Report of the directors
   
  The directors have pleasure in presenting the annual financial statements for Kumba Resources Limited (“Kumba”) and the group for the 18-months ended 31 December 2004.
   
  CHANGE OF YEAR-END
  The group changed its year-end from 30 June to 31 December to be in line with the year-end of its majority shareholder, Anglo American plc and is consequently reporting on an 18-month period.
   
  NATURE OF BUSINESS
  Kumba, incorporated in South Africa, is a mining group of companies focusing on extracting and processing a range of minerals and metals including iron ore, coal, heavy minerals, base metals and selected industrial minerals.
   
  CORPORATE GOVERNANCE
  The board endorses the Code of Corporate Practice and Conduct as set out in the King II Report on Corporate Governance and has satisfied itself that Kumba has complied throughout the period in all material aspects with the King II Code. To view a detailed report click here.
   
  REGISTRATION DETAILS
  Kumba is a listed company on the JSE Securities Exchange South Africa. The company registration number is 2000/011076/06. The registered office is Roger Dyason Road, Pretoria West, Republic of South Africa, 0183.
   
  ACTIVITIES AND FINANCIAL RESULTS
  Detailed reports on the activities and performance of the group and the various divisions of the group are contained in the financial review in the website and to view the business operations review click here. These reports are unaudited.
   
  PROPERTY, PLANT AND EQUIPMENT
  Capital expenditure for the period amounted to R1 396 million (30 June 2003: R1 386 million).
   
  SHAREHOLDERS’ RESOLUTIONS
  At the third annual general meeting of shareholders, held on 19 November 2003, the following resolutions were passed:
 
– resolution to authorise the directors to allot and issue unissued ordinary shares required to be allotted pursuant to the share incentive scheme;
– resolution to authorise directors to issue unissued shares for cash; and
– resolution to authorise Kumba to acquire its own shares.
   
  Kumba and its subsidiaries have passed no other special or ordinary shareholders’ resolutions of material interest or of substantive nature.
   
  SHARE CAPITAL
  The total number of shares in issue increased during the period to 301 854 211. The increase can be summarised as follows:
 
 
Number
 
Date of issue
of shares
Opening balance
    
296 962 801
Issued in terms of the
Management Share Option Scheme
due to options exercised at prices
ranging from R13,18 to R36,10
19 November 2003
4 891 410
     
     
301 854 211
 
   
  SHAREHOLDERS
  An analysis of shareholders and shareholdings appears in the annual report.
   
  DIVIDEND PAYMENT
  Dividend number two
  Kumba paid a final dividend of R177 million on 29 September 2003 for the year ended June 2003. The STC amounted to R22 million.
   
  Dividend number three and four
  On 29 March 2004 and 13 September 2004 the company paid interim dividends of R60 million and R105 million respectively, the STC amounted to R8 million and
R13 million.
   
  Dividend number five
  Final dividend number 5 of 90 cents per share has been declared in South African currency in respect of the period ended 31 December 2004. The dividend will be paid on Monday, 14 March 2005 to shareholders recorded in the books of the company at the close of business on 11 March 2005. To comply with the requirements of STRATE the last day to trade cum dividend will be Friday, 4 March 2005. The shares commence trading ex dividend on Monday, 7 March 2005 and the record date is Friday, 11 March 2005.
   
  INVESTMENTS AND SUBSIDIARIES
  The financial information in respect of investments and interests in subsidiaries of the company is disclosed in annexures 2 and 3 to the financial statements.
   
  Kumba announced on 28 July 2003 that it has disposed of its stake in Australian nickel miner Mincor Resources NL on 25 July 2003. The shares were sold for R103 million (A$21 million) to a range of Australian and overseas financial institutions. The profit on the disposal has been reflected in the 2004 financial year.
   
  Kumba disposed of its interest in two bulk ore carriers with a carrying value of R27 million in September 2003 for a purchase consideration of R73 million. The carrying value of R27 million is post a R90 million impairment accounted for in the 2002 financial year. The financial result of the disposal has been adequately disclosed in the 2004 financial year (refer to note 8).
   
  The investment in Chifeng Kumba Hongye Zinc Corporation Limited was reclassified from a subsidiary to a joint venture arrangement and is consequently equity accounted.
   
  CHANGE IN ACCOUNTING POLICIES
  The accounting policies are consistent with those applied in the annual financial statements for the year ended 30 June 2003 except for the consolidation of the Management Share Trust, and biological assets (refer note 1 of the annual financial statements).
   
  SUBSEQUENT EVENTS
  The directors are not aware of any matter or circumstance arising since the end of the financial period, not otherwise dealt with in this report or in the group financial statements that would significantly affect the operations or the results of the group.
   
  DIRECTORATE AND SHAREHOLDINGS
  The names of the directors in office at the date of this report are set out in this website.
   
  During the period under review, the following directors were appointed:
 
PM Baum 17 February 2004
WA Nairn 17 February 2004
PL Zim 17 February 2004
   
  Mrs MLD Marole was re-elected as chairman of the board with effect from 1 November 2004.
   
  The following directors are required to retire by rotation in terms of clause 16.1 of the articles of association at the forthcoming annual general meeting:
TL de Beer
JJ Geldenhuys
Dr D Konar
   
  At the forthcoming annual general meeting the directors mentioned above will retire and, being eligible, will offer themselves for re-election.
   
  COMPANY SECRETARY
  The company secretary is Marie Viljoen. The company secretary’s registered address is:
 
Roger Dyason Road, PO Box 9229
Pretoria West Pretoria,
0183, 0001,
Republic of South Africa Republic of South Africa
   
  INDEPENDENT AUDITORS
  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 to replace KPMG Inc. subsequent to their review of Kumba’s interim results for the period ended 31 December 2003.
   
  Deloitte & Touche will continue in office in accordance with section 270(2) of the Companies Act, 1973, of South Africa.
   
 
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