AUDITED CONDENSED CONSOLIDATED FINANCIAL ... - AFGRI

NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
continued
9. Assets of disposal groups classified as held-for-sale and discontinued operations
On 31 July 2012 the Group and Senwes Limited (“Senwes”) entered into binding sale of business agreements with Business
Venture Investments No 1658 Proprietary Limited (“Newco”) in terms of which the Group and Senwes will merge their
respective agricultural retail businesses, as well as the Partrite business of AFGRI.
In terms of the sale of business agreements, the Group will sell its retail agricultural business as well as its shareholding in
Partrite (Pty) Limited and Dormanco (Pty) Limited to Newco as a going concern. Senwes will sell to Newco its agricultural
retail business as a going concern, including Senwes Capital Proprietary Limited. The respective values of the AFGRI Retail
Business and the Senwes Retail Business will be determined and the party whose business’s value is the lower of the two
shall contribute a cash adjustment to the other party to ensure that the respective values of the businesses are equal. This
will ensure that upon completion of the transaction each party will hold 50% of the issued shares in Newco. The transaction
is subject to the fulfilment of various suspensive conditions, in particular the unconditional approval of the South African
Competition Authorities, both parties’ satisfaction with the results of financial, legal and technical due diligence and the
determination of the respective values of both parties’ retail businesses. Further details regarding this transaction were
published on SENS on 31 July 2012.
As a result of this transaction, this group of assets (“disposal group”) are disclosed as a disposal group held-for-sale as at
30 June 2012 as its carrying values will be recovered principally through a sales transaction rather than through continuing
use under the conditions specified in IFRS 5. It also meets the definition of a discontinued operation, as it is a separate major
line of business which will be disposed of in a single transaction. Comparatives have been restated to ensure comparability.
During the year the Group entered into various discussions regarding the sale of its intellectual property right, trademark and
patent on automated banking machines registered as “Deposita” together with its 46% investment in Deposita Systems (Pty)
Limited. A number of indicative offers were received and final negotiations are underway. In accordance with IFRS5, these
assets were disclosed as held-for-sale at 30 June 2012, as all conditions within IFRS5 have been met.
During the prior financial year the Group concluded a sale agreement of one of its poultry breeder farms “Uitkyk”, situated
near Mokopane, with Mike’s Chicken (Pty) Limited. The affected assets and liabilities were disclosed as held-for-sale.
The prior year further includes the loss on the remeasurement of assets of the poultry breeder farm “Uitkyk” to fair value
due to its held-for-sale classification. The prior year also includes the loss from the discontinued business unit in the Group’s
trading division which were closed in 2011.
10. Subsequent event
On 31 July 2012 the Group and Senwes Limited (“Senwes”) entered into binding sale of business agreements with Business
Venture Investments No 1658 Proprietary Limited (“Newco”) in terms of which the Group and Senwes will merge their
respective agricultural retail businesses, as well as the Partrite business of AFGRI.
Although this represents a non-adjustable event after balance sheet date in terms of IAS10, the conditions for held-forsale
classification under IFRS5 have all been met as at 30 June 2012 resulting in the affected assets and liabilities of the
Group’s affected businesses being disclosed as held-for-sale as at 30 June 2012. Please refer to note 9 for more detail on this
transaction.
11. Comparative figures
During the current financial year interest income was separately disclosed on the face of the income statement. The prior
year information has been reclassified to ensure comparability and a total amount of R24.7 million has been reclassified from
selling and administration expenses to interest income due to an incorrect classification in the prior year.
The Group also disclosed the non-current portion of biological assets for the year ended 30 June 2012. The prior year
information has also been reclassified from current to non-current due to its incorrect classification in the prior year, to the
value of R7,4 million.
12. Going concern
The Board of Directors is satisfied that, after taking into account the current banking facilities, its utilisation thereof and the
budgeted profit and cash flows for the year ending 30 June 2013, the working capital available to AFGRI will be sufficient to
meet its requirements for the next 12 months.
13. Corporate governance and JSE Limited (JSE) compliance
The Group applied the principles of good corporate governance as set out in King III and complies with the JSE Listings
Requirements regarding the contents of the condensed consolidated annual financial statements.
14. Audit opinion
These condensed consolidated financial results have been audited by our auditors, PricewaterhouseCoopers Inc., who have
performed their audit in accordance with the International Standards on Auditing. A copy of their unqualified audit report is
available for inspection at the registered office of the company.
15. Annual financial statements
A copy of the Group’s annual financial statements for the year ended 30 June 2012 is available at the Group’s registered
office and can be obtained from company secretary, Ms M Shikwinya. The Group’s Integrated Report will be distributed to
shareholders on or before 18 September 2012.
(R’millions)
Year
ended
30 June
2012
Year
ended
30 June
2011
16. Capital commitments
Contracted for additions to property, plant and equipment and intangibles 44 12
Authorised but not yet contracted for additions to property, plant and equipment 91 18
135 30
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