NOTES (31-35) TO THE
FINANCIAL STATEMENTS

31.  RETIREMENT BENEFITS (Rmillion)            
                 
   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 members of either a Tongaat Hulett implemented scheme or of various designated industry or state schemes. The Tongaat Hulett schemes, which are predominantly defined contribution 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             
   The latest audited financial statements of the defined contribution schemes, including the scheme in Swaziland, reflect a satisfactory state of affairs. Contributions of R111 million were expensed during the year (2017: R106 million). 
                 
   Defined Benefit Pension Scheme 
   A defined benefit scheme in South Africa which previously covered the old Tongaat-Hulett Group was split between Tongaat Hulett and Hulamin in 2012 and then in 2013 was converted to a Defined Contribution arrangement for in-service members and the pensioner liabilities were outsourced to an insurer. 
                 
   Details of the IAS 19 valuation of the DB Fund (South Africa):  2018  2017    
                 
   Fair value of fund assets             
   Balance at beginning of year     910  845    
   Expected return on scheme assets     72  61    
   Settlements/conversion       
   Balance at end of year     985  910    
                 
   Comprises:             
   Employer surplus account (note 2)    751  689    
   Provisions and reserves     234  221    
         985  910    
  
   Post-Retirement Medical Aid Benefits 
   In the South African operations, 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 benefit. The entitlement to this benefit for these current employees is dependent upon the employee remaining in service until retirement. The Zimbabwe operations provide post-retirement medical benefits for pensioners and current employees. In Mozambique, Acucareira de Xinavane subsidises the medical contributions in respect of its pensioners. 
                 
   The unfunded liability for post-retirement medical aid benefits is determined actuarially each year using the projected unit credit method and comprises: 
     
      Consolidated  Company 
      2018  2017  2018  2017 
                 
   Amounts recognised in the statements of financial position:             
   Net liability at beginning of year  576  600  435  450 
                 
   Actuarial loss/(gain) included in other comprehensive income:  (25) (3) (31)
   From changes in financial assumptions     (26)    (26)
   From changes in demographic assumptions  (10)    (12)
   From changes in experience items during the year     11  (3)
   Net expense recognised in income statement  55  57  43  46 
   Employer contributions  (40) (38) (33) (30)
   Currency alignment  (16) (18)      
   Net liability at end of year  576  576  442  435 
                 
   Amounts recognised in profit or loss:             
   Current service costs 
   Interest costs  48  48  40  42 
      55  57  43  46 
                 
   The principal actuarial assumptions applied are:             
   Discount rate:             
   South Africa  8,80%  9,60%  8,80%  9,60% 
   Mozambique  7,99%  8,60%       
   Zimbabwe  6,00%  5,00%       
                 
   Healthcare cost inflation rate:             
   South Africa  7,35%  8,15%  7,35%  8,15% 
   Mozambique  6,61%  7,31%       
   Zimbabwe  4,50%  3,50%       
                 
   Sensitivity analysis (based on varying an individual input):             
   On discount rate:             
   1% increase in trend rate - decrease in the aggregate of the service and interest costs  (1) (1) (1) (1)
   1% increase in trend rate - decrease in the obligation  (56) (57) (39) (38)
   1% decrease in trend rate - increase in the aggregate of the service and interest costs 
   1% decrease in trend rate - increase in the obligation  68  70  46  45 
                 
   On healthcare cost inflation rate:             
   1% increase in trend rate - increase in the aggregate of the service and interest costs 
   1% increase in trend rate - increase in the obligation  69  70  46  46 
   1% decrease in trend rate - decrease in the aggregate of the service and interest costs  (1) (1) (1) (1)
   1% decrease in trend rate - decrease in the obligation  (57) (58) (39) (39)
                 
   Estimated contributions payable in the next financial year  41  40  34  32 
                 
   Weighted average duration of the obligation:             
   South Africa  10,3 years  10,5 years  10,3 years  10,5 years 
   Mozambique  6,5 years  6,4 years       
   Zimbabwe  16,4 years  16,5 years       
              
   Key risks associated with the post-retirement medical aid obligation:             
   Higher than expected inflation (to which medical cost/contribution increases are related). 
   "Real" future medical aid cost/contribution inflation (i.e. above price inflation) turns out higher than allowed for. 
   Members/pensioners changing medical aid plans to more expensive plans subject to maximum in terms of policy. 
   Longevity pensioners (and their dependants) living longer than expected in retirement. 
   Changes in the prescribed basis (as a result of market conditions) which adversely impact the financial results of the company. 
              
              
   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 benefit is applicable to employees in the South African and Zimbabwean operations. 
  
   The unfunded liability for retirement gratuities is determined actuarially each year using the projected unit credit method
and comprises: 
   Consolidated  Company 
   2018  2017  2018  2017 
              
   Amounts recognised in the statements of financial position:             
   Net liability at beginning of year  208  226  126  130 
              
   Actuarial loss/(gain) included in other comprehensive income:  (15) (9)
   From changes in financial assumptions     (8)    (8)
   From changes in demographic assumptions     (2)    (2)
   From changes in experience items during the year  (5)
   Net expense recognised in income statement  28  29  19  20 
   Payments made by the employer  (20) (22) (11) (15)
   Currency alignment  (9) (10)      
   Net liability at end of year  215  208  135  126 
              
   Amounts recognised in profit or loss:             
   Service costs  12  13 
   Interest costs  16  16  12  12 
   28  29  19  20 
   The principal actuarial assumptions applied are:             
   Discount rate:             
   South Africa  8,80%  9,60%  8,80%  9,60% 
   Zimbabwe  6,00%  5,00%       
                 
   Salary inflation rate:             
   South Africa  7,10%  7,90%  7,10%  7,90% 
   Zimbabwe  3,50%  2,50%       
                 
   Sensitivity analysis (based on varying an individual input):             
   On discount rate:             
   1% increase in trend rate - decrease in the aggregate of the service and interest costs  (1) (1) (1) (1)
   1% increase in trend rate - decrease in the obligation  (19) (19) (12) (11)
   1% decrease in trend rate - increase in the aggregate of the service and interest costs 
   1% decrease in trend rate - increase in the obligation  23  22  14  13 
                 
   On salary inflation rate:             
   1% increase in trend rate - increase in the aggregate of the service and interest costs 
   1% increase in trend rate - increase in the obligation  23  23  14  13 
   1% decrease in trend rate - decrease in the aggregate of the service and interest costs  (3) (3) (2) (2)
   1% decrease in trend rate - decrease in the obligation  (20) (20) (12) (12)
                 
   Estimated amounts payable in the next financial year  22  20  12  11 
                 
   Weighted average duration of the obligation:             
   South Africa  10,5 years  10,6 years  10,5 years  10,6 years 
   Zimbabwe  10,6 years  10,9 years       
                 
   Key risks associated with the retirement gratuity obligation:             
   Higher than expected inflation (to which salary increases are related). 
   "Real" salary increases (i.e. above price inflation) turn out higher than allowed for. 
   Large number of early retirements (normal or ill health) bringing forward gratuity payments. 
   Fewer exits prior to retirement than expected (i.e. more people reach retirement than allowed for in terms of current
demographic assumptions). 
  
   Changes in the prescribed basis (as a result of market conditions) which adversely impact the financial results of the company. 
  
           
32.  DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS AND INTERESTS       
           
   The information in respect of directors’ and prescribed officers’ emoluments and interests is included in the Remuneration Report as follows: 
  
          
   Executive directors’ and prescribed officers’ remuneration     
   Non-executive directors’ remuneration     
   Declaration of full disclosure     
   Interest of directors of the company in share capital     
           
           
33.  EMPLOYEE SHARE INCENTIVE SCHEMES       
           
   Details of awards made in terms of the company's share incentive schemes comprising the Share Appreciation Right Scheme 2005, the Long Term Incentive Plans 2005 and the Deferred Bonus Plan 2005 are set out here of the Remuneration Report and details of the interest of directors in share-based instruments are set out here
     
   
34.  BEE EMPLOYEE SHARE OWNERSHIP PLANS 
                    
   The BEE employee transaction, which comprises the Employee Share Ownership Plan (ESOP) and the Management Share Ownership Plan (MSOP), vested during the year ended 31 March 2013. The ESOP scheme consisted of a share appreciation right scheme and participants shared in 50% of the dividend payable to ordinary shareholders. The MSOP scheme consisted 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 benefit of designated employees. Tongaat Hulett Limited and its subsidiaries made contributions to the MSOP Trust and the ESOP Trust. Due to these shares having specific repurchase rights at maturity (five years from grant date), they were a separate class of restricted shares which, other than for the repurchase terms, ranked pari passu with ordinary shares and became ordinary shares at maturity of the scheme on 1 August 2012. 
                    
   Employee Share Ownership Plan 
                    
   The ESOP Trust has delivered to designated employees all the ordinary shares held in Tongaat Hulett that had been awarded to these employees, leaving a balance of 32 331 ordinary shares that are unallocated. 
                    
   Management Share Ownership Plan 
                    
   Grant date  Number of 
shares at 
31 March 2017 
Released 
including deaths 
in service 
Awarded 
during 
2017/18 
Forfeited / 
adjustments 
Balance time 
constrained 
31 March 2018 
  
  
                    
   1 June 2012  43 885  (43 884)    (1)   
   1 July 2012  41 935  (41 934)    (1)   
   1 November 2012  242 475  (239 377)    (3 098)   
   7 January 2013  5 000  (5 000)         
   1 March 2013  4 855  (4 855)         
   1 August 2014  40 476        (1 906) 38 570 
   1 September 2014  1 928           1 928 
   1 September 2015  50 170        (4 572) 45 598 
   1 March 2017  52 789           52 789 
   22 September 2017        35 000     35 000 
   2 January 2018        35 000     35 000 
   Unallocated  133 235     (70 000) 9 578  72 813 
      616 748  (335 050)       281 698 
                    
   The fair value of the awards made during the year was the Tongaat Hulett closing share price on the Johannesburg Stock Exchange on grant date being R108,60 for the award of 22 September 2017 and R111,15 for the award of 2 January 2018. 
                    
           
35.  SUBSEQUENT EVENTS       
           
   There were no material events between 31 March 2018 and the date of this report.