Kumba Annual Report 2004

Notice of annual general meeting

Notice is hereby given that the fourth annual general meeting of members of Kumba Resources Limited will be held at the Corporate Office, Dyason Road, Pretoria West, South Africa, at 14:00 on Friday, 15 April 2005.

The following business will be transacted and resolutions proposed, with or without modification:

ORDINARY RESOLUTION NUMBER 1
Approval of financial statements
To receive and adopt the annual financial statements of the group for the period ended 31 December 2004, including the directors’ report and the report of the auditors thereon.

ORDINARY RESOLUTION NUMBER 2
Re-appointment of independent auditors
To ratify the re-appointment of Deloitte & Touche as auditors of the company for the ensuing year.

ORDINARY RESOLUTION NUMBER 3
Auditors’ fees
To authorise the directors to determine the auditors’ remuneration for the period ended 31 December 2004.

ORDINARY RESOLUTION NUMBER 4
Re-election of directors
To re-elect the following directors appointed to the board since the last annual general meeting:

4.1

PM Baum

4.2

WA Nairn

4.3

PL Zim

To re-elect the following directors who retire by rotation in terms of the articles of association of the company:

4.4

TL de Beer

4.5

JJ Geldenhuys

4.6

Dr D Konar

Such re-elections are to be voted on individually unless a resolution is agreed to by the meeting (without any vote against it) that a single resolution be used.

An abbreviated curriculum vitae in respect of each director offering themselves for re-election is set out in this annual report.

ORDINARY RESOLUTION NUMBER 5

Remuneration of non-executive directors

To approve the proposed remuneration for the period

1 January 2005 to 31 December 2005:

Chairman:	R267 500
Director:	R133 750
Audit committee chairman:	R85 600
Audit committee member:	R42 800
Board committee chairman:	R64 200
Board committee member:	R32 100

ORDINARY RESOLUTION NUMBER 6

Renewal of the authority that the unissued shares be placed under the control of the directors
“Resolved that subject to the provisions of the Companies Act, 61 of 1973, as amended (the Act), and the Listing Requirements of the JSE Securities Exchange South Africa (JSE), the directors are hereby authorised to allot and issue at their discretion until the next annual general meeting of the company, authorised but unissued shares for such purposes as they may determine, after setting aside so many shares as may be required to be allotted and issued by the company pursuant to the company’s approved employee share incentive schemes (the schemes).”

ORDINARY RESOLUTION NUMBER 7

General authority to issue shares for cash
“Resolved that pursuant to the articles of association of the company and subject to the Act, and the Listings Requirements of the JSE, the directors are hereby authorised, by way of a general authority, to allot and issue ordinary shares for cash on the following basis, after setting aside so many shares as may be required to be allotted and issued by the company pursuant to the schemes, without restrictions to any public shareholder, as defined by the Listings Requirements of the JSE, as and when suitable opportunities arise, subject to the following conditions:

7.1

this authority shall not extend beyond the next annual general meeting or fifteen months from the date of this annual general meeting, whichever date is earlier;

7.2

a press announcement giving full details, including the impact on net asset value and earnings per share, be published at the time of any issue representing, on a cumulative basis within one year, 5% or more of the number of shares in issue prior to the issue/s;

7.3

the shares be issued to public shareholders as defined by the JSE and not to related parties;

7.4

any issue in the aggregate in any one year shall not exceed 15% of the number of shares of the company’s issued ordinary share capital; and

7.5

in determining the price at which an issue of shares be made in terms of this authority, the maximum discount permitted will be 10% of the weighted average traded price of the shares over the thirty days prior to the date that the price of the issue is determined or agreed to by the directors. In the event that shares have not traded in the said thirty day period a ruling will be obtained from the committee of the JSE.”

The approval of a 75% majority of the votes cast by shareholders present or represented by proxy at the meeting is required for ordinary resolution number 7 to become effective.

ORDINARY RESOLUTION NUMBER 8

“Resolved that:

8.1

The company adopts and approves the Kumba Resources Long-Term Incentive Plan 2005, as contained in the plan rules for the Long-Term Incentive Plan 2005, a copy of which was laid before the meeting;

8.2

The company adopts and approves the Kumba Resources Deferred Bonus Plan 2005, as contained in the plan rules for the Deferred Bonus Plan 2005, a copy of which was laid before the meeting;

8.3

The company authorises the board of directors to do all things necessary and incidental to the implementation of the above resolution, including the signature of the plan rules referred to in 8.1 and 8.2 above, and all related or ancillary documents, on behalf of the company.”

The documents setting out the full rules of the respective schemes will be available for inspection during normal business hours at the registered office of the company from 24 March 2005 to 15 April 2005.

The reasons for and effects of the ordinary resolutions are set out in the explanatory notes that form part of this notice.

SPECIAL RESOLUTION NUMBER 1

Authority to repurchase shares
“Resolved that by way of a general authority, the company or any subsidiary of the company may, subject to the Act, the articles of association of the company or subsidiary respectively and the Listings Requirements of the JSE, from time to time purchase shares issued by itself or shares in its holding company, as and when deemed appropriate.”

Pursuant to the above, the following additional information, required in terms of the Listings Requirements of the JSE, is submitted.

It is recorded that the general repurchase will be subject to the following limitations:

9.1

that the repurchase is effected through the order book operated by the JSE trading system and is done without any prior understanding or arrangement between the company and the counterparty;

9.2

that this authority shall not extend beyond 15 months from the date of this resolution or the date of the next annual general meeting, whichever is the earlier date;

9.3

that an announcement containing full details of such repurchases is published as soon as the company has repurchased shares constituting, on a cumulative basis, 3% of the number of shares in issue prior to the repurchases and for each 3%, on a cumulative basis, thereafter;

9.4

that the repurchase of shares shall not, in the aggregate, in any one financial year, exceed 20% of the company’s issued share capital at the time this authority is given;

9.5

that at any one time, the company may only appoint one agent to effect any repurchase;

9.6

that the repurchase of shares will not take place during a prohibited period and will not affect compliance with the shareholders’ spread requirements as laid down by the JSE;

9.7

shares issued by the company may not be acquired at a price greater than 10% above the weighted average traded price of the company’s shares for the five business days immediately preceding the date of repurchase.

The reason for this special resolution is, and the effect thereof will be to grant, in terms of the provisions of the Act and the Listings Requirements of the JSE, and subject to the terms and conditions embodied in the said special resolution, a general authority to the directors to approve the repurchase by the company of its own shares.

At the present time the directors have no specific intention with regard to the utilisation of this authority, which will only be used if the circumstances are appropriate.

10.

To transact such other business as may be transacted at an annual general meeting.

DISCLOSURES REQUIRED IN TERMS OF THE LISTINGS REQUIREMENTS OF THE JSE

In terms of the Listings Requirements of the JSE, the following disclosures are required when requiring shareholders’ approval to:

•

authorise the company, or any of its subsidiaries, to repurchase any of its shares as set out in the special resolution above; and

•

the general authority to issue shares for cash as set out in ordinary resolution number 7.

Working capital statement

The directors of the company agree that they will not undertake any repurchase unless:

•

the company and the group will be able, in the ordinary course of business, to pay its debts;

•

the assets of the company and the group will be in excess of the liabilities of the company and the group, recognised and measured in accordance with the accounting policies used in the latest annual financial statements;

•

the share capital and reserves of the company and the group will be adequate for ordinary business purposes; and

•

the working capital resources of the company and the group will be adequate for ordinary business purposes.

Litigation statement
Other than disclosed or accounted for in these annual financial statements, the directors of the company, whose names are given in these annual financial statements, are not aware of any legal or arbitration proceedings, pending or threatened against the group, which may have or have had a material effect on the group’s financial position in the 18 months preceding the date of this notice of annual general meeting.

Material changes
Other than the facts and developments reported on in these annual financial statements, there have been no material changes in the affairs, financial or trading position of the group since the signature date of this annual report and the posting date thereof.

The following further disclosures required in terms of the Listings Requirements of the JSE are set out in accordance with the reference pages in these annual financial statements of which this notice forms part:

•

Directors and management;

•

Major shareholders of the company;

•

Directors’ interest in the company’s shares;

•

Share capital of the company

By order of the board

MS Viljoen
Company secretary

Pretoria
23 March 2005

EXPLANATORY NOTES TO RESOLUTIONS FOR CONSIDERATION AT THE ANNUAL GENERAL MEETING

Ordinary business
Resolution 1: Approval of financial statements

The directors must present to shareholders at the annual general meeting the annual financial statements incorporating the directors’ report and the report of the auditors, for the period ended 31 December 2004. These are contained within the annual report.

Resolution 2: Re-appointment of independent auditors
The reason for proposing ordinary resolution number 2 is to confirm the appointment of Deloitte & Touche as external auditors of the company. Anglo American plc acquired a controlling interest in Kumba during December 2003. In line with current practice of appointing a single service provider for the statutory auditing of corporate groups, Kumba appointed Deloitte & Touche as its statutory auditors from 16 February 2004 in place of KPMG Inc.

Resolution 3: Auditors’ fees
It is usual for this matter to be left to the directors, as they will be conversant with the amount of work that was involved in the audit. The chairman will therefore move a resolution to this effect authorising the directors to attend to this matter.

Resolution 4: Re-election of directors
Under the 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 fill a casual vacancy on the board of directors, or as an addition thereto, is similarly required to retire and is eligible for re-election at the next annual general meeting. Biographical details of the directors, who are offering themselves for re-election, appear here.

Resolution 5: Remuneration of non-executive directors
The company in general meeting as per the articles of association shall from time to time determine the remuneration of directors, subject to shareholders’ approval.

Resolutions 6 and 7: Directors’ control of unissued ordinary shares
The existing authorities relating to resolutions 6 and 7 are due to expire at the forthcoming annual general meeting. The directors consider it advantageous to renew these authorities to enable the company to take advantage of business opportunities, which might arise in the future.

Resolution 8: Adoption and approval of new share incentive schemes
Recent developments in taxation legislation, accounting standards and best practice in local and global share schemes have required a review of the company’s existing share option scheme.

In line with global best practice, and emerging South African practice, the HR and Rem committee recommends adoption of a Long-Term Incentive Plan, and a Deferred Bonus Plan. The recommended schemes are in line with practice in FTSE 100 and FTSE 500 companies in the UK and with several recently adopted schemes for large JSE listed or dual listed companies.

SPECIAL BUSINESS
Special resolution 1:
General authority to permit the repurchase of shares

The reason for the special resolution is to grant the directors of the company a general authority for the acquisition of the company’s shares by the company, or a subsidiary of the company.

The effect of the special resolution, once registered, will be to permit the company or any of its subsidiaries to repurchase such securities subject to the limitations applicable. This authority will only be used if circumstances are appropriate.