Annual Financial Statements


Financial Statements for the year ended 31 March 2010


Notes to the Annual Financial Statements (11 - 20)


11. SHARE CAPITAL (Rmillion) Consolidated Company
    31 March 31 December 31 March 31 December
    2010 2008 2010 2008
  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 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
    3 200 000 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:        
    103 677 229 (31 December 2008 - 103 246 983) ordinary shares of R1,00 each 104 103 104 103
    25 104 976 A 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
    139 138 139 138
 
Under control of the directors:
  • for the purposes of the employee share option schemes 9 595 431 shares (31 December 2008 - 9 082 047 shares).
  • in terms of a shareholders’ resolution 5 162 349 shares (31 December 2008 - 5 153 918 shares).

Details of the employee share incentive schemes are set out in note 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 34. At 31 March 2010 employees have an option to subscribe for 667 500 shares at an average price of R32,85 per share (31 December 2008 - 1 099 590 shares at an average price of R32,39 per share) in respect of the Tongaat Hulett component and the equivalent of approximately 105 000 shares in respect of the Hulamin component (31 December 2008 - 143 000 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
    31 March 31 December
    2010 2008
  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 amount attributable to A preferred ordinary shareholders (59)  
  Less amortisation of IFRS 2 charge on shares relating to the employee share ownership plans (refer to notes 3 and 35) (72) (43)
    935 1 023
       
13.  DEFERRED TAX (Rmillion) Consolidated Company
    31 March 31 December 31 March 31 December
    2010 2008 2010 2008
  Balance at beginning of period 582 673 469 487
  Currency alignment (214) 3    
  Consolidation of subsidiaries 1 038      
  Accounted for in equity 6 (6) 6 (6)
  Current period Income Statement (relief)/charge on:        
    Earnings before exceptional items (16) (11) (134) (7)
    Rate change adjustment (154) (22)   (17)
  Prior periods’ charge/(relief) 30 (55)   12
  Balance at end of period 1 272 582 341 469
  Comprising temporary differences relative to :        
    Property, plant and equipment 1 220 409 428 382
    Growing crops 336 102 72 36
    Export partnership   142   142
    Current assets 114 78 40 29
    Current liabilities (34) (26) (25) (25)
    Tax losses (108) (5) (65)  
    Other (256) (118) (109) (95)
    1 272 582 341 469
           
14.  BORROWINGS (Rmillion)   Consolidated Company
      31 March 31 December 31 March 31 December
      2010 2008 2010 2008
  Long-term   1 103 1 212 1 066 1 155
  Short-term and bank overdraft   2 077 1 373 1 768 1 166
      3 180 2 585 2 834 2 321
  Long-term borrowings comprise:          
    Effective        
    interest        
    rate (%)        
  Secured:          
  SA Rand          
    Repayable 2011/2012 6,25 17 35    
    Finance leases (refer to note 29) 8,50 1 1 1 1
  Foreign          
    Repayable 2011/2016 21,50 17 35    
    Finance leases (refer to note 29) 8,93 13      
      48 71 1 1
  Unsecured:          
    SA Rand 3 month        
    Long-term portion repayable 2011/2015 JIBAR + 1,35 1 155 1 200 1 155 1 200
  Foreign          
    Repayable 2011/2012 nil 5 9    
      1 160 1 209 1 155 1 200
  Long-term borrowings   1 208 1 280 1 156 1 201
  Less: current portion included in short-term borrowings   105 68 90 46
      1 103 1 212 1 066 1 155
 
Plant and machinery of Mozambique and Zimbabwe subsidiaries with a book value of R311 million (31 December 2008 - R287 million) are encumbered as security for the secured long-term borrowings and certain short-term borrowings of R232 million (31 December 2008 - R143 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 R226 million (31 December 2008 - R143 million) and in Zimbabwe equivalent to R62 million (31 December 2008 - nil).

Summary of future loan repayments by financial year:
    Year     2011/12 2012/13 2013/14  2014/15 2015/16
    Rmillion     111 98 93 798 3
 
In terms of the company’s articles of association the borrowing powers of Tongaat Hulett are limited to R8 165 million.
 
15. NON-RECOURSE EQUITY-SETTLED BEE BORROWINGS (Rmillion)
      Consolidated
      31 March 31 December
      2010 2008
  The non-recourse equity-settled BEE borrowings comprise:      
    Effective    
    interest    
    rate (%)    
  4 122 000 Class A redeemable preference shares 8,486 nacs 287 365
  4 122 000 Class B redeemable preference shares 10,873 nacs 482 438
  Accrued dividends   18 40
      787 843
         
  Less: BEE cash resources     51
      787 792
 
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 SPVs 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 SPVs will continue to be consolidated while Tongaat Hulett carries a residual risk in these entities.
 
16. PROVISIONS (Rmillion) Consolidated Company
    31 March 31 December 31 March 31 December
    2010 2008 2010 2008
           
  Post-retirement medical aid obligations 304 223 236 223
  Retirement gratuity obligations 145 55 61 55
  Other 97 1   1
    546 279 297 279
 
Further details on provisions are set out in note 32.
 
17. TRADE AND OTHER PAYABLES (Rmillion) Consolidated Company
    31 March 31 December 31 March 31 December
    2010 2008 2010 2008
           
  Accounts payable 1 750 1 476 1 033 584
  Maize obligation - interest bearing 381 373 381 373
    2 131 1 849 1 414 957
 
The directors consider that the carrying amount of trade and other payables approximates their fair value.
 
18. OPERATING PROFIT (Rmillion) Consolidated Company
    15 months to 12 months to 15 months to 12 months to
    31 March 31 December 31 March 31 December
    2010 2008 2010 2008
  Revenue 11 136 7 106 8 155 5 694
  Cost of sales (9 629) (5 578) (6 986) (4 680)
  Administration expenses (947) (459) (533) (400)
  Marketing and selling expenses (332) (179) (189) (151)
  Other income 1 463 242 341 364
  Profit from operations 1 691 1 132 788 827
  Capital profit from land (refer to note 19) 52 22 47 6
  Capital profit on insurance claim (refer to note 19) 13 49 13 49
  BEE IFRS 2 charge and transaction costs (35) (33) (33) (31)
  Valuation adjustments:        
    Zimbabwe consolidation take-on gain 1 969      
    Other (3) 2   (7)
  Operating profit after corporate transactions 3 687 1 172 815 844
           
  Disclosable items included in operating profit:        
  Dividends received from subsidiaries:        
    Triangle Sugar   35   35
    Other subsidiaries     137 294
  Profit on disposal of plant and equipment 6 3 2 2
  Amortisation of intangible assets 3 2 3 1
  Depreciation charged:        
    Buildings 115 11 7 6
    Plant and equipment 265 186 196 169
    Vehicles and other 141 47 27 16
  Growing crops fair valuation 1 288 153 128 29
  Management fees paid to subsidiaries     1 1
  Management fees paid to third parties 4 4    
  Technical fees paid 11 11 11 11
  Operating lease charges (property, plant and vehicles) 27 16 23 14
  Share-based payments:        
    IFRS 2 charge on share options, SARS, LTIP and DBP 39 27 26 18
    BEE IFRS 2 charge (refer to note 3) 29 30 27 28
  Auditors’ remuneration:        
    Fees 12 6 6 4
    Other services 2 2 1 1
  Net (losses)/gains on:        
  Fair value hedges, losses on the hedging instrument (15) (4) (15) (4)
  Fair value hedges, gains on the hedged item 15 4 15 4
           
  Valuation adjustments on financial instruments and other items:        
    Translation of foreign currency:        
    - foreign cash holdings (5) 9    
    - other (44) 193    
    Other financial instruments 5 (15) 2 (15)
             
19. CAPITAL PROFITS (Rmillion) Consolidated Company
  15 months to 12 months to 15 months to 12 months to
  31 March 31 December 31 March 31 December
  2010 2008 2010 2008
  Comprises:        
    Surplus on sale of land 52 22 47 6
    Surplus on insurance claim 13 49 13 49
    Capital profits before tax 65 71 60 55
    Tax (refer to note 21)   (3)   (3)
  Capital profits after tax 65 68 60 52
           
20. NET FINANCING (COSTS)/INCOME (Rmillion) Consolidated Company
  15 months to 12 months to 15 months to 12 months to
  31 March 31 December 31 March 31 December
  2010 2008 2010 2008
  Net financing costs comprise:        
    Interest paid - external (577) (428) (419) (304)
    Interest capitalised 88 103    
    Interest paid - subsidiaries     (59) (56)
  Financing costs (489) (325) (478) (360)
    Interest received - external 37 45 15 15
    Interest received - subsidiaries     89 111
  Finance income 37 45 104 126
  Net financing costs (452) (280) (374) (234)