2012 - overberg agri web 2.pdf · 2 overberg agri limited and its subsidiaries general information...

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Annual Report Jaarverslag

2012

2012

Ann

ual R

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Jaar

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lag

FIREFLY Advertising OAB9778

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OVERBERG AGRI LIMITED AND ITS SUBSIDIARIES

CONTENTSOVERBERG AGRI BEPERK EN SY FILIALE

INHOUD

PAGE BLADSY

General Information 2 Algemene Inligting 2

Organogram 3 Organogram 3

Operational Review 4 – 11 Bedryfsoorsig 4 – 11

Integrated Report 12 – 21 Geïntegreerde Verslag 12 – 21

Directors’ Responsibilities and Approval 22 – 23 Direkteure se Verantwoordelikhede en Goedkeuring 22 – 23

Certificate of the Company Secretary 24 Sertifikaat van die Maatskappysekretaris 24

Audit and Risk Committee Report 24 Verslag van die Oudit-en-risikokomitee 24

Independent Auditors' Report 25 Verslag van die Onafhanklike Ouditeure 25

Directors' Report 26 – 28 Direkteursverslag 26 – 28

Statement of Financial Position 29 Staat van Finansiële Posisie 29

Income Statement 30 Inkomstestaat 30

Statement of Comprehensive Income 31 Staat van Omvattende Inkomste 31

Statement of Changes in Equity 32 – 35 Staat van Verandering in Ekwiteit 32 – 35

Statement of Cash Flows 36 Kontantvloeistaat 36

Accounting Policies 37 – 51 Rekeningkundige Beleide 37 – 51

Notes to the Financial Statements 52 – 111 Aantekeninge tot die Finansiële State 52 – 111

Annexure A 112 – 113 Bylaag A 112 – 113

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GENERAL INFORMATIONOVERBERG AGRI BEPERK EN SY FILIALE

ALGEMENE INLIGTING

Maatskappy-registrasienommer 1998/001018/06

DirekteureD de Kock ^ Voorsitter

DG de Kock ° ^ Ondervoorsitter

AJ Uys * ¤ Besturende Direkteur

RR Blom ° ^ S Cassiem ^ LE Coetzer + ¤ ZL Combi ^ DC Human ^ FGG Joubert ¤ HP Marais ° ^ R Pheiffer # ¤ J v/d M Rossouw ^ MJ Roux ° ^ HG Schönfeldt ^ JG van Deventer ^ JP Viljoen ^

^ = Nie-uitvoerende Direkteure¤ = Uitvoerende Direkteure° = Oudit-en-risikokomitee# = Oorlede op 20 November 2011* = Aangestel op 20 Maart 2012 as Besturende Direkteur+ = Aangestel op 17 April 2012 as Finansiële Direkteur

Maatskappysekretaris A Steyn

Besigheidsadres Donkinstraat 11, Caledon, 7230

Geregistreerde kantoor Posbus 50 Caledon 7230

Eksterne Ouditeure PricewaterhouseCoopers Geïnk.

Interne Ouditeure Boshoff Visser Bredasdorp Geïnk.

Prokureurs Van der Spuy en Vennote

Bankiers en Finansierders Landbank Rand Aksepbank ABSA Bank Beperk Eerste Nasionale Bank Wesbank

Webtuiste www.overbergagri.co.za

Kennisgewing ingevolge Artikel 29 van die Maatskappywet: Hierdie Finansiële State is voorberei deur L de Villiers onder toesig van LE Coetzer en is geoudit in ooreenstemming met die toepaslike vereistes van die Maatskappywet, 71 van 2008.

Company registration number 1998/001018/06

DirectorsD de Kock ^ Chairperson

DG de Kock ° ^ Vice-Chairperson

AJ Uys * ¤ Managing Director

RR Blom ° ^ S Cassiem ^ LE Coetzer + ¤ ZL Combi ^ DC Human ^ FGG Joubert ¤ HP Marais ° ^ R Pheiffer # ¤ J v/d M Rossouw ^ MJ Roux ° ^ HG Schönfeldt ^ JG van Deventer ^ JP Viljoen ^

^ = Non-executive Directors¤ = Executive Directors° = Audit and Risk Committee# = Deceased on 20 November 2011* = Appointed on 20 March 2012 as Managing Director+ = Appointed on 17 April 2012 as Financial Director

Company Secretary A Steyn

Business address 11 Donkin Street, Caledon, 7230

Registered office PO Box 50 Caledon 7230

External Auditors PricewaterhouseCoopers Inc.

Internal Auditors Boshoff Visser Bredasdorp Inc.

Attorneys Van der Spuy and Partners

Bankers and Financiers Land Bank Rand Merchant Bank ABSA Bank Limited First National Bank Wesbank

Website www.overbergagri.co.za

Notice in terms of section 29 of the Companies Act: These Financial Statements were prepared by L de Villiers and supervised by LE Coetzer and have been audited in compliance with the applicable requirements of the Companies Act, 71 of 2008.

BACK TO CONTENTS TERUG NA INHOUD

33

OVERBERG AGRI BEPERK OVERBERG AGRI LIMITED

Overberg Agri Bedrywe(Edms) Bpk/(Pty) Ltd

Overberg Agri Beleggings(Edms) Bpk/(Pty) Ltd

Boltfast(Edms) Bpk/(Pty) Ltd

Bontebok Lime Works(Edms) Bpk/(Pty) Ltd

Bredasdorp Slagpale(Edms) Bpk/(Pty) Ltd

Promeal (Edms) Bpk/(Pty) Ltd

Finansies en Administrasie-afdelingFinance and Administration

Division

HandelsafdelingTrade Division

VersekeringsafdelingInsurance Division

Produkte-afdelingProduct Division

Meganisasie-afdelingMechanisation Division


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OPERATIONAL REVIEWOVERBERG AGRI BEPERK EN SY FILIALE

BEDRYFSOORSIG

2011 and 2012

The operations of Overberg Agri delivered good results and all the companies made a positive contribution to the performance of the Group. In general the financial year again showed the critical importance of the diversification strategy of Overberg Agri for the long-term sustainability of the business.

The past year has been an exceptional one for Overberg Agri and it will be remembered as one of the most favourable agricultural years in history. The Overberg was blessed with the best harvest of all time and this had a positive effect on the results of the business. However, good results are not only driven by good harvests, but are also influenced by the hard work of dedicated staff, the support of loyal clients and the support of suppliers. The latter, together with relatively good commodity prices, resulted in a huge financial injection for producers in the region and the performance of Overberg Agri Bedrywe and Bontebok Lime Works. Bredasdorp Slagpale also had a good year due to the good international price of hides and skins.

In contrast, the financial markets experienced difficult economic conditions last year, in particular in the second half of the year. Markets were negatively affected by the debt crisis in Europe, politics in the USA and a slow-down in the Chinese economy. The latter had an impact on the construction industry in particular and consumer spending in general, which had an effect on the results of Boltfast in particular and also the results of Promeal to a lesser degree.

Overberg Agri’s ability to perform over time within the economic realities of the market can be ascribed to the ability of the business to adapt, the diversification strategy of the business, a focused management team, competent staff and strategic partnerships.

In an important step to unlock value for the shareholders of the Group, the Board resolved on 28 February 2012 to declare 8,4 million shares in Pioneer Foods Ltd as a dividend in specie. This resulted in the Group’s investment in Pioneer Foods Ltd decreasing to 6 million shares.

Financial Overview

Income Statement

The increase in earnings from R33,6 million to R581,3 million was mainly the result of the unbundling of the Pioneer Foods Ltd shares. This transaction resulted in an accounting profit of R533,9 million (after tax).

All the companies in the Group made a positive contribution to the headline earnings of R42,8 million (2011: R31,5 million). The reason for the increase is the good results of Overberg Agri Bedrywe, Bredasdorp Slagpale and Bontebok Lime Works. A dividend of R13,4 million (2011: R nil) has also been received from Pioneer Foods Ltd.

2011 en 2012

Overberg Agri se bedrywighede het goeie resultate gelewer en al die maatskappye het ‘n positiewe bydrae tot die prestasie van die Groep gelewer. Oor die algemeen beskou het die finansiële jaar weer getoon hoe krities belangrik die diversifikasie-strategie van Overberg Agri vir die langtermyn-volhoubaarheid van die besigheid is.

Vir Overberg Agri was die afgelope jaar ‘n besondere jaar en dit sal onthou word as een van die gunstigste landbou-jare in die geskiedenis. Die Overberg is geseën met die beste oes ooit en dit het ‘n positiewe invloed op die resultate van die besigheid gehad. Goeie resultate word egter nie net gedryf deur goeie oeste nie, maar word ook beïnvloed deur die harde werk van toegewyde personeel, die ondersteuning van lojale kliënte en die ondersteuning van verskaffers. Laasgenoemde, saam met betreklik goeie pryse vir kommoditeite, het ‘n groot finansiële inspuiting tot gevolg gehad vir die produsente in die gebied en die prestasie van Overberg Agri Bedrywe en Bontebok Lime Works. Bredasdorp Slagpale het ook ‘n goeie jaar beleef as gevolg van die goeie internasionale pryse van huide en velle.

Daarteenoor het die finansiële markte verlede jaar en veral in die tweede helfte van die jaar moeilike tye beleef. Markte is veral negatief beïnvloed deur die skuldkrisis in Europa, politiek in die VSA en ’n afkoeling in die Chinese ekonomie. Laasgenoemde het veral ‘n uitwerking op die konstruksiebedryf en verbruikersbesteding oor die algemeen gehad, wat die resultate van veral Boltfast en in ‘n mindere mate Promeal beïnvloed het.

Overberg Agri se vermoë om oor die tyd heen binne die ekonomiese reali-teite van die mark te kan presteer, kan toegeskryf word aan die vermoë van die besigheid om te kan aanpas, die diversifikasie-strategie van die besigheid, ‘n gefokusde bestuurspan, bekwame personeel en strategiese vennootskappe.

In ‘n belangrike stap om waarde vir die aandeelhouers van die Groep te ontsluit, het die Direksie op 28 Februarie 2012 besluit om 8,4 miljoen aandele in Pioneer Foods Bpk as ‘n dividend in specie te verklaar. Dit het tot gevolg gehad dat die Groep se belegging in Pioneer Foods Bpk tot 6 miljoen aandele verminder het.

Finansiële Oorsig

Inkomstestaat

Die styging in verdienste vanaf R33,6 miljoen tot R581,3 miljoen is hoofsaaklik ‘n uitvloeisel van die ontbondeling van die Pioneer Foods Bpk-aandele. Hierdie transaksie het ’n rekeningkundige wins van R533,9 miljoen (na belasting) tot gevolg gehad.

Al die maatskappye in die Groep het positief bygedra tot die wesensverdienste van R42,8 miljoen (2011: R31,5 miljoen). Die rede vir die toename is die goeie resultate van Overberg Agri Bedrywe, Bredasdorp Slagpale en Bontebok Lime Works. ‘n Dividend van R13,4 miljoen (2011: R nul) is ook van Pioneer Foods Bpk ontvang.

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BEDRYFSOORSIG

The Group’s income increased by 7,4% to R1,558 million and the gross profit increased by 13,1% from R252 million to R285 million. The growth in gross profit can be ascribed to the increase in silo income due to the bigger harvest.

Other profits and losses increased from R2 million to R658 million. This profit resulted from the unbundling of the Group’s investment in Pioneer Foods Ltd. The subsidiary companies held 16,7 million shares in Pioneer Foods Ltd prior to the unbundling. During the unbundling 10,9 million Pioneer Foods Ltd shares were disposed of, of which 8,4 million shares were distributed as a dividend in specie to shareholders and 2,5 million shares were sold to cover the tax and costs involved in the unbundling. The disposal resulted in an accounting profit of R533,9 million (after tax).

Statement of Financial Position

The unbundling of a portion of the Pioneer Foods Ltd investment had an effect on various figures in the Statement of Financial Position.

n Fixed assets

Available-for-sale investments decreased by R660,4 million due to the disposal of 10,9 million Pioneer shares.

n Current assets

Debtors increased by R155 million due to the sale of 2,5 million Pioneer shares at year-end to cover the cost of the unbundling transaction. The cash was received in the first week of March 2012.

n Equity

The reserves and net asset value of the Group decreased by R658,3 million.

In the previous two years, 2011 and 2010, Overberg Agri Bedrywe entered into a supply and financing agreement with SABM. In terms of this agreement Overberg Agri Bedrywe buys all the malting barley from producers and SABM guarantees to take the barley in the next year. The financing of this was provided by Rand Merchant Bank. This transaction did not take place in the 2012 year and resulted in the following:

n Inventory

The Group’s total inventory decreased by R135 million to R233 million. The decrease in grain inventory amounted to R169 million and the increase in inventory of other subsidiary companies is a temporary increase that will normalise in the coming year.

n Loans

The previous year included a loan from Rand Merchant Bank in the amount of R203 million that has not been taken up in the current year.

Die Groep se inkomste het met 7,4% tot R1,558 miljoen toegeneem en die bruto wins het met 13,1% van R252 miljoen tot R285 miljoen toegeneem. Die groei in bruto wins kan toegeskryf word aan die styging in silo-inkomste vanweë die groter oes.

Ander winste en verliese het van R2 miljoen tot R658 miljoen gestyg. Hierdie wins het ontstaan met die ontbondeling van die Groep se belegging in Pioneer Foods Bpk. Die filiaalmaatskappye het 16,7 miljoen aandele in Pioneer Foods Bpk besit voor die ontbondeling. Tydens die ontbondeling is 10,9 miljoen Pioneer Foods Bpk-aandele vervreem, waarvan 8,4 miljoen aandele as dividend in specie uitgekeer is aan aandeelhouers en 2,5 miljoen aandele verkoop is om die belasting en koste verbonde aan hierdie ontbondeling te dek. Met hierdie vervreemding het daar ‘n rekeningkundige wins van R533,9 miljoen (na belasting) ontstaan.

Staat van Finansiële Posisie

Die ontbondeling van ’n gedeelte van die belegging in Pioneer Foods Bpk het ‘n invloed op verskeie syfers op die Staat van Finansiële Posisie gehad.

n Vaste bates

Beskikbaar-vir-verkoop beleggings het met R660,4 miljoen afgeneem weens die vervreemding van 10,9 miljoen Pioneer-aandele.

n Bedryfsbates

Debiteure het met R155 miljoen toegeneem weens die verkoop van 2,5 miljoen Pioneer-aandele op jaareinde om die koste van die ontbondelingstransaksie te dek. Die kontant is in die eerste week van Maart 2012 ontvang.

n Ekwiteit

Die reserwes en netto batewaarde van die Groep het met R658,3 miljoen afgeneem.

In die vorige twee jare, 2011 en 2010, het Overberg Agri Bedrywe ‘n lewerings- en finansieringsooreenkoms met SABM gesluit. Ingevolge hierdie ooreenkoms koop Overberg Agri Bedrywe alle moutgars van produsente en SABM waarborg om die gars in die volgende jaar te neem. Die finansiering hiervoor is deur Rand Aksepbank verskaf. Hierdie transaksie is nie in die 2012-jaar gesluit nie en het die volgende tot gevolg gehad:

n Voorraad

Die totale voorraad van die Groep het met R135 miljoen tot R233 miljoen gedaal. Die daling in graanvoorraad beloop R169 miljoen en die styging in voorraad van die ander filiaalmaatskappye is ‘n tydelike styging wat gedurende die komende jaar sal normaliseer.

n Lenings

In die vorige jaar was daar ‘n lening van Rand Aksepbank ter waarde van R203 miljoen wat nie in die huidige jaar aangegaan is nie.

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BEDRYFSOORSIG

The core statistics of the Group are shown in the following table:

The graphs below show the following:

1. The turnover of Overberg Agri Ltd for the period 2008 to 2012.2. The headline earnings of Overberg Agri Ltd for the period 2008 to

2012.3. The net asset value (NAV) and market value of the Overberg Agri Ltd

shares for the period 2008 to 2012.4. The dividend declared per Overberg Agri Ltd share for the period

2008 to 2012.

Die kernstatistieke van die Groep word in die volgende tabel getoon:

Die onderstaande grafieke toon die volgende:

1. Die omset van Overberg Agri Bpk vir die tydperk 2008 tot 2012.2. Die wesensverdienste van Overberg Agri Bpk vir die tydperk 2008

tot 2012.3. Die netto batewaarde (NBW) en markwaarde van die Overberg Agri

Bpk-aandele vir die tydperk 2008 tot 2012.4. Die dividend verklaar per Overberg Agri Bpk-aandeel vir die tydperk

2008 tot 2012.

2012 2011 2010 2009 2008Net profit – R’m 581,3 33,7 56,7 60,8 48,1 Netto wins – R’m

Headline earnings – R’m 42,8 31,5 54,7 52,9 44,7 Wesensverdienste – R’m

Headline earnings per share – cents

518,7 381,6 662,1 666,6 563,6Wesensverdienste per aandeel – sent

Dividend per share – cents 80 150 145 121 90 Dividend per aandeel – sent

Net asset value per share – Rand 105 164 133 97 98Netto batewaarde per aandeel – Rand

Market value per share at year-end – Rand

98,00 80,00 49,50 44,50 46,00Markwaarde per aandeel op jaareinde – Rand

DIVIDEND PER SHARE (c)DIVIDEND PER AANDEEL (c)

200

150

100

50

02008 2009 2010 2011 2012

NAV and MARKET VALUE per share (R million)NBW en MARKWAARDE per aandeel (R miljoen)

200

150

100

50

02008

NAVNBW

Market valueMarkwaarde

2009 2010 2011 2012

TURNOVER (R million)OMSET (R miljoen)

2 000

1 500

1 000

500

02008 2009 2010 2011 2012

HEADLINE EARNINGS (R million)WESENSVERDIENSTE (R miljoen)

100

80

60

40

20

02008 2009 2010 2011 2012

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BEDRYFSOORSIG

All the companies in the Group made a positive contribution to the net income of the Group. The following graph shows the contribution on operating profit level.

OPERATING ACTIVITIES

Subsidiary companies

Overberg Agri Bedrywe:

The Company operates mainly in the agricultural environment and the performance of the business is dependent on seasonal climate factors.

The Company is exposed to credit risk relating to the provision of financing for clients’ activities in the normal course of business. The main portion of this financing relates to the provision of production credit to and financing of instalment sales of agricultural producers. As a result, the Company’s business and financial results are to a large extent dependent on the agricultural producers’ ability to repay the capital and interest liability.

The provision of credit is done in accordance with a Credit policy that contains the general guidelines for the provision of credit and the operational procedures for the management thereof. The control and management of credit provision in accordance with the Credit policy is the responsibility of two regional Credit offices and a Credit committee.

During the year under review the financing of Trade debtors and Instalment sales decreased by 5,5% to R330 million. The decrease of 33% in past due debt can be ascribed to the bigger harvest and favourable commodity prices during the marketing cycle.

Al die maatskappye in die Groep het ‘n positiewe bydrae tot die netto inkomste van die Groep gelewer. Die volgende grafiek toon die bydrae op bedryfswinsvlak.

BEDRYFSAKTIWITEITE

Filiaalmaatskappye

Overberg Agri Bedrywe:

Die Maatskappy doen hoofsaaklik besigheid in die landbou-omgewing en die prestasie van die besigheid is afhanklik van seisoenale klimaatsfaktore.

Die Maatskappy is blootgestel aan kredietrisiko’s wat verband hou met die verskaffing van finansiering vir kliënte se bedrywighede in die normale verloop van sake. Die grootste deel van hierdie finansiering behels die verskaffing van produksiekrediet en finansiering vir huurkope aan landbouprodusente. As gevolg hiervan is die Maatskappy se besigheid en finansiële resultate in ‘n groot mate afhanklik van die landbouprodusente se vermoë om die kapitaal- en renteverpligting te kan diens.

Kredietverskaffing word hanteer in ooreenstemming met ‘n Kredietbeleid wat die algemene riglyne vir die verskaffing van krediet en die bedryfsprosedure vir die bestuur daarvan bevat. Die beheer en bestuur van kredietverskaffing in ooreenstemming met die Kredietbeleid is die verantwoordelikheid van twee streekskredietkantore en ‘n Kredietkomitee.

Gedurende die jaar onder oorsig het die finansiering van Handelsdebiteure en Huurkope met 5,5% tot R330 miljoen afgeneem. Die afname van 33% in die oorlaatskuldsyfer kan toegeskryf word aan die groter oes en gunstige kommoditeitspryse tydens die bemarkingsiklus.

Bedrywe Boltfast Bontebok Promeal Slagpale Beleggings

All the companies in the Group made a positive contribution to the net income of the Group. The following graph shows the contribution on operating profit level.

Al die maatskappye in die Groep het ‘n positiewe bydrae tot die netto inkomste van die Groep gelewer. Die volgende grafiek toon die bydrae op bedryfswinsvlak.

12%

44%

14%

15%

10%

5%

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BEDRYFSOORSIG

The results of the Product division were positively affected by the realisation of a record harvest as a result of favourable climatic conditions, particularly good rainfall distribution. The above-average harvest naturally had a positive effect on income from grain storage and handling, which resulted in a higher income than budgeted for the department. In the year under review 384,082 tons of grain were handled in the silos compared to the available capacity of 277,000 tons. The average throughput of the silos is 260,000 tons. In order to accommodate the harvest, provision was made to dispatch surplus grain to buyers during harvesting and 39,000 tons were stored in silo bags and alternative structures. Additional expenditure had to be incurred to buy and rent equipment in order to handle silo bags. Unfortunately all the malting barley and oats were not bought for processing and a large portion had to be sold as feed. Due to the good quality of the 2010 harvest and strict monitoring and management of stored barley, all the barley could be loaded to SABM and there were no rejections. Variation in the quality of grain offered opportunities for upgrading. The market remains extremely competitive with regard to services rendered to the grain producer and the division’s focus therefore remains on improving service levels in an innovative way in order to retain market share. Maintenance and upgrading of expensive storage infrastructure remains a challenge and careful planning is imperative.

Roodebloem experimental farm remains a strategic asset for the business and serves as basis for the Agricultural Development division. The unit offers clients and suppliers of Overberg Agri the opportunity to conduct relevant research, trials and demonstrations where research institutions lack the necessary funding to do so. Producers, researchers and suppliers are involved in identifying and prioritising problem areas and doing research and demonstrations and arranging information days to address the needs of producers and clients. The Agricultural development division focuses on the collection and dissemination of production and economic information to clients and offers support to organised agriculture and projects for emerging farmers in the area.

The Trade and Mechanisation activities of Overberg Agri Bedrywe consist of retail branches, mechanical workshops, engineering workshops and parts divisions. These activities are primarily focused on agricultural needs in the region and on serving the agricultural market with expertise and focused agricultural products and equipment.

The activities and financial performance of these divisions are a reflection of the agricultural conditions in the area and the economic condition of the typical retail environment. The Mechanisation division had a positive year due to the maintenance of good service levels and favourable agricultural conditions and did particularly well with the sales of agricultural implements. The slow recovery of the economic conditions, however, did have an impact on retail margins, but due to the maintenance of good service levels and focus, the division nevertheless managed to make a big contribution to the total income of the Company.

Die Produkte-afdeling se resultate is positief beïnvloed deurdat ‘n rekordoes gerealiseer het as gevolg van gunstige klimaatstoestande, veral goeie reënvalverspreiding. Die bo-gemiddelde oes het uiteraard ‘n positiewe effek op inkomste uit graanopberging en -hantering gehad, wat gelei het tot ‘n hoër inkomste as waarvoor begroot is vir die afdeling. Gedurende die jaar onder oorsig is 384,082 ton graan in die silo’s hanteer in vergelyking met die beskikbare kapasiteit van 277,000 ton. Die gemiddelde deurset deur die silo’s beloop 260,000 ton. Ten einde die oes te kon akkommodeer, is voorsiening gemaak om surplus graan in oestyd na kopers te versend en 39,000 ton is in silosakke en alternatiewe strukture opgeberg. Addisionele uitgawes is aangegaan om toerusting aan te koop en te huur om silosakke te kan hanteer. Ongelukkig is al die moutgars en hawer nie gekoop vir verwerking nie en moes ‘n groot gedeelte daarvan as voer verkoop word. Danksy die goeie kwaliteit van die 2010-oes en noukeurige monitering en bestuur van opgebergde gars, kon alle gars aan SABM uitgelaai word en geen afkeurings het plaasgevind nie. Variasie in die kwaliteit van graan het geleenthede vir opgradering gebied. Die mark bly hoogs mededingend ten opsigte van dienste gelewer aan die graanprodusent en dus fokus die afdeling voortdurend daarop om diensvlakke op innoverende wyse te verhoog en sodoende markaandeel te behou. Instandhouding en opgradering van duur opberginginfrastruktuur bly ‘n uitdaging en noukeurige beplanning is uiters noodsaaklik.

Roodebloem-proefplaas bly ‘n strategiese bate vir die onderneming en dien as basis van die Landbou-ontwikkelingsafdeling. Die eenheid bied aan kliënte en verskaffers van Overberg Agri die geleentheid om toepaslike navorsing, proewe en demonstrasies te doen waar navor-singsinstansies tekortskiet weens beperkte fondse. Produsente, navorsers en verskaffers word betrek om knelpunte te identifiseer, te prioritiseer en navorsing en demonstrasies te doen en inligtingsdae aan te bied om daardeur die behoeftes van produsente en kliënte aan te spreek. Die Landbou-ontwikkelingsafdeling fokus op die insameling en verspreiding van produksie- en ekonomiese inligting aan kliënte en bied ondersteuning aan die georganiseerde landbou en projekte vir opkomende boere in die gebied.

Overberg Agri Bedrywe se Handel- en Meganisasie-aktiwiteite bestaan uit kleinhandelstakke, meganiese werkswinkels, ingenieurswerkswinkels en onderdele-afdelings. Hierdie aktiwiteite is primêr gefokus op die behoeftes van die streek se landbou en fokus op die diens van die landboumark met kundigheid, gefokusde landbouprodukte en -toerusting.

Die aktiwiteite en finansiële prestasie van hierdie afdelings is ’n spieëlbeeld van die landboutoestande van die omgewing en die ekonomiese toestand van die tipiese kleinhandelsomgewing. Die Meganisasie-afdeling het met die handhawing van goeie diensvlakke en gunstige landboutoestande ’n positiewe jaar gehad en het veral goed presteer met die verkope van landbou-implemente. Die traagheid in die herstel van die ekonomiese toestande het egter ’n impak op die kleinhandel se marges gehad, maar die afdeling kon daarin slaag om deur die handhawing van goeie diensvlakke en fokus steeds ’n groot bydrae tot die totale inkomste van die Maatskappy te lewer.

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BEDRYFSOORSIG

The continued marketing actions also made a big contribution to the total income of the Trade division in the year under review and the strategy of direct marketing in the vine and fruit-growing regions in particular delivered positive results. These actions have been successfully expanded to other regions.

Insurance activities, comprising short-term, harvest and life insurance, as well as a Group funeral plan for employees in agriculture and medical insurance are making a continuously increasing contribution to the profit of Overberg Agri. The division has offices in Bredasdorp, Caledon and Paarl, from where the insurance brokers services the whole country. There are various opportunities for growth in the future and further expansion opportunities are continuously being investigated. This division has risen to incredible heights since the merger in 2005 and in 2009 it was awarded the Santam Agricultural Broker of the Year Award for the Western Cape.

Boltfast:

Boltfast is a company that markets and distributes industrial fasteners throughout the country. These actions take place through a network of branches situated in Epping, Montague Gardens, Vredenburg, Port Elizabeth, Durban, Johannesburg and Pretoria. During the year under review various actions were launched to promote the brand and further expand the product range and various branches were upgraded. The Company is actively busy expanding this national network and will expand it even further in the coming year.

The economic conditions had a negative effect on the construction and manufacturing industry in the year under review and also had a direct negative effect on the Company’s performance. Despite the difficult economic conditions prevalent during the year, the Company still made a positive contribution to the results of the Group. The Board and Management are of the view that the economy is busy recovering and therefore expect an improvement in the results of Boltfast in the coming year.

Promeal:

Promeal, situated in Atlantis, manufactures, distributes and markets wet pet food nationally and internationally. Despite the economic conditions the Company succeeded in achieving real volume growth and thereby increasing the Company’s market share.

The Company made a positive contribution to the results of the Group. Management is in the process of investigating the possibility to expand the range of products.

Bontebok Lime Works:

Bontebok Lime Works (trading as P&B Lime), a lime mine in Bredasdorp, produces hydrated lime products, feed lime and agricultural lime. The expansion of the production capacity that was completed in the prior

Die volgehoue bemarkingsaksies het ook in die jaar onder oorsig ’n groot bydrae tot die totale inkomste van die Handelsafdeling gelewer en die strategie van direkte bemarking, veral in die wingerd- en vrugtestreke, het positiewe resultate gelewer. Hierdie aksies is ook suksesvol na ander streke uitgebrei.

Versekeringsaktiwiteite, bestaande uit korttermyn-, oes- en lewens-versekering, sowel as ‘n Groepbegrafnisplan vir werknemers in die landbou en mediese versekering lewer toenemend ’n groot bydrae tot die wins van Overberg Agri. Die afdeling het kantore in Bredasdorp, Caledon en die Paarl waarvandaan die versekeringsbemarkers landswyd versekeringsbesigheid doen. Daar is verskeie groeigeleenthede in die vooruitsig en ondersoeke na verdere uitbreidingsgeleenthede vind voortdurend plaas. Hierdie afdeling het sedert die samesmelting in 2005 ongekende hoogtes bereik en hulle is in 2009 deur Santam vereer met die Santam Landboumakelaar van die Jaar-toekenning vir die Wes Kaap.

Boltfast:

Boltfast is ’n maatskappy wat industriële hegstukke bemark en versprei aan kliënte op ‘n nasionale basis. Hierdie aksies geskied deur ’n netwerk van takke wat geleë is in Epping, Montague Gardens, Vredenburg, Port Elizabeth, Durban, Johannesburg en Pretoria. Gedurende die jaar onder oorsig is verskeie aksies van stapel gestuur om die handelsmerk en produkreekse verder uit te brei en verskeie takke is opgradeer. Die Maatskappy is aktief besig om hierdie nasionale netwerk uit te brei en sal dit gedurende die komende jaar verder uitbrei.

Die ekonomiese toestande wat die konstruksie- en vervaardigingsbedryf gedurende die jaar onder oorsig negatief beïnvloed het, het ’n direkte negatiewe invloed op die Maatskappy se prestasie gehad. Ten spyte van die moeilike ekonomiese omstandighede wat geheers het, het die Maatskappy egter steeds ’n positiewe bydrae tot die resultate van die Groep gelewer. Die Direksie en Bestuur is van mening dat die ekonomie besig is om te herstel en daarom behoort die resultate van Boltfast in die komende jaar te verbeter.

Promeal:

Promeal, geleë in Atlantis, vervaardig, versprei en bemark nat troeteldierkos nasionaal en internasionaal. Ten spyte van die ekonomiese omstandighede het die Maatskappy daarin geslaag om ’n reële volumegroei te bewerkstellig om sodoende die Maatskappy se markaandeel te verhoog.

Die Maatskappy het ’n positiewe bydrae tot die resultate van die Groep gelewer. Bestuur is tans besig om die moontlikheid te ondersoek om die reeks produkte uit te brei.

Bontebok Lime Works:

Bontebok Lime Works (handeldrywend as P&B Kalkwerke), ’n kalkmyn in Bredasdorp, produseer hidroksied-gebaseerde kalkprodukte, veevoerkalk en landboukalk. Die uitbreiding van die produksiekapasiteit wat in die

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BEDRYFSOORSIG

period was in full production for the period under review.

However, production is sporadically disrupted due to the unreliable supply of coal-dust that is used in the hydroxide process. As a result of this, an own pulverising plant was erected to eliminate this risk.

The Company’s application to renew the existing mining licence in terms of new legislation has been approved by the Department of Energy. The enterprise made a positive contribution to the results of the Group.

Bredasdorp Slagpale:

Bredasdorp Slagpale offers slaughtering facilities for sheep and cattle with a capacity of 450 small stock units per day. The trademark, Overberg Vleis, is already well-known and is becoming increasingly popular amongst clients in the wholesale and retail trade due to the exceptional quality of the meat from this region.

Increasing international prices of hides and skins, the good throughput during the summer months and the direct supply of meat to the retail trade made a positive contribution to the profitability of Bredasdorp Slagpale and the enterprise made a positive contribution to the profitability of the Group. In order to ensure the long-term profitability and sustainability of the enterprise, emphasis is placed on increasing the throughput, as well as the prospect of becoming involved in the value-added chain of the meat industry.

An important aspect that enjoys continuous attention and is imperative for the long-term sustainability of the business, is compliance with agricultural and environmental-related legislation with regard to the safe handling of waste products.

Competition Commission matters

The investigation by the Competition Commission in terms of the Competitions Act of 1998 into the enterprise’s alleged horizontal collusion with the industry by means of association with the Grain Silo Industry (GSI) in the determination of the day tariffs on grain and oilseed products at SAFEX-registered owners has been finalised during the year under review. The Company reached a settlement agreement with the Commission in terms of which an amount of R241,186 was paid.

However, the Competition Commission informed Overberg Agri subsequently of its intention to do a further investigation into the enterprise’s alleged horizontal collusion with the industry by means of association with the Grain Silo Industry (GSI) in the determination of the weight adjustment for different kinds of grain with regard to moisture and siftings. This notice was received subsequent to the year-end and is currently being addressed

vorige tydperk afgehandel is, was vir die tydperk onder oorsig in volle produksie.

Produksie word egter sporadies gestrem weens onbetroubare steenkool-poeier-voorsiening wat in die hidroksiedproses verbruik word. ’n Eie verpoeierings aanleg is as gevolg hiervan ingerig om hierdie risiko uit te skakel.

Die Maatskappy se aansoek om die bestaande mynlisensie in terme van nuwe wetgewing te hernu, is deur die Departement van Energie goedgekeur. Die onderneming het ’n positiewe bydrae tot die resultate van die Groep gelewer.

Bredasdorp Slagpale:

Bredasdorp Slagpale bied slaggeriewe vir die slag van skaap en bees en het ’n kapasiteit van 450 kleinvee-eenhede per dag. Vanweë die uitsonderlike kwaliteit van die vleis uit hierdie streek is die handelsmerk, Overberg Vleis, reeds wyd bekend en vind dit toenemende byval by kliënte in die groot- en kleinhandel.

Stygende internasionale pryse van huide en velle, die goeie deurset tydens die somermaande en die direkte verskaffing van vleis aan die kleinhandel het ‘n positiewe bydrae tot die winsgewendheid van Bredasdorp Slagpale gelewer en die onderneming het positief tot die winsgewendheid van die Groep bygedra. Om langtermynwinsgewendheid en -volhoubaarheid te verseker, word klem geplaas op die verhoging in deurset, asook die vooruitsig om by die toegevoegde waardeketting van die vleisbedryf betrokke te raak.

‘n Belangrike aspek wat voortdurend aandag geniet en noodsaaklik is vir die langtermyn-volhoubaarheid van die besigheid is voldoening aan landbou- en omgewingsverwante wetgewing ten opsigte van die veilige hantering van afvalprodukte.

Mededingingskommissie-aangeleenthede

Die ondersoek deur die Mededingingkommissie ingevolge die Wet op Mededinging van 1998 na die onderneming se beweerde horisontale samewerking met die industrie by wyse van assosiasie met die Graansilo Industrie (GSI) in die bepaling van die dagtariewe op graan- en oliesaad-produkte by SAFEX-geregistreerde eienaars is gedurende die jaar onder oorsig afgehandel. Die Maatskappy het ’n skikkingsooreenkoms met die Kommissie bereik ingevolge waarvan ’n bedrag van R241,186 betaal is.

Die Mededingingkommissie het Overberg Agri egter daarna in kennis gestel van sy voorneme om ‘n verdere ondersoek te doen na die onderneming se beweerde horisontale samewerking met die industrie by wyse van sy assosiasie met die Graansilo Industrie (GSI) in die bepaling van die gewigsaanpassing vir verskillende soorte graan wat betref vog en sifsels. Hierdie kennisgewing is na afsluiting van die finansiële jaar ontvang

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with the assistance of the Group’s legal representatives.

Prospects

In the light of the present economic realities and the impact of the declaration of 8,4 million shares in Pioneer Foods Ltd as a dividend in specie to shareholders, the Board feels positive about the Group’s ability to perform and achieve the strategic objectives. The Group’s strategic objectives remain the strengthening of the core businesses, the expansion of related businesses, the acquisition of new businesses and the improvement of operational efficiency. Investments are made in strengthening the Group’s competitive advantage, diversification, the expansion of a national network, improved risk management and services that add value.

Acknowledgement

I have to acknowledge our Heavenly Father for wonderful blessings bestowed upon us during the past year. Apart from enjoying an exceptional agricultural year, the enterprise in general was blessed with His presence and favour.

I would also like to extend my sincere appreciation to Rian Pheiffer for his selfless service to Overberg Agri, his passion for agriculture and the integral role he played in the success of the business. We’ll miss him not only as Managing Director of Overberg Agri, but also as a friend.

My sincere gratitude to the Board for strategic guidance, a competent management team and staff who each and everyone contributed to the good results of the Company.

On behalf of the Board and Management I would also like to express my appreciation and gratitude to all the shareholders, clients and staff, as well as suppliers of products and professional services, for their continued support and positive involvement with Overberg Agri.

AJ UysManaging Director

en word tans in samewerking met die Groep se regsverteenwoordigers hanteer.

Vooruitsigte

In die lig van die huidige ekonomiese realiteite en die impak van die verklaring van 8,4 miljoen aandele in Pioneer Foods as ‘n dividend in specie aan aandeelhouers, is die Direksie positief oor die Groep se vermoë om te kan presteer en die strategiese doelwitte te behaal. Die Groep se strategiese doelwitte bly steeds die versterking van kernbesighede, die uitbreiding van verwante besighede, die verkryging van nuwe besighede en die verhoging van operasionele doeltreffendheid. Investering vind plaas in die versterking van die Groep se mededingende voordeel, diversifikasie, die uitbreiding van ’n nasionale netwerk, verbeterde risikobestuur en dienste wat waarde toevoeg.

Erkenning

Ek kan nie anders as om op hierdie wyse erkenning te gee aan ons Hemelse Vader vir besonderse seëninge die afgelope jaar nie. Afgesien van ‘n uitsonderlike landbou-jaar, was die besigheid in geheel geseën met Sy teenwoordigheid en guns.

Ek wil ook my opregte dank en waardering uitspreek teenoor Rian Pheiffer vir sy onbaatsugtige diens aan Overberg Agri, sy passie vir die landbou en ook die integrale rol wat hy gespeel het in die sukses van die besigheid. Ons sal hom nie net mis as Besturende Direkteur van Overberg Agri nie, maar ook as vriend.

My opregte dank aan die Direksie vir strategiese leiding, ‘n bekwame bestuurspan en personeel wat elkeen ‘n bydrae gelewer het tot die goeie resultate van die Maatskappy.

Ek wil ook namens die Direksie en Bestuur my opregte dank en waardering uitspreek teenoor al die aandeelhouers, kliënte en personeel, asook aan verskaffers van produkte en professionele dienste, vir die volgehoue ondersteuning en positiewe betrokkenheid by Overberg Agri.

AJ UysBesturende Direkteur


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INTEGRATED REPORTOVERBERG AGRI BEPERK EN SY FILIALE

GEÏNTEGREERDE VERSLAG

Objective and strategy

The objective of the Overberg Agri Group is maintaining a sustainable and focused business in order to create wealth for the benefit of shareholders and other stakeholders.

The pursuit of a sustainable and prosperous company is embodied in the focused company structure comprising an agriculture-focused company as well as a group of investment-supporting companies. The philosophy behind the company structure is to create focus on sustainability, specifically playing a role in the sustainability of agricultural clients and to operate businesses through which prosperity is built for the Company, its shareholders and the relevant stakeholders.

Corporate governance

Board of Directors

The application of sound corporate governance principles and the effective control and management of the Overberg Agri Group are primarily the responsibility of the Board of Directors. The Board supports the principles of good corporate governance and is committed to the due fulfilment of its duties and responsibilities as set out in legislation and the Company’s Articles of Association and continually strives to not only meet the minimum requirements in this regard, but to strive for sound corporate citizenship in all respects.

The primary objectives of sound corporate governance and the fulfilment thereof are continually evaluated against the expectations of stakeholders of the Company and the Board is actively committed to comply with the ethical values and norms with regard to all aspects of the enterprise.

The Board of Directors consists of 12 Non-executive Directors and 3 Executive Directors. Both the Chairperson, Mr D de Kock, and Vice-Chairperson, Mr DG de Kock, are Non-executive Directors.

In terms of the provisions of the Articles of Association the 10 Non-executive Directors who were elected by shareholders in 2010 will rotate as from the Annual General meeting to be held in 2013. The two Directors appointed by Thembeka OVB Holdings (Pty) Ltd and the Executive Directors are not subject to rotation.

The Group Board of Directors is subjected to an evaluation process on an annual basis to determine their effectiveness, during which a wide range of related activities and requirements are evaluated against practical realities. Based on the outcome of this evaluation, the Directors are given applicable exposure and/or training.

Directors declare their interests at each committee and Board meeting.

Doelwit en strategie

Die doelwit van die Overberg Agri Groep is die handhawing van ’n volhoubare en gefokusde besigheid om welvaart te skep tot voordeel van aandeelhouers en ander belangegroepe.

Die strewe na ’n volhoubare en welvarende maatskappy word vergestalt deur die gefokusde maatskappystruktuur wat bestaan uit ’n landbou-gefokusde maatskappy asook ’n groepering van beleggingsondersteunende maatskappye. Die filosofie agter die maatskappystruktuur is om fokus te bewerkstellig op volhoubaarheid, om spesifiek ’n rol te speel in die volhoubaarheid van landboukliënte en om besighede te bedryf waardeur welvaart gebou word vir die Maatskappy, sy aandeelhouers en die betrokke belanghebbendes.

Korporatiewe bestuur

Direksie

Die toepassing van goeie korporatiewe bestuursbeginsels en die effektiewe beheer en bestuur van die Overberg Agri Groep is primêr die verantwoordelikheid van die Direksie. Die Direksie ondersteun die beginsels van goeie korporatiewe bestuur en is verbind tot die behoorlike nakoming van hul pligte en verantwoordelikhede soos uiteengesit in wetgewing en die Maatskappy se Statute en poog deurentyd om nie bloot die minimum voorskrifte in hierdie verband na te kom nie, maar om goeie korporatiewe burgerskap in alle opsigte na te streef.

Die primêre doelwitte van goeie korporatiewe bestuur en die nakoming daarvan word deurlopend evalueer aan die hand van die verwagtinge van belanghebbendes van die Maatskappy en die Direksie is daadwerklik verbind tot die nakoming van etiese waardes en norme ten opsigte van alle aspekte van die onderneming.

Die Direksie bestaan uit 12 Nie-uitvoerende Direkteure en 3 Uitvoerende Direkteure. Die Voorsitter, mnr. D de Kock, en Ondervoorsitter, mnr. DG de Kock, is beide Nie-uitvoerende Direkteure.

Ingevolge die bepalings van die Statuut roteer die 10 Nie-uitvoerende Direkteure wat in 2010 deur aandeelhouers verkies is, vanaf die Algemene Jaarvergadering wat in 2013 gehou gaan word. Die twee Direkteure aangewys deur Thembeka OVB Holdings (Edms) Bpk en die Uitvoerende Direkteure is nie onderhewig aan rotasie nie.

Die Groepdireksie word jaarliks onderwerp aan ‘n evalueringsproses om hul effektiwiteit te bepaal, waartydens ‘n wye reeks verbandhoudende aktiwiteite en vereistes geëvalueer word teenoor die praktyk. Gebaseer op die uitkoms hiervan, word die Direkteure onderwerp aan toepaslike blootstelling en/of opleiding.

Direkteure verklaar tydens elke komitee- en Direksievergadering hul belange.

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Meeting attendance

Six Board meetings are normally scheduled annually and unscheduled meetings take place when there is a specific need. Eight Board meetings were held during the past year.

S = scheduled meetings US = unscheduled meetingsA = absent with apology

*Deceased on 20 November 2011.

Subsidiary boards

Since August 2007, each subsidiary company has a Board of Directors in its own right that carries the full responsibility of a board within certain empowerment guidelines.

The Boards have the authority to appoint additional Directors should the need arise. The subsidiary Boards, which were established to place more focus on the objectives and activities of the subsidiary companies, function very efficiently and effectively and are also subjected to an annual evaluation.

Board committees

Committees are established from the ranks of the Board and Management with the specific objective of assisting and supporting the Board of Directors in discharging its responsibilities. The Company currently has two standing committees, namely the Audit and Risk Committee and the Remuneration, nominations, social and ethics committee. The Audit and Risk Committee is appointed by shareholders on an annual basis in terms of the provisions of the Companies Act. In terms of the Companies Act, Overberg Agri

Bywoning van vergaderings

Ses Direksievergaderings word normaalweg geskeduleer en ongeskedu-leerde vergaderings vind volgens spesifieke behoefte plaas. Die afgelope jaar is agt Direksievergaderings gehou.

G = geskeduleerde vergaderings OG = ongeskeduleerde vergaderings A = afwesig met verskoning

*Oorlede op 20 November 2011.

Filiaaldireksies

Elke filiaalmaatskappy beskik sedert Augustus 2007 oor ‘n volwaardige Direksie, wat binne sekere bemagtigingsriglyne die volle verantwoordelikheid van ‘n Direksie dra.

Die Direksies het die magtiging om addisionele Direkteure aan te stel, sou ‘n behoefte daarvoor ontstaan. Die filiaaldireksies, wat juis gevestig is om meer fokus op die doelstellings en werksaamhede van die filiaalmaatskappye te plaas, funksioneer baie effektief en doeltreffend en is ook onderhewig aan jaarlikse evaluasie.

Direksiekomitees

Komitees vanuit die Direksie- en Bestuursgeledere word gevorm met die spesifieke doel om die Direksie behulpsaam te wees en by te staan met die uitvoering van hul verantwoordelikhede. Die Maatskappy beskik tans oor twee staande komitees, naamlik die Oudit-en-risikokomitee en die Vergoeding-, nominasie-, sosiale- en etiesekomitee. Die Oudit-en-risikokomitee word jaarliks ingevolge die bepalings van die Maatskappywet deur aandeelhouers aangewys. Ingevolge die bepalings van die

Date 2011/06/15 2011/08/11 2011/08/24 2011/10/7 2011/11/23 2011/12/13 2012/02/24 2012/02/28 Datum

Type of meeting S/G S/G S/G US/OG S/G US/OG US/OG S/G Tipe vergadering

Directors DirekteureD de Kock X X X X X X X X D de Kock

DG de Kock X X X X X X X X DG de KockRR Blom X X X X X X X X RR Blom

LE Coetzer X X X X X X X X LE CoetzerZL Combi A X A A X A X X ZL Combi

DC Human X X X X X X X X DC HumanFGG Joubert X X X X X X X X FGG Joubert

HP Marais X X X X X X X X HP MaraisR Pheiffer* X X X A R Pheiffer*

MJ Roux X X A X X X X X MJ RouxHG Schönfeldt X X X X X X X X HG Schönfeldt

AJ Uys X X X X X X X X AJ UysJ v d M Rossouw X X X X X X X X J v d M RossouwJG van Deventer X X X X X X X X JG van Deventer

JP Viljoen X X X X X X X X JP Viljoen

S Cassiem X X X A X X X X S Cassiem

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has to appoint a Social and ethics committee. Ad hoc committees are also established from time to time to facilitate focus on specific matters as required. With the exception of powers conferred upon these committees by the Companies Act, the Board committees have no decision-making authority and mainly make recommendations to the Group Board. The Chairperson of the committees report to the Group Board after each meeting to inform the Board of its activities and to make recommendations. These committees fulfil their activities on behalf of all the subsidiary companies.

Audit and Risk Committee

The Audit and Risk Committee is responsible to fulfil certain duties in terms of the Companies Act. These responsibilities include:• thenominationoftheExternalAuditortoshareholders;• theapprovalofthefeesandtermsofappointmentoftheExternal

Auditor;• ensuringthattheappointmentoftheExternalAuditorisdoneinterms

oftheCompaniesActandotherlegislation;• theapprovalofthenon-auditservicesthatmaybeprovidedbythe

ExternalAuditor;and• thepreparationofareporttobeincludedwiththeAnnualFinancial

Statements.

The committee has, as required by the Act, determined the independence of the External Auditor, PricewaterhouseCoopers, and recommended to shareholders at the Annual General meeting in 2011 that PricewaterhouseCoopers be reappointed as the Company’s External Auditor for the ensuing financial year. The committee considered the fees and terms of appointment of PricewaterhouseCoopers and approved these after consultation with Management. The committee annually review a policy in terms of which the External Auditor may render certain non-audit services and has reviewed and confirmed this policy again during the year under review.

The responsibilities of the committee have been expanded to also assist the Board in the execution of its responsibilities with regard to risk management and specifically the safeguarding of assets, the operation of systems, control procedures and the preparation of accurate financial reports and statements, taking into account all applicable legal requirements and accounting standards. The committee is also responsible to ensure that the risk management policy, methodology and standards are applied. The External and Internal Auditors have unrestricted access to the Audit and Risk Committee.

Members of the Audit and Risk Committee

The members of the Audit and Risk Committee who have been elected by shareholders at the Annual General meeting on 24 August 2011 are as follows: Messrs. DG de Kock, HP Marais, RR Blom and MJ Roux.

Maatskappywet moet Overberg Agri ’n Sosiale-en-etiesekomitee aanwys.Ad hoc komitees word van tyd tot tyd gevestig om fokus op spesifieke aangeleenthede te bewerkstellig soos benodig. Met die uitsondering van die magte verleen aan hierdie komitees by wyse van die Maatskappywet, het die Direksiekomitees geen besluitnemingsmagte nie en maak hoofsaaklik aanbevelings aan die Groepdireksie. Die Voorsitter van die komitees rapporteer na afloop van elke vergadering aan die Direksie ten opsigte van hulle werksaamhede en aanbevelings. Hierdie komitees vervul hul werksaamhede namens al die filiaalmaatskappye.

Oudit- en-risikokomitee

Die Oudit-en-risikokomitee is verantwoordelik om sekere pligte uit te voer in terme van die Maatskappywet. Hierdie verantwoordelikhede sluit in:• dienominasievandieEksterneOuditeuraanaandeelhouers;• diegoedkeuringvandiefooieenaanstellingsvoorwaardesvandie

EksterneOuditeur;• om toe te siendat dieaanstelling vandie EksterneOuditeur

ooreenkomstigdieMaatskappywetenanderwetgewingplaasvind;• diegoedkeuringvandienie-ouditdienstewatdeurdieEksterne

Ouditeurvoorsienkanword;en• dievoorbereidingvan’nverslagwatingesluitmoetwordbydie

Finansiële Jaarstate.

Die komitee het, soos vereis deur die Wet, die onafhanklikheid van die Eksterne Ouditeur, PricewaterhouseCoopers, bepaal en aan aandeelhouers tydens die 2011 Algemene Jaarvergadering aanbeveel dat PricewaterhouseCoopers heraangestel word as Eksterne Ouditeur van die Maatskappy vir die volgende finansiële jaar. Die komitee het die fooie en aanstellingsvoorwaardes van PricewaterhouseCoopers oorweeg en dit na oorlegpleging met Bestuur goedgekeur. Die komitee oorweeg jaarliks ’n beleid waarvolgens die Eksterne Ouditeur sekere nie-ouditdienste kan verrig en het weer gedurende die jaar onder oorsig hierdie beleid hersien en bevestig.

Die verantwoordelikhede van die komitee is ook uitgebrei om die Direksie by te staan in die uitvoering van sy verantwoordelikheid ten opsigte van risikobestuur en spesifiek die beveiliging van bates, die bedryf van stelsels, kontroleprosedures en die voorbereiding van akkurate finansiële verslae en -state, inaggenome alle toepaslike wetlike vereistes en rekeningkundige standaarde. Die komitee is ook verantwoordelik om toe te sien dat die risikobestuursbeleid, metodologie en standaarde toegepas word. Die Eksterne en Interne Ouditeure het onbeperkte toegang tot die Oudit-en-risikokomitee.

Lede van die Oudit-en-risikokomitee

Die lede van die Oudit-en-risikokomitee wat verkies is deur aandeelhouers tydens die Algemene Jaarvergadering op 24 Augustus 2011 is die volgende: mnre. DG de Kock, HP Marais, RR Blom en MJ Roux.

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The Chairperson of the Audit and Risk Committee is Mr DG de Kock and the committee consists solely of Non-executive Directors. In terms of the principles of good corporate governance the Chairman of the Board does not serve on this committee. The Chairperson of the Board, the Managing Director, other members of Management and the Internal and External Auditors attend meetings of the committee by invitation.

All the members of the committee comply with the minimum requirements set by the Companies Act, namely that the members must be independent, that the members must be Directors of the Company and that at least one third of the members must have certain minimum qualifications or experience.

The criteria for independence entail that the members of the Audit and Risk Committee:• maynotbeinvolvedintheday-to-daymanagementoftheCompany

orhavebeeninvolvedassuchduringthepreviousfinancialyear;• maynotbeormaynothavebeenaprescribedofficeroftheCompany

or full-time employee of the Company or a related company during the pastthreefinancialyears;

• maynotbematerialsupplierorcustomeroftheCompany,suchthat a reasonable and informed third party would conclude in the circumstances that the integrity, impartiality and objectivity of that Directoriscompromisedbythatrelationship;

• maynotberelatedtoanypersonwhoisrelatedtoanyoftheabovewho fall within any of the criteria set out above.

The Board has tested the independence of the Audit and Risk Committee members during the year under review with reference to the criteria in the Companies Act and found that none of the members are not independent. For purposes of determining whether a Director is a significant client of the Company, a measurement of 5% of the Group’s turnover for a given year has been set.

Meeting attendance

At least three Audit and Risk Committee meetings are scheduled annually and special meetings are arranged according to specific needs.

Three scheduled meetings and two unscheduled meetings were held during the past year.

S = scheduled meetingsUS = unscheduled meetings A = absent with apology

Die Voorsitter van die Oudit-en-risikokomitee is mnr. DG de Kock en die komitee bestaan uitsluitlik uit Nie-uitvoerende Direkteure. Die Voorsitter van die Direksie dien nie, in terme van die beginsels van goeie korporatiewe bestuur, op hierdie komitee nie. Die Voorsitter van die Direksie, die Besturende Direkteur, ander bestuurslede en die Interne en Eksterne Ouditeure woon wel vergaderings van die komitee op uitnodiging by.

Al die lede van die komitee voldoen aan die minimum vereistes deur die Maatskappywet gestel, naamlik dat die lede onafhanklik moet wees, dat die lede Direkteure van die Maatskappy moet wees en dat ten minste een derde van die lede sekere minimum kwalifikasies of ondervinding moet hê.

Die kriteria vir onafhanklikheid behels dat die lede van die Oudit-en-risikokomitee:• niebetrokkemoetweesbydiedaagliksebestuurvandieMaatskappy

nieofsodanigbetrokkewasgedurendedievorigefinansiëlejaarnie;• nie’nvoorgeskrewebeamptevandieMaatskappyofvoltydse

werknemer van die Maatskappy of verwante maatskappy is of was gedurendedievorigedriefinansiëlejarenie;

• niesodanigewesenlikeverskafferofkliëntvandieMaatskappyweesdat ’n redelike en ingeligte derde party in die omstandighede tot die slotsom sou kom dat die integriteit, onpartydigheid of objektiwiteit van daardie Direkteur deur daardie verhouding onder verdenking geplaas word;

• nieverwantisaanenigepersoonwatbinneenigevandiemaatstawwehierbo val nie.

Die Direksie het gedurende die jaar onder oorsig die onafhanklikheid van die Oudit-en-risikokomiteelede getoets aan die hand van die kriteria in die Maatskappywet en bevind dat geen van die lede nie onafhanklik is nie. Vir doeleindes van die bepaling of ’n Direkteur ’n wesenlike kliënt van die Maatskappy is, is ’n maatstaf van 5% van die Groep se omset vir ’n gegewe jaar vasgestel.

Bywoning van vergaderings

Ten minste drie Oudit-en-risikokomiteevergaderings word jaarliks geskedu-leer en spesiale vergaderings word volgens spesifieke behoefte gereël.

Drie geskeduleerde vergaderings en twee ongeskeduleerde vergaderings het die afgelope jaar plaasgevind.

G = geskeduleerde vergaderings OG = ongeskeduleerde vergaderingsA = afwesig met verskoning

Date 2011/06/13 2011/11/22 2011/12/13 2012/01/18 2012/02/27 Datum

Type of meeting S/G S/G US/OG US/OG S/G Tipe vergadering

Members Lede

DG de Kock X X X X X DG de KockHP Marais X X X X X HP MaraisMJ Roux X X X X X MJ RouxRR Blom X X X X X RR Blom

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Remuneration, nominations, social and ethical committee

This committee, which discharges its responsibilities within the framework of a formal Charter, consists of Non-executive Directors and the Managing Director.

The activities of the existing Remuneration and nominations committee have been expanded in 2011 to also fulfil the duties of the Social and ethics committee, as provided for in the Companies Act. These duties comprise the monitoring of, inter alia, the Company’s socio-economic activities, good corporate governance, its impact on the environment, health and safety.

The committee also makes recommendations to the Board with regard to general human resources matters, including the remuneration of employees, Management and Directors. The committee is also responsible to formulate the Company’s remuneration policy and to ensure that the policy that has been approved by the shareholders is implemented.

The committee is further also responsible for the functions of a Nominations committee. These responsibilities entail the evaluation of the composition of the Board in terms of competencies, experience and also the balance between Executive and Non-executive Directors. The committee also ensures that the Board is evaluated annually. After the evaluation process, the committee considers the results of the evaluation and ensures that succession planning is done.

Members of the Remuneration, nominations, social and ethics committee

The committee consist of three Non-executive Directors, namely Messrs DG de Kock, D de Kock and HP Marais, and the Managing Director, Mr AJ Uys. The Chairperson of the committee is Mr DG de Kock.

Meeting attendanceTwo meetings are normally held per year, but special meetings are held according to specific needs.

The committee met twice during the past year. No unscheduled meetings took place.

S = scheduled meetings US = unscheduled meetingsA = absent with apology

*Deceased on 20 November 2011

Vergoeding-, nominasie-, sosiale- en etiesekomitee

Hierdie komitee, wat sy verantwoordelikhede binne die raamwerk van ‘n formele Handves uitvoer, bestaan uit Nie-uitvoerende Direkteure en die Besturende Direkteur.

Die werksaamhede van die bestaande Vergoeding-en-nominasiekomitee is gedurende 2011 uitgebrei om ook die pligte van die Sosiale-en-etiesekomitee, soos vervat in die Maatskappywet, na te kom. Hierdie pligte behels die monitering van, onder andere, die Maatskappy se sosio-ekonomiese aktiwiteite, goeie korporatiewe bestuur, sy impak op die omgewing, gesondheid en veiligheid.

Die komitee maak ook aanbevelings aan die Direksie ten opsigte van algemene menslikehulpbron-aangeleenthede, onder meer die vergoeding van personeel, Bestuur en Direkteure. Die komitee is ook verantwoordelik om die Maatskappy se vergoedingsbeleid te formuleer en toe te sien dat die beleid wat deur die aandeelhouers goedgekeur is, geïmplementeer word.

Die komitee is verder ook verantwoordelik vir die funksies van ‘n Nominasiekomitee. Hierdie verantwoordelikhede behels die evaluering van die samestelling van die Direksie in terme van vaardighede, ervaring en ook die balans tussen Uitvoerende en Nie-uitvoerende Direkteure. Die komitee verseker ook dat die Direksie jaarliks geëvalueer word. Na afloop van die evaluasieproses oorweeg die komitee die resultate daarvan en sien toe dat opvolgbeplanning plaasvind.

Lede van die Vergoeding-, nominasie-, sosiale- en etiesekomitee

Die komitee bestaan uit drie Nie-uitvoerende Direkteure, naamlik mnre. DG de Kock, D de Kock en HP Marais, en die Besturende Direkteur, mnr. AJ Uys. Die Voorsitter van die komitee is mnr. DG de Kock.

Bywoning van vergaderingsTwee vergaderings word normaalweg per jaar gehou maar spesiale vergaderings vind volgens spesifieke behoefte plaas.

Die komitee het twee keer die afgelope jaar vergader. Geen ongeskeduleerde vergaderings het plaasgevind nie.

G = geskeduleerde vergaderings OG = ongeskeduleerde vergaderings A = afwesig met verskoning

*Oorlede op 20 November 2011

Date 2011/11/22 2012/02/27 DatumType of meeting S/G S/G Tipe vergaderingMembers LedeDG de Kock X X DG de KockD de Kock X X D de KockHP Marais X X HP MaraisR Pheiffer* X X R Pheiffer*

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Charters

Each Board and Board committee has a Charter that is based on the principles contained in the King III Code. These Charters, approved by the Group Board, are evaluated annually in terms of their effectiveness and relevance.

The Boards and Board committees function within the provisions of the formal Charters.

Training and development

The Directors attended three formal training events during the past financial year. The training focused on the new Consumer Act, Companies Act and financial management principles.

Internal control and risk management

The Board is responsible for the identification and management of risks. The material risks have been identified within the risk management framework and Management reports to the Board and the Audit and Risk Committee in this regard on a regular basis.

The objectives of this framework within which risk management is applied, are the following:

1. To give the Board assurance and comfort that material risks are identifiedonacontinuousbasis;

2. Todetermineacceptablerisklevels;3. Toreducetherisks,wherereasonablypossible,toacceptablelevels;4. That, where it is not reasonably possible to decrease the risks, to

continuouslymonitorthoserisks;and5. To ensure that the identification of material risks forms part of the daily

responsibilities of Management and employees.

Assurance is obtained annually that the Group’s assets are sufficiently insured against abnormal disasters as well as normal insurable risks.

An Internal Audit function, assigned to Boshoff Visser Bredasdorp, exists within the Group and is primarily focused on the investigation of internal control systems and the management and control of identified risks. The Internal Auditor reports directly to the Audit and Risk Committee regarding his activities.

The principles of responsibility and accountability are continuously emphasised, applied and supported by internal management and control within the Group.

The going concern principle was applied in the preparation of the Financial Statements and, based on forecasts and available cash resources, the Board has no reason to believe that the Group will not be a going concern

Handveste

Elke Direksie en Direksiekomitee beskik oor ‘n Handves wat gebaseer is op die beginsels vervat in die King III Kode. Hierdie Handveste, goedgekeur deur die Groepdireksie, word jaarliks geëvalueer in terme van hul effektiwiteit en relevantheid.

Die Direksies en Direksiekomitees funksioneer binne die bepalings van die formele Handveste.

Opleiding en ontwikkeling

Die Direkteure het drie formele opleidingsgeleenthede gedurende die afgelope finansiële jaar bygewoon. Hierdie opleiding het gefokus op die nuwe Verbruikerswet, Maatskappywet en beginsels van finansiële bestuur.

Interne beheer en risikobestuur

Die Direksie is verantwoordelik vir die identifisering en bestuur van risiko’s. Binne die risikobestuursraamwerk word die wesenlike risiko’s geïdentifiseer en Bestuur doen gereeld hieroor verslag aan die Direksie en die Oudit-en-risikokomitee.

Die doelwitte van hierdie raamwerk waarbinne risikobestuur toegepas word, is die volgende:1. Om aan die Direksie die versekering en gerusstelling te gee dat

wesenlikerisiko’sdeurlopendgeïdentifiseerword;2. Dataanvaarbarerisikovlakkebepaalword;3. Dat die risiko’s, waar dit redelik moontlik is, verminder word tot

aanvaarbarevlakke;4. Dat, waar dit nie redelikerwyse moontlik is om risiko’s te verminder nie,

daardierisiko’sweldeurlopendgemonitorword;en5. Om te verseker dat die identifisering van wesenlike risiko’s deel vorm

van Bestuur en werknemers se normale daaglikse verantwoordelikhede.

Daar word jaarliks toegesien dat die Groep se bates voldoende verseker is teen abnormale rampe sowel as teen normale versekerbare risiko’s.

’n Interne Ouditfunksie, opgedra aan Boshoff Visser Bredasdorp, bestaan binne die Groep en is primêr gefokus op die ondersoek van interne beheerstelsels en die bestuur en beheer van geïdentifiseerde risiko’s. Die Interne Ouditeur rapporteer direk aan die Oudit-en-risikokomitee oor sy werksaamhede.

Die beginsels van verantwoordelikheid en toerekenbaarheid word voortdurend beklemtoon, toegepas en ondersteun deur interne beheer en kontrole binne die Groep.

Die lopendesaakgrondslag is met die opstel van die Finansiële State toege-pas en gegrond op voorspellings en beskikbare kontanthulpbronne en die Direksie het geen rede om te glo dat die Groep in die afsienbare

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in the foreseeable future. The viability and sustainability of the the Overberg Agri Group are supported by the Financial Statements.

Shareholding and share trading

Shareholding

The shareholder distribution is as follows:

Entities:

Number of shares:

The Directors of Overberg Agri Ltd, with the exception of the Directors appointed by Thembeka, hold 4% of the Company’s issued shares.

Share trading

Share trading takes place in accordance with the Articles of Association of the Company through an internal trading mechanism. This trading process functions on the principles of equity and transparency and is continually subjected to an internal audit. A closed period for trading of shares by Directors and/or Senior Management is introduced from time to time, based on the principles of additional knowledge about the Company’s performance or potential performance which may influence the value and/or price of the shares.

toekoms nie ’n lopende saak sal wees nie. Die lewensvatbaarheid en volhoubaarheid van die Overberg Agri Groep word deur die Finansiële State ondersteun.

Aandeelhouding en aandeleverhandeling

Aandeelhouding

Die verspreiding van aandeelhouding is soos volg:

Entiteite:

Hoeveelheid aandele:

Die Direkteure van Overberg Agri Bpk hou, met die uitsondering van die Direkteure aangewys deur Thembeka, 4% van die Maatskappy se uitgereikte aandele.

Aandeleverhandeling

Aandeleverhandeling word ooreenkomstig die Maatskappy se Statute bestuur deur ‘n interne verhandelingsmeganisme. Hierdie verhandelingsproses funksioneer op die beginsels van billikheid en deursigtigheid en word deurlopend aan ’n interne oudit onderwerp. ’n Geslote periode vir verhandeling van aandele deur Direkteure en/of Senior Bestuur word van tyd tot tyd ingestel, gegrond op die beginsel van meerdere kennis van die Maatskappy se prestasie of potensiële prestasie wat die waarde en/of prys van aandele mag beïnvloed.

Number/Aantal % Shares/Aandele %

Individual 526 70,79 2,982,809 35,56 Individu

Company 66 8,88 2,850,356 33,98 Maatskappy

Close corporation 62 8,34 1,129,729 13,47 Beslote korporasie

Trust 80 10,77 1,416,067 16,88 Trust

Partnership 3 0,40 4,027 0,05 Venootskap

Other 6 0,81 5,595 0,07 Ander

Total 743 100 8,388,583 100 Totaal

Number/Aantal % Shares/Aandele %

Between 1 and 1 000 322 43,34 121,173 1,44 Tussen 1 en 1 000

Between 1 001 and 10 000 249 33,51 944,737 11,26 Tussen 1 001 en 10 000

Between 10 001 and 50 000 145 19,52 3,174,878 37,85 Tussen 10 001 en 50 000

Between 50 001 and 80 000 20 2,69 1,280,061 15,26 Tussen 50 001 en 80 000

Above 80 000 7 0,94 2,867,734 34,19 Bo 80 000

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Trading of shares by Directors/Senior Management in the year under review was as follows:

Diversity and social responsibility

Overberg Agri supports the principles of Broad Based Black Economic Empowerment and each subsidiary company has specific objectives in terms of the Broad Based Black Economic Empowerment Act and associated codes. The subsidiary companies are individually audited in terms of compliance with the BBBEE codes.

Overberg Agri is thoroughly aware of its social responsibility to the environment, community and employees and is committed to the sustainable growth, development and protection of the environment in which the Group functions.

Employees are actively involved in the communities in which the Company operates. The Company makes various financial contributions to enterprises within the framework of a formal policy on sponsorships. In considering applications for sponsorships, focus is placed on the communities within which the Company functions.

In accordance with the Company’s policy, no contributions are made to any political party, religious group or individual.

Ethical norms

Business ethics require that every Director and employee of Overberg Agri complies with high moral, ethical and professional standards at all times. By signing a Code of Ethics everyone undertakes to pursue the following values:

IntegrityThe requirement to be honest, sincere, consistent, fair, faithful and transparent.

AccountabilityThe requirement to commit yourself to what has been undertaken, to accept responsibility for decisions and actions and to account for it.

ResponsibilityThe acknowledgement of everyone’s duty to the Company and to act accordingly and to contribute actively to the good image of the Company, as well as the sustainability and success of the Company.

Aandeleverhandeling gedurende die jaar onder oorsig deur Direkteure en/of Senior Bestuurslede was soos volg:

Diversiteit en sosiale verantwoordelikheid

Overberg Agri ondersteun die beginsels van Breë Basis Swart Ekonomiese Bemagtiging en elke filiaalmaatskappy beskik oor spesifieke doelwitte in terme van die Wet op Breë Basis Swart Ekonomiese Bemagtiging en gepaardgaande kodes. Die filiaalmaatskappye word individueel geoudit in terme van voldoening aan die BBSEB-kodes.

Overberg Agri is deeglik bewus van sy sosiale verantwoordelikheid teenoor die omgewing, gemeenskap en werknemers en is verbind tot die volhoubare groei, ontwikkeling en beskerming van die omgewing waarbinne die Groep funksioneer.

Werknemers is aktief betrokke by die gemeenskappe waarbinne die Maatskappy bedryf word. Die Maatskappy maak binne die raamwerk van ‘n formele beleid oor borgskappe verskeie finansiële bydraes aan instellings. Met die oorweging van aansoeke vir borgskappe word fokus geplaas op die gemeenskappe waarbinne die Maatskappy funksioneer.

Ooreenkomstig die Maatskappybeleid word geen bydraes aan enige politieke party, religieuse instansie of individu gemaak nie.

Etiese norme

Besigheidsetiek vereis van elke Direkteur en werknemer van Overberg Agri om te alle tye aan hoë morele, etiese en professionele standaarde te voldoen. Deur die ondertekening van ‘n Etiese Gedragskode onderneem elkeen om die volgende waardes na te streef:

IntegriteitDie vereiste om eerlik, opreg, konsekwent, billik, getrou en openlik te wees.

RekenskapDie vereiste om jouself te verbind tot dit wat onderneem word, om verantwoordelikheid te aanvaar vir besluite en optrede en om verantwoording daaroor te doen.

VerantwoordelikheidDie erkenning van elkeen se verpligtinge teenoor die Maatskappy en om daarvolgens te handel en om aktief by te dra tot die goeie beeld van die Maatskappy, asook die volhoubaarheid en sukses van die Maatskappy.

PersonNumber of sharesAantal aandele

PricePrys

Bought/soldKoop/verkoop Persoon

R Pheiffer 20 000 R80,00 Sold/Verkoop R Pheiffer

Heuningneskloof Trust (HG Schönfeldt) 37 342 R45,00 Bought/Koop Heuningneskloof Trust (HG Schönfeldt)



JP Viljoen 1 043 R85,00 Bought/Koop JP Viljoen

Blydskap Trust (J van Deventer) 20 000 R90,00 Bought/Koop Blydskap Trust (J van Deventer)

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RespectThe recognition of every person’s dignity and the commitment to treat all people with respect irrespective of their culture, traditions, language preference, race, gender or opinions.

The objective of the Code of Ethics is the awareness and promotion of ethical actions and to communicate the Group’s view and standards for ethical behaviour to stakeholders.

Formal policies and accompanying processes exist which require Directors and employees to declare their interests on a regular basis. There is a closed period for share trading for Directors and Management at times when they have more knowledge than shareholders.

The Company has a formal whistle-blower policy that has been very successfully applied on numerous occasions in the past. Protection and confidentially are given to anyone who reports irregularities. The Company also fulfils its obligation in terms of the Prevention and Combating of Corrupt Activities Act by reporting criminal cases to the South African Police Service. Regular awareness programmes are launched with regard to the prevention of fraud and corruption.

Employees

The Group has approximately 1,000 employees in its service, of whom 17% are Black, 52% are Coloured and 31% are White. Good progress has been made with regard to the objectives set in terms of the Employment Equity Act since the introduction of the Act.

Overberg Agri attaches great value to well-trained staff and employees are encouraged to improve and expand their skills. A total of 581 employees attended training courses during the past year and 37 employees are currently busy obtaining a tertiary qualification on a part-time basis and with Company-supported bursaries.

Overberg Agri recognises its obligation to provide and maintain a safe workplace for its employees and recognises the right of employees to work in a safe and healthy working environment. Occupational safety is managed on subsidiary company level and each company has occupational safety policies and procedures in place. Safety committee meetings are held according to a schedule. No incidents have occurred in the year under review that resulted in the serious injury or death of an employee due to a work related injury.

Remuneration

The Company’s remuneration policy, which includes the remuneration paid to Directors, was approved by means of a special resolution at the Annual General meeting held on 24 August 2011. The percentage vote in favour of the remuneration policy was 91,6%.

The approved policy is:• that the remuneration levels of executiveDirectors andother

employees are reviewed annually within the guidelines of the

RespekDie erkenning van elke mens se waardigheid en onderneming om alle mense met respek te behandel ongeag hul kultuur, tradisies, taalvoorkeur, ras, geslag en opinies.

Die doel van die Gedragskode is die bewusmaking en bevordering van etiese optrede en om die Groep se siening en standaarde oor etiese gedrag aan belanghebbendes te kommunikeer.

Formele beleide en gepaardgaande prosesse bestaan waarvolgens Direkteure en werknemers hul belange op ‘n gereelde basis verklaar. ’n Geslote periode vir aandeleverhandeling bestaan vir Direkteure en Bestuur gedurende tye wanneer hulle oor meerdere kennis as aandeelhouers beskik.

Die Maatskappy beskik oor ’n formele fluitjieblaser-beleid, wat op vele geleenthede in die verlede baie suksesvol toegepas is. Beskerming en vertroulikheid word verleen aan enigeen wat ongerymdhede rapporteer. Die Maatskappy kom ook sy verpligting na in terme van die Wet op Voorkoming en Bekamping van Korrupsie, deur kriminele sake by die Suid-Afrikaanse Polisiediens aan te meld. Gereelde bewusmakingsprogramme word geloods ten opsigte van die voorkoming van bedrog en korrupsie.

Personeel

Die Groep het ongeveer 1,000 personeellede in diens, waarvan 17% Swart, 52% Kleurling en 31% Wit is. Heelwat vordering is al gemaak ten opsigte van die doelwitte wat gestel is in terme van die Wet op Gelyke Indiensneming sedert die inwerkingtreding van die Wet.

Overberg Agri heg baie waarde aan goed opgeleide personeel en per-soneel word aangemoedig om hul vaardighede te verbeter en uit te brei. ‘n Totaal van 581 personeellede het die afgelope jaar opleidingskursusse bygewoon en 37 personeellede is tans besig om op ’n deeltydse basis en met Maatskappy-ondersteunde studiebeurse ’n tersiêre kwalifikasie te bekom.

Overberg Agri erken sy verpligting om ’n veilige werksplek vir sy personeel te skep en te handhaaf en erken die reg van personeel om in ’n veilige en gesonde werksomgewing te werk. Beroepsveiligheid word op filiaalmaatskappyvlak bestuur en elke maatskappy beskik oor beleide en prosedures vir beroepsveiligheid. Veiligheidskomiteevergaderings word volgens ’n skedule gehou. Geen insidente het gedurende die jaar onder oorsig plaasgevind waar ’n personeellid baie ernstig beseer of gesterf het weens ’n werksbesering nie.

Vergoeding

Die Maatskappy se vergoedingsbeleid, waarby ingesluit is die vergoeding betaalbaar aan Direkteure, is goedgekeur by wyse van ’n spesiale besluit gedurende die Algemene Jaarvergadering gehou op 24 Augustus 2011. Die persentasie stemme ten gunste van die vergoedingsbeleid het 91,6% beloop.

Die goedgekeurde beleid is:• datdievergoedingskalevanUitvoerendeDirekteureenander

personeel jaarliks oorweeg word binne die riglyne van die resultate

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results of the National Deloitte Consulting remuneration surveys and the principles of fairness towards the company and the particular individualconcerned;

• that,withinthediscretionof theBoard,thecompanystrivestomaintain the remuneration of employees on at least the 10th or 25th percentile of the salary scale of each position as reflected in the annual survey, or from the 50th percentile where a high measure of expertise is required or where there is a shortage of suitable employees;

• thattheremunerationofNon-executiveDirectors,fortheirservicesasDirectors, is determined with reference to the results of the National Deloitte Consulting survey for Non-executive Directors and the size oftheGroup;and

• thatNon-executiveDirectorsreceiveafixedmonthlyfeedeterminedinaccordance with the average fixed fee applicable to Non-executive Directors as reflected in the annual survey and, in addition thereto, be reimbursed for official travel expenses, but that they do not participate in the Group pension fund, medical aid or other similar remuneration scheme.

Sustainability

The Group is committed to creating wealth for all stakeholders in a way that is economically sustainable and socially acceptable and at the same time taking the long-term sustainability of the environment into account.

In order to ensure the sustainability of the business, the internal focus is on economic performance, employment equity, Broad Based Black Economic Empowerment, health and safety and skills development and training.

Overberg Agri also recognises its responsibility to the broader community and is actively involved in the support of the communities in which we conduct our business.

Overberg Agri is also involved in the training and development of groups such as farm workers and local communities. These opportunities focus on aspects such as life skills, resource conservation, health and safety and HIV/AIDS.

A new Memorandum of Incorporation was approved, by special resolu-tion, by shareholders at a shareholders meeting held on 19 June 2012. 57,47% of the voting rights were present, either personally or by proxy and 93,75% voted in favour of the new Memorandum of Incorpora-tion. The new Memorandum of Incorporation will replace the existing Memorandum of Incorporation and Articles of Association that contain provisions that are in conflict with the new Companies Act, 71 of 2008. It also removes the restrictions on the acquisition, possession and trading of shares and incorporate certain provisions of the existing agreement with Thembeka in accordance with the new Companies Act.

D de Kock Chairperson AJ Uys Managing Director

van die Nasionale Deloitte Consulting-vergoedingsopnames en die beginsels van billikheid en regverdigheid teenoor die Maatskappy en diebetrokkepersoon;

• datdaar,binnediediskresievandieDireksie,gepoogwordomdie vergoeding van personeel op ten minste die 10de of die 25ste persentiel van daardie pos se salarisskaal, soos gerapporteer in die jaarlikse opname, te handhaaf en waar ’n hoë mate van vakkundigheid vereis word of waar ’n skaarsheid van geskikte personeel bestaan, vanafdie50stepersentiel;

• datdievergoedingvanNie-uitvoerendeDirekteurevirhuldiensteas Direkteure bepaal word met verwysing na die resultate van die Nasionale Deloitte Consulting-opname vir Nie-uitvoerende Direkteure endiegroottevandieGroep;en

• datNie-uitvoerendeDirekteure’nvastemaandeliksefooiontvang,bepaal volgens die gemiddelde vaste fooi van toepassing op Nie-uitvoerende Direkteure soos gerapporteer in die jaarlikse opname, en addisioneel vergoed word vir amptelike reisuitgawes, maar nie deelneem aan die Groep se pensioenfonds, mediese fonds of enige ander soortgelyke vergoedingskema nie.

Volhoubaarheid

Die Groep is daartoe verbind om welvaart te skep vir alle belangegroepe op ‘n wyse wat ekonomies volhoubaar en sosiaal aanvaarbaar is en in die proses ook die langtermyn-volhoubaarheid van die omgewing in ag neem.

Ten einde volhoubaarheid van die besigheid te verseker, word intern gefokus op ekonomiese prestasie, billike indiensneming, Breë Basis Swart Ekonomiese Bemagtiging, gesondheid en veiligheid en vaardigheidsontwikkeling en opleiding.

Overberg Agri erken ook sy verantwoordelikheid teenoor die breër gemeenskap en is aktief betrokke by die ondersteuning van die gemeenskappe waarbinne ons besigheid doen.

Overberg Agri is ook betrokke by die opleiding en ontwikkeling van groeperings soos plaaswerkers en plaaslike gemeenskappe. Hierdie geleenthede fokus op aspekte soos lewensvaardighede, hulpbronbewaring, gesondheid en veiligheid en MIV/VIGS.

’n Nuwe Akte van Oprigting is deur aandeelhouers tydens ’n aandeel-houersvergadering op 19 Junie 2012 by wyse van ’n spesiale besluit goedgekeur. 57,47% van die stemgeregtigdes was persoonlik of by wyse van volmag teenwoordig en 93,75% het ten gunste van die nuwe Akte van Oprigting gestem. Die nuwe Akte van Oprigting sal die be-staande Akte van Oprigting en Statuut, wat bepalings bevat wat teen- stydig is met die Maatskappywet, 71 van 2008, vervang. Dit hef ook die beperkings op die verkryging, besit en verhandeling van aandele op en bevat sekere bepalings van die bestaande ooreenkoms met Thembeka ooreenkomstig die bepalings van die nuwe Maatskappywet.

D de Kock Voorsitter AJ Uys Besturende Direkteur


2222


DIRECTORS’ RESPONSIBILITIES AND APPROVAL

OVERBERG AGRI BEPERK EN SY FILIALE

DIREKTEURE SE VERANTWOORDE-LIKHEDE EN GOEDKEURING

The Directors are required in terms of the Companies Act 71 of 2008, to maintain adequate accounting records and are responsible for the content and integrity of the Annual Financial Statements and related financial information included in this report. It is their responsibility to ensure that the Annual Financial Statements fairly present the state of affairs of the Group as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with International Financial Reporting Standards. The External Auditors are engaged to express an independent opinion on the Annual Financial Statements.

The Annual Financial Statements are prepared in accordance with International Financial Reporting Standards and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

The Directors acknowledge that they are ultimately responsible for the system of internal financial control established by the Group and place considerable importance on maintaining a strong control environment. To enable the Directors to meet these responsibilities, the Board sets standards for internal control aimed at reducing the risk of error or loss in a cost-effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the Group and all employees are required to maintain the highest ethical standards in ensuring the Group’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the Group is on identifying, assessing, managing and monitoring all known forms of risk across the Group. While operating risk cannot be fully eliminated, the Group endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The Group Audit committee plays an integral role in risk management as well as overseeing the Group’s integrated reporting and internal audit function.

The Group’s internal audit function, which operates unimpeded and independently from operational management, has unrestricted access to the Group Audit committee, assesses and, when necessary, recommends improvements to the system of internal controls and accounting practices, based on audit plans that take cognisance of the relative degrees of risk of each function or aspect of the business.

The Code of Corporate Practices and Conduct has been integrated into Group strategies and operations.

The Directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the Annual Financial Statements. However, any system of

Die Maatskappywet van Suid-Afrika bepaal dat die Direkteure omvat-tende rekeningkundige rekords moet handhaaf en verantwoordelik is vir die inhoud en integriteit van die Finansiële Jaarstate en verwante finansiële inligting wat by die verslag ingesluit word. Dit is hul verantwoordelikheid om te verseker dat die Finansiële Jaarstate ter voldoening aan ’International Financial Reporting Standards’ ’n redelike weergawe is van die Maat-skappy se sake aan die einde van die finansiële jaar en die resultate van sy bedrywighede vir die tydperk wat op daardie tydstip geëindig het. Die Eksterne Ouditeure is aangestel om ’n onafhanklike mening oor die Finansiële Jaarstate uit te spreek.

Die Finansiële Jaarstate is ooreenkomstig ’International Financial Reporting Standards’ opgestel en is gegrond op toepaslike rekeningkundige beleid wat konsekwent toegepas is en deur redelike en verstandige oordeel en ramings ondersteun is.

Die Direkteure erken dat hulle uiteindelik verantwoordelik is vir die stelsels van interne finansiële beheer wat die Maatskappy ingestel het en plaas aansienlike klem op die belang van handhawing van streng beheer. Sodat die Direkeure die verantwoordelikhede kan nakom, stel die Direksie standaarde vir interne beheeer wat daarop gerig is om die risiko van foute of verlies op ’n kostedoeltreffende wyse te verklein. Die standaarde sluit in die behoorlike delegasie van verantwoordelikhede binne ’n duidelik omskrewe raamwerk, effektiewe rekeningkundige prosedures en toereikende skeiding van pligte om ’n aanvaarbare risikovlak te verseker. Die beheermaatreëls word deur die hele Maatskappy gemonitor en alle werknemers moet die hoogste etiese standaarde handhaaf om te verseker dat die Maatskappy se besigheid gedoen word op ’n wyse wat onder alle redelike omstandighede bo verdenking is. Die Maatskappy se risikobestuur is gerig op die identifisering, evaluering, bestuur en moni-tering van alle bekende risiko’s in die Maatskappy. Hoewel die bedryfs-risiko nie heeltemal uitgeskakel kan word nie, probeer die Maatskappy dit tot ’n minimum beperk deur te verseker dat die toepaslike infrastruktuur-, beheer- en ander stelsels en etiese gedrag volgens voorafbepaalde

prosedures en beperkings toegepas word.

Die Groep ouditkomitee speel ‘n integrale rol in risikobestuur sowel as om toesig te hou oor die Groep se geïntegreerde verslagdoening en interne ouditfunksie.

Die Groep se interne ouditfunksie, wat sonder belemmering en onafhanklik van operasionele bestuur plaasvind, het onbeperkte toegang tot die Groep ouditkomitee en evalueer en beveel, waar nodig, verbeterings aan die stelsel van interne beheer en rekeningkundige praktyke aan, gebaseer op ouditplanne wat die relatiewe graad van risiko van elke funksie of aspek van die onderneming in ag neem.

Die Kode van Korporatiewe Praktyke en Gedrag is in die strategieë en bedrywighede van die Groep geïntegreer.

Die Direkteure is op grond van inligting en verduidelikings wat bestuur

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DIRECTORS’ RESPONSIBILITIES AND APPROVAL


DIREKTEURE SE VERANTWOORDE-LIKHEDE EN GOEDKEURING

internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The Directors have reviewed the Group’s and Company’s cash flow forecast for the year to 28 February 2013 and, in the light of this review and the current financial position, they are satisfied that the Group and Company have or had access to adequate resources to continue in operational existence for the foreseeable future.

The External Auditors are responsible for independently reviewing and reporting on the Group’s and Company’s Annual Financial Statements and their report is presented on page 25.

The External Auditors were given unrestricted access to all financial records and related data, including minutes of all meetings of shareholders, the Board of Directors and committees of the Board. The Directors believe that all representations made to the independent Auditors during their audit are valid and appropriate.

The Annual Financial Statements, set out on pages 26 to 113, which have been prepared on the going concern basis, were approved by the Board of Directors and signed on its behalf by:

D de Kock AJ UysChairperson Managing Director14 June 2012

verskaf, van mening dat die interne beheerstelsels redelike sekerheid bied dat daar vir die opstel van die Finansiële Jaarstate op die finansiële rekords gesteun kan word. Enige interne stelsels vir finansiële beheer kan egter slegs redelike, en nie absolute versekering nie, teen enige beduidende wanverklaring of verlies bied.

Die Direkteure het die Maatskappy se kontantvloeivoorspelling vir die jaar tot 28 Februarie 2013 nagesien en is in die lig van die nasiening en die huidige finansiële posisie oortuig dat die Maatskappy toereikende middele het of toegang tot toereikende middele het om sy bedrywighede in die voorsienbare toekoms voort te sit.

Die Eksterne Ouditeure is verantwoordelik vir die onafhanklike nasiening van die Maatskappy se Finansiële Jaarstate en om daaroor verslag te doen. Die Finansiële Jaarstate is deur die Maatskappy se Eksterne Oudit-eure ondersoek en hul verslag word op bladsy 25 aangebied.

Die Eksterne Ouditeure het onbeperkte toegang tot alle finansiële rekords en verwante data gehad, met inbegrip van notules van alle vergaderings van aandeelhouers, die Direksie en komitees van die Direksie. Die Direkteure is van mening dat alle voorleggings wat aan die onafhanklike Ouditeure tydens hulle oudit gemaak is, geldig en toepaslik was.

Die Finansiële Jaarstate wat op bladsy 26 tot 113 uiteengesit is en opgestel is op die lopendesaakgrondslag, is deur die Direksie goedgekeur en namens hulle onderteken deur:

D de Kock AJ UysVoorsitter Besturende Direkteur14 Junie 2012


2424


CERTIFICATE OF THE COMPANY SECRETARY


AUDIT AND RISK COMMITTEE REPORT


SERTIFIKAAT VAN DIE MAATSKAPPYSEKRETARIS


VERSLAG VAN DIE OUDIT-EN-RISIKOKOMITEE

In terms of section 88(2)(e) of the Companies Act 2008, the Company Secretary hereby certifies that all returns of the Company and its subsidiaries, as prescribed by the said Act, have been submitted to the Companies and Intellectual Property Commission (CIPC) and that the said returns are true, correct and up to date.

A SteynCompany SecretaryCaledon14 June 2012

The Audit and Risk Committee has pleasure in submitting this report, as required in terms of the Companies Act. The Audit and Risk Committee consists of four Non-executive Directors who act independently as described in the Companies Act. During the year under review six meetings were held and the committee members attended the required number of meetings. At the meetings the members fulfilled all their functions as prescribed by the Companies Act. The Audit and Risk Committee is satisfied that the Auditors are independent of the Company and are therefore able to conduct their audit functions without any influence from the Company.

DG de KockChairperson of the Audit and Risk CommitteeCaledon14 June 2012

Ingevolge artikel 88(2)(e) van die Maatskappywet 2008, bevestig die Maatskappysekretaris hiermee dat alle opgawes van die Maatskappy en sy filiale, soos voorgeskryf deur die genoemde Wet, ingedien is by die Kommissie vir Maatskappye en Intellektuele Eiendom (KMIE) en dat genoemde opgawes waar, korrek en op datum is.

A SteynMaatskappysekretarisCaledon14 Junie 2012

Dit is vir die Oudit-en-risikokomitee aangenaam om hulle verslag voor te lê, soos vereis ingevolge die Maatskappywet. Die Oudit-en-risikokomitee bestaan uit vier Nie-uitvoerende Direkteure wat onafhanklik optree, soos in die Maatskappywet omskryf. Ses vergaderings is gedurende die oorsigjaar gehou en die komiteelede het die vereiste aantal vergaderings bygewoon. Die lede het by die vergaderings hul pligte vervul soos deur die Maatskappywet voorgeskryf. Die Oudit-en-risikokomitee is tevrede dat die Ouditeure onafhanklik van die Maatskappy is en dus in staat is om hul ouditfunksies sonder enige invloed van die Maatskappy uit te voer.

DG de KockVoorsitter van die Oudit-en-risikokomiteeCaledon14 Junie 2012


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INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF OVERBERG AGRI LIMITEDFOR THE YEAR ENDED 29 FEBRUARY 2012

ONAFHANKLIKE OUDITEURSVERSLAG AAN DIE AANDEELHOUERS VAN

OVERBERG AGRI BEPERKVIR DIE JAAR GEËINDIG 29 FEBRUARIE 2012

We have audited the consolidated Annual Financial Statements and Annual Financial Statements of Overberg Agri Limited, which comprise the consolidated and separate Statements of Financial Position as at 29 February 2012, and the consolidated and separate Income Statements and the consolidated and separate Statements of Comprehensive Income, Changes in Equity and Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and the Directors’ Report, as set out on pages 26 to 113.

Directors’ responsibility for the Financial StatementsThe Company’s Directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and the requirements of the Companies Act of South Africa, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

Auditors’ responsibilityOur 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 about 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 fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the 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.

OpinionIn our opinion, the Financial Statements present fairly, in all material respects, the consolidated and separate financial position of Overberg Agri Limited as at 29 February 2012, and its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended, in accordance with International Financial Reporting Standards, and the requirements of the Companies Act of South Africa.

PricewaterhouseCoopers Inc.Director: JM Calitz Registered AuditorCape Town 15 June 2012

Ons het die gekonsolideerde Finansiële Jaarstate en Finansiële Jaarstate van Overberg Agri Beperk geoudit. Hierdie finansiële state bestaan uit die gekonsolideerde en afsonderlike State van Finansiële Stand soos op 29 Februarie 2012, en die gekonsolideerde en afsonderlike Inkomstestate en die gekonsolideerde en afsonderlike State van Omvattende Inkomste, Veranderings in Ekwiteit en Kontantvloeie vir die jaar wat op daardie datum geëindig het, en ‘n opsomming van beduidende rekeningkundige beleid en ander verduidelikende inligting, en die Direkteursverslag, soos uiteengesit op bladsy 26 tot 113.

Direkteure se verantwoordelikheid vir die Finansiële StateDie Maatskappy se Direkteure is verantwoordelik vir die opstel en redelike voorstelling van hierdie finansiële state ooreenkomstig ‘International Financial Reporting Standards’ en die vereistes van die Maatskappywet van Suid-Afrika, en vir sodanige interne beheer as wat die Direkteure nodig ag om die opstel van finansiële state, wat vry is van wesenlike wanvoorstelling, hetsy weens bedrog of foute, in staat te stel.

Ouditeur se verantwoordelikheidDit is ons verantwoordelikheid om op grond van ons oudit ‘n mening oor hierdie Finansiële State uit te spreek. Ons het ons oudit ooreenkomstig ’International Standards on Auditing’ uitgevoer. Daardie standaarde vereis dat ons voldoen aan etiese vereistes en die oudit beplan en uitvoer om redelike gerusstelling te verkry of die finansiële state vry is van wesenlike wanvoorstelling.

‘n Oudit behels die uitvoer van prosedures om ouditbewyse te verkry oor die bedrae en openbaarmakings in die Finansiële State. Die prosedures wat gekies word, hang af van die Ouditeur se oordeel, insluitend die beoordeling van die risiko’s van wesenlike wanvoorstelling van die finansiële state, hetsy weens bedrog of foute. Tydens daardie risiko-beoordeling oorweeg die Ouditeur interne beheer relevant tot die entiteit se opstel en redelike voorstelling van die finansiële state, ten einde ouditprosedures te ontwerp wat in die omstandighede toepaslik is, maar nie met die doel om ‘n mening uit te spreek oor die effektiwiteit van die entiteit se interne beheer nie. ‘n Oudit sluit ook ‘n evaluering van die toepaslikheid van rekeningkundige beleid wat gebruik is en die redelikheid van rekeningkundige ramings wat deur bestuur gemaak is in, asook ‘n evaluering van die algehele aanbieding van die Finansiële State.

Ons glo dat die ouditbewyse wat ons verkry het, toereikend en toepaslik is om ‘n grondslag vir ons ouditmening te bied.

MeningNa ons mening is die Finansiële State, in alle wesenlike opsigte, ‘n redelike voorstelling van die gekonsolideerde en afsonderlike finansiële stand van Overberg Agri Beperk soos op 29 Februarie 2012, en van die Maatskappy se gekonsolideerde en afsonderlike finansiële prestasie en die gekonsolideerde en afsonderlike kontantvloeie vir die jaar wat op daardie datum geëindig het, ooreenkomstig ‘International Financial Reporting Standards’ en die vereistes van die Maatskappywet van Suid-Afrika.

PricewaterhouseCoopers Geïnk.Direkteur: JM Calitz Geregistreerde OuditeurKaapstad 15 Junie 2012


2626

The Directors’ annual report, which forms part of the audited Annual Financial Statements of the Group and the Company for the year ended 29 February 2012, is presented below.

1. Review of activities

The objectives of the enterprise have not changed during the financial year. The principal activities of the Group are the supply and delivery of agriculture-related products and services, as well as the focus on a number of wealth-creating enterprises of which mining activities, an abattoir, the production of pet food and selling of industrial fasteners are the most important.

2. Directors

Refer to General Information on page 2.

Directors’ interestsThe Executive Directors of the Group and its subsidiaries own a shareholding of less than one percent. The Non-executive Directors of the Group and its subsidiaries own a shareholding of less than five percent.

Directors’ employment contracts and trade limitationsThe Executive Directors of the Group and its subsidiaries are subject to written employment agreements. These employment agreements regulate the duties, remuneration, allowances, limitations, leave and notice periods of the Executive Directors.

Directors’ remunerationThe Directors’ remuneration for the year under review has been set out in note 50.

3. Company Secretary

The Secretary of the Company is A Steyn of: Business address:11 Donkin StreetCaledon7230

4. Share capital

The authorised and issued share capital remained unchanged during the year under review. The authorised share capital consists of 10,000,000 ordinary shares of 15 cents each. On the reporting date 8,388,583 shares had been issued.

Die Direkteure se jaarverslag, wat deel vorm van die geouditeerde Finansiële Jaarstate van die Groep en die Maatskappy vir die jaar geëindig 29 Februarie 2012, word hieronder aangebied.

1. Oorsig oor aktiwiteite

Die doelstellings van die onderneming het nie gedurende die finansiële jaar verander nie. Die hoofaktiwiteite van die Groep is die verskaffing en lewering van landbou-verwante produkte en dienste, sowel as die fokus op ‘n aantal welvaartskeppende ondernemings waarvan mynbou-aktiwiteite, ‘n slagpale, die vervaardiging van troeteldierkos en die verkoop van industriële hegstukke die belangrikste is.

2. Direkteure

Verwys na Algemene Inligting op bladsy 2.

DirekteursbelangeDie Uitvoerende Direkteure van die Groep en sy filiale besit ‘n aandeel-houding van minder as een persent. Die Nie-uitvoerende Direkteure van die Groep en sy filiale besit ‘n aandeelhouding van minder as vyf persent.

Direkteure se dienskontrakte en handelsbeperkingsDie Uitvoerende Direkteure van die Groep en sy filiale is onderhewig aan skriftelike diensooreenkomste. Hierdie diensooreenkomste reguleer die pligte, vergoeding, toelaes, beperkings, verlof en kennisgewingtydperke van die Uitvoerende Direkteure.

DirekteursvergoedingDie Direkteure se vergoeding vir die oorsigjaar word in aantekening 50 uiteengesit.

3. Maatskappysekretaris

Die Sekretaris van die Maatskappy is A Steyn van:Besigheidsadres:Donkinstraat 11Caledon7230

4. Aandelekapitaal

Die gemagtigde en uitgereikte aandelekapitaal het onveranderd gebly gedurende die oorsigjaar. Die gemagtigde aandelekapitaal bestaan uit 10,000,000 gewone aandele van 15 sent elk. Op die verslagdatum was 8,388,583 aandele uitgereik.


DIRECTORS‘ REPORTFOR THE YEAR ENDED 29 FEBRUARY 2012


DIREKTEURSVERSLAGVIR DIE JAAR GEËINDIG 29 FEBRUARIE 2012

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5. Financial results, dividends and other financial matters

Dividend and capital distributionAnordinarydividendofR0,80(2011:R1,50;2010:R1,45)persharewas declared on 30 June 2011 and paid on 8 July 2011. A dividend inspecieofR512,710,193(2011:Rnil;2010:Rnil)wasdeclaredon 28 February 2012, consisting of one Pioneer Foods Ltd share being distributed for every one ordinary share held in Overberg Agri Ltd. No specialdividend(2011:Rnil;2010:R1,00)wasdeclaredduring the year.

Share tradingOverberg Agri Ltd manages the over-the-counter trading internally. Trading is regularly audited by independent Internal Auditors for compliance with the Memorandum of Incorporation. Further information with regard to the Company’s shares can be obtained on Overberg Agri Ltd’s website.

Financial resultsThe Group realised a profit from normal activities for the year amounting to R47,477,351 (2011: R33,656,226;2010: R56,733,047),after provision for tax of R14,738,512 (2011: R12,874,126; 2010: 16,018,618) was made.

The Board has decided to dispose of a significant portion of the available-for-sale investments (Pioneer Foods Ltd investment) as part of the unbundling of the investment in the Group. The Group realised a profit from this transaction for the year amounting to R533,866,649, after provision for tax of R120,566,327.

The results of the Group are presented in detail in the Financial Statements.

Subsidiary companiesInformation regarding the subsidiary companies is provided in Annexure A to the Financial Statements.

BBBEE legislation complianceThe Directors of the Group are committed to comply with Broad Based Black Economic Empowerment legislation. The estimated cost before tax involved for the Group to be more compliant with BBBEE, specifically enterprise development and socio-economic development, is R1,830,543.

6. Mining licence

A converted mining right has been awarded to one of the subsidiaries in the Group, and the mining licence is valid until 21 July 2021.

5. Finansiële resultate, dividende en ander finansiële aangeleenthede

Dividend en kapitaaldistribusie‘nGewonedividendvanR0,80(2011:R1,50;2010:R1,45)peraandeel is op 30 Junie 2011 verklaar en op 8 Julie 2011 betaal. ‘n DividendinspecievanR512,710,193(2011:Rnul;2010:Rnul)isop28 Februarie 2012 verklaar, wat bestaan het uit een Pioneer Foods Bpk aandeel wat uitgekeer is vir elke een gewone aandeel wat in Overberg AgriBpkgehouis.Geenspesialedividend(2011:Rnul;2010:R1,00)is gedurende die jaar verklaar nie.

Verhandeling van aandeleOverberg Agri Bpk hanteer die oor-die-toonbank-verhandeling intern. Ver-handeling word gereeld deur onafhanklike Interne Ouditeure geoudit vir nakoming van die Statute. Verdere inligting met betrekking tot die Maat-skappy se aandele kan op Overberg Agri Bpk se webtuiste gevind word.

Finansiële resultateDie Groep het ‘n wins vir die jaar uit normale aktiwiteite van R47,477,351 (2011: R33,656,226;2010: R56,733,047) gerealiseer nadatvoorsieningvirbelastingvanR14,738,512(2011:R12,874,126; 2010: 16,018,618) gemaak is.

Die Direksie het besluit om ‘n beduidende gedeelte van die beskikbaar-vir-verkoop beleggings (Pioneer Foods Bpk-belegging) te verkoop as deel van die ontbondeling van die belegging in die Groep. Die Groep het ‘n netto wins vir die jaar uit hierdie transaksie gerealiseer van R533,866,649, nadat voorsiening vir belasting van R120,566,327 gemaak is.

Die resultate van die Groep word in besonderhede in die Finansiële State uiteengesit.

FiliaalmaatskappyeInligting ten opsigte van die filiaalmaatskappye word in Bylaag A tot die Finansiële State gegee.

Voldoening aan BBSEB-wetgewingDie Direkteure van die Groep is daartoe verbind om aan wetgewing ten opsigte van Breë Basis Swart Ekonomiese Bemagtiging te voldoen. Die beraamde koste voor belasting vir die Groep om sy voldoening aan BBSEB te verbeter, veral ten opsigte van ondernemingsontwikkeling en sosio-ekonomiese ontwikkeling, beloop R1,830,543.

6. Mynboulisensie

‘n Omgeskakelde mynboureg is aan een van die filiale van die Groep toegeken, en die mynboulisensie is geldig tot 21 Julie 2021.

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7. Events after the reporting period

Secondary tax on companies was abolished on dividends effective from 1 April 2012 and was replaced by a dividend withholding tax. While STC was a tax on the entity paying the dividend, the new withholding tax will be levied on the recipient in respect of cash dividends. The paying entity will be responsible for deducting any withholding tax due and remitting it to SARS on behalf of the recipient. Any existing STC credits held by an entity may be used either against any dividends paid prior to 1 April 2012 in the normal way, to provide relief against future non-cash dividends, or to provide relief to shareholders against the new withholding tax up to the value of credits on hand. Once the STC credits have been exhausted, the new withholding tax would be deducted on the excess. If an entity with STC credits pays a dividend to an entity that is exempt from the new withholding tax, the STC credit is not used, but rather passes to the recipient along with the dividend. In this way the STC credit remains available to provide relief to the ultimate shareholders when the receiving entity declares a dividend. Existing STC credits will expire on 1 April 2015 if not utilised. STC credits will not directly benefit the Company because the new withholding tax is levied on the shareholder and not the Company, with the exception of non-cash dividends. The Company will only carry STC deferred tax assets to the extent that they will be utilised against cash dividends paid prior to 1 April 2012, or future non-cash dividends.

The Minister of Finance announced in his recent Budget speech that the Capital Gains Tax (CGT) inclusion rate for companies will increase from the current 50% to 66,6% for all disposals of assets after 1 March 2012. This will increase the effective CGT rate for companies from the current 14% to 18,6%.

No other material events, knowledge of which would have influenced the users of the statements in making accurate evaluations and decisions, took place after the date of the Financial Statements until the approval thereof.

8. Auditors

PricewaterhouseCoopers Inc. will continue in office in accordance with section 90(6) of the Companies Act, 71 of 2008.

9. Subsidiary companies

The details of interest in subsidiaries are presented in Annexure A.

7. Gebeure na die verslagtydperk

Sekondêre belasting op maatskappye is met ingang van 1 April 2012 afgeskaf en is vervang deur ‘n dividend terughoubelasting. Waar SBM ‘n belasting vir die entiteit was wat die dividend betaal het, word die nuwe terughoubelasting op die ontvanger gehef ten opsigte van kontantdivi-dende. Die entiteit wat die dividend betaal, sal verantwoordelik wees om enige terughoubelasting af te trek en dit namens die ontvanger aan SARS oor te betaal. Enige bestaande SBM-krediete wat deur ‘n entiteit gehou word, mag gebruik word teen enige dividende wat voor 1 April 2012 op die gewone manier betaal is, om verligting te verskaf teen toekomstige nie-kontantdividende, of om verligting te verskaf aan aandeelhouers teen die nuwe terughoubelasting tot ‘n maksimum van die waarde van die krediete wat beskikbaar is. Wanneer die SBM-krediete uitgeput is, sal die nuwe terughoubelasting op die balans afgetrek word. As ‘n entiteit met SBM-krediete ‘n dividend betaal aan ‘n entiteit wat van die nuwe terug-houbelasting vrygestel is, word die SBM-krediet nie gebruik nie maar gaan dit oor na die ontvanger tesame met die dividend. Op hierdie manier bly die SBM-krediet beskikbaar om verligting te verskaf aan die uiteindelike aandeelhouers wanneer die ontvangende entiteit ‘n dividend verklaar. Bestaande SBM-krediete sal op 1 April 2015 verval indien dit nie benut word nie. SBM-krediete sal nie die Maatskappy direk bevoordeel nie omdat die nuwe terughoubelasting op die aandeelhouer gehef word en nie die Maatskappy nie, met die uitsondering van nie-kontantdividende. Die Maatskappy sal slegs SBM- uitgestelde belastingbates dra tot die mate waarin dit benut kan word teen kontantdividende wat voor 1 April 2012 betaal is of toekomstige nie-kontantdividende.

Die Minister van Finansies het in sy onlangse Begrotingsrede aangekondig dat die insluitingskoers van Kapitaalwinsbelasting (KWB) vir maatskappye van die huidige 50% tot 66,6% verhoog sal word vir alle bates wat na 1 Maart 2012 verkoop word. Dit sal die effektiewe KWB-koers vir maatskappye van die huidige 14% tot 18,6% verhoog.

Geen verdere wesenlike gebeure waarvan sodanige kennis die gebruikers van die state sou beïnvloed om korrekte evaluasies en besluite te maak, het na die datum van die Finansiële State en die goedkeuring daarvan plaasgevind nie.

8. Ouditeure

PricewaterhouseCoopers Ing. sal voortgaan om as ouditeure op te tree ingevolge Artikel 90(6) van die Maatskappywet, 71 van 2008.

9. Filiaalmaatskappye

Besonderhede van belange in filiaalmaatskappye word in Bylaag A aangetoon.


2929

GROUP COMPANY

Notes2012R’000

2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

Assets

Non-current assetsProperty, plant and equipment 5 220,879 205,968 190,264 – – –Investment property 6 1,331 1,492 1,152 – – –Intangible assets 7 126,730 130,427 115,434 – – –Investments in subsidiaries – Company 14 – – – 190,586 190,586 190,586Available-for-sale investments 11 370,354 888,226 653,749 – – –Biological assets 13 2,293 1,555 1,180 – – –Deferred tax asset 15 – 3,306 6,530 – – –Trade and other receivables 18 72,660 57,782 59,735 – – –Loans and other receivables 21 22,804 22,365 14,921 – – –

817,051 1,311,121 1,042,965 190,586 190,586 190,586

Current assetsInventory 16 233,052 368,305 403,292 – – –Trade and other receivables 18 465,464 322,552 342,128 – – –Loans to Group companies 17 – – – 48,531 26 26Current tax asset 20 26,031 19,041 10,130 – – –Loans and other receivables 21 576 4,043 428 – – –Cash and cash equivalents 19 22,844 26,895 18,441 – – –

747,967 740,836 774,419 48,531 26 26Non-current assets held-for-sale and assets of disposal groups 12 – – 40,694 – – –Total assets 1,565,018 2,051,957 1,858,078 239,117 190,612 190,612

Equity and liabilitiesEquityEquity attributable to equity holders of parentShare capital 22 187,966 187,966 187,966 188,322 188,322 188,322Reserves 236,193 794,201 559,734 2,290 2,290 2,290Retained income 422,845 355,898 336,497 20 – –

847,004 1,338,065 1,084,197 190,632 190,612 190,612Non-controlling interest 19,362 17,946 16,309 – – –

866,366 1,356,011 1,100,506 190,632 190,612 190,612

LiabilitiesNon-current liabilitiesBorrowings 24 42,842 59,343 44,562 – – –Instalment sale agreements 25 1,463 5,442 10,998 – – –Post-retirement medical liability 23 12,115 11,545 11,358 – – –Deferred tax liability 15 73,920 34,667 29,345 – – –Trade and other payables 26 2,354 97 – – – –Provisions 27 754 1,679 1,482 – – –

133,448 112,773 97,745 – – –

Current liabilitiesBorrowings 24 375,901 458,603 525,995 – – –Instalment sale agreements 25 2,660 4,439 3,885 – – –Current tax liability 20 45,922 466 816 45,922 – –Post-retirement medical liability 23 1,155 1,193 1,309 – – –Trade and other payables 26 139,566 117,872 111,653 2,563 – –Provisions 27 – 600 6,070 – – –

565,204 583,173 649,728 48,485 – –Liabilities of disposal groups 12 – – 10,099 – – –Total liabilities 698,652 695,946 757,572 48,485 – –

Total equity and liabilities 1,565,018 2,051,957 1,858,078 239,117 190,612 190,612


STATEMENT OF FINANCIAL POSITIONAS AT 29 FEBRUARY 2012


3030

GROUP COMPANY

Notes2012R’000

2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

Continuing operations

Revenue 28 1,557,854 1,450,794 1,088,176 – – –

Cost of sales (1,272,525) (1,198,649) (848,733) – – –

Gross profit 285,329 252,145 239,443 – – –

Interest income 29 36,098 36,692 37,351 – – –

Other income 30 16,971 3,358 24,279 567,927 12,583 20,552

Sales and marketing cost (11,021) (18,509) (19,949) – – –

Administration cost (62,471) (49,220) (53,697) – – –

Operating expenses (171,738) (141,168) (116,348) – (2) –

Other profits and losses 32 657,763 2,030 (871) (1,282) – –

Operating profit 33 750,931 85,328 110,208 566,645 12,581 20,552

Financing income 31 983 607 248 – – –

Finance costs 34 (35,265) (39,403) (37,478) – – –

Profit before taxation 716,649 46,532 72,978 566,645 12,581 20,552

Taxation 35 (135,305) (12,875) (16,019) (45,922) – –

Profit from continuing operations 581,344 33,657 56,959 520,723 12,581 20,552

Discontinued operations

Loss from discontinued operations 12 – – (229) – – –

Profit for the year 581,344 33,657 56,730 520,723 12,581 20,552

Profit attributable to:

Owners of the parent 579,581 31,786 55,670 520,723 12,581 20,552

Non-controlling interest 1,763 1,871 1,060 – – –

581,344 33,657 56,730 520,723 12,581 20,552


INCOME STATEMENTFOR THE YEAR ENDED 29 FEBRUARY 2012


31

GROUP COMPANY

Notes2012R’000

2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

Profit for the year 581,344 33,657 56,730 520,723 12,581 20,552

Other comprehensive income:

Fair value adjustments on available-for-sale investments (517,489) 234,467 259,584 – – –

Taxation related to components of other comprehensive income

(40,519) – – – – –

Other comprehensive income for the year net of taxation 40 (558,008) 234,467 259,584 – – –

Total comprehensive income 23,336 268,124 316,314 520,723 12,581 20,552

Total comprehensive income attributable to:

Owners of the parent 21,573 266,253 315,254 520,723 12,581 20,552

Non-controlling interest 1,763 1,871 1,060 – – –

23,336 268,124 316,314 520,723 12,581 20,552

Earnings per share (cents) 36

Basic earnings per share

– From continuing operations 7,018,4 384,9 676,9

– From discontinued operations – – (2,8)

Headline earnings per share 518,7 381,6 662,1


STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 29 FEBRUARY 2012


3232


STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 29 FEBRUARY 2012

Share capital Share premium

Treasury shares

Total share capital

Reserve for fair value

adjustment of available-for-

sale assets

Share-based payment reserve

Existing control

business combination

reserve

Total reserves Retained income

Total attributable to equity holders of the Group/

Company

Non-controlling

interest

Total equity

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

GROUP

Balance at 01 March 2009 1,258 187,064 (1,309) 187,013 301,109 – – 301,109 285,232 773,354 – 773,354

Changes in equity

Total comprehensive income for the year – – – – 259,584 – – 259,584 55,670 315,254 1,060 316,314

Capital contribution for BBBEE transaction – – – – – 2,290 – 2,290 – 2,290 – 2,290*

Minority interest arising on dilution of investment in subsidiary – share issue by subsidiary – – – – – – 8,870 8,870 – 8,870 3,130 12,000*

Minority interest arising on dilution of investment in subsidiary – – – – – – (12,119) (12,119) – (12,119) 12,119 –

Recognition of gain on disposal of treasury shares – – 960 960 – – – – 15,414 16,374 – 16,374*

Acquisition of shares – – (7) (7) – – – – – (7) – (7)

Dividends – – – – – – – – (19,820) (19,820) – (19,820)

Total changes – – 953 953 259,584 2,290 (3,249) 258,625 51,264 310,842 16,309 327,151

Balance at 01 March 2010 1,258 187,064 (356) 187,966 560,693 2,290 (3,249) 559,734 336,497 1,084,197 16,309 1,100,506

Changes in equity


Dividends – – – – – – – – (12,385) (12,385) (234) (12,619)

Total changes – – – – 234,467 – – 234,467 19,401 253,868 1,637 255,505

Balance at 01 March 2011 1,258 187,064 (356) 187,966 795,160 2,290 (3,249) 794,201 355,898 1,338,065 17,946 1,356,011

Changes in equity

Total comprehensive income for the year – – – – – – – – 579,581 579,581 1,763 581,344

Derecognition due to sale of Pioneer shares – – – – (658,271) – – (658,271) – (658,271) – (658,271)

Derecognition due to sale of shares – – – – (1,778) – – (1,778) – (1,778) – (1,778)

Fair value adjustments for the year – – – – 142,560 – – 142,560 – 142,560 – 142,560

Deferred taxation provided on available-for-sale investments

– – – – (40,519) – – (40,519) – (40,519) – (40,519)

Dividends – – – – – – – – (512,634) (512,634) (347) (512,981)

Total changes – – – – (558,008) – – (558,008) 66,947 (491,061) 1,416 (489,645)

Balance at 29 February 2012 1,258 187,064 (356) 187,966 237,152 2,290 (3,249) 236,193 422,845 847,004 19,362 866,366

Notes 22 22 22 22 40 40

* Refer to note 42

3333


Treasury shares

Total share capital



sale assets


Existing control


reserve



Company

Non-controlling

interest

Total equity

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

GROUP

Balance at 01 March 2009 1,258 187,064 (1,309) 187,013 301,109 – – 301,109 285,232 773,354 – 773,354

Changes in equity


Capital contribution for BBBEE transaction – – – – – 2,290 – 2,290 – 2,290 – 2,290*

Minority interest arising on dilution of investment in subsidiary – share issue by subsidiary – – – – – – 8,870 8,870 – 8,870 3,130 12,000*

Minority interest arising on dilution of investment in subsidiary – – – – – – (12,119) (12,119) – (12,119) 12,119 –

Recognition of gain on disposal of treasury shares – – 960 960 – – – – 15,414 16,374 – 16,374*

Acquisition of shares – – (7) (7) – – – – – (7) – (7)

Dividends – – – – – – – – (19,820) (19,820) – (19,820)

Total changes – – 953 953 259,584 2,290 (3,249) 258,625 51,264 310,842 16,309 327,151

Balance at 01 March 2010 1,258 187,064 (356) 187,966 560,693 2,290 (3,249) 559,734 336,497 1,084,197 16,309 1,100,506

Changes in equity


Dividends – – – – – – – – (12,385) (12,385) (234) (12,619)

Total changes – – – – 234,467 – – 234,467 19,401 253,868 1,637 255,505

Balance at 01 March 2011 1,258 187,064 (356) 187,966 795,160 2,290 (3,249) 794,201 355,898 1,338,065 17,946 1,356,011

Changes in equity

Total comprehensive income for the year – – – – – – – – 579,581 579,581 1,763 581,344

Derecognition due to sale of Pioneer shares – – – – (658,271) – – (658,271) – (658,271) – (658,271)

Derecognition due to sale of shares – – – – (1,778) – – (1,778) – (1,778) – (1,778)

Fair value adjustments for the year – – – – 142,560 – – 142,560 – 142,560 – 142,560

Deferred taxation provided on available-for-sale investments

– – – – (40,519) – – (40,519) – (40,519) – (40,519)

Dividends – – – – – – – – (512,634) (512,634) (347) (512,981)

Total changes – – – – (558,008) – – (558,008) 66,947 (491,061) 1,416 (489,645)

Balance at 29 February 2012 1,258 187,064 (356) 187,966 237,152 2,290 (3,249) 236,193 422,845 847,004 19,362 866,366

Notes 22 22 22 22 40 40

* Refer to note 42

34


STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 29 FEBRUARY 2012


Total share capital



sale assets


Existing control


reserve



Company

Non-controlling

interest

Total equity

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

COMPANY

Balance at 01 March 2009 1,258 187,064 188,322 – – – – – 188,322 – 188,322

Changes in equity

Total comprehensive income for the year – – – – – – – 20,552 20,552 – 20,552

Capital contribution to subsidiaries for BBBEE transaction – – – – 2,290 – 2,290 – 2,290 – 2,290*

Dividends – – – – – – – (20,552) (20,552) – (20,552)

Total changes – – – – 2,290 – 2,290 – 2,290 – 2,290

Balance at 01 March 2010 1,258 187,064 188,322 – 2,290 – 2,290 – 190,612 – 190,612

Changes in equity


Dividends – – – – – – – (12,581) (12,581) – (12,581)

Total changes – – – – – – – – – – –

Balance at 01 March 2011 1,258 187,064 188,322 – 2,290 – 2,290 – 190,612 – 190,612

Changes in equity


Dividends – – – – – – – (520,703) (520,703) – (520,703)

Total changes – – – – – – – 20 20 – 20

Balance at 29 February 2012 1,258 187,064 188,322 – 2,290 – 2,290 20 190,632 – 190,632

Notes 22 22 22 40 40

* Refer to note 42

35


Total share capital



sale assets


Existing control


reserve



Company

Non-controlling

interest

Total equity

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

COMPANY

Balance at 01 March 2009 1,258 187,064 188,322 – – – – – 188,322 – 188,322

Changes in equity


Capital contribution to subsidiaries for BBBEE transaction – – – – 2,290 – 2,290 – 2,290 – 2,290*

Dividends – – – – – – – (20,552) (20,552) – (20,552)

Total changes – – – – 2,290 – 2,290 – 2,290 – 2,290

Balance at 01 March 2010 1,258 187,064 188,322 – 2,290 – 2,290 – 190,612 – 190,612

Changes in equity


Dividends – – – – – – – (12,581) (12,581) – (12,581)

Total changes – – – – – – – – – – –

Balance at 01 March 2011 1,258 187,064 188,322 – 2,290 – 2,290 – 190,612 – 190,612

Changes in equity


Dividends – – – – – – – (520,703) (520,703) – (520,703)

Total changes – – – – – – – 20 20 – 20

Balance at 29 February 2012 1,258 187,064 188,322 – 2,290 – 2,290 20 190,632 – 190,632

Notes 22 22 22 40 40

* Refer to note 42


3636

GROUP COMPANY

Notes2012R’000

2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

Cash flows from/(utilised in) operating activities

Cash used in operations 37 64,706 153,600 (205,173) – (2) –

Interest income 37,081 37,299 37,599 – – –

Dividends and bonuses received 13,425 17 20,973 8,013 12,583 20,552

Finance costs (35,265) (39,403) (37,478) – – –

Tax paid 39 (21,767) (16,350) (24,473) – – –

Cash flows of held-for-sale/discontinued operations 43 – – (19,179) – – –

Net cash from/(utilised) in operating activities 58,180 135,163 (227,731) 8,013 12,581 20,552

Cash flows from/(utilised in) investing activities

Acquisition of property, plant and equipment 5 (30,716) (26,152) (25,793) – – –

Proceeds from sale of property, plant and equipment 5 1,373 1,553 1,342 – – –

Acquisition of investment property 6 (56) (691) (159) – – –

Proceeds from sale of investment property 6 1,360 2,319 732 – – –

Acquisition of intangible assets 7 (1,245) (324) (343) – – –

Proceeds from sale of intangible assets 7 – 1 – – – –

Business combinations 44 – (46,752) – – – –

Sale of businesses 45 – 9,241 – – – –

Loans to Group companies repaid – – – (20) – –

Proceeds from sale of non-current assets held-for-sale – – 15,414 – – –

Proceeds/(loss) from sale of available-for-sale investments 151,865 – – – – –

Net proceeds from/(repayments of) loans and other receivables 3,028 (12,239) (12,485) – – –

Tax paid on sale of investments (74,644) – – – – –

Net cash from/(utilised) in investing activities 50,965 (73,044) (21,292) (20) – –

Cash flows (utilised in)/from financing activities

Proceeds from issue of ordinary shares 22 – – 12,000 – – –

Net proceeds from borrowings/(borrowings repaid) (99,203) (36,043) 256,749 – – –

Proceeds from/(repayments of) instalment sale agreements (5,758) (5,002) (13,045) – – –

Dividends paid 38 (8,235) (12,620) (19,820) (7,993) (12,581) (20,552)

Treasury shares sold by subsidiary – – 960 – – –

Acquisition of shares – – (7) – – –

Net cash (utilised in)/from financing activities (113,196) (53,665) 236,837 (7,993) (12,581) (20,552)

Net (decrease)/increase in cash, cash equivalents and overdrafts (4,051) 8,454 (12,186) – – –

Net cash, cash equivalents and overdrafts at the beginning of the year 26,895 18,441 30,627 – – –

Net cash, cash equivalents and overdrafts at the end of the year 19 22,844 26,895 18,441 – – –


STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 29 FEBRUARY 2012


3737


ACCOUNTING POLICIESFOR THE YEAR ENDED 29 FEBRUARY 2012

1. Accounting policies

The principal accounting policies applied in preparing these Annual Financial Statements have been set out below and were applied consistently to all periods presented.

1.1 Basis of preparation

The Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

The Financial Statements have been prepared on the historical cost basis, as modified for the following: Available-for-sale financial assets are measured at fair value in other comprehensive income, financial assets and financial liabilities have been valued and measured at fair value through the Income Statement and restatement of prior year figures. Refer to note 51.

The preparation of the Annual Financial Statements in accordance with IFRS requires that certain critical accounting estimates and assumptions be used. It also requires that management uses its discretion in applying the accounting policies of the Group. Those areas requiring a higher level of judgement or that are more complex, or areas where assumptions and estimates have a material effect on the Annual Financial Statements, are represented in note 1.38.

1.2 Consolidation of subsidiaries

Subsidiaries are entities where the Group has the right to exercise control over the financial and operational policies, as normally with shareholding of more than half of the voting rights in the entities. The existence and effect of potential voting rights that are immediately exercisable or convertible are taken into account when the Group determines whether an entity is controlled or not.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. The entities are deconsolidated from the date on which control ceases to exist.

The buy-in method is used when recording the acquisition of subsidiaries within the Group.

The buy-in value of an acquisition is measured as the fair value of the assets given up, equity instruments issued and liabilities incurred or taken over on the date of transfer, plus any costs directly attributable to the acquisition.

Identifiable assets obtained and liabilities and conditional liabilities accepted in business mergers are initially measured at fair value on the date of acquisition, irrespective of the extent of any minority interest. The surplus of cost of acquisition over the fair value of the Group’s share in the identifiable net assets is recognised as goodwill. If the cost of acquisition is lower than the fair value of the Group’s share in the net assets of the subsidiary acquired, the difference is recognised immediately in the Income Statement.

Intergroup transactions, balances and unrealised surpluses on transactions between Group companies are eliminated. The accounting policies of the subsidiaries are in line with the Company. Similar transactions within the Group are accounted for in the same manner.

Investments in subsidiaries are shown as investments in subsidiaries in the Company’s Statement of Financial Position.

1.3 Segment reporting

Operating segments are reported in a manner consistent with internal reporting to the Chief Operating Decision-Maker (Managing Director) for purposes of allocating Company resources and assessing its performance. Operating segments are individual components of an entity that engage in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), and whose operating results are regularly reviewed by the entity’s Chief Operating Decision-Maker and for which discreet financial information is available. Operating segments which display similar economic characteristics are aggregated for reporting purposes.

3838

1.4 Property, plant and equipment

Land and buildings consist mainly of grain silos, retail outlets, warehouses, factories, an abattoir, an open cast mine and offices. All property, plant and equipment are shown at cost (including borrowing costs – refer to notes 1.21 and 1.38) less subsequent decrease in value and impairment, except for land, which is shown at cost less impairment. The cost price includes costs directly attributable to the acquisition of the assets. Additional costs are either included in the carrying amount of the existing asset or recognised as an individual asset, as the case may be, only if it is probable that future economic benefits relating to the item will flow to the Group and the cost price of the item can be reliably measured. All other repair and maintenance costs are recognised in the Income Statement in the financial period in which they were incurred.

The construction or commissioning of a mining asset results in an obligation for an entity to dismantle or remove the asset, restore the site on which the asset was constructed and restore the mining site mined. Property, plant and equipment includes the initial estimate of the costs of dismantling and removing the item, restoring the site on which it is located and the mining site mined, the obligation for which the Company incurs when the item is acquired. Decommissioning and restoration costs are accounted as separate items under property, plant and equipment.

Changes in the decommissioning, restoration or similar liability, other than the unwinding of the discount, is to be added to or deducted from the cost of the assettowhichitrelates;theadjusteddepreciableamountoftheassetisthendepreciatedprospectivelyoveritsremainingusefullife. Decrease in value is calculated according to the straight-line basis to decrease the cost price of each asset to the residual value of the asset over the expected useful life of the asset, as follows:

Item Useful life Land Unlimited Buildings 20 – 50 years Silos 50 years Steel silos 25 yearsSilo machinery and equipment 15 years Machinery and equipment 4 – 30 years Office furniture and equipment 1 – 15 years Computers 3 – 5 years Motor vehicles – LDVs, motor cars and other vehicles 3 – 15 years Motor vehicles – trucks and tractors 8 – 15 years Implements 15 years Decommissioning assets – Land 288 years Decommissioning assets – Buildings 30 years

The residual values and useful lives of assets are reviewed and adjusted, if necessary, on each reporting date. The carrying amount of an asset is immediately written down to the realisable amount thereof if the carrying amount of the asset exceeds it.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

1.5 Investment property

Investment property consists of land and buildings, owned by the Group, with the objective of collecting rentals or increasing capital value, rather than producing and supplying goods or for administrative purposes. Investment property is shown at cost less subsequent decrease in value and impairment, except for land, which is shown at cost less impairment.



3939

1.5 Investment property (continued)

Decrease in value is calculated according to the straight-line basis to reduce the cost price of each asset to the residual value of the asset over the expected useful life of the asset, as follows:

Item Useful life Investment property – land Unlimited Investment property – buildings 50 years


The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.

Profit and loss on disposal is determined by means of a comparison of the return with the carrying amount. The difference is recognised in the Income Statement.

1.6 Intangible assets

1.6.1 Goodwill

Goodwill represents the surplus of the cost price of an acquisition over the fair value of the Group’s interest in net identifiable assets of the business combination or subsidiary/associate on the date of acquisition. Goodwill from acquisitions is included in intangible assets. Goodwill from the acquisition of an associate is included in investments in associates. Goodwill is tested annually for impairment and is carried at cost less accumulated impairment. Profit or loss on the sale of an entity includes the carrying amount of goodwill attributable to that entity.

Goodwill is allocated to cash-generating units or groups of cash-generating units where it is expected that benefit will be gained from the acquisition in which the goodwill originated. Any impairment is recognised immediately in profit and loss and is not written back at a later stage. Negative goodwill arising on acquisition is recognised directly in the Income Statement.

1.6.2 Computer software

Computer software bought is capitalised as computer software if it does not form an integral part of the hardware. It is capitalised on the basis of the costs incurred to acquire and commission the specific software. These costs are amortised according to the straight-line basis over the expected useful life.

Costs associated with the development or maintenance of computer software programs are recognised as an expense as incurred. Costs directly attributable to the production of identifiable and unique software products under the control of the Group that are expected to generate economic benefits exceeding costs for a period of more than one year are recognised as an intangible asset. Direct costs include software development employee costs as well as an appropriate portion of relevant overhead costs.

Computer software development costs recognised as an asset are amortised on a straight-line basis over the expected useful life thereof, as follows:

Item Useful lifeSoftware 5 years


The amortisation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.

Profit or loss on disposal is determined by means of a comparison of the return with the carrying amount. The difference is recognised in the Income Statement.



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1.6 Intangible assets (continued)

1.6.3 Product development costs

Costs relating to the development of a product are recognised as an intangible asset as soon as the following requirements have been met:

• Itistechnicallyviabletocompletethedevelopmentoftheassettobethusapplied;• Thepossibilityexistsofusingorsellingtheintangibleasset;• Managementintendscompletingtheintangibleassettobethususedorsold;• Theprobabilityoffutureeconomicbenefitscanbedemonstrated;• Sufficientfinancial,technicalandothersourcesexisttoenablethedevelopmentoftheintangibleassetandtheuseorsalethereof;and• Thedevelopmentcostscanbereliablymeasured.

Product development costs are carried at cost less accumulated amortisation.

Amortisation is calculated on the straight-line basis to allocate the cost price of the asset over its expected useful life, as follows:

Item Useful lifeProduct development costs 10 years




1.6.4 Trademarks, client relations and mineral rights

Trademarks, client relations and mineral rights are shown at historical cost. Trademarks, client relations and mineral rights are carried at cost less accumulated amortisation. Amortisation is calculated according to the straight-line basis to allocate the cost price of the trademarks, client relations and mineral rights over the expected useful lives thereof, as follows:

Item Useful lifeTrademarks 5 – 20 yearsClient relations 5 – 20 yearsMineral rights 300 years




1.7 Impairment of non-financial assets

Assets with an unlimited useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to depreciation or amortisation are examined for impairment when there are events or changes in circumstances indicating that the carrying amount may not be recoverable. Impairment is recognised in the Income Statement for the amount by which the carrying amount exceeds the recoverable value. The recoverable amount is the larger of the fair value of the asset less sales costs and value-in-use. For the purposes of testing for impairment, assets are grouped into the lowest levels of separately identifiable cash-generating units. Non-financial assets other than goodwill that have suffered impairment are reviewed on each reporting date for possible reversal of the impairment. An impairment reversal is recognised in the Income Statement.



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1.8 Impairment of financial assets

The Group determines at each reporting date whether objective proof exists that impairment in respect of a financial asset or group of financial assets has occurred. In the case of equity securities classified as available-for-sale, a significant or extended decline in the fair value of the security to below cost is considered to determine whether impairment has occurred in respect of the securities. If any such proof exists in respect of available-for-sale financial assets, the cumulative loss, measured as the difference between the acquisition cost and the current fair value, less any impairment on the relevant financial asset previously recognised, is removed from equity and recognised in the Income Statement. Impairment recognised in the Income Statement on equity instruments is not written back through the Income Statement.

1.9 Financial instruments

Classification

The Group classifies its investments under the following categories: financial assets at fair value through profit or loss, loans and receivables, investments to be kept until maturity and available-for-sale financial assets. The classification depends on the purpose which the investments were acquired for. Management determines the classification of the investments on initial recognition.

Financial instruments designated as at fair value through profit or loss

This category has two sub-categories: Held-for-trading financial assets and those designated at fair value through profit or loss upon origination. A financial asset is classified under this category if it was acquired mainly to be sold, or if it was so designated by Management. Derivative instruments are also categorised as held for trading. Assets in this category are classified as operating assets if they are either held for trading or expected to be realised within twelve months of the reporting date.

Financial instruments designated as available-for-sale

Available-for-sale financial assets are non-derivative instruments that are either designated under this category or are not classified under any of the other categories. They are included under non-current assets unless Management intends selling the investment within twelve months of the reporting date.

The acquisition and sale of investments are recognised on the trading date, the date on which the Group commits itself to acquire or sell the asset. Investments in respect of all financial assets not carried at fair value through profit or loss are initially recognised at fair value plus transaction costs. Financial assets carried at fair value through profit and loss are initially recognised at fair value. Transaction costs are recognised in the Income Statement.

Financial instruments are no longer recognised when the rights to receive cash flows from the investments have expired or been transferred and the Group has materially transferred all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are carried at fair value thereafter. Loans and receivables and held-to-maturity investments are carried at amortised cost according to the effective return method.

Profits and losses arising from changes in the category “fair value of the financial assets through profit or loss” are included in the Income Statement in the period in which they arise. Profits and losses arising from changes in the fair value of securities classified as available- for-sale are recognised in other comprehensive income. When securities classified as available-for-sale are sold or become impaired, the accumulated fair value adjustments are included in the Income Statement as profits and losses from investment securities.

The fair values of quoted investments are based on current supply prices. If the market for a financial asset (and for listed securities) is inactive, the Group determines fair value employing valuation techniques. This includes the use of recent arm’s-length transactions, reference to other instruments that are materially the same, option price determination models and discounted cash flow analyses, refined to reflect the specific circumstances of the issuer.

If a current legally enforceable right exists to set off recognised amounts of financial assets and liabilities appearing in determinable currencies and the Group intends setting them off on a net basis, the relevant assets and liabilities are set off against each other.



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1.9 Financial instruments (continued)

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed dates of maturity which the Group’s Management intends and is able to keep to maturity. Held-to-maturity investments are included in non-current assets, except for those within maturities less than twelve months from the end of the reporting period, which are classified as current assets.

Held-to-maturity investments are initially recognised at fair value plus transaction costs. Held-to-maturity investments are subsequently carried at amortised cost using the effective interest method.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor without any intention of trading such receivables. They are included in current assets. In the case of dates of maturity exceeding twelve months after the reporting date they are classified as non-current assets. Loans and receivables are included in trade and other receivables and loans and other receivables in the Statement of Financial Position.

Loans and receivables are initially recognised at fair value. Transaction costs are recognised in the Income Statement. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Accounting for derivative financial instruments

The Group is party to financial instruments that reduce exposure to fluctuations in commodity prices. These instruments mainly comprise forward sales entered into from time to time to preserve and enhance future cash flow streams. The purpose of these instruments is to reduce risk.

Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at their fair value. The Company documents at the inception of the transaction, the relationship between derivative instruments and derivative items, as well as its risk management objectives and strategy for undertaking various derivative transactions.

Trading derivatives are classified as current assets or liabilities. In the case of dates of maturity exceeding twelve months after the reporting date the derivatives are classified as non-current assets or non-current liabilities.

Changes in the fair value of these derivative instruments are recognised immediately in the Income Statement within other income and operating expenses.

1.10 Non-current assets held-for-sale

Non-current assets held-for-sale is classified as held-for-sale if the carrying amount of such assets is mainly recovered through disposal and not through use thereof. This type of asset is shown at the lowest of the carrying value and the fair value less selling costs. This type of asset can represent a segment of an entity, a unit for disposal or an individual non-current asset.

1.11 Inventory

Inventory is recognised at the lower of cost or net realisable value. Cost is determined in accordance with the average cost price method. The cost price of finished products and work in process involves raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity). Borrowing costs are capitalised against inventory under the provisions of IAS 23 (AC 114). Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling costs.

1.12 Biological assets

Livestock is shown at fair value less estimated sales cost. Fair value is deemed to be market value on the date of measurement. Fair value adjustments are recognised in the Income Statement. All costs incurred upon the acquisition of biological assets are capitalised.

1.13 Agricultural produce

Agricultural produce are initially recognised at fair value, after the deduction of sales costs incurred at the time of harvesting. Fair value is deemed to be the market value on the date of recognition. Agricultural produce are subsequently shown against cost or net realisable value, whichever is the lowest.



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1.14 Trade receivables

Trade receivables are initially recognised at fair value and thereafter at amortised cost according to the effective return method, less provision for impairment as measured. A provision for impairment of trade receivables is created when objective proof exists that the Group will not be able to collect all amounts owing in terms of the original credit terms. The amount of the provision is the difference between the carrying value of the asset and the current value of estimated future cash flows discounted against the effective interest rate. The amount of the provision is recognised in the Income Statement.

The normal credit terms of trade receivables are as follows:

Production accounts < 365 daysRenegotiated production accounts > 365 daysTrade receivables Between 30 and 60 daysSundry receivables Between 30 and 90 days

1.15 Cash and cash equivalents

Cash and cash equivalents are carried in the Statement of Financial Position at cost. Cash and cash equivalents consist of cash on hand, demand deposits at banks, other short-term highly liquid investments with maturities of three months or less and overdrafts.

Overdrafts are included on the Statement of Financial Position under current liabilities.

1.16 Share capital and equity

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown as a decrease, after the deduction of income tax, of the returns in equity. Incremental costs directly attributable to the issue of new shares, or for the acquisition of a business, are recognised as a decrease of equity.

1.17 Borrowings

Borrowings are initially recognised at fair value, after the deduction of transaction costs incurred. Borrowings are subsequently shown against amortised costs. Any difference between return after deduction of transaction costs and redemption value is recognised in the Income Statement over the period of the borrowings according to the effective return method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer the settlement of the liability until at least twelve months after the reporting date.

1.18 Tax

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax assets/liabilities for the current and prior periods are measured at the amount expected to be recovered from/paid to the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.



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1.18 Tax (continued)

Deferred tax assets and liabilities

Deferred income tax is fully provided for in the financial statements, according to the liability method, for temporary differences arising between the tax bases of assets and liabilities and their carrying values in the Financial Statements. If, however, the deferred income tax arose from the initial recognition of an asset or liability in a transaction other than a business merger influencing, at the time of the transaction, neither accounting nor taxable profit or loss, it is not recognised. Deferred income tax is determined according to tax rates and acts promulgated or materially promulgated at the reporting date and expected to apply when the relevant deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised in so far as it is probable that future taxable profit will be available against which to utilise the temporary differences.

If a current legally enforceable right exists to set off recognised amounts of financial assets and liabilities appearing in determinable currencies and the Group intends setting them off on a net basis, the relevant assets and liabilities are set off against each other.

1.19 Mineral royalty tax

The Mineral and Petroleum Resource Royalty Act 2008 (Royalty Act) was promulgated on 24 November 2008 and became effective from 1 March 2010. The Royalty Act imposes a royalty tax on refined and unrefined minerals. The mineral royalty tax is deducted from revenue.

1.20 Secondary tax on companies (STC)

South African residential companies are subject to a two-pronged tax system. Firstly, tax is payable on taxable income and secondly, tax is payable on distributed income profit. A company has to pay STC on dividends declared or deemed to have been declared (as defined in the Income Tax Act) to its shareholders.

STC payable on dividends is recognised as a tax expense in the Income Statement in the year in which the Company recognises the relevant dividends payable as a liability. Any dividends received in the relevant dividend cycle decrease the STC payable. If the dividends declared exceed the dividends received, STC is payable on the net amount at the applicable STC rate. If dividends received exceed the dividends declared, no STC is payable. The amount by which the dividends received exceed the dividends declared is carried over to the following dividend cycle as an STC credit. Deferred tax assets are recognised on any unutilised STC credits in so far as it is probable that the Company will declare future dividends against which the STC credit can be applied.

1.21 Borrowing costs

Borrowing costs directly attributable to the acquisition, establishment or production of a qualifying asset are capitalised as part of the costs of that asset. Other borrowing costs are recognised as an expense in the Income Statement.

1.22 Leases

1.22.1 Group is the lessee

Rentals in respect of property, plant and equipment where the Group essentially bears all the risks and enjoys all the benefits of ownership are classified as leases. Leases are capitalised upon conclusion thereof at the lower of fair value of the lease property and the current value of the minimum lease payments. Each lease payment is allocated between the liability and financing costs to obtain a constant rate in respect of the outstanding financing balance. The corresponding lease liabilities, after deduction of financing costs, are accounted under loans.

The interest element of the financing costs is debited against the Income Statement over the lease term to provide a constant periodic interest rate in respect of the remaining balance of the liability for each period. The property, plant and equipment acquired in terms of leases are depreciated over the shorter of the useful life of the asset and the lease term.

Rentals where the lessor retains a significant portion of the risks and rewards of ownership are classified as operating leases. Payments made in terms of operating leases, following the deduction of any incentives received from the lessor, are debited against the Income Statement on a straight-line basis over the term of the lease.



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1.22 Leases (continued)

1.22.2 Group is the lessor

When assets are leased in terms of a lease contract, the current value of the lease payments is recognised as a debtor. The difference between the gross debtor and the current value of the debtor is recognised as an unearned financing income. Lease income is recognised over the term of the lease in accordance with the net investment method, which reflects a constant periodic rate of return.

Assets leased to third parties in terms of operating leases are included in investment property in the Statement of Financial Position. The assets are depreciated over their expected useful life on a basis agreeing with similar investment property owned. Lease income net of any incentives given to lessees is recognised on a straight-line basis over the term of the lease.

1.23 Employee benefits

Pension and provident fund obligations

The Group operates various pension and provident fund schemes. The Group has defined fixed-contribution plans. A defined fixed-contribution plan is a retirement plan in terms of which the Group pays over fixed contributions to the separate entities. The Group has no legal or derivative obligation to pay any further contributions if the fund does not have sufficient assets to pay the benefits with regard to employee service in the current and previous periods to all employees.

For defined fixed-contribution plans, the Group makes contributions to state or privately administered pension insurance plans on a compulsory, contractual or voluntary basis. The contributions are recognised as employee benefit costs when owing. Prepaid contributions are recognised as an asset in so far as a cash repayment or a decrease in future payments are available.

Post-retirement medical obligations

The Group provides post-retirement medical benefits in terms of a fixed-contribution plan to a specific group of participating former and current employees by means of a contribution to their monthly costs. The post-retirement medical benefit obligation and the cost of the benefit are determined annually by an independent actuary. Any surpluses or deficits between the actuarially determined obligation and the amounts provided during the year are recognised in the liability and the Income Statement in the relevant year. The assumptions used include long-term estimates in the consumer price index and applicable discount rates. Actuaries use the projected credit unit method to determine the liability.

Performance incentive scheme

A performance incentive scheme was approved by the Board of Directors in 2007. The aim of the performance incentive scheme is to encourage employees to achieve specified agreed upon objectives and to acknowledge excellent performance. The performance incentive scheme is awarded at the sole discretion of the Board of Directors. A liability for the performance incentive scheme is recognised under trade and other payables if an enforceable legal or contractual right exists to settle the liability. A portion of the liability will be settled within twelve months and is included under current liabilities. A portion of the liability will only be settled after twelve months and is included under non-current liabilities. Financial goals must first be achieved before the liability is recognised.

Incentive scheme

The Group also operates a cash-based incentive scheme based on phantom shares, which can be paid out if an increase in the value, as determined by the scheme, occurs. The incentive scheme is aimed at managing performance in accordance with the Board of Directors’ strategies. The incentive scheme involves specific agreed upon objectives with an Executive Director and is awarded at the sole discretion of the Board of Directors. The fair value of the accrued liability for the incentive scheme is recognised in the Income Statement on the date of allotment. The Group revalues the fair value adjustment of the liability at each reporting date and at the settlement date until the liability has been settled. Any change in fair value between the date of allotment and the reporting date is recognised in the Income Statement during the relevant period. The cost of the incentive scheme is measured at fair value, by using the Black Scholes Merton option model, taking into consideration the terms and conditions of the agreement.

1.24 Trade and other payables

Trade and other payables are initially recognised at fair value. After initial recognition, trade and other payables are disclosed at amortised cost by using the effective interest method.



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1.25 Provisions

Provisions are recognised when:

• theGrouphasacurrentlegalorconstructiveliabilityduetoeventsinthepast;• itismoreprobablethatanoutflowofeconomicbenefitswillberequiredtosettletheliability;and• theamounthasbeenreliablyestimated.

Provisions are measured against the current value of the expenditure expected to be required to settle the liability, measured according to a pre-tax rate reflecting current market conditions of the time value of money and the specific risk of the liability. In the case of dates of maturity exceeding twelve months after the reporting date they are classified as non-current liabilities. The increase in the provision due to the lapse of time is recognised as an interest expense.

1.26 Financial guarantees

A financial guarantee contract is a contract requiring that the issuer makes specific payments to the holder of the guarantee to reimburse a loss due to default by a specified debtor when a debt was payable. Financial guarantees are initially valued at fair value. Subsequently it is measured at:

• theamountdeterminedinaccordancewithIAS37Provisions,ContingentLiabilitiesandContingentAssets;and• theamountinitiallyrecognisedminus,ifapplicable,anycumulativeamortisationrecognisedinaccordancewithIAS18Income.

1.27 Income recognition

Income involves the fair value of the remuneration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Income is shown net of value-added tax and allowances and discounts. Income is recognised as follows:

a) Sale of goodsSale of goods is recognised when the Group has supplied products to the customer, the customer has accepted the goods and recoverability of the debtor concerned is relatively certain.

b) Sale of servicesSales of services are recognised in the accounting period in which the services are rendered, by referring to completion of the specific transaction, estimated on the basis of the actual service rendered in relation to the total services to be rendered.

c) Financing incomeFinancing income is recognised on a time-ratio basis according to the effective interest rate method. When impairment occurs in respect of a debtor, the Group reduces the carrying amount to the recoverable amount, being the estimated future cash flow discounted against the original effective interest rate of the instrument, and proceeds to recognise the discount as financing income. Financing income on loans in respect of which impairment has taken place is recognised by using the original effective interest rate.

d) Dividend incomeDividend income is recognised when the right to receive payment has been established.

e) Storage incomeThe storage income is recognised over the term in which the grain is supplied and as the costs are incurred.

f) CommissionDirect delivery transactions with regard to fuel, fertiliser, seed and other farming inputs are eliminated from revenue since their nature is in line with agency principles rather than acting as principal. The underlying reason for the transactions is credit extension. Commission earned on the transactions is accounted for as revenue. Commission income is also earned on short-term insurance where Overberg Agri Ltd acts as agent to the parties involved.



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1.28 Dividends declared

Dividends declared to the Group’s shareholders are recognised as a liability in the period in which the dividends are approved by the Board of Directors.

1.29 Rehabilitation costs

Provision has been made for rehabilitation costs and expected accrued liabilities, based on the Group’s estimate of environmental and legal requirements, to show the net current value of the current expected cost of repairing the disturbance to the environment as at the reporting date.

Environmental rehabilitation provisionsEstimated long-term environmental provisions, comprising pollution control, rehabilitation and mine closure, are based on the Group’s environmental policy taking into account current technological, environmental and regulatory requirements. The provision for rehabilitation is recognised as and when the environmental liability arises. To the extent that the obligations relate to the construction of an asset, they are capitalised as part of the cost of those assets. The effect of subsequent changes to assumptions in estimating an obligation for which the provision was recognised as part of the cost of the asset is adjusted against the asset.

Decommissioning costs of plant and equipmentThe estimated present value of future decommissioning costs, taking into account current environmental and regulatory requirements, is capitalised as part of property, plant and equipment, to the extent that they relate to the construction of the asset and the related provisions are raised. These estimates are reviewed at least annually. The effect of subsequent changes to assumptions in estimating an obligation for which the provision was recognised as part of the cost of the asset is adjusted against the asset. Any subsequent changes to an obligation which did not relate to the initial construction of a related asset are charged to the Income Statement.

The unwinding of the discountThe unwinding of the discount is not a borrowing cost for the purposes of IAS 23 Borrowing Costs, and may thus not be capitalised under the allowed alternative treatment of capitalisation, as the decommissioning liability does not fall within this description since it does not reflect funds (i.e. cash) borrowed. Hence, the unwinding of the discount is expenditure and is charged to the Income Statement.

Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision. Such changes could similarly impact the useful lives of assets depreciated on a straight-line-basis, where those lives are limited to the life of the mine.

1.30 Other profits and losses

Other profits and losses disclosed in the Income Statement are disclosed separately as they are not deemed to form part of the Group’s trade operations. Included in other profits and losses are capital profits and losses realised on non-current assets, and increases and/or decreases in value written down and/or back on non-current assets.

1.31 Profit bonus

The Board of Directors may, if the Board is of the opinion that there is sufficient headline earnings, approve a profit bonus for distribution to clients in one of the subsidiaries who, through their purchases, enabled the subsidiary in the Group to achieve sufficient headline earnings. This profit bonus is determined and approved on an annual basis at the sole discretion of the Board of Directors. The profit bonus is recognised as an expense in the Income Statement as operating expenses.

1.32 Quality upgrading

The Board of Directors may, if the Board is of the opinion that there is sufficient headline earnings, approve a payment based on the actual additional income earned from outloading a better quality of grain than the actual quality at intake, which enabled the Group to achieve sufficient headline earnings. The quality upgrading is determined and approved on an annual basis at the sole discretion of the Board. The quality upgrading is recognised as an expense in the Income Statement as operating expenses.



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1.33 Business combinations

The cost of acquisition is measured at the fair value of the acquired assets, equity instruments that are issued or liabilities which are acquired at the date of acquisition, plus cost that can be directly attributed to the acquisition. Identifiable assets acquired, liabilities and contingent liabilities acquired in the business combination are initially valued at fair value on acquisition date, irrespective of the extent of any minority interest.

The surplus that can result, if the cost of acquisition is more than the fair value of the net assets of the business acquired, is accounted for as goodwill. If the cost of acquisition is less than the fair value of the net assets of the acquired business, the difference is accounted for in the Income Statement.

1.34 Common control transactions

A business combination of entities or businesses under common control is a business combination where all the entities or businesses being combined are ultimately controlled by the same party or parties before and after the business combination, and where the control is not of a temporary nature.

The Group has elected to account for transactions under common control in terms of IFRS 3, Business combinations. Refer to note 1.33.

1.35 Broad Based Black Economic Empowerment share-based payment transaction

As the Company granted Broad Based Black Economic Empowerment benefits to certain subsidiaries, the carrying value of the investment in the relevant subsidiary is increased in the Company’s Financial Statements, with a corresponding increase in the fair value reserve, namely the share-based payment reserve. The relevant subsidiary recognises the expense in the Income Statement as an IFRS 2 share-based payment cost and an equivalent increase in equity as a share-based payment reserve.

1.36 Transactions with minority shareholders – ‘economic entity approach’

The Group applies a policy of treating transactions with minority interests as transactions with equity owners of the Group. For purchases from minorities, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to minority interests are also recorded in equity.

1.37 Foreign currency

a) Functional and presentation currencyItems included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated Financial Statements are presented in South African Rand (“R”), which is the Group’s functional and presentation currency.

b) Transactions and balancesForeign currency transactions are translated to the functional currency using the exchange rates prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the transactions at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement, except when deferred in equity as qualifying cash flow hedges.

1.38 Critical accounting assumptions and judgements

Estimates and assumptions are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are reasonable in the circumstances.

The Group makes estimates and assumptions regarding the future. The resultant accounting estimates may possibly, per definition, not agree with the actual results. Assumptions and estimates with a material risk of resulting in a significant adjustment to the carrying amount of assets and liabilities in the following financial year are discussed below:



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1.38 Critical accounting assumptions and judgements (continued)

Life-span and residual value of fixed assets and intangible assets

Management reviews the life-span and residual value of fixed assets and appropriate intangible assets on an annual basis and adjustments are made as appropriate. Management uses its experience, judgement and assumptions in the process of determining life-span and residual value.

Impairment of silos

Management performs an impairment test on the silos and silo equipment of the Group in order to determine the recoverable value of the silos as a separate cash-generating unit. This may result in a value adjustment on carrying values as disclosed in note 5.

The following assumptions were used during the calculation:

• Discountedcash-flowmethodwasusedtoperformthevaluation;• Anadjustedstandardcostpertonwasusedasabasisforcosts;• 6year-averagetonnagewasusedasabasisforvolumes;• 70,00%(2011:60,00%;2010:60,00%)ofwheatisondaily-tariffanddaily-tariffstoragelastsanaverageof45days(2011:45days;

2010:52days);and• Discountrate12,96%(post-tax)(2011:12,96%;2010:14,71%).

The following are indicators that can lead to a value impairment test and ultimate write back of the previous period’s impairment/impairment reversals:

• Interestratechanges;• Materialchangesingrainyields;• Economicalconditions;and• Grainstoragealternatives.

Impairment of client relations

At the end of the financial period in which the insurance business was acquired, the client relations relating to the insurance business was evaluated by a specialist valuator for impairment by using the free cash flow method. The total insurance business is identified as a cash-generating unit for impairment tests. Management considers client relations for impairment using similar valuation techniques. Refer to note 7.

Impairment of goodwill

At the end of the financial period in which the insurance business was acquired, the goodwill relating to the insurance business was evaluated by a specialist valuator for impairment by using the free cash flow method. The total insurance business is identified as a cash-generating unit for impairment tests. Management considers goodwill for impairment using similar valuation techniques. Refer to note 7.

Valuation of unlisted investments

Material unlisted investments are valued based on the latest over-the-counter trading prices available at year-end.

Deferred income tax on available-for-sale investments

Deferredtaxonlistedavailable-for-saleinvestmentshasbeenprovidedforat14,00%(2011:0,00%;2010:0,00%).Afteryear-end,theCapitalGainsTax(CGT) inclusion rate for companies will increase from the current 50,00% to 66,60% for disposals of assets after 1 March 2012. This will increase the effective CGT rate for companies from the current 14,00% to 18,60%.



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Deferred tax on unlisted available-for-sale investments is provided at 0,00% because the method of recouping is used. The income received from available-for-sale investments is dividends which are exempt from tax.

Impairment of receivables

A provision for impairment of trade receivables is established when there is objective proof that the Group will not be able to collect all amounts on the original conditions. The provision amount is the difference between the carrying amount of the asset and the current value of expected future cash flows, discounted against the effective interest rate.

Management considers, amongst others, the following when estimating the provision to be recognised in the Income Statement:

– Identification of specific non-performing debtorsThe provision for individual debtors only takes into account the difference between total debt minus security and the financial means of debtors. The risk profile of the debtor and the security required is initially determined as part of the credit provision policy.

– Revision of the recovery history of securitiesManagement reviews the recoverability of securities on an annual basis, and adjustments are made as appropriate. Management uses its experience, judgement and assumptions in the process. Deficits will lead to an increase in the required provision. Capitalisation of borrowing costs

The Group is of the opinion that at least a three-month period has to lapse on grain products before these products are in a marketable condition, e.g. on barley a dormancy period before germination is required and on seed, a dormancy period, cleaning and chemical treatment process. For barley an average period of 3 or 6 months is used depending on cultivars, and for seed a 3-month period. The Group further assumes that on other assets a period of six months has to lapse before borrowing costs will be capitalised.

Provision for slow-moving and obsolete stock

The provision for slow-moving and obsolete stock is continuously calculated by Management on the various segments of stock in the Group according to an ageing method and adjusted accordingly. Implements are considered individually by Management for provision of obsolete stock.

Post-retirement medical benefits

Refer to note 23 for details regarding calculations and assumptions.

Surplus of employee benefit pension fund

The Group’s policy is to recognise all profits and losses as they arise in the Income Statement. Judgement regarding the apportionment of any surpluses and deficits lies with the Board of Trustees, as appointed at that time.

The following benefit improvement allotted to members of Management and not to other members was reported: Period 1 August 1982 to 1 June 1986:

According to the valuation report of 1 August 1982 there was no distinction between the benefits which members of Management were entitled to as against the benefits which other members were entitled to.

According to the consolidated Rules of the Fund as at 1 June 1986 some amendments had been made since 1982.



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The amendments would have resulted in an increase in the expired service obligation of certain members. The surplus in the Fund has declined accordingly, under the assumption that a corresponding amount was not paid into the Fund to finance this. The additional expired service obligation thus qualifies as an improper utilisation of surplus. Refer to note 27.

Incentive scheme

The fair value of the employee services received in exchange for share-based payments settled in cash, is determined by calculating the fair value of the option. Refer to note 26 for the assumptions used in these calculations.

Earnings per share

Earnings and headline earnings per share are calculated by dividing the net profit attributable to shareholders and headline earnings, respectively, by the weighted average number of ordinary shares in issue during the year, excluding the ordinary shares held by the Group as treasury shares.

Interim financial reporting

The operating activities of one of the subsidiaries in the Group, whose figures have a significant influence on the Group’s figures, are not spread evenly throughout the year, but occur on a cyclical basis. In view of this, the Group has obtained exemption from the Registrar of Companies to apply interim financial reporting.

Decommissioning and restoration provision

The construction or commissioning of an asset results in an obligation for the Group to dismantle or remove the asset and restore the site on which the asset was constructed.

The determination of long-term provisions, in particular environmental provisions, remains a key area where Management’s judgement is required. Estimating the future cost of these obligations is complex and requires Management to make estimates and judgements because most of the obligations will only be fulfilled in the future and contracts and laws are often not clear regarding what is required. The resulting provisions could also be influenced by changing technologies and political, environmental, safety, business and statutory considerations.

It is envisaged that, based on the current information available, any additional liability in excess of the amounts provided will not have a material adverse effect on the Group’s financial position, liquidity or cash flow.

Deferred revenue

Deferred revenue is calculated on storage levies received in advance and based on the accounting principle to pair income and expenses in the same accounting period. Management estimates that 60% of variable costs are incurred with receiving and storage of grain and 40% of variable costs are incurred with dispatching of grain. Fixed costs are incurred over time for the period that the grain is stored in the silos. Management based this estimate on historical experience and knowledge.

Biological assets and agricultural produce

The fair value of biological assets is determined by using the products’ current market prices at year-end. The fair value of agricultural produce is determined by using the market price on the date of harvest. Refer to note 13.




52


NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 29 FEBRUARY 2012

2. New standards and interpretations

Standards, interpretations and amendments to published standards effective in 2012

• ImprovementstoIFRSs–2010(effectiveonorafter1January2011).ThisisacollectionofamendmentstoIFRSs.Theseamendmentsaretheresultofconclusions the International Accounting Standards Board (IASB) reached on proposals made in its annual improvements project for 2010. The annual improvements project provides a vehicle for making non-urgent, but necessary amendments to IFRSs. Some amendments involve consequential amendments to other IFRSs.

Standards, interpretations and amendments to published standards not yet effective

The following standards, interpretations and amendments to published standards are compulsory for and applicable to the Group’s future accounting periods beginning on or after 1 March 2012:

• IFRS9,FinancialInstruments(2009)(effectivefrom1January2013).ThisIFRSispartoftheIASB’sprojecttoreplaceIAS39.IFRS9replacesclassificationand measurement models in IAS 39 with a single model that has only two classification categories: amortised cost and fair value.

• IFRS9,FinancialInstruments(2010)(effectivefrom1January2013).TheIASBhasupdatedIFRS9,‘FinancialInstruments’toincludeguidanceonfinancialliabilities and derecognition of financial instruments. The accounting and presentation for financial liabilities and for derecognising financial instruments has been relocated from IAS 39, ‘Financial Instruments: Recognition and measurement’, without change, except for financial liabilities that are designated at fair value through profit or loss.

• AmendmentstoIFRS9,FinancialInstruments(2011)(effectivefrom1January2015).TheIASBhaspublishedanamendmenttoIFRS9,‘Financialinstruments’, that delays the effective date to annual periods beginning on or after 1 January 2015. The original effective date was for annual periods beginning on or after 1 January 2013. This amendment is a result of the Board extending its timeline for completing the remaining phases of its project to replace IAS 39 (for example, impairment and hedge accounting) beyond June 2011, as well as the delay in the insurance project. The amendment confirms the importance of allowing entities to apply the requirements of all the phases of the project to replace IAS 39 at the same time. The requirement to restate comparatives and the disclosures required on transition have also been modified.

• AmendmentstoIAS32,FinancialInstruments:Presentation(effectivefrom1January2014).TheIASBhasissuedamendmentstotheapplicationguidancein IAS 32, ‘Financial Instruments: Presentation’, that clarify some of the requirements for offsetting financial assets and financial liabilities on the balance sheet. However, the clarified offsetting requirements for amounts presented in the Statement of Financial Position continue to be different from US GAAP.

• IFRS10,ConsolidatedFinancialStatements(effectivefrom1January2013).ThisIFRSreplacesalloftheguidanceoncontrolandconsolidationsin IAS 27, ‘Consolidated and separate financial statements’, and SIC-12, ‘Consolidation – special purpose entities’. IFRS 10 changes the definition of control so that the same criteria are applied to all entities to determine control.

• IFRS12,Disclosureofinterestsinotherentities(effectivefrom1January2013).ThisIFRSsetsouttherequireddisclosureforentitiesreportingunderthetwonewstandards,IFRS10,‘Consolidatedfinancialstatements’,andIFRS11,‘Jointarrangements’;itreplacesthedisclosurerequirementscurrentlyfoundinIAS 28, ‘Investments in associates’. The new standard requires entities to disclose information that helps financial statement readers to evaluate the nature, risks and financial effects associated with the entity’s interest in subsidiaries, associates, joint arrangements and unconsolidated structured entities.

• IFRS13,FairValueMeasurement(effectivefrom1January2013).ThisIFRSexplainshowtomeasurefairvalueandaimstoenhancefairvaluedisclosures.It does not indicate when to measure fair value or require additional fair value measurements.

• AmendmentstoIAS1,PresentationofItemsofOtherComprehensiveIncome(effectivefrom1July2012).Theamendmentrequiresentitiestoseparateitems presented in OCI into two groups, based on whether or not they may be recycled to profit or loss in the future. Items that will not be recycled, such as revaluation gains on property, plant and equipment, will be presented separately from items that may be recycled in the future, such as deferred gains and losses on cash flow hedges. Entities that choose to present OCI items before tax will be required to show the amount of tax related to the two groups separately. The title used by IAS 1 for the statement of comprehensive income has changed to ‘statement of profit or loss and other comprehensive income’. However, IAS 1 still permits entities to use other titles.

53



2. New standards and interpretations (continued)

• AmendmentstoIAS19,EmployeeBenefits(effectivefrom1January2013).Theseamendmentseliminatethecorridorapproachandcalculatefinancecosts on a net funding basis.

• RevisedIAS27,SeparateFinancialStatements(effectivefrom1January2013).IAS27hasbeenrenamed‘Separatefinancialstatements’;itcontinuesto be a standard dealing solely with separate financial statements. The existing guidance for separate financial statements is unchanged.

Management is still considering the impact of standards published but not yet effective above.

Standards, interpretations and amendments to published standards effective in 2012, but not applicable

• AmendmentstoIFRIC14,Pre-paymentsofaMinimumFundingRequirement(effectivefrom1January2011).Thisamendmentwillhavealimitedimpactas it applies only to companies that are required to make minimum funding contributions to a defined benefit pension plan. It removes an unintended consequence of IFRIC 14 related to voluntary pension prepayments when there is a minimum funding requirement.

• AmendmentstoIAS24–Relatedpartydisclosures(effectivefrom1January2011).Thisamendmentprovidespartialrelieffromtherequirementforgovernment-related entities to disclose details of all transactions with the government and other government-related entities. It also clarifies and simplifies the definition of a related party.

• IFRIC19,ExtinguishingFinancialLiabilitieswithEquityInstruments(effectivefrom1July2010).ThisIFRICclarifiestheaccountingwhenanentityrenegotiatesthe terms of its debt with the result that the liability is extinguished through the debtor issuing its own equity instruments to the creditor. A gain or loss is recognised in the profit and loss account based on the fair value of the equity instruments compared to the carrying amount of the debt.

Standards, interpretations and amendments to published standards not yet effective and not applicable

The following standards, interpretations and amendments to published standards, which are compulsory for periods beginning on or after 1 March 2012, should not apply to the future accounting periods of the Group:

• AmendmentstoIFRS1–‘Firsttimeadoption’onhyperinflationandfixeddates(effectivefrom1July2011).Thefirstamendmentreplacesreferencestoa fixed date of ‘1 January 2004’ with ‘the date of transition to IFRSs’, thus eliminating the need for companies adopting IFRSs for the first time to restate derecognition transactions that occurred before the date of transition to IFRSs. The second amendment provides guidance on how an entity should resume presenting financial statements in accordance with IFRSs after a period when the entity was unable to comply with IFRSs because its functional currency was subject to severe hyperinflation.

• AmendmenttoIFRS7Disclosures–Transferoffinancialassets(effectivefrom1July2011).Theamendmentsareintendedtoaddressconcernsraisedduring the financial crisis by the G20, among others, that financial statements did not allow users to understand the ongoing risks the entity faced due to derecognised receivables and other financial assets.

• AmendmenttoIFRS7,FinancialInstruments:Disclosure(effectivefrom1January2013).TheIASBhaspublishedanamendmenttoIFRS7,‘Financialinstruments: Disclosures’, reflecting the joint requirements with the FASB to enhance current offsetting disclosures. These new disclosures are intended to facilitate comparison between those entities that prepare IFRS financial statements to those that prepare financial statements in accordance with US GAAP.

• AmendmenttoIAS12,‘Incometaxes’ondeferredtax(effectivefrom1January2012).CurrentlyIAS12,‘Incometaxes’,requiresanentitytomeasurethe deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. It can be difficult and subjective to assess whether recovery will be through use or through sale when the asset is measured using the fair value model in IAS 40 Investment Property. Hence this amendment introduces an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. As a result of the amendments, SIC 21, ‘Income taxes – recovery of revalued non-depreciable assets’, would no longer apply to investment properties carried at fair value. The amendments also incorporate into IAS 12 the remaining guidance previously contained in SIC 21, which is accordingly withdrawn.

54



2. New standards and interpretations (continued)

• IFRS11,JointArrangements(effectivefrom1January2013).Changesinthedefinitionhavereducedthe‘types’ofjointarrangementstotwo:jointoperationsand joint ventures. The existing policy choice of proportionate consolidation for jointly controlled entities have been eliminated. Equity accounting is mandatory for participants in joint ventures. The standard also provides guidance for parties that participate in joint arrangements but do not have control.

• RevisedIAS28,InvestmentsinAssociatesandJointVentures(effectivefrom1January2013).Thisstandardnowincludestherequirementsforjointventures,as well as associates, to be equity-accounted following the issue of IFRS 11.

• IFRIC20,StrippingcostsintheProductionPhaseofSurfaceMine(effectivefrom1January2013).Clarifieswhenproductionstrippingshouldleadtotherecognition of an asset and how that asset should be measured, both initially and in subsequent periods.

3. Segment reporting

Management has determined that operating segments are individual components of the Group that engage in business activities from which it may earn revenue and incur expenses, and whose operating results are regularly reviewed by the Group’s Chief Operating Decision-Maker and for which discrete financial information is available to make strategic decisions. Operating segments which display similar economic characteristics are aggregated for reporting purposes.

The Group identifies its operating segments on the basis of products and services offered, the dominant customer basis and the economic sector in which they operate. Geographical areas in which the operating segments operate are of secondary concern.

The Group’s strategy is sustainability and wealth creation. To reflect this strategy in the segment reporting, it was decided not to aggregate the figures of segments not contributing more than 10% of the Group’s revenues, as this would not reflect the strategy of the Group. Other income and expenses, for example interest received, interest paid, depreciation and amortisation, are not disclosed per segment as these amounts are not reported to the Chief Operating Decision- Maker in such a manner.

RevenuesofapproximatelyR226,260,157(2011:R293,829,952;2010:Rnil)arederivedfromasingleexternalcustomer.Theserevenuesareattributableto the Overberg Agri Bedrywe (Pty) Ltd segment.

The operating segments of the Group are as follows:

Overberg Agri Bedrywe (Pty) LtdOverberg Agri Bedrywe (Pty) Ltd supplies agricultural inputs, products and services to farmers in the Overberg region, and derives its revenue from the sale of these agricultural inputs, products and services.

Overberg Agri Beleggings (Pty) LtdOverberg Agri Beleggings (Pty) Ltd is an investment company and derives its revenue from dividend and interest income.

Boltfast (Pty) Ltd

Boltfast (Pty) Ltd is a company that markets and distributes industrial fasteners to consumers throughout the country. These actions take place through a network of branches situated in Epping, Montague Gardens, Vredenburg, Port Elizabeth, Johannesburg, Durban and Pretoria. The Company derives its revenue primarily from the sale of these industrial fasteners.

Promeal (Pty) LtdPromeal (Pty) Ltd, situated in Atlantis, manufactures, distributes, markets and derives its revenue from the sale of pet food.

Bontebok Lime Works (Pty) LtdBontebok Lime Works (Pty) Ltd, (trading as P&B Lime), a lime mine in Bredasdorp, produces and derives its revenue from the sale of hydrated lime products, feed lime and agricultural lime.

Bredasdorp Slagpale (Pty) LtdBredasdorp Slagpale (Pty) Ltd (trading as Overberg Farm Meat) provides slaughtering facilities for sheep and cattle and derives its revenue from the selling thereof, as well as the selling of livestock.

55



3. Segment reporting (continued)

Overberg Motors (Pty) Ltd (2010)Overberg Motors (Pty) Ltd operates motor dealerships, forecourts and workshops and derives its revenue from the operation thereof.

Bontebok Motorgroep (Pty) LtdBontebok Motorgroep (Pty) Ltd is dormant.

GROUP

2012R’000

2011R’000

2010R’000

3.1 Segment income and results

Total segment revenue

Overberg Agri Bedrywe (Pty) Ltd 1,107,708 1,064,330 770,639

External revenue 1,104,099 1,061,945 767,024

Inter-segment revenue 3,609 2,385 3,615

Boltfast (Pty) Ltd 173,868 160,005 91,892

External revenue 173,361 159,577 91,492

Inter-segment revenue 507 428 400

Bontebok Lime Works (Pty) Ltd 61,787 58,493 49,769


Inter-segment revenue 2,870 2,191 1,839

Bredasdorp Slagpale (Pty) Ltd 101,352 61,645 47,261


Inter-segment revenue – – –

Overberg Motors (Pty) Ltd – – 97,452

External revenue – – 93,152

Inter-segment revenue – – 4,300

Promeal (Pty) Ltd 119,803 108,881 111,087


Inter-segment revenue 115 101 115

Total segment revenue 1,564,518 1,453,354 1,168,100

Total segment revenue 1,564,518 1,453,354 1,168,100

Discontinued operations – – (70,664)

Consolidation adjustments (6,664) (2,560) (9,260)

Group revenue 1,557,854 1,450,794 1,088,176

All external revenue is attributed to South African customers.

56



GROUP

2012R’000

2011R’000

2010R’000

3.1 Segment income and results (continued)

Profit/(loss) before taxation and discontinued operations

Overberg Agri Ltd (1,282) (2) –

Overberg Agri Bedrywe (Pty) Ltd 328,985 12,392 13,744

Overberg Agri Beleggings (Pty) Ltd 385,243 1,284 90

Boltfast (Pty) Ltd 703 9,863 19,411



Overberg Motors (Pty) Ltd – – (2,010)

Promeal (Pty) Ltd 7,862 11,178 12,438

Bontebok Motorgroep (Pty) Ltd 15 (590) 44

Ontbondeling 1 (Pty) Ltd – (407) –

Profit before taxation 735,839 44,707 52,134

Profit before taxation 735,839 44,707 52,134

Consolidation adjustments and discontinued operations (19,190) 1,825 20,844

Group profit before taxation 716,649 46,532 72,978

Interest income


Overberg Agri Beleggings (Pty) Ltd 5,710 4,947 4,425

Boltfast (Pty) Ltd 1,114 591 54

Bontebok Lime Works (Pty) Ltd 8 – –

Bredasdorp Slagpale (Pty) Ltd 364 475 560

Overberg Motors (Pty) Ltd – – 32

Promeal (Pty) Ltd 551 1,212 1,028

Total 46,187 42,920 44,942

Total 46,187 42,920 44,942


Group interest income 37,081 37,299 37,599

57



GROUP

2012R’000

2011R’000

2010R’000


Interest expense



Boltfast (Pty) Ltd 10,925 9,218 8,376

Bontebok Lime Works (Pty) Ltd 676 1,060 1,489



Promeal (Pty) Ltd 39 79 247

Bontebok Motorgroep (Pty) Ltd – 1 –

Total 44,373 45,024 47,656

Total 44,373 45,024 47,656


Group interest expense 35,265 39,403 37,478

Depreciation and amortisation


Overberg Agri Beleggings (Pty) Ltd – 6 6

Boltfast (Pty) Ltd 5,400 4,340 2,343



Overberg Motors (Pty) Ltd – – 815

Promeal (Pty) Ltd 1,597 1,181 1,383

Total 18,503 16,060 13,922

Total 18,503 16,060 13,922

Consolidation adjustments 1,528 2,263 1,227

Group depreciation and amortisation 20,031 18,323 15,149

58



GROUP2012R’000

2011R’000

2010R’000


Contribution to attributable earnings

Overberg Agri Ltd 520,723 12,581 20,552



Africa’s Best 323 (Pty) Ltd – – (1)

Boltfast (Pty) Ltd 480 6,746 14,018



Overberg Motors (Pty) Ltd – – (659)

Promeal (Pty) Ltd 5,263 8,589 8,102

Bontebok Motorgroep (Pty) Ltd 13 (590) 32

Ontbondeling 1 (Pty) Ltd – (407) –

Contribution to attributable earnings 1,168,107 51,879 95,721

Contribution to attributable earnings 1,168,107 51,879 95,721

Consolidation adjustments – dividends received (580,207) (18,426) (21,290)

Other consolidation adjustments (6,556) 204 (17,701)

Contribution to attributable earnings – Group 581,344 33,657 56,730

GROUP2012

%2011

%2010

%

Contribution to attributable earnings

Overberg Agri Ltd 89,57 37,38 36,23



Boltfast (Pty) Ltd 0,08 20,05 24,71



Overberg Motors (Pty) Ltd – – (1,16)

Promeal (Pty) Ltd 0,91 25,51 14,29

Bontebok Motorgroep (Pty) Ltd – (1,75) 0,06

Ontbondeling 1 (Pty) Ltd – (1,21) –

Contribution to attributable earnings 200,93 154,15 168,74

Contribution to attributable earnings 200,93 154,15 168,74


Contribution to attributable earnings – Group 100,00 100,00 100,00

Contribution % per segment in relation to Group total contribution to attributable earnings not reported to the COD and is disclosed as additional information.

59



GROUP

2012R’000

2011R’000

2010R’000

3.2 Segment assets and liabilities

Non-current assets*

Overberg Agri Ltd 190,586 190,586 190,586Overberg Agri Bedrywe (Pty) Ltd 550,398 709,205 564,147Overberg Agri Beleggings (Pty) Ltd 201,446 443,544 337,829Boltfast (Pty) Ltd 89,947 91,309 69,167Bontebok Lime Works (Pty) Ltd 61,340 61,441 58,404Bredasdorp Slagpale (Pty) Ltd 3,356 2,956 2,046Overberg Motors (Pty) Ltd – – 11,089Promeal (Pty) Ltd 20,585 18,036 15,692Non-current assets 1,117,658 1,517,077 1,248,960Consolidation adjustments (300,607) (205,956) (205,995)Group non-current assets 817,051 1,311,121 1,042,965

*All non-current assets are located in South Africa

Current assets

Overberg Agri Ltd 48,531 26 26



Boltfast (Pty) Ltd 104,204 76,398 48,273




Promeal (Pty) Ltd 52,123 49,128 49,391

Bontebok Motorgroep (Pty) Ltd – – 1,414

Ontbondeling 1 (Pty) Ltd – – 590

Current assets 841,540 804,412 870,270


Group current assets 747,967 740,836 774,419

Non-current liabilities


Overberg Agri Beleggings (Pty) Ltd 42,286 110 –

Boltfast (Pty) Ltd 112,864 69,388 47,299




Promeal (Pty) Ltd 2,350 1,973 832

Non-current liabilities 219,640 100,946 94,656

Consolidation adjustments (86,192) 11,827 3,089

Group non-current liabilities 133,448 112,773 97,745

60



GROUP

2012R’000

2011R’000

2010R’000

3.2 Segment assets and liabilities (continued)

Current liabilities

Overberg Agri Ltd 48,485 – –



Africa’s Best 323 (Pty) Ltd 1 1 1

Boltfast (Pty) Ltd 48,004 64,204 39,764




Promeal (Pty) Ltd 13,238 11,667 17,903

Bontebok Motorgroep (Pty) Ltd – 13 602

Ontbondeling 1 (Pty) Ltd – – 183

Current liabilities 658,802 646,763 735,931


Group current liabilities 565,204 583,173 649,728

Capital expenditure

Overberg Agri Ltd – – 2,290


Boltfast (Pty) Ltd 4,570 27,367 1,438


Bredasdorp Slagpale (Pty) Ltd 671 1,288 111


Promeal (Pty) Ltd 3,958 3,524 1,752

Capital expenditure 31,253 52,187 28,906

Consolidation adjustments 1,013 (984) (2,611)

Group capital expenditure 32,266 51,203 26,295

Capital expenditure comprises additions to non-current assets including property, plant and equipment, intangible assets, investment property, investments in subsidiaries and biological assets.

61



4. Financial risk management

Financial risk factors

The Group’s activities expose it to various financial risks:

(a)marketrisk(includingpriceriskandcurrencyrisk)andcash-flowandfairvalueinterestraterisk;(b)creditrisk;and(c) liquidity risk.

The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

Management is responsible for the Group’s risk management and identifies, evaluates and hedges financial risks where needed in close co-operation with the Group’s operating units. The Board of Directors provides principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

(a) Market risk (including price risk and currency risk) and cash-flow and fair value interest rate risk

(i) Foreign exchange rate risk

The Group imports products from abroad and is exposed to a foreign exchange rate risk arising from various currency exposures, mainly the US Dollar, British Pound and Euro. Foreign exchange rate risk arises when imports of products realise at another exchange rate as the one at which the order took place for products which have already been contracted at an agreed price.

The functional currency is ZAR and Management has prepared a policy stipulating how the foreign exchange risk is to be managed. To manage the foreign exchange rate risk, the Group makes use of exchange rate hedging instruments which commence when predetermined exchange rate levels are reached. The exchange rate hedging instruments are concluded with a financial institution.

On29February2012,iftheexchangeratechangedbyR1,theeffectontheprofitaftertaxationwouldbeR115,669(2011:R544,122;2010:R405,609).All exposure to foreign currency are hedged by forward exchange contracts (“FECs”). Refer to note 33 for exchange rate differences during 2012.

(ii) Price risk

Commodity price risk

The Group is exposed to commodity price risk as a result of commodities that are held as stock. Losses will be shown if the net realisable value decreases to less than the cost price of the commodities held.

At year-end, should the price for the commodities indicated below have strengthened/weakened by R1, with all other variables being constant, the after-tax profit for the year will decrease/increase, as follows:

62



GROUP2012R’000

2011R’000

2010R’000

4. Financial risk management (continued)

Chemical products 12 28 16

Feed 206 174 145

Fertiliser 16 12 11

Fuel 357 547 960

Seed 4 5 4

Coal 7 7 7

602 773 1,143

At year-end, should the price for the commodity indicated below have strengthened/weakened by 1,00%, with all other variables being constant, the after-tax profit for the year will decrease/increase, as follows:

Steel 703 632 270

Equity security price risk

The Group is exposed to equity security price risk due to investments held by the Group and classified on the Statement of Financial Position as available-for-sale and non-current assets held-for-sale. Equities will increase/decrease as a result of any profits/losses on equity securities classified as available-for-sale investments and non-current assets held-for-sale.

Thecalculationofa20,00%(2011:20,00%;2010:20,00%)changeinthecarryingvalueofavailable-for-saleinvestmentswouldhaveresultedinaR73,939,925movementinothercomprehensiveincome(2011:R177,518,317;2010:R130,626,686).

Derivative instruments price risk

The Group is exposed to derivative instruments price risk due to the grain contract held by the Group and classified on the Statement of Financial Position as trade and other payables.

ThecarryingamountofthederivativefinancialinstrumentwouldbeanestimatedRnillowerorhigher(2011:Rnil;2010:R138,239)shouldthecommodityprice differ by 10,00% from the quoted May SAFEX price.

(iii) Cash-flow and fair value interest rate risk

The Group’s income and operational cash flow depend to a lesser extent on changes in market interest rates. The interest rates of hire-purchase contracts where the Group is the supplier in respect of hire-purchase assets are determined upon commencement of the hire-purchase contract and adjusted to current market interest rates.

The Group’s cash-flow interest rate risk arises from cash and cash equivalents, non-current and current loans. Loans granted at variable rates expose the Group to cash-flow interest rate risk.

At year-end, should the interest rates have strengthened/weakened by 100 basis points against the respective currencies, with all other variables being constant, theafter-taxprofitfortheyearwouldhavebeenR342,728(2011:R556,628;2010:R400,984)higher/lower,primarilyduetovariableinterestratechanges.

63




(b) Credit risk

The Group’s credit risk arises from credit exposure to agriculture, wholesale and retail debtors, cash and cash equivalents and deposits with banks. Continuous credit evaluations of the financial positions, past experience, the vesting of suitable securities, as well as other factors of such debtors are performed individually in accordance with a formal credit policy which is continuously re-evaluated to take account of changes in risks. The Group’s cash and cash equivalents are placed at high credit quality financial institutions.

Credit LimitR‘000

BalanceR‘000

29 February 2012 – Group

Cash and cash equivalents 15,500 22,844





ABSA’s credit rating by Moody’s in February 2012 was judged Aa2, which denotes to be high quality and is subject to very low credit risk. ABSA’s credit valuation by Fitch in December 2011 was judged AA+, which denotes to be very low expectation of credit risk. Fitch’s valuation indicates a very strong capacity for payment of financial commitments and this capacity is not significantly vulnerable to foreseeable events.

FirstRand’s credit rating by Moody’s in February 2012 was judged Aa2, which denotes to be high quality and is subject to very low credit risk. FirstRand’s credit valuation by Fitch in January 2012 was judged AA, which denotes to be very low expectation of credit risk. Fitch’s valuation indicates a very strong capacity for payment of financial commitments and this capacity is not significantly vulnerable to foreseeable events. (c) Liquidity risk

Prudent liquidity risk management implies the maintenance of sufficient cash and marketable securities, the availability of funding by means of a sufficient number of approved credit facilities and the ability to fully unbundle market positions. As a result of the dynamic nature of the underlying businesses, Management intends to maintain funding adjustability by keeping available approved lines of credit.

Amortisation schedule:

Within 1 year

R’000

Between 1 and 5 years

R’000

More than 5 yearsR’000

Total

R’000


Instalment sale agreements 2,660 1,463 – 4,123

Borrowings 375,901 38,910 3,932 418,743

Trade and other payables 139,566 2,354 – 141,920

Post-retirement medical liabilities 1,155 12,115 – 13,270

519,282 54,842 3,932 578,056



Borrowings 458,603 50,875 8,468 517,946

Trade and other payables 117,872 96 – 117,968


582,107 67,958 8,468 658,533

64




Amortisation schedule:

Within1 yearR’000

Between 1 and 5 years

R’000

More than 5 yearsR’000

Total

R’000



Borrowings 531,201 38,685 5,877 575,763

Trade and other payables 116,092 – – 116,092


652,487 61,041 5,877 719,405

TheseamountswillbefinancedfromcashandcashequivalentsofR22,845,299(2011:R26,894,373;2010:R37,818,016),approvedfacilitiesofR515,500,000(2011:R805,500,000;2010:R872,500,000)ofwhichR270,849,871(2011:R447,781,725;2010:R433,388,946)areavailable,as well as the realising of other current assets.

Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The Board of Directors reviews the capital structure on a regular basis. As part of this review, it considers the Group’s commitments, availability of funding and the risks associated with each. There are no external capital requirements imposed on the Group.

There were no major changes in the Group’s approach to capital management during the year and the Board of Directors’ policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business and acquisitions. Capital is herein defined as equity attributable to equity holders of the Group.

The own capital ratios are as follows:

GROUP2012R’000

2011R’000

2010R’000

Total capital and reserves 847,004 1,338,065 1,084,197

Total assets 1,565,018 2,051,957 1,858,078

Own capital ratio 54,12% 65,21% 58,35%

Fair value estimation

The fair value of financial instruments traded in active markets, such as exchange-traded derivative instruments and trade and available-for-sale securities, are based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group is the current offer price. The applicable quoted market price for financial liabilities is the current asking price.

The fair value of financial instruments not traded in active markets is determined by using valuation techniques. The Group uses its judgement to select various methods and mainly makes assumptions based on market conditions prevailing at the reporting date. Other techniques, such as estimated discounted cash flow, are used to determine fair value for available-for-sale financial assets that are not traded in active markets. Refer to note 1.38.

It is assumed that the nominal values less estimated value adjustments of trade receivables and trade payables reflect their fair values. The fair value of financial liabilities is estimated, with disclosure in mind, by discounting the future contractual cash flows at the current market interest rate available to the Group for similar financial instruments.

65



5. Property, plant and equipment

Group 2012 2011Cost/

ValuationR’000

Accumulateddepreciation

R’000

Carrying valueR’000

Cost/ Valuation

R’000


R’000


Land and buildings 105,755 (18,741) 87,014 94,994 (11,637) 83,357Machinery, motor vehicles and equipment 205,428 (72,148) 133,280 187,580 (65,339) 122,241Decommissioning assets – land 420 (10) 410 258 (5) 253Decommissioning assets – buildings 228 (53) 175 146 (29) 117

Total 311,831 (90,952) 220,879 282,978 (77,010) 205,968

Group 2010Cost/

ValuationR’000


R’000


Land and buildings 97,006 (15,203) 81,803Machinery, motor vehicles and equipment 164,952 (56,491) 108,461Decommissioning assets – land – – –Decommissioning assets – buildings – – –

Total 261,958 (71,694) 190,264

Reconciliation of property, plant and equipment – Group – 2012Openingbalance

R’000

Additionsand borrow-

ing costs capitalised

R’000

Disposals

R’000

Transfers

R’000

Depreciation

R’000

Total

R’000Land and buildings 83,357 6,108 – 137 (2,588) 87,014Machinery, motor vehicles and equipment 122,241 24,613 (1,137) – (12,437) 133,280Decommissioning assets – land 253 162 – – (5) 410Decommissioning assets – buildings 117 82 – – (24) 175

205,968 30,965 (1,137) 137 (15,054) 220,879


R’000



R’000

Additions through business

combinationsR’000

Disposals

R’000

Transfers

R’000

Depreciation

R’000

Total

R’000Land and buildings 81,803 3,436 – – 417 (2,299) 83,357

Machinery, motor vehicles and equipment 108,461 22,713 4,373 (1,682) (252) (11,372) 122,241

Property, plant and equipment – 258 – – – (5) 253

Other property, plant and equipment – 146 – – – (29) 117

190,264 26,553 4,373 (1,682) 165 (13,705) 205,968

66



Plant,equipmentandmotorvehicleswithabookvalueofR51,006,150(2011:R53,724,683;2010:R55,218,013)serveassecurityforinstalmentsaleagreements and borrowings (notes 24 and 25).

ThelandandbuildingswithabookvalueofR15,681,271(2011:R16,112,169;2010:R16,448,585)serveassecurityforamortgagebondfromABSABank (note 24).

ThereisamortgageofR5,000,000heldoverthelandandbuildingswithabookvalueofR720,001(2011:R758,062;2010:R796,124)registeredinfavour of FirstRand Bank Ltd. The mortgage serves as security for the instalment sale agreements (notes 24 and 25).

Thereisageneralnotarialbondovermachinery,motorvehiclesandequipmenttothevalueofR10,487,800(2011:R8,812,767;2010:R15,265,486)in favour of ABSA (note 24).

Some of the property are encumbered by means of covering bonds of R1,750,000 in favour of ABSA for one of the subsidiaries’ facilities with ABSA which has been cancelled.

On 1 February 2012, one of the subsidiaries in the Group registered a notarial bond to the value of R100 million on all movable fixed assets (specifically or generally) that the subsidiary owns or has in its possession that Land Bank may deem necessary to serve as security for the loan, excluding barley inventory.

The registers with full particulars of land and buildings are available for inspection by shareholders or their authorised agents at the registered offices of the respective companies.

The recoverable amount of silo buildings are calculated based on value-in-use for each cash-generating unit. For these calculations, current results and assumptions are used (refer to note 1.38). Movements in impairments/impairment reversals are included in other profits and losses in the Income Statement.

The increase in value of silo machinery and buildings with the reversal of impairments is limited to the previous impairments. The impairment reversal of the silo machinery and buildings is attributable to the increase in commodity prices and better harvests.

No borrowing costs have been capitalised for the 2010 to 2012 financial years.

5. Property, plant and equipment (continued)


R’000



R’000

Disposals

R’000

Transfers

R’000

Depreciation

R’000

lmpairment reversal

R’000

Total

R’000Land and buildings 75,467 8,360 – (87) (2,230) 293 81,803Machinery, motor vehicles and equipment 110,541 17,433 (1,128) (8,520) (10,085) 220 108,461

186,008 25,793 (1,128) (8,607) (12,315) 513 190,264

67



6. Investment property2012 2011

Cost/Valuation

R’000

Accumulated depreciation

R’000


Cost/Valuation

R’000


R’000


Group

Investment property 1,689 (358) 1,331 1,928 (436) 1,492

2010Cost/

ValuationR’000


R’000


Group

Investment property 1,703 (551) 1,152

Reconciliation of investment property – Group – 2012Opening balanceR’000

Additions

R’000

Disposals

R’000

Transfers

R’000

Depreciation

R’000

Total

R’000Investment property 1,492 56 (44) (137) (36) 1,331


Additions

R’000

Disposals

R’000

Transfers

R’000

Depreciation

R’000

Total

R’000Investment property 1,152 691 (158) (165) (28) 1,492


Additions

R’000

Disposals

R’000

Transfers

R’000

Depreciation

R’000

Total

R’000

Investment property 2,467 159 (39) (1,407) (28) 1,152

ManagementdeemsthefairvalueofinvestmentpropertytobeR10,131,255on29February2012(2011:R11,531,255;2010:R12,889,850).Indetermining the fair value of investment property, Management takes into account the latest selling values, age of the property and general market conditions.

The rental income earned from investment property amounts to R792,257 (2011: R907,994;2010: R797,531) for the year. The rentalincome earned from business properties held under investment property is contractually determined and any changes in the rental income are determined by the contract. The rental income earned from residential properties is determined by agreement after market value research is done by independent realestateagents.DirectoperatingexpenditureofinvestmentpropertyamountstoR680,013(2011:R519,494;2010:R791,972).Directoperatingexpenditure accrued by investment property represents the actual expenditure incurred for repairs and maintenance of investment property.

The registers with full particulars of land and buildings are available for inspection by shareholders or their authorised agent at the registered offices of the respective companies.

68



7. Intangible assets2012 2011

Cost/Valuation

R’000

Accumulatedamortisation

and impairment

R’000

Carrying value

R’000

Cost/Valuation

R’000


and impairment

R’000

Carrying value

R’000

GroupTrademarks 22,604 (6,196) 16,408 22,604 (4,980) 17,624

Mineral rights 24,945 (582) 24,363 24,945 (499) 24,446

Software 4,336 (3,084) 1,252 4,093 (2,527) 1,566

Client relations 32,486 (11,022) 21,464 32,486 (8,027) 24,459

Goodwill 62,695 – 62,695 61,881 – 61,881

Product development 907 (359) 548 719 (268) 451

Total 147,973 (21,243) 126,730 146,728 (16,301) 130,427

2010Cost/

Valuation

R’000


and impairment

R’000

Carrying value

R’000

GroupTrademarks 19,081 (3,825) 15,256

Mineral rights 24,945 (416) 24,529

Software 3,773 (1,949) 1,824

Client relations 25,760 (5,327) 20,433

Goodwill 52,869 – 52,869

Product development 719 (196) 523

Total 127,147 (11,713) 115,434

Reconciliation of intangible assets – Group – 2012

Opening balance

R’000

Additions

R’000

Amortisation and

impairmentR’000

Total

R’000Trademarks 17,624 – (1,216) 16,408

Mineral rights 24,446 – (83) 24,363

Software 1,566 243 (557) 1,252

Client relations 24,459 – (2,995) 21,464

Goodwill 61,881 814 – 62,695

Product development 451 188 (91) 548

130,427 1,245 (4,942) 126,730

69



7. Intangible assets (continued)

Reconciliation of intangible assets – Group – 2011Opening balance

R’000

Additions

R’000

Additions through business

combinationsR’000

Disposals

R’000

Amortisation and

impairment

R’000

Total

R’000Trademarks 15,256 – 3,523 – (1,155) 17,624

Mineral rights 24,529 – – – (83) 24,446

Software 1,824 325 – (3) (580) 1,566

Client relations 20,433 – 6,726 – (2,700) 24,459

Goodwill 52,869 – 9,012 – – 61,881

Product development 523 – – – (72) 451

115,434 325 19,261 (3) (4,590) 130,427

Reconciliation of intangible assets – Group – 2010

Opening balance

R’000

Additions

R’000

Transfers to disposal

groupsR’000

Amortisation and

impairmentR’000

Total

R’000Trademarks 20,835 – (4,375) (1,204) 15,256

Mineral rights 24,612 – – (83) 24,529

Software 2,201 245 – (622) 1,824

Client relations 22,083 – – (1,650) 20,433

Goodwill 52,869 – – – 52,869

Product development 497 98 – (72) 523

123,097 343 (4,375) (3,631) 115,434

Trademarks

Amortisation is written off to the Income Statement and included under operating expenditure. Impairment is written off to the Income Statement and included under other profits and losses.

Mineral rights


Software


Client relations


70




Product development costs

The intangible asset for product development costs consists of costs incurred in prior years in respect of a subsidiary, Promeal (Pty) Ltd, for development of a new line of products and includes all costs incurred in developing recipes and testing the new products. All development costs arose from internal development.


Impairment test for intangible assets

Management assessed the intangible assets for possible impairment by investigating indicators showing a possibility that impairment may have occurred.

Goodwill, client relations, trademarks and mineral rights acquired in business combinations are allocated, at acquisition, to the cash-generating units (CGU’s) that are expected to benefit from the business combination.

The carrying amount of goodwill, client relations, trademarks and mineral rights has been allocated as follows:

29 February 2012Goodwill

R’000

Trademarks

R’000

Client relationsR’000

Mineral rights

R’000

Insurance agency business in Overberg Agri Bedrywe (Pty) Ltd 1,499 – 67 –

Promeal (Pty) Ltd 14,883 9,133 11,067 –

Bontebok Lime Works (Pty) Ltd – – – 24,363

Boltfast (Pty) Ltd 46,313 7,275 10,329 –

62,695 16,408 21,463 24,363


R’000

Trademarks

R’000


Mineral rights

R’000

Insurance agency business Overberg Agri Bedrywe (Pty) Ltd 685 – 157 –

Promeal (Pty) Ltd 14,883 9,818 11,897 –


Boltfast (Pty) Ltd 46,313 7,806 12,405 –

61,881 17,624 24,459 24,446


R’000

Trademarks

R’000


Mineral rights

R’000

Insurance agency business Overberg Agri Bedrywe (Pty) Ltd 685 – 247 –

Promeal (Pty) Ltd 14,883 10,503 12,727 –


Boltfast (Pty) Ltd 37,301 4,753 7,459 –

52,869 15,256 20,433 24,529

71




The recoverable amount of a cash-generating unit (CGU) is determined based on value-in-use calculations. These calculations use cash-flow projections based on financial budgets approved by Management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates as stated below.

Key assumptions used for value-in-use calculations:

Insurance agency business

29 February 2012

Goodwill%

Client relations%

Discount rate (post-tax) 16,55 16,55

Growth rate 4,50 4,50

Long-term growth rate 6,00 6,00

Overberg Agri commission % portion of total premiums new business up to 2012 7,50 7,50

Overberg Agri commission % of total premiums after 2012 15,00 15,00

28 February 2011

Goodwill%

Client relations%






28 February 2010

Goodwill%

Client relations%






The budgeted turnover and growth rate are based on Management’s expectations of the industry. The growth rate used represents the long-term growth rate based on forecasted inflation rates. The discount rate represents a post-tax rate based on the Group’s weighted average cost of capital.

A reasonable possible change in the key assumptions above on which Management has based its determination of the recoverable amount would not cause the carrying amount to exceed its recoverable amount.

72


Promeal (Pty) Ltd

29 February 2012

Goodwill

%

Trademarks

%

Client relations%

Growth in gross profit per year 10,21 – 14,35 10,21 – 14,35 10,21 – 14,35

Discount rate (post-tax) 15,48 15,48 15,48

Long-term growth rate 6,00 6,00 6,00

28 February 2011

Goodwill

%

Trademarks

%

Client relations%

Growth in gross profit per year 8,50 8,50 8,50



28 February 2010

Goodwill

%

Trademarks

%

Client relations%




Management determined the budgeted gross margins based on past performance and its expectations for market development. The long-term growth rate used is based on forecasted inflation rates. The discount rate represents a post- tax rate based on the Group’s weighted average cost of capital.

The following change in the key assumptions above on which Management has based its determination of the recoverable amount would cause the carrying amount to exceed its recoverable amount as follows:

29 February 2012:

• Anincreaseinthediscountrate(post-tax)of1,34%;• Adecreaseinthelong-termgrowthrateof3,11%;and• Adecreaseingrowthingrossprofitperyearof3,67%.

28 February 2011:


28 February 2010:




73


Bontebok Lime Works (Pty) Ltd

29 February 2012 Mineral rights%

Growth in gross profit per year 6,00

Discount rate (post-tax) 15,48

Long-term growth rate 6,00









Management determined the budgeted gross margins based on past performance and its expectations for market development. The long-term growth rate used is based on forecasted inflation rates. The discount rate represents a post- tax rate based on the Group’s weighted average cost of capital.

The following change in the key assumptions above on which Management has based its determination of the recoverable amount would cause the carrying amount to exceed its recoverable amount as follows:

29 February 2012:

•Anincreaseinthediscountrate(post-tax)of0,47%;•Adecreaseinthelong-termgrowthrateof2,60%;and•Adecreaseingrowthingrossprofitperyearof3,32%.

28 February 2011:

•Anincreaseinthediscountrate(post-tax)of5,49%;•Adecreaseinthelong-termgrowthrateofn/a;and•Adecreaseingrowthingrossprofitperyearof10,63%.

28 February 2010:

•Anincreaseinthediscountrate(post-tax)of0,092%;•Adecreaseinthelong-termgrowthrateof0,13%;and•Adecreaseingrowthingrossprofitperyearof0,12%.



74


Boltfast (Pty) Ltd


%Trademarks

%Client relations

%





%Trademarks

%Client relations

%





%Trademarks

%Client relations

%




Management determined the budgeted gross margins based on past performance and its expectations for market development. The long-term growth rate used is based on forecasted inflation rates. The discount rate represents a post-tax rate based on the Group’s weighted average cost of capital.

A reasonable possible change in the key assumptions above on which Management has based its determination of the recoverable amount would not cause the carrying amount to exceed its recoverable amount.

8. Financial assets by category

The accounting policies for financial instruments have been applied to the line items below:


R’000

Available-for-sale

investmentsR’000

Total

R’000

Group – 29 February 2012

Available-for-sale investments ¹ – 370,354 370,354

Derivative financial instruments ² – – –

Trade and other receivables 531,142 – 531,142

Loans and other receivables 23,380 – 23,380

Cash and cash equivalents 22,844 – 22,844

577,366 370,354 947,720



75

8. Financial assets by category (continued)



R’000

Available-for-sale

investmentsR’000

Total

R’000


Derivative financial instruments ² 279 – 279




430,048 888,226 1,318,274



R’000

Available-for-sale

investmentsR’000

Total

R’000


Derivative financial instruments 2 1,544 – 1,544




416,185 653,749 1,069,934

Company – 29 February 2012


R’000

Available-for-sale

investmentsR’000

Total

R’000




R’000

Available-for-sale

investmentsR’000

Total

R’000

Loans and other receivables 26 – 26



R’000

Available-for-sale

investmentsR’000

Total

R’000

Loans and other receivables 26 – 26

¹ Refer to note 11.² Derivative financial instruments carried at fair value are in Level 2 of the fair value hierarchy.

Fair value hierarchy:Level 1 – Quoted prices in active markets for the same instrument.Level 2 – Valuation techniques for which significant inputs are based on observable market data.Level 3 – Valuation techniques for which any significant input is not based on observable market data.

Fair value of derivative financial instruments

The fair value of financial instruments is determined by using market conditions existing at the end of each reporting period. Derivative instruments are initially recognised at fair value on the date the derivative contract is entered into. Subsequently the derivative contracts are remeasured at fair value using the quoted May SAFEX price for the commodities on which the derivative financial instruments are based.



76

9. Financial liabilities by category

The accounting policies for financial instruments have been applied to the line items below:


Other financial liabilities at

amortised costR’000

Total

R’000

Non-current borrowings 44,305 44,305

Current borrowings 378,561 378,561

Trade and other payables 113,107 113,107

535,973 535,973




Total

R’000




Derivative financial instrument 279 279

632,970 632,970




Total

R’000




697,247 697,247

10. Financial instruments’ credit quality

The credit quality of the financial assets not past due and on which no impairment has been made may be determined with reference to the historical information.

GROUP COMPANY2012R’000

2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

Trade receivables

New clients 5,923 4,448 6,021 – – –

Current clients with no non-payment history 258,656 228,221 237,994 – – –

Total trade receivables 264,579 232,669 244,015 – – –

Cash and cash equivalents

ABSA Bank 16,165 24,414 35,617 – – –

First National Bank 1,481 864 1,132 – – –

Bank deposits 410 410 406 – – –

Other 4,788 1,207 663 – – –

Total cash and cash equivalents 22,844 26,895 37,818 – – –



77

10. Financial instruments’ credit quality (continued)

ABSA’s credit rating by Moody’s in February 2012 was judged Aa2, which denotes to be high quality and is subject to very low credit risk. ABSA’s credit valuation by Fitch in December 2011 was judged AA+, which denotes to be very low expectation of credit risk. Fitch’s valuation indicates a very strong capacity for payment of financial commitments and this capacity is not significantly vulnerable to foreseeable events.

FirstRand’s credit rating by Moody’s in February 2012 was judged Aa2, which denotes to be high quality and is subject to very low credit risk. FirstRand’s credit valuation by Fitch in January 2012 was judged AA, which denotes to be very low expectation of credit risk. Fitch’s valuation indicates a very strong capacity for payment of financial commitments and this capacity is not significantly vulnerable to foreseeable events.

11. Available-for-sale investmentsGROUP COMPANY

2012R’000

2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

Beginning of the year 888,226 653,749 394,143 – – –

Investments acquired – – – 512,710 – –

Investments derecognised (660,449) – – (512,710) – –

Fair value adjustments 142,560 234,467 259,584 – – –

Movement in deferred bonus funds 17 10 22 – – –

370,354 888,226 653,749 – – –

Available-for-sale investments consist of the following:

Listed investments ¹

– Companies 369,700 887,592 653,133 – – –

•PioneerFoodsLtdshares:5,915,194(2011:16,747,011;2010:16,747,011)

Unlisted investments ²

– Cooperatives 34 34 34 – – –

– Companies and others 48 45 37 – – –

– Deferred bonus funds 572 555 545 – – –

370,354 888,226 653,749 – – –

¹ Available-for-sale financial instruments carried at fair value are in Level 1 of the fair value hierarchy.² Available-for-sale financial instruments carried at fair value are in Level 2 of the fair value hierarchy.

Fair value hierarchy:Level 1 – Quoted prices in active markets for the same instrument.Level 2 – Valuation techniques for which significant inputs are based on observable market data.Level 3 – Valuation techniques for which any significant input is not based on observable market data.

The available-for-sale investments of one of the subsidiaries have been encumbered through a cession of 4,943,703 Pioneer Foods Ltd shares (2011:9,943,703;2010:9,943,703)infavouroftheLandBank(note24).

For the determination of fair values of unlisted investments refer to note 1.38.

ManagementestimatesthevalueofunlistedinvestmentsatR654,284(2011:R634,270;2010:R615,784).



78

12. Discontinued operations or disposal groups or non-current assets held-for-sale

The Group sold its investment in two of its subsidiaries, Overberg Motors (Pty) Ltd and Ontbondeling 1 (Pty) Ltd, excluding the Total Caledon forecourt and convenience store in Caledon, with an effective date of 1 March 2010. The Total Caledon forecourt and convenience store in Caledon have been incorporated in a fellow subsidiary, Overberg Agri Bedrywe (Pty) Ltd on the same date.


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

Profit and loss

Revenue – – 110,463 – – –

Expenses – – (110,266) – – –

Impairment on Overberg Motors (Pty) Ltdnet assets – – (426) – – –

Net loss before tax – – (229) – – –

Tax – – – – – –

– – (229) – – –

Assets and liabilities

Assets of disposal groups

Property, plant and equipment – – 6,582 – – –

Investment property – – 3,409 – – –

Impairment of subsidiary – – (426) – – –

Cash and cash equivalents – – 19,378 – – –

Inventory – – 6,042 – – –

Trade and other receivables – – 1,334 – – –

Intangible assets – – 4,375 – – –

– – 40,694 – – –

Liabilities of disposal groups

Borrowings – – 5,206 – – –

Deferred tax liability – – 454 – – –

Trade and other payables – – 4,439 – – –

– – 10,099 – – –



79

13. Biological assets2012 2011

Cost/Valuation

R’000


R’000


Cost/Valuation

R’000


R’000


Group

Livestock 2,293 – 2,293 1,555 – 1,555

2010Cost/

ValuationR’000


R’000


Group

Livestock 1,180 – 1,180

Reconciliation of biological assets – Group – 2012Opening balanceR’000

Fair value adjustments

R’000

Total

R’000Livestock 1,555 738 2,293



R’000

Total

R’000Livestock 1,180 375 1,555



R’000

Total

R’000Livestock 911 269 1,180

The Group conducts farming activities, including a herd of sheep and the cultivation of grain crops. Wheat, sheep and wool are traded. On 29February2012theGroupheld1750sheep[1531fullygrownand219lambs](2011:1701sheep[1054fullygrownand647lambs]; 2010: 1 659 sheep [1 450 fully grown and 209 lambs]). The Group produced the following, measured against fair value less selling costs at point of harvest:


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

Sheep 927 617 559 – – –

Wool 455 276 227 – – –

Grain 2,470 1,727 1,412 – – –

3,852 2,620 2,198 – – –



80

14. Investments in subsidiaries – Company

Name of company % holding2012

% holding2011

% holding2010

Carrying amount2012

Carrying amount2011

Carrying amount2010

Investment in Overberg Agri Bedrywe (Pty) Ltd 100,00 100,00 100,00 1,338 1,338 1,338Investment in Overberg Agri Beleggings (Pty) Ltd 100,00 100,00 100,00 189,248 189,248 189,248

190,586 190,586 190,586

The carrying amounts of subsidiaries are shown net of impairment losses.

Details of the abovementioned investments are provided in Annexure A.COMPANY

2012R’000

2011R’000

2010R’000

Reconciliation of investments in subsidiaries

Beginning of the year 190,586 190,586 188,296

Capital contribution to Overberg Agri Bedrywe (Pty) Ltd for BBBEE transaction – – 546

Capital contribution to Overberg Agri Beleggings (Pty) Ltd for BBBEE transaction – – 1,744

190,586 190,586 190,586

15. Deferred tax

Deferredtaxationiscalculatedonalltemporarydifferencesaccordingtotheliabilitymethodandatataxationrateof28,00%(2011:28,00%; 2010: 28,00%).

The movement on the deferred taxation account comprises the following:


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

Deferred taxation asset

Reconciliation of deferred tax asset:

Beginning of the year 3,306 6,530 5,594 – – –

Movement for the year: – – –

– Carried over from deferred tax liability (3,306) – (233) – – –

– Depreciation – (350) (1,211) – – –

– Provisions – (2,764) 1,098 – – –

– Deferred revenue – (5) (122) – – –

– Biological assets – (105) (75) – – –

– Non-current assets held-for-sale – – 1,479 – – –

– 3,306 6,530 – – –

The balance comprises the following:

Accelerated wear and tear – (9,213) (8,863) – – –

Biological assets – (433) (328) – – –

Provisions – 12,837 15,600 – – –

Deferred income – 115 121 – – –

– 3,306 6,530 – – –



81


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

15. Deferred tax (continued)

Deferred taxation liability

Reconciliation of deferred tax liability:

Beginning of the year (34,667) (29,345) (27,302) – – –

Movement for the year:

– Carried over to deferred tax asset 3,306 – 233 – – –

– Taxation loss (1,929) (93) (25) – – –

– Depreciation and amortisation (1,448) (2,106) (1,663) – – –

– Provisions 825 (362) (588) – – –

– Deferred revenue 719 – –

– Biological assets (207) – –

– Available-for-sale investments (40,519) – –

– Business combinations – (2,761) – – – –

(73,920) (34,667) (29,345) – – –

The balance comprises the following:

Accelerated amortisation on intangible assets (10,739) (11,866) (10,069) – – –

Accelerated wear and tear (40,580) (28,791) (25,720) – – –

Available-for-sale investments (40,519) – – – – –

Biological assets (640) – – – – –

Calculated assessed loss 1,181 3,110 3,202

Deferred revenue 835 – –

Provisions 16,542 2,880 3,242

(73,920) (34,667) (29,345) – – –

The deferred taxation asset is recognised where taxable income is expected to be realised as indicated by budgets and approved by Management.

Deferred taxation is not provided for where there is no expectation of future taxable income in the near future.

Deferred tax assets are recognised on any unutilised STC credits in so far as it is probable that subsidiaries in the Group will declare future dividends against which the STC credit can be applied. At year-end the STC credits of the subsidiaries in the Group on which no deferred taxation was recognised amounted toRnil(2011:R41,623,503;2010:R54,005,143).



82


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

16. Inventory

Grain and other products 43,286 211,890 267,452 – – –

Work-in-progress 1,652 1,076 1,118 – – –

Raw materials 1,640 2,776 179 – – –

Finished goods 6,901 7,729 7,727 – – –

Trading stock 164,855 135,164 121,691 – – –

Consumable inventory 14,718 9,670 5,125 – – –

233,052 368,305 403,292 – – –

BorrowingcoststothevalueofR466,287(2011:R260,020;2010:R408,246)havebeencapitalisedandincludedintheseedvalueataninterestrateofprimeless2,00%(2011:primeless2,00%;2010:primeless2,00%).Refertonote34.

BorrowingcoststothevalueofRnil(2011:R3,294,728;2010:R5,093,010)havebeencapitalisedandincludedinthebarleyvalueataninterestrateofprimeless2,20%(2011:primeless2,20%;2010:primeless2,00%).Refertonote34.

ManagementhaswrittenofftradeandgraininventoryofR2,499,770(2011:R504,000;2010:R1,573,267)tonetrealisablevalue.Thewrite-offisincluded in cost of sales in the Income Statement.

Managementmadeaprovision for impairmentof inventory. Includedin trade inventory isaprovisionofR5,309,892(2011:R4,857,587; 2010: R4,322,153) as an adjustment for slow-moving inventory. The movement in the provision is included in cost of sales in the Income Statement.

GrainproductsincludebarleyofRnil(2011:R183,986,162;2010:R249,642,258),whichservesascollateralinfavourofRandMerchantBank(“RMB”).RMB provides a facility in terms of a Milldoor contract for the financing and supply of malting barley and barley services between Overberg Agri Bedrywe (Pty) Ltd and the South African Breweries Maltings (Pty) Ltd (“SABM”). The facility bears interest as determined by RMB from time to time (2011: prime less 2,20%;2010:primeless2,00%).IntermsoftheMilldoorcontract,SABMisobligedtotakeupthecontractedbarleybetweenMarchandOctober.Forbarley received by SABM and approved for quality, SABM has the obligation to make payment directly to RMB. For barley rejected by SABM, Overberg Agri Bedrywe (Pty) Ltd has the obligation to immediately repay the amount advanced by RMB. Refer notes 18 and 24.

There is a general notarial bond over certain inventory in favour of ABSA Bank (note 24).

17. Loans to Group companies


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

Subsidiaries

Overberg Agri Bedrywe (Pty) Ltd – – – 48,531 26 26

This loan is unsecured, interest-free and has no terms of repayment. The carrying value represents the fair value of the loan.



83


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

18. Trade and other receivables

Trade receivables 287,568 311,616 292,360 – – –

Hire-purchase receivables 102,561 88,417 89,898 – – –

Less: Provision for impairment in receivables (19,228) (26,232) (23,723) – – –

370,901 373,801 358,535 – – –

Other receivables:

Sale of investment 155,704 – –

South African Revenue Services – VAT 4,297 – 38,812 – – –

Derivative financial instruments – 279 1,544 – – –

Staff loans 424 965 117 – – –

Prepayments 2,685 3,589 1,368 – – –

Deposit for purchases from suppliers 1,602 – –

Sundries 2,511 1,700 1,487 – – –

538,124 380,334 401,863 – – –

Less: Non-current portion of hire-purchase receivables (72,660) (57,395) (59,735) – – –

Less: Long-term portion of post-retirement medical recoupment right – (387) – – – –465,464 322,552 342,128 – – –

The fair value of trade and other receivables is as follows:

Trade receivables 268,340 285,384 269,243 – – –

Hire-purchase receivables 102,561 88,417 89,292 – – –

Other receivables 167,223 6,533 43,328 – – –

538,124 380,334 401,863 – – –

For credit quality of trade receivables refer to note 10.

The trade receivables, hire-purchases and other receivables that are fully performing, amount to: 264,579 232,865 243,974 – – –

Trade and other receivables past due but not impaired

Included in trade and other receivables are accounts past due, but no impairment has been done. These trade receivables represent individual clients who have no recent history of default and amount to: 31,312 37,797 16,950 – – –

The age analysis of these trade and other receivables is as follows:

0 – 30 days 7,890 11,658 6,305 – – –

30 – 60 days 4,016 4,353 4,631 – – –

60 – 90 days 5,693 2,920 2,232 – – –

90 days and older 13,713 18,866 3,782 – – –

31,312 37,797 16,950 – – –



84


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

18. Trade and other receivables (continued)

Trade and other receivables past due but renegotiated

Included in trade and other receivables are accounts past due on which no impairment has been done due to renegotiated terms. These trade receivables represent individual clients who have no recent history of default and amount to: 36,606 62,186 66,091 – – –

The age analysis of these trade and other receivables is as follows:

360 days and older 36,606 62,186 66,091 – – –

The Group owns the following types of securities that are taken into account in determining any provision for impairment of trade receivables and hire-purchase receivables, for trade and other receivables past due but renegotiated:

•Firstmortgagesoverproperty 16,070 14,250 4,940 – – –

•Secondmortgagesoverproperty 19,130 12,677 9,088 – – –

•Thirdmortgagesoverproperty 5,850 3,773 3,509 – – –

•Fourthmortgagesoverproperty 1,500 971 1,755 – – –

•Fifthmortgagesoverproperty – – 396 – – –

•Notarialbonds 1,175 1,003 525 – – –

•Cessionofshares 49,970 26,345 24,634 – – –

•Cessionofgrain – 1,147 2,490 – – –

•Personalguarantees 507 1,515 5,834 – – –

•Hire-purchaseassets – – 12,175 – – –

94,202 61,681 65,346 – – –

Trade and other receivables impaired

The trade receivables, hire-purchases and other receivables on which provision has been made for impairment after taking into account securities, amount to: 57,632 67,185 55,243 – – –

It is expected that a portion of these receivables will be recovered.

The age analysis of these receivables is as follows:

Within 1 year 20,626 16,176 8,779 – – –

Between 1 and 2 years 36,596 50,526 46,401 – – –

Between 2 and 3 years 410 483 63 – – –

57,632 67,185 55,243 – – –



85


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000


The Group owns the following types of securities that are taken into account in determining any provision for impairment of trade receivables and hire-purchase receivables, for trade and other receivables impaired:

•Firstmortgagesoverproperty 8,300 4,700 10,520 – – –

•Secondmortgagesoverproperty 7,300 10,800 4,250 – – –

•Thirdmortgagesoverproperty 1,963 4,200 800 – – –

•Fourthmortgagesoverproperty 1,750 2,600 – – – –

•Fifthmortgagesoverproperty 150 – –

•Sixthmortgagesoverproperty 1,000 – –

•Notarialbonds 737 1,287 2,262 – – –

•Cessionofshares 5,745 6,734 4,623 – – –

•Cessionofgrain – 773 2,629 – – –

•Personalguarantees 6,000 6,112 – – – –

•Hire-purchaseassets – 271 3,079 – – –

32,945 37,477 28,163 – – –

The fair values of the securities are limited to the total debtors balances on which an impairment was recognised. The fair values of the applicable securities were determined as set out in note 4.

TheGrouphasrecognisedamovementinprovisionof(R7,003,943)(2011:R2,508,496;2010:R1,119,850)forimpairmentoftradereceivables.Theindividual impairment of trade receivables is in respect of debtors who could possibly not settle their debts from current activities. The provision for impairment has been included in sales and marketing costs in the Income Statement.

TheGrouphaswrittenoffbaddebtstothevalueofR768,046(2011:R310,631;2010:R1,924,733).Baddebtswrittenoffhavebeenincludedinsalesand marketing costs in the Income Statement.

Movements in the provisions for impairment of trade receivables and hire-purchase receivables are as follows:

Opening balance 26,232 23,723 22,603 – – –

Provision for impairment 8,371 15,087 14,430 – – –

Trade receivables and hire-purchase receivables written off as irrecoverable during the year (239) (280) (280)

– – –

Unutilised amounts written back (15,136) (12,298) (13,030) – – –

Balance 29 February 19,228 26,232 23,723 – – –

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables referred to above.

All hire-purchase receivables are receivable within 5 years of the reporting date. The effective interest rate of the hire-purchase receivables is linked to the Land Bank rate plus a certain percentage point, based on the debtors’ risk profile. The dates of maturity of hire-purchases are as follows:



86

GROUPCapital

R’000

FinancingcostsR’000

Instalments

R’000


At 29 February 2012

Within one year 39,011 7,073 46,085

Between 1 and 2 years 28,882 4,754 33,637


Between 3 and 4 years 10,139 970 11,109


102,561 15,632 118,193

At 28 February 2011

Within one year 31,022 6,071 37,094





88,417 13,147 101,564

At 28 February 2010

Within one year 30,163 7,726 37,889





89,898 16,085 105,983

The effective interest rate on the receivables is as follows:

•Atfloatinginterestratesof9,07%(2010:8,26%;2010:11,85%).

TradereceivablesofR271,142,825(2011:R233,273,163;2010:R213,771,814)serveascollateralinfavouroftheLandBank.TheLandBankprovidesaproductionloanwithanoverdraftfacility,bearinginterestasdeterminedbytheLandBankfromtimetotime(currently7,00%[2011:7,00%;2010:8,50%]).If the Group does not keep to the terms of the production loan, the Land Bank has the right to collect cash flow from the trade receivables and/or call up other securities (refer to note 24) to settle the outstanding amount. If the terms of the production loan are honoured, the Group will continue to collect the trade receivables and offer new trade receivables debt as collateral. In terms of the credit policy debtors have to take out insurance to settle the debt in the event of death. The insurance policies have been ceded to the Group. The insurance policies have also been ceded to the Land Bank as security for the loans (refer to note 24).

IncludedintradeandotherreceivablesisanamountofRnil(2011:R14,482,352;2010:Rnil)inrespectofbarleyreceivedandapprovedforqualitybySouth African Breweries Maltings (Pty) Ltd (“SABM”) before year-end. In terms of the Milldoor contract, SABM has the obligation to make a payment directly to Rand Merchant Bank (“RMB”) for the barley received and approved. If SABM does not make payment to RMB, Overberg Agri Bedrywe (Pty) Ltd is obliged to make payment to RMB for the barley already delivered, but Overberg Agri Bedrywe (Pty) Ltd will then have a recoupment right against SABM in terms of the Milldoor contract. Payment was made after year-end. Refer to notes 16 and 24.

ThereisalsoacessionontradereceivablesofR25,542,873(2011:R20,440,851;2010:R12,050,453)infavouroftheABSABankloans.Thebankloansbearinterestasdeterminedfromtimetotimeandcurrentlytheinterestrateisprimeless1,50%(2011:primeless1,50%;2010:primeless1,50%)(note24).



87


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

19. Cash and cash equivalents

Cash and cash equivalents consist of:

Bank balances and cash on hand 22,361 26,415 17,960 – – –

Short-term deposits 483 480 481

22,844 26,895 18,441 – – –

The Group has overdraft facilities with financial institutions. The facilities bear interest as determined from time to time by these financial institutions (currently 7,00%–9,00%[2011:7,00%–9,00%;2010:8,50%–9,00%]).

Oneofthesubsidiaries,OverbergAgriBeleggings(Pty)Ltd,hasoverdraftfacilitiesofR15,000,000(2011:R15,000,000;2010:R15,000,000)withABSA Bank. As security for these overdraft facilities, fellow subsidiaries issued a limited suretyship of R5 million, and a cession of their issued share capital and aloanaccountofR10,200,000(2011:R13,522,715;2010:R11,863,842).Thebankborrowingsbearinterestatprime(2011:prime;2010:prime).AnothersubsidiaryintheGrouphasanoverdraftfacilityatFirstNationalBanktothevalueofR500,000(2011:R500,000;2010:R500,000)andacreditcardfacilitytothevalueofR20,000(2011:R20,000;2010:R20,000).

The effective interest rates on bank balances and short-term bank deposits are as follows:

At floating interest rates: % % % % % %

Bank balances 0,00 - 9,00 0,00 - 9,00 0,00 - 10,50 – – –

Short-term bank deposits 0,00 - 5,17 1,20 - 5,75 1,60 - 9,50 – – –

20. Current taxation

Current tax receivable 26,031 19,041 10,130 – – –

Current tax payable 45,922 466 816 45,922 – –

21. Loans and other receivables

•AgriMega 2,026 2,229 1,936 – – –

•ThembekaLimeHoldings(Pty)Ltd 14,573 13,927 13,132 – – –

•Realty1PropertyCapeAgulhas(Pty)Ltd 240 265 281 – – –

•RolaPropertyInvestments(Pty)Ltd 6,541 9,987 – – – –

23,380 26,408 15,349

Agri Mega:

This loan is secured by a first mortgage on land and buildings to the value of R2,4 million, bears interest at prime less 1,00% and is repayable in 80 (2011:92;2010:104)equalmonthlyinstalmentsofR31,244(2011:R24,227;2010:R18,616),withlastpaymentpayableon27October2018.Thecarrying value represents the fair value of the loan.



88

21. Loans and other receivables (continued)

Thembeka Lime Holdings (Pty) Ltd:

The shares held by non-controlling shareholders of Bontebok Lime Works (Pty) Ltd serve as security for this loan. The loan bears interest at prime less 2,00%. Interest is capitalised on a monthly basis. If dividends are declared by Bontebok Lime Works (Pty) Ltd, these dividends would firstly be offset against the interest capitalised. The loan can be repaid at any time, but no later than one month after the Financial Statements of Bontebok Lime Works (Pty) Ltd for the year ended 29 February 2016 have been finalised.

Realty 1 Property Cape Agulhas (Pty) Ltd:

R240,045(2011:R199,208;2010:R214,985)ofthisloanissecured,bearsinterestatprimeandisrepayablein15monthlyinstalments,starting 1May2012.Rnil(2011:R66,111;2010:R66,111)ofthisloanwasunsecured,borenointerestandhadnotermsofrepayment.Thecarryingvaluerepresents the fair value of the loan.

Rola Property Investments (Pty) Ltd:

Operating loanRnil(2011:R2,541,273;2010:Rnil)ofthisloanwasunsecured,boreinterestatprimeandwasrepayableby31March2011.Thecarryingvaluerepresented the fair value of the loan.

Contractual loanR6,541,318 of this loan is secured by a suretyship from Rola Holdings (Pty) Ltd and bears interest at prime. An initial instalment of R4,000,000 was paid. Thereafter equal interest instalments are payable for 24 months starting from the first month after the implementation date (1 March 2011), whereafter the capital balance plus interest calculated thereon, are payable in 60 equal instalments. The carrying value represents the fair value of the loan.


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

Non-current assets 22,804 22,365 14,921 – – –

Current assets 576 4,043 428 – – –

23,380 26,408 15,349 – – –

22. Share capital

Authorised

10 000 000 Ordinary shares of 15 cents each(2011:10000000Ordinarysharesof15centseach;2010: 10 000 000 Ordinary shares of 15 cents each) 1,500 1,500 1,500 1,500 1,500 1,500

Issued

8 388 583 Ordinary shares of 15 cents each (2011:8388583Ordinarysharesof15centseach;2010: 8 388 583 Ordinary shares of 15 cents each) 1,258 1,258 1,258 1,258 1,258 1,258

Share premium 187,064 187,064 187,064 187,064 187,064 187,064

Treasury shares (356) (356) (356) – – –

187,966 187,966 187,966 188,322 188,322 188,322



89


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

23. Post-retirement medical liability

Post-retirement medical benefits are payable to a specific grouping of participating former employees and, in prior years, a grouping of current employees. Refer to note 1.23 for a description of the plan.

Liability as at reporting date:

Post-retirement medical liability 13,270 12,667 12,727 – – –

Short-term portion of liability (1,155) (1,309) (1,336) – – –

12,115 11,358 11,391 – – –

Costs recognised in the Income Statement:

Post-retirement medical benefits 1,724 1,360 1,250 – – –

23.1 Post-retirement medical liability – Former employees

Post-retirement medical benefits are payable to a specific grouping of participating former employees. At year-end the number of members consisting of former employeeswas61(2011:66;2010:70)

Movement in the liability recognised in the Statement of Financial Position:

Net liability at the beginning of the year 12,738 12,556 12,458 – – –

Net expense recognised in the Income Statement 1,724 1,360 1,291 – – –

Contributions by the employer (1,192) (1,178) (1,193) – – –

Net liability at the end of the year 13,270 12,738 12,556 – – –

Short-term portion of liability (1,155) (1,193) (1,198) – – –

Long-term portion of liability 12,115 11,545 11,358 – – –

The amounts recognised in the Income Statement are as follows:

Interest paid 990 1,074 958 – – –

Actuarial loss/(profit) on liability 734 286 333 – – –

1,724 1,360 1,291 – – –

Primary actuarial assumptions:

Discount rate 7,36 % 8,14 % 8,96 % – – –

Healthcare inflation rate 5,66 % 5,45 % 5,78 % – – –

Retirement age 65/60 65/60 65/60 – – –

Mortality post-retirement PA90-1 PA90-1 PA90-1 – – –

Ultimate Ultimate Ultimate



90


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

23. Post-retirement medical liability (continued)

Sensitivity analysis of post-retirement medical liability for former employees:

Effect of healthcare inflation rate increase/decrease of 1,00% on the liability 1,243 1,128 1,118 – – –

Effect of post-retirement death date increase/decrease of 1 year on the liability 535 476 438 – – –

History of experience adjustments (734) (208) (253) – – –

23.2 Post-retirement medical liability – Current employees

Post-retirement medical benefits were payable to a specific grouping of participating current employees. At year-end the number of members that are current employeeswasnil(2011:nil;2010:29).

Movement in the liability recognised in the Statement of Financial Position:

Net liability at the beginning of the year – 111 270 – – –

Net expense recognised in the Income Statement – – (41) – – –

Contributions by the employer – (111) (118) – – –

Net liability at the end of the year – – 111 – – –

Short-term portion of liability – – (111) – – –

Long-term portion of liability – – – – – –

EstimatedcontributionstobepaidinthenextfinancialperiodamounttoRnil(2011:Rnil;2010:R111,410).

The amounts recognised in the Income Statement are as follows:

Movement in liability upon termination of service of members – – (41) – – –

On 1 March 2005 the liability of 49 current employees was bought out. Instead of retirement subsidy or medical scheme contributions, a fixed amount is payable in equal monthly instalments over the shorter of six years or the remaining years until retirement. The fixed contribution differs per individual and contributions cease immediately upon withdrawal, death, disability or early retirement.

The actuarial valuation calculated in 2005 was done by calculating the current value of the liability, taking into account a discount rate, death figure and withdrawals. Management calculates the liability annually, taking in consideration the assumptions used in previous valuations.

Non-current liabilities (12,115) (11,545) (11,358) – – –

Current liabilities (1,155) (1,193) (1,309) – – –

(13,270) (12,738) (12,667) – – –



91


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

24. Borrowings

Non-current

•Bankborrowings 42,842 59,343 44,562 – – –

42,842 59,343 44,562 – – –

Current

•LandBankproductionborrowings 244,650 154,346 184,469 – – –

•RandMerchantBank – 203,372 249,642 – – –

•Bankborrowings 16,391 15,178 8,284 – – –

•Shareholders’loans 114,860 85,707 83,600 – – –

375,901 458,603 525,995 – – –

418,743 517,946 570,557 – – –

TheGrouphasLandBankproductionborrowingswithanoverdraftfacilityofR500million(2011:R500million;2010:R500million),bearinginterestasdeterminedfromtimetotimebytheLandBank,currently7,00%[2011:7,00%;2010:8,50%]).

The Land Bank borrowings are secured through grain and other products, excluding barley (refer to note 16), a cession of certain Pioneer Foods Ltd shares (refertonote11),anencumbranceoftradereceivablestothevalueofR271,142,825(2011:R233,273,163;2010:R213,771,814)(refertonote18),cession of the insurance contract (refer to note 18) and general suretyship of Overberg Agri Ltd.

On 1 February 2012, one of the subsidiaries in the Group registered a notarial bond to the value of R100 million on all movable fixed assets (specifically or generally) that the subsidiary owns or has in its possession that Land Bank may deem necessary to serve as security for the loan (refer to note 5).

TheGrouphasafacilityofRnil(2011:R260million;2010:R300million)intermsofaMilldoorcontractwithRandMerchantBankandTheSouthAfricanBreweries Maltings (Pty) Ltd for the financing and supply of malting barley and the barley serves as security (note 16). The facility bears interest as determined fromtimetotimebytheRandMerchantBank(2011:primeless2,20%;2010:primeless2,00%).

The Group has bank borrowings repayable in monthly instalments over periods varying between seven and 10 years. The bank borrowings have beensecuredbyanunlimitedgeneralcessionover receivablesofR25,542,873 (2011:R20,440,851;2010:R12,050,453) (note18),a mortgageonpropertyofR20,000,000(2011:R20,000,000;2010:R20,000,000)(note5),ageneralnotarialbondovermovableassetsof R35,000,000(2011:R35,000,000;2010:R25,000,000)(note5),andlimitedsuretyshipofR65,000,000(2011:R65,000,000;2010:R67,000,000).Thebankborrowingsbearinterestasdeterminedfromtimetotimeandtheinterestrateiscurrentlyprimeminus1,50%(2011:primeminus1,50%; 2010: prime minus 1,50%).

The shareholders’ loans represent deposits made by shareholders of Overberg Agri Ltd and are unsecured. The number of shareholders with deposits amounted to121in2012(2011:104;2010:116).Theloansbearinterestasdeterminedfromtimetotime[currently6,00%(2011:6,00%;2010:7,50%)].Theloans are payable on demand.

Oneofthesubsidiaries,OverbergAgriBeleggings(Pty)Ltd,hasborrowingfacilitieswithABSABankofR15million(2011:R45million;2010:R45million).As security for these borrowing facilities, fellow subsidiaries issued a limited suretyship of R5 million, a cession of their issued share capital and a loan account ofR10,200,000(2011:R13,522,715;2010:R11,863,842).Thebankborrowingsbearinterestatprime(2011:prime;2010:prime).

A loan from ABSA Bank is secured with a negative pledge of assets and a letter of undertaking that shares in Pioneer Foods Ltd (to a maximum of 803,308 shares[2011:6,803,308;2010:6,803,308])wouldnotbesoldtorepayobligationsnotmet,withoutnotificationtoABSABank.



92


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

24. Borrowings (continued)

The Group’s exposure to interest rate adjustments and contractual renewal dates at reporting date is as follows:

Within 1 year 375,901 458,603 525,995 – – –

Within 1 to 5 years 38,910 50,875 38,684 – – –

5 years and longer 3,932 8,468 5,878 – – –

418,743 517,946 570,557 – – –

TheGroup’stotalborrowingfacilitiesavailableamounttoR515,500,000(2011:R805,500,000;2010:R872,500,000).

The Group has the following unutilised annually renewable borrowing facilities available at varying interest rates:

Borrowing facilities provided by financial institutions 270,850 447,782 433,389 – – –

25. Instalment sale agreements

Minimum payments due

– within one year 3,214 5,165 5,143

– in second to fifth year inclusive 2,002 6,559 13,085 – – –

5,216 11,724 18,228 – – –

Less: Future finance charges (1,093) (1,843) (3,345) – – –

Present value of minimum payments due 4,123 9,881 14,883 – – –

Present value of minimum payments due

– within one year 2,660 4,439 3,885 – – –

– in second to fifth year inclusive 1,463 5,442 10,998 – – –

4,123 9,881 14,883 – – –

Non-current liabilities 1,463 5,442 10,998 – – –

Current liabilities 2,660 4,439 3,885 – – –

4,123 9,881 14,883 – – –

Theinstalmentsaleagreementsinrespectoffixedassetsarerepayablein68(2011:68;2010:68)monthlyinstalments.Theinstalmentsdecreaseasexistingagreementsmature.Currentlytheinterestratevariesbetween6,90%and7,50%(2011:6,9%and7,50%;2010:8,60%and9,00%).AnamountofR4,654,464(2011:R6,377,311;2010:R3,927,370)hasbeenprepaidatWesbank,adivisionofFirstRandBankLtd.

TheinstalmentsaleagreementsaresecuredbyplantandequipmentwithabookvalueofR47,560,052(2011:R50,681,494;2010:R53,825,032) (note5),motorvehicleswithabookvalueofR3,446,098(2011:R3,043,189;2010:R1,392,981)(note5)andmortgageofR5,000,000heldoverthelandwithabookvalueofR720,001(2011:R758,062;2010:R796,124)(note5)registeredinfavourofFirstRandBankLtd.

The carrying value of the borrowings is approximately equal to the fair value thereof.



93


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

26. Trade and other payables

Trade payables 78,334 83,561 65,744 (1) – –

South African Revenue Services – VAT 1,177 3,173 602 – – –

Audit fees 3,142 3,192 2,734 – – –

Accrued expenditure

•Leave 5,168 4,693 4,329 – – –

•Profitbonus 1,911 1,425 4,761 – – –

•Performanceincentivescheme 8,777 2,368 9,769 – – –

•Compensationcommissioner 1,164 1,237 5,319 – – –

•Contractualgraintransportobligation – 1,071 – – – –

•Professionalservices 474 – –

•Insurancebusinessagencyliability 2,221 – – – – –

•Other 12,935 11,064 12,554 – – –

Incentive scheme – 702 – – – –

Quality upgrading liability 2,366 1,320 2,592 – – –

Deferred revenue 21,291 3,437 2,878 – – –

Derivative financial instruments – 279 – – – –

Securities transfer tax payable 2,564 – – 2,564 – –

Other payables 396 447 371 – –

141,919 117,968 111,653 2,653 – –

Less: Long-term portion of performance incentive scheme (2,354) (97) –

139,566 117,872 111,653 2,563 – –

Incentive scheme

29 February 2012

After the death of the beneficiary, the vesting of the incentive scheme was approved during the year and payment took place before year-end. No new incentive scheme has been entered into since.

28 February 2011

The Group operated a cash-based incentive scheme based on phantom shares, which can be paid out if an increase in the value, as determined by the incentive scheme, occurs. The incentive scheme comprises 100,000 phantom shares for the period of the incentive scheme. Any calculated increase in the value of the phantom shares is recognised in the Income Statement and included in administration cost.

The incentive scheme comprises that an allotted amount is determined, which is payable at the end of the term. The allotted amount is calculated with reference to the shares in Overberg Agri Ltd by determining the movement in the weighted trade value of shares between the allotment date and the vesting date.

GROUP

Key assumptions used in this model: 2012R’000

2011R’000

2010R’000

Weighted share value per share on the allotment date n/a R55,00 n/a

Weighted share value per share on the reporting date n/a R75,00 n/a

Discounting rate n/a 7,77% n/a



94

26. Trade and other payables (continued)

28 February 2010

The Group operated a cash–based incentive scheme based on phantom shares, which can be paid out if an increase in the value, as determined by the incentive scheme, occurs. The incentive scheme comprised 100,000 phantom shares for the period of the incentive scheme. Any calculated increase in the value of the phantom shares is recognised in the Income Statement and included in administration cost. Vesting took place on 1 March 2010 and the incentive was settled on 28 February 2010.

The incentive scheme comprises that an allotted amount is determined, which is payable at the end of the term. The allotted amount is calculated with reference to the shares in Overberg Agri Ltd by determining the movement in the weighted trade value of shares between the allotment date and the vesting date.

GROUP

Key assumptions used in this model: 2012R’000

2011R’000

2010R’000

Weighted share value per share on the allotment date n/a n/a R35,00

Weighted share value per share on the reporting date n/a n/a R55,00

Discounting rate n/a n/a n/a

The accrued liability, in terms of the incentive scheme, is provided against income on a time basis. Participants of the incentive scheme must be employed by the Group on the vesting date. Payment under the incentive scheme is subject to terms as determined by the Board of Directors.

Deferred revenue

Deferred revenue relates to storage levies raised in the current financial year which will only accrue in the next financial year as the grain costs are incurred. Refer to note 1.38.

Insurance agency business liability

Refer to note 27 for more information.

27. Provisions

Reconciliation of provisions – Group – 2012

Opening balance

Additions to goodwill

Transfer to accruals

Movement in Income Statement

Reversed during the

year

Total

Rehabilitation of mining land 478 – – 276 – 754

Insurance agency business liability 1,201 814 (2,221) 206 – –

Competition Commission 600 – – (241) (359) –

2,279 814 (2,221) 241 (359) 754


Opening balance


Settledduring the

year

Total

Rehabilitation of mining land 458 20 – 478

Pension fund surplus appropriation 6,070 (1,284) (4,786) –

Insurance agency business liability 1,024 177 – 1,201

Other provisions – 600 – 600

7,552 (487) (4,786) 2,279



95

27. Provisions (continued)


Opening balance


Total

Rehabilitation of mining land 219 239 458

Pension fund surplus appropriation 5,597 473 6,070

Insurance agency business liability 874 150 1,024

6,690 862 7,552

Pension fund surplus appropriation

The amount represents the expected liability, according to actuarial valuation of the improper appropriation of pension fund surpluses in the past, using the projected cash value method. The actuary assumed that the return on the portfolio where the surplus was actually invested should be used. The actuary assumed that the surplus was invested in a cash portfolio with minimum risk. The obligation was settled during the current financial year. Refer to note 1.38 for details.

Rehabilitation of mining land

The specific changes in the treatment of decommissioning and restoration asset were done retrospectively. The retrospective application of this requirement at the date of transition required the Group to construct a historical record of all such adjustments that would have been made in the past. In order to comply, the Group included the depreciated cost of the asset, at the date of transition, an amount calculated by discounting the liability at that date back to, and depreciating it from, when the liability was first incurred.

The changes in accounting estimates were recognised retrospectively by including it in profit or loss in the periods of the changes. To the extent that a change in accounting estimates gives rise to changes in assets or liabilities, or relates to an item of equity, it is required to be recognised by adjusting the asset, liability or equity item in the periods of the changes.

FNB provided a guarantee on behalf of a subsidiary of the Group to the Department of Mineral Resources for the estimated future rehabilitation cost. It is possible that the estimate of the rehabilitation liability could change as a result of changes in regulations or cost estimations. The carrying amount of the rehabilitation obligationsfortheGroupat29February2012wasR754,032(2011:R478,296;2010:R458,314).

Insurance agency business

The amount represents the expected liability relating to a business acquisition, as determined by external valuation, and is initially recognised at the discounted fair value on the acquisition date.

The estimated initial total purchase price of R1,656,335 was discounted from the date of acquisition until the final purchase price was calculated. The final purchase price as per the contract was determined and is payable on 1 March 2012 (80%) and 30 June 2012 (20%). For discounting, the Group applied the long-term financing rate (prime less 2,00%), which amounts to an annual rate of 13,68%. The net current value of the acquisition cost amounts to R2,220,763 (2011:R1,200,562;2010:R1,024,149),consistingofclientrelationsandgoodwill.

Competition Commission

The Competition Commission has issued a notice to a subsidiary of Overberg Agri Ltd, informing the subsidiary of an investigation into alleged collusion in the determination of SAFEX storage tariffs, in which Overberg Agri and other industry participants are named as respondents. The Competition Commission has not reverted back on this matter and Overberg Agri has settled the claim.



96


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

27. Provisions (continued)

Non-current liability 754 1,679 1,482 – – –

Current liability – 600 6,070 – – –

754 2,279 7,552 – – –

28. Revenue

Sale of goods 1,485,402 1,396,873 1,034,914 – – –

Rendering of services 72,452 53,921 53,262 – – –

1,557,854 1,450,794 1,088,176 – – –

Income includes sales of inventory, storage levies, labour sold, services rendered and commission received on short-term insurance and commission earned on the transactions where we act as agents (notes 1.27 and 51). For one of the subsidiaries, mineral royalty tax amounting to R71,658 (2011:R25,054;2010:Rnil)isdeductedfromrevenue.Refertonote1.19.

29. Interest income

Interest charged on trade and other receivables 28,102 28,294 29,061 – – –

Interest charged on hire-purchases 7,993 8,337 8,116 – – –

Interest received – South African Revenue Services 3 61 174 – – –

36,098 36,692 37,351 – – –

30. Other income

Investment income

•Dividendsreceivedfromlistedcompanies 13,404 6 20,945 – – –

•Dividendsreceivedfromunlistedcompanies – – – 567,927 12,583 20,552

•Bonusesreceived 21 11 28 – – –

Rental income

•Investmentproperties 792 908 798 – – –

•Otherproperties 220 203 167 – – –

•Vehicles,machineryandequipment – 2 – – – –

Bad debts recovered 6 99 81 – – –

Transport expense recovered 1,224 1,014 1,063 – – –

Derivative instruments – 255 230 – – –

Sundry income 1,304 860 967 – – –

16,971 3,358 24,279 567,927 12,583 20,552

31. Financing income

Interest revenue

Interest received – Bank 983 607 248 – – –



97


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

32. Other profits and losses

Net profit/(loss) on sale of property, plant and equipment 236 (129) 214 – –

Reversal of impairment on silos – – 513 – – –

Net profit on sale of investment property 1,316 2,161 693 – – –

Net loss on sale of intangible assets – (2) – – – –

Net profit /(loss) on sale of investments 656,211 – – (1,282) – –

Share-based payment cost – – (2,291) – – –

657,763 2,030 (871) (1,282) – –

33. Operating profit

Operating profit for the year is stated after accounting for the following:

Depreciation 15,090 13,747 11,768 – – –

Amortisation and impairments 4,942 4,591 2,868 – – –

Write-off and provision of inventory to net realisable value 2,952 1,039 1,923 – – –

Proceeds from the harvesting of biological assets (3,523) (2,004) (1,639) – – –

Adjustment of fair value of biological assets (738) (375) (268) – – –

Bad debts 768 311 1,925 – – –

Provision for impairment of receivables (7,004) 2,509 1,120 – – –

Rent paid 7,257 5,711 2,238 – – –

Profit bonus 1,903 923 5,213 – – –

BBBEE share-based payment cost – – 2,291 – – –

Employee costs

Salaries and wages 123,906 107,912 95,888 – – –

Other costs 5,131 4,432 3,373 – – –

Performance incentive scheme 6,028 491 5,784 – – –

Retirement benefit cost 9,708 9,254 7,341 – – –

Discontinued operations – – (5,219) – – –

144,773 122,089 107,167 – – –

Auditors’ remuneration

Audit fees for statutory auditing

– current year provision 3,142 3,326 3,292 – – –

– underprovision previous year 157 (269) 286 – – –

Other fees paid to auditors of the Group

– Management advisory services – 21 379 – – –

– Other 169 193 373 – – –

Tax advisory fees 551 215 4 – – –

4,019 3,486 4,334 – – –



98


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

33. Operating profit (continued)

Expenses by nature

Changes in inventories of finished goods and work in progress (132,301) (34,987) 214,788 – – –

Purchase of goods (1,140,224) (1,147,627) (1,110,741)

Purchase of goods – discontinued operations – – (100,508) – – –

Employee remuneration and benefit expense (159,327) (135,111) (120,049) – – –

Employee remuneration and benefit expense – discontinued operations – – (5,219) – – –

Depreciation, amortisation and impairment (20,030) (19,517) (14,636) – – –

Depreciation, amortisation and impairment – discontinued operations – – (825) – – –

Maintenance (10,497) (10,080) (9,950) – – –

Maintenance – discontinued operations – – (250) – – –

Foreign exchange gains (losses) 278 (458) 28 – – –

Auditors’ remuneration (4,019) (3,486) (3,803) – – –

Auditors’ remuneration – discontinued operations – – (531) – – –

Internal auditors’ remuneration (536) (672) (821) – – –

Provision for impairment of receivables 7,004 (2,509) (1,120) – – –

Motor vehicle expenses (3,532) (3,258) (1,351) – – –

Commission paid (1,902) (1,974) (1,912) – – –

Transportation expenses (9,601) (9,709) (11,471) – – –

Rent paid (7,244) (5,649) (2,238) – – –

Rent paid – discontinued operations – – (252) – – –

Insurance (4,895) (4,304) (3,687) – – –

Insurance – discontinued operations – – (376) – – –

Telephone expenses (4,236) (3,787) (3,311) – – –

Telephone expenses – discontinued operations – – (218) – – –

Water and electricity (7,423) (6,371) (5,491) – – –

Water and electricity – discontinued operations – – (279) – – –

Printing and stationery (2,047) (2,095) (1,600) – – –

Printing and stationery – discontinued operations – – (164) – – –

Trade promotions (4,331) (3,409) (2,517) – – –

BBBEE share-based payment cost – – (2,290) – – –

Impairment on investment – Overberg Motors (Pty) Ltd – discontinued operations – – (426) – – –

Profit bonus (1,903) (923) (5,213) – – –

Other expenses (10,989) (23,301) (22,769) (1,282) (2) –

Other expenses – discontinued operations – – (1,642) – – –

Total cost of sales, selling and marketing costs, operating expenses, administrative costs and other profits and losses (through Income Statement) (1,517,755) (1,419,227) (1,220,844) (1,282) (2) –



99


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

34. Finance costs

Gross interest paid•Bank,LandBankandshareholders’loans 31,358 30,337 35,091 – – –

•Instalmentsaleagreements 769 1,058 1,336 – – –

•RandMerchantBankandotherinterestpaid 6,795 14,952 6,552 – – –

38,922 46,347 42,979 – – –

Less: Interest paid capitalised

•Seed 466 260 408 – – –

•Barley 3,191 6,684 5,093 – – –

3,657 6,944 5,501 – – –

Net interest paid

•Bank,LandBankandshareholders’loans 30,892 30,337 33,164 – – –

•Instalmentsaleagreements 769 1,058 1,336 – – –

•RandMerchantBankandotherinterestpaid 3,604 8,008 2,978 – – –

35,265 39,403 37,478 – – –

Borrowing costs capitalised are attributable to borrowings specifically concluded in respect of qualifying assets (refer to notes 5 and 16).

35. Taxation

Major components of the tax expense

Current taxationCurrent period 12,080 6,967 13,799 – – –Local income tax – recognised in current tax for prior periods 519 – – – – –STC 45,957 23 – 45,922 – –CGT 74,709 99 659

133,265 7,089 14,458 45,922 – –

Deferred taxationCurrent period 2,040 5,786 1,561 – – –

135,305 12,875 16,019 45,922 – –

Reconciliation of the tax expense (%)

Reconciliation between applicable tax rate and average effective tax rate:

% % % % % %Applicable tax rate 28,00 28,00 28,00 28,00 28,00 28,00

Non-taxable income (26,40) (0,87) (8,17) (28,00) (28,00) (28,00)Non-allowable expenditure 0,06 1,83 0,52 – – – Prior year adjustments for taxation 0,07 (2,80) – – – – Capital gains taxation 10,42 0,20 (0,06) – – – Other permanent differences 0,27 (1,14) 0,09 – – – Secondary taxation on companies 6,41 – – 8,10 – – Deferred taxation not provided for 0,05 2,45 1,51 – – –

18,88 27,67 21,89 8,10 – –



100

GROUP

2012R’000

2011R’000

2010R’000

36. Earnings per share

Basic and headline earnings per share

The calculation of earnings per ordinary share is based on earnings as detailed below and on the weighted average number of ordinary shares in issue.

Weighted average number of ordinary shares in issue (’000) 8,258 8,258 8,258

– Issued shares (‘000) 8,389 8,389 8,389

– Less: Treasury shares (‘000) (130) (130) (130)

Earnings reconciliation

Profit attributable to equity holders 579,581 31,786 55,670

– From continuing operations 579,581 31,786 55,899

– From discontinued operations – – (229)

Adjusted for:

(Profit)/loss on sale of property, plant and equipment (236) 129 (214)

(Profit)/loss on sale of investment property (1,316) (2,161) (693)

(Profit)/loss on sale of intangible assets – 2 –

Reversal of impairment on silos – – (513)

Impairment of loan – 1,180 –

Profit on the sale of investments (656,211) – –

Total tax effects of adjustments 121,001 568 398

Total non-controlling interest effects on adjustments 17 8 31

Headline earnings 42,836 31,512 54,679

Basic earnings per share (cents)

– From continuing operations 7,018.4 384.9 676.9

– From discontinued operations – – (2,8)

Headline earnings per share (cents) 518,7 381,6 662,1



101


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

37. Cash (used in)/generated from operations

Profit before taxation 716,649 46,532 72,978 566,645 12,581 20,552

Adjustments for:

Depreciation and amortisation 20,031 18,323 15,149 – – –

Depreciation and amortisation – discontinued operations – – 825 – – –

Profit/loss on sale of assets (1,692) (2,030) (907) 1,282 – –

Dividends received (13,404) (6) (20,945) (567,927) (12,583) (20,552)

Interest received (37,081) (37,299) (37,599)

Penalties and interest 1,375 – – – – –

Finance costs 35,150 39,403 37,478 – – –

BBBEE share-based payment cost – – 2,290 – – –

Impairment (reversal) /loss (2) 1,179 (513) – – –

Bonuses received (21) (11) (28) – – –

Profit from sale of investments (656,211) – – – – –

Change in fair value of biological assets (738) (375) (269) – – –

Provision for pension surplus appropriation – (1,284) 473 – – –

Provision for post-retirement medical benefits 531 71 (60) – – –

Provision for retirement gratification (55) (58) (160) – – –

Provision for incentive scheme (702) 702 (1,161) – – –

Provision for performance incentive 6,409 (7,401) 1,198 – – –

Provision for profit bonus 486 (3,336) 631 – – –

Provision for slow-moving inventory 2,952 1,039 4,498 – – –

Provision for impairment of receivables (7,004) 2,508 1,120 – – –

Reallocation – property, plant and equipment, investment property and intangible assets – – 23 – – –

Accrual/provision for insurance agency business liability 1,020 177 150

Provision for Competition Commission (359) 600 – – – –

Bad debts written off 768 311 1,925 – – –

Provision for rehabilitation of mining land 276 20 239 – – –

Movement in deferred bonus funds (17) (10) (22) – – –

Decommissioning assets – land – (258) – – – –

Decommissioning assets – buildings – (146) – – – –

Changes in working capital:

Inventory 132,301 46,522 (225,326) – – –

Trade and other receivables (151,554) 32,640 (58,378) – – –

Trade and other payables 15,598 15,787 1,218 – – –

64,706 153,600 (205,173) – (2) –



102


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

38. Dividends paid

Balance at beginning of the year – – – – – –

Distribution according to the Statement of Changes in Equity (512,981) (12,620) (19,820) (520,703) (12,581) (20,552)

Dividend in specie 504,746 512,710 – –

Balance at end of the year – – – – – –

(8,235) (12,620) (19,820) (7,993) (12,581) (20,552)

AordinarydividendofR0,80(2011:R1,50;2010:R1,45)persharewasdeclaredandpaidduringthefinancialyear.SecuritiestransfertaxationofR1,281,775waspaidonbehalfofshareholderswhichisaccountedforasdividendspaid.AdividendinspecieofR512,710,193(2011:Rnil; 2010: R nil) was declared on 28 February 2012, consisting of one Pioneer Foods Ltd share being distributed for every one ordinary share held in Overberg AgriLtd.Nospecialdividendhasbeendeclaredorpaidduringtheyear(2011:Rnil;2010:R1,00).

39. Tax paid

Balance at beginning of the year 18,575 9,314 (702) – – –

Current tax for the year recognised in profit or loss (133,265) (7,089) (14,457) (45,922) – –

Overprovision of tax asset (1,612) – – – – –

Balance at end of the year 19,891 (18,575) (9,314) 45,922 – –

(96,411) (16,350) (24,473) – – –

40. Other comprehensive income

Gross Tax Net

Components of other comprehensive income – Group – 2012

Available-for-sale financial assets adjustments

Fair value adjustments on available-for-sale investments (517,489) (40,519) (558,008)

Gross Tax Net



Fair value adjustments on available-for-sale investments 234,467 – 234,467

Gross Tax Net



Fair value adjustments on available-for-sale investments 259,584 – 259,584



103

41. Unbundling of Pioneer Foods Ltd Group investment

During a special Board meeting on 28 February 2012, the Board approved a decision to unbundle a portion of the Group’s investment in Pioneer Foods Ltd in favour of the Group’s shareholders registered on 28 February 2012. The decision was implemented on 28 February 2012.

Overberg Agri Ltd holds 100 percent of the issued share capital of Overberg Agri Bedrywe (Pty) Ltd (“Bedrywe”) and Overberg Agri Beleggings (Pty) Ltd (“Beleggings”). Although Bedrywe is an operating entity and mainly houses operating activities, it also holds a significant number of Pioneer Foods Ltd shares. Beleggings is an investment company and holds a significant number of Pioneer Foods Ltd shares. The Pioneer Foods Ltd shares were held for more than three years in both companies. It was a requirement that 5,803,308 Pioneer Foods Ltd shares will be retained in Bedrywe (5,000,000) and Beleggings (803,308), and not form part of the unbundling of the Pioneer Foods Ltd investment.

Bedrywe sold a number of Pioneer Foods Ltd shares in the market in order to raise funding for the transaction and tax costs relating to the proposed unbundling. Bedrywe sold the remaining Pioneer Foods Ltd shares (except for 5 million) to Overberg Agri Ltd. Beleggings sold 6,018,429 Pioneer Foods Ltd shares to Overberg Agri Ltd. The sale of the Pioneer Foods Ltd shares constituted a disposal for capital gains tax purposes in consequence of which Bedrywe and Beleggings had to determine a taxable capital gain. Such capital gain was calculated as the difference between the base cost of the Pioneer Foods Ltd shares and the proceeds on disposal (i.e. the sales proceeds).

Overberg Agri Ltd distributed the Pioneer Foods Ltd shares acquired from Bedrywe and Beleggings as a dividend in specie to its shareholders. This included a distribution of 130,315 Pioneer Foods Ltd shares to Beleggings as a dividend in specie. 42. Broad Based Black Economic Empowerment share-based payment transaction

During 2010 the Group successfully completed some of the phases of the Broad Based Black Economic Empowerment transaction planned in fiscal 2009.

Details of the transaction completed include:

• AshareissuebyBontebokLimeWorks(Pty)Ltdof7028ordinarysharesofR2eachatapremiumofR1,705pershare(totalequityissueR12,000,000).Bontebok Lime Works (Pty) Ltd received BBBEE accreditation as required by law for renewal of the mining licence. This dilution of the share investment of theGroupinBontebokLimeWorks(Pty)LtdtominoritieswasaccountedforintheGroupfinancialstatementsasatransactionwithequityparticipants;

• ThedisposalofaportionoftheirinvestmentinOverbergAgriLtdbytwosubsidiariesintheGroup(OverbergAgriBedrywe(Pty)LtdandOverbergAgriBeleggings (Pty) Ltd to the BBBEE partner Thembeka OVB Holdings (Pty) Ltd on 1 March 2009. At the time when the parties agreed to the terms, the selling price and market price of Overberg Agri Ltd’s shares were almost equal. The effective date for the transaction was after the fiscal 2009 year-end. As the market price has increased in the period between reaching the agreement and the effective date, this effectively meant that the shares were sold at a discount in terms of the Accounting standards. The discount was accounted for as a share-based payment cost of R2,290,082 in profit and loss with the corresponding entry in equity as a share-based payment reserve in the accounts of the subsidiaries. The Company’s investment in the subsidiaries increased as a result of the share-based payment cost with the corresponding entry in equity as a share-based payment reserve. On consolidation the increased investment in subsidiaries is eliminated with the subsidiaries’ share-based payment reserve. The profit with the disposal of treasury shares was accountedforintheGroupfinancialstatementsasatransactionwithequityparticipantsandwasaccountedforintheStatementofChangesinEquity;

• Duringfiscal2010theBBBEEpartner(ThembekaOVBHoldings(Pty)Ltd)alsoacquiredsharesinOverbergAgriLtdatmarketvalue.Atyear-endThembekaOVBHoldings(Pty)Ltdhada20,10%(2011:20,10%;2010:20,10%)interestinOverbergAgriLtd.


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

43. Cash flows of held-for-sale/discontinued operations

Cash flows (utilised in)/from operating activities – – (19,179) – – –



104


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

44. Business combinations

44.1 Business combinations occurring during the current and prior year

Aggregated business combinations

Property, plant and equipment – 4,373 – – – –

Intangible assets – 10,250 – – – –

Inventory – 12,574 – – – –

Staff loans – 116 – – – –

Trade and other receivables – 13,578 – – – –

Cash and cash equivalents – 17 – – – –

Deferred tax – (2,761) – – – –Trade and other payables – (389) – – – –Total identifiable net assets – 37,758 – – – –Goodwill – 9,011 – – – –

– 46,769 – – – –

Consideration paidCash (46,769) – – – –

Net cash outflow on acquisitionCash consideration paid – (46,769) – – – –Cash acquired – 17 – – – –

– (46,752) – – – –

44.1.1 Acquisition of total assets and liabilities of Acorn Fasteners (Pty) Ltd and Howson Ramsden (Pty) Ltd

Acorn Fasteners (Pty) Ltd:

The total assets and liabilities of the entity Acorn Fasteners (Pty) Ltd were acquired on 1 December 2010 for an amount of R13,514,889.

The total purchase price is financed by inter-Group loans. The loan is repayable within 5 years, with an interest rate of prime bank rate minus 1,50%.

Included in the purchase price was an amount of R5,500,000 paid for intangible assets. The entity trades as a distributor of industrial fasteners in Gauteng.

Howson Ramsden (Pty) Ltd:

The total assets and certain liabilities of the entity Howson Ramsden (Pty) Ltd were acquired on 1 March 2010 for an amount of R33,254,057.

The abovementioned purchase price is financed by ABSA through a 5-year loan to Boltfast (Pty) Ltd. The conditions of the loan are as follows:–-Interestrate:Primebankrateless0,75%;–Period:5years;–AnotarialbondofR10millionovertheinventoryofHowsonRamsden(Pty)Ltd;–SuretybyOverbergAgriBeleggings(Pty)LtdofR20million;and– Cession of the loan account of Overberg Agri Beleggings (Pty) Ltd to Boltfast (Pty) Ltd.

Included in the purchase price was an amount of R11,000,000 paid for intangible assets.

The entity trades as a distributor of industrial fasteners in Gauteng.

The assets and liabilities of abovementioned entities, as at 1 March 2010 and 1 December 2010, the dates of acquisition, may be summarised as follows:



105

44. Business combinations (continued)

44.1.1 Acquisition of total assets and liabilities of Acorn Fasteners (Pty) Ltd and Howson Ramsden (Pty) Ltd (continued)

Fair value of assets required and liabilities assumed

GROUP2012R’000

2011R’000

AcornFasteners (Pty) Ltd

Howson Ramsden(Pty) Ltd

Property, plant and equipment – 1,619 2,754 – – – Intangible assets – 2,771 7,479 – – – Inventories – 4,277 8,297 – – – Staff loans – – 116 – – – Trade and other receivables – 2,251 11,327 – – – Cash and cash equivalents – – 17 – – – Deferred tax – (739) (2,022) – – – Provisions – (132) (257) – – – Total identifiable net assets – 10,047 27,711 – – –Goodwill – 3,468 5,543 – – –

– 13,515 33,254 – – –

Acquisition date fair value of consideration paid

Cash – (13,515) (33,254) – – –


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

45. Disposal of shares in subsidiaries

During the previous year the Group disposed of its shareholding in Overberg Motors (Pty) Ltd and Ontbondeling 1 (Pty) Ltd excluding the Total Caledon forecourt and convenience store. The Total Caledon forecourt and convenience store in Caledon have been incorporated into a fellow subsidiary.

The Group realised the following gain with the transaction:

Proceeds with disposal of shares in subsidiaries

Consideration received– Cash and cash equivalents – 28,619 – – –

Fair value of net assets held in subsidiaries comprising:

Property, plant and equipment – 5,360 – – –Investment property – 3,409 – – –Intangible assets – 4,375 – – –Inventories – 6,042 – – –Trade and other receivables – 1,334 – – –Cash and cash equivalents – 19,378 – – –Borrowings – (5,206) – – –Trade and other payables – (4,439) – – –Deferred tax liability – (454) – – –Impairment – (1,180) – – –

Total – 28,619 – – –

Net cash inflow with disposal of subsidiaries – 9,241 – – –



106


2011R’000

2010R’000

2012R’000

2011R’000

2010R’000

46. Operating lease commitments

The Group leases various property, machinery and equipment under cancellable operating lease agreements, including the following:

1. PhotocopiersThe subsidiaries in the Group are required to give 90 days’ notice for the termination of these agreements. The remaining lease periods at year-end are between 4 and 44 months. The lease expenditure is charged to the Income Statement during the year.

2. Rented propertiesThe future aggregate minimum lease payments under non-cancellable operating leases are as follows:

Within 1 year 5,740 4,275 3,150 – – –

Within 2 – 5 years 13,437 11,900 9,193 – – –

After 5 years 830 646 – – – –

20,007 16,821 12,343 – – –

47. Capital obligations

Property, plant and equipment

Amounts approved

– Contracted 32,943 – 2,754 – – –

– Not contracted – 33,099 – – – –

32,943 33,099 2,754 – – –

Intangible assets

Amounts approved

– Contracted – – 13,022 – – –

– Not contracted – – – – – –

– – 13,022 – – –

These amounts will be financed from own or borrowed funds.

48. Contingent liabilities and guarantees

Guarantees

The following guarantees are provided by banks:

Western Cape Regional Services Board 20 20 20 – – –

Perishable Products Export Control Board 4 4 4 – – –

Cape Metropolitan Board 5 5 5 – – –

Eskom 28 28 68 – – –

Department of Mineral Resources 850 500 178 – – –

Theewaterskloof Municipality 19 19 19 – – –

926 576 294 – – –



107

48. Contingent liabilities and guarantees (continued)

Other guarantees

Overberg Agri Beleggings (Pty) Ltd provided a guarantee of R10 million to Wesbank for the financing of the extension of the hydroxide plant in Bontebok Lime Works (Pty) Ltd.

Performance incentive scheme

As part of the conditions of the performance incentive scheme, a part is deferred to the following financial year and employees will only be eligiblefortheseamountsifspecificagreedupongoalsareachieved.Thedeferredperformanceincentiveliabilityatyear-endamountstoRnil(2011:Rnil;2010: R1,710,906).

Taxation

OnthetaxassessmentsreceivedfromSARSforoneofthesubsidiaries,penaltiestothevalueofRnil(2011:R1,497,000;2010:Rnil)hasbeenlevied.Management has investigated the penalties and is of the opinion that there are reasonable grounds for an objection. Management have lodged an objection.

Environmental authorisations

The Department of Environmental Affairs and Tourism has determined that one of the subsidiaries in the Group has transgressed the National Environmental Management Act and Air Quality Act. This finding will lead to a possible penalty being imposed on the subsidiary. The amount of the penalty could not be determined at the time of compiling this financial report. This penalty is due to the erection of the current Calcining and Hydrating Plants before obtaining the necessary environmental authorisations.

COMPANY

2012R’000

2011R’000

2010R’000

49. Related parties – Company

49.1 Related party balances

(i) Loans to related parties

•OverbergAgriBedrywe(Pty)Ltd 48,531 26 26

(ii) Investments in subsidiaries

•OverbergAgriBedrywe(Pty)Ltd 1,338 1,338 1,338

•OverbergAgriBeleggings(Pty)Ltd 189,249 189,249 189,249

190,587 190,587 190,587

Investments in subsidiaries are disclosed in Annexure A.



108108

(i) Key personnel remuneration

Short-term employee benefits paid by subsidiaries 2,467 2,294 1,728

Performance incentive scheme paid by subsidiaries 90 – 393

2,557 2,294 2,121

(ii) Dividends paid to subsidiaries

Distribution as per the Statement of Changes in Equity 8,069 195 738

(iii) Dividends received from subsidiaries

Intergroup dividends received on shareholding 567,927 12,583 20,552

(iv) Directors’ remuneration

Executive

•RemunerationforservicesasDirectorspaidbysubsidiaries 9,903 8,818 9,193

Non-executive

•RemunerationforservicesasDirectorspaidbysubsidiaries 2,094 1,911 1,569

11,997 10,729 10,762

50. Directors’ emoluments

Executive

29 February 2012

Salaries Incentive bonus

Pension fund contributions

Medical aid contributions

Total

R Pheiffer 1,699 1,622 326 45 3,692

LE Coetzer 1,545 305 271 36 2,157

FGG Joubert 1,347 366 176 36 1,925

AJ Uys 1,502 366 230 31 2,129

6,093 2,659 1,003 148 9,903


2011R’000

2010R’000

49. Related parties – Company (continued)

49.2 Related party transactions



2012109109

50. Directors’ emoluments (continued)

28 February 2011




Total

R Pheiffer 2,243 1,003 466 38 3,750

LE Coetzer 1,434 56 274 33 1,797

FGG Joubert 1,421 77 181 34 1,713

AJ Uys 1,204 92 233 29 1,558

6,302 1,228 1,154 134 8,818

28 February 2010




Total

R Pheiffer 2,071 1,916 426 28 4,441

LE Coetzer 1,180 270 199 25 1,674

FGG Joubert 1,092 284 169 27 1,572

AJ Uys 996 283 206 21 1,506

5,339 2,753 1,000 101 9,193

Non-executive

29 February 2012

Directors’ fees

Total

D de Kock 322 322

DG de Kock 267 267

RR Blom 193 193

S Cassiem 130 130

ZL Combi 124 124

DC Human 139 139

HP Marais 192 192

J v/d M Rossouw 133 133

MJ Roux 188 188

HG Schönfeldt 134 134

JG van Deventer 136 136

JP Viljoen 136 136

2,094 2,094



110110

50. Directors’ emoluments (continued)

28 February 2011

Directors’ fees

Total

D de Kock 309 309

DG de Kock 253 253

RR Blom 133 133

S Cassiem 31 31

ZL Combi 128 128

DC Human 133 133

HP Marais 181 181


MJ Roux 179 179



JP Viljoen 131 131

1,911 1,911

28 February 2010

Directors’ fees

Total

D de Kock 264 264

DG de Kock 229 229

RR Blom 120 120

ZL Combi 97 97

DC Human 122 122

HP Marais 131 131


MJ Roux 126 126



JP Viljoen 121 121

1,569 1,569



111111

51. Comparative figures

Cost of sales and other income

In the previous financial years, rebates on purchases amounting to R806,033 for 2011 (2010: R245,855) were incorrectly disclosed as other income on the face of the Income Statement. In the current year it was reclassified to be included in cost of sales. There is no effect on operating profit and tax.

Trade receivables and trade payables

In the previous financial years, the amount of R196,181 for 2011 [2010: R(40,492)] owed to/(receivable from) foreign creditors was disclosed as part of trade receivables. In the current year it was reclassified to be included in trade payables. There is no effect on operating profit and tax.

Sales, cost of sales and operating expenditure

In the previous financial years, interdepartmental sales amounting to R10,743,645 for 2011 (2010: R11,884,253), interdepartmental cost of sales amounting to R6,204,187 for 2011 (2010: R6,811,394) and interdepartmental operating expenditure amounting to R4,539,458 for 2011 (2010: R5,072,859) were overstated on the face of the Income Statement. In the current year it was reclassified and the net amounts were disclosed. There is no effect on operating profit and tax.

52. Events after the reporting period

Refer to note 7 of the Directors’ report for more details.




112112

1. Investments in Subsidiaries of Overberg Agri Ltd

2012#

Shares

2011#

Shares

2010#

Shares

2012

R’000

2011

R’000

2010

R’000

Shares at cost price

Overberg Agri Bedrywe (Pty) Ltd(100% interest)

79,238,110 79,238,110 79,238,110 1,338 1,338 1,338

Nature of business: Supply and delivery of agriculture-related products and services. Contribution to Group profit: R287,820,218(2011:R10,455,210;2010:R32,682,321)

Overberg Agri Beleggings (Pty) Ltd(100% interest)

175,229 175,229 175,229 189,248 189,248 189,248

Nature of business: Investment company.Contribution to Group profit: R343,508,381(2011:R6,577,715;2010:R14,847,195)

190,586 190,586 190,586

2. Investments in Subsidiaries of Overberg Agri Beleggings (Pty) Ltd

2012#

Shares

2011#

Shares

2010#

Shares

2012

R’000

2011

R’000

2010

R’000


Avello Kaap (Africa’s Best 323) (Pty) Ltd(100% interest)

2,000,000 2,000,000 2,000,000 – – –

Nature of business: Selling of agrichemicals. Contribution to Groupprofit:R1,145(2011:-R539;2010:-R603)

Bontebok Motorgroep (Pty) Ltd(100% interest)

400,000 400,000 400,000 – – –

Nature of business: Dormant. Contribution to Group profit: R12,963(2011:-R590,083;2010:R31,820)

Boltfast (Pty) Ltd (100% interest) 100 100 100 – – –

Nature of business: Buying and selling of industrial fasteners. Contribution to Group profit: R479,592 (2011:R6,745,815;2010:R14,018,799)

Bontebok Lime Works (Pty) Ltd(74,00% interest)

20,000 20,000 20,000 3,437 3,437 3,437

Nature of business: Lime mine that produces hydrated lime, feed lime and agricultural lime. Contribution to Group profit: R5,473,164(2011:R4,933,809;2010:R3,422,308)


ANNEXURE A FOR THE YEAR ENDED 29 FEBRUARY 2012

2012113113

2012#

Shares

2011#

Shares

2010#

Shares

2012

R’000

2011

R’000

2010

R’000


Bredasdorp Slagpale (Pty) Ltd(100% interest)

638,500 638,500 638,500 6,146 6,146 6,146

Nature of business: Operates abattoir. Contribution to Group profit:R2,904,461(2011:R1,258,838; 2010: R1,522,517)

Overberg Motors (Pty) Ltd (0,00% interest)(2011:0%;2010:100%)

– – 100 – – 354

Nature of business: Operates motor dealerships, forecourt and workshops. Contribution to Group profit: R nil (2011:Rnil;2010:-R658,690)

Ontbondeling 1 (Pty) Ltd (0,00% interest) (2011:0%;2010:100%)

– – 100 – – –

Nature of business: Dormant. Contribution to Group profit: R nil (2011:-R406,778;2010:Rnil)

Promeal (Pty) Ltd (100% interest) 2,000 2,000 2,000 56,441 56,441 56,441

Nature of business: Manufactures wet pet food for retail market. Contribution to Group profit: R5,263,176(2011:R8,589,478;2010:R8,102,220)

Procuro (Pty) Ltd (100% interest) 100 100 100 – – –

Nature of business: Dormant. Contribution to Group profit: R nil (2011:Rnil;2010:Rnil)

66,024 66,024 66,378

The total profit/loss for the year of the subsidiaries differ from the Group’s profit due to intergroup transactions eliminated upon consolidation.

The abovementioned subsidiaries are all incorporated in South Africa. The subsidiaries are consolidated in accordance with IAS 27, Consolidated and Separate Financial Statements.

2. Investments in Subsidiaries of Overberg Agri Beleggings (Pty) Ltd (continued)


ANNEXURE AFOR THE YEAR ENDED 29 FEBRUARY 2012


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