Hippo Valley Annual Report 2014 - Final Printers' Draft PDF

59
Sugar cane irrigation
CONTENTS
Pages
NOTICE TO SHAREHOLDERS
DIRECTORATE, MANAGEMENT AND ADMINISTRATION
GROUP FINANCIAL SUMMARY
CHAIRMANS STATEMENT AND CHIEF EXECUTIVES REVIEW
5-6
CORPORATE GOVERNANCE 7 - 8
DIRECTORS REPORT 9 - 10
STATISTICAL SUMMARY
11
REPORT OF THE INDEPENDENT AUDITORS
12
GROUP STATEMENT OF FINANCIAL POSITION
13
GROUP STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
14
GROUP STATEMENT OF CHANGES IN EQUITY
15
GROUP STATEMENT OF CASH FLOWS
16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
17 - 26
NOTES TO THE GROUP FINANCIAL STATEMENTS
27 - 54
COMPANY STATEMENT OF FINANCIAL POSITION
55
COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
56
DEFINITION OF TERMS
57
ANALYSIS OF SHAREHOLDERS
58
NOTICE TO SHAREHOLDERS
Notice is hereby given that the fifty-eighth Annual General Meeting of members of Hippo Valley Estates Limited will be held at Meikles
Hotel, Harare, Zimbabwe, at 12 noon on 22 September 2014 to conduct the following business:
1.
To receive and consider the financial statements of the Group and Company for the year ended 31 March 2014;
2.
To fix the remuneration of the Auditors for the past audit and to re-appoint Deloitte & Touche as Auditors for the ensuing year;
3.

To elect Directors in place of Messrs L R Bruce, J E Chibwe, and S G Nhari who retire by rotation in terms of article 100 of
the Articles of Association, and who, being eligible, offer themselves for re-election. Motions for re-election will be moved
individually; and
4.
To consider and, if deemed fit, to pass, with or without modification, the following resolution:
Ordinary Resolution
Resolution as an ordinary resolution that the proposed fees, set out below, payable to Non-executive Directors for their services as
Directors on the Board and Board Committees for the period 1 April 2014 to 31 March 2015 be and are hereby approved.
Hippo Valley Estates Limited Board:

Chairman
Non-Executive Director
Audit and Compliance Committee:
Chairman
Non-Executive Director
Existing
quarterly fee
US$
Proposed
quarterly fee
1 April 2014 to
31 Mar 2015*
US$
5 906
2 953
6 113
3 056
2 953
1 476
3 056
1 528
*60% paid as a Fixed/Retainer Fee and 40% as an Attendance Fee per meeting.
A member entitled to attend, speak and vote at the meeting may appoint any other person or persons (none of whom need to be a
shareholder), as a proxy or proxies to attend, speak and vote at the Annual General Meeting in such shareholders stead. A proxy form
is enclosed for use by shareholders which should be lodged, duly completed, at the registered office of the Company not less than 48
hours before the start of the Annual General Meeting.
By order of the Board
B Shava
Company Secretary
20 August 2014
DIRECTORATE, MANAGEMENT AND ADMINISTRATION
Directorate

M H Munro**
Non-executive Chairman
S D Mtsambiwa
Chief Executive Officer
L R Bruce*
Independent Non-executive Director
F A D Musikavanhu
Agricultural Director
S G Nhari
Non-executive Director
J E Chibwe
Finance Director
N Kudenga*
J P Maposa
S L Slabbert*
P H Staude
B G Dunlop***
Non-executive Chairman
Board
attendance
(4 Meetings)
3
3
4
4
4
4
3
3
4
3
1
Audit Committee
attendance
(4 Meetings)
3
3
4
-
* Member of the Audit Committee

** Appointed 1 September 2013
*** Retired 31 August 2013
Management and Administration
Senior Management
Transfer Secretaries
Mill Manager
C A S Kubara
First Transfer Secretaries (Private) Limited
Human Resources Manager
K Gwamura
1 Armagh Road
Senior Medical Officer
T A Mukwewa (Dr)
Eastlea
Finance Operations Manager and
Harare
Company Secretary
B Shava

Independent Auditors

Deloitte & Touche

Cnr Josiah Tongogara St

& 9th Avenue

Bulawayo

Main Bankers

Standard Chartered Bank Zimbabwe Limited

Barclays Bank Zimbabwe Limited
African Banking Corporation of Zimbabwe

Limited (BancABC)

CBZ Bank Limited

Central Africa Building Society (CABS)

Stanbic Bank

Legal Practitioners

Scanlen and Holderness

CABS Centre

74 Jason Moyo Avenue
Harare

Estate and Registered Office

Hippo Valley Estates

P O Box 1

Chiredzi

Telephone : +263 31 5151/6

E-mail : companysecretary@hippo.co.zw
Fax : +263 31 3154
GROUP FINANCIAL SUMMARY
Revenue
Operating profit
Profit before tax
Profit for the year
Cash generated from operations
Net cash inflow from operating activities
Capital expenditure
Earnings per share (US cents)
Net asset value
Net asset value per share (US cents)
Market capitalisation
Price per share at year end (US cents)
Year ended
31.03.14
US$000
Year ended
31.03.13
US$000
Restated
136 125
19 113
11 926
9 015
29 142
12 981
8 099
4.67
285 310
148
135 114
70
174 239
23 288
17 724
13 586
31 928
11 648
17 585
7.04
275 198
143
212 323
110
CHAIRMANS STATEMENT AND CHIEF EXECUTIVES REVIEW

HIGHLIGHTS

Sugar production of 239 338 tons (2013: 228 083 tons) +5%
Revenue of $136,1 million (2013: $174,2 million) - 22%
Cash generated from operations of $29,1 million (2013: $31,9 million) -9%
Operating profit of $19,1 million (2013:$23,3 million) -18%
Profit for the year of $9,0 million (2013:$13,6 million) -34%
INTRODUCTION
Production increased marginally during the period under review
despite both the Company and private growers significantly
curtailing their plough out and replanting programmes due to a
shortage of irrigation water during the season. The results for the
year were negatively impacted upon by substantially increased
imports in the market and the resultant additional exports at
lower prices. These severe market dynamics impacting revenue
and cane valuations were partially off-set by substantial cost
reductions and volume growth.
of private farmer cane land were replanted against a target of

3 990 hectares for the season. This resulted in a cumulative
total of 11 160 hectares being replanted to date, equivalent
to 70% of the total area farmed by private growers since
commencement of the Sustainable Rural Communities
(SusCo) project launched in 2010/11. The total value of
private farmer cane deliveries to the industry mills amounted
to $58 million in 2013/14. At the end of the 2013/14 season,
there were some 813 active indigenous private farmers,
farming some 14 000 hectares and employing more than 6 700
workers. Current initiatives will increase the number of private
farmers to some 1 022 supplying more than 1 800 000 tons of
cane at yields in excess of 100 tons per hectare from 18 880
farmed hectares.
The slight increase in production was achieved in a macroeconomic environment characterised by liquidity challenges,
which persisted during the period under review, registering a
significant decline in consumer spending, a corresponding
slowdown in economic activity and deflationary pressures.
Following the recent good rains received countrywide, all

the storage dams supplying the industry received significant
inflows, resulting in most of the dams spilling by 31 March
2014. As a result of this significantly improved water
situation, the previously scaled down replanting programmes
have resumed as the industry seeks to accelerate recovery to
installed production capacity.
OPERATING REVIEW
Sugar production increased by 5% to 239 338 tons (2013:
228 083 tons). A total of 1 874 524 tons of cane were
crushed during the season (2013: 1 906 156 tons) of
which 1 082 205 tons was Company cane, at an average yield of
98,4 tons cane per hectare, compared to 1 100 787 tons milled
in the previous year, at an average yield of 92,7 tons cane per
hectare. Out of a total of 12 019 hectares under cane, 11 001
hectares (including 8 hectares for seed cane) were harvested
during the season under review, leaving a balance of 1 018
hectares as carry over to be harvested in the 2014/15 season.
The 2013/14 milling season commenced on 16 April and

closed on 17 December 2013. Overall milling recovery was
87,11%, up from 84,75% achieved in the previous season.
The marked improvement in mill performance was a direct
result of the extensive mill refurbishment programmes carried
out in the past four years. The mill registered improvements
in all factory efficiency parameters, namely Boiling House
Recovery, Extraction and Undetermined Losses resulting in a
cane-to-sugar ratio of 7,82 : 1 for the season compared to
8,36 : 1 achieved in the previous year.
The private farmers in the Hippo Valley Mill Group delivered

441 437 tons of cane during the season (2012/ 13: 347 618
tons), representing a 27% increase, whilst the Mkwasine private
farmers delivered 216 495 tons (2012/13: 182 082 tons),
representing a 19% increase. Cane deliveries from Green Fuel
in Chisumbanje amounted to 134 386 tons during the season
compared to 275 669 tons delivered in the previous year.
MARKETING
The Industry revenues were negatively impacted upon by
increased imports at substantially discounted prices into the
local market, as well as from significantly lower sugar prices
realised on exports into the European Union. The industrys
domestic market sales for the year amounted to 148 000
tons compared to 258 000 tons achieved in the previous
marketing season, a decrease of 43%. A combination of
declining consumer disposable income and the influx of
cheap imported sugar militated against the industrys efforts
to maximise sales volumes in the domestic market. Local
market dynamics have since shifted favourably following
government interventions to protect the industry against
unfair competition from cheap imports. A total of 279 000
tons of raw sugar were exported to the European Union which
was an increase of 38% (2012/13 : 202 000 tons).
Private farmers cane deliveries to the industry mills totalled

1 017 163 tons in 2013/14 compared to 852 979 tons
delivered in 2012/13, an increase of 19%. The increase in
deliveries was achieved largely on account of an increase in
the area harvested from 11 260 hectares in prior season to
13 797 hectares in the current season. The 23% increase in
harvested hectares under cane compensated for the 3% drop
in cane yields from 75.7 tons/ha in 2012/13 to of 73,7 tons
/ha achieved in the current season. The drop in yields was
largely attributed to the reduced availability of irrigation water
as a consequence of the poor rainfall season experienced.
Due to the shortage of irrigation water, only 1 011 hectares
CHAIRMANS STATEMENT AND CHIEF EXECUTIVES REVIEW (continued)

SAFETY AND SUSTAINABILITY
A total of 6 Lost Time Injuries were recorded during the
year compared to 3 in 2012/13, resulting in a Lost Time
Injury Frequency Rate of 0,06 compared to 0,03 achieved in
2012/13. Improved and sustainable safety measures have
been developed and implemented to reverse this negative
trend. Safety and Sustainability programmes remain a key area
of focus for the Company.
As a consequence of the decrease in profit after tax, earnings

per share dropped to 4,7 US cents from 7,0 US cents achieved
in the prior year.
OUTLOOK
The recent good rains which saw almost all the dams supplying
the industry attaining the 100% full capacity level have revived the
industrys expectations of restoring sugar production to installed
milling capacity of around 640 000 tons per annum by 2017/18.
The replanting programme has since resumed and is now back on
track and is gaining momentum with sugar production expected to
progressively increase over the next four years. The industry remains
focused on achieving its goal of attaining installed production
capacity by the 2017/18 season.
INDUSTRIAL RELATIONS AND SOCIO-ECONOMIC DEVELOPMENT

A stable industrial relations climate prevailed in the industry
throughout the year. Despite the harsh economic environment,
the Company continues to develop and implement mutually
beneficial and collaborative initiatives with Government
and local communities to improve the quality of life of its
employees and the surrounding communities at large. As part
of the companys ongoing community empowerment drive
under its Socio Economic Development programme, a total
of $1,5 million (2012/ 13: $1,5 million) was spent in various
community related initiatives.
In light of the positive outturn of the 2013/14 rainfall season, the

industry will receive a full water allocation during the 2014/15
season and consequently will apply full irrigation duty to the
entire crop. The imminent completion of the Tokwe Mukorsi Dam,
besides augmenting the current water sources, will present new
development opportunities for expansion.
FINANCIAL RESULTS
Revenue for the year under review amounted to $136,1 million
(2013: $174,2 million), a decrease of 22% as a result of significantly
reduced local market sales (mainly due to a substantial increase of
imports into the local market) and the resultant additional lower
priced exports. Cane valuations were impacted by lower prices
and the effect of curtailed root replanting as a consequence of the
water dynamics during the year.
The recently instituted measures to protect the local market

against unfair competition from cheap world market imports are
expected to yield positive results in the short term resulting in early
restoration of lost market share.
The sustainable cost reductions achieved in the past year provide
a solid platform from which the ongoing cost reduction initiatives
will further accelerate the companys competitiveness into the
future. This, coupled with further growth in volumes and better
yields, will impact positively on the unit cost of sugar production.
Operating profit and net profit for the year amounted to $19,1
million and $9,0 million (2013: $23,3 million and $13,6
million), respectively. The decline in profitability is a result
of margin squeeze in both the domestic and export markets
caused by the low prices achieved during the 2013/14
marketing season.
DIVIDENDS
In light of the on-going recapitalisation of the business, the
Directors have decided not to declare a dividend for the year
ended 31 March 2014.
Significant success has been achieved in the drive to reduce

sugar production costs. Substantial cost reductions amounting
to $26,2 million were realised during the past season.
APPRECIATION
The Board pays tribute to the Groups management and employees
for their effort and commitment during a very challenging year.
Cash generated from operations totalled $29,1 million

for the year under review (2013: $31,9 million). Working
capital increased by $10,5 million (2013: $12,2 million) as
a consequence of an increase in sugar stocks resulting from
the low sugar sales volumes in the local market.
M H Munro
Chairman
The Companys net debt at the end of March 2014 was $31,5
million compared to $37,9 million at 31 March 2013. A total
of $8,4 million was incurred in finance costs commensurate
with the levels of borrowings during the 12 months under
review, compared to a total of $6,8 million incurred in the year
S D Mtsambiwa
27 May 2014
CORPORATE GOVERNANCE
Directors responsibilities in relation to financial statements
In terms of the Companies Act (Chapter 24:03), the Directors are
responsible for ensuring that the Group keeps adequate accounting
records and prepares financial statements that fairly present the
financial position, results of operations and cash flows of the
Group and that these are in accordance with International Financial
Reporting Standards (IFRS). In preparing the accompanying financial
statements, the Directors have complied with all the requirements of
IFRS, the Companies Act (Chapter 24:03) and the relevant statutory
instruments SI33/99 and SI62/96. The financial statements are
the responsibility of the Directors and it is the responsibility of the
Independent Auditors to express an opinion on them based on their
audit.
accordingly, remunerated on terms commensurate with market

rates that recognise their responsibilities to shareholders for the
performance of the Group. These rates are reviewed annually
utilising independent consultants.
Audit Committee
The Audit Committee comprises Non-executive Directors,
including its Chairman. It is responsible for monitoring the
adequacy of the Groups internal controls and reporting, including
reviewing the audit plans of the Internal and External Auditors,
ascertaining the extent to which the scope of the audits can be
relied upon to detect weaknesses in internal controls, and ensuring
that interim and year end financial reporting meet acceptable
accounting standards. The Internal Audit function has been
outsourced.
In preparing the financial statements, the Group has used appropriate

accounting policies consistently supported by reasonable and
prudent judgements and estimates, and has complied with all
applicable accounting standards. The Directors are of the opinion
that the financial statements fairly present the financial position and
the financial performance of the Group as at 31 March 2014.
In addition to the executives and managers responsible for

finance, the Internal and External Audit partners attend meetings
of the Audit Committee. The Committee meets at least three times
a year. The Internal and External Audit partners have unrestricted
access to the Chairman of the Committee.
The Board is committed to providing timeous, relevant and

meaningful reporting to all stakeholders. The reporting is provided in
a format most relevant to the respective stakeholders and the nature
of the information being reported.
To enable the Directors to meet their responsibilities, management

sets standards and implements systems of internal control aimed
at reducing the risk of error or loss in a cost-effective manner. On
behalf of the Board, the Groups Internal Auditors independently
appraise the Groups internal control systems and report their
findings to the Audit Committee. The Audit Committee accounts
to and makes recommendations to the Board for its activities and
responsibilities.
Board of Directors
The Group has a unitary Board that comprises Executive and Nonexecutive Directors. All the Directors bring to the Board a wide range
of expertise as well as significant professional and commercial
experience and in the case of Non-executive Directors, independent
perspectives and judgement.
Employment policy
The Group is committed to creating a workplace in which
individuals of ability and application can develop rewarding
careers at all levels, regardless of their background, race or gender.
The Board meets under the chairmanship of a Non-executive

Director, on a quarterly basis, to consider the results for the period,
issues of strategic direction on policy, major acquisitions and
disposals, approval of major capital expenditure and other matters
having a material effect on the Group. A complete listing of matters
reserved for decision by the Board has been agreed and is reviewed
on a regular basis.
The Groups employment policy emphasises opportunity for all

and seeks to identify, develop and reward each employee who
demonstrates the qualities of individual initiative, enterprise,
hardwork and loyalty in their job and is embraced by participative
programmes designed to achieve appropriate communication and
sharing of information between employer and employee.
All Directors with the exception of the Chief Executive Officer are
subject to retirement by rotation and re-election by shareholders
at least once every three years in accordance with the Companys
Articles of Association. Appointment of new Directors is approved by
the Board as a whole. All Directors have access to the advice and
services of the Company Secretary.
These policies include appropriate training, recruitment targets

and development programmes.
Safety and sustainable development
The Group strives to create wealth and to contribute to sustainable
development by operating its business with due regard to
economic, social, cultural and environmental issues. Safety and
health issues are of special concern. The Group is providing antiretroviral therapy to employees living with HIV/AIDS.
Remuneration policy
The Board has not established a Remuneration Committee. However,
the Boards policy on remuneration is outlined below.
In terms of its remuneration policy, the Group seeks to provide
rewards and incentives for the remuneration of Directors performing
executive duties and senior executives and employees that reflect
performance aligned to the objectives of the Group.
The Group is committed to addressing and impacting, in a

systematic, comprehensive and professional manner, on
environmental risks through developing effective management
systems and employing the critical principles of forward planning,
efficiency and wise resource utilisation.
The Directors are appointed to the Board to bring appropriate

management, direction, skills and experience to the Group. They are,
CORPORATE GOVERNANCE
Code of corporate practices and conduct
The Group is committed to promoting the highest standards of
ethical behaviour amongst all its employees. All employees are
required to maintain the highest ethical standards in ensuring
that the Groups business practices are conducted in a manner
which, in all reasonable circumstances, is above reproach.
Furthermore, all employees are required to sign the Groups Code
of Ethics and are aware of the Fraud Hotline system subscribed
to by the Group.
for internal control, a strong emphasis has been placed on

identifying and appropriately managing key risks that threaten
the achievement of Group objectives. Although this system is
considered robust, it can only provide reasonable, but not
absolute assurance that the Groups business objectives will be
achieved within the risk tolerance levels defined by the Board.
An internal control system to manage significant risks has been
established by the Board. This system, which is designed
to manage rather than eliminate risk, includes risk management
policies and operating guidelines on the identification,
evaluation, management, monitoring and reporting of significant
risks. The Board reviews all significant Group risks on a quarterly
basis, including an assessment of the likelihood and impact of
risks materialising, as well as risk mitigation initiatives and their
effectiveness. The Board makes an annual overview of the
effectiveness of risk management.
In line with the Zimbabwe Stock Exchange Listing Requirements,

the Group operates a closed period prior to the publication of
year end financial results during which period Directors, officers
and employees of the Group may not deal in the shares of the
Company. Where appropriate, this is also extended to include
other sensitive periods.
Risk management and internal control
Effective management of risk is key to the Groups success. As
the Board and management accept that they are responsible
DIRECTORS REPORT
The Directors have pleasure in submitting their report and the financial statements of the Group for the year ended 31 March 2014. The
Groups Independent Auditors, Deloitte & Touche, have audited the financial statements and their report appears on page 12.
Share capital and reserves
During the year there was no change in the authorised and issued share capital of the Company. At 31 March 2014 the number of
authorised shares amounted to 200 million ordinary shares of which 193 020 564 were in issue. During the year, nil (2013: nil) share
options granted under the employee share option scheme were exercised and nil (2013: 115 500) share options lapsed. There are nil
(2013:nil) share options outstanding as at 31 March 2014.
The movement in the non-distributable reserve of the Group is as follows:

31.03.14

US$000

Balance at the beginning of the year
Exchange loss on translation of equity in
foreign associated company net of tax
Actuarial gain on post retirement provision
Balance at the end of the year
31.03.13
US$000
Restated
128 246
128 299
(156)
123
128 213
(363)
310
128 246
Property, plant and equipment

Capital expenditure amounted to US$8 099 338 (2013: US$17 584 985) made up as follows:
(See note 3.1 and 3.2 for details of shareholding in Mkwasine Estates (Mkwasine) and Zimbabwe Sugar Sales (Private) Limited (ZSS),
respectively).

Land and permanent improvements
Housing and buildings
Irrigation, dams and equipment
Sugar factory buildings and plant
Agricultural, haulage and motor
vehicles and implements
Other buildings, plant and equipment
Furniture, fittings and IT equipment
Capital work in progress

Hippo Valley
US$000
2013/2014
ZSS
Mkwasine
US$000
US$000
Total
US$000
743
66
391
1 885
-
-
-
-
-
-
-
-
743
66
391
1 885
1 489
473
253
2 799
8 099
-
-
-
-
-
-
-
-
-
-
1 489
473
253
2 799
8 099
DIRECTORS REPORT (continued)

Group profit and loss account for the year ended 31 March 2014

Year

ended

31.03.14

US$000

Year
ended
31.03.13
US$000
Restated
Profit before tax

Income tax expense
11 926
(2 911)
17 724
(4 138)
Profit for the year

Retained earnings brought forward
9 015
67 213
13 586
53 627
Retained earnings carried forward
76 228
67 213
Dividend
In order to restore the Groups operational capacity to optimal levels, the Directors have decided not to declare a dividend for the year
Directorate
In terms of the Articles of Association, Messrs L R Bruce, J E Chibwe and S G Nhari retire by rotation. The retiring Directors, being eligible,
offer themselves for re-election.
Directors fees
At the Annual General Meeting held on 16 September 2013, the members approved the payment of Directors fees for the year ended 31
March 2014 amounting to US$11 812 per non-executive director.
Independent Auditors
The Independent Auditors, Messrs Deloitte & Touche, have notified their willingness to continue in office and a resolution for the purpose
of fixing their remuneration for the past audit and re-appointing them auditors until the conclusion of the next Annual General Meeting will
be submitted to members at the forthcoming Annual General Meeting.
Approval of financial statements
The Group financial statements for the year ended 31 March 2014 set out on pages 13 to 54, were approved by the Board of Directors on
27 May 2014 and signed on its behalf by Messrs M H Munro and S D Mtsambiwa.
Directors note on going concern
The Directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. For this
reason, they have adopted the going-concern basis in preparing the financial statements. (Refer also to note 27).
By order of the Board,
B Shava
Company Secretary
Chiredzi
27 May 2014
10
STATISTICAL SUMMARY
The following statistical summary reflects the Groups performance during the season in comparison with the figures for
the previous season:
2013/14

2012/13
Restated
Total sugar production for the season (tons)

Molasses production (tons)
Average pol - all sugars
239 338
67 782
99.34
228 083
70 518
99.33
Sugar cane
Area planted at year end (hectares)
Hippo Valley Estates Limited
Farmers
12 083
9 020
12 019
8 680
21 103
20 699
Area cut for milling during the year (hectares)

Farmers
10 993
8 458
11 880
6 847
19 451
18 727
Sugar cane harvested for milling (tons)

Farmers
Green Fuel
1 082 205
657 933
134 386
1 100 787
529 700
275 669
Total cane milled at Hippo Valley Estates Limited
1 874 524
1 906 156
98.4
92.7
16/04/13
17/12/13
245
410.56
97.15
89.67
87.11
24/04/12
12/12/12
232
410.74
96.69
87.65
84.75
Yield per hectare of Hippo Valley Estates Limited cane milled (tons)
Mill performance
Season started
Season completed
Number of crushing days
Throughput - tons cane per hour
Extraction (%)
Boiling house recovery (%)
Overall recovery (%)
11
REPORT OF THE INDEPENDENT AUDITORS
PO Box 125
Bulawayo
Zimbabwe
Deloitte & Touche

Chartered Accountants
Deloitte House
Cnr Josiah Tongogara St
& 9th Avenue
Bulawayo
Tel: +263 (0)9 882084-8
Fax: +263 (0)9 79340
www.deloitte.com
TO THE MEMBERS OF HIPPO VALLEY ESTATES LIMITED

Report on the financial statements
We have audited the accompanying financial statements of Hippo Valley Estates Limited (the Group) as set out on pages 13 to 54,
which comprise the consolidated statement of financial position at 31 March 2014, the consolidated statement of profit or loss and other
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then
ended and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes.
Directors responsibility for the financial statements
The Directors are responsible for the preparation and fair presentation of these financial statements in accordance with International
Financial Reporting Standards (IFRS) and in the manner required by the Companies Act (Chapter 24.03) and the relevant statutory
instruments (SI33/99 and SI62/96). This responsibility includes: designing, implementing and maintaining internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting
and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditors responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with
International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors judgement, including the assessment of the risk of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys
preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion the financial statements present fairly, in all material respects, the consolidated financial position of Hippo Valley Estates
Limited as at 31 March 2014 and its consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with International Financial Reporting Standards.
Report on other legal and regulatory requirements
In our opinion, the consolidated financial statements have, in all material respects, been properly prepared in compliance with the
Companies Act (Chapter 24:03) and the relevant statutory instruments (SI33/99 and SI62/96).
Emphasis of matter
Without qualifying our opinion, we draw attention to note 27, which relates to the impact of the land acquisition on the Group.
DELOITTE & TOUCHE

Bulawayo, Zimbabwe
27 May 2014
12
GROUP STATEMENT OF FINANCIAL POSITION

As at 31 March 2014

31.03.14

US$000

Notes
ASSETS
Non-current assets
234 010
31.03.13
US$000
Restated

Biological assets
Investments in associate companies
243 519
4
5
6
198 753
31 830
3 427
202 428
37 917
3 174
Current assets
147 223
119 786
Biological assets
5
Inventories - stores
- sugar and by-products
Accounts receivable - trade
7
- other
7
Deferred plant maintenance costs
8
Current tax asset
Cash and cash equivalents
49 958
15 167
17 867
13 272
9 250
7 204
-
34 505
47 793
18 989
6 164
6 535
18 346
10 935
359
10 665
Total assets
381 233
363 305
EQUITY AND LIABILITIES

Capital and reserves
219 883
210 901
Issued capital
9
Non-distributable reserve
9.3
Retained earnings
15 442
128 213
76 228
15 442
128 246
67 213
Non-current liabilities
71 410
75 424
Deferred tax liabilites

Provisions
10
12.1
65 427
5 983
64 297
11 127
Current liabilities
89 940
76 980
Trade and other payables

11
Provisions
12.2
Short-term borrowings
13
Current tax liability
18 933
4 516
65 995
496
23 418
5 009
48 553
-
Total equity and liabilities
381 233
363 305
Company results have not been shown here and in the notes to the financial statements for reasons explained in note 29.
M H Munro
Chairman
S D Mtsambiwa
B Shava
Company Secretary
27 May 2014
13
GROUP STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 March 2014

Year

ended

31.03.14

US$000

Year
ended
31.03.13
US$000
Restated
Notes
Turnover
Revenue
Fair value (loss)/gain on biological assets
5
136 125
(3 922)
174 239
3 729
132 203
177 968
Operating profit
Net finance charges
14
15
19 113
(8 410)
23 288
(6 794)
10 703
16 494
1 223
1 230
Profit before tax

Income tax expense
16
11 926
(2 911)
17 724
(4 138)
Profit for the year
9 015
13 586
Other comprehensive income, net of tax

(33)
(53)

Share of associated companies profit
Items that may be reclassified subsequently to profit or loss

- Exchange loss on translation of equity in foreign
associated company
(156)
(363)
Items that will not be reclassified subsequently to profit or loss

- Actuarial gains on post retirement provision
123
310
Total comprehensive income for the year
8 982
13 533
4.67
7.04
Earnings per share (cents)
17
14
GROUP STATEMENT OF CHANGES IN EQUITY

Non
Share distributable

capital
reserve

US$000
US$000
Retained
earnings
US$000
Total
US$000
Balance at 31 March 2012 (as previously reported)

Change in accounting policy
15 442
-
128 299
-
53 386
241
197 127
241
Balance at 31 March 2012 (restated)
15 442
128 299
53 627
197 368
(53)
13 586
13 533
-
-
(363)
310
13 646
(60)
13 283
250

15 442
-
128 246
(33)
67 213
9 015
210 901
8 982
Balance at 31 March 2014
15 442
128 213
76 228
219 883
Restated total comprehensive (loss)/income

for the year
Total comprehensive income for the year (as
previously reported)
Change in accounting policy (note 2.1)
15
GROUP STATEMENT OF CASH FLOWS


Year

ended

31.03.14

US$000

Notes
Cash flows from operating activities
Year
ended
31.03.13
US$000
Restated

19.1
Changes in working capital
19.2
Decrease/(increase) in deferred plant maintenance costs
29 142
(10 500)
3 731
31 928
(12 186)
(1 300)
Net cash generated from operations

Net finance charges
Tax paid
22 373
(8 410)
(982)
18 442
(6 794)
-
12 981
11 648
Cash flows from investing activities

Replacement of property, plant and equipment

Proceeds on disposal of property, plant and equipment
19.3

Dividends received
(8 099)
689
828
(17 585)
861
Net cash outflow from investing activities
(6 582)
(16 724)
Cash flows from financing activities

Increase in borrowings

Repayment of borrowings
27 956
(10 515)
22 113
(16 691)
Net cash inflow from financing activities
17 441
5 422
Movement in cash and cash equivalents

Net cash and cash equivalents at beginning of year


Net cash outflow from investing activities

Net cash inflow from financing activities
10 665
12 981
(6 582)
17 441
10 319
11 648
(16 724)
5 422
Cash and cash equivalents at end of year
34 505
10 665
Comprising of:
34 505
10 665
Cash at bank
Cash on hand
34 489
16
10 646
19
16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Statement of compliance and basis of preparation
The annual financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS), and
the International Financial Reporting Interpretations Committee
(IFRIC), interpretations. The financial statements are based on
statutory records that are maintained under the historical cost
convention. Historical cost is generally based on the fair value of
the consideration given in exchange for goods and services at the
date of the transaction.
are sufficient to give it the practical ability to direct the relevant activitites
of the investee unilaterally. The Company considers all relevant facts
and circumstances in assessing whether or not the Companys voting
rights in an investee are sufficient to give it power, including:
the size of the Companys holding of voting rights relative to
the size and dispersion of holdings of the other vote holders;
potential voting rights held by the Company, other vote
holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstances that indicate that the
Company has, or does not have, the current ability to direct the
relevant activities at the time that the decisions need to be made,
including voting patterns at previous shareholders meetings.
Fair value is the price that would be received to sell an asset or paid
to transfer a liablility in an orderly transaction between market
participants at the measurement date, regardless of whether that
price is directly observable or estimated using another valuation
technique. In estimating the fair value of an asset or a liability,
the Group takes into account the characteristics of the asset or
liability if market participants would take those characteristics into
account when pricing the asset or liability at the measurement
date. Fair value for measurement and/or disclosure purposes in
these consolidated financial statements is determined on such
a basis, except for share-based payment transactions that are
within the scope of IFRS 2, leasing transactions that are within the
scope of IAS 17, and measurements that have some similarities to
fair value but are not fair value, such as net realisable value in IAS
2 or value in use in IAS 36.
Consolidation of a subsidiary begins when the Company obtains

control over the subsidiary and ceases when the Company loses
control of the subsidiary. Specifically, income and expenses of a
subsidiary acquired or disposed during the year are included in the
consolidated statement of profit or loss and other comprehensive
income from the date the Company gains control until the date
when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive
income are attributed to the owners of the Company and to the
non-controlling interests even if this results in the non-controlling
interests having a deficit balance.
In addition, for financial reporting purposes, fair value

measurements are categorised into Level 1, 2 or 3 based on the
degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value
measurement in its entirety, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets

for identical assets or liabilities that the entity can access at

the measurement date;
Level 2 inputs are inputs, other than quoted prices included

within Level 1, that are observable for the asset or liability,

either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
When necessary, adjustments are made to the financial statements

of subsidiaries to bring their accounting policies into line with the
Groups accounting policies.
All intra-group assets and liabilities, equity, income, expenses and
cash flows relating to transactions between members of the Group
are eliminated in full on consolidation.
2.1 Changes in Groups ownership interests in existing subsidiaries
Changes in the Groups ownership interests in subsidiaries that do not
result in the Group losing control over the subsidiaries are accounted
for as equity transactions. The carrying amounts of the Groups
interests and the non-controlling interests are adjusted to reflect the
changes in their relative interests in the subsidiaries. Any difference
between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received is
recognised directly in equity and attributed to owners of the Company.
The annual financial statements have been prepared in United

States Dollars (US$), the Groups functional currency.
The principal accounting policies are set out below.
2. Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities (including structured
entities) controlled by the Company and its subsidiaries. Control
is achieved when the Company:
has power over the investee;
is exposed, or has rights, to variable returns from its involvement

with the investee;
has the ability to use its power to affect its returns.
When the Group loses control of a subsidiary, a gain or loss is

recognised in profit or loss and is calculated as the difference
between (i) the aggregate of the fair value of the consideration
received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill), and
liabilities of the subsidiary and any non-controlling interests.
When assets of the subsidiary are carried at revalued amounts or fair
values and the related cumulative gain or loss has been recognised
in other comprehensive income and accumulated in equity, the
amounts previously recognised in other comprehensive income
and accumulated in equity are accounted for as if the Group had
directly disposed of the relevant assets (i.e. reclassified to profit or
loss or transferred directly to retained earnings as specified by
applicable IFRSs).
The Company reassesses whether or not it controls an investee if

facts and circumstances indicate that there are changes to one or
more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of
an investee, it has power over the investee when the voting rights
17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.1 Changes in Groups ownership interests in existing
subsidiaries (continued)
The fair value of any investment retained in the former subsidiary
at the date when control is lost is regarded as the fair value on
initial recognition for subsequent accounting under IAS 39
Financial Instruments: Recognition and Measurement or, when
applicable, the cost on initial recognition of an investment in an
associate or a joint venture.
When the consideration transferred by the Group in a business

combination includes assets or liabilities resulting from
a contingent consideration arrangement, the contingent
consideration is measured at its acquisition-date fair value and
included as part of the consideration transferred in a business
combination. Changes in the fair value of the contingent
consideration that qualify as measurement period adjustments
are adjusted retrospectively, with corresponding adjustments
against goodwill. Measurement period adjustments are
adjustments that arise from additional information obtained
during the measurement period (which cannot exceed one
year from the acquisition date) about facts and circumstances
that existed at the acquisition date.
3. Business combinations
Acquisitions of businesses are accounted for using the
acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as
the sum of the acquisition-date fair values of the assets
transferred by the Group, liabilities incurred by the Group to
the former owners of the acquiree and the equity interests
issued by the Group in exchange for control of the acquiree.
Acquisition-related costs are generally recognised in profit or
loss as incurred.
The subsequent accounting for changes in the fair value of the

contingent consideration that do not qualify as measurement
period adjustments depends on how the contingent
consideration is classified. Contingent consideration that is
classified as equity is not remeasured at subsequent reporting
dates and its subsequent settlement is accounted for within
equity. Contingent consideration that is classified as an asset
or a liability is remeasured at subsequent reporting dates
in accordance with IAS 39, or IAS 37 Provisions, Contingent
Liabilities and Contingent Assets, as appropriate, with the
corresponding gain or loss being recognised in profit or loss.
At the acquisition date, the identifiable assets acquired and the

liabilities assumed are recognised at their fair value, except that:
deferred tax assets or liabilities, and assets or liabilities

related to employee benefit arrangements are recognised

and measured in accordance with IAS 12 Income Taxes and

IAS 19 Employee Benefits, respectively;
liabilities or equity instruments related to share-based

payment arrangements of the acquiree or share-based

payment arrangements of the Group entered into to replace

share-based payment arrangements of the acquiree are

measured in accordance with IFRS 2 Share-based Payment

at the acquisition date (see note 16); and
assets (or disposal groups) that are classified as held for sale

in accordance with IFRS 5 Non-current Assets Held for Sale and

Discontinued Operations are measured in accordance with

that Standard.
When a business combination is achieved in stages, the

Groups previously held equity interest in the acquiree is
remeasured to fair value at the acquisition date (i.e. the date
when the Group obtains control) and the resulting gain or loss,
if any, is recognised in profit or loss. Amounts arising from
interests in the acquiree prior to the acquisition date that have
previously been recognised in other comprehensive income are
reclassified to profit or loss where such treatment would be
appropriate if that interest were disposed of.
Goodwill is measured as the excess of the sum of the

consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirers
previously held equity interest in the acquiree (if any) over the
net of the acquisition-date amounts of the identifiable assets
acquired and the liabilities assumed. If, after reassessment, the
net of the acquisition-date amounts of the identifiable assets
acquired and liabilities assumed exceeds the sum of the
consideration transferred, the amount of any non-controlling
interests in the acquiree and the fair value of the acquirers
previously held interest in the acquiree (if any), the excess is
recognised immediately in profit or loss as a bargain purchase gain.
If the initial accounting for a business combination is

incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts
for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement
period (see above), or additional assets or liabilities are
recognised, to reflect new information obtained about facts and
circumstances that existed at the acquisition date that, if known,
would have affected the amounts recognised at that date.
3.1 Goodwill
Goodwill arising on an acquisition of a business is carried at
cost as established at the date of acquisition of the business
less accumulated impairment losses, if any.
Non-controlling interests that are present ownership interests

and entitle their holders to a proportionate share of the
entitys net assets in the event of liquidation may be initially
measured either at fair value or at the non-controlling interests
proportionate share of the recognised amounts of the acquirees
identifiable net assets. The choice of measurement basis is
made on a transaction-by-transaction basis. Other types of
non-controlling interests are measured at fair value or, when
applicable, on the basis specified in another IFRS.
For the purposes of impairment testing, goodwill is allocated

to each of the Groups cash-generating units (or groups of
cash-generating units) that is expected to benefit from the
synergies of the combination. A cash-generating unit to
which goodwill has been allocated is tested for impairment
annually, or more frequently when there is indication that the
unit may be impaired.
18

If the recoverable amount of the cash-generating unit is less
than its carrying amount, the impairment loss is allocated
first to reduce the carrying amount of any goodwill allocated
to the unit and then to the other assets of the unit prorata
based on the carrying amount of each asset in the unit. Any
impairment loss for goodwill is recognised directly in profit or
loss in the consolidated statement of comprehensive income.
An impairment loss recognised for goodwill is not reversed in
subsequent periods.
profit or loss in the period in which the investment is acquired.

The requirements of IAS 39 are applied to determine whether
it is necessary to recognise any impairment loss with
respect to the Groups investment in an associate or a joint
venture. When necessary, the entire carrying amount of the
investment (including goodwill) is tested for impairment in
accordance with IAS 36 Impairment Assets as a single asset
by comparing its recoverable amount (higher of value in use
and fair value less costs to sell) with its carrying amount.
Any impairment loss recognised forms part of the carrying
amount if the investment subsequently increases.
On disposal of the relevant cash-generating unit, the attributable

amount of goodwill is included in the determination of the profit
or loss on disposal.
The Group discontinues the use of the equity method from

the date when the investment ceases to be an associate or
a joint venture, or when the investment is classified as held
for sale. When the Group retains an interest in the former
associate or joint venture and the retained interest is a
financial asset, the Group measures the retained interest at
fair value at that date and the fair value is regarded as its fair
value on initial recognition in accordance with IAS 39. The
difference between the carrying amount of the associate or
joint venture at the date the equity method was discontinued,
and the fair value of any retained interest and any proceeds
from disposing of a part interest in the associate or joint
venture is included in the determination of the gain or loss
on disposal of the associate or joint venture. In addition,
the Group accounts for all amounts previously recognised in
other comprehensive income in relation to that associate or
joint venture on the same basis as would be required if that
associate or joint venture had directly disposed of the related
assets or liabilities. Therefore, if a gain or loss previoulsy
recognised in other comprehensive income by that associate
or joint venture would be reclassified to profit or loss on
the disposal of the related assets or liabilities, the Group
reclassifies the gain or loss from equity to profit or loss (as
a reclassification adjustment) when the equity method is
discontinued.
The Groups policy for goodwill arising on the acquisition of an

associate is described in note 4 below.
4. Investments in associates and joint ventures
An associate is an entity over which the Group has significant
influence. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not
control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that
have joint control of the arrangement have rights to the net
assets of the joint arrangement. Joint control is the contractually
agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities require unanimous
consent of the parties sharing control.
The results and assets and liabilities of joint ventures are
incorporated in these consolidated financial statements using
the equity method of accounting, except when the investment,
or a portion thereof, is classified as held for sale, in which case
it is accounted for in accordance with IFRS 5. Under the equity
method, an investment in an associate or a joint venture is
initially recognised in the consolidated statement of financial
position at cost and adjusted thereafter to recognise the Groups
share of the profit or loss and other comprehensive income
of the associate or joint venture. When the Groups share of
losses of an associate or a joint venture exceeds the Groups net
investment in the associate or joint venture (which includes any
long-term interests that, in substance, form part of the Groups
net investment in the associate or joint venture), the Group
discontinues recognising its share of further losses. Additional
losses are recognised only to the extent that the Group has
incurred legal or constructive obligations or made payments on
behalf of the associate or joint venture.
The Group continues to use the equity method when an

investment in an associate becomes an investment in a
joint venture or an investment in a joint venture becomes an
investment in an associate. There is no remeasurement to fair
value upon such changes in ownership interest.
When the Group reduces its ownership interest in an associate
or a joint venture but the group continues to use the equity
method, the group reclassifies to profit or loss the proportion
of the gain or loss that had previously been recognised in
other comprehensive income relating to that reduction in
ownership interest if that gain or loss would be reclassified to
profit or loss on the disposal of the related assets or liabilities.
An investment in an associate or a joint venture is accounted

for using the equity method from the date on which the investee
becomes an associate or a joint venture. On acquisition of the
investment in associate or a joint venture, any excess of the cost
of the investment over the Groups share of the net fair value of
the identifiable assets and liabilities of the investee is recognised
as goodwill, which is included within the carrying amount of
the investment. Any excess of the Groups share of the net fair
value of the identifiable assets and liabilities over the cost of
investment, after reassessment, is recognised immediately in
When a group entity transacts with an associate or a joint

venture of the Group, profits and losses resulting from the
transactions with the associate or joint venture are recognised
in the Groups consolidated financial statements only to the
extent of interests in the associate or joint venture that are
not related to the Group.
19

5.
Interests in joint operations

A joint operation is a joint arrangement whereby the parties
that have the joint control of the arrangement have rights to
the assets, and obligations for the liabilities, relating to the
arrangement. Joint control is the contractually agreed sharing
of control of an arrangement, which exists only when decisions
about the relevant activities require unanimous consent of the
parties sharing control.
When a group entity undertakes its activities under joint
operations, the Group as a joint operator recognises in relation
to its interest in a joint operation:
its assets, including its share of any assets held jointly.
its liabilities, including its share of any liabilities
incurred jointly.
its revenue from the sale of its share of the output
arising from the joint operation.
its expenses, including its share of any expenses
incurred jointly.
6.1.1 Financial assets at amortised cost and the effective

interest method
The financial assets of the Group are measured at amortised
cost if both of the following conditions are met:
the asset is held with the objective of collecting
contractual cash flows; and
the contractual terms of the instrument give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Financial assets meeting these criteria are measured initially at fair
value plus transaction costs. They are subsequently measured at
amortised cost using the effective interest rate method less any
impairment (see 6.1.3 below), with interest revenue recognised on
an effective yield basis in interest received.
Subsequent to initial recognition, the Group is required to reclassify
such instruments from amortised cost to fair value through profit
and loss (FVTPL) if the objective of holding the asset changes so
that the amortised cost criteria are no longer met.
The Group accounts for the assets, liabilities, revenues and

expenses relating to its interest in a joint operation in accordance
with its IFRS applicable to the particular assets, liabilities,
revenues and expenses.
The effective interest rate method is a method of calculating

the amortised cost of a financial asset and of allocating interest
income over the relevant period. The effective interest rate is the
rate that exactly discounts the estimated future cash receipts
(including all fees on points paid or received that form an integral
part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the financial
asset, or (where appropriate) a shorter period, to the net carrying
amount on initial recognition.
When a group entity transacts with a joint operation in which a

group entity is a joint operator (such as a sale or contribution of
assets), the Group is considered to be conducting the transaction
with the other parties to the joint operation, and gains and losses
resulting from the transactions are recognised in the Groups
consolidated financial statements only to the extent of other
parties interests in the joint operation.
When a group entity transacts with a joint operation in which a
group entity is a joint operator (such as a purchase of assets),
the Group does not recognise its share of the gains and losses
until it resells those assets to a third party.
6.
Financial instruments
Financial assets and financial liabilities are recognised on the
statement of financial position when the Group becomes party
to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at
fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the fair
value of the financial assets or financial liabilities, as appropriate,
on initial recognition. Transaction costs directly attributable to
the acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognised immediately in profit
and loss.
6.1
Financial assets
Financial assets of the Group are classified as loans and
receivables as they do not fall into the other financial asset
categories as defined in IAS 39 Financial Assets: Recognition
and Measurement.
The Group may irrevocably elect at initial recognition to classify

a financial asset that meets the amortised cost criteria above as
a FVTPL if that designation eliminates or significantly reduces an
accounting mismatch had the financial asset been measured at
amortised cost.
6.1.2 Foreign exchange gains and losses
The fair value of financial assets denominated in a foreign
currency is determined in that foreign currency and translated
at the spot rate at the end of the reporting period. The foreign
exchange component forms part of its fair value gain or loss.
For financial assets classified as FVTPL, the foreign exchange
component is recognised in profit or loss.
For foreign currency denominated financial assets classified
at amortised cost, the foreign exchange gains and losses are
determined based on the amortised cost of the asset and are
recognised in the operating profit line item (note 14) in the
statement of comprehensive income.
6.1.3 Impairment of financial assets at amortised cost
Financial assets that are measured at amortised cost, are assessed
for indicators of impairment at the end of each reporting period.
Financial assets are considered to be impaired when there is objective
evidence that, as a result of one or more events that occurred after
the initial recognition of the financial asset, the estimated future
cash flows of the financial asset have been affected.
20

Objective evidence of impairment could include:
significant financial difficulty of the issuer or
counterparty; or
default or delinquency in interest or principal
payments; or
it becoming probable that the borrower will enter
bankruptcy or financial re-organisation.
For certain categories of financial assets, such as trade
receivables, assets that are assessed not to be impaired
individually are, in addition, assessed for impairment on a
collective basis. Objective evidence of impairment for a portfolio
of receivables could include the Groups past experience of
collecting payments, an increase in the number of delayed
payments in the portfolio past the average credit period of 21
days for sugar debtors and 30 days for other debtors, as well as
observable changes in national or local economic conditions
that correlate with default on receivables.
interest in the assets of an entity after deducting all its liabilites.

Equity instruments issued by the Group are recognised at the
proceeds received, net of direct issue costs.
Financial Liabilities
Financial liabilities of the Group are classified as other
financial liabilities as defined under IAS 39
Financial Instruments; - Recognition and Measurement.
6.2.2 Other financial liabilities
Other financial liabilities, including borrowings, are initially
measured at fair value, net of transaction costs. Other
financial liabilities are subsequently measured at amortised
cost using the effective interest rate method, with interest
expense recognised on an effective yield basis.
The effective interest rate method is a method of calculating
the amortised cost of a financial liability and of allocating
interest expense over the relevant period.
The amount of the impairment recognised is the difference

between the assets carrying amount and the present value
of estimated future cash flows, reflecting the impact of
collateral and guarantees, discounted at the financial assets
original effective interest rate.
The carrying amount of the financial asset is reduced by the
impairment directly for all financial assets with the exception
of trade receivables, where the carrying amount is reduced
through the use of an allowance account. When a trade
receivable is considered uncollectible, it is written off against
the allowance account. Subsequent recoveries of amounts
previously written off are credited against the allowance
account. Changes in the carrying amount of the allowance
account are recognised in profit or loss.
6.1.4 Derecognition of financial assets
The Group derecognises a financial asset only when the
contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and substantially all the
risks and rewards of ownership of the asset to another entity.
If the Group neither transfers nor retains substantially all the
risks and rewards of ownership and continues to control the
transferred asset, the Group recognises its retained interest
in the asset and an associated liability for amounts it may
have to pay. If the Group retains substantially all the risks and
rewards of ownership of a transferred financial asset, the Group
continues to recognise the financial asset and also recognises
a collateralised borrowing for the proceeds received.
6.2
The effective interest rate is the rate that exactly discounts

estimated future cash payments through the expected life of
the financial liability, or (where appropriate) a shorter period,
to the net carrying amount on initial recognition.
6.2.3 Foreign exchange gains and losses
The fair value of financial liabilities denominated in a foreign
currency is determined in that foreign currency and translated
at the spot rate at the end of the reporting period. The foreign
exchange component forms part of its fair value gain or loss.
For foreign currency denominated debt instruments classified
at amortised cost, the foreign exchange gains and losses are
determined based on the amortised cost of the liability and
are recognised in the operating profit line item (note 14) in
the statement of comprehensive income.
6.2.4 Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only
when, the Groups obligations are discharged, cancelled or
they expire. The difference between the carrying amount of
the financial liability derecognised and the consideration paid
and payable is recognised in profit and loss.
7.
Revenue recognition
Revenue represents the net proceeds after VAT in respect of
the Groups trading activities and comprises principally of raw
and refined sugar sales and sales of other biological assets
such as livestock and citrus fruits. Revenue is measured at
the fair value of the consideration received or receivable.
Revenue is reduced for estimated customer returns, rebates
and other similar allowances.
7.1
Sale of goods
Sales are recognised when the goods are delivered and title has
passed, at which time all the following conditions are satisfied:
the Group has transferred to the buyer the significant
risks and rewards of ownership of the goods;
the Group retains neither continuing managerial
involvement to the degree usually associated with
ownership nor effective control over the goods sold;
Financial liabilities and equity instruments issued by the Group
6.2.1 Classification as debt or equity

Debt and equity instruments are classified as either financial
liabilities or as equity in accordance with the substance of
the contractual arrangement and the definitions of a financial
liability and equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual
21

9. Property, plant and equipment
9.1 Freehold land and capital work in progress are not depreciated.
7.1 Sale of goods (continued)

the amount of revenue can be measured reliably;
it is probable that the economic benefits associated
with the transaction will flow to the Group; and
the costs incurred or to be incurred in respect of the
transaction can be measured reliably.
9.2 To the extent to which the carrying amounts exceed the residual
values, all other assets are depreciated on a straight line basis
so as to write-off the cost or valuation of such assets over their
expected useful lives which generally are as follows:
7.2 Dividend and interest income

Dividend income from investments is recognised when the
shareholders right to receive payment has been established
(provided that it is probable that the economic benefits will
flow to the Group and the amount of income can be measured
reliably).
Land improvements, irrigation canals,

dams, roads and bridges
Sugar factory buildings and plant*
Buildings and permanent
improvements
Estate electrification and
railway line
Rolling stock, plant, equipment,
furniture and fittings
Tractors, trailers, dumpers
and heavy equipment
Motor vehicles
IT software
Interest income from a financial asset is recognised when it

is probable that the economic benefits will flow to the Group
and the amount of income can be measured reliably. Interest
income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which
is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that assets net
carrying amount on initial recognition.
50 - 99 years
5 - 50 years
50 years
35-45 years
8-30 years
8-15 years
5-10 years
4-10 years
*Depreciation on the sugar factory and buildings is based on the

units of production when the capacity utilisation is below 80%.
At utilisation levels exceeding 80%, the depreciation is charged
as described above. This method of determining the depreciation
charge was used in the current period since the capacity
utilisation was approximately 75%. This was determined based
on an installed capacity of 320 000 tonnes of sugar production
per year.
7.3 Rental income

The Groups policy for recognition of revenue from operating
leases is described in note 8.1 below.
8. Leasing
Leases are classified as finance leases whenever the terms
of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as
operating leases.
9.3 Following the adoption of the US$ as the reporting currency in

January 2009, property, plant and equipment was valued by the
Directors to the lower of value in use or depreciated replacement
cost, with reference to the last independent market valuation
carried out in January 2006. This became the deemed cost,
subsequent to which all property, plant and equipment are
recorded at cost, including refurbishment, less accumulated
depreciation and any impairment losses. Interest and other
costs incurred on major capital projects are capitalised until all
the activities necessary to prepare assets for their intended use
are substantially complete.
8.1 The Group as lessor

Rental income from operating leases is recognised on
a straight-line basis over the term of the relevant lease.
Initial direct costs incurred in negotiating and arranging
an operating lease are added to the carrying amount of the
leased asset and recognised on a straight-line basis over the
lease term.
8.2 The Group as lessee
Assets held under finance leases are initially recognised as
assets of the Group at their fair value at the inception of
the lease or, if lower, at the present value of the minimum
lease payments. The corresponding liability to the lessor is
included in the consolidated statement of financial position
as a finance lease obligation.
9.4 The gain or loss arising on the disposal or retirement of an item

of property, plant and equipment is determined as the difference
between the sales proceeds and the carrying amount of the
asset and is recognised in the statement of comprehensive
income (SOCI).
Lease payments are apportioned between finance expenses

and reduction of the lease obligation so as to achieve a
constant rate of interest on the remaining balance of the
liability. Finance expenses are recognised immediately in
profit or loss, unless they are directly attributable to qualifying
assets, in which case they are capitalised in accordance with
the Groups general policy on borrowing costs (see note 11
below). Contingent rentals are recognised as expenses in the
periods in which they are incurred.
10. Impairment of tangible assets

At the end of each reporting period, the Group reviews the carrying
amounts of its tangible assets to determine whether there is any
indication that those assets have suffered an impairment. If any
such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment (if any).
Where it is not possible to estimate the recoverable amount of an
individual asset, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
22

Where a reasonable and consistent basis of allocation can
be identified, corporate assets are also allocated to individual
cash-generating units, or otherwise they are allocated to the
smallest group of cash-generating units for which a reasonable
and consistent allocation basis can be identified. Recoverable
amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and
the risks specific to the asset for which the estimates of future cash
flows have not been adjusted. If the recoverable amount of an asset
(or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash-generating unit)
is reduced to its recoverable amount. An impairment is recognised
immediately in the statement of comprehensive income, unless the
relevant asset is carried at a revalued amount, in which case the
impairment is treated as a revaluation decrease.
When an impairment subsequently reverses, the carrying amount
of the asset (or cash-generating unit) is increased to the revised
estimate of its recoverable amount, such that the increased
carrying amount does not exceed the carrying amount that would
have been determined had no impairment been recognised for
the asset (or cash-generating unit) in prior years. A reversal of
an impairment is recognised immediately in the statement of
comprehensive income, unless the relevant asset is carried at a
revalued amount, in which case the reversal of the impairment is
treated as a revaluation increase.
11.
where applicable, the fair value component of biological

assets. NRV represents the estimated selling price less all
estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
13.
13.1 Current tax

The tax currently payable is based on taxable profit for the year.
Taxable profit differs from profit before tax as reported in the
consolidated statement of comprehensive income because of
items of income or expenses that are taxable or deductible in
other years and items that are not taxable or deductible. The
Groups current tax is calculated using tax rates that have
been enacted by the end of the reporting period.
13.2 Deferred tax
Deferred tax is recognised on temporary differences between
the carrying amounts of assets and liabilities in the consolidated
financial statements and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible
temporary differences to the extent that it is probable that taxable
profits will be available against which those deductible temporary
differences can be utilised. Such deferred tax assets and liabilities are
not recognised if the temporary difference arises from goodwill or
from the initial recognition (other than in a business combination)
of other assets and liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction
or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use
or sale, are added to the cost of those assets, until such time as the
assets are substantially ready for their intended use or sale.
Deferred tax liabilities are recognised for taxable temporary

differences associated with investments in subsidiaries and
associates, and interests in jointly controlled operations, except
where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not
reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments
and interests are only recognised to the extent that it is probable
that there will be sufficient taxable profits against which to utilise
the benefits of the temporary differences and they are expected to
reverse in the foreseeable future.
Investment income earned on the temporary investment of

specific borrowings pending their expenditure on qualifying assets
is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the
period in which they are incurred.
12.
Taxation
Income tax expense represents the sum of the tax currently
payable and deferred tax.
Inventories
12.1 Stores
Stores inventory is valued at the lower of weighted average
cost and net realisable value (NRV). Cost comprises direct
materials and freight costs that have been incurred in bringing
the inventory to its present location and condition. NRV
represents the estimated selling price less all estimated costs
to sell off the individual inventory items or of the ultimate end
product where the item is a raw material or consumable for
which the NRV cannot be individually ascertained.
The carrying amount of deferred tax assets is reviewed at the end of

each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that
are expected to apply in the period in which the liability is settled
or the asset realised, based on tax rates (and tax laws) that have
been enacted or substantively enacted by the end of the reporting
period. The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the manner
in which the Group expects, at the end of the reporting period, to
recover or settle the carrying amount of its assets and liabilities.
12.2 Sugar and by-products

Inventory of sugar and its by-products is valued at the lower
of cost or NRV. Cost is determined by reference to the cost of
production including all relevant production overheads and
23

13.3 Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss,
except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case,
the current and deferred tax are also recognised in other
comprehensive income or directly in equity respectively. Where
current tax or deferred tax arises from the initial accounting
for a business combination, the tax effect is included in the
accounting for the business combination.
14.
Foreign currencies
In preparing the financial statements of each individual group
entity, transactions in currencies other than the entitys
functional currency (foreign currencies) are recognised at the
rates of exchange prevailing at the dates of the transactions. At
the end of each reporting period, monetary items denominated
in foreign currencies are retranslated at the rates prevailing at
that date.
16.1 Share-based payment transactions of the acquiree in a

business combination
When the share-based payment awards held by the employees of
an acquiree (acquiree awards) are replaced by the Groups sharebased payment awards (replacement awards), both the acquiree
awards and the replacement awards are measured in accordance
with IFRS 2 Share-based Payment (market-based measure) at
the acquisition date. The portion of the replacement awards that is
included in measuring the consideration transferred in a business
combination equals the market-based measure of the acquiree
awards multiplied by the ratio of the portion of the vesting period
completed to the greater of the total vesting period or the original
vesting period of the acquiree award. The excess of the marketbased measure of the replacement awards over the marketbased measure of the acquiree awards included in measuring the
consideration transferred is recognised as remuneration cost for
post-combination service.
However, when the acquiree awards expire as a consequence of a
business combination and the Group replaces those awards when
it does not have an obligation to do so, the replacement awards are
measured at their market-based measure in accordance with IFRS
2. All of the market-based measure of the replacement awards is
recognised as remuneration cost for post-combination service.
Non-monetary items carried at fair value that are denominated

in foreign currencies are retranslated at the rates prevailing at
the date when the fair value was determined. Non-monetary
items that are measured in terms of historical cost in a foreign
currency are not retranslated.
Exchange differences on monetary items are recognised in profit
or loss in the period in which they arise except for:

15.
16.
At the acquisition date, when the outstanding equity- settled sharebased payment transactions held by the employees of an acquiree
are not exchanged by the Group for its share-based payment
transactions, the acquiree share-based payment transactions
are measured at their market-based measure at the acquisition
date. If the share-based payment transactions have vested by the
acquisition date, they are included as part of the non-controlling
interest in the acquiree. However, if the share-based payment
transactions have not vested by the acquisition date, the marketbased measure of the unvested share-based payment transactions
is allocated to the non-controlling interest in the acquiree based
on the ratio of the portion of the vesting period completed to the
greater of the total vesting period or the original vesting period of
the share-based payment transaction. The balance is recognised as
remuneration cost for post-combination service.
exchange differences on foreign currency borrowings

relating to assets under construction for future productive
use, which are included in the cost of those assets when
they are regarded as an adjustment to interest costs on
those foreign currency borrowings;
exchange differences on transactions entered into in
order to hedge certain foreign currency risks; and
exchange differences on monetary items receivable from
or payable to a foreign operation for which settlement is
neither planned nor likely to occur (therefore forming part
of the net investment in the foreign operation), which are
recognised initially in other comprehensive income and
reclassified from equity to profit or loss monetary items.
Retirement benefits
Provision is made for post-retirement medical aid benefits and
gratuities payable on retirement and is based on the present value
of those liabilities for services rendered to date as determined by
independent actuaries.
17.
Payments to defined contribution retirement benefit plans are

recognised as an expense when employees have rendered service
entitling them to the contributions.
17.1 Growing crops

Growing crops comprise cane roots, standing cane and fruit
orchards. The carrying value is determined as follows:
Share-based payments
The requirements of IFRS 2 (Share-based Payment) to recognise
equity-settled share-based payments at fair value at the date of
grant have not been complied with as this information has been
estimated to be qualitatively and quantitatively immaterial in the
context of these financial statements.
24
Agricultural activities
Agricultural activities comprise the growing of cane and milling it
into sugar and the raising of livestock, which includes both cattle
and sheep for purposes of disposal on the open market. It also
includes the growing of various fruits for sale on the open market.
r oots at current replacement cost of planting and

establishment, amortised over the period of their productive
life; and
standing cane at the estimated cane price and sucrose content

less harvesting, transport and over the weighbridge costs.

fruit orchards at estimated future sales proceeds less

harvesting and transport costs. Future sales proceeds
and costs to sell are discounted to present values at
valuation date using the weighted average cost of capital
which was 10.63% at current year end.
17.2 Wild Life

Wild life management activities comprise the management of game
animals with safari and hunting activities. Valuation is based on
managements best estimate after taking into consideration the game
population and trophy fees.
17.3 Agricultural produce
Agricultural produce comprises the harvested product of the Groups
biological assets. This is measured at its fair value less estimated point
of sale costs at the point of harvest. The consumption of the Groups
agricultural produce is charged to production costs at fair value.
only the direct expenditures arising from the restructuring, which are
those amounts that are both necessarily entailed by the restructuring
and not associated with the ongoing activities of the entity.
18.3 Contingent liabilities acquired in a business combination
Contingent liabilities acquired in a business combination are initially
measured at fair value at the acquisition date. At the end of subsequent
reporting periods, such contingent liabilities are measured at the
higher of the amount that would be recognised in accordance with IAS
37 Provisions, Contingent Liabilities and Contingent Assets and the
amount initially recognised less cumulative amortisation recognised
in accordance with IAS 18 Revenue.
19.
17.4 Changes in the fair value of biological assets

Changes in the fair value of biological assets are recognised in revenue
in accordance with IAS 41 Agriculture which is also consistent with
the treatment in prior years. Fair value of biological assets is determined
as described in 19.1 below. The Group has provided an analysis of the
change in the fair value of biological assets as encouraged by IAS 41
in note 5. A significant portion of this change relates to price changes.
18.
Provisions
Provisions are recognised when the Group has a present obligation
(legal or constructive) as a result of a past event, it is probable that the
Group will be required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the end of
the reporting period, taking into account the risks and uncertainties
surrounding the obligation. When a provision is measured using the
cash flows estimated to settle the present obligation, its carrying
amount is the present value of those cash flows (when the effect of
the time value of money is material).
Key sources of estimation uncertainty

In the application of the Groups Accounting policies, which are
described above, the Directors of the company are required to
make judgements, estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based
on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The following are the key assumptions concerning the future, and
other key sources of estimation uncertainty at the end of the reporting
period, that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial
year.
19.1 Biological assets valuation

Growing crops are required to be measured at fair value less
harvesting, transport and over the weighbridge costs. In determining
fair value an estimate is made of the yield of the standing cane as
well as the estimated cane price. These estimates can vary from the
actuals achieved.
Cane roots are valued based on total establishment costs amortised
over the period of their productive life which is currently estimated at
9 years. In determining these costs an estimate is made of the current
cost of establishing a hectare of cane roots. This estimate can vary
from the actuals achieved.
When some or all of the economic benefits required to settle a

provision are expected to be recovered from a third party, a receivable
is recognised as an asset if it is virtually certain that reimbursement
will be received and the amount of the receivable can be measured
reliably.
Fruit orchards are measured at fair value less harvesting and transport
costs. In determining fair value an estimate is made of the yield of fruit
trees over the period of their productive life as well as the estimated
sales price. These estimates can vary from the actuals achieved.
18.1 Onerous contracts

Present obligations arising under onerous contracts are recognised
and measured as provisions. An onerous contract is considered to
exist where the Group has a contract under which the unavoidable
costs of meeting the obligations under the contract exceed the
economic benefits expected to be received from the contract.
Livestock and game are measured at their fair value. In determining the
fair value an estimate is made of their current market value. A discount
factor is applied on the game to provide for embedded inefficiencies in
the physical counting process, the mobility of game across established
boundaries and the varying ages of the game. These estimates involve
significant judgements and can vary from one period to another. As
a result of accumulated knowledge and improved methodology in
ascertaining game quantities, the Directors have revised the discount
factor to 25% (2013: 30%). The effect of this change in accounting
estimate is an increase in the fair value gain resulting from valuation of
game for the year ended 31 March 2014 amounting to US$231 848.
The future effect of the change in accounting estimate is not readily
determinable as game quantities are a key variable in the valuation
thereof and these cannot be forecast.
18.2 Restructurings
A restructuring provision is recognised when the Group has developed
a detailed formal plan for the restructuring and has raised a valid
expectation in those affected that it will carry out the restructuring by
starting to implement the plan or announcing its main features to those
affected by it. The measurement of a restructuring provision includes
25

19.2 Remaining useful lives and residual values of property,

plant and equipment
Property, plant and equipment are depreciated over their
useful lives taking into account residual values. The actual
lives of the assets and residual values are assessed annually
and are influenced by factors such as technological innovation,
product life cycles and maintenance programmes. Residual
value assessments consider issues such as market conditions,
the remaining life of the asset and projected disposal values.
19.3 Impairment of property, plant and equipment (PPE)

other than land
Determining whether PPE is impaired requires an estimation
of the value in use of the cash-generating units to which PPE
has been allocated. The value in use computation requires the
Group to estimate the future cash flows expected to arise from

the cash-generating unit and a suitable discount rate in order
to calculate present value.
The Directors carried out impairment tests on all categories
of the Groups PPE as at 31 March 2014 and no impairment was
identified.
19.4 Post-retirement benefit obligations
Post-retirement benefit obligations are provided for certain
existing and former employees. Actuarial valuations are based
on assumptions which include employee turnover, mortality
rates, the discount rate, the expected long-term rate of return
of retirement plan assets, healthcare costs, inflation rates and
salary increments.
26
NOTES TO THE GROUP FINANCIAL STATEMENTS

1. Country of incorporation and main activities
The Company and its wholly owned subsidiary, Chiredzi Township (Private) Limited, joint ventures Zimbabwe Sugar Sales (Private) Limited
(ZSS) and Mkwasine Estates (Mkwasine) and the Tokwane Consortium are incorporated in Zimbabwe. Its parent and ultimate holding
company is Tongaat Hulett Limited through its wholly owned subsidiary, Triangle Sugar Corporation Limited. The Company engages
in the growing and milling of sugar cane and other farming operations. The subsidiary is engaged in the provision of water treatment
services. ZSS, in which the Company has a 50% shareholding, is a sugar broking entity for the Company. Mkwasine is a cane farming
consortium in which the Company has a 50% interest and provides administrative services to the out grower sugarcane farmers. The
Tokwane Consortium is a consortium for the construction and maintenance of the Tokwane barrage and canal in which the Company has
32.56% interest.
2. Application of new and revised International Financial Reporting Standards (IFRS)
2.1 New and revised IFRSs affecting amounts reported and/or disclosures in the financial statements
In the currrent year, the Group has applied a number of new and revised IFRSs issued by the International Accounting Standard Board
(IASB) that are mandatory effective for an accounting period that begins on or after 1 January 2013.
Amendments to IFRS 7 Disclosures - Offsetting
Financial Assets and Financial Liabilities
The Group has applied the amendments to IFRS 7 Disclosures - Offsetting

Financial Asset and Financial Liabilities for the first time in the current
year. The amendments to IFRS 7 require entities to disclose information
about rights of offset and related arrangements (such as collateral posting
requirements) for financial instruments under an enforceable master
netting agreement or similar arrangement.
The amendments have been applied retrospectively. As the Group does
not have any offsetting arrangements in place, the application of the
amendments has had no material impact on the discloures or on the
amounts recognised in the consolidated financial statements.
New and revised Standards on consolidation, joint arrangements, associate and disclosures
In May 2011, a package of five standards on consolidation, joint arrangements, associates and discloures was issued comprising IFRS
10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities, IAS 27 (as revised
in 2011) Separate Financial Statements and IAS 28 (as revised in 2011) Investments in Associated and Joint Ventures. Subsequent to
the issue of these standards, amendments to IFRS 10, IFRS 11 and IFRS 12 were issued to clarify certain transitional guidance on the
first-time application of the standards.
In the current year, the Group has applied for the first time IFRS 10, IFRS 11, IFRS 12 and IAS 28 (as revised in 2011) together with the
amendments of IFRS 10, IFRS 11, and IFRS 12 regarding the transitional guidance. IAS 27 (as revised in 2011) is not applicable to the
Group as it deals only with separate financial statements.
The impact of the application of these standards is set out below.
Impact of the application of IFRS 10
IFRS 10 replaces the parts of IAS 27 Consolidated and Separate

Financial Statements that deal with consolidated financial
statements and SIC-12 Consolidated - Special Purpose Entities.
IFRS 10 changes definition of control such that an investor has
control over an investee when a) it has power over the investee b)
it is exposed, or has rights, to variable returns from its involvement
with the investee and c) has the ability to use its power to affect its
returns. All three of these criteria must be met for an investor to
have control over an investee. Previously, control was defined as
the power to govern the financial and operating policies of an entity
so as to obtain benefits from its activities. Additional guidance has
been included in IFRS 10 to explain when an investor has control
over an investee. Some guidance included in IFRS 10 that deals with
whether or not an investor that owns less than 50% of the voting rights
in an investee has control over the investee is relevant to the Group.
27
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued)

2.1 New and revised IFRSs affecting amounts reported and/or disclosures in the financial statements (continued)
The directors of the Company made an assessment as at the date of initial
application of IFRS 10 (i.e. 1 April 2013) as to whether or not the Group has
unilateral control over its investees in accordance with the new definition
of control and the related guidance set out in IFRS 10. The Directors
concluded that it has control over Chiredzi Township (Private) Limited as all
three of the above criteria are met. This represents no change in accounting
treatment before application of this new definition of control.
IFRS 11 replaces IAS 31 Interests in Joint Ventures, and the guidance

contained in a related interpretation, SIC-13 Jointly Controlled Entities Non-Monetary Contributions by Ventures, has been incorporated in IAS 28
(as revised in 2011). IFRS 11 deals with how a joint arrangement of which
two or more parties having joint control should be classified and accounted
for. Under IFRS 11, there are only two types of joint arrangements - joint
operations and joint ventures. The classification of joint arrangements
under IFRS 11 is determined based on the rights and obligations of
parties to the joint arrangements by considering the structure, the legal
form of the arrangements, the contractual terms agreed to by the parties
to the arrangement, and, when relevant, other facts and circumstances. A
joint operation is a joint arrangement whereby the parties that have joint
control of the arrangement (i.e joint operators) have rights to the assets
and obligations for the liabilities, relating to the arrangement. A joint
venture is a joint arrangement whereby the parties that have joint control
of the arrangement (i.e. joint venturers) have rights to the net assets of
the arrangement. Previously, IAS 31 contemplated three types of joint
arrangements; jointly controlled entities, jointly controlled operations and
legal form of the arrangement (e.g. a joint arrangement that was established
through a separate entity was accounted for as a jointly controlled entity).
The initial and subsequent accounting of joint ventures and joint operations
is different. Investments in joint ventures are accounted for using the equity
method (proportionate consolidation is no longer allowed). Investment
in joint operations are accounted for such that each joint operator
recognises its assets (including its share of any assets jointly held), its
liabilities (including its share of any liabilities incurred jointly), its revenue
(including its share of revenue from the sale of the output by the joint
operation) and its expenses (including its share of any expenses incurred
jointly). Each joint operator accounts for the assets and liabilities, as well
as revenues and expenses relating to its interest in the joint operation in
accordance with the applicable Standards. The directors of the Company
reviewed and assessed the classification of the Groups investments in
joint arrangements in accordance with the requirements of IFRS 11. The
directors concluded that the Groups investments in Zimbabwe Sugar
Sales (Private) Limited, Mkwasine Estates and the Tokwane Consortuim
which were classified as jointly controlled entities under IAS 31 and were
accounted for using the proportionate consolidation method, should be
classified as joint operations under IFRS 11 and accounted for in relation
to the Groups interest in the joint operations. This effectively represents no
change in accounting treatment.
28

IFRS 12 is a new disclosure standard and is applicable to entities that
have interests in subsidiaries, joint arrangements, associates and/or
unconsolidated structured entities. In general, the application of IFRS
12 has resulted in more extensive disclosures in the consolidated
financial statements.
IFRS 13 Fair Value Measurement
The Group has applied IFRS 13 for the first time in the current year, IFRS 13
establishes a single source of guidance for fair value measurements and
disclosures about fair value measurements. The scope of IFRS 13 is broad;
the fair value measurement requirements of IFRS 13 apply to both financial
instrument items and non-financial instrument items for which other IFRSs
require or permit fair value measurements and disclosures about fair value
measurements, except for share-based payment transactions that are
within the scope of IFRS 2 Share-based Payment, leasing transactions
that are within the scope of IAS 17 Leases, and measurements that have
some similarities to fair value but are not fair value (e.g. net realisable value
for the purposes of measuring inventories or value in use for impairment
assessment purposes).
IFRS 13 defines fair value as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction in the principal (or most
advantageous) market at the measurement date under current market
conditions. Fair value under IFRS 13 is an exit price regardless of whether
that price is directly observable or estimated using another valuation
technique. Also, IFRS 13 includes extensive disclosure requirements.
IFRS 13 requires prospective application from 1 January 2013. In addition,
specific transitional provisions were given to entities such that they
need not apply the disclosure requirements set out in the Standard in
comparative information provided for periods before the initial application
of the Standard. In accordance with these transitional provisions, the
Group has not made any new disclosures required by IFRS 13 for the 2013
comparative period. Other than the additional disclosures, the application
of IFRS 13 has not had any material impact on the amounts recognised in
the consolidated financial statements.
Amendments to IAS 1 Presentation of Items

of Other Comprehensive Income
The Group has applied the amendments to IAS 1 Presentation of Items

of Other Comprehensive Income for the first time in the current year. The
amendments introduce new terminology, whose use is not mandatory, for
the statements of comprehensive income and income statement. Under
the amendments to IAS 1, the statement of comprehensive income is
renamed as the statement of profit or loss and other comprehensive
income [and the income statement is renamed as the statement of
profit or loss]. The amendments to IAS 1 retain the option to present profit
or loss and other comprehensive income in either a single statement or in
two separate but consecutive statements. However, the amendments to
IAS 1 require items of other comprehensive income to be grouped into two
categories in the other comprehensive income section: (a) items that will
not be reclassified subsequently to profit or loss and (b) items that may
be reclassified subsequently to profit or loss when specific conditions
are met. Income tax on items of other comprehensive income is required
to be allocated on the same basis - the amendments do not change the
option to present items of other comprehensive income either before tax
or net of tax. The amendments have been applied retrospectively, and
hence the presentation of items of other comprehensive income has
been modified to reflect the changes. Other than the above mentioned
presentation changes, the application of the amendments to IAS 1 does
not result in any impact on profit or loss, other comprehensive income
and total comprehensive income.
29

Amendments to IAS 1 Presentation of
The Annual Improvements to IFRSs 2009 - 2011 have made a number of
Financial Statements (as part of the Annual
amendments to IFRSs. The amendments that are relevant to the Group
Improvements to IFRSs 2009 - 2011 Cycle
are the amendments to IAS 1 regarding when a statement of financial
issued in May 2012)
position as at the beginning of the preceding period (third statement
of financial position) and the related notes are required to be presented.
The amendments specify that a third statement of financial position is
required when (a) an entity applies an accounting policy retrospectively,
or makes a retrospective restatement or reclassification of items in its
financial statements, and (b) the retrospective application, restatement
or reclassification has a material effect on the information in the third
statement of financial position. The amendments specify that related notes
are not required to accompany the third statement of financial position.
In the current year, the Group has applied a number of new and revised
IFRSs (see the discussion above), none of which have resulted in material
effects on the information in the consolidated statement of financial
position as at 1 April 2012. The Group has therefore not presented a third
statement of financial position as at 1 April 2012. The notes in respect
of the disclosure requirements of IAS 8 Accounting Policies Changes in
Accounting Estimates and Errors are detailed below.
IAS 19 Employee Benefits (as revised in 2011)
In the current year, the Group has applied IAS 19 Employee Benefits
(as revised in 2011) and the related consequential amendments for the
first time.
IAS 19 (as revised in 2011) changes the accounting for defined benefit
plans and termination benefits. The most significant change applicable
to the Group relates to the accounting for changes in the post retirement
provision. All acturial gains and losses are now recognised immediately
through other comprehensive income and no longer amortised through
profit or loss. These changes have had an impact on the amounts
recognised in profit or loss and other comprehensive income in prior
years (see the tables below for details).
Specific transitional provisions are applicable to first-time application
of IAS 19 (as revised in 2011). The Group has applied the relevant
transitional provisions and restated the comparative amounts on a
retrospective basis (see the tables below for details).
30

Impact on total comprehensive income for the year ended 31 March 2013 of the application of IAS 19 (as revised in 2011)

IAS 19
adjustments

US$000
Impact on profit for the year
Increase in administration expenses
Decrease in income tax expenses
(81)
21
Decrease in profit for the year
(60)
Impact on other comprehensive income for the year

Increase in other comprehensive income for the year
Increase in income tax relating to items of other comprehensive income
417
(107)
Increase in total comprehensive income for the year
310
Impact on assets, liabilities and equity as at 31 March 2013 of the application of the
amendments to IAS 19 (as revised in 2011)

IAS 19
adjustments

US$000
Decrease in retirement benefit obligation
Increase in deferred tax liabilities
661
(170)
Increase in net assets
491
Increase in retained earnings

Increase in non-distributable reserve
(181)
(310)
Increase in equity
(491)
The impact of application of the new and revised standards on basic earnings per share is disclosed in note 17.1.
31

2.2 New and revised IFRSs in issue, but not yet effective
The Group has not applied the following new and revised IFRSs that have been issued but not yet effective:
Amendment to IAS 32 -Financial Instruments:
Presentation, on asset and liability offsetting
(effective 1 January 2014). These amendments are to the application

guidance in IAS 32, Financial instruments: Presentation, and clarify existing
application issues relating to the offsetting requirements. Specifically the
amendments clarify the meaning of currently has a legally enforceable
right of set off and simultaneous realisation and settlement.
Amendments to IFRS 10, 12 and IAS 27 on

consolidation for investment entities
(effective 1 January 2014). These amendments mean that many funds and
similar entities will be exempt from consolidating most of their subsidiaries.
Instead, they will measure them at fair value through profit or loss. The
amendments give an exception to entities that meet an investment entity
definition and which display particular characteristics. Changes have also
been made to IFRS 12 to introduce disclosures that an investment entity
needs to make.
Amendment to IAS 36 - Impairment of assets

on recoverable amount disclosures
(effective 1 January 2014).This amendment addresses the disclosure

of information about the recoverable amount of impaired assets if that
amount is based on fair value less costs of disposal.
Financial Instruments: Recognition and

Measurement Amendment to IAS 39 Novation
of derivatives
(effective 1 January 2014). This amendment provides relief from

discontinuing hedge accounting when novation of a hedging instrument to
a central counter party meets specified criteria.
IFRIC 21, Levies This is an interpretation of

IAS 37, Provisions, contingent liabilities and
contingent assets.
(effective 1 January 2014). IAS 37 sets out criteria for the recognition of
a liability, one of which is the requirement for the entity to have a present
obligation as a result of a past event (known as an obligating event). The
interpretation clarifies that the obligating event that gives rise to a liability to
pay a levy is the activity described in the relevant legislation that triggers the
payment of the levy.
IFRS 9, Financial instruments
IFRS 9 is the first standard issued as part of a wider project to replace

IAS 39. IFRS 9 retains but simplifies the mixed measurement model and
establishes two primary measurement categories for financial assets:
amortised cost and fair value. The basis of classification depends on the
entitys business model and the contractual cash flow characteristics of the
financial asset. The guidance in IAS 39 on impairment of financial assets
and hedge accounting continues to apply.
The Directors anticipate that these amendments will be adopted in the Groups financial statements where applicable, when they become
effective. Other than for additional disclosures, the application of these IFRSs will not have a material impact on the financial statements
for future periods.
32

3 Interest in consortia
3.1 Mkwasine Estates
The Group has a 50% interest in Mkwasine Estates (Mkwasine). Mkwasine engages in the provision of administrative services to out
grower sugarcane farmers at Mkwasine. The Groups share of Mkwasines loss for the year ended 31 March 2014 amounted to US$1
034 782 (2013: US$1 505 537). 50% of the assets and liabilities of the consortium at 31 March 2014 are included in the statement of
financial position under their respective headings as follows:
31.03.14
US$000
31.03.13
US$000
Non-current assets
56
75

56
75
Current assets
3 492
4 930
Biological assets
Inventories
Accounts receivable
229
185
2 983
95
303
327
4 165
135
Total assets
3 548
5 005
Current liabilities
(3 236)
(4 313)
Accounts payable
(3 236)
(4 313)
Net assets
312
692
33

3. Interest in Consortia (continued)
3.2 Zimbabwe Sugar Sales (Private) Limited
The Group has a 50% interest in Zimbabwe Sugar Sales (Private) Limited (ZSS). ZSS acts as a broker to the sugar millers, and all income
and expenditure is for the millers account. 50% of the assets and liabilities other than inventories, accounts receivable and accounts
payable which are included in proportion to sugar produced by each miller at 31 March 2014 are included in the statement of financial
position under their respective headings as follows:

31.03.14
US$000
31.03.13
US$000
Non-current assets
57
80
Buildings, plant and equipment

30
36
27
44
Current assets
33 715
7 179
Inventories
Accounts receivable
568
880
32 267
773
578
5 828
Total assets
33 772
7 259
Current liabilities
(4 055)
(2 683)
Accounts payable
(4 055)
(2 683)
Net assets
29 717
4 576
3.3 Tokwane Consortium

The Group has a 32.56% interest in the Tokwane Consortium whose financial year ends on 31 March. The Groups share of the
value of the Tokwane Barrage and Canal amounting to US$1 310 592 (2013: US$1 339 084) is included in property, plant and
equipment (note 4).
3.4 Chiredzi Township (Private) Limited
The Group has a 100% interest in the Chiredzi Township (Private) Limited (incorporated in Zimbabwe) which provides water
treatment services. The subsidiary whose financial year ends on 31 December is controlled by the Group and is consolidated in
these financial statements.
34

4 Property, plant and equipment
4.1 Cost

Balance
31.03.12
Additions
US$000
US$000
Freehold land
13 524
Permanent improvements
43 533
Irrigation canals, dams
and equipment
21 995
60 431
Sugar factory buildings
and plant
52 791
Other buildings, plant
and equipment
3 253
22 475
Furniture, fittings and
IT equipment
251
5 208

223 461
Disposals/
transfer
US$000
Balance
31.03.13 Additions
US$000
US$000
Disposals/
transfer
US$000
Balance
31.03.14
US$000
-
3 637
-
-
13 524
47 170
-
743
-
221
13 524
48 134
1 961
878
165
499
24 121
61 808
391
66
-
95
24 512
61 969
2 496
4 312
59 599
1 885
1 300
62 784
1 981
44
5 278
473
(199)
5 552
3 815
26 290
1 489
(1 050)
26 729
28
2 789
162
(5 182)
441
2 815
253
2 799
1
(1 837)
695
3 777
17 585
241 046
8 099
(1 469)
Balance
31.03.12
US$000
Charge for
the year
US$000
Disposals/
transfer
US$000
Balance
31.03.13
US$000
Charge for
the year
US$000
Disposals/
transfer
US$000
Balance
31.03.14
US$000
1 643
606
1 273
3 522
1 356
4 878
3 135
8 259
422
2 080
(1 273)
-
2 284
10 339
468
1 941
-
-
2 752
12 280
7 644
5 772
13 416
4 364
17 780
649
140
789
310
(198)
901
5 301
2 839
8 140
2 355
(367)
10 128
69
59
128
79
(3)
204
26 700
11 918
38 618
10 873
(568)
48 923
247 676
4.2 Accumulated depreciation

Irrigation canals, dams
and equipment
Sugar factory buildings
and plant
Other buildings, plant
and equipment
Furniture, fittings and
IT equipment

35

4. Property, plant and equipment (continued)
4.3 Carrying amounts

31.03.14
US$000
31.03.13
US$000
Freehold land
13 524
43 256
Irrigation canals, dams and equipment
21 760
49 689
Sugar factory buildings and plant
45 004
Other buildings, plant and equipment
4 651
Agricultural, haulage and motor vehicles and implements
16 601
Furniture, fittings and IT equipment
491
3 777

198 753
13 524
43 648
21 837
51 469
46 183
4 489
18 150
313
2 815
202 428
In accordance with the requirements of International Accounting Standard 36 Impairment of Assets, the Directors carried out
impairment tests on all categories of the Groups property, plant and equipment as at 31 March 2014 and no impairment was identified.
4.4 Assets pledged as security
The Group does not have any property, plant and equipment pledged as security for any debts.
5. Biological assets

Cane
Growing
Fruit

roots
cane
orchards

US$000
US$000 US$000
Livestock
and game
US$000
Total
US$000

Fair value gain
35 600
2 317
42 506
1 206
-
-
3 875
206
81 981
3 729
- Gain/(loss) arising from physical growth

- Gain arising from price changes
(3 161)
5 478
469
737
-
-
(553)
759
(3 245)
6 974
37 917
43 712
4 081
85 710
Split as follows:
Short-term biological assets
Long-term biological assets
-
37 917
43 712
-
-
-
4 081
-
47 793
37 917

Fair value (loss)/gain
37 917
(6 087)
43 712
1 364
-
716
4 081
85
85 710
(3 922)
- (Loss)/gain arising from physical growth

- Loss arising from price changes

(4 721)
(1 366)
5 307
(3 943)
716
-
85
-
1 387
(5 309)
31 830
45 076
716
4 166
81 788
Split as follows
Short-term biological assets
Long-term biological assets
-
31 830
45 076
-
716
-
4 166
-
49 958
31 830
31 830
45 076
7 16
4 166
81 788
31.03.14
12 083
20
765
4 582
31.03.13
12 019
20
782
2 806
Biological assets on hand at year end are as follows:

Hectares under cane
Hectares under fruit orchards
Livestock population
Game population
36

5. Biological assets (continued)
5.1 Growing cane sensitivity analysis
The sensitivity analyses below have been determined based on exposure to yield and cane prices for growing cane held at the end
of the reporting period. A 5% increase or decrease is used when reporting yield and cane price risk internally to key management
personnel and represents managements assessment of the reasonably possible change in yield and cane prices.
If yield had been 5% higher/lower and all other variables held constant, the Groups profit for the year ended 31 March 2014 would
have decreased/increased by US$ 2 253 772 and if cane price had been 5% higher/lower and all other variables held constant, the
Groups profit for the year ended 31 March 2014 would have decreased/increased by US$ 2 666 328. There is no impact on other
comprehensive income.
Variable factor
% Movement

Impact on profit
US$000
Price
Yield - 100 tons/ha
Combined
(2 666)
(2 254)
(4 920)
(-5%)/+5%
(-5%)/+5%
(-5%)/+5%
2 666
2 254
4 920
6. Investments in associate companies

Name of associated company
Principal activity
Place of incorporation
Proportion of ownership

and operation
interest and voting power held
31.03.13 31.03.14
Tongaat Hulett (Botswana)
Packer and distributor
Botswana
33.3%
33.3%
(Proprietary) Limited (i)
of sugar
National Chemical Products
Distillers Zimbabwe (Private)
Limited (ii)
Conversion of
molasses into alcohol
Zimbabwe
49%
49%
(i) The financial year-end is 31 March, and the associated company is equity accounted using the audited year-end accounts.
(ii) The financial year-end for National Chemical Products Distillers Zimbabwe (Private) Limited (NCPDZ) is 31 December.
For the purpose of applying the equity method of accounting, the financial statements of NCPDZ for the year ended 31
December 2013 have been used, and appropriate adjustments have been made for the effects of transactions between that
date and 31 March 2014 based on the unaudited management accounts.
37

6. Investments in associate companies (continued)
Summarised financial information in respect of the associated companies is set out below:

31.03.14

US$000
31.03.13
US$000
Total assets
Total liabilities
10 820
(1 176)
10 257
(1 228)
Net assets
9 644
9 029
Groups share of net assets of associated companies
3 427
3 174

Year

ended

31.03.14

US$000
Year
ended
31.03.13
US$000
Total revenue
43 550
45 992
Total profit for the year
3 459
3 660
Groups share of after tax profit of associated companies
1 223
1 230

31.03.14

US$000
31.03.13
US$000
7. Trade and other receivables
Sugar receivables
Molasses receivables
12 116
1 156
4 959
1 576
Trade receivables
13 272
6 535
- Prepayments
- VAT receivable
- Staff receivables
- Sundry (planters, game, safari and citrus)
- Allowance for credit losses
557
1 277
321
7 621
(526)
4 319
3 844
367
10 256
(440)
Other receivables
9 250
18 346
Total trade and other receivables
22 522
24 881
7.1 Trade receivables

Trade receivables disclosed above are classified as financial assets measured at amortised cost. All the amounts are classified as current
assets. Fair value of trade and other receivables is disclosed in note 28.
38

7. Trade and other receivables (continued)
The average credit period on sugar debtors is 28 days with the average credit period for other debtors being 30 days. No interest is
charged on trade receivables which are overdue and no security is held on any of the receivables disclosed above. Before accepting
any new customer, the Group uses an internal credit review system to assess the potential customers credit quality and defines credit
limits by customer. Limits and scoring attributed to customers are reviewed periodically by management.
Trade receivables disclosed above include amounts (see below for aged analysis), that are past due date at the end of the reporting
period but against which the Group has not recognised an allowance for credit losses, because there has not been a significant
change in credit quality and the amounts are still considered recoverable. The Group does not hold any collateral or other credit
enhancements over these balances, nor does it have a legal right of offset against any amounts owed by the Group to the counterparty. The Directors consider that the carrying amount of accounts receivable approximates the fair value.
Ageing of receivables past due but not impaired;

31.03.14

US$000
31.03.13
US$000
Other trade receivables:

31-60 days
61 + days
409
3 183
1 276
957
Total
3 592
2 233
Average age (days) of past due accounts
110
71
Movement in the allowance for credit losses:

Impairment losses recognised on receivables
Amounts recovered during the year
440
132
(46)
370
117
(47)
Balance at end of year
526
440
Ageing of receivables that have been impaired is as follows:

120 + days
526
440
7.2 Sale of receivables

Trade receivables at year end are disclosed net of balance sold to a local financial institution. At year end, the Group sold the right to
its trade receivables in return for cash payment from a local institution with no recourse. The costs of the transaction amounting to
US$23 695 (2013:US$72 391) were written off as an expense for the year ended 31 March 2014.
The trade receivables were sold net of related allowance for credit losses.

31.03.14
US$000
31.03.13
US$000
Sunsweet trade receivables

Allowance for impairment losses
3 093
(272)
3 016
-
Net amount sold
2 821
3 016
8. Deferred plant maintenance costs

This amount relates to actual costs incurred during the off-crop season which relate to plant maintenance. These costs are amortised
to profit or loss during the course of the next milling season.
39

9. Capital and reserves
9.1 Authorised and issued share capital
The Company has an authorised share capital of 200 million shares with a nominal value of $0.08 each, of which 193 020 564 shares
have been issued.
9.2 Unissued share capital
In terms of an ordinary resolution dated 22 August 1990, the Directors are authorised to issue or dispose of all or any of the unissued
share capital of the Company for an indefinite period upon such terms and conditions and with such rights and privileges attached thereto
as they may determine, subject to the limitations of the Companies Act (Chapter 24:03) and the Zimbabwe Stock Exchange.
9.3 Non-distributable reserve
Foreign

currency

translation

reserve

US$000
Other nondistributable
reserve
US$000
Total
US$000
(72)
128 371
128 299
(363)
-
-
310
(363)
310

(435)
128 681
128 246
(156)
(156)
Deferred tax on post acquisition of foreign associate

Revaluation of original investment
Revaluation of opening post acquisition reserves
(13)
(18)
(125)
-
-
-
(13)
(18)
(125)
123
123
(591)
128 804
128 213

Note 2.1
The other non-distributable reserve arose as the net effect of restatement of assets and liabilities previously denominated in Zimbabwean
dollars on 1 January 2009.
40

10.
Deferred tax liabilities

31.03.14

US$000

64 297
-
59 964
192
Balance at the beginning of the year (restated)

Transfer from capital reserve arising from exchange
gain/(loss) on translation of equity in foreign
associated company
Profit or loss charge arising on originating
temporary differences
64 297
60 156
13
65 427
64 297
43 271
-
42 851
(2 042)
664
21 060
432
1 001
22 070
417
65 427
64 297
Trade payables
10 938
Accrued liabilities
7 995

18 933
17 535
5 883
Deferred tax comprises the

tax effect of temporary differences arising from:
property, plant and equipment
tax losses
prepayments, provisions, deferred
offcrop expenditure and exchange gain
biological assets
accumulated profit of foreign associated company
11.
31.03.13
US$000
Restated
1 117
4 138
23 418
Trade payables comprise amounts outstanding for trade purchases. The average credit period taken to settle trade purchases
is 30 days. The majority of trade payables do not accrue interest. The Group has financial risk management policies in place
to ensure that all payables are paid within the pre-agreed credit terms. The Directors consider that the carrying amount of
accounts payable approximates their fair value.
12.
Provisions
12.1
Post retirement provisions

31.03.14

US$000

12.2
31.03.13
US$000
Restated

11 127
-
11 419
(325)
Balance at the beginning of the year (restated)

(Decrease)/increase during the year

11 127
(5 144)
11 094
33
5 983
11 127

(Decrease)/increase during the year
5 009
(493)
3 762
1 247
4 516
5 009
Leave pay and other provisions
41

12.
Provisions (continued)
12.3
Provisions for decommissioning costs

The main resources of the Group are land and its sugar production facilities. The Directors have always pursued a policy of
annual planned maintenance and renewal of the sugar production facilities. In addition to this, it is the policy of the Group to
carry out sound and proven agricultural practices that do not result in the loss of the income generating capability of the land.
Accordingly, it is the opinion of the Directors that the Groups resources are completely renewable and do not have a finite
life. No provision has therefore been made for decommissioning costs as specified by International Accounting Standard 37
Provisions, Contingent Liabilities and Contingent Asset as this event is unlikely to occur.
13.
Borrowings

31.03.14
US$000
31.03.13
US$000
Unsecured - at amortised cost

Loans from:
- Barclays Bank Zimbabwe Limited (i)
- Standard Chartered Bank Zimbabwe Limited (ii)
- Triangle Limited (iii)
- Central African Building Society (CABS) (iv)
- CBZ Bank Limited (v)
- Stanbic Bank Zimbabwe Limited (vi)
- African Banking Corporation of Zimbabwe Limited (BancABC) (vii)
124
12 800
33 849
3
-
3 523
15 696
5 000
12 776
29 354
1 423
-
65 995
48 553
Short-term
Long-term
65 995
-
48 553
-
65 995
48 553
13.1
Summary of borrowing arrangements
(i)
(ii)

(iii)

(iv)
(v)
(vi)
(vii)

The overdraft facility is renewable annually and bears interest of 9% per annum (2013: 6% above libor).
The loans are repayable within periods ranging from 90 to 180 days and bear interest of 6.33% per annum (2013:
6% per annum).
The amount is repayable to a related party of the Group. Interest of 12% per annum (2013:12% per annum) is
charged on the outstanding loan balances at year end.
The overdraft facility is renewable annually and bears interest of 10% per annum.
The overdraft facility is renewable annually and bears interest of 10% per annum (2013: 12% per annum).
The overdraft facility is renewable annually and bears interest of 9% per annum.
The facility consists of an overdraft portion renewable annually, and short term renewable loans repayable
within 180 days. The facility bears interest of 11.5% per annum.
42

14.
15.
Operating profit

Year

ended

31.03.14

US$000

Year
ended
31.03.13
US$000
Restated
Turnover
Revenue
136 125
(3 922)
174 239
3 729
132 203
177 968
Cost of sales
87 705
121 656
Agricultural and mill chemicals

Cane purchases
Depreciation
Staff costs
Maintenance and other direct production costs
5 347
33 770
9 297
18 420
20 871
8 446
50 303
8 958
22 613
31 336
Administration costs
25 801
33 183
Audit fees - external

- internal
Depreciation
Staff costs
Maintenance and other administration costs
211
121
1 575
17 719
6 175
205
116
2 960
18 084
11 818
Loss on disposal of property, plant

and equipment
Exchange loss/(gain)
Other sundry income
212
23
(651)
(50)
(109)
Net operating costs
113 090
154 680
Operating profit
19 113
23 288
Interest received
Interest paid - loans
(66)
8 476
(60)
6 854
8 410
6 794
Net finance charges
43

16.
Income tax expense

Year

ended

31.03.14

US$000

16.1
16.2
Year
ended
31.03.13
US$000
Restated
Income tax expense

Normal tax
Movement in deferred taxation
Transfer to Non-distributable reserve
(1 837)
(1 130)
56
(4 141)
3
Charged to group statement of profit or loss
(2 911)
(4 138)

%
Reconciliation
of tax rate
Gross tax rate
25.75
Tax effect of associate results reported net of tax
(2.64)
Tax effect of Income exempt from tax
(0.04)
Tax effect of expenses not deductible for tax purposes
1.34
%
25.75
(1.77)
(1.10)
0.47
Effective tax rate
23.35
17.
Earnings per share
17.1
Earnings per share is calculated as shown below:

Profit for the year
Weighted average number of shares in issue (shares)
24.41
9 015
13 586
193 020 564 193 020 564
4.67
7.04
Changes in the Groups accounting policies during the year are described in detail in note 2.1. The changes in accounting
policies affected only the Groups results from continuing operations. To the extent that those changes have had impact on
results for the current year and prior year, they have had an impact on the amounts reported for earnings per share.
The following table summarises the effect on basic earnings per share for the year ended 31 March 2013.

Decrease

in profit

for the year

US$000

Decrease in
basic earnings
per share
US cents
Note
Changes in accounting policies relating to:
Application of IFRS 10
2.1
Application of IFRS 11
2.1
Application of IAS 19 (revised in 2011)
2.1
-
-
(60)
(0.03)
(60)
(0.03)
17.2
Diluted earnings per share has not been calculated as the extent of the dilution is immaterial.
18.
Dividends
In order to restore the Groups operational capacity to optimal levels, the Directors have decided not to declare a dividend for
the year ended 31 March 2014.
44

19.
Notes to the Group statement of cash flows

Year

ended

31.03.14

US$000

19.1

Profit before tax
Depreciation
Net movement in provisions
11 926
10 873
(4 978)
17 724
11 918
451
Gross movement in provisions

Movement in non distributable reserves

(5 144)
166
33
418
212
3 922
8 410
(1 223)
(3 729)
6 794
(1 230)
29 142
31 928
Changes in working capital

Increase in inventories
Decrease/(increase) in accounts receivable
(Decrease)/increase in accounts payable
Movement in provisions
(7 881)
2 359
(4 485)
(493)
(5 242)
(10 563)
2 372
1 247
(10 500)
(12 186)
Proceeds on disposal of property, plant and equipment

Carrying amount of property, plant and
equipment disposed
Loss on disposal of property,
plant and equipment
477
212
689
Directors emoluments
In respect of services as Directors
In respect of managerial services
Audit committee fees
77
1 319
18
88
1 259
22
1 414
1 369
Loss on disposal of property,

plant and equipment
Fair value loss/(gain) on biological assets
Net finance charges
Share of associated companies profit

19.2
19.3
20.
21.
22.
Year
ended
31.03.13
US$000
Restated
Employee benefit expense

Wages and salaries
32 408
Pension cost - defined contribution plans
3 121
Other employee benefits
610

36 139
36 814
3 193
690
40 697
Borrowing powers
In terms of Article 89 of the Articles of Association as amended at the extraordinary general meeting held on 20 April 2002,
the borrowing power of the Company is limited to a maximum amount equal to half the shareholders funds comprising issued
capital, share premium, non-distributable reserves and distributable reserves.
45

23.

Related party transactions and balances

Sugar revenue which constitutes approximately 93% of the Group revenue is derived from sales made on behalf of the
Group by Zimbabwe Sugar Sales (Private) Limited in which the Group has a 50% shareholding. (note 3.2)
23.1
Balances between the Group and related parties as at 31 March are shown below:
23.2
31.03.14
US$000
31.03.13
US$000
Trade accounts receivable/(payable):

NCPDZ - Associate company
Tongaat Hulett Limited (Tongaat Hulett) - Parent company
688
(6 728)
537
(4 527)
Borrowings:
Triangle Limited
33 849
29 354
Transactions between the Group and related parties are shown below:

Year
ended
31.03.14
US$000
Year
ended
31.03.13
US$000
Triangle Limited
- Sales
- Operating expenses
- Interest
- Directors fees

Tongaat Hulett
- Technical and management fees
2 601
(882)
(3 412)
64
2 468
(992)
(3 235)
61
(1 629)
(1 698)
2 723
3 485
Tongaat Hulett facilitates purchase of inputs from South Africa on behalf of the Group as part of the Groups initiative to derive
synergistic benefits and internal economies of scale. These purchases are conducted at arms length.
23.3
- Sales
- Operating expenses
143
(3)
53
(2)
140
51
Compensation to key members of management

Short-term benefits
Post-employment benefits
3 105
334
2 627
347
3 439
2 974
The remuneration of Directors and key executives is determined based on the remuneration policy detailed in the Corporate
Governance statement.
46

23.
Related party transactions and balances (continued)
23.4
Receivables from key management personnel
24.
31.03.14
US$000
31.03.13
US$000
Receivables from key management personnel
10
Segmental reporting
IFRS 8 Operating Segments
The Group has two major operating segments, namely Agriculture and Milling. Other smaller segments which are individually
immaterial are aggregated into the Gaming and other Farming Activities segment. Agriculture deals mainly with the planting,
maintenance, harvesting and haulage of cane to the mill. Milling deals mainly with the crushing and subsequent production
of raw sugar. Other aggregated segments mainly deal with sugar packaging, game hunting and fishing, citrus fruits and cattle
ranching. All these segments operate their activities in Chiredzi. The accounting policies of the reportable segments are the
same as the Groups accounting policies.
Segment information for the reportable segments for the year ended 31 March 2014 is as follows:

Agriculture
Milling

$000
$000
Gaming
and other
farming
activities
$000
Total
$000
Total segment revenue

Inter segment revenue
Fair value gain on biological assets
56 057
(60 780)
4 723
135 363
-
-
1 818
(255)
(801)
193 238
(61 035)
3 922
Revenue from external customers
135 363
762
136 125
EBITDA
Depreciation and amortisation
13 721
(5 672)
15 836
(4 473)
429
(728)
29 986
(10 873)
Operating profit
8 049
11 363
(299)
19 113
Total non-currrent assets
164 912
47 448
18 223
230 583
Reportable segments for non-current assets are reconciled to total non-current assets as follows:
Segment non-current assets for reportable segments
Unallocated: Investments in associated companies
230 583
3 427
Total non-current assets per statement of financial position
234 010
Included in revenues arising from direct sales by the milling segment are revenues of approximately US$42 526 302 (2013:
US$28 368 592) realised from sales to the Groups largest customer. The only other single customer that contributed 10% or
more to the Groups revenue accounted for revenues of approximately US$16 004 268 (2013:US$21 386 600).
47

24.
Segmental reporting (continued)
Segment information for the reportable segments for the year ended 31 March 2013 is as follows:

Agriculture
Milling

US$000
US$000
Gaming
and other
farming
activities
US$000
Total
US$000
Total segment revenue

Inter segment revenue
Fair value gain on biological assets
74 073
(70 550)
(3 523)
173 513
-
-
1 329
(397)
(206)
248 915
(70 947)
(3 729)
Revenue from external customers
173 513
726
174 239
EBITDA
Depreciation and amortisation
9 575
(3 913)
25 257
(6 340)
374
(1 665)
35 206
(11 918)
Operating profit
5 662
18 917
(1 291)
23 288
Total non-currrent assets
159 162
72 152
9 031
240 345
Segment non-current asset for reportable segments

Unallocated: Investments in associated companies
240 345
3 174
Total non-current assets per statement of financial position
243 519
Reportable segments for non-current assets are reconciled to total non-current assets as follows:
Current assets and total liabilites are not allocated to segments, as working capital and financing are driven by a central treasury
function, which manages the cash position of the Group. Information provided regulary to the chief operating decision-maker
does not separate these elements into different segments.
Sales between segments are carried out at arms length. The revenue from external parties reported to the strategic steering
committee is measured in a manner consistent with that in the statement of comprehensive income.
25.

Directors shareholdings
Ordinary shares held by Directors

Number of
shares held
31.03.14
Number of
shares held
31.03.13
Non-beneficial shareholding
M H Munro
S D Mtsambiwa
L R Bruce
F A D Musikavanhu
S G Nhari
J E Chibwe
N Kudenga
J P Maposa
S L Slabbert
P H Staude
-
100
100
-
700
-
-
100
-
-
100
100
700
100
-
Total Directors shareholding
1 000
1 000
48

26.
Capital expenditure commitments

31.03.14
US$000
31.03.13
US$000
Commitments for capital expenditure

Contracted for
Authorised but not contracted for
2 989
7
6 909
2 214
2 996
9 123
The capital expenditure will be financed from the Groups resources and existing facilities.
27.
Land acquisition
As the full 4 979 hectares of Mkwasine arable land has been allocated to private farmers, focus continues to be on the
restoration of cane production by the private farmers. This is being driven through the SusCo project facilitated by the Mkwasine
consortium partners, Hippo Valley Estates Limited and Triangle Limited.
Notwithstanding the dynamics of land ownership in Zimbabwe, the Directors are satisfied that future economic benefits from
the use of land will continue to flow to the Group. As a consequence, the Directors believe that the preparation of the financial
statements on a going concern basis is still appropriate.
28.
Financial instruments
28.1
Group risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising
the return to stakeholders through an appropriate debt and equity balance. The Groups strategy remains relatively unchanged
from 2013. The capital structure of the Group consists of debt, which includes borrowings disclosed in note 13, cash and cash
equivalents and equity comprising issued share capital, non-distributable reserves and retained earnings as disclosed in the
financial statements.
28.1.1 Gearing ratio

The Board reviews the capital structure on an ongoing basis depending on the emerging needs of the Group. The borrowing
powers are detailed in note 22. The gearing ratio at end of year was 14.32% (2013:17.96%), calculated as shown below.

31.03.14

US$000

31.03.13
US$000
Restated
Debt (i)
Cash and bank balances
65 995
(34 505)
48 553
(10 665)
Net debt
31 490
37 888
Equity (ii)
219 883
210 901
Net debt/(cash) to equity ratio
14.32%
17.96%
(i) Debt is defined as long-term and short-term borrowings, as described in note 13.
(ii) Equity includes all capital and reserves of the Group that are managed as capital.
28.2
Significant accounting policies

Details of the significant accounting policies and methods adopted (including the criteria for recognition, the bases of
measurement and the bases for recognition of income and expenses), for each class of financial asset, financial liability and
equity instrument are disclosed in significant accounting policy note 6 to the financial statements.
49

28.
Financial instruments (continued)
28.3
Categories of financial instruments

31.03.14

US$000

28.4
31.03.13
US$000
Restated
Financial assets
Amortised cost
Trade and other receivables (excluding
prepayments and VAT)
34 505
10 665
20 688
16 718
55 193
27 383
Financial liabilities
Amortised cost
Borrowings (note 13)
18 933
65 995
23 418
48 553
84 928
71 971
Fair value of financial instruments
28.4.1 Fair value of financial instruments measured at amortised cost

The carrying amounts of financial assets and financial liabilities recognised at amortised cost in the financial statements
approximate their fair values.
28.4.2 Valuation techniques and assumptions applied for the purposes of measuring fair value
The fair values of other financial assets and other financial liabilities are determined in accordance with generally accepted
pricing models based on discounted cash flow analysis using prices from observable current market transactions and
dealer quotes for similar instruments.
The Group currently does not hold any other forms of financial instruments.
28.5
Financial risk management objectives

The Board through the Audit Committee and in conjunction with relevant senior management manages the financial risks
relating to the operations of the Group through internal risk reports which analyse exposures by degree and magnitude of risks.
These risks include market risk including currency risk, interest rate risk, credit risk, liquidity risk and cash flow risk as well as
ancillary risks such as political risk.
In a rapidly changing environment such as Zimbabwe, these risks are managed on an on-going basis. The Group does not
enter into or trade in financial instruments for speculative purposes.
28.6
Market risk
The Groups activities expose it primarily to financial risk of interest rates and changes in foreign currency exchange rates.
28.7
Interest rate risk management

The Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and floating interest rates. The risk
is managed by the Group by maintaining an appropriate mix between fixed and floating rates and where possible borrowing
at concessionary rates below that of inflation. Details of the interest rates on the Groups short term liabilities are provided in
note 13.
28.7.1
Interest rate sensitivity analysis

The sensitivity analysis below has been determined based on the exposure to interest rates for financial liabilities held at the
end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding
at the end of the reporting period was outstanding for the whole year. A 1% increase or decrease is used when reporting interest
rate risk internally to key management personnel and represents managements assessment of the reasonably possible change
in interest rates.
50

28.
28.7.1 Interest rate sensitivity analysis (continued)

If interest rates had been 1% higher/lower and all other variables were held constant, the Groups profit for the year ended
31 March 2014 would have decreased/increased by US$84 758 (2013: decreased/increased by US$54 663). There is no
impact on other comprehensive income.
28.8
Foreign currency risk management

The Group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations
arise. The Group does not use forward exchange contracts to hedge its foreign currency risk.
The carrying amounts of the Groups foreign currency denominated monetary assets and monetary liabilities at the end of the
reporting period are as follows.
Liabilities
31.03.14
31.03.13
US$000
US$000

South African Rand (ZAR)
European (Euro)
7 263
-
4 972
25
Assets
31.03.14
31.03.13
US$000
US$000
-
-
28.8.1 Foreign currency sensitivity analysis

The Group is mainly exposed to the currency of South Africa (ZAR).
The following table details the Groups sensitivity to a 10% increase and decrease in the US$ exchange rate against the
relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management
personnel and represents managements assessment of the reasonably possible change in foreign exchange rates.
The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation
at the year end for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as where the
denomination of the loan is in a currency other than the US$. A positive number below indicates an increase in profit and other
equity where the US$ strengthens by 10% against the relevant currency. For a 10% weakening of the US$ against the relevant
currency, there would be a comparable impact on the profit and other equity, and the balances below would be negative.

Change by 10%
Statement of comprehensive income
Other equity

28.9
EURO impact
31.03.14
31.03.13
US$000 US$000

-
-
3
-
ZAR impact
31.03.14
31.03.13
US$000
US$000
726
-
497
-
Other price risks

The Group does not have exposure to equity price risk as it does not hold shares in any listed securities. Equity investments are
held for strategic rather than trading purposes. The Group does not actively trade in these investments.
28.10 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group has adopted a policy of only dealing with creditworthy counterparties. This is managed by a separate marketing
arm of the Sugar Industry - Zimbabwe Sugar Sales which largely sells to long established customers. The Group does not have
any significant credit risk exposure.
28.11 Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built a liquidity risk
management framework for the management of the Groups short, medium and long term funding and liquidity management
requirements. The Group manages liquidity risk by maintaining adequate reserves and banking facilities, by continually
monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
28.11.1 Liquidity and interest risk tables
The following tables detail the Groups remaining contractual maturity for its non-derivative financial liabilities with agreed repayment
periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the Group can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows
are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period.
51

28.
28.11.1 Liquidity and interest risk tables (continued)

Weighted
average

interest

rate

%
less than
1 month
US$000
1-3
months
US$000
3 months
to 1 year
US$000
1-5
years
US$000
Total
US$000
31.03.14
Non-interest bearing
18 933
18 933
Floating rate loans

Barclays Bank
6.33
12
9
11.5
9
10
12 867
338
1
84
26
-
-
677
2
8 955
3 576
-
-
36 896
127
-
-
3
-
-
-
-
-
-
12 867
37 911
130
9 039
3 602
3
32 249
13 210
37 026
82 485
31.03.13
Non-interest bearing
23 418
23 418
6.3
5 026
5 026
6.0
12.0
12.0
5 064
268
14
7 815
537
28
-
29 249
1 481
-
-
-
12 879
30 054
1 523
33 790
8 380
30 730
72 900
Fixed rate loans

Standard Chartered Bank
Triangle Limited
Barclays Bank
BancABC
Stanbic Bank
CABS
Floating rate loans

Barclays Bank
Fixed rate loans
Triangle Limited
CBZ Bank
52

28.
28.11.2 Financing facilities

Unsecured loan facilities with various maturity dates through to 31 March 2014 and which may be extended by mutual
agreement.

31.03.14
31.03.13

US$000
US$000

Barclays Bank
- amount used
124
5 000
- amount unused
7 876

8 000
5 000

- amount used
- amount unused
12 800
2 200
12 776
2 224
15 000
15 000
Triangle Limited
- amount used
33 849
29 354
33 849
29 354
CBZ Bank
- amount used
- amount unused
-
5 000
1 423
3 577
5 000
5 000
CABS
- amount used
- amount unused
3
8 997
9 000
Banc ABC
- amount used
- amount unused
15 696
(62)
16 000
15 634
16 000
Stanbic Bank
- amount used
- amount unused
3 523
6 477
5 000
10 000
5 000
Total facilities available

Analysed as follows:
96 483
-total amount used

-total amount unused
53
65 995
30 488
75 354
48 553
26 801

29.
Company Results
The Company results have not been shown in the notes to the financial statements as the difference between the Group and
Company results is immaterial and would result in duplication of a significant number of the notes. The Company statement
of financial position and statement of comprehensive income have been added to the report as supplementary information to
the Group financial statements (see pages 55 to 56). Consequently the directors believe that the Group financial statements
comply with the Companies Act (Chapter 24:03) in all material respects.
29.1
The Group financial statements differ from those of the Company on the following elements.
31.03.14

Group
Company
Difference

US$000
US$000
US$000

Group
US$000
Restated
31.03.13
Company
US$000
Restated
Difference
US$000
Restated
Net assets
Investment in associate companies 3 427
15 167
Accounts receivable - other
9 250
Deferred tax liabilities
65 427
3 174
18 989
18 346
(64 297)
1 718
18 986
18 354
(64 147)
1 456
3
(8)
(150)
1 540
1 301
1 718
15 165
9 258
65 264
Net difference
Equity
Profit for the year
9 015
Retained earnings at beginning of
the year
67 213
Non-distributable reserves
128 213
1 709
2
(8)
(163)
8 620
395
13 586
13 217
369
66 058
128 223
1 155
(10)
53 627
128 246
52 841
128 100
786
146
1 540
1 301
Net difference
54
COMPANY STATEMENT OF FINANCIAL POSITION

As at 31 March 2014

31.03.14

US$000

31.03.13
US$000
Restated
ASSETS
Non-current assets
232 301
242 063

Biological assets
Investments in associate companies
198 753
31 830
1 718
202 428
37 917
1 718
Current assets
147 229
119 791
Biological assets
- sugar
Accounts receivable - trade
- other
Deferred plant maintenance costs
Current tax asset
49 958
15 165
17 867
13 272
9 258
7 204
-
34 505
47 793
18 986
6 164
6 535
18 354
10 935
359
10 665
Total assets
379 530
361 854
EQUITY AND LIABILITIES

Capital and reserves
218 343
209 600
Issued capital
Non-distributable reserve
Retained earnings
15 442
128 223
74 678
15 442
128 100
66 058
Non-current liabilities
71 247
75 274
Deferred tax liabilites

Provisions
65 264
5 983
64 147
11 127
Current liabilities
89 940
76 980

Provisions
Short-term borrowings
Current tax liability
18 933
4 516
65 995
496
23 418
5 009
48 553
-
Total equity and liabilities
379 530
361 854
55
COMPANY STATEMENT OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME

Year

ended

31.03.14

US$000

Year
ended
31.03.13
US$000
Restated
Turnover
Revenue
136 125
(3 922)
174 239
3 729
132 203
177 968
Operating profit
Dividends received
Net finance charges
19 113
828
(8 410)
23 288
861
(6 794)
Profit before tax

Income tax expense
11 531
(2 911)
17 355
(4 138)
Profit for the year
8 620
13 217
Items that will not be reclassified subsequently to profit or loss

- Actuarial gain on post retirement provision
123
310
8 743
13 527
4.47
6.85
Other comprehensive income, net of tax
56
DEFINITION OF TERMS
Capital employed
Total capital and reserves plus long-term borrowings.
Current ratio
Current assets divided by current liabilities.
Gearing ratio
Interest bearing debt less cash and bank balances divided by total share capital and reserves.
Earnings per share
Profit for the year divided by the weighted average number of shares in issue at year-end.
Interest cover
Operating profit divided by interest payable.
Market capitalisation
Number of shares in issue at year-end multiplied by the closing price per share.
Net asset value
Total assets minus total liabilities excluding deferred taxation.
Net asset value per share
Net asset value divided by the number of shares in issue at year-end.
Net worth per share
Total capital and reserves divided by the number of shares in issue at year-end.
Operating profit
Profit before interest, dividends received, taxation and share of associated companies profits.
Return on total capital and reserves
Profit for the year expressed as a percentage of total share capital and reserves.
Shareholders funds
Issued share capital, share premium, capital reserve, revenue reserves and proposed dividend.
Total liabilities
Long-term borrowings and current liabilities excluding deferred taxation.
57
ANALYSIS OF SHAREHOLDERS
Shareholders
Number
%
Shares
Number
Shareholders registered with Zimbabwean addresses

Shareholders registered with external addresses
963
483
66.60
33.40
165 385 821

27 634 743
85.68
14.32
1 446
100.00
193 020 564
100.00
Shares held by:

Individuals
Pension funds and insurance companies
Other corporate bodies
960
133
353
66.39
9.20
24.41
11 628 615
48 778 699
132 613 250
6.02
25.27
68.71
1 446
100.00
193 020 564
100.00
Ten largest shareholders as at 31 March 2014

Number

of shares
1.
2.
3.
4.
5.
6.
7.
8
9.
10.
Triangle Sugar Corporation Limited

Old Mutual Life Assurance Company Zimbabwe Limited
Tate & Lyle Holland B.V.
National Social Security Authority
Standard Chartered Nominees (Private) Limited- NNR
Stanbic Nominees (Private) Limited - NNR
Old Mutual Zimbabwe Limited
Mining Industry Pension Fund
First Mutual Life
Datvest Nominees (Private) Limited
97 124 027
24 638 446
19 314 480
11 034 856
5 396 081
4 052 807
3 328 313
2 984 352
1 149 705
1 090 880
50.32
12.76
10.01
5.72
2.80
2.10
1.72
1.55
0.60
0.57
170 113 947
88.15
58

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59

Sugar cane irrigation

DIRECTORATE, MANAGEMENT AND ADMINISTRATION

GROUP FINANCIAL SUMMARY

CHAIRMANS STATEMENT AND CHIEF EXECUTIVES REVIEW

REPORT OF THE INDEPENDENT AUDITORS

GROUP STATEMENT OF FINANCIAL POSITION

GROUP STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

GROUP STATEMENT OF CHANGES IN EQUITY

GROUP STATEMENT OF CASH FLOWS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTES TO THE GROUP FINANCIAL STATEMENTS

COMPANY STATEMENT OF FINANCIAL POSITION

COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Hippo Valley Estates Limited Board:

DIRECTORATE, MANAGEMENT AND ADMINISTRATION

* Member of the Audit Committee

Telephone : +263 31 5151/6

GROUP FINANCIAL SUMMARY

CHAIRMANS STATEMENT AND CHIEF EXECUTIVES REVIEW

of private farmer cane land were replanted against a target of

Following the recent good rains received countrywide, all

The 2013/14 milling season commenced on 16 April and

The private farmers in the Hippo Valley Mill Group delivered

Private farmers cane deliveries to the industry mills totalled

CHAIRMANS STATEMENT AND CHIEF EXECUTIVES REVIEW (continued)

As a consequence of the decrease in profit after tax, earnings

INDUSTRIAL RELATIONS AND SOCIO-ECONOMIC DEVELOPMENT

In light of the positive outturn of the 2013/14 rainfall season, the

The recently instituted measures to protect the local market

Significant success has been achieved in the drive to reduce

Cash generated from operations totalled $29,1 million

accordingly, remunerated on terms commensurate with market

In preparing the financial statements, the Group has used appropriate

In addition to the executives and managers responsible for

The Board is committed to providing timeous, relevant and

To enable the Directors to meet their responsibilities, management

The Board meets under the chairmanship of a Non-executive

The Groups employment policy emphasises opportunity for all

These policies include appropriate training, recruitment targets

The Group is committed to addressing and impacting, in a

The Directors are appointed to the Board to bring appropriate

for internal control, a strong emphasis has been placed on

In line with the Zimbabwe Stock Exchange Listing Requirements,

Property, plant and equipment

DIRECTORS REPORT (continued)

Profit before tax

Profit for the year

Retained earnings carried forward

Total sugar production for the season (tons)

Area cut for milling during the year (hectares)

Sugar cane harvested for milling (tons)

Total cane milled at Hippo Valley Estates Limited

REPORT OF THE INDEPENDENT AUDITORS

Deloitte & Touche

TO THE MEMBERS OF HIPPO VALLEY ESTATES LIMITED

DELOITTE & TOUCHE

GROUP STATEMENT OF FINANCIAL POSITION

Property, plant and equipment

EQUITY AND LIABILITIES

Deferred tax liabilites

Trade and other payables