Annual Financial Statements


Financial Statements for the year ended 31 December 2008


Notes to the Annual Financial Statments (1 - 10)


1. PROPERTY, PLANT AND EQUIPMENT (Rmillion)
               
  Consolidated Total Land
and
buildings
Plant and equipment Vehicles
and other
Capitalised
leased plant
and vehicles
Capital
work in
progress
  Carrying value at beginning of year 3 210 498 1 750 279 73 610
  Additions 1 576 215 232 605   524
  Disposals (23) (12) (9) (2)    
  Depreciation (244) (11) (186) (44) (3)  
  Transfers   9 111 18   (138)
  Currency alignment 140 41 73 (13) 18 21
  Carrying value at end of year 4 659 740 1 971 843 88 1 017
  Comprising:            
  2008            
     At cost 6 670 949 3 391 1 201 112 1 017
     Accumulated depreciation 2 011 209 1 420 358 24  
    4 659 740 1 971 843 88 1 017
  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
               
  Company Total Land
and
buildings
Plant and
equipment
Vehicles
and other
Capitalised
leased plant
and vehicles
Capital
work in
progress
  Carrying value at beginning of year 2 125 303 1 468 118 1 235
  Additions 460 157 187 18   98
  Disposals (22) (11) (9) (2)    
  Depreciation (191) (6) (169) (16)    
  Transfers   9 111 18   (138)
  Carrying value at end of year 2 372 452 1 588 136 1 195
  Comprising:            
  2008            
     At cost 3 899 531 2 847 325 1 195
     Accumulated depreciation 1 527 79 1 259 189    
    2 372 452 1 588 136 1 195
  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
  Plant and machinery in Mozambique subsidiaries with a book value of R287 million (2007 -R248 million) are encumbered as security for the secured long-term borrowings and certain short-term borrowings of R143 million (2007 - R111 million).

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

2. GROWING CROPS (Rmillion) Consolidated      Company        
    2008 2007 2008 2007
  Carrying value at beginning of year 353 212 98 87
  Subsidiaries consolidated   70    
  Gain arising from physical growth and price changes 145 40 20 7
  Increase due to increased area under cane 185 19 17 7
  Decrease due to reduced area under cane (9) (3) (5) (3)
  Currency alignment 68 15    
  Carrying value at end of year 742 353 130 98
  The carrying value comprises:        
     Roots 497 201 83 58
     Standing cane 245 152 47 40
    742 353 130 98
  Area under cane (hectares):        
     South Africa 11 417 10 401 11 417 10 401
     Mozambique 20 534 14 393    
     Swaziland 3 750 3 750    
    35 701 28 544 11 417 10 401
           

3. LONG-TERM RECEIVABLE AND PREPAYMENT (Rmillion) Consolidated      Company        
    2008 2007 2008 2007
  Long-term receivable        
     Advances to an export partnership - at fair value        
     Carrying value at beginning of year 203 203 203 203
     Fair value adjustment due to reduction in tax rate (7)   (7)  
     Carrying value at end of year 196 203 196 203
  Prepayment        
     Contribution to the BEE Employee Share Ownership Plan 136 136 132 132
     Contribution to the BEE Management Share Ownership Plan 91 91 78 78
    227 227 210 210
  Less accumulated amortisation at end of year (43) (13) (40) (12)
    At beginning of year (13)   (12)  
    Charge for the year (30) (13) (28) (12)
  Less BEE share ownership plan consolidation shares (184) (214)    
        170 198
           
  Carrying value at end of year 196 203 366 401
  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         
    2008 2007    
  Carrying value at beginning of year 42 21    
  Increase in shareholding in subsidiaries 46 20    
  Currency exchange rate changes 11 1    
  Carrying value at end of year 99 42    
  Goodwill is attributable to the Mozambique sugar operations and the Botswana subsidiary. Goodwill is tested annually for impairment. The recoverable amount of goodwill was determined from the "value in use" discounted cash fl ow model. The value in use cash fl ow 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 fl ows which incorporate growth rates consistent with the average long term growth trends of the market. As at 31 December 2008, the carrying value of goodwill was considered not to require impairment.
   

5. INTANGIBLE ASSETS (Rmillion) Consolidated      Company        
    2008 2007 2008 2007
  Software at cost:        
     At beginning of year 16 26 11 7
     Hulamin unbundling   (14)    
     Additions 2 4 1 4
     Diposals (2)      
     Currency alignment 1      
  At end of year 17 16 12 11
  Accumulated amortisation:        
     At beginning of year 10 12 7 7
     Hulamin unbundling   (2)    
     Charge for the year 2   1  
     Disposals (2)      
     Currency alignment 1      
  At end of year 11 10 8 7
  Carrying value at end of year 6 6 4 4
           

6. INVESTMENTS (Rmillion) Consolidated      Company        
    2008 2007 2008 2007
  Unlisted shares at cost 265 264 263 263
  Loans 3 3 2 2
           
  Carrying value of investments (Directors' valuation) 268 267 265 265
  A schedule of unlisted investments is available for inspection at the company's registered office.
   

7. SUBSIDIARIES AND JOINT VENTURES (Rmillion) Company        
    2008 2007
  Shares at cost, less amounts written off 1 255 556
  Indebtedness by 1 302 908
  Indebtedness to (653) (326)
    1 904 1 138
    Consolidated   
    2008 2007
  Tongaat Hulett's proportionate share of the assets, liabilities and post-acquisition reserves of joint ventures which comprise in the main, Effingham Development and Tongaat Hulett/ IFA Resort Developments and which are included in the consolidated financial statements are set out below.    
  Property, plant, equipment and investments 8 7
  Current assets 328 435
  Less: Current liabilities (93) (170)
  Interest in joint ventures 243 272
  Tongaat Hulett's proportionate share of the trading results of the joint ventures
is as follows:
   
     Revenue - continuing operations 10 224
     Profit before tax 16 125
     Tax (4) (15)
     Net profit after tax 12 110
     Discontinued operation - Hulamin unbundling   42
    12 152
    Consolidated   
    2008 2007
  Tongaat Hulett's proportionate share of cash flows of the joint ventures is as follows:    
     Cash flows from operating activities 8 69
     Net cash used in investing activities (48) (19)
     Net movement in cash resources 40 50
  The original investment in Triangle Sugar is retained at a nominal value with the subsequent investment held at cost. As such, its assets and liabilities are not consolidated in the annual financial statements. Its results are accounted for in operating profit only to the extent that dividends, net of any witholding taxes, are received. Dividends of R35 million (2007 - R53 million) were received from Triangle Sugar in 2008.
   

8. INVENTORIES (Rmillion) Consolidated      Company        
2008 2007 2008 2007
  Raw materials 386 206 386 206
  Work in progress 13 15 13 15
  Finished goods 933 737 891 721
  Consumable stores 180 142 111 90
  Development properties 197 231
  1 709 1 331 1 401 1 032
  Included in raw materials is an amount of R305 million (2007 - R155 million) that relates to the constructive obligation that has been recognised on maize procurement contracts.
   

9. DERIVATIVE INSTRUMENTS (Rmillion) Consolidated      Company        
    2008 2007 2008 2007
  The fair value of derivative instruments at year end was:        
  Forward exchange contracts - hedge accounted (17) 8 (17) 8
  Forward exchange contracts - not hedge accounted (1) (1) (1) (1)
  Futures contracts - hedge accounted (3) 3 (3) 3
    (21) 10 (21) 10
  Summarised as:        
     Derivative assets 2 12 2 12
     Derivative liabilities (23) (2) (23) (2)
    (21) 10 (21) 10
  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.