Annual Financial Statements


Financial Statements for the year ended 31 March 2014


NOTES (1-10) TO THE FINANCIAL STATEMENTS

1.  PROPERTY, PLANT AND EQUIPMENT (Rmillion)
   Consolidated  Total  Land, 
improvements 
and buildings 
Plant and 
equipment 
Vehicles 
and other 
Capitalised 
leases 
Capital 
work in 
progress 
   Carrying value at beginning of year  10 287  2 798  4 706  2 305  67  411 
   Additions  546  46  240  129  129 
   Disposals  (21) (6) (1) (14)      
   Depreciation  (571) (80) (321) (166) (4)  
   Transfers    117  94  (29)    (182)
   Currency alignment  1 038  330  400  279  21 
   Carrying value at end of year  11 279  3 205  5 118  2 504  73  379 
                       
   Comprising:                   
   31 March 2014                   
   At cost  15 686  3 821  7 866  3 511  109  379 
   Accumulated depreciation  4 407  616  2 748  1 007  36    
      11 279  3 205  5 118  2 504  73  379 
   31 March 2013                   
   At cost  13 952  3 281  7 061  3 101  98  411 
   Accumulated depreciation  3 665  483  2 355  796  31    
      10 287  2 798  4 706  2 305  67  411 
                       
   Company                   
                       
   Carrying value at beginning of year  2 578  477  1 659  191  249 
   Additions  277  176  88 
   Disposals  (5) (4) (1)         
   Depreciation  (206) (7) (168) (29) (2)   
   Transfers    58    (63)
   Carrying value at end of year  2 644  472  1 724  172  274 
                       
   Comprising:                   
   31 March 2014                   
   At cost  4 986  581  3 686  438  274 
   Accumulated depreciation  2 342  109  1 962  266    
      2 644  472  1 724  172  274 
                       
   31 March 2013                   
   At cost  4 729  581  3 456  437  249 
   Accumulated depreciation  2 151  104  1 797  246    
      2 578  477  1 659  191  249 
                       
  Plant and machinery of Mozambique subsidiaries with a book value of R495 million (2013: R748 million) are encumbered as security for the secured long-term borrowings and certain short-term borrowings of R101 million (2013: R92 million).

The register of land and buildings is available for inspection at the company’s registered office.   
 
     
2.  GROWING CROPS (Rmillion) Consolidated Company 
      2014  2013  2014  2013 
   Carrying value at beginning of year  4 583  3 575  1 003  613 
   (Loss)/gain arising from physical growth and price changes  (276) 418  54  164 
   Increase due to increased area under cane  131  107  131  107 
   Expenditure on new area  118  157  107  125 
   Decrease due to reduced area under cane  (8) (57) (7) (6)
   Currency alignment  457  383       
   Carrying value at end of year  5 005  4 583  1 288  1 003 
                 
   The carrying value comprises:             
   Roots  2 532  2 289  910  705 
   Standing cane  2 473  2 294  378  298 
      5 005  4 583  1 288  1 003 
   Area under cane (hectares):             
   South Africa  35 035  34 011  35 035  34 011 
   Mozambique  25 687  25 352       
   Swaziland  3 838  3 838       
   Zimbabwe  27 557  27 978       
      92 117  91 179  35 035  34 011 
                 
   In terms of IAS 41: Agriculture, sugarcane 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 or 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: 
      2014  2013 
      South Africa  Swaziland  Zimbabwe  Mozambique  Total    
   Roots                   
   Hectares  35 035  3 838  27 557  25 687  92 117  91 179 
   Amortised root value (Rand per hectare) 25 964  15 278  23 136  36 045  27 484  25 108 
   Cane                   
   Hectares for harvest  29 206  3 741  27 153  24 958  85 058  82 969 
   Standing cane value (Rand per hectare) 12 942  33 463  40 099  35 321  29 080  27 644 
   Yield (Tons cane per hectare ) 66  125  102  89  87  86 
   Average maturity of cane at 31 March (%) 71  66  67  69  69  67 
   Statement of Financial Position (Rmillion)                  
   Roots  910  59  638  925  2 532  2 289 
   Standing cane  378  125  1 088  882  2 473  2 294 
   Total  1 288  184  1 726  1 807  5 005  4 583 
               
    2014  2013         
  Carrying value at beginning of year  4 583  3 575         
  Change in fair value *  (153) 468         
  Currency alignment  457  383         
  Expenditure on new area  118  157         
  Carrying value at end of year  5 005  4 583         
               
  The IAS 41 fair value change included in profit or loss for the year ended 31 March 2014 is set out below and the fair value measurement disclosures are included in note 25. 
               
     2014  2013       2014  2013 
   Roots  (78) 303     South Africa  178  265 
   Standing cane  (75) 165     Swaziland  14  15 
   Change in fair value *  (153) 468     Zimbabwe  (241) 78 
               Mozambique  (104) 110 
               Change in fair value *  (153) 468 
               
 
* This represents the gross change in fair value. The agricultural costs actually incurred in generating this increase in fair value are charged to cost of sales.
               
               
3.  LONG-TERM RECEIVABLE AND PREPAYMENTS (Rmillion) Consolidated Company 
      2014  2013  2014  2013 
   Long-term receivable             
   Employer surplus account  552  515  552  515 
   Less current portion  (67) (60) (67) (60)
   Carrying value at end of year  485  455  485  455 
                 
   Prepayments             
   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  (209) (193) (194) (180)
   At beginning of year  (193) (156) (180) (145)
   Charge for the year  (16) (37) (14) (35)
                 
   Less BEE share ownership plan consolidation shares  (18) (34)      
            16  30 
                 
   Carrying value at end of year  485  455  501  485 
                 
   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 34.   
 
                 
4.  GOODWILL (Rmillion) Consolidated       
      2014  2013       
   Carrying value at beginning of year  300  260       
   Currency exchange rate changes  38  40       
   Carrying value at end of year  338  300       
                 
  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 five 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 2014, the carrying value of goodwill was considered not to require impairment. 
 
                   
5.  INTANGIBLE ASSETS (Rmillion) Consolidated Company 
      2014  2013  2014  2013 
   Cost:             
   At beginning of year  111  89  105  83 
   Additions  15  15 
   Transfer from property, plant and equipment       
   At end of year  118  111  112  105 
                 
   Accumulated amortisation:             
   At beginning of year  33  24  28  19 
   Charge for the year  15  15 
   At end of year  48  33  43  28 
                 
   Carrying value at end of year  70  78  69  77 
                 
   The carrying value comprises:             
   Software  53  59  53  59 
   Patents and licences  16  17  15  16 
   Cane supply agreements 
      70  78  69  77 
                 
                   
6.  INVESTMENTS (Rmillion) Consolidated Company 
      2014  2013  2014  2013 
   Unlisted shares at cost  17  13       
   Loans       
   Carrying value of investments (Directors’ valuation) 18  14       
                 
   A schedule of unlisted investments is available for inspection at the company’s registered office. 
 
                 
7.  SUBSIDIARIES AND JOINT OPERATIONS (Rmillion)       Company
            2014  2013 
   Shares at cost, less amounts written off        4 307  4 397 
   Indebtedness by        631  809 
   Indebtedness to        (934) (665)
            4 004  4 541 
                 
   Details of principal subsidiary companies and joint operations are included in note 26

Tongaat Hulett's proportionate share of the assets, liabilities and post-acquisition reserves of joint operations, 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:  
                 
            Consolidated
            2014  2013 
   Property, plant and equipment       
   Current assets        199  208 
   Less Current liabilities        (56) (47)
   Interest in joint operations        149  167 
           
   Tongaat Hulett's proportionate share of the trading results of the joint operations is as follows:       
   Revenue        17 
                 
   Operating profit/(loss)       (2)
   Financing costs        (1)   
   Profit/(loss) before tax          (2)
   Tax          
   Net profit/(loss) after tax          (1)
                 
  Tongaat Hulett's proportionate share of cash flows of the joint operations is as follows:     
   Cash flows from operating activities        16 
   Net cash used in investing activities        (18) (6)
   Movement in net cash resources        (2) (5)
                 
                   
8.  INVENTORIES (Rmillion) Consolidated Company 
      2014  2013  2014  2013 
   Raw materials  408  389  401  269 
   Work in progress  21  17  20  16 
   Finished goods  747  217  154  135 
   Consumables  585  637  143  136 
   Development properties  546  493       
   Livestock and game  109  105       
      2 416  1 858  718  556 
                 
   Included in raw materials is an amount of R321 million (2013: R209 million) that relates to the constructive obligation that has been recognised on maize procurement contracts.  
 
       
9.  DERIVATIVE INSTRUMENTS (Rmillion) Consolidated Company 
      2014  2013  2014  2013 
   The fair value of derivative instruments at year end was:             
   Forward exchange contracts - hedge accounted  (1) (6) (1) (6)
   Futures contracts - hedge accounted  16  (10) 16  (10)
      15  (16) 15  (16)
   Summarised as:             
   Derivative assets  16     16    
   Derivative liabilities  (1)  (16) (1) (16)
      15  (16) 15  (16)
                 
   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.