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Annual Report 2005
Your future packaging today
Contents
Films Rigids Flexibles
The primary objective of the Group is to producetechnologically advanced packaging and servicesto customers in order to achieve superior growthin earnings and value for linked unitholders.
01 Financial highlights
02 Group history
04 Group structure
05 Business profile
10 Directorate
12 Report to investors
14 Divisional chief executives’ reports
20 Group value added statement
21 Notes to the Group
value added statement
22 Five year financial review
23 Definitions
24 Statistics
25 Corporate governance
28 Remuneration report
30 Financial statements
ASTRAPAK 2005 1
Astrapak Limited (‘Astrapak’ or ‘the Group’) headquartered in Johannesburg, manufactures and distributes an extensive range
of plastic packaging products. The Group has manufacturing facilities in all the main centres of South Africa and a joint venture
in Mauritius and employs approximately 3 000 people.
The operations are grouped into three divisions – Films, Rigids and Flexibles – and service principally the pharmaceutical,
personal care, food and beverage, agricultural, industrial and retail markets.
Astrapak has, since inception, invested in businesses that are market leaders or have significant technological advantages to
benefit from the global move towards plastic packaging. The Group focuses on service, innovation and technology in order
to achieve superior returns and growth in earnings for linked unitholders.
Financial highlights as at 28 February 2005
Foreword
37%
20%
Incomebefore interest,
taxation,depreciationand amortisation
Cashflowfrom operations
up
33%
Gearingdown
to
30%
Headlineearningsper linked unit
up
28%
Investment in
AstrapakLimitedby the Royal
BafokengNation
up
22%
Revenue
Annualisedreturn on equity
up
20%
2 ASTRAPAK 2005
Group history
January• Diverse Labelling
Consultants (Pty) Ltd(‘Diverse LabellingConsultants’ or ‘DLC’)acquired
May • Tristar Plastics (Pty) Ltd
(‘Tristar’), Durpak (Pty) Ltd (‘Durpak’) and CIC Brands SA(Pty) Ltd (‘CIC Brands’) acquired
December • The businesses of
Emcape-Thermopakand Blista Pac (Pty) Ltdare merged andcommence trading asThermopac
March
• Converted funding in
International Tube
Technology (Pty) Ltd
(‘International Tube
Technology’ or ‘ITT’)
into 60% equity
July
• Acquired 60% of the
equity in Pack-Line
Holdings (Pty) Ltd
(‘Pack-Line’)
March
• Astrapak Exports
(Pty) Ltd (‘Astrapak
Exports’) established
to promote exports
April
• Acquired 70% of the
equity in JJ Precision
Plastics (Pty) Ltd
(‘JJ Precision’)
May
• Acquired 75% of the
equity in Saflite
(Pty) Ltd (‘Saflite’)
• Transpoly assets sold to
Nampak Ltd
July
• Astra Repro (Pty) Ltd
(‘Astra Repro’)
commences operation
as a joint venture
between DLC and
Packaging Converters
September
• Tamperpak (Pty) Ltd
(‘Tamperpak’)
established as a grass
roots project
• Astrapak incorporated
as First Round
Investments (Pty) Ltd
• Astrapak acquires the
businesses of Emcape
(Pty) Ltd and
Thermopac (Pty) Ltd
and forms Emcape-
Thermopac (Pty) Ltd
(‘Emcape-Thermopac’)
• Astrapak acquires the
business of Ysebrand
Natal (Pty) Ltd
(‘Transpoly’)
March
• Astrapak acquires the
businesses of the East
Rand Plastics Group,
viz: East Rand Plastics
(Pty) Ltd (‘East Rand
Plastics’), Packaging
Consultants (Pty) Ltd
(‘Packaging
Consultants’) and
Peninsula Packaging
(Pty) Ltd
(‘Peninsula Packaging’)
• PAK 2000 (Pty) Ltd
(‘PAK 2000’) acquired
April
• City Packaging
(Pty) Ltd
(‘City Packaging’)
acquired
July
• Packaging Converters
(Pty) Ltd (‘Packaging
Converters’) acquired
November
• Astrapak listed on the
JSE Securities Exchange
South Africa (‘JSE’)
1996
1997
1998
1999
2000
ASTRAPAK 2005 3
February
• A Black Economic
Empowerment
transaction entered
into with Royal
Bafokeng Finance
(‘RBF’), in terms
of which RBF
acquired a 20%
stake in Astrapak,
signed
March
• Group reorganised in
terms of section 39 of
the Income Tax Act
July
• Astrapak Flexibles
(Pty) Ltd (‘Astrapak
Flexibles’) established to
operate as a selling arm
of the Flexibles division
October
• International Edgeboard
Technology (Pty) Ltd
(‘International
Edgeboard Technology’
or ‘IET’) established as
a grass roots project
March
• Acquired 50% of the
equity in Marcom
Plastics (Pty) Ltd
(‘Marcom’)
• Acquired 49% of the
equity in Knilam
Packaging (Pty) Ltd
(‘Knilam’)
• Acquired a further
2,5% of the shares in
Thermopac increasing
the interest to 97,5%
• Acquired a further 20%
of the shares in Master
Plastics. Astrapak now
holds 95% of the
shares in Master
Plastics
• Master Plastics
subscribed to 50% of
the equity in
Euromatic-Plastop
(Pty) Ltd (‘Euromatic’)
November
• Acquired a further 21%
of the shares in Knilam
increasing the
shareholding to 70%
March
• Acquired 75% of the
equity in Master
Plastics (Pty) Ltd
(‘Master Plastics’)
March
• Acquired the shares
belonging to the
minority shareholders
of Pack-Line
representing 40% of
the issued share capital
of Pack-Line
April
• Acquired a further
2,5% of the shares in
Thermopac increasing
the interest to 95%
May
• Barrier Film Converters
(Pty) Ltd (‘Barrier
Films’) established as
a grass roots project
2001
2002
2003
2004
2005
4 ASTRAPAK 2005
Master Plastics(Pty) Ltd
95%
Rigids
Rigids
Flexibles
Films
100%
Incorporating the followingtrading divisions:
East Rand Plastics FilmsCity Pack FilmsTristar Plastics Films
Incorporating the following trading divisions:
Peninsula PackagingFilms
100%
Tamperpak(Pty) Ltd
JJ Precision Plastics(Pty) Ltd
Diverse LabellingConsultants (Pty) Ltd
Standard Labels Ltd(A company incorporated
in Mauritius)
PAK 2000(Pty) Ltd
Astraflex(Pty) Ltd
Incorporating the followingtrading divisions:
Packaging ConsultantsFilms
Astrapak FlexiblesFlexibles
Astrapak KwaZulu-Natal(Pty) Ltd
Astrapak Western Cape(Pty) Ltd
International TubeTechnology (Pty) Ltd
Pack-Line Holdings(Pty) Ltd
Thermopac(Pty) Ltd
Thermopackaging(Pty) Ltd
Cinqplast-Plastop
(Pty) Ltd
Cinqpet(Pty) Ltd
Durpak(Pty) Ltd
100%
International Edgeboard Technology
(Pty) Ltd Films
ASTRAPAK LIMITED
100%
EuromaticPlastop (Pty) Ltd
50% 100%
100%
100%
Astrapak Exports(Pty) Ltd
100%
100% 100% 100%
75%
Knilam Packaging (Pty) Ltd
70%
Barrier Film Converters(Pty) Ltd
100% 60%
100%49,5%
97,5%
100%
80%
Marcom Plastics(Pty) Ltd
50%
Astra Repro(Pty) Ltd
Saflite Packaging(Pty) Ltd
Plastop KwaZulu-Natal(Pty) Ltd
100% 80% 75%
Group structure as of 28 February 2005 (operating entities only)
Films FilmsFilms
Astrapak Gauteng (Pty) Ltd
ASTRAPAK 2005 5
City Pack • Randburg
Tristar Plastics specialises in pallet stabilisation and related products for the industrial packaging
sector. It is widely acknowledged as the market leader in the manufacture of high-quality shrink and
stretch film products, specifically for blue-chip companies in the cement, brewing, milling, retail
and mining industries.
Tristar’s market success is maintained through developing integrated partnerships with customers in
order to provide effective packaging solutions.
Tristar Plastics • Aeroton
Priding itself on outstanding production quality, East Rand Plastics produces high and low-density
polyethylene films, converting them into a range of sophisticated products – from multilayer film
structures to superbly decorated and wicketed bags for a range of applications.
Applications include refuse bags, carrier bags, shrink films, heavy-duty fertilizer bags, multilayer
lamination sheeting, tamper-evident form-fill-seal film and packaging for the bakery and
agricultural industries.
Films
Business profile
Packaging Consultants • Durban
Peninsula Packaging • Bellville
Widely acknowledged as a market leader in the manufacture of plain and printed polyethylene films,
sheeting, tubing and bags (both printed and unprinted). The extensive product range is supported
by advanced flexographic printing facilities and the company also boasts comprehensive bagmaking
facilities, catering for all manner and type of bags – from wicketed bags through to side-sealed bags.
These products are primarily used for packaging fresh fruit and vegetables (for local and export
market), fresh fish, general food, beverages, refuse bags and industrial packaging.
Initially committed to the plain and construction film market, Packaging Consultants now also
serves the six-to-eight-colour high-quality print market and sophisticated bag market.
Major markets include boutique bags, form-fill-seal packaging material (for confectionery, maize
and rice), bags for poultry, maize, pet food and frozen vegetables, as well as heavy-duty sacks for
agricultural and chemical products.
Due to the installation of co-extrusion technology, City Pack has been able to move shrink films
into a new era of sophistication and added-value, and today is amongst South Africa’s market
leaders in the supply of co-extruded, printed film for the shrink wrapping of food products,
beverages and industrial products. City Pack also entered the form-fill-seal market and is a
major supplier of high-quality films flexographically-printed in up to eight colours for frozen
vegetable packaging.
East Rand Plastics • Brakpan
6
Business profile continued
Barrier Films • Benoni
With a well-deserved reputation as a ‘one-stop packaging shop’, Pack-Line Packaging specialises
in the manufacture of extruded film products – in both reel form and bags – for the industrial,
agricultural and funeral sectors. As well as its involvement in the extrusion of virgin polymers,
it also uses recycled material for certain packaging applications.
Key product lines include shrink film and tubing for a diverse assortment of applications – from
prepacked fruit and vegetables to clothing, linen and confectionery products.
Pack-Line Holdings • East London
International Edgeboard Technology • Cape Town
International Tube Technology • Cape Town
ITT manufactures world-class industrial cores and tubes, focusing primarily on the textile/synthetic
fibre industry. ITT has gained an enviable reputation for innovation and quality in both products
and service; and its entrepreneurial approach and flexibility means that – when it comes to cores
and tubes – virtually any design specification can be achieved.
In addition to textile tubes, ITT also supplies a comprehensive range of cores, tubes and composite
containers, which are produced for a wide range of packaging applications.
IET manufactures edgeboard for use in stabilising pallet loads and for edge protection. Although
mainly used to stabilise cartons of deciduous and citrus fruit for the export market, local packers and
distributors also use edgeboard to preserve fruit quality.
The use of edgeboard combined with stretch or pallet wrap provides improved pallet stability, as
well as moisture and dust protection, representing cost savings and providing aesthetic appeal.
Barrier Film Converters specialises in the manufacture of commodity co-extruded barrier films for use
in vacuum bag and pouch production as well as roll stock thermoformable films for semi-automated
packaging of meat, cheese and allied food industries.
Co-extruded barrier films have many applications in the industrial market including packaging of
explosives, detergents, chemicals, paint and solvents.
Barrier Film Converters also manufactures high barrier films for the wine and allied industries, for
products ranging from bag-in box liners to bulk liners for containers.
Rigids
JJ Precision Plastics • Pinetown
JJ Precision supplies all the closures for PAK 2000’s products and also serves in the food and industrialinjection-moulding markets.
JJ Precision also offers a fully-fledged toolroom that’s vital for both the business and PAK 2000. When itcomes to tool and die-making there is an abundance of qualified toolmakers with extensive experiencein component and mould designs.
ASTRAPAK 2005
PAK 2000’s primary business is the supply of blow-moulded polyethylene containers – ranging insize from 200ml to five litres – to the motor vehicle lubricants sector. The company’s current focusis on providing innovative and cost-effective packaging to the petrochemical industry.
PAK 2000 • Pinetown
ASTRAPAK 2005 7
Thermopac specialises in the production of rigid thermoformed PP, HIPS and PET plastic packaging– mainly for the fresh food, prepared food, bakery and confectionery industry, but also forpharmaceuticals and cosmetics, and some industrial packaging. In addition, Thermopac extrudesplastic sheeting for the general thermoforming market.
Serving many of South Africa’s blue-chip companies, Thermopac offers a JIT service on a range ofcustom-moulded packs, as well as off-the-shelf packs. To ensure world-class products for its customers,Thermopac continually benchmarks itself against international standards of production efficiency andhas aligned itself with overseas companies with which it enjoys technology-sharing arrangements.
Cinqpet, a subsidiary of Master Plastics (Proprietary) Limited, offers both single-stage and two-step processes for PET conversion, allowing for the production of the widest possible range of PET containers – from high-volume water, oil and carbonated soft drink bottles through to wide-mouth jars and specialised cosmetics bottles.
The Cinqpet plant at the Denver complex offers the following PET technologies:
• injection stretch blow moulding of PET containers (single stage);• stretch blow moulding of PET containers (two stage); and• injection moulding of PET performs.
Thermopac • Cape Town
Cinqpet • Denver
Plastop KZN • Prospecton
Plastop KZN, a subsidiary of Master Plastics (Proprietary) Limited, is among South Africa’s leadingmanufacturers of rigid plastic bottles, jars, closures and other components for personal care productsand toiletries.
This air-conditioned, ISO 9002-accredited factory is primarily a ‘hole-in-the-wall’ operation, serving theLever Ponds, Maydon Wharf plant with packaging products for its top-class personal care products.
Plastop • Bronkhorstspruit
Plastop is a subsidiary of Master Plastics (Proprietary) Limited. At its manufacturing plant inBronkhorstspruit the accent is on the production and decorating of world-class packaging fortoiletries and personal care products.
It is at this plant that roll-on balls are manufactured using a complex procedure involving injection moulding, welding and grinding.
Plastop • Denver
Cinqplast-Plastop is a subsidiary of Master Plastics (Proprietary) Limited. At its Denver plant the emphasisis on producing superbly designed plastic bottles, jars and closures.
Plastop’s Denver plant offers the following technologies:
• extrusion blow moulding of PE, PP and PVC containers;• multi-layer extrusion blow moulding of PE and PP containers;• injection moulding of PE and PP tubs and closures; and• decoration of containers using UV silkscreen printing, foiling, labelling, pad printing and offset printing.
Flexibles
Diverse Labelling Consultants • Durban
Initially established to supply PVC shrink labels to the beverage industry, DLC soon expanded into
related technologies, such as tamper-evident neck bands, stretch labels, wraparound labels and
flexible packaging for the confectionery industry.
DLC enjoys a major share of South Africa’s labelling market, and an ever-growing share of the
flexible packaging market for the country’s major confectionery manufacturers. It has particular
competence in the market for high-quality, flexo-printed narrow-web flexible packaging materials.
8 ASTRAPAK 2005
Astraflex • Durban
Situated in brand-new custom designed premises, Astraflex works in conjunction with DLC,
through a common marketing arm, to provide customers with the mix-and-match convenience of
a ‘one-stop shop’.
Customers for the top-class printed flexible packaging produced by Astraflex include producers of
confectionery, baked products, frozen products, spices and cereals. Apart from the food industry,
there are numerous customers in the pharmaceutical, medical and personal care sectors.
Marcom Plastics was established in 1994 to produce unprinted 175ml and 250ml polypropylene
yoghurt containers. The company forms an integral part of Astrapak’s Rigids division, bringing
thin-wall injection moulding into the Group’s comprehensive range of offerings.
Marcom has the technology and capacity to produce a wide range of thin-wall injection-moulded
polypropylene containers and lids, including tubs for the dairy industry (yoghurt, cottage cheese,
etc), as well as items such as beer cups and food trays for the catering and hospitality sectors.
Marcom is South Africa’s only supplier to offer a complete standard range as well as a complete
pedestal range of containers for the premium end of the yoghurt market in sizes from 150ml
to one-litre.
Marcom Plastics • Rosslyn
Business profile continued
Euromatic • Bronkhorstspruit
This joint venture between Master Plastics and Euromatic AS is a highly focused and automated
plant dedicated to the manufacture of 1.4” (35,6mm) hollow PP roll-on balls. As the world’s
leading manufacturer of hollow plastic balls was the natural choice to partner Plastop, who had
already been manufacturing hollow balls for almost 20 years. The commissioning of the new
factory took place in early 2005.
ASTRAPAK 2005 9
Astrapak Flexibles • Durban • Johannesburg
Situated in custom-designed premises in Cape Town, Knilam are manufactures of specialisedpackaging systems utilising Modified Atmosphere Packaging (MAP) technology. Applications aretypically for shelf life extension of perishable food product, such as fresh produce.
In addition, the company processes and supplies peelable lidding film systems.
The company supplies to clients in both South and Central Africa. Many of their customers utilise thepackaging manufactured by Knilam in the supply of prepared vegetables into the European market.
Knilam has links with Amcor Australasia in the supply and technical support services relating toAmcor's ‘Lifespan’ products. This new development involves creating carton liners utilising MAP that enables fruit to be transported to export markets by sea freight.
Knilam Packaging • Cape Town
Saflite was established to take advantage of the burgeoning and fast-expanding market in stand-up pouches. In its short history, this innovative operation has taken a sizeable share of the stand-up pouch market for both food and non-food products.
Saflite also offers stand-up pouches with resealable zippers, providing the added consumer convenience of easily resealable packs – a strong marketing plus for brand owners.
Applications include confectionery, baking powder, dry yeast, DIY products, pet foods, pool chemicals and fabric softeners, to name but a few.
Saflite • Cape Town
Astra Repro • Durban
Tamperpak • Johannesburg
Tamperpak was established to complement the products offered by DLC – specifically to supply theGauteng and Cape markets for short-run, undecorated tamper-evident sleeves.
Tamperpak enjoys a major share of the market for undecorated tamper-evident sleeves for cosmetic,personal care, pharmaceutical, food and industrial products.
Astra Repro provides an invaluable service to the division and the Group as a whole in their dedicated in-house reproduction facility. Apart from ensuring that prepress adjustments and hard-earned know-how remain strictly confidential, the in-house reproductioncapabilities offered bring numerous advantages for Group operations and their customers, including improved turnaround times, reduced costs and improved control over the production of photopolymer printing plates.
Astrapak Flexibles, which also incorporates Astrapak Exports, is the sales and marketing company within the Flexibles division. Astrapak Flexibles strives to provide customers with the mix-and-match convenience of a ‘one-stop shop’ for their flexible packaging andlabelling solutions.
The sole function of Astrapak Exports is to develop untapped international markets for Group products and services. While the initial focus isto develop the untapped potential of Africa, the Group also conducts business in the Americas, Europe and Australasia. A joint ventureoperation in Mauritius offers some flexible packaging and labelling products to SADC and COMESA countries, at reduced import tariffs.
10 ASTRAPAK 2005
Directorate
ChairmanRussell Upton#* (70) – CA(SA)Non-executive Director
Russell Upton qualified as a Chartered Accountant. He has been in theplastics and packaging industries for more than 30 years. He iscurrently a management consultant and apart from being a directorof Astrapak Limited, is also a director of Investec Bank Limited, theFrame Textile Group and Seardel Investment Corporation Limited.
Executive directorsRay Crewe-Brown (60) – BSc Mech EngChief Executive Officer
Ray Crewe-Brown has been in the plastics and packaging industriesfor more than 30 years. He was appointed Managing Director ofAmpaglas (Pty) Limited, a specialised plastic sheeting manufacturer.Following the acquisition of Ampaglas (Pty) Limited by Murray &Roberts Holdings Limited in 1983, was appointed Executive Chairmanof Murray & Roberts Plastics and Abrasives Corporation Limited.Following Kohler Limited’s acquisition of Murray & Roberts PlasticsLimited in 1992, was appointed Chief Executive Officer of KohlerPlastics Limited and appointed to the board of Kohler Limited in1994. A member of the Plastics Federation since 1982, President ofthe Plastics Federation for three years and a member of the steeringcommittee for the Department of Trade and Industry’s sponsoredcluster study for the plastics industry. He is currently a director of theboard of the Packaging Council of South Africa (PACSA) and amember of the executive committee.
Harry Todd (42) – CA(SA)Financial Director
Harry Todd qualified as a Chartered Accountant after completingarticles with Deloitte & Touche. He began his career as FinancialManager at HL & L Timber Processors, then Rowa International. Hethen became Group Financial Manager of Swaziland Brewers Limited.Upon his return to South Africa he took up the position of FinancialManager – Other Beverage Interests, at South African Breweries Plc.He joined Astrapak as Financial Director with effect May 2001.
Manley Diedloff (35) – BCom (Accounts)Business Development Director
Manley Diedloff completed his articles with Fisher Hoffman & Stridein December 1994. He was then employed as a financial managerwith Bupa Health Services in the United Kingdom before joiningHSBC Bank Plc as internal audit manager. Upon his return to SouthAfrica he joined Grinaker Construction as an accountant and afterthree years moved to Astrapak as group accountant. He has heldvarious positions in Astrapak including that of group financialmanager and group commercial manager before being appointed to the Astrapak Board as Business Development Director on 1 January 2005.
Greg Petzer (47) Divisional Chief Executive – Flexibles division
Greg Petzer joined Kohler Flexibles (Pty) Limited in 1979 as cashbookclerk and by 1990 held the position of Commercial Director. In 1990he established Diverse Labelling Consultants in Durban. During 1992he was awarded the SBDC/Sanlam Entrepreneur of the Year Award.He joined Astrapak in 1998 when the Company acquired an equityshare in Diverse Labelling Consultants. He was appointed as DivisionalChief Executive – Flexibles division in April 2000.
Marco Baglione (43) Divisional Chief Executive – Rigids division
Marco Baglione started in the packaging industry in March 1984. Heprogressed through the ranks within Nampak Limited before leavingto establish PAK 2000 in Durban in 1994. He joined Astrapak in 1997when the Company acquired an equity share in PAK 2000. He wasappointed as Divisional Chief Executive – Rigids division in July 2002.
Johan Venter (62) – BCom BCompt HonsDivisional Chief Executive – Films division
Johan Venter joined East Rand Plastics in 1979. He establishedPeninsula Packaging in 1979 and was appointed Managing Directorof Peninsula Packaging in 1994. He was appointed as Divisional ChiefExecutive – Films division in February 2002.
ASTRAPAK 2005 11
Non-executive directorsTshepo Kgage* (34) – CA(SA)
Non-executive director
Tshepo Kgage qualified as a Chartered Accountant after
completing articles at PricewaterhouseCoopers. He was appointed
as a senior audit manager at Deloitte and Touche and then
became Chief Financial Officer of the South African Weather
Service. Subsequently he joined Royal Bafokeng Finance where
he is responsible for effective financial management and
administration. His expanded role includes participation in
strategic investment as well as treasury management. He is a
non-executive director to Bafokeng Concor Technicrete
(Proprietary) Limited. Tshepo is the Founding Executive Member
of the Black Manager Forum (Vaal Branch) and a member of
the Association of Black Accountants of South Africa.
Christopher Molefe (57) – BCom (Admin)
Corporate Credit Training, Post Graduate Diploma
(Property Development)
Non-executive director
Christopher Molefe commenced his career as Group HR Manager
at Union Carbide Africa Corporation. He was subsequently employed
as the Manager of Corporate Affairs at Mobil Oil Southern Africa
(Pty) Ltd; an Executive Director at Black Management Forum; a
Financial Analyst at Chase Manhattan Bank; the Marketing Manager
at The African Bank Ltd; an Executive Manager at Transnet (Propnet)
and an Executive Director at Dipapatso Media (Pty) Ltd. In 2002
he joined Royal Bafokeng Resources as an Executive Director
and was appointed Managing Director of Royal Bafokeng Resources
(Pty) Ltd in May 2004. Christopher’s other responsibilities include
being the non-executive chairman of Merafe Resources Limited;
the non-executive chairman of the Royal Bafokeng Economic board;
a non-executive director of Astrapak Limited; and a non-executive
director of Jubilee Platinum Plc.
Thierry Dalais# (46) – BCom, BAcc, CA(SA)
Thierry Dalais qualified as a Chartered Accountant in 1984. He wasthen employed with Merchant Shippers, a subsidiary of MerholdInvestment Corporation Limited, and was engaged in trade financingactivities. In 1987 he was appointed Director of Merhold CorporateLimited and in the Group’s Investments and Corporate advisoryservices arm. In 1991 he co-founded the Brait Private Equity Groupand retired as Brait’s Executive Deputy Chairman in 2003. He hasextensive experience in corporate finance, private equity investingand general counsel to entrepreneurs in South Africa and abroad. He currently serves as a Non-executive director on various boards and is Executive Chairman of Metier, a private equity investment and advisory house.
Paul Botha* (42) – BA iLLB, H Dip Company Law, H Dip Tax
Paul Botha is a practising Attorney and Notary Public having been in private practice since 1986. Paul was a partner in the law firm Bell Dewar & Hall until 1997 when he established anadvisory business for Brait, an international Investment Bankingbusiness. He was the CEO of the Advisory Business of Brait from 1997 to February 2003. He has a wide range of experience inmergers and acquisitions and private equity transactions and is also Managing Director of Metier, a private equity investment and advisory house.
Company secretaryYolande Cowley (35) – CA(SA)
Yolande Cowley qualified as a Chartered Accountant after completingarticles at BDO Spencer Steward and joining PricewaterhouseCoopers.She joined Astrapak as Group Financial Manager and CompanySecretary with effect from November 2002.
# member of the Remuneration Committee
* member of the Audit Committee
12 ASTRAPAK 2005
Report to investors
IntroductionTrading environmentIn the financial year ended February 2005 trading conditions weresimilar in many respects to those experienced in the previous year.The market was characterised by good overall demand forpackaging products for the fast moving consumer goods sector, as adirect result of non-durable expenditure being up by 4% on theprevious year. This demand was obviously driven by lower interestrates and a generally buoyant economy. On the other hand, inputcosts were materially different during this financial year. In theprevious year the industry experienced a relative decline in polymerprices, however for the year ended February 2005 there weresubstantial price increases in the second half of the year, as a resultof oil prices in excess of US$50 per barrel. An added complicationtowards the end of last year was an explosion at the Sasolpolyethylene facility, which resulted in the Group having to importconsiderable quantities of raw material in order to ensure that wewere able to meet all our customers’ year-end requirements.
Due to the continuing strength of the Rand relative to the dollar, theindustry experienced a similar pattern of importation of finishedgoods such as confectionery and biscuits and some manufacturersalso flirted with the importation of flexible packaging from theMiddle East and India.
Black Economic EmpowermentIn a significant transaction, Astrapak agreed to sell 20% of its equityto Royal Bafokeng Finance, which took place in two tranches, thefirst in February 2005 and the second on 1 March 2005, for anoverall cash injection of R219 million. This is considered to be aparticularly important and mutually beneficial transaction, given the fact that it was a cash deal and also contributes to theempowerment of 300 000 people.
The BEE transaction in the previous year, which saw Astrapak enteringinto an agreement to sell 25% + 1 share in the company PAK 2000 toempowerment partners, has been very successful and has resulted inthe Company showing significantly improved trading results.
DevelopmentsThis year saw the acquisition by Astrapak of a majority interest in
two small companies, namely Marcom Plastics and Knilam
Packaging, and also a joint venture start up with Euromatic. These
investments had relatively little impact on the profit performance of
Astrapak due to their size, but introduced the Group to important
new markets, namely the dairy and fresh food markets. The
Euromatic JV allowed us to cease the importation of deodorant roll-
on balls from the USA and to make us self sufficient in that regard.
Astrapak also led the way in terms of environmental responsibility in
South Africa by signing an agreement with Symphony Plastic
Technologies in the UK to introduce a range of degradable
polyethylene additives, using the company’s ‘D2W’ (degrade to
water) technology. The Group rolled this out in the form of a new
range of biodegradable refuse bags.
Group performance and highlightsRevenue increased by a healthy 22,1% to R1,65 billion which
reflected the strong demand in the economy and also the effect of
the large increase in raw material prices in the second part of the
year. The real volume growth achieved by Astrapak was 5,7%.
Trading income increased by a very satisfactory 18,4% to R182 million
as a result of the volume growth and improved efficiencies.
Moving on to the three divisions: firstly Flexibles, the smallest part
of the Group, representing 16,1% of overall group revenue.
The actual revenue for the year increased by a relatively modest
7,2% to R266,7 million. But it was pleasing to report a 29% growth
in operating profits. This was a particularly good performance given
the fact that the Flexibles market has been negatively affected by
the importation of finished goods and also some flexible packaging
from the Middle East. The improved performance is as a result of
refocusing the operations in the division, stringent cost control and
a strengthening of the overall marketing team.
In a Black Economic Empowermenttransaction with Royal BafokengFinance, Astrapak agreed to sell
20% of its equity and therebycontributes to the empowerment
of 300 000 people.Ray Crewe-Brown • Chief Executive Officer
ASTRAPAK 2005 13
The Films division achieved substantial revenue growth of 18,5%and operating profit growth of 8%. This division was most adverselyaffected by the substantial increase in raw material prices in view ofthe fact that the raw material content in films is very significant. In addition to this, the Sasol explosion affected the grades usedextensively in the Films division. In spite of this, the Films divisionperformed very well indeed, entering new markets, including theproduction of specialised barrier films, increasing its exports to theUK and Europe and improving overall production efficiencies.
The Rigids division had an exceptional year with revenue up 34%and operating profit increasing by 24,1%. Very good growth wasachieved at PAK 2000, JJ Precision Plastics, Thermopac and MarcomPlastics. In addition to this the Denver turnaround was largelycompleted, resulting in renewed customer confidence and astreamlined product and customer base.
In conclusion, it turned out to be another exceptionally good yearfor the Astrapak Group with headline earnings per linked unit up28,3% to 119,3 cents.
Balance sheetThe Group’s balance sheet was strengthened during the year, partlyas a result of the equity injection of R92 million from Royal BafokengFinance (Proprietary) Limited on 1 February 2005, and also becauseof our continued focus on working capital management. Theresultant effect of these two items was a reduction in net debt from R190 million to R152 million, giving rise to a debt equity ratio of 30% at year-end.
Capital was spent on the following items during the year:
• R47,7 million to acquire minority interests in Master Plastics and Thermopac;
• R12,2 million to acquire 70% of Knilam Packaging;
• R4,5 million to acquire 50% of Marcom Plastics;
• R28,1 million for a buy back of 3,1 million Astrapak linked units;
• R122 million in respect of capital expenditure (mainly forexpansion); and
• R33 million in respect of replacement of assets damaged in theBronkhorstspruit fire.
Dividend and debenture interestThe Board approved an overall increase in the combined paymentof debenture interest and dividend to 22,7 cents per linked unit(16,5 cents ordinary dividend and 6,2 cents debenture interest),which is a growth of 66,9% over the previous year.
Group strategyIn the past year the strategy was aimed at internal growth, with aview to maintaining or growing margins and at the same time toimprove control of working capital to reduce overall debt.
The strategy proved largely successful with the substantial growth
achieved, given the relatively small expenditure on acquisitions
during the year. As a result of the inflow of capital from Royal
Bafokeng Finance to Astrapak, the strategy in the new year will be
a more balanced one, of internal growth, as well as judicious
acquisitional growth. In addition, particular focus will be placed on
expanding our small new acquisitions and to continuing to focus
on cost reduction and improvement of efficiencies.
One of the most important aspects of the Group’s strategy is our
innovative entrepreneurial culture and the support for our
management to empower their staff to achieve creative, more
efficient businesses. The focus on innovation and people orientation
has been a major factor in assisting us to achieve our growth in an
environment of fluctuating oil prices.
Outlook
Looking ahead we are confident of sustained demand for non-
durable consumer goods which we expect to increase by 3,5%.
In the first quarter of the year we anticipate benefiting from some
raw material price reductions, and thereafter a strengthening of
the oil price and a weakening Rand could result in a further round
of price increases in the second quarter.
The weakening Rand could help strengthen the Flexibles market to
some extent, as it makes it a little less attractive to import both
packaging and finished goods into the country.
In a post year-end event Astrapak acquired Hilfort Plastics. This is a
particularly important investment for us as it takes us into the PET
bottle market in the Western Cape, allowing us to offer a
comprehensive national supply of these products.
We intend to maintain our focus on exports this year, and given the
fact that exports grew in the previous financial year, despite the strong
Rand, we are optimistic of even further expansion in the future.
Appreciation
I would like to extend my gratitude to the executive team, all the
Managing Directors and their management and staff, and our non-
executive directors and congratulate them on another outstanding
year’s achievement. To our customers and suppliers, we appreciate
your loyal and growing support and look forward to strengthening
our mutual relationships in the future.
Ray Crewe-Brown
Chief Executive Officer
23 August 2005
14 ASTRAPAK 2005
Divisional chief executive’s report – Films
Divisional overviewIn the face of a continued strong Rand, dramatically increased prices
of raw materials and feisty challenge from imported products, the
Films division has, once again, performed beyond expectations.
Increased input costs, coupled with heightened reluctance in the
market place for their acceptance, encouraged each operation
within the division to embark on a massive efficiency drive. In many
instances we have managed to minimise the scale of these increases.
This achievement has come about mainly through our on-going
programme of staff development – skills training, leadership and
mentoring. Training has added value to our business.
The leadership shown at group level on the empowerment front has
been the catalyst for similar activity at operational level. All entities
are constantly looking for ways to increase representivity from
previously-disadvantaged groups and this is showing results. One
business unit has increased diversity within its senior and middle
management group to 75%.
MarketsOur continued introduction of new equipment to serve niche
markets has helped us stave off the threat of increased competition
across almost all product categories, the bread making industry
being a case in point, with the introduction of state-of-the-art
bag-wicketting equipment.
Our quest for import product substitution continues. This year the
introduction of an EVOH barrier film in the confectionery market
replaced a similar, costlier imported product. Foreign-exchange
savings run into several million Rand annually.
EnvironmentalThe introduction of degradable product in the garbage bag market
has enabled us to assert a unique position on the environmental
front – that of a supplier of totally degradable plastic. This has,
however, not diminished our commitment to acting in an
environmentally-friendly manner and we once again manufactured,
at no cost to the campaign, more than half a million refuse bags
used in the annual national clean-up programme.
All operating units are totally committed to environmentally-sound
manufacturing principles and continually strive to reduce emissions
and recover and recycle waste.
Increased exports at most plants – resulting in audits from overseas
clients and authorities – have demanded that operating methods
adhere to international best practice.
Future prospectsThe outlook for the Films division is healthy. Demanding trading
conditions over the past year have been the catalyst to refine
processes and home manufacturing techniques. These advances
will bear additional returns in the coming year.
Our proven training programmes will continue as we seek to
empower our staff, not only from a professional and technical skills
point but, also through personal growth and change management.
We are learning to tackle issues with a new mindset.
In addition new equipment will be commissioned that will further
entrench the division’s leadership role and ensure the product
offering available to the local packaging industry is in line with the
best available globally.
Continued introduction of new equipment
has helped stave off the threat of
increased competition across almost all
product categories.
Johan Venter • Divisional Chief Executive – Films division
ASTRAPAK 2005 15
621
735
580
500
432
01
02
03
04
05
We continue to evaluate new technologies and their appropriateness
to our sector and are confident that product innovation will
continue to be a force in our market offering.
Our ability to compete in international markets and commitment
to exploring those opportunities will also have an effect on our
business in the future.
Johan Venter
Divisional Chief Executive – Films division
23 August 2005
R735,3 million
up 18,5% to
Turnover – Films(R million)
16 ASTRAPAK 2005
Divisional chief executive’s report – Flexibles
Divisional overviewThe Astrapak Flexibles division consists of seven operating
entities, of which three are located in KwaZulu-Natal, two in
the Western Cape, one in Gauteng and one in Mauritius.
Each entity is a separate profit centre and is managed by a
independent entrepreneurial team.
The division maintains a competitive position within the
flexible packaging industry, through intelligent use of both
plant synergies and capacity on a national basis.
Within KwaZulu-Natal, the wide and narrow web capability
of Astraflex and DLC Pack can be used in tandem to provide
flexible print packages that optimise cost benefits to the client.
AstraRepro, an in-house repro operation, can respond rapidly,
allowing fast print transition between the two companies.
DLC Pack and Astraflex also supply printed film to the
Cape based operations, Saflite and Knilam. There are further
links between TamperPak and DLC Pack, for the supply of
PVC shrink sleeves.
During the 2005 financial year, Astraflex, DLC Pack and Standard
Labels (Mauritius) featured prominently in the prestigious FTASA
Printing Awards. In addition, DLC Pack scooped a Gold FTA USA
award, as well as the Exxon Mobil Oppack Award, and a Merit
Award for waste management from the IWMSA.
StrategyThe restructuring that began within 2004 was continued into the
2005 financial year and personnel adjustments, acquisitions and
investment were made in line with this new strategy for the
Flexibles division.
Strategic thinking involved refocusing Astraflex and DLC Pack,
allowing Astraflex to concentrate on flexible packaging while
DLC Pack targeted labelling. As part of this strategy, Derek Huntley
has been appointed Sales Director for Astraflex and Vaughan
Bradfield, Sales Director for DLC Pack.
There has also been an increased focus from both Astraflex and
DLC Pack into promotional niche products such as transfers, tattoos
and stickers. These can be applied internally to flexible packaging
to provide added value. DLC Pack and Astraflex have formed a
valuable partnership with Argentina based Autopack for the
supply of these products.
On the investment front, DLC Pack have purchased an
8-colour UV Flexo machine which allows top level entry into
the self-adhesive labelling market.
The acquisition in 2004 of Knilam has also extended
Astrapak Flexibles into the highly specialised field of modified
atmospheric packaging (MAP) and into new niche markets
for the supply of printed reel stock or premade, micro perforated
bags. This small entrepreneurial company has the potential
for huge growth.
Markets servedWithin a very short time, our refocused strategy has already
produced improved financial results and increased Astrapak
Flexibles market share in the following areas:
• PVC shrink labels, stretch labels, specialised full length
labelling and wraparound labelling to the beverage and
other industries;
• flexible packaging for the food industry, including promotional
transfers, MAP, confectionery, baked products, frozen products,
spices and cereals;
• flexible packaging for the pharmaceutical, medical and personal
care industries;
The Flexibles division maintains a competitive
position within the industry through
intelligent use of both plant synergies and
capacity on a national basis.
Greg Petzer • Divisional Chief Executive – Flexibles division
ASTRAPAK 2005 17
AcquisitionsAstrapak Flexibles are continually seeking new opportunities to
increase market share within the local and international flexible
packaging industry.
Greg Petzer
Divisional Chief Executive – Flexibles division
23 August 2005
• undecorated or decorated tamper-evident sleeves and banded
packs for the cosmetic, personal care, pharmaceutical, food and
industrial industries; and
• stand-up pouch market for food and non food products.
Within the Astrapak Group, the Flexibles division operates
as a supplier to the Rigids division and as a client to the
Films division.
Future prospectsNew markets developing in the 2006 financial year will include
self-adhesive labels, including labels for the Astrapak Rigids division
and promotional, value-added flexible packaging.
The Flexibles division also sees Central Africa as a potential export
market for MAP. This opportunity, as well as existing overseas
markets, will be actively targeted by Astrapak's international
marketing arm, Astrapak Exports.
Astrapak Flexibles will also continue to develop as a competitive
global player by focusing on the following:
• reduction of input costs through sourcing raw material from
non-traditional markets;
• rapid adaptation to changing market conditions, through
entrepreneurial management structures;
• innovative product development;
• on-going training;
• development of further beneficial synergies within the
Astrapak Group; and
• supply of specialised packaging to niche markets.
248
267
253
182
158
01
02
03
04
05
R266,8 million
up 7,7% to
Turnover – Flexibles(R million)
Divisional chief executive’s report – Rigids
Divisional overviewThe Astrapak Rigids division currently consists of eight operating
units. Gauteng province is home to Plastop Denver, Plastop
Bronkhorstspruit, Cinqpet and Marcom Plastics. JJ Precision,
PAK 2000 and Plastop KZN are based in KwaZulu-Natal and
Thermopac in the Cape. Over the years growth has been
consistent and the division is recognised as a major player
within the South African plastic packaging industry.
A competitive edge is maintained by a regional presence on a
national basis. This regional framework is in line with long-term
divisional strategy.
Rigids takes full advantage of Astrapak Group synergies both
divisional and inter-divisional, yet maintains independent,
entrepreneurial teams in each separate plant. Each operation is a
separate profit centre and is required to compete for business in an
open market. This allows the division to be highly focused, wholly
decentralised, and to target selected markets in order to maximise
profits and develop its people.
Major capital investment over the past years is already showing
positive results. An influx of the latest technology, from the
construction of two world class facilities, has allowed the division to
compete effectively in the South African market. Continuous and
planned upgrading of plants and equipment, facilitates the ongoing
development of a variety of manufacturing processes.
Year under reviewWithin the 2005 financial year, Astrapak Rigids performed well.
The acquisition of Marcom Plastics extended divisional capacity
into a new and growing dairy related market.
The restructuring at Cinqplast Denver produced improved results in
2005 and will produce even better results in 2006.
PAK 2000 opened a brand-new plant in Pinetown which was
designed and built in accordance with anticipated market growth.
Plastop Bronkhorstspruit recovered rapidly from the devastating fire
in August 2003 and opened a world class facility on the same site
one year later. The plant is equipped with the latest fire prevention
technology and has been strategically positioned to accommodate
predicted market demand.
All operations continue to focus internally on core values i.e., cutting
input costs and maximising plant efficiencies. Hence within the 2005
financial year, the majority of the companies within the Rigids
division performed well.
Astrapak Rigids offers world class packaging to selected markets
as follows:
• containers and closures for the beverage, personal care, cosmetics
and pharmaceutical industries;
• clear packaging containers for fresh and prepared foods;
• containers for the petrochemical industry;
• innovative closures for rigid containers and industrial markets; and
• thin-walled injection moulded containers for the dairy industry.
Future prospectsThe Rigids division looks forward to increased growth in the
PET industry, through the acquisition of Cape and Bloemfontein
based Hilfort Plastics in March 2005.
In a strategic move, Euromatic Plastop has been established as a
joint venture with the world's largest manufacturer of deodorant
balls. This will allow Astrapak Rigids to take full advantage of the
benefits offered by an international partner.
The brand new facility under construction for Cinqpet is scheduled
for opening in the 2006 financial year.
The Rigids division maintains a
competitive edge by having a regional
presence on a national basis.
Marco Baglione • Divisional Chief Executive – Rigids division
18 ASTRAPAK 2005
ASTRAPAK 2005 19
In addition, the divisional business model will be restructured to
take full advantage of the latest marketing opportunities developing
within Southern Africa.
The division will be in a position to take advantage of national
manufacturing capacity through the provision of country wide deals
for multinationals, but will also be able to look after selected
companies on a regional basis.
Divisional strategy will continue as follows:
• real growth through strong market positioning;
• strategic acquisitions to support growth and extend markets;
• identify and enter niche and high growth markets;
• continually investigate joint ventures with international players;
• enhance workforce skills through training;
• exploit synergies between the Rigids division and other
group companies;
• address social, environmental and empowerment issues; and
• cement relationships between national and international raw
material and equipment suppliers and overseas companies
operating in similar industries.
Marco Baglione
Divisional Chief Executive – Rigids division
23 August 2005
483
648
515
134
107
01
02
03
04
05
R648,2 million
up 34,1% to
Turnover – Rigids(R million)
20 ASTRAPAK 2005
for the year ended 28 February 2005
Group value added statement
R’000 Notes 2005 % 2004 %
Wealth createdRevenue 1 650 227 1 351 637
Paid to suppliers for materials and services 1 122 429 859 459
Value added 527 798 492 178
Interest received 2 416 4 041
Total wealth created 530 214 100 496 219 100
Wealth distributedEmployees 1 242 372 46 249 495 50
Providers of capital: 49 428 9 59 972 11
Interest paid on borrowings 43 545 8 46 923 9
Interest paid to debenture holders 5 883 1 6 834 1
Dividends paid to outside shareholders – 0 6 215 1
Central and local government 2 34 805 7 30 848 7
Wealth reinvestedReinvested in the Group to maintain and develop operations 203 609 38 155 904 32
Depreciation 89 962 17 72 902 15
Retained profit 111 877 21 84 989 17
Deferred taxation 1 770 1 (1 987) –
Total wealth distributed 530 214 100 496 219 100
Value added ratiosNumber of employees (28/29 February) 2 991 3 015
Revenue per employee (R’000) 552 448
Value added per employee (R’000) 176 164
Wealth added per employee (R’000) 177 165
Average benefit per employee (R’000) 81 83
for the year ended 28 February 2005
Notes to the group value added statement
ASTRAPAK 2005 21
R’000 2005 2004
1. EmployeesSalaries, wages, overtime payments, commission, bonuses
and allowances, employer contributions and fringe benefits 242 372 249 495
2. Central and local governmentCurrent taxation 27 676 27 751
Secondary tax on companies 1 377 530
Regional Service Council levies 2 817 2 738
Rates and taxes paid to local authorities 1 827 1 320
Custom duties, import surcharges and excise taxes 2 137 2 027
Gross contribution to central and local government 35 834 34 366
Less: Government cash grants and subsidies 1 029 3 518
34 805 30 848
Wealth distribution
Employees
Reinvested
Lenders
Government
2004
50%
11%
32%
Employees
Reinvested
Lenders
Government
2005
46%
9%
7%
38%
7%
22 ASTRAPAK 2005
at 28 February 2005
Five year financial review
R’000 2005 2004 2003 2002 2001
Operating resultsRevenue 1 650,2 1 351,6 1 348,4 816,2 697,4
Profit before interest and taxation 181,7 153,5 140,0 81,9 68,3
Exceptional item 12,8 23,0 – – –
Net interest paid (41,1) (42,9) (47,0) (13,9) 13,8
Interest paid to debenture holders (5,9) (6,8) (7,7) (7,6) 11,3
Profit before taxation 147,5 126,8 85,3 60,4 43,2
Taxation (32,7) (26,3) (21,5) (12,6) 7,6
Profit after taxation 114,8 100,5 63,8 47,7 35,6
Aborted bid costs – – – – 0,7
Share of associates’ net income after taxation 2,9 2,3 3,1 2,3 1,2
Attributable to outside shareholders (5,8) (11,6) (6,6) (3,6) 1,4
Retained profit for the year 111,9 91,2 60,3 46,5 34,7
Headline income 113,5 88,9 70,5 55,8 47,2
FundingEquity 498,8 332,0 248,7 193,8 185,2
Minority interest 23,5 55,3 46,0 18,7 15,2
Deferred taxation 49,1 35,4 32,0 20,9 18,3
Debt
• interest-bearing 250,4 262,7 365,0 99,7 98,5
• non-interest bearing 287,0 252,1 217,1 170,1 140,6
Total funds 1 108,8 937,5 908,8 503,2 457,8
Assets managedProperty, plant and equipment 477,2 407,6 387,3 185,4 179,8
Deferred taxation 32,1 22,2 18,1 14,1 15,6
Investments and loans 16,8 5,6 6,1 4,8 2,6
Goodwill 42,1 28,5 30,1 9,1 10,2
Current assets 540,6 473,6 467,2 289,8 249,6
Total assets managed 1 108,8 937,5 908,8 503,2 457,8
Number of linked units in issue at the end
of the financial year (000) 120 117 108 105 108 105 108 105 97 510
Weighted average number of linked units in issue
during the year (000) 95 158 95 608 95 608 96 953 100 322
Weighted number of linked units in issue during the year –
fully diluted (000) 110 018 109 756 105 776 107 121 97 510
for the year ended 28 February 2005
Five year financial review
ASTRAPAK 2005 23
R’000 2005 2004 2003 2002 2001
Ratios and statisticsEarnings
Earnings per linked unit (cents) 123,8 102,5 71,1 55,8 45,9
Headline earnings per linked unit (cents) 119,3 93,0 73,8 57,5 47,1
Profitability
Return on net tangible assets (%) 44,3 44,7 37,4 45,3 44,2
Operating profit margin (%) 11,0 11,4 10,4 10,0 9,8
Funding and liquidity
Interest-bearing debt to equity – net of cash (:100) 30,5 57,3 102,7 27,1 18,1
Total liabilities to equity (excluding
deferred tax) – net of cash (:100) 107,7 155,1 234,0 138,8 129,1
Current ratio (:100) 137,8 140,5 127,4 140,0 122,0
Interest cover (times) 4,4 3,6 3,0 5,9 5,0
Linked unit statistics
Net asset value per linked unit (cents) 524,2 347,2 260,1 199,9 189,9
Net tangible asset value per linked unit (cents) 480,0 317,4 228,6 193,2 179,5
JSE market prices (cents)
• year-end 1 200,0 700,0 400,0 260,0 180,0
• high 1 210,0 809,0 425,0 330,0 242,0
• low 640,0 340,0 210,0 175,0 140,0
• average price traded at during the year 861,0 526,0 300,0 251,0 169,0
Linked units traded during the year (000) 53 123 76 550 14 690 7 231 20 968
Market capitalisation 28/29 February (Rm) 1 441,4 756,7 432,4 281,1 194,6
Earnings yield (%) 8,4 11,3 18,5 22,1 26,2
Price earnings ratio 28/29 February (:100) 11,9 8,8 5,4 4,5 3,8
DefinitionsReturn on net tangible assetsProfit before interest, taxation and depreciation as a percentage of net tangible assets excluding interest-bearing debt, cash and
taxation payable.
Operating income marginProfit before interest and taxation as a percentage of revenue.
Interest-bearing debt to equityShort and long-term interest-bearing debt, net of cash, as a percentage of equity.
Total liabilities to equityShort and long-term interest-bearing debt, which includes current liabilities, less cash on hand as a percentage of equity.
Current ratioTotal current assets divided by total current liabilities.
Interest coverProfit before interest and taxation divided by net financing costs (excluding debenture interest).
24 ASTRAPAK 2005
Statistics
276
230
206
115
93
1 650
1 352
1 348
816
697
Revenue
EBITDA (R million)
01
02
03
04
05
01
02
03
04
05
152190
31 57
103
27
18
255
53
34
Net debt (R millio
n)
Net debt equity ratio (%)
01
02
03
04
05
11,0
11,4
10,4
10,0
9,8
93,0
119,3
73,8
57,5
47,1
01
02
03
04
05
44,7
37,4
44,3
45,3
44,2
01
02
03
04
05
13,6
22,7
11,7
11,6
11,6
01
02
03
04
05
700
1 200
400
260
180
01
02
03
04
05
Revenue vs EBITDA (R million) Net debt vs net debt equity ratio (R million)
Operating profit margin (%) Headline earnings per linked unit (cents)
Return on net tangible assets (%) Distribution per linked unit (cents) JSE market prices at year-end (cents)
ASTRAPAK 2005 25
Corporate governance
IntroductionThe Company is committed to an open governance process and so managing the business effectively in compliance with legalrequirements and best practice.
The Company is committed to meeting the standards of goodcorporate governance as laid down by the King Reports and its Code of Corporate Practices and Conduct. The Board of Directors is committed to the consideration and implementation of initiativesto improve corporate governance for the benefit of stakeholders andhas materially complied with the King Report and its Code ofCorporate Practices and Conduct for the year.
Astrapak realises the importance of striking a balance between‘performance’ (i.e. decisions and actions designed to ensure thecreation and protection of value) and ‘conformance’ (i.e. thedemonstrable adherence to due process in coming to such decisions and taking such actions).
Astrapak is, on a continual basis, reviewing the Company’senvironment, risk assessment management and financial andoperational control procedures to ensure that all major risks to thebusiness are properly managed.
EthicsThe Group’s value system commits all its employees to maintainhigh ethical and moral codes in conduct in the Group’s dealingswith its stakeholders and society at large.
Astrapak is committed to:
• embracing the principles of transparency, honesty and integrityin all its dealings;
• carrying on business through fair commercial competitivepractices;
• removing discrimination and promoting employees throughtraining and development; and
• being proactive towards dealing with environmental and social issues.
Board of DirectorsThe Board of Directors is a unitary board and comprises sixexecutive and five non-executive directors and is chaired by a non-executive director whose roles are separate from that of thechief executive officer. The strict separation of roles of the non-executive chairman and the CEO underpins the Board’s policyof a clear division of responsibilities at board level. This ensures abalance of authority and precludes any one director exercisingunfettered powers of decision-making. All the non-executivedirectors are independent with the exception of Mr PC Botha whoprovides legal advice to the Group. The profiles of the directorateare contained on pages 10 and 11 in this annual report.
During the current financial year one executive and two non-executive directors were appointed. Refer to the Directors’ Report on page 32 for further details.
The appointment of new directors is approved directly by the
Board as a whole, subject to linked unitholder confirmation at the
following Annual General Meeting. An orientation programme for
new directors is in place to ensure they are adequately briefed
and have the required knowledge of the Company’s structure,
operations and policies to enable them to fulfil their company
duties and responsibilities.
The Board is responsible for Group strategy, policy and performance
as well as the management, control, compliance and ethical
behaviour of the Group companies under its direction. The
non-executive directors support the skills and experience of the
executive directors, contributing to the formulation of policy and
decision-making through the knowledge and experience of other
businesses and sectors. The executive directors, being actively
involved in day to day business activities of the Group, are
responsible for ensuring that the decisions, strategies and views
of the Board are implemented. All directors bring independent
judgment to the issues of strategy, performance, resources, key
appointments and standards of conduct.
The Board meets approximately eight times a year and has a formal
schedule of matters reserved to it. The Board retains full and
effective control over the Group and monitors executive
management through a structured approach to reporting and
accountability under the auspices of an Executive Committee.
Board committeesThree principal committees of the Board, to which certain of
their functions have been delegated, were in place during the
year. They are:
Executive committeeThe Executive Committee is chaired by the Chief Executive Officer
of the Group and all three divisions within the Group have a
representative on the Committee. The Committee meetings are also
attended by the Financial Director, Financial Manager of the Group.
The Committee meets monthly as well as on an ad-hoc basis for
urgent matters of business. It is the responsibility of the Executive
Committee to develop the Group’s operating strategy, its business
plan and corporate policies for Board approval, and to implement
and monitor these in accordance with the Board’s directives.
Audit committeeThe Group’s Audit Committee comprises three non-executive
directors, one of whom is responsible for chairing the Committee.
The external auditors have unrestricted access to the Audit
Committee and attend meetings to report on their findings and
to discuss accounting, auditing, internal control and financial
reporting matters. The Committee meets at least three times a
year and these meeting are also attended, by invitation, by the
Chief Executive Officer and appropriate members of financial
management. The Committee operates in accordance with a
written charter authorised by the Board.
26 ASTRAPAK 2005
During the year the Audit Committee has been involved in ensuring
that appropriate controls and processes are in place to identify all
significant business, strategic, statutory and financial risks and that
these risks are being effectively monitored and managed.
The Audit Committee enhances the credibility of financial reports
and strengthens communication amongst directors, auditors and
management, which reduces the risk of inadequate reporting.
Remuneration committee
The Remuneration Committee consists of the Chief Executive Officer
and two non-executive directors. The Committee is chaired by a
non-executive director. The Chief Executive Officer is excluded from
review of his own remuneration.
The overall strategy is to ensure that executives are rewarded for
their contribution to the Group’s operating and financial
performance at levels which take account of industry, market and
country benchmarks. In order to promote goal congruence, share
incentives are considered to be critical elements of executive
incentive pay.
The Committee meets at least twice a year and is responsible for
formulating a strategy for senior executives in the Group.
Employment practicesAstrapak is mindful of the need to empower staff and is committed
to providing equal opportunities for all its employees, regardless of
their ethnic origin or gender. The Group has plans in place to ensure
that equity is achieved within the framework and regulations laid
down in the Employment Equity Act.
Structures are in place with trade unions and other employee
representatives to achieve good relations through consultation and
identification and resolution of conflict.
The Group is committed to providing education and training
opportunities, both internally and externally, for all employees; and
sees the acquisition of skills and provision of career paths as a
fundamental prerequisite for success.
The Group believes in the importance of a clean and healthy work
environment for the wellbeing of its employees. All Group companies
strive to achieve the highest safety and environmental standards.
Going concernThe Board of Directors believes that the Group has adequate
resources and facilities available to continue to operate in the
foreseeable future. The Board therefore continues to apply the going
concern basis in preparing the annual financial statements.
Internal controlThe directors are responsible for the Group’s systems of internal
control and for reviewing their effectiveness. The systems of internal
control are designed to manage, rather than to eliminate, the risk of
failure to achieve business objectives and can provide reasonable,
but not absolute, assurance against material misstatement or loss. In
reviewing these, the Board has taken into account the results of all
the work carried out by internal and external auditors to review the
activities of the Group.
There is an ongoing process for identifying, assessing, managing,
monitoring and reporting on the significant risks faced by individual
group companies and by the Group as a whole.
For the year under review, nothing has come to the attention of the
directors to indicate any material breakdown in the functioning of
controls, procedures and systems.
Risk management The Board is responsible for the total process of risk management.
The focus of risk management in the Group is to support the
delivery of business objectives by identifying, assessing, managing
and monitoring risk across the Group. Management is responsible
for a continuous process of developing and enhancing its risk and
control procedures to improve the mechanisms for identifying and
monitoring risks.
There is a process of regular reporting to the Board through the
Audit Committee on the status of the risk management process and
internal control systems, and any evolving risk issues or internal
control breakdowns that may have occurred.
Assurance on compliance with systems of internal control and on
their effectiveness is obtained through regular management reviews,
internal audit reviews and testing of certain aspects of systems by
the external auditors during the course of their statutory
examinations.
Internal auditThe internal audit function is an appraisal function whose primary
mandate is to examine and evaluate the effectiveness of the
applicable operational activities, the attendant business risks,
including those which arise subsequent to year-end, and the systems
of internal control, so as to bring material deficiencies and instances
of non-compliance to the attention of the Audit Committee, external
auditors and operational management for resolution.
Internal audit co-ordinates with the external auditors to ensure
appropriate coverage and to minimise duplication of efforts.
Price-sensitive informationIn accordance with the JSE Limited’s guidelines on price-sensitive
information, the Company has adopted policies dealing with
the following:
Corporate governance continued
ASTRAPAK 2005 27
• determination of price-sensitive information;
• discussion with the press, institutions and linked unitholders;
and
• ‘Closed’ periods during which no director or employee of the
Group is allowed to trade in the Company’s linked units.
Relationship with investorsIt is the policy of the Group to pursue dialogue with institutional
shareholders. To achieve this dialogue, there have been a number of
presentations to and meetings with investors and analysts to
communicate the strategy and performance of the Group.
The quality of this information is based on the standards of
promptness, relevance and transparency. The Group has a dedicated
investor relations and communications team whose responsibility it
is to liaise with institutional investors and the media and to arrange
presentations and site visits.
The Company encourages all linked unitholders to attend its
Annual General Meeting, which provides linked unitholders with
the opportunity to ask questions of the Board of Directors.
Attendance at board and committee meetingsDuring the year ended 28 February 2005
Executive Audit Remuneration
Board Committee Committee Committee
A B A B A B A B
RA Upton 11 11 – – 3 3 5 5
R Crewe–Brown 11 11 10 10 – – 5 5
HA Todd 11 11 10 10 – – – –
M Baglione 11 10 10 9 – – – –
G Petzer 11 9 10 9 – – – –
WJ Venter 11 9 10 8 1 1 – –
RT Dalais 11 10 – – – – 5 5
PC Botha 11 11 – – 3 3 – –
M Diedloff 3 3 2 2 – – – –
Column A: Indicates the number of meetings held during the period the director was a member of the Board and/or Committee.
Column B: Indicates the number of meetings attended during the period the director was a member of the Board and/or Committee.
28 ASTRAPAK 2005
Remuneration
This report on remuneration and other related matters covers the
issues dealt with by the Remuneration Committee. Further details
regarding the Committee and its duties can be found on page 26
of this Annual Report.
Remuneration policiesThe remuneration policies are formulated to attract and retain the
correct quality of executive and to give recognition to superior
individual and team performance. The attraction and retention of
these executives require remuneration structures that are seen as
fair, transparent and competitive when benchmarked.
Incentive and linked unit option schemes are used as mechanisms
to align the goals of management with that of linked unitholders.
These schemes are designed to ensure sustainable growth in
earnings through the setting of demanding performance targets.
Remuneration: Executive directorsExecutive directors’ remuneration packages consist of three
elements, namely:
• fixed remuneration;
• flexible remuneration; and
• linked unit options.
Fixed remuneration: guaranteed remunerationFixed remuneration includes guaranteed cash and the value of all
benefit contributions, such as provident fund and medical aid. These
are benchmarked annually against similar industries and positions of
similar responsibility. The benchmarking process therefore takes into
account the size and complexity of the executive’s position as well
as giving due consideration to the relative size and performance of
the businesses for which the executive assumes responsibility.
The Committee is satisfied that fair and transparent remuneration
procedures and practices are applied and that all executives are
appropriately remunerated.
The fixed remuneration earned by the executive directors is
reflected in table 1 on page 29 of this report.
Flexible remuneration: Incentive bonus schemeA portion of the executive’s earnings is provided in the form of
an annual incentive bonus, which is introduced to motivate the
executives to deliver sustainable growth.
For the year under review the incentive bonus target was primarily
based on the achievement of specified financial performance
targets. A portion of the incentive bonus was linked to individual
performance targets or key performance areas.
With effect 1 March 2003 the Company had introduced an
Economic Value Added based incentive scheme, the aim being:
• to further align the expectations of management and
linked unitholders;
• to make employees think and act like linked unitholders and by
so doing create a value-based culture within the Company
• to create a sense of ownership and pride; and
• further assist in driving the methodology of capital rationing.
The Remuneration Committee reviews and approves the design of
the incentive bonus scheme, which includes the approval of
appropriate targets at the commencement of the period covered by
the scheme. The Committee ensures that these targets are fair to
both the executives and the linked unitholders. The Committee is
also responsible for the approval or authorisation of any payments
under the incentive bonus scheme.
The flexible remuneration earned by the executives is reflected in
table 1 on page 29 of this report.
Linked unit option schemeThe aggregate number of linked units reserved for the Astrapak
Limited Linked Unit Incentive Scheme may not at any time exceed
21 621 000 (2004: 21 621 000) linked units, representing 20% of
the Company’s issued linked unit capital.
The maximum number of linked units available to any one
beneficiary is 5 405 250 (2004: 5 405 250) linked units,
representing 25% of the capital of the Company available for
the purpose of the linked unit incentive scheme.
As at 28 February 2005, 14 976 500 (2004: 14 147 500) linked
unit options had been issued.
Balance at Issued Cancelled Balance at1 March during during 28 February
2004 the year the year 2005
14 147 500 1 471 000 (642 000) 14 976 500
As is the case with all the various elements of remuneration, the
linked unit option scheme is designed to attract and retain the
correct quality of executive and to further align management’s
expectations with that of linked unitholders.
The actual linked unit options issued to executive and non-executive
members of the Board are indicated in table 2 on page 29 of this report.
Remuneration: Non-executivedirectorsNon-executive directors are remunerated for their services based on
the number of meetings attended, their level of contribution and
responsibility. The Chief Executive Officer recommends the proposed
fees to the Board after due consideration has been given to
comparable fee structures.
Non-executive directors’ remuneration is approved by linked
unitholders in a general meeting.
The remuneration earned by the non-executives is reflected in
table 3 on page 29 of this report.
ASTRAPAK 2005 29
Table 1: Executive directors’ remuneration 2005 (Rands)
Car Expense Benefit Fund Total fixed Total flexible TotalName Basic salary allowance allowances contributions remuneration remuneration remuneration
M Baglione 1 119 567 90 611 – 10 218 1 220 396 347 000 1 567 396 R Crewe–Brown 1 528 609 159 285 – 13 475 1 701 369 1 000 800 2 702 169 M Diedloff 547 791 145 512 – 6 561 699 864 169 189 869 053 G Petzer 975 483 142 884 – 20 365 1 138 732 – 1 138 732 HA Todd 664 340 145 000 – 8 551 817 891 151 283 969 174 WJ Venter 1 264 565 125 793 – – 1 390 358 323 867 1 714 225
Total 6 100 355 809 085 – 59 170 6 968 610 1 992 139 8 960 749
Table 2: Executive and non-executive directors’ share options
Options granted to date Options Balance as atOptions Price Effective date Expiry exercised 28 February
Name granted (cents) of grant date to date 2005
M Baglione 342 000 240 14 April 2002 14 April 2010 114 000 228 000 758 000 240 18 October 2002 18 October 2010 – 758 000 100 000 375 5 May 2003 5 May 2011 – 100 000 120 000 895 8 November 2004 8 November 2012 – 120 000
1 320 000 114 000 1 206 000
R Crewe–Brown 693 000 240 14 April 2002 14 April 2010 – 693 000 907 000 240 18 October 2002 18 October 2010 – 907 000 200 000 375 5 May 2003 5 May 2011 – 200 000 200 000 895 8 November 2004 8 November 2012 – 200 000
2 000 000 – 2 000 000
RT Dalais 400 000 410 14 July 2003 14 July 2011 – 400 000 50 000 895 8 November 2004 8 November 2012 – 50 000
450 000 – 450 000
M Diedloff 135 000 240 14 April 2002 14 April 2010 – 135 000 365 000 240 18 October 2002 18 October 2010 – 365 000 150 000 375 5 May 2003 5 May 2011 – 150 000 100 000 895 8 November 2004 8 November 2012 – 100 000
750 000 – 750 000
G Petzer 378 000 240 14 April 2002 14 April 2010 126 000 252 000 722 000 240 18 October 2002 18 October 2010 – 722 000 100 000 375 5 May 2003 5 May 2011 – 100 000
1 200 000 126 000 1 074 000
HA Todd 180 000 240 14 April 2002 14 April 2010 – 180 000 520 000 240 18 October 2002 18 October 2010 – 520 000 100 000 375 5 May 2003 5 May 2011 – 100 000
80 000 895 8 November 2004 8 November 2012 – 80 000
880 000 – 880 000
RA Upton 400 000 240 18 October 2002 18 October 2010 133 333 266 667 100 000 410 14 July 2003 14 July 2011 – 100 000
50 000 895 8 November 2004 8 November 2012 – 50 000
550 000 133 333 416 667
WJ Venter 750 000 240 18 October 2002 18 October 2010 – 750 000 250 000 375 5 May 2003 5 May 2011 – 250 000 150 000 895 8 November 2004 8 November 2012 – 150 000
1 150 000 – 1 150 000 Notes:1. Certain dates of the grant of options to Mr RT Dalais, Mr RA Upton and Mr PC Botha were incorrectly reflected in the 2004 annual report. The correct dates of the
grant of the options to these individuals are as reflected in the table above.2. The options granted to Mr PC Botha and reflected in the 2004 annual report did not become effective because they were subject to a suspensive condition that
was not fulfiled.
Table 3: Non-executive directors’ remuneration 2005 (Rands)
Directors' Committee Consulting TotalName fees fees services remuneration
PC Botha 110 000 50 000 895 413 1 055 413 RT Dalais 172 222 75 000 – 247 000 RA Upton 171 000 75 000 – 246 000
Total 453 000 200 000 895 413 1 548 413
Financial statements
30 ASTRAPAK 2005
Contents
31 Report of the independent auditors
31 Secretarial certification
31 Directors’ responsibility statement
32 Directors’ report
34 Balance sheets
35 Income statements
36 Statement of changes in equity
37 Cash flow statements
38 Notes to the cash flow statements
40 Accounting policies
43 Notes to the annual financial statements
60 Annexure 1
61 Linked unitholders’ information – diary
62 Linked unitholders’ information – notice of meeting
66 Administration
67 Form of proxy – linked unitholders
68 Notes to proxy
Revenue up 22%
Income before interest, taxation, depreciation and amortisation up 20%
Cash flow from operations up 33%
Gearing down to 30%
Headline earnings per linked unit up 28%
Annualised return on equity 37%
Investment in Astrapak Limited by the Royal Bafokeng Nation 20%
Highlights as at 28 February 2005
ASTRAPAK 2005 31
Secretarial certification
Directors’ responsibility statement
In accordance with section 268G(d) of the Companies Act, it is hereby certified that the Company has lodged with the Registrar of Companies
all such returns as are required of a public company in terms of the Act and that such returns are true and correct.
Y Cowley
Company Secretary
Sandton
23 August 2005
The directors of the Company are responsible for the maintenance
of adequate accounting records and the preparation and integrity of
the annual financial statements and related information. The annual
financial statements have been prepared in accordance with South
African Statements of Generally Accepted Accounting Practice.
The Group’s independent auditors, Deloitte & Touche, have audited
the annual financial statements and their unqualified report
appears above.
The directors are also responsible for the systems of internal control.
These are designed to provide reasonable, but not absolute,
assurance as to the reliability of the annual financial statements, and
to adequately safeguard, verify and maintain accountability of
assets, and to prevent and detect material misstatement and loss.
The systems are implemented and monitored by suitably trained
personnel with an appropriate segregation of authority and duties.
Nothing has come to the attention of the directors to indicate that
any material breakdown in the functioning of these controls,
procedures and systems has occurred during the year under review.
The annual financial statements are prepared on a going concern basis.
Nothing has come to the attention of the directors to indicate that
the Group will not remain a going concern for the foreseeable future.
The annual financial statements set out on pages 32 to 59 were
approved by the Board of Directors and are signed on their behalf by:
R Crewe-Brown HA Todd
Chief Executive Officer Financial DirectorSandton23 August 2005
To the linked unitholders of Astrapak LimitedWe have audited the financial statements and group financial
statements of Astrapak Limited set out on pages 32 to 59 for
the year ended 28 February 2005. 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.
ScopeWe 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 annual financial statements;
• assessing the accounting principles used and significant
estimates made by management; and
Report of the independent auditors
• evaluating the overall annual financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
Audit opinionIn our opinion the financial statements fairly present, in all materialrespects, the financial position of the Company and the Group at 28 February 2005 and the results of their operations and cash flowsfor the year then ended in accordance with South AfricanStatements of Generally Accepted Accounting Practice, and in themanner required by the Companies Act in South Africa.
Deloitte & Touche
Registered Accountants and Auditors
Chartered Accountants (SA)
Johannesburg
23 August 2005
Directors’ report
32 ASTRAPAK 2005
DirectorsThe names of the directors of the Company are listed on pages
10 to 11 of this report.
The following appointments have been made and resignations
accepted during the financial year under review:
Mr M Diedloff was appointed on 12 January 2005.
Mr T Kgage was appointed on 1 March 2005.
Mr C Molefe was appointed on 1 March 2005.
In accordance with the Company’s Articles of Association one-third
of the directors shall retire at the forthcoming Annual General
Meeting but, being eligible, offer themselves for re-election and
shall be deemed not to have vacated their respective offices.
(Refer notice of meetings for further details.)
Directors’ remunerationThe aggregate remuneration and benefits paid to the executive
and non-executive directors of the Group for the year ended
28 February 2005 are set out in the Remuneration Report on
pages 28 to 29 of this Annual Report.
Astrapak Limited Linked Unit TrustSchemeFurther details on the Astrapak Limited Linked Unit Trust Scheme
and the number of options issued to executive and non-executive
directors in terms of such scheme are set out in the Remuneration
Report on pages 28 to 29 of this Annual Report.
Profit and losses of subsidiarycompaniesThe total after tax profit by subsidiaries attributable to the Group was
R142 792 150 (2004: R114 294 451). Subsidiaries incurred losses of
R27 972 953 (2004: R13 821 751).
Distribution to linked unitholdersDebenture interest of 6,2 cents (2004: 7,1 cents) per linked unit
totalling R5,9 million (2004: R6,8 million) was paid. The interest
payment approximates the average prime rate of interest for the
financial year ended 28 February 2005. In addition, Astrapak paid
an ordinary dividend of 16,5 cents (2004: 6,5 cents) per linked unit
totalling R20,0 million (2004: R6,2 million) to linked unitholders for
the year ended 28 February 2005. The total combined dividend and
debenture interest was 22,7 cents (2004: 11,8 cents) per linked unit
totalling R25,9 million (2004: R13,0 million).
Both distributions were paid on Monday, 6 June 2005 to linked
unitholders recorded in the register on Friday, 3 June 2005. The last
date to have traded cum-distribution was Friday, 27 May 2005 and
the linked units commenced trading ex-distribution on Monday,
30 May 2005. Linked unit certificates could not be dematerialised
or rematerialised between Monday, 30 May 2005 and Friday,
3 June 2005, both days inclusive.
The directors’ report on the Company and the Group for the year
ended 28 February 2005 is as follows:
Nature of businessThe Group is engaged in the plastic packaging industry providing
products and packaging solutions to manufacturers and retailers of
consumer products.
Trading resultsA summary of the Group’s trading results is set out below:
R million 2005 2004
Revenue 1 650,2 1 351,6
Trading income 181,7 153,5
Profit after taxation 114,8 100,5
Attributable profit for the year 111,9 91,2
Earnings per linked unit (cents) 123,8 102,5
Headline earnings per linked unit (cents) 119,3 93,0
Share capitalDetails of the authorised and issued share capital are given in note 8
to the annual financial statements.
Ten percent of the unissued share capital was placed under the control
of the directors in terms of section 221 of the Companies Act 61 of
1973 at the Annual General Meeting held on 21 September 2004.
During the current year, 15 014 583 ordinary par value shares of
0,1 cent each in the authorised but unissued shares were converted
into 15 014 583 deferred ordinary par value shares of 0,1 cent each.
The deferred shares are not listed on the JSE. Each deferred share is
linked to a warrant. The warrants give RBF the right to acquire further
shares on a predetermined pricing formula. The warrants may not be
exercised prior to 1 March 2005.
12 011 667 ordinary par value shares of 0,1 cent each were issued
during the current year.
Linked unitsThe ordinary shares are linked to the debentures to form a linked
unit in Astrapak Limited. As at 28 February 2005, each linked unit
comprised one ordinary share of 0,1 cent each and one debenture of
50 cents each.
The holder of a linked unit will be entitled to receive dividends on
the equity portion of the linked unit and will receive interest on the
debenture portion of the linked unit.
Subsidiaries and non-subsidiariesDetails of operating entities are set out in note 28 to the
financial statements.
A number of special resolutions were passed by subsidiary
companies. None of these resolutions is of significance to the linked
unitholders in the assessment of the state of affairs of the Group.
ASTRAPAK 2005 33
Directors’ report
Post balance sheet eventsSubsequent to 1 March 2005, the following events have taken place:
• Astrapak Gauteng acquired a further 18% of the shares belonging to the minority shareholders of Barrier Film Converters. Astrapak Gauteng now holds 98% of the shares in Barrier Film Converters.
• On 1 March Royal Bafokeng Finance exercised their rights to purchase a further 15,014 million linked units for R125 million.
• On 1 March Astrapak purchased 100% of Hilfort Plastics (Proprietary) Limited for a maximum consideration of R85 million.
• Astrapak Western Cape (Pty) Limited acquired a further 2,5 % of the shares belonging to the minority shareholders of Thermopac with effectfrom 1 March 2005. Astrapak Western Cape now holds 100% of the shares in Thermopac.
Directors’ interestDirector Beneficial direct Non-beneficial indirect Unitholding (%)
Interest in linked units as at 29 February 2004 351 920 13 231 424 11,3
R Crewe-Brown 155 020 584 570 0,6 M Baglione 34 900 50 000 0,1 PC Botha* – 12 496 854 10,4 RT Dalais – 100 000 0,1 G Petzer 70 000 – 0,1 WJ Venter 92 000 – 0,1
Appointments 1 March 2004 to 28 February 2005 101 000 – 0,1
M Diedloff 101 000 – 0,1
Net purchases/(sales) from 1 March 2004 to 28 February 2005 (3 580) 2 847 424 2,4
RA Upton (80 000) – (0,1) R Crewe-Brown 55 440 11 078 0,1 M Baglione 4 200 6 700 0,0 WJ Venter 98 780 – 0,1 PC Botha* – 2 789 646 2,3 RT Dalais – 40 000 0,0 G Petzer (70 000) – (0,1) M Diedloff (12 000) – (0,0)
Exercise of options from 1 March 2004 to 28 February 2005 373 333 (949 500) (0,5)
RA Upton 133 333 – 0,1M Baglione 114 000 – 0,1G Petzer 126 000 – 0,1PC Botha* – (949 500) (0,8)
Interest in linked units as at 28 February 2005 822 673 15 129 348 13,3
RA Upton 53 333 – 0,0 R Crewe-Brown 210 460 595 648 0,7 M Baglione 153 100 56 700 0,2 WJ Venter# 190 780 – 0,2 PC Botha* – 14 337 000 11,9 RT Dalais – 140 000 0,1 G Petzer 126 000 – 0,1 M Diedloff 89 000 – 0,1
* Mr PC Botha is a trustee of the Astrapak Limited Linked Unit Trust Scheme, the holder of 14 327 000 linked units.# The number of linked units held by WJ Venter increased by 116 667 between 1 March 2005 and the date of this report.
Service contractsIndefinite-term contracts based on a notice period of three months by either party have been signed by the following directors: Messers R Crewe-Brown, HA Todd, WJ Venter, M Baglione and G Petzer. Mr M Diedloff has signed an indefinite-term contract based on a notice period of one month by either party.
34 ASTRAPAK 2005
at 28 February 2005
Balance sheets
Group Company
R’000 Notes 2005 2004 2005 2004
AssetsNon-current assets 568 237 463 880 209 333 116 660
Property, plant and equipment 1 477 241 407 585 976 943
Goodwill 2 42 086 28 521 – –
Deferred taxation 3 32 111 22 166 6 737 4 637
Investments and loans 4 16 724 5 608 43 946 50 363
Investment in associates 5 75 – – –
Investment in subsidiaries 6 – – 157 674 60 717
Current assets 540 561 473 641 53 553 19 950
Inventories 7 186 960 138 021 – –
Accounts receivable 8 250 883 263 296 498 1 980
Cash and short-term investments 13 98 224 72 324 53 055 17 970
Taxation receivable 4 494 – – –
Total assets 1 108 798 937 521 262 886 136 610
Equity and liabilitiesLinked unitholders’ funds 498 803 331 969 246 525 117 874
Share capital 9 135 108 135 108
Share premium 9 84 302 – 84 302 –
Retained profit 410 049 298 172 102 030 57 498
Non-distributable reserve 10 858 2 878 – –
Dividend reserve – 6 215 – 6 215
Treasury linked units 11 (48 950) (23 208) – –
Ordinary shareholders’ fund 446 394 284 165 186 467 63 821
Debentures 12 52 409 47 804 60 058 54 053
Minority shareholders’ interest 23 535 55 301 – –
Non-current liabilities 194 200 213 191 – –
Long-term interest-bearing debt 13 145 058 177 757 – –
Deferred taxation 3 49 142 35 434 – –
Current liabilities 392 260 337 060 16 361 18 736
Accounts payable 14 230 228 191 986 9 519 4 800
Provisions 15 41 896 40 915 – –
Linked unitholders for debenture interest 5 883 6 834 6 742 7 727
Short-term interest-bearing debt 13 105 299 84 909 100 6 209
Taxation payable 8 954 12 416 – –
Total equity and liabilities 1 108 798 937 521 262 886 136 610
for the year ended 28 February 2005
ASTRAPAK 2005 35
Income statements
Group Company
R’000 Notes 2005 2004 2005 2004
Revenue 1 650 227 1 351 637 – –
Cost of sales (1 129 054) (901 202) – –
Gross profit 521 173 450 435 – –
Dividends received – – 31 835 41 050
Other operating income 17 441 9 108 31 501 25 637
Distribution and selling expenses (127 216) (117 565) – –
Administrative and other expenses (229 687) (188 503) (12 143) (1 615)
Trading income 16 181 711 153 475 51 193 65 072
Exceptional item 17 12 783 23 007 – –
Finance costs 18 (43 545) (46 923) (13 307) (11 102)
Finance income 18 2 416 4 041 12 166 5 444
Profit before debenture interest 153 365 133 600 50 052 59 414
Distribution to linked unitholders – debenture interest (5 883) (6 834) (6 742) (7 727)
Profit before taxation 147 482 126 766 43 310 51 687
Taxation 19 (32 662) (26 294) 1 222 2 188
Profit after taxation 114 820 100 472 44 532 53 875
Income from associate companies 890 – – –
Equity accounted profit from Mauritian Joint Venture 1 995 2 352 – –
Attributable to outside shareholders (5 828) (11 620) – –
Attributable profit for the year 111 877 91 204 44 532 53 875
Earnings per linked unit (cents) 20 123,8 102,5
Headline earnings per linked unit (cents) 20 119,3 93,0
Diluted earnings per linked unit (cents) 20 107,9 90,2
Diluted headline earnings per linked unit (cents) 20 103,2 81,0
36 ASTRAPAK 2005
for the year ended 28 February 2005
Statement of changes in equity
Share
capital Retained Non-distributable Dividend Treasury
R’000 and premium profit reserve reserve shares Debentures Total
Group
Balance as at 1 March 2003 108 214 991 5 347 3 442 (23 011) 47 804 248 681 Recognition and measurement of financial instruments – (1 808) – – – – (1 808)Net income for the year – 91 204 – – – 91 204 Net ordinary dividends paid – – – (3 442) – – (3 442)Decrease in foreign currency translation reserve – – (1 132) – – – (1 132)Transfer to deferred tax asset – – (1 337) – – – (1 337)Transfer to dividend reserves – (6 215) – 6 215 – – – Acquisition of treasury shares – – – – (197) – (197)
Balance as at 29 February 2004 108 298 172 2 878 6 215 (23 208) 47 804 331 969 Net income for the year – 111 877 – – – – 111 877 Net ordinary dividends paid – – – (6 215) – – (6 215)Decrease in foreign currency translation reserve – – (683) – – – (683)Transfer to deferred tax asset – – (1 337) – – – (1 337)Acquisition of treasury shares – – – – (25 742) – (25 742)Issue of shares at a premium 84 329 – – – – – 84 329 Issue of debentures – – – – – 4 605 4 605
Balance as at 28 February 2005 84 437 410 049 858 – (48 950) 52 409 498 803
CompanyBalance as at 1 March 2003 108 9 838 – 3 442 – 54 053 67 441 Net income for the year – 53 875 – – – – 53 875 Net ordinary dividends paid – – – (3 442) – – (3 442)Transfer to dividend reserves – (6 215) – 6 215 – – –
Balance as at 29 February 2004 108 57 498 – 6 215 – 54 053 117 874 Net income for the year – 44 532 – – – – 44 532 Net ordinary dividends paid – – – (6 215) – – (6 215)Issue of shares at a premium 84 329 – – – – – 84 329 Issue of debentures – – – – – 6 005 6 005
Balance as at 28 February 2005 84 437 102 030 – – – 60 058 246 525
Reconciliation of retained profit28/29 February Group CompanyR’000 2005 2004 2005 2004
Retained income restated as at 1 March 298 172 213 183 57 498 9 838
Opening retained income as previously reported 298 172 214 991 57 498 9 838Adoption of AC133 – (1 808) – –
Net income for the year 111 877 91 204 44 532 53 875
Transfer to dividends reserve – (6 215) – (6 215)
Retained income at 28/29 February 410 049 298 172 102 030 57 498
for the year ended 28 February 2005
ASTRAPAK 2005 37
Cash flow statements
Group Company
R’000 Notes 2005 2004 2005 2004
Cash flows from operating activities
Cash generated by operations A 283 577 212 529 25 834 24 830
Interest received 2 416 4 041 12 166 5 444
Interest paid (excluding interest distribution to linked unitholders) (43 545) (46 923) (13 307) (11 102)
Net dividends (paid)/received (10 755) (2 642) 25 620 37 608
Taxation paid B (39 308) (22 619) (878) (431)
Interest distribution to linked unitholders (6 834) (7 708) (7 727) (8 715)
Net cash inflow from operating activities 185 551 136 678 41 708 47 634
Cash flows from investing activities
Decrease/(increase) in investment in subsidiary companies – – (63 049) (3 936)
Acquisition of subsidiary companies C (17 505) – – –
Decrease in investment in joint ventures 805 1 785 – –
Additions to property, plant and equipment D (155 398) (97 546) (313) (956)
Goodwill on acquisition of minority shareholders’ interests (6 039) (2 204) – –
(Decrease)/increase in investment and loans (11 358) – 6 417 (28 761)
Proceeds on disposal of investments 12 500 – – –
Proceeds on disposal of plant and equipment E 11 977 28 930 5 101
Net cash outflow from investing activities (165 018) (69 036) (56 940) (33 552)
Cash flows from financing activities
Increase in share capital 27 – 27 –
Increase in share premium 84 302 – 84 302 –
Increase in debentures 4 605 – 6 005 –
Acquisition of treasury linked units (25 742) (197) – –
Decrease in minority shareholders’ interest (36 616) (2 333) – –
Decrease in loans to Group companies – – (33 908) (6 998)
Decrease in long-term liabilities (38 725) (37 679) – –
Increase/(decrease) in short-term interest-bearing debt 7 926 9 389 (5 685) 5 685
Net cash outflow from financing activities (4 223) (30 820) 50 741 (1 313)
Net increase in cash and cash equivalents 16 310 36 823 35 509 12 769
Cash and cash equivalents at the beginning of the year 66 730 29 907 17 446 4 677
Cash and cash equivalents at the end of the year F 83 040 66 730 52 955 17 446
38 ASTRAPAK 2005
at 28 February 2005
Notes to the cash flow statements
Group Company
R’000 2005 2004 2005 2004
A. Cash generated by operationsProfit before taxation 147 482 126 766 43 310 51 687
Adjustments for:
Dividends received – – (31 835) (41 050)
Depreciation 89 962 72 902 280 144
Amortisation of goodwill 4 666 3 828 – –
Profit on disposal of investments (9 171) – – –
Impairment of assets 4 388 – – –
Profit on disposal of property, plant and equipment (5 380) (24 616) (5) (4)
Translation differences on investments and loans 1 251 – – –
Interest received (2 416) (4 041) (12 166) (5 444)
Interest paid (including debenture interest distribution) 49 428 53 757 20 049 18 829
Operating income before working capital changes 280 210 228 596 19 633 24 162
Adjustments for working capital changes:
(Increase)/decrease in inventories (44 479) 613 – –
Decrease/(increase) in accounts receivable 19 891 (44 317) 1 482 (183)
Increase in accounts payable 27 955 27 637 4 719 851
3 367 (16 067) 6 201 668
283 577 212 529 25 834 24 830
B. Taxation paidAmounts unpaid at the beginning of the year 12 416 6 754 – –
Taxation balances acquired 460 – – –
Amounts charged to income statement 30 892 28 281 878 431
Amounts unpaid at end of year (4 460) (12 416) – –
39 308 22 619 878 431
for the year ended 28 February 2005
ASTRAPAK 2005 39
Notes to the cash flow statements
Group Company
R’000 2005 2004 2005 2004
C. Acquisition of subsidiary companiesFair value of assets acquired
Property, plant and equipment 10 817 – – –
Deferred taxation (656) – – –
Long-term liabilities (6 026) – – –
Accounts receivable 7 480 – – –
Cash resources 2 973 – – –
Inventory 4 460 – – –
Accounts payable (7 429) – – –
Taxation (460) – – –
Current portion of long-term liabilities (2 873) – – –
8 286 – – –
Less:
Cash resources acquired (2 973) – – –
Add:
Goodwill on acquisition 12 192 – – –
Purchase price 17 505 – – –
D. Additions to property, plant and equipmentPlant, equipment and furniture 151 819 94 505 213 609
Motor vehicles 1 740 1 183 88 97
Leasehold improvements 1 675 1 136 12 250
Land and buildings 164 722 – –
155 398 97 546 313 956
The above listed additions to property, plant and
equipment consist of:
Expansion 118 525 83 901 – 956
Replacement 36 873 13 645 313 –
155 398 97 546 313 956
E. Proceeds on disposal of plant and equipmentNet book value of disposals 6 597 4 314 – 97
Profit on disposal 5 380 24 616 5 4
11 977 28 930 5 101
F. Cash and cash equivalents at the end of the yearCash and short-term investments 98 224 72 324 53 055 17 970
Bank overdrafts (15 184) (5 594) (100) (524)
83 040 66 730 52 955 17 446
40 ASTRAPAK 2005
1. Basis of preparationThe financial statements have been prepared under thehistorical cost convention, as modified by the revaluationof certain trading assets and liabilities to fair value.
These financial statements have been prepared inconformity with South African statements of GenerallyAccepted Accounting Practice. The principal accountingpolicies adopted are set out below. The principalaccounting policies of the Group have been appliedconsistently with the previous year except for anamendment in respect of goodwill as required by IFRS3(AC140). Goodwill in respect of business combinations onor after 31 March 2004 is not amortised, but reflected atoriginal cost less provision for impairment. In terms of thetransitional provisions of IFRS3 (AC140) the accountingpolicy for business combinations with an agreement date before 31 March 2004 remains unchanged for the 2005 financial year.
The migration to new International Financial ReportingStandards (IFRS) will, in its full extent, be evident in thefollowing year’s financial results.
2. Basis of consolidationThe consolidated financial statements include the assets,liabilities, results and cash flow information of theCompany and its subsidiaries. The results of thesubsidiaries and joint venture are included in theconsolidated financial statements from the effective dates of acquisition until the effective dates of disposal.
All inter-company transactions, balances and unrealisedsurpluses and deficits on transactions between groupcompanies have been eliminated.
3. Subsidiary companiesSubsidiary companies are those companies in which theGroup has an interest of more than one half of the votingrights or otherwise has the power to exercise control.
The assets and liabilities of subsidiary companies aremeasured at their fair values at the date of acquisition. The interest of outside shareholders is stated at their proportion of the fair values of the assets andliabilities recognised.
Where necessary, adjustments are made to the financialstatements of subsidiary companies to bring theiraccounting policies into line with those of the Group.
4. Associated companiesAn associate company is a company, not being asubsidiary, in which the Astrapak Group has a long-termequity investment and is in the position to exercisesignificant influence, but not control, through participationin the financial and operating policies of the investee.
The results of the associate companies are accounted forusing the equity method of accounting, based on theirmost recent audited financial statements. If the most recentaudited financial statements are for an accounting periodthat ended more than six months prior to the Group’s year-end, then the most recently available managementaccounting results have been brought to account.
The carrying amount of such investments is reduced torecognise the decline, other than a temporary decline, inthe value of individual investments.
5. Joint ventures
A joint venture is a contractual arrangement whereby theGroup and outside parties undertake an economic activity,which is subject to joint control.
Joint venture arrangements undertaken in a separate entity are referred to as jointly controlled entities. The Group reports its interests in jointly controlled entities using the equity method, in terms of which the post-acquisition results of the joint venture areincluded in the income statement.
6. Foreign currenciesAssets and liabilities denominated in foreign currencies
are translated at rates ruling at the balance sheet date.
Transactions in foreign currencies are accounted for at
the rate ruling at the date of the transaction. Profit or
losses on translation are charged to the income statement
in the period in which they are incurred.
In order to hedge its exposure to certain foreign
exchange risks, the Group enters into derivative financial
instruments. Further details are provided in the accounting
policy note relating to financial instruments (accounting
policy note 15).
7. GoodwillGoodwill arising on consolidation represents the excess of
the cost of an acquisition over the Group’s interest in the
fair value of the identifiable assets and liabilities of a
subsidiary at the date of acquisition.
Goodwill in respect of business combinations with an
agreement date before 31 March 2004 is recognised as
an asset and amortised on a systematic basis over its
economic life, subject to a maximum of ten years. The
assessment of useful economic life of goodwill is based on
the nature of the specific underlying business acquired.
Goodwill in respect of business combinations with
an agreement date on or after 31 March 2004 is not
amortised. The carrying amount of goodwill is allocated to
cash generated units and reviewed bi-annually and written
down for impairment where this is considered necessary.
Accounting policies
ASTRAPAK 2005 41
8. Property, plant and equipmentProperty, plant and equipment are accounted for at costless accumulated depreciation. All direct costs, includingfinance costs relating to major capital projects, arecapatilised up to the date of commissioning.
Depreciation is charged so as to write off the cost ofassets, other than freehold land, over their estimatedeconomic useful lives, using the straight-line method.Depreciation is not provided for on freehold land.
Owner occupied property, defined as property held for usein the supply of services or for administration purposes, isvalued at cost less provisions for impairment of value,where appropriate. Depreciation is provided against thegross cost of the properties, taking into account theresidual value and estimated life of the property.
Assets held under finance lease are depreciated over thelesser of the expected useful life or the term of therelated lease.
The rates of depreciation used are:
Plant, equipment and furniture 3 to 8 yearsMotor vehicles 5 yearsLeasehold improvements 5 yearsBuildings 20 years
The gain or loss arising on the disposal or scrapping ofproperty, plant and equipment is recognised in the income statement.
9. LeasesLeases are classified as finance leases whenever the termsof the lease transfer substantially all the risks and rewardsof ownership to the lessee. All other leases are classified asoperating leases.
Assets held under finance leases are recognised as assets ofthe Group at their fair value at the date of acquisition. Thecorresponding liability to the lessor is included in thebalance sheet as a finance lease obligation. Finance costs,which represent the difference between the total leasingcommitments and the fair value of the assets acquired, arecharged to the income statement over the term of therelevant lease so as to produce a constant periodic rate ofinterest on the remaining balance of the obligations foreach accounting period.
Rentals payable under operating lease are charged toincome on a straight-line basis over the terms of therelevant lease.
10. InventoriesInventories are stated at the lower of cost and net
realisable value, after making allowance for slow moving
and redundant items. Cost comprises direct material and,
where applicable, direct labour and those overheads that
have been incurred in bringing the inventories to their
present location and condition. Cost is calculated using
either the first-in first-out method or valued at average
cost which approximates actual.
11. TaxationThe charge for the year is based on the results for the year
adjusted for items that are non-deductible or non-taxable.
It is calculated using tax rates that have been enacted or
substantially enacted by the balance sheet date.
Deferred taxation is provided for on the comprehensive basis
using the balance sheet liability method. A deferred tax
liability is recognised for all taxable temporary differences.
A deferred tax asset is recognised to the extent that it is
probable that taxable profit will be available against which
deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary differences
arise from goodwill or from the initial recognition of other
assets and liabilities, which affects neither the tax profit nor
the accounting profit at the time of the transaction.
Deferred tax is calculated at the tax rates that are
expected to apply to the period when the asset is
realised or the liability settled.
12. Retirement benefitsThe Group operates a number of defined contribution
funds in compliance with respective local legislation.
Payments to defined contribution funds are expensed
as incurred.
13. ProvisionsProvisions are raised when a present obligation exists
as a result of a past event and it is probable that an
outflow of resources will be required to settle the
obligation, and a reliable estimate can be made of
the amount of the obligation.
14. ImpairmentOn an annual basis the Group reviews all assets, both
tangible and intangible, carried on the balance sheet for
impairment. Where the recoverable amount of an asset or
cash-generating unit is estimated to be lower than its
carrying amount, its carrying amount is reduced to its
recoverable amount. Impairment losses are charged
against income in the period in which they are identified.
Where an impairment loss subsequently reverses the
carrying amount of the asset or cash-generating unit is
increased to the revised estimate of its recoverable amount.
Such increase in carrying amount is limited to the original
cost. A reversal of an impairment loss is recognised in
income in the period in which such reversal is identified.
Accounting policies
Accounting policies
42 ASTRAPAK 2005
15. Financial instrumentsFinancial assets and financial liabilities are recognised on
the Group’s balance sheet when the Group has become a
party to contractual provisions of the instrument.
Trade receivables and trade payables are stated at their
nominal value. Trade receivables are reduced by
appropriate allowances for estimated recoverable amounts.
Cash and cash equivalents are measured at fair value.
Interest-bearing bank loans and overdrafts are recorded
at the proceeds received, net of direct issue costs.
Finance charges, including premiums payable on
settlement or redemption, are accounted for on an
accrual basis and are added to the carrying amount
of the instrument to the extent they are not settled
in the period in which they arise.
Equity instruments are recorded at the proceeds received,
net of direct issue costs.
The Group uses derivative financial instruments, primarily
foreign currency forward contracts, to hedge its risks
associated with foreign currency. The fair value of
these derivatives is recorded and remeasured at each
reporting date.
Changes in fair value of derivative financial instruments that
are designated and effective as hedges of future cash flows
relating to firm commitments and forecasted transactions
are recognised directly in equity. If the hedged firm
commitment or forecasted transaction results in the
recognition of an asset or a liability, then, at the time of
the asset or liability is recognised, the associated gain or
loss on the derivative that had previously been recognised
in equity are included in the initial measurement of the
asset or liability.
Hedge accounting is discontinued when the hedging
instrument expires or is sold, terminated, exercised or no
longer qualifies for hedge accounting. At that time, any
cumulative gain or loss on the hedging instrument
recognised in equity is retained in equity until the
forecasted transaction occurs. If a hedged transaction
is no longer expected to occur, the net cumulative
gain or loss recognised in equity is transferred to
net profit or loss for the period.
Changes in fair value of derivative financial instruments
that do not qualify for hedge accounting are recognised in
the income statement as they arise.
16. Revenue recognition• Sales of goods are recognised when goods are
delivered and services rendered during the year and
exclude value added tax.
• Interest income is accrued on a time basis, by
reference to the principal outstanding and at the
interest rate applicable.
• Government grants are recognised as income over the
periods necessary to match them with the related costs.
17. Segmental reportingFor management purposes the Group is organised into
business clusters on the basis of operational types. These
clusters are the basis on which the Group reports its
primary segment information. The principal activities of
the clusters are as follows:
• Films
Manufacturers of high-density polyethylene films,
low-density single and multi-layered films, plain and
printed films, co-extruded film, blown film, film for
pallet stretch wrap and industrial pallet shrink shroud.
• Rigids
Manufacturers of plastic closures for rigid containers
and jars, clear packaging containers, industrial cores,
tubes and composite cans, paper edgeboard used for
pallet stabilisation and blow-moulding and decoration
of rigid plastic containers and jars.
• Flexibles
Manufacturers of high-tech polyethylene stretch
labels, PVC shrink labels, wraparound polypropylene
labels, tamper evident seals, decorated stand-up
pouches and converters and distributors of specialist
printed mono and composite films.
In addition, the businesses are grouped by geographical
location. The main geographic regions identified are:
• Gauteng;
• Cape; and
• KwaZulu-Natal.
Geographic split is determined by location of the
operating assets.
18. Headline earnings per linked unitThe Group has followed the recommendation contained in
Circular 7/2002 Headline Earnings issued by SAICA and
has published headline earnings per linked unit in addition
to attributable earnings per linked unit. Headline earnings
per linked unit have been calculated in accordance with
the requirements of Circular 7/2002. Attributable profit
per linked unit has been based on earnings attributable
including interest to linked unitholders.
for the year ended 28 February 2005
ASTRAPAK 2005 43
Notes to the annual financial statements
Plant,
Land and equipment Motor Leasehold
R’000 buildings and furniture vehicles improvements Total
1. Property, plant and equipmentGroup 2005
Cost
Balance at beginning of year 74 277 661 698 11 266 7 567 754 808
Additions 164 151 819 1 740 1 675 155 398
Acquisition of business – 22 547 1 112 – 23 659
Disposals (5 856) (7 112) (2 388) – (15 356)
Balance at end of year 68 585 828 952 11 730 9 242 918 509
Accumulated depreciation
Balance at beginning of year 19 840 315 842 7 461 4 080 347 223
Acquisition of business – 12 227 615 – 12 842
Charge for the year 3 162 84 610 1 351 839 89 962
Depreciation on disposals (1 880) (5 445) (1 434) – (8 759)
Balance at end of year 21 122 407 234 7 993 4 919 441 268
Net book value at 28 February 2005 47 463 421 718 3 737 4 323 477 241
Net book value at 29 February 2004 54 437 345 856 3 805 3 487 407 585
Group 2004
Cost
Balance at beginning of year 73 555 589 575 11 306 7 877 682 313
Additions 722 94 505 1 183 1 136 97 546
Disposals – (22 382) (1 223) (1 446) (25 051)
Balance at end of year 74 277 661 698 11 266 7 567 754 808
Accumulated depreciation
Balance at beginning of year 16 822 266 430 6 800 5 006 295 058
Charge for the year 3 018 67 932 1 432 520 72 902
Depreciation on disposals – (18 520) (771) (1 446) (20 737)
Balance at end of year 19 840 315 842 7 461 4 080 347 223
Net book value at 29 February 2004 54 437 345 856 3 805 3 487 407 585
Net book value at 28 February 2003 56 733 323 145 4 506 2 871 387 255
44 ASTRAPAK 2005
for the year ended 28 February 2005
Notes to the annual financial statements
Accumulated Net book
R’000 Cost depreciation value
1. Property, plant and equipment (continued)Reconciliation of net book value at 28 February 2005
Land and buildings 68 585 21 122 47 463
Plant, equipment and furniture 828 952 407 234 421 718
Motor vehicles 11 730 7 993 3 737
Leasehold improvements 9 242 4 919 4 323
918 509 441 268 477 241
Plant, Leasehold
Motor equipment improve-
R’000 vehicles and furniture ments Total
Company 2005
Cost
Balance at beginning of year – 1 179 334 1 513
Additions 88 213 12 313
Disposals – (3) – (3)
Balance at end of year 88 1 389 346 1 823
Accumulated depreciation
Balance at beginning of year – 487 83 570
Charge for the year 15 205 60 280
Disposals – (3) – (3)
Balance at end of year 15 689 143 847
Net book value at 28 February 2005 73 700 203 976
Net book value at 29 February 2004 – 692 251 943
Company 2004
Cost
Balance at beginning of year – 575 84 659
Additions 97 609 250 956
Disposals (97) (5) – (102)
Balance at end of year – 1 179 334 1 513
Accumulated depreciation
Balance at beginning of year – 366 65 431
Change for the year – 126 18 144
Disposals – (5) – (5)
Balance at end of year – 487 83 570
Net book value at 29 February 2004 – 692 251 943
Net book value at 28 February 2003 – 209 19 228
for the year ended 28 February 2005
ASTRAPAK 2005 45
Notes to the annual financial statements
Accumulated Net book
R’000 Cost depreciation value
1. Property, plant and equipment (continued)Reconciliation of net book value at 28 February 2005Plant, equipment and furniture 1 389 689 700Leasehold improvements 346 143 203Motor vehicles 88 15 73
1 823 847 976
Assets are encumbered as detailed in note 12.Details of land and buildings are included in annexure 1.
Group Company
R’000 2005 2004 2005 2004
2. GoodwillBalance at the beginning of the year 28 521 30 145 – –Purchases during the year:• minority interests purchased 6 039 2 204 – –• acquisition of 50% of Marcom Plastics 2 347 – – –• acquisition of 70% of Knilam Packaging 9 845 – – –Amortisation for the year (4 666) (3 828) – –
Total 42 086 28 521 – –
Reconciliation of net goodwill as at 28/29 FebruaryCost 56 509 38 278 – –Accumulated amortisation (14 423) (9 757) – –
Net carrying value 42 086 28 521 – –
3. Deferred taxAccelerated wear and tear for tax purposes on plant and equipment 26 215 11 692 – –Other temporary differences 22 927 23 742 – –Estimated tax losses (32 111) (22 166) (6 737) (4 637)
Net deferred tax liability/(asset) 17 031 13 268 (6 737) (4 637)
Reconciliation between deferred tax opening and closing balances:Net deferred tax liability/(asset) at beginning of year 13 268 13 918 (4 637) (2 018)(Increase)/utilisation of tax losses (9 945) 3 512 (2 100) (2 619)Net originating/(reversing) temporary differences on plant and equipment 14 523 (5 499) – –Transfer from non-distributable reserve (note 9) 1 337 1 337 – –Other temporary differences (2 152) – – –
Net deferred tax liability/(asset) at end of year 17 031 13 268 (6 737) (4 637)
Analysed between:Deferred tax assets (32 111) (22 166) (6 737) (4 637)Deferred tax liabilities 49 142 35 434 – –
Net deferred tax liability/(asset) at end of year 17 031 13 268 (6 737) (4 637)
46 ASTRAPAK 2005
for the year ended 28 February 2005
Notes to the annual financial statements
Group Company
R’000 2005 2004 2005 2004
4. Investments and loansInvestments
Investment in label printing Mauritian Joint Venture (49,5% interest held) 5 441 5 608 – –
Investment to date 776 776 – –
Equity accounted profit to date 11 578 9 583 – –
Dividends received to date (4 520) (3 716) – –
Foreign exchange translation differences to date (2 393) (1 035) – –
12 500 125 cumulative redeemable preference shares at
R1 each in Really Useful Investments No 143 (Pty) Ltd 11 283 – – –
16 724 5 608 – –
Loans
Loan (from)/to Desert Charm Trading 149 (Pty) Limited – – (2 112) 25 887
Loan to Astrapak Limited Linked Unit Trust Scheme – – 46 058 24 476
The loans are non-interest bearing, unsecured and have no fixed
terms of repayment
Total 16 724 5 608 43 946 50 363
Directors’ valuation 16 724 5 608 – –
Included in the financial results of the Mauritian Joint Venture,
Standard Labels Limited, at 28/29 February is:
Current assets 14 376 14 908
Non-current assets 8 983 11 857
Current liabilities 5 483 8 223
Non-current liabilities 5 183 7 196
Retained profit for the year 11 134 3 093
5. Investment in associate companyUnlisted – Izakhamzi Plastics (Pty) Ltd (20% interest held)
Equity accounted profit to date 75 – – –
75 – – –
Directors’ valuation of unlisted investment 75 – – –
6. Investment in subsidiariesShares at cost – – 285 945 222 896
Indebtedness – – (128 271) (162 179)
Total – – 157 674 60 717
Directors’ valuation – – 157 674 60 717
Refer note 28 for further details
7. InventoriesRaw materials 79 174 67 603 – –
Work in progress 24 866 10 674 – –
Finished goods 82 920 59 744 – –
Total 186 960 138 021 – –
for the year ended 28 February 2005
ASTRAPAK 2005 47
Notes to the annual financial statements
Group Company
R’000 2005 2004 2005 2004
8. Accounts receivableTrade debtors 239 744 209 156 – –
Less: Provision for bad debts 10 420 11 105 – –
229 324 198 051 – –
Prepayments 10 387 5 500 – 38
Insurance claim – 27 132 – –
Property development costs to be recovered – 22 767 – –
Other (including VAT receivable, deposits, etc) 11 172 9 846 498 1 942
Total 250 883 263 296 498 1 980
9. Share capital and share premiumAuthorised share capital
Ordinary share capital
184 985 417 (2004: 200 000 000) shares of
0,1 cent per share 185 200 184 200
Deferred ordinary share capital
15 014 583 (2004: nil) shares of 0,1 cent per share 15 – 15 –
Issued share capital
Ordinary shares Deferred ordinary shares
of 0,1 cent per share of 0,1 cent per share
Number of Number of Share
shares R'000 shares R'000 premium
Balance at beginning of year 108 105 000 108 – – –
Issued during the year at par – – 15 014 583 15 –
Issued during the year at a premium 12 011 667 12 – – 91 904
120 116 667 120 15 014 583 15 91 904
Less: Share issue expenses – – – – 7 602
Balance at end of year 120 116 667 120 15 014 583 15 84 302
10. Non-distributable reservesBalance at the beginning of the year 2 878 5 347 – –Movements in non-distributable reserves (2 020) (2 469) – –
Balance at the end of the year 858 2 878 – –
Comprising:Non-distributable reserve created in previous years as a result of a change in accounting policy relating to the amortisation of intangible assets 2 673 4 010 – –Foreign currency translation reserve (1 815) (1 132) – –
858 2 878 – –
48 ASTRAPAK 2005
for the year ended 28 February 2005
Notes to the annual financial statements
Group Company
R’000 2005 2004 2005 2004
11. Treasury linked units14 327 000 (2004: 12 496 854) linked units registered in the name of the Astrapak Limited Linked Unit Trust Scheme 41 358 23 208 – –971 125 (2004: Nil) linked units purchased by Tristar Plastics 7 592 – – –
48 950 23 208 – –
12. DebenturesAuthorised200 000 000 unsecured variable rate redeemable debentures of 50 cents each 100 000 100 000 100 000 100 000Issued120 116 667 (2004: 108 105 000) unsecured variable rate redeemable debentures of 50 cents each 60 058 54 053 60 058 54 05314 327 000 (2004: 12 496 854) unsecured variable rate redeemable debentures of 50 cents each held in treasury (7 164) (6 249) – –971 125 (2004: Nil) unsecured variable rate redeemable debentures of 50 cents each held by nominee (485) – – –
52 409 47 804 60 058 54 053
13. Interest-bearing debt and cash13.1 Long-term
Secured debtInstalment sale agreements 147 826 128 102 – –Other variable rate loans:• monthly instalments 1 063 7 088 – –Other fixed rate loans:• monthly instalments – 5 685 – 5 685• quarterly instalments 10 451 17 557 – –• bi-annual instalments 75 833 98 640 – –
Total secured debt 235 173 257 072 – 5 685Current portion transferred to short-term interest-bearing debt (90 115) (79 315) – (5 685)
Net long-term interest-bearing debt 145 058 177 757 – –
The capitalised finance leases, instalment sale agreements and other variable rate loans are secured by the related property, plant
and equipment with net book values of R177 486 893 (2004: R155 780 667). Refer note 1.
Variable rate loans
These loans bear interest at variable money market rates ruling at the roll-over dates. Redemption is reviewed and rolled forward.
Security is provided by the underlying property and cession of key main insurance policies.
Fixed rate loans
The loan repayable in quarterly instalments bears interest at 11,85% per annum, is repayable at R2 292 322 per quarter.
The loan repayable in bi-annual instalments bears interest at 16% per annum, is repayable in bi-annual instalments of R18 855 416.
The fixed rate loans are secured by a group security pooling arrangement over the assets of the business.
for the year ended 28 February 2005
ASTRAPAK 2005 49
Notes to the annual financial statements
Group Company
R’000 2005 2004 2005 2004
13. Interest-bearing debt and cash (continued)13.1 Long-term (continued)
Analysis of repayments
Repayable during the twelve months to:
28 February 2005 – 79 315 – 5 685
28 February 2006 90 115 68 826 – –
28 February 2007 98 651 66 585 – –
29 February 2008 31 090 35 010 – –
28 February 2009 10 594 3 204 – –
28 February 2009 5 123 4 133 – –
Total repayments 235 173 257 073 – 5 685
13.2 Short-term interest-bearing debt
Bank overdrafts 15 184 5 594 100 524
Current portion of long-term interest-bearing debt 90 115 79 315 – 5 685
105 299 84 909 100 6 209
13.3 Cash and short-term investments (98 224) (72 324) (53 055) (17 970)
13.4 Net interest-bearing debt/(cash)
Long-term interest-bearing debt 145 058 177 757 – –
Short-term interest-bearing debt 105 299 84 909 100 6 209
Cash and short-term investments (98 224) (72 324) (53 055) (17 970)
152 133 190 342 (52 955) (11 761)
The Group evaluated numerous capital allocation opportunities during the year under review and invested to achieve an optimal
result for linked unitholders. The opportunities that were pursued were funded partly by debt and partly by the cash generated
from within the Group. This resulted in a net interest-bearing debt of R152,1 million (2004: R190,3 million). The major capital
allocations were as follows:
• R155,4 million for plant replacement as well as expansionary capital expenditure;
• R36,6 million for the purchase of certain minority interests; and
• R17,5 million for the purchase of subsidiaries.
Where possible the effect of these capital allocations on headline earnings have been disclosed in note 19 of the report.
In accordance with the provisions of the Articles of Association adopted by the Company on 17 September 1997,
the borrowing powers of the directors are unlimited.
50 ASTRAPAK 2005
for the year ended 28 February 2005
Notes to the annual financial statements
Group Company
R’000 2005 2004 2005 2004
14. Accounts payableTrade payables 177 624 164 516 – –
Accruals 52 604 27 470 9 519 4 800
Total 230 228 191 986 9 519 4 800
Leave Distributor Credit
R’000 Royalties pay Bonuses commissions notes Other Total
15. Provisions – Group 2005Opening balance 1 770 6 200 17 006 340 2 356 13 243 40 915
Additions – 6 701 16 285 5 261 2 070 11 579 41 896
Usage (1 770) (6 200) (17 006) (340) (2 356) (13 243) (40 915)
Closing balance – 6 701 16 285 5 261 2 070 11 579 41 896
Other provisions consist of provisions for repairs and maintenance, volume discounts and settlement discounts.
All the provisions are expected to be utilised in full during the next financial year.
Group Company
R’000 2005 2004 2005 2004
16. Trading incomeTrading income has been determined after taking into account
the items detailed below:
Income:
Decentralisation benefits 132 871 – –
Foreign exchange gains 586 218 – –
Net gain on disposal of property, plant and equipment 5 380 24 616 5 4
Profit on disposal of investments 9 171 – – –
Expenses:
Auditors’ remuneration
• audit fees 1 536 1 389 106 193
• prior year under provision 24 36 – –
• other services 42 3 – –
1 602 1 428 106 193
Directors’ emoluments
Non-executive directors
• Number of non-executive directors 3 3
• Fees for services as a director 375 280
• Fees for services as Committee members 200 186
• Fees for consulting services 973 321
1 548 787
for the year ended 28 February 2005
ASTRAPAK 2005 51
Notes to the annual financial statements
Group Company
R’000 2005 2004 2005 2004
16. Trading income (continued)Executive directors• Number of executive directors 6 5
• Basic remuneration 6 101 4 565• Bonus and performance related payments 1 992 1 587• Contributions to retirement and medical aid funds 59 36• Other incentives and benefits 809 553
8 961 6 741Less: Paid by subsidiary and non-subsidiary companies (8 961) (6 741)
– –
(Refer to the remuneration report on pages 28 to 29 for a further analysis of aggregate remuneration and benefits paid to executive and non-executive directors.)
Amortisation of goodwill 4 666 3 828 – –Depreciation• land and buildings 3 162 3 018 – –• plant, equipment and furniture 84 610 67 932 205 126• motor vehicles 1 351 1 432 15 –• leasehold improvements 839 520 60 18
89 962 72 902 280 144
Foreign exchange losses 3 298 9 164 – –
Operating lease charges• land and buildings 19 274 13 618 596 487• plant, equipment and motor vehicles 711 324 81 92• other 138 162 – –Number of employees 2 991 3 015 12 9
Net profit Minority Net
R’000 before taxation Taxation interests profit
17. Exceptional itemThe exceptional item consists of:Group 2005:Surplus on replacement of destroyed plant and equipment from the insurance claim relating to the fire that occurred at Plastop (Proprietary) Limited, Bronkhorstspruit on 1 August 2003 8 000 (208) – 7 792Gain on disposal of empowerment shareholding in PAK 2000 9 171 (1 271) – 7 900Non-recurring costs incurred in respect of the sinkhole at Cinqpet (Pty) Ltd’s factory (4 388) – 219 (4 169)
12 783 (1 479) 219 11 523Group 2004:The exceptional item represents the net gain from the insurance claim relating to the fire that occurred at Cinqplast Plastop (Pty) Limited, Bronkhorstspruit on 1 August 2003, and consists of:Surplus on replacement of destroyed plant and equipment 24 507 (2 055) (5 613) 16 839Profit provision for the loss of turnover 5 223 (2 467) (1 439) 1 317Non-recurring costs associated with the fire (6 723) 2 617 1 527 (2 579)
23 007 (1 905) (5 525) 15 577
52 ASTRAPAK 2005
for the year ended 28 February 2005
Notes to the annual financial statements
Group Company
R’000 2005 2004 2005 2004
18. Net interest paid/(received)Interest paid (excluding debenture interest distribution) 43 545 46 923 13 307 11 102
Interest received (2 416) (4 041) (12 166) (5 444)
(41 129) 42 882 1 141 5 658
19. TaxationCurrent tax – Current year 27 676 27 751 – –
– Capital gains tax 1 839 – – –
Deferred taxation 1 770 (1 987) (2 100) (2 619)
Secondary tax on companies 1 377 530 878 431
Total 32 662 26 294 (1 222) (2 188)
%
Reconciliation of rate of taxation
South African normal tax rate on companies 30,0 30,0 30,0 30,0
• Change in tax rate (0,1) –
• Tax rate difference in respect of trusts 0,1 0,1 – –
• Incentive allowances (1,1) (1,0) – –
• Disallowable expenses 7,3 5,6 – –
• Non-taxable income (12,5) (11,6) (34,8) (35,0)
• Prior year losses utilised (1,3) (2,8) – –
• Capital gains tax (1,2) – – –
Secondary tax on companies 0,9 0,4 2,0 0,8
Effective rate of taxation 22,1 20,7 (2,8) (4,2)
R’000
Tax losses
Estimated tax losses 139 788 106 576 63 460 57 614
Tax losses against which no deferred taxation asset was raised 40 229 42 159 40 229 42 159
for the year ended 28 February 2005
Notes to the annual financial statements
ASTRAPAK 2005 53
Group
R’000 2005 2004
20. Earnings and headline earnings per linked unit (cents)Earnings per linked unit (cents) 123,8 102,5
Net profit attributable to linked unitholders 117,6 95,4
Debenture interest 6,2 7,1
Headline earnings per linked unit (cents) 119,3 93,0
Net headline earnings attributable to linked unitholders 113,1 85,9
Debenture interest 6,2 7,1
Earnings per linked unit – fully diluted (cents) 107,9 90,2
Attributable income 101,7 83,1
Debenture interest 6,2 7,1
Headline earnings per linked unit – fully diluted (cents) 103,2 81,0
Attributable income 97,0 73,9
Debenture interest 6,2 7,1
Weighted average number of linked units in issue (000) 95 158 95 608
Weighted average number of linked units in
issue – fully diluted (000) 110 018 109 756
Reconciliation between attributable
profit and headline earnings
Net profit attributable to linked unitholders 111 877 91 204
Distribution to linked unitholders – debenture interest 5 883 6 834
Amortisation of goodwill relating to acquisitions
after 15 June 2000, before 31 March 2004 4 666 3 828
Profit on disposal of property, plant and equipment (5 380) (24 616)
Profit on disposal of 25% investment in PAK 2000 (9 171) –
Exercise of options (41) –
Sinkhole costs 4 388 –
Tax effect 1 437 7 385
Attributable to minorities (127) 4 289
Headline earnings attributable to linked unitholders 113 532 88 924
Headline earnings per linked unit increased by 28,3% to
119,3 cents. The increase was attributable to increased
volumes, improved margins and greater efficiencies.
54 ASTRAPAK 2005
for the year ended 28 February 2005
Notes to the annual financial statements
21. Distribution policyThe profits available for distribution by way of debenture interest and dividends (‘distributable profits’) will be covered
approximately three times by after tax earnings before debenture interest.
Debenture interest
Debenture interest will be calculated at the lower of:
• the prime rate of interest of the face value of the debentures; and
• the distributable profits.
Dividend policy
The dividend policy will be to declare and pay the excess of the distributable profits, if any, over the debenture interest.
The distribution policy will be reviewed by the Board of Directors of Astrapak from time to time in light of prevailing
circumstances and future cash requirements.
Group Company
R’000 2005 2004 2005 2004
22. Capital commitments
Authorised, contracted not spent 19 641 8 795 – –
23. Lease commitmentsOperational leases
• due within one year 12 919 13 946 624 551
• due thereafter 51 667 61 072 287 1 049
Total 64 586 75 018 911 1 600
24. Retirement benefitsWith effect 1 March 1999, the Astrapak Provident and Astrapak Pension Funds were established for the purpose of consolidating
the Group’s funds, by transferring all employees in the Group onto the Astrapak Provident and Pension Funds. All the funds are
defined contribution funds as governed by the Pension Funds Act, 1956 (Act no 26 of 1956).
All eligible employees are members of either the Astrapak Provident and Pension Funds, or are members of funds within the various
industries in which they are employed.
The assets of the funds, at 28 February 2005, are held in administered trust funds, separate from the Group’s assets, and are
administered by various pension fund administrators.
The cost of retirement benefits charged to the income statement during the financial period under review amounts to
R16 918 170 (2004: R14 424 791).
25. Contingent liabilitiesThe Group has no material contingent liabilities. The Company has contingent liabilities in respect of guarantees issued to bankers
and other creditors for normal business commitments of subsidiaries.
26. Financial risk managementThe Group purchases financial instruments in order to finance its operations and to manage the interest rate and currency risks that
arise from normal business operations. In addition, financial balances, for example, trade debtors, trade creditors, bank balances,
accruals and prepayments arise from normal business operations within the Group.
The Group finances its operations mainly through retained profits, bank credit borrowings and long-term bank loans.
The Group also enters into derivative transactions, principally, forward currency contracts, forward rate agreements and interest
rate swaps in order to manage the currency and interest rate risks arising.
for the year ended 28 February 2005
ASTRAPAK 2005 55
Notes to the annual financial statements
26. Financial risk management (continued)The risk areas the Group is exposed to are credit risk, treasury risk, interest rate risk, liquidity risk and foreign currency risk.
Compliance with the Group’s policies is reviewed at the Executive Committee meetings. These policies have remained unchanged
throughout the year ended 28 February 2005.
Treasury risk management
The Group’s treasury risk is managed through the Executive Committee reporting to the Board of Directors. One of the roles of this
Committee is to decide the appropriate philosophy to be adopted within the Group regarding the management of treasury risks
and for considering and managing the Group’s existing financial market risks by adopting strategies within the guidelines set by
the Board.
Interest rate risk management
Interest rate risk is the possibility that the Group may suffer financial loss if either a fluctuating interest rate or fixed interest rate
position is entered into and interest rates move adversely. The Group uses swaps, options, forward rate arrangements and other
standard market instruments to manage this risk. The risk profile of financial liabilities and assets at balance sheet date is detailed
below, which excludes short-term debtors and non-interest-bearing short-term creditors:
Floating rate Fixed rate Floating rate Net
R’000 assets liabilities liabilities liability
South African Rand (98 224) 86 284 164 073 152 133
Total at 28 February 2005 (98 224) 84 284 164 073 152 133
South African Rand (72 324) 121 882 140 784 190 342
Total at 29 February 2004 (72 324) 121 882 140 784 190 342
Liquidity risk management
Liquidity risk is the possibility that the Group may suffer financial loss through liquid funds not being available or that excessive
finance costs must be paid to obtain funds to meet payment requirements. The Group manages this risk through forecasting and
monitoring cash flow requirements on a regular basis, and by maintaining sufficient undrawn facilities. Significant liquid resources
were held at year-end. The Group had the following undrawn facilities available at the balance sheet date:
R’000 2005 2004
Expiry period at 28/29 February
Within one year 149 380 96 899
Within two to five years 250 017 323 102
399 397 420 001
The facilities expiring within one year are of a general banking nature and thus subject to review at various dates (usually on an
annual basis), and it is expected that this profile will continue.
The facilities expiring beyond two years are of a project and structured finance nature, and are utilised primarily to finance capital
expenditure.
Foreign currency risk management
Foreign currency risk is the risk that the Group may suffer financial loss as a consequence of depreciation in a reporting currency
relative to a foreign currency prior to payment of a commitment in that foreign currency or of the reporting currency
strengthening prior to receiving payment in that foreign currency.
56 ASTRAPAK 2005
for the year ended 28 February 2005
Notes to the annual financial statements
26. Financial risk management (continued)The Group has transactional exposures in currencies other than South African Rands. These exposures arise from sales, or
purchases, of inventory and capital expenditure.
The Group uses swaps, options and other financial instruments, in particular forward contracts, to manage transactional
currency risks. Specific translation risks are managed through the Group’s individual operating units. Speculative positions are
not permitted.
All imports and exports are fully covered at balance sheet date. The values of forward contracts entered into at
28/29 February are:
Average
R’000 contract rate 2005 2004
US Dollars 6,2477 21 17 186
Euro 7,2450 4 546 42 073
UK Pounds 11,2100 3 1 074
4 570 60 333
Currency conversion guide at 28/29 February
US Dollars 5,8888 6,7857
Euro 7,8358 8,5636
UK Pounds 11,3865 12,6835
Credit risk management
Potential concentrations of credit risk consist principally of cash investments and trade receivables. The Group only deposits cash
surpluses with major banks of high standing.
Trade receivables comprise a large, widespread customer base. Ongoing credit evaluations on the financial condition of customers
are performed and, where appropriate, credit guarantee insurance cover is purchased or provisions made.
The Group does not consider there to be any significant concentration of credit risk that had not been insured or adequately
provided for at balance sheet date.
Fair value of financial instruments
The carrying amounts reported in the balance sheet for liquid resources, trade receivables and trade payables approximate
fair value.
for the year ended 28 February 2005
ASTRAPAK 2005 57
Notes to the annual financial statements
R’000 Films Rigids Flexibles Group
27. Segmental analysis27.1 Business segment report (primary report)
Revenue – 2005 735 307 648 169 266 751 1 650 227
Revenue – 2004 620 677 483 350 247 610 1 351 637
Trading income – 2005 63 907 94 051 23 753 181 711
Trading income – 2004 59 198 75 804 18 473 153 475
Depreciation – 2005 27 588 50 216 12 159 89 963
Depreciation – 2004 23 854 37 665 11 383 72 902
Capital expenditure – 2005 23 681 117 708 14 009 155 398
Capital expenditure – 2004 32 939 50 744 13 863 97 546
Total assets – 2005 441 594 503 125 164 079 1 108 798
Total assets – 2004 387 512 412 205 137 804 937 521
Total liabilities – 2005 273 227 218 690 94 543 586 460
Total liabilities – 2004 219 292 242 073 88 886 550 251
KwaZulu-
R’000 Gauteng Natal Cape Group
27.2 Geographical report (secondary report)
Revenue – 2005 949 814 421 185 279 228 1 650 227
Revenue – 2004 745 725 385 431 220 481 1 351 637
Trading income – 2005 102 939 56 529 22 243 181 711
Trading income – 2004 78 307 45 627 29 541 153 475
Depreciation – 2005 58 691 18 152 13 120 89 963
Depreciation – 2004 44 298 17 882 10 722 72 902
Capital expenditure – 2005 125 100 17 843 12 455 155 398
Capital expenditure – 2004 53 022 21 909 22 615 97 546
Total assets – 2005 735 788 223 341 149 669 1 108 798
Total assets – 2004 574 712 234 160 128 649 937 521
Total liabilities – 2005 389 278 125 154 72 028 586 460
Total liabilities – 2004 356 676 128 849 64 726 550 251
58 ASTRAPAK 2005
for the year ended 28 February 2005
Notes to the annual financial statements
Issued Effective Amount owing Cost ofshare percentage holding (to)/by subsidiary investment
capital 2005 2004 2005 2004 2005 2004 R % % R’000 R’000 R’000 R’000
28. Analysis of interest in subsidiary companiesSubsidiaries all incorporated in the Republic of South Africa
28.1 Directly heldAstrapak Finance Company (Pty) Ltd (1) 100 100 100 56 424 32 912 53 000 53 000Astrapak Gauteng (Pty) Ltd 100 100 100 (131 244) (109 825) – –Astrapak KwaZulu-Natal (Pty) Ltd 100 100 100 (52 337) (28 195) – –Astrapak Properties (Pty) Ltd (2) 100 100 100 2 047 2 163 – –Astrapak Western Cape (Pty) Ltd 100 100 100 15 265 (19 257) – –International Edgeboard Technology (Pty) Ltd 100 100 100 871 1 669 – –Master Plastics (Pty) Ltd 563 95 75 13 055 4 451 169 608 124 997Deset Charm Trading 149 (Pty) Ltd (2) 100 100 100 – – – –
Indirectly heldAstra Repro (Pty) Ltd 100 80 80 (1 214) (142) – –Astraflex (Pty) Ltd 100 100 100 34 793 25 229 – –Barrier Film Converters (Pty) Ltd 1000 80 80 11 669 4 512 – –Diverse Labelling Consultants (Pty) Ltd 1 110 100 100 (42 991) (49 929) 14 282 14 282Durpak (Pty) Ltd 1 000 100 100 (1 011) (1 012) 1 003 1 003Thermopac (Pty) Ltd 6 000 97,5 95 (19 607) (14 223) 14 941 12 906International Tube Technology (Pty) Ltd 1 000 000 60 60 3 669 6 690 600 600JJ Precision Plastics (Pty) Ltd 200 100 100 (2 898) (3 372) 4 241 4 241PackLine Holdings (Pty) Ltd 750 100 100 3 336 (93) 3 215 3 215PAK 2000 (Pty) Ltd 4 000 100 100 (17 379) (15 703) 6 756 6 756Saflite Packaging (Pty) Ltd 200 75 75 (2 250) (1 204) 432 432Tamperpak (Pty) Ltd 1 000 75 75 (2 739) (1 553) – –Thermopackaging Natal (Pty) Ltd 100 100 100 – – – –Marcom Plastics (Pty) Ltd 100 50 – 1 143 – 4 518 –Knilam Packaging (Pty) Ltd 100 70 – (815) – 12 987 –
28.2 Subsidiaries in process of being deregistered or liquidatedDirectly heldAstrapak Corporate Services (Pty) Ltd (3) 100 100 100 – – – –Portion 727 Randjiesfontein (Pty) Ltd (3) 2 100 100 3 942 4 703 362 362CIC Brands SA (Pty) Ltd (3) 100 100 100 – – – 99Tristar (Pty) Ltd (3) 1 000 100 100 – – – 1 003
(128 271) (162 179) 285 945 222 896
Subsidiaries are packaging companies, except for:(1) Finance company(2) Property company(3) Dormant company
for the year ended 28 February 2005
ASTRAPAK 2005 59
Notes to the annual financial statements
29. Related party transactionsThe ultimate holding company of the Group is Astrapak Limited.
During the year, Group companies entered into the following transactions with the ultimate holding company, which performed
certain administrative services for the companies.
R’000 2005 2004
Interest paid to Group companies 10 777 9 527
Interest paid by Group companies 12 053 2 865
Management fees paid by Group companies 22 412 14 379
Treasury assets of the ultimate holding company 60 020 6 322
Treasury liabilities of the ultimate holding company 88 386 145 424
Amounts owing to Group companies 58 412 31 414
Amounts owing by Group companies 125 639 90 203
The management fees charged by the ultimate holding company, to Group companies,
represents an appropriate allocation of costs incurred by the ultimate holding company.
60 ASTRAPAK 2005
at 28 February 2005
Annexure 1 – details of land and buildings
2005 2004
Cost Cost
Owner Description of premises Erf R’000 R’000
Astrapak Properties (Pty) Ltd Factory and offices utilised by Erf 22380, Goodwood
Thermopac Cape Province 3 745 3 745
Astrapak Gauteng (Pty) Ltd Factory and offices utilised by Stand 95
East Rand Plastics Vulcana, Brakpan 139 139
Astrapak Gauteng (Pty) Ltd Factory and offices utilised by Portion 40 of the farm
East Rand Plastics Koobult 121 IR 6 572 6 572
Astrapak Gauteng (Pty) Ltd Factory and offices utilised by Stand 29158
Peninsula Packaging Bellville 5 538 5 538
Astrapak Gauteng (Pty) Ltd Factory and offices utilised by Stand 87
East Rand Plastics Vulcana, Brakpan 3 779 3 779
Astrapak Gauteng (Pty) Ltd Vacant stand Erf 45, Aeroton
Gauteng Province 506 506
Astrapak KwaZulu-Natal (Pty) Ltd Factory and offices utilised by Sub 44 of lot 391
Packaging Consultants Springfield, Durban – 5 800
Astrapak KwaZulu-Natal (Pty) Ltd Factory and offices utilised by Sub 1 of lot 2823
Diverse Labelling Consultants, Pinetown 9 847 9 847
Astrapak Exports and Astra Repro
Cinqprop (Pty) Ltd Factory and offices utilised by Erf 594, Denver
Cinqplast Plastop Gauteng Province 19 704 19 655
Plastop (Pty) Ltd Factory and offices utilised by Stands 84 and 960
Cinqplast Plastop Bronkhorstspruit 54 111
Gauteng Province
Plastop Properties (Pty) Ltd Factory and offices utilised by Lot 2354
Plastop Amanzimtoti Port Natal
KwaZulu-Natal 6 664 6 612
Cinqcorp (Pty) Ltd Factory and offices utilised by Erf 756, 757 and 758
Cinqplast Plastop Denver, Extension 12 11 992 11 973
Gauteng Province
68 540 74 277
for the year ended 29 February 2005
ASTRAPAK 2005 61
at 28 February 2005
Linked unitholders’ information – diary
Linked unitholders’ diary
February Financial year-end September Annual General MeetingMay Preliminary results announcement October Interim results announcement
for the year ended 28 February 2005 for the period ending 31 August 2005August Annual Report published
Analysis of linked unitholdersLinked unitholders’ spreadas at 28 February 2005
Linked unitholders in SA Linked unitholders outside SA Total linked unitholdersNumber Linked % Number Linked % Number Linked %
of holders units held issued of holders units held issued of holders units held issued
Public 1 767 100 509 937 83,7 23 2 019 884 1,7 1 790 102 529 821 85,4
Non-public 22 17 586 846 14,6 – – – 22 17 586 846 14,6
• Directors of the Companyand its subsidiaries 20 2 288 721 1,9 – – – 20 2 288 721 1,9
• Trustee of the Astrapak Limited Linked Unit Trust Scheme 1 14 327 000 11,9 – – – 1 14 327 000 11,9
• Tristar Plastics (a division of Astrapak Gauteng (Pty) Ltd) 1 971 125 0,8 – – – 1 971 125 0,8
Major linked unitholdersas at 28 February 2005
Linked units %held issued
Rand Merchant Bank 32 389 403 27,0Alan Gray 15 571 224 13,0Astrapak Limited Linked Unit Trust Scheme 14 327 000 11,9Royal Bafokeng Finance 12 011 667 10Old Mutual 11 135 871 9,3Coronation 6 505 433 5,4Sanlam 5 870 037 4,9Liberty Life Association of South Africa 5 826 771 4,9
Directors’ interestas at 28 February 2005
Beneficial Non-beneficial UnitholdingDirector Direct Indirect (%)
R Crewe-Brown 210 460 595 648 0,7PC Botha* – 14 337 000 11,9M Baglione 153 100 56 700 0,2RT Dalais – 140 000 0,1G Petzer 126 000 – 0,1WJ Venter 190 780 – 0,2M Diedloff 89 000 – 0,1RA Upton 53 333 – 0,1
* Mr PC Botha is a trustee of the Astrapak Limited Linked Unit Trust Scheme, the holder of 14 327 000 linked units.
62 ASTRAPAK 2005
Linked unitholder information – notice of meeting
Notice is hereby given that the Annual General Meeting of the
linked unitholders of the Company will be held at the Inanda Club,
1 Forest Road, Inanda, Sandton on Thursday, 22 September 2005
at 09:00 for the following purposes:
Ordinary business
1. Ordinary resolution number 1
To receive, consider and approve the annual financial
statements of the Company and the Group together with
the reports of the directors and auditors for the year ended
28 February 2005.
2. Ordinary resolution number 2
To elect a director in the place of Mr R Crewe-Brown who
retires in terms of the Company’s Articles of Association and
who, being eligible, offers himself for re-election. A brief
CV appears on page 10 of this report.
3. Ordinary resolution number 3
To elect a director in the place of Mr HA Todd who retires in
terms of the Company’s Articles of Association and who, being
eligible, offers himself for re-election. A brief CV appears on
page 10 of this report.
4. Ordinary resolution number 4
To elect a director in the place of Mr M Diedloff who retires in
terms of the Company’s Articles of Association and who, being
eligible, offers himself for re-election. A brief CV appears on
page 10 of this report.
5. Ordinary resolution number 5
To confirm the re-appointment of Deloitte & Touche as
auditors for the ensuing year and to authorise the directors to
approve their remuneration.
6. Ordinary resolution number 6
To approve the directors’ remuneration for the year ended
28 February 2005.
7. Ordinary resolution number 7
To place 10% of the authorised but unissued linked units of the
Company under the control of the directors as a general
authority contemplated in terms of section 221 of the
Companies Act (Act 61 of 1973) as amended (‘the Act’), and to
grant the directors the authority to allot and issue these shares
on such terms and conditions as the directors may determine
and subject to the provisions of the Act, the Articles of
Association of he Company and the Listings Requirements of
the JSE Limited.
8. Ordinary resolution number 8
To authorise the directors by way of a general approval to
issue authorised but unissued linked units for cash as they may
deem fit, subject to the Act, the Articles of Association of the
Company and the Listings Requirements of the JSE subject to
the following limitations:
• that at least 75% of the shareholders present in person or
by proxy at the Annual General Meeting cast their vote in
favour of this resolution;
• that this general authority shall not extend beyond
15 months from the date of this Annual General Meeting
or the date of the next Annual General Meeting,
whichever is the earlier;
• the securities will be issued only to the public shareholders
as defined in the Listings Requirements of the JSE and not
to related parties;
• any such issue will only be securities of a class already
in issue;
• that issues in the aggregate in any financial year will not
exceed 15% of the Company’s issued linked unit capital as
at the date of the first such issue. The securities of a
particular class will be aggregated with the securities that
are compulsorily convertible into securities of that class;
and, in the case of the issue of compulsorily convertible
securities, aggregated with the securities of that class into
which they are compulsorily convertible. The number of
securities of a class which may be issued shall be based on
the number of securities of that class in issue at the date of
such application less any securities of the class issued
during the current financial year, provided that any
securities of that class to be issued pursuant to a rights
issue (announced and irrevocable and underwritten) or
acquisition (concluded up to the date of application) may
be included as though they were securities in issue at the
date of application; and
ASTRAPAK 2005 63
• that in determining the price at which the issue of linked
units will be made in terms of this authority, the
maximum discount permitted will be 10% of the
weighted average traded price as determined over
30 business days prior to the date that the price of the
issue is determined or agreed by the Company’s directors.
The JSE should be consulted for a ruling if the Company’s
securities have not traded in such 30 business day period.
The Company will publish a press announcement, at the time
of any issue representing on a cumulative basis within one
year, 5% or more of the number of linked units which it had
in issue prior to such issue containing full details of such
issue, including the impact of the issue on net asset value and
earnings per share.
General authority to acquire linked units
Special resolution 1
Linked unitholders are requested to consider and, if deemed
fit, pass with or without modification, the following
special resolution:
Resolved that the Company’s directors be hereby authorised,
by way of a general authority, to repurchase linked units in the
Company and permit any subsidiary of the Company to purchase
linked units in the Company, as and when deemed appropriate;
subject to the Act, the Articles of Association of the Company
and the Listings Requirements of the JSE and the following
limitations that:
• any such acquisition of linked units shall be effected through
the order book operated by the JSE trading system and done
without any prior understanding or arrangement between
the Company and the counter party;
• that this general authority shall not extend beyond
15 months from the date of this Annual General Meeting or
the date of the next Annual General Meeting, whichever is
the earlier;
• a press announcement will be published as soon as the
Company has acquired linked units constituting, on a
cumulative basis, 3% of the number of the linked units in
issue as at the time the authority was granted;
• acquisitions of linked units in the aggregate in any one
financial year may not exceed 20% of the Company’s issued
ordinary share capital and debentures (‘linked units’) as at
the beginning of the financial year;
• in determining the price at which linked units issued by the
Company will be acquired, the maximum premium at which
such linked units may be acquired will be 10% of the
weighted average of the market value at which such
linked units are traded on the JSE, as determined over the
five business days immediately preceding the date of
such acquisition;
• the sponsor to the Company provides a letter on the
adequacy of working capital in terms of section 2.14 of the
JSE Listings Requirements prior to any repurchases being
implemented on the open market of the JSE; and
• to the extent it is needed, the consent of the debt
providers to the Company and the Group has been
obtained prior to any repurchases being implemented
on the open market of the JSE.
• after such repurchase the Company will still comply with
the JSE Listings Requirements concerning shareholder
spread requirements;
• the Company or its subsidiary are not repurchasing
securities during a prohibited period as defined in the
JSE Listings Requirements;
• and the Company only appoints one agent to effect any
repurchase(s) on its behalf.
The directors undertake that the Company shall not make any
payment to acquire any linked units issued by the Company if
there are reasonable grounds for believing that for a period of
12 months after the date of approval of special resolution
number 1:
• the Company and the Group will after payment be unable
to pay its debts as they become due in the ordinary course
of business;
• the assets of the Company and the Group, fairly valued in
terms of Generally Accepted Accounting Practice and on a
Linked unitholder information – notice of meeting
Linked unitholder information – notice of meeting
64 ASTRAPAK 2005
basis consistent with the last financial year of the Company,
will after the payment be less than the liabilities of the
Company and the Group;
• the ordinary capital and reserves of the Company and the
Group will be inadequate for the purposes of the business of
the Company and the Group; and
• the working capital available to the Company and the Group
will be inadequate for the purposes of the business of the
Company and the Group.
The Board has no immediate intention to use this authority to
repurchase linked units. However, the Board is of the opinion that
this authority should be in place should it become appropriate to
undertake a linked unit repurchase in the future.
Reason and effect for special resolution number 1
The Board believes it to be in the best interests of the Company that
linked unitholders pass a special resolution granting the Company a
general authority for the acquisition by the Company of its own
linked units or to permit any subsidiary of the Company to purchase
linked units in the Company should such acquisition be in the
interests of the Company. Such general authority will provide the
directors with the flexibility, subject to the requirements of the Act
and the Listings Requirements of the JSE, to repurchase linked units
should it be in the best interests of the Company at any time while
the general authority subsists.
General disclosure
The JSE Listings Requirements require the following disclosure,
some of which are elsewhere in the annual report of which this
notice forms part as set out below:
Directors and management – pages 10 and 11;
Major shareholders of the Company – page 61;
Directors’ interests in securities – page 61; and
Share capital of the company – page 47.
Litigation statement
In terms of section 11.26 of the Listings Requirements of the JSE,
the directors, whose names are given on page 10 and 11 of the
annual report of which this notice forms part, are not aware of any
legal or arbitration proceedings, including proceedings that are
pending or threatened, that may have or have had in the recent
past, being at least the previous 12 months, a material effect on the
Group's financial position.
Directors’ responsibility statement
The directors, whose names are given on pages 10 and 11 of the
annual report, collectively and individually accept full responsibility
for the accuracy of the information pertaining to this resolution
and certify that to the best of their knowledge and belief there are
no facts that have been omitted which would make any statement
false or misleading, and that all reasonable enquiries to ascertain
such facts have been made and that this resolution contains
all information required by Law and the Listings Requirements.
Material change
Other than the facts and developments reported on in the annual
report, there have been no material changes in the affairs or
financial position of the Company and its subsidiaries since the date
of signature of the audit report and the date of this notice.
Voting and proxies
Members who have not dematerialised their linked units or who
have dematerialised their linked units with ‘own name’ registration
are entitled to attend and vote at the meeting and are entitled to
appoint a proxy or proxies to attend, speak and vote in their stead.
The person so appointed need not be a member.
A form of proxy setting out the relevant instructions for its
completion is enclosed for use by a linked unitholder who wishes to
be represented at the general meeting. Completion of a form of
proxy will not preclude such linked unitholder from attending and
voting (in preference to that linked unitholder’s proxy) at the
Annual General Meeting. Proxy forms should be forwarded to
reach the registered office of the Company’s transfer secretaries,
Computershare Investor Services 2004 (Pty) Limited, 70 Marshall
Street, Johannesburg, 2001 or posted to the transfer secretaries at
PO Box 61051, Marshalltown, 2107, South Africa so as to be
received by them by not later than 9:00 on Wednesday,
21 September 2005.
ASTRAPAK 2005 65
Linked unitholder information – notice of meeting
On a show of hands, every member of the Company present in
person or represented by proxy shall have one vote only. On a poll,
every member of the Company shall have one vote for every linked
unit held in the Company by such member.
Members who have dematerialised their linked units, other than
those members who have dematerialised their linked units with
‘own name’ registration, should contact their CSDP or broker in the
manner and time stipulated in their agreement:
• to furnish them with their voting instructions; and
• in the event that they wish to attend the meeting, to obtain
the necessary authority to do so.
Y Cowley
Secretary
Sandton
23 August 2005
66 ASTRAPAK 2005
Administration
Business address and registered office1st Floor, Wierda Court, Johan Avenue, Wierda Valley, Sandton
Postal addressPO Box 652740, Benmore 2010
Transfer secretariesComputershare Investor Services 2004 (Pty) Limited,
70 Marshall Street, Johannesburg
PO Box 61051,
Marshalltown 2107
AuditorsDeloitte & Touche, Deloitte Place
The Woodlands Office Park, Woodmead Drive, Woodmead
Principal bankersCiti Bank N.A. South Africa, 145 West Street, Sandown
ABSA Bank Ltd, ABSA Towers North, 180 Commissioner Street
Johannesburg
SponsorRand Merchant Bank (A division of FirstRand Bank Limited),
1 Merchant Place
Cnr Fredman Drive and Rivonia Road,
Sandton
Corporate law advisorsPaul Botha and Associates (Pty) Ltd, 39 Rivonia Road, Sandhurst
Company registration number1995/009169/06
Website addresswww.astrapak.co.za
for the year ended 28 February 2005
ASTRAPAK 2005 67
Form of proxy – linked unitholders
This form is only to be completed by certificated and ‘own name’ registered dematerialised linked unitholders.
Astrapak LimitedRegistration number 1995/009169/06
Incorporated in the Republic of South AfricaShare code: APK ISIN: ZAE000030938
(‘the Company’)
A linked unitholder entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy, or proxies, to attend, speak andvote thereat in his/her stead. A proxy need not also be a linked unitholder of the Company. All forms of proxy must be lodged with the transfersecretaries, Computershare Investor Services 2004 (Pty) Limited, by not later than 9:00 on Wednesday, 21 September 2005.
Linked unitholders, other than own name registered dematerialised linked unitholders, that have dematerialised their linked units with a Central Securities Depository Participant (‘CSDP’) or broker must arrange with the CSDP or broker concerned to provide them with the necessaryauthorisations to attend the Annual General Meeting or the linked unitholders concerned must instruct them as to how they wish to vote in thisregard. This must be done in terms of the agreement entered into between the linked unitholders concerned and the CSDP or broker concerned.
I/We
of (address)
being a member(s) of the abovenamed company, hereby appoint:
or failing him/her,
the Chairman of the Annual General Meeting,
as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at 9:00 on Thursday, 22 September 2005.
Signed at this day of 2005
Signature
Please indicate in the space below how you wish your votes to be cast by inserting the number of linked units in the appropriate space. If youreturn this form duly signed, without any specific directions, the proxy shall be entitled to vote as he/she thinks.
Abstain In favour of Against from voting
1. Ordinary resolution numbers 1 – To receive, consider and approve annual financial statements
2. Ordinary resolution number 2 – Re-election of Mr R Crewe-Brown
3. Ordinary resolution number 3 – Re-election of Mr HA Todd
4. Ordinary resolution number 4 – Re-election of Mr M Diedloff
5. Ordinary resolution number 5 – Re-appointment of Deloitte & Touche as auditors
6. Ordinary resolution number 6 – Directors’ remuneration
7. Ordinary resolution number 7 – Control of authorised but unissued shares
8. Ordinary resolution number 8 – General issue of linked units for cash
9. Special resolution number 1 – General authority to acquire linked units
Please read the notes on the reverse side hereof.
68 ASTRAPAK 2005
Notes to proxy
1. A linked unitholder may insert the names of one or more
proxies (who need not be linked unitholders of the Company)
in the space provided, with or without deleting the words ‘the
Chairman of the Annual General Meeting’. The person whose
name appears first on the form of proxy and has not been
deleted will be entitled to act in priority to those whose names
follow. In the event that no names are filled in, the proxy shall
be exercised by the Chairman of the Annual General Meeting.
2. A linked unitholder’s instructions to the proxy must be
indicated by the insertion of the relevant number of votes in
the space provided. Failure to comply with the above will be
deemed to authorise the proxy to vote as he/she thinks fit.
However, where the proxy is the Chairman, such failure shall
be deemed to authorise the Chairman to vote in favour of the
resolutions. A linked unitholder or his/her proxy is not obliged
to use all the votes exercisable by the linked unitholder or
his/her proxy.
3. The completion and lodging of this form of proxy shall in no
way preclude the linked unitholder from attending, speaking
and voting in person at the Annual General Meeting to the
exclusion of any proxy appointed in terms hereof.
4. Should this form of proxy not be completed and/or received in
accordance with these notes, the Chairman may accept or
reject it, provided that in respect of its acceptance the
Chairman is satisfied as to the manner in which the linked
unitholder wishes to vote.
5. This form of proxy shall be valid for any adjournment of the
Annual General Meeting as well as the Annual General Meeting
to which it relates, unless the contrary is stated hereon.
6. Where this form of proxy is signed under power of attorney,
such power of attorney must accompany this form of proxy
unless it has previously been registered with the Company.
7. Where linked units are held jointly, all joint holders are
required to sign.
8. This form of proxy must be returned to the transfer secretaries
of the Company, Computershare Investor Services 2004
(Pty) Limited, 70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107), to be received by
not later than 9:00 on Wednesday, 21 September 2005.
9. Linked unitholders that have dematerialised their linked units
with a CSDP or broker must arrange with the CSDP or broker
concerned to provide them with the necessary authorisations
to attend the Annual General Meeting or the linked
unitholders concerned must instruct them as to how they wish
to vote in this regard. This must be done in terms of the
agreement entered into between the linked unitholders
concerned and the CSDP or broker concerned.
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