Directors’ report for the year ended 30 September 2009
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
Pioneer Food Group Limited and its subsidiaries are involved in the manufacturing of food, beverages and related products for human and animal consumption. The various segments are highlighted in the Operational Review.
FINANCIAL RESULTS
The annual financial statements set out fully the financial position, results of operations and the cash flows for the year ended 30 September 2009. Further information is provided in the Financial Review.
SHARE CAPITAL
The authorised share capital consists of 400,000,000 (2008: 400,000,000) ordinary shares of 10 cents each and 18,130,000 (2008: 18,130,000) class A ordinary shares of 10 cents each. At year-end 201,183,898 (2008: 201,183,898) ordinary shares and 11,397,190 (2008: 12,619,180) class A ordinary shares are in issue.
The movement in issued share capital is disclosed in note 21 to the annual financial statements. The Company issued Nil (2008: 20,000,000) ordinary shares. The 2008 ordinary share issue, of 20,000,000 ordinary shares, was at a premium of R24,90 through a rights offer.
There was no movement (2008: Nil) in the treasury shares held by a subsidiary. This subsidiary held 17,982,056 (2008: 17,982,056) ordinary shares at year-end.
The number of ordinary shares held by the share incentive trust at year-end is 6,758,105 (2008: 8,570,935). A net number of 1,812,830 (2008: 715,513) ordinary shares were sold by the share incentive trust for R13,880,913 (2008: R5,699,841). No ordinary shares were issued to the trust (2008: 415,384 shares were acquired by exercising rights as part of the rights offer).
The Company bought back and cancelled 1,221,990 (2008: 1,593,900) class A ordinary shares during the year at a premium of R1,43 (2008: R1,01) per share.
BORROWINGS
No new borrowings were obtained by Group companies, except for a foreign wholly-owned subsidiary that restructured its foreign borrowings.
For further detail of the borrowings obtained refer to notes 24 and 45 of the annual financial statements. For the carrying amounts of property, plant and equipment or inventories or trade and other receivables encumbered refer to notes 11, 17 and 19 of the annual financial statements respectively.
DIVIDENDS
A final dividend of R179,053,669 (2008: R132,781,373) has been declared, representing 89,0 (2008: 66,0) cents per share. The dividend is payable on 1 February 2010 to shareholders recorded as such in the share register of the Company on 29 January 2010 (the record date). The last date to trade cum dividend will be 22 January 2010.
The total dividend for the year, representing 125,0 (2008: 96,0) cents per ordinary share, is R251,479,873 (2008: R187,136,542).
SUBSIDIARIES AND JOINT VENTURES
The detail on interest in subsidiaries and loans to joint ventures are presented in note 46 to the annual financial statements. The interest of the holding company in the profits and losses of subsidiaries and joint ventures, after income tax expense and profit attributable to minority interest, is as follows:
| 2009 | 2008 | |
|---|---|---|
| R’000 | R’000 | |
| Subsidiaries | ||
| Profits | 607,502 | 469,173 |
| Losses | (78,537) | (31,837) |
| Joint ventures | ||
| Profits | 32,846 | 22,684 |
| Losses | (1,251) | (2,344) |
DIRECTORS
The directors of the holding company, Pioneer Food Group Limited, are responsible for the activities and reports related to the Group. Full details of the directors appear here.
SPECIAL RESOLUTIONS PASSED
A special resolution was passed by Pioneer Foods Holdings Limited, a wholly-owned subsidiary of Pioneer Food Group Limited, to sell its total shareholding in the issued share capital of Sasguard Insurance Company Limited to Pioneer Foods (Pty) Limited, a wholly-owned subsidiary of Pioneer Foods Holdings Limited, for a consideration of R3 million with an effective date of 1 October 2009. This disposal is subject to the approval of the relevant regulatory authorities.
No other special resolutions were passed by any Group subsidiary.
LITIGATION STATEMENT
Refer to note 30 (contingent liabilities) of the annual financial statements for detail on the status of the Complaint referral by the Competition Commission of South Africa as well as the dispute with contract growers.
POST-BALANCE SHEET EVENTS
Other than the matters raised in note 43 to the annual financial statements, no other events occurred after the balance sheet date that may have a material effect on the Group.