Annual Financial Statements

Financial Statements for the year ended 31 December 2006

Notes to the Annual Financial Statements (11 - 20)

11.	SHARE CAPITAL (Rmillion)
							2006	2005
	Authorised:
	150 000 000 ordinary shares of R1 each						150	150
	Issued and fully paid:
	106 591 252 (2005 – 103 895 629)						107	104
	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 2 941 810 shares at an average price of R41,23 per share (2005 – 5 699 233 shares at R40,40 per share).
	These share option schemes were replaced in 2005 with the Share Appreciation Right Scheme 2005, the Long Term Incentive Plan 2005 and the Deferred Bonus Plan 2005. The primary intention of these 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 purposes of the employee share option schemes 7 717 315 shares (2005 – 4 690 330 shares). - in terms of a shareholders' resolution 5 254 684 shares (2005 – 10 288 054 shares).
	Details of the employee share incentive schemes are set out in note 31.
12.	DEFERRED TAX (Rmillion)				Group		Company
					2006	2005	2006	2005
	Balance at beginning of year				936	854	357	276
		Accounted for in equity			2	(2)	1	(2)
		Currency alignment				(1)
	Income statement:
		Current year charge/(relief) on:
			Earnings before exceptional items		124	122	121	100
			Rate change adjustment			(28)		(9)
			Exceptional items		6	1	6	1
		Prior years’ charge			(13)	(10)	(13)	(9)
	Balance at end of year				1 055	936	472	357
	Comprising temporary differences relative to:
		Property, plant and equipment			855	854	363	355
		Growing crops			40	36	25	22
		Export partnership			203	203	203	203
		Current assets			36	54	2	5
		Current liabilities			(115)	(114)	(93)	(95)
		Tax losses			(16)	(135)	(16)	(131)
		Other			52	38	(12)	(2)
					1 055	936	472	357
13.	BORROWINGS (Rmillion)				Group		Company
					2006	2005	2006	2005
	Short-term				1 112	668	1 038	530
	Bank overdraft				62	34	1	17
					1 174	702	1 039	547
	Long-term				49	138
					1 223	840	1 039	547
	Long-term borrowings comprise:			Effective
				interest rate (%)
	Secured:
	SA Rand
	Finance leases (refer to note 26)			11,3	3	3
	Unsecured:
	Foreign
	Repayable 2007/2009			Libor + 0,4	81	103
	SA Rand
	Repaid in 2006					104
					81	207
	Long-term borrowings				84	210
	Less: Current portion included in short-term borrowings				35	72
	Plant and machinery with a book value of R88 million (2005 – R89 million) are encumbered as security for the secured finance lease obligations and as security for certain short-term borrowings of R50 million (2005 – R2 million).
	Short-term borrowings comprise call loans and bank overdrafts with various South African financial institutions at interest rates linked to the prime overdraft rate, as well as a Mozambique bank overdraft equivalent to R50 million (2005 – R2 million).
	The foreign Libor linked unsecured loans are repayable in US dollars and amount to US $12 million (2005 – US $16 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 capital loan repayments by financial year:				Year	2008	2009	2010
					Rmillion	34	14	1
	In terms of the company's articles of association the borrowing powers of the Group are limited to R7 550 million.
14.	PROVISIONS (Rmillion)				Group		Company
					2006	2005	2006	2005
	Post-retirement medical aid obligations (refer to note 29)				241	230	198	190
	Retirement gratuity obligations (refer to note 29)				55	52	48	46
	Other				1	1	1	1
					297	283	247	237
15.	TRADE AND OTHER PAYABLES (Rmillion)				Group		Company
					2006	2005	2006	2005
	Accounts payable				1 258	1 009	420	429
	Maize obligation – interest bearing				130	110	130	110
					1 388	1 119	550	539
	The directors consider that the carrying amount of trade and other payables approximates their fair value.
16.	OPERATING PROFIT (Rmillion)				Group		Company
					2006	2005	2006	2005
	Revenue				7 848	6 926	4 194	4 084
	Cost of sales				(6 168)	(5 218)	(3 481)	(3 162)
	Administration expenses				(646)	(737)	(359)	(459)
	Marketing and selling expenses				(239)	(421)	(95)	(284)
	Other income				199	174	229	262
	Exceptional items (refer to note 17)				26	6	290	252
	Operating profit				1 020	730	778	693
	Disclosable items included in operating profit:
	Valuation adjustments on financial instruments and other items:
		Translation of foreign currency:
			Foreign cash holdings		57	14
			Other		(3)	7		2
		Export receivables			(1)	10		(2)
		Other financial instruments			1	(6)
					54	25
	Dividends received from subsidiaries:
		Triangle Sugar			61	19
		Other subsidiaries						45
	Income from unlisted investments				3
	Surplus on disposal of plant and equipment				1	1		1
	Amortisation of intangible assets				1	1
	Depreciation charged:
		Buildings			12	11	5	4
		Plant and equipment			235	225	157	147
		Vehicles and other			25	29	14	16
	Management fees paid to subsidiaries						1	1
	Management fees paid to third parties				5	4
	Technical fees paid				12	9	12	9
	Operating lease charges (property, plant and vehicles)				13	16	9	12
	Share-based payments				22	15	20	12
	Auditors’ remuneration:
		Fees			5	6	3	4
		Other services			1	1		1
17.	EXCEPTIONAL ITEMS (Rmillion)				Group		Company
					2006	2005	2006	2005
	Included in operating profit:
		Surplus on sale of property			27	11	291	40
		Estate closure costs			(1)	(5)	(1)	(5)
		Recovery of loan to subsidiary, previously
			written-off by the company					217
	Exceptional items before tax				26	6	290	252
	Tax (refer to note 19)				(6)	(1)	(6)	(1)
	Exceptional items after tax				20	5	284	251
18.	NET FINANCING COSTS (Rmillion)				Group		Company
					2006	2005	2006	2005
	Net financing costs comprise:
		Interest paid – external			(149)	(131)	(67)	(77)
		Set-off of related financial instrument income			104	33
		Interest paid – subsidiaries					(6)	(15)
	Financing costs				(45)	(98)	(73)	(92)
		Financial instrument income					104	33
		Interest received – external			22	38	4	5
	Finance income				22	38	108	38
	Net financing (costs)/finance income				(23)	(60)	35	(54)
19.	TAX (Rmillion)				Group		Company
					2006	2005	2006	2005
	Earnings before exceptional items:
		Current			91	51
		Deferred			124	122	121	100
		Rate change adjustment (deferred)				(28)		(9)
		Secondary tax on companies			63	26	63	26
		Prior years			(15)	(10)	(13)	(10)
					263	161	171	107
	Exceptional items:
		Deferred			6	1	6	1
	Tax for the year				269	162	177	108
	Foreign tax included above				9	7
	Tax charge at normal rate of South African tax				288	187	236	185
	Adjusted for:
		Non-taxable income			(89)	(28)	(123)	(95)
		Assessed losses of foreign subsidiaries			4	(5)
		Share of associate company’s loss			1	7
		Non-allowable expenditure			7	7	4	5
		Rate change adjustment (deferred)				(28)		(9)
		Secondary tax on companies			63	26	63	26
		Capital gains			10	6	10	6
		Prior years			(15)	(10)	(13)	(10)
	Tax charge as reported				269	162	177	108
					%	%	%	%
	Normal rate of South African tax				29,0	29,0	29,0	29,0
	Adjusted for:
		Non-taxable income			(9,0)	(4,3)	(15,1)	(14,9)
		Assessed losses of foreign subsidiaries			0,4	(0,8)
		Share of associate company’s loss			0,1	1,1
		Non-allowable expenditure			0,7	1,1	0,5	0,8
		Rate change adjustment (deferred)				(4,3)		(1,4)
		Secondary tax on companies			6,3	4,0	7,8	4,1
		Capital gains			1,0	0,9	1,2	0,9
		Prior years			(1,5)	(1,6)	(1,6)	(1,6)
	Effective rate of tax				27,0	25,1	21,8	16,9
	Normal tax losses of R54 million (2005 – R472 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.
20.	HEADLINE EARNINGS (Rmillion)						Group
							2006	2005
	Profit attributable to shareholders						723	472
	Less after tax effect of:
		Exceptional capital items (refer to note 17)					(20)	(5)
		Surplus on disposal of plant and equipment						(1)
	Headline earnings						703	466
	Headline earnings per share (cents)
		Basic					666,4	452,4
		Diluted					649,4	441,5