Annual Financial Statements


Financial Statements for the year ended 31 December 2004


Notes to the Financial Statments (21 - 32)


21.HEADLINE EARNINGS/(LOSS) (Rmillion) Group
2004 2003
Total net earnings/(loss) 226(41)
Less after tax effect of:
   Exceptional items (note 18) (9)(9)
   Surplus on disposal of fixed assets (3)(1)
   Realised gain on cash equivalent investment  (42)
Headline earnings/(loss) 214 (93)
 
22. EARNINGS PER SHARE   
   
Earnings per share are calculated using the weighted average number of ordinary shares in issue during the year. 
In the case of basic earnings per share the weighted average number of shares in issue during the year is 101 718 002 (2003 - 101 417 620) and in respect of diluted earnings per share the weighted average number of shares is 102 790 613 (2003 - 101 815 540).
 
23.DIVIDENDS (Rmillion)   
20042003
Paid:   
   Final for previous year, paid 25 March 2004 - 80 cents (2003 - 190 cents) 81193
   Interim for current year, paid 2 September 2004 - 50 cents (2003 - 40 cents) 5140
132 233
The final dividend for the year ended 31 December 2004 of 120 cents per share declared on 18 February 2005 and payable on 24 March 2005 has not been accrued.
 
24. RETIREMENT BENEFITS
 

 
Pension and provident fund schemes
The Group contributes towards retirement benefits for substantially all permanent employees who, depending on preference or local legislation, are required to be a member of either a Group implemented scheme or of various designated industry or state schemes. The Group schemes are governed by the relevant retirement fund legislation. Their assets consist primarily of listed shares, fixed income securities, property investments and money market instruments and are held separately from those of the Group. The scheme assets are administered by boards of trustees, each of which includes elected employee representatives.

Defined benefit pension scheme
There is one defined benefit scheme for employees including those of the Hulett Aluminium Joint Venture. This scheme is actuarially valued at intervals of not more than three years using the projected unit credit method. The statutory actuarial valuation of the scheme as at 31 December 2001 was certified by the reporting actuary to be in a sound financial position. With effect from 7 December 2001 The Pension Funds Second Amendment Bill was enacted. This Bill requires that the actuarial valuation at 31 December 2001, together with a plan for the apportionment on a fair basis to the employer and past and current members of the fund, of any surplus established by this valuation must be approved by the Financial Services Board (FSB). Whilst the valuation has been completed and submitted to the FSB, the apportionment plan, which will determine the entitlement of any party, is currently being developed and is expected to be submitted to the FSB for approval before 30 June 2005. Accordingly, due to the uncertainty regarding entitlement, no surplus has been recognised on the Group's Balance Sheet.

An actuarial valuation of liabilities, based on the existing benefits, carried out as at 31 December 2004 in accordance with AC116 showed the present value of obligations to be adequately covered by the fair value of the scheme assets.

  Group
  2004 2003
     RmillionRmillion
 Details of the valuation are as follows:
  Fair value of scheme assets 3 602 3 061
  Present value of obligation (3 109) (2 558)
 Excess of Fund assets over member liabilities 493 503
 The reconciliation for the year is as follows:
  Opening balance 503 521
  Interest costs (270) (252)
  Service costs (91) (70)
  Contributions paid (company and employee) 6759
  Expected return on scheme assets 270308
  Actuarial gains/(losses) 14 (63)
  Closing balance 493 503
  Actual return on scheme assets: 367438
 Included in the assets of the scheme are ordinary shares held in
    The Tongaat-Hulett Group Limited, stated at fair value 8552
 The principal actuarial assumptions are:
  Discount rate 8,0% 10,0%
  Salary cost inflation 5,0% 7,0%
  Pension increase allowance 4,0% 6,0%
 Expected rate of return on assets 8,0%10,0%
 

 
Defined contribution pension and provident schemes
There are three Group defined contribution schemes, one of which is located in Swaziland. The latest audited financial statements of these schemes all reflect a satisfactory state of affairs. Contributions of R15 million were expensed during the year (2003 - R13 million).
 

Post-retirement medical aid benefits
  The obligation of the Group to pay medical aid contributions after retirement is no longer part of the conditions of employment for employees engaged after 30 June 1996. A number of pensioners and current employees, however, remain entitled to this benefit. The entitlement to this benefit for current employees is dependent upon the employee remaining in service until retirement and completing a minimum service period of ten years. The unfunded liability for post-retirement medical aid benefits is determined actuarially each year and comprises:
  Group Company
  2004 2003 2004 2003
Amounts recognised in the balance sheet:
  Present value of unfunded obligations 239 218 198 184
  Unrecognised actuarial losses (18) (7) (14) (7)
  Net liability in balance sheet 221 211 184 177
The liability is reconciled as follows:
  Net liability at beginning of year 211 199 177 170
  Net expense recognised in income statement 26 25 22 19
  Contributions (16) (13) (15) (12)
  Net liability at end of year 221 211 184 177
Amounts recognised in the income statement:
  Service costs 3 4 2 2
  Interest costs 21 23 18 20
  Net actuarial losses/(gains) recognised 2 (2) 2 (3)
  26 25 22 19
The principal actuarial assumptions applied are:
  Discount rate 8,0% 10,0% 8,0% 10,0%
  Health care cost inflation rate 5,0% 7,0% 5,0% 7,0%
Retirement gratuities
  The Group has in the past made payments, on retirement, to eligible employees who have remained in service until retirement, and have completed a minimum service period of ten years. The unfunded liability for retirement gratuities which is determined actuarially each year comprises:
  Group Company
  2004 2003 2004 2003
Amounts recognised in the balance sheet:
  Present value of unfunded obligations 45 48 40 43
  Unrecognised actuarial gains/(losses) 4 (2) 3 (2)
  Net liability in balance sheet 49 46 43 41
The liability is reconciled as follows:
  Net liability at beginning of year 46 43 41 39
  Net expense recognised in income statement 7 7 6 6
  Payments made (4) (4) (4) (4)
  Net liability at end of year 49 46 43 41
Amounts recognised in the income statement:
  Service costs 3 3 2 2
  Interest costs 5 5 4 5
  Net actuarial gains recognised (1) (1) (1)
  7 76 6
The principal actuarial assumptions applied are:
    Discount rate 8,0% 10,0% 8,0% 10,0%
    Salary inflation rate 5,0% 7,0% 5,0% 7,0%
 
25.SHARE OPTIONS
 
Details of share options issued in terms of the company's share incentive schemes are as follows:
Option Number of OptionsOptions OptionsNumber of Options
 price Expiring options at granted inexercised in forfeited inoptions at time
 Rand ten years from 31 Dec 20032004 20042004 31 Dec 2004constrained
 28,33 4 March 199419 200   19 200
 40,50 20 September 1994488 020   487 520500
 40,00 24 March 199597 400   3 000 94 400
 33,25 4 November 1998227 200   25 500 201 700
 32,90 5 March 19991 366 800   141 254 1 225 546
 40,10 7 May 1999611 240   51 580 559 660
 30,00 19 May 2000196 900   8 720 188 18075 272
 29,40 26 July 200022 300   1 600 20 7008 280
 39,85 12 January 2001132 600   3 000 129 60077 760
 40,00 16 May 20011 192 650   39 1506 795 1 146 705344 011
 42,00 15 August 200158 500   58 50017 550
 49,60 13 May 20021 293 250   13 320 1 279 930767 958
  31,9014 April 2003 1 289 400   18 3001 271 100 1 271 100
  34,501 October 2003 45 000   45 000 45 000
    47,00 21 April 2004  1 260 800   15 2001 245 600 1 245 600
      7 040 460 1 260 800 780 524 54 115 7 466 621 3 852 531
 
26. DIRECTORS' REMUNERATION AND INTERESTS
  
Directors' remuneration (R000)
 The directors' remuneration for the year ended 31 December 2004 was as follows:
  Travel RetirementShare
  #Cashexpense and medicalOtheroption
 Name FeessalaryBonusallowances contributionsbenefitsgains Total
 Executive directors:
 D G Aitken (to 29 February 2004) 1316928 29945*651 249
 B G Dunlop 95 1 418811 312 219103+553 013
 A Fourie 95 1 163638 296 19934+192 444
 G R Hibbert 95 970637 305 17569+162 267
 G P N Kruger 95 1 319742 308 222206+532 945
 M H Munro 95 939617 302178392 170
 S J Saunders 95 1 322767 298 214206+742 976
 M Serfontein 95 971605 304 187103+1282 393
 P H Staude 95 2 6221 493 361 344206+185 139
  773 10 893 6 310 2 514 1 7671 872 46724 596
#During 2004 the company converted to a cash based remuneration structure which resulted in the inclusion in cash salary of amounts in respect of various separate fringe benefits previously disclosed as other benefits.
 * Including accrued leave and retirement gratuity.
+ A once-off lump sum settlement was paid on the discontinuance of an educational assistance scheme.
 Bonuses and other benefits are reported to match the amount payable to the applicable financial year.
   
 Directors' remuneration (R000)
 The directors' remuneration for the year ended 31 December 2003 was as follows:
  Travel RetirementShare
  expense and medicalOtheroption
 Name FeesSalaryBonusallowances contributionsbenefitsgains Total
 Executive directors:
 D G Aitken 80946190 162178701 626
 B G Dunlop 801 218193 207278231 999
 A Fourie 80948194 168198531 641
 G R Hibbert 80787251203 140236551 752
 G P N Kruger 801 156187 1862351 844
 J B Magwaza (to 31 July 2003) 4051897 90967*841 796
 M H Munro (from 1 October 2003) 20227 54 3976416
 S J Saunders 801 005193 1792122161 885
 M Serfontein 80793182 1522711 478
 P H Staude 802 200230 2825931563 541
  7009 798 2511 723 1 6053 244 65717 978
*Including accrued leave and retirement gratuity.
 Bonuses and other benefits are reported to match the amount payable to the applicable financial year.
 
  
  2004 2003
 Name    Fees Other Total Fees Other Total
 Non-executive directors:   
 D D Barber   95 9580 80
 P M Baum   95 60155
 I Botha (from 23 February 2004)   82 25107
 L Boyd   95 7016580 70150
 E le R Bradley   95 13523080 135215
 B E Davison (from 3 May 2004)   67 67
 M W King   95 5014580 50130
 J B Magwaza   95 239+33440 40
 M Mia   95 8017580 80160
 T H Nyasulu   95 2512080 50130
 C M L Savage   215 571786200 562762§
 R H J Stevens   95 9018580 90170
 A M Thompson   95 9580 80
 Directors retired/resigned    8085165
    1 314 1 345 2 659 9601 122 2 082
+Includes share option gain on the exercise of options awarded when he was an executive director.
§ Restated
      
Declaration of full disclosure
 Other than that disclosed above, no consideration was paid to, or by any third party, or by the company itself, in respect of services of the company's directors, as directors of the company, during the year ended 31 December 2004.
   
  Interest of directors of the company in share capital
  The aggregate holdings as at 31 December 2004 of those directors of the company holding issued ordinary shares of the company are detailed below. Holdings are beneficial except where indicated otherwise.
  2004 2003
  Direct Indirect Direct Indirect
  Name shares shares shares shares
  Executive directors:
  B G Dunlop 1 440   1 440
  A Fourie 5 000   3 600
  G R Hibbert 21 562   21 562
  G P N Kruger 205   205
  M H Munro 500
  S J Saunders 761 632 760 632
  S J Saunders (non-beneficial) 487 376 487 376
  M Serfontein 1 000 8 000 500 8 000
  P H Staude 22 049   18 049
        51 756 1 257 008 45 356 1 256 008
  Non-executive directors:
  L Boyd 500   500§
  E le R Bradley 104 191   104 191
  E le R Bradley (non-beneficial) 20 934   20 934
  J B Magwaza 5 760   5 760
  C M L Savage 24 003 73 225 24 003 73 225
  R H J Stevens 618   618
  30 881 198 350 30 881 198 350
§ Restated.
  
  Interest of directors of the company in share options
  The interest of the directors in share options of the company are shown in the table below:
          Number Options Options Number
          of shares granted exercised of shares
    Option price   Expiring at 31 Dec during during at 31 Dec
  Name Rand   ten years from 2003 the year the year 2004
   
  Executive directors
  B G Dunlop 40,50   20 September 1994 14 000   14 000
    40,00   24 March 1995 6 000     6 000
    33,25   4 November 1998 8 000     8 000
    32,90   5 March 1999 39 000     39 000
    40,10   7 May 1999 14 000     14 000
    30,00   19 May 2000 7 000     7 000
    39,85   12 January 2001 9 000     9 000
    40,00   16 May 2001 30 000    30 000
    49,60   13 May 2002 25 000     25 000
    31,90   14 April 2003 24 400     24 400
    47,00   21 April 2004   3 600   3 600
          176 400 3 600 14 000 166 000
   
 The interest of the directors in share options of the company are shown in the table below:
    Number Options Options Number
    of shares granted exercisedof shares
  Option price   Expiring at 31 Dec during during at 31 Dec
 Name Rand   ten years from 2003 the year the year 2004
 Executive directors (continued):
 A Fourie 40,50   20 September 1994 4 000 4 000
  33,25   4 November 1998 4 000  4 000
  32,90   5 March 1999 18 000 18 000
  40,10   7 May 1999 5 200 5 200
  30,00   19 May 2000 4 000 4 000
  39,85   12 January 2001 2 400 2 400
  40,00   16 May 2001 10 000 10 000
  49,60   13 May 2002 35 000 35 000
  31,90   14 April 2003 40 000 40 000
   47,00 21 April 2004 30 000 30 000
   122 600 30 0004 000 148 600
 G R Hibbert 40,50   20 September 1994 4 000   4 000
  40,00   24 March 1995 4 000  4 000
  33,25   4 November 1998 8 000    8 000
  32,90   5 March 1999 40 000 40 000
  40,10   7 May 1999 9 000  9 000
  30,00   19 May 2000 4 000  4 000
  39,85   12 January 2001 5 000    5 000
  40,00   16 May 2001 15 000 15 000
  49,60   13 May 2002 15 000 15 000
  31,90   14 April 2003 15 000  15 000
   47,00 21 April 2004 25 000 25 000
   119 000 25 0004 000 140 000
 G P N Kruger 40,50   20 September 1994 1 800   1 800
  40,00   24 March 1995 8 800   4 8004 000
  33,25   4 November 1998 8 000    8 000
  32,90   5 March 1999 43 000 43 000
  40,10   7 May 1999 14 000 14 000
  30,00   19 May 2000 4 000 4 000
  39,85   12 January 2001 5 000 5 000
  40,00   16 May 2001 20 000    20 000
  49,60   13 May 2002 25 000    25 000
  31,90   14 April 2003 20 000 20 000
   47,00 21 April 2004 10 000 10 000
    149 600 10 000 6 600 153 000
  
The interest of the directors in share options of the company are shown in the table below:
    Number Options Options Number
    of shares granted exercisedof shares
  Option price   Expiring at 31 Dec during during at 31 Dec
 Name Rand   ten years from 2003 the year the year 2004
 Executive directors (continued):
 M H Munro 40,50   20 September 1994 8 400 8 400
  33,25   4 November 1998 4 000 4 000
  32,90   5 March 1999 14 000    14 000
  40,10   7 May 1999 5 800 5 800
  30,00   19 May 2000 3 800 3 800
  39,85   12 January 2001 2 400 2 400
  40,00   16 May 2001 9 000 9 000
  49,60   13 May 2002 11 500 11 500
  31,90   14 April 2003 12 400 12 400
  34,50   1 October 2003 30 000 30 000
   47,00 21 April 2004 32 000 32 000
   101 300 32 0008 400 124 900
 S J Saunders 40,50   20 September 1994 18 000   18 000
  40,00   24 March 1995 6 000 6 000
  33,25   4 November 1998 8 000 8 000
  32,90   5 March 1999 30 000 30 000
  40,10   7 May 1999 14 000 14 000
  30,00   19 May 2000 5 000 5 000
  39,85   12 January 2001 5 000 5 000
  40,00   16 May 2001 18 000 18 000
  49,60   13 May 2002 18 000  18 000
  31,90   14 April 2003 18 000 18 000
   47,00 21 April 2004 18 000 18 000
    140 000 18 000 18 000 140 000
 M Serfontein 40,50   20 September 1994 24 000   24 000
  40,00   24 March 1995 6 000   6 000
  33,25   4 November 1998 8 000 8 000
  32,90   5 March 1999 28 000 28 000
  40,10   7 May 1999 10 000 10 000
  30,00   19 May 2000 5 000 5 000
  39,85   12 January 2001 5 000 5 000
  40,00   16 May 2001 15 000 15 000
  49,60   13 May 2002 15 000 15 000
  31,90   14 April 2003 20 000 20 000
   47,00 21 April 2004 14 000 14 000
   136 000 14 00030 000 120 000
 P H Staude 40,50   20 September 1994 4 000 4 000
  40,00   24 March 1995 4 000  4 000
  33,25   4 November 1998 10 000 10 000
  32,90   5 March 1999 49 000 49 000
  40,10   7 May 1999 14 000 14 000
  30,00   19 May 2000 7 000 7 000
  39,85   12 January 2001 9 000 9 000
  40,00   16 May 2001 30 000 30 000
  49,60   13 May 2002 65 000 65 000
  31,90   14 April 2003 30 000 30 000
   47,00 21 April 2004 28 000 28 000
  
    222 000 28 000 4 000 246 000
 
The interest of the directors in share options of the company are shown in the table below:
  Number Options Options Number
  of shares granted exercised of shares
Option price   Expiring at 31 Dec during during at 31 Dec
Name Rand   ten years from 2003 the year the year 2004
* Non-executive directors:
J B Magwaza 40,50   20 September 1994 36 000 36 000
40,00   24 March 1995 4 800 4 800
33,25   4 November 1998 7 000 7 000
32,90   5 March 1999 30 000 30 000
40,10   7 May 1999 10 000 10 000
30,00   19 May 2000 5 000 5 000
39,85   12 January 2001 4 000 4 000
40,00   16 May 2001 20 000 20 000
49,60   13 May 2002 10 000 10 000
  126 800   36 000 90 800
C M L Savage 32,90   5 March 1999 60 000 60 000
40,10   7 May 1999 50 000 50 000
39,85   12 January 2001 8 000 8 000
40,00   16 May 2001 22 000     22 000
  140 000     140 000
Total   1 433 700 160 600 125 000 1 469 300
* The non-executive directors' share options were awarded when they were executive directors.
114 600 options relating to a director who retired during the year are excluded from the opening balance.
 
27. GUARANTEES AND CONTINGENT LIABILITIES (Rmillion) Group Company
  2004 2003 2004 2003
Guarantees in respect of obligations of the Group and third parties 21 20 15 14
Contingent liabilities 13 235 5
  34 43 20 19
 
28.LEASES (Rmillion) Group Company
2004 2003 2004 2003
Amounts payable under finance leases
Minimum lease payments due:
   Not later than one year 23
   Later than one year and not later than five years 25
   Later than five years 11
  5 9
Less: future finance charges (1)(2)
Present value of lease obligations 47
Payable:
   Not later than one year 12
   Later than one year and not later than five years 24
   Later than five years 11
4 7
Operating lease commitments, amounts due:
   Not later than one year 1221720
   Later than one year and not later than five years 453831 26
  57 5938 46
In respect of:
   Property 423624 23
   Plant and machinery 6464
   Other 919819
  57 5938 46
 
29.CAPITAL EXPENDITURE COMMITMENTS (Rmillion) Group Company
2004 2003 2004 2003
Contracted 524639 21
Approved but not contracted 868549 46
  138 13188 67
  Funds to meet this future expenditure will be provided from retained net cash flows and established facilities.
 
30.RELATED PARTY TRANSACTIONS (Rmillion)
 During the year the Group, in the ordinary course of business, entered into various related party sales, purchases and investment transactions, in the main, with companies in the Anglo American plc group.
These transactions occurred under terms that are no less favourable than those arranged with third parties.
  Group Company
  2004 2003 2004 2003
The outstanding balances at year end are as follows and are included in:
   Accounts receivable 109 109
    Accounts payable 11
     Borrowings 2 1 2 1
31. FINANCIAL RISK MANAGEMENT 
 

The Group's financial instruments consist primarily of cash deposits with banks, unlisted investments, derivatives, accounts receivable and payable, and loans to and from associates and others. Derivatives and investments, other than investments which are accounted for as subsidiaries, joint ventures and associates, are carried at fair value. All other financial instruments are carried at cost or amortised cost.

In the normal course of its operations, the Group is inter alia exposed to credit, foreign currency, interest, liquidity and commodity price risk. In order to manage these risks, the Group may enter into transactions, which make use of derivatives. They include forward exchange contracts (FEC's) and options, interest rate swaps and commodity futures and options. Separate committees are used to manage the risks and the hedging activities of the Group. The Group does not speculate in or engage in the trading of derivative instruments. Since the Group utilises derivative instruments for risk management, market risk relating to derivative instruments will be offset by changes in the valuation of the underlying assets, liabilities or transactions being hedged.

Credit risk
The Group's financial instruments do not represent a concentration of credit risk because the Group deals with a variety of major banks, and its debtors and loans are spread among a number of major industries, customers and geographic areas. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies. In addition, appropriate credit committees review significant credit transactions before consummation. An appropriate level of provision is maintained.

Foreign currency risk
In the normal course of business, the Group enters into transactions denominated in foreign currencies. As a result, the Group is subject to transaction and translation exposure from fluctuations in foreign currency exchange rates. The Group uses a variety of instruments to minimise foreign currency exchange rate risk in terms of its risk management policy. In principle it is the Group's policy to cover its foreign currency exposure in respect of liabilities and purchase commitments and an appropriate portion of its foreign currency exposure on receivables. There were no speculative positions in foreign currencies at year end. All foreign exchange contracts are supported by underlying transactions. The Group is not reliant on imported raw materials to any significant extent.

The Group's forward exchange contracts that constitute designated hedges of currency risk at year end are summarised as follows:
 

   Group  Company
      20042003 20042003
 Average  Commitment Fair value Fair value AverageCommitment Fair value Fair value
 contract  of FEC of FEC contract of FEC of FEC
 rate   (Rmillion)(Rmillion)(Rmillion) rate (Rmillion) (Rmillion) (Rmillion)
 Imports
 Euro 7,68  6
 US dollars 5,66  4
 UK pounds11,21  2
   12    
 Exports
 US dollars 6,37  273 28  7,0543 8
 Euro 7,68  22
 UK pounds11,05  8 9   10
     303 28 9   43 8 10
  Loan capital payments and interest
 US dollars 7,49  173 (36) (43)
 Net total    488 (8) (34)   43 8 10
 

 
The hedges in respect of imports and exports are expected to mature within approximately one year. The hedges in respect of the capital payments and interest on the loan will mature during 2005 and 2006.

The fair value is the estimated amount that the Group would pay or receive to terminate the forward exchange contracts at the balance sheet date.

The Group's forward exchange contracts that do not constitute designated hedges of currency risk at year end are summarised as follows:
 

  Group Company
  20042003 2004

2003
 Average Commitment Fair valueFair value AverageCommitment Fair value Fair value
 contract  of FEC of FECcontract  of FEC of FEC
 rate (Rmillion)(Rmillion)(Rmillion) rate (Rmillion) (Rmillion) (Rmillion)
 Imports
 US dollars 6,4210(1)  6,4210(1)
 Euro 7,841 7,841
  11(1)   11(1)  
 Exports
 US dollars 6,20735  6,42163
 Australian dollars 4,562 (1) 4,562(1)
 Euro 8,003       
  785 (1) 183 (1)
 Net total 894 (1)  292 (1)
The Group has the following uncovered foreign receivables:
   Group    Company
  Foreign   Foreign
  amount20042003  amount2004 2003
  (million) (Rmillion)(Rmillion)  (million) (Rmillion) (Rmillion)
 US dollars 159064  2152
 Mozambique meticais 56 3981716  56 3981716
 Euro 1822 
 Australian dollars 15   15
 UK pounds 78 
  127 110  3718
Commodity price risk
Commodity price risk arises from the risk of an adverse effect on current or future earnings resulting from fluctuations in the prices of commodities. To hedge prices for the Group's substantial commodity requirements, commodity futures and options are used, including fixed and spot-defined forward sales contracts and call and put options.

Tongaat-Hulett Sugar secures the premium on refined sugar exports from fluctuating international prices by using commodity futures.

African Products has secured its maize requirements for the current maize season to 31 May 2005 and a significant portion of its requirements for the year ending 31 May 2006 by means of unpriced procurement contracts and futures.

Hulett Aluminium purchases its aluminium raw material at prices that fluctuate with movements in the London Metal Exchange price for aluminium and the Rand/US Dollar exchange rate. The exposure to movements in the price of aluminium arising from fixed price sales contracts is hedged by entering into fixed price purchase contracts with suppliers and by futures and options contracts.
 

     At the year end the commodity futures and options contracts were:
 Futures - hedge accounted: Group Company
   2004 2003  2004 2003
   Tons ContractFair FairTons ContractFair Fair
   Value value value  valuevalue value
   (Rmillion) (Rmillion)(Rmillion)   (Rmillion) (Rmillion)(Rmillion)
   Raw sugar futures
        purchased 13 475 123 (1) 13 475 12 3(1)
   Raw sugar futures
        sold 32 013 37 (9) 2 32 013 37 (9) 2
   Maize futures
        purchased 29 700 26 (1) 29 700 26(1)
   Aluminium futures
        purchased 13 108
   Aluminium futures
        sold 13 119  (8)
      (7) (7)   (7) 1
 Futures - not hedge accounted: Group Company
    2004 2003 2004  2003
    
   Tons Contract Fair Fair Tons Contract Fair Fair
    value value value value value value
    (Rmillion) (Rmillion)(Rmillion)   (Rmillion)(Rmillion)(Rmillion)
        Maize futures  
             purchased     33  33
  Embedded derivatives:   Group Company
      2004 2003 2004 2003
      Fair Fair Fair Fair
      value value value value
      (Rmillion)(Rmillion) (Rmillion)(Rmillion)
        Sales orders not yet fulfilled  (5)        
  
Interest rate risk
 The Group is exposed to interest rate price risk on its fixed rate loan liabilities and accounts receivable and payable, which can impact on the fair value of these instruments. The Group is exposed to interest rate cash flow risk in respect of its variable rate loans and short term cash investments, which can impact on the cash flows of these instruments. The exposure to interest rate risk is managed using derivatives, where it is considered appropriate, and through the Group cash management system, which enables the Group to maximise returns while minimising risks.
 
 Liquidity risk
  The Group manages its liquidity risk by monitoring forecast cash flows on a weekly basis. The Group has unutilised committed banking facilities of R696 million (2003 - R799 million).
 
32.PRINCIPAL SUBSIDIARY COMPANIES AND JOINT VENTURES (Rmillion)
Interest of Holding Company
Shares Indebtedness
2004 2003 2004 2003
African Products (Pty) Limited 1515(15) (15)
* Hulett Aluminium (Pty) Limited (50%) 7 7 582 345
Hulett-Hydro Extrusions (Pty) Limited (35%)
Moreland Estates (Pty) Limited (113)54
Tongaat-Hulett Sugar Limited 451 422 94 34
Tambankulu Estates Limited (Swaziland)
Açucareira de Moçambique, SARL (Mozambique) (75%)
+ Triangle Sugar Corporation Limited (Zimbabwe)     
The Tongaat Group Limited 5454(24) 3
527 498524 421
* Joint Venture
+ Not consolidated
Except where otherwise indicated, effective participation is 100 percent.
  A full list of all subsidiaries and joint ventures is available from the group secretary on request.