| Fri 28 May 2010, 7:06 | | TON - Tongaat Hulett Limited - Audited Results for the fifteen months ended |
|
TON
THGL
TON - Tongaat Hulett Limited - Audited Results for the fifteen months ended
31 March 2010
Tongaat Hulett Limited
Registration No: 1892/000610/06
JSE share code: TON
ISIN: ZAE000096541
Audited Results for the fifteen months ended 31 March 2010
- Revenue of R11,136 billion (prior period: R9,453 billion)
- Profit from operations of R1,691 billion (prior period: R1,323 billion)
- Headline earnings of R858 million (prior period: R626 million)
- Recovery of Zimbabwe operations underway
- Scrip distribution with cash dividend alternative of 175 cents per share
COMMENTARY
Profit from operations increased by 28% to R1,691 billion for the 15 months
ended March 2010, compared to the corresponding 15 month prior period, with
headline earnings growing by 37% to R858 million. Tongaat Hulett has
increased profit from continuing operations every year since 2003 as the
company benefits from its growing operations and the emerging global dynamics
of increasing demand for agricultural products, food, renewable energy and
land usage.
The financial year-end has changed to the end of March, which corresponds
with the sugar season in all the countries in which Tongaat Hulett operates.
The current financial results are thus for the 15 months to 31 March 2010 and
include the revenue of a single sugar milling season and the increased value
of the growing crop. The costs are for a 15 month period, including those
costs incurred from January to March in the off-crop period that are required
to be expensed in the income statement.
Profit from the starch operations for the 15 months was R301 million,
compared to R290 million in the prior period. Starch and glucose sales
volumes in the local market declined by 5% over this period, with the rate of
decline slowing in the first quarter of 2010. Lower demand was experienced in
the alcoholic beverage, paper, coffee creamer and confectionary sectors, with
the contraction in consumer spending. The negative effect of the lower demand
was offset by improved starch and glucose margins. A second consecutive year
of favourable agricultural conditions in South Africa yielded a large maize
crop in 2009 of 12,9 million tons (previous crop: 12,7 million tons) and
resulted in local maize prices trading closer to world prices for most of the
year. Co-product revenues decreased as a result of lower prices for edible
oils and animal feeds.
Land and property development activity is currently focused on the growth
corridor north of Durban that commences inland of Umhlanga/Umdloti, extends
around the new King Shaka International Airport and includes the greater
Tongaat area. In the present economic conditions, with the sale of
development land across most sectors being depressed, few hectares are being
converted to development in the higher value, prime locations on the
coastline and to the west of eThekwini. Good progress is being made, working
with all spheres of Government, on processes leading to the conversion of
agricultural land to optimal land usage and accelerated socio economic
development, including tourism in KwaZulu-Natal. Tongaat Hulett owns 13 863
gross hectares for development in South Africa. Operating profit from land
conversion and development for the 15 months to March 2010 amounted to R187
million (prior period: R256 million) with a further R52 million in capital
profits (prior period: R22 million) being realised. During this period, 169
developable hectares (280 gross hectares) were sold comprising 159 hectares
in the eThekwini growth corridor, including new airport related activities,
and 10 hectares in the prime coastal corridor.
The South African sugar milling, refining and agriculture operations
contributed R158 million to profit for the 15 months ended March 2010 (prior
period: R95 million), with higher local and export sales realisations. Sugar
production decreased to 564 000 tons compared to the 644 000 tons produced in
the previous season. Almost all of Tongaat Hulett`s sugar production was sold
in the local market under the Hulett`s brand in 2009/10. In terms of the
South African sugar industry legislated regulations, only 65% of the sales
were deemed to be local and 35% were recognised and valued as exports. Raw
sugar export volumes from South Africa were sold at an effective world sugar
price of 15,4 US c/lb (prior year: 12,1 US c/lb) at an average exchange rate
of R8,20/US$ (prior year: R8,05/US$).
The downstream sugar value added activities contributed R226 million to
profit (prior period: R230 million). This includes Voermol animal feeds,
South African refined exports, regional marketing, sales, packing and
distribution activities.
In Swaziland, Tambankulu Estates produced a raw sugar equivalent of 54 000
tons (previous season: 56 000 tons). Operating profit for the 15 months,
including the value of the cane growth in the period of January to March
2010, was R63 million, compared to R56 million in the prior period.
Sugar production in Mozambique increased to 134 000 tons from 108 000 tons in
the previous season. The start-up problems that limited sugar production in
2009/10 at the expanded and modernised Xinavane mill have now been resolved,
including replacing the diffuser chain and modifying conveyer systems. This
resulted in a large portion of the crop on the substantially expanded cane
growing estates being carried over, for harvesting at the start of the
2010/11 season. Production of sugar at Xinavane was 89 000 tons (previous
season: 63 000 tons). Mafambisse`s sugar production of 45 000 tons (previous
season: 45 000 tons) was adversely affected by a number of factors, including
the harvesting of young cane in the newly established cane areas and
overcoming irrigation bottlenecks. The Mozambique operation`s raw sugar
export volumes to the European Union totaled 49 000 tons (prior: 39 000 tons)
and sales to the domestic market increased to 85 000 tons (prior: 69 000
tons). The currency gains of R122 million realised in 2008, when financial
structures were finalised, were not repeated in 2009/10. The Mozambique
profit from operations amounted to R192 million (prior period: R301 million).
The profit from sugar operations in Zimbabwe was R576 million in the 15
months to March 2010, as relevant economic fundamentals were reintroduced
into the local economy and the business. Sales to the domestic market of 188
000 tons were undertaken in US dollars at levels in line with regional
pricing and 146 000 tons were exported to the European Union. Sugar
production in Zimbabwe amounted to 259 000 tons (previous season: 298 000
tons). The situation that prevailed in Zimbabwe in 2008 had a negative impact
on the 2009 harvest and sugar production levels.
The recovery of the Zimbabwe sugar operations commenced in 2009, coinciding
with the US dollarisation of the Zimbabwe economy and the return to more
normal economic fundamentals relevant to the sugar business, including the
restoration of domestic sales prices to regional levels. As reported in the
interim results, the Zimbabwe operations are consolidated in Tongaat Hulett`s
financial results from the beginning of 2009. The accounting treatment, in
terms of International Financial Reporting Standards, on the commencement of
consolidation of these operations gave rise to a balance sheet take-on gain
of R1,969 billion, which is recognised in the income statement. This gain is
excluded from the profit from operations and excluded from headline earnings.
The centrally accounted and consolidation items include a R82 million gain
(prior period: R86 million) on the recognition of an unconditional
entitlement in 2009 to an employer surplus account allocation in the Tongaat
Hulett pension fund.
The tax charge in the income statement includes the benefit of a release from
the deferred tax provision following the reduction of the Zimbabwe tax rate
from 30% to 25% at the end of 2009 and the advantage of an attractive
Mozambique tax rate for agricultural operations.
Finance costs for the 15 months to March 2010 increased to R452 million from
R367 million in the equivalent prior period, commensurate with the borrowings
in the business.
Cash inflow from operations was R1,955 billion for the 15 months to March
2010. Tongaat Hulett`s net debt at the end of March 2010 was R3,040 billion
(compared to R3,370 billion at December 2009 and R2,356 billion at December
2008) with significant capital expenditure, mainly on the Mozambique
expansion, cash absorption in the establishment of the expanded cane crops
and replanting of sugar cane in Zimbabwe.
The Board has declared a final distribution, as a scrip distribution with a
cash dividend alternative of 175 cents per share, bringing the total
distribution for the full period to 275 cents per share. There is a separate
detailed announcement on the scrip distribution and the related circular will
be posted to shareholders.
Outlook
Tongaat Hulett`s land and property development activity is currently focused
on opportunities in the growth corridor north of Durban, including those
related to the new international air platform.
The South African maize harvest in 2010 is projected to be above 13 million
tons, the largest crop in 29 years, which should maintain local maize prices
close to world prices and contribute to the competitiveness of the starch
operation.
The world sugar price, after rising substantially, has recently declined
sharply to a level similar to the average earned on exports from South Africa
in 2009/10. These exports currently constitute some 20% of Tongaat Hulett`s
total sugar sales and this percentage will reduce as the Zimbabwe and
Mozambique production increases. Movements in the Rand, US dollar and Euro
exchange rates have a direct impact on export proceeds and the conversion of
earnings into Rands by the operations outside South Africa.
The business is driving to increase sugar production from the 957 000 tons
milled in the 2009/10 season to the installed sugar milling capacity of 1,9
million tons per annum, with a simultaneous reduction in the unit cost of
production. Sugar production in the 2010/11 season is expected to be 20% to
25% above the previous season. Plans are in place to increase sugar
production over the next two seasons in Mozambique from the 134 000 tons in
2009/10 to the newly installed milling capacity of 300 000 tons per annum,
with the cane supply already well established. A recovery programme is
currently underway in Zimbabwe, focused on the two sugar factories, improving
cane yields and re-establishing outgrower cane lands, so as to restore sugar
production to the existing installed capacity of 600 000 tons per annum. In
South Africa, the rainfall in the cane growing months has been below average
for the 2010/11 season, which will affect the sugar operations. The focus in
South Africa is on working with commercial and small scale growers on
increasing hectares under cane, areas to be replanted and farming practices
to improve yields, leading to higher milling capacity utilisation.
Tongaat Hulett remains well positioned to benefit from the medium to longer
term global fundamentals of increasing demand for agricultural products,
food, renewable energy and land usage.
For and on behalf of the Board
J B Magwaza Peter Staude
Chairman Chief Executive Officer
Amanzimnyama
Tongaat, KwaZulu-Natal
26 May 2010
INCOME STATEMENT
Condensed consolidated Audited Pro forma Audited
15 months 15 months 12 months
to to to
31 March 31 March 31
December
Rmillion 2010 2009 2008
Revenue 11 136 9 453 7 106
Profit from operations 1 691 1 323 1 132
Capital profit on land 52 22 22
Capital profit on insurance claim 13 49 49
BEE IFRS 2 charge and transaction
costs (35) (42) (33)
Zimbabwe consolidation take-on
gain 1 969 1 969
Valuation adjustments (3) 3 2
Operating profit 3 687 3 324 1 172
Share of associate company`s
profit 1 1
Net financing costs (note 1) (452) (367) (280)
Profit before tax 3 236 2 958 892
Tax (note 2) (208) (262) (212)
Net profit for the period 3 028 2 696 680
Profit attributable to:
Shareholders of Tongaat Hulett 2 898 2 662 649
Minority (non-controlling)
interest 130 34 31
3 028 2 696 680
Headline earnings attributable
to Tongaat Hulett
shareholders (note 3) 858 626 583
Earnings per share (cents)
Net profit per share
Basic 2 791,6 2 581,8 629,7
Diluted 2 736,0 2 529,0 616,8
Headline earnings per share
Basic 826,5 607,1 565,6
Diluted 810,0 594,7 554,1
Dividend per share (cents) 275,0 310,0 310,0
Currency conversion
Rand/US dollar closing 7,39 9,53 9,30
Rand/US dollar average 8,23 8,60 8,27
Rand/Euro average 11,40 12,33 12,17
Rand/Metical average 0,29 0,35 0,34
SEGMENTAL ANALYSIS
Condensed consolidated Audited Pro forma Audited
15 months 15 months 15 months
to to to
31 March 31 March 31
December
Rmillion 2010 2009 2008
REVENUE
Starch operations 2 778 2 685 2 150
Land Conversion and Development 274 426 412
Sugar
Zimbabwe operations 1 636 311
Swaziland operations 134 138 137
Mozambique operations 463 543 527
SA agriculture, milling
and refining 4 285 3 561 2 424
Downstream value added
activities 1 566 1 789 1 456
Consolidated total 11 136 9 453 7 106
PROFIT FROM OPERATIONS
Starch operations 301 290 240
Land Conversion and Development 187 256 263
Sugar
Zimbabwe operations
(2008: dividends) 576 93 35
Swaziland operations 63 56 44
Mozambique operations 192 301 250
SA agriculture, milling and
refining 158 95 73
Downstream value added
activities 226 230 204
Centrally accounted and
consolidation items (12) 2 23
Consolidated total 1 691 1 323 1 132
STATEMENT OF FINANCIAL POSITION
Condensed consolidated Audited Audited
31 March 31 December
Rmillion 2010 2008
ASSETS
Non-current assets
Property, plant and equipment 7 710 4 659
Growing crops 2 041 742
Long-term receivable 196
Goodwill 240 99
Intangible assets 9 6
Investments 10 268
10 010 5 970
Current assets 3 358 3 587
Inventories 1 373 1 709
Trade and other receivables 1 580 1 647
Major plant overhaul costs 256
Derivative instruments 9 2
Cash and cash equivalents 140 229
TOTAL ASSETS 13 368 9 557
EQUITY AND LIABILITIES
Capital and reserves
Share capital 139 138
Share premium 1 519 1 506
BEE held consolidation shares (935) (1 023)
Retained income 4 691 2 087
Other reserves (841) 351
Shareholders` interest 4 573 3 059
Minority interest in subsidiaries 870 276
Equity 5 443 3 335
Non-current liabilities 3 709 2 865
Deferred tax 1 272 582
Long-term borrowings 1 104 1 212
Non-recourse equity-settled BEE borrowings 787 792
Provisions 546 279
Current liabilities 4 216 3 357
Trade and other payables (note 4) 2 131 1 849
Short-term borrowings 2 076 1 373
Derivative instruments 3 23
Tax 6 112
TOTAL EQUITY AND LIABILITIES 13 368 9 557
Number of shares (000)
- in issue 103 677 103 247
- weighted average (basic) 103 811 103 070
- weighted average (diluted) 105 922 105 225
STATEMENT OF CASH FLOWS
Condensed consolidated Audited Audited
15 months 12 months
to to
31 March 31 December
Rmillion 2010 2008
Operating profit 3 687 1 172
Profit on disposal of property, plant
and equipment (87) (74)
Depreciation 521 244
Zimbabwe consolidation take-on gain (1 969)
Growing crops and other non-cash items (729) (297)
Tax payments (257) (163)
Change in working capital 789 83
Cash flow from operations 1 955 965
Net financing costs (452) (280)
Cash flow from operating activities 1 503 685
Expenditure on property, plant and equipment:
New (1 416) (1 317)
Replacement (280) (221)
Major plant overhaul costs (291) (38)
Expenditure on intangible assets (7) (2)
Expenditure on growing crops (76) (167)
Proceeds on disposal of property, plant
and equipment 110 96
Investments 8 (55)
Long-term receivable 7
Net cash flow before dividends and
financing activities (449) (1 012)
Dividends paid (283) (355)
Net cash flow before financing activities (732) (1 367)
Borrowings raised 651 1 160
Non-recourse equity-settled BEE borrowings (4) (20)
Shares issued 14 7
Settlement of share-based payment awards (21) (11)
Net decrease in cash and cash equivalents (92) (231)
Balance at beginning of period 229 396
Foreign exchange adjustment (61) 55
Exchange rate translation (loss)/gain (5) 9
Subsidiaries consolidated 69
Cash and cash equivalents at end of period 140 229
STATEMENT OF CHANGES IN EQUITY
Condensed consolidated Audited Audited
15 months 12 months
to to
31 March 31 December
Rmillion 2010 2008
Balance at beginning of period 3 059 2 735
Total comprehensive income for the period 1 689 633
Retained earnings 2 898 649
Movement in hedge reserve 17 (15)
Foreign currency translation (1 226) (1)
Dividends paid (264) (336)
Allocation of BEE amount 29 (22)
Share capital issued - ordinary 14 7
BEE held consolidation shares 29 30
Share-based payment charge 39 27
Settlement of share-based payment awards (22) (15)
Shareholders` interest 4 573 3 059
Minority interest in subsidiaries 870 276
Balance at beginning of period 276 223
Total comprehensive income for the period (106) 58
Retained earnings 130 31
Foreign currency translation (236) 27
Dividends paid to minorities (19) (19)
Allocation of BEE amount (29) 22
Change of interest in subsidiary (7) (8)
Consolidation of subsidiaries 755
Equity 5 443 3 335
STATEMENT OF OTHER COMPREHENSIVE INCOME
Condensed consolidated Audited Audited
15 months 12 months
to to
31 March 31 December
Rmillion 2010 2008
Profit for the period 3 028 680
Other comprehensive income (1 445) 11
Movement in non-distributable reserves:
Foreign currency translation (1 462) 26
Hedge reserve 23 (21)
Tax on movement in hedge reserve (6) 6
Total comprehensive income for the period 1 583 691
Total comprehensive income attributable to:
Shareholders of Tongaat Hulett 1 689 633
Minority (non-controlling) interest (106) 58
1 583 691
NOTES
Condensed consolidated Audited Audited
15 months 12 months
to to
31 March 31 December
Rmillion 2010 2008
1. Net financing costs
Interest paid (577) (428)
Interest capitalized 88 103
Interest received 37 45
(452) (280)
2. Tax
Normal (308) (256)
Deferred (15) 66
Rate change adjustment - deferred 154 22
Secondary tax on companies (39) (44)
(208) (212)
3. Headline earnings
Profit attributable to shareholders 2 898 649
Less Zimbabwe consolidation take-on gain (1 969)
Less after tax effect of:
Capital profit on disposal of land (52) (22)
Capital profit on insurance claim (11) (46)
Fixed assets and other disposals (8) 2
858 583
4. Trade and other payables
Included in trade and other payables is the maize obligation (interest
bearing) of R381 million (31 December 2008: R373 million).
5. Capital expenditure commitments
Contracted 234 587
Approved 118 114
352 701
6. Operating lease commitments 31 28
7. Guarantees and contingent liabilities 148 122
8. Basis of preparation
The audited results for the 15 months ended 31 March 2010, from which these
condensed consolidated financial statements were derived, have been presented
in accordance with International Accounting Standard 34 Interim Financial
Reporting. The accounting policies are consistent with those used for the
audited 2008 annual financial statements which fully comply with
International Financial Reporting Standards and the JSE Limited Listing
Requirements. Tongaat Hulett`s Zimbabwean operations, which were previously
accounted for on a dividend received basis, have been consolidated in the
current period, giving rise to a balance sheet take-on gain of R1,969
billion, as determined within the measurement period in accordance with IFRS
3 (revised 2008). This standard has been early adopted and has been applied
prospectively with no restatement of comparatives. In addition, IAS 1
Presentation of Financial Statements (revised), IFRS 7 Financial Instruments:
Disclosures and IFRS 8 Operating Segments were adopted during the current
financial period. The adoption of these new standards has resulted in certain
disclosure reclassifications but has not resulted in any changes in
accounting policy.
9. Audited results
The consolidated financial statements for the 15 month period ended 31 March
2010 have been audited by Deloitte & Touche. Their unmodified audit opinion
is available for inspection at the registered office of the company.
10. Pro forma Income Statement and Segmental Analysis for the 15 months ended
31 March 2009
The pro forma income statement and segmental results for the prior period are
presented for comparative purposes and comprise the audited results for the
12 months to 31 December 2008 plus the unaudited results for the 3 months to
31 March 2009. The pro forma detail (refer Annexure 1)and the requisite
reporting accountants` report form part of this announcement and will be
included in the Annual Report.
CORPORATE INFORMATION
Directorate: J B Magwaza (Chairman), P H Staude (Chief Executive Officer)*, B
G Dunlop*, F Jakoet, J John, R P Kupara, A A Maleiane+, T V Maphai, T N
Mgoduso, M Mia, N Mjoli-Mncube, M H Munro*, T H Nyasulu, C B Sibisi, R H J
Stevens.
* Executive directors Zimbabwean +Mozambican
Company Secretary: M A C Mahlari
Registered office: Amanzimnyama Hill Road, Tongaat, KwaZulu-Natal
P O Box 3, Tongaat 4400 Telephone: +27 32 439 4019, Facsimile: +27 32 945
3333
Transfer secretaries: Computershare Investor Services (Pty) Limited
Telephone: +27 11 370 7700
Sponsor: Investec Bank Limited Telephone: +27 11 286 7000
www.tongaat.co.za
email: info@tongaat.co.za
PRO FORMA INCOME STATEMENT AND SEGMENTAL RESULTS
FOR THE 15 MONTHS ENDED 31 MARCH 2009 (ANNEXURE 1)
INCOME STATEMENT (1) (2) (3)
Unadjusted Actual Pro forma
Audited 3 months 15 months
12 months 1 January to
to 31 December 2009 to 31 March
2008 31 March 2009
Rmillion 2009
Revenue 7 106 2 347 9 453
Profit from operations 1 132 191 1 323
Capital profit on land 22 22
Capital profit on insurance claim 49 49
BEE IFRS 2 charge and transaction
costs (33) (9) (42)
Zimbabwe consolidation take-on
gain 1 969 1 969
Valuation adjustments 2 1 3
Operating profit 1 172 2 152 3 324
Share of associate company`s
profit 1 1
Net financing costs (280) (87) (367)
Profit before tax 892 2 066 2 958
Tax (212) (50) (262)
Net profit for the period 680 2 016 2 696
Profit attributable to:
Shareholders of Tongaat Hulett 649 2 013 2 662
Minority (non-controlling)
interest 31 3 34
680 2 016 2 696
Headline earnings attributable to
Tongaat Hulett shareholders 583 43 626
Earnings per share (cents)
Net profit per share
Basic 629,7 1 952,4 2 581,8
Diluted 616,8 1 912,4 2 529,0
Headline earnings per share
Basic 565,6 41,7 607,1
Diluted 554,1 40,9 594,7
Dividend per share (cents) 310,0 - 310,0
SEGMENTAL ANALYSIS
Unadjusted Actual Pro forma
Audited 3 months 15 months
12 months 1 January to
to 31 December 2009 to 31 March
2008 31 March 2009
Rmillion 2009
REVENUE
Starch operations 2 150 535 2 685
Land Conversion and Development 412 14 426
Sugar
Zimbabwe operations 311 311
Swaziland operations 137 1 138
Mozambique operations 527 16 543
SA agriculture, milling
and refining 2 424 1 137 3 561
Downstream value added
activities 1 456 333 1 789
Consolidated total 7 106 2 347 9 453
PROFIT FROM OPERATIONS
Starch operations 240 50 290
Land Conversion and Development 263 (7) 256
Sugar
Zimbabwe operations
(2008: dividends) 35 58 93
Swaziland operations 44 12 56
Mozambique operations 250 51 301
SA agriculture, milling and
refining 73 22 95
Downstream value added
activities 204 26 230
Centrally accounted and
consolidation items 23 (21) 2
Consolidated total 1 132 191 1 323
NOTES
(1) Unadjusted audited results for the 12 months ended
31 December 2008, including the Zimbabwe operations being
dividend accounted.
(2) Unaudited results for the 3 months from 1 January 2009 to
31 March 2009 and incorporating the following:
- Complete management account information for the 3 months,
including 31 March 2009 reporting cut-off, prepared in
terms of IRFS.
- Inclusion of the Zimbabwe operations from the commencement
of consolidation to 31 March 2009. The commencement of
consolidation gave rise to an audited balance sheet take-on
gain of R1,969 billion as determined in accordance with
IFRS 3 (Revised).
(3) Pro forma results for the 15 months to 31 March 2009, being
column 1 plus column 2.
(4) The table above sets out the unaudited pro forma comparative
income statement for the 15 months to 31 March 2009.
This pro forma statement is the responsibility of the Tongaat
Hulett directors, who are satisfied with its quality, and has
been prepared for comparative purposes only.
(5) The reporting accountants` report from Deloitte & Touche on
the pro forma is set out in the annual financial statements
and forms part of the SENS announcement of results.
INDEPENDENT REPORTING ACCOUNTANTS` ASSURANCE REPORT
26 May 2010
The Directors
Tongaat Hulett Limited
P O Box 3
TONGAAT
4400
Dear Sirs
Independent Reporting Accountants` Assurance Report on the Pro Forma
Financial Information of Tongaat Hulett Limited
We have performed our limited assurance engagement in respect of the
unaudited 15 month period ended 31 March 2009 comparative pro forma income
statement and segmental result information which is to be included in Tongaat
Hulett Limited`s SENS announcement of results and as an annexure to the
company`s 31 March 2010 annual financial statements. The pro forma financial
information as set out in the enclosed Annexure 1 has been prepared in
accordance with the requirements of the JSE Limited ("JSE") Listings
Requirements, for illustrative purposes only, to provide certain comparative
financial information as a consequence of the change in Tongaat Hulett
Limited`s reporting period from December, to a 15 month period ended 31 March
2010.
Directors` responsibility
The directors are responsible for the compilation, contents and presentation
of the pro forma financial information to be contained in the company`s SENS
announcement of results and annual financial statements and the financial
information from which it has been prepared. Their responsibility includes
determining that: the pro forma financial information has been properly
compiled on the basis stated; the basis is consistent with the accounting
policies of Tongaat Hulett Limited; and the pro forma adjustments are
appropriate for the purposes of the pro forma financial information disclosed
in terms of the JSE Listings Requirements.
Reporting accountants` responsibility
Our responsibility is to express our limited assurance conclusion on the pro
forma financial information included in the SENS announcement of results and
as an annexure to the company`s 31 March 2010 annual financial statements. We
conducted our assurance engagement in accordance with the International
Standard on Assurance Engagements applicable to Assurance Engagements Other
Than Audits or Reviews of Historical Financial Information and the Guide on
Pro Forma Financial Information issued by SAICA.
This standard requires us to obtain sufficient appropriate evidence on which
to base our conclusion.
We do not accept any responsibility for any reports previously given by us on
any financial information used in the compilation of the pro forma financial
information beyond that owed to those to whom those reports were addressed by
us at the dates of their issue.
Sources of information and work performed
Our procedures consisted primarily of comparing the unadjusted financial
information with the source documents, considering the pro forma adjustments
in light of the accounting policies of Tongaat Hulett Limited, considering
the evidence supporting the pro forma adjustments and discussing the adjusted
pro forma financial information with the directors of the company in relation
to the change in the company`s year-end, giving rise to a 15 month reporting
period.
In arriving at our conclusion, we have relied upon financial information
prepared by the directors of Tongaat Hulett Limited and other information
from various public, financial and industry sources.
While our work performed has involved an analysis of the historical published
audited financial information and other information provided to us, our
assurance engagement does not constitute an audit or review of any of the
underlying financial information conducted in accordance with International
Standards on Auditing or International Standards on Review Engagements and
accordingly, we do not express an audit or review opinion.
In a limited assurance engagement, the evidence-gathering procedures are more
limited than for a reasonable assurance engagement and therefore less
assurance is obtained than in a reasonable assurance engagement. We believe
our evidence obtained is sufficient and appropriate to provide a basis for
our conclusion.
Conclusion
Based on our examination of the evidence obtained, nothing has come to our
attention, which causes us to believe that, in terms of the section 8.17 and
8.30 of the JSE Listings Requirements:
- the pro forma financial information has not been properly compiled on the
basis stated,
- such basis is inconsistent with the accounting policies of the issuer, and
- the adjustments are not appropriate for the purposes of the pro forma
financial information as disclosed
Consent
We consent to the inclusion of this report, which will form part of the SENS
announcement of results, to be issued on or about 28 May 2010, and as an
annexure to the company`s 31 March 2010 annual financial statements, in the
form and context in which it will appear.
Deloitte & Touche 2 Pencarrow Park
Registered Auditors Pencarrow Crescent
Per JAR Welch La Lucia Ridge Office Estate
Partner La Lucia, 4051
National Executive: GG Gelink Chief Executive AE Swiegers Chief Operating
Officer GM Pinnock Audit DL Kennedy Tax, Legal and Risk Advisory L
Geeringh Consulting L Bam Corporate Finance
CR Beukman Finance TJ Brown Clients & Markets NT Mtoba Chairman of the
Board CR Qually Deputy Chairman of the Board
A full list of partners and directors is available on request
Date: 28/05/2010 07:06:03 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
