Tongaat Hulett - Financial reporting

11.	SHARE CAPITAL (Rmillion)	Consolidated		Company
		2017	2016	2017	2016

	Authorised:
	150 000 000 ordinary shares of R1,00 each	150	150	150	150

	Issued and fully paid:
	135 112 506 ordinary shares of R1,00 each	135	135	135	135

	Under control of the directors in terms of a shareholders' resolution: 6 755 625 shares (2016: 6 755 625 shares).

	Details of the employee share incentive schemes are set out here in the Remuneration Report.


12.	BEE HELD CONSOLIDATION SHARES (Rmillion)	Consolidated
		2017	2016

	Broad based 18% interest:
	25 104 976 (2016: 25 104 976) ordinary shares	839	839

	BEE employee 7% interest:
	649 079 (2016: 830 888) ordinary shares
		839	839
	Less BEE SPV reserves	(197)	(214)
		642	625


13.	DEFERRED TAX (Rmillion)	Consolidated		Company
		2017	2016 Restated (note 35)	2017	2016 Restated (note 35)

	Balance at beginning of year	2 864	2 491	400	486

	Currency alignment	(215)	327

	Current year other comprehensive income charge/(relief) on:
	Actuarial gain/(loss)	11	(6)	11	(4)
	Hedge reserve	(2)	3	(2)	3

	Current year income statement (relief)/charge on:
	Earnings before capital profits	(128)	33	(47)	(89)
	Capital profits	13	2	13	2
	Prior years	(6)	14		2
	Balance at end of year	2 537	2 864	375	400

	Comprising temporary differences related to:

	Property, plant and equipment	1 908	2 085	638	560
	Growing crops	1 035	1 271	550	453
	Long-term receivable	193	177	193	177
	Current assets	280	237	14	9
	Current liabilities	(125)	(118)	(42)	(33)
	Tax losses	(882)	(699)	(805)	(569)
	Other	128	(89)	(173)	(197)
		2 537	2 864	375	400


14.	BORROWINGS (Rmillion)		Consolidated		Company
			2017	2016	2017	2016

	Long-term		4 975	3 791	4 861	3 631
	Short-term and bank overdraft		2 546	3 187	2 575	2 994
			7 521	6 978	7 436	6 625
	Long-term borrowings comprise:
	Effective interest rate


	Secured:
	SA Rand
	Repayable 2019/20	10,70%	157	199
	Finance leases (note 28)	11,50%	2	3	2	3
			159	202	2	3
	Unsecured:
	SA Rand
	Repayable 2023/24	3 month JIBAR + 0,50%	120		120
	Repayable 2023/24	3 month JIBAR + 2,70%	410		410
	Repayable 2022/23 (2016: repayable 2017/18)	3 month JIBAR + 3,05%	180	180	180	180
	Bond repayable 2021/22	3 month JIBAR + 2,85%	180		180
	Bond repayable 2021/22	3 month JIBAR + 2,85%	220		220
	Repayable 2020/21	3 month JIBAR + 2,55%	300		300
	Bond repayable 2020/21	3 month JIBAR + 2,80%	180	180	180	180
	Repayable 2019/20 (2016: repayable 2017/18)	3 month JIBAR + 2,55%	500	500	500	500
	Repayable 2019/20	3 month JIBAR + 2,05%	500	500	500	500
	Repayable 2019/20	3 month JIBAR + 2,00%	350	350	350	350
	Repayable 2019/20 (2016: repayable 2017/18)	3 month JIBAR + 2,30%	375	500	375	500
	Repayable 2018/19 (2016: repayable 2017/18)	3 month JIBAR + 2,30%	375	250	375	250
	Repayable 2018/19	3 month JIBAR + 1,85%	350	350	350	350
	Bond repayable 2018/19	3 month JIBAR + 2,60%	350	350	350	350
	Repayable 2018/19 (2016: repayable 2017/18)	3 month JIBAR + 2,50%	300	300	300	300
	Bond repayable 2018/19	3 month JIBAR + 2,40%	170	170	170	170
	Repaid during the current year			223		220
			4 860	3 853	4 860	3 850
	Long-term borrowings		5 019	4 055	4 862	3 853
	Less current portion included in short-term borrowings		44	264	1	222
			4 975	3 791	4 861	3 631
	Plant and machinery of Mozambique subsidiaries with a book value of R367 million (2016: R581 million) are encumbered as security for the secured long-term borrowings and certain short-term borrowings of nil (2016: R84 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 of nil (2016: R71 million) and in Zimbabwe equivalent to R2 million (2016: R94 million).

	Summary of future long-term loan repayments by financial year:

Year	2017/18	2018/19	2019/20	2020/21	2021/22	Thereafter
Rmillion	44	1 593	1 792	480	400	710

In terms of the company's memorandum of incorporation the borrowing powers exercisable by the directors is limited to R19 107 million.


15.	NON-RECOURSE EQUITY-SETTLED BEE BORROWINGS (Rmillion)

			Consolidated
			2017	2016

	The non-recourse equity-settled BEE borrowings comprise:

		Effective interest rate



	4 122 000 Class B redeemable preference shares	80% of prime	693	689

	Less BEE cash resources		70	84
			623	605

	These borrowings relate to Tongaat Hulett's black economic empowerment partners, yoMoba SPV Proprietary Limited and TH Infrastructure SPV Proprietary Limited, which have been fully consolidated in terms of IFRS. yoMoba SPV Proprietary Limited owns 11 157 767 ordinary shares and TH Infrastructure SPV Proprietary Limited owns 13 947 209 ordinary shares in Tongaat Hulett.

	The original preference share structure, comprising Class A and Class B redeemable preference shares, ran up until mid-2014 and had a fixed coupon payable semi-annually on 2 January and 1 July each year. The Class A redeemable preference shares were repaid on 1 July 2014, while the repayment terms of the Class B redeemable preference shares were extended to 31 July 2017. The dividend payable on these shares is also payable on 31 July 2017. The debt due will be settled by the SPVs utilising the shares that they hold in Tongaat Hulett together with dividends received from Tongaat Hulett. These SPVs will continue to be consolidated while Tongaat Hulett carries a residual risk in these entities.


16.	PROVISIONS (Rmillion)		Consolidated		Company
			2017	2016	2017	2016

	Post-retirement medical aid obligations		576	600	435	450
	Retirement gratuity obligations		208	226	126	130
			784	826	561	580

	Further details on provisions are set out in note 31.


17.	TRADE AND OTHER PAYABLES (Rmillion)		Consolidated		Company
			2017	2016	2017	2016

	Accounts payable		3 080	3 520	1 874	1 589
	Maize obligation - interest bearing		509	376	509	376
			3 589	3 896	2 383	1 965

	The directors consider that the carrying amount of trade and other payables approximates their fair value.


18.	OPERATING PROFIT (Rmillion)	Consolidated		Company
		2017	2016 Restated (note 35)	2017	2016 Restated (note 35)

	Revenue	17 915	16 676	9 188	8 405
	Cost of sales - cane, sugar and maize purchases	(6 259)	(5 448)	(5 214)	(4 527)
	Cost of sales - other (includes goods, services, salaries and wages and offcrop)	(7 555)	(7 906)	(2 789)	(2 893)
	Administration and other expenses	(1 689)	(1 728)	(695)	(673)
	Marketing and selling expenses	(385)	(373)	(241)	(233)
	Other net income (including growing crops fair value change)	309	425	1 515	679
	Capital profits (note 19)	12	42	118	91
	BEE IFRS 2 charge and transaction costs	(15)	(19)	(14)	(18)
	Operating profit	2 333	1 669	1 868	831

	Disclosable items included in operating profit:

	Income from subsidiaries:
	Dividends received			1 024	333
	Management fees			124	108

	Amortisation of intangible assets	8	8	8	8
	Auditors' remuneration:
	Fees	18	17	7	7
	Other services	4	2	1
	Depreciation charged:
	Buildings	104	108	8	8
	Cane roots	481	644	130	143
	Plant and equipment	277	287	169	151
	Vehicles and other	165	192	28	17
	Growing crops: gain from change in fair value	143	141	245	141
	Management fees paid to subsidiaries			1	1
	Management fees paid to third parties	5	5
	Operating lease charges (property, plant and vehicles)	75	85	68	78
	Surplus/(loss) on disposal of property, plant and equipment	4	(4)		(1)
	Share-based payments:
	IFRS 2 charge on SARS, LTIP and DBP	60	60	54	44
	BEE IFRS 2 charge	13	17	12	16
	Technical fees paid	22	20	22	20
	Translation of foreign currencies	95	22	(4)	5
	Valuation adjustments:
	Financial instruments	(2)	5	(2)	5
	Fair value hedges:
	- Net (losses)/gains on the hedged item	(64)	57	(64)	57
	- Net gains/(losses) on the hedging instrument	64	(57)	64	(57)

	Included in the consolidated revenue is notional interest on credit granted to customers of R122 million (company: R70 million).Included in the consolidated cost of sales is notional interest on credit received from suppliers of R46 million (company: R19 million).

19.	CAPITAL PROFITS (Rmillion)	Consolidated		Company
		2017	2016	2017	2016

	Comprises:
	Surplus on sale of land, cane roots and buildings	38	88	144	136
	Costs thereon	(26)	(46)	(26)	(45)
	Capital profits before tax	12	42	118	91

	Tax (note 21)	(13)	(3)	(13)	(2)
	Capital profits after tax	(1)	39	105	89


20.	NET FINANCING (COSTS)/INCOME (Rmillion)	Consolidated		Company
		2017	2016	2017	2016

	Net financing costs comprise:
	Interest paid - external	(973)	(778)	(839)	(631)
	Interest capitalised	34	28	34	28
	Interest paid - subsidiaries			(60)	(101)
	Financing costs	(939)	(750)	(865)	(704)

	Interest received - external	129	70	8	6
	Finance income	129	70	8	6
	Net financing costs	(810)	(680)	(857)	(698)

	Excluded from the consolidated Interest received is notional interest on credit granted to customers of R122 million (company: R70 million). Excluded from the consolidated Interest paid is notional interest on credit received from suppliers of R46 million (company: R19 million).

financial reporting

NOTES (11-20) TO THE
FINANCIAL STATEMENTS

financial reporting

NOTES (11-20) TO THE FINANCIAL STATEMENTS

NOTES (11-20) TO THE
FINANCIAL STATEMENTS