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Annual general meeting – explanatory notes

 

1.
ADOPTION OF ANNUAL FINANCIAL STATEMENTS

  		 At the annual general meeting, the directors must present the annual financial statements for the year ended 28 February 2009 to shareholders, together with the reports of the directors and the auditors. These are contained within the annual report.
2.
ELECTION/RE-ELECTION OF DIRECTORS
  In accordance with the company’s articles of association, one third of the directors are required to retire at each annual general meeting and may offer themselves for re-election. In addition, any person appointed to the board of directors since the previous annual general meeting is similarly required to retire and is eligible for election at the next annual general meeting. Messrs AMR Smith, NJ Adami and Ms DNM Mokhobo retire from the board in accordance with article 15.3 of the company’s articles of association and Messrs N Claussen, PMO Curle and RE Venter retire by rotation at the annual general meeting in accordance with article 16.1 of the company’s articles of association.

An abbreviated curriculum vitae in respect of each director offering himself/herself for election/re-election is contained on pages 206 to 212 of this annual report.
The board of directors of the company has reviewed the composition of the board against corporate governance and transformation requirements and has recommended the election/re-election of the directors listed above. It is the view of the board that the election/re-election of the candidates referred to above would enable the company to:
  arrow responsibly maintain a mixture of business skills and experience relevant to the company and balance the requirements of transformation, continuity and succession planning; and
  arrow comply with corporate governance requirements in respect of matters such as the balance of executive, non-executive and independent directors on the board.
  In addition, the performance of retiring directors was formally evaluated. This process culminated in the company’s board, on the recommendation of the Altron nomination committee, considering whether the retiring directors should be recommended for election/re-election. Having considered the inputs of the Altron nomination committee, the board recommends the election/re-election of the retiring directors.
     
3.
RE-APPOINTMENT OF INDEPENDENT AUDITORS
  KPMG Inc has indicated its willingness to continue in office and resolution 3 proposes among others the re-appointment of that firm as the company’s auditors until the next annual general meeting.

At an Altron audit committee meeting held on 26 February 2009, the committee considered the independence of the external auditors KPMG Inc in accordance with section 270A of the Corporate Laws Amendment Act. In assessing the independence of the external auditors, the audit committee satisfied itself that KPMG Inc:
  arrow does not hold a financial interest (either directly or indirectly) in Altron;
  arrow does not hold a position, either directly or indirectly, that gives the right or responsibility to exert significant influence over the financial or accounting policies of Altron;
  arrow is not economically dependent on Altron, having specific regard to the quantum of the audit fees paid by Altron and its sub-holding companies to KPMG Inc during the period under review in relation to its total fee base;
  arrow does not provide consulting or non-audit-related services to Altron or its sub-holding companies which fall outside of the permitted or qualified non-audit-related services as specified in the policy for the use of the external auditors for non-audit-related services and which could compromise or impair the external auditors’ independence (see page 129 of the directors report); and
  arrow including the individual registered auditors who undertake the audit, does not have personal or business relationships of immediate family, close relatives, partners or retired partners, either directly or indirectly, with Altron and its subholding companies.
     
  Accordingly, the Altron audit committee is satisfied that KPMG Inc is independent as contemplated by the South African Independence laws and the applicable rules of the International Federation of Accountants (IFAC) and nominated the reappointment of KPMG Inc as registered auditors for the 2009/2010 financial year. On 26 February 2009, the Altron board, subject to shareholder approval, re-appointed KPMG Inc and Mr MCA Hoffman as the independent registered audit firm and individual registered auditor of Altron respectively.
   
  Furthermore, the Altron audit committee has, in terms of paragraph 3.86 of the JSE Listings Requirements, considered and satisfied itself that KPMG Inc the reporting accountant and individual auditor are registered as such on the JSE Register of Auditors, in compliance with section 22 of the JSE Listings Requirements.
   
4.
SPECIAL RESOLUTION NUMBER 1: GENERAL AUTHORITY TO REPURCHASE SHARES
 

The effect of special resolution number 1 and the reason therefore is to grant the company or any of its subsidiaries a general approval in terms of the Companies Act, No 61 of 1973, as amended (the Companies Act), for the acquisition by the company or any of its subsidiaries of the company’s shares, which general approval shall be valid until the earlier of such next annual general meeting of the company or its variation or revocation of such general authority by special resolution at any subsequent general meeting of the company, provided that the general authority shall not extend beyond 15 months from the date of this annual general meeting.

The directors are of the opinion that it would be in the best interests of the company to extend such general authority and thereby allow the company or any of its subsidiaries to be in a position to repurchase the securities issued by the company through the order book of the JSE, should market conditions and the price justify such an action.

   
5.
ORDINARY RESOLUTIONS NUMBERS 1 AND 2: CONTROL OF AUTHORISED BUT UNISSUED SHARES AND GENERAL AUTHORITY TO ISSUE SHARES FOR CASH
 

In terms of sections 221 and 222 of the Companies Act the shareholders have to approve the placement of the unissued shares under the control of the directors. The existing authorities granted by the shareholders at the previous annual general meeting held on 15 July 2008 expire at the following annual general meeting unless renewed. The authorities will be subject to the Companies Act and the JSE Listings Requirements. Ordinary resolution number 1 requires a 50% majority of the votes cast by shareholders present or represented by proxy at this annual general meeting.

Ordinary resolution number 2 requires the approval of a 75% majority of the votes cast by shareholders present or represented by proxy at this annual general meeting in order for this ordinary resolution to become effective.

The directors consider it advantageous to renew these authorities to enable the company to take advantage of any business opportunity that may arise in future.

   
6.
FEES OF NON-EXECUTIVE DIRECTORS
 

Shareholders are requested to approve the proposed fees payable to the company’s non-executive directors with effect from 1 September 2009.

This resolution is recommended by the company’s board of directors. Full particulars of all fees for the past year as well as the process followed by the remuneration committee in recommending board fees are contained on pages 112 to 121 of this report.

Furthermore shareholders are referred to the announcement published by Altron on SENS on 3 March 2009 advising that with effect from 1 March 2009 Dr WP Venter’s role and responsibilities at Altron would change from being a full-time chairman to a non-executive chairman.

Pursuant thereto, Dr WP Venter has waived a portion of his remuneration which he earned as a full-time chairman in order to align his fee with market norms.

Altron’s remuneration committee is satisfied that having engaged external remuneration consultants to review Dr WP Venter’s fee relative to the market, and having regard to the number of boards within the Altron group on which Dr WP Venter will serve as either a chairman or non-executive director, that his proposed annual fee is consistent with the fees paid to chairmen of other public listed companies in South Africa.