| Home |
| Overview |
| Commentary |
| Financials |
| Shareholders' Info |
 |
Directors' Report
for the year ended 30 June 2006
DIRECTORS’ RESPONSIBILITIESThe directors acknowledge responsibility for the integrity and objectivity of the annual financial statements, and all other information contained therein. In declaring this responsibility, the group maintains suitable internal control systems to provide reasonable assurance that all assets are safeguarded and that transactions are executed and recorded in accordance with group policies. The directors, supported by the audit committee, are satisfied that the controls, systems and procedures in place minimise the possibility of material loss or misstatement. The directors are responsible for the systems of internal control. These are designed to provide reasonable, but not absolute, assurance as to the reliability of the 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 maintained 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 and systems has occurred during the year under review.
The NATURE OF BUSINESSPrimedia is a leading South African media group whose vision is to become a world-class media company. The group has an established portfolio of businesses that cover advertising, content and one to one marketing. These businesses have leading positions in the markets in which they operate. Primedia’s advertising businesses are located principally in South Africa and its broad base of assets spans both the traditional and non-traditional media sectors. This mix strategically positions Primedia well, as advertisers attempt to reach an increasingly fragmented and diverse audience. The businesses enjoy a high degree of exclusivity, derived from regulated rights to various delivery platforms, which contributes to their attractive operating margins. The group’s content businesses, also principally located in South Africa, comprise cinema exhibition, film distribution, video and DVD distribution, and electronic games distribution as well as mobile content. The group launched Primedia Unlimited in 2004, which houses advertising and content businesses, in high growth sectors in which Primedia previously did not operate. GROUP RESULTS AND REVIEW OF OPERATIONSThe results for the year ended 30 June 2006 are reflected in the attached annual financial statements. The review of the group’s businesses and operations for the year ended 30 June 2006 is contained in the reports set out here. SUBSIDIARIESDetails of the company's direct interests in subsidiaries and jointly controlled entities are set out in Annexure 2 to the financial statements. SHARE CAPITALPrimedia Limited is funded by means of ordinary shares, N ordinary shares and non-redeemable, cumulative, non-participating preference shares, the summarised terms of which are detailed below:
At a general meeting held on 4 May 2006, shareholders approved the creation of 5 000 000 non-redeemable, cumulative, non-participating preference shares (“the preference shares”) with a par value of 0,02 cent each. 1 500 000 of these shares were issued through a private placement on 16 May 2006 at R100 per share. The preference shares have a coupon of 75% of the average daily prime lending rate, and if declared, preference shareholders are entitled to a preference dividend which is payable on 31 March and 30 September each year. The funds raised through the issue of the preference shares were used as part of the general capital management programme. As a result, the company’s authorised share capital had changed during the year through the creation of the preference shares. The following changes to the company’s issued share capital took place during the year under review:
Details of the authorised and issued share capital are included in note 19 to the annual financial statements and in the statement of changes in shareholders' equity. The unissued shares are under the control of the directors until the next annual general meeting, subject to the provisions of Section 221 and 222 of the Companies Act and the requirements of the JSE. DISCLOSURE RELATING TO DIRECTORSThe requisite disclosure relating to the interests of directors in options and shares of the company, as well as directors' remuneration, are detailed in note 37 and Annexure 4 to the annual financial statements. DISTRIBUTIONS TO SHAREHOLDERSAn interim distribution out of share premium of 40,0 cents per share (2005: 22,0 cents per share), in lieu of dividends, was declared on 27 February 2006, awarded to ordinary and N ordinary shareholders recorded in the register of the company on 28 April 2006 and paid on 2 May 2006. A final distribution out of share premium of 45,0 cents per share (2005: 34,0 cents per share), in lieu of dividends, was declared on 1 September 2006, to be awarded to ordinary and N ordinary shareholders recorded in the register of the company on 27 October 2006 and to be paid on 30 October 2006. In accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets, the distribution will be accounted for in the 2007 financial year. DIVIDEND TO PREFERENCE SHAREHOLDERSThe first dividend of 317 cents per share payable to the holders of non-redeemable, cumulative, non-participating preference shares was declared on 1 September 2006, and was payable to shareholders recorded in the register of the company on 29 September 2006 and paid on 2 October 2006. SHARE OPTION SCHEMEThe rationale for the share option scheme, together with the rights and options over allocated ordinary and N ordinary shares outstanding at 30 June 2006 and a reconciliation of the movement for the year then ended, is fully detailed in note 38 to the annual financial statements. EVENTS SUBSEQUENT TO FINANCIAL YEAR-ENDFull details in respect of material events subsequent to financial year-end have been included in note 39 to the annual financial statements. SPECIAL RESOLUTIONSSpecial resolutions which have been adopted by the company or its subsidiaries since the date of the last annual general meeting are detailed in Annexure 2 to the annual financial statements. GOING CONCERNThe directors are of the opinion that the group will be a going concern in the year ahead. In reaching this opinion, the directors considered the following factors:
DIRECTORATEThe current directorate of the company is shown in here. During the year under review, the following changes to the board of directors took place:
In accordance with the company's articles of association, NJM Canca, I Kirsh, AP Nkuna, K Pillay and CS Seabrooke retire by rotation at the annual general meeting and, being eligible, offer themselves for re-election at the forthcoming annual general meeting. In terms of the company’s articles of association, newly appointed directors are required to be elected at the next annual general meeting, MN Lekota, being eligible, offers herself for election at the forthcoming annual general meeting. ACQUISITIONSDetails of the group’s acquisitions during the period under review are given in note 30 to the annual financial statements. COMPANY SECRETARYThe company secretary is SE Sather. His business and postal address are: 6th Floor, Primedia House, 5 Gwen Lane, Sandown, Sandton 2196 and PO Box 652110, Benmore 2010.
|
financial statements