Grindrod AR 09.Indd
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CContentsontents VVisionision OVERVIEW The Grindrod group's vision is to create sustainable Business overview 1 returns and long-term value for shareholders which Geographic profi le 1 is to be achieved through the contribution of the Group history 2 four divisions: Strategic objectives and profi le 4 Directorate 6 Shipping To be a signifi cant and profi table international COMMENTARIES shipowner and operator managing in excess of Chairman’s report 12 150 ships. Chief executive offi cer’s report 14 Financial director’s report 18 Trading Group fi nancial review 23 To be a sustainable commodity trading business Divisional reviews 28 which is a respected global participant. SUSTAINABILITY Freight Services Sustainability review 58 To be a dominant and profi table regional freight Corporate governance 59 services provider focusing on infrastructural Audit committee report 65 development. Remuneration report 67 Risk management 74 Financial Services Social performance 78 To grow Grindrod Bank to be a meaningful Corporate social investment 85 participant in the southern African fi nancial services Stakeholder engagement 87 arena. Environmental performance 89 G3 Global Reporting Initiative content index 104 ANNUAL FINANCIAL STATEMENTS Directors’ responsibility and approval 108 MMissionission Certifi cate by company secretary 108 Independent auditor’s report 109 Shipping Directors’ report 110 To provide worldwide, high quality shipping services Accounting policies 112 through the ownership and operation of a diversifi ed Statements of fi nancial position 122 fl eet of modern ships. Income statements 123 Statements of comprehensive income 124 Trading Statements of cash fl ows 125 To provide a global commodity trading service in Statements of changes in equity 126 agricultural, mineral and fuel products through end- Segmental analysis 128 to-end solutions by being an informed and trusted Notes to the fi nancial statements 130 business partner. Loan funds 174 Interests in subsidiaries 175 Freight Services To be the fi rst choice provider of a broad range of SHAREHOLDERS INFORMATION regional freight services by integrating the group’s Share analysis of ordinary shareholders 178 Share analysis of preference shareholders 179 strategic infrastructure, assets and logistics and Share performance 180 ships agency capabilities. Notice of meeting 181 Financial Services Form of proxy attached To be a fast moving, medium size bank with a credit Corporate information 183 Terms and expressions 184 rating and status that attracts stable funding and generates an above average return on capital. GGrouproup historyhistory D IN RO R D G CCelebratingelebrating a ccenturyentury ofof shippingshipping andand 1 9 years 0 ffreightreight logisticslogistics excellenceexcellence 1 1 0 - 2 0 THE YEAR 2010 MARKS GRINDROD’S CENTENARY One hundred years ago, Captain John Grindrod started Grindrod & Company, a clearing and forwarding agency and marine surveying business. Twelve years later he and Leon Renaud purchased the 150 tonne steamer Frontier as she lay disabled on the Durban breakwater. Refl oated and re-equipped, she began trading to Port St Johns and East London carrying sugar, oil, timber, hides, wool and occasionally livestock. Their company, the SS Frontier Company was the predecessor of the founding company of Unicorn Shipping and the Grindrod group. Cecile Mapleson Nine years later Renaud, a leading Durban legal counsel, learned through the legal network of an old pilgrim ship, the Halal, which was lying in Aden pending sale by auction. Purchasing her for £9 355 under the name African Coasters (Pty) Limited, he renamed the 430 tonne ship Cecile Mapleson, his wife’s maiden name and with Grindrod & Company as ships agents began trading between Durban and Lourenço Marques (now Maputo). On the death of Captain John Grindrod in 1930, his son, Walter Grindrod, born in Britain in 1903, took over the management of Grindrod & Company and became a very active 2009 protagonist of the coasting industry. An interest that was amplifi ed in 1931 when he became an alternate director on the board of SS Frontier Company. When Leon Renaud died in 1934, his son Cecil joined the board of SS Frontier Company, rekindling with Walter Grindrod the business partnership their fathers had enjoyed. Within three years they had consolidated the operations of the SS Frontier Company and African Coasters. Grindrod Limited / Annual Report Grindrod The Second World War interrupted their hard work as both men joined the armed forces, but immediately on their return they set about expanding their fl eet, a programme led by Walter Grindrod, who became managing director of African Coasters in 1946. Steeped in shipping from dinnertable discussions and a family life that revolved around the small vessels trading out of Durban, Murray Grindrod, son of Walter Grindrod, joined Grindrod in 1957. In his job he learnt the trade from the wharf side, becoming involved in the hiring of personnel, stevedoring and general ships husbandry. He also took every opportunity to study the operation of the ships at sea, which gave him a personal grasp page 2 of the trade and an affi nity with the people aboard. In 1960, he was appointed alternate director to his father. business annual fi nancial shareholder overview commentaries sustainability statements information Pauli and Murray Grindrod at the launching of the fi rst South African container ship, Berg Captain John Edward Grindrod Steamer, Frontier (5) PLOTTING THE COURSE FOR GRINDROD The Grindrod Unicorn Group Limited changed its With the limited volumes of coastal cargoes being name to Grindrod Limited, incorporating a new spread among three players and African Coasters brand and logo. Under the dynamic leadership of needing an urgent injection of capital to replace Ivan Clark and a new executive team together with their ageing fl eet, it was Murray Grindrod who a general rationalisation of structures, the group persuaded his father and Cecil Renaud to seek acquired several key companies in rapid succession fi nance elsewhere. Indeed, it was the team that he led including Island View Shipping. The shipping fl eet was that secured funding from Union Corporation, thus increased at a low point in the market, land-based paving the way for the modernisation of the fl eet, the activities were expanded and trading businesses and subsequent merger with Smith’s Coasters in 1966 the full shareholding in Grindrod Bank were acquired. to form Unicorn Shipping Lines and the acquisition of Thesen’s Steamship Company from Safmarine in Grindrod today lists numerous proud achievements, the same year. The Unicorn brand has since been including being named the top listed shipping synonymous with local shipping. company in the world in 2004 and 2005 and as the Under Murray Grindrod’s leadership as managing top listed company in South Africa for 2004 and director, Unicorn pioneered a fully cellular container 2005. In 2009, the group received the accolade as service in 1971. the number one JSE listed company over 10 years. Limited / Annual Report 2009 Grindrod GRINDROD LISTS ON THE JSE At the end of 2006 and after nearly 30 years' service, Ivan Clark retired as chief executive offi cer and A personal sense of achievement for Murray Grindrod was appointed deputy chairman and subsequently followed the acquisition of the majority shareholding from Union Corporation’s successor, Gencor in 1986 chairman when Murray Grindrod retired after and then the listing of the group in the same year. 21 years as chairman and 50 years with the group. Alan Olivier was appointed Ivan Clark’s successor as Mike Groves was appointed managing director of the chief executive offi cer and has recently had to steer newly listed Grindrod Unicorn group and a number the group through tough economic times. of years later Ivan Clark became the group's chief operating offi cer, a move that culminated in his INVESTING IN THE FUTURE – CHARTING NEW appointment as managing director in July 1999. HORIZONS GROWTH STORY Grindrod has committed employees, a strong A highlight of 1999 was the successful acquisition balance sheet, limited debt, good liquidity, a low cost of Safmarine’s 40% interest in Unicorn Lines (Pty) fl eet and diversifi ed freight and logistics operations. The Grindrod group is poised for future growth in Limited (which later changed its name to Unicorn page Shipping (Pty) Limited) held by the Restis group of all its divisions and looks forward to “Charting New Greece. Horizons” with all its stakeholders. 3 SStrategictrategic oobjectivesbjectives andand profileprofile SShippinghipping TTradingrading Strategic objectives Strategic objectives • grow drybulk ship operating business contract base with • source and develop value chain enhancements that reputable counterparties; improve the offering to customers; • improve product tanker operating capability and expand • expand into new products and markets; the bunker tanker business; • leverage intra-group synergies with Shipping and Freight • monitor the international shipping market for distressed Services; and purchase opportunities both in the liquid and drybulk markets; and • focus on containment of costs and maintenance/ improvement of margins. • maintain good forward employment cover through reliable counterparties. 2009 SHIPPING CONTRIBUTION TO CONTRIBUTION TO CONTRIBUTION TO CONTRIBUTION TO GROUP REVENUE GROUP INCOME GROUP REVENUE GROUP INCOME Grindrod Limited / Annual Report Grindrod 2009 2009* 2009 2009* 17,8% 52,8% D D DR DR IN RO IN RO IN O IN O R D R D R D R D G G