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 leases work in
      and buildings       progress
               
  Carrying value at beginning of year 7 665 2 116 3 793 1 505 52 199
  Additions 665 82 193 147 1 242
  Disposals (9) (1) (3) (5)    
  Depreciation (366) (41) (219) (103) (3)  
  Transfers   26 49 (3)   (72)
  Currency alignment 1 089 238 531 275 13 32
  Transfer to intangible assets (18)         (18)
  Carrying value at end of year 9 026 2 420 4 344 1 816 63 383
               
  Comprising:            
  31 March 2012            
  At cost 12 171 2 796 6 455 2 446 91 383
  Accumulated depreciation 3 145 376 2 111 630 28  
    9 026 2 420 4 344 1 816 63 383
  At cost 10 323 2 417 5 638 1 997 72 199
  Accumulated depreciation 2 658 301 1 845 492 20  
    7 665 2 116 3 793 1 505 52 199
               
  Company            
  Carrying value at beginning of year 2 386 468 1 671 158 1 88
  Additions 238 11 60 20 1 146
  Disposals (3) (2) (1)      
  Depreciation (164) (5) (136) (22) (1)  
  Transfers   5 35 10   (50)
  Transfer to intangible assets (18)         (18)
  Carrying value at end of year 2 439 477 1 629 166 1 166
               
  Comprising:            
  31 March 2012            
  At cost 4 435 574 3 293 398 4 166
  Accumulated depreciation 1 996 97 1 664 232 3  
    2 439 477 1 629 166 1 166
               
  31 March 2011            
  At cost 4 239 560 3 208 380 3 88
  Accumulated depreciation 1 853 92 1 537 222 2  
    2 386 468 1 671 158 1 88
 

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).

Land and agricultural improvements, 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
    2012 2011 2012 2011
  Carrying value at beginning of year 2 608 2 041 363 256
  Gain arising from physical growth and price changes 375 611 102 58
  Increase due to increased area under cane 135 102 122 55
  Expenditure on new area 57   57  
  Decrease due to reduced area under cane (45) (8) (31) (6)
  Currency alignment 445 (138)    
  Carrying value at end of year 3 575 2 608 613 363
           
  The carrying value comprises:        
    Roots 1 668 1 179 367 221
    Standing cane 1 907 1 429 246 142
    3 575 2 608 613 363
           
  Area under cane (hectares)        
    South Africa 25 013 18 859 25 013 18 859
    Mozambique 24 675 24 664    
    Swaziland 3 840 3 838    
    Zimbabwe 28 432 28 494    
    81 960 75 855 25 013 18 859
 

In terms of IAS 41: Agriculture, sugar cane 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 and loss.

  • The fair value of roots is determined on a current amortised cost basis, which is adjusted for cost increases, and the l 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:
        2012     2011
    South Africa Swaziland Zimbabwe Mozambique Total  
  Roots            
  Hectares under cane 25 013 3 840 28 432 24 675 81 960 75 855
  Amortised root value (Rand per hectare) 14 682 11 997 18 155 29 941 20 355 15 540
  Cane            
  Hectares for harvest 21 529 3 741 28 432 24 037 77 739 73 079
  Standing cane value (Rand per hectare) 11 399 28 947 29 877 29 254 24 522 19 552
  Yield            
  Tons cane per hectare 57 127 104 86 86 85
  Statement of Financial Position (Rmillion)            
  Roots 367 46 516 739 1 668 1 179
  Standing cane 245 108 850 704 1 907 1 429
  Total 612 154 1 366 1 443 3 575 2 608
       
  Rmillion 2012 2011
  Carrying value at beginning of year 2 608 2 041
  Change in fair value * 465 662
  Foreign currency translation 445 (138)
  Other 57 43
  Carrying value at end of year 3 575 2 608
 

The IAS 41 fair value change included in profit or loss for the year ended 31 March 2012 is as follows:
  Rmillion 2012 2011
  Roots 201 332
  Standing cane 264 330
  Change in fair value * 465 662
       
  Rmillion 2012 2011
  South Africa 191 109
  Swaziland 21 7
  Zimbabwe 214 283
  Mozambique 39 263
  Change in fair value * 465 662
 

*

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 PREPAYMENT (Rmillion) Consolidated Company
    2012 2011 2012 2011
  Long-term receivable        
    Pension fund employer surplus account allocation
  (refer to note 32)		 175 216 175 216
    Less current portion of employer surplus account allocation (60) (81) (60) (81)
    Carrying value at end of year 115 135 115 135
           
  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 year (156) (114) (145) (106)
  At beginning of year (114) (72) (106) (67)
  Charge for the year (42) (42) (39) (39)
  Less BEE share ownership plan consolidation shares (71) (113)    
        65 104
  Carrying value at end of year 115 135 180 239
 

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  
    2012 2011  
  Carrying value at beginning of year 230 240  
  Consolidation of subsidiaries   8  
  Currency exchange rate changes 30 (18)  
  Carrying value at end of year 260 230  
         
 

Goodwill is attributable to the Mozambique and Zimbabwe sugar operations and a Botswana and a Namibia 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 2012, the carrying value of goodwill was considered not to require impairment.

5. INTANGIBLE ASSETS (Rmillion) Consolidated Company
    2012 2011 2012 2011
  Cost:        
    At beginning of year 50 22 45 19
    Consolidation of subsidiaries   2    
    Additions 20 26 20 26
    Transfer from property, plant and equipment 18   18  
    Currency alignment 1      
    At end of year 89 50 83 45
           
  Accumulated amortisation:        
    At beginning of year 18 13 14 11
    Consolidation of subsidiaries   1    
    Charge for the year 5 4 5 3
    Currency alignment 1      
    At end of year 24 18 19 14
  Carrying value at end of year 65 32 64 31
           
  The carrying value comprises:        
    Software 28 28 27 27
    Cane supply agreements 3 4 3 4
    Patents (in progress) 34   34  
    65 32 64 31
           
6. INVESTMENTS (Rmillion)        
    Consolidated Company
    2012 2011 2012 2011
  Unlisted shares at cost 11 6    
  Loans 1 1    
  Carrying value of investments (Directors’ valuation) 12 7    
 

A schedule of unlisted investments is available for inspection at the company’s registered office.

7. SUBSIDIARIES AND JOINT VENTURES (Rmillion)    
    Company
    2012 2011
  Shares at cost, less amounts written o 4 397 4 703
  Indebtedness by 514 42
  Indebtedness to (366) (828)
    4 545 3 917
 

Details of principal subsidiary companies and joint ventures are included in note 26.

Tongaat Hulett’s proportionate share of the assets, liabilities and post-acquisition reserves of joint ventures, which comprise in the main, E ngham Development (33%) and Tongaat Hulett/IFA Resort Developments (50%) and which are included in the consolidated financial statements are set out below.

    
    Consolidated
    2012 2011
  Property, plant and equipment 7 7
  Current assets 238 345
  Less: Current liabilities (52) (110)
  Interest in joint ventures 193 242
       
  Tongaat Hulett’s proportionate share of the trading results of the joint ventures is as follows:    
    Revenue 18 111
    Profit before tax 6 54
    Tax (2) (15)
    Net profit after tax 4 39
       
  Tongaat Hulett’s proportionate share of cash flows of the joint ventures is as follows:    
    Cash flows from operating activities 18 40
    Net cash used in investing activities (2) (35)
    Movement in net cash resources 16 5
       
8. INVENTORIES (Rmillion) Consolidated Company
    2012 2011 2012 2011
  Raw materials 251 255 217 209
  Work in progress 21 17 20 17
  Finished goods 192 178 103 95
  Consumables 492 450 131 115
  Development properties 441 413    
  Livestock and game 86 52    
    1 483 1 365 471 436
 

Included in raw materials is an amount of R157 million (2011: R164 million) that relates to the constructive obligation that has been recognised on maize procurement contracts.

9. DERIVATIVE INSTRUMENTS (Rmillion) Consolidated Company
    2012 2011 2012 2011
  The fair value of derivative instruments at year end was:        
  Forward exchange contracts - hedge accounted 2 3 2 3
  Forward exchange contracts - not hedge accounted   5   5
  Futures contracts - hedge accounted 1 1 1 1
    3 9 3 9
           
  Summarised as:        
    Derivative assets 4 11 4 11
    Derivative liabilities (1) (2) (1) (2)
    3 9 3 9
 

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.
top of page