NOTES (1-10) TO THE FINANCIAL STATEMENTS



1. PROPERTY PLANT AND EQUIPMENT (Rmillion)
               
  Consolidated Total Land, Plant and Vehicles Capitalised Capital
      improvements equipment and other leased plant work in
      and buildings     and vehicles progress
  Carrying value at beginning of period 4 659 740 1 971 843 88 1 017
  Consolidation of subsidiaries 3 534 2 127 544 863    
  Additions 1 731 32 283 95 1 1 320
  Disposals (23) (7) (7) (9)    
  Depreciation (521) (115) (265) (138) (3)  
  Transfers   2 1 759 165   (1 926)
  Currency alignment (1 670) (519) (514) (419) (28) (190)
  Carrying value at end of period 7 710 2 260 3 771 1 400 58 221
  Comprising:            
  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
  31 December 2008            
    At cost 6 670 949 3 391 1 201 112 1 017
    Accumulated depreciation 2 011 209 1 420 358 24  
    4 659 740 1 971 843 88 1 017
  Company            
  Carrying value at beginning of period 2 372 452 1 588 136 1 195
  Additions 255 14 189 19 1 32
  Disposals (10) (6) (4)      
  Depreciation (230) (7) (196) (26) (1)  
  Transfers   2 87 19   (108)
  Carrying value at end of period 2 387 455 1 664 148 1 119
  Comprising:            
  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
  31 December 2008            
    At cost 3 899 531 2 847 325 1 195
    Accumulated depreciation 1 527 79 1 259 189    
    2 372 452 1 588 136 1 195
 

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).

Land, agricultural improvements and buildings 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
    31 March 31 December 31 March 31 December
    2010 2008 2010 2008
  Carrying value at beginning of period 742 353 130 98
  Consolidation of subsidiaries 342      
  Gain arising from physical growth and price changes 1 231 145 76 20
  Increase due to increased area under cane 141 185 54 17
  Decrease due to reduced area under cane (8) (9) (4) (5)
  Currency alignment (407) 68    
  Carrying value at end of period 2 041 742 256 130
  The carrying value comprises:        
    Roots 895 497 144 83
    Standing cane 1 146 245 112 47
    2 041 742 256 130
  Area under cane (hectares):        
    South Africa 13 910 11 417 13 910 11 417
    Mozambique 22 609 20 534    
    Swaziland 3 767 3 750    
    Zimbabwe 27 753      
    68 039 35 701 13 910 11 417
           
3. LONG-TERM RECEIVABLE AND PREPAYMENT (Rmillion) Consolidated Company
    31 March 31 December 31 March 31 December
    2010 2008 2010 2008
  Long-term receivable        
    Advances to an export partnership - at fair value        
    Carrying value at beginning of period 196 203 196 203
    Settlement (196)   (196)  
    Fair value adjustment due to reduction in tax rate   (7)   (7)
    Carrying value at end of period   196   196
  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 period (72) (43) (67) (40)
    At beginning of period (43) (13) (40) (12)
    Charge for the period (29) (30) (27) (28)
  Less BEE share ownership plan consolidation shares (155) (184)    
        143 170
  Carrying value at end of period   196 143 366
  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
    31 March 31 December
    2010 2008
  Carrying value at beginning of period 99 42
  Consolidation of subsidiaries 207  
  Increase in shareholding in subsidiaries   46
  Currency exchange rate changes (66) 11
  Carrying value at end of period 240 99
 
Goodwill is attributable to the Mozambique and Zimbabwe sugar operations and a Botswana 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 2010, the carrying value of goodwill was considered not to require impairment.
 
5. INTANGIBLE ASSETS (Rmillion) Consolidated Company
    31 March 31 December 31 March 31 December
    2010 2008 2010 2008
  Cost at beginning of period 17 16 12 11
    Additions 7 2 7 1
    Disposals   (2)    
    Currency alignment (2) 1    
    At end of period 22 17 19 12
  Accumulated amortisation at beginning of period 11 10 8 7
    Charge for the period 3 2 3 1
    Disposals   (2)    
    Currency alignment (1) 1    
    At end of period 13 11 11 8
  Carrying value at end of period 9 6 8 4
  The carrying value comprises:        
    Software 4 6 3 4
    Cane supply agreements 5   5  
    9 6 8 4
           
6. INVESTMENTS (Rmillion)        
    Consolidated Company
    31 March 31 December 31 March 31 December
    2010 2008 2010 2008
  Unlisted shares at cost 7 265   263
  Loans 3 3 2 2
  Carrying value of investments (Directors’ valuation) 10 268 2 265
 
The original investment in Triangle Sugar was recorded at cost at a nominal value with the subsequent investment of R263 million included in unlisted shares at 31 December 2008. Triangle Sugar was consolidated during the current period (refer to note 27) and the carrying value of the investment is now included in Subsidiaries and Joint Ventures (refer to note 7).

A schedule of unlisted investments is available for inspection at the company’s registered office.
 
7. SUBSIDIARIES AND JOINT VENTURES (Rmillion)    
    Company
    31 March 31 December
    2010 2008
  Shares at cost less amounts written off 2 733 1 255
  Indebtedness by 1 498 1 302
  Indebtedness to (535) (653)
    3 696 1 904
       
    Consolidated
    31 March 31 December
    2010 2008
  Tongaat Hulett’s proportionate share of the assets, liabilities and post-acquisition reserves of joint ventures, which comprise in the main, Effingham Development and Tongaat Hulett/IFA Resort Developments and which are included in the consolidated financial statements are set out below:    
       
    Property, plant and equipment 8 8
    Current assets 283 328
    Less: Current liabilities (68) (93)
    Interest in joint ventures 223 243
       
    Consolidated
    15 months to 12 months to
    31 March 31 December
    2010 2008
  Tongaat Hulett’s proportionate share of the trading results of the joint ventures is as follows:    
    Revenue 21 10
    Profit before tax 19 16
    Tax (4) (4)
    Net profit after tax 15 12
  Tongaat Hulett’s proportionate share of cash flows of the joint ventures is as follows:    
    Cash flows from operating activities (4) 8
    Net cash used in investing activities (38) (48)
  Net movement in cash resources (42) (40)
       
8. INVENTORIES (Rmillion) Consolidated Company
    31 March 31 December 31 March 31 December
    2010 2008 2010 2008
  Raw materials 464 386 464 386
  Work in progress 14 13 13 13
  Finished goods 204 933 120 891
  Consumables 402 180 123 111
  Development properties 289 197    
    1 373 1 709 720 1 401
 
Included in raw materials is an amount of R360 million (31 December 2008 - R305 million) that relates to the constructive obligation that has been recognised on maize procurement contracts.
 
9. DERIVATIVE INSTRUMENTS (Rmillion) Consolidated Company
    31 March 31 December 31 March 31 December
    2010 2008 2010 2008
  The fair value of derivative instruments:        
  Forward exchange contracts - hedge accounted 9 (17) 9 (17)
  Forward exchange contracts - not hedge accounted   (1)   (1)
  Futures contracts - hedge accounted (3) (3) (3) (3)
    6 (21) 6 (21)
  Summarised as:        
  Derivative assets 9 2 9 2
    Derivative liabilities (3) (23) (3) (23)
    6 (21) 6 (21)
 
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.
 
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