Wrap Text
Audited Results for the year ended 31 March 2017
Tongaat Hulett Limited
Registration No: 1892/000610/06
JSE share code: TON
ISIN: ZAE000096541
AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2017
- Revenue of R17,915 billion (2016: R16,676 billion) +7,4%
- Operating profit of R2,333 billion (2016: R1,669 billion) +39,8%
- Headline earnings of R982 million (2016: R679 million) +44,6%
- Operating cash flow (after working capital) of R3,176 billion
(2016: R1,863 billion) +70,5%
- Annual dividend of 300 cents per share (2016: 230 cps) +30,4%
COMMENTARY
The results for the year ended 31 March 2017 show a 39,8% increase in
operating profit to R2,3 billion. This reflects an improvement in
sugar revenue and operating profit under difficult conditions. The
starch operations were negatively impacted by maize costs that traded
at import parity levels as a result of the past season’s drought.
Sales concluded in land conversion and developments in these twelve
months were lower than the prior year. Operating cash flow, after
working capital movements, has also advanced substantially.
The various sugar operations generated operating profit of R1,271 billion
(2016: loss of R15 million). This is reflective of more effective import
protection dynamics, improved local market prices and higher prices
realised for exports, especially into regional African markets and the
EU.Sugar production totaled 1 056 000 tons (2016: 1 023 000 tons),
with volumes impacted by low cane yields due to the drought experienced
in KwaZulu-Natal and poor growing conditions with low rainfall and
restricted irrigation levels in Mozambique and Zimbabwe as a result
of low dam levels. The momentum established to reduce costs has been
maintained across all operations.
The South African sugar operations, including various downstream
activities, produced operating profit of R390 million
(2016: loss of R85 million). Sugar production started to recover,
amounting to 353 000 tons (2016: 323 000 tons), costs were well
contained and Tongaat Hulett increased its share of total industry
production to 22% (2016: 19,5%), leading to an increased proportion
of local market sales. The local market saw significantly better
pricing and sales mix dynamics. The higher value of standing cane
is reflective of the yield recovering in the next crop following
the good summer rainfall in the past six months. Voermol animal
feeds has contributed well, with increased margins.
The Mozambique sugar operating profit improved to R308 million
(2016: R25 million). Sugar production was 198 000 tons
(2016: 232 000 tons). Domestic market sales of locally produced
sugar increased by 21%, for the whole industry, as a result of
better protection against imports and improved sugar distribution
and availability in more remote areas. Local market price increases
and higher export prices positively impacted revenue and cane
valuations. The Metical weakened substantially against the Rand
and the US dollar, benefitting the operations with sizeable
Metical based costs and revenue linked to the US dollar.
The Zimbabwe sugar operating profit increased to R504 million
(2016: R9 million). Sugar production increased by 10% to 454 000 tons
(2016: 412 000 tons). Local market sales volumes and mix improved
due to there being lower imports into the market. Exports increased
on the back of higher production and prices realised into the EU and
regional markets were some 20% above the previous year. As part
of an ongoing process, involving Government and farmers, to
review the division of proceeds, an upward adjustment to the
milling portion was made in the past year, with the commensurate
recovery for sugar milling.
The starch and glucose operation recorded an operating profit
of R510 million (2016: R658 million). Margins were negatively
impacted in the second half of the year by maize costs which were
at import parity levels following the drought of the past season
and by lower co-product revenues. An improved sales mix was achieved
during the period due to the successful replacement of imported
volumes with local production and ongoing market development for
modified starches and powdered glucose. This was offset by lower
volumes as the prevailing economic climate led to lower consumer
demand.
Land conversion and development activities recorded operating profit
of R641 million (2016: R1,115 billion). The major contributors were
Sibaya (high-end residential, retirement and school – 57 developable
hectares sold), the industrial area of Cornubia (6 hectares), high
intensity mixed use areas of Umhlanga Ridgeside (2 hectares) and
Umhlanga Ridge Town Centre (1 hectare), integrated affordable
residential at Bridge City (3 hectares) and further high end
residential at Izinga (4 hectares) and Kindlewood (2 hectares),
totaling 75 developable hectares compared to 121 developable hectares
sold in the prior year. Revenue, costs and profit recorded per
developable hectare vary, reflective of the degree of enhancement
through urban planning, land use integration and density, location
and the intensity of infrastructure investment and are in line with
the value ranges communicated previously. During the year, the
remaining interests in the Zimbali properties were disposed of to
IFA for a cash component and in exchange for their joint venture
share of the Westbrook/Zimbali South Banks land, resulting in some
R24 million being recognised in operating profit.
The stronger Rand exchange rate at the year-end against the US dollar
in respect of Zimbabwe and the Metical in respect of Mozambique has
led to a reduction in the foreign currency translation reserve on
consolidation into Rands of these operations’ balance sheets, which
is reflected in the statement of changes in equity and other
comprehensive income.
Operating cash flow (after working capital movements) was R3,176 billion
which is a R1,3 billion increase over the R1,863 billion of last year.
Sugar cash flows improved as a result of higher revenue and operating
profits, as well as lower root planting costs and capital expenditure
during the past drought. The land conversion and development activities
generated stronger operating cash flow, with significant proceeds being
received and after development expenditure related payments being made.
In total, after taking into account capex and root planting costs which
totaled R1,2 billion (2016: R1,9 billion), there was a net cash inflow
(after dividend payments) of R544 million, compared to a net cash
outflow of R1,278 billion last year. Tongaat Hulett’s net debt at
31 March 2017 was R4,780 billion, compared to R5,101 billion
at March 2016. Finance costs of R810 million (2016: R680 million)
were commensurate with the borrowing levels during the period and the
higher interest rates.
Taking all of the aforementioned into account, headline earnings for
the year increased by 44,6% to R982 million (2016: R679 million).
A final dividend of 200 cents per share (2016: 60 cents per share)
has been declared bringing the annual dividend to 300 cents per
share (2016: 230 cents per share).
LOOKING AHEAD
Tongaat Hulett will continue to enhance its strategic positioning,
focusing on multiple strategic thrusts, with a positive impact on
earnings and cash flow.
Increasing Returns from the Sugar Asset Base – Recovering Cane Yields,
Growing Sugar Production, Utilising Existing Capacity, with Low
Incremental Costs
Weather and growing conditions over the past two years have masked the
substantial progress that is being made with intensive agricultural
improvement programmes, increased hectares under cane, irrigation efficiency
and power reliability. The estimated impact is some 500 000 tons of
annual sugar production. The existing sugar cane footprint, with regular
growing conditions, the agricultural improvement programmes and the
completion of the few new planting partnership initiatives underway
should produce some 1 650 000 tons of sugar. Tongaat Hulett’s objective
is to continue with these actions until it fully utilises its installed
milling capacity of more than 2 000 000 tons per annum. The recent
completion in Zimbabwe of the Tokwe-Mukorsi dam and, in Mozambique
(Xinavane), the raising of the Corumana dam wall and the construction
of the new Moamba dam on the Incomati river, will diversify the water
catchment area and provide increased stability in future water supply.
An early season estimate for total sugar production in 2017/18 is
between 1 176 000 tons and 1 278 000 tons, compared to 1 056 000 tons
in 2016/17. The good rainfall of the 2016/17 summer in the coastal areas
of KwaZulu-Natal is positive for the 2017/18 crop yield and more hectares
are to be harvested. The 2017/18 crop in Zimbabwe and Mozambique will be
impacted to some extent by the reduced irrigation and limited replanting
that was necessary during 2016. The current dam levels following the
good rains at the end of 2016 into 2017 will provide full irrigation
during 2017/18 leading to a significant crop recovery by 2018/19. Total
sugar production is expected to recover over 2 years, to between some
1 485 000 and 1 588 000 tons in 2018/19. Tongaat Hulett’s marginal cost
of additional sugar production is currently some US$100 per ton from own
cane (40%) and US$280 per ton from third party cane (60%). Realisations,
ex-mill, based on current regional and EU market dynamics are
approximately US$390 per ton.
The decrease in costs achieved over the past four years (equivalent to
some R1,45 billion in real terms) provides good momentum for the ongoing
cost reduction process. The objective is to further reduce the cost of
sugar production, from cane growing to the delivery of sugar to the
customer. The nature of sugar milling and cane growing is such that
there is a high proportion of fixed costs and a low variable or
incremental portion. Unit costs of sugar production will reduce further
with the benefit of future volume increases. The ongoing cost reduction
process is focused on bought-in goods, services, transport, marketing,
salaries and wages.
The domestic markets in countries where Tongaat Hulett produces sugar
remain a key focus area. There has been some progress in South Africa and
significant success in Zimbabwe and Mozambique with the required
protection from imports, with Government support, given the high rural job
impact of these industries and being in line with international norms. In
South Africa, discussions are underway between the South African Sugar
Association and the relevant SA government departments, to increase the
level of the reference price used for the import tariff determination. The
current import tariff level is the lowest in the region and with the
volatility of the Rand against the US dollar, a risk exists of increased
imports from overseas sources into the SACU market. In Zimbabwe and
Mozambique, sugar refining matters are being addressed, which should lead
to the replacement of imported industrial white sugar. Growth is expected
in consumption per capita, off a low base, particularly in Mozambique and
partly in Zimbabwe, supported by distribution, industrialisation and
marketing initiatives. Tongaat Hulett has the leading sugar brands in
South Africa, Zimbabwe, Botswana and Namibia. The proposed sugar sweetened
beverage tax in South Africa and its socio impact is being assessed and
debated. It is likely to have a limited effect on total local sugar
demand and the financial impact would inter alia depend on the level of
the prevailing world sugar price.
Tongaat Hulett has key market positions and experience in both the region
(southern and eastern Africa) and the EU for the sale of its additional
sugar. It is developing and expanding its positions in regional deficit
markets, where a premium is earned over world market prices as well as
broadening its footprint in key value-add markets in the EU where it
enjoys preferential access.
The price of raw sugar in the world market, having traded in a wide range
of some 14,0 to 23,8 US cents per pound in the 12 months to March 2017
(13,2 to 16,7 US cents per pound in the prior year), has come under pressure
over the past six months from emerging forecasts for a global supply surplus
in the 12 months to September 2018. Of late, it is trading in the region of
16,5 US cents per pound. The price of raw sugar is currently expected in
the coming year to trade in a broad range of 14 to 18 US cents per pound,
impacted by supply prospects over the coming 15 months in the major sugar
producing countries. The sugar/ethanol mix in Brazil is expected to
increasingly impact on world sugar prices. In the medium term, there
continue to be concerns of the ability of global supply to match demand at
prevailing price levels. Global sugar consumption is predicted to continue
to grow at a rate of some 1,5% per annum, with most of this growth coming
from low per capita consumption developing countries.
Starch and Glucose – More Competitive Maize and Better Volume Prospects
The starch and glucose operation is well positioned strategically and is
focused on growing its sales volume, as it consolidates its gains from
replacement of imports in the coffee/creamer and other sectors, continued
enhancement of its product mix and developing opportunities which have
been identified and targeted for growth through exports. Working together
with customers, further opportunities are being targeted for growth through
customer exports. Market development to increase the production of value
added modified starches is progressing. This is all underpinned by
improving the use of the available capacity and the efficiency of operations.
Following the drought of the past year, high maize prices led to a
significant increase in maize plantings and combined with good summer
rainfall conditions are expected to yield a crop of 14,5 million tons
(2016/17: 7,5 million tons). New season maize prices have moved close to
export parity levels and will benefit operating margins in the second half
of the new financial year. Co-product revenues are expected to remain under
significant pressure in the first half of the year. A recovery in sales
volumes is anticipated during the coming year as customers’ import contracts
expire and are replaced with local production. Further volume growth is
expected to be supported by some recovery in consumer demand and increased
export sales as the benefits of lower maize prices materialise.
Value Creation from Land Conversion and Development
Tongaat Hulett is focused on creating stakeholder value through converting
prime land near Durban and Ballito to enable investors, developers and end
users to access bankable, shovel-ready real estate investment projects that
yield the best possible urban use. Over the past three years 304 developable
hectares, from the portfolio of some 7 709 developable hectares, have been
converted to such projects. Simultaneously, Tongaat Hulett drives rural
development in the cane catchment area of its sugar mills and over the past
five years 24 560 hectares of new cane land have been planted, mainly in
communal areas. The value creating capability of the land conversion
activities continues to increase, with good progress in the important
value drivers. These include nurturing sound relationships with key
stakeholders; growing demand in selected usage areas; increasing the
supply of shovel-ready land through planning processes and unlocking
infrastructure; and transferring land to others through sales that include
structuring selected transactions that are appropriate to unlock targeted
demand drivers and that deliver specific progress in transformation of
ownership and participation in the real estate value chain. Further
Act 70 of 1970 approvals were received in the period, taking the total to
some 3 582 developable hectares. These approvals are being consolidated
through further planning. A total of 962 developable hectares achieved
EIA approval in the period, bringing the total of land with EIA
approvals in the portfolio to 1 314 developable hectares, with a
further 1 100 developable hectares being well advanced in EIA processes.
Negotiations on some 233 developable hectares are currently underway,
representing profit potential of around R1,58 billion. These reflect
diverse current demand, covering affordable residential, mid-to-upper
market residential, retirement, offices, warehousing and logistics,
resort/hotel, a range of urban amenities, and educational uses. The
nature of the transactions being negotiated is selected to suit the
demand sector, optimise value created and achieve transformation
objectives and accelerated investment into the region. Geographically,
these negotiations include Umhlanga Ridge Town Centre (Commercial and
Residential), Ridgeside Precincts 1 and 2, Sibaya Nodes 1, 5 and 4,
Kindlewood, Bridge City, various Precincts in Cornubia (Cornubia Town
Centre, Marshall Dam Residential, Umhlanga Hills and Blackburn Extension)
and Tinley Manor. In addition, increasing enquiries are being received
at Ntshongweni, west of Durban, and in the airport region. A detailed
update on the portfolio and the process and progress of creating value
through land conversion in KwaZulu-Natal is available on
the www.tongaat.com website.
The Year Ahead
Tongaat Hulett’s profit for the 2017/18 year will continue to be
influenced by a number of substantial and varying dynamics, both
positive and negative. Overall, there is a positive outlook for the
full year with earnings growth expected to continue and the cash flow
momentum expected to be maintained.
Tongaat Hulett strives to be a proactive and resilient organisation
working in collaboration with all its stakeholders in a focused,
constructive, mutual value-adding and developmental manner. It has
operations in six countries in SADC, significant sugar cane and maize
processing facilities, a unique land conversion platform, a sizeable
animal feeds thrust and possibilities to further grow ethanol and
electricity generation.
For and on behalf of the Board
Bahle Sibisi Peter Staude
Chairman Chief Executive Officer
Amanzimnyama
Tongaat, KwaZulu-Natal
25 May 2017
DIVIDEND DECLARATION
Notice is hereby given that the Board has declared a final gross
cash dividend (number 179) of 200 cents per share for the year ended
31 March 2017 to shareholders recorded in the register at the
close of business on Friday 23 June 2017.
The salient dates of the declaration and payment of this final
dividend are as follows:
Last date to trade ordinary shares
“CUM” dividend Tuesday 20 June 2017
Ordinary shares trade “EX” dividend Wednesday 21 June 2017
Record date Friday 23 June 2017
Payment date Thursday 29 June 2017
Share certificates may not be dematerialised or re-materialised,
nor may transfers between registers take place between Wednesday
21 June 2017 and Friday 23 June 2017, both days inclusive.
The dividend is declared in the currency of the Republic of South
Africa. Dividends paid by the United Kingdom transfer secretaries
will be paid in British currency at the rate of exchange ruling at
the close of business on Tuesday 20 June 2017.
The dividend has been declared from income reserves. A net
dividend of 160 cents per share will apply to shareholders liable
for the local 20% dividend withholding tax and 200 cents per share
to shareholders exempt from paying the dividend tax.
The issued ordinary share capital as at 25 May 2017 is 135 112 506
shares. The company’s income tax reference number is 9306/101/20/6.
For and on behalf of the Board
M A C Mahlari
Company Secretary
Amanzimnyama,
Tongaat, KwaZulu-Natal
25 May 2017
SUMMARISED AUDITED CONSOLIDATED FINANCIAL STATEMENTS - PROVISIONAL
REPORT AS PER THE JSE LIMITED LISTINGS REQUIREMENTS
INCOME STATEMENT
Summarised consolidated Audited Audited
2017 2016
(restated-
Rmillion note 10)
Revenue 17 915 16 676
Operating profit 2 333 1 669
Net financing costs (note 1) (810) (680)
Profit before tax 1 523 989
Tax (note 2) (428) (326)
Profit for the year 1 095 663
Profit attributable to:
Shareholders of Tongaat Hulett 983 716
Minority (non-controlling) interest 112 (53)
1 095 663
Earnings per share (cents)
Basic 853,6 620,1
Diluted 853,6 620,1
Headline earnings attributable to
Tongaat Hulett shareholders (note 3) 982 679
Headline earnings per share (cents)
Basic 852,7 588,0
Diluted 852,7 588,0
Dividend per share (cents) 300,0 230,0
Currency conversion
Rand/US dollar closing 13,38 14,84
Rand/US dollar average 14,09 13,81
Rand/Metical average 0,22 0,35
Rand/Euro average 15,45 15,20
US dollar/Euro average 1,10 1,10
SEGMENTAL ANALYSIS
Summarised consolidated Audited Audited
2017 2016
(restated-
Rmillion note 10)
REVENUE
Sugar
Zimbabwe 4 399 3 549
Swaziland 236 205
Mozambique 1 723 1 664
South Africa 6 405 5 964
Sugar operations – total 12 763 11 382
Starch operations 4 172 3 640
Land Conversion and Developments 980 1 654
Consolidated total 17 915 16 676
OPERATING PROFIT
Sugar
Zimbabwe 504 9
Swaziland 69 36
Mozambique 308 25
South Africa 390 (85)
Sugar operations – total 1 271 (15)
Starch operations 510 658
Land Conversion and Developments 641 1 115
Centrally accounted and consolidation items (74) (70)
BEE IFRS 2 charge and transaction costs (15) (19)
Consolidated total 2 333 1 669
FURTHER ANALYSIS OF SUGAR OPERATING PROFIT
Summarised consolidated Audited Audited
2017 2016
(restated-
Rmillion note 10)
Sugar operations - before cane valuations 1 128 (156)
Zimbabwe 748 138
Swaziland 67 26
Mozambique 168 (94)
South Africa 145 (226)
Cane valuations - income statement effect 143 141
Zimbabwe (244) (129)
Swaziland 2 10
Mozambique 140 119
South Africa 245 141
Sugar operations - after cane valuations 1 271 (15)
Zimbabwe 504 9
Swaziland 69 36
Mozambique 308 25
South Africa 390 (85)
STATEMENT OF OTHER COMPREHENSIVE INCOME
Summarised consolidated Audited Audited
2017 2016
(restated-
Rmillion note 10)
Profit for the year 1 095 663
Other comprehensive income (3 600) 1 384
Items that will not be reclassified to
profit or loss:
Foreign currency translation (3 624) 1 395
Actuarial gain/(loss) on post-
retirement benefits 40 (24)
Tax on actuarial gain/(loss) (11) 6
Items that may be reclassified
subsequently to profit or loss:
Hedge reserve (7) 10
Tax on movement in hedge reserve 2 (3)
Total comprehensive income for the year (2 505) 2 047
Total comprehensive income attributable to:
Shareholders of Tongaat Hulett (2 324) 1 763
Minority (non-controlling) interest (181) 284
(2 505) 2 047
STATEMENT OF FINANCIAL POSITION
Summarised consolidated Audited Audited
2017 2016
(restated-
Rmillion note 10)
ASSETS
Non-current assets
Property, plant and equipment 13 688 16 415
Long-term receivable 619 564
Goodwill 382 438
Intangible assets 366 212
Investments 28 26
15 083 17 655
Current assets 12 871 13 037
Inventories 2 949 2 866
Growing crops 2 549 2 914
Trade and other receivables 4 070 4 738
Major plant overhaul costs 562 642
Cash and cash equivalents 2 741 1 877
TOTAL ASSETS 27 954 30 692
EQUITY AND LIABILITIES
Capital and reserves
Share capital 135 135
Share premium 1 544 1 544
BEE held consolidation shares (642) (625)
Retained income 9 044 8 191
Other reserves 700 4 028
Shareholders' interest 10 781 13 273
Minority (non-controlling) interest 1 957 2 152
Equity 12 738 15 425
Non-current liabilities 8 296 8 086
Deferred tax 2 537 2 864
Long-term borrowings 4 975 3 791
Non-recourse equity-settled BEE borrowings 605
Provisions 784 826
Current liabilities 6 920 7 181
Trade and other payables (note 5) 3 598 3 897
Short-term borrowings 2 546 3 187
Non-recourse equity-settled BEE borrowings 623
Tax 153 97
TOTAL EQUITY AND LIABILITIES 27 954 30 692
Number of shares (000)
– in issue 135 113 135 113
– weighted average (basic) 115 158 115 471
– weighted average (diluted) 115 158 115 471
STATEMENT OF CHANGES IN EQUITY
Summarised consolidated Audited Audited
2017 2016
(restated-
Rmillion note 10)
Balance at beginning of year 13 273 11 889
Total comprehensive income for the year (2 324) 1 763
Retained earnings 1 012 698
Movement in hedge reserve (5) 7
Foreign currency translation (3 331) 1 058
Dividends paid (176) (417)
BEE share-based payment charge 13 17
Share-based payment charge 60 60
Settlement of share-based payment awards (65) (39)
Shareholders' interest 10 781 13 273
Minority (non-controlling) interest 1 957 2 152
Balance at beginning of year 2 152 1 887
Total comprehensive income for the year (181) 284
Retained earnings 112 (53)
Foreign currency translation (293) 337
Dividends paid to minorities (14) (19)
Equity 12 738 15 425
STATEMENT OF CASH FLOWS
Summarised consolidated Audited Audited
2017 2016
(restated-
Rmillion note 10)
Operating profit 2 333 1 669
Surplus on disposal of property,
plant and equipment (42) (84)
Depreciation 1 027 1 231
Growing crops valuation and other
non-cash items (38) 36
Operating cash flow 3 280 2 852
Change in working capital (104) (989)
Cash flow from operations 3 176 1 863
Tax payments (482) (221)
Net financing costs (810) (680)
Cash flow from operating activities 1 884 962
Expenditure on property, plant and equipment:
New (423) (488)
Replacement and plant overhaul (202) (634)
Root planting (418) (668)
Intangible assets (166) (123)
Other capital items 59 109
Net cash flow before dividends and
financing activities 734 (842)
Dividends paid (190) (436)
Net cash flow before financing activities 544 (1 278)
Borrowings raised 680 1 273
Non-recourse equity-settled BEE borrowings 18 (49)
Settlement of share-based payment awards (65) (39)
Net increase/(decrease) in cash and
cash equivalents 1 177 (93)
Balance at beginning of year 1 877 1 668
Currency alignment (313) 302
Cash and cash equivalents at end of year 2 741 1 877
NOTES
Summarised consolidated Audited Audited
2017 2016
(restated-
Rmillion note 10)
1. Net financing costs
Interest paid (973) (778)
Interest capitalised 34 28
Interest received 129 70
(810) (680)
2. Tax
Normal (549) (277)
Deferred 121 (49)
(428) (326)
3. Headline earnings
Profit attributable to shareholders 983 716
Adjusted for:
Capital profit on disposal of land
and buildings (12) (42)
(Surplus)/loss on other capital items (4) 4
Minority (non-controlling) interest 1 (1)
Tax on the above items 14 2
982 679
4. Growing crops
Growing crops, comprising standing cane, is measured at fair
value which is determined using an estimate of cane yields and
prices which are unobservable inputs and, in accordance with
IFRS, categorised as level 3 under the fair value hierarchy.
Changes in fair value are recognised in profit or loss. A
change in yield of one ton per hectare on the estimated yield
of 76 tons cane per hectare (2016: 73 tons per hectare) would
result in a R35 million (2016: R37 million) change in fair
value while a change of one percent in the cane price would
result in a R32 million (2016: R33 million) change in fair
value.
5. Trade and other payables
Included in trade and other payables is the maize obligation
(interest bearing) of R509 million (2016: R376 million).
6. Capital expenditure commitments
Contracted 104 196
Approved 250 213
354 409
7. Operating lease commitments 60 75
8. Guarantees and contingent liabilities 96 101
9. Basis of preparation
The summarised consolidated financial statements for the year
ended 31 March 2017 have been prepared in accordance with the
JSE Limited Listings Requirements for provisional reports, the
framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards
(IFRS), the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee, Financial Reporting
Pronouncements as issued by the Financial Reporting Standards
Council, and as a minimum, contains the information as
required by International Accounting Standard 34: Interim
Financial Reporting and the requirements of the Companies Act
of South Africa. This announcement does not include the
information required pursuant to paragraph 16A(j) of IAS 34
which is available on the website, at the registered office
and upon request. Except as described below, the summarised
financial statements have been prepared using accounting
policies that comply with IFRS which are consistent with
those applied in the consolidated annual financial statements
for the year ended 31 March 2016 and were prepared under the
supervision of the Chief Financial Officer, M H Munro CA (SA).
10. Adoption of new or revised accounting standards
Tongaat Hulett has adopted all the new or revised accounting
pronouncements as issued by the IASB which were effective for
Tongaat Hulett from 1 January 2016. The adoption of these
standards had no recognition and measurement impact on the
financial results, other than for the compulsory adoption of
the revised IAS 16 and IAS 41 which has resulted in cane roots
being reclassified from growing crops to property, plant and
equipment in the statement of financial position, root
planting costs being capitalised to the cost of the roots and
thereafter the roots depreciated over their estimated useful
lives. Standing cane is now disclosed as a current asset.
Comparative figures have been restated. The effect of the
adoption of the revised IAS 16 and IAS 41 on profit or loss
for the year ended 31 March 2016 was a decrease in operating
profit of R139 million, deferred tax relief of R32 million and
a decrease in net profit for the year of R107 million. The
effect on earnings per share and headline earnings per share
(basic and diluted) was a decrease of 90,1 cents per share.
There was a R2 million decrease in other comprehensive income
(foreign currency translation). The effect on the statement of
financial position was the reclassification of cane roots of
R3 234 million from growing crops to property, plant and
equipment, a decrease of R137 million in the carrying value
of cane roots, and decreases in equity and deferred tax of
R105 million and R32 million respectively.
11. Audited results
These summarised consolidated financial statements, which have
been derived from the audited consolidated financial statements
for the year ended 31 March 2017 and with which they are
consistent in all material respects, have been audited by
Deloitte & Touche. Their unmodified audit opinions on the
consolidated financial statements and on the summarised
consolidated financial statements are available for
inspection at the registered office of the company. The
auditor’s report does not necessarily report on all of the
information contained in this announcement and any reference
to future financial performance included in this announcement
has not been audited or reported on. Shareholders are
therefore advised that in order to obtain a full understanding
of the nature of the auditor’s engagement they should obtain a
copy of the auditor’s report together with the accompanying
financial information from the registered office of Tongaat
Hulett.
12. Subsequent events
There were no material events between 31 March 2017 and the
date of this report.
CORPORATE INFORMATION
Directorate: C B Sibisi (Chairman), P H Staude (Chief Executive
Officer)*, S M Beesley, F Jakoet, J John, R P Kupara^,
T N Mgoduso, N Mjoli-Mncube, M H Munro*, S G Pretorius,
T A Salomão +
* Executive directors + Mozambican ^ Zimbabwean
Registered office: Amanzimnyama Hill Road, Tongaat, KwaZulu-Natal
P O Box 3, Tongaat 4400
Telephone: +27 32 439 4019
Facsimile: +27 31 570 1055
Transfer secretaries: Computershare Investor Services (Pty)
Limited Telephone: +27 11 370 7700
Sponsor: Investec Bank Limited Telephone: +27 11 286 7000
www.tongaat.com
e-mail: info@tongaat.com
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