2016 Financial Statements

Transcription

OVERBERG AGRI LIMITED AND ITS SUBSIDIARIES
(Registration number 1998/001018/06)
FINANCIAL STATEMENTS
for the year ended 29 February 2016
These financial statements were prepared by:
L de Villiers
and supervised by:
LE Coetzer
These financial statements have been audited in compliance with the applicable requirements of the
Companies Act 71 of 2008.
Overberg Agri Limited and its subsidiaries
General Information
Company registration number
1998/001018/06
Country of incorporation and domicile
South Africa
Directors
DG de Kock
DCH Uys
AJ Uys
D de Kock
RR Blom
LE Coetzer
DC Human
FGG Joubert
RP Krige
P Malan
HP Marais
AC Neethling
J v/d M Rossouw
MJ Roux
CA Smith
MR van Breda
° ^
° ^
¤
* ^
^
¤
^
¤
# ^
^
* ^
° ^
^
^
° ^
° ^
^ = Non-executive Directors
¤ = Executive Directors
° = Audit committee
# = Appointed on 27 August 2015 as Non-executive Director
* = Stepped down on 27 August 2015
Company Secretary
A Steyn
Business address
11 Donkin Street
Caledon
7230
Registered office
PO Box 50
Caledon
7230
External Auditors
PricewaterhouseCoopers Inc.
Internal Auditors
Moore Stephens Risk Services (Pty) Ltd
Attorneys
Van der Spuy and Partners
Bankers and Financiers
Land Bank
Standard Bank
ABSA Bank Ltd
First National Bank
Wesbank
Nedbank Ltd
Website
www.overbergagri.co.za
1
Chairperson
Vice Chairperson
Managing Director
Contents
Page
Directors' responsibilities and approval
3
Certificate of the Company Secretary
4
Audit and risk committee report
4
Independent auditor's report
5-6
Directors' report
7-8
Statement of financial position
9
Income statement
10
Statement of comprehensive income
10
Statement of changes in equity
11 - 12
Statement of cash flows
13
Accounting policies
14 - 25
Notes to the financial statements
26 - 78
Annexure A
79 - 80
2
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF
OVERBERG AGRI LIMITED AND ITS SUBSIDIARIES
We have audited the consolidated and seperate financial statements of Overberg Agri Limited and
its subsidiaries set out on pages 9 to 80, which comprise the statement of financial position as at
29 February 2016, and the statement of comprehensive income, statement of changes in equity
and statement of cash flows for the year then ended, and the notes, comprising a summary of
significant accounting policies and other explanatory information.
Directors’ Responsibility for the Financial Statements
The company’s directors are responsible for the preparation and fair presentation of these
consolidated and separate 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 consolidated
and separate financial statements that are free from material misstatement, whether due to fraud
or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated and separate 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 consolidated and
separate 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.
PricewaterhouseCoopers Inc., No 1 Waterhouse Place, Century City 7441, P O Box 2799, Cape Town 8000
T: +27 (21) 529 2000, F: +27 (21) 529 3300, www.pwc.co.za
Chief Executive Officer: T D Shango
Management Committee: T P Blandin de Chalain, S N Madikane, P J Mothibe, C Richardson, F Tonelli, C Volschenk
Western Cape region – Partner in charge: D J Fölscher
The Company's principal place of business is at 2 Eglin Road, Sunninghill where a list of directors' names is available for inspection.
Reg. no. 1998/012055/21, VAT reg.no. 4950174682
Directors' report for the year ended 29 February 2016
The Directors' annual report, which forms part of the Annual Financial Statements of the Group and the Company for the year ended 29
February 2016, is presented below.
1.
Review of activities
The objectives of the Group 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.
Going concern
Based on the financial statements, the present position of the Group, budgets for the coming year and available financing facilities, the
directors have no reason to believe that the Group will not be a going concern. The going concern principle is therefore accepted and
applied in the preparation of the financial statements.
3.
Directors
Refer to General Information on page 1.
Directors' interests
The 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 six percent.
Directors' employment contracts and trade limitations
The 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' remuneration
The Directors' remuneration for the year under review has been set out in note 46.
4.
Company Secretary
The Company secretary of the Company is A Steyn of:
Business address:
11 Donkin Street
Caledon
7230
5.
Share capital
During the year under review, 838,858 of the issued shares were repurchased from Overberg Agri Beleggings (Pty) Ltd. The authorised
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 7,549,725 (2015: 8,388,583 ; 2014: 8,388,583) were in issue.
6.
Financial results, dividends and other financial matters
Dividend and capital distribution
An ordinary dividend of R2.94 (2015: R2.18 ; 2014: R1.20) per share was declared on 30 June 2015 and paid on 24 July 2015. No
special dividend (2015: R3.16 ; 2014: R nil) was declared during the year.
Share trading
Overberg Agri Ltd manages the over-the-counter trading internally. Trading is regularly reviewed 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.
Overberg Agri was granted temporary exemption by the Registrar of Security Services of the FSB in terms of the provisions of the
Financial Markets Act, 19 of 2012 (“the Act”). In view of the provisions of the Act, Overberg Agri reviewed the manner in which trading
of its shares takes place and amended its trading procudures to ensure the trading of Overberg Agri’s shares falls outside the ambit
of the Act. The trading procedure requires bilateral negotiation between buyers and sellers, and unless the shares are ceded to
Overberg Agri, the buyer will pay the purchase price directly to the seller. Overberg Agri has also amended its systems to
accommodate this new procedure. The amended procedure was implemented on 17 August 2015.
7
Directors' report for the year ended 29 February 2016
6.
Financial results, dividends and other financial matters (continued)
Financial results
The Group realised a profit from normal activities for the year amounting to R104,197,572 (2015: R74,059,464 ; 2014 R54,080,054),
after provision for tax of R35,129,998 (2015: R27,800,364 ; 2014: R19,459,990) was made.
During the financial year the following extraordinary transactions took place:

The Board decided to dispose of part of the available-for-sale investment held in Pioneer Foods Ltd, consisting of 1,869,296
shares. The Group realised a profit from this transaction amounting to R313,406,428, after provision for tax of R49,130,685
was made.

During the 2016 budget speech the capital gains tax inclusion rate for companies was increased from 66.6% to 80.0%.
Subsequently, the deferred tax provision on available-for-sale investments for the Group was increased on 29 February 2016 in
terms of AC 502 ('Substantively Enacted Tax Rates and Tax Laws').
In the 2015 financial year the following extraordinary transactions took place:

Quantum Foods Ltd shares were acquired in the form of a dividend in specie to the value of R27,542,536.
In the 2014 financial year the following extraordinary transactions took place:

The Board approved a transaction in terms whereof Overberg Agri Beleggings (Pty) Ltd bought Zeder Financial Services (Pty)
Ltd's direct investment in Overberg Agri Ltd. As consideration for the shares, 1 345 898 Pioneer Foods Ltd shares were
transferred to Zeder Financial Services. 150,000 of these shares were transferred by Overberg Agri Beleggings (Pty) Ltd, and
1,195,898 by Overberg Agri Bedrywe (Pty) Ltd. The Group realised a profit from this transaction for the year amounting to
R111,344,795. There are no tax consequences as the transaction was done in terms of Section 42 of the Income Tax Act.

The Gro Capital loan was settled in 2014 by disposing of 1 700 000 Pioneer shares held by Grain Farmers Group and
1,000,000 Pioneer shares held by Overberg Agri Bedrywe (Pty) Ltd. The Group realised a profit from this transaction for the
year amounting to R88,709,151, after provision for tax of R22,537,513. The nett proceeds was used to settle the loan.

As a result of the rationalisation in the Overberg Agri group, a dividend in specie of R66,024,326 was declared by Overberg
Agri Beleggings (Pty) Ltd to Overberg Agri Ltd on 1 November 2013, consisting of the investment that the company held in
Boltfast (Pty) Ltd, Promeal (Pty) Ltd, Bontebok Limeworks (Pty) Ltd and Bredasdorp Slagpale (Pty) Ltd. The Grain Farmers
Group was unbundled and the businesses of Mooreesburgse Koringboere (Pty) Ltd, Unique Agri Trade (Pty) Ltd and MKB
Versekeringsmakelaars (Pty) Ltd were incorporated within Overberg Agri Bedrywe (Pty) Ltd from 1 September 2013.
The results of the Group are presented in detail in the financial statements.
7.
Mining licence
A converted mining right awarded to one of the subsidiaries in the Group in 2012 is valid until 21 July 2021.
8.
Events after the reporting period
During 2016 the transaction with Moov Fuel (Pty) Ltd was finalised between the parties pending approval from the Department of Energy.
During 2016 all the fuel retail operations will be sold to a newly formed company named Overberg Energy Trading Trust (Pty) Ltd.
On 1 March 2016 the facility with Nedbank was finalised resulting in an new facility of R1,3 billion secured by trade debtors.
No further 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.
9.
Auditors
PricewaterhouseCoopers Inc. will continue in office in accordance with section 90(6) of the Companies Act 71 of 2008.
10. Subsidiary companies
Information regarding the subsidiary companies and details of interest in subsidiaries are presented in Annexure A to the financial
statements.
8
Statement of financial position as at 29 February 2016
Group
Notes
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
Assets
Non-Current Assets
Property, plant and equipment
Investment property
Intangible assets
Investments in subsidiaries
Available-for-sale investments
Biological assets
Deferred tax asset
Trade and other receivables
Loans and other receivables
5
6
7
13
11
12
14
17
20
431,208
17,761
128,736
780,478
2,851
3,444
184,518
24,392
383,325
18,127
118,021
1,288,867
2,483
64
144,296
24,182
333,143
18,331
119,000
655,818
1,758
132,540
26,779
297,899
-
297,899
-
297,899
-
1,573,388
1,979,365
1,287,369
297,899
297,899
297,899
384,574
590,271
7,796
41,820
69,761
358,959
476,769
3,287
9,272
33,650
328,515
437,272
10,763
14,441
52,278
626,173
-
30,997
-
13,001
-
Current Assets
Inventory
Loans to Group companies
Current tax asset
Cash and cash equivalents
15
17
16
19
20
18
Total Assets
1,094,222
881,937
843,269
626,173
30,997
13,001
2,667,610
2,861,302
2,130,638
924,072
328,896
310,900
28,938
337,277
1,388,244
68,720
796,570
957,898
68,720
251,621
899,755
28,938
895,133
188,322
2,290
111,778
188,322
2,290
120,288
1,754,459
28,574
1,823,188
25,333
1,220,096
22,657
924,071
-
302,390
-
310,900
-
1,783,033
1,848,521
1,242,753
924,071
302,390
310,900
13,461
16,191
10,248
179,040
8,986
894
24,424
17,813
10,435
218,225
7,453
857
6,674
6,153
11,436
130,198
2,211
821
-
-
-
228,820
279,207
157,493
-
-
-
346,428
2,978
1,078
1,265
304,008
-
457,119
3,337
4,214
1,215
245,814
21,875
-
478,677
4,655
16
1,233
244,309
1,502
1
-
1,981
24,525
-
-
655,757
733,574
730,392
1
26,506
-
884,577
1,012,781
887,885
1
26,506
-
2,667,610
2,861,302
2,130,638
924,072
328,896
310,900
Equity and Liabilities
Equity
Equity Attributable to Equity Holders of
Parent
Share capital
Reserves
Retained income
21
Non-controlling interest
47
Liabilities
Non-Current Liabilities
Borrowings
Instalment sale agreements
Post-retirement medical liability
Deferred tax liability
Trade and other payables
Provisions
24
25
23
14
26
27
Current Liabilities
Borrowings
Current tax liability
Dividend payable
Bank overdraft
Total Liabilities
Total Equity and Liabilities
24
25
19
23
26
18
9
Income statement for the year ended 29 February 2016
Group
Notes
Revenue
Cost of sales
Gross profit
Interest income
Other income
Sales and marketing cost
Administration cost
Operating expenses
Other profits and losses
Operating profit
Financing income
Profit from equity accounted investments
Finance costs
Profit before taxation
Taxation
28
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2,807,561 2,637,427 2,767,062
(2,310,719) (2,184,067) (2,334,216)
2015
R '000
-
2014
R '000
-
-
496,842
72,972
29,938
(25,387)
(109,037)
(274,711)
362,780
453,360
63,384
52,547
(25,953)
(88,172)
(281,522)
9,466
432,846
55,436
20,728
(21,828)
(138,060)
(243,363)
234,300
806,125
(398)
-
36,283
-
129,052
-
34
553,397
3,587
(55,120)
183,110
881
(54,589)
340,059
1,031
361
(45,318)
805,727
-
36,283
-
129,052
-
35
501,864
(84,260)
129,402
(27,800)
296,133
(41,999)
805,727
-
36,283
-
129,052
-
417,604
101,602
254,134
805,727
36,283
129,052
413,721
3,883
98,457
3,145
251,881
2,253
805,727
-
36,283
-
129,052
-
417,604
101,602
254,134
805,727
36,283
129,052
29
30
32
33
31
Profit for the year
Profit attributable to:
Owners of the parent
47
Statement of comprehensive income for the year ended 29 February 2016
Group
Notes
Profit for the year
Company
2016
R '000
2015
R '000
2014
R '000
2016
R '000
2015
R '000
2014
R '000
417,604
101,602
254,134
805,727
36,283
129,052
(507,410)
47,158
633,006
(88,057)
(84,579)
6,854
-
-
-
(460,252)
544,949
(77,725)
-
-
-
(42,648)
646,551
176,409
805,727
36,283
129,052
(46,531)
3,883
643,406
3,145
174,156
2,253
805,727
-
36,283
-
129,052
-
(42,648)
646,551
176,409
805,727
36,283
129,052
5,479.7
1,325.8
1,304.1
1,282.5
3,065.8
789.7
Other comprehensive income:
Items that may be reclassified to profit or loss
Fair value adjustments on available-for-sale investments
Taxation related to components of other comprehensive
income
Other comprehensive (loss) / income for the year net
of taxation
40
Total comprehensive (loss) income
Total comprehensive (loss) income attributable
to:
Owners of the parent
Earnings per share (cents)
Basic earnings per share
Headline earnings per share
47
36
10
Statement of changes in equity for the year ended 29 February 2016
Group
Balance at 01 March 2013
Changes in equity
Total comprehensive income for the year
Profit
Other comprehensive income
Transactions with owners
Recognition of gain on disposal of treasury
shares
Acquisition of shares
Acquisition of minority interest in Grain
Farmers Group
Dividends
Share capital
Share
premium
Treasury
shares
Total share
capital
R '000
R '000
R '000
R '000
1,258
187,064
-
-
-
-
-
-
283
283
-
-
-
-
-
-
(119,246)
(119,246)
(77,725)
1,258
187,064
(119,602)
68,720
252,580
2,290
-
-
-
-
544,949
-
-
-
-
-
-
-
-
544,949
-
68,720
797,529
2,290
(3,249)
(460,252)
-
(2,290)
3,249
Total changes
Changes in equity
Profit
Dividends
Total changes
Changes in equity
Profit
Transfer of reserves
Share buyback
Dividends
-
-
1,258
187,064
-
-
Total changes
Balance at 29 February 2016
Notes
(119,529)
-
187,966
(77,725)
(119,529)
-
-
-
(119,602)
330,305
-
-
251,881
-
251,881
(77,725)
11,858
-
-
-
-
(6,841)
4,858
(126,370)
4,858
-
-
-
-
-
119,602
(39,782)
(460,252)
28,938
337,277
11
(77,725)
11,575
-
40
1,165,500
-
(159,258)
21
648,188
-
(126)
21
329,346
-
(39,782)
-
21
R '000
-
119,602
-
(3,249)
R '000
Total
Nonattributable to controlling
equity holders
interest
of the Group /
Company
-
(159,258)
27,806
2,290
Retained
income
-
(126)
1,132
21
(356)
Reserve for Share based
Existing Total reserves
fair value
payment
control
adjustment of
reserve
business
assets
combination
available-forreserve
sale
R '000
R '000
R '000
R '000
(2,290)
-
-
(9,910)
Total equity
R '000
R '000
30,301
2,253
-
1,195,801
254,134
(77,725)
11,858
(9,523)
(126,370)
(4,665)
(374)
(10,284)
(9,910)
(77,725)
251,563
54,592
251,621
899,755
1,220,096
22,657
1,242,753
-
544,949
98,457
-
98,457
544,949
3,145
-
101,602
544,949
-
-
(40,314)
(40,314)
-
544,949
58,143
603,092
2,676
605,768
796,570
957,898
1,823,188
25,333
1,848,521
(460,252)
959
413,721
(959)
413,721
(460,252)
-
39,782
(22,198)
(22,198)
(3,249)
3,249
-
(459,293)
337,277
430,346
1,388,244
(68,729)
1,754,459
(7,644)
(469)
3,883
(641)
3,242
28,574
47
46,948
(40,783)
417,604
(460,252)
(22,839)
(65,487)
1,783,033
Statement of changes in equity for the year ended 29 February 2016
Share capital
Share
premium
Total share
capital
R '000
R '000
R '000
Reserve for Share based
Existing Total reserves
fair value
payment
control
adjustment of
reserve
business
assetscombination
available-forreserve
sale
R '000
R '000
R '000
R '000
Retained
income
R '000
Total
Nonattributable to controlling
equity holders
interest
of the Group /
Company
R '000
Total equity
R '000
R '000
Company
Changes in equity
Dividends
1,258
187,064
188,322
-
2,290
-
2,290
-
-
-
-
-
-
-
-
-
-
-
-
-
1,258
187,064
188,322
-
2,290
-
-
-
-
-
-
-
1,258
187,064
(126)
(126)
Total changes
Changes in equity
Dividends
Total changes
Changes in equity
Share buyback
Transfer of distributable reserve
Dividends
Total changes
Balance at 29 February 2016
Notes
1,132
21
191,914
-
191,914
129,052
(10,066)
129,052
(10,066)
-
129,052
(10,066)
-
118,986
118,986
-
118,986
-
2,290
120,288
310,900
-
310,900
-
-
-
36,283
(44,793)
36,283
(44,793)
-
36,283
(44,793)
-
-
-
-
(8,510)
(8,510)
-
(8,510)
188,322
-
2,290
-
2,290
111,778
302,390
-
302,390
(159,258)
-
(159,384)
-
-
(2,290)
-
-
(2,290)
-
805,727
2,290
(24,662)
805,727
(159,384)
(24,662)
-
805,727
(159,384)
(24,662)
(159,258)
(159,384)
-
(2,290)
-
(2,290)
783,355
621,681
-
621,681
895,133
924,071
-
924,071
27,806
21
28,938
21
40
12
-
-
-
1,302
Statement of cash flows for the year ended 29 February 2016
Group
Notes
2016
R '000
Company
2015
R '000
2014
R '000
2016
R '000
2015
R '000
2014
R '000
Cash flows from / (utilised in) operating activities
Cash generated from / (used in) operations
Interest income
Dividends and bonuses received
Finance costs
Tax (paid) received
37
20,322
76,559
21,726
(55,120)
(38,185)
15,829
64,265
17,453
(54,589)
(16,219)
(57,439)
56,467
12,218
(45,318)
8,155
(2,378)
806,125
-
1,981
36,283
-
21,739
-
25,302
26,739
(25,917)
803,747
38,264
21,739
(76,336)
2,986
(76,588)
13,502
(86,417)
11,684
-
-
-
6
6
7
7
41
(8)
(13,642)
(15,059)
363,106
(32,758)
(167)
(3,688)
27,684
7,766
(319)
564
(398)
7
1,649
225,650
20,295
39
(49,131)
39
Net cash (utilised in) / from operating
activities
Cash flows from / (utilised in) investing activities
Acquisition of property, plant and equipment
Proceeds from sale of property, plant and
equipment
Acquisition of investment property
Proceeds from sale of investment property
Acquisition of intangible assets
Proceeds from sale of intangible assets
Business combinations
Loans to group companies repaid
Proceeds from sale of investments
Net (repayments of) / proceeds from loans and
other receivables
Tax paid on sale of investments
5
Net cash from / (utilised in) investing
activities
-
(24,570)
(595,176)
-
(17,996)
(17,996)
(11,673)
-
179,158
(31,491)
148,145
(595,176)
(11,673)
21
(121,654)
(1,981)
(3,808)
10,342
(108,995)
8,668
(159,384)
-
38
(44,714)
(18,908)
(10,284)
(49,187)
(20,268)
(10,066)
(168,349)
(12,374)
(110,611)
(208,571)
(20,268)
(10,066)
36,111
(17,126)
11,617
-
-
-
33,650
50,776
39,159
-
-
-
69,761
33,650
50,776
-
-
-
Cash flows utilised in financing activities
Repurchase of shares
Net borrowings repaid
(Repayments of) / proceeds from instalment
sale agreements
Dividends paid
Net cash utilised in financing activities
Net increase / (decrease) in cash, cash
equivalents and overdrafts
Net cash, cash equivalents and overdrafts at
the beginning of the year
Net cash, cash equivalents and overdrafts
at the end of the year
18
13
-
-
Accounting policies for the year ended 29 February 2016
1.
Accounting policy
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.
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 use their 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 1.37.
1.2 Consolidation
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 is 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 and measured at
cost less accumulated impairment.
Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of
between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are
initially recognised at cost. The Group’s investment in associates includes goodwill identified on acquisition. Goodwill is indicated
separately from the cost of the investment.
The Group's share of its associates' post-acquisition profits or losses is recognised in the Income statement, and its share of post
acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate,
including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made
payments on behalf of the associate.
Unrealised gains on transactions between the Group and its associates are eliminated by virtue of the Group's interest in the associates.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting
policies of associates have been changed where necessary to ensure consistency with the accounting policies adopted by the Group.
Control is established where the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits
from its activities. Based on this fact, the Overberg Agri Development Trust and Woza Phambili Enterprises (Pty) Ltd are consolidated.
Refer to note 48.
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 group 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.
14
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 1.20 and 1.37) 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 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 group incurs when the item is acquired. Decommissioning and restoration cost 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 asset to which it relates; the adjusted depreciable amount of the asset is then depreciated prospectively over its
remaining useful life.
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
Buildings
Silos
Steel silos
Silo machinery and equipment
Machinery and equipment
Office furniture and equipment
Computers
Motor vehicles
Implements
Decommissioning assets - Land
Decommissioning assets - Buildings
Unlimited
20 - 50 years
50 years
25 years
15 years
4 - 30 years
1 - 15 years
3 - 5 years
3 - 15 years
15 years
288 years
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.
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
Investment property - buildings
Unlimited
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 are determined by means of a comparison of the return with the carrying amount. The difference is recognised
in the Income statement.
15
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 and loss on the sale of an entity include 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 life
Software
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.
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:






It is technically viable to complete the development of the asset;
The possibility exists of using or selling the intangible asset;
Management intend completing the intangible asset;
The probability of future economic benefits can be demonstrated;
Sufficient financial, technical and other sources exist to enable the development of the intangible asset and the use or sale thereof;
And
The development costs can be reliably measured.
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 life
Product development costs
10 years
16
1.6 Intangible assets (continued)
1.6.4 Trademarks, client relations and mineral rights
Trademarks, client relations and mineral rights are measured 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.
Item
Useful life
Trademarks
Client relations
Mineral rights
5 - 20 years
5 - 20 years
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. Nonfinancial 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.
1.8 Impairment of financial assets
The Group determines at each reporting date whether objective proof exist 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 financial assets available-for-sale. 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
Financial assets available-for-sale 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 intend selling the investment within
twelve months of 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.
17
1.9 Financial instruments (continued)
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. Financial assets available-for-sale 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 availablefor-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 analysis, 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.
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 intend and are 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 reporting date they are classified as noncurrent 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 Group 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. Net
realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling costs.
18
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 measured at cost or net realisable
value, whichever is the lowest.
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
Renegotiated production accounts
Trade receivables
Sundry receivables
< 366 days
> 366 days
Between 30 and 60 days
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 measured
at 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 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 by the reporting date.
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 reporting date and expected to apply when the relevant deferred income tax asset is
realised or the deferred income tax liability is settled.
19
1.18 Tax (continued)
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) imposes a royalty tax on refined and unrefined minerals. The
Mineral Royalty tax is deducted from revenue.
1.20 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.
1.21 Leases
1.21.1 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 finance leases. Leases are capitalised upon conclusion thereof at the lower of fair value of the leased
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.
1.21.2 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.
1.22 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
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.
20
1.22 Employee benefits (continued)
Performance incentive scheme
A performance incentive scheme was approved by the Board of Directors. 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 exist to settle the liability. It is expected that the liability will be settled within
twelve months. Financial goals must first be achieved before the liability is recognised.
Share based payments
For cash-settled share-based payment transactions, the goods or services acquired and the liability incurred are measured at the fair
value of the liability. Until the liability is settled, the fair value of the liability is re-measured at each reporting date and at the date of
settlement, with any changes in fair value recognised in profit or loss for the period.
If the share based payments granted do not vest until the counterparty completes a specified period of service, the Group accounts for
those services as they are rendered by the counterparty during the vesting period (or on a straight-line basis over the vesting period).
If the share based payments vest immediately the services received are recognised in full.
1.23 Trade and other payables
Trade and other payables are initially recognised at fair value. After initial recognition, trade and other payables are measured at
amortised cost by using the effective interest method.
1.24 Provisions
Provisions are recognised when:



The Group has a current legal or constructive liability due to events in the past;
It is more probable that an outflow of economic benefits will be required to settle the liability; and
The amount has been reliably estimated.
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.
1.25 Financial Guarantees
A financial guarantee contract is a contract requiring that the issuer make 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:


The amount determined in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets; and
The amount initially recognised minus, if applicable, any cumulative amortisation recognised in accordance with IAS 18 Income.
1.26 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 goods
Sale 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 services
Sales 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.
21
1.26 Income Recognition (continued)
c) Financing income
Financing 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 income
Dividend income is recognised when the right to receive payment has been established.
e) Storage income
The storage income is recognised over the term in which the grain is supplied and as the costs are incurred.
f) Commission
Certain direct 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 acts as agent to the parties involved.
1.27 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.
1.28 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
reporting date.
Environmental rehabilitation provisions
Estimated 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 equipment
The 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 discount
The 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 mine.
1.29 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.
1.30 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 some of the subsidiaries who, through their purchases, enabled the subsidiaries in the Group to achieve sufficient headline
earnings. This profit bonus is determined and approved on an annual basis at sole discretion of the Board of Directors. The profit bonus
is recognised as an expense in the Income statement as operating expenses.
22
1.31 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.
1.32 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 is 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.
1.33 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, is ultimately controlled by the same party or parties before and after the business combination, and where the control is
not of a temporary nature.
Business combinations under common control is accounted for using the 'acquisition accounting' principle. Under this principle, all assets
and liabilities acquired is initially recognised at its fair value. The difference between the fair value of the net assets and consideration will
be recognised as goodwill or bargain purchase.
1.34 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.
1.35 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.
1.36 Foreign currency
a) Functional and presentation currency
Items 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 balances
Foreign 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.
1.37 Critical accounting assumptions and judgments
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:
Life-span and residual value of fixed assets and intangible assets
Management review 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 their experience, judgement and assumptions in the process of determining
life-span and residual value.
23
1.37 Critical accounting assumptions and judgments (continued)
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 are indicators that can lead to a value impairment test and ultimate write back of the previous periods impairment /
impairment reversals:




Interest rate changes;
Material changes in grain yields;
Economical conditions; and
Grain storage alternatives
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 consider 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 consider 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
Deferred tax on available-for-sale investments have been provided for at 22.40% (2015: 18.67% ; 2014: 18.67%). During the 2016 budget
speech the capital gains tax inclusion rate for companies was increased from 66.6% to 80.0%. Subsequently, the deferred tax provision
on available-for-sale investments for the Group was increased on 29 February 2016 in terms of AC 502 ('Substantively Enacted Tax
Rates and Tax Laws').
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 debtors
The 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 securities
Management reviews the recoverability of securities on an annual basis, and adjustments are made as appropriate. Management use
their experience, judgement and assumptions in the process. Deficits will lead to an increase in the required provision.
Capitalisation of borrowing cost
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 a qualifying asset takes more than six months to construct.
24
1.37 Critical accounting assumptions and judgments (continued)
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.
Taxation
Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions
and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The company recognises
liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of
these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax
provisions in the period in which such determination is made.
The group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible
temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the
group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on
forecast cash flows from operations and the application of existing tax laws. To the extent that future cash flows and taxable income
differ significantly from estimates, the ability of the company to realise the net deferred tax assets recorded at the end of the reporting
period could be impacted.
Share based payment 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 22 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.
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 period to which it applies.
Biological assets and agricultural produce
The fair value of biological assets is determined by using the products' current market prices on year end. The fair value of agricultural
produce is determined by using the market price on the date of harvest. Refer note 12.
Principle vs Agent Revenue
Certain trade creditors are identified as agent suppliers. The identified suppliers' transactions are used to determine if a transaction is
principle or agent related. Transactions where only a discount / commission is received (thus no mark-up) are corrected to only reflect the
commission / discount in revenue.
25
Notes to the Financial Statements for the year ended 29 February 2016
2.
New standards and interpretations
Standards, interpretations and amendments to published standards effective in 2016

Amendment to IAS 19 regarding defined benefit plan (effective from 1 July 2014). These narrow scope amendments apply to
contributions from employees or third parties to defined benefit plans. The objective of the amendments is to simplify the
accounting for contributions that are independent of the number of years of employee service, for example, employee contributions
that are calculated according to a fixed percentage of salary.

Annual improvements to IFRS’s - 2010-12 cycle (effective on or after 1 July 2014). This is a collection of amendments to IFRS's.
These amendments are the result of conclusions the International Accounting Standards Board (IASB) reached on proposals made
in its annual improvements project for the 2010-12 cycle. The annual improvements project provides a vehicle for making nonurgent, but necessary amendments to IFRS's. Some amendments involve consequential amendments to other IFRS's.

Annual improvements to IFRS’s - 2011-13 cycle (effective on or after 1 July 2014). This is a collection of amendments to IFRS's.
These amendments are the result of conclusions the International Accounting Standards Board (IASB) reached on proposals made
in its annual improvements project for the 2011-13 cycle. The annual improvements project provides a vehicle for making nonurgent, but necessary amendments to IFRS's. Some amendments involve consequential amendments to other IFRS's.
The aggregate impact of the initial application of the new effective standards and interpretations on the Group's annual financial
statements is expected to be immaterial.
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 2016:

IFRS 9, Financial Instruments (2009 and 2010) (effective from 1 January 2018). This IFRS is part of the IASB's project to replace
IAS 39. IFRS 9 addresses classification and measurement models in IAS 39 with a single model that has only two classification
categories: amortised cost and fair value. The IASB has updated IFRS 9, 'Financial Instruments' to include guidance on financial
liabilities 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.

Amendments to IFRS 9, Financial Instruments on general hedge accounting (effective from 1 January 2018). The IASB has
amended IFRS 9 to align hedge accounting more closely with an entity's risk management. The revised standard also establishes a
more principle-based approach to hedge accounting and addresses inconsistencies and weaknesses in the current model in IAS
39. Early adoption of the above requirements has specific transitional rules that need to be followed. Entities can elect to apply
IFRS 9 for any of the following:
- The own credit risk requirements for financial liabilities.
- Classification and measurement requirements for financial assets.
- Classification and measurement requirements for financial assets and financial liabilities.
- The full current version of IFRS 9 (that is, classification and measurement requirements for financial assets and financial
liabilities and hedge accounting).
The transitional provisions described above are likely to change once the IASB completes all phases of IFRS 9.

IFRS 15, Revenue from contracts with customers (effective from 1 January 2018). The FASB and IASB issued their long awaited
converged standard on revenue recognition on 29 May 2014. It is a single, comprehensive revenue recognition model for all
contracts with customers to achieve greater consistency in the recognition and presentation of revenue. Revenue is recognised
based on the satisfaction of performance obligations, which occurs when control of good or service transfers to a customer.

Amendment to IAS 16, Property, plant and equipment and IAS 38, Intangible assets, on depreciation and amortisation (effective
from 1 January 2016). In this amendment the IASB has clarified that the use of revenue based methods to calculate the
depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally
reflects factors other than the consumption of the economic benefits embodied in the asset. The IASB has also clarified that
revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in
an intangible asset.

Amendments to IAS 1, Presentation of financial statements, disclosure initiative (effective from 1 January 2016). In December 2014
the IASB issued amendments to clarify guidance in IAS 1 on materiality and aggregation, the presentation of subtotals, the
structure of financial statements and the disclosure of accounting policies.

Amendment to IAS 27, Equity method in separate financial statements (effective from 1 January 2016). An entity can now account
for investments in subsidiaries, joint ventures and associates in its separate financial statements either at cost, in accordance with
IFRS 9 or using the equity method as described in IAS 28. The IASB has also clarified the definition of separate financial
statements as those produced in addition to: 1) consolidated financial statements by an entity with subsidiaries; or 2) financial
statements prepared by an entity which has no subsidiaries but has investments in associates or joint ventures required to be
equity accounted under IAS 28. IFRS 1 has been amended to permit use of the business combinations exemption for investments
in subsidiaries accounted for using equity method in the separate financial statements of the first-time adopter.
26
2.
New standards and interpretations (continued)

IFRS 16, Leases (effective from 1 January 2019). After ten years of joint drafting by the IASB and FASB they decided that lessees
should be required to recognise assets and liabilities arising from all leases (with limited exceptions) on the balance sheet. Lessor
accounting has not substantially changed in the new standard.
The model reflects that, at the start of a lease, the lessee obtains the right to use an asset for a period of time and has an
obligation to pay for that right. In response to concerns expressed about the cost and complexity to apply the requirements to large
volumes of small assets, the IASB decided not to require a lessee to recognise assets and liabilities for short-term leases (less
than 12 months), and leases for which the underlying asset is of low value (such as laptops and office furniture).
A lessee measures lease liabilities at the present value of future lease payments. A lessee measures lease assets, initially at the
same amount as lease liabilities, and also includes costs directly related to entering into the lease. Lease assets are amortised in a
similar way to other assets such as property, plant and equipment. This approach will result in a more faithful representation of a
lessee’s assets and liabilities and, together with enhanced disclosures, will provide greater transparency of a lessee’s financial
leverage and capital employed.
One of the implications of the new standard is that there will be a change to key financial ratios derived from a lessee’s assets and
liabilities (for example, leverage and performance ratios).
IFRS 16 supersedes IAS 17, Leases, IFRIC 4, Determining whether an Arrangement contains a Lease, SIC 15, Operating Leases
– Incentives and SIC 27, Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

Annual improvements to IFRS’s - 2012-14 cycle (effective on or after 1 January 2016). This is a collection of amendments to
IFRS's. These amendments are the result of conclusions the International Accounting Standards Board (IASB) reached on
proposals made in its annual improvements project for the 2012-14 cycle. The annual improvements project provides a vehicle for
making non-urgent, but necessary amendments to IFRS's. Some amendments involve consequential amendments to other IFRS's.
Management is still considering the impact of standards published, but not yet effective above.
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 2015, should not apply to the future accounting periods of the Group:

Amendment to IFRS 11, Joint arrangements on acquisition of an interest in a joint operation (effective from 1 January 2016). This
amendment adds new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business.
The amendments specify the appropriate accounting treatment for such acquisitions.

IFRS 14, Regulatory deferral accounts (effective from 1 January 2016). The IASB has issued IFRS 14, Regulatory deferral
accounts, an interim standard on the accounting for certain balances that arise from rate-regulated activities ('regulatory deferral
accounts'). Rate regulation is a framework where the price that an entity charges to its customers for goods and services is subject
to oversight and/or approval by an authorised body.

Amendments to IAS 16 and IAS 41, Agriculture: Bearer plants (effective from 1 January 2016). Biological assets that meet the
definition of 'bearer plants' are measured either at cost or revalued amounts, less accumulated depreciation and impairment losses.
Bearer plants are measured at accumulated costs until maturity, similar to the accounting for a self-constructed item of property,
plant and equipment. Agricultural produce growing on bearer plants remain within the scope of IAS 41 and are measured at fair
value less costs to sell with changes recognised in profit or loss as the produce grows. The amendments are to be applied
retrospectively and are effective for annual periods beginning on or after 1 January 2016. Early application is permitted. Existing
IFRS preparers who measure bearer plants at fair value less costs to sell are permitted to use fair value as deemed cost for these
assets upon adoption of the amendments.

Amendments to IFRS 10, Consolidated financial statements, and IAS 28, Investments in associates and joint ventures on sale or
contribution of assets (effective from 1 January 2016). The IASB has issued this amendment to eliminate the inconsistency
between IFRS 10 and IAS 28. If the non-monetary assets sold or contributed to an associate or joint venture constitute a
‘business’, then the full gain or loss will be recognised by the investor. A partial gain or loss is recognised when a transaction
involves assets that do not constitute a business, even if these assets are housed in a subsidiary.

Amendments to IFRS 10, Consoldiated financial statements, and IAS 28, Investments in associates and joint ventures on applying
the consolidation exemption (effective from 1 January 2016). The amendments clarify the application of the consolidation exception
for investment entities and their subsidiaries.
27
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.
Revenues of approximately R135,460,915 (2015: R104,202,270 ; 2014: R361,292,440) are derived from a single external customer.
These revenues are attributable to the Overberg Agri Bedrywe (Pty) Ltd segment.
The operating segments of the Group are as follows:
Overberg Agri Bedrywe (Pty) Ltd
Overberg Agri Bedrywe (Pty) Ltd supply agricultural inputs, products and services to farmers in the Overberg, Swartland and Eastern
Cape regions, and derive its revenue from the sale of these agricultural inputs, products and services.
Moorreesburgse Koringboere (Pty) Ltd
Moorreesburgse Koringboere (Pty) Ltd supplied agricultural inputs, products and services to farmers in the Swartland region, and
derived its revenue from the sale of these agricultural inputs, products and services. From 1 September 2013, the operations of
Mooreesburgse Koringboere (Pty) Ltd were incorporated in Overberg Agri Bedrywe (Pty) Ltd.
Petfood Caterers (Pty) Ltd
Petfood Caterers (Pty) Ltd, situated in Moorreesburg, manufactured, distributed, marketed and derived its revenue from the sale of
dog food. The Company is in process of voluntary liquidation and all operations have been suspended.
Nutroscience (Pty) Ltd
Nutroscience (Pty) Ltd, situated in Malmesbury, did testing, development, manufacturing and marketing of high quality extruded
feeds for the aquaculture and petfood industries and derived its revenue from the sale thereof. The Company is in process of
voluntary liquidation and all operations have been suspended.
MKB Versekeringsmakelaars (Pty) Ltd
MKB Versekeringsmakelaars (Pty) Ltd rendered services as an insurance broker and derived its revenue from commission. From 1
September 2013, the operations of MKB Versekeringsmakelaars (Pty) Ltd were incorporated in Overberg Agri Bedrywe (Pty) Ltd. The
Company was liquidated during the current financial year.
Unique Agri Trade (Pty) Ltd
Unique Agri Trade (Pty) Ltd is an investment company and derived its revenue from rental income on investment property. From 1
September 2013, the operations of Unique Agri Trade (Pty) Ltd were incorporated in Overberg Agri Bedrywe (Pty) Ltd. The Company
was liquidated during the current financial year.
Overberg Agri Beleggings (Pty) Ltd
Overberg Agri Beleggings (Pty) Ltd is an investment company and derive its revenue from dividend income and interest income.
Overberg Agri Management Services (Pty) Ltd
Overberg Agri Management Services (Pty) Ltd performs a Group administration function for the Overberg Agri Group and derive its
revenue from administration fee 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 and
Pretoria. The Company derives its revenue primarily from the sale of these industrial fasteners.
28
3.
Segment reporting (continued)
Promeal (Pty) Ltd
Promeal (Pty) Ltd, situated in Atlantis, manufactures, distributes, markets and derive its revenue from the sale of pet food.
Bontebok Limeworks (Pty) Ltd
Bontebok Limeworks (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) Ltd
Bredasdorp 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.
Bontebok Motorgroep (Pty) Ltd
Bontebok Motorgroep (Pty) Ltd is dormant.
Overberg Agri Development Trust
Overberg Agri has created the Overberg Agri Development Trust with the purpose of identifying commercial opportunities with the
aim of advancing Black Economic Empowerment in the interest of and for the benefit of beneficiaries. During the financial year Woza
Phambili Enterprises (Pty) Ltd was formed, of which the Overberg Agri Development Trust owns 100% of the shareholding. From 1
November 2015, Woza Phambili Enterprises (Pty) Ltd have taken over the operational activities of the Trust. In the future the
Overberg Agri Development Trust will only be receiving dividends from Woza Phambili Enterprises (Pty) Ltd.
Woza Phambili Enterprises (Pty) Ltd
The principle activities of Woza Phambili Enterprises (Pty) Ltd is the advancing of Black Economic Empowerment through bursaries,
community projects and services rendered.
29
3.
3.1 Segment income and results
2016
R'000
GROUP
2015
R'000
2,189,832
2,179,945
9,887
2,055,390
2,048,919
6,471
1,842,393
1,837,277
5,116
-
9,192
9,192
14,580
14,580
Boltfast (Pty) Ltd
External revenue
Inter-segment revenue
223,220
221,086
2,134
219,694
216,552
3,142
202,061
198,919
3,142
External revenue
100,634
96,018
4,616
87,807
83,093
4,714
72,745
70,306
2,439
External revenue
162,409
158,097
4,312
143,403
139,232
4,171
121,685
120,742
943
External revenue
1,651
1,651
3,557
3,557
-
External revenue
3,549
3,549
-
-
24,386
16
24,370
-
-
152,621
152,362
259
138,746
138,543
203
142,510
142,334
176
External revenue
-
-
338,682
331,734
6,948
External revenue
-
149
149
-
39,275
29,401
9,874
External revenue
-
10,888
10,888
-
46,561
45,697
864
External revenue
-
-
16
16
-
External revenue
-
-
267
267
Total segment revenue
2,858,302
2,668,826
2,820,775
Consolidation adjustments
2,858,302
(50,741)
2,668,826
(31,399)
2,820,775
(54,066)
Group revenue
2,807,561
2,637,427
2,766,709
External revenue
External revenue
Promeal (Pty) Ltd
External revenue
All external revenue is attributed to South African customers.
30
2014
R'000
3.
3.1 Segment income and results (continued)
Profit / (loss) before taxation
2016
R'000
Overberg Agri Ltd
Boltfast (Pty) Ltd
Promeal (Pty) Ltd
805,727
811,024
228,820
915
21,203
9,267
3,372
(11,734)
1,640
266
(857)
(309)
-
Group profit before taxation
GROUP
2015
R'000
36,283
108,420
(5,168)
10,081
17,816
7,815
3,222
3,026
(3,069)
11,361
9,841
-
2014
R'000
129,052
499,753
(29,492)
9,343
11,816
7,007
9,788
350,653
14,797
(588)
1
3,461
1,869,334
199,628
1,005,591
1,869,334
(1,367,470)
199,628
(70,226)
1,005,591
(709,457)
129,402
296,134
501,864
Interest and finance income
2016
R'000
GROUP
2015
R'000
2014
R'000
Boltfast (Pty) Ltd
Promeal (Pty) Ltd
78,411
11,306
96
1,039
716
309
52
1
69
4
48
7
-
68,335
9,415
122
553
336
254
126
164
112
-
54,967
1,474
270
252
426
600
7,911
320
53
5
Total
92,058
79,417
66,278
92,058
(15,499)
79,417
(15,152)
66,278
(9,811)
76,559
64,265
56,467
Total
Group interest income
31
3.
Interest expense
2016
R'000
GROUP
2015
R'000
2014
R'000
Boltfast (Pty) Ltd
Promeal (Pty) Ltd
55,057
3,470
8,249
2,039
212
141
491
923
39
-
54,205
5,686
9,320
226
5
9
177
114
39,726
6,101
2,072
232
4
20
4,418
1,999
643
Total
70,621
69,742
55,215
Total
70,621
(15,501)
69,742
(15,153)
55,215
(9,897)
Group interest expense
55,120
54,589
45,318
Depreciation, amortisation and impairment
2016
R'000
GROUP
2015
R'000
2014
R'000
Boltfast (Pty) Ltd
Promeal (Pty) Ltd
13,683
6
3,401
6,834
620
2,491
1
-
11,681
4
4,167
4,781
614
3,591
643
49
-
9,026
6
5,714
4,467
524
2,164
1,534
11,821
1,697
1
11
Total
27,036
25,530
36,965
Total
27,036
2,046
25,530
1,735
36,965
2,155
Group depreciation and amortisation
29,082
27,265
39,120
32
3.
Income tax expense / (income)
2016
R'000
GROUP
2015
R'000
2014
R'000
Boltfast (Pty) Ltd
Promeal (Pty) Ltd
54,627
21,073
294
5,653
2,590
617
(3,177)
463
1,835
-
20,445
(1,949)
2,839
5,497
2,175
707
(42)
-
22,463
3,338
2,773
2,798
1,962
2,741
6,472
649
Total
83,975
29,672
43,196
Total
83,975
285
29,672
(1,872)
43,196
(1,198)
Group income tax expense
84,260
27,800
41,998
Contribution to attributable earnings
2016
R'000
Overberg Agri Ltd
Boltfast (Pty) Ltd
Promeal (Pty) Ltd
805,727
756,398
207,747
621
15,550
6,677
2,756
(8,557)
1,177
(1,569)
(857)
(309)
-
GROUP
2015
R'000
36,283
87,976
(3,219)
7,242
12,319
5,639
2,515
3,026
(3,027)
11,361
9,841
-
2014
R'000
129,052
477,290
(32,830)
6,569
9,017
5,045
7,047
344,182
14,797
(588)
1
2,812
1,785,361
169,956
962,394
Consolidation adjustments - dividends received
Other consolidation adjustments
1,785,361
(808,592)
(559,165)
169,956
(42,820)
(25,534)
962,394
(383,893)
(324,365)
Contribution to attributable earnings - Group
417,604
101,602
254,136
33
3.
2016
%
GROUP
2015
%
2014
%
Overberg Agri Ltd
Boltfast (Pty) Ltd
Promeal (Pty) Ltd
192.94 %
181.13 %
49.75 %
0.15 %
3.72 %
1.60 %
0.66 %
(2.05)%
0.28 %
(0.38)%
-%
(0.21)%
(0.07)%
-%
-%
35.71 %
86.59 %
(3.17)%
7.13 %
12.12 %
5.55 %
2.48 %
-%
-%
2.98 %
(2.98)%
11.18 %
9.69 %
-%
-%
50.78 %
187.81 %
(12.92)%
2.58 %
3.55 %
1.98 %
2.77 %
-%
-%
-%
135.43 %
5.82 %
(0.23)%
-%
1.11 %
427.52 %
167.28 %
378.68 %
427.52 %
(327.52)%
167.28 %
(67.28)%
378.68 %
(278.68)%
100.00 %
100.00 %
100.00 %
Contribution to attributable earnings - Group
Contribution % per segment in relation to Group total contribution to attributable earnings are not reported to the COD and is
disclosed as additional information.
3.2 Segment assets and liabilities
Non-current assets *
2016
R'000
Overberg Agri Ltd
Boltfast (Pty) Ltd
Promeal (Pty) Ltd
GROUP
2015
R'000
2014
R'000
297,899
498,728
781,700
81,867
112,938
5,592
34,004
3,506
11,575
-
297,899
1,586,474
274,654
81,313
90,948
5,255
29,181
11,575
-
297,899
965,121
151,477
82,271
74,187
3,874
31,775
1,000
200
Non-current assets
1,827,809
(254,421)
2,377,299
(397,934)
1,607,804
(320,435)
Group non-current assets
1,573,388
1,979,365
1,287,369
* All non-current assets are located in South Africa.
34
3.
3.2 Segment assets and liabilities (continued)
Current assets
2016
R'000
Overberg Agri Ltd
Boltfast (Pty) Ltd
Promeal (Pty) Ltd
GROUP
2015
R'000
2014
R'000
626,173
880,893
182,294
101,114
32,366
23,629
65,991
25,312
2,512
1,891
-
30,997
707,592
117,787
111,560
40,419
21,797
54,311
3,226
1,082
356
-
13,001
705,131
117,152
103,153
24,464
19,608
51,275
8,484
8,159
9,553
26
192
Current assets
1,942,175
(847,953)
1,089,127
(207,190)
1,060,198
(216,930)
Group current assets
1,094,222
881,937
843,268
Non-current liabilities
2016
R'000
GROUP
2015
R'000
2014
R'000
Boltfast (Pty) Ltd
Promeal (Pty) Ltd
Nutrocience (Pty) Ltd
17,409
126,172
4,065
37,866
369
5,073
7,573
12,000
-
196,727
31,458
6,461
35,669
252
3,648
11,575
-
93,765
12,945
9,971
20,256
140
3,785
6
210,527
18,293
285,790
(6,583)
140,868
16,625
Group non-current liabilities
228,820
279,207
157,493
35
3.
3.2 Segment assets and liabilities (continued)
Current liabilities
2016
R'000
Overberg Agri Ltd
Boltfast (Pty) Ltd
Promeal (Pty) Ltd
GROUP
2015
R'000
2014
R'000
1
663,167
639,675
118,015
17,381
5,272
29,750
29,802
1,335
8
-
26,506
647,743
91,784
125,415
18,727
3,901
17,426
200
107
-
674,366
84,950
133,274
11,940
6,083
19,363
966
19,793
19,479
Current liabilities
1,504,406
(847,897)
931,809
(198,235)
970,214
(239,825)
Group current liabilities
656,509
733,574
730,389
Capital expenditure
2016
R'000
GROUP
2015
R'000
2014
R'000
Boltfast (Pty) Ltd
Promeal (Pty) Ltd
47,359
5,257
28,864
1,415
7,315
20
-
52,040
17
3,677
21,556
1,945
1,213
-
50,697
6
2,551
21,589
850
10,102
1,147
138
62
Capital expenditure
90,230
-
80,448
(5)
87,142
-
Group capital expenditure
90,230
80,443
87,142
Capital expenditure comprise additions to non-current assets including property, plant and equipment, intangible assets, investment
property, investments in subsidiaries and biological assets.
36
4.
Financial risk management
4.1 Financial risk factors
The Group's activities expose it to various financial risks:
(a) market risk (including price risk and currency risk) and cash-flow and fair value interest rate risk;
(b) credit risk; and
(c) liquidity risk.
The Group’s overall risk management program 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 nonderivative 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 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.
On 29 February 2016, if the exchange rate changed by R1, the effect on the profit after taxation would be R176,923 (2015: R575,522 ;
2014: R211,598). All exposure to foreign currency are hedged by forward exchange contracts ("FEC's"). Refer to note 33 for exchange
rate differences.
(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 commodity indicated below, have strengthened/weakened by 1%, with all other variables being
constant, the after tax profit for the year will decrease/increase, as follows:
2016
R'000
969
Steel
GROUP
2015
R'000
908
2014
R'000
855
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. Equities will increase/decrease as a result of any profits/losses on equity securities classified as availablefor-sale investments.
A variation of a 20.00% change in the carrying value of available-for-sale investments would have resulted in a R156,095,517 movement
(pre-tax) in other comprehensive income (2015: R257,773,575 ; 2014: R131,163,451).
Derivative instruments price risk
The Group is not exposed to any material derivative instruments price risk.
37
4.
Financial risk management (continued)
4.1 Financial risk factors (continued)
(iii) Cash-flow and fair value interest rate risk
The Group's income and operational cash flow depends to a lesser extent on changes in market interest rates. The interest rates of
instalment sale agreement contracts where the Group is the supplier in respect of instalment sale agreement assets are determined upon
commencement of the instalment sale agreement 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, the after-tax profit for the year would have been R3,068,315 (2015: R566,096 ; 2014: R622,730) higher/lower,
primarily due to variable interest rate changes.
(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 Limit
Current
utilisation
of credit
limit
R'000
R'000
500
-
29 February 2016 - Group
Credit Limit
Current
utilisation
of credit
limit
R'000
R'000
500
-
Credit Limit
Current
utilisation
of credit
limit
R'000
R'000
4,582
1,502
Available
balance
R'000
70,261
Available
balance
R'000
34,150
Available
balance
R'000
53,856
Standard Bank's credit rating by Moody's in March 2016 was judged A1.za, which denotes to be high quality and is subject to very low
credit risk. Standard Bank's credit valuation by Fitch in December 2015 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.
ABSA's credit rating by Moody's in December 2015 was judged A1.za, which denotes to be high quality and is subject to very low credit
risk. ABSA's credit valuation by Fitch in March 2016 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 (including divisions First National Bank and Wesbank) credit rating by Moody's in December 2015 was judged A1.za, which
denotes to be high quality and is subject to very low credit risk. FirstRand's credit valuation by Fitch in December 2015 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.
38
4.
4.1 Financial risk factors (continued)
(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.
Within 1 year Between 1 and More than 5
5 years
years
R'000
R'000
R'000
2,978
16,191
346,428
13,461
304,008
8,986
1,265
10,248
-
Amortisation schedule:
Borrowings
Post-retirement medical liabilities
654,679
48,886
-
5 years
years
R'000
R'000
R'000
3,337
17,813
457,119
24,424
245,814
7,454
1,215
10,435
-
Borrowings
707,485
60,126
-
5 years
years
R'000
R'000
R'000
4,655
6,153
478,677
6,674
244,306
2,211
1,233
11,436
-
Borrowings
728,871
26,474
-
Total
R'000
19,169
359,889
312,994
11,513
703,565
Total
R'000
21,150
481,543
253,268
11,650
767,611
Total
R'000
10,808
485,351
246,517
12,669
755,345
These amounts will be financed from cash and cash equivalents of R69,760,496 (2015: R33,650,236 ; 2014: R52,278,598), approved
facilities of R255,500,000 (2015: R1,300,500,000 ; 2014: R904,582,000) of which R155,811,986 (2015: R1,068,229,446 ; 2014:
R621,143,122) are available, as well as the realising of other assets.
4.2 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 Director's policy is to
maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of business
and acquisitions. Capital is herein defined as equity attributable to equity holders of the Group.
The own capital ratios are as follows:
2016
R'000
1,754,459
2,667,610
65.77 %
Total capital and reserves
Total assets
Own capital ratio
39
GROUP
2015
R'000
1,823,188
2,861,302
63.72 %
2014
R'000
1,220,098
2,130,637
57.26 %
4.
4.3 Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as
follows:



Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (Level 2).
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
The following table presents the group's financial assets and liabilities that are measured at fair value at 29 February 2016. See note 11
for disclosures of the available-for-sale investments that are measured at fair value and note 12 for disclosures of the biological assets
that are measured at fair value.
Assets
Level 1
Level 2
Level 3
Total
Financial assets at fair value through profit or
loss
Biological assets
- Livestock
-
2,851
-
2,851
780,120
269
-
35
54
-
780,120
269
35
54
780,389
2,940
-
783,329
Financial assets at fair value through other
comprehensive income
Available-for-sale financial assets
Equity securities
- Agricultural industry
- Financial services
Cooperatives
Companies and others
Total assets
The following table presents the group's financial assets and liabilities that are measured at fair value at 28 February 2015.
Assets
Level 1
Level 2
Level 3
Total
loss
Biological assets
- Livestock
-
2,483
-
2,483
1,287,810
271
-
34
132
620
-
1,287,810
271
34
132
620
1,288,081
3,269
-
1,291,350
Equity securities
Cooperatives
Deferred bonus funds
Total assets
40
4.
4.3 Fair value estimation (continued)
The following table presents the group's financial assets and liabilities that are measured at fair value at 28 February 2014.
Assets
loss
Level 1
Biological assets
- Livestock
Level 2
Level 3
Total
-
1,758
-
1,758
654,804
271
-
34
132
577
-
654,804
271
34
132
577
655,075
2,501
-
657,576
Equity securities
Cooperatives
Deferred bonus funds
Total assets
There were no transfers between levels 1 and 2 during the year.
(a) Financial instruments in level 1
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is
regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or
regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted
market price used for financial assets held by die group is the current bid price. These instruments are included in Level 1. Instruments
included in Level 1 comprise primarily JSE equity investments classified as available-for-sale.
(b) Financial instruments in level 2
The fair value of financial instruments that are not traded in an active market is determinted by using valuation techniques. These
valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific
estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
5.
Group
2016
Cost
2015
Accumulated
depreciation
Carrying value
Cost
Accumulated
depreciation
Carrying value
Land and buildings
Machinery, motor vehicles and
equipment
Decommissioning assets -Land
Decommissioning assets Buildings
226,267
361,480
(34,539)
(122,548)
191,728
238,932
209,298
308,974
(29,598)
(105,907)
179,700
203,067
420
228
(23)
(77)
397
151
420
228
(14)
(76)
406
152
Total
588,395
(157,187)
431,208
518,920
(135,595)
383,325
Group
2014
Cost
Land and buildings
Machinery, motor vehicles and equipment
Decommissioning assets -Land
Total
41
Accumulated
depreciation
Carrying value
189,474
289,100
(30,776)
(115,221)
158,698
173,879
420
228
(13)
(69)
407
159
479,222
(146,079)
333,143
Figures in Rand thousand
5.
Property, plant and equipment (continued)
Reconciliation of property, plant and equipment - Group - 2016
Opening Balance Additions and
borrowing costs
capitalised
179,700
17,402
203,067
59,178
406
152
-
Land and buildings
383,325
76,580
Disposals
Depreciation
Total
(432)
(2,484)
-
(4,942)
(20,829)
(9)
(1)
191,728
238,932
397
151
(2,916)
(25,781)
431,208
Land and buildings
Opening Balance Additions and
borrowing costs
capitalised
158,698
26,759
173,879
49,829
407
159
333,143
Disposals
76,588
Depreciation
Impairment loss
Total
(1,488)
(2,691)
-
(4,269)
(16,783)
(1)
(7)
(1,167)
-
179,700
203,067
406
152
(4,179)
(21,060)
(1,167)
383,325
Land and buildings
Opening balance Additions and
borrowing costs
capitalised
134,290
37,555
157,451
48,862
409
167
292,317
Disposals
86,417
Plant, equipment and motor vehicles with a book value of R41,538,907 (2015: R43,676,342 ; 2014: R44,387,753) serve as security for
instalment sale agreements and borrowings (notes 24 and 25).
The land and buildings with a book value of R13,789,020 (2015: R14,269,820 ; 2014: R14,860,800) serve as security for a mortgage
bond from ABSA Bank (note 24).
There is a mortgage of R5,000,000 held over the land and buildings with a book value of R568,758 (2015: R606,318 ; 2014: R643,879)
registered in favour of FirstRand Bank Ltd. The mortgage serves as security for the instalment sale agreements (notes 24 and 25).
42
Depreciation
Impairment loss
Total
(5,307)
(7,888)
-
(4,013)
(18,328)
(2)
(8)
(3,827)
(6,218)
-
158,698
173,879
407
159
(13,195)
(22,351)
(10,045)
333,143
5.
Property, plant and equipment (continued)
There is a general notarial bond over machinery, motor vehicles and equipment to the value of R12,654,415 (2015: R10,455,153 ; 2014:
R8,947,221), in favour of ABSA as disclosed in note 24.
Investment property and certain land and buildings to a maximum value of R109 million was encumbered to Land Bank as disclosed in
note 24 until January 2016.
Included in land and buildings are work-in-progress amounting to R14,486,252 (2015: R703,258 ; 2014: R14,714,498).
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 1.37). Movements in impairments/impairment reversals are included in other
profits and losses in the Income statement.
During the year, the Group capitalised borrowing costs amounting to R703,142 (2015: R972,820 ; 2014: R12,314) on qualifying assets.
Borrowing costs were capitalised at a prime-linked interest rate.
Depreciation expense of R15,776,225 (2015: R12,609,486 ; 2014: R13,872,346) has been charged in 'operating expenses', R845,594
(2015: R926,026 ; 2014: R1,932,299) in 'administration costs', R69,100 (2015: R56,199 ; 2014: R48,643) in 'sales and marketing cost'
and R9,091,021 (2015: R7,467,452 ; 2014: R6,505,972) in 'cost of sales'.
In the 2014 year, an impairment loss of R10,044,584 had been charged in 'operating expenses', the decision to liquidate Petfood
Caterers (Pty) Ltd and Nutroscience (Pty) Ltd taken and the assets were written down to their recoverable amount of R1 million, obtained
through a director's valuation.
6.
Investment property
Group
2016
Cost
Investment property
20,523
2015
Accumulated
depreciation
(2,762)
Carrying value
Cost
17,761
Accumulated
depreciation
20,515
Carrying value
(2,388)
Group
18,127
2014
Cost
Investment property
Accumulated
depreciation
18,874
Carrying value
(543)
18,331
Reconciliation of investment property - Group - 2016
Investment property
Opening
Balance
18,127
Additions
Opening
Balance
18,331
Additions
Additions
Disposals
Depreciation
8
(374)
Total
17,761
Investment property
167
Depreciation
(371)
Total
18,127
Opening
balance
18,455
Investment property
319
(90)
Depreciation
(353)
Total
18,331
Management deems the fair value of investment property to be R54,843,284 on 29 February 2016 (2015: R69,523,214 ; 2014:
R60,999,427). In determining the fair value of investment property, Management takes into account the latest selling values, municipal
valuations, age of the property and general market conditions.
43
6.
Investment property (continued)
The rental income earned from investment property amounts to R2,786,320 (2015: R2,406,791 ; 2014: R2,469,189) for the year. Direct
operating expenditure of investment property amounts to R355,280 (2015: R458,609 ; 2014: R647,577). Direct operating expenditure
accrued by investment property represents the actual expenditure incurred for rates, insurance and repairs and maintenance of
investment property.
Investment property and certain land and buildings to a maximum value of R109 million were encumbered to Land Bank as disclosed in
Depreciation expense of R374,310 (2015: R370,972 ; 2014: R352,480) has been charged in 'operating expenses'.
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.
7.
Intangible assets
Group
2016
Cost
Trademarks
Mineral rights
Software
Client relations
Goodwill
Product development
Total
2015
Accumulated
Carrying value
amortisation and
impairment
Cost
Accumulated
Carrying value
amortisation and
impairment
22,604
24,945
18,095
33,434
62,978
907
(11,058)
(915)
(819)
(20,714)
(721)
11,546
24,030
17,276
12,720
62,978
186
22,604
24,945
4,453
33,434
62,978
907
(9,843)
(831)
(745)
(19,250)
(631)
12,761
24,114
3,708
14,184
62,978
276
162,963
(34,227)
128,736
149,321
(31,300)
118,021
Group
2014
Cost
Trademarks
Mineral rights
Software
Client relations
Goodwill
Product development
Total
44
Accumulated
Carrying value
amortisation and
impairment
24,604
24,945
5,688
33,434
62,978
907
(10,627)
(748)
(4,906)
(16,735)
(540)
13,977
24,197
782
16,699
62,978
367
152,556
(33,556)
119,000
7.
Intangible assets (continued)
Reconciliation of intangible assets - Group - 2016
Opening
Balance
12,761
24,114
3,708
14,184
62,978
276
Trademarks
Mineral rights
Software
Client relations
Goodwill
Product development
118,021
Additions
Amortisation
Total
13,642
-
(1,215)
(84)
(74)
(1,464)
(90)
11,546
24,030
17,276
12,720
62,978
186
13,642
(2,927)
128,736
Opening
Balance
Trademarks
Mineral rights
Software
Client relations
Goodwill
Product development
Additions
13,977
24,197
782
16,699
62,978
367
3,688
-
119,000
3,688
Amortisation Impairment
and
loss
impairment
(1,216)
(83)
(268)
(494)
(2,515)
(91)
(4,173)
(494)
Total
12,761
24,114
3,708
14,184
62,978
276
118,021
Opening
balance
Trademarks
Mineral rights
Software
Client relations
Goodwill
Product development
45
Additions
Disposals
16,309
24,280
1,430
19,506
62,978
458
398
-
(7)
-
124,961
398
(7)
Amortisation Impairment
and
loss
impairment
(1,415)
(917)
(83)
(781)
(258)
(2,807)
(91)
(5,177)
(1,175)
Total
13,977
24,197
782
16,699
62,978
367
119,000
7.
Trademarks, Mineral rights, Software and Client relations
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.
Product development costs
The intangible asset for product development costs consists of costs incurred 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.
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.
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 cashgenerating 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 2016
Goodwill Trademarks
6,393
5,153
Client
relations
R '000
1,015
7,747
3,958
11,546
12,720
Goodwill Trademarks
7,078
5,683
Client
relations
R '000
1,015
8,576
4,592
12,761
14,183
Goodwill Trademarks
7,763
6,214
Client
relations
R '000
1,015
9,407
6,277
13,977
16,699
R '000
1,782
14,883
46,313
Insurance agency business in Overberg Agri Bedrywe (Pty) Ltd
Promeal (Pty) Ltd
Boltfast (Pty) Ltd
62,978
R '000
Mineral
rights
R '000
24,030
24,030
28 February 2015
R '000
1,782
14,883
46,313
Promeal (Pty) Ltd
Boltfast (Pty) Ltd
62,978
R '000
Mineral
rights
R '000
24,114
24,114
28 February 2014
R '000
1,782
14,883
46,313
Promeal (Pty) Ltd
Boltfast (Pty) Ltd
62,978
46
R '000
Mineral
rights
R '000
24,197
24,197
7.
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 2016
Goodwill
Discount rate (post-tax)
Growth rate
Long term growth rate
Overberg Agri commission % of total premiums
11.30%
4.50%
6.00%
15.00%
Client
relations
11.30%
4.50%
6.00%
15.00%
28 February 2015
Goodwill
Growth rate
10.80%
4.50%
6.00%
15.00%
Client
relations
10.80%
4.50%
6.00%
15.00%
28 February 2014
Goodwill
Growth rate
12.00%
4.50%
7.00%
15.00%
Client
relations
12.00%
4.50%
7.00%
15.00%
The budgeted turnover and growth rate are based on management 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.
Promeal (Pty) Ltd
29 February 2016
Growth in gross profit per year
Long-term growth rate
Inflation rate
Goodwill
Trademarks
7.00% 35.11%
13.60%
7.00%
6.00%
7.00% 35.11%
13.60%
7.00%
6.00%
Goodwill
Trademarks
7.00% 18.90%
16.06%
6.00%
7.00% 18.90%
16.06%
6.00%
Client
relations
7.00% 35.11%
13.60%
7.00%
6.00%
28 February 2015
47
Client
relations
7.00% 18.90%
16.06%
6.00%
7.
28 February 2014
Goodwill
Trademarks
11.82% 15.29%
16.59%
6.00%
11.82% 15.29%
16.59%
6.00%
Client
relations
11.82% 15.29%
16.59%
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 2016:


An increase in the discount rate (post-tax) of 1.23%; and
An increase in the inflation rate of 0.46%.
28 February 2015:

An increase in the discount rate (post-tax) of 3.54%.
28 February 2014:

29 February 2016
Mineral
rights
6.00%
15.46%
6.00%
28 February 2015
Mineral
rights
6.00%
16.06%
6.00%
28 February 2014
Mineral
rights
6.00%
16.59%
6.00%
48
7.
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 2016:

28 February 2015:

28 February 2014:


An increase in the discount rate (post-tax) of 0.19%; and
A decrease in long-term growth rate of 2.35%.
Boltfast (Pty) Ltd
29 February 2016
Goodwill
Trademarks
5.5% - 9.6%
12.50%
5.50%
5.5% - 9.6%
12.50%
5.50%
Goodwill
Trademarks
Goodwill
Trademarks
Client
relations
5.5% - 9.6%
12.50%
5.50%
28 February 2015
Client
relations
5.0% - 14.92% 5.0% - 14.92% 5.0% - 14.92%
16.79%
16.79%
16.79%
5.00%
5.00%
5.00%
28 February 2014
Client
relations
8.0% - 10.9% 8.0% - 10.9% 8.0% - 10.9%
16.06%
16.06%
16.06%
5.40%
5.40%
5.40%
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.
49
8.
Financial assets by category
The accounting policies for financial instruments have been applied to the line items below:
Group - 29 February 2016
Loans and Available-forreceivables
sale
investments
780,478
744,645
66,212
69,761
-
Available-for-sale investments ¹
880,618
780,478
Total
780,478
744,645
66,212
69,761
1,661,096
sale
investments
1,288,867
604,519
33,454
33,650
-
671,623
1,288,867
Total
1,288,867
604,519
33,454
33,650
1,960,490
sale
investments
655,817
546,116
41,221
52,279
-
639,616
655,817
Total
655,817
546,116
41,221
52,279
1,295,433
Company - 29 February 2016
sale
investments
626,173
-
Total
sale
investments
30,997
-
Total
sale
investments
13,001
-
Total
626,173
30,997
¹ Refer to note 11.
50
13,001
Group
2016
R '000
9.
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
Financial liabilities by category
The accounting policies for financial instruments have been applied to the line items below:
Other financial
liabilities at
amortised cost
29,652
349,406
258,492
Non-current borrowings
Current borrowings
Total
29,652
349,406
258,492
637,550
637,550
Other financial
liabilities at
amortised cost
42,237
460,456
204,263
Current borrowings
Total
42,237
460,456
204,263
706,956
706,956
Other financial
liabilities at
amortised cost
12,826
483,333
201,525
1,502
Current borrowings
Bank overdraft
Total
12,826
483,333
201,525
1,502
699,186
699,186
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.
Trade receivables
New clients
Current clients with no non-payment history
18,079
590,660
31,247
473,396
11,685
436,777
-
-
-
Total trade receivables
608,739
504,643
448,462
-
-
-
ABSA Bank
Standard Bank
First National Bank
PSG Konsult
Cash
11,079
51,717
6,609
356
12,337
12,341
4,976
2,689
1,307
13,922
26,358
8,098
8
2,390
-
-
-
Total cash and cash equivalents
69,761
33,650
50,776
-
-
-
51
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
10. Financial instruments credit quality (continued)
Standard Bank's credit rating by Moody's in March 2016 was judged A1.za, which denotes to be high quality and is subject to very low
credit risk. Standard Bank's credit valuation by Fitch in December 2015 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.
ABSA's credit rating by Moody's in December 2015 was judged A1.za, which denotes to be high quality and is subject to very low credit
risk. ABSA's credit valuation by Fitch in March 2016 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 (including divisions First National Bank and Wesbank) credit rating by Moody's in December 2015 was judged A1.za, which
denotes to be high quality and is subject to very low credit risk. FirstRand's credit valuation by Fitch in December 2015 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 investments
Beginning of the year
Acquired through dividend in specie
Investments derecognised
Fair value adjustments
Movement in deferred bonus funds
1,288,867
(363,356)
(145,033)
-
655,818
27,542
(27,614)
633,077
44
874,756
(323,045)
104,103
4
-
-
-
780,478
1,288,867
655,818
-
-
-
780,120
1,287,810
654,804
-
-
-
269
271
271
-
-
-
35
54
-
34
132
620
34
132
577
-
-
-
780,478
1,288,867
655,818
-
-
-
Available-for-sale investments consist of the following:
Listed investments ¹
- Companies

Pioneer Foods Ltd shares: 6,000,000 (2015: 7,869,296 ;
2014: 7,869,296)

Sanlam Ltd shares: 5,025 (2015: 5,994 ; 2014: 5,994)
Unlisted investments ²
- Cooperatives
- Companies and others
- Deferred bonus funds
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 were encumbered through a cession of 7,104,102 Pioneer Foods Ltd shares
in favour of the Land Bank (note 24) until January 2016. Available-for-sale investments were further encumbered to Land Bank as
disclosed in note 24 until January 2016.
For the determination of fair values of unlisted investments refer to note 1.37.
52
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
12. Biological assets
Group
2016
Valuation
Livestock¹
2015
Accumulated
depreciation
2,851
Carrying value
-
Valuation
2,851
Accumulated
depreciation
2,483
Group
Carrying value
-
2,483
2014
Valuation
Livestock¹
Accumulated
depreciation
1,758
Carrying value
-
1,758
Reconciliation of biological assets - Group - 2016
Livestock¹
Opening
Fair value
balance
adjustments
2,483
368
Total
Opening
Fair value
balance
adjustments
1,758
725
Total
Opening
Fair value
balance
adjustments
1,787
(29)
Total
2,851
Livestock¹
2,483
Livestock¹
1,758
The Group conducts farming activities including a herd of sheep and the cultivation of grain crops. Grain, sheep and wool are traded. On
29 February 2016 the Group held 2041 sheep [1477 fully grown and 564 lambs] (2015: 2 444 sheep [1 458 fully grown and 986 lambs] ;
2014: 1 816 sheep [1 070 fully grown and 746 lambs]). The Group produced the following, measured against fair value less selling costs
at point of harvest:
Sheep
Wool
Grain
1,060
702
3,090
787
544
3,144
927
572
2,614
-
-
-
4,852
4,475
4,113
-
-
-
Biological assets were encumbered to Land Bank as disclosed in note 24 until January 2016.
¹ Biological assets 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 fair value of biological assets is determined by using the available market price of livestock for the end of each reporting period.
53
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
13. Investments in subsidiaries
Name of Company
Investment in Overberg Agri Bedrywe (Pty) Ltd
Investment in Overberg Agri Beleggings (Pty) Ltd
Investment in Promeal (Pty) Ltd
Investment in Boltfast (Pty) Ltd
Investment in Bontebok Limeworks (Pty) Ltd
Investment in Bredasdorp Slagpale (Pty) Ltd
% holding % holding % holding
2016
2015
2014
100.00
100.00
100.00
74.00
74.00
100.00
%
%
%
%
%
%
100.00
100.00
100.00
74.00
74.00
100.00
%
%
%
%
%
%
100.00
100.00
100.00
100.00
74.00
100.00
%
%
%
%
%
%
Carrying
amount
2016
2,442
182,954
26,251
37,501
37,501
11,250
Carrying
amount
2015
2,442
182,954
26,251
37,501
37,501
11,250
Carrying
amount
2014
2,442
182,954
26,251
37,501
37,501
11,250
297,899
297,899
297,899
The carrying amounts of subsidiaries are shown net of impairment losses.
Details of the abovementioned investments are provided in Annexure A.
Reconciliation of investment in Overberg Agri Bedrywe (Pty) Ltd
Opening balance
Acquisition
2,442
-
2,442
-
1,338
1,104
Nett
2,442
2,442
2,442
Opening balance
Investment allocation¹
Acquisition
182,954
-
182,954
-
189,248
(112,502)
106,208
Nett
182,954
182,954
182,954
Opening balance
26,251
-
26,251
-
26,251
Nett
26,251
26,251
26,251
Opening balance
37,501
-
37,501
-
37,501
Nett
37,501
37,501
37,501
Opening balance
37,501
-
37,501
-
37,501
Nett
37,501
37,501
37,501
Opening balance
11,250
-
11,250
-
11,250
Nett
11,250
11,250
11,250
Reconciliation of investment in Overberg Agri Beleggings (Pty) Ltd
Reconciliation of investment in Promeal (Pty) Ltd
Reconciliation of investment in Boltfast (Pty) Ltd
Reconciliation of investment in Bontebok Limeworks (Pty) Ltd
Reconciliation of investment in Bredasdorp Slagpale (Pty) Ltd
¹ For more details on the restructuring during 2014, please refer to note 6 of the Directors' report.
54
Group
2016
R '000
Company
2015
R '000
2014
R '000
2016
R '000
2015
R '000
2014
R '000
14. Deferred tax
Deferred taxation is calculated on all temporary differences according to the liability method and at a normal taxation rate of 28.00%
(2015: 28.00% ; 2014: 28.00%), and capital gains tax rate of 22.40% (2015: 18.65% ; 2014: 18.65%)
The movement on the deferred taxation account comprises the following:
Deferred taxation asset
Reconciliation of deferred tax asset:
Movement for the year:
- Carried over from deferred tax liability
- Depreciation
- Provisions
- Prepayments
- Inventory
64
Accelerated wear and tear
Provisions
Prepayments
Inventory
-
-
-
-
-
22
3,356
4
(2)
(47)
2
102
3
4
-
-
-
-
3,444
64
-
-
-
-
(273)
3,747
(30)
(295)
391
(4)
(28)
-
-
-
-
3,444
64
-
-
-
-
Deferred taxation liability
Reconciliation of deferred tax liability:
Movement for the year:
- Carried over to deferred tax asset
- Taxation loss
- Depreciation and amortisation
- Provisions
- Deferred revenue
- Biological assets
- Available-for-sale investments
- Deferred tax asset not provided
- Prepayments
- Inventory
(218,225)
(130,198)
(138,226)
-
-
-
(999)
(5,694)
(1,662)
494
(104)
47,157
(7)
-
47
1,950
(3,074)
2,447
32
(202)
(89,227)
-
(10,504)
(5,765)
(6,759)
70
8
21,653
9,364
(7)
(32)
-
-
-
(179,040)
(218,225)
(130,198)
-
-
-
(6,562)
(65,866)
(126,194)
(796)
950
1,866
17,569
(7)
-
(7,337)
(59,527)
(173,351)
(692)
1,949
1,372
19,361
-
(8,408)
(55,549)
(84,124)
(490)
1,340
17,072
(7)
(32)
-
-
-
(179,040)
(218,225)
(130,198)
-
-
-
The balance comprises the following:
Accelerated amortisation on intangible assets
Accelerated wear and tear
Available-for-sale investments
Biological assets
Calculated assessed loss
Deferred revenue
Provisions
Prepayments
Inventory
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.
55
Group
2016
R '000
Company
2015
R '000
2014
R '000
2016
R '000
2015
R '000
2014
R '000
15. Inventory
Grain and other products
Work-in-progress
Raw materials
Finished goods
Trading stock
Consumable inventory
75,720
1,516
4,695
15,708
273,972
12,963
55,303
1,170
2,571
15,949
272,950
11,016
57,452
2,021
5,009
12,140
238,049
13,844
-
-
-
384,574
358,959
328,515
-
-
-
Borrowing costs to the value of R1,224,719 (2015: R866,632 ; 2014: R828,059) have been capitalised and included in the seed value at
an interest rate of prime less 2.00% (2015: prime less 1.75% ; 2014: prime less 1.80%). Refer to note 34.
The cost of inventories recognised as an expense and included in 'cost of sales' amounted to R2,310,718,482 (2015: R2,184,164,218 ;
2014: R2,334,758,007).
Management has written off trade- and grain inventory of R3,349,780 (2015: R1,699,009 ; 2014: R709,426) to net realisable value. The
write-off is included in cost of sales in the Income statement.
Management made a provision for impairment of inventory. Included in trading stock is a provision of R6,638,826 (2015: R4,817,855 ;
2014: R5,013,491) as an adjustment for slow moving inventory. The movement in the provision is included in cost of sales in the Income
statement.
There is a general notarial bond over inventory amounting to R69,521,288 (2015: R79,076,077 ; 2014: R71,279,947) in favour of ABSA
Bank (note 24).
There is a negative pledge in favour of Nedbank Ltd over unencumbered stock of R252 million in conjuction with an undertaking from the
borrower not to encumber unencumbered assets within Nedbank prior to written consent.
Inventory amounting to R nil (2015: R252,546,136 ; 2014: R229,441,626) was encumbered to Land Bank as disclosed in note 24 until
January 2016.
16. Loans to Group companies
Associates
Silo Trust
-
-
2,876
-
-
-
Impairment of loans to associates
-
-
2,876
(2,876)
-
-
-
-
-
-
-
-
-
This loan was unsecured, interest-free and had no terms of repayment. The carrying value represented the fair value of the loan.
Subsidiaries
-
-
-
1
626,172
1
30,996
1
13,000
-
-
-
626,173
30,997
13,001
These loans are unsecured, interest-free and has no terms of repayment. The carrying value represents the fair value of the loans.
56
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
17. Trade and other receivables
Trade receivables
Less: Provision for impairment in receivables
516,281
235,936
(12,421)
369,685
221,278
(16,263)
366,773
191,417
(16,417)
-
-
-
739,796
574,700
541,773
-
-
-
20,282
782
9,258
4,671
24,935
15,402
673
1,144
4,211
20,490
603
3,206
3,740
-
-
-
774,789
(184,518)
621,065
(144,296)
569,812
(132,540)
-
-
-
590,271
476,769
437,272
-
-
-
503,860
235,936
34,993
353,422
221,278
46,365
351,055
190,718
28,039
-
-
-
774,789
621,065
569,812
-
-
-
608,739
504,643
448,462
-
-
-
25,821
49,087
-
-
-
13,071
6,536
5,763
3,063
13,261
2,282
1,231
9,047
7,566
4,930
1,979
34,612
-
-
-
28,433
25,821
49,087
-
-
-
94,429
35,030
27,377
-
-
-
35,030
27,377
-
-
-
Other receivables:
Sale of investment
South African Revenue Services - VAT
Staff loans
Prepayments
Sundries
Less: Non-current portion of instalment sale agreements
The fair value of trade and other receivables is as follows:
Trade receivables
Other receivables
For credit quality of trade receivables refer to note 10.
The trade receivables, instalment sale agreements and other
receivables who are fully performing, amount to:
Trade and other receivables past due but not impaired
Included in trade and other receivables are accounts past
due, but no impairment has been recognised. These trade
receivables represent individual clients who have no recent
history of default and amount to:
28,433
The age analysis of these trade and other receivables is as follows:
0 - 30 days
30 - 60 days
60 - 90 days
90 days and older
Trade and other receivables past due but renegotiated
Included in trade and other receivables are accounts past
due, on which no impairment has been recognised due to
renegotiated terms. These trade receivables represent
individual clients who have no recent history of default and
amount to:
The age analysis of these trade and other receivables is as follows:
366 days and older
94,429
57
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
17. Trade and other receivables (continued)
The Group owns the following types of securities that are taken into account in determining any provision for impairment of trade
receivables:
• First mortgages over property
• Second mortgages over property
• Third mortgages over property
• Fourth mortgages over property
• Fifth mortgages over property
• Sixth mortgages over property
• Seventh mortgages over property
• Notarial bonds
• Cession of shares
• Cession of shareholders' loan
• Policy redemption values
56,620
23,600
19,413
18,700
2,650
9,500
3,000
5,500
55,956
2,000
182
20,320
18,050
11,673
2,950
3,350
4,000
1,175
48,519
159
24,020
20,000
7,513
3,250
2,150
1,000
1,175
58,754
4
-
-
-
197,121
110,196
117,866
-
-
-
20,616
25,468
33,264
-
-
-
20,532
84
-
19,837
5,631
-
30,102
2,762
400
-
-
-
20,616
25,468
33,264
-
-
-
Underlying assets serve as security for instalment sale agreements.
Trade and other receivables impaired
The trade receivables, instalment sale agreements and other
receivables on whom provision has been made for
impairment after taking into account securities,
amount to:
It is expected that a portion of these receivables will be recovered.
The age analysis of these receivables is as follows:
Within 1 year
Between 1 and 2 years
The Group has recognised a movement in provision of R(3,843,528) (2015: R(153,638) ; 2014: R(897,534) for impairment of trade
receivables. The individual 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 or other income in the Income statement.
The Group has written off bad debts to the value of R2,332,889 (2015: R1,331,023 ; 2014: R1,266,186). Bad debts written off has been
included in sales and marketing costs in the Income statement.
Movement in the provisions for impairment of trade receivables and instalment sale agreements are as
follows:
Opening balance
Provision for impairment
Trade receivables and instalment sale agreements written
off as irrecoverable during the year
Unutilised amounts written back
16,263
1,428
(2,333)
(2,937)
Balance 29 February
12,421
16,417
7,253
(1,331)
17,315
2,392
(557)
-
-
-
(6,076)
(2,733)
-
-
-
16,263
16,417
-
-
-
The maximum exposure to credit risk on the reporting date is the fair value of each class of receivables referred to above.
58
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
17. Trade and other receivables (continued)
All instalment sale agreements are receivable within 6 years of the reporting date. The effective interest rate of the instalment sale
agreements is linked to the prime interest rate, based on the debtors’ risk profile. The dates of maturity of instalment sale agreements are
as follows:
At 29 February 2016
Capital
Within one year
At 28 February 2015
R'000
78,816
68,840
49,941
28,500
9,839
R'000
19,011
15,547
8,551
3,590
895
R'000
97,827
84,387
58,492
32,090
10,734
235,936
47,594
283,530
Capital
Within one year
At 28 February 2014
GROUP
Financing Instalments
costs
R'000
96,606
62,285
34,722
17,727
9,938
R'000
16,004
11,100
5,354
2,399
960
R'000
112,610
73,385
40,076
20,126
10,898
221,278
35,817
257,095
Capital
Within one year
GROUP
costs
GROUP
costs
R'000
58,877
55,234
43,304
25,391
8,611
R'000
13,531
11,519
6,616
2,868
805
R'000
72,407
66,753
49,920
28,260
9,416
191,417
35,339
226,756
The effective interest rate on the receivables is as follows:
• At floating interest rates of 10.93% (2015: 9.88% ; 2014: 8.54%).
Trade receivables of R nil (2015: R497,786,126 ; 2014: R461,842,690) served as collateral in favour of the Land Bank until January 2016.
There is also a cession on trade receivables of R25,978,082 (2015: R27,774,676 ; 2014: R22,856,008) in favour of the ABSA Bank loans.
18. Cash and cash equivalents
Cash and cash equivalents consist of:
Bank balances and cash on hand
Short-term deposits
Bank overdraft
67,668
2,093
-
30,469
3,181
-
50,044
2,234
(1,502)
-
-
-
69,761
33,650
50,776
-
-
-
The Group has overdraft facilities with several financial institutions. The facilities bear interest as determined from time to time by these
financial institutions (currently 7.45% - 10.50% [2015: 7.45% - 9.00% ; 2014: 7.20% - 9.00%]).
59
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
18. Cash and cash equivalents (continued)
Cash and cash equivalents amounting to R nil (2015: R12,316,315 ; 2014: R30,773,422) were encumbered to Land Bank as disclosed in
Short-term bank deposits amounting to R2,002,032 (2015: R2,328,193 ; 2014: R1,423,163) is held in terms of SAFEX trade agreements
and is not accessible other than for this purpose.
The effective interest rate on bank balances and short-term bank deposits are as follows:
At floating interest rates:
Bank balances
Short-term bank deposits
Bank overdraft
%
%
%
0.00 - 6.50 0.00 - 5.25 0.00 - 5.00
0.00 - 7.27 0.00 - 8.00 0.00 - 5.00
n/a
n/a
9.00
%
%
%
-
-
-
19. Current taxation
Current tax receivable
7,796
3,287
10,763
-
-
-
Current tax payable
1,078
4,214
16
-
-
-
11,487
21,073
2,345
3,662
2,624
25,021
5,146
21,013
2,781
570
19
3,925
-
9,233
21,627
3,023
2,070
35
5,232
-
-
-
-
66,212
33,454
41,220
-
-
-
20. Loans and other receivables
Agri Mega NPC
Tehila Investments (Pty) Ltd
Zamani Lime (Pty) Ltd
Boshoff Visser Lewende Hawe (Pty) Ltd
Realty 1 Property Cape Agulhas (Pty) Ltd
Rola Motors (Pty) Ltd
Moov Fuel (Pty) Ltd
Agri Mega NPC:
This loan is secured by a first mortgage on land and buildings to the value of R11,4 million and bears interest at a sub-prime-linked
interest rate. There are no fixed repayment terms.
Zamani Lime (Pty) Ltd:
The loan is unsecured, bears interest at a sub-prime-linked interest rate. Interest is capitalised on a monthly basis. If dividends are
declared by subsidiary Bontebok Limeworks (Pty) Ltd, these dividends would firstly be applied to service the capitalised interest. No other
formal repayment terms are specified.
Moov Fuel (Pty) Ltd:
This loan is unsecured, bears interest at a prime-linked interest rate and is repayable on demand.
Realty 1 Property Cape Agulhas (Pty) Ltd:
This loan was secured, bore interest at a sub-prime-linked interest rate and was repayable in 15 monthly instalments, starting 1 May
2012. The loan was repaid during the current financial year.
Rola Motors (Pty) Ltd:
This loan is secured by a suretyship from Rola Holdings (Pty) Ltd and bears interest at a prime-linked interest rate. An initial instalment of
R4,000,000 was received and thereafter equal interest instalments is receivable for 24 months starting from the first month after the
implementation date (1 March 2011), whereafter the capital balance plus interest calculated thereon, is receivable in 60 equal
instalments.
60
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
20. Loans and other receivables (continued)
Tehila Investments (Pty) Ltd
This loan is secured by a mortgage on land and buildings to the value of R22,000,000, a notarial bond of R5,000,000, a session of
interest over the Overberg Agri Credit insurance scheme and a guarantee. The loan bears interest at a sub-prime-linked interest rate and
is repayable in 139 (2015: 151 ; 2014: 163) equal monthly instalments of R184,146 (2015: R184,146 ; 2014: R184,146) with last payment
payable on 30 September 2027.
Boshoff Visser Lewende Hawe (Pty) Ltd
The first loan, amounting to R nil (2015: R nil ; 2014: R90,775), is secured by a bond from Boshoff Visser Financial Services (Pty) Ltd to
the value of the loan, bears interest at a sub-prime-linked interest rate and is repayable in nil (2015: nil ; 2014: one) equal monthly
instalment of R nil (2015: R nil ; 2014: R92,644) with last payment payable on 31 March 2014.
The second loan, amounting to R nil (2015: R80,854 ; 2014: R1,004,184), is secured by a bond from Boshoff Visser Financial Services
(Pty) Ltd to the value of the loan, bears interest at a sub-prime-linked interest rate and is repayable in nil (2015: one ; 2014: 13) monthly
instalments of R nil (2015: R81,771 ; 2014: R81,688) with last payment payable on 31 March 2015.
The third loan, amounting to R nil (2015: R489,192 ; 2014: R975,215), is secured by a bond from Boshoff Visser Financial Services (Pty)
Ltd to the value of the loan, bears interest at a sub-prime-linked interest rate, and is repayable in nil (2015: 11 ; 2014: 23) equal monthly
instalments of R nil (2015: R46,730; 2014: R46,636) with the last payment payable on 1 January 2016.
The fourth loan, amounting to R1,634,154 (2015: n/a ; 2014: n/a) is secured by a bond from Boshoff Visser Financial Services (Pty) Ltd
to the value of the loan, bears interest at a sub-prime-linked interest rate, and is repayable in 28 (2015: n/a ; 2014: n/a) equal monthly
instalments of R66,279 (2015: n/a ; 2014: n/a), with the last payment payable on 30 June 2018.
The fifth loan, amounting to R2,027,572 (2015: n/a ; 2014: n/a), is secured by a bond from Boshoff Visser Financial Services (Pty) Ltd to
the value of the loan, bears interest at a sub-prime-linked interest rate, and is repayable in 28 (2015: n/a ; 2014: n/a) equal monthly
instalments of R82,214 (2015: n/a ; 2014: n/a), with the last payment payable on 30 June 2018.
Loans and other receivables amounting to R nil (2015: R29,528,689 ; 2014: R35,988,276) were encumbered to Land Bank as disclosed
in note 24 until January 2016.
The carrying value represents the fair value of the loans.
Non-current assets
Current assets
24,392
41,820
24,182
9,272
26,779
14,441
-
-
-
66,212
33,454
41,220
-
-
-
1,500
1,500
1,500
1,500
1,500
1,500
21. Share capital
Authorised
10 000 000 Ordinary shares of 15 cents each
Issued
7 549 725 Ordinary shares of 15 cents each (2015: 8 388
583 Ordinary shares of 15 cents each ; 2014: 8 388 583
Ordinary shares of 15 cents each)
Share premium
Treasury shares
1,132
27,806
-
1,258
187,064
(119,602)
1,258
187,064
(119,602)
1,132
27,806
-
1,258
187,064
-
1,258
187,064
-
28,938
68,720
68,720
28,938
188,322
188,322
Opening balance
Share buyback
8,388,583 8,388,583
(838,858)
-
8,388,583
-
8,388,583 8,388,583
(838,858)
-
8,388,583
-
Closing balance
7,549,725
8,388,583
7,549,725
8,388,583
All shares are fully paid up.
Reconciliation of issued shares
61
8,388,583
8,388,583
Group
2016
R '000
Company
2015
R '000
2014
R '000
2016
R '000
2015
R '000
2014
R '000
22. Share based payments
Cash-settled share appreciation rights are granted to certain directors and to selected employees. The exercise price of the granted
appreciation rights is equal to the change in market price of the Overberg Agri Ltd shares from the grant date to each vesting date.
Appreciation rights are conditional on the employee completing a minimum of three years' service from the grant date, with an additional
two years service needed to get the full benefit of the appreciation rights. The options are exercisable starting three years from the grant
date, subject to the group achieving its target growth in earnings per share over the period, and the appreciation rights have a contractual
option term of five years. The group has no legal or constructive obligation to repurchase the appreciation rights.
Movements in the number of share appreciation rights and their related weighted average exercise prices are as follows:
GROUP
2016
Average exercise
price per share
appreciation right
Appreciation
rights
At 1 March
Granted during the year
Forfeited during the year
Exercised during the year
Movement through statement of comprehensive income
At 29 February
207,610
(41,394)
166,216
GROUP
2015
Average exercise
price per share
appreciation right
Appreciation
rights
At 1 March
Granted during the year in respect of prior years
At 28 February
31.36
56.97
23.28
54.06
124,182
124,822
(41,394)
207,610
GROUP
2014
Average exercise
price per share
appreciation right
Appreciation
rights
At 1 March
At 28 February
47.65
20.56
47.65
31.36
-
Total value
R'000
6,511
(2,358)
4,833
8,986
Total value
R'000
5,917
2,567
(1,973)
6,511
Total value
R'000
-
-
Out of the 166,216 outstanding appreciation rights no rights were exercisable on 29 February 2016.
Share appreciation rights outstanding at the end of the year have the following expiry date and exercise prices:
Grant - vest
2012-2016
2012-2017
2014-2017
2014-2018
2014-2019
Expiry date
Exercise price per share
appreciation right
14 March 2016
14 March 2017
14 March 2017
14 March 2018
14 March 2019
113.94
135.13
92.10
98.06
103.50
62
Share appreciation rights
2016
2015
2014
41,394
41,607
41,607
41,608
166,216
41,394
41,394
41,607
41,607
41,608
207,610
-
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
22. Share based payments (continued)
The weighted average fair value of appreciation rights outstanding at the end of the period as determined using the Black-Scholes
valuation model was R54.06 per right (2015: R31.36 ; 2014: n/a). The significant inputs into the model were weighted average Overberg
Agri Ltd share price of R78.48 (2015: R78.48 ; 2014: n/a) at the grant date, exercise price shown above, volatility of 21.70% (2015:
21.70% ; 2014: n/a), dividend yield of 1.67% (2015: 1.67% ; 2014: n/a), an expected option life of three to five years (2015: three to five
years ; 2014: n/a) and an annual risk-free interest rate of 6.70% (2015: 6.70% ; 2014: n/a). The volatility measured at the standard
deviation of continuously compounded share returns is based on statistical analysis of daily share prices of a comparable company. See
note 33 for the total expense recognised in the income statement for share options granted to directors and employees.
23. Post-retirement medical liability
Post-retirement medical benefits are payable to a specific grouping of participating former employees. Refer to note 1.22 for description
of the plan. At year-end the number of members consisting of former employees was 57 (2015: 58 ; 2014: 60)
Liability as at reporting date:
Short-term portion of liability
11,513
(1,265)
11,650
(1,215)
12,669
(1,233)
-
-
-
10,248
10,435
11,436
-
-
-
1,078
214
(708)
-
-
-
Costs recognised in the Income statement:
Post-retirement medical benefits
Movement in the liability recognised in the Statement of financial position:
Net liability at the beginning of the year
Net expense recognised in the Income statement
Contributions by the employer
11,650
1,078
(1,215)
12,669
214
(1,233)
14,578
(708)
(1,201)
-
-
-
Net liability at the end of the year
Short-term portion of liability
11,513
(1,265)
11,650
(1,215)
12,669
(1,233)
-
-
-
Long-term portion of liability
10,248
10,435
11,436
-
-
-
881
(1,589)
-
-
-
214
(708)
-
-
-
(129)
(9)
418
(26)
(46)
(743)
2,018
(15)
(414)
-
-
-
280
(815)
1,589
-
-
-
8.52 %
6.21 %
65 / 60
PA90-1
Ultimate
-
-
-
The amounts recognised in the Income statement are as follows:
Interest paid
Actuarial loss (profit) on liability
798
280
1,078
1,029
(815)
Actuarial gain / (loss) reconciliation
Contribution to actuarial gain / (loss)
Basis change increase in net discount rate
Medical inflation higher than assumed
Changes to membership profile different from assumed
Primary actuarial assumptions:
Discount rate
Healthcare inflation rate
Retirement age
Mortality post-retirement
9.12 %
6.66 %
65 / 60
PA90-1
Ultimate
63
7.22 %
4.88 %
65 / 60
PA90-1
Ultimate
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
23. Post-retirement medical liability (continued)
Sensitivity analysis of post-retirement medical liability for former employees:
Effect of discount rate increase of 1% on the liability
Effect of healthcare inflation rate increase of 1.00% on the
liability
Effect of post-retirement death date decrease of 1 year on
the liability
Current liabilities
847
770
749
821
971
1,096
-
-
-
487
481
513
-
-
-
(10,248)
(1,265)
(10,435)
(1,215)
(11,436)
(1,233)
-
-
-
(11,513)
(11,650)
(12,669)
-
-
-
13,461
20,499
3,925
6,674
-
-
-
13,461
24,424
6,674
-
-
-
99,688
1,967
244,773
226,271
6,000
2,752
222,096
285,722
11,608
181,347
-
-
-
346,428
457,119
478,677
-
-
-
359,889
481,543
485,351
-
-
-
24. Borrowings
Non-current
Land Bank term loan
Bank borrowings
Current
Land Bank production borrowings
Land Bank term loan
Nedbank facility
Bank borrowings
Shareholders loans
The Group has Nedbank borrowings with a revolving facility of R250 million (2015: R nil ; 2014: R nil). The facility bears interest at a subprime-linked interest rate. The loan is secured by a limited suretyship of R250 million and a negative pledge over unencumbered stock of
R252 million in conjuction with an undertaking from the borrower not to encumber unencumbered assets within Nedbank prior to written
consent.
The Group had Land Bank production borrowings with an overdraft facility of R1,300 million (2015: R1,300 million ; 2014: R900 million),
bearing interest at prime-linked interest rates as was determined from time to time by the Land Bank until January 2016.
The Land Bank borrowings was secured through grain and other products, excluding barley (refer to note 15), a cession of certain
Pioneer Foods Ltd shares (refer to note 11), an encumbrance of trade receivables to the value of R nil (2015: R497,786,126 ; 2014:
R461,841,690) (refer to note 17), cession of the insurance contract (refer to note 17), general suretyship of Overberg Agri Ltd, covering
bonds to the value of R109 million over selected land and buildings, cession of loans and other receivables (refer to note 20) and notarial
bonds to the value of R109 million on all movable assets (specifically or generally) that certain subsidiaries own or has in its posession
that Land Bank may have deemed necessary to serve as security for the loan until January 2016.
The Group has bank borrowings with ABSA repayable in monthly instalments over a period of 10 years. The bank borrowings have been
secured by an unlimited general cession over receivables of R25,978,082 (2015: R27,774,676 ; 2014: R22,856,008) (note 17), a
mortgage on property of R20,000,000 (2015: R20,000,000 ; 2014: R20,000,000) (note 5), a general notarial bond over movable assets
(excluding inventory) of R35,000,000 (2015: R35,000,000 ; 2014: R35,000,000) (note 5), and limited suretyship of R nil (2015: R nil ;
2014: R65,000,000). The bank borrowings bear interest as determined from time to time at prime-linked interest rates.
The shareholders loans represent deposits made by shareholders of Overberg Agri Ltd and are unsecured. The number of shareholders
with deposits amounted to 149 in 2016 (2015: 247 ; 2014: 143). The loans bear interest as determined from time to time at prime-linked
interest rates. The loans are payable on demand.
The Group's exposure to interest rate adjustments and contractual renewal dates at reporting date is as follows:
Within 1 year
Within 1 to 5 years
346,428
13,461
457,119
24,424
478,677
6,674
-
-
-
359,889
481,543
485,351
-
-
-
64
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
24. Borrowings (continued)
The Group's total borrowing facilities available amount to R255,500,000 (2015: R1,300,500,000 ; 2014: R904,582,000).
The Group has the following unutilised annually renewable borrowing facilities available at varying interest rates:
Borrowing facilities provided by financial
institutions
155,812
1,068,229
621,143
-
-
-
The group used own funds during the transition period between facilities from Land Bank to Nedbank that realised after year-end.
The carrying value of the long- and short-term borrowings is approximately equal to the fair value thereof.
25. Instalment sale agreements
Minimum payments due
- within one year
- in second to fifth year inclusive
4,492
19,443
5,040
22,012
5,443
7,867
-
-
-
Less: future finance charges
23,935
(4,766)
27,052
(5,902)
13,310
(2,502)
-
-
-
Present value of minimum payments
due
19,169
21,150
10,808
-
-
-
2,978
16,191
3,337
17,813
4,655
6,153
-
-
-
19,169
21,150
10,808
-
-
-
16,191
2,978
17,813
3,337
6,153
4,655
-
-
-
19,169
21,150
10,808
-
-
-
Present value of minimum payments due
- within one year
- in second to fifth year inclusive
Current liabilities
The instalment sale agreements, in respect of fixed assets, are repayable within 84 (2015: 84 ; 2014: 84) monthly instalments. The
instalments decrease as existing agreements mature. The instalment sale agreements bear interest at prime-linked interest rates. An
amount of R nil (2015: R1,505,443 ; 2014: R1,761,951) has been prepaid at Wesbank, a division of FirstRand Bank Ltd.
The instalment sale agreements are secured by plant and equipment with a book value of R37,349,715 (2015: R40,403,079 ; 2014:
R42,440,535) (note 5), motor vehicles with a book value of R4,189,192 (2015: R3,273,263 ; 2014: R3,495,553) (note 5), a first mortgage
of R5,000,000 and a second mortgage of R20,000,000 held over the land with a book value of R568,758 (2015: R606,318 ; 2014:
R643,879) (note 5) registered in favour of FirstRand Bank Ltd.
The carrying value of the borrowings is approximately equal to the fair value thereof.
65
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
26. Trade and other payables
Trade payables
South African Revenue Services - VAT
Audit fees
Accrued expenditure
• Leave
• Profit bonus
• Performance incentive scheme
• Compensation commissioner
• Other
Share based payments
Quality upgrading liability
Deferred revenue
Dividends Tax payable
Barley producers
Less: Long-term portion of performance
incentive scheme and share based payment liability
164,609
2,399
4,351
130,443
992
3,671
152,420
2,007
3,957
1
-
-
-
8,726
6,315
19,466
3,761
45,330
8,986
4,620
44,431
-
8,552
5,857
15,598
3,827
37,520
6,511
3,310
35,005
1,981
-
8,087
6,369
15,061
2,354
13,985
3,521
33,426
5,333
-
1,981
-
-
312,994
253,268
246,520
1
1,981
-
-
-
-
1
1,981
-
(8,986)
304,008
(7,453)
245,814
(2,211)
244,309
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 note 1.37.
The carrying amount of trade and other payables approximates its fair value at year-end.
27. Provisions
Reconciliation of provisions - Group - 2016
Opening
Balance
Movement in
Income
statement
857
37
Rehabilitation of mining land
Total
894
Opening
Balance
Movement in
Income
statement
821
36
Total
857
Opening
balance
Movement in
Income
statement
787
34
1,740
(1,740)
Grain handling loss provision
2,527
Total
821
-
(1,706)
821
FNB provided a guarantee on behalf of a subsidiary of the Group to the Department of Minerals and Energy 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 obligations for the Group at 29 February 2016 was R894,389 (2015: R857,022 ;
2014: R821,217).
Non-current liability
894
66
857
821
-
-
-
Group
Company
2016
R '000
2015
R '000
2014
R '000
2016
R '000
2015
R '000
2014
R '000
Gross sales of goods and services
3,034,934
2,825,348
2,917,942
-
-
-
Sale of goods
Rendering of services
2,665,185
142,376
2,506,049
131,378
2,658,281
108,781
-
-
-
2,807,561
2,637,427
2,767,062
-
-
-
28. Revenue
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 the group act as agents (notes 1.26). For one of the subsidiaries, Mineral Royalty tax
amounting to R54,171 (2015: R56,149 ; 2014: R23,942) is deducted from Revenue. Refer to note 1.19.
29. Interest income
Interest charged on trade and other receivables
Interest charged on instalment sale agreements
Interest received - South African Revenue
Services
Interest received - other
49,888
23,013
43,100
19,863
36,235
14,448
-
-
-
19
52
421
-
4,753
-
-
-
-
72,972
63,384
55,436
-
-
-
21,697
29
44,930
66
12,176
42
806,125
-
36,283
-
129,052
-
2,786
315
39
2,789
653
1,630
2,407
239
46
2,541
2,318
2,469
271
23
611
2,151
898
2,087
-
-
-
29,938
52,547
20,728
806,125
36,283
129,052
3,587
881
1,031
-
-
-
70
362,710
-
9,323
143
-
(1,511)
474
223,687
11,650
-
-
-
362,780
9,466
234,300
-
-
-
30. Other income
Investment income
• Dividends received from listed companies
• Dividends received from unlisted companies
• Bonuses received
Rental income
• Investment properties
• Other properties
• Vehicles, machinery and equipment
Bad debts recovered
Transport expense recovered
Movement in provision for bad debt and fines
Foreign exchange gains
Sundry income
31. Financing income
Interest revenue
Interest received - Bank
32. Other profits and losses
Net profit / (loss) on sale of property, plant and
equipment
Net profit on sale of investment property
Net profit on sale of investments
Reversal of impairment on loans
67
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
33. Operating profit
Operating profit for the year is stated after accounting for the following:
Depreciation
Amortisation and impairments
Write-off and provision of inventory to net
realisable value
Proceeds from the harvesting of biological assets
Adjustment of fair value of biological assets
Bad debts
Provision for impairment of receivables
Rent paid
Profit bonus
26,155
2,927
21,601
4,172
22,723
6,352
-
-
-
5,171
(4,852)
(368)
2,333
(3,842)
12,223
5,636
1,699
(4,475)
(725)
1,331
(154)
11,379
5,198
2,015
(4,113)
28
2,778
(898)
13,404
4,015
-
-
-
191,885
8,075
15,061
-
-
-
Employee costs
Salaries and wages
Other costs
Performance incentive scheme and share based payment
provision
Retirement benefit cost
219,855
10,914
22,106
196,891
10,191
22,108
15,568
15,288
13,003
-
-
-
268,443
244,478
228,024
-
-
-
4,112
138
4,503
1,457
-
-
-
1,389
1,241
792
137
148
-
-
-
-
6,832
5,179
6,108
-
-
-
-
-
-
Auditor's remuneration
Audit fees for statutory auditing
- current year provision
- (over) / underprovision previous year
Other fees paid to auditors of the Group
- Consulting and tax advisory services
- Other
4,227
(25)
Expenses by nature
Changes in inventory of finished goods and
work in progress
Purchase of goods
Employee remuneration and
benefit expense
Depreciation, amortisation and impairment
Maintenance
Foreign exchange losses
Auditor's remuneration
Internal Auditor's remuneration
Motor vehicle expenses
Transportation expenses
Rent paid
Insurance
Telephone expenses
Water and electricity
Printing and stationery
Trade promotions
Profit bonus
Other expenses
30,786
31,948
48,849
(2,341,505) (2,216,110) (2,383,607)
(268,443)
(29,082)
(24,813)
(6,832)
(1,331)
3,842
(5,224)
(10,888)
(12,223)
(9,155)
(4,236)
(17,351)
(3,085)
(1,610)
(5,636)
(13,068)
(228,024)
(39,120)
(20,965)
(6,108)
(560)
898
(6,698)
(9,561)
(13,399)
(7,791)
(5,273)
(17,456)
(2,891)
(3,192)
(4,015)
(38,554)
(398)
-
-
Total cost of sales, selling and marketing costs,
operating expenses, administrative costs and items of a
capital nature (through
Income statement)
(2,719,854) (2,579,714) (2,737,467)
(398)
-
-
68
(244,478)
(26,940)
(25,071)
(239)
(5,179)
(1,482)
154
(5,003)
(10,360)
(12,144)
(8,003)
(5,435)
(15,210)
(2,992)
(3,363)
(5,198)
(24,609)
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '000
34. Finance costs
Gross interest paid
Bank and Land Bank
Shareholders' loans
Other interest paid
36,287
14,715
2,087
3,959
42,542
11,329
1,225
1,333
24,969
8,312
170
6,012
-
-
-
57,048
56,429
46,158
-
-
-
1,225
65
638
867
973
-
828
12
-
-
-
-
1,928
1,840
840
-
-
-
34,424
14,715
2,022
3,959
41,675
11,329
252
1,333
32,577
8,312
158
4,271
-
-
-
55,120
54,589
45,318
-
-
-
Less: Interest paid capitalised
Seed
Net interest paid
Bank and Land Bank
Shareholders' loans
Other interest paid
Borrowing costs capitalised are attributable to borrowings specifically concluded in respect of qualifying assets (refer to notes 5 and 15).
35. Taxation
Major components of the tax expense
Current taxation
Current period
Local income tax - recognised in current tax for
prior periods
78,458
1,213
27,893
-
44,949
(16,574)
-
-
-
79,671
27,893
28,375
-
-
-
13,624
-
-
-
27,800
41,999
-
-
-
28.00 %
28.00 %
28.00 %
28.00 %
28.00 %
28.00 %
(1.39)%
0.36 %
0.11 %
(10.49)%
0.09 %
0.11 %
-%
(16.08)%
6.50 %
(0.35)%
2.59 %
1.03 %
-%
(0.33)%
18.78 %
(0.68)%
(5.02)%
8.22 %
(34.07)%
-%
(1.05)%
(28.01)%
0.01 %
-%
-%
-%
-%
-%
(28.00)%
-%
-%
-%
-%
-%
-%
(28.00)%
-%
-%
-%
-%
-%
-%
16.79 %
21.36 %
14.18 %
-%
-%
-%
Deferred taxation
Current period
4,589
84,260
(93)
Reconciliation of the tax expense (%)
Reconciliation between applicable tax rate and average effective tax rate.
Applicable tax rate
Non-taxable income
Non-allowable expenditure
Prior year adjustments for taxation
Capital gains taxation
Other permanent differences
Different statutory tax rate
Deferred taxation not provided for
69
Group
2016
R '000
2015
R '000
Company
2014
R '000
2016
R '000
2015
R '000
2014
R '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)
- Issued shares ('000)
- Less: Treasury shares ('000)
7,550
8,045
(495)
7,550
8,389
(839)
8,216
8,389
(173)
Earnings reconciliation
Profit attributable to equity holders
- From continuing operations
413,721
413,721
98,457
98,457
251,883
251,883
(70)
(362,710)
49,150
6
(9,323)
1,167
494
(143)
6,232
(57)
1,559
(474)
10,045
1,175
(223,687)
24,266
116
Headline earnings
100,097
96,827
64,883
Basic earnings per share (cents)
5,479.7
1,304.1
3,065.8
Headline earnings per share (cents)
1,325.8
1,282.5
789.7
Adjusted for:
(Profit) / loss on sale of property, plant and equipment
(Profit) / loss on sale of investment property
Impairment of property, plant and equipment
Impairment of intangible assets
Profit on the sale of investments
Total tax effects of adjustments
Total non-controlling interest effects on adjustments
37. Cash (used in) generated from operations
501,864
129,402
296,133
805,727
36,283
129,052
29,082
(70)
(21,697)
(76,559)
55,120
(29)
(362,710)
(368)
(137)
3,868
458
(3,842)
2,333
37
620
(37)
27,265
(9,323)
(44,930)
(64,265)
54,589
(66)
(143)
(725)
(1,019)
537
(512)
(154)
1,331
36
(43)
-
39,120
1,037
(361)
(12,176)
(56,467)
45,318
(42)
(223,687)
28
(1,909)
3,793
1,673
(898)
1,266
34
(5)
(11,650)
(1,740)
90
(806,125)
-
(36,283)
-
(129,052)
-
(10,800)
(152,215)
55,404
(30,444)
(52,430)
6,723
(46,376)
(53,418)
(37,202)
(1,980)
1,981
-
20,322
15,829
(57,439)
(2,378)
1,981
-
Adjustments for:
Depreciation and amortisation
(Profit) loss on sale of assets
(Income) / loss from equity accounted investments
Dividends received
Interest received
Finance costs
Bonuses received
Profit from sale of investments
Change in fair value of biological assets
Provision for post-retirement medical benefits
Accrual for performance incentive
Accrual for profit bonus
Bad debts written off
Provision for rehabilitation of mining land
Movement in deferred bonus funds
Impairment on loans
Provision for grain handling loss
Other non-cash flow item
Changes in working capital:
Inventory
70
Group
2016
R '000
Company
2015
R '000
2014
R '000
2016
R '000
2015
R '000
2014
R '000
38. Dividends paid
Balance at beginning of the year
Distribution according to the statement of changes
in equity
Balance at end of the year
(21,875)
-
-
(24,525)
-
-
(22,839)
-
(40,783)
21,875
(10,284)
-
(24,662)
-
(44,793)
24,525
(10,066)
-
(44,714)
(18,908)
(10,284)
(49,187)
(20,268)
(10,066)
An ordinary dividend of R2.94 (2015: R2.18 ; 2014: R1.20) per share was declared and paid during the financial year. No special dividend
(2015: R3.16 ; 2014: R nil) was declared during the year.
39. Tax paid
Balance at beginning of the year
Current tax for the year recognised in profit or loss
Balance at end of the year
(927)
(79,671)
(6,718)
10,747
(27,893)
927
22,707
(28,375)
(10,747)
-
-
-
(87,316)
(16,219)
(16,415)
-
-
-
40. Other comprehensive income
Components of other comprehensive income - Group - 2016
Gross
Tax
Net
Available-for-sale financial assets adjustments
(507,410)
47,158
(460,252)
Gross
Tax
Net
(88,057)
544,949
Tax
Net
633,006
Gross
(84,579)
6,854
(77,725)
41. Business combinations
41.1
Business combinations occurring during the current and prior year
Aggregated business combinations
Inventory
244
14,815
-
-
-
-
-
15,059
-
-
-
-
-
(15,059)
-
-
-
-
-
(15,059)
-
-
-
-
-
Consideration paid
Cash
Net cash outflow on acquisition
Cash consideration paid
71
Group
2016
R '000
Company
2015
R '000
2014
R '000
2016
R '000
2015
R '000
2014
R '000
41. Business combinations (continued)
41.1.1 Acquisition of assets of the Eastern Cape retail branches
On 1 September 2015 the Group acquired Eastern Cape retail branches which resulted in the Group obtaining control over these
businesses.
The total purchase price was paid in cash.
Fair value of assets acquired and liabilities assumed
Inventory
244
14,815
-
-
-
-
-
15,059
-
-
-
-
-
(15,059)
-
-
-
-
-
Acquisition date fair value of consideration paid
Cash
42. Operating lease commitments
The Group leases various assets under non-cancellable operating lease agreements.
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Within 1 year
Within 2 - 5 years
After 5 years
6,742
9,062
8,966
6,976
8,808
-
5,810
3,119
-
-
-
-
24,770
15,784
8,929
-
-
-
164,808
47,069
20,447
56,602
37,195
7,066
-
-
-
211,877
77,049
44,261
-
-
-
2,500
8,513
-
-
-
-
20
4
5
13
960
19
20
4
5
13
850
19
20
4
5
13
850
19
-
-
-
1,021
911
911
-
-
-
43. Capital obligations
Amounts approved
- Contracted
- Not contracted
Intangible assets
Amounts approved
- Contracted
These amounts will be financed from own and borrowed funds.
44. Contingent liabilities and guarantees
Guarantees
The following guarantees are provided by Banks:
Western Cape Regional Services Board
Perishable Products Export Control Board
Cape Metropolitan Board
Eskom
Department of Minerals Resources
Theewaterskloof Municipality
72
Group
2016
R '000
Company
2015
R '000
2014
R '000
2016
R '000
2015
R '000
2014
R '000
44. Contingent liabilities and guarantees (continued)
Other guarantees
Overberg Agri Beleggings (Pty) Ltd provided a guarantee of R10 million to Wesbank in respect of instalment sales agreements on the
hidroxy plant of Bontebok Limeworks (Pty) Ltd. Bontebok Limeworks (Pty) Ltd's financial position is sound and the liabilities which the
guarantee apply to have been prepaid. Bontebok Limeworks (Pty) Ltd, in the opinion of Management, has the capacity to meet the future
liabilities in time. Management have considered the fair value of the guarantee and found that the fair value was R nil.
In previous years, Overberg Agri Beleggings (Pty) Ltd provided a guarantee of R45 million to ABSA Bank in respect of general bank
facilities of a fellow subsidiary, Boltfast (Pty) Ltd. As part of the guarantee the loan account with Boltfast (Pty) Ltd was provided as
security, limited to the guarantee amount.
In previous years, Overberg Agri Ltd provided general suretyship to the Land Bank for the borrowings of Overberg Agri Bedrywe (Pty) Ltd.
Contingent liability for grain stored on behalf of third parties
Contingent liability for wheat and barley stored on behalf of third parties R1,490,538,660 (2015: R1,223,482,176; 2014: R1,229,054,654).
45. Related parties - Group and Company
`
Subsidiaries
Refer to Annexure A
Minority shareholder with significant influence
Acorn Agri (Pty) Ltd
Common controlled entities
Directors
Refer to General Information on page 1
45.1 Related party balances
(i) Loans to related parties
• Overberg Agri Bedrywe (Pty) Ltd
• Overberg Agri Beleggings (Pty) Ltd
• Shareholders
244,773
222,096
181,347
1
626,172
-
1
30,996
-
1
13,000
-
244,773
222,096
181,347
626,173
30,997
13,001
-
-
-
2,442
182,954
26,251
37,501
37,501
11,250
2,442
182,954
26,251
37,501
37,501
11,250
2,442
182,954
26,251
37,501
37,501
11,250
-
-
-
297,899
297,899
297,899
-
-
30
-
-
-
(ii) Investments in subsidiaries
• Overberg Agri Bedrywe (Pty) Ltd
• Overberg Agri Beleggings (Pty) Ltd
• Promeal (Pty) Ltd
• Boltfast (Pty) Ltd
• Bontebok Limeworks (Pty) Ltd
• Bredasdorp Slagpale (Pty) Ltd
Investments in subsidiaries are disclosed in Annexure A.
(iii) Year end balances from the
sale/purchase of goods/services
Trade receivables
• Acorn Agri (Pty) Ltd
73
Group
2016
R '000
Company
2015
R '000
2014
R '000
2016
R '000
2015
R '000
2014
R '000
45. Related parties - Group and Company (continued)
45.2 Related party transactions
(i) Key personnel remuneration
Short-term employee benefits paid by subsidiaries
Performance incentive scheme paid by subsidiaries
Share based payment provision
2,283
444
338
2,327
616
289
2,312
535
-
-
-
-
3,065
3,232
2,847
-
-
-
-
-
-
2,466
1,829
156
-
-
-
806,125
36,283
129,052
Executive
• Remuneration for services as directors paid by
subsidiaries
10,916
14,224
7,826
-
-
-
Non executive
• Remuneration for services as directors paid by
subsidiaries
2,528
2,443
2,267
-
-
-
13,444
16,667
10,093
-
-
-
14,715
11,329
8,312
-
-
-
(ii) Dividends paid to subsidiaries
Distribution as per the Statement of changes in equity
(iii) Dividends received from subsidiaries
Intergroup dividends received on shareholding
(iv) Director's remuneration
(v) Interest paid to related parties
Interest paid
• Shareholders
74
46. Directors' emoluments
Executive
29 February 2016
Figures in R'000
LE Coetzer
FGG Joubert
AJ Uys
Salaries
Incentive bonus
Pension fund
contributions
Medical aid
contributions
Total cash-based
emoluments
Share based
payment
provision
966
869
(402)
1,915
1,824
2,625
432
477
963
358
251
487
53
53
45
2,758
2,605
4,120
6,364
1,872
1,096
151
9,483
1,433
Total cash-based
emoluments
28 February 2015
Figures in R'000
LE Coetzer
FGG Joubert
AJ Uys
Salaries
Incentive bonus
Pension fund
contributions
Medical aid
contributions
1,771
1,661
2,422
490
439
860
306
208
416
48
48
41
2,615
2,356
3,739
Share based
payment
provision
826
743
3,945
5,854
1,789
930
137
8,710
5,514
28 February 2014
Figures in R'000
LE Coetzer
FGG Joubert
AJ Uys
Salaries
Incentive bonus
Pension fund
contributions
Medical aid
contributions
Total cash-based
emoluments
Share based
payment
provision
1,681
1,418
2,119
516
388
748
278
181
371
45
44
37
2,520
2,031
3,275
-
5,218
1,652
830
126
7,826
-
Non-executive
29 February 2016
Directors' fees
R'000
194
361
164
201
165
112
231
159
161
239
261
198
82
D de Kock
DG de Kock
RR Blom
DC Human
P Malan
HP Marais
AC Neethling
J v/d M Rossouw
MJ Roux
DCH Uys
MR van Breda
CA Smith
RP Krige
2,528
75
Total
194
361
164
201
165
112
231
159
161
239
261
198
82
2,528
46. Directors' emoluments (continued)
28 February 2015
Directors' fees
R'000
381
309
186
158
170
217
201
151
182
155
190
74
69
D de Kock
DG de Kock
RR Blom
DC Human
P Malan
HP Marais
AC Neethling
J v/d M Rossouw
MJ Roux
DCH Uys
MR van Breda
JP Viljoen
CA Smith
2,443
Total
381
309
186
158
170
217
201
151
182
155
190
74
69
2,443
28 February 2014
Directors' fees
R'000
359
289
206
137
134
150
13
196
13
141
200
71
71
72
72
143
D de Kock
DG de Kock
RR Blom
S Cassiem
ZL Combi
DC Human
P Malan
HP Marais
AC Neethling
J v/d M Rossouw
MJ Roux
HG Schönfeldt
DCH Uys
MR van Breda
JG van Deventer
JP Viljoen
2,267
76
Total
359
289
206
137
134
150
13
196
13
141
200
71
71
72
72
143
2,267
47. Summarised information on subsidiaries with material non-controlling interests
Set out below is summarised financial information for each subisidary that has non-controlling interests that are material to the Group.
The amounts disclosed for each subsidiary are based on those included in the consolidated financial statements before inter-company
eliminations.
2016
R'000
2015
R'000
2014
R'000
26%
26%
26%
NCI percentage
Summarised statement of financial position:
Current assets
Current liabilities
Non-current assets
32,366
(17,381)
112,938
(37,866)
40,419
(18,727)
90,948
(35,669)
24,464
(11,940)
74,187
(20,256)
Net assets
90,057
76,971
66,455
Accumulated non-controlling interests
28,574
25,333
22,657
100,634
87,808
73,097
Net profit
15,550
-
12,319
-
9,018
-
Total comprehensive income
15,550
12,319
9,018
Summarised statement of comprehensive income:
Revenue
Profit allocated to NCI
Dividends paid to NCI
3,883
(641)
3,145
(469)
2,253
(374)
24,575
(28,794)
5,851
25,546
(21,847)
(6,822)
10,680
(18,697)
13,609
1,632
(3,123)
5,592
Summarised statement of cash flows:
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase / (decrease) in cash and cash equivalents
48. Interests in consolidated common controlled entitites
The Group has effective control of the Overberg Agri Development Trust and Woza Phambili Enterprises (Pty) Ltd. The assets, liabilities
and results of these entities are consolidated with those of the Group.
The Overberg Agri Development Trust was formed in South Africa with the object to identify commercial opportunities with the general
aim of advancing BEE in the interest of and for the benefit of the beneficiaries that will include, but not be limited to:

providing a vehicle through which the beneficiaries acquire economic exposure to investments derived from the acquisition of the
ownership interests in commercial enterprises, subject to the principles contained in and as contemplated in the ownership series;
and

rendering consultancy services and receiving consultancy fees derived from facilitating and promoting socia-economic
development and enterprise and supplier development.
During the previous financial year the Overberg Agri Development Trust acquired 26% interest in Boltfast (Pty) Ltd.
During the current financial year Woza Phambili Enterprises (Pty) Ltd was formed, of which the Overberg Agri Development Trust owns
100% of the shareholding. From 1 November 2015, Woza Phambili Enterprises (Pty) Ltd have taken over the operational activities of the
Trust. The Trust will only be receiving dividends from Woza Phambili Enterprises (Pty) Ltd and Boltfast (Pty) Ltd in the future.
77
49. Going concern
Based on the financial statements, the present position of the Group, budgets for the coming year and available financing facilities, the
directors have no reason to believe that the Group will not be a going concern. The going concern principle is therefore accepted and
applied in the preparation of the financial statements.
50. Events after the reporting period
During 2016 the transaction with Moov Fuel (Pty) Ltd was finalised between the parties pending approval from the Department of Energy.
During 2016 all the fuel retail operations will be sold to a newly formed company named Overberg Energy Trading Trust (Pty) Ltd.
On 1 March 2016 the facility with Nedbank was finalised resulting in an increased facility of R1,3 billion secured by trade debtors.
No further 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.
78
Annexure A for the year ended 29 February 2016
1.
INVESTMENTS IN SUBSIDIARIES OF OVERBERG AGRI LTD
Shares at cost price
2016
#
Shares
2015
#
Shares
2014
#
Shares
2016
2015
2014
R'000
R'000
R'000
100
100
100
37,501
37,501
37,501
20,000
20,000
20,000
37,501
37,501
37,501
Boltfast (Pty) Ltd (74% interest)
Nature of business: Buying and selling of industrial
fasteners
Contribution to Group profit: R620,721 (2015: R7,242,074
; 2014: R6,569,035)
Bontebok Limeworks (Pty) Ltd (74% interest)
Nature of business: Lime mine that produces hydrated
lime, feed lime and agricultural lime
Contribution to Group profit: R11,507,098 (2015:
R9,116,141 ; 2014: R6,673,265)
Principle place of business:
Profit associated to non-controlling interest during the reporting year:
Accumulated non-controlling interest at the end of the reporting year:
Dividend paid to minority shareholder during the reporting year:
Swellendam Road, Bredasdorp, 7280
R3,882,523
R28,574,859
R640,537
Please refer to note 3.2 for summarised financial information of Bontebok Limeworks (Pty) Ltd.
Bredasdorp Slagpale (Pty) Ltd (100% interest)
638,500
638,500
638,500
11,250
11,250
11,250
39,329,515 39,329,515 39,329,515
-
-
-
Nature of business: Operates abattoir
R5,639,350 ; 2014: R5,045,234)
Grain Farmers Group Ltd (100% interest)
Nature of business: Dormant
Contribution to Group profit: R nil (2015: R nil ; 2014: R
nil)
100
100
100
-
-
-
10,000
10,000
10,000
-
-
-
Overberg Agri Bedrywe (Pty) Ltd (100% interest) 79,238,112 79,238,112 79,238,112
2,442
2,442
2,442
MKB Versekeringsmakelaars (Pty) Ltd (100%
interest)
Contribution to Group profit: R nil (2015: R nil ; 2014:
R1,402)
Nutroscience (Pty) Ltd (100% interest)
Nature of business: Testing, development, manufacturing
and marketing of high quality extruded feeds for the
aquaculture and petfood industries
Contribution to Group profit: -R309,329 (2015:
R9,840,584 ; 2014: -R587,992)
Nature of business: Supply and delivery of agriculturerelated products and services
R87,975,716 ; 2014: R477,290,042)
Overberg Agri Beleggings (Pty) Ltd (100%
interest)
349,261
349,261
349,261
182,954
182,954
182,954
100
100
100
-
-
-
2,000
2,000
2,000
26,251
26,251
26,251
Nature of business: Investment company
Contribution to Group profit: R207,746,630 (2015: R568,226 ; 2014: -R32,829,570)
Petfood Caterers (Pty) Ltd (100% interest)
Nature of business: Manufacture and sell dog food
Contribution to Group profit: -R856,698 (2015:
R11,360,570 ; 2014: R14,797,054)
Promeal (Pty) Ltd (100% interest)
Nature of business: Manufactures wet pet food for retail
market
R2,514,547 ; 2014: R7,047,049)
79
Annexure A for the year ended 29 February 2016
2016
#
Shares
Unique Agri Trade (Pty) Ltd (100% interest)
2015
#
Shares
2014
#
Shares
2016
2015
2014
R'000
R'000
R'000
300
300
300
-
-
-
100
-
-
-
-
-
297,899
297,899
297,899
2016
2015
2014
R'000
R'000
R'000
Contribution to Group profit: R nil (2015: R nil ; 2014:
R2,812,185)
(100% interest [2015: 0% ; 2014: 0%])
Nature of business: Group administration company
Contribution to Group profit: -R8,556,745 (2015: R nil ;
2014: R nil)
2.
INVESTMENTS IN SUBSIDIARIES OF OVERBERG AGRI BEDRYWE (PTY) LTD
2016
#
Shares
2015
#
Shares
2014
#
Shares
- 29,994,910 29,994,910
Moorreesburgse Koringboere (Pty) Ltd (0%
interest [2015: 100% ; 2014: 100%])
-
-
-
-
-
-
Nature of business: Supply and delivery of agriculturerelated products and services
Contribution to Group profit: R nil (2015: -R3,027,065 ;
2014: R344,181,527)
3.
INVESTMENTS IN SUBSIDIARIES OF OVERBERG AGRI BELEGGINGS (PTY) LTD
2016
#
Shares
2015
#
Shares
2014
#
Shares
2016
2015
2014
R'000
R'000
R'000
-
200,000
200,000
-
-
-
-
400,000
400,000
-
-
-
-
50
50
-
-
-
29,994,910
-
-
-
-
-
-
-
-
Avello Kaap (Africa's Best 323) (Pty) Ltd (100%
interest)
nil)
Bontebok Motorgroep (Pty) Ltd (100% interest)
nil)
Procuro (Pty) Ltd (50% interest [2015: 50% ;
2014: 50%])
nil)
Moorreesburgse Koringboere (Pty) Ltd (100%
interest [2015: 0% ; 2014: 0%])
Contribution to Group profit: R nil (2015: -R3,027,065 ;
2014: R344,181,527)
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.
80

2016 Financial Statements

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