Document YDNoqqJ441ymEyR19yZ7aoxN0

FILE NAME Cape Asbestos CAPE DATE 1979 Mar 31 DOC CAPE181 DOCUMENT DESCRIPTION Consolidated Profit and Loss Account Legal Tibbs Case Exhibit 79 * Income frominvestments investments 1 investments Surplus on realizations Interest receivable a . . Trading profit of industrial subsidiaries 2 note ae cela 1979 000 | 19.517 ats 11,990 Deduct Administration and technical expenditure note 2 Prospecting expenditure / Interest payable nate 3 ra compacniesompaniens ote losses : Profit before taxation : Taxation ( note 6 taxation 7 Profit after and before extraordinary items me ye Deduct Interest outside shareholdersin profits of subsidiaries Attributable to Charter Earnings per share 21.93p 1978 24,26p note 15 Dividends paid and proposed note 7 Nsretained : Profit for the year retained before extraordinary items Deduct Extraordinary items note 8 26,582 ao 3,591 22,991 9,043 7 oT 13,948 5,682 Retained profit transferred to reserves 1978 - deficiu . 8.266 Profit for the year after extraordinary items totalled 17,309,000 17,309,000 1978 - 3,774,000 Movements on reserves Reserves at 31 March 1978 Retained profit for the year 1978 - delicit Surplus on revaluation of a subsidiary's Discount on purchases of shares of subsidiary companies 1978 - premium freehold property Disposals of shareholdingsin subsidiary and associated companies Reserves at 31 March 1979 note 16 150,467 8,266 983 94 > 159,810 The accounting policies on pages 18 and and the notes on pages 23 to 31 form part of these accounts The report the auditorsis on page 17 Consolidated Balance Sheet 31 March 1979 CHARTER CONSOLIDATED LIMITED ITS SUBSIDIARY COMPANIES Fixed assets rot^'9 . : Exploration and development expenditure = Investments Gote . Market or directors valuation 282,239,000 1978 262,858,000 : : . : Current assets | Stocks and work in progress note 11 7 Debtors Short term loans and deposits . Bank and cash balances : : 1979 000 000 . 74,905 2 Se ie 722 158,306 : : 18.550 1,800 158,243 Current liabilities an oe Associated companies and other deposit accounts |e : overdrafts Bank loans and secured - 1,358,000 : oa 3,115,000 ee Creditors note 12 6g oe Taxation Jes . i nnn bods Proposed final dividend 5.938 ere PST 24,301 63.700 2 5,863 ' 5,871 105,763 Net current assets : Deferrer taxation note 6 52,480 10.880 296,693 Financed by Share capital note 13 Share premium account note 17 Reserves note 16 Total capital and reserves Capital expenditure grants : Interest of outside shareholders in subsidiaries Long term indebtednneostse 14 26,215 30.695 6: 159,810 216.720 2,560 20,736 : 56.677 296,693 HOFMEYR W. PAIN } Directors a The accounting policies on pages 18 and 19 and the notes on pages 23 to 31 form part of these accounts The report of the auditors is on page 17. 26,212 30.683 Balance Sheet 31 March 1979 CHARTER CONSOLIDATED LIMITED Subsidiary companies Shares cost or valuation Add . 7 Amounts due from subsidiaries Deduct Amounts due to subsidiaries Current assets Bank balances Deferred asset ~ Advance corporation tax note 6 1979 000 000 93,779 56,514 N 2,516 Financed by Share capital note 13 Share premium account note 17 " Reserves note 16 Total capital and reserves Long term indebtedness note 14 Current liabilities Creditors Taxation Proposed final dividend M. HOFMEYR - W. PAIN 26.215 18,702 4,626 49,543 2.337 18.699 2.339 313 _ 968 5,371 7,152 1.176 5,532 en 59,032 6,982 ah SM? Directors The accounting policies on pages 18 and 19 and the notes on pages pages 23 to form part of these accounts The report of the auditors is onpage 17 Source and Application of Funds Year ended 31 March 1979 CHARTER CONSOLIDATED LIMITED AND ITS SUBSIDIARY COMPANIES : : 1979 SOURCE OF FUNDS 000 : 000 Profit before taxation 44.547 Extraordinary items before interest of outside shareholders and adjusted for taxation relief of 16,162,000 1978 - 907,000 Adjustments for items not involving movements of funds Depreciation Provisions against mining projects investments Provisions for industrial disease and closure of operations > Provisions against guaranteed leaansd i leansigng financing commitments : Effect of currency translation on loans investments and Exed assets : wy Share of losses less retained profits of associated companies Funds generated Disposal fixed assets increase in long term indebtedness - govie n gr ovn ernm mene t gn rat nts oe Soe ee 59,867 S807) APPLICATION OF FUNDS Purchases of fixed assets Investments see note i below Goodwill on acquisition of subsidiaries Taxation paid increase in working capital and other items see note ii below Dividends paid Increase in liquid tunds see note iii below NOTES Investments Long term - purchases book value of realizations : 1979 000 8.868 7,127 7,127 ae vie we : Portfolio - net realizations et book value 44,563 16,111 Increase in liquid funds Increase in short term loans deposits and cash Increase in associated companies and other deposits increase increase in bank loans and 3 overdrafts 1979 900 25.378 1.441 7,826 7,826 16.111 Realizations less purchases tributed 17.159.000 17.159.000 1978 source of funds of investments con- 1.607,000 1.607,000 to the jin Analysiosf working capital capital as Increase stacks stacks and workin workin progress Increase in debtors increase in creditors Other items 1,159 10,425 +5.584 1,019 7.019 acquisition feciNet feciNet assets on acquisition of subsidiaries asFis xed ets Goodwill Stocks Debtors Creditors Taxation Government grants Other items ae Charter Consolidated Limited _ Annual Report and Accounts For the year ended 31 March 1979 \ \e . La A ty i Contents Notice of Meeting Directorate and Administration Report of the Directors Review by the Chairman Accounts Principal Investments Subsidiary Companies Analysis of Assets and Income Ten Year Financial Record Interests of the Group WENUEW WENUEW WENUEW WENUEW WENUEW WENUEW LWWW LWWW LWWW LWWW \ Se ae - - cet a LS at Re Offices 140 Holborn Viaduct London EC1P 1Ajfregistered 1Ajfregistered Charter House Park Street Ashford 7 Kent IN24 8LQ 44 Main Street Johannesburg 2001 South Africa ' PO Box 28 Dominion Centre Toronto Ontario M5K 188 Canada 581 Little Collins Street Melbourne Victoria 3000 Australia 70 Jameson Avenue Central Salisbury C4 Zimbabwe Rhodesia 8th Floor Oriental Plaza Jalan Parry Kuala Lumpur 04-01 Malaysia 9 rue de Vienne 75008 Paris France 244 Avenida da Liberdade Lisbon 2. Portugal Registrars Charter Consolidated Services Limited PO Box 102 Charter House Park Street Ashford Kent IN24 Consolidated Share Registrars Limited 62 Marshall Street Johannesburg 2001 South Africa Anglo American Corporation of South Africa Limited 70 Jameson Avenue Central Salisbury C Zimbabwe Rndlesia Notice of Meeting _ NOTICE IS HEREBY GIVEN that the fourteenth annual general meeting of members of Charter Consolidated Limited will be held at Winchester House 100 Old Broad Street London EC2N 1BU on Friday 10 August 1979 at 12 noon for the following purposes To consider the accounts and the report of the directors for the year to 31 March 1979 To declare final dividend 3. To reappoint as a director Mr H. F. Oppenheimer who has attained the age of 70 special notice having been intention to given by the chairman of this this propose a resolution for Mr : Oppenheimer's reappointment To reappoint as directors Mr G. A. Smith Mr J. O. Hambro and Mr. M. W. Thomas 5. To appoint Mr A. Higham as a director 6. To reappoint Coopers & Lybrand and Deloitte Haskins & Sells as auditors and authorize the board to fix their remuneration A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and on poll to vote instead of him A proxy need not be a member of the company A form of proxy accompanies this notice . 40 Holborn Viaduct London EC1P TAL 17 July 1979 by ordofetr he board BOOTH secretary NOTES 1. Holders of share warrants to bearer who wish to attend in person or by proxy or to vote at the meeting must comply with the relevant conditions governing share warrants to bearer see page 48 2. Holders of loan stock are reminded that only shareholders are entitled to attend and vote at the meeting 3. To be valid the form of proxy must reach the company at Box 102 Charter House Park Street Ashford Kent TN23 2BR not less than 48 hours before the meeting 4. There are no directors service contracts required by The Stock Exchange to be made available for inspection at the meeting Chairman and Managing Director M. Hofmeyr Deputy Chairman Sir Philip Oppenheimer Directors D. Burnell G. A. Carey N. Clarke J.E. H. Collins MBF DSC H. Dent O. Hambro MC A. Howard H. Oppenheimer J.W. Owston W. Pair G.W. Relly J.G. Richardson Stopford Sackville H. Stucke W. Thomas 1. Ogilvie Thompson W. Wilson Alternate Directors R. J. Armitage A. Oppenheimer | Executive Commillee M. Hofmeyr Sir Philip Oppenheimer N. Clarke BAV Pain J. G. Richardson G. Stopford Sackville Managers R. J. Armitage P. C. Burnell F.L.A. F.L.A. Howard AW Owston Secretary D. Booth Chief Accountant H. Dawkins Chief Economist L.L. C. Smets Personnel Consultant D. McVean Public Relations Consultant H. O. Ellison Director responsible for technical services H.J. Stucke Consulting Engineers J. V. Cleasby C. Forristal A. Smith Consulting Geologist Dr.f. Dr.f. Osten Consulting Mechanical and Electrical Engineers H. Purkiss S Sheer Consulting Metallurgist Chaston Report of the Directors The directors have pleasure in submitting their fourteenth annual report with the audited accounts for year ended 31 March The group's operations during the year are dealt with by the chairman in his review on pages 7 to 16 Financial results The following are the major features of the consolidated profit and loss account Consolidated profit before laxation Deduct Taxation Interest of outside shareholders - 1979 000 44,547 44,547 | 17.965 | | 3,591 1978 000 43,087 14.387 3,265 21,556 17,652 Earnings attributable Dividends Interim of 3.025p per share paid on 3 January 1979 Recommended final of 5.6p per share payable on or about 14 August 1979 22,991 25.435 3.172 3,171 5,871 9,043 8,703 Profit for the year retained Extraordinary items 13.948 5,682 16,732 21,661 Transfer to reserves 8,266 4,929 Earnings per share after taxation and prior to extraordinary items were 21.93p compared with 24.26p in the year to 31 March 1978 The board has recommended a final dividend of 5.6p per share to make a total dividend for the year of 8.625p per share carrying a tax credit of 3.88993p per share Directorate A list of the directors of the company appears on page 4 Mr H. R. Fraser resigned from the board on 4 July 1979 The chairman has given special notice to the company of his intention to propose at the forthcoming the annual general meeting a esolution the reappointment as a director of Mr H. F. Oppenheimer who has attained the age of 70. Mr. Oppenheimer also retires by rotation in accordance with the company's articleosf association Mr G. A. Smith Mr J. O. Hambro and M. W. Thomas retire by rotation and offer themselves for reappointment Mr R. H. Dent retires by rotation but does not wish to be reappointed The directors recommend the appointmenotf Mr. G. A. Higham to the board in his place General information The book value of the group's fixed assets increased from 63,786,000 to 74,905,000 during the year Details are shown on page 27 in note 9 on the accounts Movements on re- serves are shown in the consolidated profit and loss account on page 20 In September 1978 the company issued 405 fully paid shares of 25p each against conver sion of 1,685 five per cent convertible un- secured loan stock 1984. During the year 9,500 partly paid shares issued under the company's share incentive scheme became fully paid and a further 400 have become fully paid since the end of the year these shares now rank pari passu with the other fully paid shares of the company The issued share capital stands at 26,214,691.50 in 104,847,702 fully paid shares of 25p each and 276,600 partly paid shares of 25p each 1p paid up An analysis of assets and income appears on pages 36 and 37. Other particulars which constitute part of this report are on page 47 and a list of principal subsidiary companies on pages 34 and 35 40 Holborn Viaduct London EC1P 1A by order of the board D. BOOTH secretary 4 July 1979 Review by theChairman Financial results The consolidated profit before tax for the year ended 31 March 1979 was 44.6 million compared with 43.1 million last year However higher corporation tax charges on the increased profits from realization of investments and the absence of credit for tax relief in respect of the loss of Cleveland Potash included in the results of associated companies resulted in fall earnings after tax to 23.0 million from 25.4 million equivalent to 21.93p per share compared with 24.26p last year Investment income showed decline from 21.1 million to 19.5 million mainly reflecting the special additional interim dividend received last year from Anglo Corporation of South Africa in consequence of the change in its accounting period Increases in dividend income were received from our diamond and tin mining interests but these were offset by reductions resulting mainly from investment disposals No income was received during the year from our Zambian copper interests held through Minerals and Resources Corporation Advantage was taken of the high level of investment currency premium and the strength of the gold share market during the year to make special realizations and to strengthen cash resources The holding in Blyvooruitzicht Gold Mining Company and the greater part of the holding in Harmony Gold Mining Company were sold Profits from realizations of invest- ments amounted to 12.0 million compared with 5.8 million in the previous year Interest receivable and interest payable were higher due to the increased rates but the net charge on balance was reduced this year as a result of Charter's increased cash resources The industrial subsidiaries increased their trading profits for the year to 21.2 million compared with 18.1 million last year The figures included a full year's results from our newly acquired subsidiary M.K. Refrigeration whose profits on an annualized basis were slightly lower than in the previous year Cape Industries made a further advance in earnings with very strong growth in the building and insulation division compensating for lower turnover and profit in the mining division Production problems at Heatrae prevented the advances in earn- ings that had been expected but both Elastic Rail Spike Torque Tension achieved satisfac- tory growth in profits Included in the results of associated companies was charge of million representing Charter's share of the loss of Cleveland Potash from 1 April 1978 the date of commencement of commercial production to 31 December 1978. Of this amount of 5.8 million 1.4 million represented finance charges 0.7 million depreciation and the balance of 3.7 million the operating loss for the period The share of Cleveland's loss slightly more than | offset the retained earnings of other associates which were also below the level of last year It was deemed prudent to make under extraordinary items a provision against the full book value of Charter's investment in Cleveland Potash After deduction of share of Cleve- land's loss referred to above and the appropriate tax relief and taking into account the provision made last year of 7.5 million the amount required to write off fully our investment in Cleveland at 31 March was 11.0 million In addition a provision has been made against the full amount of our liabilities under guaran- tees in respect of loan and leasing finance for Cleveland amounting to 9.2 million Overall extraordinary items give rise to a charge this year of 5.7 million The greater part of our holding in Union Corporation was sold during the year and this together with some minor items led to a profit after tax of 6.0 million on the sale of long term invest- ments A credit of 12.6 million for tax relief arose in respect of the loss on Soci^'t^M'ini^re de Fungurume previously written off and the appreciation of sterling caused a deficit of 4.5 million on the conversion of foreign currency assets and liabilities In the circumstances the board feels that any increase in dividend this year apart from adjusting for the lower rate of imputed tax credit and rounding off would not be appropriate At 31 March 1979 the value of Charter's net assets adjusted for market and directors valuation of investments was 340.6 million equivalent to 325p per share compared with 287.6 million equivalent to 274p per share at 31 March 1978 Mining CLEVELAND POTASH . - As reported last year the Cleveland Potash mine has faced series of formidable problems since the first potash was recovered from underground development 1973. These have stemmed mainly from the complex orebody and from problems arising from the difficulty in establishing a stable labour force in an area with no mining tradition The mine was designed to produce and hoist by 1977 approximately 2.5 million tonnes of ore per annum from which the plant would produce one million tonnes of : : potash . These problems limited production in 1977 to 800,000 tonnes of ore from which only 135,000 tonnes of potash were produced Performance in 1978 after an encouraging start deteriorated and potash production for the year was 249,000 tonnes By the end of 1978 the project had absorbed 117.3 million of which the partners had provided 76.4 million third party loans and overdraft amounted to 25 million goverriment grants were 11.5 million and 4.4 million represented leased assets Charter's investment amounted to 22.0 million after writing off 7.5 million in 1978 and in addition it had furnished guarantees for an amount of 9.2 million The mine forecast for 1979 presented to the partners in January of this year was for production of 534,000 tonnes of potash from 1.7 million tonnes ofore The forecast projected an increase in monthly production from just under 30,000 tonnes at the beginning of the year to a monthly rate of some 55,000 tonnes by the end of the year which reflected break on operating costs The forecast indicated that Cleveland Potash would require up to 14 million to be contributed by the partners during the year In these circumstances the partners jointly voted 8 million to the project of which Charter's share is million with the intention of reviewing the project in the middle of the : year In the first half of the year 750,000 of tonnes ore were hoisted and 212,000 tonnes of potash produced which is within three cent of target Although this represents considerable improvement on the performance in 1978 it ' has not proved possible to produce in one month more than 41,000 tonnes of potash which is significantly lower than was expected by the end of June The company's estimated los for the six months ended 30 June 1979 is million of which 4.7 million attributed to an operating deficit and the balance to depreciation and financial charges on external loans Funds voted the project will meet requirements until the end of August before which time the futuroef the project will be reviewed by the partners MALAYSIA Malaysia Mining Corporation MMC which Charter has a 28.6 per cent interest is established as the world's major tin mining invest ment company Its tin interests are concentrated in Malaysia but it also has investments in Thailand and Nigeria In addition MMC has a significant interest in the Ashton venture which has made some diamond discoveries in north- west Australia MMC's consolidated pre profit for the year ended 31 January 1979 of 52.9 million compares favourably with the 48.5 million earned in the previous year The tin mining companies which comprise the bulk of the MMC group interest produced a total of 24,500 tonnes of tin concentrate in 1978 compared with 24,977 tonnes in 1977 Although output has declined during the year the increased tin price ensured that the group's satisfactory profit levels were maintained The average London Metal Exchange cash price for tin during 1978 was 46706 per tonne as against 6,181 per tonne in 1977 The world production of tin increased marginally during 1978 but until significant new orebodies are discovered and developtehids cannot be regarded as a long term trend The supply of tin is roughly matched at present by consumer demand at prices which enhance the profitability of MMC's mining operation Consequently satisfactory results are expected for the coming year During 1978 MMC discontinued the traditional method of direct selling of tin concentrate out- put to the smeltingcompanices ompanies and has in con- junction with international marketing agents undertaken the world marketing of the group's tin output which is an important new facet to MMC's growing expertise The prolonged negotiations for the develop- ment of the important tin discovery in south Selangor continued throughout the year and it now seems possible that agreement can reached to activate this project With the in- creasing world demand for tin is important that this project should proceed as soon as possible . During this year it intended that MMC should Singapore Lumpur seek a public quotation on the Kuala and stockexchanges TUNGURUME In the light of the very high capital costs involved and the prevailing political and economic conditions it is not anticipated that it will be possible to bring to fruition the rich copper deposits at Fungurume in the near future and the project continues on a caretaker basis Standard Oil of Indiana has disposed of its shareholding in Soci^'t^M'ini^re de Fungurume which has been taken largely by the French organization Bureau de Recherches G^'ologiqueset Mini^resConsideration continues to be given to ways and means of turning the ore reserves to account BERALT AND ANGLADE The year 1978 was particularly active for Beralt Tin and Wolfram and the results achieved can be considered satisfactory although not up to the record levels of the previous year Consolidated profit before tax was 3.5 million compared with 4.6 million in 1977 and after taking taxation and minority interests into account profit attributable to Beralt amounted to 2,1 million equivalent to 18.5p per share compared with 2.8 million equivalent to 24.8p per share in 1977. The escudo depreciated against sterling over the year by 19 per cent and as a result the profit and loss account has been charged with an exchange loss of 1.0 million Beralt's Portuguese operating company increased its production at the Panasqueira mine for the first time in four years with an output of concentrates amounting to 1,450 tonnes of wolfram 1,101 tonnes of copper and 62 tonnes of tin compared with 1,267 1,176 and 58 tonnes respectively in 1977. However the average London Metal Bulletin quotatifoonr wolfram during the year was 147.15 per metric ton unit compared with 174.76 per metric ton unit in 1977. The lower price wolfram more than offset Beralt's increased pro- duction and volume of sales during the period and was the principal reason for the year's ~ operating profit falling below the record levels of 1977. The underground mechanizatiproon- gramme which is aimed at increasing produc- tion and improving working conditions at Pana- squeira is continuing and work on new inclined shaft system which should be com- progressing missioned early in 1981 is factorily satis- Beralt acquired in December 1978 a 64.8 per cent interest in Minas da Borralha which operates a wolfram mine in north Portugal and treats the concentrate on site to produce ferro- tungsten While it has not had a significant effect on Beralt's results for 1978 sales in the early part of 1979 have so far been satisfactory The results of Soci^'t^'Mini^re d'Anglade in which Charter has a 25 per cent interest were also affected by the fall in the tungsten price in 1978 and a drop in sales revenue of FF9.0 million was reported The company made a net profit of FF6.0 million compared with FF4.4 million in 1977 and declared FF4.5 million in dividends Production of 652 tonnes of WO in concentrate was slightly lower than in 1977 Exploration work which I reported on in last year's review has resulted in the blocking out of additional reserves which will extend the life of the mine by six years Anglade is also engaged in the final stage of an evaluation of an open scheelite project near Toulouse BOTSWANA RST LIMITED Charter has interests in BCL Limited which owns and operates the Phikwe nickel copper mine in Botswana and in Botswana RST which holds 85 per cent of the ordinary share capital of BCL Production of copper matte by BCL in 1978 totalled 39,517 tonnes which is 94 per Ae emce teens bov^ kova's cent of design capacity compared with 30,772 tonnes produced in 1977. Despite continued depressed metal prices BCL achieved an operating profit P2.0 million compared with a loss of P5.9 million in 1977 but after deduction of loan interest payable and other expenditure the loss was P24.7 million compared with a loss of P31.6 millionin 1977 equivalent to 29.6 million and 38.0 million respectively at the rate of exchange rulingat 31 December 1978 Charter has provided funds during year - following the commitments contracted under terms of the restructuring arrangements negotiated in March 1978 in addition to the project phase commitment to provide funds for completion of of the The level of working costs was well controlled in a year when inflation continued to have a marked effect on costs However even though production increased sales revenue was almost the same as in 1977 as a result of lower overall metal prices Since the end of the year metal prices have improved and steps have been taken to benefit from the substantial rise in the price of cobalt by increasing production of cobalt at BCL as far as is practicable If metal prices remain at their current levels it is expected that BCL will continue to achieve an operating profit TARA Charter has 10.6 per cent interest in Tara Exploration and Development Company which holds 75 per cent of Tara Mines which owns and operates a lead mine at Navan in the Republic of Ireland Commercial production at Navan commenced on 1 January 1978. In the year to 31 December 1978 1,381,140 tonnes of ore were milled to produce 237,877 tonnes of zinc concentrates and 41,801 tonnes of lead concentrates The company is giving priority to increasing mine production to design capacity of 2.3 million tonnes of ore per annum In 1973 partly as a result of weak metal prices Tara Exploration made a loss of 10.7 million 1.66 per share and was obliged to renegotiate the terms of its financing with the main lenders The revised terms provide for a delayed repayment schedule and for increased facilities guaranteed by the principal share- Sy holders available meet operating short- Se repayments falls and in certain circumstances of principal of bank loans : OS OSE Prices of zinc and lead have improved over the past year and this together withincreasing pro- duction should to satisfactory operating profits during 1979 as : EXPLORATION Charter has maintained exploration pro- gramines for ferrous metals in Spain France Ireland and the United Kingdom Spain and Ireland emphasis has been on tungsten and number of ore grade inter- -sections have been made near Segovia in Spain and these will be followed up with further drilling this year In the United Kingdom we are searching for uranium in a joint venture with the French company Minatome with the aid of a grant from the European Economic Community Outside Europe Charter main- tained its interest in the Anglo American Cor- poration group exploration programmes in Australia and Brazil a : a In the North Sea detailed geophysical work has been undertaken on our fifth round licence covering blocks 14/16 and 14/17 and an initial exploration well is now under consideration The British National Oil Corporation is operator for this licence and Charter's interest is % per cent A thorough reappraisal of our fourth round licence covering block 210/19 in which Charter has a 25 per cent interest is being made in the light of discoveries in neighbouring blocks Charter made no application in the xth licensing round Vy te Incastrial Incastrial subsidiaries Incastrial subsidiaries Group turnover in CAPE INDUSTRIES amounted to 180 million in 1978 compared with 155 million in 1977. Net profit before tax and extraordinary items rose to 12.7 million compared with 11.9 million in the previous year The world reduction in demand for asbes- tos fibre has continued resulting in a decline in turnover and profit from Cape's mining division which ran at a lower level of productithoann in 1977. The increase in group profits though Ay modest can be attributed to the strong growth and profit of the building and insulation division - On 29 June 1979 Cape's South African mining companies were sold to Transvaal Consolidated Land and Exploration Company The sale comes at a time when Cape is diversifying away from the manufacture of asbestos related products. and ne net sterling proceeds of 15.1 million will used to finance the group's expansion in other areas of its business The automotive engineering division: was prevented from maintaining .the lower im- provement achieved in recent years by lower sales than anticipated the home replace- ment and original equipment markets All sections of the building and insulation division made substantial advances in turnover and the trading profit of the division improved by over per cent This was due both to im proved market conditions in the construction and insulation industries and to effective cost control in the building products sector Further substantial growth in the division is expected during 1979 The ELASTIC RAIL SPIKE ERS group which manufactures and markets railway track fasterings and associated components increased sales by 48 per cent to 19.9 million and trading profit before interest and tax increased from 1.6 million to 1.9 million The figures are not strictly comparable with those shown in last report as during the year Torque Tension formerly a wholly owned subsidiary of ERS became a wholly owned subsidiary of Charter and its results are now shown separately Although progress was considerable during the year export orders expected by the operations in the United Kingdom Canada and Australia were deferred resulting in sales lower than forecast Overseas plants are ex- pected to show improved performances during 1979 with particularly attractive prospects in Canada and Brazil The operation in the United Kingdom is faced with an uncertain year but Fone in which reorganization will be completed to permit satisfactory adaptation to reduced volume with maintained profitability Sales in the HEATRAE group improved by 1.0 million over the 1977 results to 15.0 million but trading profit before interest and - tax fell to 0.7 million 1977 1.1 million The |= heating division the largest in the group suffered substantial manufacturing problems . following the closure of factory early 1978 and the transfer of its production to larger group factory Numerous difficulties have been and encountered in bringing into production several new products and these have proved very costly in view of the fact that they occurred at time when the level of orders was high The '. problems are now being resolved productivity has improved substantially and group sales and profitability are expected to recover during = 1979 ae : . The MK REFRIGERATION group increased sales by 13 per cent to 17.4 million in 1978 but overall margins declined as a result of changed pro- duct mix and increased overheads associated with new manufacturing facilities which have still to produce a return Trading profit before interest and tax was 2.5 million compared with acquisition profits from August to December 1977 of 1.1 million M.K. Refrigeration produces and markets a wide range of drink cooling equipment and sales reflected the lower level of expenditure by the brewery industry generally in 1978 due to ine poor summer and reduction of the industry's previously high stocks of beer coolers This busi- ness is expected to recover during 1979 and the introduction of a wider range of drink cooling equipment is expected to have a favourable impact TORQUE TENSION which is now a wholly owned subsidiary of Charter reported a substantially increased trading profit of 0.4 million before interest and tax 1977 - 0.2 million The com- pany which has developed a range of hydraulic drilling equipment in addition to its existing roof bolt systems looks forward to a consider- able increase in sales during 1979. Its drilling equipment has acceptance by the National Coal Board and a significant growth in the Board's orders is leading to further product development for this market Associated companies MINORCO Minerals and Resources Corporation MINORCO which Charter holds a 20 per cent interest SEEe reported consolidated profits after tax for the year to 30 June 1978 of 15.1 million com~ pared with 12.7 million in the previous year This was principally due to the increased dividends paid by Engelhard Minerals & Chemicals Corporation EMC in which MINORCO has a 29 per cent interest EMC's net earnings for the year to 31 December were 142.2 million 1977 - 122.6 million This record level reflects very largely the increase in earnings accruing to the Philipp Brothers division due to far more active markets in base metals and other industrial raw materials Net sales and operating revenues at 10,200 millien for the year exceeded last year'sfigures by per cent EMC paid dividends amounting to - US 1.25 per share during 1978 1977 1.20 per share MINORCO also owns 43 per cent of Trend Inter- = national with reported net earnings of 11.6 million for the year to December 1977 which compares favourably with the loss in the previous year of 5.9 million before extraordinary items For the six months 30 June 1978 Trend's net earnings were 5.2 million The corporation received the dividends from Trend of US million during the year MINORCOhashas 49.9 per cent holdingin Zambia Copper Investments ZCI which earned a profit after tax and before extraordinary items of 0.7 million for the year ended 30 June 1978. There was no dividend income from its major copper producing investments Nchanga Consolidated Copper Mines and Roan Consoli- dated Mines in which ZCI holds 40 per cent and 12.25 per cent respectively A deficit on extraordinary items of 21.5 million was recorded of which 19.9 million represented a provision against the investment in BRST and BCL and the loans to BRST This provision together with the provision of US million made in the previous financial year means that with the exception of the senior unsecured loan to BCL of 0.7 million full provision was made in respect of ZCI's total investment in BRST and BCL to date ZCI did not declare any dividends during the year MINORCO has increased its holding in another major copper investment Inspiration Consolidated Copper Company ICC from 16 per cent to 50 per cent ICC which produces and sells EN copper from its Arizona operations in the United States lost 7.8 millionin compared with a loss of 11.1 million 1977. The average copper price for 1978 at cents per pound was just under two cents per pound Hower than 1977 but higher revenue from tolling operations resulted in a smaller deficit the year Improved results for 1979 are expected as a result of the strengthening of the copper price AMCAN : Charter has 24.8 per cent holding in Anglo American Corporation of Canada AMCAN an investment company whose principal asset is its 44.3 per cent interest in Hudson Bay Mining and Smelting Co. Limited H^...dbaya diversified natural resources organization which is a ~ leading producer of copper and zinc in Canada and has major investments in copper mining oil and gas fertilizers and chemicals Hudbay reported net earnings of 5.1 million 16 per cent up 1977. The results include . however 2.6 million of unrealized exchange gains due to the fall the value of the - Canadian dollar against the United States dollar with consequent upward valuation of Hudbay's assets in the United States Hence realized net profits amounted to 2.5 million for 1978 a marginal improvement on the disappointing 2.1 million for 1977. No dividends were paid during 1978 although a dividend of 10 cents per share was declared in January 1979 and 20 cents per share in April In June 1978 Hudbay and MINORCO made an offer of US per share for all the shares not held by them in ICC As a result Hudbay's interest increased from 23 per cent to 36.5 per cent in 1978 and from January 1979 ICC became wholly owned by the two companies with 50 per cent each when those common shares still outstanding were converted into preferred shares Francana Oil & Gas in which Hudbay has a 55 per cent interest and AMCAN a 28 per cent interest reported net earnings in 1978 of 9.7 million slightly lower than the 9.9 million earned in 1977. Canadian Merrill of which Hudbay holds 62 per cent had a disappointing year with net earnings of 2.3 million compared with 3.6 million for the year to 30 June oe The new Bison twin drilling machine produced by Torque Tension Limited 1977. Weak demand for fertilizers led to low margins and reduced profits at Terra Chemicals International Hudbay's 51 per cent subsidiary where net earnings were 1.3 million compared with 8.0 million in 1977 The prospects for Hudbay are for an improvement over the disappointing results of 1978 The market for most of its products has improved notably in metals and oil and payment of dividends was resumed in January and April 1979 Outlook The more buoyant economic conditions which emerged in the second half of 1978 reflected simultaneous expansion in the principal economies of the free world A revival of industrial activity in Germany and in Japan coincided with a surprisingly robust extension of the economic recovery in the United States Steel production showed a particularly strong upturn and it appears that investment spending mach of which had been deferred for several once again came to play significant role in economic growth Charter has a substantial interest in many mining projects which have been able to benefit from higher metal prices during the last year and these investments could have been ex- pected to yield improving returns returns in the future However once again the recent sharp escalation in oil prices casts doubt on the ability of the western economies to sustain their rate of growth as the resources that were destined for new industrial investment will now be diverted to meeting the higher costs of energy Indicators already show a reduction of growth in the American economy and a striking fall in the production of steel in west Germany In spite of an expected reduction of economic activity stock levels in many metal markets are now lower than in recent years and the indications are that in a number of metals in which Charter has an interest there is likely to be some shortfall of supply which will bolster the returns to existing producers The gold market is exped to continue to flourish as a result of a general of confidence in the main currencies of the world and Charter will benefit from this through its holdings in the companies of the Anglo American Corporation group I commented last year on the lack of investment in new mines which has been largely attributed to the high political risk associated with the mounting of such ventures in lesser developed countries as well as uneconomical price levels Price improvements over the past year have yet to induce a growth investment the political hazirds hazirds in potential host countries remain and economic prospects are still not attractive sufficiently to promote the confid- ence needed to develop develop mining projects whose payback period necessarily extensive There- metal fore is likely that prices will continue to rise as a result of shortage of supply for as long as capital investment in new mines remains at low ebb However the European Commission and a number of member governments are now seri- ously concerned by this inadequacy in investment as well as by the sharp decline in exploration expenditure of the European mining industry which has occurred over the last decade in developing countries I therefore hope that the resistance of some member states to the proposals of the Commission for the establishment of a European investment guarantee system will be overcome in the near future The severe winter and industrial unrest at the end of last year affected our industrial com- panies in common with British industry generally but since then results have been more encouraging and some improvement in profits is forecast by our wholly owned industrial subsidiaries The Cape Industries group after an indifferent start to the year has regained in the past months much of the ground that was broadly lost and is expected to produce results similar to those of last year but with a higher proportion of earnings coming from the building and insulation division Looking to the future we believe that the most favourable opportunities for growth lie in the development of Charter's industrial holdings and we are actively engaged in furthering our interests in certain specified areas which we have identified as capable of future expansion and which complement our existing industrial interests Our objective is to achieve a better balance between our mining industrial investments and between our United Kingdom and foreign earnings As the bulk of our mining income comes from abroad there are financial and tax advantages to be derived from increased earnings from industrial investment at home The process of achieving the right mix of investments has been taken a stage further during the past year with the disposal of some of our South African interests among them substantial holdings in Union Corporation Blyvooruitzicht Mining Gold = Mining Company Harmony Gold Mining Company and the recent sale by Cape Industries of its asbestos mines in South Africa The extent to which the process can or should be carried further is under continuous review Directorate and personnel As shown in the report of the directors Mr R. Fraser has resigned from the board and Mr H. Dent retires by rotation but does not wish to be considered for reappointment I would like each of them to know how much all their col- leagues on the board appreciate and value their contribution to the running of the company In the case of Mr Dent whose principal interest has been as chairman of our subsidiary Cape Industries we are fortunate in being able to propose Mr G. A. Higham deputy chairman and managing director of Cape to take his place on the Charter board Once again it gives me great pleasure to express my gratitude for the loyalty and support of those who work with us I am very happy to be able to take this opportunity to thank all our employees throughout the group for their very significant contribution to our activities during the past year 4 July 1979 M. B. HOFMEYR chairman tes ; * . ; . Accounts CHARTER CONSOLIDATED LIMITED AND ITS SUBSIDIARY COMPANIES Accounting Policies 18 Consolidated Profit and Loss Account 8 Consolidated Balance Sheet 21 = Balance Sheet 22 * Notes on the Accounts 23 Source and Application of Funds 32 : a : 4 a Report of the Auditors to the Members We report on the accounts set out on pages 18 to 35 Included in investments in the consolidated balance sheet is an investment in Cleveland Potash Limited Cleveland at a nominal value of As set out in note 8 on page 26 the directors have considered it prudent to provide a further 22.4 million against the investment which together with the provision made in 1978 amounts to a total provision of 29.9 million In addition a provision of 9.2 million included in creditors in the consolidated balance sheet has been made for guarantees given by a subsidiary company in respect of loan and leasing finance of Cleveland In view of the continuing uncertainty as to the future of the Cleveland mine and having regard to the commitment to subscribe for further loan facilities referred to in note iii on page 28 it is not possible for us to assess whether the total amounts provided will prove to be adequate or excessive and whether the investment in Cleveland after the provisions made is fairly stated Subject to the foregoing in our opinion the accounts give a true and fair view of the state of affairs of the company and so far as concerns the members of the holding company of the group at 31 March 1979 and of the profit and source and application of funds for the year ended on that date and comply with the Companies Acts 1948 and 1967 COOPERS & LYBRAND DELOITTE HASKINS & SELLS Chartered Accountants London 13 July 1979 Accounting Policies 1. Basis of consolidation The accounts are prepared on the historical cost cost basis of accounting except for certain assets included at revaluation nent loss in value arisen on any investment The foss in value of long term investments is charged as an extra-ordinary item in the profit and loss account ii In order to facilitate administration the financial years of Cape Industries Limited and its subsidiaries and those of the other group industrial subsidiaries terminate on 31 December Details of these subsidianes are shown on Page 34 5. Turnover Turnover is the invoiced value of sales of industrial subsidiaries and excludes both transactions between group companies and sales turnover taxes iii The results of subsidiaries acquired acquired during the year are included the consolidated profit and loss account from their effective dates of acquisition The premium or discount between the purchase consideration and their net assets is dealt with through reserves 2. Foreign currencies 6. Capital expenditure grants Grants in respect of capital expenditure are credited to profit and loss account over estimated average life of the relevant fixed assets Grants shown in the consolidated balance sheet represent total grants to date less the amount credited to profit and loss account i Profit and loss items assets and liabilities are translated into sterling at the rates of exchange ruling at the dates of the respective balance sheets ii Differences arising from the translation into sterling of foreign currency loans financing foreign portfolio investments included the sterling profits less losses arising on the realization of those investments In accordance with policy 4 these differences and the profits less losses arising from the realizations of foreign portfolio investments are included in the profit and loss account as surplus on realizations of investments 7. Depreciation Fixed assets are written off evenly over their expected useful lives with the exception that no depreciation has been provided on freehold land The following rates are normally applied Freehold buildings - 2 per cent per annum Leasehold property - the period of the lease or 2 cent per annum for leases in excess of 50 years Plant furniture and fittings - 10 to 25 cent annum Mining rights are amortized evenly over a year period Depreciation on assets qualifying for capital expenditure iii Differences arising from the translation into sterling of grants is calculated on their full cost see 6 1 all other foreign currency items are shown as an extra- policy ordinary item in the profit and loss account 8. Technical development expenditure 3. Income received Income from investments including where applicable the imputetadx credit is accounted for on received basis Group expenditure on research and development patents and trade marks is written off when incurred ' 4. Investments ) Investments have been classified into portfolio which includes investments in prospecting companies and long term holdings Investments are deemed to be long term when they are considered to be of strategic importance to the group and are not held with the intention of resale If due to changed circumstances long term investments cease to be of strategic importance they are reclassified as portfolio investments 9. Deferred taxation Provision Provision is made for deferred taxation at the rate of corporation tax ruling at the year end except in respect of any tax reduction which is reasonably expected to continue for the foreseeable future Debit balances are carried forward in the balance sheet where there is a reasonable certainty of recovery in the near future Advance corporation tax on dividends payable after the balance sheet date included with deferred taxation ji Profits less losses arising on disposal of portfolio investments are included in the profit and loss account as surplus on realizations of investments Any profits and losses arsing from the disposal of long term investments are dealt with as an extraordinary item in the profit and loss account aggregate iii Investments are included at cost unless the of market value and directors valuation is less than book value or when in the opinion of the directors a perma- 10. Stocks and work in progress Stocks and work in progress are valued at the lower of cost and net realizable value Contract work in progress is valued at cost less foreseeable losses and progress payments received and receivable includes expenditure which is incurred in the normal course of business in bringing the product or service to its present location and condition Net realizable value is the estimated selling price less all costt o bse incurred 11. Prospecting exploration and development expenditure Group expenditure on prospecting and on exploration and development is dealt with as follows i Expenditure to develop existing mining areas This expenditure being part of the general development of the mine is written off to mine operating costs in the year incurred and is reflected in trading profit in the profit and loss account ii Expenditure on general prospecting Expenditure during the initial exploration stage is written off in full in the profit and loss account of the year Further expenditure on prospects which after initial stage appear promising is forward as an asset in the consolidated balance sheet under the heading of exploration and development expenditure while an evaluation is carried out to establish its commercial viability In the event that any prospect is abandoned after such evaluation the total expenditure is charged as an extraordinary item in the profit and loss account . iii Expenditure on development of new mines When it is decided to develop a prospect into a mine any exploration and development expenditure relating thereto is capitalized as an investment or fixed asset All further expenditure on development of the mine is capitalized If any project has to be abandoned in the development stage the total expenditure is charged as an extraordinary item in the profit and loss account 12. Associated companies The group accounts for profits less losses of associated companies as defined under Statement of standard accounting practice no 1 as follows 0 Dividends from associated companies are accounted for on a received basis and this income is included in income from investments in the profit and loss account ii In addition the group share of retained profits less losses for the year is accounted for separately in the profit and loss account The accounts used to calculate the group share of retained profits less losses of associated companies are normally available to the group the latest audited accounts ii The group share of retained profits less losses of associated companies since 1 April 1971 or the date when they were first treated as associated companies is included in the book values of the investments in the consolidated balance sheet It is not practicable to ascertain the group share of retained profits prior to these dates Mine development costs of companies in the course of developing mines including costs charged to revenue by those companies are not accounted for in the profit and loss account in accordance with policy 11 iii : weet te ms * ce a Consolidated Profit and Loss Account Year ended 31 March 1979 CHARTER CONSOLIDATED LIMITED AND ITS SUBSIDIARY COMPANIES . : ; . . v Income from investments note 1 on of Surplus investm inveesn tmt ens ts : Interest receivable Trading profit of industrial subsidiaries note 2 1979 000 19,517 - . 11,990 4,059 21,212 Deduct Administration and technical expenditure note 2 Prospecting expenditure Interest payable note 3 . 56,778 . 4,096 1,079 7 7,000 ; ; . Group share of losses less retained profits of associated companies note 4 Profit before taxation Taxation note 6 Profit after taxation and before extraordinary items Deduct Interest of outside shareholders in profits of subsidiaries Attributable to Charter Earnings per share 21.93p 1978 24.26p note 15 Dividends paid and proposed note 7 Profit for the year retained before extraordinary items Deduct Extraordinary items note 8 Retained profit transferred to reserves 1978 - deficit Profit for the year after extraordinary items totalled 17,309,000- 3,774,000 12,175 44,603 56 44,547 17,965 26,582 3,591 22,991 9,043 13,948 5,682 8,266 Movements on reserves Reserves at 31 March 1978 Retained profit for the year - defidcefi ict it Surplus on revaluation ofa subsidiary's freehold property Discount on purchases of shares of subsidiary companies 1978 - premium Disposals of shareholdings in subsidiary and associated companies Reserves at 31 March 1979 note 16 150,467 8,266 983 94 ad 159,810 1978 000 - 21,054 5.790 1,646 18.065 10,167 . 36.394 ~ 6,693 43,087 - 8 14,387 25,435 16.732 16.732 21,661 +4,929 159.888 14,929 14,929 > 4,294 4,294 198 150.467 : ; : Ny . - ~ { rs es The accounting policies on pages 18 and 19 and the notes on pages 23 to 31 form part of these accounts La The report of the auditors is on page 17 Consolidated Balance Sheet 31 March 1979 CHARTER CONSOLIDATED LIMITED AND ITS SUBSIDIARY COMPANIES Fixed assets note 9 Exploration and development expenditure Investments note 70 Market or directors valuation 282,239,000 1978 - 262,858,000 Current assets . Stocks and work in progress note 11 Debtors Short term loans and deposits __ Bank and cash balances Current liabilities Associated companies and other deposit accounts Bank loans and overdrafts secured - 1,358,000 1978 3,415,000 Creditors note 12 Taxation Proposed final dividend Net current assets Deferred taxation note 6 Financed by Share capital note 13 Share premium account note 17 Reserves note 16 Total capital and reserves Capital expenditure grants Interest of outside shareholders in subsidiaries Long term indebtedness note 14 1979 000 000 74,905 722 158,306 1978 000 2 000 63,786 VW 182,616 47.079 47.079 49,140 19,415 5.647 121.281 5,938 24,301 63,790 5,863 5,871 105,763 52,480 10,880 296,693 4,497 16.475 48.898 6,271 5.532 81.673 39.608 5791 285.602 26,215 30,695 159,810 216,720 2,560 20,736 56,677 296,693 26,212 30,683 1504467 207.362 207.362 285.002 M. HOFMEYR B. W. PAIN Directors The accounting policies on pages 18 and 19 and the notes on pages 23 to 31 form part of these accounts The report of the auditors is on page 17 Balance Sheet 31 March 1979 CHARTER CONSOLIDATED LIMITED Subsidiary companies Shares at cost or valuation Add Amounts due from subsidiaries yy Deduct Amounts due to subsidiaries Current assets Bank balances Deferred asset Advance corporation tax note 6 Financed by Share capital note 13 Share premium account note 17 Reserves note 16 Total capital and reserves Long term indebtedness note 14 Current liabilities Creditors Taxation Proposed fir.al dividend ul M. HOFMEYR W. PAIN 1979 000 . 000 1978 . IGOU 1.000 93,779 37,265 : .56.514 4 2,516 59,032 26,275 18,702 4,626 49.543 2,337 313 968 5,871 7,152 59,032 Directors 60.535 2.850 63.387 26.212 18,690 9.164 54,066 2.339 6.982 63.387 The accounting policies on pages 18 and 19 and the notes on pages 23 to 31 form part of these accounts The report of the auditors is on page 17 1. Income from investments i Associated companies we : Other investments . 000 19781978 : 3,778 15,739 ii Arising from Listed investmanus investmanus Unlisted investments tif Includes franked investment income . 7 : s NOTE . Dividends of 335,000 1978-354,000 1978-354,0 1978-354,000 paid by Anglo American Corporation Khodesia Limited but blocked in Zimbabwe Rhodesia have not been included in investment income Total such dividends blocked at 31 March 1979 amounted to 90-1,000 = ca . 2. Trading profit of industrial subsidiaries and . administration and technical expenditure , he . 7 Expenses charged ono Auditors remuneration parent company - 16,000 1978 Directors emoluments see note 5 : Depreciation of fixed assets see note Hire of plant and equipment oc : oe Charge in respect of depreciation of assets held under finance leases Credits ; Capital expenditure grants Rents receivable a : ' . . : ii Turnover of the industrial subsidiaries 3 iii Administration and technical expenditure : . Expenditure . . Deduct Recovered from companies outside the group = . 1979 000 418 205 7,248 1,043 125 325 . 498 238,446 : : 11,112 7,016 21,054 . 398 S 1978 2000 322 133 6,030 M 781 594 192.582 4,096 3.472 iv A subsidiary has a commitment to make an annual payment of 187,000 to the Charter Consolidated pension scheme for the next six years 3. Interest payable on borrowings by the group a Loans repayable after more than five years 5 ~ Loans repayable within five years Amounts deposited with the group . Bank loans and overdrafts 7 . a 1979 000 3,091 44 425 3,440 7,000 1978 900 3.308 5.728 Sa 4. Associated companies Principal associated companies are listed on page 33 Group share of losses less retained profits of associated : companies Share of profits less losses before taxation Deduct Dividends declared from these profits Grou share of losses less retained profits before taxation Taxation Extraordinary items see note 8 1979 000 2,673 2,729 56 3,666 : 3,722 1,239 Group share of losses less retained profits for the year : ended 31 March 1979 4,961 1.928 For balance shect details of investments in associated companies see note 10 NOTES i The 1979 results include for the first time the group share of the loss of Cleveland Potash Limited Cleveland This share totals 5,801,000 is based on the period from 1 April 1978 when the production phase was deemed to have commenced to 31 December 1978 Cleveland's financial year end In accordance with accounting policy 12 on page 19 mine development costs prior to this period charged to revenue by Cleveland were not accounted for within the associated companies results in Charter's consolidated profit and loss account ii Associated companies deferred taxation has not been adjusted to reflect the group's accounting policy because of different taxation systems and accounting standards applicable to certain overseas associated companies 5. Directors emoluments Directors of the parent company Ices Salaries and other remuneration including pension contributions Pension payable to widoowf former director Deduct Fees received from other companies and refunded to the group Amounts paid to directors Chairman Mr M. B. Hofmeyr Others 27,501- 25,001- 22,501- ote 20,001- 7,501- 5,001- 7,500 2,501- 5,000 up 2,500 NOTE 13 directors have agreed to waive emoluments due to them from Charter Consolidated Limited and its subsidiary companies Fees waived by these directors during the year amounted to 126,000 1978 13 directors - 33,000 1979 16,000 271,000 3,000 290,000 85,000 205,000 34,057 2 3 1 1 _ 12 1978 17.000 17.000 189,000 5.000 211,000 78,000 133.000 1 1 i 1 13 a SS . . 7 . fe ne 6. Taxation 1 Charge in consolidated profit and loss account GROUP COMPANIES on profit for the year United Kingdom s Corporation tax at 52 per cent Deferred taxation : Double taxation relief - Advance corporation tax written off by subsidiary Taxation at 33 per cent 1978-34 1978-34 1978-34 per cent on investment income Overseas Taxation Deferred taxation : 1979 :) 000 16,146 2,980 5,726 - 1,095 1,570 1978 2000 4,263 1.167 Adjustments in respect previous years ASSOCIATED COMPANIES see note 4 NOTES i The taxation charge for the year excludes 5,400,000 1978 6,726,000 not expected to be payable in the foreseeable future resulting from accelerated capital allowances stock appreciation relief and other timing umerences 17,965 44.387 ii Overseas taxation is arrived at after exporters taxation allowance for which mining subsidiaries are eligible taking credit for the South African t taxation 2 The provision madein the accounts for deferred : and the full potential liability are set out below a 1979 PROVISION MADE MADE FULL POTENTIAL LIABILITY 1978 FULL POTENTIAL LIABILITY of Excess of the book asseat sses ts qualifying for taxation purposes allowances over their written down value for taxation Taxation on capital gains on property revaluation 000 3,712 32 000 12,934 3,206 3,082 27 000 327 1,945 Taxation on capital gains on assets sold and rolled over against the acquisition of new assets _ 1,183 - ~ 1,469 1,196 Taxation relief relating to provision for compensation for industrial disease _ a Stock appreciation relief relating to certain industrial subsidiaries 111 10,664 238 Taxation relief on prospecting expenditure not yet claimed 237 497 108 Difference between book and taxation value of investments a see note ii below 11,932 14,001 130 Advance corporation tax see note iii below 2,516 5,213 2850 NOTES No account has been taken for relief in deferred or potential deferred taxation on either provisions totalling 29,946,000 of which 13,820,000 was raised in previous years against certain investments or the provision of 9,195,000 against the Cleveland Potash Limited guarantee commitments see note 8 Such relief cannot at present be quantified because of uncertainty as to the crystallization of losses and the incidence of double taxation relief ii The amount of 11,982,000 included in respect of the difference between book and taxation value of investments 10,880 7,080 519 11,898 7 consists priniarily of a 5,561,000 relating to provisions against the investment in Cleveland Potash Limited see note 8 b 6,263,000 relating to the profits arising on certain inter- group transactions eliminated on consolidation which is deferred until such time as the profits are realized outside the group iii Advance corporation tax recoverable of 2,516,000 1978 - 2,850,000 is shown as a deferred asset in the parent company's balance sheet 7. Dividends paid and proposed Interim dividend of 3.025p per share 1978 - 3.025p paid on 3 January 1979 final dividend of 5.6p per share 5.27645p per share payable on or about 14 August 1979 8. Extraordinary items Cleveland Potash Limited see note ) below see review by the chairman on pages 7 and 8 Soci^'t^M'ini^rede Fungurume SMTF in ( Taxation relief on amounts written off prior see note ii below ii Balance of investment written off years Profits less losses on disposals of long term investments net of taxation of 1,912,000 ~ Net effect of translation of currencies Industrial disease provision see note iv below Discount on purchase in of % per cent guaranteed FF bonds Botswana RST Limited Limited investment provision Losses and provisions relating to closure of operations 1979 net recovery Surplus on sale of fixed assets Mining assets Written off Sundry Associated companies see note v below Minority interest NOTES & Details of the Cleveland Potash Limited loss are set out below Provision against the cost of the investment Deduct Deferred taxation relief 000 22.356 5,561 Deduct Share of Cleveland Potash Limited's loss included in group share oflosses less retained profits of associated companies 16,795 5,801 Provision against guarantees in respect of loan and leasing finance raised by Cleveland Potash Limited 10,994 9,195 20,189 Deferred taxation relief on provisions against the investment in Cleveland has been restricted to that amount which is considered reasonably certain of recovery in the near future No account has been taken in deferred or potential deferred taxation for relief on the balance of the provisions raised see note 2 Credit has been taken by way of taxation relief for the whole of the amounts written off in prior years of 24,195,000 relating to SMTF The anticipated taxation relief amounting to 000 20,189 12.581 5.984 3,272 445 442 137 4F 3,171 5.532 8,703 1978 000 379 15,998 1.695 149 1,239 6,079 397 5,682 12,581,000 has been matched in full against taxation arising on profits of the year iii Extraordinary items have been reduced by 3,165,000 as a result of deferred taxation relief relating to group profits which are eliminated on consolidation see note 2 ii The industrial disease charge relates to the provision for the estimated maximum amount of costs defending claims in the USA see note 18 Associated companies extraordinary following ffect of currency realignment On the group sharoef retained opening reserves In associated companies own accounts items include the 1979 000 1978 000 918 378 Provision for loss in value of underlying investments Gain on mine disposal Sundry 1,296 93 _ 150 1,239 ye. > 4 iSor 4 BOT Are : - ~ Z t I 3 9. Fixed assets . COST OR VALUATION At March 1978 Currency realignment : Revaluation Additions at cost Subsidiaries acquired : ; Disposals Reallocations ~ At 31 March 1979 . DEPRECIATION ON ASSETS AT COST OR AT VALUATION At March 1978 Currency realignment ' Charge to profit and loss account Subsidiaries acquired Disposals Reallocations At March 1979 FREEHOLD PROPERTY 000 LONG LEASEHOLD PROPERTY 000 SHORT LEASEHOLD PROPERTY 000 37,107 472 983 2,658 219 1,86-4 6 3,019 _ _ 507 _ 203 54 2,028 29 _ 168 .15 106 60 PLANT TURNITURE AND FITTINGS 000 art 60,537 1,087 ~ 13,100 1,260 4,346 col 38,625 3,269 2,136 69,464 MINING RIGHTS 000 TOTAL 000 1,455 80 _ 1,596 _ 2 _ 104,146 1,668 983 18,029 1,494 6,521 _ 2,969 116,463 6,437 246 1,070 52 1,827 --- 5.486 546 _ .54 _ 203 1 396 704 20 70 6 104 1 32,435 628 6.023 815 3,881 _ 657 34,764 238 14 31 _ _ _ 40.360 908 7,248 873 6,015 _ 255 41,558 NET BOOK AMOUNTS At 31 March 1979 At March 1978 ~ NOTES NOTES ( Fixed assets are included on the following bases At cost At - valuati1o94n8 1972 1974 1975 1976 1978 33,139 30,670 2,873 5.473 1,479 1.324 34,700 28.102 FREEHOLD PROPERTY 1000 .20,583 _ 135 268 15,366 1,123 1,150 38,625 LONG SHORT LEASEHOLD LEASEHOLD LEASEHOLD PROPERTY 000 2,044 _ _ PROPERTY 000 1,416 _ _ 882 310 33 _ 720 _ _ _ 3,269 2,136 PLANT FURNITURE AND FRITINGS 000 69.458 _ _ _ & _ 69,464 ii Freehold properties at valuation include an amount of 886,000 relating to land and factory premises acquired by the Belgian subsidiary and financed by secured loans see note 14 The legal title to the factory premises does not vest in the company concerned until the final instalments on the loans have been paid iii The freehold property at valuation in 1978 was valued by chartered surveyors based on current open market values iv Commitments for capital expenditure of subsidiaries amount to 5,782,000 1978- 1978- 3,347,000 v Estimated capital expenditure of subsidiaries authorized but not committed amounts to 2,937,000 1978- 1978- 2,514,000 2,714 74,905 1,217 63,786 MINING RIGHTS 000 1,773 1,196 _- > _ _ _ 2,969 SS eee Se : TOTAL 1000 95,274 1,196 135 1,150 16,396 1,162 7,150 116,463 10 Investments ASSOCIATED COMPANIES Listed in Great Britain Listed outside Great Britain Unlisted Advances Add Group share of retained profits less losses see note 16 OTHER INVESTMENTS Listed in Great Britain Listed outside Great Britain Unlisted TOTAL INVESTMENTS Listed in Great Britain Listed outside Great Britain Unlisted including advances AT COST LESS AMOUNTS WRITTEN OFF 1979 000 2009 23,483 62 23 367 62 23,545 21,679 _ 45,224 158 53,849 3.362 45,382 55217 10,091 55,473 15052 70.263 70.263 70.263 AT MARKET VALUE OR DIRECTORS VALUATION 1979 000 31,649 135 24.381 117 31,784 28,360 24.6967 38,317 60,144 158 60,302 HATS 76,223 17,598 93,821 9,012 102,833 32,236 19827 102063 10.290 10.290 112.373 192,518 17,140 209,658 12,279 221,937 185.782 185.782 12,501 198.283 198.283 108,619 17,717 126,336 31,970 158,306 114.022 19,921 1,941 AAT Y 132616 132616 224,167 17,275 241,442 40,797 282,239 193.641 16837 210 178 52.380 52.380 262.858 262.858 NOTES i In the case of listed South African securities London stock exchange prices have been taken where the securities are held in the United Kingdom and Johannesburg stock exchange prices where the securities are held in South Africa ii Included in other unlisted investments are shares in Anglo American Corporation Rhodesia Limited The book value and directors valuation at 31 March 1979 both amount to 2,989,000 1978 2,989,000 Any disposal of these shares would require consent under existing exchange control regulations and no income can be remitted to the group from Zimbabwe Rhodesia iii Commitments by the company and its subsidiaries in respect of subscriptions for shares and loan facilities amount to 5,723,000 11,990,000 of which 2,625,000 19787,500,000 relates to Cleveland Potash Limited and 2,343,000 1978- 3,636,000 relates to Botswana RST Limited Limited iv A subsidiary company has entered into contracts for exploration expenditure to be incurred after 31 March 1979 v The greater part of the investments is of a long term nature In the event of the realization of investments at the market value or directors valuation at 31 March 1979 of 282,239,000 there would be a tax liability which it is not possible to quantify because of the incidence of relief in respect of losses and variations in overseas rates of tax vi The market value of foreign currency investments includes the investment currency premium where applicable 11. Stocks and work in progress Contract work in progress Deduct Progress payments received and receivable Raw materials and consumable stores Work in progress Finished goods 1979 000 48,765 48,132 633 21,493 6,044 20,068 48,238 1978 5000 33,470 32.570 12. Creditors Creditors include ) an amount of 2,790,000 1978 - 3,154,000 represent- ing the balance of provisions established by Cape Industries Limited in earlier years for compensation payments for industrial disease The assessment of the likely sum required remains very difficult to determine and it is not possible to state with certainty that the provision will be adequate The directors have reviewed 2, the position with Cape Industries Limited and believe in the light of the available evidence that it will be sufficient to meet either all or the great majority of claims ii a provision of 9,195,000 in respect of guarantees provided on of behalf Cleveland Potash Limited 13. Share capital Authorized Issued Fully paid shares Partly paid shares 1p paid see note iii below Total of issued share capital 31 March 1979 Shares of 25p each 120,000,000 30,000,000 31 March 1978 Shares of 25p each 120,000.600 104,847,302 26,211,825 277,000 2,770 26,214,595 104.837.397 104.837.397 104.837.397 286.560 286.560 NOTES ( During the year 405 fully paid shares of 25p each were issued against conversion of the company's loan stock and 9,500 partly paid shares were fully paid up see report of the directors The maximum number of shares conversion of the company's five stock 1984 is 560,924 which may be issued on per cent convertible loan iii Under the share incentive scheme adopted in 1970 and the share option scheme designed to supersede it in 1973 the directors can at their discretion issue to senior employees up to a further 2,642,088 partly paid shares under the former scheme or options to subscribe for up to 2,873,500 shares 14. Long term indebtedness Debenture stocks secured issued by i Charter Consolidated Investments Limited 4per cent first debenture stock 1978/83 4 per cent second debenture stock 1978/83 ) Cape Industries Limited % per cent debenture stock 1986/89 6...4per cent debenture stock 1986/89 Unsecured loan stocks issued by i The company 5 per cent convertible loan stock 1984 see note ) below ii Cape Industries Limited ran % per cent loan stock 1986/91 iii Swaziland Collieries Limited % per registered convertible notes 1972/81 Bonds issued by Charter Consolidated Overseas N.V. see note ii below i % per cent unsecured bonds of DM106,000,000 1968/83 ; ii 77 per cent guaranteed bonds of FF76,500,000 1987 Belgian secured 1979/86 see note iii below 1979 000 1978 2000 500 500 2,000 600 500 500 2.000 600 2,337 3,459 14 2.339 3,459 15 27,824 8,675 286 28,740 10.353 328 Bank loans secured see note iv below Bank loans unsecured 1980/88 see note iv below NOTES ( The company's five per cent convertible loan stock 1984 carries the following conversion rights Year of conversion Number of shares 1979 per 100 stock 24 1980-84 23 ) The DM106,000,000 6 per cent unsecured bonds 1968-83 are listed on the Frankfurt stock exchange The FF76,500,000 7per cent guaranteed bonds 1987 are listed on The Stock Exchange in London The company has guaranteed bath repayment of principal including payment of interest bond issues premium if as regards any and iii The Belgian loans are repayable by annual instalments and interest is payable at rates currently not exceeding nine per cent per annum determined yearly the Belgian authorities 46,135 180 10,362 56,677 48,834 32 8,307 57,173 iv Bank loans are repayablien the following currencies Sterling Belgian francs US dollars Swedish kroner French francs Dutch guilders 1979 000 3,720 3,940 1,393 646 532 311 10,542 1978 000 3,100 4,976 1,271 609 326 57 8,339 v Repayments are due as follows BANK LOANS OTHER BORROWINGS Within one year Between one and 000 2,220 000 5,601 two years 8 5,615 Between two and five years 1,752 17,801 Over five years 6,562 17,118 10,542 46,135 TOTAL 000 7,821 5,623 19.553 23,680 56,677 15. Earnings per share Earnings per share attributable to Charter is calculated on earnings of 22,991,000 1978 - 25,435,000 and on 104,847,302 shares 1978 - 104,837,397 shares as if the additional 405 shares issued during the financial year had been issued for the whole year and the 9,500 partly paid shares which became fully paid during the financial year had been fully paid for the whole year 16. Reserves Group reserves at 31 March are held as follows Parent company Subsidiary companies Associated companies NOTES {i In the event of certain overseas subsidiaries and associated companies distributing reserves or profits additional liability to United Kingdom and overseas taxation would arise 17. Share premium account Balances at 31 March 1978 by Premium on shares issued the company 7 Balances at 31 March 1979 1979 000 4,626 145,093 10,091 159,810 1978 2000 9,164 130,467 a The movement in reserves of the parent company is accounted for by a transfer from reserves riter payment of dividends of 4,538,000 1978 retained profit of 182,000 included in the consolidated profit and loss account if - GROUP 000 30,683 12 30,695 COMPANY 000 18,690 12 18,702 18. Contingent liabilities and outstanding commitments For amounts not called on investments In respect of guarantees of 14,773,000 less guarantees 5,275,000 company net - 20,415,000 1978- 1978- 10,617,000 In respect of underwriting participations and options granted Bills receivable discounted Commitment to purchase metal in 1979 Other items 1979 000 300 9,498 25 115 _ 884 10,822 1978 000 410 7,340 _ 157 2,054 923 20,884 NOTES i Certain companies in the Cape Industries Limited group continue to be named along with other asbestos fibre and asbestos product suppliers as defendants in legal actions in the USA claiming damages as a result of the use of their products The directors believe in the light of legal advice received that the outcome of these actions is unlikely to have any material effect on the group's financial position and accordingly no provision in respect of them has been made in these accounts except for the estimated maximum amount of costs which might be incurred in the USA defen thedseiclnaig ms ii The net guarantee liability for 1979 includes 3,775,000 for Botswana RST Limited Limited Source and Application of Funds ended 31 CHARTER CONSOLIDATED LIMITED AND ITS SUBSIDIARY COMPANIES March 1979 SOURCE OF FUNDS Profit before taxation shareholders Extraordinary items before interest of outside and adjusted for taxation relief of 16,162,000 shareholders 1978- 1978- 907,000 1979 000 000 44,547 22,241 1978 2000 000 43,087 Adjustments for items not involving movements of funds Depreciation Provisions against mining projects and investments Provisions for industrial disease and closure of operations Provisions against guaranteed loans and leasing financing commitments Effect of currency translation on loans investments and fixed assets Share of losses less retained profits of associated companies Funds generated Disposal of fixed assets Increase in long term indebtedness Increase in government grants 22,306 6,030 15.638 18.367 37,561 59,867 6.335 1,713 27,494 27,494 45.861 APPLICATION OF FUNDS Purchases of fixed assets Investments see note ) below Goodwill on acquisition of subsidiaries Taxation paid Increase in working capital and other items see note ii below Dividends paid Increase in liquid funds see note iii below NOTES ) Investments Long term - purchases - book value of realizations 1979 000 8,868 7,127 1978 2000 7,908 12588 12588 Portfolio - net realizations at book value 1,741 1,360 5.420 5.420 11.128 381 4.182 Realizations less purchases of investments con- tributed 17,159,000 1978 - 1,607,000 to the source of funds ii Analysis of working capital Increase in stocks and work in progress Increase in debtors Increase in creditors Other items 1,159 10,425 5,584 1,019 44,563 16,171 iii Increase in liquid funds Increase in short term loans deposits and cash Increase in associated companies and other deposits Increase in bank loans and overdrafts iv Net assets on acquisition of subsidiaries Fixed assets Goodwill Stocks Debtors Creditors Taxation Government grants Cash Other items 56.589 5,466 es 1979 000 1978 000 25,378 1,441 15.58 # 7,826 16,111 , nf > . : we 2 tt os : . , ; a . : Ea Principal Investments PRINCIPAL INVESTMENTS OF 10 PER CENT OR MORE INCLUDING ASSOCIATED COMPANIES Australia Australian Anglo American Limited Tinnabruich Pty Limited Bermuda Minerals and Resources Corporation Limited Brazil Anglo American Corporation do Brasil Limitada Canada Anglo American Corporation of Canada Limited France Soci^'t^M'ini^red'Anglade Ireland and Development Company Limited Incorporated Canada Malaysia Malaysia Mining Corporation Berhad : Pernas Charter Management Sendirian Berhad Portugal Beralt Tin and Wolfram Limited Incorporated in England Singapore Haw Par Brothers International Limited South Africa Anglo American Investment Trust Limited The Argus Printing and Publishing Company Limited Eurangio Limited United Kingdom . Anmercosa Sales Limited od Charter Mineral Services Limited Cleveland Potash Limited Covenant Industries Limited Selection Trust Limited Zimbabwe Rhodesia Anglo American Corporation Rhodesia Limited OTHER PRINCIPAL INVESTMENTS Botswana Botswana RST Limited Limited South Africa o> *" Anglo American Corporation of South Africa Limited Rustenburg Platinum Holdings Limited United Kingdom The Rio Tinto Corporation Limited NOTES 1. Companies are shown by principal country of operation where they are incorporated in a different country this is shown beneath the company name 2. Accounts of Minerals and Resources Corporation Limited used to calculate the group share of retained profits covered the six months to 30 June based on audited accounts and the six months to 31 December unaudited accounts Nature of business Group interest in ^'quitycapital : percent Mining finance 15 Investment 37 Mining finance and investment 20 Gold mining and general prospecting 12 Mining finance * Wolfram mining 24.8 25 Zinc and lead mining 10.6 Accounting date for inclusion of associated company results December December ~~ Tin mining Technical and administrative services Wolfram mining 28.6 50 50 January December December General trading insurance shipping 13.2 and investment Diamond investments G83 Printing and publishing G83 Investment G83 Marketing of metals . Technical services Potash mining Marketing and manufacture of chemicals Mining finance WEEE WEEE 37.5 33.9 25.8 Mining finance and investment 33.5 March March December December September Nickel and copper mining Mining finance Platinum mining Mining finance 3. The Charter group holds 37.5 per cent of the 10 cent redeemable participating preference shares of Cleveland Potash Limited : . . S . sd ; . : . . . \I : * : ho ch Company Industrial ' INDUSTRIES GROUP Cape Industries Limited Cape Asbestos Fibres Limited : Cape Asbestos South Africa Pty Limited Cape Blue Mines Pty Limited Cape Boards and Panels Limited Cape Building Services Limited Cape Contracts Limited Cape Distribution Limited Cape Insulation Limited Cape Investments 5.A. Pty Limited Cape Universal Claddings Limited Don International Limited Don International S.A Egnep Pty Limited Trist Draper Limited Nature of business Group interest equity capital cent and Industrial mining : ' Marketing of asbestos fibre : companies Administration ofSouth African mining Mining of blue asbestos Insulation board for ship and building construction construction contracting - Fire protection and insulation Industrial thermal insulation contracting Distribution of automotive components *s = Manufacture of insulation products Holdingcompany for South Africar industrial subsidiaries 67.3 Asbestos cement products and other building materials Manufacture of friction materials Manufacture of friction materials 67.3 67.3 67.3 Mining of amosite asbestos 67.3 Manufacture of friction materials 67.3 ELASTIC RAIL SPIKE GROUP Elastic Rail Spike Company Limited Elastic Rail Spike Company Australia Pty Limited Pandrol Canada Limited - Pandrol Incorporated Railway track fastenings Railway track fastenings Railway track fastenings Railway track fastenings HEATRAE GROUP Heatrae Holdings Limited Heatrae Catering Equipment Limited Heatrae Heating Limited Sadia Airofreeze Limited Industrial holding company Commercial catering equipment Domestic and industrial heating equipment Commercial refrigeration MK REFRIGERATION GROUP M.K. Refrigeration Limited Caskell & Chambers Limited M.K. Refrigeration Manufacturing Limited Morgan Furniture Limited Paterex Limited Industrial holding company Drink dispensing equipment Bar cooling equipment Contract furniture Precision engineering Swaziland Collieries Limited Torque Tension Limited Coal mining Mine roof bolting systems and drilling equipment i,Finance af pnt : Finance and investment Barnato Holdings U.K. Limited The British South Africa Company The British South Africa Company Investments Limited Central Mining Finance Limited The Central Mining & Investment Corporation Limited Centramic South Africa Limited Charter Consolidated Finance Limited Investment Investment Investment Finance and investment Investment Investment Finance Country of incorporation operation England England South Africa South Africa England England England England Scotland South Africa England England Belgium South Africa England England Australia Canada United States of America England England England England England England England England England Swaziland England England England England England England : South Africa ., = England an eae Company Nature of business Charter Consolidated Investments Limited Charter Consolidated Malaysia Sendirian Berhad Charter Consolidated Overseas N.V. Investment Investment Finance Hawkswick Holdings Limited Interlink Investments Limited Leonora Investments Limited Nimbus Investments S.A. Raven Investments Limited Shafford Holdings Limited Town Properties Limited _ Investment Investment Investment Investment . Investment + Investment Investment Services Group interest in equity capital percent Country of incorporation operation England Malaysia Netherlands Antilles England Canada Gibraltar Luxembourg Gibraltar England South Africa Anglo Charter International Services Limited Charter Consolidated Services Limited Employment services Administrative and technical services 100 Shares in these companies are held directly by the company the shares in the remaining companies are held through subsidiaries ; England England NOTES 1. The companies listed above activities materially affected the Charter group during the year include profit or those assets whose of the mining 2. On 29 June 1979 the Cape Industries subsidiaries in South Africa were sold outside the group 3. A subsidiary holds 100 per cent of the % per cent cumulative preference shares of Cape Industries Limited and 67.3 per cent of the 4.2 per cent cumulative preference shares of Don International Limited 4. The accounts of Cape Industries Limited M.K. Refrigeration Limited Charter Consolidated Overseas N.V. and Swaziland Collieries Limited are not audited by the Charter group auditors but are available on application 7! 5. The financial years of the industrial subsidiaries terminate on 31 December apart from Paterex Limited and Swaziland Collieries Limited whose years end on 31 May and 31 March respectively Analysis of Assets and Income ~ Geographical analysis of ik assets and revenue i United Kingdom Rest of Europe ; North and South America . South Africa . Rest of Africa South Asia Australasia Assets 1979 1978 000 000 . 103,975 93,399 31,463 30,557 89,699 61,085 98,701 114,149 34,701 19,956 29,726 15,079 31,251 16,868 409,746 366,363 Per cent of assets 1979 1978 25.4 7.6 21.9 24.1 8 4.9 7.6 27.0 8.3 16.7 31.2 8.1 % 4.1 4.6 100.0 100.0 Per cent of revenue 1979 1978 29.1 5.5 12.7 34.4 7.3 9.1 1.9 32.8 100.0 100.0 Analysis by category of investments and investment - income Investments 1979 1978 000 000 2 7 Finance Diamonds Gold Tin and wolfram 169,362 44,507 5,467 14,557 145,779 36,937 11,568 9,652 Copper potash and other minerals 14,903 25,985 Industrial commercial etc. Long term loans 31,235 2,208 29,791 3,146 282,239 262,858 Per cent of investments 1979 1978 60.0 15.7 1.9 5 5.3 11.1 0.8 55.4 14.1 4.4 3.7 9.9 11.3 1.2 100.0 100.0 Per cent of investment income 1979 1978 51.4 54.2 22.4 18.2 3.7 6.2 6.9 3.1 0.9 100.0 NOTES ve 1. Listed investments are included at market value at 31 March and unlisted investments at directors valuation at 31 March 2. The geographical analysis takes into consideration direct ' interests and where possible major indirect interests in the areas concerned and is therefore only approximate Deferred taxation is excluded 3. The analysis of investments does not include the industrial subsidiaries 36 18 Aree et $ g a Sg pop! : od : 2 rae : oS a i . ; Be fe. ce. : : ! San 0 ee SS a ob Analysis by product category of turnover and trading profit of industrial subsidiaries - a . : " ~ cent Per cent of * - Turnover of turnover trading profit . 1979 1978 1979 1978 1979 1978 : : 000 000 : WH tf i : : . Building and insulation products : Automotive and engineering products Mining and sale of asbestos fibre Heating catering and bar equipment : Railway track fastenings Mining equipment . Coal mining 104,150 51,796 82,358 82,358 43,232 25,615 31,447 32,386 20,215 19,997 13,350 4,313 3,233 1,813 300 43.4 21.6 10.7 13.5 8.3 1.8 0.7 42.1 22 16.1 10.4 6.8 1.7 0.7 2 41.5 10.6 * 19.8 15.1 9.1 .2.1 1.8 30.1 13.2 33.3 - 479 9.1 1.3 f 1.1 . . Q . Say . : 8 ; S oe 2 4 H 3 i eo Deduct Sales between different classes of business : v 240,070 195.135 . 1,624 238,446 192,582 100.0 '. 100.0 ~_ _ 100.0 | 100.0 _ fi - : my : an des S: ls : | Je +0 | . ; . . . , ; . * 4 : Geographical turnofotuvrneovr er of industrial subsidiaries s ; United Kingdom Rest of Europe Australasia and South Asia North and South America South Africa Po Rest of Africa and Middl Eaest \\ rm Turnover 1979 1978 1978 000 '1000 176,758 120,874 26,236 33,794 3,498 10,552 10,440 5,503 551 8.303 3,963 13,556 VN Per cent of turnover 1979 74.1 11.0 /; 1.5 4.4 7.3 1.7 + 238,446 192,582 100.0 100.0 m a : oo os NOTE The aggregate value of goods exported by the group's United Kingdom industrial subsidiaries during the year was 26,346,000 a mo 1978 122,444,000 W i t 5 ' Ten Year Financial Record i Charter Consolidated Limited and its subsidiary companies ay Earnings year 31 March Income from investments Surplus on realizations Trading profit of industrial subsidiaries Deduct Administration and technical expenditure Prospecting expenditure Interest payable less receivable Add Group share of retained profits less losses of associated companies Profit before taxation Deduct Taxation ig acquisition Deduct Amount attributable outside |. bell^w acquisition ( shareholders and note 4 bell^w Earnings attributable Deduct Dividends paid Earnings per share Dividends per share Imputed tax credit per share Net assets 31 March Investments at market value or directors valuation Investments at book amount Fixed assets Exploration and development expenditure Net current assets Djurt Djurt Capital expenditure grants minority interest l^igterm indebtedness and deferred taxation Total capital and reserves Add Surplus of market value or directors valuation of investments over book value Total net assets Nel assets per -share Issued share capital at 31 March 1979 000 1978 000 1977 000 1976 000 19,517 11,990 21,212 52.719 4.096 1,079 2,941 8,116 44,6031 56 44,547 17,965 26,582 3,591 22,991 9,043 13,948 21.93p 8.62p 3.89p 12.51p 21.054 5,790 18,065 44,909 3,472 961 4,082 8,515 36,394 6.693 43,087 14,387 28,700 3,265 25.435 .8.703 16,732 24.26p 8.30p 4.28p 12.58p 18.581 2.375 18.936 39,892 3,674 825 3,031 7,530 32,362 6.369 38,731 16,134 22,597 18,220 .6,078 14,566 38.864 36,437 14,666 21,771 2,382 = 19,389 7,081 12,308 18.50p 6.76p 3.64p 10.40p 17,699 2,124 6,566 | 26,389 1.497 2.163 758 4,418 4,418 21,971 5,965 27,936 9,869 18,067 ) 861 282,239 158,306 74,905 122 52,480 285,813 69,093 216,720 123,933 340,653 262.858 182,616 63,786 111 39,608 286,121 78,759 287,604 274p 252,792 195.969 54,199 601 37.679 288,448 71,727 216,721 56,823 273,544 261p 255,606 196,151 47.353 657 34,765 278,926 66,981 211,945 59,455 271,400 259p 303,863 : 199.393 : 36,668 4,442 9,269 + - 104,470 302,020 : : 288p 26,212 26.202 26.202 2626.20.1 201 3 2 nN ae 1974 + 2000 1973 000 1972 000 1971 000 1970 000 13.254 4,309 7,198 4 16,907 u 1,016 15,891 5,987 9,904 y : i 5 iN 15.16p 5.71p 5.71p 2.69p 8.40p 10,440 4,034 5.716 20,190 944 602 129 1,675 18,515 1,137 378 3.832 13,546 1,103 12,443 6,654 5,789 - 11.87p 6.35p 1.65p 8.00p 10,441 R45 AAN2 18,328 901 778 222 16,871 774 17.645 17.645 3,036 14,609 673 13,936 8,383 5,553 13.30p 8.00p od 8.00p 14,372 1,104 3,704 19.180 909 769 15 1,783 17,397 2,803 20,200 16,924 556 16.368 8.381 7.987 7.987 15.84p 8.00p = 8.00p 10,705 5,343 4,499 20,547 1.748 18,799 ... ... ... 14,027 ... 12,998 7,422 ............... ............... ............... ............... ............... 351,347 324,189 272,637 266,785 325,959 184,410 30,075 4,069 24,531 178,597 23,640 2,250 27,177 150,413 150,413 22,000 759 34,425 143,559 21,556 _- 37,760 138.388 138.388 19.578 a 17.969 243,085 231.664 207,597 202.875 175,935 48,189 46.951 35.234 35.175 33,969 194,896 184,713 172,363 167,700 141.966 NOTES 166,937 361,833 145.592 330,305 122,224 294.587 123,226 290,926 187.571 1. Prospecting expenditure group share of retained profits less losses of associated companies and exploration and development expenditure were introduced in 1972 on the adoption of new accounting policies 345p 315p 281p 277p 333p 2. Surplus on realizations and earnings per share from 1976 reflect a revised accounting policy for foreign currencies 3. Taxation and earnings per share from 1977 reflect the revised accounting policy for deferred taxation 26,200 oh 26.201 26,199 26,194 24,738 4. From 1977 acquisition profits have been excluded from the profit and loss account in Interests of the Group The following are brief descriptions of some of the companies in which the Charter group has an important interest Anglo American Corporation of South Africa Limited Anglo American Corporation of South Africa develops and holds investments in mining industrial and investment companies on a world basis but principally in southern Africa The corporation administers companies that are necessarily subsidiaries provides them with a full range of administrative and technical services and assists them in raising capital for expansion and develop- mente In mining the corporation and its associates have im- portant interests in the production of gold and uranium diamonds copper and nickel coal platinum tin polash asbestos iron ore lead zinc manganese and wolfram In the year to 31 March production by the eight principal gold mines administered by the corporation totalled 261,271 kilograms and the combined working profit was R715.4 million Production at the new Elands- rand Gold Mining Company Limited mine began in December 1978 and the milling rate is planned to reach 120,000 3 of ore a month during the second half of 1979 Industrial interests range from steelmaking and heavy engineering to construction motor vehicles paper and textiles chemicals drilling tools refractories and foodstuffs The principal commercial interests are in insurance and property banking freight and travel and computer services A major interest is Highveld Steel and Vanadium Corporation Limited which recorded an attributable profit of R21.0 million for the year to 30 June 1978 in spite of difficult trading conditions and increased its dividend from 15 to 16 cents The corporation's investments are held largely through associated companies such as Anglo American Gold Investment Company Limited AMGOLD Anglo American Coal Corporation Limited AMCOAL and Anglo American Industrial Corporation Limited AMIC while its interest in diamonds lies mainly in its holding in De Beers Consolidated Mines Limited through its subsidiary Anglo American Investment Trust Limited in which Charter has 10 per cent interest The Bermudian company Minerals and Resources Corporation Limited in which Charter has a 20 per cent interest participates in the corporation's international mining and industrial interests AMGOLD has substantial interests in gold and gold uranium mines in the Transvaal at Orange Free State and also has a small interest in a group of gold mines in Brazil The market value of AMGOLD's listed investments at 28 February 1979 was R1,095.1 million and equity equity earnings for the fourteen months to that date were R69.7 million compared with R41.5 million for the twelve months to 31 December 1977. The dividend was in- creased from 165 cents to 250 cents per share \ AMCOAL has a considerable investment in the South African coal industry through a number of subsidiaries which mine and market coal Sales of coal and coke by the AMCOAI group in 1978 totalled 26.7 million tons a rise year of 3.9 per cent compared with the previous Attributable profit rose to R52.7 million 11om R47.3 million in 1977 and the dividend was increased from 6 cents to 72 cents per share AMC is an industrial holding company with subsidiaries operating in the fields of mining equipment engineering and timber products and a large portfolio of investments Avic's main subsidiaries Boart International Limited and Scaw Metals Limited showed good results in 1978 and Bruynzeel Plywoods Limited returned to profitability The AMC group's net equity earnings rose from R39.1R39.1 million in 1977 to R48.8 million and the dividend was increased from 70 cents to 80 cents per share During 1978 Amic acquired the business of the African Products Limited group manufacturers of maize and starch products for a total consideration of R26.4 million of which approximately R11 million was raised by means of a US dollar loan In July 1978 the corporation issued 40 million redeemable cumulative preference shares of 2.5 cents each at a premium of 97.5 cents the rate of dividend being 10.5 per : cent on the issue price of R1 per share % FEATURES THE ACCOUNTS oS, ended 31 March 1979 Sh 15 months ended 31 unaudited March Issued share capital in 223,978,377 ordinary shares of 10 cents each R4,758,750 six R000 R000 per cent cumulative preferred stock and 40,000,000 cumulative preferred shares of 2.5 cents each Share premium jj distributable reserve Distributable reserves Loan capital Group profit before taxation Taxation Equity earnings Earnings per ordinary share Dividends ordinary - amount 28,200 5,900 366,700 560,200 1-46,300 265,000 16,900 202,000 cents 103,000 : 27,100 nil 365,800 470,200 166,500 258,700 17,000 195,000 89.9 cents 99,100 share Extraordinary items Market value of listed cents 6,900 45.25 cents 33,500 investments Directors valuation of unlisted 3,071,400 1,996,700 investments 314,500 272,300 Anglo American Corporation do Brasil Limitada Anglo American Corporation do Brasil is an associate of the Anglo American Corporation group involved in mining and exploration in Brazil It has a 49 per cent interest in Minera^^oMorro Velho S.A. which owns a group of producing gold mines in state of Minas Gerais and clared a dividend the year to 31 January 1979 equivalent to 6.7 million and an interest currently 50 per cent in Unigeo Geologia e Minera^^o S.A. which is conducting an extensive programme of drilling and underground adit work at the Jacobina gold prospect in Bahia It also has a 35 per cent interest in Empresa de Desenvolvimento de Recursos Minerais Codemin S.A. which is developing a nickel mine and smelting facilities in Goias smelting af Anglo American Corporation of Canada Limited The company AMCAN is an investment company whose principal asset is its 44.3 per cent interest in Hudson Bay Mining and Smelting Co. Limited a diversified natural resources organization which is a leading producer of copper and zinc in Canada and has investments in copper capital ANAMINI has an interest of 26.4 per cent in De Beers Consolidated Mines Limited and shareholdings in various diamond trading companies mining oil and gas fertilizers and chemicals Hudson Bay's earnings for 1978 rose from 4.4 million The principal activities of the De Beers group are the mining of gem and industrial diamonds in southern Africa before extraordinary items to 5.1 million but these the manufacture of synthetic diamonds for use in industry a included unrealized currency exchange gains of 2.6 arid the marketing through the Central Selling Organisa- million 2.3 million in 1977 The Canadian metals tion of diamonds produced by the De Beers group and division improved its results because of greater sales other producers It also holds a portfolio of international higher prices and the increase to 100 per cent of the interest in Whitehorse Copper Mines Ltd. However the petroleum subsidiaries reported lower profits because of reduced Indonesian sales and higher amortization charges resulting from a downward revision of of the estimated reserves of Canadian Merrill Ltd. The earnings of Terra Chemicals International Inc. were adversely affected by lower fertilizer prices and rising operating costs The industrial operations group performed satisfactorily investments in mining industrial and finance companies De Beers operates diamond mines at Kimberley and elsewhere in South Africa and through its wholly owned subsidiary CDM Proprietary Limited in South West Namibia Other mining operations are conducted by De Beers Lesotho Mining Company Proprietary Limited a 75 per cent subsidiary of De Beers and De Beers Botswana Mining Company Proprietary Limited of which De Beers holds 50 per cent Total diamond production by the De Beers group including the Orapa and Letlhakane In June 1978 Hudson Bay and Minerals and Resources mines which are jointly owned by De Beers and the Corporation Limited made offer of US per share for Botswana government amounted to 12.0 million carats in all the shares not held by them in Inspiration Consoli- 1978 compared with 11.8 million card in 1977 and it is dated Copper Company ICC whose principal activity is planned to raise productive capacity to 19 million carats the production and sale of copper from its operations in by 1983 through programmes of expansion and the Arizona As a result Hudson Bay's interest increased from opening of the new mine at Jwaneng in southern 23 per cent to 36.5 per cent and from January 1979 ICC Botswana : became wholly owned by the two companies with 50 per cent each when those common shares still outstanding were converted into preferred shares ICC made a loss of 7.8 million in 1978 compared with a loss of 11.1 million in 1977 The market for rough diamonds in which there had beeri a high level of speculative activity in 1977 returned to normality by the end of 1978 after the replacement of temporary surcharges by a permanent price increase of 30 per cent The demand for industrial diamonds remained In November 1978 Hudson Bay acquired a 37.5 per cent interest in Tantalum Mining Corporation of Canada Limited which has a tantalum mine and a lithium deposit in south Manitoba strong Sales by the Central Selling Organisation at 2,552 million were a record for the third year in succession and exceeded the 1977 figure by 23 per cent The group attributable profit of De Beers rose from R563.3 AMCAN'S earnings before extraordinary items for 1978 showed some reduction the increased profit from its milloinn 1977 to R741.2 million in 1978 and dividends on the deferred shares were increased from 52.5 cents to 65 holding in Hudson Bay being outweighed by a fall in interest received higher prospecting expenditure and a cents per share smaller gain on realizations of investments FEATURES OF THE ACCOUNTS FEATURES OF THE ACCOUNTS Year ende3d1 December 1978 Issued share capital in 9.929,545 shares of no par value 000 101,085 Earnings before extraordinary items Earnings after extraordinary items 3,506 3,725 Earnings per share 38 cents 1977 C5000 101,085 3,913 23,771 2.39 Yearded 31 March 1979 R000 Issued share capital in 10,000,000 ordinary shares of 50 cents each and 2,500,000 six per cent cumulative preference shares of R2 each Distributable reserves Profit before taxation Taxation . 10,000 57,533 79,856 251 1978 R000 10,000 53,228 64,777 143 Dividends - amount 1,986 4,319 Equity earnings 79,305 64,334 share Market value of listed investments Book cost of unlisted investments Net asset value Net asset value per share cents 111,509 2,326 108,395 10.92 43.5 cents 82,896 2,494 93.087 9.37 Earnings per ordinary share cents Dividends ordinary amount 75,000 share cents Market value of listed investments 805.112 Directors valuation of unlisted 643 cents 60,000 cents 20,123 includes listed investments at market value unlisted investments at lower of cost or directors valuation investments : Net asset value per ordinary share 105,249 R91.48 92,343 R61.26 includes investments at market value or directors valuation Anglo American Investment Trust Limited The company ANAMINT is a holding company for the diamond interests of the Anglo American Corporation group which holds 52.2 per cent of its issued equity Australian Anglo American Limited Australian Anglo American AAA is a holding company associated with the Anglo American Corporation Minerals and Resources Corporation Limited and Charter Consolidated whose business is to establish mining activities in Australia neighbouring regions primarily through exploration FEATURES OF THE ACCOUNTS Year ended 30 June Issued capital in ordinary shares of 50 cents each Capital reserve and share premium Group profil after extraordinary items 1978 000 18,000 5,937 343 1977 000 18,000 5,607 7,702 Beralt Tin and Wolfram Limited The company owns 80.55 per cent of Beralt Tin & Wolfram Portugal which owns and operates a mine and plant in central Portugal producing concentrates of wolfram tin and copper Towards the end of 1978 that company acquired 80.5 per cent of the share capital of Minas da Borralha S.A.R.L. which owns the wolfram mine plant and properties at Borralha in northem Portugal Production of wolfram concentrates at the Panasqueira mine increased from 1,287 tonnes in 1977 to 1,450 tonnes 1978 and sales rose from 1,308 tonnes to 1,452 tonnes There was a fall in the market price of wolfram during the year but the adverse effect of lower prices was partly offset by the rise in sales and by higher interest earnings The substantially value of the company's fixed assets increased following the acquisition of Minas da Borralha and a revaluation by Beralt Tin & Wolfram Portugal under new Portuguese legislation A dividend of 4p per share was paid following receipt of the company's share of the dividend paid by Beralt Tin & Wolfram Portugal out of its earnings for 1977 FEATURES OF THE ACCOUNTS Year ended 31 December 1978 1977 . Issued share capital in ordinary shares of 25p each 000 2,869 000 2,869 Capital reserves 940 248 General reserve and retained earnings Consolidated profit before taxation 4,739 3,480 4,037 4,653 Taxation Consolidated net profit attributable to Beralt before exchange losses Earnings per share Exchange losses 737 2,126 18.5p 965 1.021 2,846 24.8p 1,079 Consolidated net profit after exchange losses Dividends amount 1,161 459 1,767 430 - per share 4p 3.75p certain figures have been restated to reflect changes in the accounting treatment of exchange differences on fixed assets and interest on deposits in Portugal Botswana RST Limited The company BRST has an interest of 85 per cent in BCL Limited which conducts a copper mining operation at Phikwe in the Republic of Botswana The remaining 15 per cent of BCL is held by the Botswana government In 1978 production of copper matte rose to 39,517 tonnes compared with 30,772 tonnes in 1977 and 32,506 tonnes in 1976 and in spite of continued depressed metal prices operating profit was realized of P2.0 million After charging interest payable of P26,9 million and allowing for exchange gains interest received and other expenditure the loss on current operations was P24.7 million compared with a loss of P31.6 million for the previous year In terms of the March 1978 restructuring arrangements P75 million of BCL's subordinated indebtedness to BRST and BRST's corresponding indebtedness to its principal shareholders was cancelled and BCL issued to those principal shareholders P75 million 10 per cent cumulative redeemable preference shares of P1 each FEATURES OF THE ACCOUNTS Year ended 31 December >) 1978 1977 Issued share capital in shares of P2 each P000 35,959 Share premium 838 _.. Accumulated deficit 59,704 Total shareholders deficit 22,907 Loans from principal shareholders and others 229,704 Loss on current operations 24,682 Exploration expenditure and extraordinary items Attributable to minority shareholder " BCL nil 759 Attributable to preference shareholders in BCL 18,260 Net loss attribui to BRST m 5,66.3 .P000 35,959 838 102,497 65,700 278,918 31,643 7,172 279 nil 38,536 reflects reduction of P48,456,000 attributable to preference shareholders IBCL IBCL i Cape Industries Limited Based in the United Kingdom the Cape Industries group manufactures and insulation products and friction materiais undertakes insulation contracting and related building services and distributes components for the autorictive industry Until June 1979 when the company sold its mining division to Transvaal Consolidated Land and Exploration Company Limited for a net consideration of approximately 15.1 million it also mined asbestos fibre in South Africa and sold it world wide Group turnover increased from 155.4 million in 1977 to 180.3 million in 1978 and profit before taxation from 11.9 million to 12.7 million These results reflected a strong growth in the building and insulation division little change in the automotive and engineering division and a decline in the mining division Capital expenditure during the year amounted to 12.6 million of which 2.9 million was spent in South Africa The building and insulation divisio made substantial advances in both turnover and profit Increased sales of cladding products resulted in a marked recovery in earnings and the manufacture of fireproof panels was maintained at a high and profitable level Demand for thermal insulation materials was strong particularly in the domestic market and there was a further significant expansion in the thermal insulation contracting business despite keen competition The automotive and engineering division suffered from _ lower than expected sales of friction materials in both the home replacement and original equipment m^/rketsdue partly to labour disputes the United Kingdom motor industry and margins came under pressure progress was made in consolidating the position of the manufacturing companies in Belgium and Sweden and the distribution companies had a successful year Sales and profits in the mining division were reduced in spite of a satisfactory operating performance due to continuer weakness in the world market for asbestos FEATURES OF THE ACCOUNTS Year ended 31 December 1978 . 2000 Issued share capital in 24,003,260 ordinary shares of 25p each and 250,000 % per cent cumulative preference shares of each 6,251 Reserves and share premium Loan capital % per cent and 7 % cent debenture stocks and % cent unsecured loan stock Othe term debt 53,688 6,059 10,705 Consolidated profit before taxation 12,731 Taxation Consolidated profit after taxation and extraordinary items 2.196 10,029 10,029 Earnings per ordinary share Dividends ordinary - amount 43.9p 2,219 share 9.2-143p calculated on profit before extraordinary items ay 1977 000 6.251 46,686 6,059 8,667 11,857 2,455 6,218 39.1p 1,970 8.2064p Covenant Industries Limited The company which is jointly owned by Charter Consolidated and associates and by Imperial Chemical Industries Limited imports and markets chemicals and related products and manufactures and formulates agricultural chemicals paints and commercial explosives It operates mainly in Kenya Nigeria Tanzania and Zambia In Nigeria the growth of Chemical and Allied Products Limited was slowed down by the substantial reduction in government spending and the profit also decreased compared with the previous year due to an increase in operating costs Twiga Chemical Industries Tanzania Limited which manufactures agricultural and veterinary products had a very successful year In Kenya the agricultural sector had another good year but the exports of Twiga Chemical Industries Limited declined and as a result there was an overall reduction in profit compared with the previous year Dukon Limited which manufactures paints in Zambia had a satisfactory year Dividend and exchange control regulations in the overseas territories restrict the amount of profits which can be remitted to the United Kingdom In October 1978 the company's shareholding in Chemical and Allied Products was reduced to 40 per cent by an issue of new shares in accordance with the Nigerian Enterprises Promotion Decree to allow Nigerians to hold 60 per cent of the shares FEATURES OF THE ACCOUNTS Year ended 30 September 1978 1977 LO00 000 Issued share capital in ordinary shares 1 of each . 92 92 Reserves Consolidated profit before taxation 12,123 3,726 10,736 6,313 Taxation 2,218 2,996 Consolidated profit after and minorities == taxation 1,210 2,321 Dividends * 270 360 includes share of profit of unconsolidated subsidiary of 1,358,000 before taxation Haw Par Brothers International Limited The company which is incorporated in Singapore operates in Singapore Malaysia Hong Kong and Indonesia Its principal activities are direct and indirect investment in trading manufacturing insurance property marine transportation and pharmaceutical products The company again made a loss after taxation but before extraordinary items in 1978 mainly due to the substantial losses incurred the marine division and poor performance by the insurance division However there a was considerable surplus on extraordinary items the profit on the sale of long term investments being only partially offset by a deficit on the revaluation of vessels FEATURES OF THE ACCOUNTS Year ended 31 December Issued share capital in ordinary shares of $ each Consolidated profit loss before taxation Taxation _ Consolidated profit loss after taxation Consolidated profit loss after taxation and extraordinary items Net asset value Net asset value per share Dividends 1978 000 107,873 3,925 1,045 4,970 14,078 115,960 1.07 nil 1977 000 106,973 2,340 2,433 4,773 3,725 105,613 0.99 nil includes investments at book value J Malaysia Mining Corporation Berhad Malaysia Mining Corporation MMC holds substantial interests in tin mining companies which previously formed the London Tin Corporation and Tronoh Mines groups It is held as to 28.65 per cent by Charter Consolidated and the remainder by Pernas Securities an agency of the federal governament of Malaysia The MMC group which forms the biggest tin mining group in the world has interests in large number of tin mining companies principally in Malaysia but with some investments in Thailand and Nigeria It also has an investment in a possible diamond mining operation in Australia which is under investigation The group produced some 24,500 tonnes of tin concentrate in 1978 representing approximately 9.5 per cent of the world's known production It is the intention that MMC should seek a public quotation on the Kuala Lumpur and Singapore stock exchanges during the current year FEATURES OF THE ACCOUNTS Year ende3d1 January Issued share capital in shares of M each Share premium * Reserves Medium term loan Consolidated profit before taxation Taxation Consolidated profit after taxation and extraordinary items Dividends 1979 000 10,000 84,977 14,763 89,277 52,927 393 19,553 14.400 1978 000 10,000 8-4,977 9,121 107,132 48,494 26,505 22,297 33,000 Minerals and Resources Corporation Limited Minerals and Resources Corporation MINORCO is a Bermudian based mining and industrial investment company whose purpose is to invest in natural resources and industrial projects throughout the world MINORCO has a 29 per cent interest in Engelhard Minerals & Chemicals Corporation EMC a United States company marketing ores minerals and metals refining and manufacturing precious metals and mining metallic minerals In 1978 EMC's net earnings reached a record level of 142.2 million an increase of 16 per cent over the previous year's earnings of 122.6 million and 14 per cent higher the previous record established in 1976 MINORCO has an interest of just over 43 per cent in Trend International Limited an oil and gas company operating principally in Indonesia and North America Trend has a 27 per cent interest in and acts as operator of a joint venture consortium which has a production sharing con-tract with Pertamina the Indonesian state oil enterprise In the six months to 30 June 1978 Trend's net earrings were 5.2 million compared with 6.0 million in the corresponding period of 1977 MINORCO holds just under 50 per cent of Zambia Copper Investments Limited ZCD which has an interest of just under 40 per cent in Nchanga Consolidated Copper Mines Limited a 12.2512.25 per interest in Roan Consolidated Mines Limited and a direct interest of 11.75 per cent in Botswana RST Limited BRST ZCI showed a profit after taxation and before extraordinary items for the year to 30 June 1978 of 0.7 million Extraordinary items showed a deficit of 21.5 million arising mainly from a further provision against the investments in and loans to BRST and BCL Limited for which virtually full provision has now been made In June 1978 MINORCO and Hudson Bay Mining and Smelting Co. Limited made an offer of US per share for all the shares not held by them in Inspiration Consolidated Copper Company ICC whose principal activity is the production and sale of copper from its operations in Arizona As a result MINORCO's interest increased from 16 per cent to 36.5 per cent and from January 1979 ICC became wholly owned by the two companies with 50 per cent each when those common shares still outstanding were converted into preferred shares ICC made a loss of 7.8 million in 1978 compared with a loss of 11.1 million in 1977 FEATURES OF THE ACCOUNTS Year ended 30 June 1978 Issued share capital in 73,579,517 ordinary and 8,572 deferred shares of 1.40 each 000 103,023 Capital reserve and share premium Revenue reserves 166,586 58.409 Consolidated profit before taxation and extraordinary items st Foreign taxation Consolidated net profit before extraordinary items Extraordinary items Market value of listed investments 16,324 1,179 15,145 1,576 214,270 Book value of unlisted investments 78,702 Dividends - amount 8,829 ~ per share 12 cents 1977 000 103,023 166,020 51,457 x 13,812 1,092 12,720 34,133 313,291 51,879 8,829 12 cents The Rio Tinto Corporation Limited The Rio Tinto Corporation RTZ and its subsidiary companies is a British based international group of mining and industrial companies with interests in almost every major metal and fuel including aluminium and its products borax coal copper gold industrial and agricul- tural chemicals iron ore lead oil silver specialty steels tin uranium and zinc Wi Conzinc Riotinto of Australia Limited CRA 68.2 per cent owned by RTZ is the holding company for most of the RTZ group's interests in Australia New Zealand Papua New Guinea and Malaysia and also has interests in Europe and the United States Australian Mining & Smelting Limited a wholly owned subsidiary of CRA marginally improved its earnings in 1978 as the demand for and price of zinc and lead began to pick up Bougainville Copper Limited 53.6 per cent owned by CRA increased its earnings because of the steady rise in copper prices during the second of 197198 78 and the high average prices of gold and silver experienced throughout the year Revenue and earnings from Hamersley iron Pty Limited 54 per cent owned by CRA were significantly lower than those of the previous year owing to a reduction in the volume of ore shipped and a less favourable exchange rate movement for the year Sales by Comalco Limited 45 per cent owned by CRA which has interests in bauxite alumina and aluminium were appreciably higher than in 1977 but a rise in production costs adversely affected profits V RTZ has a 51.3 per cent becial interest in Rio Algom Limited a Canadian company with interests in copper and uranium mining and in stainless and specialty steels Revenue from uranium production mainly from operations at Elliot Lake in Ontario was higher than in 1977 but the lower average grade of ore mined and increased operating costs resulted in a slight fall in earnings Lornex Mining Corporation Ltd 68.1 per cent owned by Rio Algom showed a rise in earnings compared with 1977 rey emnt attributable to the higher average prices realized for copper and molybdenum in 1978. Rio Algom is developing a uranium mine owned by Preston Mines Limited in which RTZ has an interest of 80.9 per cent which is scheduled to reach its target rate of production early in 1984 Through its wholly owned subsidiary Rio Tinto South Africa Limited RTZ has a 38,9 per cent beneficial holding in the copper producer Palabora Mining Company Limited which recorded a greater volume of sales at higher prices and increased its earnings RTZ also holds beneficially 66.2 per cent of Brinco Limited whose principal interest is in mineral exploration and development in North America and 46.5 per cent of Rossing Uranium Limited which started commercial production in January 1978 and made a profit for the year The wholly owned subsidiary.R.T.Z subsidiary.R.T.Z Borax Limited benefited from strong demand for industrial borax products and higher earnings from chemicals Also wholly owned by RTZ R.T.Z. Industries Limited is the holding company for many of RTZ's light industrial activities and particularly in the United Kingdom North America and Australia Its chief interests are in products made of aluminium steel glass and wood and in tin smelting and light engineering The RTZ Industries group had another successful year in spite of depressed conditions in virtually all the countries in which it operated with Indal Limited 55.6 per cent owned by R.T.Z. Industries achieving record sales and earnings Through membership of a Harailton Brothers consortium R.T.Z. Oil and Gas Limited a wholly owned subsidiary of RTZ has a 25 per cent interest in the Argyll oil field in the United Kingdom sector of the North Sea where produc- tion exceeded five million barrels in 1978 The significant improvement in metal prices in the second half of 1978 resulted in an increase of 16.1 million in the net profit attributable to RTZ in spite of a reduction in the sterling value of profits earned overseas due to the strengthening of the pound OF FEATURES THE GROUP ACCOUNTS Year ended 31 December 1978 17 Issued share capital of RTZ in 242,479,211 ordinary shares of 25p each 8,697,646 accumulating ordinary shares of 25p each and 7,732,967 3.325 per cent and 000 a 3,143,750 3.5 per cent B cumulative preference shares of each 73,700 Capital reserves and share premium 200,500 Revenue reserves 461,700 capital Loan Profit before taxation 415,500 284,000 Taxation Net profit attributable to RTZ 115,800 shareholders before extraordinary items 98,400 Earnings per ordinary share of RTZ before extraordinary items . 39.04p Extraordinary items : Dividends tordinary amount 9,800 27,800 - per share 11.5p 1977 000 73,500 195,400 402,800 426,400 271,500 130,100 82,300 32.68p 32.68p 40,400 22,900 9.5p Rustenburg Platinum Holdings Limited The company's principal asset is its wholly owned subsidiary Rustenburg Platinum Mines Limited which operates three platinum mines in the Transvaal The company also owns Atok Platinum Mines Proprietary Limited In year to 31 August 1978 demand for Japanese jewellery was firm and the demand from the automobile industry increased Coupled with a marked fall in sales by the Soviet Union this enabled Rustenburg to improve its turnover by per cent and substantially increase the price of platinum In consequence there was a strong recovery in the profit after taxation and a final dividend was declared By the end of 1978 the rate of production had been restored to the level before the cutbacks instituted in November 1977 and it was decided to reinstate part of the planned programme of expansion.- FEATURES OF THE ACCOUNTS Year ended 31 August 1978 R000 Issued share capital in shares of 10 cents each 12,500 distributable reserves Distributable reserves 280,600 800 Consolidated profit before taxation 34,300 Taxation Consolidated profit after taxation Dividends ~ amount - per share 8,500 25,800 9,900 8 cents 1977 RO00 12,300 254,600 4,400 4,500 100 4,600 3,100 2.5 cents Selection Trust Limited The company and its subsidiaries form a British based mining finance group whose business covers a wide range of interests mainly related to the extraction and use of mineral resources The revenue of the group for the year to 31 December 1978 was 34.6 million compared with 26.6 million for the preceding nine months Earnings from operations which included the first full year's income from the Kleeman Industrial Holdings group totalled 20.6 million of which 2.7 million came from the gas field and 4.5 million through the renegotiated arrangement with the Heerema organization Dividend income rose to 5.1 miflion reflecting increased payments by the National Diamond Mining Company Sierra Leone Limited and resumed payments Tsumeb.Corporation Tsumeb.Corpation Tsumeb.Corporation Limited In Western Australia construction of the facilities at the Agnew nickel deposit was completed during 1978 and the planned rate of production should be achieved by th end of 1979. With the upturn in metal prices th economics of bringing the copper deposit near Teutonic Bore into production are again being examined At the Mt Newman iron ore project shipments of ore reached a record 30.8 million tons and the profit derived by Selection Trust group from its five per cent direct interest increased to 3.6 million In Canada the South Bay copper mine in western Ontario incurred a loss of million in 4 the year to 31 December 1978 compared with a loss of 1.0 million for the nine months to 31 December 1977 This improvement was attributable to lower operating ices costs throughout the year and higher metals during the last quarter At the Detour copper deposit in Quebec consideration is being given to the production of copper from the B zone and the continuation of exploration and feasibility studies in the other zones Swaziland Collieries Limited The company operates a colliery at Mpaka Swaziland where saleable coal production for the year to 31 March 1979 was 174,076 tons compared with 143,880 tons for the previous year Turnover rose by 49 per cent from E2.1 million to E3.2 million The compcaonmpyany has an impimportan ortant interest in Amax Inc. a major American natural resources company with interests in metals minerals and fuels in many parts of the world Amax reported record net earnings of 160 million for the year to 31 December 1978 compared with million in 1977 and the quarterly rate of dividend was increased in the fourth quarter of 1978 from to 55 cents per common share Other mining investments are in Western Mining Corporation Limited and Unisel Gold Mines Limited a developing gold mine in the Orange Free State which should reach full production in November : 1979 In the United Kingdom Alexander Shand Limited whose business is primarily open Holdings cast coal mining building and engineering contributed million stockholding election Trust's operating profit Sales by the Amari Limited group whose principal activity is the and marketing of metals increased from 28.9 million in the last nine months of 1977 to 55.7 million in the year 1978 in spite of difficult trading conditions and some fall a in the prices obtainable The wholly owned subsidiary Kleeman Industrial Holdings Limited parent company of group involved in the design and manufacture of products for controlling liquids and gases performed unevenly in 1978 particularly in overseas markets trade dropped significantly in certain areas In january 1979 the Selection Trust group extended its activities in Australia by completing arrangements to purchase the ship Regional Endeavour at a cost of 18.4 million _ The Swaacqzuire iland government has indicated that it may wish to acquire a 50 per cent iinterest nterest iin n the company FEATURES FEATURES FEATURES OF THE ACCOUNACT COUNSTS Year ended 31 March 1979 Issued share capital in shares of each : premium Share premium Loan capital taxation Profit before taxation Taxation : Profit after taxation - Earnings per share Dividends amount . - per share E000 2,529 29 24 701 203 +98 39.4 cents 228 18 cents 1978 E000 2,529 2,529 29 24 315 + 311 24.6 cents . 38 3 cents TLiamriatEexdploration and Development Company The company which is incorporated in Canada owns 75 per cent of Tara Mines Limited which operates an milled underground lead mine at Navan in the Republic of Ireland During 1978 the first year of commercial production 1,381,140 tonnes of ore were producing 237,877 tonnes of zinc concentrates and 41,801 tonnes of lead concentrates Revenue from concentrate sales to amounted 49.4 million * FEATURES OF THE ACCOUNTS Year ended 31 December 1978 FEATURES OF THE ACCOUNTS . 000 , = ended 31 December 1978 Nine months Consolidated loss before taxation Taxation ended Minority interest in loss of subsidiary 31 Decem Consolidated loss after taxation 13,484 772 3,099 Issued share capital in 31,699,675 ordinary shares of 25p each fully paid and 24,444 ordinary shares 000 1977 000 \ ck \ -and minority interest Extraordinary item Consolidated net loss 11,157 461 10,696 : of 25p each 5.625p paid 7,900 Share premium and reserves 91.300 onsolidated profit before taxation 19,800 Taxation 7,900 6,000 Consolidated profit after laxation 7 and minority interests 11,400 9,600 DEiarvniidnegnsdspe-r asmhaoruent 35.8p 32.8p 7 6,600 300 . 20.844p Satp asset share : Net asset value 204,000 174,000 - Net asset value per share 6.43 5.48 tw includes investments at market or valu diree ctors directors valuation ae 1977 000 1,169 nil nil 1,169 352 1,521 us 4 General Information : . an 3 : . : : . : 2 : te : pO = : ^' nt xy Directors interests The following are theinterests of the directors of the company company who held office on 31 March 1979 as notified the in company terms Act 1967 ofthe Companies FULLY PAID SHARES OF 25p EACH DIRECTOR 1 April 1978 31 March 1979 SAaye. D. Burnell A. Smith 100 100 100 100 MVC? tke 28 100 100 Collins . FAH Dent : } H.R.FraserH.R.Fraser # Hambro ~ 100 100 1,155 .100 1,131 2 1,155 100 : 1,131 1,745 1,745 M. Hofmeyr 100 100 F.J. Howard : H. Oppenheimer i. Sir Philip Oppenheimer . W. Owston 500 100 9,798 100 500 100 9,798 100 W. Pain 100 100 - C.W.H. Relly J.G. Richardson 500 100 100 500 100 100 L.C. Stopford Sackville H. Stucke 4,000 100 4,000 100 W. Thomas J. Ogilvie Thompson W. Wilson 100 100 100 100 100 100 ALTERNATE DIRECTORS R. Armitage A. Oppenheimer . 22 nil 22 nil these interests are beneficially owned the remainder are not beneficially owned n Of these directors and alternate directurs the following had beneficial interests in the partly paid shares of the company issued under its share incentive scheme the effect of which was - to enable executive directors and senior employees to subscrive for shares which after a qualifying period could be fully paid up at price determined at the time of subscription PARTLY PAID SHARES OF 25p EACH April 31 March 1979 D. Burnell 7,500 7,500 N. Clarke ay 7,500 W. Owstan 6,000 W. Pain Richardson a 12,500 12,500 12,500 10,000 10,000 G. Stopford Sackville . 10,000 10.000 K. Armitage 7,500 7,500 ' beneficial Mr H. Dent also had a interest in 4,750 ordinary shares of 25p eachin Cape Industries a subsidiary of the company at 1 April 1978 and 31 March 1979 There has been no change notified in any of the abovementioned interests between the end of the financial year and 17 June 1979 being une month prior to the date of the notice of annual general meeting There were contracts or arrangements subsisting during the financial year which require to be disclosed in terms of section 16 of the Companies Act 1967 as interpreted by the Council ThTehe Stock Exchange Angio American interest of 35.6per cent company at 17 lune 1979 n, in the Africa Limited held an issued share capictapitaal olf + the Taxation . ) Capital gains tax The market price of the company's shares on 6 April 1965 was Registered shares - 98.75p Shares represented by renounceable letters of allotment 100p Share warrants to bearer 100p ii The company is not a close company within the provisions of position the Income and Corporation Taxes Act 1970 and this has changed since the end of the financial year Number and remuneration of employees The average number of employees per week of the company and its subsidiaries working wholly or mainly in the United Kingdom was 11,651 during the year The aggregate amount of the remuneration paid to such employees during the year was 51,688,000 Pol^>ticaland charitable contributions Contributions for political purposes purposes made through subsidiary companies during the year amounted to 25,400 of which 25,000 was paid to The City and Industrial Liaison Council 300 to the Ashford Conservative Association and 100 to the Conservative Commonwealth Council Contributions for charitable purposes made by the company and its subsidiaries during the year totalled 60,270 - 7 pee wt : ot . ws ay o I i Ly in Proc^'durepermettant aux d^'tenteursde certificats d'actions au porteur d'assister ^ une assembl^'eg^'n^'rale Les de d^'tenteurscertificats d'actions au porteur d^'sirantassister en leur qualit^'de membre ^ une assembl^'eg^'n^'ralseont tenus de d^'poserleurs certificats d'actions trois jours ouvrables francs au moins avant la date l'assembl^'eau bureau du directeur du registre de soci^'t^a'u Royaume ou ^ ceux des agents de la soci^'t^' soci^'t^' l'^'tranger Les administrateurs qu'^ la place du certificat d'actions soit d^'pos^'eune attestation d^'livr^'e par d^'positaire autoris^'ou par toute autre personne d^'clarantavoir d^'p^tdu certificat d'actions Le d^'positaireautoris^'ou la personne habilit^'e doit s'engager ne remettre le certificat d'actions au d^'posant que contre remise de l'attestation de d^'p^ett d'engagement La soci^'t^r'emettra au d^'posant d'un certificat d'actions ou d'une attestation de d^'p^tet d'engagement une carte d'admission portant ses nom et adresse de m^"meque le nombre d'actions repr^'sentepar le certificat correspondant Cette carte lui permettra de ce fait d'assister et de voter en personne ou par mandataire ^ une assembl^'eg^'n^'rale des formulaires peuvent indiqu^'sdessus ^"tre obtenus aupr^s des bureaux MM les actionnaires peuvent se procurer des exemplaires des porteur conditions r^'gissant les certificals d'action au en s'adressant soit au si^ge social ou au bureau du directeu registre de la soci^'t^s'oit aux bureaux des agents de la soci^'t^s' oci^'t^' aux adresses suivantes Cr^'dit Lyonnais 19 boulevardeds Italiens 75002 Paris Banque Rothschiirl 21 rue Laffitte 75009 Paris Procedure for holders of share warrants to to bearer attend a general meeting Holders of share warrants to bearer wishing to attend as members at a general meeting must deposit their share warrants at least three clear normal business days before the meeting at the offices of the company's registrars in the United Kingdom or any of the company's overseas paying agents The directors may accept lieu of the deposit of a share warrant depositary a certificate from authorized or other approved person the effect that the share warrant has been deposited must with him The authorized depositary or approved person give an undertaking not surrender the share warrant to the of depositor except against return of the certificate deposit and _ the undertaking s The company will deliver the person depositing a share warrant or certificate of deposit and undertaking an admission card stating his name address and the number of shares represented by the relative warrant to enable him to attend and vote in person or by proxy at meeting forms are available from the abovementioned offices Copies of the conditions governing share warrants to bearer are available from the registered office of the company and the office of its registrars in the United Kingdom and from the company's overseas paying agents Cr^'dit Lyonnais 19 boulevard des Italiens 75002 Paris and Canque Rothschild 21 rue Laffitte 75009 Paris s'adressant MM les actionnaires sont inform^'squ'ils peuvent se procurer un exemplaire en fran^aisde ce rapport en soit soit ^ Charter Consolidated Limited 40 Holborn Viaduct London EC1P 1AJ soit ^ Charter France 9 rue de Vienne 75008 Paris soit ^ Cr^'ditLyonnais 19 boulevard des Italiens 75002 Paris soit la Banque Rothschild 21 rue Laffitte 75009 Paris te ee a eet