Annual Financial Statements


Financial Statements for the year ended 31 March 2011


Notes to the Annual Financial Statments (1 - 10)


1. PROPERTY, PLANT AND EQUIPMENT (Rmillion)
  Consolidated Total Land, Plant and Vehicles Capitalised Capital
      improvements equipment and other leases work in
      and buildings       progress
  Carrying value at beginning of year 7 710 2 260 3 771 1 400 58 221
  Consolidation of subsidiaries 2   2      
  Additions 719 34 366 273 1 45
  Disposals (6) (2) (1) (3)    
  Depreciation (344) (43) (207) (92) (2)  
  Transfers   7 36 17   (60)
  Currency alignment (416) (140) (174) (90) (5) (7)
  Carrying value at end of year 7 665 2 116 3 793 1 505 52 199
  Comprising:            
  31 March 2011            
  At cost 10 323 2 417 5 638 1 997 72 199
  Accumulated depreciation 2 658 301 1 845 492 20  
    7 665 2 116 3 793 1 505 52 199
  31 March 2010            
  At cost 10 083 2 534 5 425 1 825 78 221
  Accumulated depreciation 2 373 274 1 654 425 20  
    7 710 2 260 3 771 1 400 58 221
  Company            
  Carrying value at beginning of year 2 387 455 1 664 148 1 119
  Additions 152 13 101 17 1 20
  Disposals (2) (1)   (1)    
  Depreciation (151) (6) (126) (18) (1)  
  Transfers   7 32 12   (51)
  Carrying value at end of year 2 386 468 1 671 158 1 88
  Comprising:            
  31 March 2011            
  At cost 4 239 560 3 208 380 3 88
  Accumulated depreciation 1 853 92 1 537 222 2  
    2 386 468 1 671 158 1 88
  31 March 2010            
  At cost 4 096 541 3 077 357 2 119
  Accumulated depreciation 1 709 86 1 413 209 1  
    2 387 455 1 664 148 1 119
 

Plant and machinery of Mozambique and Zimbabwe subsidiaries with a book value of R787 million (2010: R311 million) are encumbered as security for the secured long-term borrowings and certain short-term borrowings of R291 million (2010: R232 million).

Land and agricultural improvements, to which Tongaat Hulett has rights in Zimbabwe, have been included in the consolidation of the Zimbabwe subsidiaries.

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

2. GROWING CROPS (Rmillion) Consolidated Company
    2011 2010 2011 2010
  Carrying value at beginning of year 2 041 742 256 130
  Consolidation of subsidiaries   342    
  Gain arising from physical growth and price changes 611 1 231 58 76
  Increase due to increased area under cane 102 141 55 54
  Decrease due to reduced area under cane (8) (8) (6) (4)
  Currency alignment (138) (407)    
  Carrying value at end of year 2 608 2 041 363 256
  The carrying value comprises:        
  Roots 1 179 895 221 144
  Standing cane 1 429 1 146 142 112
    2 608 2 041 363 256
  Area under cane (hectares)        
  South Africa 18 859 13 910 18 859 13 910
  Mozambique 24 664 22 609    
  Swaziland 3 838 3 767    
  Zimbabwe 28 494 27 753    
    75 855 68 039 18 859 13 910
 

In terms of IAS 41 Agriculture sugar cane growing crops are accounted for as biological assets and are measured and recognised at fair value. Changes in the fair value, replanting and agricultural operating costs incurred are included in profit and loss.

  • The fair value of roots is determined on a current amortised cost basis, which is adjusted for cost increases, and the amortisation takes place over the life of the roots (between approximately 6 and 12 years).
  • The fair value of standing cane is determined by the growth of the cane, the yield, sucrose content, selling prices (including specifics such as European Union exports), less costs to harvest and transport, over-the-weighbridge costs and costs into the market.

The statement of financial position reflects the following in respect of growing crops:

        2011     2010
    South Africa Swaziland Zimbabwe Mozambique Total  
  Roots            
  Hectares under cane 18 859 3 838 28 494 24 664 75 855 68 039
  Amortised root value            
  (Rand per hectare) 11 718 12 261 12 993 21 915 15 540 13 148
  Standing cane            
  Hectares for harvest 17 047 3 756 28 229 24 047 73 079 67 419
  Standing cane value            
  (Rand per hectare) 8 356 23 032 22 865 23 057 19 552 17 000
  Yield            
  Tons cane per hectare 54 124 98 85 85 91
  Balance Sheet (Rmillion)            
  Roots 221 47 370 541 1 179 895
  Standing cane 142 87 646 554 1 429 1 146
  Total 363 134 1 016 1 095 2 608 2 041
           
    Rmillion      
  Carrying value at beginning of year 2 041      
  Change in fair value * 662      
  Foreign currency translation (138)      
  Other 43      
  Carrying value at end of year 2 608      
           
  The IAS 41 fair value change included in profit or loss for the year ended 31 March 2011 is as follows:
           
    Rmillion     Rmillion
  Roots 332   South Africa 109
        Swaziland 7
  Standing cane 330   Zimbabwe 283
        Mozambique 263
  Change in fair value * 662   Change in fair value * 662
 

*
  

This represents the change in fair value from opening balance sheet date to closing balance sheet date. The agricultural costs actually incurred in generating this increase in fair value are charged to cost of sales.

3. LONG-TERM RECEIVABLE AND PREPAYMENT (Rmillion) Consolidated Company
    2011 2010 2011 2010
  Long-term receivable        
  Carrying value at beginning of year - advances to an export partnership   196   196
  Settlement - export partnership   (196)   (196)
  Pension fund employer surplus account allocation (refer to note 32) 216   216  
    216   216  
  Less current portion of employer surplus account allocation (81)   (81)  
  Carrying value at end of year 135   135  
  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 (114) (72) (106) (67)
  At beginning of year (72) (43) (67) (40)
  Charge for the year (42) (29) (39) (27)
  Less BEE share ownership plan consolidation shares (113) (155)    
        104 143
  Carrying value at end of year 135   239 143
           
 

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 35.

4. GOODWILL (Rmillion) Consolidated  
    2011 2010  
  Carrying value at beginning of year 240 99  
  Consolidation of subsidiaries 8 207  
  Currency exchange rate changes (18) (66)  
  Carrying value at end of year 230 240  
         
 

Goodwill is attributable to the Mozambique and Zimbabwe sugar operations and a Botswana and a Namibian subsidiary. 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 March 2011, the carrying value of goodwill was considered not to require impairment.

5. INTANGIBLE ASSETS (Rmillion) Consolidated Company
    2011 2010 2011 2010
  Cost:        
  At beginning of year 22 17 19 12
  Consolidation of subsidiaries 2      
  Additions 26 7 26 7
  Currency alignment   (2)    
  At end of year 50 22 45 19
  Accumulated amortisation:        
  At beginning of year 13 11 11 8
  Consolidation of subsidiaries 1      
  Charge for the year 4 3 3 3
  Currency alignment   (1)    
  At end of year 18 13 14 11
  Carrying value at end of year 32 9 31 8
  The carrying value comprises:        
  Software and information technology 28 4 27 3
  Cane supply agreements 4 5 4 5
    32 9 31 8
           
6. INVESTMENTS (Rmillion)        
    Consolidated Company
    2011 2010 2011 2010
  Unlisted shares at cost 6 7    
  Loans 1 3   2
  Carrying value of investments (Directors’ valuation) 7 10   2
 

A schedule of unlisted investments is available for inspection at the company’s registered office.

7. SUBSIDIARIES AND JOINT VENTURES (Rmillion) Company
    2011 2010
  Shares at cost, less amounts written off 4 703 2 733
  Indebtedness by 42 1 498
  Indebtedness to (828) (535)
    3 917 3 696
       
    Consolidated
    2011 2010
 

Tongaat Hulett’s proportionate share of the assets, liabilities and post-acquisition reserves of joint ventures, which comprise in the main, Effingham Development (33%) and Tongaat Hulett/IFA Resort Developments (50%) and which are included in the consolidated financial statements are set out below.

  Property, plant and equipment 7 8
  Current assets 345 283
  Less: Current liabilities (110) (68)
  Interest in joint ventures 242 223
       
    12 months to 15 months to
    31 March 31 March
    2011 2010
  Tongaat Hulett’s proportionate share of the trading results of the joint ventures is as follows:
  Revenue 111 21
  Profit before tax 54 19
  Tax (15) (4)
  Net profit after tax 39 15
  Tongaat Hulett’s proportionate share of cash flows of the joint ventures is as follows:
  Cash flows from operating activities 40 (4)
  Net cash used in investing activities (35) (38)
  Movement in net cash resources 5 (42)
       
8. INVENTORIES (Rmillion) Company
    2011 2010
  Raw materials 209 464
  Work in progress 17 13
  Finished goods 95 120
  Consumables 115 123
  Development properties    
    436 720
 

Included in raw materials is an amount of R164 million (2010: R360 million) that relates to the constructive obligation that has been recognised on maize procurement contracts.

9. DERIVATIVE INSTRUMENTS (Rmillion) Consolidated Company
    2011 2010 2011 2010
  The fair value of derivative instruments at year end was:        
  Forward exchange contracts - hedge accounted 3 9 3 9
  Forward exchange contracts - not hedge accounted 5   5  
  Futures contracts - hedge accounted 1 (3) 1 (3)
    9 6 9 6
  Summarised as:        
  Derivative assets 11 9 11 9
  Derivative liabilities (2) (3) (2) (3)
    9 6 9 6
 

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.