| Fri 26 Sep 2003, 17:59 | | Putco Limited - Audited Results For The Year Ended |
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Putco Limited - Audited Results For The Year Ended 30 June 2003.
Release Date: 26/09/2003 17:39:17 Code(s): PTC
PUTCO LIMITED - AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2003.
PUTCO LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1945/018672/06)
Share code:PTC
ISIN:ZAE000005716
("The Company")
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2003
Income Statements For The Year Ended 30 June 2003
Group Company
R000 R000 R000 R000
2003 2002 2003 2002
Revenue 899 101 828 411 873 190 790 696
Turnover - Bus operating 894 067 827 148 853 211 785 713
Cost of operating and trading 827 780 759 546 794 333 728 279
Operating profit before onerous
contracts 66 287 67 602 58 878 57 434
Onerous contracts 17 128 (23 548) 17 128 (23 548)
Operating profit after onerous
contracts 83 415 44 054 76 006 33 886
Other dividends 20 18 20 18
Distributions from trading trusts 15 345 3 887
Interest received 5 014 1 245 4 614 1 078
Profit before finance costs and
taxation 88 449 45 317 95 985 38 869
Finance costs 26 684 15 189 26 684 15 175
Profit before taxation 61 765 30 128 69 301 23 694
Taxation 19 820 10 691 24 015 8 614
Profit attributable to shareholders 41 945 19 437 45 286 15 080
Earnings per share (cents) 158,7 73,6
Headline earnings per share (cents) 159,0 70,5
Adjusted headline earnings
per share (cents) 113,7 132,9
Dividends per share (cents) 50,0 50,0
- Final paid - October 2002 (2001) 30,0 30,0
- Interim paid - April 2003 (2002) 20,0 20,0
- Final declared - October 2003 30,0
Reconciliation between earnings and
headline earnings per share
Attributable earnings 41 945 19 437
Loss/(profit) on disposal of assets 78 (802)
Headline earnings 42 023 18 635
Provision for onerous contracts (17 128) 23 635
- Deferred tax effect thereof 5 138 (7 064)
Adjusted headline earnings 30 033 35 119
Balance Sheets At 30 June 2003
Group Company
R000 R000 R000 R000
2003 2002 2003 2002
Assets
Non-current assets 327 840 268 359 306 658 244 766
Property, plant and equipment 325 109 259 304 279 401 211 599
Investments 2 731 5 102 7 822 1 415
Investments in subsidiaries 16 728 16 789
Deferred taxation - 3 953 2 707 14 963
Current assets 154 168 118 608 146 469 110 183
Inventory 51 794 56 157 50 671 54 922
Trade and other receivables 56 696 29 969 53 030 25 550
Cash on call, at bank and on hand 45 678 32 482 42 768 29 711
Total assets 482 008 386 967 453 127 354 949
Equity and liabilities
Equity capital and reserves 122 402 94 449 102 016 69 943
Share capital and share premium 10 917 10 917 10 917 10 917
Non-distributable reserves 20 410 22 954 - -
Distributable reserves 91 075 60 578 91 099 59 026
Ordinary shareholders" interest 122 402 94 449 102 402 69 943
Non-current liabilities 145 721 107 940 139 869 107 391
Long-term liabilities 72 644 35 664 72 644 35 664
Deferred taxation 5 852 - - -
Provisions 67 225 72 276 67 225 71 727
Current liabilities 213 885 184 578 211 242 177 615
Short-term liabilities 18 228 8 207 18 228 8 207
Provisions 95 801 81 671 94 796 80 934
Trade and other payables 90 317 82 461 88 046 78 144
Taxation 4 406 11 381 4 577 9 472
Bank overdraft 5 133 858 5 595 858
Total equity and liabilities 482 008 386 967 453 127 354 949
Statements Of Changes In Equity For The Year Ended 30 June 2003
GROUP Share capital Non-
and distri- Distri-
share butable butable
premium reserves reserves Total
R000 R000 R000 R"000
Balance at 30 June 2001 10 917 8 648 53 929 73 494
Net profit for the year 19 437 19 437
Revaluation of properties 21 043 21 043
Deferred tax on properties (6 313) (6 313)
Revaluation reserve realised
through depreciation (424) 424 -
Dividends paid (13 212) (13 212)
Balance at 30 June 2002 10 917 22 954 60 578 94 449
Net profit for the year 41 945 41 945
Revaluation of properties (1 113) (1 113)
Deferred tax on revaluation 334 334
Revaluation reserve realised
through depreciation (1 765) 1 765 -
Dividends paid (13 213) (13 213)
Balance at 30 June 2003 10 917 20 410 91 075 122 402
COMPANY
Balance at 30 June 2001 10 917 - 57 158 68 075
Net profit for the year 15 080 15 080
Dividend paid (13 212) (13 212)
Balance at 30 June 2002 10 917 - 59 026 69 943
Net profit for the year 45 286 45 286
Dividends paid (13 213) (13 213)
Balance at 30 June 2003 10 917 - 91 099 102 016
Cash Flow Statements For The Year Ended 30 June 2003
Group Company
R000 R000 R000 R000
2003 2002 2003 2002
Cash generated by operating
activities 61 215 117 070 69 279 104 236
Net cash generated by operations
(see below) 99 230 143 788 92 346 127 139
Investment income 5 034 1 263 19 979 4 983
Finance costs (13 180) (4 791) (13 180) (4 777)
Taxation paid (16 656) (9 978) (16 653) (9 897)
Dividends paid (13 213) (13 212) (13 213) (13 212)
Investing activities (99 295) (84 648)(107 960) (73 397)
Replacement of property, plant
and equipment (104 733) (85 622)(104 674) (85 553)
Proceeds on disposal of plant
and equipment 3 067 2 940 3 061 2 934
Decrease/(increase) in investments 2 371 (1 966) (6 408) 8 700
Decrease in loans to subsidiaries - 61 522
Financing activities 47 001 43 871 47 001 43 871
Net long-term liabilities advanced 36 980 35 664 36 980 35 664
Net short-term liabilities advanced 10 021 8 207 10 021 8 207
Cash resources
Net increase in cash and cash
equivalents 8 921 76 293 8 320 74 710
Cash and cash equivalents at
beginning of year 31 624 (44 669) 28 853 (45 857)
Cash and cash equivalents at end
of year 40 545 31 624 37 173 28 853
Reconciliation of profit before
taxation with net cash generated
by operations
Profit before taxation 61 765 30 128 69 301 23 694
Adjusted for depreciation 34 670 23 072 33 725 21 720
Finance costs 26 684 15 189 26 684 15 175
Loss/(profit) on disposal of
property,
plant and equipment 78 (802) 86 (798)
Investment income (5 034) (1 263) (19 979) (4 983)
Changes in working capital (14 508) 47 800 (13 327) 43 221
Non-cash effect of provisions raised (4 425) 29 664 (4 144) 29 110
99 230 143 788 92 346 127 139
CHAIRMAN"S STATEMENT
OVERVIEW
The improvement in the results experienced for the first six months continued
and is reflected in the final results for the financial year. There has been a
continued improvement in many of our operations. Savings in operating
expenditure, increased passenger growth in certain areas, and the control of
costs have contributed to the improved results. Discussion and investigation
with many of our major suppliers into ways of mutual improvement in the supply
chain has significantly assisted in reducing our costs.
The following items are highlighted mainly for information purposes and to keep
stakeholders informed of important matters facing the Company. The issues, which
are not necessarily placed in order of importance, are considered significant in
that they could impact on the future performance of the Company. Management and
staff are addressing these points on an ongoing basis and are taking appropriate
action.
NEGOTIATED CONTRACTS
As reported in last year"s Chairman"s Statement, the National and Provincial
Departments of Transport were considering the introduction of negotiated instead
of tendered contracts. Subsequently, their decision was to continue with
competitive tendered contracts while leaving the door open for negotiated
contracts, if these would advance black economic empowerment. Negotiations,
which have already commenced for the concluding of negotiated contracts, will
continue.
TENDERED CONTRACTS
Tenders Postponed Until February 2004
The Department of Transport (DOT) has decided to postpone the tender process
until early next year, while discussions are continuing between Government, Bus
Operators and Organised Labour on the Heads of Agreement (HOA) - which regulates
certain issues in moving towards tendered contracts - and the overall Black
Economic Empowerment (BEE) initiatives. This postponement applies only to those
operations on interim contracts and tendered contracts due for tendering or
retendering.
Model Tender Document Discussions
The National Land Transport Transition Act 22 of 2000 (NLTTA) makes provision
for the Model Tender Contract Document (MTCD), containing prescribed
requirements, to be used in subsidised service contracts and negotiated
contracts. The Department of Transport has recently issued a revised MTCD for
comment by all interested parties. A number of inclusions relate to fundamental
issues which are covered elsewhere in my statement.
These issues will need to be discussed and agreed upon before the MTCD can be
accepted by the industry. One of the major changes already accepted by all
parties is the extension of the newly awarded tendered contracts from five years
to seven years. This will enable more acceptable financial treatment of costs
for large capital expenditures, a more stable operating environment and a more
permanent work environment for employees.
HEADS OF AGREEMENT
Right Of First Refusal
The current operator enjoys a right of first refusal in terms of the "Tripartite
Heads of Agreement" (HOA) concluded with the National Department of Transport
(NDOT), Labour Unions and the South African Bus Operators Association (SABOA).
In terms of that right, if that operator tenders for its own services and its
tender is not more than 10% higher than the most acceptable tender, that
operator will have the right to be awarded the new contract at the rates and on
the basis of the most acceptable tenderer.
30% Set Aside
The Government is of the view that in order to effectively change the current
profile of the bus industry, a minimum of 30% of all contracted services should
be set-aside for companies with a 50,1% of Previously Disadvantaged Individuals
(PDI) equity ownership. Therefore, tendering authorities in the procurement of
set-aside services should only consider tenders received from companies with PDI
equity ownership above 50%. For the remaining 70% of the services to be put out
to competitive tender a minimum PDI equity ownership of 35% should be compulsory
in order for the tendering authorities to consider bids. In addition, a further
minimum of 10% subcontracting of the revenue kilometres of the contract is to be
applied. This must be subcontracted to small business entities.
There are certain concerns within SABOA regarding this proposal as it conflicts
with the right of first refusal. Although the transformation process is already
at an advanced level in many companies in the industry, some operators have not
yet reached either 35% or 50,1% black ownership and this proposal would preclude
them from tendering for all or portions of their existing services.
The industry has repeatedly expressed its support for BEE, and believes that the
approach adopted by Central Government in introducing BEE Scorecards is the
correct method. In terms of this approach clear targets and goals for BEE (as
measured by all the components of BEE) must be achieved within agreed time
periods. The NDOT policy proposal, however, focuses only on ownership and
ignores other elements defined by Central Government. It also violates the right
of first refusal and the undertaking to limit set-asides, service cutbacks and
sub contracting requirements negotiated between Government and the individual
operators in the HOA.
Bargaining Council Determining Actual Wage Rates And Benefits
Following the meetings held recently between Government, Labour and SABOA
(Operators) it was decided that the impasse in the HOA negotiations, regarding
the level of wages/salaries and benefits in tenders, be referred to The South
African Road Passenger Bargaining Council (SARPBAC) to negotiate the actual
wages/salaries levels that will apply in the tendered contract documents. All
tenders will be based on these actual rates and benefits for employees. This
effectively removes competition on labour rates and benefits.
Extension Of Agreement
It was agreed that the agreement reached above would be referred to the
Department of Labour in order to ensure that the envisaged SARBPAC
wage/salary/benefit agreement would be extended to all participants in the
Industry and therefore included in the MTCD.
BLACK ECONOMIC EMPOWERMENT
Debate Between Big And Small Enterprises
The existing Transport Policy strives to bring Small, Medium and Micro
Enterprises (SMME) operators into the formal subsidised bus industry by lowering
the barriers to entry. Current bus operations are redesigned into a number of
smaller tenders that allows SMME operators to tender for the reduced business
and enter the market.
The downside of this approach is that economies of scale are lost and the
overall transport network is fragmented instead of being integrated. In
addition, many Government macro-economic objectives/initiatives need the support
and structure of a large organisation to enable the implementation and
achievement of the objectives. Satisfactory financing facilities are not readily
available to fund SMME operators.
Whilst we understand and support the intention to bring SMMEs into the formal
bus industry we believe that there are other ways of achieving this without
undermining the provision of transport. This will involve a managed evolution of
the process with clearly defined targets and checkpoints.
The BEE Scorecard
Government embarked on a strategy to determine BEE sector charters and targets
to accelerate BEE in South Africa. A Bus Sector Working Group was established by
NDOT, including operators, organised labour and other role-players to determine
appropriate BEE targets and timeframes. Subsequently a detailed survey was
conducted among all SABOA members to determine the current status of BEE in the
Industry. It was generally agreed that the survey information would be used as a
point of departure for the determination of industry targets. SABOA is of the
view that BEE be seen as a process with an end state (time and achievement
targets) in mind.
Companies that cannot immediately comply with whatever BEE targets are set,
should be given reasonable time to conform as envisaged in the HOA and not be
penalised at the outset, as for instance in the tendering process. SABOA
prepared a draft BEE Scorecard that was submitted to the Bus Sector Working
Group for comment. The proposed Bus BEE Scorecard will include BEE targets,
timeframes and weights in respect of the following BEE core components:
* Ownership
* Control
* Employment equity
* Skills development
* Preferential procurement
* Enterprise development
* A residual indicator which is industry specific i.e. social investment
The industry supports Government"s objectives for the transformation of the
economy and the broadening of the base. Putco will, through SABOA, continue to
play a leading role in finalising the BEE Scorecard for the Bus Industry.
Difficulties With The Empowerment Or Equity Restructuring Of Putco
Putco has been engaged in BEE negotiations with a substantial black economic
empowerment group for more than a year. A number of cautionary notices have been
placed in the media advising interested parties to exercise caution when dealing
in Putco shares. Initially delays were caused by financial constraints; however,
this aspect was resolved. More recently the uncertainty surrounding the policy
direction of Government regarding negotiated/tendered contracts caused further
delays. Subsequently, the new Government proposal to set-aside a minimum of 30%
of all contracted services for companies with 50,1% PDI equity ownership has
created uncertainty among the potential BEE group. A meeting between the
potential BEE group and the Department of Transport has been arranged to obtain
further information in order to address these concerns.
Our official request to the DOT, as prescribed in our contract, to enable us to
cede our contracts to a new transformed BEE company has not to-date been agreed
to despite numerous follow ups both verbally and in writing. No official reason
has been given for the lack of response. The issues identified above caused our
BEE transaction to be delayed.
Ongoing Search For Suitable Empowerment Partners
Contingency plans have been put in place to ensure that the empowerment
transaction proceeds with other suitable groups should our negotiations with the
current BEE group not be concluded shortly. We are organising an acceptable,
revised transaction structure in such a manner that the ceding of our contracts
(discussed above) would no longer be required.
The Soweto Court Ruling
The court ruling set aside the decision to discontinue the tender process for
the Soweto routes and the decision not to award contracts to any of the tenders
received. The matter was referred back to the DOT to reconsider whether the
current tender process should be discontinued or reinstated. The DOT is to
afford each of the tenderers an opportunity to make written representations
concerning the discontinuation or reinstatement of the current tender process.
Thereafter the DOT must make a decision. Should the DOT decide to continue with
the current tender process, the process is to be reinstated and the tender
process must then be brought to a conclusion by the appropriate award of a
contract/s. Should the DOT decide to discontinue the current tender process the
existing interim contract will continue up to the end of the month following the
month during which the routes are awarded to Putco or another operator through a
lawful process.
Putco, on legal advice, has appealed the court ruling. The basis for the appeal
is as follows:
* Putco has a legitimate expectation that once the tender process has been
initiated, it will be taken to its logical conclusion. This means that
tenders will be awarded and if Putco is within its right of first refusal
limit, it then becomes a foregone conclusion that Putco will be the
successful tenderer.
Due to the above statement Putco believes that the Judge erred in both fact and
law.
WAGE NEGOTIATIONS
SARPBAC concluded the annual negotiations on 12 March 2003. The wage settlement
was 9% on the base rate of pay, effective from 1 April 2003.
BUS FOR THE DISABLED
Putco engineers at our Dubigeon factory in Brits have designed and built a bus
exclusively for the transport of disabled people. The bus operates in the
Tshwane, Mamelodi and Soshanguve areas. This project was embarked upon in
conjunction with the Tswhane Metropolitan Council. It is the only bus of its
kind operating in the Gauteng region. The service is very well accepted by the
relevant communities and we hope to implement similar services in other areas in
which we operate.
HIV/AIDS
The Company is continuing with its comprehensive HIV/Aids awareness campaign. As
reported previously, over one hundred Aids Monitors have undergone professional
training to assist with the awareness campaign education and provide information
and guidance. This important programme is under the direct supervision of our
Chief Medical Officer and his team of qualified occupational health sisters.
BUS INVESTMENTS/FLEET
We introduced a further 82 buses into our operations during the year. This is in
line with our plan to introduce new improved technology buses into our fleet on
an on-going basis and to cater for future tender requirements and planned
growth. In addition, we rebuilt/refurbished 55 of our existing fleet during the
year.
We are continuing with the project to replace old mobile ticket-selling vehicles
in order to improve these facilities for our passengers. We built a further 10
units during this financial year.
FUEL
Putco, as a large user of diesel fuel in South Africa, finds that the
unpredictability of fuel price increases/decreases creates uncertainty and
introduces a risk element. We are conducting detailed investigations and
studying alternative proposals to address and reduce our risk exposure and
uncertainty.
RISK ASSESSMENT
KPMG Management Assurance Services were engaged in March 2001, on a co-sourcing
basis, to assist management in assessing and prioritising the risks that need
specific attention in order to achieve our business objectives and to develop a
risk-based internal audit plan. Focus is directed to the areas of most
significant risk and concern to stakeholders.
ROAD SAFETY PLAN
We are continuing to give high attention to road safety matters. Our holistic
safety plan is built on four core elements - the driver, the vehicle, the role
of supervision and emergency medical services. We continue to align our
initiatives with the Department of Transport"s Drive Alive campaign, their
safety programmes and new safety legislation.
EMPLOYMENT EQUITY
Putco has a well-defined employment equity strategy and a comprehensive
implementation plan. Our first official Equity Plan, as agreed to with labour,
was submitted in May 2000 to the Department of Labour in terms of the Employment
Equity Act, No 55. The Employment Equity Consultative Committee oversees the
process. Top management will continue to give attention and support to this
strategic objective.
The stringent targets that we set ourselves have predominantly been met in all
categories. We are in the process of discussing and compiling our plan for the
next three years for submission to the Department of Labour. The training and
development of staff continue to be an important objective for the Company.
PUTCO FOUNDATION
Changes In The Directorate
The Chairman of the Foundation, Mr. Niel Groenewald, retired at the end of July
2003. I would like to take this opportunity of thanking him for the contribution
he made to the success of the Foundation under his chairmanship. Mr. R More,
Manager Corporate Affairs Putco, has been selected to succeed Mr. Groenewald. We
wish him well in this important role. Mr. T Wickham, SBU Manager, has been
selected as a Trustee of the Foundation.
OPERATING RESULTS
The current financial year"s results were achieved from a sound base. Group
revenue increased by 8,5% from R828,4 million to R899,1 million, while operating
and trading costs increased by 9% from R759,5 million to R827,8 million. Group
profit before taxation is R61,8 million (2002: R30,1 million).
As reported in last year"s financial report the Group"s accounting policy was
changed to comply with AC 116 (Post Retirement Benefits) and this together with
the cost of accounting for onerous contracts in terms of AC 130 (Provisions,
contingent liabilities and contingent assets) had the effect of adversely
affecting the profit after tax figure. The results in the current year are again
affected by the reversal of a large part of the provision for onerous contracts
due to the sale by the landlord of property previously leased by Putco and no
longer used by it. In 2002 our headline earnings were significantly understated
because of complying with AC 130, and the converse applies in 2003. Despite the
above, the performance of the Group has been good.
Passenger levels are down slightly by 2,6%, from 78 million in the previous year
to 76 million.
The operating bus fleet at the end of June 2003 was 1 402, compared to
1 483 at the end of June 2002, a decrease of 5,5%.
The total number of employees was 4 020, compared to 4 235 at the end of the
previous year, down by 5,1%.
OPERATING FLEET
The bus programme for the financial year ending June 2003 costed R96,5 million
(2002: R74,4 million).
FUTURE PROSPECTS
Future Bus Plans
One of our key strategic thrust areas remains "bus fleet management". A senior
management bus planning committee meets regularly to discuss and action the on-
going bus requirements for the Group.
We will purchase 50 new bus chassis in the first six months of the new financial
year. We also plan to order a further 50 bus chassis in the second half of the
new financial year. The bus bodies will be built at our Dubigeon factory.
A further 46 of our existing bus fleet will undergo extensive rebuild and
refurbishment during this period.
The decision to purchase bus chassis and/or rebuild our bus fleet is governed by
the winning of new tenders and/or the retention of our existing business.
Soweto Special Payment
The agreement with the DOT, to partly assist with the losses being incurred in
our Soweto operation because of the delay in finalising the tender process, has
been extended up to the end of the month following the month during which the
routes are awarded through the official tender process.
Restructuring/Rationalisation
We are continuing with our plans to restructure and reposition the Group to
ensure that we remain competitive, in line with the changing public transport
requirements. We will continue to strive towards maintaining a good balance
between cost containment and the achievement of professional standards and
safety in all areas of our operations. A critical review and study of all our
support functions is an important strategic objective. We must ensure that
support services are efficient and add value to our core business.
Corporate Governance
The directors support the Code of Corporate Practice and Conduct as contained in
the King II Report and are implementing the provisions thereof, where
applicable. The directors and management acknowledge the need to manage the
business with integrity and according to accepted corporate practices (see
detailed section on Corporate Governance on pages 30 to 35).
Diversification Options Within Sa And Outside Sa
One of our strategic thrust areas is "diversification". We are looking to
diversify some of our operations to include the non-subsidised bus sector. This
could include long distance coach and tourist business and contract type bus
services. In addition, we are exploring a number of opportunities in the bus
commuter market in other parts of Africa.
Our diversification plans also cover the provision of specialised expertise,
resources and management services to the existing emerging SMMEs market and
other operators.
Transformation Issue
At present Government in its drive to accelerate transformation objectives, and
to accommodate SMMEs, appears to be acting in conflict with certain major
aspects of previously negotiated agreements. These aspects relate to the Heads
of Agreement and Interim/Tendered Contracts. Some of these issues have
unfortunately only been able to be decided upon by engaging in court action. In
my view this is not the preferred way to find solutions and every effort must be
made to eliminate the litigation route.
Integrated Transport Plans (Jhb Metropolitan Council)
The Johannesburg Metropolitan Council has prepared an Integrated Transport Plan
(ITP) in terms of the National Land Transport Transition Act (NLTTA-Act22 of
2000). The document addresses public transport services (minibus-taxi,
subsidised bus and rail) as well as private and freight transport. An Operating
Licence Strategy, Rationalisation Plan and Public Transport Plan are included.
The period under consideration for the plan is the five-year period between 2003
to 2008. The ITP will have an impact on the design and implementation of future
tenders for the area, affecting some of Putco"s existing operations. We are
attending presentations of the ITP and will provide input and comments where
necessary.
SABOA Transformation Process
During the course of this financial year SABOA embarked on an extensive revamp
of its constitution. After detailed discussions with stakeholders the members
adopted the new constitution. A number of changes were made that addressed the
representation and voting rights of the small bus operators. This will hopefully
lead to the unification of the industry.
CONCLUSION
I want to thank the management and all the staff for their contribution to the
results of the Group. Thank you for the hard work, loyalty and dedication
displayed during the past year. In the changing times that we are living in we
look forward to a stable and progressive Government that plays an impartial role
for all its minority groups.
Best Wishes
A CARLEO
Chairman
16 September 2003
Johannesburg
NOTICE OF THE ANNUAL GENERAL MEETING
Notice is hereby given that the 58th annual general meeting of members of the
Company will be held at 12h00 on Tuesday, 25 November 2003, at the registered
office of the Company, "Mimosa Park", Mimosa Way, Gallo Manor, Sandton.
DIRECTORS" RESPONSIBILITIES FOR FINANCIAL REPORTING
The annual financial statements for Putco Limited and the Group incorporate the
results for the year ended 30 June 2003.
The Directors are ultimately responsible for the preparation of the annual
financial statements and related financial information that fairly present the
state of affairs and the results of the company and of the Group. The external
auditors are responsible for independently auditing and reporting on these
annual financial statements in conformity with Statements of South African
Auditing Standards.
The annual financial statements set out in this report have been prepared by
management in accordance with South African Statements of Generally Accepted
Accounting Practice and in the manner required by the Companies Act in South
Africa. They incorporate full and reasonable disclosure and are based on
appropriate accounting policies which have been consistently applied and which
are supported by reasonable and prudent judgments and estimates.
The directors have considered the appropriateness of the going concern basis for
the preparation of the annual financial statements and consider that the Company
and the Group have adequate resources in place to continue in operation for the
foreseeable future.
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF PUTCO LIMITED
We have audited the annual financial statements and Group annual financial
statements of Putco Limited set out on pages 38 to 68. These financial
statements are the responsibility of the Company"s directors. Our responsibility
is to express an opinion on these financial statements based on our audit.
Scope
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,
* evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
Audit Opinion
In our opinion, the financial statements fairly present, in all material
respects, the financial position of the Company and of the Group at 30 June
2003, and the results of their operations and cash flow information 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 of 1973 in
South Africa.
ERNST & YOUNG
Chartered Accountants (SA)
Registered Accountants and Auditors
Johannesburg
16 September 2003
DIVIDEND ANNOUNCEMENT
The Board of Directors has resolved to declare a final dividend of 30 cents per
share to all ordinary shareholders. The dividend is declared out of current year
profits attributable to shareholders of R41,9 million.
In compliance with the requirements of STRATE, the following dates are
applicable:
Last day to trade cum the dividend Friday, 17 October 2003
Date trading commences ex the dividend Monday, 20 October 2003
Record date Friday, 24 October 2003
Date of payment on Monday, 27 October 2003
Share certificates may not be dematerialised or rematerialised between Monday,
20 October 2003 and Friday, 24 October 2003, both dates inclusive.
By order of the Board
A S J NEL
Secretary
Johannesburg
26 September 2003
Registered Office: Transfer Secretaries:
Mimosa Park Computershare Limited
5 Mimosa Way 70 Marshall Street
Gallo Manor Johannesburg, 2001
Sandton, 2052 P O Box 61051
Private Bag 3 Marshalltown 2107
Wendywood 2144
