NOTES (21-36) TO THE FINANCIAL STATEMENTS

31.	RETIREMENT BENEFITS
	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 Contribution Pension and Provident Schemes
	There are three defined contribution schemes, one of which is located in Swaziland. The latest audited financial statements of these schemes all reflect a satisfactory state of affairs. Contributions of R22 million were expensed during the year (2007 - R18 million).

	Defined Benefit Pension Scheme
	There is one defined benefit scheme, The Tongaat-Hulett Pension Fund (the Fund), for employees including those of Hulamin Limited. The Fund is actuarially valued at intervals of not more than three years using the projected unit credit method. In the statutory actuarial valuation of the scheme as at 31 December 2007 the Fund was certified by the reporting actuary to be in a sound financial position. With effect from 7 December 2001 the Pension Funds Second Amendment Act was promulgated. This Act required the Fund to submit a plan for the apportionment on a fair basis to the employer and past and current members of the Fund of the actuarial surplus as at 31 December 2001. The 2001 apportionment plan was approved by the Financial Services Board in May 2007. During 2008, Tongaat Hulett became unconditionally entitled to its share of the employer surplus account pursuant to the 2001 apportionment plan and an amount of R86 million was recognised as an asset. The manner in which the Fund proceeds following the unbundling of Hulamin from Tongaat Hulett and the split between the employers participating in the Fund has yet to be finalised and/or made unconditional. Consequently, no further surplus apportionment has been recognised.

	An actuarial valuation of liabilities, based on the existing Benefits, carried out as at 31 December 2008 in accordance with IAS 19 showed the present value of obligations to be adequately covered by the fair value of the scheme assets.

	2008	2007
	Rmillion	Rmillion
Details of the valuation of the Fund (100%) are as follows:

Fair value of plan assets
Balance at beginning of year	6 544	5 945
Expected return on scheme assets	520	460
Employer contributions	52	45
Members' contributions	41	36
Benefits paid	(549)	(457)
Net member transfers	(24)	(15)
Actuarial (loss)/gain	(1 047)	530

Balance at end of year	5 537	6 544

Present value of defined benefits obligation
Balance at beginning of year	4 444	4 202
Current service cost	118	97
Interest cost	350	322
Members' contributions	41	36
Benefits paid	(549)	(457)
Net member transfers	(24)	(15)
Actuarial loss	75	259

Balance at end of year	4 455	4 444

Fund assets less member liabilities, before reserves	1 082	2 100

Asset information:
Equities	3 542	3 896
Fixed interest bonds	751	647
Property	101	151
Cash	1 143	1 850
	5 537	6 544
Included in the assets of the scheme are ordinary shares
held in Tongaat Hulett Limited, stated at fair value	95	136
Actual return on scheme assets	(527)	990

The principal actuarial assumptions are:
Discount rate	7,25%	8,25%
Salary cost and pension increase	4,25%	5,25%
Expected rate of return on assets	8,25%	8,00%

Experience gains and (losses) on:
Plan liabilities	(137)	(137)
Percentage of the present value of the plan liabilities	3,1%	3,1%
Plan assets	(1 047)	530
Percentage of plan assets	(18,9%)	8,1%
Estimated contributions payable in the next financial year	58	48

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.

Post-Retirement Medical Aid Benefits
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 benefi t. The entitlement to this benefi t for current employees is dependent upon the employee remaining in service until retirement and completing a minimum service period of ten years. The unfunded liability for post-retirement medical aid benefi ts is determined actuarially each year and comprises:

	Consolidated		Company
	2008	2007	2008	2007
	Rmillion	Rmillion	Rmillion	Rmillion
Amounts recognised in the balance sheet:
Present value of unfunded obligations	281	246	281	246
Unrecognised actuarial losses	(58)	(37)	(58)	(37)
Net liability in balance sheet	223	209	223	209

The liability is reconciled as follows:
Net liability at beginning of year	209	241	209	198
Hulamin unbundling		(43)
Net expense recognised in income statement	30	26	30	26
Contributions	(16)	(15)	(16)	(15)

Net liability at end of year	223	209	223	209

Amounts recognised in the income statement:
Service costs	2	3	2	3
Interest costs	20	18	20	18
Net actuarial losses recognised	8	5	8	5
	30	26	30	26
The principal actuarial assumptions applied are:
Discount rate	7,25%	8,25%	7,25%	8,25%
Health care cost inflation rate	5,00%	5,75%	5,00%	5,75%

Sensitivity of healthcare cost trend rates:
1% increase in trend rate - effect on the aggregate of the service and interest cost	3	3	3	3
1% increase in trend rate - effect on the obligation	33	29	33	29
1% decrease in trend rate - effect on the aggregate of the service and interest cost	2	2	2	2
1% decrease in trend rate - effect on the obligation	28	24	28	24

Estimated contributions payable in the next financial year:	18	16	18	16

Experience losses:
Discount rate	22	11	22	11
Percentage of the present value of the plan liabilities	7,8%	4,5%	7,8%	4,5%

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 unfunded liability for retirement gratuities which is determined actuarially each year comprises:

	Consolidated		Company
	2008	2007	2008	2007
	Rmillion	Rmillion	Rmillion	Rmillion
Amounts recognised in the balance sheet:
Present value of unfunded obligations	67	56	67	56
Unrecognised actuarial losses	(12)	(5)	(12)	(5)

Net liability in balance sheet	55	51	55	51

The liability is reconciled as follows:
Net liability at beginning of year	51	55	51	48
Hulamin unbundling		(7)
Net expense recognised in income statement	9	8	9	8
Payments made	(5)	(5)	(5)	(5)

Net liability at end of year	55	51	55	51

Amounts recognised in the income statement:
Service costs	3	3	3	3
Interest costs	5	4	5	4
Net actuarial losses recognised	1	1	1	1
	9	8	9	8
The principal actuarial assumptions applied are:
Discount rate	7,25%	8,25%	7,25%	8,25%
Salary inflation rate	5,00%	5,75%	5,00%	5,75%
Estimated contributions payable in the next financial year:	5	5	5	5
Experience losses:
On plan liabilities	9	3	9	3
Percentage of the present value of the plan liabilities	13,4%	5,4%	13,4%	5,4%

32.	DIRECTORS' EMOLUMENTS AND INTERESTS (R000)

	Directors' remuneration

	The directors' remuneration for the year ended 31 December 2008 was as follows:
				Retirement
		Cash		and medical
	Name	Package	Bonus	contributions	Total
	Executive directors:
	B G Dunlop	2 541	1 164	287	3 992
	M H Munro	2 290	1 065	271	3 626
	P H Staude	4 430	2 746	474	7 650
		9 261	4 975	1 032	15 268

	Bonuses are reported to match the amount payable to the applicable financial year.
	The directors' remuneration for the year ended 31 December 2007 was as follows:
				Retirement
		Cash		and medical
	Name	Package	Bonus	contributions	Total
	Executive directors:
	B G Dunlop	2 341	808	282	3 431
	M H Munro	2 036	987	242	3 265
	P H Staude	4 053	2 553	434	7 040
	Directors who came off the Board in 2007	5 070		601	5 671
		13 500	4 348	1 559	19 407

	Bonuses are reported to match the amount payable to the applicable fi nancial year.

	Share incentive gains
	Following the approval by shareholders of the split of the Tongaat-Hulett Group into two separate listed entities, Tongaat Hulett and Hulamin and with the circular to shareholders relating to the corporate transactions including detail on the approach to the share incentive schemes, certain share incentive scheme transactions, prior to the corporate restructuring, were concluded. These transaction are included in the share incentive gains set out below for 2007 and were settled by the delivery of shares, some of which were sold, inter alia to meet tax payments, with the remainder being held in shares in Tongaat Hulett.

	2008	2007
Executive directors:
B G Dunlop	710	5 641
M H Munro	563	8 212
P H Staude	1 789	17 861
Directors who came off the Board in 2007		34 029
	3 062	65 743

Tongaat-Hulett Group Limited incentive bonus on Hulamin unbundling and introduction of BEE
In June 2006 the Tongaat-Hulett Group board introduced an incentive plan whereby the executive directors and the chief executive officer could earn a maximum potential payment ranging from 30% to 50% of cash package for the successful implementation of the Hulamin unbundling and the introduction of BEE equity participation in both Tongaat Hulett and Hulamin. Following the successful implementation of these transactions, the board approved the payment of the bonus, as set out below.

	2008	2007
Executive directors:
B G Dunlop	n/a	650
M H Munro	n/a	905
P H Staude	n/a	2 045
Directors who came off the Board in 2007	n/a	3 239
		6 839
n/a = not applicable

Non-Executive Directors' Remuneration
		2008			2007
Name	Fees	Other	Total	Fees	Other	Total

P M Baum	163	65	228	150	60	210
E le R Bradley	163	228	391	150	210	360
F Jakoet*	41		41
J John	163	82	245	75	38	113
J B Magwaza	163		163	150	80	230
T V Maphai*	41		41
M Mia	163	277	440	150	195	345
N Mjoli-Mncube*	41		41
T H Nyasulu	163		163	150		150
C M L Savage	550	65	615	535	100	635
C B Sibisi	163		163	75		75
R H J Stevens	163	40	203	150	80	230
J G Williams	163		163	34		34
Directors who retired/resigned during 2007				441	123	564
	2 140	757	2 897	2 060	886	2 946

* Appointment to the Board with effect from 1 October 2008.

Declaration of full disclosure
Other than that disclosed above, 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 December 2008.

Interest of directors of the company in share capital
The aggregate holdings as at 31 December 2008 of those directors of the company holding issued ordinary shares of the company are detailed below. Holdings are beneficial except where indicated otherwise.

	2008		2007
	Direct	Indirect	Direct	Indirect
Name	shares	shares	shares	shares
Executive directors:
B G Dunlop	17 384		14 654
M H Munro	19 063		12 171
P H Staude	78 391		55 868
	114 838		82 693
Non-executive directors:
E le R Bradley		94 847		94 847
E le R Bradley (non-benefi cial)+		12 710		24 647
J B Magwaza	5 501		5 501
C M L Savage	22 923	69 930	22 923	69 930
R H J Stevens	590		590
	29 014	177 487	29 014	189 424

+Excludes 11 937 shares in respect of which it has been determined that Mrs Bradley has no right to vote and dispose.

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 new share incentive scheme comprising the Share Appreciation Right Scheme 2005 (SARS), the Long Term Incentive Plan 2005 (LTIP) and the Deferred Bonus Plan 2005 (DBP).

	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 these share schemes for its own employees only, 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 Employees Share Incentive Scheme and The Tongaat-Hulett Group Limited 2001 Share Option Scheme (the Original Share Option Schemes)
	Under the original share option schemes, 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)		Number of options		Options exercised		Options forfeited		Number of options
	Apportioned		at 31 December 2007		2008		2008		at 31 December 2008
Expiring	Tongaat	Hulamin	Tongaat	Hulamin	Tongaat	Hulamin	Tongaat	Hulamin	Tongaat	Hulamin
ten years from	Hulett		Hulett		Hulett		Hulett		Hulett

4 November 1998	25,40	7,85	8 000	8 000	8 000	8 000
5 March 1999	25,13	7,77	128 300	129 300	100 000	14 855			28 300	114 445
7 May 1999	30,63	9,47	89 800	89 800	1 800	1 800			88 000	88 000
19 May 2000	22,91	7,09	17 100	17 100					17 100	17 100
12 January 2001	30,44	9,41	20 300	20 300					20 300	20 300
16 May 2001	30,55	9,45	134 000	136 700	5 000	2 000			129 000	134 700
15 August 2001	32,08	9,92	3 500	3 500					3 500	3 500
13 May 2002	37,88	11,72	197 200	200 700	24 400	9 500			172 800	191 200
14 April 2003	24,37	7,53	195 250	196 850	12 660	31 800			182 590	165 050
1 October 2003	26,35	8,15	30 000	30 000					30 000	30 000
21 April 2004	35,90	11,10	491 700	502 500	63 200	76 400	500	500	428 000	425 600
			1 315 150	1 334 750	215 060	144 355	500	500	1 099 590	1 189 895

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 (2007 - R11,14 and R16,08).

No awards were made in 2008 (2007 - nil) under the original share option schemes.

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

	Share price at grant date	The share option price at grant date is the share price at the date on which the share option is issued, as noted above.

	Exercise price	The exercise price is the share price at grant date, as noted above.
	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: R32,39 (2007 - R31,98) and Hulamin componentR9,91 (2007 - R9,90)
	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	44 months (2007 - 55 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 (Tongaat Hulett) and a Hulamin component (Hulamin), as detailed in the 2007 Annual Report.

	Click to enlarge

	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:

	Share price at grant date	The grant price at which the share appreciation right is issued, as noted above.
	Exercise price	The share price at grant date, as noted above in respect of the 2008 and 2007 awards and apportioned for the Tongaat Hulett and Hulamin components for the 2006 and 2005 awards.


	Expected option life	80 months (assume contractual plus a leaving percentage of 5%).
	Risk-free interest rate	2008 award : 8,75% (2007 award : 8,11%, 2006 award : 7,22% and
		2005 award : 8,09%).
	Expected volatility	Expected volatility of 27% (2007 : 27% and 2006 and 2005 : 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 3,5% was used for the 2008 award (2007 award : 3,44%, 2006 award : 4,0% and 2005 award : 3,9%).
	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 allowed.
	Non-market performance conditions	Growth in headline earnings per share.
	Market performance conditions	No market conditions.
	Estimated fair value per right at grant date	2008 award : R16,93 (2007 award : R15,97, the combined TH and Hulamin components : 2006 award : R18,11 and 2005 award : R13,88).
	Weighted average remaining life:
	-Expected	2008 award : 76 months (2007 award : 68 months, 2006 award : 52 months and 2005 award : 40 months).
	-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.

	The issue price and number of unexercised conditional awards 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.

	Click to enlarge

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

	Share price at grant date	The grant price at which the conditional share award is issued, as noted above.
	Exercise price	The share price at grant date, as noted above in respect of the 2008 and 2007 awards and apportioned for the Tongaat Hulett and Hulamin components for the 2006 and 2005 awards.
	Expected option life	34 months (assume contractual plus a leaving percentage of 5%).
	Risk-free interest rate	2008 award : 9,22% (2007 award : 8,8%, 2006 award : 7,01% and 2005 award : 7,44%).
	Expected volatility	Expected volatility of 27% for the 2008 award (2007 award : 23,98%, 2006 award : 25,60% and 2005 award : 27,02%) 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 conditional share awards did not take into account dividends, as no dividend payment was expected. A continuous dividend yield of 3,5% was used for the 2008 award (2007 award : 3,6%, 2006 award : 3,8% and 2005 award : 3,9%).
	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	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.
	Estimated fair value per conditional award at grant date	2008 award : R56,62 (2007 award : R46,28, the combined Tongaat Hulett and
		Hulamin components : 2006 award : R39,78 and 2005 award : R24,96).
	Weighted average remaining life:
	- Expected	2008 award : 28 months (2007 award : 20 months and 2006 award : 4 months)
	- Contractual	36 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.

		Number of	Conditional	Conditional	Conditional	Number of
		conditional	awards	awards	awards	conditional
Expiring	Issue price	awards at	granted in	settled in	forfeited	awards at
three years from	Rand	Dec 2007	2008	2008	in 2008	31Dec 2008

27 July 2007	90,27	24 274		837	1 900	21 537
1 March 2008	88,75		28 936			28 936
		24 274	28 936	837	1 900	50 473

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.
	Exercise price	The grant share price at grant date, as noted above.
	Expected option life	34 months (assume contractual plus a leaving percentage of 5%).
	Risk-free interest rate	Not applicable.
	Expected volatility	Not applicable.
	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.

	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	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	2008 award : R71,33 (2007 - R67,53).

	Weighted average remaining life:
	- Expected	2008 award : 26 months (2007 : 19 months).
	- Contractual	36 months.

	The deferred bonus shares were purchased by the participating employees on 1 March 2008 in respect of the 2008 award (2007: purchased on 3 August 2007).

	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 Schemes

	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)		Number of options at		Options exercised	Number of options at
		Apportioned		31 December 2007		in 2008	31 December 2008
	Expiring	Tongaat		Tongaat		Tongaat	Tongaat
Name	ten years from	Hulett	Hulamin	Hulett	Hulamin	Hulett	Hulett	Hulamin

Executive directors:

B G Dunlop	21 April 2004	35,90	11,10	1 100	1 100		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		66 900	66 900

P H Staude	13 May 2002	37,88	11,72	17 000	17 000		17 000	17 000
	21 April 2004	35,90	11,10	28 000	28 000		28 000	28 000

				45 000	45 000		45 000	45 000

Non-executive directors: *

J B Magwaza	19 May 2000	22,91	7,09	2 000	2 000		2 000	2 000
	12 January 2001	30,44	9,41	1 600	1 600		1 600	1 600
	16 May 2001	30,55	9,45	6 000	6 000		6 000	6 000
	13 May 2002	37,88	11,72	6 000	6 000		6 000	6 000

				15 600	15 600		15 600	15 600

C M L Savage	5 March 1999	25,13	7,77	60 000	60 000	60 000		60 000
	7 May 1999	30,63	9,47	50 000	50 000		50 000	50 000
	12 January 2001	30,44	9,41	8 000	8 000		8 000	8 000
	16 May 2001	30,55	9,45	22 000	22 000		22 000	22 000

				140 000	140 000	60 000	80 000	140 000

Total				268 600	268 600	60 000	208 600	268 600

* The non-executive directors' share options were awarded when they were executive directors.

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 unbundlingof Hulamin were apportioned into a Tongaat Hulett component (Tongaat Hulett) and a Hulamin component (Hulamin), as detailed in the 2007 Annual Report.

Click to enlarge

Long Term Incentive Plan 2005

The issue price and number of unexercised conditional awards 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.

Click to enlarge

Deferred Bonus Plan 2005

			Number	Conditional	Number	Conditional
			of conditional	awards	of conditional	awards
	Expiring	Original Issue	awards at	granted in	awards at	time
Name of executive director	three years from	price (Rand)	31 Dec 2007	2008	31 Dec 2008	constrained
B G Dunlop	3 August 2007	90,27	3 357		3 357	3 357
	1 March 2008	88,75		2 730	2 730	2 730
			3 357	2 730	6 087	6 087
M H Munro	3 August 2007	90,27	2 887		2 887	2 887
	1 March 2008	88,75		3 337	3 337	3 337
			2 887	3 337	6 224	6 224
P H Staude	3 August 2007	90,27	7 711		7 711	7 711
	1 March 2008	88,75		11 219	11 219	11 219
			7 711	11 219	18 930	18 930

The deferred bonus shares were purchased by the participating employees on 1 March 2008 in respect of the 2008 award (2007: purchased on 3 August 2007).

The share awards were made and exercised at various times and the average share price for the year was R77,80 (2007: R128,64 for Tongaat-Hulett Group Limited up to 30 June 2007 and R93,39 for Tongaat Hulett for the remainder of the year).

The gains made by directors are reflected in note 32 under Directors' Emoluments and Interests.

34.	BEE EMPLOYEE SHARE OWNERSHIP PLANS
	The 7% BEE employee transaction comprises the Employee Share Ownership Plan (ESOP) and the Management Share Ownership Plan (MSOP)

	The ESOP scheme consists of a share appreciation right scheme and participants share in 50% of the dividend payable to ordinary shareholders. The MSOP scheme consists 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 benefi t of designated employees. Tongaat Hulett Limited and its subsidiaries have made contributions to the MSOP Trust and the ESOP Trust (refer note 3). Due to these shares having specifi c repurchase rights at maturity (fi ve years from grant date), they are a separate class of restricted shares which, other than for the repurchase terms, rank paripassu with ordinary shares and become ordinary shares on repurchase.

	The number of shares repurchased at maturity is calculated such that the market value of the repurchased shares will be equal to :
	-	The grant price of the shares allocated , plus the value of cash dividends paid to ESOP participants;
	-	80% of the market value (at the outset) of the shares issued in terms of the share appreciation right component of the MSOP;
	-	Rnil in respect of the share grant component of the MSOP ; and
	-	The Trusts will distribute the remaining Tongaat Hulett shares to the benefi ciaries.

		Under the share appreciation right scheme, participating employees are awarded the right to receive shares equal in value to the difference between the exercise price which will be equal to the grant price plus the aggregate of all cash dividends received (in the instance of the ESOP) and the market value at maturity of the scheme. The employees therefore participates in the share price appreciation in Tongaat Hulett. Under the share grant scheme, participating employees were granted the right to obtain ordinary shares in Tongaat Hulett on vesting. The value of both the MSOP share appreciation scheme and the MSOP share grant scheme are capped at a level of 10% compounded growth per year.

	Employee Share Ownership Plan - Share Appreciation Right Scheme


Grant date	Estimated fair value per right	Number of shares issued at	Number of rights allocated at	Number of rights allocated	Number of rights forfeited	Number of rights allocated at
	Rand	31 December 2007	31 December 2007	in 2008	in 2008	31 December 2008

1 August 2007	28,90	5 422 829	4 408 235		494 660	3 913 575
1 February 2008	18,38			205 850	24 110	181 740
1 August 2008	17,92			215 460	7 110	208 350

		5 422 829	4 408 235	421 310	525 880	4 303 665

Management Share Ownership Plan - Share Appreciation Right Scheme
Grant date	Estimated fair value per right	Number of shares issued at	Number of rights allocated at	Number of rights allocated	Number of rights forfeited	Number of rights allocated at
	Rand	31 December 2007	31 December 2007	in 2008	in 2008	31 December 2008
1 August 2007	19,80	3 296 657	1 546 630		93 050	1 453 580
1 February 2008	13,93			167 710		167 710
1 August 2008	14,79			176 460		176 460
		3 296 657	1 546 630	344 170	93 050	1 797 750
Management Share Ownership Plan - Share Grant Scheme

Grant date	Estimated fair value per right	Number of shares issued at	Number of rights allocated at	Number of rights allocated	Number of rights forfeited	Number of rights allocated at
	Rand	31 December 2007	31 December 2007	in 2008	in 2008	31 December 2008
1 August 2007	64,00	1 021 422	478 870		28 800	450 070
1 February 2008	54,37			51 950		51 950
1 August 2008	57,39			54 620		54 620
		1 021 422	478 870	106 570	28 800	556 640

The estimated fair value costing of these share appreciation rights and share grant rights was determined using option pricing methodology, based on the following significant inputs:

	Fixed share price at grant dates	R92,90
	Expected option life	57 months (assume contractual plus a leaving percentage of 5%).
	Risk-free interest rate	1 August 2008 award : 10,06%, 1 February 2008 award : 9,62% and 1 August 2007 award : 8,45%
	Expected volatility	The weighted average expected volatility of 28% (2007 : 27%) is based on historical volatility determined by the statistical analysis of daily share price movements over the past three years.




	Expected early exercise	Not applicable
	Time constraints	Five 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.
	In addition, the following data is specific to each of the above schemes:
	Employee Share Ownership Plan - Share appreciation right scheme
	Exercise price	R92,90 plus cash dividends to be received over the life of the scheme.
	Expected dividends	A weighted average dividend yield of 4,9% (2007 : 4,6%) was used.
	Management Share Ownership Plan - Share appreciation right scheme
	Exercise price	R74,32.
	Expected dividends	Nil.
	Management Share Ownership Plan - Share grant scheme
	Exercise price	Nil.
	Expected dividends	Nil.

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