Corporate governance

The directors endorse the Code of Corporate Practices and Conduct set out in the second King Report on Corporate Governance (King 2) that was released in March 2002. The directors are of the view that the company now substantially adheres to the Code of Corporate Practices and Conduct contained in King 2, as is more fully explained in the corporate governance report on page 24.

Mining licences

The company's mining licences cover an area of approximately 7 625 hectares on the farms Aapieskraal 377 KQ, Amandelbult 383 KQ, Elandsfontein 386 KQ, Grootkuil 376 KQ, Kopje Alleen 422 KQ, Middeldrift 379 KQ, Vrugbaar 381 KQ and 387 KQ, Witvley 423 KQ and Zondereinde 384 KQ.

Property

A register of land and buildings is available for inspection at the registered office of the company during normal business hours.

Financial results

The accounting policies, balance sheet, income statement, cash flow statement, statement of changes in equity and Notes to the annual financial statements on pages 39 to 58 reflect the financial results and position of the company.

Dividends

Dividends totalling 90 cents per share (F2002: 170 cents per share) absorbing R208 385 000 (F2002: R392 646 000) were
declared. Details are as follows:

Interim dividend (No 9) - 90 cents per share
 

Declaration date:	5 February 2003
Last day to trade cum div:	21 February 2003
Commencement of trading ex div:	24 February 2003
Record date:	28 February 2003
Payment date:	3 March 2003

No final dividend was declared.

Shareholders who have dematerialised their shares receive payment electronically as provided for by STRATE. For those shareholders who have not yet dematerialised their shares, or who may intend not to do so, the company operates an electronic funds transmission service, whereby dividends may be electronically transferred to members' accounts. These shareholders are encouraged to mandate this method of payment for all future dividends.
 
Share capital

The authorised share capital of the company remains unchanged at R3 500 000 (F2002: R3 500 000) divided into 350 000 000 (F2002: 350 000 000) shares of one cent each.

During the year 624 000 shares were allotted and issued to participants of the Northam Share Option Scheme, for an aggregate consideration of R6 742 000, resulting in the issued share capital at 30 June 2003 being 231 538 500 (2002: 230 914 500) shares of one cent each.

At the forthcoming annual general meeting, members will be asked to place the authorised but unissued shares in the capital of the company, other than those shares that are reserved for purposes of the Northam Share Option Scheme, under the control of the directors in terms of Section 221(2) of the Companies Act, 1973 and the Listings Requirements of the JSE Securities Exchange South Africa.

Repayment of share premium

At the annual general meeting that was held on 7 November 2002, shareholders ratified the repayment of Share Premium in the amount of 75 cents per share (Capital Repayment No 1). Subsequent to this repayment, the following repayments of share premium have taken place:

Capital repayment No 2 - 20 cents per share
 

Last day to trade cum distribution:	2 May 2003
Commencement of trading ex distribution:	5 May 2003
Record date:	9 May 2003
Payment date:	12 May 2003

Proposed capital repayment
No 3 - 35 cents per share

Shareholders are referred to the circular to be mailed to shareholders on or about 15 September 2003 regarding the proposed capital repayment. The salient details are as follows:
 

Date of general meeting:	1 October 2003
Last day to trade cum distribution:	10 October 2003
Commencement of trading ex distribution:	13 October 2003
Record date:	17 October 2003
Payment date:	20 October 2003

At the forthcoming annual general meeting shareholders will be asked to grant the directors a general authority to distribute up to a maximum of 20% of the company's issued share capital in terms of the Listings Requirements of the JSE Securities Exchange South Africa and subject to the requirements of Section 90 of the Companies Act, 1973, as amended. The text of the resolution appears in the notice of annual general meeting on page 59.

Proposed acquisition of company's own shares

The Companies Act permits a company and its subsidiaries to acquire its own shares and for such subsidiaries to acquire shares of its holding company. Accordingly the directors have agreed to propose that shareholders be requested at the forthcoming annual general meeting to consider a special resolution granting the company a general authority to repurchase its own shares.

The text of the proposed special resolution, as well as the reasons therefor and effect thereof, appears in the notice of annual general meeting on page 59, which forms part of this report. A statement by the directors regarding the effect of the maximum repurchase permitted, also appears in the said notice. The general authority, if granted, will be subject to certain terms and conditions as set out in the aforementioned special resolution and will provide the directors with the necessary flexibility to procure the repurchase of the company's shares from time to time should such repurchase, in view of prevailing market conditions, be opportune and be deemed to be in the best interests of the company.

Borrowing powers

In terms of the articles of association, the directors may borrow for purposes of the company, such sums as they deem fit.

STRATE (Share Transactions Totally Electronic)

The company transferred to the STRATE environment during September 2001. Shareholders who have not already dematerialised their shares (certificated shareholders) are strongly urged to do so as soon as possible (unless it is their explicit intention not to do so) in order to enable them to trade in such shares.

It is most important for certificated shareholders to note that their shares may not be traded on the JSE Securities Exchange South Africa unless the shares have been dematerialised.

Proposed amendment to articles of association

It is proposed to amend article 78 of the company's articles of association as certain provisions contained in this article, as it now stands, are no longer required. At the forthcoming annual general meeting of the company shareholders will accordingly be requested to approve a special resolution to amend this article.

The text of the proposed special resolution, as well as the reasons therefor and effect thereof, appears in the notice of annual general meeting on page 59, which forms part of this report.

Northam Share Option Scheme (the Scheme)

The Scheme was established on 4 January 1995 with the objective of attracting and retaining employees with appropriate levels of ability and expertise who make a significant contribution to the operations of the company.

A summary of the shares held under option at 30 June 2003 is as follows:
 

	Price	Total
	per share	number
Earliest and latest exercise date	(cents)	of options
1 March 2001 and 29 February 2004	420	25 000
10 March 2001 and 9 March 2004	400	15 000
29 July 2001 and 28 July 2004	520	25 000
9 November 2001 and
8 November 2004	600	142 000
7 November 2002 and
6 November 2005	1500	345 000
20 November 2003 and
19 November 2006	1200	1 491 000
Number of options held at 30 June 2002		2 043 000
New options granted during
the year
- at R12.00 per share		109 000
- at R20.00 per share		3 420 000
- at R17.30 per share		60 000
Number of options forfeited during the year		340 000
Number of options exercised during the year		624 000
Number of options held at 30 June 2003		4 668 000

At 30 June 2003, the outstanding options were exercisable as follows:
 

		Price per		Total			Options			Options		Options
		share (cents)		number			vested at			exercisable		exercisable
Earliest and latest exercise date				of options			30 June 2003			in F2004		thereafter
9 November 2001 and     8 November 2004		600		35 000		35 000			-			-
7 November 2002 and     6 November 2005		1 500		218 000		64 000			154 000			-
20 November 2003 and     19 November 2006		1 200		1 275 000		-			637 500			637 500
18 November 2004 and     17 November 2007		2 000		3 080 000		-			-			3 080 000
23 January 2005 and     22 January 2008		1 730		60 000		-			-			60 000
				4 668 000		99 000			791 500			3 777 500

Salient details of the options exercised during the year under review are as follows:
 

	Number of	Exercise
	options	price	Consideration
Exercise date	exercised	R	R000
July 2002	15 000	4.00	60
August 2002	25 000	5.20	130
August 2002	15 000	6.00	90
August 2002	75 000	12.00	900
August 2002	20 000	15.00	300
November 2002	45 000	6.00	270
November 2002	82 500	15.00	1 237
December 2002	25 000	4.20	105
December 2002	24 500	6.00	147
December 2002	250 000	12.00	3 000
December 2002	24 500	15.00	368
February 2003	22 500	6.00	135
Total	624 000		6 742

Included in the tables above are the following regarding options issued and exercised by directors during the year:

Gains realised by directors on options exercised during the year:
 

	Number	Subscription	Market price	Share option
	of shares	price - cents	- cents	gain
				R000
I C Watson	25 000	420	1 885	366
	17 000	600	1 885	219
	17 000	1 500	1 885	65
	250 000	1 200	1 885	1 713
	309 000			2 363

Directorate

The following changes have taken place since the publication of the 2002 annual report dated 26 September 2002:

16 December 2002 - Mr I C Watson retired as managing director.

1 July 2003 - Mr R Havenstein was appointed a director in place of Mr B E Davison who resigned with effect from 30 June 2003.

The composition of the board of directors, as well as of board appointed committees, at the date of this report, is reflected on pages 25, 26 and 28.

The directors retiring by rotation in terms of the provisions of the company's articles of association are Messrs. E Molobi, R H H van Kerckhoven and M J Willcox who, being eligible and available, offer themselves for re-election. Furthermore, any director appointed during the course of a year shall retain office only until the next annual general meeting. Accordingly, members will be requested at the forthcoming annual general meeting, to consider resolutions providing for the re-election of Messrs. R Havenstein, E Molobi, R H H van Kerckhoven and M J Willcox.

Brief summaries of their curricula vitae appear on page 28.

Directors' fees

In terms of the articles of association the fees for services as directors are determined by the company in general meeting. The current level of fees paid to directors for their services is as follows:

Board fees

• Board chairman - R80 000 per annum.
• Board members - R40 000 per annum.
• Board meeting attendance fees - R3 000 per meeting.

Board appointed committees

• Committee chairmen - R40 000 per annum.
• Committee members - R20 000 per annum.
• Committee meeting attendance fees - R2 000 per meeting.

These fees are waived by executive directors.
 
Directors' remuneration

The directors' remuneration for the year was as follows:

					Gain on
		Remuneration		Performance	share options
		Fees	package	bonus	exercised	Total
		R000	R000	R000	R000	R000
2003
Executive
I C Watson		-	1 439*	103	2 363	3 905
Non-executive
M E Beckett		106				106
B E Davison		73				73
D T G Emmett		83				83
A S Malone		76				76
E Molobi		76				76
T M G Sexwale		141				141
R H H van Kerckhoven		103				103
B R van Rooyen		145				145
M J Willcox		81				81
		884	1 439	103	2 363	4 789
2002
Executive
I C Watson		-	1 250	188	-	1 438
Non-executive
M E Beckett		111				111
B E Davison		77				77
D T G Emmett		81				81
A S Malone		81				81
E Molobi		73				73
T M G Sexwale		141				141
R H H van Kerckhoven		105				105
B R van Rooyen		133				133
M J Willcox		99				99
		901	1 250	188	-	2 339
*   Includes leave pay

Service contracts

None of the directors has a service contract with the company.
 
Directors' interests

According to information available to the company after reasonable inquiry, the interests of the directors and their families in the shares of the company at 30 June 2003 were as follows:
  

			30 June 2003			30 June 2002
			Indirect			Indirect
	Direct		non-		Direct	non
	Beneficial		beneficial		beneficial	beneficial
Name	Holding		holding	Total	holding	holding	Total
M E Beckett	30 000		-	30 000	30 000	-	30 000
A S Malone	55 000		-	55 000	40 432	-	40 432
T M G Sexwale	-		6 757 959	6 757 959	-	6 155 536	6 155 536
R H H van Kerckhoven	5 145		-	5 145	5 145	-	5 145
B R van Rooyen	37 462		-	37 462	37 462	-	37 462
M J Willcox	-		1 351 592	1 351 592	-	1 230 516	1 230 516
	127 607		8 109 551	8 237 158	113 039	7 386 052	7 499 091

At 30 June 2003, there were no indirect beneficial nor any direct non-beneficial holdings by directors.

Since 30 June 2003 and up to the date of this report, there have been no changes to the directors' shareholdings.

Analysis of shareholders at 30 June 2003

		Total		Percentage
Shareholding range	Number of holders	Shareholding		holding
1 - 5 000	6 609	5 602 947		2.4
5 001 - 10 000	382	2 960 385		1.3
10 001 - 50 000	388	8 849 730		3.8
50 001 - 100 000	66	4 686 964		2.0
100 001 - 1 000 000	172	51 538 582		22.3
1 000 001 and over	29	157 899 892		68.2
	7 646	231 538 500		100.0
		Total		Percentage
Category of shareholder	Number of holders	Shareholding		holding
Individuals	7 466	19 879 402	8.6
Companies	2	103 823 821	44.8
Pension and provident funds	64	50 209 873	21.7
Banks and insurance companies	12	12 602 376	5.4
Unit trusts and other managed funds	77	36 953 007	16.0
Investment trusts and other
corporate bodies	25	8 070 021	3.5
Total	7 646	231 538 500	100.0

 
Major shareholders at 30 June 2003

To the best of the knowledge of the directors, and after reasonable enquiry, shareholders' holdings and holdings under management in excess of five per cent of the share capital of the company were as follows:
 

Owner	Number of shares	Percentage holding
Anglo American Platinum Corporation Limited	52 095 516	22.5
Mvelaphanda Resources Limited	51 728 305	22.3
Fund manager	Number of shares	Percentage holding
Allan Gray Limited	58 417 914	25.2
Stanlib Limited	18 174 553	7.8

Shareholder spread

The company's shareholder spread is set out below.
 

	Number of		Number of shareholders
	shareholders in SA		other than in SA		Total shareholders
Shareholder	Nominal	Percentage	Nominal	Percentage	Nominal	Percentage
type	number	holding	number	holding	number	holding
Public	7 115	54.83	525	0.28	7 640	55.11
Directors	3	0.04	1	0.01	4	0.05
Other (any who
fall outside the scope
of the above)	2	44.84			2	44.84
Total	7 120	99.71	526	0.29	7 646	100.00

Options are offered at the prevailing price on the JSE Securities Exchange South Africa on the day before the offer. In terms of the rules of the Scheme, option holders may exercise 50% of their options two years after the offer date and 100% of their options three years after the offer date. Options not exercised within five years of the offer date shall lapse.

In terms of the rules of the Scheme, 11 550 000 unissued shares are reserved for participants of the scheme, and the maximum number of options that any one participant may hold is limited to 0.4% of the issued share capital of the company prevailing from time to time. At the date of this report, 0.4% of the issued capital equated to 926 000 shares.

Northam Platinum Restoration Trust Fund

The Northam Platinum Restoration Trust Fund was established in 1996 to assist the company in making financial provision for the environmental rehabilitation of the mine, in terms of the Minerals Act, 1991, upon cessation of its mining operations.

Details of the contributions made and provisions raised are disclosed in notes 3 and 7 of the Notes to the annual financial statements.

In addition, the company has registered a bond over certain areas of its property in favour of the Fund in order to secure payment of its obligations.

Special resolutions

Details of special resolutions passed by the company during the year are available upon request.

Going concern

Mining entities have a finite life that depends on geological and technical factors as well as commodity prices and other economic factors. Taking account of the outlook for these factors as contained in the chairman's letter and general manager's report as well as the company's present financial resources, the directors believe that the company is a going concern. The annual financial statements have accordingly been prepared on this basis.

Company secretary

Mr S J van der Spuy continues in office as company secretary. Relevant details appear on page 64 of this report.

Transfer secretaries

During the year the company's transfer secretaries, Computershare Investor Services Limited changed its name to Computershare Limited - Investor Services Division.

Listing

The company's shares are listed in the Resources - Mining [Platinum] sector of the JSE Securities Exchange South Africa.

Post balance sheet events

Shareholders are referred to the cautionary announcement published in the press on Thursday 7 August 2003. Shareholders will be informed of further developments in due course.

No material changes, other than those highlighted in this report, have taken place in the affairs of the company between the end of the financial year and the date of this report.