Hulamin Limited (HLM) Earnings Call Transcript & Summary

Mr. S P Ngwenya has been proposed and seconded, for election. Ladies and gentlemen, those shareholders or representatives voting today, please record your vote on Line #9 of the voting paper. [Voting]

The next member is Dr. B Mehlomakulu. Is there a proposer and seconder for her election as a member?

Mr. Chairman, I propose the election of Dr. B Mehlomakulu as a member of the SES.

Mr. Chairman, I second the resolution.

Dr. B Mehlomakulu has been proposed and seconded for election. Ladies and gentlemen, those shareholders or representatives voting today, please record your vote on Line #10 of the voting paper. [Voting]

We move on to deal with ordinary resolution #4, and that relates to the external auditor appointment. I propose that Ernst & Young, Inc. be appointed as the company's external auditors and that Mr. Farouk Ebrahim, be appointed as the designated auditor to hold office for the ensuing year. Is there a seconder for this motion?

Mr. Chairman, I second the motion.

This resolution has been proposed and seconded and is open for discussion. Ladies and gentlemen, those shareholders or representatives voting today, please record your vote on Line #11 of the voting paper. [Voting]

We then move on to remuneration matters and ordinary resolution #5, is the nonbinding advisory vote on the remuneration policy. Ladies and gentlemen, the remuneration policy nonbinding advisory vote reads as follows: resolved to endorse through a nonbinding advisory note, the company's remuneration policy as set out in the remuneration report contained on Pages 39 to 45 of the integrated report. I now propose that the remuneration policy nonbinding advisory vote as set out in the notice convening this meeting be adopted. Is there a seconder for this motion?

Mr. Chairman, I second the motion.

This resolution has been proposed and seconded and is now open for discussion. If there is no further discussion -- no discussion, those shareholders or representatives voting today please record your vote on Line #12 of the voting paper. [Voting]

We now deal with the ordinary resolution #6, which is the nonbinding advisory note -- vote pertaining to the remuneration implementation report. Ladies and gentlemen, the remuneration implementation report nonbinding advisory vote reads as follows: resolved to endorse, through a nonbinding advisory vote, the company's remuneration implementation report as set out on Pages 45 to 47 of the integrated report. I now propose that the remuneration implementation report nonbinding advisory vote as set out in the notice convening this meeting, be adopted. Is there a seconder for this motion?

Mr. Chairman, I second the motion.

This resolution has been proposed and seconded and is now open for discussion. If there is no discussion, those shareholders or representatives voting today, please record your vote on Line #13 of the voting paper. [Voting]

We then move on to ordinary resolution #7. Ladies and gentlemen, the authorization to sign documents to give effect to resolutions, reads as follows: resolve that any 1 director or the Company Secretary be and are hereby authorized to do all such things and sign all such documents and take all such actions as they consider necessary to give effect to the resolutions set out in this notice of AGM. I now propose that the authorization to sign documents to give effect to resolutions as set out in the notice convening this meeting be adopted. Is there a seconder for this motion?

Mr. Chairman, I second the motion.

This resolution has been proposed and seconded and is now open for discussion. If there is no discussion, those shareholders or representatives voting today, please record your vote on line #14 of the voting paper. [Voting]

We then move on to deal with special resolutions, starting with special resolution number one, dealing with the approval of nonexecutive director fees. Ladies and gentlemen, the resolution is as follows: to grant the company authority by a separate vote in respect of each item to remunerate its nonexecutive directors for their fees as directors and/or to pay any fees related there to on the following basis provided that the above-mentioned authority shall be valid with immediate effect until the next AGM to be held in 2024. I now propose that the special resolution dealing with the approval of nonexecutive directors' fees as set out in the notice convening this meeting, be adopted as a special resolution. Is there a seconder for this motion?

Mr. Chairman, I second the motion.

This resolution has been proposed and seconded and is now open for discussion. If there is no discussion, those shareholders or representatives voting today, please record your vote on Line #15 of the voting paper. [Voting]

We now move to deal with special resolution #2. Ladies and gentlemen, the resolution is as follows: resolve as a special resolution subject to the provisions of Section 45(2) of the Companies Act that the provision of any financial assistance by the company to any company or corporation, which is related or interrelated to the company as defined in the Companies Act on the terms and conditions, which the directors may determine be and is hereby approved. I now propose that the special resolution dealing with financial assistance as set out in the notice convening this meeting, be adopted as a special resolution. Is there a seconder for this motion?

Mr. Chairman, I second the resolution -- the motion.

This resolution has been proposed and seconded and is now open for discussion. If there is no discussion, please record your vote on Line #16 of the voting paper. [Voting]

We then deal with the special resolution #3, which is the general authority to repurchase shares in the company. Ladies and gentlemen, the resolution is as follows: resolve as a special resolution that the Board of Directors is hereby authorized in terms of Section 48(8) of the Companies Act by a way of a renewable general authority in terms of the provisions of the JSE listing requirements and as permitted by the company's memorandum of incorporation to approve the purchase by the company of its ordinary shares and/or the purchase of ordinary shares in the company by any of its subsidiaries or any trust controlled by the company upon such terms and conditions and in such amounts as the Board may, from time to time, determine but subject to the memorandum of incorporation of the company, the provisions of the Companies Act and JSE listing requirements when applicable and provided that the conditions as more fully described in the notice convening this meeting are observed or fulfilled. I now propose that the special resolution dealing with the general authority to repurchase shares in the company as set out in the notice convening this meeting, be adopted as a special resolution. Is there a seconder for this motion?

Mr. Chairman, I second the motion.

This resolution has been proposed and seconded and is now open for discussion. If there is no discussion, please record your vote on Line #17 of the voting paper. [Voting]

Before dealing with the report back by the Social, Ethics and Sustainability Committee and to allow the independent scrutineers to count the votes, those shareholders or representatives voting today are now requested to email their voting papers to proxy@computershare.co.za. The Computershare representatives will now tally up the votes received today. Please ensure that the voting paper is signed. Mr. V N Khumalo will now provide feedback on social and ethics matters pertaining to the company as set out on Page 19 of the governance report. Mr. Khumalo.

As the Chairman of the Social, Ethics and Sustainability Committee, I advise that the following [ material ] were discussed in the Social, Ethics and Sustainably Committee Meeting we had during 2022: Responsibilities, Broad-Based Black Economic Empowerment, reviewed the performance against the group's employment equity targets obtained by the remuneration [indiscernible] committee, reviewed and approved the strategy to be followed by the group to achieve this transformation, social and ethics goals, reviewed and reported on the implementation of this strategy through the evaluation of the goals set at the performance of the group in respect of these goals. On statutory duties, the committee also has to perform the statutory duties as set out in Section 43(5) of the company's regulations 20(11) for Social and Ethics committee that monitor the group's activities, having regards to any relevant legislation, other legal requirements or prevailing codes of best practices related to specific areas. On ethics, the committee must review and approve for recommendation to the board for authorization, the following codes and policies or any amendments thereof: The code of ethics, code of conduct for suppliers and service providers, conflict of interest and gifts policy for employees, whistleblowing policy, corporate compliance policy, crime involving dishonesty, fraud policy and fraud prevention strategy. On sustainability, the committee has the following responsibilities: review and approve for recommendation to the Board for authorization, the group's sustainability development policy, delegate to management the implementation of the group's sustainability development policy, review the performance of the group in implementing the sustainability development policy, review and approve position statements for key sustainability issues such as climate change and water security in light of the risk profile set by the Board and report to the Risk Committee on the group's sustainability risk profile. The work of the committee included the following: review progress made on the preferential procurement, enterprise development and supply development, approval of procurement policy, consideration of progress on corporate social investment, including development of communities in the greater Pietermaritzburg area and granting of sponsorships, donations and charitable givings, engagements on the Aluminum Beneficiation Initiative. Considerations included the following: matters relating to environment, health and safety, resource efficiency, Hulamin carbon footprint, COVID-19, self-health and environment performance standards, environmental strategy matters relating to group fraud and ethics, matters relating to stakeholder engagements, matters relating to legal compliance, consumer relationships, assurance compliance, code of ethics training and King IV compliance data of Principle 2 and Principle 8. Thank you, Chair.

Thank you, Mr. V N Khumalo. Let's then move on to the results. I will now ask the Company Secretary to announce the results of the poll.

Thank you, Mr. Chair. Let me start by confirming that Computershare has indeed verified all the shareholders and the voting results have been scrutinized by them. The results for the Hulamin AGM are as follows: ordinary resolution 1.1, the reelection of Dr. B Mehlomakulu as a Director. 99.86% for and 0.14% against. Ordinary resolution #1.2, reelection of V N Khumalo as a Director. 99.34% for, 0.66% against. Ordinary resolution #1.3, reelection of N Maharajh as a Director. 99.94% for, 0.06% against. Ordinary resolution #1.4 reelection of S P Ngwenya as a Director. 99.80% for, 0.20% against. Chair, ordinary resolution #2.1 to elect Dr. B Mehlomakulu as a member of the Audit Committee. We have 99.75% for, 0.25% against. Ordinary resolution #2.2 to elect in N Maharajh as a member of the Audit Committee. Chair, we have 99.91% for, 0.09% against. Ordinary resolution 2.3 to elect C A Boles as a member of the Audit Committee. 99.91% is for, 0.09% against. Ordinary resolution #3.1 Chair, to elect V N Khumalo as a member of the Social, Ethics and Sustainability Committee. We have 99.40% for, 0.60% against. Ordinary resolution #3.2 to elect S P Ngwenya as a member of the Social, Ethics and Sustainability Committee. We have 99.81% for, 0.19% against. We then come to ordinary resolution 3.3 to elect BA Mngadi as a member of the Social, Ethics and Sustainability Committee. Chair, we have 99.73 for -- sorry, 99.73% for and 0.27% against. Ordinary resolution #3.4 to elect Dr. B Mehlomakulu as a member of the Social, Ethics and Sustainability Committee. We have 99.84% for and 0.16% against. Then it is ordinary resolution 4, the appointment of Ernst & Young as the auditors of the company. It is 99.97% for and 0.03% against. Ordinary resolution #5, which is the nonbinding advisory vote on the endorsement of the company's remuneration policy. We have 92.38% for and 7.62% against. Ordinary resolution #6, is the nonbinding advisory vote. This is the endorsement on the company's remuneration implementation report. We have 92.38% for and 7.62% against. Ordinary resolution #7, authorization to sign documents to give effect to resolutions stands at 99.91% for, 0.09% against. Special resolutions. Special resolution #1, to approve remuneration payable to nonexecutive directors. We are standing at 94.51% for, 5.49% against. And special resolution #2 to approve the granting of financial assistance to subsidiaries and other related and interrelated entities. We have 99.77% for and 0.23% against. And Chair, the final resolution for the day is special resolution #3, which is to approve the general authority to repurchase the company's shares. We have 97.67% for and 2.33% against. Chair, those are the results. Thank you.

Thank you very much, Company Secretary. We now get to general. And I guess this is the opportunity for shareholders or representatives to ask any questions they may have. Company Secretary, can I ask you to read out the first question.

Thank you, Chair. The first question comes from Cobus Cilliers from All Weather Capital. And it reads as, could you please provide us an update on the operations to date, meaning volumes rolled and challenges faced to date. Also, how has the increased level of load shedding impacted the supply chain and downstream customers for Hulamin. In the event of Stage 8 load shedding is implemented nationwide. Does this make a big impact on the load curtailment at the factory in Pietermaritzburg? Thank you, Chair.

Thank you, company's secretary. Can I ask -- the interim CEO to make comments, obviously, bearing in mind that we can only speak in generalities. We can, for instance, address specifically the issue of volumes. But we can provide a very broad sense of the environment and where the business is heading.

Thanks, Thabo. And thank you for the question, Cobus. Let me start with the second part first, which is the issue of load shedding. There has been some impact on our customers in the extrusion area and in the can sheet area due to load shedding. In terms of overall volume, it's not overly material. It's concerning but not overly material at this point in time. As you know, we don't, at Hulamin suffer from load shedding, we suffer from load curtailment. And we have generation capacity to protect us out to a load shedding level of Level 6 -- it's Level 4, I should say. And that's with the generation capacity. If it goes above that, then we need to start shutting down key machinery and it becomes -- it impacts on volume. We haven't had anything again material, this year, there's been some nuisance ones. But generally, we've been able to work with the supply authority to be able to not have again, a material impact on volume. We have 3 generators on order. I think there's one arriving this month, another one in late June and another one in August. And that will take us up to a load shedding comparison -- that will take us up to protection to Level 6. If it goes beyond that into Level 8, then yes, that would -- has the potential to have significant effects, but it depends on the length of time and the frequency that we suffer from Stage 6 -- Stage 8. I don't really want to predict time of what that would have -- what would have a major effect. But let's say it was in place for 3 days, and yes, that would have a big effect on us. Let me come back and generally talk about how our first part of the year has been. It's pretty much where we wanted it to be. There's been some change in mix. The mix is a lot better than we thought it might have been, and we have shared some very low-margin products. So in terms of where we are year-to-date, I'm pretty happy.

Wonderful. Company Secretary, any other questions?

Thank you, Chair. I confirm that, that is all the questions we've received thus far. Thank you, Chair.

Thanks, Geoff, for answering that question, and thank you to [ Zulia ] for asking that question. I think it has helped us to provide a sense for all other participants and representatives on the call a sense of the environment we have traded under in -- since the beginning of the year. Ladies and gentlemen, I think we have dealt with the business of this meeting. I thank you all for your participation, and we look forward to engaging again in our next meeting. Thank you all, and goodbye.