Contentsexcel on its service delivery mandate to the Swazi Nation in 2015. An amount of E109.5...

Contents

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PRESENTATION TO HIS MAJESTY THE INGWENYAMA

MISSION STATEMENT

OBJECTIVES OF THE ORGANISATION

CHAIRMAN’S STATEMENT

MANAGING DIRECTOR’S REPORT

TIBIYO MAIN COMMITTEE

CORPORATE GOVERNANCE

TIBIYO TAKA NGWANE INVESTMENTS

REVIEW OF OPERATIONS

AGRICULTURE & AGRO-PROCESSING

TOURISM

PROPERTY

SERVICES

MANUFACTURING

MINING

SWAZI NATION DEVELOPMENT EXPENDITURE

FINANCIAL STATEMENTS

CORPORATE DETAILS INSIDE BACK COVER

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6 - 7

8 - 9

10 - 11

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25 - 29

30 - 32

33 - 37

38 - 39

40 - 41

42 - 45

46 - 66

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HIS MAJESTY INGWENYAMA KING MSWATI III

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Ngwenyama Ndvuna,

Libandla leTibiyo (the Main Committee of Tibiyo) is honoured and privileged to present the Annual Report for the financial year ended 30 April 2015, covering:

Review of the operations of the organisation Audited Financial Statements Tibiyo’s Social Responsibility.

May it please your Majesty to receive this report.

BAYETHE! WENA WAPHAKATHI!!

Absalom Themba Dlamini Fipha DlaminiManaging Director Chairman

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PRESENTATION TO HIS MAJESTY THE INGWENYAMA

TIBIYO TAKA NGWANE ANNUAL REPORT 2015

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Tibiyo Taka Ngwane (Tibiyo) is a Swazi Nation Organisation that is at the core of the social, cultural and economic development of the Swazi people.

MISSION STATEMENT

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To complement Government in fostering economic independence and self sufficiency;To increase formal sector employment;To increase income in the hands of citizens;To earn and/or save foreign exchange;To develop the rural communities of the Kingdom;To foster and support the maintenance of Swazi tradition and cultural heritage;To assist financially and materially in the education and training of citizens.

To meet its objectives, Tibiyo Taka Ngwane actively promotes the establishment of commercially viable projects in all sectors of the economy. These projects must satisfy the following criteria:• National desirability;• Economic viability;• Technical feasibility;• Profitability.

In playing its developmental role, Tibiyo Taka Ngwane cooperates with and appreciates assistance from national and international investment organisations. It also invites suitable and experienced local as well as foreign business entities to either form business partnerships or manage its wholly owned projects.

OBJECTIVES OF THE

ORGANISATION

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The country’s performance in 2015 is estimated to have expanded by 2.7% which is marginally higher than the 2.5% initially projected. The improved

performance was largely influenced by a combination of factors, one being the expansion of some sectors, including construction which grew by 16.3% and wholesale and retail subsectors. Output of the secondary sector grew by 4.3% compared to 3.5% the previous year. This was attributed to manufacturing which achieved an output of 2.9% compared to 1.9% the previous year. Manufacturing output, was driven mainly by increased sugar production, various edibles and soft drink concentrates.

Meanwhile, the primary sector decreased by 2.1% compared to a 3.1% increase the previous year. Contri-buting factors were the low citrus production, closure of the iron ore mine and reduced coal production. The tertiary sector grew by 2.4% compared to 3% in the previous year.

The mining sector was severely affected by the falling global demand and suffered a 50% decline in iron ore prices which culminated into the termination of operations at the iron ore mine towards the end of 2014.

Global EconomyThe Global Economy in 2015 recorded a 3.4% growth from 2.9% the previous year. According to the IMF’s World Economic outlook, going forward, factors that will impact on the global economy’s growth are mainly geopolitical tensions, inflation, declining oil and commodity prices, interest rates and currency adjustments.

The IMF growth forecast for RSA was reduced to 2% from 2.3%, which was attributed to electricity shortages which is considered to be the biggest impediment to growth. In addition, the exchange rate depreciation and rising food prices in the region have a direct effect on Swaziland.

Swazi Nation Development ExpenditureInspite of adverse economic conditions, Tibiyo continued to excel on its service delivery mandate to the Swazi Nation in 2015. An amount of E109.5 million was spent on the relevant services in 2015 compared to E103.4 million the previous year.

Tibiyo continued to ensure that all cultural and traditional ceremonies were efficiently serviced. Funds were expended

The success of the organisation in 2015 is largely attributed to the commitment and dedication of the Executive Management, Management and the entire staff of Tibiyo, together with the able leadership and management of its associate and subsidiary companies.

Prince Fipha Chairman

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CHAIRMAN’S STATEMENT

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on food, accommodation, transport, security, health care and other support services to participants.

During the year the following national ceremonies were catered for: Incwala, Buganu and Umhlanga. The cultural ceremonies have continued to attract throngs of Swazi nationals who increasingly participate every year and tourists who flock the country to be part of the main days of these ceremonies.

OutlookGoing forward, the country is faced with various challenges, including the loss of AGOA which has impacted on the textile sector; the imminent loss of AGOA for South Africa; the EU Sugar Regime which is due to change in 2017; the falling EU sugar prices and the projected decline in SACU revenue. Swaziland sources over 80% of imports from South Africa and hence the economic performance of this country has a major influence on Swaziland.

AcknowledgementThe success of the organisation in 2015 is largely attri-buted to the commitment and dedication of the Executive

Management, Management and the entire staff of Tibiyo, together with the able leadership and management of its associate and subsidiary companies.

In a special way, I recognise with appreciation and gratitude, the contribution of the Main Committee and their valued support and guidance at all times.

Last but not least, on behalf of the Main Committee, I acknowledge with gratitude and honour, the wise counsel and guidance of His Majesty King Mswati III throughout the year.

Bayethe Wena waPhakathi!

Prince Fipha Chairman

The Main Committee at RSSC sugar cane fiellds

MANAGING DIRECTOR’S REPORT

The Economic recovery slowed down in 2015 and the adverse economic conditions faced by Tibiyo’s investee companies impacted negatively on their

performance. As such, Tibiyo was not spared as revenues declined by 28% in the year under review when compared to the previous year, from E270 million to E199 million.

Total assets, however, grew from E1.52 billion to E1.71billion, signifying a growth of 9.87%. Net income for the year grew from E137.45 million to E280.73 million.

Sugar MattersSugar production increased by 5.1% from 653,337 tonnes to 686,778 tonnes, however, sales revenues declined by 9.7% from E4.55 billion to E4.11 billion. The decrease in revenues was mainly due to a reduction in prices of more than 30% in the European Union market.

Molasses production increased by 8.80% from 241,248 tonnes to 263,484 tonnes. The average exchange rate achieved increased by 18% from E1.00 = E12.61 to E1.00 = E14.90. Looking ahead, in the short term, the overall value is expected to decline by 6% as a result of the decline in the EU sugar prices. Preferential access into the EU and US Markets and effective protection in the domestic SACU market, will guarantee sustained value creation for the sugar business.

The major challenges of the sugar industry going forward include increase in production costs, mainly energy costs and climate change. In the 2014/15 growing season, rainfall averaged 360mm which translates to a 74% shortfall that had to be supplied by irrigation. The prevailing drought had an adverse impact on the sugar industry and other agricul-tural projects, subsequently affecting volumes of production.

On markets, the SACU market remains vital for our sugar industry’s survival and the implementation of an effective tariff protection system in this market will ensure increased value. The industry strategy is to diversify sales to the regional markets to counter the price declines in the EU market. Even though EU prices are forecasted to decline, the prices are still at a premium compared to world market prices. Access to other markets e.g. US and COMESA will allow for flexibility in the event the EU market does not yield value for the industry going forward.

Social ResponsibilityIn 2015, Tibiyo continued to complement Government’s effort in development through education and training. An amount of E32 million was spent on scholarships and bursaries.

TrainingThe organisation continues to place emphasis on training and development. Several employees enrolled for both

On behalf of Management and the entire staff, I extend my sincere gratitude to His Majesty, King Mswati III, for his wise leadership in 2015. I also wish to thank profoundly, the Main Committee for their support and guidance throughout the year.

Absalom Themba Dlamini Managing Director

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short and long term training programmes in the country and outside the country.

Long Service AwardsWe congratulate a number of members of staff who received long term service awards in 2015. They were awarded as follows:

• 15 Years - Mavis Dlamini• 20 Years - Nonophile Shongwe, Maria Mthethwa & Busisiwe Shongwe• 25 Years - Simanga Tsabedze• 35 Years - Winston Lomahoza

Tibiyo congratulates these employees and wishes them many more fruitful years in the service of the organisation. Their loyalty is much appreciated.

RetirementIn 2015, the organisation had two retirements, being Ms Lonhlanti Dlamini and Qinisile Ndwandwe. The two have served the organisation with loyalty and dedication over the years. Their contribution is much valued.

OutlookThe organisation is bracing itself for tough times ahead in light of a bleak economic outlook going forward and adverse conditions in the sugar industry, where Tibiyo is heavily invested. As such, a strategic review process and a review of Tibiyo’s Policies as a whole will be prioritised, with a view to aggressively pursue opportunities for diversification.

AppreciationOn behalf of Management and the entire staff, I extend my sincere gratitude to His Majesty, King Mswati III, for his wise leadership in 2015. I also wish to thank profoundly, the Main Committee for their support and guidance throughout the year.

To the Management and staff, I extend my appreciation for their commitment towards achieving the vision and mission of the organisation.

Bayethe Wena waPhakathi!

Absalom Themba DlaminiManaging Director

Long Service Awards recipients posing with members of The Main Committee

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THE MAIN COMMITTEE

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1. Prince Fipha

2. HRH Prince Simelane

3. HRH Princess Sidvumolesihle

4. Chief Ndzabankulu Simelane

5. Chief Ndlaluhlaza Ndwandwe

6. Mr. Absalom Themba Dlamini

7. Mrs. Nokukhanya Gamedze

8. Mr. Winston Lomahoza

9. Mr. Mvuselelo Fakudze

10. Mr Vusi Fakudze

11. Mr. Sigodvo Motsa

12. Mr. Khephu Cindzi

13. Ms. Lindiwe Chola Dlamini

14. Mr. Manqoba Khumalo

CORPORATE GOVERNANCE

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The Main Committee supports the principles of openness, integrity and accountability. It is the Main Committee’s intention that Tibiyo complies

with, in all material aspects, the recommendations on the code of corporate practice and conduct recommended by the King III Report on Corporate Governance. The Main Committee is ultimately responsible for ensuring that the business of Tibiyo Taka Ngwane remains a going concern.

There are three sub-committees of the Main Committee, the Audit Committee, the Remuneration Committee and the Investments Committee, to which specific duties and responsibilities are delegated by the Main Committee.

The External Auditors have unrestricted access to all of Tibiyo’s Committees and all the organisation’s records. Their duty is to report on the maintenance of effective internal controls over the organisation’s business.

ChairmanThe Chairman is a non-executive member of the Main Committee and his role as Chairman is separate from that of the Managing Director.

Audit CommitteeThe Committee is made up of the following members:-Mr. Mvuselelo Fakudze (Chairman), HRH Princess Sidvumolesihle, Chief Ndlaluhlaza Ndwandwe and Mr. Manqoba Khumalo. All the Audit Committee members are non-executive.The mandate of the Audit Committee is to ensure compliance with financial and regulatory frameworks, good corporate governance, accountability and transparency in all transactions and dealings of Tibiyo Taka Ngwane.

Remuneration CommitteeThe Remuneration Committee, comprises four (4) non-executive members. It is responsible for the assessment and approval of the remuneration structure of Tibiyo. The Committee is chaired by Mrs Nokukhanya Gamedze and the other members are HRH Prince Simelane, Chief Ndzabankhulu Simelane, and Mr Khephu Cindzi.

Investment CommitteeThe investment committee comprises four members, namely: Mr. Vusi Fakudze who is chairman, Mr. Sigodvo Motsa, Mr. Manqoba Khumalo, and Ms. Lindiwe Dlamini.

“This committee advises management on the placement of organisational funds. It also advises management on proposed new projects before they are brought to the Main Committee for approval. Additional adhoc members can be co-opted as and when necessary.”

The effective date of appointment for all three committees is 1 April 2015 for a period of three years.

Financial StatementsThe Main Committee is responsible for ensuring the preparation of the Financial Statements in a manner that will present the state of affairs and results of the business operations of Tibiyo Taka Ngwane in accordance with stated accounting policies appropriate to the business of the organisation, which have been consistently applied. The organisation’s External Auditors (KPMG), carry out an independent audit of the Financial Statements in accordance with International Standards of Auditing and report their findings.

The Main Committee believes that Tibiyo will continue to be a going concern in the year ahead and the auditors concur with this opinion.

ManagementThe Management Committee meets regularly, to review operational performance, capital programmes and other relevant issues. Consideration is also given, through well-defined structures, to Tibiyo investments and capital expenditure proposals and other issues of strategic importance to the organisation, for recommendation to the Main Committee.

Internal ControlsTibiyo maintains internal controls and systems designed to provide reasonable assurance as to the integrity of the Financial Statements and to verify and maintain accountability of the organisation’s assets. Such internal controls and systems are based on established policies and procedures and are implemented by trained personnel. The effectiveness of these internal controls and systems is monitored by the organisation’s External and Internal Auditors.

Nothing has come to the attention of the Main Committee, Management or the external auditors, to indicate that any material breakdown in the functioning of the internal controls and systems has occurred during the year under review.

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ACTIVITY/PRODUCTS PERCENTAGE HOLDING

AGRICULTURE

Dalcrue Agricultural Holdings (Pty) Ltd Livestock, Sugar cane, Dairy, Crops, Milling & Foresty Plantations

100.00

Inyoni Yami Swaziland Irrigation Scheme Sugar cane & Livestock 50.00

Sihhoye Estate Sugar cane 100.00

Sivunga Estate Sugar cane 100.00

The Royal Swaziland Sugar Corporation Ltd Sugar cane & Sugar 50.00

Ubombo Sugar Limited Sugar cane & Sugar 40.00

V I F Limited (under Provisional liquidation) Sugar cane 100.00

COMMERCIAL, FINANCE, SERVICES & PROPERTY

Bhunu Mall Property 40.79

Manica Swaziland (Pty) Limited (Dormant) Shipping & Car Rental 25.00

Nedbank (Swaziland) Limited Banking 1.49

Swaziland Development Finance Corporation (FINCORP) SME financier 30.00

Simunye Plaza (Pty) Ltd Property 25.00

The Swazi Observer (Pty) Ltd Newspapers 100.00

Tibiyo Insurance Brokers (Pty) Ltd Insurance Broker 41.25

Tibiyo Properties (Pty) Ltd Property 100.00

MINING

Maloma Colliery Limited Anthracite Coal 25.00

MANUFACTURING & PROCESSING

Parmalat Swaziland (Pty) Ltd Dairy Products 26.00

Swaziland Beverages Limited Beverages 40.00

TOURISM AND TRANSPORT

Royal Swazi National Shipping Corp Ltd (Dormant) Shipping (Containerisation) 76.00

Swazi Spa Holdings Limited Hotels 39.69

Tibiyo Leisure and Resorts (Pty) Ltd, Trading as The Royal Villas

Hotel 100.00

TIBIYO TAKA NGWANE INVESTMENTS

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UBOMBO SUGARLIMITED

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UBOMBO SUGARLIMITED

Ubombo Sugar Limited (USL) & its Subsidiaries, is owned by Illovo (60%) and Tibiyo Taka Ngwane (40%). It is the oldest miller-cum-grower in the

Kingdom, established in the late 1950s.

The principal activity of the company is growing and milling of sugar cane from which it produces about 200 000 tonnes of raw and refined sugar. It is one of the major players in the sugar industry in Swaziland.

Area under cane during the reporting period was 8,646 hectares (2014: 8,646 ha). The estimated area to be harvested for the following season was 8,236 hectares (2014: 8,150 ha) which was anticipated to yield 92.00 tonnes cane per hectare (tch) (2014: 98.50 tch).

Area harvested during the year was 8,168 hectares (2014:8,137 ha) against a budgeted 8,236ha. 92.5 tonnes cane/hectare were realised (2014:95.8 tc/ha). Pol % cane was 13.6% against a budgeted 13.48% (2014: 13.50%).

Finance

An improvement in the sugar price and additional revenue accrued from the previous year has helped increase the forecast profit before interest and tax quite significantly. The deferment of capital projects has reduced financing costs and the loss after taxation is forecast to improve in the near future.

Revenue declined by 13% compared to the previous year and operating profit also declined by 27%.

The net operating margin of 3.5% is an improvement on the previous estimate but below 16.7% achieved last year. Interest cover improved from 0.8 to 0.9.

Commercial

SACU sales for 2014/15 reached the target for the year, but have increased year on year by 64,322 tonnes (21%). The main reason for the large increase is due to the implementation of the import protection reference price at the beginning of the 2014/15 year resulting in recapture of market share from what was previously supplied by importers. Included in the SACU sales for 2014/15 are 12,000 tonnes of spot refined sugar sales to two South African millers. Despite the large increase, Swaziland’s share of the SACU market is 18.6% which is lower than its 22% share of SACU sugar production.

The 10.6% drop in EU sales volumes year on year is due to Swaziland redirecting export sales to better priced USA and regional markets during the year as well as executing its strategy to move into the regional markets with the decrease in the EU prices.

The average price achieved for all sales in 2014/15 of E5,605/tonne, is 10.5% lower than the previous year’s average. The main driver for the drop in the average price is the 21.4% year on year drop in the average EU price. The forecasted EU ex-mill price for 2015/16 is E3,583/tonne (-34.6% vs. 2014/15) driven by an expected 12% strengthening of the Lilangeni against the Euro and a further 22.6% drop in the Euro price. A domestic price increase of 8.5% was implemented with effect from 1 April 2015.

The group and company had an average of 1 203 (2014 : 1,209) employees during the year.

Despite disappointing losses before and after tax it is pleasing to note that since the previous estimate, aided by a strict focus on cost reduction, operating profit has increased by E10.8 million to end the financial year at E74.3 million.

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ROYAL SWAZILANDSUGAR ASSOCIATION

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ROYAL SWAZILANDSUGAR ASSOCIATION

The Royal Swaziland Sugar Corporation posted good results, despite ongoing challenges in the EU marketplace...

Royal Swaziland Sugar Corporation (RSSC) is one of the largest companies in Swaziland and is located in the north-eastern Lowveld. It employs

over 4,000 people (including seasonal employees) and produces two-thirds of the country’s sugar and a significant quantity of ethanol.

It is listed on the local Swaziland Stock Exchange (SSX) and is owned by several minority shareholders (23.8%), while the larger shareholders are Tsb Sugar International (Proprietary) Limited (26.2%) and Tibiyo Taka Ngwane (50%). The minority shareholders include the Swaziland Government, the Nigerian Government, Coca-Cola Export Corporation Limited and Booker Tate Limited.

The Group is engaged in the planting, management and harvesting of sugar cane and the manufacturing of sugar in mills owned by the Group.

The Group grows sugar cane on approximately 16 346 (2014: 16 200) hectares of land leased from the Swazi Nation. The Group manages a further 4 286 (2014: 4 222) hectares on behalf of the IYSIS/MSCo Sugar Partnership and 796 (2014: 796) hectares on hehalf of Tibiyo Taka Ngwane. Fields are managed on a sustainable basis which comprise an average 108 month rotation. All growing cane is harvested in the following financial year.The company grows cane on approximately 11 700 (2014: 11 700) hectares of sugar cane leased from the Swazi Nation land and 31 hectares of freehold land.

Material Issues

3,505,708 tonnes of cane was delivered this year.108tc/ha was achieved, compared to 103tc/ha in 2013/14. In 2012/13, 112tc/ha was achieved because of an older crop from an extended season.Outgrower yields increased from 102.7tc/ha in 2013/14 to 104.6tc/ha in 2014/15. Mills produced 471,208 tonnes of sugar (96ºPol) this season.

The Royal Swaziland Sugar Corporation posted good results, despite ongoing challenges in the EU market, with income attributable to owners of the Group amounting to E234 million. The notable challenges faced during the 2015 financial year include:

The volatile sugar market which translates into possible decreased revenue and having to compete in an unprotected market environment. To counter this, RSSC has a strategy in place to expand its agricultural and mill operations to reduce production costs and find new markets for its products.

An inability to expand production capacity translates into an inability to reduce the unit cost of production. The Company has a strategy in place to expand its production capacity at Mhlume Mill and its land under cane in order to reduce cost per unit.

A strategy to penetrate new markets which is being investigated. This requires a new vision for the Swaziland sugar industry. Unpredictable rainfall, drought and damaging storms have the potential to impact on future cane yields.

RSSC has engaged experts on climate change to advise on strategies to deal with the impacts of climate change.Dependency on service providers and potential power shortages could impact on the productivity of the mills.

Cane yields and the factories are affected if the water supply is insufficient. RSSC has assessed its water supplies and established that it has sufficient water to accommodate its expansion plans. The Company limits its use of coal and wood chips by using bagasse to generate power in the mills.

A scarcity of skills, particularly engineering skills, impacts on the efficiency and effectiveness of the production process. A Graduate Development Programme is in place, aimed at retaining and attracting talent.

Because sugar is a global commodity, RSSC has no control over its pricing. Sugar produced by the Company is placed on the Southern African Customs Union (SACU) and EU markets via the Swaziland Sugar Association (SSA), which aggregates the country’s production and outsources the outbound logistics and marketing of Swazi-grown sugar.

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INYONI YAMI SUGARIRRIGATION SCHEME

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INYONI YAMI SUGARIRRIGATION SCHEME

The entity is primarily involved in the growing of sugar cane, livestock rearing, ecotourism and sale of meat products in local and regional markets.

Inyoni Yami Swaziland Irrigation Scheme (IYSIS) is a partnership between The Ingwenyama (50%) and The Royal Swaziland Sugar Corporation (RSSC) (50%).

The partnership was formed on 1 October 2009 following the dissolution of a partnership between The Ingwenyama and the CDC Group Plc. The new partnership acquired the assets, liabilities, operations and obligations of the previous partnership between The Ingwenyama and CDC Group Plc.

The Partnership is an investor in a joint venture with Mhlume (Swaziland) Sugar Company Limited (MSCo) in the IYSIS/MSCo Sugar Partnership, a joint venture

whereby the IYSIS contribution is the use of IYSIS sugar estates and property, and in return IYSIS receives 80 percent of the joint venture’s profit or bears 80 per cent of the losses.

The entity is primarily involved in the growing of sugar cane, livestock rearing, ecotourism and sale of meat products in local and regional markets.

The partnership grows sugar cane on 796 hectares (2014: 796) which are managed by RSSC.

The average number of employees employed by the Partnership during the year was 104 (2014: 95).

IYSIS, effects of the drought. Mnjoli Dam now at below 20% capacity, and more than 10 000 cattle lost.

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DALCRUE AGRICULTURAL HOLDINGS (PTY) LTD

In a quest to keep abreast with the advancements in the farming industry, especially cattle breeding and farm equipment, Dalcrue Managing Director Mr. Simanga Simelane attended a Farming Exposition in neighbouring South Africa. Here he is seen touring the John Deere display Expo site.

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DALCRUE AGRICULTURAL HOLDINGS (PTY) LTD

For the year ended 30th April 2015, revenue grew by 6.85 % when compared to last year. The income from the milling played a significant role, contributing 37% of the total revenue. This was an improvement from last year’s contribution of 31%.

Dalcrue Agricultural Holding Limited (“DAH or Dalcrue”) is a wholly owned subsidiary of Tibiyo Taka Ngwane (“Tibiyo”) incorporated in Swaziland

in the year 1999. It is a multifaceted corporation with widely spread portfolio confined in the agricultural sector covering cattle ranching, milk production from dairy cows, sugar cane growing, sugar beans and other cash crops; mainly white and yellow maize. In addition, it has a maize mill plant located in the Malkerns area that produces maize meal, samp and mealie rice. In the maize milling process a hominy chop byproduct is

produced which is used predominantly as an ingredient in the manufacturing of dairy meal.

Financial results

For the period ended 30 April 2015, revenue grew by 6.85% when compared to last year. The income from the milling played a significant role, contributing 37% of the total revenue. This was an improvement from last year’s contribution of 31%. At 29%, the sugar division was the second best contributor. The combined contributions

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translate to 66% of the total revenue. Other income recorded 31.18% decline, mainly due to the fair value loss for sugar cane arising from decreases in sugar prices. For the year under review net profit margins decreased by 49.45%.

Comparison of revenue

Dairy

For the year under review, the total herd showed a decline of three animals, from 613 in 2014 to 610 animals in 2015.Gross profit percentage for the year was 67.40% which compares favorably to 57.33% in the previous year. Net profit margin of 28.04% was achieved in the current period which compares favourably to a loss margin of 9.63% realised in the previous year.

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DISTRIBUTION OF REVENUE 2014

Dairy

Milling

Livestock

Crops

Tractor Pool

Sugar

31%

12%

33%

11%10%

3%

DISTRIBUTION OF REVENUE 2015

Dairy

Milling

Livestock

Tractor Pool

Sugar

37%

15%

29%

6%7%6%

Crops

Sugar Dairy Milliing Livestock Crops Administration Tractor Pool

REVENUE

2013 2014 2015

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Sugar cane

Harvesting for the year ending 30 April 2015 went smoothly. The total cane yields recorded was 27 000 tonnes against 27 999 tonnes that was achieved in the previous season. The unfavorable growth was due to 75% of cane being 15 years and above in age; thus yields are on the downward trend.

Area harvested for the year declined from 283.4 hectares to 278.8 hectares and the sucrose content declined from 14.32% to 13.54%.

For the year under review, the sugar cane division recorded a gross profit margin of 48.01% which compares favourable to the previous year 44.17%.

Crops

A total of 410 hectares was planted under maize and beans, with the latter accounting for 36.59%. The overall results for the crops division reflect an overall loss margin of 88.04% year on year. The ongoing drought was a major contributor to the decline in productivity.

Milling

For the year under review, three (3) products were produced, packed and distributed for the local market. These were maize meal, sugar beans, and hominy chop. Revenue for the year 2015 recorded growth of 25.39% when compared to the previous year. This growth was attributable to increase in sugar bean prices.

Gross profit of 32.50% was recorded this year. The improvement in the margins was as a result of internally produced maize crop when compared to previous periods.

Overall profitability of the milling division was excellent, achieving net profit margin of 25.04%.

Forestry Plantations

For the year under review, total area under forestry plantation was 687.45 hectares, shared between Gege (221.12 hectares) and Ngazine (466.33 hectares) farms.

The species under plantation are wattle and eucalyptus tree, with the latter accounting for 61% (471.43 hectares) and the remaining 39% (270.02 hectares) being wattle.

Livestock

The cattle ranching is carried on four farms, namely; Macnabs, Lubhuku, Magomba and Lavumisa with a total area of 11 471 hectares.

For the year ended 30 April 2015, commercial livestock achieved a revenue increase of 51% when compared to the previous year. The number of animals sold during the year has been on the upward trend, recording 216 animals compared to 161 animals that were sold in the previous year.

The Managing Director of Tibiyo Taka Ngwane, together with the Managing Director of DAH, attended an Agricultural Show in South Africa with the aim of sourcing new methods of farming and to view the latest available farming equipment that could possibly be sourced for DAH. More than 50 different breeds were on display at the show. There were also exhibitions by major companies from all over the world who have designed farming implements suitable for the terrain in Sub Sahara Africa.

At present, the Dairy section of DAH uses artificial insemination for breeding purposes, in conjunction with the natural insemination. The semen is secured from well-known breeders in South Africa. Selection of the semen is heavily influenced by the progeny performance in the milk yields and its suitability to the body of the breeding herd.

The possibility of sourcing specific prime breed cows and goats was also on the agenda, with options of sourcing artificial insemination inputs to be used on animals already in the DAH herd.

At the end of the year (30 April 2015), the company had 207 (2014:88) permanent and 35 (2014:45) casual employees.

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Sivunga Sugar Project is a wholly owned sugar estate of Tibiyo, which is managed by Ubombo Sugar Limited. It consists of four farms measuring

approximately 2 600 hectares in total which are 100% under irrigation.

Sihhoye Sugar Project is a wholly owned sugar cane project of Tibiyo, under the management of Mhlume Swaziland Sugar Company. The estate

covers about 165 hectares of irrigated sugar cane which is delivered to the Mhlume Sugar Mill.

SIVUNGA & SIHHOYESUGAR PROJECTS

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SIVUNGA & SIHHOYESUGAR PROJECTS

25One of the villas at Royal Villas

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ROYAL SWAZI SPAHOLDINGS LIMITED

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ROYAL SWAZI SPAHOLDINGS LIMITED

The company achieved satisfactory results under the difficult trading conditions it operated in. Total revenues grew by 7% to E172 million.

Swazi Spa Holdings Limited is a public company listed on the Swaziland Stock Exchange. It is jointly owned by All Saints (Pty) Ltd (50.60%), Tibiyo

Taka Ngwane (39%) and minority shareholders (10.40%). The group owns and operates the Sun International Hotel and Casino Resorts in Swaziland. These comprise the Royal Swazi Sun Hotel & Casino, Lugogo Sun Hotel and Ezulwini Sun Hotel.

The company is a subsidiary of Sun International Limited, a company incorporated in the Republic of South Africa.

The principal activity of the company, which is incorporated in the Kingdom of Swaziland, is an investment holding company. The continuation of the global economic financial crisis, the subsequent slowdown in economic activity in Swaziland, credit contraction and high volatility in material prices have contributed to a difficult operating environment during the financial year.

TRADING ENVIRONMENTIn comparison to preceding years, the company’s financial standing has steadily improved as reflected by an increase in revenues and a consistent decrease in borrowings. This is satisfactory considering the backdrop of the recent global crisis which resulted in a slowdown in economic activity, coupled with the Casino operations which continue to struggle due to the opening of a competitor casino within close proximity. Notwithstanding the improved performance, the economic environment continues to pose challenges to the company’s trade such as the rise in consumer inflation in recent months resulting in increases in the price index for food and non-alcoholic beverages as well as transport.

RESULTSThe company achieved satisfactory results under the difficult trading conditions it operated in. Total revenues grew by 7% to E172 million. Hospitality revenues were up 13% whilst gaming revenue was marginally up by 1% on last year.

The growth in hospitality revenue is attributed to growth in corporate, international and non-campaign business which

grew by 30%, 17% and 21% respectively; compounded by various outside catering functions held during this financial year. The room occupancy increased by 3% whilst the room rate was 1.5% higher than the prior year.

Direct costs increased by 6% as a result of the growth in room nights sold and food served. Indirect costs were 5% up on last year. The increase in revenue and tight control of direct and indirect costs resulted in an EBITDA of E125 million, an increase of 22.4% on the prior year.

Headline earnings per share of 58.8 cents (2013: 36.6 cents) was achieved. Capital expenditure of E2.1 million was incurred during the year, which included the replacement of motor vehicles, golf carts, table shufflers and computer equipment.

CORPORATE SOCIAL DEVELOPMENTThe company actively supports the local communities with the objective of promoting the upliftment and socio-economic development of these communities. The company ensures that it operates its gaming activities in a responsible manner and that there is strict adherence to the standards that have been implemented with regard to problem gambling in Swaziland.

THE MINT ACQUISITIONSun International Limited (“Sun International”) has entered into an agreement with Minor International Public Company Limited (“MINT”) that will result in Sun International’s effective shareholding in Swazi Spa decreasing from 50.60% to 10.12% with MINT acquiring an effective 40.48% interest in Swazi Spa (“the MINT acquisition”). Sun International and MINT will continue to hold their respective effective interest in Swazi Spa via St. Vincent Investments Limited.

The MINT acquisition is subject to the fulfilment or waiver of certain conditions precedent including inter alia the finalisation of transaction documents and regulatory approvals.

The number of employees during the reporting period was 208 (2013 : 199). All but two are Swazi citizens.

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TIBIYO LEISURE RESORTS T/AROYAL VILLAS

29

The Royal Villas once again won the Swaziland’s Leading Hotel Award from the World Travel Awards for the year 2015. Royal Villas previously won this award in 2011, 2012 & 2013.

Tibiyo Leisure Resorts (Pty) Ltd, trading as The Royal Villas is a wholly owned subsidiary of Tibiyo established in 2004. It comprises 20 Villas, 12 of

which are operated as hotel inventory availing a total 46 hotel rooms and suites. 5 Villas are subject to long term stays with the other 3 being utilised as the restaurant, conferencing and administration facilities.

The Royal Villas is a unique accommodation offering that is different to your conventional Hotel. Each available Villa consists of 4 different room types ranging from the King suite to the Standard room. The option of hiring an entire Villa or rooms on an individual basis is available. This layout makes the Royal Villas the accommodation of choice for VIPs, dignitaries as well as small groups.

Tourist numbers into Swaziland were affected by the new South African immigration laws that were introduced in June 2015. Nevertheless, the Royal Villas experienced a slight growth with regards to room’s revenue, and there has been a notable increase in conferencing revenue.The financial results for the year ended 30 April 2015 showed an improved performance when compared to the previous year, despite the challenges faced in the tourism industry.

Revenues for the year ended 30 April 2015 show an increase of 23% compared to the previous year. Spending on repairs and maintenance was higher than budgeted as the Royal Villas embarked on a gradual soft refurbishment of the Villas.

Awards

The Royal Villas once again won the Swaziland’s Leading Hotel Award from the World Travel Awards for the year 2015. Royal Villas previously won this award in 2011, 2012 and 2013.Royal Villas has also been awarded a certificate of excellence by the world’s largest online travel review website Tripadvisor.

Marketing

As part of the marketing plan, a short video that encompasses the entire property and services offered was produced and can be viewed on the website www.royalvillas.co.sz .

As at 30 April 2015, the Royal Villas had 25 permanent and 65 casual employees (2014: 62).

EXPENDITURE MAY-APRIL 2015

Telephone

Marketing

Property Cost

Rooms

Tobacco 0%

Interest Paid/(Received)

Repairs & Maintenance

DepreciationCharges

Food &Beverages32%

1%

14%

14%12%

5%

16%

4%

Administration & General

REVENUE MAY-APRIL 2015

Rooms

Laundry & Valet 0%

Telephone 0%

Membership 0%

Sundry Income

Food &Beverages

Tobacco 0%

32%

14%

14%12%

5%

16%

4%

51%

1%

48%

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BHUNU MALL

Bhunu Mall in Manzini is a partnership owned by Swaziland National Provident Fund (36.85%), RMS Manzini (Pty) Ltd (22.37%) and Tibiyo

Taka Ngwane (40.79%). The Mall has a gross lettable area of 15 962 square metres for shops and offices. It enjoys added revenues from overnight usage of the parking bays. The Mall enjoys very high occupancy rates because of its central location in the hub of the country. For the 18 month period ended 31 March 2015, the Bhunu

Mall’s rental revenue declined by 26.9%. This was due, in part, to the increase in office space vacancies, decrease in parking space income during the refurbishment exer-cise, and an increase in investing activities. Operating profit however, improved significantly during the reporting period, but surplus for the year showed a slight decline.

The Partnership had 6 employees during the reporting period (2014: 4).

The Mall has a gross lettable area of 15 962 square metres for shops and offices.

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SIMUNYE PLAZA

Simunye Plaza (Pty) Ltd is jointly owned by Swaziland Industrial Development Corporation (SIDC) (50%), RSSC (25%) and Tibiyo Taka Ngwane (25%).

It is a property holding and management company presently managed by SIDC. The company has a Notarial Deed of Lease with RSSC over 16 sites at Lusoti Township of Simunye Sugar Estate on which residential houses have been constructed and rented out to private tenants.

Rent and recoveries improved by 7.2% compared to 2014 and the Plaza remained fully let. Operating profit improved by 34.8% year on year despite the poor economic climate engulfing the region. Profit after tax was 11.5% higher than that realised in 2014.

The company had 15 employees during the year (2014: 15).

Operating profit improved by 34.8% year on year despite the poor economic climate engulfing the region. Profit after tax was 11.5% higher than that realised in 2014.

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TIBIYO PROPERTIES

Tibiyo Properties (Pty) Ltd is wholly owned by Tibiyo Taka Ngwane. It was formed in 2000 and operates a property company.

The company owns several properties in Mbabane, Ezulwini and Manzini. It also manages commercial, retail and residential properties on behalf of Tibiyo Taka Ngwane, Tisuka Taka Ngwane and other clients. These

properties are situated in Nhlangano, Ezulwini and the central business districts of Manzini and Mbabane.Revenue for the year increased by 27.2% compared to 2014. Net operating profit also improved by over 100% as the company made losses in the previous year.

The company had 17 employees during the year under review (2014: 16).

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The company owns several properties in Mbabane, Ezulwini and Manzini.

7

TIBIYO PROPERTIES

33

Tibiyo Insurance Brokers (Pty) Ltd (TIB), operates as an insurance broker.The company’s shareholders are the Swaki Group of Companies 50% and Tibiyo

Taka Ngwane 50%.

The company saw a 24.3% increase in revenue compared to the previous year. Operating profit increased by 42.7% year on year, and profit for the year saw a 42.4% improvement compared to prior year.

TIB has 50% interest in Swaziland Employee Benefit Consultants (Pty) Ltd, whose principal business is pension fund administration. It also has a 50% interest in Pivotal (Pty) Ltd, whose principal business is property investment.

The company saw a 24.3% increase in revenue compared to the previous year. Operating profit increased by 42.7% year on year, and profit for the year saw a 42.4% improvement compared to prior year.

TIBIYOINSURANCEBROKERS

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SWAZILAND DEVELOPMENT FINANCE CORPORATION

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The group is reporting profit after tax of E25.2 million. This is more than double from last year’s profit of E11.5 million and this is a significant improvement...

Swaziland Development Finance Corporation (FINCORP) is a Company with two shareholders, the Swaziland Government and Tibiyo Taka

Ngwane, holding 80 percent and 20% shareholding, respectively.

Initially operating as a wholesale lending institution, the organisation was, in 2003 transformed to become a development finance institution encompassing both wholesale and retail lending. This culminated in a change in legal status from being a Trust to a company.The core objectives of the organisation have remained unchanged.

Lending OperationLoan approvals during the year under review were to the value of E882 million towards 15 075 (fifteen thousand and seventy-five) new loans. Out of that figure, General Purpose Finance Loans accounted for E673 million of the total approvals, and 13 907 (thirteen thousand nine hundred and seven) in number.

Loan commitments as at the end of the year were E40.1 million.Gross loan portfolio for FINCORP (parent company) grew by 24% from E360.5 million to E447 million. Meanwhile general business and agricultural loans approved amounted to E84.3 million and E32.6 million respectively. Micro Loans and Sugar cane loan approvals amounted to E3.2 million and E88.5 million respectively.

Meanwhile gross loan portfolio for First Finance (the subsidiary company) grew by 32% from E333.5 million to E493.5 million. A significant proportion of lending activities under the subsidiary company goes towards educational and rural housing needs.

Branch RolloutTshaneni BranchIt was reported the previous year that FINCORP is pursuing a branch rollout strategy. After opening one Branch in Siphofaneni the previous year, another Branch in Tshaneni was officially opened in March 2015. The

branch commenced operations in January 2015. This is a branch of the parent company, and as at the end of the quarter, the branch was managing a loan portfolio totalling E80.9 million.

Nhlangano BranchThe subsidiary company also expanded operations and outreach to the Shiselweni region. Nhlangano was identified as an ideal location in view of growing clientele from the region that visits the other branches.

Upgrading of Insurance Agency Business to an Insurance Brokerage

In pursuit of the long standing commitment of expanding the income streams, FINCORP successfully concluded the acquisition of an existing brokerage business, resulting in the termination of FINCORP’s insurance agency business operation to a fully-fledged brokerage business. The transaction was concluded in December 2014. As such, the brokerage business officially began operations under new management in January 2015 at the Bhunu Mall in Manzini operating as Finsure Insurance Brokers.

Financial OverviewFINCORP as a group, reported profit after tax of E25.2 million in 2015 which is more than double 2014’s profit of E11.5 million. This is a significant improvement considering that the operating environment has not yet fully recovered from the impact of the recent economic meltdown which adversely affected general economic growth.

Interest Expense and BorrowingsFINCORP incurred interest expense of E57.0 million against E46.7 million the previous financial year. This is an increase of 22% and is attributable to a relative increase of 24% in borrowings which increased from E526 million in 2014 to E653 million in the current year. New funding totalling E140.9 million was received during the course of the financial year.

One loan facility was paid-off during the year under review, namely, the E17 million medium term note from Standard Bank.

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In an effort to raise funding for the company’s lending operations and in line with the five year Strategic Plan, the organisation issued a E300 million Medium Term Note through local brokers African Alliance in the prior year. Inflows from the bond issue as at the end of the year totalled E203 million. The company will continue to draw down on the remaining balance the following financial year in order to meet the increased demand.

Key performance IndicatorsPerformance of the FINCORP Group improved when compared to previous financial periods. However, this good performance is largely attributed to the performance of the subsidiary, First Finance Company which offers General Purpose Finance. SME lending also improved as the local economy showed signs of slow recovery from the effects of the financial crisis experienced in the last few years.

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THE SWAZI OBSERVER

The Swazi Observer (Pty) Ltd was established in 1981 and is wholly owned by Tibiyo Taka Ngwane.

The company continued to be engaged in the business of advertising, distribution and publishing of the Swazi Observer and Weekend Observer newspapers and operates principally in Swaziland.

The papers enjoy a wide circulation in all the regions of the country with emphasis to make inroads into the remote rural areas.

The company had a total of 119 (2014:118) permanent and 12 casual employees during the reporting period.

The papers enjoy a wide circulation in all the regions of the country with emphasis to make inroads into the remote rural areas.

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SWAZILAND BEVERAGES

Swaziland Beverages Limited (SB) is controlled by SAB Miller Africa BV incorporated in the Netherlands, which owns 60% of the company’s

equity. Tibiyo Taka Ngwane owns the remaining 40%.

The company is a manufacturer and distributor of beer, soft drinks and traditional beverages. The nature of the

company’s business has not changed during the year under review.

The company had 380 (2014: 391) employees at year end.

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PARMALAT

Parmalat (Swaziland) (Pty) Ltd is controlled by Parmalat Africa Spa, which owns 60% of the company’s issued capital. The remaining 40%

is held by Tibiyo Taka Ngwane (26%) and Swaziland Government (14%). The ultimate holding company is Parmalat Spa, Italy, owned by Lactalis Groupe, France.

It is a limited liability company incorporated and domiciled in Swaziland.

Parmalat Swaziland (Proprietary) Limited (‘the company’) manufactures, processes, distributes and sells dairy and other related products through a network of independent wholesalers and retailers. The company has a manu-facturing plant in Swaziland and sells to the local market.

The supply of raw milk has not reached the growth levels anticipated at the beginning of the year. Pressures are applied on pricing by economic conditions, which may

require increases above inflationary levels in order to secure better volumes from producers.

International powder prices, which is applied in the absence of sufficient raw milk, will also be rising excessively, placing pressures on profit margins for the medium to long term. Slow economic growth and potential declines in fiscal balance may also impact negatively on economic stability, and future growth potential.

Revenue for the period under review increased by 9.1% compared to the previous year (2013) and gross profit also improved by 0.4% over the same period. Operating profit was 4.6% above that reported in the previous year and profit for 2014 improved by 8.2% against prior year.

The number of employees in 2014 was 129 (2013: 135).permanent and 7 casual employees.

Revenue for the period under review increased by 9.1% compared to the previous year (2013) and gross profit also improved by 0.4% over the same period.

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MALOMA COLLIERY LIMITED

41

MALOMA COLLIERY LIMITED

Maloma production volumes declined by 4% in 2015 compared to 2014. The low production is a result of geological complexities which made the extraction of coal more difficult.

Maloma Colliery Limited (MCL) is jointly owned by Chancellor House Holding (Pty) Limited (50%), Swaziland Government (25%) and Tibiyo Taka

Ngwane (25%). It is incorporated in Swaziland and is in the business of mining quality anthracite coal.

Production

Maloma production volumes declined by 4% in 2015 compared to 2014. The low production is a result of geological complexities which made the extraction of coal more difficult. The coal yield also dropped by 1% which caused saleable coal to further decline by 8% compared to 2014.

Marketing

Coal demand continued to stay above supply in 2015 globally. However, the mining sector is undergoing an economic slump with saturated markets and declining prices for the various ores. The market price for ores has been on the decline since September 2014 and there was no improvement in 2015. The coal particle size remains a key factor in its final consumption. Maloma experienced a decline in the sale of Duff in 2015 due to commodities price decline that affected our key customers in South Africa.

Duff is fine size coal which is consumed by limited and specialised metallurgical markets. The bad market conditions resulted in accumulation of stocks which could not sell faster in 2015.

RevenueMaloma sales for 2015 declined by 20.37% compared to prior year. The decrease in sales was a result of low production volumes, low yield and the adverse market conditions explained above.

Costs

The company spend reduced by 1% compared to 2014. The slight declined on expenditure still paints a poor performance compared to the low production volumes for the year. During the year the company mined over 800 metres of stone compared to about 300 metres in 2014. This was a result of the poor geological structure underground, being faults and dykes.

Profitability

Profit for the year dropped by 57% year on year, contributable to the complex geology, low production volumes, low yield and the adverse market conditions.

Future Outlook

The adverse market conditions are expected to prevail in the future. Commodity prices are not expected to improve. The markets for coal fines remain fickle.The geology continues to constrain production.

Employee Numbers

The company had 353 full time employees, 18 contract employees and 92 subcontractor employees at the end of 2015.

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In 2015 Tibiyo Taka Ngwane continued to complement Government’s effort in development through education and training. Bursaries and scholarships were granted

to deserving applicants.

During the reporting period, Tibiyo Taka Ngwane continued to maintain the number of students in our system at 1 000 at the rate of E2 800.00 per student for school fees, books and examination fees were paid in full for Form III’s and Form V’s.

An amount of E32 million was spent on Tibiyo scholar-ships and Tibiyo bursaries in 2015 compared to E49 million spent the previous year. At least E0.4 million

was spent on donations to various institutions dealing with poverty alleviation and health issues in the country compared to E0.24 million spent the previous year.

174 students were sponsored by Tibiyo Taka Ngwane during the reporting period in both local and foreign universities.

In 2015, 24 students completed their tertiary studies and we wish them well in their pursuit of different careers and in finding employment.

The Managing Director has continued to motivate young people to be better citizens through speaking engage-ments in different schools around the country.

EDUCATION AND PUBLIC AFFAIRS

43

CULTURAL AND TRADITIONAL AFFAIRS

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Tibiyo continued to service National Cultural Ceremonies. In this respect, Tibiyo expended funds towards food, accommodation, transport,

security and medical coverage of all who participated in these ceremonies in 2015. The main ceremonies that were financed during the reporting period were Incwala, Buganu and Umhlanga.

IncwalaThis is a longstanding traditional ceremony that lasts for up to two months. It is essentially about cleansing and renewal, and, above all, celebrating kingship. It is marked by a number of significant events, such as:-

Bemanti The water party, usually known as Bemanti, is com-missioned by His Majesty King Mswati III to the Indian Ocean, south of Maputo, Mozambique, signaling the start of the sacred national ceremony Incwala Ceremony. After the commissioning, His Majesty then goes into seclusion.The journey is mostly on foot. The Water Party is mainly formed by warriors and members of the Umbutfo Swaziland Defence Force, Royal Swaziland Police and His Majesty’s Correctional Services.When the Party returns about a month later with the sacred water collected from the Indian Ocean, the little Incwala starts.

The little IncwalaThe little Incwala is a buildup to the main Incwala. Here, traditional dances take place on a daily basis at all the royal residences around the country where royalty and the general public also participates.

LusekwaneThe little Incwala is then followed by the cutting of the sacred shrub (lusekwane) and it is cut at Nhlambeni under the full moon by Tingatja. The shrub is delivered at the

Ludzidzini Royal Residence the following morning.The following day, the young boys cut branches of the black “Imbondvo” tree in the morning before they catch and overpower a bull and return it to the sanctuary.This ritual is then followed by the main Incwala.

Main IncwalaThe main Incwala day is always a public holiday. All the key players perform in a spectacular traditional dance series inside the cattle byre. His Majesty and the regiments appear in full traditional war-gear and dance to a number of songs.Traditionally, the dates for the annual event are not known, but are astrologically detected by the traditionalists deter-mined by the phases of the moon. The Incwala ceremony also marks the harvesting of the first fruits of the season. Every Swazi may take part in the public parts of the Incwala and spectators are permitted but not actively encouraged hence the traditional saying that ‘Incwala ayibukelwa’. The songs, dances and rituals that take place inside the royal kraal remain a matter of utmost secrecy and may not be recorded or written down, nor even be sung outside of the Incwala ceremony. After the Incwala, other events such as the weeding and harvesting of the royal fields take place. This is done by both the regiments and young troops known as Tingatja.The final day of the Incwala is that on which the king disperses Emabutfo.

BuganuLocally known as ‘Emaganwini’, Swaziland’s Marula festival is a time of song, dance and celebration of the harvest of the Marula Fruit – used not just to make the delightful and highly potent beer, but also in skin care products and medicine. A tribute to the riches of Mother Nature, this highlight of the Swaziland calendar is initiated by His Majesty King Mswati III and Her Majesty the Queen Mother, who lead the nation’s celebrations at the Buhleni

45

and the Hlane royal residences. The Festival is focused across two main weekends, the first this year being February 21 at the Buhleni Royal Residence, and the second was on March 7 at the Hlane Royal Residence. Despite the focus on these two marked events the festival continues for as long as the harvest season lasts, often right through to May.February’s celebration marked the start of this wonderful season, and coincided with the fall of the green Marula fruits. Women and children collect the fallen fruit, and store it until it ripens to a creamy yellow colour. Placed in sugar and water, the mixture is left to ferment, eventually creating Marula beer – a drink with quite a kick! Found in abundance in Swaziland more than any other African country, the Marula fruit is sacred, and used as much more than a food source. Its medicinal properties, its rich oily seed and its sweet beer are all held in high regard. The festival is full of song and dance, music and celebration, with the women taking the lead – perhaps something to do with their involvement in the Marula Beer production! Aside from the dancing, and celebration, this festival is incredibly important to the Swazi tradition, giving thanks for another ‘fruitful’ harvest, and showing appreciation in anticipation for the next year.Tibiyo provided accommodation and food for all parti-cipants at these events.

Umhlanga (Wembali/Maidens) at Ludzidzini and ShiselweniThis is Swaziland’s best known cultural event. The event takes place around the last week of August / first week of September. In this eight-day ceremony thousands of girls take part, dressed up in brightly coloured traditional attires - making it one of the biggest and most spectacular cultural events in Africa. The events take place in the following order:-Day OneThe girls gather at the Ludzidzini Royal Resitance. They come in groups from the 200 or so chiefdoms and are registered for security. Usually about four men from each chiefdom accompany them for supervision purposes. The armed forces also send their younger unmarried members to participate. They sleep in classrooms of nearby schools as well as in marquees provided by Tibiyo. Day TwoThe girls are separated into two groups, the older (about 14 to 22 years) and the younger (about 8 to 13 years). In the afternoon; seen off by Their Majesties; they march to the designated areas where there are sufficient reeds. They march together with their supervisors and members of the armed forces who provide them with security. Nurses in ambulances drive alongside the maidens in

case any of them need medical attention along the way. The older girls often march about thirty kilometres, while the younger girls march a distance of about ten kilometres. If the older girls are sent further, government provides trucks for their transport. Campsites equipped by Tibiyo await them in areas as close as possible to the riverbeds where the reeds grow in abundance.Day ThreeThe girls cut their reeds, usually about ten to twenty each, using long knives. Each girl ties her reeds into a bundle. The reeds are placed in trucks to be transported back to Ludzidzini. The girls then return to their campsites to rest. There is often singing and dancing throughout the night as a form entertainment and rehearsal for the main event.Day FourIn the morning, the girls set off on a return journey to Ludzidzini, again on foot. For those who tire along the way, government provides transport.Day FiveA day of rest where the girls make final preparations to their hair and traditional attires. They visit local shops to purchase whatever adorning articles they may still need to look their best during the next two days.Day SixFrom about 3pm, the maidens gather in their respective groups, each carrying her bundle of reeds. They walk a short distance to an area near the entrance to the royal household where they deliver their reeds in neat piles before Her Majesty the Indlovukazi. These reeds are ostensibly to repair the windbreaks around the royal residences. They then move to the arena and dance, keeping within their groups and each group singing different songs at the same time. Once all groups are in the arena, Their Majesties also arrive as spectators to the dancing which unfolds with as much panache as culture allows. It is only the darkness of night that cuts the dancing short.Day SevenThe dancing continues on day seven which is normally declared a national holiday. This is the highlight of the event as Their Majesties and their guests attend as spectators. The general public and tourists fill the stands around the arena and watch in wonder.Day EightHis Majesty commands that a large number of cattle be slaughtered for the girls. They receive food parcels and are transported back to their chiefdoms. This marks the end of the Umhlanga Ceremony.Tibiyo’s role in these events is to provide food, sanitation and shelter for all the maidens attending the events, from the time they first report for registration until they are dispersed by His Majesty at the end of the event.

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46


CONTENTS Page

Statement of Responsibility by the Main Committee 47

Report of the Independent Auditors 48

Report of the Main Committee 49 - 50

Statement of Accounting Policies 51 - 54

Statement of Comprehensive Income 55

Statement of Changes in Funds and Reserves 56

Statement of Financial Position 57

Statement of Cash Flows 58

Notes to the Financial Statements 59 - 66

FINANCIAL STATEMENTS

for the year ended 30 April 2015

TIBIYO TAKA NGWANE

47

RESPONSIBILITY STATEMENT BYTHE MAIN COMMITTEEfor the year ended 30 April 2015

Statement of Responsibility by the Main Committee

The Main Committee is responsible for the preparation and presentation of the financial statements of Tibiyo Taka Ngwane, comprising the statement of financial position at 30 April 2015, and the statements of comprehensive income, changes in funds and reserves, and 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, and the Main Committees’ report, in accordance with the requirements of the entity’s basis of accounting as described in the notes to the financial statements.

The Main Committee is also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error and for maintaining adequate accounting records and an effective system of risk management as well as the preparation of the supplementary schedules included in these financial statements.

The Main Committee has made an assessment of the ability of the entity to continue as going concern and have no reason to believe that the entity will not be a going concern in the year ahead.

The auditor is responsible for reporting on whether the financial statements are presented in accordance with the applicable financial reporting framework. The unqualified opinion of KPMG is presented on page 48.

Approval of annual financial statements

The financial statements of Tibiyo Taka Ngwane, as identified in the first paragraph were approved by the Main Committee on 10 December 2015 and are signed on its behalf by:

___________________ ___________________Chairman Member Main Committee


48


INDEPENDENT AUDITOR’S REPORTTo the Main Committee of Tibiyo Taka Ngwane

We have audited the financial statements of Tibiyo Taka Ngwane, which comprise the statement of financial position at 30 April 2015, and the statements of comprehensive income, changes in funds and reserves and 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, and the Main Committees’ report.

Main Committees’ responsibility for the financial statements

The Main Committee is responsible for the preparation and presentation of these financial statements in accordance with the basis of accounting described in the statement of significant accounting policies set out on pages 51 to 54, for determining the acceptability of the basis of accounting and for such internal control as the Committee determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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 auditor’s judgement, including the assessment of the risks 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 entity’s preparation and 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 entity’s 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 of Tibiyo Taka Ngwane for the year ended 30 April 2015 have been prepared, in all material respects, in accordance with the basis of accounting described in the statement of significant accounting policies, set out on pages 51 to 54.

Restriction on use

The financial statements are prepared to meet the requirements of the Royal Charter that established Tibiyo Taka Ngwane and in accordance with the basis of accounting as indicated above. Consequently, the financial statements may not be suitable for any other purpose.

Auditors

49

REPORT OF THE MAIN COMMITTEEfor the year ended 30 April 2015

The members of the Main Committee have pleasure in presenting these financial statements for the year ended 30 April 2015.

Nature of the organisation’s business

Tibiyo Taka Ngwane was created by Royal Charter on 19 August 1968 by King Sobhuza II for the purpose of managing projects and investments on behalf of the Swazi Nation. Investments are registered in the name of the iNgwenyama as Trustee for the Swazi Nation. The organisation is essentially a developmental agency with the objectives of enhancing the economic development of Swaziland and the welfare of its citizens by providing assistance to the Swazi Nation to preserve its customs and traditional institutions and for the education and training of its citizens.

To achieve these objectives the organisation seeks to be actively involved in the establishment of commercially viable projects in all sectors of the economy. These projects are managed by Tibiyo, experienced local or international organisations, or operated as a joint venture with other business partners who have an equity stake in the project.

Accounting policies

The Royal Charter does not prescribe the accounting framework or policies to be used and the Main Committee has therefore developed transparent, entity specific accounting policies, as described in the statement of significant accounting policies set out on pages 53 to 56, to meet the financial requirements of the entity and the users of its financial statements.

The Main Committee is satisfied that this basis of preparation and presentation is suitable for the intended users of the financial statements and meets the requirements of the Royal Charter for the preparation of financial statements.

State of the organisation’s affairs

The organisation’s affairs are fully disclosed in the attached financial statements.



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REPORT OF THE MAIN COMMITTEEfor the year ended 30 April 2015

Members of Main Committee

The Main Committee is appointed by the iNgwenyama.

Members of the Main Committee as at date of signing these financial statements were:

HRH Prince Fipha (Chairman)HRH Prince Simelane HRH Princess SidvumolesihleChief N NdwandweChief N SimelaneS MotsaV FakudzeM FakudzeM KhumaloK CindziL DlaminiN GamedzeA T Dlamini Managing DirectorW Z Lomahoza General ManagerJ N Gule Secretary and General Manager Corporate Affairs (retired 31 December 2014)N F Shongwe (Assistant Secretary)

Business address Postal address

Lomawa House P O Box 181Lozithehlezi Kwaluseni M201

Auditors

KPMGUmkhiwa HouseLot 195 Kal Grant StreetMbabane

Bankers

First National Bank of Swaziland LimitedNedbank Swaziland LimitedStandard Bank Swaziland Limited

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STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES for the year ended 30 April 2015

Statement of compliance

The financial statements of the organisation have been prepared in accordance with the accounting policies stated below.

Basis of preparation

The financial statements are presented in Emalangeni, the functional currency of the organisation, rounded to the nearest one. They are prepared on the historical cost basis except that the following assets are stated at their fair value: investments classified as held for trading, investments classified as available for sale, cane roots and growing cane. The financial statements incorporate the following principal accounting policies which are materially consistent with those adopted in the previous financial year.

Consolidation

The organisation does not present consolidated financial statements.

Associated companies

An associated company is one in which Tibiyo Taka Ngwane holds, as a long-term investment, between 20 per cent and 50 per cent of the equity capital or, where the holding is less than 20 per cent, has significant influence.

The equity method of accounting for associated companies is adopted in the financial statements. In applying the equity method, account is taken of Tibiyo Taka Ngwane’s share of accumulated post-acquisition retained earnings and movements in reserves from the date on which the company became an associated company.

The post-acquisition retained earnings and reserves of associated companies attributable to the organisation are transferred to a capital reserve.

An appropriate impairment is made where, in the opinion of the Main Committee, there has been a permanent diminution in the carrying value of an investment in an associated company.

The share of associated companies’ retained earnings and reserves are determined from their latest audited financial statements.



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Investments

Investments are classified for valuation purposes as either held-to-maturity, available-for-sale, held for trading or loans originated by the organisation. Investments held-to-maturity are classified as non-current assets and are reflected at amortised cost. Investments held for trading are reflected at fair value with any increase or decrease in fair value recognised in the statement of comprehensive income. Investments considered to be available-for-sale are reflected at fair value with any resultant gain or loss recognised in the statement of comprehensive income. Loans originated by the organisation are classified as non current assets and are reflected at cost. Fair value is determined by the organisation using quoted prices where the investment is traded in an active market or where fair value can be reliably measured. Where fair value cannot be reliably measured investments are reflected at cost. Income is brought to account to the extent of dividends declared or interest earned.

Revenue

Revenue comprises revenue earned from sucrose sales, share of partnership earnings, interest and dividends earned from investments.

Revenue from the sale of sucrose is recognised in the statement of comprehensive income when significant risks and rewards of ownership have been transferred to the buyer.

Dividends earned from investments are recognised in the statement of comprehensive income when they are declared by investee companies.

Interest income is recognised in the statement of comprehensive income as it accrues, using the effective interest rate method.

Retirement and termination benefits

The policy of the organisation is to provide retirement benefits for all its employees by way of a pension fund or a provident fund. Current contributions to the pension and provident funds operated for employees are charged against income as incurred. The costs of improved pension benefits or any deficits arising from time to time on such funds are funded by way of increased future contributions.

Preliminary project expenses

Preliminary project expenses are written off if the project concerned does not become viable and are refunded or capitalised, as an equity interest, if the project becomes viable.

Acquisition of land and improvements for the Swazi Nation

It is a policy of Tibiyo to purchase land, buildings and other assets on behalf of the Swazi Nation. The land so acquired does not vest in Tibiyo Taka Ngwane as such but is registered in the name of the iNgwenyama as Trustee for the Swazi Nation. The accumulated costs of acquisition of such land, improvements and other assets less accumulated depreciation, where applicable, are treated as follows:

• Land, improvements and other assets which are utilised and controlled by Tibiyo Taka Ngwane for its various agricultural and other projects are reflected as property, plant and equipment.

• Land, improvements and other assets which are utilised by the community and not controlled by Tibiyo Taka Ngwane are reflected as a deduction from accumulated funds and reserves.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued

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Property, plant and equipment and depreciation

Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is charged on the straight line basis at rates which will reduce their book values to estimated residual values over the anticipated useful lives of the assets using the following rates:

Land 0 yearsBuildings and capital improvements 50 yearsFencing, water development and other improvements 10 years and 5 yearsMotor vehicles 5 and 4 yearsFurniture, fittings and equipment 10 and 3.33 years

Assets are depreciated from the date of acquisition to the date of disposal. The basis of depreciation, useful lives and residual values is assessed annually. Expenditure on repairs and maintenance of property, plant and equipment incurred to restore or maintain future economic benefits expected from the assets is recognised as an expense when incurred.

Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is determined using the first-in first-out method.

Redundant and slow moving inventories are identified and written down to their estimated net realisable value.

Subventions

From time to time the organisation grants subventions to wholly owned subsidiaries that are under financial stress in order for these entities to continue operations in order to meet their developmental goals.

These subventions are approved by the Main Committee.




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Swazi Nation development expenditure

Tibiyo Taka Ngwane utilises a portion of its income for:-(a) the promotion of the health, welfare, education and housing of the Swazi Nation; (b) the general maintenance and administration of the traditional institutions of the Swazi Nation;(c) the funding of traditional ceremonies;(d) generally, any other purpose the iNgwenyama considers to be beneficial to the Swazi Nation and which will further their

interests.

Such expenditure is reflected as Swazi Nation development expenditure and is included in the statement of changes in funds and reserves.

Rental

Rental income is brought to account on a straight line basis over the lease term after deducting maintenance costs.

Financial instruments

Financial assets include cash and bank balances, listed investments and interest earning investments not held to maturity, loans originated by the organisation, interest earning investments held to maturity and accounts receivable. Cash and bank balances, listed investments and interest earning investments not held to maturity are carried at fair value. Loans originated by the organisation and interest earning investments held to maturity are carried at cost and amortised cost. Accounts receivable classified as current assets are carried at cost less impairment losses.

Financial liabilities including bank overdrafts, accounts payable and provisions are carried at cost.

Cane roots and growing cane

Cane roots and growing cane are valued at fair value determined on the following basis:

Cane roots – the escalated average cost of each year of planting adjusted for the remaining expected life.

Growing cane – the estimated sucrose content valued at the estimated sucrose price for the following season, less estimated costs for harvesting and transport.

Comparative figures

When an accounting policy has changed and the results thereof are material for the appreciation of the financial position of Tibiyo Taka Ngwane, the comparative figures are restated in accordance with the new policy.

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STATEMENT OF COMPREHENSIVEINCOME

Note 2015 2014

E E

Revenue Third party managed projects 98 327 368 102 334 700Interest received from investments 7 223 531 7 681 855Dividends received from investments 74 807 086 138 623 712Share of partnership earnings 19 462 840 21 389 338

199 820 825 270 029 605 Direct operating expenses Third party managed projects (87 493 842) (75 897 819)

Operating income for the year 112 326 983 194 131 786

Sundry income 1 14 217 681 6 910 931Fair value adjustments on biological assets (11 133 936) 9 749 753

115 410 728 210 792 470 Indirect operating expenses (49 825 034) (52 784 003) Net income for the year before subventions 2 65 585 694 158 008 467 Subventions 3 (12 174 409) (5 149 986)

Net income for the year after subventions 53 411 285 152 858 481 Share of associated companies equity earnings/(losses) 227 313 821 (15 404 713)

Net income for the year 280 725 106 137 453 768



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STATEMENT OF CHANGES IN FUNDS AND RESERVES

Capital Accumulated reserve funds Total E E EEEBalance at 1 May 2014 871 455 175 627 920 503 1 499 375 678

Net income for the year - 280 725 106 280 725 106Swazi Nation development expenditure - (109 471 225) (109 471 225)Transfer of equity earnings to capital reserve 227 313 821 (227 313 821) -

Balance at 30 April 2015 1 098 768 996 571 860 563 1 670 629 559

Balance at 1 May 2013 886 859 888 578 100 021 1 464 959 909

Net income for the year - 137 453 768 137 453 768Swazi Nation development expenditure - (103 037 999) (103 037 999)Transfer of equity losses from capital reserve (15 404 713) 15 404 713 -

Balance at 30 April 2014 871 455 175 627 920 503 1 499 375 678

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STATEMENT OF FINANCIAL POSITION

Note 2015 2014 E E

ASSETS

Non-current assets Property, plant and equipment 5 125 622 312 118 865 743Investments (Appendix 1) 1 349 393 727 1 119 005 286Cane roots 7 41 603 503 52 447 391

1 516 619 542 1 290 318 420

Current assets Inventories 6 965 027 513 206Growing cane 7 46 096 050 46 386 098Loans and accounts receivable 8 85 520 884 86 667 897Short term securities 11.2 61 445 146 95 969 955Bank balances and cash 11.2 44 555 50 722

194 071 662 229 587 878

Total assets 1 710 691 204 1 519 906 298

FUNDS EMPLOYED AND LIABILITIES

Funds and reservesCapital reserve 9 1 098 768 996 871 455 175Accumulated funds 571 860 563 627 920 503

1 670 629 559 1 499 375 678Deduct: Land and improvements acquired on behalf of the Swazi Nation 10 (34 839 214) (27 107 165)

1 635 790 345 1 472 268 513

Current liabilitiesAccounts payable 73 438 907 43 532 439Bank overdrafts 11.2 1 461 952 4 105 346

74 900 859 47 637 785

Total funds employed and liabilities 1 710 691 204 1 519 906 298

at 30 April 2015



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STATEMENT OF CASH FLOWS

Note 2015 2014 E E

Cash flows from operating activities Cash generated by operations 11.1 105 882 081 88 692 327Interest received 7 223 531 7 681 855

Net cash flows from operating activities 113 105 612 96 374 182 Cash flows from investing activities Acquisition of land and improvements for the Swazi Nation (7 732 049) (1 582 765)Additions to property, plant and equipment (12 614 966) (5 185 060)Proceeds from disposal of property, plant and equipment 74 075 136 421Investments acquired (3 074 620) (4 748 332)

Net cash flows from investing activities (23 347 560) (11 379 736) Cash flows from financing activities Subventions (12 174 409) (5 149 986)Swazi Nation development expenditure 4 (109 471 225) (103 037 999)

Net cash flows from financing activities (121 645 634) (108 187 985)

Net decrease in cash and cash equivalents (31 887 582) (23 193 539) Cash and cash equivalents at beginning of year 11.2 91 915 331 115 108 870 Cash and cash equivalents at end of year 11.2 60 027 749 91 915 331

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NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 April 2015

2015 2014 E E

1. Sundry income

Rental income 5 553 987 5 109 483 Other income 8 554 624 1 714 438 Interest on staff loans 34 995 6 044 Surplus on disposal of property, plant and equipment 74 075 80 966

14 217 681 6 910 931 2. Net income for the year before subventions

Is arrived at after charging/(crediting):

Audit fee 323 720 279 849 Depreciation of property, plant and equipment 5 858 397 4 200 907 Depreciation of land and improvements acquired on behalf of Swazi Nation 1 370 586 1 420 546 Consultancy fees 255 407 292 921 Investment promotion expenditure 384 480 894 778 Surplus on disposal of property, plant and equipment (74 075) (80 966) Management fees 1 031 211 2 106 763 Main Committee fees and expenses 1 578 217 2 826 437

3. Subventions

The Swaziland Observer (Proprietary) Limited 628 090 - Tibiyo Leisure Resorts (Proprietary) Limited 4 058 337 4 049 591 Dalcrue Agricultural Holdings (Proprietary) Limited 7 487 982 1 100 395

12 174 409 5 149 986 4. Swazi Nation development expenditure

Bursaries and scholarships 39 811 632 31 694 928 Cost of services 5 324 375 5 914 618 Health care 4 659 378 8 000 360 National ceremonies 25 377 012 22 137 800 Sundry expenses 49 094 326 37 839 439 Donations 53 583 403 410 Contract income (14 849 081) (2 952 556)

109 471 225 103 037 999



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Accumulated Net book Cost depreciation value E E E

5. Property, plant and equipment

2015 Farms 34 662 394 - 34 662 394 Land, buildings and improvements 125 385 559 (44 933 339) 80 452 220 Motor vehicles 12 110 718 (10 024 887) 2 085 831 Furniture, fittings and equipment 20 137 976 (11 716 109) 8 421 867

192 296 647 (66 674 335) 125 622 312

2014 Farms 28 895 907 - 28 895 907 Land, buildings and improvements 123 072 794 (40 506 504) 82 566 290 Motor vehicles 12 032 445 (9 314 469) 2 717 976 Furniture, fittings and equipment 16 402 836 (11 717 266) 4 685 570

180 403 982 (61 538 239) 118 865 743

Opening Closing net book net book value Additions Disposal Depreciation value E E E E E

5.1 Reconciliation of book values 2015 Farms 28 895 907 5 766 487 - - 34 662 394 Land, buildings and improvements 82 566 290 2 312 766 - (4 426 836) 80 452 220 Motor vehicles 2 717 976 228 000 - (860 145) 2 085 831 Furniture, fittings and equipment 4 685 570 4 307 713 - (571 416) 8 421 867 118 865 743 12 614 966 - (5 858 397) 125 622 312

NOTES TO THE FINANCIAL STATEMENTS - continued


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Opening Closing net book net book value Additions Disposal Depreciation value E E E E E

5. Property, plant and equipment (continued) 5.1 Reconciliation of book values (continued) 2014 Farms 28 895 907 - - - 28 895 907 Land, buildings and improvements 84 885 010 2 103 435 (38 281) (4 383 874) 82 566 290 Motor vehicles 1 457 546 2 062 747 - (802 317) 2 717 976 Furniture, fittings and equipment 4 119 127 1 018 878 (17 173) (435 262) 4 685 570

119 357 590 5 185 060 (55 454) (5 621 453) 118 865 743

2015 2014 E E

6. Inventories Fuel 241 689 220 730 Cattle for ceremonies 723 338 292 476

965 027 513 206


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7. Growing crop

7.1 Description of principal activities

The organisation’s fields are situated in the Big Bend and Tshaneni areas and consist of 2 761 hectares (2014: 2 761 hectares) of sugar cane. The management, planting and harvesting of sugar cane has been outsourced to two related party companies involved in similar operations. Fields are managed on a sustainable basis with approximately 11% of the area replanted per annum.

Cane Growing roots cane Total E E E 7.2 Reconciliation of carrying amounts

Carrying amount at 1 May 2014 52 447 391 46 386 098 98 833 489 Adjustment for changes in fair values (10 843 888) (290 048) (11 133 936)

Carrying amount at 30 April 2015 41 603 503 46 096 050 87 699 553

7.3 Measurement base

Cane roots and growing cane are valued at fair value as detailed in the accounting policy. Agricultural land is carried at cost.

7.4 Specific risk management strategies

The organisation follows prudent industry accepted care practices with respect to the use of fertilisers, insecticides and herbicides to control growth, diseases and insect infestation. The organisation does not insure growing crops in the fields.



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2015 2014 E E

8. Loans and accounts receivable

Related party receivables 43 737 410 65 175 240 Other receivables 41 783 474 21 492 657

85 520 884 86 667 897

9. Capital reserve

Balance at beginning of year 871 455 175 886 859 888

Share of equity earnings

Current year (losses)/earnings 227 313 821 (15 404 713)

Balance at end of year 1 098 768 996 871 455 175

10. Land and improvements acquired on behalf of the Swazi Nation

Buildings 3 220 877 3 220 877 Farms 12 469 856 12 469 856 Mineral rights 354 994 354 994 Other assets 18 793 487 11 061 438 34 839 214 27 107 165


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2015 2014 E E

11. Notes to the statement of cash flows 11.1 Cash generated by operations Net income for the year before subventions 65 585 694 158 008 467 Adjusted for:

Depreciation of property plant and equipment 5 858 397 5 621 453 Interest received (7 223 531) (7 681 855) Surplus on disposal of property, plant and equipment (74 075) (80 966) Change in fair value of cane roots 10 843 888 (9 772 476) Change in fair value of growing cane 290 048 22 723

Net operating income for the year before working capital changes 75 280 421 146 117 346 Increase in inventories (451 821) (56 526) Decrease in loans and accounts receivable 1 147 013 3 241 080 Increase/(decrease) in accounts payable 29 906 468 (60 609 573)

105 882 081 88 692 327

11.2 Cash and cash equivalents

Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts:

Opening balances Bank balances and cash 50 722 14 365 Short term securities 95 969 955 118 817 667 Bank overdrafts (4 105 346) (3 723 162)

91 915 331 115 108 870

Closing balances

Bank balances and cash 44 555 50 722 Short term securities 61 445 146 95 969 955 Bank overdrafts (1 461 952) (4 105 346)

60 027 749 91 915 331

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12. Retirement benefits All eligible employees belong to a defined benefit pension or a provident fund. The pension fund is actuarially

valued, in terms of the rules of the fund, every three years. A valuation was carried out as at 30 April 2012 which revealed a surplus of E99 344.

The provident fund is actuarially valued every year. The last valuation was carried out as at 30 April 2014 which

revealed a deficit of E64 974. The 2015 actuarial valuation had not been carried out as at the day of issue of these financial statements.

The organisation made contributions amounting to E1 982 106 (2014: E2 521 846) to the funds during the year. 13. Employees and employment costs The number of employees employed by the organisation at year-end was 88 (2014: 85). Employment costs during the year for the organisation amounted to E26 377 803 (2014: E32 183 078) 14. Related parties 14.1 Related parties comprise subsidiaries, associates and members of the Main Committee. Details of balances for

income received from subsidiaries and associates are set out in Appendix 1 of the financial statements. Related party transactions comprise dividends received, subventions paid, and interest received. Certain

reimbursive expenditure is recouped by related parties. 14.2 Related party contingent liabilities and commitments Related party contingent liabilities and commitments are disclosed in note 16. Details of related party balances and transactions are disclosed in the appendices to these financial statements.

15. Financial instruments Financial assets of the organisation include investments, cash and bank balances, loans and accounts receivable.

Financial liabilities of the organisation include bank overdrafts and accounts payable. Accounting policies for financial assets and liabilities are set out in the statement of accounting policies.

Interest rate risk Bank overdrafts and bank balances attract interest at rates linked to the prime overdraft rate as applicable in

Swaziland on a floating rate basis.

Credit risk Credit risk represents the accounting loss that would be recognised at financial year-end in the event of non-

payment by debtors. The organisation has no significant credit risk exposures. To reduce exposure to credit risk the organisation performs ongoing credit evaluations of the financial conditions of its debtors and obtains collateral as necessary. The organisation invests available cash and cash equivalents with banks. The organisation is exposed to credit related losses in the event of non-payment but does not expect any significant debtor to fail to meet its obligations.

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15. Financial instruments (continued)

Foreign exchange hedge instruments and exposures.

The organisation had no foreign exchange hedge instruments outstanding or any foreign currency exposures at financial year-end.

Fair values

The balances, as reflected in the statement of financial position, of financial instruments of the organisation are not materially different from their carrying amounts.

16 Contingent liabilities and guarantees

16.1 As part of its bank facilities the organisation has the following performance guarantees:

• First continuing covering mortgage bond over Portion 8 (portion of portion 3) Farm III Manzini in favour of Standard Bank of Swaziland.

• Pledge and cession over funds held in Standard Bank’s call deposit account for E18 500 000.00 dated 8 March 2013.

• Pledge and cession over funds held in Standard Bank’s call deposit account for E2 400 000.00 dated 13 November 2014.

• Surety bond for E2 000.00 with Nedbank Swaziland Limited in favour of Customs and Excise dated 4 July 2001.

16.2 The organisation grants scholarships to students for educational purposes. Certain conditions are attached to the scholarships and these may be revoked should students not comply. It is the organisation’s policy to provide for scholarships payable in the following year, whilst amounts due thereafter are considered to be contingent on students complying with all the conditions attached to the scholarships. Renewal of the scholarships is at the discretion of the organisation. The organisation has commitments in respect of scholarships awarded which would be payable as shown below:

2015 2014 E E

Payable in the next year and included in accounts payable 4 392 682 44 538 693 Payable between 2 and 5 years 73 110 048 104 280 820

77 502 730 148 819 513 16.3 The entity has sub-ordinated its loan to Dalcrue Agricultural Holdings (Pty) Limited in favour of other creditors until

the assets of Dalcrue Agricultural Holdings (Pty) Limited fairly valued exceed its liabilities.

CORPORATE DETAILS

Business address Postal addressLomawa House P.O. Box 181

Lozithehlezi Kwaluseni

M201

Telephone +268-2510 1978/9

+268-2510 1390

+268-2510 1399 (Fax)

+268-2510 1306 (Fax)

Auditors BankersKPMG First National Bank (Swaziland) Limited

Umkhiwa House Nedbank (Swaziland) Limited

Lot 195 Kal Grant Street Standard Bank (Swaziland) Limited

Mbabane Swaziland Development and Savings Bank

E-mail: [email protected]: www.tibiyo.com

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