DIRECTORS’ REPORT 2008
FOR THE YEAR ENDED 31 DECEMBER
NATURE OF BUSINESS
Nedbank Group Limited (‘Nedbank Group’ or ‘the company’) is a widely held company and a registered bank controlling company that, through its subsidiaries, provides a wide range of banking and financial services. Nedbank Group maintains a primary listing under ‘Banks’ on JSE Limited (‘JSE’), with a secondary listing on the Namibian Stock Exchange.
FINANCIAL RESULTS
Full details of the financial results are set out here.
YEAR UNDER REVIEW
The year under review is fully covered in the Chairman’s Statement, Chief Executive’s Report, operational reviews and the Chief Financial Officer’s Report.
SHARE CAPITAL
Details of the authorised and issued share capital, together with details of shares issued and options granted during the year, appear in note 39 to the annual financial statements.
OWNERSHIP
The holding company of Nedbank Group is Old Mutual Life Assurance Company (SA) Limited and associates, which hold 53,89% of the issued ordinary shares of the company. The ultimate holding company is Old Mutual plc, incorporated in England and Wales. Further details of shareholders appear here.
DIVIDENDS
Details of the dividends appear in note 20 to the annual financial statements.
DIRECTORS
Biographical details of the current directors appear here. Details of directors’ remuneration and shareholdings appear here.
During the period under review, and also subsequent to year-end, the following changes occurred in the Nedbank Group Board:
- CML Savage resigned as an independent non-executive director (14 May 2008).
- BE Davison resigned as an independent non-executive director (2 August 2008).
- JH Sutcliffe resigned as a non-executive director (9 September 2008).
- NP Mnxasana was appointed as an independent non-executive director (1 October 2008).
- A de VC Knott-Craig was appointed as an independent non-executive director (1 January 2009).
Also during the period under review the Nedbank Group Board decided to do away with the position of vice-chairman of the board. The role of the vice-chairman is no longer considered to be necessary following the creation of the position of senior independent non-executive director, which post is held by Mr CJW Ball. As a result of this decision the Joint Vice-chairmen of the board, Prof MM Katz and Mr ML Ndlovu, will formally step down from their positions asVice-chairmen at the annual general meeting to be held on 14 May 2009 and will continue to serve as directors of Nedbank Group.
The directors who, in terms of the articles of association, are required to seek reelection at the annual general meeting are Dr RJ Khoza, Mr MA Enus-Brey and Ms GT Serobe. Being eligible, they make themselves available for reelection.
Directors of Nedbank Group who have served on the board for a period longer than nine years are now required to seek reelection annually. These directors are Prof MM Katz and Messrs JB Magwaza, ME Mkwanazi and ML Ndlovu and they, being eligible, make themselves available for reelection.
Ms NP Mnxasana and Mr A de VC Knott-Craig were appointed by the board of directors with effect from 1 October 2008 and 1 January 2009 respectively, and in terms of the articles of association their appointments terminate at the close of the annual general meeting. They are available for election and separate resolutions to seek their election will be submitted for approval at the annual general meeting to be held on 14 May 2009.
At a board meeting held on 20 February 2009 Prof MM Katz and Mr ML Ndlovu were reclassified as independent non-executive directors.
Details of the members of the board who served during the year are given below:
| Name | Position as director | Date appointed as director | Date resigned/retired (where applicable) | |||
| CJW Ball | Senior independent director | 1 November 2002 | ||||
| TA Boardman | Chief Executive – executive director | 1 November 2002 | ||||
| MWT Brown | Chief Financial Officer – executive director | 17 June 2004 | ||||
| TCP Chikane | Independent non-executive director | 1 November 2006 | ||||
| BE Davison | Independent non-executive director | 25 November 2002 | 2 August 2008 | |||
| MA Enus-Brey | Non-executive director | 16 August 2005 | ||||
| B de L Figaji | Independent non-executive director | 25 November 2002 | ||||
| R Harris (British) | Non-executive director | 10 December 2007 | ||||
| RM Head (British) | Non-executive director | 1 January 2005 | ||||
| MM Katz | Vice-chairman – independent non-executive director* | 4 November 1997 | ||||
| RJ Khoza | Chairman – non-executive director | 16 August 2005 | ||||
| JB Magwaza | Independent non-executive director | 1 October 1996 | ||||
| ME Mkwanazi | Independent non-executive director | 20 April 1999 | ||||
| NP Mnxasana | Independent non-executive director | 1 October 2008 | ||||
| ML Ndlovu | Vice-chairman – independent non-executive* director* | 5 May 1993 | ||||
| CML Savage | Independent non-executive director | 1 November 2002 | 14 May 2008 | |||
| GT Serobe | Non-executive director | 16 August 2005 | ||||
| JH Sutcliffe (British) | Non-executive director | 10 December 2001 | 9 September 2008 | |||
| * With effect from 20 February 2009: independent non-executive director. | ||||||
AUDIT COMMITTEE
The Audit Committee Report appears here.
COMPANY SECRETARY AND REGISTERED OFFICE |
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| The Company Secretary is Mr GS Nienaber and his addresses and the registered office are as follows: | |||
| Business address | Registered address | Postal address | |
| Nedbank Group Limited | 135 Rivonia Road | Nedbank Group Limited | |
| Nedbank Sandton | Sandown | PO Box 1144 | |
| 135 Rivonia Road | 2196 | Johannesburg, 2000 | |
| Sandown, 2196 | South Africa | ||
| South Africa | |||
PROPERTY AND EQUIPMENT
There was no material change in the nature of the property and equipment of the group or in the policy regarding their use during the year.
CONTRACTS
In 2004 Nedbank Group and Old Mutual plc entered into a relationship agreement, which formally records the terms of the relationship between the two parties. This agreement is available on the Nedbank Group website, www.nedbankgroup.co.za.
In 2005 the Wiphold Consortium and the Brimstone Consortium were chosen as active black business partners to assist in growing and repositioning the Nedbank Group business and driving its internal transformation. Aka Capital fulfils the role of business development partner. Consequently, performance agreements were entered into between Nedbank Group and the aforementioned parties, which govern, inter alia, the setting of the performance criteria, their evaluation and the resultant performance fees in respect of the black business partners.
Nedbank Limited entered into a contract with Group Five Building (Pty) Limited in 2008 for the construction of the second phase of the headoffice campus situated at 135 Rivonia Road. The building will comprise 43 258m2 of mainly office space and a portion of retail space. The contract is due for completion on 13 March 2010.
Details of other contracts material to the affairs of Nedbank Group are discussed in the operational reviews included in the annual report.
DIRECTORS’ SERVICE CONTRACTS
There are no service contracts with the directors of the company, other than those as set out below. The directors who entered into these service contracts remain subject to retirement by rotation in terms of Nedbank Group’s articles of association.
The key responsibilities relating to Dr RJ Khoza’s position as Chairman of Nedbank Group are encapsulated in a contract, which addresses, inter alia, his remuneration and term for occupying the position as Chairman.
Mr TA Boardman’s employment is governed by a service contract, which has a termination date of 28 February 2010. This service contract stipulates a maximum notice period of six months under most circumstances.
A similar service contract was agreed at the time of the appointment of Mr MWT Brown on 17 June 2004. This service contract is effective until Mr Brown reaches the normal retirement age and stipulates a maximum notice period of six months under most circumstances.
Mr ML Ndlovu’s employment was governed by a consultancy contract, agreed at the time of his appointment as a Non-executive Vice-chairman of the company on 1 May 2005, and which expired on 31 December 2008.
INSURANCE
The group has placed cover in the London traditional insurance market of up to R1,85 billion for losses in excess of R50 million. Group captive insurers provide cover for losses that may occur below the R50 million level, retaining R100 million. Certain layers of the group insurance programme are shared with the Old Mutual Group. These arrangements are unchanged from those entered into in 2007.
SUBSIDIARY COMPANIES
Details of principal subsidiary companies are reflected here.
SPECIAL RESOLUTIONS BY SUBSIDIARIES
Bellissima Investments Seventy Two (Pty) Limited passed a special resolution at its shareholders’ meeting on 31 October 2008, changing its name to NedProperties (Proprietary) Limited with effect from 7 November 2008.
BoE Developments (Pty) Limited passed a special resolution at its shareholders’ meeting on 16 October 2008, amending certain articles contained in its articles of association to conform to Nedbank Group practice, with effect from 14 November 2008.
BoE Unit Trust Management Company Limited passed a special resolution at its shareholders’ meeting on 28 May 2008, changing its name to Nedinvest Limited with effect from 25 June 2008.
CKD Leasing (Pty) Limited passed a special resolution at its shareholders’ meeting on 9 December 2008, disposing of its major asset in terms of section 228 of the Companies Act, 61 of 1973 (as amended), with effect from 6 January 2009.
Manco Management Company (Pty) Limited passed a special resolution at its shareholders’ meeting on 25 July 2008, changing its name to Tunga Management Company (Pty) Limited with effect from 31 July 2008.
NedEurope Limited (Isle of Man) passed a special resolution on 3 November 2008, adopting a new memorandum and articles of association and applying for reregistration as a company incorporated under the Isle of Man Companies Act 2006.
Nedcor Securities (Pty) Limited passed a special resolution at its shareholders’ meeting on 23 July 2008, changing its name to Nedgroup Securities (Pty) Limited with effect from 11 August 2008.
Umlingo Trade and Invest 71 (Pty) Limited passed a special resolution at its shareholder’s meeting on 25 January 2008, changing its name to Aard Mining Equipment (Pty) Limited with effect from 22 February 2008.
In addition, a number of dormant subsidiary companies adopted the prescribed special resolutions to enter into voluntary liquidation as part of the Nedbank Group Rationalisation Project, a project with the aim of streamlining the number of subsidiary companies and special-purpose vehicles during the course of the year under review.
A number of subsidiary companies, registered as dormant share block companies, amended their articles of association to incorporate use agreements as part of the articles of association in compliance with the Share Block Control Act.
ACQUISITION OF SHARES
No shares in Nedbank Group were acquired by Nedbank Group or by a Nedbank Group subsidiary during the financial year under review, other than those subject to the repurchase of shares from the Nedbank Eyethu Retail Scheme, the terms and conditions of which scheme are detailed in the circular to ordinary shareholders dated 15 June 2005. Members will be requested to renew the general authority enabling the company or a subsidiary of the company to repurchase shares.
POST-BALANCE-SHEET EVENTS
The directors are not aware of any material post-balance-sheet events that have occurred between the balance sheet date and 25 February 2009.
DIRECTORS’ INTERESTS
The directors’ interests in ordinary shares in Nedbank Group and non-redeemable non-cumulative preference shares in Nedbank Limited at 31 December 2008 are set out in the Remuneration Report.