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Notes to the consolidated annual financial statements

for the year ended 30 September



    2009 2008 2007
    Rm Rm Rm
31. Contingent liabilities      
  Bills, lease and hire-purchase agreements discounted with recourse, other guarantees and claims 1 212 1 066  989
  Litigation, current or pending, is not considered likely to have a material adverse effect on the group.      
  Buy-back and repurchase commitments not reflected on the balance sheet 294 517 449
  The related assets are estimated to have a value at least equal to the repurchase commitment.;
   
  The group has given guarantees to the purchaser of the coatings Australian business relating to environmental claims. The guarantees are for a maximum period of eight years and are limited to the sales price received for the business. Freeworld Coatings Limited is responsible for the first AUD5 million of any claim in terms of the unbundling arrangement.
   
  Warranties and guarantees have been given as a consequence of the various disposals completed during the year and prior years. None are expected to have a material impact on the financial results of the group.
   
  There are no material contingent liabilities in joint venture companies.
   
32. Insurance contracts
  Certain transactions are entered into by the group as insurer which fall within the definition of insurance contracts per IFRS 4 Insurance Contracts. Significant items included are the following:
 
– Credit life and warranty products sold with vehicles in the automotive segment;
– Specific portions of maintenance contracts on equipment and vehicles sold in the equipment, handling and automotive segments; and
– Guaranteed residual values on equipment and vehicles in the equipment, handling and automotive segments.
   
    2009 2008 2007
    Rm Rm Rm
  Income 1 336 1 315 1 195
  Expenses 1 034 1 021 933
  Cash inflow/(outflow) 8 (67) (96)
  (Gains)/losses recognised on buying reinsurance (4) 5 3
  Deferral of gains and losses on reinsurance:      
  Unamortised amount at the beginning   2 4
  Amortisation for the period   (2) (2)
  Unamortised amount at the end of the period     2
  Liabilities      
  At the beginning of the period 650 482 434
  Amounts added 898 1 261 737
  Amounts used (951) (1 080) (682)
  Amounts reversed unused (66) (36)  
  Translation difference (18) 23 (7)
  At the end of the period 513 650 482
  Maturity profile:      
  Within one year 296 372 344
  Two to five years 215 267 137
  More than five years  2 11 1
    513 650 482
  Assets      
  At the beginning of the period 222 220 162
  Amounts added 586 616 309
  Amounts used (595) (614) (276)
  Acquisitions     25
  At the end of the period 213 222 220
  Age analysis of items overdue but not impaired:      
  Overdue 30 to 60 days 3 10  
  Overdue 60 to 90 days   1  
  Overdue 90+ days   3 5
    3 14 5
  Significant assumptions and risks arising from insurance contracts:
  Credit life and warranty products
  The sale of credit life and extended warranty products in the automotive segment is conducted through cell captive arrangements. The principal risk that the group faces under these insurance contracts is that the actual claims and benefit payments exceed the carrying amount of the insurance liabilities. This could occur because the frequency or severity of claims and benefits are greater than estimated. Insurance events are random and the actual number and amounts of claims and benefits will vary from year to year from the estimate determined using statistical techniques.
   
  The key financial risk is that the proceeds from financial assets are not sufficient to fund the obligations arising from insurance contracts and includes credit risk, interest rate risk, currency risk and liquidity risk. All risks are managed on behalf of the group by an outside insurance company.
   
  The risks are spread over a large variety of clients in the South African market.
   
  The terms and conditions that have a material effect on the amount, timing and uncertainty of future cash flows arising from these contracts are as follows:
   
  Personal accident – Provides compensation arising out of the death, permanent or temporary total disability of the insured, the family of the insured or the employees of a business. Such death or disability is restricted to certain accidents and does not provide the wider cover available from the life insurance industry.
   
  Automotive– Provides indemnity for loss of or damage to the insured motor vehicle. The cover is normally on an all risks basis providing a wide scope of cover following an accident or a theft of the vehicle but the insured can select restricted forms of cover such as cover for fire and theft only.
   
  The critical accounting judgements made in applying the group’s accounting policies relate to the estimation of the ultimate liability arising from claims made under insurance contracts. The group’s estimates for reported and unreported losses are continually reviewed and updated, and adjustments resulting from this review are reflected in the profit or loss. The process relies upon the basic assumption that past experience adjusted for the effect of current developments are likely trends, is an appropriate basis for predicting future events.
   
  Maintenance contracts
  Maintenance contracts are offered to customers in the equipment, automotive and handling segments. The contracts are managed internally through ongoing contract performance reviews, review of costs and regular fleet inspections. Risks arising from maintenance contracts includes component lives, component failure and cost of labour. The contracts consist of a variety of forms but generally include cover for regular maintenance as well as for repairs due to breakdowns and component failure which is not covered by manufacturer’s warranties or other external maintenance plans. The amounts above include the estimated portion of contracts that meet the definition of an insurance contract. Revenue is recognised on the percentage of completion method based on the anticipated cost of repairs over the life cycle of the equipment/vehicles.
   
  Financial risk mainly relates to credit risk but credit quality of customers is generally considered to be good and similar to the rest of the group’s operations. Risks are spread over a large diversity of customers, fleets of equipment and vehicles and geographically in southern Africa, Iberia, United Kingdom and the United States.
   
  Guaranteed residual values
  Guaranteed residual values on repurchase commitments are periodically given with the sale of equipment/vehicles in the equipment, handling and automotive segments. The principal risk relates to the likelihood of the repurchase commitments being exercised by the customer which is dependent on the used equipment and vehicle market conditions at the time when the repurchase option is exercisable as well as terms of the repurchase agreements regarding age and condition of the equipment/ vehicles. Risks are spread over a large diversity of customers and geographically in southern Africa, Iberia, United Kingdom and the United States. The likelihood of the repurchase commitments being exercised is assessed at inception as well as on an ongoing basis and determines the accounting applied. The charge to customers for the repurchase commitment is generally included in the sales price at the time of sale and is not measured separately. Refer to note 31 for the gross value of repurchase commitments.
   
33. Financial instruments
  The group’s financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable and payable, bank borrowings, money and capital market borrowings, loans to and from subsidiaries, leases, hire-purchase agreements discounted with recourse and derivatives. Details of the amounts discounted with recourse are included in note 31. Derivative instruments are used by the group for hedging purposes. Such instruments include forward exchange, currency option contracts and interest rate swap agreements. The group does not speculate in the trading of derivative instruments.
   
             2009 2008 2007
      Notes Rm Rm Rm
  33.1 Summary of the carrying and fair value of financial instruments        
    Carrying value of financial instruments by category:        
    Financial assets:        
    Financial assets at fair value through profit or loss        
    – Designated as such at initial recognition 7,10 121 160 332
    – Held for trading items  7,10 15 77 62
    Available-for-sale financial assets 7 46 47 28
    Loans and receivables 7,10,11 6 197 8 107 7 465
    Derivative assets designated as effective hedging instruments 7,10 4 109 29
    Finance lease receivables 6 733 597 769
    Total carrying value of financial assets   7 116 9 097 8 685
    Financial liabilities:        
    Financial liabilities at fair value through profit or loss        
    – Designated as such at initial recognition 17,18 78 11 26
    – Held for trading items  17,18 11 31 9
    Financial liabilities measured at amortised cost 15,17,18,19 15 163 17 172 16 412
    Derivative liabilities designated as effective hedging instruments 17,18 142 42 84
    Total carrying value of financial liabilities   15 394 17 256 16 531
    Carrying value of financial instruments by class:        
    Financial assets:        
    Trade receivables        
    – Industry   3 379 5 059 4 214
    – Government   136 202 177
    – Consumers   307 309 468
    Other loans and receivables, prepayments and cash balances   2 396 2 538 2 605
    Finance lease receivables   733 597 769
    Derivatives (including items designated as effective hedging instruments)        
    Forward exchange contracts     144 48
    – Interest rate swaps   15 40 40
    – Other derivatives   4 1 3
    Other financial assets at fair value   146 207 361
    Total carrying value of financial assets   7 116 9 097 8 685
    Financial liabilities:        
    Trade payables        
    – Principals   1 553 1 923 2 460
    – Other suppliers   4 129 5 359 4 303
    Other non-interest-bearing payables   636 602 583
    Derivatives (including items designated as effective hedging instruments)        
    Forward exchange contracts   28 11 47
    – Interest rate swaps     55 43
    – Other derivatives   125 7 3
    Other financial liabilities at fair value   78 11 26
    Interest-bearing debt measured at amortised cost   8 845 9 288 9 066
    Total carrying value of financial liabilities   15 394 17 256 16 531
    Fair value of financial instruments by class:        
    Financial assets:        
    Trade receivables        
    – Industry   3 379 5 059 4 214
    – Government   136 202 177
    – Consumers   307 309 468
    Other loans and receivables, prepayments and cash balances   2 396 2 538 2 605
    Finance lease receivables   733 597 769
    Derivatives (including items designated as effective hedging        
    instruments)        
    Forward exchange contracts     144 48
    – Interest rate swaps   15 40 40
    – Other derivatives   4 1 3
    Other financial assets at fair value   146 207 361
    Total fair value of financial assets   7 116 9 097 8 685
    Financial liabilities:        
    Trade payables        
    – Principals   1 553 1 923 2 460
    – Other suppliers   4 129 5 359 4 303
    Other non-interest-bearing payables   636 602 583
    Derivatives (including items designated as effective hedging        
    instruments)        
    Forward exchange contracts   28 11 47
    – Interest rate swaps     55 43
    – Other derivatives   125 7 3
    Other financial liabilities at fair value   78 11 26
    Interest-bearing debt measured at amortised cost   8 845 9 245 9 034
    Total fair value of financial liabilities   15 394 17 213 16 499
    All financial instruments are carried at fair value or amounts that approximate fair value, except for the non-current portion of fixed rate receivables, payables and interest-bearing borrowings, which are carried at amortised cost. The carrying amounts for investments, cash, cash equivalents as well as the current portion of receivables, payables and interest-bearing borrowings approximate fair value due to the short-term nature of these instruments. The fair values have been determined using available market information and appropriate valuation methodologies.
     
  33.2 Financial risk management
    a. Capital risk management
    The group manages its capital to ensure that all entities in the group will be able to continue as a going concern while maximising the return to stakeholders through the optimization of debt and equity. The overall strategy remains unchanged from the previous year.
     
    The capital structure of the group consists of debt (refer notes 15 and 19), cash and cash equivalents (note 11) and equity attributable to equity holders of Barloworld Limited, comprising issued capital (note 13), reserves and retained earnings (note 14).
     
    A finance committee consisting of senior executives of the group meets on a regular basis to review the capital structure based on the cost of capital and the risks associated with each class of capital, analyse currency and interest rate exposure and to re-evaluate treasury management strategies in the context of most recent economic conditions and forecasts. The group has targeted gearing ratios for each major business segment as disclosed in note 1.1. The group’s various treasury operations provide the group with access to local money markets and provide group subsidiaries with the benefit of bulk financing and depositing.
     
    b. Market risk
    i) Currency risk
    Trade commitments
    The group’s currency exposure management policy for the southern African operations is to hedge all material foreign currency trade commitments as soon as they arise. In respect of offshore operations, where there is a traditionally stable relationship between the functional and transacting currencies, the need to take foreign exchange cover is at the discretion of the divisional board. Each division manages its own trade exposure within the overall framework of the group policy. In this regard the group has entered into certain forward exchange contracts which do not relate to specific items appearing in the balance sheet, but were entered into to cover foreign commitments not yet due or proceeds not yet received. The risk of having to close out these contracts is considered to be low. There has been no change during the year to the group’s approach to managing foreign currency risk.
     
    Net currency exposure and sensitivity analysis
    The following table represents the extent to which the group has monetary assets and liabilities in currencies other than the group companies’ functional currency. The information is shown inclusive of the impact of forward contracts and options in place to hedge the foreign currency exposures. Based on the net exposure below it is estimated that a simultaneous 10% change in all foreign currency exchange rates against divisional functional currency will impact the fair value of the net monetary assets/liabilities of the group to the extent of R43 million (2008: R140 million; 2007: R246 million), of which R31 million (2008: R124 million; 2007: R164 million) will impact equity and R12 million (2008: R16 million; 2007: R82 million) will impact profit or loss.
     
                  Currency of assets/(liabilities)  
      SA rand Euro British
sterling		 US
dollar		 Australian
dollar		 Japanese
yen		 Other
African
currencies		 Other
currencies		 Total
      Rm Rm Rm Rm Rm Rm Rm Rm Rm
    Net foreign currency monetary                  
    assets/(liabilities)                  
    Functional currency of group                  
    operation:                  
    SA rand n/a (3) 6 344 17   1 1 366
    Euro 1 n/a   2         3
    British sterling   3 n/a (80)         (77)
    US dollar 2 52 11 n/a 9   50 1 125
    Other African currencies (8) (11)   6     n/a   (13)
    Other currencies       29       n/a 29
    As at 30 September 2009 (5) 41 17 301 26   51 2 433
    SA rand n/a 7 (1) 1 340 (3)     2 1 345
    Euro   n/a   23         23
    British sterling     n/a 4         4
    US dollar (41) 23 18 n/a     2 21 23
    Other African currencies 6     (51)     n/a   (45)
    Other currencies   1   42   1   n/a 44
    As at 30 September 2008 (35) 31 17 1 358 (3) 1 2 23 1 394
    SA rand n/a 103 92 1 736 (1) 102     2 032
    Euro (2) n/a   (1)         (3)
    British sterling   10 n/a 4         14
    US dollar (2) 181 125 n/a (7) 121 (27) 391  
    Other African currencies (9) (10)   (33)     n/a 81 29
    Other currencies     (1) 1       n/a  
    As at 30 September 2007 (13) 284 216 1 707 (8) 223 (27) 81 2 463
                       
                  2009 2008 2007
                  Rm Rm Rm
    Hedge accounting applied in respect of foreign currency risk      
    Cash flow hedges      
    – fair value of asset/(liability) – foreign currency forward exchange contracts (19) 73 (41)
    The foreign currency contracts have been acquired to hedge the underlying currency risk arising from a firm commitment to acquire Equipment machines as well as the forecast purchases of spare parts. All cash flows are expected to occur and affect profit or loss within the next twelve months.      
           
    Hedges of net investments in foreign operations
    As at September 2009, the group had 12 cross-currency interest rate swap contracts which were all designated as a hedge of a net investment in a foreign entity. Details are as follows:
           
                      Foreign
amount
notional		 Interest
rate		 Maturity   2009 Fair value
2008		 2007
      Currency (000’s) % date   Rm Rm Rm
    Fair value of asset/(liability)                
    – cross-currency interest rate swap contracts EUR (99 569) 2.7 2011 – 2012      
    Fair value of asset/(liability)              
    – cross-currency interest rate swap contracts GBP 86 167 2.9 2009 – 2011 (59) (28) (23)
    Fair value of asset/(liability)                
    – cross-currency interest rate swap contracts AUD (25 000) 6.6 2010      
    Fair value of asset/(liability)              
    – cross-currency interest rate swap contracts GBP 10 111 5.2 2010 (45) (14) (19)
    Total           (104) (42) (42)
    ii) Interest rate risk
    The group manages the exposure to interest rate risk by maintaining a balance between fixed and floating rate borrowings. The interest rate characteristics of new borrowings and the refinancing of existing borrowings are structured according to expected movements in interest rates. There has been no change to this approach in the current year.
                     
    The interest rate profile of total borrowings is as follows:
                    Year of          
        redemption/ Interest   2009 2008 2007
      Currency repayment rate (%)   Rm Rm Rm
    Liabilities in foreign currencies              
    Secured loans NOK 2012 Nibor’’ + 0.4       488
      SEK 2012 Stibor% + 0.4       464
      BWP 2009 – 2013 15.4     20 16
      UAE 2009 – 2011 EIBOR** 3m + 2.5%     18  
    Unsecured loans USD 2010 Libor* + 2.5     522  
      EUR 2009 – 2012 Euribor*** + .77     104 379
      USD 2007 – 2008 8.8       35
      USD 2010 3 month Libor* + 1.5   4    
      USD 2009 – 2011 Libor* + 1.5   16 28  
    Liabilities under capitalised finance leases GBP 2009 6 to 7   239 270 341
      EUR 2020 Euribor*** + 5.68   190 89 83
          US 3yr swap        
      USD 2010 – 2014 rate +.38%   54 69 64
      BWP 2010 – 2013 15.5   4 5 17
    Total foreign currency liabilities (note 15)         507 1 125 1 887
    Liabilities in South African rand              
    Secured loans   2010 – 2023 9.0   64 105 60
    Unsecured loans   2010 – 2015 7.8 – 11.78   4 900 3 454 2 590
    Liabilities under capitalised finance leases   2010 – 2022 12   499 512 372
    Total South African rand liabilities (note 15)         5 463 4 071 3 022
    Total South African rand and foreign currency liabilities (note 15)         5 970 5 196 4 909
   
* Libor – London inter-bank offered rate
’’ Nibor – Norwegian inter-bank offered rate
% Stibor – Swedish inter-bank offered rate
** EIBOR – Emirates inter-bank overdraft rate
*** Euribor – European inter-bank offered rate
                          2009 2008 2007
              Rm Rm Rm
    Interest rates              
    Loans at fixed rates of interest         4 414 3 678 2 975
    Loans linked to South African money market         1 332 734 473
    Loans linked to offshore money markets         224 734 1 461
              5 970 5 196 4 909
    Hedge accounting applied in respect of interest rate risk              
    As at September 2009, the group had the following designated cash flow hedge interest rate swap contract:
                   
      Currency Amount- Interest     Fair value  
        notional rate Maturity 2009 2008 2007
        (000's) % date Rm Rm Rm
    Fair value of asset/(liability) – designated     7.96        
      cash flow hedge interest rate swap contract ZAR 500 000 (fixed) 2010 (4) 24 17
    Total         (4) 24 17
    Cash flow hedges              
    – fair value of interest rate swaps         (4) 24 17
    The interest swap contract has been acquired to hedge the underlying interest rate risk arising from interest cash flows on the loans linked to the South African prime rate. The cash flows occur on a quarterly basis until June 2010.
                   
    Other interest rate derivatives
As at September 2009, the group had two other interest rate swap contracts. Details are as follows:
    Fair value of asset/(liability)     3m Jibar#        
    – interest rate swap contracts ZAR 750 000 + 55 bps 2011 33 (5) 10
    Fair value of asset/(liability)     7.83        
    – interest rate swap contracts ZAR 750 000 (fixed) 2011 (1) 49 47
    Total         32 44 57
    The interest rate swap contracts have been acquired to hedge the interest rate risk arising from the Baw1 corporate bond (refer note 10 of the company financial statements).
     
    # Jibar – Johannesburg inter-bank acceptance rate.
                  2009 2008 2007
      Rm Rm Rm
    Interest rate sensitivity analysis      
    Impact of a 1% increase in South African interest rates      
    – charge to profit or loss 39 43 42
    – increase in equity 4 12 18
    Impact of a 1% increase in offshore interest rates      
    – charge to profit or loss 13 23 31
    The above impact was calculated on the average opening      
    and closing variable rate debt for the year.      
    iii) Other price risk      
    The group is exposed to price risk arising out of the following:      
    PPC share price      
    The group has a liability to option holders following the unbundling of PPC during 2007 and holds shares against the liability (refer note 7).      
    PPC share price sensitivity analysis      
    Impact of a 10% increase in the PPC share price as at 30 September      
    – gain in profit or loss in respect of the shares 10 33 16
    – charge to profit or loss in respect of the liability 10 10 19
    Baw share price      
    The group has a liability to option holders in terms of the      
    Share Appreciation Right Scheme (refer note 34.2)      
    Baw share price sensitivity analysis      
    Impact of a 10% increase in the Baw share price as at 30 September      
    – charge to profit or loss in respect of the liability 3    
    – fair value of designated cash flow hedge – Baw share call options   3  
    The call options have been acquired to hedge against future additional cash flows arising from increases in the Baw share price. The cash flows are expected to occur after the vesting of the rights as per note 34.2.
     
    There has been no change during the current year in the group approach to managing other price risk.
     
    c. Credit risk
    Potential areas of credit risk consist of trade receivables and short-term cash investments. Trade receivables consist mainly of a large and widespread customer base. Group companies monitor the financial position of their customers on an ongoing basis. Where considered appropriate, use is made of credit guarantee insurance. The granting of credit is controlled by application and account limits. Provision is made for bad debts and at the year end management did not consider there to be any material credit risk exposure that was not already covered by credit guarantee insurance or a bad debt provision. It is group policy to deposit short-term cash investments with major banks and financial institutions with strong credit ratings.
     
    Maximum exposure to credit risk (excluding collateral held)      
    Trade receivables      
    – Industry 3 379 5 059 4 214
    – Government 136 202 177
    – Consumers 307 309 468
    Other loans and receivables, prepayments and cash balances 2 396 2 538 2 605
    Finance lease receivables 733 597 769
    Derivatives (including items designated as effective hedging instruments)      
    Forward exchange contracts    144 48
    – Interest rate swaps 15 40 40
    – Other derivatives 4 1 3
    Other financial assets at fair value 146 207 361
    Other items, including financial guarantees 1 212 1 066 776
      8 328 10 163 9 461
    Carrying value of financial assets, the terms of which have been renegotiated      
    Trade receivables      
    – Industry 1 1  
    – Government   3  
    Impairment losses/(gains) on financial assets      
    Trade receivables      
    – Industry   58 36
    – Government   (2)  
    – Consumers   7 20
    Finance lease receivables   (10) 29
    Fair value of collateral held on overdue or impaired amounts   1 5
    Fair value of collateral held on amounts not overdue or impaired   123 145
    The collateral for 2007 and 2008 consists largely of a mortgage in favour of the group as security against a property loan which arose with the disposal of the Steel business during November 2006. The loan was repaid in the current year.
     
     d. Liquidity risk
    The group manages liquidity risk by monitoring forecastcash flows, maintaining a balance between long-termand short-term debt and ensuring that adequate unutilised borrowing facilities are maintained. Unutilised borrowing facilities amounted to R9.0 billion (2008: R7.8 billion). There has been no change to this approach during the current year.
     
    Maturity profile of financial liabilities
    The maturity profile of the financial instruments is summarised as follows (based on contractual undiscounted cash flows):
     
                         
        Repayable during the year
      Total ended 30 September
      owing   2011 to 2015 and
      2009 2010 2014 onwards
    Interest-bearing liabilities 11 797 4 853 4 303 2 641
    Trade payables and other non-interest-bearing liabilities 8 077 7 250 738 89
        2009 2008 2007
        Rm Rm Rm
34. Share incentive schemes and share-based payments      
  34.1 Financial effect of share-based payment transactions        
    Income statement effect        
    Expense arising from share-based payment transactions   6 337 5
    Compensation expense arising from equity-settled share option incentive plan   1 2 16
    Compensation expense arising from cash settled share appreciation rights incentive plan   (2) (4) 20
    Share-based payment expense included in operating profit   5 335 41
    Taxation benefit on cash-settled share appreciation rights and BEE transactions   (6) (40) (6)
    Net share-based payment expense after taxation   (1) 295  35
    Balance sheet effect        
    Non-current liability raised for cash-settled share appreciation rights granted (to be incurred within 1 – 5 years)   (14) (16) (20)
    Deferred taxation asset raised on share appreciation rights liability and BEE transactions   20 40 6
    Net reduction in shareholders’ interest as a result of share-based payment transactions   6 24 (14)
     
  34.2 Cash-settled share appreciation rights scheme
    During 2007 the group introduced the Barloworld Cash-Settled Share Appreciation Right Scheme.
     
    The scheme allows executive directors and certain senior employees to earn a long-term incentive amount calculated based on the increase in the Barloworld Limited share price between the grant date and the vesting and exercise of such rights.
     
    No shares are issued in terms of this scheme and all amounts payable will be settled in cash. The objective of the scheme is to recognise the contributions of senior staff to the group’s financial position and performance and to retain key employees.
     
    The vesting of the rights are subject to specific performance conditions, based on group headline earnings per share. Rights are granted for a period of six years and vest one-third after three years from grant date, a further one-third after four years and the final third after five years.
     
    The grant price of these appreciation rights equals the volume weighted average market price of the underlying shares on the three trading days immediately preceding grant date.
     
    On resignation, share appreciation rights which have not yet vested and those vested but not exercised, are forfeited. On death or retirement the Barloworld remuneration committee may permit a portion of unvested rights to be exercised within one year (or such extended period as the committee may decide) of the date of cessation of employment.
     
    It is group policy that employees should not deal in Barloworld Limited shares (and this is extended to the share appreciation rights and share options schemes) for the periods from 1 April for half year end and 1 October for year end until 24 hours after publication of the results and at any other time during which they have access to price sensitive information.
     
    Fair value estimates
    In terms of IFRS 2, liabilities relating to cash-settled share-based payments are adjusted to fair value at balance sheet date. The estimated fair value of the share appreciation rights was calculated using a binomial pricing model, with inputs as set out below.
     
    Date of grant   15 Nov 2006* 12 July 2007* 29 Sept 2008
    Number of share appreciation rights granted   624 929 3 730 345 3 094 816
    Exercise price (R)   64.18 113.01 61.01
    Share price at grant date (R)   140.00 123.88 61.01
    Share price at balance sheet date (R)   49.00 49.00 49.00
    Expected volatility (%)   42.0 42.0 42.0
    Expected dividend yield (%)   4.6 6.2 6.9
    Risk free rate (%)   7.2 7.4 7.9
    Exercise multiple (share price at exercise date/option exercise price)   2.0 2.0 2.0
    Estimated fair value per share appreciation right at grant date (R)   26.91 46.41 15.64
    Estimated fair value per share appreciation right at year end (R)   9.67 4.08 11.50
   
* The 15 November 2006 and 12 July 2007 grants were modified due to the Cement and Coatings unbundling as set out in note 34.4 and 34.5 below.
     
  34.3 Equity-settled share option scheme
    Equity-settled share options were granted to executive directors and senior employees in terms of the Barloworld Share Option Scheme 1985.
     
    The objectives of the scheme are similar to that of the share appreciation rights scheme.
     
    The options have a total contractual life of 10 years, with the exception of the May 2004 grant which has a six year contractual life.
     
    The options vest one-third after three years from grant date, a further one-third after four years and the final third after five years.
     
    Fair value estimates
Options granted after 7 November 2002 are expensed over their vesting period in terms of IFRS 2 . The estimated fair value of these equity settled options were calculated at grant date using a binomial model with the following inputs:
             
    Date of grant     1 April 2003 26 May 2004
    Number of options granted     2 168 400 2 205 200
    Exercise price (R)     47.50 67.80
    Share price at grant date (R)     47.50 67.80
    Expected volatility (%)     35.0 35.0
    Expected dividend yield (%)     5.8 4.3
    Risk free rate (%)     10.4 10.9
    Exercise multiple (Share price at exercise date/option exercise price)     2.0 2.0
    Estimated fair value per option at grant date (R)     16.59 25.37
     
  34.4 Modification for Cement and Coatings unbundling
The equity-settled share options were modified in line with shareholder approval granted as a result of the unbundling of Cement in July 2007 and Coatings in December 2007. Cash-settled share appreciation rights awarded on 15 November 2006 were modified in terms of the rules of the scheme.
     
    The modifications did not result in any incremental fair value being granted to option or right holders, as the objective was to maintain intrinsic value at the same level before and after unbundling. The modification for the Cement unbundling entailed a downward re-pricing of exercise prices combined with additional entitlements to compensate for the impact of a lower Barloworld share price after unbundling. The Cement unbundling resulted in an estimated 41.7% reduction in the Barloworld
share price, based on the pre- and post-unbundling share price of R214.50 and R125 respectively. The modification for the Coatings unbundling entailed a downward re-pricing of exercise prices only.
     
    The Coatings unbundling resulted in an estimated 6.2% reduction in the Barloworld share price, based on the pre- and post-unbundling share price of R114.60 and R107.50 respectively.
     
    Corresponding fair values were demonstrated before and after unbundling based on a binomial option pricing model, as were intrinsic values.
     
    The modified option entitlement ratio for the Cement unbundling was as follows:
   
Entitlement before unbundling   Entitlement after unbundling
[1 Barloworld option]   [1 Barloworld option + 0.866 new Barloworld options] or [1 Barloworld option + 1.8555 PPC sub-divided options]
     
    The modified exercise prices are indicated in the table of unexercised options below (note 34.5).
     
  34.5 Total share options and appreciation rights unexercised
                The following share options and share appreciation rights granted are unexercised:
          Contractual            
      Date from   life Original Modified        
      which   remaining exercise exercise Barloworld Barloworld   Total
    Date of grant exercisable Expiry date (years) price (R) price (R) directors employees# Ceded* unexercised**
    29 May 2000 29 May 2003 29 May 2010 0.7 36.70 8.80   90 001   90 011
    25 Sept 2001 25 Sept 2004 25 Sept 2011 2.0 45.0 13.63   177 279   177 279
    25 Sept 2002 25 Sept 2005 25 Sept 2012 3.0 58.20 20.33   21 000   21 000
    1 April 2003 1 April 2006 1 April 2013 3.5 47.50 14.59 6 667 687 360 30 349 724 376
    26 May 2004 26 May 2007 26 May 2010 0.7 67.80 25.48 97 202 1 380 353 147 488 1 625 043
    Total equity-settled share options granted and unexercised 103 869 2 356 003 177 837 2 637 709
    15 Nov 2006 15 Nov 2009 15 Nov 2012 3.1 140.00 64.18 270 492 354 437   624 929
    12 July 2007 12 July 2010 12 July 2013 3.8 123.88 113.01 328 614 3 050 352   3 378 966
    29 Sept 2008 29 Sept 2011 29 Sept 2014 5.0 61.01 n/a 539 822 2 407 108   2 946 930
    Total cash-settled share appreciation rights granted and unexercised 1 138 928 5 811 897   6 950 825
    Total unexercised 1 242 797 8 167 900 177 837 9 588 534
    The weighted average share price of options exercised during the period was R43.91 (2008: R96.51; 2007: R174.67).
                        Number of Number of Weighted average
    Share options and appreciation rights movement for the year appreciation rights share options exercise price (R)
    Share options and appreciation rights movement for the year      
    2009      
    Unexercised at the beginning of the year 7 114 885 3 261 917 66.19
    Options forfeited   (62 323) 65.63
    Appreciation rights forfeited (164 060)   100.11
    Options exercised   (561 885) 58.71
    Options and appreciation rights unexercised at year end 6 950 825 2 637 709 68.56
    Held by:      
    Directors, employees and ex-employees of Barloworld 6 950 825 2 459 872 69.41
    Financial institutions   177 837 23.62
    2008      
    Unexercised at the beginning of the year 4 355 274 4 661 117 76.83
    Rights granted in terms of cash-settled share appreciation rights scheme 2 987 635   61.01
    Options forfeited   (52 075) 60.30
    Appreciation rights forfeited (228 024)   113.01
    Options exercised   (1 347 125) 51.66
    Options unexercised at year end 7 114 885 3 261 917 66.19
    Held by:      
    Directors, employees and ex-employees of Barloworld 7 114 885 2 821 776 68.19
    Financial institutions   440 141 21.12
    2007      
    Unexercised at the beginning of the year   7 149 483 51.41
    Additional option entitlements in terms of modification for Cement unbundling   875 670 31.33
    Rights granted in terms of cash-settled share appreciation rights scheme 4 355 274   116.87
    Options forfeited   (236 205) 30.19
    Options exercised   (3 127 831) 25.22
    Options unexercised at year end 4 355 274 4 661 117 76.83
    Held by:      
    Directors and employees of Barloworld 4 355 274 3 701 024 74.03
    Employees of PPC   360 345 30.32
    Financial institutions   599 748 30.04
   
* In terms of the rules of the Barloworld Share Option Scheme options may be ceded to an approved financial institution.
** Scheme rules dictate that the number of unexercised options may not exceed 10% of the total number of issued shares of the company at any time.
#  The unexercised share options granted to retired directors and employees are included in this column.
           
  34.6 Other share-based payment transactions      
    During 2008 the group implemented a Broad Based Black Economic Empowerment transaction.
           
    The impact of this transaction, calculated in terms of IFRS 2 Share-based Payment, was a charge to profit or loss in the current year of R6 million (2008: R337 million) which was determined on assumptions and inputs as set out below:
          Weighted
        Number of average
        shares fair value
        issued per share (R )
    Strategic black partners   12 331 337 10.02
    The fair value is based on a Monte Carlo valuation model using an expected average dividend yield of 9.9% and a Barloworld share price volatility of 28.55% over the term of the lock-in period. The strategic black partners are permitted to receive all dividends paid in the lock-in period.    
           
    Community service groups   2 153 676 10.02
    The fair value is based on a Monte Carlo valuation model using an expected average dividend yield of 9.9% and a Barloworld share price volatility of 28.55% over the term of the lock-in period. The community service groups are permitted to receive all dividends paid in the lock-in period.    
           
    Education trust   1 054 058  
    No charge has been taken into account as no award to beneficiaries of the trust has been made to date. The shares awarded to the trust are treated as treasury shares.    
           
    Black managers trust   3 060 166 4.67
    The fair value is based on a valuation model using an expected average dividend yield of 9,9% and a Barloworld share price volatility of 28.55% over the term of the lock-in period. The trust is not entitled to receive dividends during the lock-in period.    
           
    Black non-executive directors trust   108 030 83.31
    The fair value is based on the 30 day volume weighted average share price of Barloworld Limited as at 9 July 2008, the date when the shares were donated to the trust. The three beneficiaries of the trust are DB Ntsebeza, S Baqwa and S Mkhabela, who are black non-executive directors of Barloworld Limited. The beneficiaries’ shares are subject to a seven year lock-in period from 29 September 2008, during which period the beneficiaries will not be entitled to sell, cede, transfer or otherwise dispose of or encumber their Barloworld ordinary shares or their rights in the trust.    
           
    General staff trust   2 980 829 64.50
    The fair value is based on the Barloworld Limited closing share price on 30 September 2008, the date when the shares were allocated to staff members. 36 278 shares were not issued and are treated as treasury shares (note 13).    
   
35. Changes in accounting policy and disclosures
  35.1 New standards and interpretations adopted
    The annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB on a basis consistent with the prior year except for the adoption of the following new and amended standards and new interpretations:
     
    IFRIC Interpretation 18 Transfers of Assets from Customers (IFRIC 18)
IFRIC 18 is effective for the group from the year ending 30 September 2009 and the interpretation applies prospectively to transfers of assets received from customers on or after 1 July 2009. The interpretation is particularly relevant for the utility sector and did not have a significant impact on the group.
     
    The South African Institute of Chartered Accountants Circular 3/2009 on headline earnings
This circular is effective for the group from the year ending 30 September 2009. It replaces circular 8/2007 and provides a link to IFRS and accounting policy choices through guidance on the calculation of headline earnings including rules for every IFRS. The focus is to ensure that headline earnings reflect the operating/trading earnings of an entity and generally excludes re-measurements (changes – realised and unrealised – to the initial recognition of assets and liabilities) processed through profit and loss (with certain exceptions). The impact of the adoption of this circular on the group was not significant.
     
    IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (Amended – April 2009) (IFRS 5)
The amendment to IFRS 5 is effective for the group from the year ending 30 September 2010 and relate to the disclosures required in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations. Disclosures in other IFRSs do not apply to such assets (or disposal groups) unless those IFRSs require specific disclosures in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations. The amendment clarifies that the disclosures under note 33 is not applicable to non-current assets (or disposal groups) classified as held for sale or discontinued operations and was early adopted in the current year.
     
  35.2 Changes to comparative information
    No changes to comparative information have been made.
     
  35.3 New standards and interpretations not yet adopted
    The following standards and interpretations are not yet effective and will be adopted in future years:
     
    IFRS 8 Operating Segments (IFRS 8)
This standard is effective for the group from the year ending 30 September 2010. It replaces IAS 14 Segment Reporting and requires an entity to adopt a “management approach” to reporting on the financial performance of its operating segments. Generally, the information to be reported would be what management uses internally for evaluating segment performance and deciding how to allocate resources to operating segments. Such information may be different from what is used to prepare
the income statement and balance sheet. The standard therefore requires explanations of the basis on which the segment information is prepared and reconciliations to the amounts recognised in the income statement and balance sheet. The current group segment reporting is similar to the group management reporting and no material change is anticipated when this standard will be adopted from the year ending 30 September 2010.
     
    IAS 1 Presentation of Financial Statements (Revised) (IAS 1)
This revised standard is effective for the group from the year ending 30 September 2010 and requires the preparation of a “Statement of comprehensive income” which replaces the income statement. All non-owner changes in equity (that is, “comprehensive income”) must be recognised either in one statement of comprehensive income or in two statements (a separate income statement and a statement of comprehensive income). Comprehensive income for a period includes profit or loss for that period plus other comprehensive income recognised which includes revaluation surpluses, actuarial gains and losses, foreign currency translation reserves and hedge accounting reserves. The group is in the process of evaluating the effects of this standard.
     
    IFRS 3 Business Combinations (Revised) (IFRS 3)
The revised IFRS 3 has been issued after completion of the International Accounting Standards Board’s second phase of its business combinations project and is now largely aligned with US accounting. Consequential amendments were also made to IAS 27 Consolidated and Separate Financial Statements, IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures. The changes mainly relate to the treatment of acquisition costs (now to be expensed), contingent considerations, goodwill where minorities are involved, step acquisitions and partial disposals. The revised standards are effective from the year ending 30 September 2010 and the group is in the process of evaluating the requirements of the amendments.
     
    IFRS 2 Share-based Payments (Revised) (IFRS 2)
The amendments to IFRS 2 are effective for the group from the year ending 30 September 2010 and clarify the definition of vesting conditions and the accounting treatment of cancellations, whether by the entity or other parties, to a share-based arrangement. The group is in the process of evaluating the detailed requirements of the amendments.
     
    IFRS 2 Group Cash-settled Share-based Payment Transactions (Revised – June 2009) (IFRS 2)
In June 2009 the IASB amended IFRS 2 to clarify its scope and the accounting for group cash-settled share-based payment transactions in the separate or individual financial statements of the entity receiving the goods or services when that entity has no obligation to settle the share-based payment transaction. The amendments also incorporate the guidance contained in IFRIC 8 Scope of IFRS 2 and IFRIC 11 IFRS 2 – Group and Treasury Share Transactions. As a result IFRIC 8 and IFRIC 11 were withdrawn. The amendments are effective for the group from the year ending 30 September 2011 and the group is in the process of evaluating the requirements of the amendments.
     
    Annual improvements project 2008
In May 2008 the International Accounting Standards Board issued Improvements to IFRSs – a collection of amendments to International Financial Reporting Standards (IFRSs). These amendments consist of various necessary, but non-urgent, amendments to IFRSs that will not be part of another major project of the Board. These amendments are effective from the year ending 30 September 2010. The group is in the process of evaluating the detailed requirements of the amendments.
     
    Annual improvements project 2009
In April 2009 the International Accounting Standards Board issued Improvements to IFRSs – a collection of amendments to International Financial Reporting Standards (IFRSs). These amendments consist of various necessary, but non-urgent, amendments to IFRSs that will not be part of another major project of the Board. Most of these amendments are effective from the year ending 30 September 2011. The group is in the process of evaluating the detailed requirements of the amendments.
     
    IFRIC Interpretation 17 Distributions of Non-cash Assets to Owners (IFRIC 17)
IFRIC 17 provides guidance on the appropriate accounting treatment when an entity distributes assets other than cash as dividends to its owners or when the owners are given a choice of taking cash in lieu of the non-cash assets. The interpretation clarifies that:
   
  • A dividend payable should be recognised when the dividend is appropriately authorised and is no longer at the discretion of the entity.
  • An entity should measure the dividend payable at the fair value of the net assets to be distributed.
  • An entity should re-measure the liability at each reporting date and at settlement, with changes recognised directly in equity.
  • An entity should recognise the difference between the dividend paid and the carrying amount of the net assets distributed in profit or loss, and should disclose it separately.
    The Interpretation also requires an entity to provide additional disclosures if the net assets being held for distribution to owners meet the definition of a discontinued operation. The interpretation is effective for the group from the year ending 30 September 2010 and will apply to non-cash distributions to owners after 1 October 2009.
     
36. Directors’ remuneration and interests
  Directors’ remuneration
  The group remuneration philosophy and basis for determining performance bonuses is set out in the Remuneration report. Other benefits determined below include company cars, Share Purchase Trust loans, expatriate benefits and redundancy and termination payments. There are no directors with service contracts with termination benefits exceeding one year’s salary and notice periods in excess of one year.
                 
  The directors’ remuneration for the year ended 30 September 2009 was as follows:
          Share      
        Retirement appreciation      
        and medical rights Car Other Total
    Salary Bonus contributions awarded* allowances benefits 2009
    R000 R000 R000 R000 R000 R000 R000
  2009              
  Executive directors              
  PJ Blackbeard 2 888 227 327 (85) 201 876 4 434
  M Laubscher 3 141 3 826 604 (91) 236 17 7 733
  OI Shongwe 1 928 1 285 270 100 228 20 3 831
  CB Thomson 4 761 3 219 818 39 266 355 9 458
  DG Wilson 2 450 1 463 518 (163) 246 23 4 537
    15 168 10 020 2 537 (2100) 1 177 1 291 29 993
  No share options issued in previous years were exercised/ceded during the year.
              Fees  
              for services  
              to subsidiaries  
            Car /other Total
          Fees allowances services 2009
          R000 R000 R000 R000
  Non-executive directors              
  S Baqwa       298     298
  AGK Hamilton       1 060     1 060
  MJ Levett (retired 30 January 2009)       283     283
  S Mkhabela       316     316
  DB Ntsebeza       1 438 266 2 1 706
  TH Nyasulu       198     198
  SB Pfeiffer       880     880
  G Rodriguez de Castro Garcia de los Rios       690   790 1 480
  SS Ntsaluba       265     265
  MJN Njeke (appointed 16 September 2009)       11     11
          5 439 266 792 6 497
  Total directors’ remuneration             36 490
 
* This amount relates to the IFRS 2 Share Based Payment (credit)/charge for the year on share appreciation rights and share options awarded in previous years.
         Retirement Share            
        and appre            
        medical ciation Car       Share Share
        contri- rights allow- Other Total   options options
    Salary Bonus butions awarded* ances benefits 2008   ceded^ exercised^
    R000 R000 R000 R000 R000 R000 R000   R000 R000
  2008                    
  Executive directors                    
  PJ Blackbeard 3 222 2 105 333 (386) 232 1 753 7 259   294  
  BP Diamond (resigned 31 December 2007) 876   303 (88) 29 8 722 9 842      
  AJ Lamprecht (resigned 30 November 2007) 361   95 (88) 39 1 117 1 524      
  M Laubscher 2 487 1 758 463 (464) 236 16 4 496     1 779
  OI Shongwe 1 513 1 550 212 (22) 228 5 3 486      
  PM Surgey (resigned 30 September 2008) 2 280 2 132 512 (377) 249 8 629 13 425     2 805
  CB Thomson 3 873 4 348 660 (431) 264 295 9 009     1 876
  DG Wilson 2 216 2 109 459 (508) 244 27 4 547      
    16 828 14 002 3 037 (2 364) 1 521 20 564 53 588   294 6 460
                       
              Fees for        
              services        
              to sub-        
            Car sidiaries/        
            allow- other Total      
          Fees ances services 2008      
          R 000 R 000 R 000 R 000      
  Non-executive directors                    
  SAM Baqwa       252     252      
  AGK Hamilton       1 061     1 061      
  MJ Levett (retired 30 January 2009)       936     936      
  S Mkhabela       252     252      
  SS Ntsaluba (appointed 28 July 2008)       43     43      
  DB Ntsebeza       1 437 265 7 1 709      
  TH Nyasulu       173     173      
  SB Pfeiffer       867     867      
  G Rodriguez de Castro Garcia de los Rios       715   2 601 3 316      
  TS Munday (resigned 17 January 2008)       94   58 152      
  RC Tomkinson (resigned 24 January 2008)       387     387      
          6 217 265 2 666 9 148      
  Total directors’ remuneration             62 736      
                       
         Retirement              
        and              
        medical Share Car       Share Share
        contri- options allow- Other Total   options options
    Salary Bonus butions awarded* ances benefits 2008   ceded^ exercised^
    R000 R000 R000 R000 R000 R000 R000   R000 R000
  2008                    
  Executive directors                    
  PJ Blackbeard 2 958 3 395 310 1 357 331 1 254 9 605   2 789 6 820
  MD Coward (resigned 4 December 2006) 359   316 42 40   757      
  LS Day (retired 30 November 2006) 298   495 42 37 596 1 468      
  BP Diamond (resigned 31 December 2007) 3 034 1 226 709 1 252 110 62 6 393     5 712
  JE Gomersall (resigned 16 July 2007) 1 852 2 007 462 939 119 1 151 6 530     3 328
  M Laubscher 1 994 1 957 470 1 252 233 142 6 048   3 306  
  AJ Phillips 2 019 2 551 371 1 461 302 19 6 723   2 347 692
  AJ Lamprecht (resigned 25 January 2007) 1 203   2 875 447 67 16 707 21 299      
  OI Shongwe (resigned 26 January 2007) 978 1 562 137 84 152   2 913      
  PM Surgey 2 100 2 545 464 1 377 242 14 6 742   707 3 740
  CB Thomson 3 003 5 258 518 1 642 256 126 10 803     3 844
  DG Wilson (Appointed 29 September 2006) 1 984 2 390 399 1 186 240 16 6 215      
    21 782 22 891 7 526 11 081 2 129 20 087 85 496   9 149 24 136
                       
              Fees for        
              services        
            Car to sub-        
            allow- sidiaries/ Total      
          Fees ances services 2008      
          R 000 R 000 R 000 R 000      
  Non-executive directors                    
  SAM Baqwa       172     172      
  WAM Clewlow (retired 25 January 2007)       479 64 275 818      
  AGK Hamilton       474     474      
  MJ Levett (retired 30 January 2009)       961     961      
  S Mkhabela       172     172      
  DB Ntsebeza (appointed as chairman 26 January 2007)       1 048 66   1 114      
  TH Nyasulu (appointed 26 January 2007)       103     103      
  SB Pfeiffer       781     781      
  G Rodriguez de Castro Garcia de los Rios       627   3 103 3 730      
  TS Munday (appointed 26 January 2007)       110   101 211      
  EP Theron (retired 16 July 2007)       202   139 341      
  RC Tomkinson       1 088     1 088      
          6 217 130 3 618 9 965      
  Total directors’ remuneration             95 461      
 
* This amount relates to the IFRS 2 Share Based Payment (credit)/charge for the year on share appreciation rights awarded in the current and prior year and share options awarded in previous years.
^ These amounts relate to the gain made on share options issued in previous years exercised/ceded during the current year excluding gains realised after resignation as a director.
   
  Interest of directors in contracts
  The group has guaranteed a loan from a financial institution amounting to R50 million (2008: R98 million; 2007: R91 million) to a controlled entity in which OI Shongwe has a 48% beneficial interest. The transaction was concluded before his appointment to the board.
   
  The directors have certified that they did not have any other material interest in any transaction of any significance with the company or any of its subsidiaries.
   
  A register detailing directors’ and officers’ interests is available for inspection at the company’s registered office.
   
  Interest of directors of the company in share capital
  The aggregate beneficial holdings as at 30 September 2009 of the directors of the company and their immediate families (none of which has a holding in excess of 1%) in the issued ordinary shares of the company are detailed below. There have been no material changes in these shareholdings since that date.
   
    Number of shares at 30 September
    2009 2009 2008 2008 2007 2007
    Direct Indirect Direct Indirect Direct Indirect
  Executive directors            
  PJ Blackbeard 38 334   38 334   73 334  
  M Laubscher 46 101   46 101   15 000  
  OI Shongwe 2 100   2 100      
  CB Thomson 108 270 103 108 270 103 86 499 103
  DG Wilson 5 000   5 000      
    199 805 103 199 805 103 174 833 103
  Non-executive directors            
  AGK Hamilton 1 850   1 850     1 000
  S Mkhabela 1 420          
  HT Nyasulu 650   100      
  DB Ntsebeza 5 950   4 500   2 500  
  SB Pfeiffer 10 000   10 000   10 000  
    19 870   16 450   12 500 1 000
    219 675 103 216 255 103 187 333 1 103
  Interest of directors of the company in share options and share appreciation rights
  The interests of the executive and non-executive directors in shares of the company provided in the form of options and share appreciation rights are shown in the table below:
           
    Number Number    
    of options/ of options/    
    rights as at rights as at Option*/ Date from
    30 Sep 30 Sep rights which
    2008 2009 price exercisable
  PJ Blackbeard 6 667 6 667 14.59  
    35 000 35 000 25.48 2007/05/26
    65 291 65 291 64.18 2009/14/09
    46 627 46 627 113.01 2010/07/12
    43 296 43 296 16.95 2007/05/26
    88 978 88 978 61.01 2011/09/29
  M Laubscher 18 660 .48 66025 18
    74 619 74 619 64.18 2009/11/14
    42 091 42 091 113.01 2010/07/12
    98 431 98 431 61.01 2011/09/29
  OI Shongwe 37 229 37 229 113.01 2010/07/12
    62 176 62 176 61.01 2011/09/29
  CB Thomson 43 542 43 542 25.48 2007/05/26
    65 291 65 291 64.18 2009/11/14
    137 870 137 870 113.01 2010/07/12
    201 259 201 259 61.01 2011/09/29
  DG Wilson 65 291 65 291 64.18 2009/11/14
    64 797 64 797 113.01 2010/07/12
    88 978 88 978 61.01 2011/09/29
  Baw share options 103 869 103 869    
  Baw share appreciation rights 1 138 928 1 138 928    
  PPC options 43 296 43 296    
  *  The original option price has been modified for the changes in share price as a result of the PPC and Coatings unbundlings.
   
          Interest of holding company
      Issued capital   Effective
percentage holdings		 Shares Indebtedness Amounts owing
to subsidiaries
        Local currency 2009 2008 2007 2009 2008 2007 2009 2008 2007 2009 2008 2007
    Type Currency amount % % % Rm Rm Rm Rm Rm Rm Rm Rm Rm
37. Principal subsidiary companies                              
  Avis Southern Africa H ZAR 17 897 036 100 100 100 106 107 477 70 70 70      
  Barloworld Australia (Pty) Limited5 O AUD 82 275 501 100 100 100                 32
  Barloworld Botswana (Pty) Limited3 H BWP 35 329 536 100 100 100                  
  Barloworld Capital (Pty) Limited F ZAR 30 000 000 100 100 100 30 30 30 979   3 647     1 159
  Barloworld Coatings (Australia) (Pty) Limited5 O AUD 27 246 000     100                  
  Barloworld Equipment (Pty) Limited O ZAR 2 100 100 100             95 46 46
  Barloworld Equipment UK Limited1 O GBP 4 500 000 100 100 100                  
  Barloworld Holdings PLC1 H GBP 213 301 000 100 100 100                  
  Barloworld Handling Limited1 O GBP 22 180 000 100 100 100                  
  Barloworld Insurance Limited1 O GBP 4 100 000 100 100 100 63 63 63            
  Barloworld International Investment PLC1 F GBP 50 000 100 100 100                  
  Barloworld Investments Namibia (Pty) Limited1 H ZAR 900 100 100 100 108 108 108 2 590 2 642 2 963      
  Barloworld Logistics (Pty) Limited O ZAR 100 100 100 100                  
  Barloworld South Africa (Pty) Limited O ZAR 600 000 100 100 100 1 1 1 9 430 5 326   154 5 5
  Barloworld Investments Namibia (Pty) Limited4 H NAD 1 450 000     100 4 4 4           32
  Barloworld Scientific Group Limited1 O GBP 17 000 000     100                  
  Finanzauto SA2 O EUR 41 382 127 99.7 99.7 99.7                  
  Freeworld Coatings Limited# O ZAR 1 813 198     100     2 419     686      
  RIH Investments (Pty) Limited – Ord O ZAR 3 264 730 100 100 100 131 131 131            
    – ’A’ Ord   ZAR 5 876 514 100 100 100                  
  Sociedade Technica De Equipamentos e Tractores SA6 O EUR 4 000 000 98.8 98.8 98.8                  
  Zeda Car Leasing (Pty) Limited t/a Avis Fleet Services O ZAR 100 100 100 100                  
  Barloworld Siyakhula (Pty) Limited O ZAR 100 100 100 100                  
  Other foreign subsidiaries*             31 31 31           23
  Other subsidiaries*             56 56 55 246 360 367 43 73 86
                530 531 3 319 13 315 8 398 7 733 292 124 1 383
  All companies are incorporated in (or operate principally in) the Republic of South Africa except where otherwise indicated as follows:
  1. United Kingdom                              
  2. Spain                              
  3. Botswana                              
  4. Namibia                              
  5. Australia                              
  6. Portugal                              
                                 
  Keys to type of subsidiary                              
  H – Holding companies                              
  O – Operating companies                              
  F – Finance companies                              
  Any material changes which have taken place during the year are dealt with in the appropriate operational reviews.
                                 
 
* A full list of subsidiaries and a list of the special resolutions of those companies are available to the shareholders, on request, from the registered office of the company.
# The group’s coating businesses were transferred at market value in 2007 to Freeworld Coatings Limited, the shares of which were unbundled subsequent to 30 September 2007.
      Number of shares  
    Securities exchange 2009 2008 2007
38. Listed and unlisted investments        
  Number of shares held by the holding company and by subsidiaries, where significant, are as follows :        
  Listed investments        
  Astra Industries Limited* Zimbabwe 15 311 155 15 311 155 15 311 155
  Cairns Holdings Limited* Zimbabwe 15 311 155 15 311 155 15 311 155
  Tractive Power Holdings Limited* Zimbabwe 15 311 155 15 311 155 15 311 155
  Pretoria Portland Cement Company Limited South Africa   2 945 216 5 131 797 6 952 955
  Unlisted investments        
  Business Partners Limited   2 209 594 2 209 594 2 209 594
  U.R.D Investments (Pty) Limited - preference shares   20 000 000 20 000 000 20 000 000
  First Rand Bank – preference shares   20 000 000 20 000 000  
 
* The group’s investment in these companies were fully impaired during 2007 due to the uncertain economic conditions in Zimbabwe (refer note 7).
      Issued      
      share      
    Principal products capital Percentage held by investors
  Investor company/associate or activities R000 2009 2008 2007
39. Investment in associate          
  companies          
  Barloworld Australia (Pty) Limited          
  CAN 082 879 031 (Pty) Limited1 (Formerly Mercedes-Benz of  Melbourne (Pty) Limited) Motor retailer 7 295 49 49 49
  Barloworld Coatings (Pty) Limited          
  Du Pont Barloworld (Pty) Limited Automotive coatings 21     49
  International Paints (Pty) Limited Industrial coatings 20     49
  Jatran Logistics (Pty) Limited         25
  Sizwe Paints (Pty) Limited Decorative 1     30
  Valspar (SA) (Pty) Limited Can coatings manufacturer 17     20
  Barloworld Holdings PLC          
  Barzem Enterprises (Pty) Limited2 Enterprises Caterpillar dealer 48 35 35 35
  Energyst B.V.3 Caterpillar engines rental 5 041 22 22 22
  Barloworld South Africa (Pty) Limited          
  Investment Facility Company 383 (Pty) Limited t/a Sizwe Car Rental Short-term car rental   49 49 49
  All companies are incorporated in (or operate principally in) the Republic of South Africa except where otherwise indicated as follows:
  1. Australia
2. Zimbabwe
3. Netherlands
    Principal products Percentage held by investors
  Investor companies/joint ventures or activities 2009 2008 2007
40. Significant joint ventures        
  Barloworld Equipment Company        
  Barloworld Optron Technologies (Pty) Limited GPS technology on earthmoving equipment     50
  The Used Equipment Company (Pty) Limited Traders in used Caterpillar equipment     50
  Bartrac Equipment (includes Democratic Republic of Congo) Caterpillar dealer 50 50 50
  Barloworld South Africa (Pty) Limited        
  NMI Durban South Motors (Pty) Limited Motor retailer     50
  PhakisaWorld Fleet Solutions Fleet leasing 50 50 50
  Subaru South Africa (Pty) Limited Motor retailer 50    
  Barloworld Holdings PLC        
  Finaltair SA# Energy generation 50 50 50
  Vostochnaya Caterpillar dealer 50 50 50
  Barloworld Hire of forks-lift-trucks 50 50  
           
  # Under liquidation        
41. Related party transactions        
  Various transactions are entered into by the company and its subsidiaries during the year with related parties. Unless specifically disclosed these transactions occurred under terms that are no less favourable than those entered into with third parties. Intragroup transactions are eliminated on consolidation.
           
  The following is a summary of other transactions with related parties during the year and balances due at year end:
           
  R million   Associates of
the group		 Joint ventures in which the group
is a venture
  2009      
  Goods and services sold to      
  Bartrac Equipment     5
  Barloworld Heftruck Verhuur B.V.     97
        102
  Goods and services purchased from      
  Barloworld Heftruck Verhuur B.V.     11
        11
  Other transactions      
  Management fees received from joint ventures     5
  Other transactions     1
        6
  Amounts due from related parties as at end of year      
  Vostochnaya Technica Siberia loan     73
  PhakisaWorld Fleet Solutions loan     2
  Subaru Southern Africa (Pty) Limited     11
  Barloworld Siyakhula (Pty) Limited   5  
      5 86
  2008      
  Goods and services sold to      
  Bartrac Equipment     87
  The Used Equipment Company (Pty) Limited     9
  Vostachnaya Technica UK     7
  Energyst B.V.   3  
  Barloworld Heftruck Verhuur B.V.     12
  PhakisaWorld Fleet Solutions     101
      3 216
  Goods and services purchased from      
  The Used Equipment Company (Pty) Limited     94
  Barloworld Heftruck Verhuur B.V.     29
        123
  Other transactions      
  Management fees received from joint ventures     11
        11
  Amounts due from related parties as at end of year      
  Vostochnaya Technica Siberia loan     275
  PhakisaWorld Fleet Solutions loan     221
  Other loans to joint venturers     10
        506
  2007      
  Goods and services sold to      
  Barzem Enterprises (Pty) Limited   26  
  Du Pont Barloworld (Pty) Limited (Herberts)   89  
  International Paints (Pty) Limited   38  
  NMI Durban South Motors (Pty) Limited     8
  Sizwe Paints (Pty) Limited   20  
  The Used Equipment Company (Pty) Limited     34
  PhakisaWorld Fleet Solutions   39  
  Other sales to related parties   6  
      218 42
  Goods and services purchased from      
  NMI Durban South Motors (Pty) Limited     4
  Du Pont Barloworld (Pty) Limited (Herberts)   4  
      4 4
  Other transactions      
  Management fees received from associates   4  
      4  
  Amounts due (to)/from related parties as at end of year      
  Barzem Enterprises (Pty) Limited   (15)  
  Du Pont Barloworld (Pty) Limited (Herberts)   9  
  International Paints (Pty) Limited   10  
  NMI Durban South Motors (Pty) Limited     1
  PhakisaWorld Fleet Solutions   22  
  PhakisaWorld Fleet Solutions loan   184  
  The Used Equipment Company (Pty) Limited     127
  Vostochnaya Technica Siberia loan     100
  Other loans to associates   19  
      229 228
  Terms on other outstanding balances      
  Unless otherwise noted, all outstanding balances are payable within 30 days, unsecured and not guaranteed.
   
  Except for the impairment of the Finaltair loan, there are no doubtful debt provisions raised in respect of amounts due to/from related parties and no bad debts incurred during the year on these balances.
   
  Associates and joint ventures
  The loans to associates and joint ventures are repayable on demand and bear interest at market related rates.
   
  The loan to Finaltair was fully impaired during 2007 as per note 5.
   
  Details of investments in associates and joint ventures are disclosed in notes 5, 39 and 40.
   
  Subsidiaries
  Details of investments in subsidiaries are disclosed in note 37.
   
  Directors
  Details regarding directors’ remuneration and interests are disclosed in note 36, and share options are disclosed in note 34.
   
  Transactions with key management and other related parties (excluding directors)
There were no material transactions with key management or close family members of related parties.
   
  Shareholders
The principal shareholders of the company are disclosed here.
   
  Barloworld Medical Scheme
Contributions of R84 million were made to the Barloworld Medical Scheme on behalf of employees (2008: R73 million; 2007: R92 million).
   
42. Post balance sheet events
  No material events have occurred between year end and the date of these financial statements.