Annual Financial Statements


Financial Statements for the year ended 31 December 2003


Notes 1 - 10 to the Financial Statements


1. PROPERTY, PLANT AND EQUIPMENT (Rmillion)
GroupTotalLandPlant andVehiclesCapitalisedCapital
andequipmentand otherleasedwork in
buildingsplant andprogress
vehicles
Carrying value at beginning of year4 1046853 0722059133
Additions35171021986137
Disposals (21)(14)(4)(3)
Depreciation(223)(9)(178)(32)(4)
Transfers(10)317(28)
Currency alignment(47)(25)(8)(4)(9)(1)
Impairment(2)(2)

Carrying value at end of year4 1626343 01319582238

Comprising:
2003
At cost5 4857483 956423120238
    Less: Accumulated depreciation1 32311494322838

4 1626343 01319582238

2002
    At cost5 2877903 92239745133
    Less: Accumulated depreciation1 18310585019236

4 1046853 0722059133

Company
Carrying value at beginning of year1 8892961 3421297115
Additions1935881090
Disposals(19)(14)(2)(3)
Depreciation(153)(4)(127)(21)(1)
Transfers(5)36(2)(29)
Impairment(2)(2)

Carrying value at end of year1 9082781 3351166173

Comprising:
2003
    At cost2 8813382 05928229173
    Less: Accumulated depreciation9736072416623

1 9082781 3351166173

2002
    At cost2 7593461 98828129115
    Less: Accumulated depreciation8705064615222

1 8892961 3421297115

Plant and machinery with a book value of R46 million are encumbered as security for the secured finance lease obligations and as security for certain short-term borrowings of R14 million.
 
The register of land and buildings is available for inspection at the company's registered office.

 
2.GROWING CROPS (Rmillion)GroupCompany
2003200220032002
Reconciliation of carrying value:
Carrying value at beginning of year16816510099
Increase due to purchases/increased area under cane6
Gain arising from physical growth and price changes4016169
Net decrease due to reduced area under cane(27)(2)(22)(8)
Currency alignment(8)(11)

Carrying value at end of year17916894100

Area under cane (hectares)
South Africa 13 43614 80213 43614 802
Mozambique 7 4807 570
Swaziland 3 8113 754

24 72726 12613 43614 802


 
3.LONG-TERM RECEIVABLE (Rmillion)GroupCompany
2003200220032002
Advances to an export partnership210210210210

The company participates in an export partnership engaged in the construction of luxury vessels in order to foster the use of aluminium plate in marine applications.

 
4. GOODWILL (Rmillion)Group
20032002
 
At cost4949

Accumulated amortisation
Balance at beginning of year 97
Current charge32

Balance at end of year129

Carrying value at end of year3740

Goodwill is amortised over 20 years.

 
5.INVESTMENTS (Rmillion) GroupCompany
2003200220032002
Associate:
The carrying value of the Group's 49% interest in Ašucareira de Xinavane, SARL (Mozambique) comprises:
Unlisted shares2020
Loan7472
Cumulative share of post-acquisition deficits(94)(68)
Balance at beginning of year(68)(53)
Movement in currency translation reserve1921
Loss for the year(45)(36)

Book value024

Directors' valuation024

Net assets and results of associate:
Property, plant and equipment323418
Growing crops4242
Current assets9934
Current liabilities (92)(64)
Borrowings:
- External(385)(422)
- Shareholders(155)(116)

Net deficit(168)(108)
Other shareholders' share of deficit8655

Group share of deficits (pre and post-acquisition)(82)(53)

 
Revenue103104

Operating (loss)/earnings before depreciation(3)32
Depreciation(27)(30)
Foreign exchange loss(31)(43)

Loss before financing costs(61) (41)
Financing costs(32)(33)

Loss for the year(93)(74)
Other shareholders' interest4838

Group share of loss(45)(36)

Other investments:
Unlisted shares at fair value22
Loans3322

Book value5522

 
Carrying value of investments52922

A schedule of unlisted investments is available for inspection at the company's registered office.

 
6.DERIVATIVE INSTRUMENTS (Rmillion)
The fair value of derivative instruments at year end was:
GroupCompany
2003 2002 2003 2002
Forward exchange contracts - hedge accounted (34)(86)1024
Forward exchange contracts - not hedge accounted (1) (2) (1) (2)
Options (12) (12)
Futures contracts - hedge accounted (7) (11)1 (11)
Other embedded derivatives(24)(24)

(42)(135)10(25)

Summarised as:
Derivative assets 1151 11 39
Derivative liabilities (53)(186) (1) (64)

(42)(135) 10 (25)

The book value of other financial instruments approximates fair value with the exception of the fixed rate debt of R1 168 million (2002 - R1 096 million) which will be discharged at face value during 2004. The fair value of this fixed rate debt is R1 215 million (2002 - R1 155 million) which has been determined using a discounted cash flow calculation that uses current market interest rates charged for loans with similar terms and credit risk.

Further details on derivative instruments are set out in note 30.


   
7.SUBSIDIARIES AND JOINT VENTURES (Rmillion) Company
20032002
Shares at cost, less amounts written off498409
Indebtedness by 527720
Indebtedness to (106) (490)

919639

The Group's proportionate share of the assets, liabilities and post-acquisition reserves of joint ventures, which comprise in the main, Hulett Aluminium, is included in the consolidated financial statements as follows:
Property, plant, equipment and investments 1 9871 998
Current assets 639650
Less: Current liabilities (274)(228)

Capital employed 2 3522 420
Less: Long-term borrowings (470)(564)
Post-acquisition reserves (1 169)(1 168)
Deferred tax, provisions and derivative instruments(583)(639)
Minority interests in subsidiary (6)(6)

Interest in joint ventures 12443

The Group's proportionate share of the trading results of the joint ventures is as follows:
Revenue 1 6181 625

(Loss)/earnings for the year (74)61
Tax 24(17)
Minority interest (1)

Total net (loss)/earnings (51)44

The Group's proportionate share of cash flows of the joint ventures is as follows:
Cash flows from operating activities (19)110
Net cash used in investing activities (55)(31)

Net movement in cash resources (74)79

The assets, liabilities and results of Triangle, which are not included in the consolidated financial statements and which have not been adjusted for inflation, are translated at the official Zimbabwe dollar exchange rate as follows:
2003200220032002
Equity365393 *Property, plant and equipment22216
Minority interest946Growing crops392334
Deferred tax121138Current assets486986
Long-term borrowings43Current liabilities(401)(956)


499580499580


 
Revenue9542 180

After tax earnings:
Net operating earnings15237
Surplus on revaluation of growing
crops to current fair value29380

Total net earnings445117

*  Property, plant and equipment have been accounted for in terms of the historical cost convention.

 
8.INVENTORIES (Rmillion) GroupCompany
2003 2002 2003 2002
Raw materials586576493479
Work in progress 7711144
Finished goods 775846697698
Consumable stores 117985765
Development properties 214256

1 7691 8871 2511 246

Included in raw materials is an amount of R517 million (2002 - R424 million) that relates to the constructive obligation that has been recognised on maize procurement contracts.

 
9.SHARE CAPITAL (Rmillion)
20032002
Authorised:
150 000 000 ordinary shares of R1 each 150 150

Issued and fully paid:
101 467 417 (2002 - 101 351 797) 101 101

Unissued:
Under option to employees, for a period of ten years from date granted, to subscribe for 7 040 460 shares at an average price of R38,36 per share (2002 - 5 957 600 shares at R39,50 per share). 
Under control of directors for the purposes of the company's share incentive scheme 3 106 282 shares (2002 - 4 177 580 shares).
Under control of directors in terms of a shareholders' resolution 38 385 841 shares (2002 - 38 513 023 shares).
Details of share options are set out in note 24.

 
10.DEFERRED TAX (Rmillion) GroupCompany
2003 2002 2003 2002
Restated at beginning of year 1 006 911 401 305
    Accounted for in equity (12) 25 (12) 25
    Prior years 4 (10) (13)
    Currency alignment (2) (5)
Current year (relief)/charge on:
 * Earnings before exceptional items (128) 87 (91) 86
    Exceptional items (2) (2) (2) (2)

Balance at end of year 866 1 006 296 401

Comprising temporary differences relative to:
    Property, plant and equipment 888 865 362 346
    Growing crops 41 42 28 30
    Export partnership 210 210 210 210
    Current assets 51 55 5 6
    Current liabilities (112) (103) (95) (89)
    Tax losses (229) (128) (225) (105)
    Other 17 65 11 3

866 1 006 296 401

* Included in the current year relief is the reversal of R64 million relating to the reserves of foreign subsidiaries which will no longer be taxable on repatriation to South Africa as a result of amended tax legislation.