Notes to the Annual Financial Statements (11 - 20)


11.   SHARE CAPITAL (Rmillion) Consolidated Company
    2007 2006 2007 2006
  Authorised:        
     150 000 000 ordinary shares of R1,00 each 150 150 150 150
     30 000 000 A preferred ordinary shares of R1,00 each 30   30  
     6 000 000 B1 ordinary shares of R1,00 each 6   6  
     10 500 000 B2 ordinary shares of R1,00 each 11   11  
     3 200 000 B3 ordinary shares of R1,00 each 3   3  
     10 redeemable preference shares of R1,00 each        
    200 150 200 150
  Issued and fully paid:        
     103 005 455 (2006 - 106 591 252) ordinary shares of R1,00 each 103 107 103 107
     25 104 976 (2006 - nil) A preferred ordinary shares of R1,00 each 25   25  
     5 422 829 (2006 - nil) B1 ordinary shares of R1,00 each 6   6  
     3 296 657 (2006 - nil) B2 ordinary shares of R1,00 each 3   3  
     1 021 422 (2006 - nil) B3 ordinary shares of R1,00 each 1   1  
    138 107 138 107
           
  Under control of the directors:

   - for the purposes of the employee share option schemes 8 824 919 shares (2006 - 7 717 315 shares).
   - in terms of a shareholders' resolution 5 330 818 shares (2006 - 5 254 684 shares).

Details of the employee share incentive schemes are set out in notes 33 and 34.

As a result of the unbundling of Hulamin, the options granted to employees in terms of the original employee share option schemes which had not been exercised at the unbundling date were converted into two components, a Tongaat Hulett Limited component and a Hulamin Limited component. The obligation to settle these share schemes is in accordance with the following principles, which are in accordance with the Unbundling Agreement and in terms of the scheme rules. Tongaat Hulett is obliged to settle all benefits under these share schemes for its own employees only, using Tongaat Hulett shares. It will settle the outstanding share scheme instruments that arise after the award adjustments for its own employees, by purchasing Tongaat Hulett shares in the market, or issuing Tongaat Hulett shares. The benefit for the Hulamin component will be determined with reference to the Hulamin share price, and the Tongaat Hulett component with respect to the Tongaat Hulett share price, however, benefits arising from the Hulamin component will be settled using Tongaat Hulett shares. At 31 December 2007 employees have an option to subscribe for 1 315 150 shares at an average price of R31,98 per share in respect of the Tongaat Hulett component and the equivalent of approximately 161 000 shares in respect of the Hulamin component (2006 - 2 941 810 shares at R41,23 per share in The Tongaat-Hulett Group Limited).

The original 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.

         
12.   BEE HELD CONSOLIDATION SHARES (Rmillion) Consolidated    
    2007 2006    
  25 104 976 (2006 - nil) A preferred ordinary shares of R1,00 each 839      
  5 422 829 (2006 - nil) B1 ordinary shares of R1,00 each 136      
  3 296 657 (2006 - nil) B2 ordinary shares of R1,00 each 46      
  1 021 422 (2006 - nil) B3 ordinary shares of R1,00 each 45      
    1 066 -    
  Less amortisation of IFRS 2 charge on shares relating        
  to the employee share ownership plans (notes 3 and 34) (13)      
    1 053 -    
       
       
13. DEFERRED TAX (Rmillion) Consolidated Company
    2007 2006 2007 2006
      Restated    
  Balance at beginning of year 1 055 936 472 357
  Subsidiaries consolidated 4      
  Hulamin unbundling (450) (16)    
  Accounted for in equity 1 2   1
  Current year income statement charge/(relief) on:        
     Earnings before exceptional items 68 140 13 121
     Exceptional items   6   6
  Prior years' charge (5) (13) 2 (13)
  Balance at end of year 673 1 055 487 472
  Comprising temporary differences relative to :        
     Property, plant and equipment 395 855 372 363
     Growing crops 47 40 28 25
     Export partnership 203 203 203 203
     Current assets 63 36 2 2
     Current liabilities (99) (115) (98) (93)
     Tax losses (12) (16) (11) (16)
     Other 76 52 (9) (12)
    673 1 055 487 472
         
         
14. BORROWINGS (Rmillion)   Consolidated Company
      2007 2006 2007 2006
  Long-term   410 49 351  
  Short-term and bank overdraft   977 1 174 918 1 039
      1 387 1 223 1 269 1 039
  Long-term borrowings comprise:          
    Effective        
    interest        
    rate (%)        
  Secured:          
  SA Rand          
     Repayable 2008/2011 6,3 28      
     Finance leases (refer to note 28) 12,5 1 3 1  
  Foreign          
     Repayable 2008/2012 14,9 31      
      60 3 1  
  Unsecured:          
  SA Rand          
     Repayable 2014 3 months JIBAR + 1,35% 350   350  
  Foreign          
     Hulamin unbundling     81    
      350 81 350  
  Long-term borrowings   410 84 351  
  Less: Current portion included          
     in short-term borrowings     35    
      410 49 351  
  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.

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 short-term borrowings in Mozambique equivalent to R111 million (2006 - R50 million).

Summary of future loan repayments by financial year:        
       Year 2009 2010 2011 2012 2013 2014
Rmillion 18 18 18 6 0 350

In terms of the company's articles of association the borrowing powers of Tongaat Hulett are limited to R4,4 billion.
 

         
15.    NON-RECOURSE EQUITY-SETTLED BEE BORROWINGS (Rmillion) Consolidated  
      2007 2006  
  The non-recourse equity-settled BEE borrowings comprise:        
    Effective      
    interest      
    rate (%)      
  4 122 000 Class A redeemable preference shares 8,486 nacs 412    
  4 122 000 Class B redeemable preference shares 10,873 nacs 413    
  Accrued dividends   40    
      865 -  
  Less: BEE cash resources   53    
      812 -  
  These borrowings relate to Tongaat Hulett's black economic empowerment partners, yoMoba SPV (Pty) Limited and Infrastructure SPV (Pty) Limited, which have been fully consolidated in terms of IFRS. yoMoba SPV (Pty) Limited owns 11 157 767 A preferred ordinary shares and Infrastructure SPV (Pty) Limited owns 13 947 209 A preferred ordinary shares in Tongaat Hulett. The preference shares are redeemable by no later than 30 June 2014 and have a fixed coupon payable semi-annually on 2 January and 1 July each year. The total debt due will be settled by the SPV's utilising preferred ordinary dividends received from Tongaat Hulett and by the shares that they hold in Tongaat Hulett and will have no further impact on the cash flows of Tongaat Hulett. These SPV's will continue to be consolidated while Tongaat Hulett carries a residual risk in these entities.
 

       
16.  PROVISIONS (Rmillion) Consolidated Company
    2007 2006 2007 2006
  Post-retirement medical aid obligations (note 31) 209 241 209 198
  Retirement gratuity obligations (note 31) 51 55 51 48
  Other 1 1 1 1
    261 297 261 247
       
       
17. TRADE AND OTHER PAYABLES (Rmillion) Consolidated Company
    2007 2006 2007 2006
  Accounts payable 1 331 1 258 473 420
  Maize obligation - interest bearing 163 130 163 130
    1 494 1 388 636 550
 
The directors consider that the carrying amount of trade and other payables approximates their fair value.
       
       
18. OPERATING PROFIT (Rmillion) Consolidated Company
    2007 2006 2007 2006
      Restated    
  Revenue 6 395 5 110 4 762 4 194
  Cost of sales (5 072) (3 992) (4 063) (3 481)
  Administration expenses (589) (483) (419) (359)
  Marketing and selling expenses (159) (108) (122) (95)
  Other income 263 199 357 229
  Profit from Tongaat Hulett operations 838 726 515 488
  Capital profit from land (refer to note 19) 48 26 1 290
  BEE IFRS 2 charge and transaction costs (383)   (379)  
  Exchange rate translation (loss)/gain (1) 57    
  Fair value adjustment of investment in Hulamin 3 348   3 348  
  Operating profit after corporate transactions 3 850 809 3 485 778
           
  Disclosable items included in operating profit:        
           
  Dividends received from subsidiaries:        
     Triangle Sugar 53 61 53  
     Other subsidiaries     247  
  Income from unlisted investments   3    
  (Loss)/surplus on disposal of plant and equipment   1 (1)  
  Amortisation of intangible assets   1    
  Depreciation charged:        
     Buildings 9 7 5 5
     Plant and equipment 182 158 171 157
     Vehicles and other 31 21 16 14
  Management fees paid to subsidiaries     1 1
  Management fees paid to third parties 4 5    
  Technical fees paid 16 12 16 12
  Operating lease charges (property, plant and vehicles) 11 10 9 9
  Share-based payments:        
     IFRS 2 charge on share options, SARS, LTIP and DBP 42 20 39 20
     BEE IFRS 2 charge 333   332  
  Auditors' remuneration:        
     Fees 5 5 3 3
     Other services 1 1 1  
           
  Net (losses)/gains on:        
     Loans and receivables designated at fair value through profit or loss (6) (4)    
     Fair value hedges, losses on the hedging instrument (17) (103) (17) (103)
     Fair value hedges, gains on the hedged item 17 103 17 103
  Valuation adjustments on financial instruments and other items:        
     Foreign currency gains/(losses):        
        Translation of foreign cash holdings (1) 57    
        Other 32 (3)    
     Other financial instruments 2 1    
       
       
19. CAPITAL PROFIT FROM LAND (Rmillion) Consolidated Company
    2007 2006 2007 2006
  Comprises:        
  Surplus on sale of property 48 27 1 291
  Estate closure costs   (1)   (1)
  Capital profit before tax 48 26 1 290
  Tax (refer note 21)   (6)   (6)
  Capital profit after tax 48 20 1 284
       
20. NET FINANCING (COSTS)/INCOME (Rmillion) Consolidated Company
    2007 2006 2007 2006
      Restated    
  Net financing costs comprise:        
     Interest paid - external (208) (38) (139) (67)
     Interest capitalised 15      
     Interest paid - subsidiaries     (12) (6)
  Financing costs (193) (38) (151) (73)
     Financial instrument income   104   104
     Interest received - external 74 22 49 4
  Finance income 74 126 49 108
  Net financing (costs)/income (119) 88 (102) 35