Annual Financial Statements


Financial Statements for the year ended 31 March 2013


Notes to the Annual Financial Statements (30 - 35)

31. RETIREMENT BENEFITS (Rmillion)
  Pension and Provident Fund Schemes
Tongaat Hulett contributes towards retirement benefits for substantially all permanent employees who depending on preference or local legislation are required to be a member of either a Tongaat Hulett implemented scheme or of various designated industry or state schemes. The Tongaat Hulett schemes are governed by the relevant retirement fund legislation. Their assets consist primarily of listed shares fixed income securities property investments and money market instruments and are held separately from those of Tongaat Hulett. The scheme assets are administered by boards of trustees each of which includes elected employee representatives.

Defined Benefit Pension Scheme
As explained in the Accounting Policies and Framework, a defined benefit scheme in South Africa which previously covered the old Tongaat-Hulett Group was split between Tongaat Hulett and Hulamin in 2012 and then, in 2013, the defined benefit arrangement was converted to a defined contribution arrangement with the existing pensioner liabilities being outsourced to an insurer. The following analyses are of the defined benefit arrangements:
   
 
Details of the IAS 19 valuation  of the DB Fund (South Africa):  2013  2012 
     
Fair value of fund assets    
Balance at beginning of year  5 076  4 662 
Expected return on scheme assets  366  416 
Contributions by plan members  18  29 
Benefits paid  (192) (205)
Actuarial (loss)/gain  (72) 174 
Settlements/conversion  (4 459)  
Balance at end of year  737  5 076 
     
Present value of defined benefit obligation    
Balance at beginning of year  3 794  3 519 
Current service cost  56  91 
Interest cost  261  321 
Contributions by plan members  18  29 
Benefits paid  (192) (205)
Actuarial loss  111  39 
Settlements/conversion  (4 048)  
Balance at end of year  3 794 
     
Fund assets less member liabilities  737  1 282 
Employer surplus account  (515) (175)
  222  1 107 
Defined benefit pension fund asset    (296)
Provisions and reserves (2012:  asset restriction) 222  811 
     
Amounts included in the statement of financial position:    
Balance at beginning of year  469  510 
     
Amounts recognised in profit or loss:  46  (41)
Net expense in respect of defined benefit accounting  (22) (41)
Employer surplus account recognition  68   
     
Balance at end of year  515  469 
     
Amounts recognised in profit or loss:    
Service costs  56  91 
Interest costs  261  321 
Expected return on scheme assets  (366) (416)
Net actuarial  losses recognised  183  45 
Loss on settlement  411   
Effect of change in asset ceiling  (591)  
Net (income)/expense in respect of defined benefit accounting  (46) 41 
     
Asset information    
Equities    3 046 
Fixed interest bonds    1 015 
Property    102 
Cash and other  737  913 
  737  5 076 
     
Included  in the assets of the scheme are ordinary shares held in Tongaat Hulett Limited, stated at fair value                                                                                                                            105 
     
Actual return on scheme assets 294  590 
     
The principal actuarial assumptions are:     
Discount rate  8,00%  8,90% 
Salary cost and pension increase  5,75%  6,25% 
Expected rate of return on assets  8,00%  8,90% 
     
Experience gains/(losses) on:    
Plan liabilities:    55 
Percentage of the present value of the plan liabilities    1,4% 
     
Plan assets:  (72) 174 
Percentage of plan assets  (9,8%) 3,4% 
   
  Basis used to determine the rate of return on assets
The expected rate of return on assets has been calculated using the discount rate at the beginning of the year, which corresponds to that used in the previous valuation. This is a reasonably conservative approach, adopted on the basis that the additional returns anticipated on certain other asset classes in which the Fund is invested (e.g. equities) can only be achieved with increased risk.

Estimated contributions payable in the next financial year
Following the transfer of business from the Tongaat Hulett Defined Benefit Pension Fund to the Tongaat Hulett Pension Fund 2010, no further contributions are payable to the Tongaat Hulett Defined Benefit Pension Fund. The employer surplus account will be used for contributions to the Tongaat Hulett Pension Fund 2010, which is a defined contribution fund. The benefit in the next financial year is R60 million.

Defined Contribution Pension and Provident Schemes
The latest audited financial statements of the defined contribution schemes, including the scheme in Swaziland, reflect a satisfactory state of affairs. Contributions of R55 million, which include R23 million in respect of the Tongaat Hulett Pension Fund 2010 with effect from 1 November 2012, were expensed during the year (2012 - R29 million).

Zimbabwe Pension Funds
The post-retirement benefit provisions for the Zimbabwe operations at 31 March 2013 amount to R269 million (2012: R219 million), including the post-retirement medical aid and the retirement gratuity provisions.

Post-Retirement Medical Aid Benefits
In the South African operations, the obligation to pay medical aid contributions after retirement is no longer part of the conditions of employment for employees engaged after 30 June 1996. A number of pensioners and current employees, however, remain entitled to this benefit. The entitlement to this benefit for current employees is dependent upon the employee remaining in service until retirement and completing a minimum service period of ten years. The Zimbabwe operations provide post-retirement medical benefits for pensioners and current employees. In Mozambique, Acucareira de Xinavane subsidises the medical contributions in respect of its pensioners.

The unfunded liability for post-retirement medical aid benefits is determined actuarially each year and comprises:
   
 
  Consolidated Company
  2013 2012 2013 2012
         
Amounts recognised in the statement of financial position:        
Present value of unfunded obligations 448 391 383 335
Unrecognised actuarial losses (52) (34) (85) (61)
Net liability in the statement of financial position 396 357 298 274
         
The liability is reconciled as follows:        
Net liability at beginning of year 357 323 274 254
Currency alignment 16 9    
Net expense recognised in income statement 50 49 47 42
Contributions (27) (24) (23) (22)
Net liability at end of year 396 357 298 274
         
Amounts recognised in the income statement:        
Service costs 6 5 3 3
Interest costs 34 36 29 28
Net actuarial losses recognised 10 8 15 11
  50 49 47 42
         
The principal actuarial assumptions applied are:        
Discount rate        
South Africa 8,00% 8,90% 8,00% 8,90%
Mozambique 6,75% 8,00%    
Zimbabwe 7,60% 8,00%    
         
Health care cost inflation rate        
South Africa 6,75% 7,00% 6,75% 7,00%
Mozambique 6,00% 6,00%    
Zimbabwe 6,35% 6,50%    
         
Sensitivity of healthcare cost trend rates:        
1% increase in trend rate - effect on the aggregate of the service and interest costs 2 2 1 1
1% increase in trend rate - effect on the obligation 59 50 45 38
1% decrease in trend rate - effect on the aggregate of the service and interest costs 1 1 1  
1% decrease in trend rate - effect on the obligation 50 42 38 32
         
Estimated contributions payable in the next financial year 29 26 25 23
         
Plan liabilities and experience gains/(losses): Plan liability Experience gain/(loss) Plan liability Experience gain/(loss)
         
Year ended 31 March 2013 448 (17) 383 (15)
Year ended 31 March 2012 391 (3) 335 (4)
Year ended 31 March 2011 361 4 314 (5)
Year ended 31 March 2010 (15 months) 346 3 289 (9)
Year ended 31 December 2008 281 (22) 281 (22)
   
  Retirement Gratuities
Tongaat Hulett has in the past made payments, on retirement, to eligible employees who have remained in service until retirement, and have completed a minimum service period of ten years. The benefit is applicable to employees in the South African and Zimbabwean operations. The unfunded liability for retirement gratuities, which is determined actuarially each year comprises:
   
 
  Consolidated Company
  2013 2012 2013 2012
         
Amounts recognised in the statement of financial position:         
Present value of unfunded obligations  152  124  102  88 
Unrecognised actuarial losses  (16) (8) (19) (11)
Net liability in the statement of financial position  136  116  83  77 
         
The liability is reconciled as follows:         
Net liability at beginning of year  116  97  77  68 
Currency alignment     
Net expense recognised in income statement  21  20  15  14 
Payments made  (9) (5) (9) (5)
Net liability at end of year  136  116  83  77 
         
Amounts recognised in the income statement:         
Service costs 
Interest costs  11  12 
Net actuarial  losses recognised 
  21  20  15  14 
         
The principal actuarial assumptions applied are:         
Discount rate         
South Africa                                                                                         8,00%  8,90%  8,00%  8,90% 
Zimbabwe  7,60%  8,00%     
         
Salary inflation rate         
South Africa  6,50%  7,00%  6,50%  7,00% 
Zimbabwe  5,60%  6,00%     
         
Estimated contributions payable in the next financial year  16  15  12 
         
Plan liabilities and experience gains/(losses):  Plan liability  Experience  gain/(loss) Plan liability  Experience  gain/(loss)
         
Year ended 31 March 2013  152  (7) 102  (6)
Year ended 31 March 2012  124  88 
Year ended 31 March 2011  107  (1) 80  (4)
Year ended 31 March 2010 (15 months) 155  (2) 71  (2)
Year ended 31 December 2008  67  (9) 67  (9)
   
   
32. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS AND INTERESTS (R000)
 

Executive directors’ remuneration

The executive directors’ remuneration for the year ended 31 March  2013 was as follows:

Name Cash
Package
Cash
Bonus*
Retirement
and medical
contributions
Total
         
B G Dunlop 3 743 2 033 469 6 245
M H Munro 3 665 2 041 474 6 180
P H Staude 7 019 4 794 835 12 648
  14 427 8 868 1 778 25 073

The executive directors’ remuneration for the year ended 31 March 2012 was as follows:

Name Cash
Package
Cash
Bonus*
Retirement
and medical
contributions
Total
         
B G Dunlop 3 466 2 059 390 5 915
M H Munro 3 363  2 034 392 5 789
P H Staude 6 381 4 869 679 11 929
  13 210 8 962 1 461 23 633

The requirement to include prescribed officers is covered by the above executive directors, as they exercise effective management and control.

*Bonuses are reported to match the amount payable to the applicable financial period.

Executive directors’ share incentive gains: 2013 2012
     
B G Dunlop 2 132 737
M H Munro 2 421 1 941
P H Staude 5 880 2 188
  10 433 4 866

Non-executive directors’ remuneration

  12 months to 31 March 2013  12 months to 31 March 2012
Name Fees Other Total Fees Other Total
             
F Jakoet 282 214 496 255 201 456
J John 258 277 535 255 253 508
R P Kupara 282 138 420 255 131 386
J B Magwaza 994 95 1 089 901 100 1 001
A A Maleiane 282   282 236   236
T N Mgoduso 255 95 350 255 103 358
M Mia (to 27 July 2012) 95 112 207 255 326 581
N Mjoli-Mncube 282 286 568 255 274 529
S G Pretorius 282 103 385 168   168
C B Sibisi 282 95 377 255 87 342
Directors who retired during the year       67   67
  3 294 1 415 4 709 3 157 1 475 4 632

In the above table, “fees” relates to services as directors on the board and “other”  relates to fees paid for services as committee members.

Declaration of full disclosure
Other  than the remuneration  disclosed in this note, which  was paid by the company, no consideration was paid to, or by any third party, or by the company itself, in respect of services of the company’s directors, as directors of the company, during the year ended 31 March 2013.

Interest of directors of the company in share capital
The aggregate holdings as at 31 March 2013 of those directors of the company holding  issued ordinary  shares of the company are detailed below. Holdings are direct and beneficial except where indicated otherwise.

Name 2013 2012
     
Executive directors:    
B G Dunlop 70 223 57 369
M H Munro 63 662 46 358
P H Staude 236 046 199 682
  369 931 303 409
     
Non-executive directors: F Jakoet 5 000 5 000
J B Magwaza 12 111 12 111
  17 111 17 111
   
   
33. EMPLOYEE SHARE INCENTIVE SCHEMES
 

The adoption of IFRS 2 Share-based Payment (IFRS 2) in 2005 required that all awards made after 7 November 2002 be accounted for in the financial statements of the company. IFRS 2 has therefore been applied to The Tongaat-Hulett Group Limited 2001 Share Option  Scheme in respect of the awards made on 14 April 2003, 1 October 2003 and 21 April 2004 and to the Share Appreciation Right Scheme 2005 (SARS), the Long Term Incentive Plan 2005 (LTIP), the Deferred Bonus Plan 2005 (DBP) and the Long Term Incentive Plan introduced in 2010 for retention awards.

Details of awards in terms of the company’s share incentive  schemes are as follows:

As a result of the unbundling of Hulamin, participants in these share schemes who had not exercised their rights at the unbundling date converted their existing Tongaat-Hulett Group Limited instruments into two components,  a Tongaat Hulett Limited component and a Hulamin  Limited component, as detailed in the 2007 Annual Report. The obligation to settle these share schemes is in accordance with the following principles, which are in accordance with the Unbundling Agreement. Tongaat Hulett is obliged to settle all benefits under the SARS grants  of 2005 and 2006 and the original share options for its own employees using Tongaat Hulett shares. It will settle the outstanding share scheme instruments that arise after the award adjustments for its own employees, by purchasing Tongaat Hulett shares in the market, or by issuing Tongaat Hulett shares. The benefit for the Hulamin component will be determined with reference to the Hulamin share price, and the Tongaat Hulett component with respect to the Tongaat Hulett  share price, however, benefits arising from the Hulamin component will be settled using Tongaat Hulett shares.

The Tongaat-Hulett Group Limited 2001 Share Option Scheme (the Original Share Option Scheme)

Under the original share option scheme, participating employees were awarded share options in the company. On vesting, the employee is entitled to purchase shares in the company  and immediately sell the shares at the market price, thereby benefiting from the appreciation in the share price.

The option price and number of unexercised options after the unbundling of Hulamin were apportioned into a Tongaat Hulett component (Tongaat Hulett) and a Hulamin component (Hulamin), as detailed in the 2007 Annual Report.

  Option
price (Rand)
Apportioned
Number
of options
at 31 March 2012
Options
exercised
2012/13
Options
lapsed
2012/13
Number
of options
at 31 March 2013
Expiring
ten years from
Tongaat
Hulett
Hulamin Tongaat
Hulett
Hulamin Tongaat
Hulett
Hulamin Tongaat   Hulamin
                 
13 May 2002 37,88 11,72 36 900 177 200 36 900 177 200    
14 April 2003 24,37 7,53 67 994 144 100 58 894   9 100 144 100
1 October 2003 26,35 8,15 30 000 30 000     30 000 30 000
21 April 2004 35,90 11,10 203 900 392 100 51 100   152 800 392 100
      338 794 743 400 146 894 177 200 191 900 566 200

The weighted average fair value costing of the combined Tongaat Hulett and Hulamin components of the outstanding share options granted in 2003 and 2004, determined using the binomial tree valuation model, was R11,14 per share and R16,06 per share respectively (2012: R11,14 and R16,06).

No awards have been made since 21 April 2004 under the original share option scheme, which  was replaced  by share schemes based on equity-settled share appreciation rights, conditional shares, and a deferred annual bonus plan.

The significant inputs into the model for the 2003/4 awards of the original share option scheme was:

Exercise price   The exercise price is the share price at grant date, as noted above, allocated between Tongaat Hulett and Hulamin.
Expected option life   114 months (assume contractual plus a leaving percentage of 5%).
Risk-free interest rate   9,84%
Expected volatility    Expected volatility of 35% is based on historical volatility determined by the statistical analysis of daily share price movements over the past three years.
Expected dividends   The measurement of the fair value of the share option did not take into account dividends, as no dividend payment was expected. A continuous dividend yield of 3,9% was used.
Weighted average share price    Tongaat Hulett component: R33,86 (2012: R32,96) and Hulamin component R10,04 (2012: R10,44)
Expected early exercise   Early exercise is taken into account on an expectation basis.
Performance (vesting) conditions   There are no performance (vesting) conditions other than the passage of time.
Non-market performance conditions   No non-market conditions.
Market performance conditions   No market conditions.
     
Weighted average remaining life:    
Expected    10 months (2012: 19 months)
Contractual   120 months

Share Appreciation Right Scheme 2005

Under the share appreciation right scheme, participating employees are awarded the right to receive shares equal to the difference between the exercise price and the grant price, less income tax payable on such difference. The employee therefore participates in the after tax share price appreciation in the company. The vesting of the right is conditional  on the achievement of Tongaat Hulett performance levels over a performance period.

The grant price and number of unexercised rights after the unbundling of Hulamin were apportioned into a Tongaat Hulett component and a Hulamin component as detailed in the 2007 Annual Report.

Expiring
seven years from
Grant price
(Rand)
Apportioned
Number
of rights at
31 March 2012
Rights granted in 2012/13 Rights
exercised in
2012/13
Rights lapsed/
forfeited
in 2012/13
Number
of rights at
31 March 2013
  Tongaat Hulamin Tongaat Hulamin Tongaat Tongaat Tongaat Hulamin Tongaat Hulamin
  Hulett   Hulett   Hulett Hulett Hulett   Hulett  
                     
10 May 2005 43,98 13,60 28 980 633 070   28 980   633 070    
22 April 2006 73,39 22,70 504 197 796 962   459 627   3 860 44 570 793 102
20 August 2007 88,84   899 662     268 855     630 807  
25 April 2008 92,74   1 129 163     322 587     806 576  
22 May 2009 75,06   1 504 187     513 666 4 998   985 523  
31 May 2010 97,49   1 230 462     4 390 8 366   1 217 706  
31 May 2011 90,42   1 475 541     5 109 9 600   1 460 832  
29 May 2012 110,21       1 376 435   8 989   1 367 446  
      6 772 192 1 430 032 1 376 435 1 603 214 31 953 636 930 6 513 460 793 102

The estimated fair value costing of these outstanding share appreciation rights was determined  using the binomial tree valuation model and non-market performance conditions based on the following significant inputs:

Exercise price   The share price at grant date, as noted above.
Expected option life   80 months (assume contractual plus a leaving percentage of 5%).
Risk-free interest rate   2012 award: 7,26% (2011 award: 7,95%, 2010 award: 7,71%, 2009 award: 7,66%, 2008 award: 8,75%, 2007 award: 8,19% and 2006 award: 7,22%).
Expected volatility    Expected volatility of 28,51% (2011: 30%, 2010: 26,78%, 2009: 28%, 2008 and 2007: 27% and 2006: 35%) is based on historical volatility determined by the statistical analysis of daily share price movements over the past three years.
Expected dividends   The measurement of the fair value of the share appreciation rights did not take into account dividends, as no dividend payment was expected. A continuous dividend yield of 2,6% was used for the 2012 award (2011 award:
2,75%, 2010 award: 2,5%, 2009 award: 3,5%, 2008 and 2007 awards: 3,44% and 2006 award: 4,00%).
Weighted average share price    As above.
Expected early exercise    Early exercise is taken into account on an expectation basis.                                                
Time constraints   Three years from grant date.
Performance (vesting) conditions   An increase in headline earnings per ordinary share as determined by the Remuneration Committee. Retesting of the performance condition is not allowed with effect from the 2010 award.
Non-market performance conditions   Growth in headline earnings per share.
Market performance conditions   No market conditions.
Estimated fair value per right at grant date   2012 award: R21,73 (2011 award: R17,50; 2010 award: R20,00; 2009 award:
R12,54; 2008 award: R16,93; 2007 award: R15,97 and the combined TH and Hulamin components: 2006 award: R18,11).
     
Weighted average remaining life:    
Expected   2012 award: 74 months (2011 award: 62 months; 2010 award: 50 months; 2009 award: 38 months; 2008 award: 25 months; 2007 award: 17 months and 2006 award: 1 month).
Contractual     84 months.

Long-Term Incentive Plan 2005

Under the long term incentive plan, participating employees are granted conditional  awards. These awards are converted into shares on the achievement of performance conditions over a performance period.

Expiring
three years from
Issue
price
(Rand)
Number of
conditional
awards at
31 March 2012
Conditional
awards
granted
in 2012/13
Conditional
awards
settled
in 2012/13
Conditional
awards
lapsed/
forfeited
in 2012/13
Number of
conditional
awards at
31 March 2013
             
22 May 2009 75,06 151 739   29 838 121 901  
31 May 2010 97,49 171 916       171 916
31 May 2011 90,42 202 238       202 238
29 May 2012 110,21   342 992   1 503 341 489
    525 893 342 992 29 838 123 404 715 643

The estimated fair value costing of these outstanding conditional share awards was determined using the Monte Carlo Simulation mode land non-market performance conditions, based on the following significant inputs:

Exercise price   The share price at grant date, as noted above.
Expected option life   34 months (assume contractual plus a leaving percentage of 5%).
Expected dividends    The measurement of the fair value of the conditional share awards did not take into account dividends, as no dividend payment was expected. A continuous dividend yield of 2,6% was used for the 2012 award (2011 award: 2,75% and 2010 award: 2,5%).
Weighted average share price   As above.
Time constraints   Three years from grant date.
Performance (vesting) conditions   For the 29 May 2012 award, 25% of the award will be subject to the TSR condition, 25% to the ROCE condition, 25% to a sugar production condition and 25% will be subject to the establishment of a regulatory framework for electricity in South Africa. For awards made up to 31 May 2011, 50% of the LTIP award will be subject to the TSR condition and 50% will be subject to the ROCE condition. No retesting of the performance condition is allowed.
Non-market performance conditions   - For the 29 May 2012 award, Return on Capital Employed (ROCE), sugar production and the establishment of a regulatory framework for electricity in
South Africa.
- For awards made up to 31 May 2011, ROCE.
Market performance conditions   Total shareholder return (TSR).
Estimated fair value per conditional award at grant date    2012 award: R47,69 (2011 award: R40,54 and 2010 award: R46,55).
     
Weighted average remaining life:    
Expected    2012 award: 26 months (2011 award: 14 months and 2010 award: 2 months).
Contractual   36 months.

Long-Term Incentive Plan 2005 - Retention Awards

Under the long term incentive plan participating employees are granted conditional awards which are converted into shares after the required  service period  is completed.

Expiring
four years from
Issue price 
(Rand)
Number of
conditional awards
at 31 March 2012
Conditional
awards granted
in 2012/13
Number of
conditional awards
at 31 March 2013
         
31 May 2011 90,42  13 200   13 200
14 November 2011 94,26  20 000   20 000
28 November 2011 90,86  20 000   20 000
16 November 2012 126,71    72 442 72 442
11 March 2013 139,39    15 000 15 000
    53 200 87 442 140 642

The estimated fair value costing of these outstanding conditional share awards was based on the following significant inputs:

Exercise price   The share price at grant date, as noted above.
Expected option life   46 months (assume contractual plus a leaving percentage of 5%) for the May 2011, 2012 and 2013 awards and 48 months (assume contractual plus a leaving percentage of 0%) for the November 2011 awards.
Expected dividends   The measurement of the fair value of the conditional share awards did not take into account dividends, as no dividend payment was expected. A continuous dividend yield of 2,6% was used for the 2012 and 2013 awards (2011 awards: 2,75%).
Weighted average share price   As above.
Time constraints   Four years from grant date.
Performance (vesting) conditions   There are no performance (vesting) conditions other than the passage of time.
Non-market performance conditions   No non-market conditions.
Market performance conditions   No market conditions.
     
Estimated fair value per conditional award at grant date    16 November 2012 award: R92,88 and 11 March 2013 award: R102,18 (31 May 2011 award: R65,87; 14 November 2011 award: R84,31 and 28 November 2011 award: R81,27).
     
Weighted average remaining life:    
Expected    16 November 2012 award: 44 months and 11 March 2013 award: 47 months (31 May 2011 award: 26 months; 14 November 2011 award: 31 months and 28 November 2011 award: 32 months).
Contractual   48 months.

Deferred Bonus Plan 2005

Under the deferred bonus plan, participating employees purchase shares in the company with a portion of their after tax bonus. These pledged shares are held in trust by a third party administrator for a qualifying period, after which the company awards the employee a number of shares in the company which matches those pledged shares released from the trust.

Expiring
three years from
Issue price
Rand
Number of
conditional
awards at
31 March 2012
Conditional
awards
granted in
2012/13
Conditional
awards
settled in
2012/13
Number of
conditional
awards at
31 March 2013
           
3 March 2010 97,32 39 651   39 651  
1 June 2010 100,40 10 768     10 768
30 May 2011 93,35 37 885     37 885
30 May 2012 111,11   66 008   66 008
    88 304 66 008 39 651 114 661

The estimated fair value costing of the outstanding deferred bonus share awards was based on the following significant inputs:

Share price at grant date   The price at which the deferred bonus share is issued, as noted above.
Expected option life   34 months (assume contractual plus a leaving percentage of 5%).
Expected dividends   The measurement of the fair value of the deferred bonus shares did not take into account dividends, as no dividend payment was expected. A continuous dividend yield of 2,6% was used for the 2012 award (2011 award: 2,75% and the June 2010 award: 2,5%).
Weighted average share price   As above.
Time constraints   Three years from grant date.
Performance (vesting) conditions   There are no performance (vesting) conditions other than the passage of time.
Non-market performance conditions   No non-market conditions.
Market performance conditions   No market conditions.
     
Estimated fair value per deferred bonus share at grant date   2012 award: R87,31 (2011 award: R71,30 and June 2010 award: R81,18).
     
Weighted average remaining  life:    
Expected   2012 award: 26 months (2011 award: 14 months and June 2010 award: 2 months).
Contractual   36 months.

The deferred bonus shares were purchased by the participating employees on 30 May 2012 in respect of the 2012 award (2011 award: purchased 30 May 2011 and the June 2010 award: purchased 4 June 2010).

Interest of directors of the company in share-based instruments

The interest of the directors in share options of the company are shown in the table below:

The Original Share Option Scheme

The option price and number of unexercised options after the unbundling of Hulamin were apportioned into a Tongaat Hulett component (Tongaat Hulett)  and a Hulamin component (Hulamin) as detailed in the 2007 Annual Report.

    Option price
(Rand)
Apportioned
Number of
options at
31 March 2012
Options exercised in 2012/13 Options lapsed in 2012/13 Number of
options at
31 March 2013
Name Expiring ten years from Tongaat
Hulett
Hulamin Tongaat
Hulett
Hulamin Tongaat Hulett Hulamin Tongaat
Hulett
Hulamin
                   
Executive directors:                  
B G Dunlop 21 April 2004 35,90 11,10   1 100       1 100
M H Munro 14 April 2003 24,37 7,53 4 900 4 900 4 900     4 900
  1 October 2003 26,35 8,15 30 000 30 000     30 000 30 000
  21 April 2004 35,90 11,10 32 000 32 000     32 000 32 000
        66 900 66 900 4 900   62 000 66 900
P H Staude 13 May 2002 37,88 11,72   17 000   17 000    
  21 April 2004 35,90 11,10   28 000       28 000
          45 000   17 000   28 000
Non-executive director: *                  
J B Magwaza 13 May 2002 37,88 11,72   6 000   6 000    
Total       66 900 119 000 4 900 23 000 62 000 96 000

* The non-executive director’s share options were awarded when he was an executive director more than ten years ago.

The interest of the directors in other share-based instruments of the company are shown in the table below:

Share Appreciation Right Scheme 2005

The grant price and number of unexercised rights after the unbundling of Hulamin were apportioned into a Tongaat Hulett component (Tongaat Hulett) and a Hulamin component (Hulamin) as detailed in the 2007 Annual Report.

    Grant price
(Rand) Apportioned
Number of
rights at
31 March 2012
Rights
granted in
2012/13
Rights exercised
in 2012/13
Rights
lapsed in
2012/13
Number of
rights at
31 March 2013
Rights time
constrained
Name of executive director Expiring
seven years
from
Tongaat
Hulett
Hulamin Tongaat
Hulett
Hulamin Tongaat
Hulett
Tongaat
Hulett
Hulamin Tongaat
Hulett
Hulamin Tongaat
Hulett
                       
B G Dunlop 10 May 2005 43,98 13,60   40 597     40 597      
  22 April 2006 73,39 22,70 23 737 23 737   23 737     23 737  
  20 August 2007 88,84   25 382         25 382    
  25 April 2008 92,74   27 276         27 276    
  22 May 2009 75,06   32 736         32 736    
  31 May 2010 97,49   25 698         25 698   25 698
  31 May 2011 90,42   29 552         29 552   29 552
  29 May 2012 110,21       25 700     25 700   25 700
        164 381 64 334 25 700 23 737 40 597 166 344 23 737 80 950
M H Munro 10 May 2005 43,98 13,60   21 185     21 185      
  22 April 2006 73,39 22,70 20 472 20 472   20 472     20 472  
  20 August 2007 88,84   23 830         23 830    
  25 April 2008 92,74   25 807         25 807    
  22 May 2009 75,06   30 857         30 857    
  31 May 2010 97,49   23 638         23 638   23 638
  31 May 2011 90,42   28 669         28 669   28 669
  29 May 2012 110,21       31 873     31 873   31 873
        153 273 41 657 31 873 20 472 21 185 164 674 20 472 84 180
P H Staude 10 May 2005 43,98 13,60   92 810     92 810      
  22 April 2006 73,39 22,70 62 082 62 082   62 082     62 082  
  20 August 2007 88,84   71 073         71 073    
  25 April 2008 92,74   75 720         75 720    
  22 May 2009 75,06   91 120         91 120    
  31 May 2010 97,49   74 289         74 289   74 289
  31 May 2011 90,42   87 397         87 397   87 397
  29 May 2012 110,21       93 530     93 530   93 530
        461 681 154 892 93 530 62 082 92 810 493 129 62 082 255 216

Long Term Incentive Plan 2005

Name of executive Expiring
three years
from  
Original
Issue price
(Rand)
Number of
conditional
awards at
31 March 2012
Conditional
awards
granted in
2012/13  
Conditional
awards
settled in
2012/13  
Conditional
awards
lapsed in
2012/13   
Number of
conditional
awards at
31 March 2013  
Conditional
awards
time
constrained
                 
B G Dunlop 22 May 2009 75,06 9 421   1 853 7 568    
  31 May 2010 97,49 10 160       10 160 10 160
  31 May 2011 90,42 11 734       11 734 11 734
  29 May 2012 110,21   11 439     11 439 11 439
      31 315 11 439 1 853 7 568 33 333 33 333
M H Munro 22 May 2009 75,06 8 880   1 746 7 134    
  1 May 2010 97,49 9 345       9 345 9 345
  31 May 2011 90,42 11 384       11 384 11 384
  29 May 2012 110,21   12 696     12 696 12 696
      29 609 12 696 1 746 7 134 33 425 33 425
P H Staude 22 May 2009 75,06 26 316   5 175 21 141    
  31 May 2010 97,49 29 475       29 475 29 475
  31 May 2011 90,42 34 829       34 829 34 829
  29 May 2012 110,21         39 355 39 355
      90 620 39 355 5 175 21 141 103 659 103 659

The interest of the directors in other share-based instruments of the company are shown in the table below:

Deferred Bonus Plan 2005

Name of
executive director
Expiring
three years from
Original
Issue price
(Rand)
Number
of conditional
awards at
31 March 2012
Conditional
awards
granted in
2012/13
Conditional
awards
delivered in
2012/13
Number
of conditional
awards at
31 March 2013
Conditional
awards
time
constrained
               
B G Dunlop 3 03 2010 97,32 3 838   3 838    
  1 06 2010 100,40 1 031     1 031 1 031
  30 05 2011 93,35 3 383     3 383 3 383
  30 05 2012 111,11   5 559   5 559 5 559
      8 252 5 559 3 838 9 973 9 973
M H Munro 3 03 2010 9732 3 609   3 609    
  1 06 2010 100,40 979     979 979
  30 05 2011 93,35 3 492     3 492 3 492
  30 05 2012 111,11   5 493   5 493 5 493
      8 080 5 493 3 609 9 964 9 964
P H Staude 3 03 2010 97,32 11 959   11 959    
  1 06 2010 100,40 3 272     3 272 3 272
  30 05 2011 93,35 10 856     10 856 10 856
  30 05 2012 111,11   17 090   17 090 17 090
      26 087 17 090 11 959 31 218 31 218

The deferred bonus shares were purchased by the participating employees on 30 May 2012 in respect of the 2012 award (2011 award: purchased 30 May 2011 and the June 2010 award: purchased 4 June 2010).

The share awards were made and exercised at various times and the average share price for the period was R130,03 (2012: R95,46).

The gains made by directors are reflected in note 32 under Directors’ and Prescribed Officers’ Emoluments and Interests.
   
   
34. BEE EMPLOYEE SHARE OWNERSHIP PLANS
 

The BEE employee transaction, which comprises the Employee Share Ownership  Plan (ESOP) and the Management Share Ownership  Plan (MSOP), vested during the current financial year.

The  ESOP scheme consisted of a share appreciation  right scheme and participants  shared in 50% of the dividend payable to ordinary shareholders. The MSOP scheme consisted of two components  namely a share appreciation right scheme and a share grant scheme.

The  ESOP Trust  and MSOP  Trust  were established  to acquire and hold Tongaat  Hulett Limited   shares for the benefit of designated employees. Tongaat Hulett Limited and its subsidiaries made contributions  to the MSOP Trust and  the  ESOP Trust (refer note 3). Due to these  shares having  specific  repurchase  rights  at maturity (five years from grant),  they are a separate class of restricted shares which, other than for the repurchase terms,  rank pari passu with ordinary   shares and become  ordinary   shares at  maturity of the scheme  on 1 August 2012.

Tongaat Hulett repurchased from the ESOP and MSOP Trusts a total of 6 383  283  B shares, as determined in accordance with the repurchase formulae set out in the 2007 Circular to Shareholders, at an acquisition price of one cent per share, for a total amount of R63 833. The repurchased  shares were  cancelled  immediately. The 3 357 625 remaining  shares were  converted into Tongaat Hulett ordinary   shares of R1,00 each, ranking pari passu with  the existing ordinary  shares and listed on the JSE on 25 September 2012.

The tables below provide a detailed summary of the share buyback and the conversion to listed ordinary shares.

Employee Share Ownership Plan

Grant 
date 
B1 ordinary 
shares 
Share 
buyback 
Converted
to ordinary 
shares 
Released 
including 
 deaths 
in service 
Forefeited/ 
adjustments 
Balance 
time 
constrained 
             
1 August 2007  4 385 140  (3 477 644) 907 496 (907 496)    
1 February 2008  207 940  (170 618) 37 322 (37 070) (252)  
1 August 2008 252 460  (200 754) 51 706 (690) (1 862) 49 154
1 February 2009 141 230  (112 138) 29 092 (324) (204) 28 564
1 August 2009 113 480  (88 664) 24 816 (179) (1 113) 23 524
1 February 2010 116 430  (91 644) 24 786  (152) (304) 24 330
1 August 2010  56 600  (43 172) 13 428 (125) 133 13 436
1 February 2011 52 880  (39 763) 13 117 (93) (336) 12 688
1 August 2011 47 910  (35 216) 12 694 (252) (559) 11 883
Unallocated  48 759  (34 212) 14 547    4 222  18 769 
  5 422 829  (4 293 825) 1 129 004 (946 381) (275) 182 348
 
Management Share Ownership Plan
Grant
date
B2 ordinary
shares
B3 ordinary
shares
Share
buyback
B2 ordinary
Share
buyback
B3 ordinary
Converted
to ordinary
  shares
Released
including
  deaths
in service
Awarded  Balance
time
constrained
                 
1 August 2007 1 541 530 477 290 (971 175) (74 710) 972 935 (972 935)    
1 February 2008  167 710 51 950 (95 971) (1 290) 122 399 (122 399)    
1 August 2008 176 460 54 620 (107 959) (6 270) 116 851     116 851
1 February 2009 96 110 29 740 (68 158) (10 030) 47 662 (2 242)   45 420
1 August 2009 72 920 22 560 (45 263) (3 050) 47 167     47 167
1 February 2010 108 470 33 580 (63 690) (1 970) 76 390     76 390
1 August 2010 61 640 19 100 (34 600)   46 140   3 609  49 749
1 February 2011 36 250 11 210 (22 510) (1 520) 23 430     23 430
1 August 2011 110 440 34 190 (61 992)    82 638     82 638
1 February 2012 125 280 38 780 (70 323)   93 737     93 737
1 June 2012 58 620 18 170 (32 905)   43 885     43 885
1 July 2012 56 020 17 360 (31 445)   41 935     41 935
1 August 2012             2 782  2 782
1 November 2012             267 587  267 587
7 January 2013             5 000  5 000
1 March 2013             4 855  4 855
Unallocated 685 207 212 872 (384 627)   513 452   (283 833) 229 619
  3 296 657 1 021 422 (1 990 618) (98 840) 2 228 621 (1 097 576)   1 131 045