Annual Financial Statements


Financial Statements for the year ended 31 December 2005


Notes to the Financial Statements (11 - 20)


11. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, cash on deposit and cash advanced, repayable on demand.
       
12. SHARE CAPITAL (Rmillion)
Company
          2005           2004*
 
Authorised:
      150 000 000 ordinary shares of R1 each 
150 150
 
Issued and fully paid:
      103 895 629 (2004* - 102 247 941) 
104 102
 
Unissued:
Under option to employees, in terms of the original employee share option schemes, for a period of ten years from date granted, to subscribe for 5 699 233 shares at an average price of R40,40 per share (2004* – 7 466 621 shares at R39,79 per share).
These share option schemes were replaced in 2005 with a new share incentive scheme comprising the Share Appreciation Right Scheme 2005, the Long Term Incentive Plan 2005 and the Deferred Bonus Plan 2005. The primary intention of these new schemes is to settle awards through acquiring shares in the market and delivering them to the employee and consequently no dilution of equity is expected.
Under control of the directors:
  • for the purpose of the employee share option schemes 4 690 330 shares (2004* – 2 758 173 shares).
  • interms of a shareholders’ resolution 10 288 054 shares (2004* – 37 527 265 shares).
 

Details of the employee share incentive schemes are set out in note 26.

*Restated for IFRS 

   
13. DEFERRED TAX (Rmillion)   Group Company
                2005           2004* 2005 2004*
  Balance at beginning of year   854 866 276 296
      Accounted for in equity   (2) 9 (2) 8
      Currency alignment   (1) 1    
  Income statement:          
      Current year charge/(relief) on:          
          Earnings before exceptional items  122 (24) 100 (30)
          Rate change adjustment   (28)   (9)  
          Exceptional items   1 (3) 1 (3)
      Prior years   (10) 5 (9) 5
  Balance at end of year   936 854 357 276
  Comprising temporary differences relative to:         
      Property, plant and equipment   854 886 355 356
      Growing crops   36 36 22 23
      Export partnership   203 210 203 210
      Current assets   54 58 5 5
      Current liabilities   (114) (108) (95) (90)
      Tax losses   (135) (223) (131) (214)
      Other   38 (5) (2) (14)
      936 854 357 276
               
 
14. BORROWINGS (Rmillion)   Group Company
      2005 2004* 2005 2004*
  Short-term   668 1 096 530 1 002
  Bank overdraft   34 29 17  
      702 1 125 547 1 002
  Long-term   138 255    
      840 1 380 547 1 002
  Long-term borrowings comprise: Effective        
    interest rate %          
  Secured:          
  SA Rand          
      Finance leases (refer to note 28) 11,3 3 4    
 
  Unsecured:          
  SA Rand          
      Repayable 2006/2008 12,5 104 138    
 
  Foreign          
      Repayable 2006/2009 Libor + 0,4 103 120    
      Repaid in 2005     56    
      207 314    
 
  Long-term borrowings   210 318    
  Less: Current portion included in short-term borrowings 72 63    
      138 255    
Plant and machinery with a book value of R89 million (2004* – R44 million) are encumbered as security for the secured finance lease obligations and as security for certain short-term borrowings of R2 million (2004* – R8 million).
Unsecured Rand denominated long-term loans of R104 million (2004* – R138 million) are shown net after set-off of related investments totalling R186 million (2004* – R152 million). The foreign Libor linked unsecured loans are repayable in US dollars and amount to US $16 million (2004* – US $23 million). These loans are recorded at the ruling price at year end and the foreign currency risk is covered by forward exchange contracts.

Summary of future loan repayments by financial year: 

     Year 2007 2008 2009
    Rmillion 80 45 13
 
  In terms of the company's articles of association the borrowing powers of the Group are limited to R7 billion.
* Restated for IFRS
 
15. PROVISIONS (Rmillion) Group Company
    2005 2004* 2005 2004*
 
  Post-retirement medical aid obligations (refer to note 24) 230 221 190 184
  Retirement gratuity obligations (refer to note 24) 52 49 46 43
  Other 1 1 1 1
    283 271 237 228
           
           
16. TRADE AND OTHER PAYABLES (Rmillion) Group Company
    2005 2004* 2005 2004*
 
  Accounts payable 1 009 953 429 464
  Maize obligations – interest bearing 110 218 110 218
    1 119 1 171 539 682
  The directors consider that the carrying amount of trade and other payables approximates their fair value.
           
17. OPERATING PROFIT (Rmillion) Group Company
    2005 2004* 2005 2004*
 
  Revenue 6 926 6 298 4 084 3 970
  Cost of sales (5 218) (4 972) (3 162) (3 228)
  Administration expenses (737) (772) (459) (460)
  Marketing and selling expenses (421) (391) (284) (267)
  Other income 174 187 262 187
  Exceptional items (refer to note 18) 6 8 252 62
  Operating profit 730 358 693 264
 
  Disclosable items included in operating profit:        
 
  Valuation adjustments on financial instruments and other items:        
      Maize procurement contracts   18   18
      Translation of foreign currency:        
          Foreign cash holdings 14 (47)    
          Other 7 (22) 2  
      Export receivables 10 3 (2) 2
      Financial instruments (6) (3)    
    25 (51)   20
  Dividends received from subsidiaries:        
      Triangle 19 51    
      Other subsidiaries     45 88
  Income from unlisted investments   6   5
  Surplus on disposal of plant and equipment 1 4 1 2
  Amortisation of intangible assets 1 1    
  Depreciation charged:        
      Buildings 11 11 4 4
      Plant and equipment 225 190 147 137
      Vehicles and other 29 29 16 18
  Management fees paid to subsidiaries     1 2
  Management fees paid to third parties 4 4    
  Technical fees paid 9 11 9 11
  Operating lease charges (property, plant and vehicles) 16 14 12 10
  Share-based payments 15 8 12 6
  Auditors’ remuneration:        
      Fees 6 5 4 3
      Other services 1 1 1 1
  *Restated for IFRS        
 
18. EXCEPTIONAL ITEMS (Rmillion) Group Company
    2005 2004* 2005 2004*
 
  Included in operating profit:        
  Surplus on sale of property 11 18 40 26
  Estate closure costs (5) (10) (5) (10)
  Recovery of loan to subsidiary, previously written-off by the company     217 46
  Exceptional items before tax 6 8 252 62
 
  Tax (refer to note 20) (1) 3 (1) 3
  Exceptional items after tax 5 11 251 65
           
19. NET FINANCING COSTS (Rmillion) Group Company
    2005 2004* 2005 2004*
 
  Net financing costs comprise:        
 
  Interest paid – external (131) (275) (77) (208)
  Set-off of related financial instrument income 33 112    
  Interest paid – subsidiaries     (15) (11)
  Financing costs (98) (163) (92) (219)
  Financial instrument income     33 112
  Interest received – external 38 70 5 7
  Finance income 38 70 38 119
 
  Net financing costs (60) (93) (54) (100)
           
           
20. TAX (Rmillion) Group Company
    2005 2004* 2005 2004*
 
  Profit before exceptional items:        
 
  Current 51 51    
  Deferred 122 (24) 100 (30)
  Rate change adjustment (deferred) (28)   (9)  
  Secondary tax on companies 26 12 26 12
  Prior years (10) 5 (10) 4
    161 44 107 (14)
 
  Exceptional items:        
  Deferred 1 (3) 1 (3)
 
  Tax for the year 162 41 108 (17)
  Foreign tax included above 7 4    
           
  Reconciliation of tax charge at the normal rate of        
  South African tax to the effective rate of tax:        
 
  Tax charge at normal rate of South African tax 187 81 185 49
  Adjusted for:        
  Non-taxable income (28) (61) (95) (97)
  Assessed losses of foreign subsidiaries (5) (9)    
  Share of associate company’s loss/(profit) 7 (2)    
  Non-allowable expenditure 7 2 5 2
  Rate change adjustment (deferred) (28)   (9)  
  Secondary tax on companies 26 12 26 12
  Capital gains 6 13 6 13
  Prior years (10) 5 (10) 4
  Tax charge/(relief) as reported 162 41 108 (17)
 
  *Restated for IFRS        
 
Group Company
    2005 2004* 2005 2004*
    % % % %
  Normal rate of South African tax 29,0 30,0 29,0 30,0
  Adjusted for:        
  Non-taxable income (4,3) (22,5) (14,9) (59,1)
  Assessed losses of foreign subsidiaries (0,8) (3,3)    
  Share of associate company’s loss/(profit) 1,1 (0,7)    
  Non-allowable expenditure 1,1 0,7 0,8 1,2
  Rate change adjustment (deferred) (4,3)   (1,4)  
  Secondary tax on companies 4,0 4,4 4,1 7,3
  Capital gains 0,9 4,7 0,9 7,9
  Prior years (1,6) 1,8 (1,6) 2,4
  Effective rate of tax 25,1 15,1 16,9 (10,3)
   Normal tax losses of R472 million (2004* – R742 million) have been utilised to reduce deferred tax. No deferred tax asset has been raised in respect of the tax losses of foreign subsidiaries that may not be utilised in the short-term or may expire in terms of applicable tax legislation.
  * Restated for IFRS