Annual Financial Statements


Financial Statements for the year ended 31 December 2008


Notes to the Annual Financial Statements (11 - 20)


11. SHARE CAPITAL (Rmillion) Consolidated      Company        
      2008 2007 2008 2007
   Authorised:        
    150 000 000 ordinary shares of R1,00 each 150 150 150
    30 000 000 A preferred ordinary shares of R1,00 each 30 30 30 30
    6 000 000 B1 ordinary shares of R1,00 each 6 6 6 6
    10 500 000 B2 ordinary shares of R1,00 each 11 11 11 11
    200 000 B3 ordinary shares of R1,00 each 3 3 3 3
    10 redeemable preference shares of R1,00 each        
      200 200 200 200
  Issued and fully paid:        
    103 246 983 (2007 - 103 005 455) ordinary shares of R1,00 each 103 103 103 103
    25 104 976 preferred ordinary shares of R1,00 each 25 25 25 25
    5 422 829 B1 ordinary shares of R1,00 each 6 6 6 6
    3 296 657 B2 ordinary shares of R1,00 each 3 3 3 3
    1 021 422 B3 ordinary shares of R1,00 each 1 1 1 1
      138 138 138 138
  Under control of the directors:
- for the purposes of the employee share option schemes 9 082 047 shares (2007 - 8 824 919 shares).
- in terms of a shareholders' resolution 5 153 918 shares (2007 - 5 330 818 shares).
  Details of the employee share incentive schemes are set out in notes 33 and 34. Following the unbundling of Hulamin in 2007, 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, as described in note 33. At 31 December 2008 employees have an option to subscribe for 1 099 590 shares at an average price of R32,39 per share (2007 - 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 143 000 shares in respect of the Hulamin component (2007 - 161 000 shares).
  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.
   

12. BEE HELD CONSOLIDATION SHARES (Rmillion) Consolidated     
    2008 2007
       
  25 104 976 A preferred ordinary shares of R1,00 each 839 839
    5 422 829 B1 ordinary shares of R1,00 each 136 136
    3 296 657 B2 ordinary shares of R1,00 each 46 46
    1 021 422 B3 ordinary shares of R1,00 each 45 45
    1 066 1 066
  Less amortisation of IFRS 2 charge on shares relating to the BEE employee share ownership plans (notes 3 and 34) (43) (13)
    1 023 1 053
       
13. DEFERRED TAX (Rmillion) Consolidated      Company        
    2008 2007 2008 2007
  Balance at beginning of year 673 1 055 487 472
  Currency alignment 3      
  Subsidiaries consolidated   4    
  Hulamin unbundling   (450)    
  Accounted for in equity (6) 1 (6)  
  Current year income statement (relief)/charge on:        
     Earnings before exceptional items (11) 68 (7) 13
     Rate change adjustment (22)   (17)  
  Prior years' (relief)/charge (55) (5) 12 2
  Balance at end of year 582 673 469 487
  Comprising temporary differences relative to :        
     Property, plant and equipment 409 395 382 372
     Growing crops 102 47 36 28
     Export partnership 142 203 142 203
     Current assets 78 63 29 2
     Current liabilities (26) (99) (25) (98)
     Tax losses (5) (12)   (11)
     Other (118) 76 (95) (9)
    582 673 469 487
           

14. BORROWINGS (Rmillion)       Consolidated      Company        
          2008 2007 2008 2007
  Long-term       1 212 410 1 155 351
  Short-term and bank overdraft       1 373 977 1 166 918
          2 585 1 387 2 321 1 269
  Long-term borrowings comprise:   Effective interestrate (%)          
  Secured:              
  SA Rand              
     Finance leases (refer to note 28)   13,0   1 1 1 1
  Repayable 2009/2016   11,3   35 28    
  Foreign              
     Repayable 2009/2012   14,9   35 31    
          71 60 1 1
  Unsecured:              
  SA Rand              
     Long-term portion repayable 2010/2014   3 months JIBAR + 1,35%   1 200 350 1 200 350
  Foreign              
     Repayable 2009/2012   nil   9      
          1 209 350 1 200 350
  Long-term borrowings       1 280 410 1 201 351
  Less: Current portion included in short-term borrowings   68   46  
          1 212 410 1 155 351
  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).
  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 R143 million (2007 - R111 million).
  Summary of future loan repayments by financial year:
  Year 2010 2011 2012 2013 2014
  Rmillion 113 113 101 90 795
  In terms of the company's articles of association the borrowing powers of Tongaat Hulett are limited to R5 billion.
   

15. NON-RECOURSE EQUITY-SETTLED BEE BORROWINGS (Rmillion)   Consolidated     
        2008 2007
  The non-recourse equity-settled BEE borrowings comprise:        
    Effective interest rate (%)      
  4 122 000 Class A redeemable preference shares 8,486 nacs   365412
  4 122 000 Class B redeemable preference shares 10,873 nacs   438 413
  Accrued dividends     40 40
        843 865
  Less: BEE cash resources     51 53
        792 812
  These borrowings relate to Tongaat Hulett's black economic empowerment partners, yoMoba SPV (Pty) Limited and TH 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 TH 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        
    2008 2007 2008 2007
           
  Post-retirement medical aid obligations (note 31) 223 209 223 209
  Retirement gratuity obligations (note 31) 55 51 55 51
     Other 1 1 1 1
           
    279 261 279 261
           

17.  TRADE AND OTHER PAYABLES (Rmillion) Consolidated      Company        
    2008 2007 2008 2007
           
  Accounts payable 1 476 1 331 584 473
  Maize obligation - interest bearing 373 163 373 163
           
    1 849 1 494 957 636
  The directors consider that the carrying amount of trade and other payables approximates their fair value.        
           

18.  OPERATING PROFIT (Rmillion) Consolidated      Company        
    2008 2007 2008 2007
           
  Revenue 7106 6 395 5 694 4 762
  Cost of sales (5 578) (5 072) (4 680) (4 063)
  Administration expenses (459) (589) (400) (419)
  Marketing and selling expenses (179) (159) (151) (122)
  Other income 242 263 364 357
  Profit from Tongaat Hulett operations 1 132 838 827 515
  Capital profit from land (refer to note 19) 22 48 6 1
  Capital profit on insurance claim (refer to note 19) 49   49  
  BEE IFRS 2 charge and transaction costs (33) (383) (31) (379)
  Valuation adjustments 2 (1) (7)  
  Fair value adjustment of investment in Hulamin   3 348   3 348
  Operating profit after corporate transactions 1 172 3 850 844 3 485
  Disclosable items included in operating profit:        
  Dividends received from subsidiaries:        
     Triangle Sugar 35 53 35 53
     Other subsidiaries     294 247
  Loss on disposal of plant and equipment 3   2 1
   Amortisation of intangible assets 2   1  
  Depreciation charged:        
     Buildings 11 9 6 5
     Plant and equipment 186 182 169 171
     Vehicles and other 47 31 16 16
  Growing crops fair valuation 153 44 29 11
  Management fees paid to subsidiaries     1 1
  Management fees paid to third parties 4 4    
  Technical fees paid 11 16 11 16
  Operating lease charges (property, plant and vehicles) 16 11 14 9
  Share-based payments:        
     IFRS 2 charge on share options, SARS, LTIP and DBP 27 42 18 39
     BEE IFRS 2 charge 30 333 28 332
  Auditors' remuneration:        
      Fees 6 5 4 3
      Other services 2 1 1 1
  Net (losses)/gains on:        
      Fair value hedges, losses on the hedging instrument (4) (17) (4) (17)
      Fair value hedges, gains on the hedged item 4 17 4 17
      Loans and receivables designated at fair value through profit or loss   (6)    
  Valuation adjustments on financial instruments and other items:        
     Translation of foreign:        
     Foreign cash holdings 9 (1)    
     Other 193 32    
  Other financial instruments (15) 2 (15)  
           

19. CAPITAL PROFITS (Rmillion) Consolidated     Company       
    2008 2007 2008 2007
  Surplus on sale of land 22 48 6 1
  Surplus on insurance claim 49 49    
  Capital profits before tax 71 48 55 1
  Tax (refer note 21) (3)   (3)  
  Capital profits after tax 68 48 52 1
           

20. NET FINANCING (COSTS)/INCOME (Rmillion) Consolidated      Company        
    2008 2007 2008 2007
           
  Net financing costs comprise:        
     Interest paid - external (428) (208) (304) (139)
     Interest capitalised 103 15    
     Interest paid - subsidiaries     (56) (12)
  Financing costs (325) (193) (360) (151)
     Interest received - external 45 74 15 49
     Interest received - subsidiaries     111  
  Finance income 45 74 126 49
  Net financing costs (280) (119) (234) (102)