NOTES (11-20) TO THE FINANCIAL STATEMENTS



11. SHARE CAPITAL (Rmillion) Consolidated Company
    2012 2011 2012 2011
  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:        
    105 143 181 (31 March 2011 - 105 014 181) ordinary shares of R1,00 each 105 105 105 105
    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
    140 140 140 140
           
  Under control of the directors:
  • for the purposes of the employee share option schemes in accordance with previous shareholder authority 10 086 316 shares (2011: 9 932 528 shares).
  • in terms of a shareholders’ resolution 5 250 709 shares (2011: 5 240 588 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 2012 employees have an option to subscribe for 338 794 shares at an average price of R32,96 per share (2011: 468 294 shares at an average price of R33,42 per share) in respect of the Tongaat Hulett component and the equivalent of approximately 90 000 shares in respect of the Hulamin component (2011: 100 000 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. In 2010, shareholders approved that retention awards be included within the Long Term Incentive Plan 2005.
12. BEE HELD CONSOLIDATION SHARES (Rmillion) Consolidated    
    2012 2011    
  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 (111) (84)    
  Less amortisation of IFRS 2 charge on shares relating to the employee share ownership plans (refer to notes 3 and 35) (156) (114)    
    799 868    
           
13. DEFERRED TAX (Rmillion) Consolidated Company
    2012 2011 2012 2011
  Balance at beginning of year 1 365 1 272 447 341
  Currency alignment 94 (65)    
  Consolidation of subsidiaries   (1)    
  Accounted for in equity 1 (1) 1 (1)
  Current year Income Statement charge /(relief) on:        
    Earnings before capital profits 189 161 15 108
    Capital profits 3   3  
    Rate change adjustment 16      
    Prior years (5) (1) (4) (1)
  Balance at end of year 1 663 1 365 462 447
  Comprising temporary differences relative to :        
  Property, plant and equipment 1 264 1 161 483 459
  Growing crops 598 545 172 102
  Defined benefit pension fund asset 83 82 83 82
  Long term receivable 49 38 49 38
  Current assets 126 144 8 31
  Current liabilities (95) (89) (32) (31)
  Tax losses (269) (250) (161) (95)
  Other (93) (266) (140) (139)
    1 663 1 365 462 447
  A deferred tax asset has been raised in respect of the tax losses of foreign subsidiaries only where these losses may be utilised in the short term or will not expire in terms of applicable tax legislation.
14. BORROWINGS (Rmillion)   Consolidated Company
      2012 2011 2012 2011
  Long-term   1 732 1 345 1 419 977
  Short-term and bank overdraft   3 264 2 930 2 970 2 437
      4 996 4 275 4 389 3 414
  Long-term borrowings comprise:          
      Effective        
      interest        
      rate (%)        
  Secured:          
  SA Rand          
    Repayable 2020/2021 8,60 339 367    
    Finance leases (refer to note 29) 7,50 2 2 2 2
    Repaid     6    
  Foreign          
    Finance leases (refer to note 29) 4,25 5 11    
    Repaid     11    
        346 397 2 2
  Unsecured:          
  SA Rand          
      3 month        
    Long-term portion repayable 2014/2015 JIBAR + 1,35 736 1 065 736 1 065
      3 month        
    Bond repayable 2016/2017 JIBAR + 2,43 400   400  
      3 month        
    Bond repayable 2018/2019 JIBAR + 2,60 350   350  
  Foreign          
    Indefinite nil 5 5    
    Repaid     3    
        1 491 1 073 1 486 1 065
  Long-term borrowings   1 837 1 470 1 488 1 067
  Less: current portion included in short-term borrowings   105 125 69 90
        1 732 1 345 1 419 977
               
  Plant and machinery of Mozambique and Zimbabwe subsidiaries with a book value of R957 million (2011: R787 million) are encumbered as security for the secured long-term borrowings and certain short-term borrowings of R132 million (2011: R291 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 R148 million (2011: R315 million) and in Zimbabwe equivalent to R108 million (2011: R196 million).

Summary of future loan repayments by financial year:
 
Year 2013/14 2014/15 2015/16 2016/17 2017/18 Thereafter
Rmillion 102 637 40 443 47 463

In terms of the company’s articles of association the borrowing powers of Tongaat Hulett are limited to R11 694 million.

15. NON-RECOURSE EQUITY-SETTLED BEE BORROWINGS (Rmillion)
    Consolidated    
    2012 2011    
  The non-recourse equity-settled BEE borrowings comprise:        
    Effective        
    interest        
    rate (%)        
  4 122 000 Class A redeemable preference shares 9,335 nacs 167 229    
  4 122 000 Class B redeemable preference shares 11,960 nacs 551 515    
  Accrued dividends   20 18    
      738 762    
  Less: BEE cash resources   1 1    
      737 761    
             
  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
      2012 2011 2012 2011
  Post-retirement medical aid obligations 357 323 274 254
  Retirement gratuity obligations 116 97 77 68
  Other 101 90    
    574 510 351 322
  Further details on provisions are set out in note 32.        
17. TRADE AND OTHER PAYABLES (Rmillion)        
    Consolidated Company
    2012 2011 2012 2011
  Accounts payable 1 836 1 765 951 933
  Maize obligation - interest bearing 161 173 161 173
    1 997 1 938 1 112 1 106
   
  The directors consider that the carrying amount of trade and other payables approximates their fair value.
18. OPERATING PROFIT (Rmillion)      
    Consolidated Company
    2012 2011 2012 2011
  Revenue 12 081 9 681 7 006 6 250
  Cost of sales (8 885) (7 791) (6 030) (5 394)
  Administration expenses (1 664) (1 249) (449) (485)
  Marketing and selling expenses (259) (235) (180) (162)
  Other income (including growing crops fair value change *) 648 932 325 411
  Profit from Tongaat Hulett operations 1 921 1 338 672 620
  Bulk sales / capital profit on land (refer to note 19) 3 23 104 5
  Capital profit on other items (refer to note 19)   4   2
  BEE IFRS 2 charge and transaction costs (48) (46) (45) (43)
  Valuation adjustments:        
    Defined benefit pension fund asset recognition     288   288
    Other   2 (1)    
  Operating profit after corporate transactions 1 878 1 606 731 872
  Disclosable items included in operating profit:        
  Dividends received from subsidiaries     81 105
  Amortisation of intangible assets 5 4 5 3
  Depreciation charged:        
    Buildings   41 43 6 6
    Plant and equipment   219 207 135 126
    Vehicles and other   106 94 23 19
  Growing crops: change in fair value * 465 662 192 109
  (Loss) / profit on disposal of plant and equipment (2) 1 (1) 1
  Management fees paid to subsidiaries     1 1
  Management fees paid to third parties 4 4    
  Technical fees paid 12 10 12 10
  Operating lease charges (property, plant and vehicles) 43 25 38 19
  Share-based payments:        
    IFRS 2 charge on share options, SARS, LTIP and DBP   47 42 32 30
    BEE IFRS 2 charge   42 42 39 39
  Auditors’ remuneration:        
    Fees   11 10 5 5
    Other services   2 2 1 1
  Net (losses)/gains on:        
    Fair value hedges, losses on the hedged item   (40) (5) (40) (5)
    Fair value hedges, gains on the hedging instrument   40 5 40 5
  Valuation adjustments on financial instruments and other items:        
    Translation of foreign currency:          
    - foreign cash holdings   3 (1)    
    - other   (15) (3) (1)  
    Other financial instruments   (1) (7) (5) (2)
               
 
* 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.
19. CAPITAL PROFITS (Rmillion)      
        Consolidated Company
        2012 2011 2012 2011
  Comprises:          
    Surplus on sale of land   3 23 104 5
    Other surpluses     4   2
  Capital profits before tax   3 27 104 7
  Tax (refer note 21)   (3)   (3)  
  Capital profits after tax     27 101 7
               
20. NET FINANCING (COSTS)/INCOME (Rmillion)          
        Consolidated Company
        2012 2011 2012 2011
  Net financing costs comprise:          
    Interest paid - external   (528) (491) (332) (328)
    Interest capitalised   1 7    
    Interest paid - subsidiaries       (42) (41)
  Financing costs   (527) (484) (374) (369)
    Interest received - external   20 12 5 3
    Interest received - subsidiaries       2 5
  Finance income   20 12 7 8
  Net financing costs   (507) (472) (367) (361)
             


top of page