To the shareholders of Hulamin Limited. I am Thabo Patrick Leeuw, Chairperson of the Board of Directors of Hulamin Limited. The AGM is being conducted in full electronic format in accordance with Section 63(2)(a) of the Companies Act of 2008, as amended, and the company's Memorandum of Incorporation. Accordingly, the proceedings of this meeting are being recorded and broadcast via live webcast. With me physically in attendance is the entire Board of Directors of Hulamin and the Company Secretary. Our External Auditors, EY, and the Transfer Secretaries, Computershare, are also in attendance. The notice of convening this annual general meeting, along with the 2024 Integrated Annual Report and the 2024 Annual Financial Statements, were issued on 17 March 2025.
Should any shareholder have questions on these documents and the resolutions tabled at this meeting, please send your messages through the comment section of the virtual platform. I will endeavor to respond or direct questions to the appropriate person. We will try to group the questions according to themes and respond to them collectively. I propose that the notice which contains details of the ordinary and special resolutions to be considered be taken as read. Is this public? In terms of the company's MOI, a quorum in annual general meeting of shareholders is 25% of the total voting rights entitled to be exercised in respect of at least one matter to be decided at the meeting and at least three voting members present at the meeting. Company Secretary, please confirm whether we have a quorum.
I therefore declare the annual general meeting duly constituted. Voting will be by way of a poll. In terms of clause 30.2 of the company's MOI, unless otherwise resolved, voting at this meeting shall proceed by way of a poll. Shareholders were encouraged to submit votes by proxy in advance of the AGM. I would like to thank the shareholders who have submitted their proxies, which have been duly received and recorded. Shareholders who wish to vote at this meeting may do so on their voting paper. Those who are attending online, please email your voting papers to Computershare at scf@computershare.co.za. In order to expedite the proceedings of this meeting, I propose that you complete the voting paper after each resolution is put to the meeting.
The voting paper will be collated and counted after all the resolutions have been voted upon, whereupon I will then announce the results of all the resolutions put to the meeting. We now deal with item one, which deals with the presentation of the annual financial statements. The company's audited annual financial statements for the financial year ended 1 December 2024 were distributed to shareholders and made accessible on the company's website since 17 March 2025. The audited annual financial statements incorporate the reports of the audit committee, the directors and external auditors. They are hereby presented at this meeting in accordance with the provisions of the Companies Act and are available for inspection. If there are no questions regarding the annual financial statements, I shall move on.
Let's deal with item two, presentation of the Social, Ethics and Transformation Committee report. As required in terms of Regulation 43, part C of the Companies Regulations, 2011 and Section 12 of the Companies Act, Companies Amendment Act 16 of 2024, the Social Ethics and Sustainability Committee report for the annual financial year ended 31 December 2024 is presented to shareholders. The report was issued as part of the integrated report on 17 March 2025 and is accessible on the company's website, which is www.hulamin.co.za. If there are no questions regarding the report of the Social Ethics and Sustainability Committee, I will move on. We get into the resolutions starting with the ordinary resolutions relating to the re-election of non-executive directors.
Ordinary resolutions 1.1 to 1.5 relate to the election of non-executive directors of the company who retire by rotation in accordance with paragraph 33.11 of the company's MOI and who are eligible and available and have offered themselves for election. In terms of the MOI, a third of the directors of the company must retire at each AGM. The directors that are retiring at this meeting were appointed to the board during the course of 2024 as part of our renewed succession planning. Their profiles were included in the governance report contained in the integrated report made available to shareholders on Hulamin's website on 17 March 2024. I would like to propose the approval of the following resolutions. Ordinary resolution 1.1, the election of Pravashni Nirghin as a director.
1.2, election of Zanele Monnakgotla as an Independent Non-Executive Director. 1.3, election of Andreas Tostmann as an Independent Non-Executive Director. 1.4, election of Linda Yanta as an Independent Non-Executive Director. 1.5, election of Paul Baloyi as an Independent Non-Executive Director. I move on to ordinary resolution 2 , which has to do with the election of the audit committee members. Ordinary resolutions 2.1 to 2.3 relate to the election of members of the audit committee of this company who are eligible and available and have offered themselves for election. I'd like to propose the election of the following, the approval of the following resolutions. 2.1, the election of Linda Yanta as a member of the audit committee. 2.2, election of Charles Boles as a member of the audit committee.
2.3, election of Boni Mehlomakulu as a member of the audit committee. I move on to ordinary resolution number 3, which has to do with the election of social ethics and sustainability members. Ordinary resolutions 3.1 to 3.4 relates to the election of members of the social ethics and sustainability committee of the company who are eligible and available and have offered themselves for election. I would like to propose the approval of the following resolutions. 3.1, election of Vusi Khumalo as a member of the Social Ethics and Sustainability Committee. 3.2, election of Sibusiso Peter-Paul Ngwenya as a member of the Social Ethics and Sustainability Committee. 3.3, election of Boni Mehlomakulu as a member of the Social Ethics and Sustainability Committee.
3.4, election of Zanele Monnakgotla as a member of the Social and Ethics Committee. Let's move on to ordinary resolution number 4. Which deals with the appointment of external auditors. I propose ordinary resolution number 4, the reappointment of Ernst & Young Inc as an independent auditor of the company for the ensuing year and until the conclusion of the next AGM, the designated auditor being Mr. Farouk Ebrahim. Let's move on to non-binding resolutions 5 and 6. They all relate to the approval of the remuneration policy. Non-binding ordinary resolutions 5 and 6 relate to the company's remuneration policy and remuneration implementation report as set out in the remuneration report contained in the integrated annual report. I would like to propose the following resolutions. Resolution number 5. Ordinary resolution number 5, approval of the remuneration policy.
Ordinary resolution number 6, approval of the implementation report. We move on to ordinary resolution number 7, the approval of authorization to sign documents. Approval of authorization for any one director or the company secretary to sign documents to give effect to these resolutions. The special resolutions are the ones that will now follow. Special resolution number 1 is the approval of non-executive directors' remuneration. Special resolution 1 is to consider and if deemed appropriate, grant the company authority to remunerate its non-executive directors for their services as directors and/or pay any fees related thereto on the basis outlined in the notice of AGM, and for this authority to be valid and immediate and valid and with immediate effect until the next AGM in 2026. I propose special resolution 1, the approval of non-executive directors' remuneration.
In the special resolution number 2, approval of financial assistance to subsidiaries and other related and interrelated entities. Special resolution 2 is to consider, and if deemed appropriate, grant the company authority to provide financial assistance to its subsidiaries and other related and interrelated entities as contemplated in Section 35 of the Companies Act and on the terms contemplated in special resolution 2, obtained in the notice of AGM. I propose special resolution 2, approval of financial assistance. In dealing with special resolution number 3, the approval of the general authority to repurchase the company's shares.
Special resolution 3 is to consider, and if deemed appropriate, grant the board of directors the authority to approve and implement the acquisition by the company or by a subsidiary of the company in terms of Section 28(2)(b) of the Companies Act of ordinary shares issued by the company by way of the general authority, which shall only be valid until the company's next AGM or 15 months from the date of the passing of this special resolution, whichever period is the shorter and subject to the Companies Act, the MOI and the JSE's listing requirements. I propose special resolution 3, the approval of the general authority to repurchase the company's shares. As all the voting on the resolutions put before the meeting is complete, I will pause to allow our scrutineers from Computershare to collect and count all the votes.
While the scrutineers count the votes, does any shareholder or shareholder representative have questions on these documents and the resolutions tabled? If they, I will endeavor to respond or direct the question to the appropriate director.
Okay. We've received a number of questions. We received questions from a shareholder, and we've a number of questions that have come through on the platform. May I propose that we first go with the questions that have come through the platform and then close off with the questions that have come through prior to the AGM? If I may, Chair, I will read the questions and then pause after each question for the appropriate response. The first question comes from Mr. Brown, and it states: "CapEx into UCUT in 2025, 2026.
Chair, with regard to AGM, we normally don't look forward to providing in terms of us. We would have adjusted in our roadshow and our display. I would like to refer back to our results presentation format, which we did for the 31st of March 2023.
Is that results presentation available on your website?
Yes.
Okay. Can we suggest to the shareholder or shareholder representative asking that question, perhaps please direct that shareholder to our company website for the results presentation, and that detail should be found there.
The next one is from the same shareholder, Mr. Brown. What is your strategy with staff reduction given that your staff numbers are super high by global standards? Further, net headroom versus rolling covenant you expect at the end of June and December 2025. The third question from the same shareholder. Stock levels of 2024 rose worryingly from ZAR 3.1 billion to ZAR 3.4 billion. How do you see stock levels at the end of June and at the end of 2025?
Can I give you an opportunity to state the obvious? I'll say again, the AGM is not fit for purpose to discuss this further. Again, I refer shareholder back to our presentation. In there is key drivers that we're looking to be able to execute, to be able to increase the value ultimately for Hulamin. It is not fair to also speak to the details of practice. The issue of making sure that we operate within our governance is one that we have a laser focus on a continuous basis.
I'll move on to Cecilia from All Weather Capital, long term. Can the JCP team give a brief update on the timeline for the project and if this is on track for transportation?
CEO?
Chair, as per the plan, we went out to the market in, on our March results. I can inform shareholder that we are on track as to our plan with JCP.
Yes, Mr. Shuntay, indeed. In light of the recent discussions, containers as a central cost center to the core business, does the Board believe Hulamin will continue to sustain its effectively a shadow workforce externalized via vendors and operationally based while letting go of permanent employees?
How many questions relating to containers?
If you would give me containers. Just the only one asked is in this platform that relates to containers.
They all come from Mr. Shuntay.
Specifically from Mr. Shuntay.
I'm gonna make one comment. I hope it is extensive enough to address all of these Hulamin Containers related questions. Hulamin Containers is a business that has challenged us as a company for a considerable amount of time. The board two or three years ago took a decision that is no longer fitted in the portfolio of businesses we sought to focus our attention in. We took a decision that we needed to sell the business. Management went out and embarked on a very extensive and open process to try and find an acquirer for that business.
Where we are now in as far as Hulamin Containers is we are fairly advanced with a potential buyer, and we are quite convinced that things are on the right track, and we should be able to inform shareholders sometime soon about the outcome of that process. We are of the view that we have exercised our minds extensively around Hulamin Containers and the decision that the board has taken is the right one.
Next one came from Mr. Parker, a director and the CEO, and I will read it . We will all agree, in fact, that Hulamin has underperformed over the last years. An EBITDA multiple of 381 providing a margin of 2.7% is much too low taking into account the total capital employed and investments done over the past 10-15 years since the plant. With the monopolistic market position Hulamin has in the local market and the unlimited opportunities it had and still has available in the export market, exactly 10 years ago, in 2014, Hulamin achieved a before-tax margin of 37%. This seems more aligned with the degree of upside and opportunities and could be seen as a minimum level to be achieved.
If we set a margin of 7% as a benchmark, which Hulamin has achieved before, the profit before tax should be now close to ZAR 1.1 billion. That level of profitability would allow Hulamin to continue to invest at all times to regain scale again after six years of not doing this. If we take this specific guideline for Hulamin to achieve in the next one to two years, which would be from your point of view, the areas your team will need to focus on to return to that level of profitability and what would be the realistic timeline?
Based on our default presentation, again, we've included a fair path to return to the profitability ranges that Mr. Parker talks about. Turn to the page, again, that we've highlighted clear drivers that our business and my management team will execute within the next three years to be able to get to a return on equity greater than our average cost of capital. I share the same thoughts together with the board and Mr. Parker that Hulamin has got huge opportunities to get back and deliver the return in the ranges that we've articulated in our market outlook.
I'll move on to you, Mr. Brown. How will you finance CapEx bearing in mind last year's huge ZAR 500 million negative cash flow?
Again, as highlighted with regards to our governance around liquidity, cash generation from the business is definitely where we're looking to improve our profitability bit by creating the cash to pay down our debt, thereby allowing us to spend the capital but at the same time give back the return. If you look at the last three years, this year during the year we will be completing the last phase of 18 of the wide projects with the intention to be in commercial by early next year and start giving back the return that is expected from the capital spent, thereby allowing us to be able to fund. Not only fund the capital that's required for the business, but also to give dividends back to the shareholders as we go through the three years.
Can I add to that? Please, tell me if I'm out of order if I'm repeating. I think there is an intention to invite shareholders to the plant later in the year when the output is complete.
Chair, obviously we're looking at around about September is the period, but we will be definitely in communication with our shareholders and send out invites well in advance so that we can have a good meeting and be able to share with them the [inaudible] that we visited by even including a plant tour.
Mr. Brown should look out for that invitation.
I'll move on to the next question. Again, I've got two questions from Mr. Parker. One for CEO and the other for the CFO. Market was advised by management that a decision on extrusion division would be made by end of June 2024. We are now years later and additional losses of ZAR 50 million, right, and the division has been reviewed. Now, a decision on this business unit has been promised end of June 2025. My questions are: Knowing the lack of keeping to timelines set by your management itself, can you confirm that in five weeks time, a definite overdue decision will be taken for this division which has lost more than ZAR 250 million in the last couple of years and recently lost its biggest client. Looking down the road, the second question.
Looking down the road, what tonnage do you think Hulamin will produce in total of those products in 2026? I think the question meant 2027. How will this tonnage be split between the local and the export market? How much of the total tonnage will be for the local and overseas market? Last year overseas as well.
Can I just look at the tonnage between 2026 and 2027? As already previously stated in the responses to Mr. Parker's question, we are unable to provide forward-looking numbers. We are not allowed. We are not permitted. Not that we are unable to, but we are definitely not permitted to be providing forward-looking numbers, unfortunately. I'll hand over to you to deal with.
Thanks, Chair. I can confirm that we will be able to provide feedback in line with the timeline that we have stipulated in June with regards to our extrusion business as we would have completed our strategic review by that time.
To the CFO. Looking at your very high stock levels at end of December. At ZAR 8.8 billion. Can you advise us what the stock level will be at the interim and at year-end of 2025? The second question to the CFO. What are the next capital investment projects planned for the rest of 2025 or 2026?
Thanks. Thanks, Jessica. I think, as you already indicated that we won't be giving any forward-looking information. However, I think in the March presentation, which you'll find on our website, there's a lot of justification that will be beneficial to answer some questions that you are asking.
Next question comes from Ms. Surendran from Alweza Capital. Hulamin has not implemented minimum shareholding requirements policy for its executives, particularly the CEO and CFO. Furthermore, an analysis of actual ownership, specifically just the shares as opposed to the interest of directors, reveals that both executives hold minimal equity relative to their guaranteed pay. The CEO at 13% and the CFO at 0%. This indicates a weak alignment of interest between management and shareholders. Have you given any thought to having a plan implemented in this policy going forward?
Can I ask my Chair of RemCo to address this question on the minimum shareholder requirements, shareholding requirements?
Thanks, Chair, and thanks for the clear question. The comment that Hulamin hasn't implemented a minimum shareholding requirement to date is correct. The shareholdings of the executives are quite low. Those comments are correct. We are in the process of doing a review of all the incentives for exec. One of the issues that's under consideration is a minimum shareholding requirement for executives. We'll finalize that consideration and deliberation in the next month or two. We are sympathetic and support the view that alignment of interest is important, and that will be strongly taken into account in making a decision whether to implement the policy. That decision would have been made and implemented if it comes out by the end of the year. That's it.
Thank you.
We have a follow-up from Mr. Brown in relation to the questions you asked earlier and the responses provided by Hulamin. Mr. Brown, with due respect, you seem to be confused as to the purpose of the AGM. It's an opportunity of the year for all shareholders to manage any serious questions regarding strategy, prospects, current holdings, et cetera. For the two years I was attending AGMs, I have never been fobbed off. I suggest that as business folks look at some previous presentations to find answers, some of which you will not find in that presentation.
Thanks. Yes. Okay. Thanks. We have other comments. The last comment of Mr. Brown, if you'll just
Okay.
I see there's another question coming in.
I mean, one comment I would make is we definitely note Mr. Brown's comment. I don't think the responses that the CEO provided are intended to fob anyone off. I would greatly encourage Mr. Brown to reach out to the CEO. I'm sure he'll derive a high level of satisfaction out of a one-on-one conversation. I'm not suggesting, I'm not committing the CEO to providing forward-looking numbers, but I think an engagement, a one-on-one engagement would probably be fruitful.
Thank you, Chair.
We've got a follow-up comment as well. I'm not so sure if it comes as a question, but it is from Mr. Hawker. The comment says, "Allow me to point out you have around 50 shareholders participating in this AGM. These shareholders are not receiving any dividends for six years and now in this AGM we see it, and I'll wait for the loading of the question." And it's Mr. Patience while the system loads a list of your question. I will read it again, perhaps if he'll make all this. Okay. Mr. Hawker, while he's actually speaking. I am assuming we are about to wrap up for the questions first. I have to ask the online.
You wanna- Can I read it out?
Yeah.
From Mr. Steven. Allow me to state that you have around 80 shareholders participating in this AGM. The shareholders are not receiving any dividends for the past six years, and now in this AGM they see pretty much no information. Highly disappointing AGM as stated by Mr. Brown earlier. All right. One further question. Yeah, I'm thinking that is just a reminder of Mr. Parker's, Broca's comment from April. We denote Mr. Broca's comment. But what I will say is that we are committed to a continuous engagement with our shareholders, including Mr. Broca. We look forward to engaging him further on all matters relating to the business.
We are entirely concerned of the absence of a dividend for such a long period of time. This is something that the board is intending to have addressed as soon as conditions permit. Thank you. I think that is all the questions. That is all the time we had for questions. If we were unable to respond to your question, I know I'm repeating myself here, or you feel we did not respond adequately to your question, I invite you to get in touch with the company through the company secretary. We will ensure we respond to all questions posed by shareholders. I will ask the company secretary to read the results of the polling.
If I may, the results of the vote will be the four. I'll start. The ordinary resolution one election of CFO for 99.7, 99.8% the resolution has passed. The election of Ms. Zanele Monnakgotla has also passed with 99.8%. The election of Andreas Tostmann has also passed at 99.8%. The election of Ms. Linda Yanta has also passed at 99.8%. Ordinary resolution number 12 put forward by Mr. Paul Baloyi has also passed at 99.7%. Moving on to the audit committee. The appointment of Ms. Linda Yanta as audit committee member has passed at 99.7%. The appointment of Mr. Paul Baloyi has also passed by 99.8%, as well as Boni Mehlomakulu has also passed by 99.8%.
The election of social and business leaders, Vusi Kumalo, has passed by 99.7%. Of Ms. Renia, 99.6%. Mehlomakulu , 99.7%, and Ms. Munahosa, 99.7%. The election of the general auditors, Ernst & Young, has passed by 99.7%. Non-binding advisory vote for the remuneration policy has passed by 80.2%. The non-binding advisory vote on the implementation of the remuneration policy has passed by 80.2%. The resolution for authorization to sign the documents relating to these resolutions has passed at 99.8%. In respect of the special resolution to approve the remuneration payable to non-executive directors has passed by 80.2%. The special resolution to approve the granting of financial assistance to subsidiaries and related entity has passed by 80.2%.
The last special resolution and resolution, the approval of the general authority to repurchase the company shares has passed by 88.2%. We will be releasing these results by tomorrow afternoon and will also have them on the website, and in there we will have the full details.
Thank you, Company Secretary. Unless any shareholder wishes to raise any other matter in accordance with Section 61(8)(d) of the Companies Act, I will declare the meeting closed.