omnia holdings annual report 2010 omnia holdings annu

70 OMNIA ANNUAL REPORT 2010 FINANCIAL STATEMENTS continued
DIRECTORS’ REPORT continued
Arising from the excellent cash generation, net interest-bearing
debt has reduced to R404 million (2009: R952 million) resulting
in a debt:equity ratio of 20% compared to the 45% that
prevailed at the end of the prior year.
Non-current interest-bearing borrowings have increased by
a net R134 million to R804 million (2009: R670 million) with
the injection of term loans following the Nanotron and Sakhile 2
transactions relating to management and staff participation plans
that were approved by shareholders on 11 December 2009.
DIVIDEND
Given the need to raise capital for the development and
construction of the nitric acid complex the Board has decided
not to propose a dividend for the year.
STATED CAPITAL
Stated Capital increased by R117 million to R318 million
following the issue of shares to management in terms of the
Third Partnership with Management Scheme, the five year
target to financial year end 2009 having been achieved, as well
as the capitalisation award in lieu of a cash dividend that took
place during the year.
The authorised share capital has remained unchanged at
75 million ordinary shares of no par value, and 10 million 15%
cumulative redeemable preference shares of 1 cent each since
the prior year.
The total number of issued shares on 31 March 2010, net
of treasury shares, stood at 46 490 987 shares (2009:
44 370 004 shares), an increase of 2 120 983 shares.
PROPERTY, PLANT AND EQUIPMENT
The Group’s world-class state-of-the-art fertilizer and explosives
process plants have again performed well.
Capital expenditure on tangible assets amounted to R366 million
(2009: R238 million) comprising maintenance expenditure and
ordinary replacement capital, as well as expansion capital
expenditure mainly in respect of plant, equipment and vehicles.
Capital expenditure on intangible assets amounted to R19 million
(2009: R20 million).
The Board has approved an amount of R1,4 billion for the
construction of a second nitric acid complex at the facilities in
Sasolburg. The nitric acid complex is to be developed adjacent to
Omnia’s existing plant, which for some time has operated at
capacity and will produce some 1 000 tons per day, which equates
to about 140% of the existing plant’s capacity. It is estimated that
it will generate internal cost savings of approximately R280 million
per annum (operating at 60% capacity level).
DIRECTORS AND SECRETARY
Details regarding the directors and secretary in office at the date
of this report appear on pages 14 and 15 of the annual report.
In terms of the company’s articles of association, Mr TR Scott
and Dr WT Marais will retire at the forthcoming annual general
meeting. Being eligible, they offer themselves for re-election.
Mr DL Eggers has announced his retirement from the Board
with effect from 31 August 2010.
Mr JG Pretorius retired on 23 October 2009, and
Mr RR Masebelanga resigned on 19 February 2010.
MANAGEMENT BY THIRD PARTIES
None of the businesses of the company or its subsidiaries had,
during the financial year, been managed by a third party or a
company in which a director had an interest.
DIRECTORS’ INTEREST IN CONTRACTS
No material contracts in which the directors have an interest
were entered into during the current year.
DIRECTORS’ REMUNERATION
Details of directors’ remuneration are set out in note 30 to the
financial statements.
SHAREHOLDER SPREAD
A summary of shareholder spread as at 31 March 2010 has
been included on page 127.
MAJOR SHAREHOLDERS
According to information received by the directors, the following
are the only shareholders holding, directly or indirectly, in excess
of 5% of the share capital as at 31 March 2010.
Number
of shares %
Oasis Asset Management 6 855 300 14,5
Coronation Fund managers 6 188 081 13,1
Regarding Capital 5 498 438 11,6
Dr WT Marais & Associates 5 457 776 11,6
OMIGSA 4 448 760 9,4
Total 28 448 355 60,2
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES
Details of the company’s principal subsidiaries, joint ventures
and associates are set out on page 121. The attributable interest
of the holding company in the income earned and losses
incurred after taxation by its subsidiaries, is set out in note 10
on page 96.
GOING CONCERN
The directors endorse and are of the opinion that the Group has
sufficient resources to maintain the business for the future.
Consequently, the going concern basis for preparing the financial
statements is adopted. The Board statement in this regard
appears in the statement of responsibility of directors for the
annual financial statements.
The Board minutes the facts and assumptions used in the
assessment of the going concern status of the Group at financial
year end. At the interim reporting stage, the directors consider
their assessment at the previous year end of the Group’s ability
to continue as a going concern and determine whether any of
the significant factors in the assessment have changed to such
an extent that the appropriateness of the going-concern
assumption at the interim reporting stage has been affected.
AUDITORS
PricewaterhouseCoopers Inc. will continue office in accordance
with Section 270 (2) of the Companies Act, 1973.