Annual Financial Statements


Financial Statements for the year ended 31 December 2007


Notes to the Annual Financial Statments (1 - 10)


1. PROPERTY, PLANT AND EQUIPMENT (Rmillion)            
               
  Consolidated Total Land Plant and Vehicles Capitalised Capital
      and equipment and other leased plant work in
      buildings     and vehicles progress
  Carrying value at beginning of year 4 270 632 3 058 182 69 329
  Subsidiaries acquired 316 71 167 69   9
  Hulamin unbundling (1 970) (246) (1 569) (17)   (138)
  Additions 755 40 206 60 3 446
  Disposals (10) (7) (2) (1)    
  Depreciation (222) (9) (182) (29) (2)  
  Transfers   4 51 7 (4) (58)
  Currency alignment 71 13 21 8 7 22
  Carrying value at end of year 3 210 498 1 750 279 73 610
  Comprising:            
  2007            
    At cost 4 976 674 3 018 582 92 610
    Accumulated depreciation 1 766 176 1 268 303 19  
    3 210 498 1 750 279 73 610
  2006            
    At cost 6 134 773 4 494 426 112 329
    Accumulated depreciation 1 864 141 1 436 244 43  
    4 270 632 3 058 182 69 329
  Company            
    Total Land Plant and Vehicles Capitalised Capital
      and equipment and other leased plant work in
      buildings     and vehicles progress
  Carrying value at beginning of year 1 992 284 1 427 109 5 167
  Additions 334 27 163 21   123
  Disposals (9) (7) (2)      
  Depreciation (192) (5) (171) (16)    
  Transfers   4 51 4 (4) (55)
  Carrying value at end of year 2 125 303 1 468 118 1 235
  Comprising:            
  2007            
    At cost 3 528 377 2 617 298 1 235
    Accumulated depreciation 1 403 74 1 149 180    
    2 125 303 1 468 118 1 235
  2006            
    At cost 3 267 353 2 438 279 30 167
    Accumulated depreciation 1 275 69 1 011 170 25  
    1 992 284 1 427 109 5 167
  Plant and machinery in Mozambique subsidiaries with a book value of R248 million (2006 - R88 million) are encumbered as security for certain short-term borrowings of R111 million (2006 - R50 million) and secured finance lease obligations.

The register of land and buildings is available for inspection at the company's registered office.


2. GROWING CROPS (Rmillion) Consolidated Company
    2007 2006 2007 2006
  Carrying value at beginning of year 212 182 87 77
  Subsidiaries consolidated 70      
  Gain arising from physical growth and        
  price changes 40 29 7 13
  Increase due to increased area under cane 19 4 7  
  Decrease due to reduced area under cane (3) (3) (3) (3)
  Currency alignment 15      
  Carrying value at end of year 353 212 98 87
  The carrying value comprises:        
     Roots 201 116 58 46
     Standing cane 152 96 40 41
    353 212 98 87
  Area under cane (hectares):        
     South Africa 10 401 9 639 10 401 9 639
     Mozambique 14 393 7 444    
     Swaziland 3 750 3 744    
    28 544 20 827 10 401 9 639
       
       
3. LONG-TERM RECEIVABLE AND PREPAYMENT (Rmillion) Consolidated Company
    2007 2006 2007 2006
  Long-term receivable        
     Advances to an export partnership - at fair value 203 203 203 203
  Prepayment        
     Contribution to the BEE Employee Share Ownership Plan 136   132  
     Contribution to the BEE Management Share Ownership Plan 91   78  
    227   210  
  Less amortised (13)   (12)  
  Less BEE share ownership plan consolidation shares (214)      
        198  
  Carrying value at end of year 203 203 401 203
  The prepayment relates to awards made in terms of the company's BEE employee share ownership plans, details of which are set out in note 34.
     
     
4. GOODWILL (Rmillion) Consolidated
    2007 2006
  Carrying value at beginning of year 21 21
  Subsidiaries consolidated 20  
  Currency exchange rate changes 1  
  Carrying value at end of year 42 21
  Goodwill is attributable to the Mozambique sugar operations. Goodwill is tested annually for impairment. The recoverable amount of goodwill was determined from the "value in use" discounted cash flow model. The value in use cash flow projections which cover a period of twenty years are based on the most recent budgets and forecasts approved by management and the extrapolation of cash flows which incorporate growth rates consistent with the average long term growth trends of the market. As at 31 December 2007, the carrying value of goodwill was considered not to require impairment.
 

5.  INTANGIBLE ASSETS (Rmillion)   Consolidated   Company
      2007   2006   2007   2006
  Software at cost:                
     At beginning of year   26   23   7   7
     Hulamin unbundling   (14)            
     Additions   4   3   4    
     At end of year   16   26   11   7
  Accumulated amortisation:                
     At beginning of year   12   11   7   7
     Hulamin unbundling   (2)            
     Charge for the year       1        
     At end of year   10   12   7   7
  Carrying value at end of year   6   14   4    
               
       
6.  INVESTMENTS (Rmillion)   Consolidated   Company
      2007   2006   2007   2006
  Associate:                
  The interest in Acucareira de Xinavane, SARL (Mozambique) was increased to 88% from 49% with effect from 1 January 2007, being the effective date from which this company has been consolidated.

The carrying value of the 49% interest in Acucareira de Xinavane, SARL (Mozambique) for the prior year comprises:
               
    Unlisted shares       128        
    Loan       54        
    Cumulative share of post-acquisition deficits       (121)        
       Balance at beginning of year       (117)        
       Loss for the year       (4)        
                   
  Book value       61        
  Directors' valuation       61        
  Summarised balance sheet:                
    Property, plant and equipment       306        
    Growing crops       70        
    Current assets       117        
    Current liabilities       (68)        
    Borrowings:                
    - External       (280)        
    - Shareholders       (192)        
    Net deficit       (47)        
    Other shareholders' share of deficit       24        
    Tongaat Hulett share of deficits (pre and post-acquisition)       (23)        
                   
  Summarised income statement:                
    Revenue       223        
    Profit before depreciation       42        
    Depreciation       (16)        
    Foreign exchange loss       (5)        
    Profit before financing costs       21        
    Financing costs       (29)        
    Loss after financing costs       (8)        
    Other shareholders' interest       4        
    Tongaat Hulett share of loss       (4)        
                   
  Other investments :                
    Unlisted shares at cost   264   256   263    
    Loans   3   3   2   2
    Book value   267   259   265   2
    Carrying value of investments (Directors' valuation)   267   320   265   2
  A schedule of unlisted investments is available for inspection at the company's registered office.
 

7. SUBSIDIARIES AND JOINT VENTURES (Rmillion) Company
    2007   2006
  Shares at cost, less amounts written off 556   853
  Indebtedness by 908   1 107
  Indebtedness to (326)   (126)
    1 138   1 834
    Consolidated
    2007   2006
  Tongaat Hulett's proportionate share of the assets, liabilities and post-acquisition reserves
of joint ventures which are included in the consolidated financial statements, are set out
below. The 2006 figures include Tongaat Hulett's share of Hulett Aluminium which was
unbundled in 2007, as detailed in note 35.
     
  Property, plant, equipment and investments 7   1 982
  Current assets 435   1 497
  Less: Current liabilities (170)   (652)
  Capital employed 272   2 827
  Less: Borrowings     (94)
        Post-acquisition reserves     (1 216)
        Deferred tax and provisions     (499)
        Minority interest in subsidiary     (19)
  Interest in joint ventures 272   999
  Tongaat Hulett's proportionate share of the trading results of the joint ventures      
  is as follows: Restated
     Revenue - continuing operations 224   110
     Profit before tax 125   57
     Tax (15)   (16)
     Net profit after tax 110   41
     Minority interests     (4)
  Discontinued operation - Hulamin unbundling 42   69
    152   106
  Tongaat Hulett's proportionate share of cash flows of the joint ventures is as follows:      
     Cash flows from operating activities 69   53
     Net cash used in investing activities (19)   90
     Net movement in cash resources 50   143
  The original investment in Triangle Sugar is retained at a nominal value with the subsequent
investment held at cost. Its unaudited assets, liabilities and results, which are not included in
the consolidated financial which have not been adjusted for inflation, are translated at the
official exporters Zimbabwe dollar exchange rate (2006 - official Zimbabwe dollar exchange rate) as follows:
     
    2007   2006     2007   2006
  Equity 541   668   Property, plant and equipment # 22   37
  Minority interests 23   15   Growing crops 426   388
  Deferred tax 119   123   Investment in Hippo Valley + 254   254
  Long-term borrowings 3   4   Current assets 162   484
            Current liabilities (178)   (353)
    686   810     686   810
  Revenue 598   1 547   Net profit 315   636
# Property, plant and equipment have been accounted for in terms of the historical cost convention.
+ Not consolidated.
   
       
8.  INVENTORIES (Rmillion) Consolidated Company
    2007 2006 2007 2006
  Raw materials 206 323 206 132
  Work in progress 15 180 15 10
  Finished goods 737 785 721 692
  Consumable stores 142 146 90 77
  Development properties 231 161    
    1 331 1 595 1 032 911
  Included in raw materials is an amount of R155 million (2006 - R127 million) that relates to the constructive obligation that has been recognised on maize procurement contracts.
   
       
9. DERIVATIVE INSTRUMENTS (Rmillion) Consolidated Company
    2007 2006 2007 2006
  The fair value of derivative instruments at year end was:        
  Forward exchange contracts - hedge accounted 8 9 8 4
  Forward exchange contracts - not hedge accounted (1) 7 (1)  
  Futures contracts - hedge accounted 3 10 3 (3)
  Futures contracts - not hedge accounted   (9)    
    10 17 10 1
  Summarised as:        
     Derivative assets 12 33 12 6
     Derivative liabilities (2) (16) (2) (5)
    10 17 10 1
  Further details on derivative instruments are set out in note 25.        
   
   
10. CASH AND CASH EQUIVALENTS
  Cash and cash equivalents include cash on hand, cash on deposit and cash advanced, repayable on demand and excludes bank overdrafts.