire share capital in Capital Options (Proprietary) Limited
(in liquidation) was purchased by the company in 1998 by issuing 22 545 454 shares for R5,50 per share. The effect
of the cancellation of the subsidiary shares is that those shares in the company that were issued in order to acquire
the shares in the subsidiary are "tainted".
The directors are in the process of determining a practical way in which to address the issue and are involved in
this end in discussion with the company's attorneys, the JSE Securities Exchange South Africa and STRATE. At this
stage the directors are of the opinion that the most likely outcome will be a form of "rectification" of the tainted
shares once the matter is settled. Settlement talks with the previous vendors are currently taking place.
As such, no adjustment has been made to the authorised or issued share capital in the annual financial statements.
Should an adjustment prove to be necessary, the shareholders will be advised through the normal channels.
2003
Group
2002
Company
2003 2002
R R R R
10. ACCUMULATED LOSS
Company
Subsidiaries
(100 812 174)
18 198 296
(100 600 474)
15 513 706
(100 812 174)
-
(100 600 474)
-
(82 613 878) (85 086 768) (100 812 174) (100 600 474)
11. LONG-TERM BORROWINGS
Secured loan
Secured in terms of suspensive sale
agreements over moveable assets with
a book value of R2 114 922 (2002: R4 260 773)
Less: Repayable within one year, included
in short-term borrowings
2 073 301
(736 881)
2 774 576
(1 008 466)
-
-
-
-
1 336 420 1 766 110 - -
DYNAMIC CABLES RSA LTD — ANNUAL REPORT 19
20
Notes to the financial statementsFor the year ended 31 December 2003
Group Company
2003 2002 2003 2002
R R R R
12. VENDOR LOAN 20 545 879 20 545 879 20 545 879 20 545 879
This amount represents the balance of the purchase price payable to Cape Empowerment Trust Limited in respect
of the acquisition of Dynamic Cables SA (Proprietary) Limited. The purchase price is payable at the election of
Dynamic Cables RSA Limited by way of:
• the allotment and issue of ordinary shares in Dynamic Cables RSA Limited at an issue price of 60 cents per share;
• a cash payment;
• a combination of the aforegoing.
The purchase price was determined by a multiple of 2,25 of the consolidated profit of Dynamic Cables SA
(Proprietary) Limited for the 2001 and 2002 year ends which amounted to R45 412 751.
Group Company
2003 2002 2003 2002
R R R R
13. DEFERRED TAXATION
Accelerated capital allowances
for tax purposes 1 662 226 - - -
Provision for bad debts movement (57 254) - - -
Prepayments (41 806) - - -
Deferred taxation liability 1 563 166 - - -
Reconciliation of deferred taxation liability
At beginning of the year - - - -
Transfer from deferred tax asset (784 668) - - -
(Increase)/decrease in tax losses available
for set-off against future taxable income 2 017 947 - - -
Originating temporary difference
on intangible fixed assets 284 953 - - -
Originating temporary difference on provisions 45 981 - - -
Increase in prepayments (1 047) - - -
At end of theyear 1 563 166 - - -
14. OTHER FINANCIAL LIABILITIES
Forward exchange contracts at fair value 22 087 352 892 -
Forward exchange contracts
Total foreign currency Average forward exchange rate Date of maturity
237 641,10 euros between 8,0901 and 8,4845 between 05/01/04 and 07/05/04
103 747,90 dollars between 6,4253 and 7,2760 between 07/01/04 and 21/01/04
DYNAMIC CABLES RSA LTD — ANNUAL REPORT
15. CONTINGENCIES
The company has signed an unlimited letter of suretyship in favour of The Standard Bank of South Africa Limited
in respect of overdraft and other facilities of R19 547 000 (2002: R19 547 000) granted to Dynamic Cables SA
(Proprietary) Limited. At the year end the banking facilities utilised amounted to R2 979 584 (2002: R4 558 092).
The 1998 taxable income for Capital Options (Proprietary) Limited (in liquidation) has been reassessed by the
Receiver of Revenue. As an objection has been lodged with the Receiver of Revenue, and the directors are of the
opinion that the assessment is invalid, no provision has been made in the accounts in this regard. Furthermore, as
the company has been placed in liquidation, any claim will not be settled by the group. The reassessment stipulates
an amount owing by the group of R3 413 758 (2002: R3 413 758).
The company has signed an unlimited letter of suretyship in favour of Nedcor Bank Limited in respect of facilities
granted to Capital Options (Proprietary) Limited (in liquidation), formerly known as Conlog (Proprietary) Limited.
The account has been subsequently closed and so no facility has been utilised. At the date of signature of these
financial statements, Nedcor Bank Limited had not acknowledged release of this guarantee by Dynamic Cables RSA
Limited.
The company has signed an unlimited letter of suretyship in favour of Absa Bank Limited in respect of facilities
granted to Log-Tek (Proprietary) Limited. The company has requested to have the facility released; however, Absa
Bank Limited is unable to trace the guarantee.
The company has guaranteed all amounts payable to New Republic Bank Limited (under curatorship) in respect of
asset-based finance provided to Satellite Data Networks (Proprietary) Limited. At the date of signature of these
financial statements, New Republic Bank Limited had not acknowledged release of this guarantee by Dynamic
Cables RSA Limited.
16. RISK MANAGEMENT
16.1 Forward exchange contracts
The group has entered into certain forward exchange contracts which do not relate to specific items appearing on
the balance sheet but which were entered into to cover foreign commitments not yet due and proceeds not yet
received. The contracts will be utilised for purposes of trade.
16.2 Foreign exchange risk
Group subsidiaries carry out a significant portion of their purchases in foreign currencies. Hedging instruments are
used to reduce the risks arising from foreign currency fluctuations against the various companies' own currencies.
16.3 Interest rate risk
The group is not exposed to interest rate risk to a large degree.
16.4 Credit risk
The group maintains cash and cash equivalents with reputable financial institutions. The group's policy is designed
to limit transactions executed to financial institutions with a high credit standing.
DYNAMIC CABLES RSA LTD — ANNUAL REPORT 21
Notes to the financial statementsFor the year ended 31 December 2003
17. TURNOVER
Sale of goods
Contract revenue
18. OPERATING PROFIT
Operating profit for the year is stated
after accounting for the following:
Income
Profit on disposal of tangible assets
Charges
Intangible assets
Amortisation
- Goodwill
- Trademarks
- Computer software
- Other intangible asset
Loss on foreign exchange
Loss on disposal of tangible assets
Operating lease charges
- Plant and equipment
- Premises
- Minimumpayments
Property, plant and equipment
Depreciation
- Leasehold improvements
- Plant and equipment
-Motor vehicles
-Furniture and fittings
- Office equipment
- Computer hardware
- Fibre lab equipment
Staff costs
2003
R
44 505 670
21 122 789
65 628 459
-
2 693 617
327 316
2 216 300
30 001
120 000
277 062
-
501 000
8 534
492 466
1 043 639
6 562
414 831
220 387
18 371
42 034
26 959
314 495
7 405 311
Group
2002
R
88 900 158
12 194 538
101 094 696
509 014
2 376 581
1
2 216 300
40 280
120 000
771 683
-
1 332 335
222 838
1 109 497
2 595 470
4 859
1 661 313
498 309
25 767
67 422
178 025
159 775
6 415 716
Company
2003 2002
R R
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- 41 000
233 709 222 311
- -
233 709 222 311
- -
- -
- -
- -
- -
- -
- -
- -
- 38 304
22 DYNAMIC CABLES RSA LTD — ANNUAL REPORT
Group Company
2003 2002 2003 2002
23
19.
R R R R
AUDITORS' REMUNERATION
- Audit fee 345 218 284 567 212 943 -
- Fees for other services - 42 878 - 42 878
Auditors' remuneration 345 218 327 445 212 943 42 878
20. LIQUIDATION OF SUBSIDIARY
During the year the directors became aware of various operational and management issues at Dynatech Telecoms
(Proprietary) Limited. The company was placed into liquidation by one of its creditors. These issues have caused
the directors to doubt the quality of the financial information of the subsidiary in liquidation, and the directors
believe that the separate disclosure of trading losses incurred prior to liquidation based on questionable
information may be misleading. As such, the directors have elected to deviate from South African Statements of
Generally Accepted Accounting Practice (refer note 32), and have disclosed the effects of the liquidation of Dynatech
Telecoms (Proprietary) Limited on the group as a composite item in the consolidated income statement.
This composite item comprises the effects of the following:
• The gain to the group that results from the subsidiary being placed in liquidation as the liabilities of the
subsidiary are no longer a group obligation and the directors estimate recovery of the company's loan to the
subsidiary at R8 000 000 (refer note 5).
• The current year's trading loss incurred by the company prior to its being placed in liquidation.
The directors believe that the net gain in the group net asset value of R1 553 929 is correct and that presenting this
information in any other manner based on unreliable information would be potentially misleading.
Group Company2003 2002 2003 2002
21.
R R R R
FAIR VALUE ADJUSTMENT OF INVESTMENTS
Impairment of loans to subsidiaries (1 031 102) - (341 734) -
Subsidiary debtor written off as irrecoverable (727 396) - (727 396) -
Profit on elimination of subsidiary - 549 764 - -
Goodwill impaired - (23 109 578) - -
Provision for loss on investments - (810 000) - (18 013 316)
(1 758 498) (23 369 814) (1 069 130) (18 013 316)
22. INCOME FROM INVESTMENTS
Income from investments 244 573 483 382 501 47 394
Income
Interest 244 573 483 382 501 47 394
DYNAMIC CABLES RSA LTD - ANNUAL REPORT
Notes to the financial statementsFor the year ended 31 December 2003
Group mpany
2003 2002 2003 2002
R R R R
23. FINANCE CHARGES
Bank and other short-term borrowings 12 910 43 707 - -
Finance leases 142 977 360 622 - -
Other 1 042 252 1 193 235 - -
1 198 139 1 597 564 - -
24. TAXATION
Major components of taxation expense
SA normal taxation
Current 378 861 1 296 059 30 066 659 519
Deferred taxation
- Current year 542 631 828 135 - 85 636
921 492 2 124 194 30 066 745 155
Reconciliation between accounting
profit and taxation expense
Accounting profit/(loss) 3 394 382 (18 221 419) (181 634) (17 098 402)
Taxation at the applicable tax rate of 30%
(2002: 30%) 1 018 315 (5 466 426) (54 490) (5 129 521)
Tax effect of adjustments to taxable income 115 920 7 590 620 84 556 5 874 676
- Additional allowances (1 047) (40 760) - -
- Goodwill amortisation 134 194 36 000 - -
- Loss on investment in subsidiary (363 659) - 62 459 5 403 995
- Impairment of goodwill - 6 933 000 - -
- Exempt income (388 460) (300 000) - (30 000)
-Capital items 165 599 087 (202 583) 500 681
- SARS interest 289 810 361 659 - -
- Donations 233 1 634 - -
- Non deductible expenses 232 988 - 224 680 -
- Deferred tax movement 211 696 - - -
Tax losses utilised (212 743) - - -
921 492 2 124 194 30 066 745 155
25. BASIC EARNINGS/(LOSS) PER SHARE
The calculation of basic earnings/(loss) per share is based on earnings of R2 472 890 (2002: R(20 347 811)) and a
weighted average of 46 734 249 (2002: 46 734 249) ordinary shares in issue throughout the year.
24 DYNAMIC CABLES RSA LTD - ANNUAL REPORT
26. HEADLINE EARNINGS/(LOSS) PER SHARE
The calculation of headline earnings/(loss) per ordinary share is based on earnings of R2 891 460 (2002:
R(4 109 580)) and a weighted average of 46 734 249 (2002: 46 734 249) ordinary shares in issue throughout the year.
As described in note 20, the trading loss incurred by Dynatech Telecoms (Proprietary) Limited prior to its liquidation
has not been disclosed separately and has therefore effectively been eliminated from these headline earnings.
Group Company
2003 2002 2003 2002
25
R R R R
Reconciliation between net profit/(loss)
and headline earnings:
Net profit/(loss) before taxation 3 394 382 (18 221 419)
Adjusted for:
- Additional provision for restructuring
costs reversed - (1 150 000)
- Goodwill amortisation 447 315 120 000
- (Profit)/loss on sale of fixed assets (233 314) (510 013)
- Abnormal items - 17 431 046
- Surplus on liquidation of subsidiary (1 553 929) -
- Fair value adjustment of investments 1 031 102 -
- Creditor written off 727 396 -
3 812 952 (2 330 386)
Less:
- Taxation (921 492) (2 124 194)
- Tax effect of adjustments - 345 000
Headline earnings/(loss) 2 891 460 (4 109 580)
Headline earnings/(loss) per share 6,2 (8,8)
27. FULLY DILUTED EARNINGS/(LOSS)/HEADLINE EARNINGS/(LOSS ► PER SHARE
The calculation of fully diluted earnings/(loss) per share is based on earnings of R2 472 890 (2002: R(20 347 811)) and
a weighted average of 72 337 381 (2002: 68 337 892) dilutive potential ordinary shares in issue throughout the year.
The calculation of fully diluted headline earnings/(loss) per share is based on earnings of R2 891 460 (2002:
R(4 109 580)) and a weighted average of 72 337 381 (2002: 68 337 892) dilutive potential ordinary shares in issue
throughout the year.
DYNAMIC CABLES RSA LTD — ANNUAL REPORT
I
Notes to the financial statementsFor the year ended 31 December 2003
Group Company
2003 2002 2003 2002
R R R R
28. DIRECTORS' EMOLUMENTS
Emoluments received by the directors
— Directors and past directors — executive
— For services as directors of
Dynamic Cables RSA Limited — — 65 000 38 000
— In connection with the affairs
of the company or its subsidiaries 1 125 330 1 607 941 — —
29. RELATED PARTIES AND RELATED
PARTY TRANSACTIONS
Related parties
Related parties where control existed during the year are as follows:
Directors: MJI Brown
AF Pheiffer
SL Rai
TD Rai
VA Butler
Shareholders: Cape Empowerment Trust Limited
Companies: Dynamic Cables SA (Pty) Ltd (subsidiary)
Dynatech Telecoms (Pty) Ltd (in liquidation) (subsidiary)
H Investments No 220 (Pty) Ltd (subsidiary)
Trading transactions
During the year, the company entered into the following transactions with related parties:
Amounts owed by Amounts owed to
Expenses related parties related parties
Year ended Year ended
31/12/03 31/12/02 31/12/03 31/12/02 31/12/03 31/12/02
R R R R R R
Cape Empowerment
Trust Limited 2 500 000 — 583 130 — 20 545 879 20 545 879
30. POST BALANCE SHEET EVENTS
As part of the group's ongoing rationalisation process the company has entered into negotiations regarding a
possible management buyout of one of its subsidiary companies, H Investments No 220 (Proprietary) Limited.
At the date of signing the audit report no agreement had been reached.
31. COMPARATIVE FIGURES
The comparative figures have been reclassified in certain cases.
DYNAMIC CABLES RSA LTD — ANNUAL REPORT26
32. DEPARTURE FROM GENERALLY ACCEPTED ACCOUNTING PRACTICE
During the year, a subsidiary, Dynatech Telecoms (Proprietary) Limited, was placed in liquidation. Owing to the
nature of the subsidiary's records, the directors are not able to analyse the results of this subsidiary in order to
provide all the disclosures required by Statements of Generally Accepted Accounting Practice. Instead, the net
result for the year has been presented as a single composite line item in the group income statement.
Group Company
2003 2002 2003 2002
27
33. CASH FLOW STATEMENT
33.1 The following convention applies to figures
other than adjustments:
Outflows of cash are represented by figures
in brackets. Inflows of cash are represented
by figures without brackets.
33.2 Reconciliation of profit/(loss) for the year
on ordinary activities before taxation to
cash generated/(absorbed by) operations
Profit/(loss) on ordinary activities before
taxation for the year
Adjustments
- (Profit)/loss on disposal of property, plant
and equipment
- Depreciation and amortisation
- Investment income
- Finance charges
- Movement in forward exchange contracts
- Abnormal items
- Provision for losses on investments
- Other non-cash items
Operating profit before working
capital changes
Increase in working capital
- Decrease/(increase) in inventories
- (Increase)/decrease in trade and
other receivables
- (Decrease)/increase in trade and
other payables
Cash generated/(absorbed by) operations
R R R R
3 394 382 (18 221 419) (181 634) (17 098 402)
4 564 586 31 892 825 935 094 18 971 239
- (509 014) - 41 000
3 737 256 4 972 050 - -
(244 573) (483 382) (501) (47 394)
1 198 139 1 597 564 - -
(330 805) 2 400 906 - -
204 569 23 369 814 935 595 18 013 316
- 965 317 - 965 317
- (420 430) - (1 000)
7 958 968 13 671 406 753 460 1 872 837
(4 800 887) (7 322 508) (2 370 836) (7 899 546)
6 659 805 (26 082) - -
(1 201 188) (1 919 141) (2 383 693) -
(10 259 504) (5 377 285) 12 857 (7 899 546)
3 158 081 6 348 898 (1 617 376) (6 026 709)
DYNAMIC CABLES RSA LTD — ANNUAL REPORT
Notes to the financial statements For the year ended 31 December 2003
2003
Group
2002
Company
2003 2002
R R R R
33. CASH FLOW STATEMENT (continued)
33.3 Normal taxation refunded
Taxation owing at beginning of year
Taxation charged per the income statement
Taxation owing at end of year
(7 830 570)
(378 861)
8 209 431
(6 534 511)
(1 296 059)
7 830 570
(659 519)
(30 066)
689 585
-
(659 519)
659 519
33.4 Proceeds on disposal of property, plant
and equipment
Profit on disposal of property, plant
and equipment
Carrying value of property, plant
and equipment
-
1 620 192
509 014
546 000
-
-
(41 000)
41 000
Proceeds 1 620 192 1 055 014 - -
33.5 Cash and cash equivalents
Cash and cash equivalents included in the
cash flow statement comprise the following
balance sheet amounts:
Cash and cash equivalents
Bank overdraft
6 373 030
(203 830)
7 674 500
(126 834)
3 127 538
-
213 251
-
Cash and cash equivalents 6 169 200 7 547 666 3 127 538 213 251
28 DYNAMIC CABLES RSA LTD — ANNUAL REPORT
I Notice of annual general meeting Dynamic Cables RSA Limited ("Dynamic" or "the company")
Notice is hereby given that the sixteenth annual general
meeting of shareholders of Dynamic will be held on the 21st
Floor, 2 Long Street, Cape Town at 13:00 on Friday, 1 August
2003, to transact the following business:
1. ORDINARY RESOLUTION NUMBER ONE
RESOLVED THAT –
the audited financial statements of the company, and of the
group, and the directors' and auditors' report for the financial
year ended 31 December 2003, be and they are hereby
confirmed.
2. ORDINARY RESOLUTION NUMBER TWO
RESOLVED THAT –
TD Rai, who retires by rotation at the annual general meeting
but, being eligible, offers himself for re-election, be and is
hereby reappointed as director of the company.
3. ORDINARY RESOLUTION NUMBER THREE
RESOLVED THAT –
AF Pheiffer, who retires by rotation at the annual general
meeting but, being eligible, offers himself for re-election, be
and is hereby reappointed.
4. ORDINARY RESOLUTION NUMBER FOUR
RESOLVED THAT –
the directors' fees for the financial year ended 31 December
2003, be and are hereby approved.
5. ORDINARY RESOLUTION NUMBER FIVE
RESOLVED THAT –
the remuneration of the auditors for the financial year ended
31 December 2003, be and is hereby approved.
6. ORDINARY RESOLUTION NUMBER SIX
RESOLVED THAT
Grant Thornton be reappointed as auditors of the company for
the ensuing year.
7. ORDINARY RESOLUTION NUMBER SEVEN
RESOLVED THAT
subject to not less that 75% of those shareholders of the
company, present in person or by proxy and entitled to vote at
the general meeting at which this ordinary resolution number
eight is to be considered, voting in favour thereof, the
directors of the company be and are hereby authorised by
way of a general authority to issue all or any of the authorised
but unissued ordinary shares of 0,1 cent each in the capital of
the company for cash as they in their discretion deem fit,
subject to the following limitations:
– this authority shall not extend beyond the later of the date
of the next annual general meeting of the company or the
date of expiry of 15 (fifteen) months from the date of this
general meeting;
– a paid press announcement giving full details, including the
impact on net asset value and earnings per share, will be
published at the time of any issue representing, on a
cumulative basis within one year, 5% or more of the
number of shares of that class in issue prior to such issue;
– issues in terms of this authority will not exceed 15% in the
aggregate of the number of shares in the company's issued
share capital, in any one financial year;
– in determining the price at which an issue of shares will be
made in terms of this authority the maximum discount
permitted will be 10% of the weighted average trade price
of such shares, as determined over a 30 (thirty) business
day period to the date that the price of the share issue is
determined or agreed by the directors; and
– any such issue will only be made to public shareholders as
defined by the JSE Securities Exchange South Africa
("JSE") and not to a related party.
8. ORDINARY RESOLUTION NUMBER EIGHT
RESOLVED THAT
the unissued shares in the capital of the company be and
they are hereby placed under the control of the directors of
the company as a general authority in terms of the section
221 of the Companies Act, 61 of 1973, as amended ("the
Act"), who are hereby authorised to allot and issue shares in
the capital of the company to any party upon such terms and
conditions as the directors in their sole discretion deem fit,
subject to the provisions of the Act, and the Listings
Requirements of the JSE ("the Listings Requirements").
Save as provided in ordinary resolution number eight, no issue of
these shares is contemplated at the present time and no issue will
be made that could effectively transfer the control of the company
without prior approval of shareholders in general meeting.
9. SPECIAL RESOLUTION NUMBER ONE
RESOLVED THAT
the company be and is hereby authorised, by way of a general
authority:
– to repurchase issued shares in the capital of the company;
– to purchase shares in the company's holding company
(if any);
DYNAMIC CABLES RSA LTD – ANNUAL REPORT 29
30
Notice of annual general meetingDynamic Cables RSA Limited ("Dynamic" or "the company")
— permit the purchase of shares in the company by a subsidiary may take place (a 10% premium above the weighted average
of the company; of the market value for the shares for the 5 (five) trading days
— as and when deemed appropriate, subject to the following immediately preceding the date on which such price was
provisions: agreed) and having regard to the current price of the shares
— that the authority is valid until the company's next annual on the JSE at the last practical date prior to the date of this
general meeting provided that it shall not exceed notice that
15 (fifteen) months from the date that this authority is — the company and its subsidiaries ("the group") will be able,
given; in the ordinary course of business, to pay its debts;
— that any such purchase be implemented on the JSE; — the consolidated assets of the group, fairly valued in
— that a paid press announcement giving such details, as accordance with accounting policies applied for purposes of
may be required in terms of the Listings Requirements, the latest audited annual group financial statements, will be
will be published when the company and its subsidiaries in excess of its consolidated liabilities;
(if any) has/have cumulatively repurchased 3% of its — the group will have adequate ordinary share capital and
shares in issue; reserves;
— that the general purchase during any one financial year of — the group will have adequate working capital, for the
the company may not exceed 20% of the number of 12 (twelve) month period after the date of the notice of
shares in issue at the time this authority is given; annual general meeting of which this explanatory note
— that, in determining the price at which shares may be forms part.
purchased in terms of this authority, the maximum
premium permitted will be 10% above the weighted 10. ORDINARY RESOLUTION NUMBER NINE
average of the market value of the shares as determined RESOLVED THAT —
over the 5 (five) trading days prior to the day upon which the directors and secretary of the company be and are hereby
the price was agreed; authorised to do all such things and sign all documents and
— that the repurchase may not be made at a bid price greater take all such action as they consider necessary to implement
that the current trading price of the share; the resolutions set out in the notice convening the annual
— that such purchase shall be subject to the Act, and the general meeting at which this ordinary resolution number ten
applicable provisions of the Listings Requirements; and will be considered.
— that this authority shall be automatically amended so as to
conform with the Listings Requirements applicable from TO TRANSACT SUCH OTHER BUSINESS AS MAY BE
time to time. TRANSACTED AT AN ANNUAL GENERAL MEETING
Reason for and effect of special resolution number one A shareholder entitled to attend and vote at the sixteenth
The reason for and effect of special resolution number one is annual general meeting is entitled to appoint one or more
to grant a renewable general authority to the company to proxies to attend, speak and, on a poll, vote in his/her stead.
repurchase shares of the company which are in issue from A proxy need not be a member of the company.
time to time, to permit the purchase of shares in the company
by a subsidiary of the company (if any) and to permit the A form of proxy is attached for the convenience of any
company to purchase shares in the company's holding shareholder who cannot attend the fifteenth annual general
company (if any). It is the intention of the directors of the meeting. Duly completed forms must be lodged with
company that they may use such authority should prevailing the share certificate secretaries, Computershare Investor
circumstances (including the tax dispensation and market Services 2004 Limited at 70 Marshall Street, Johannesburg
conditions) in their opinion warrant it. (PO Box 61051, Marshalltown, 2107) by not later than 13:00
on 30 August 2004 in accordance with the instructions
The directors are of the opinion, after considering the effect thereon.
of such acquisition of shares, if implemented and on the
assumption that the maximum of 20% of the current issued
shares will be repurchased using the mechanism of the By order of the board
general authority at a maximum price at which the repurchase Director/Company secretary
DYNAMIC CABLES RSA LTD — ANNUAL REPORT
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