Annual Financial Statements


Financial Statements for the year ended 31 March 2011


Notes to the Annual Financial Statements (11 - 20)


11. SHARE CAPITAL (Rmillion) Consolidated Company
    2011 2010 2011 2010
  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:        
  105 014 181 (31 March 2010 - 103 677 229) ordinary shares of R1,00 each 105 104 105 104
  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
    140 139 140 139
 

Under control of the directors:
- for the purposes of the employee share option schemes 9 932 528 shares (2010: 9 595 431 shares).
- in terms of a shareholders’ resolution 5 240 588 shares (2010: 5 162 349 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 2011 employees have an option to subscribe for 468 294 shares at an average price of R33,42 per share (2010: 667 500 shares at an average price of R32,85 per share) in respect of the Tongaat Hulett component and the equivalent of approximately 100 000 shares in respect of the Hulamin component (2010: 105 000 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    
    2011 2010    
  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 (84) (59)    
  Less amortisation of IFRS 2 charge on shares relating        
  to the employee share ownership plans (refer to notes 3 and 35) (114) (72)    
    868 935    
           
13. DEFERRED TAX (Rmillion) Consolidated Company
    2011 2010 2011 2010
  Balance at beginning of year 1 272 582 341 469
  Currency alignment (65) (214)    
  Consolidation of subsidiaries (1) 1 038    
  Accounted for in equity (1) 6 (1) 6
  Current year Income Statement charge/(relief) on:        
  Earnings before capital profits 161 (16) 108 (134)
  Rate change adjustment   (154)    
  Prior years’ (relief)/charge (1) 30 (1)  
  Balance at end of year 1 365 1 272 447 341
  Comprising temporary differences relative to :        
  Property, plant and equipment 1 161 1 220 459 428
  Growing crops 545 336 102 72
  Defined benefit pension fund asset 82   82  
  Long term receivable 38   38  
  Current assets 144 114 31 40
  Current liabilities (89) (34) (31) (25)
  Tax losses (250) (108) (95) (65)
  Other (266) (256) (139) (109)
    1 365 1 272 447 341
           
14. BORROWINGS (Rmillion)   Consolidated Company
      2011 2010 2011 2010
  Long-term   1 345 1 103 977 1 066
  Short-term and bank overdraft   2 930 2 077 2 437 1 768
      4 275 3 180 3 414 2 834
  Long-term borrowings comprise:          
    Effective
interest
rate (%)
       
  Secured:          
  SA Rand          
  Repayable 2020/2021 8,60 367      
  Repayable 2011/2012 6,25 6 17    
  Finance leases (refer to note 29) 7,50 2 1 2 1
  Foreign          
  Repayable 2011/2016 21,50 11 17    
  Finance leases (refer to note 29) 4,30 11 13    
      397 48 2 1
  Unsecured:          
  SA Rand 3 month        
  Long-term portion repayable 2011/2015 JIBAR + 1,35 1 065 1 155 1 065 1 155
  Foreign          
  Repayable 2011/2012 nil 3 5    
  Indefinite nil 5      
      1 073 1 160 1 065 1 155
  Long-term borrowings   1 470 1 208 1 067 1 156
  Less: current portion included in short-term borrowings   125 105 90 90
      1 345 1 103 977 1 066
 

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).

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 R315 million (2010: R226 million) and in Zimbabwe equivalent to R196 million (2010: R62 million).

Summary of future loan repayments by financial year:

Year 2012/13 2013/14 2014/15 2015/16 2016/17 Thereafter
Rmillion 135 129 834 39 37 171

In terms of the company’s articles of association the borrowing powers of Tongaat Hulett are limited to R8 460 million.

15. NON-RECOURSE EQUITY-SETTLED BEE BORROWINGS (Rmillion)   Consolidated
      2011 2010
  The non-recourse equity-settled BEE borrowings comprise:      
    Effective
interest
rate (%)
   
  4 122 000 Class A redeemable preference shares 8,486 nacs 229 287
  4 122 000 Class B redeemable preference shares 10,873 nacs 515 482
  Accrued dividends   18 18
      762 787
  Less: BEE cash resources   (1)  
      761 787
 

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
    2011 2010 2011 2010
  Post-retirement medical aid obligations 323 304 254 236
  Retirement gratuity obligations 97 145 68 61
  Other 90 97    
    510 546 322  
  Further details on provisions are set out in note 32.        
           
17. TRADE AND OTHER PAYABLES (Rmillion) Consolidated Company
    2011 2010 2011 2010
  Accounts payable 1 765 1 750 933 1 033
  Maize obligation - interest bearing 173 381 173  
    1 938 2 131 1 106 381
 

The directors consider that the carrying amount of trade and other payables approximates their fair value.

18. OPERATING PROFIT (Rmillion) Consolidated Company
    12 months to 15 months to 12 months to 15 months to
    31 March 31 March 31 March 31 March
    2011 2010 2011 2010
  Revenue 9 681 11 136 6 250 8 155
  Cost of sales (7 791) (9 629) (5 394) (6 986)
  Administration and overhead expenses (1 249) (947) (485) (533)
  Marketing and selling expenses (235) (332) (162) (189)
  Other income (including growing crops fair value change )* 932 1 463 411 341
  Profit from operations 1 338 1 691 620 788
  Bulk sales / capital profit on land (refer to note 19) 23 52 5 47
  Capital profit on other items (refer to note 19) 4 13 2 13
  BEE IFRS 2 charge and transaction costs (46) (35) (43) (33)
  Valuation adjustments:        
  Defined benefit pension fund asset recognition 288   288  
  Zimbabwe consolidation take-on gain   1 969    
  Other (1) (3)    
  Operating profit after corporate transactions 1 606 3 687 872 815
  Disclosable items included in operating profit:        
  Dividends received from subsidiaries     105 137
  Profit on disposal of plant and equipment 1 6 1 2
  Amortisation of intangible assets 4 3 3 3
  Depreciation charged:        
  Buildings 43 115 6 7
  Plant and equipment 207 265 126 196
  Vehicles and other 94 141 19 27
  Growing crops : change in fair value * 662 1 288 109 128
  Management fees paid to subsidiaries     1 1
  Management fees paid to third parties 4 4    
  Technical fees paid 10 11 10 11
  Operating lease charges (property, plant and vehicles) 25 27 19 23
  Share-based payments:        
  IFRS 2 charge on share options, SARS, LTIP and DBP 42 39 30 26
  BEE IFRS 2 charge 42 29 39 27
  Auditors’ remuneration:        
  Fees 10 12 5 6
  Other services 2 2 1 1
  Net (losses)/gains on:        
  Fair value hedges, losses on the hedged item (5) (15) (5) (15)
  Fair value hedges, gains on the hedging instrument 5 15 5 15
  Valuation adjustments on financial instruments and other items:        
  Translation of foreign currency:        
  - foreign cash holdings (1) (5)    
  - other (3) (44)    
  Other financial instruments (7) 5 (2) 2
 

*
  

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.

19. CAPITAL PROFITS (Rmillion) Consolidated Company
    12 months to 15 months to 12 months to 15 months to
    31 March 31 March 31 March 31 March
    2011 2010 2011 2010
  Comprises:        
  Surplus on sale of land 23 52 5 47
  Other surpluses 4 13 2 13
  Capital profits before tax 27 65 7 60
  Tax        
  Capital profits after tax 27 65 7 60
           
20. NET FINANCING (COSTS)/INCOME (Rmillion) Consolidated Company
    12 months to 15 months to 12 months to 15 months to
    31 March 31 March 31 March 31 March
    2011 2010 2011 2010
  Net financing costs comprise:        
  Interest paid - external (491) (577) (328) (419)
  Interest capitalised 7 88    
  Interest paid - subsidiaries     (41) (59)
  Financing costs (484) (489) (369) (478)
  Interest received - external 12 37 3 15
  Interest received - subsidiaries     5 89
  Finance income 12 37 8 104
  Net financing costs (472) (452) (361) (374)