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