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AFR - AFGRI - Audited condensed consolidated financial results for the year
ended 28 February 2007
AFGRI
("AFGRI" or the "Company")
(Incorporated in the Republic of South Africa)
(Registration number 1995/004030/06)
ISIN number: ZAE000040549
Share code: AFR
Audited condensed consolidated financial results for the year ended 28 February
2007
Highlights
- Group earnings per share up 45,4%
- Headline earnings per share up by 65,6%
- Net cash generated from operating activities R602 million
- Acquires broiler business
- Disposes of underperforming Cotton ginning business
COMMENTARY
The directors of AFGRI present the condensed annual financial results of the
AFGRI Group of companies ("the Group") for the year ended 28 February 2007.
We are pleased to report increases in Group earnings of 45,4% and headline
earnings of 65,6% over 2006. Headline earnings before tax from continuing
operations increased by 59,9% over 2006.
This performance was achieved in what was another challenging period for
agriculture. Farmers reduced plantings in 2006 by more than 40% in the face of
low average maize prices of R725 a ton for 2005 driven largely by the then
strong Rand and a substantial maize surplus. The lower plantings resulted in a
crop of 6,6 million tons, 43% down on the previous year`s crop of 11,5 million
tons.
Improvements were achieved on the back of a more buoyant agricultural climate
driven primarily by improved commodity prices and more specifically the increase
in the hectarage planted to maize. As a result the Group achieved a 22% increase
in turnover of the Primary Inputs and Retail businesses and a 27% increase in
turnover of the Financial Services business. This, combined with continued focus
on the reduction of fixed overheads and the optimisation of supply chain
efficiencies resulted in improved profitability of R160 million for these
businesses.
Much improved performances were achieved in the Products division as a result of
the sale of the loss making Cotton ginning business early in the year and
excellent performances in the Animal Feed business as a result of good
procurement and factory efficiencies. Daybreak, the Group`s newly acquired
broiler business also performed better than expectation.
Headline earnings before tax and after finance cost from continuing operations
compared to 2006 increased by R136 million (59,9%) in 2007. The 2007 net
increase is largely made up of:
- R64 million (147%) increase in Primary Inputs (Producer Services);
- R61 million (130%) increase in Retail (Producer Services);
- R60 million (97%) increase in Protein business (included in Products); and
- R88 million (44%) decrease in Logistics Services (including Handling &
Storage).
The Producer Services business benefited from higher volumes, improved gross
margin and cost reduction programmes, whilst the Financial Services business had
another good year after the excellent improvement achieved in 2006. The
Logistics Services business was negatively impacted through its Handling &
Storage and Logistics arms by a lower than expected crop.
On the international front, the Australian business was negatively impacted by
the worst drought recorded in history, but despite this a small operating profit
after interest was achieved.
Earnings per share up 45,4%
Headline earnings per share up 65,6%
Earnings per share of 59,9 cents are up 45,4% compared to the prior year (41,2
cents). This is due to improved performances by the Products, Producer Services
and Financial Services businesses offset by a decrease in the profitability of
the Logistics Services and International businesses.
The headline earnings per share increased by 65,6% to 65,1 cents after adjusting
for loss from discontinued operations (+15,9 cents), impairment (+1,3 cents),
profit on disposal of assets (-1,1 cents) and negative goodwill on acquisition
(-10,9 cents). The increase in headline earnings per share was largely driven by
the 59,9% increase in headline profit before tax from continuing operations,
reduced by an increase in the effective tax rate and an increase in the number
of shares issued.
After taking into account the shares held by the AFGRI Share Incentive Trust,
consolidated in terms of IFRS, the fully diluted earnings per share of 55,7
cents compares to 39,0 cents in the prior year. The fully diluted headline
earnings per share increases by 62,6% to 60,5 cents (2006: 37,2 cents). In
previous years, only the fully diluted earnings and headline earnings per share
were disclosed.
Net cash and cash collateral deposits position - R255 million
Net cash and cash collateral deposits position improved by 200,0%. This is
largely due to a R602 million cash inflow generated from operating activities
(increased profitability and R333 million improvements in working capital)
reduced by a R294 million outflow in investing and financing activities and a
R152 million net distribution to shareholders and BEE partners.
Acquisitions and major investments
AFGRI acquired 100% of the issued share capital of a broiler operation,
Daybreak, with effect from 1 April 2006. The net assets of Daybreak on this date
were R167,6 million and the consideration paid was R120,5 million. This resulted
in negative goodwill of R47,1 million, which led to an adjustment for purposes
of the calculation of headline earnings. Daybreak focuses on broiler production
and integrates well with the AFGRI Animal Feeds business. Daybreak contributed
R346,7 million to turnover and R41 million to profit before internal interest
and tax.
AFGRI incurred further capital expenditure of R137 million as set out in the
Business Segment Results.
Disposals
Subsequent to 28 February 2006 AFGRI`s Cotton ginning business, held through the
Clark Cotton group, was sold. The sale is consistent with AFGRI`s policy of
exiting businesses that fail to meet the required rate of return. The net loss
after tax on sale of this business was R41 million and was added back in the
calculation of headline earnings.
Dividends and distributions
A final cash dividend for 2007 of 19,85 cents per share is declared. This
follows the interim dividend of 10,15 cents per share that was declared and paid
at half-year and brings the total dividend for the year to 30,0 cents per share.
For the prior year, an interim dividend of 9,05 cents and a final distribution
of 21,18 cents per share were declared. The prior year final distribution of
21,18 cents included a special distribution of 10,73 cents arising from the
proceeds of the sale of the Pioneer Foods shares. The total 2007 declared
dividend of 30,0 cents per share compares therefore to a total 2006 ordinary
dividend of 19,50 cents per share, representing an increase of 53,8%.
Prospects
Recent poor rains are expected to lead to a much lower maize crop. This will
again challenge parts of our business. Higher maize prices will benefit the
Producer Services and Financial Services businesses, but the smaller crop will
have a negative impact on the Handling & Storage business and put pressure on
margins in the animal feed and broiler businesses. The emphasis in the year
ahead will be on more efficient procurement and improved management of supply
chain logistics to mitigate the effects of higher maize prices in those parts of
our business that are sensitive to escalating prices. Despite the challenging
conditions for the year that lie ahead, we remain confident of achieving
positive earnings growth in the coming financial year.
By order of the Board
PF Erasmus (Non-Executive Chairman) JD Wright (Managing Director)
15 May 2007
DECLARATION OF CASH DIVIDEND
Notice is hereby given that the directors of AFGRI have declared a final
dividend of 19,85 cents per share for the year ended 28 February 2007. In
accordance with settlement procedures of STRATE, the following dates will apply
to the final dividend:
Last day to trade cum the dividend Friday, 15 June 2007
Trading ex dividend commences Monday, 18 June 2007
Record date Friday, 22 June 2007
Dividend payment date Monday, 25 June 2007
There will be no dematerialisation or rematerialisation of AFGRI shares between
Monday, 18 June 2007 and Friday, 22 June 2007, both dates inclusive.
By order of the Board
SL Reynolds
Group Company Secretary
Johannesburg
15 May 2007
AUDITED GROUP BALANCE SHEET on 28 February (All amounts in R millions)
Note Actual Restated Restated
2007 2006 2005
ASSETS
Non-current assets 1 478 1 256 1 097
Property, plant and equipment 2 1 018 710 683
Goodwill 2 26 24 23
Other intangible assets 2 145 81 55
Investments in associates 7 9 20
Available-for-sale financial assets - 3 96
Financial receivables 152 269 100
Deferred income tax assets 130 160 120
Current assets 5 642 4 801 5 304
Biological assets 39 - -
Inventories 1 010 1 038 1 081
Trade and other receivables 896 682 932
Trade receivables financed 8/9 2 724 2 323 2 488
by Land Bank
Derivative financial instruments 177 61 68
Income tax assets 94 120 121
Cash and cash equivalents and cash 702 577 614
collateral deposits
- Cash collateral deposits 397 382 343
- Cash and cash equivalents 305 195 271
Non-current assets classified as - 86 -
Held-for-sale
Total assets 7 120 6 143 6 401
EQUITY AND LIABILITIES
Capital and reserves attributable 1 231 1 173 1 043
to the Company`s equity holders
Share capital - - -
Treasury shares (155) (155) (155)
Incentive trust shares (151) (122) (59)
Share premium - 73 -
Fair value and other reserves 10 7 (42)
Retained earnings 1 527 1 370 1 299
Minority interest 589 531 514
Total equity 1 820 1 704 1 557
Non-current liabilities 299 234 130
Borrowings 109 116 13
Deferred income tax liabilities 178 100 94
Provisions for other liabilities and 12 18 23
charges
Current liabilities 5 001 4 202 4 714
Trade and other payables 1 696 1 459 1 744
Derivative financial instruments 146 10 24
Income and other tax liabilities 20 12 8
Short-term borrowings 446 492 425
Land Bank borrowings to finance trade 8/9 2 693 2 229 2 513
receivables
Liabilities directly associated with - 3 -
non-current assets classified as
Held-for-sale
Total liabilities 5 300 4 439 4 844
Total equity and liabilities 7 120 6 143 6 401
Net asset value per share attributable to 390 371 336
equity shareholders (cents)
AUDITED GROUP INCOME STATEMENT for the year ended 28 February
(All amounts in R millions)
Note Actual Restated Restated
2007 2006 2005
Continuing operations:
Sales of goods and services 6 125 5 044 5 127
Interest on trade receivables 3 246 231 189
financed by Land Bank
Interest earned on other trade 65 58 42
receivables
Total revenue 6 436 5 333 5 358
Cost of sales (4 743) (3 944) (4 025)
Gross profit 1 693 1 389 1 333
Other operating income 83 88 54
Selling and administrative expenses (1 105) (975) (1 004)
Operating profit 671 502 383
Negative goodwill from business 47 14 -
combinations
Finance costs 3 (306) (268) (254)
Share of profit/(loss) of associates 1 (1) 2
Profit before income tax 413 247 131
Income tax expense (69) (24) (82)
Profit for the year from continuing 344 223 49
operations
Discontinued operations:
(Loss)/profit for the year from 4 (68) (51) 113
discontinued operations
Profit for the year 276 172 162
Profit for the year attributable to:
Equity holders of the Company 190 129 149
Minority interest
- BEE partners 79 43 13
- Other outside shareholders` 7 - -
interest
Profit for the year 276 172 162
Weighted average number of shares in 317,3 313,6 306,5
issue (m)
Cents Cents Cents
Earnings per share from continuing 76,3 53,0 13,2
operations
(Loss)/earnings per share from (16,4) (11,8) 35,5
discontinued operations
Earnings per share from all 59,9 41,2 48,7
operations
Fully diluted earnings per share from 70,9 50,2 12,2
continuing operations
Fully diluted (loss)/earnings per (15,2) (11,2) 32,9
share from discontinued operations
Fully diluted earnings per share from 55,7 39,0 45,1
all operations
Headline earnings per share from 65,4 46,8 24,3
continuing operations
Headline (loss)/earnings per share (0,3) (7,5) 26,4
from discontinued operations
Headline earnings per share from all 7 65,1 39,3 50,7
operations
Fully diluted headline earnings per 60,5 37,2 46,9
share from all operations
GROUP CASH FLOW STATEMENT for the year ended 28 February
(All amounts in R millions)
Actual Actual
2007 2006
Operating activities
Cash generated from operations 564 493
(excluding changes in working capital)
Changes in working capital 333 (145)
Interest received 40 9
Finance costs (310) (287)
Income tax paid (25) (26)
Net cash generated from operating activities 602 44
Net cash utilised in investing activities (210) (217)
Net cash (utilised in)/generated from financing (236) 30
activities
Net increase/(decrease) in cash and cash equivalents 156 (143)
Cash and cash equivalents at beginning of year (298) (155)
Cash and cash equivalents at end of year (142) (298)
Cash collateral deposits 397 383
Cash and cash equivalents and cash collateral 255 85
deposits
GROUP STATEMENT OF CHANGES IN EQUITY (All amounts in R millions)
Share Share Reserves Retained Treasury
capital premium earnings shares
Balance 28 February 2005 - - (42) 1 299 (155)
Profit for the year - - - 129 -
Payment to minorities - - - - -
Currency translation - - 42 - -
differences
Cash flow hedge 1 - -
revaluation differences
Share-based payments - - 6 - -
Dividends paid - - - (58) -
Issue of shares to share - 73 - - -
incentive trust
Net disposal of - - - - -
incentive shares
Balance 28 February 2006 - 73 7 1 370 (155)
Profit for the year - - - 190 -
Payment to minorities - - - - -
Currency translation - - (4) - -
differences
Capital distribution in (73) - - -
lieu of dividend
Minority interest - - - - -
resulting from business
combination
Dividends paid - - - (33) -
Share-based payments - - 7 - -
Net acquisition of - - - - -
incentive shares
Balance 28 February 2007 - - 10 1 527 (155)
Retained earnings
comprise
- Distributable reserves 1 339
- Self-insurance reserve 188
GROUP STATEMENT OF CHANGES IN EQUITY (continued)
(All amounts in R millions)
Minority interest
Incentive Total BEE Other Total
trust share- partners outside equity
shares holders share-
equity holders`
interest
Balance 28 February 2005 (59) 1 043 514 - 1 557
Profit for the year - 129 43 - 172
Payment to minorities - - (26) - (26)
Currency translation - 42 - - 42
differences
Cash flow hedge - 1 - - 1
revaluation differences
Share-based payments - 6 - - 6
Dividends paid - (58) - - (58)
Issue of shares to share (73) - - - -
incentive trust
Net disposal of incentive 10 10 - - 10
shares
Balance 28 February 2006 (122) 1 173 531 - 1 704
Profit for the year - 190 79 7 276
Payment to minorities - - (47) - (47)
Currency translation - (4) - - (4)
differences
Capital distribution in - (73) - - (73)
lieu of dividend
Minority interest - - - 19 19
resulting from business
combination
Dividends paid - (33) - - (33)
Share-based payments - 7 - - 7
Net acquisition of (29) (29) - - (29)
incentive shares
Balance 28 February 2007 (151) 1 231 563 26 1 820
Retained earnings
comprise
- Distributable reserves -
- Self-insurance reserve -
BUSINESS SEGMENT RESULTS at 28 February (All amounts in R millions)
Sales Headline operating Finance cost
profit before
finance cost
2007 2006 2007 2006 2007 2006
AFGRI Services 4 669 3 908 458 387 (228) (229)
Producer
Services
Primary 1 133 925 28 (33) (8) (11)
inputs
Retail 2 646 2 172 25 (26) (11) (21)
Financial 657 517 291 242 (209) (195)
Services
Logistics 233 294 114 204 - (2)
Services
AFGRI Products 1 766 1 423 143 75 (10) (6)
Foods 373 332 14 7 (3) -
Protein 1 393 1 091 129 68 (7) (6)
Other 1 2 - - - -
Continuing 6 436 5 333 601 462 (238) (235)
operations
Discontinued 94 405 6 (28) (4) (19)
operations
Total 6 530 5 738 607 434 (242) (254)
Capital Expenditure Depreciation
2007 2006 2007 2006
AFGRI Services 95 56 21 20
Producer
Services
Primary 10 6 3 1
inputs
Retail 78 16 7 9
Financial 6 20 2 1
Services
Logistics 1 14 9 9
Services
AFGRI Products 39 51 32 12
Foods 7 29 3 3
Protein 32 22 29 9
Other 1 - 3 3
Continuing 135 107 56 35
operations
Discontinued 2 18 4 13
operations
Total 137 125 60 48
BUSINESS SEGMENT RESULTS at 28 February (All amounts in R millions)
Headline operating Assets Liabilities
profit
after finance cost
2007 2006 2007 2006 2007 2006
AFGRI Services 230 158 5 328 4 556 4 072 3 199
Producer
Services
Primary 20 (44) 266 148 150 74
inputs
Retail 14 (47) 930 933 526 372
Financial 82 47 3 820 3 154 3 358 2 699
Services
Logistics 114 202 312 321 38 54
Services
AFGRI Products 133 69 1 111 623 547 284
Foods 11 7 272 258 96 70
Protein 122 62 839 365 451 214
Other - - 521 500 609 694
Continuing 363 227 6 960 5 679 5 228 4 177
operations
Discontinued 2 (47) 160 464 72 262
operations
Total 365 180 7 120 6 143 5 300 4 439
Amortisation
2007 2006
AFGRI Services 4 5
Producer
Services
Primary 3 2
inputs
Retail - 2
Financial 1 1
Services
Logistics - -
Services
AFGRI Products 6 1
Foods - -
Protein 6 1
Other 11 6
Continuing 21 12
operations
Discontinued - 3
operations
Total 21 15
BUSINESS SEGMENT RESULTS at 28 February
Note 1:
The pre-tax Business Segment Results are presented after taking into account the
pre-tax headline earnings adjustments and before allocation of the minority
interest (including BEE share) in profits. This makes the segmental profit more
comparable after adjustments for the profit/(loss) of discontinued operations
and disposal of businesses and assets.
Headline operating profit is shown after the allocation of cost of capital based
on each division`s net assets. The finance costs consist of interest paid less
dividends and interest received.
Note 2:
Reconciliation of business segment results to income statement:
(All amounts in Rmillions)
2007 2006
Segment headline operating profit after finance costs 365 180
before tax
Adjustment for negative goodwill 47 14
Loss from discontinued operations (69) (13)
Impairment of assets (7) -
Profit on disposal of assets 8 5
Income tax expense (68) (14)
Income statement: Profit for the year after tax 276 172
Note 3:
Reconciliation of business segment finance cost to
income statement:
(All amounts in Rmillions) 2007 2006
Segment finance cost (242) (254)
Interest received allocated to segments (41) (9)
Dividends received allocated to segments (27) (24)
Income statement: Finance cost (Refer Note 3 to the (310) (287)
Group financial results)
NOTES TO THE GROUP FINANCIAL RESULTS
1. Basis of preparation and accounting policies
These condensed consolidated financial results is an extract from the
audited consolidated annual financial statements for the year ended
28 February 2007, which have been prepared in accordance with the
recognition and measurement requirements of IFRS and the disclosure
requirements of IAS 34 and have been prepared under the historical
cost convention, as modified by the revaluation of available-for-sale
financial assets, financial liabilities (including derivative
financial instruments) and biological assets at fair value through
profit or loss. The accounting policies correspond with those applied
in the previous year, except for the changes as explained in Notes 3,
8 and 9.
2. Property, plant and equipment, goodwill and other intangible assets
Property, Goodwill Other
plant and (R millions) intangible
equipment assets
(R millions) (R
millions)
Carrying value 710 24 81
beginning of year
Additions 137 - 25
Disposals at book (37) - (1)
value
Foreign currency 13 2 -
differences
Depreciation/amortis (60) - (21)
ation and impairment
Net purchase of 255 - 61
subsidiaries
Carrying value end 1 018 26 145
of year
The Board has authorized, but has not yet contracted further
expansion in the broiler business of R410 million. This expansion
will be financed by the net cash flows from operation and utilization
of cash and borrowings.
3. Finance income/(cost)
The Group did not disclose interest income as a separate line item on
the face of the income statement as required by IFRS but does so now
based on the JSE request based on the GAAP Monitoring Panel`s advice.
Interest income was previously included in the revenue line item and
thus disclosed with other sales on the face of the income statement.
The interest paid on the Land Bank borrowings to finance certain
trade receivables was previously disclosed as cost of sales. The
Group believes that these borrowings are part of normal operating
business. However, the JSE has, based on advice that it received from
the GAAP Monitoring Panel, requested the Group to disclose the
interest paid on the face of the income statement. This disclosure is
now in line with IFRS requirements. Finance cost consists of:
28/02/07 28/02/06
(R millions) (R millions)
Continuing operations: (199) (184)
Interest paid on Land Bank borrowings
Other interest paid to financial (107) (84)
institutions
Finance cost for continuing operations (306) (268)
(Income statement)
Discontinued operations: (4) (19)
Other interst paid to financial
institutions
Total finance cost (310) (287)
4. Discontinued operations
The Group sold its Cotton ginning business during the year and the
loss realised on disposal is included in discontinued operations.
Also included in discontinued operations is the net result on the
closure of certain trading branches, new venture businesses and the
snacks business in KwaZulu-Natal.
5. Directors` remuneration
28/02/07 28/02/06
(R millions) (R millions)
Non-executive
- As directors 1,2 0,9
- As members of sub-committees 0,8 0,3
- Other services 2,5 3,3
4,5 4,5
Executive
- Basic salaries and allowances 7,5 6,5
- Bonus payments 4,0 1,2
- Share-based payments 3,4 3,6
- Company contributions and expenses 1,8 1,6
allowances
16,7 12,9
6. Shares and share options of directors
Executive and executive alternate directors are allocated share
options on approval by the Board to link them to the net worth of the
Company and to retain executive personnel. These options are
exercised in terms of a deferred share option scheme. The following
are the unimplemented contracts of executive and former executive
directors.
Balance New options Contracts Balance of
unimplemented exercised implemented unimplemented
contracts Number Number contracts
28/02/06 28/02/07
Number Number
JD Wright 5 628 000 497 000 3 400 000 2 725 000
(Executive)
DM Sewela 3 083 000 375 500 953 267 2 505 233
(Executive)
I de W Goosen 2 573 100 324 000 1 466 700 1 430 400
(Executive)
JH Mooney 1 086 000 232 500 100 000 1 218 500
(Executive)
GAL Ebedes 200 000 - 200 000 -
(former Executive)
12 570 100 1 429 000 6 119 967 7 879 133
The direct interests of executive directors in the issued share
capital of the Company are as follows:
28/02/07 28/02/06
JD Wright - 700 000
I de W Goosen - 524 802
7. Reconciliation of headline earnings per
share
28/02/07 28/02/06
Cents Cents
Earnings 59,9 41,2
Loss from discontinued operations 15,9 2,4
Impairment of assets 1,3 -
Negative goodwill from business combination (10,9) (3,2)
Net profit on disposal of businesses and (1,1) (1,1)
assets
Headline earnings 65,1 39,3
Fully diluted headline earnings 60,5 37,2
8. Trade and other receivables
The security for the liability is the trade receivables and there is
a legally enforceable right to set-off and the intention and practice
are to settle the liability simultaneously with the asset realising.
The Group bears the risk for the first 10% of losses on these
debtors, but for no losses thereafter, which are for the risk of the
Land Bank.
28/02/06 28/02/05
(R millions) (R millions)
Asset - Trade receivables 2 323 2 488
Liability - Land Bank 2 229 2 513
The differences between the amounts are due to the daily set-off and
timing differences on the last day of the month.
9. Restatement of 2006 and 2005 annual results
During 2005 AFGRI concluded a financing agreement with the Land Bank
to finance certain of its trade receivables. In the balance sheets
issued with the 2006 and 2005 annual results the Land Bank liability
and the trade receivables` asset, underlying the liability, were set-
off and the net amount was disclosed. This method of disclosure was
followed as there was a legally enforceable right to set-off and the
intention and practice were to settle the liability simultaneously
with the asset realising. Although the amounts were set-off in the
issued balance sheets the detail was disclosed in the notes to the
balance sheet.
The JSE, based on advice that it received from the GAAP Monitoring
Panel, has ruled that in accordance with IFRS, the Land Bank
liability and the trade receivables` asset may not be set-off on the
balance sheet and instructed AFGRI to reflect these amounts
separately on the balance sheet. It has also instructed AFGRI to
withdraw and republish its 2005 and 2006 annual financial statements
as restatements within the publication of the 2007 annual financial
statements.
The prior year sales have been restated with R49 million decrease due
to the fact that the gross income from the administration fees
received from third parties was disclosed as sales instead of the net
administration fees.
10. Business combinations
AFGRI acquired 100% of the issued share capital of Daybreak with
effect from 1 April 2006 for a cash consideration of R115 million
(excluding shareholders loans). The detail of each class of assets
and liabilities acquired at fair value is as follows:
ASSETS (R millions)
Property, plant and equipment 258
Intangible assets 65
Non-current receivables 25
Inventory 27
Trade receivables 49
424
LIABILITIES
Trade payables 53
Deferred income tax 87
Minority interests 19
Long-term borrowings 71
Current tax liabilities 14
Bank overdraft 18
262
The Group`s interest in the net fair value of the identifiable
assets, liabilities and contingent liabilities exceeds the cost of
the business combination by R47 million. The calculation of the
purchase price was based on the present value of future cash flows.
The calculation of the fair values of the identifiable assets was
based on the depreciated replacement values, taking into account
industry norms, and management`s focus on quality products and
customer service, conservative financial and administrative
disciplines, assets and the long term relationships with its
customers, which have resulted in the excess. Since 1 April 2006, the
date of acquisition, a profit before internal interest and tax of
R41,4 million and sales of R347 million of this business are included
in the Group`s profit and sales for the period under review. If this
business combination was effected on 1 March 2006, the revenue from
continuing operations for the combined entity would have been R6 467
million and the profit from continuing operations before tax R411
million.
11. Agency agreements
The Group manages agri debtors on behalf of third party financial
institutions to the amount of R633 million (2006: R523 million).
Management fees are paid by these third parties. The Group is liable
for bad debts to a maximum of between 10% to 15% of the value of
debtors administered.
The Group receives a fee for the handling, grading, storing and
administration of commodities on behalf of third parties. The value
of these commodities is R1 622 million (2006: R2 050 million).
12. Corporate governance and JSE Limited ("JSE") compliance
The principles of corporate governance were adhered to during the
financial year ended 28 February 2007. The Group complied with the
JSE Listings Requirements regarding the contents of the condensed
consolidated annual financial results.
13. Going concern
The Board is confident that, after taking into account the current
bank facilities, its utilisation thereof and the budgeted profit for
the year ended 28 February 2008, the working capital available to
AFGRI will be sufficient to meet its present requirements for the
next 12 months.
14. Audit opinion
These condensed consolidated annual financial results, have been
audited by our auditors, PricewaterhouseCoopers Inc., who have
performed their audit in accordance with International Standards on
Auditing. A copy of their unqualified audit report is available for
inspection in the registered office of the Company.
DIRECTORATE
Non-executive: PF Erasmus Chairman (63) BSc Agric,
GAL Ebedes (59) BSc Agric, MM Moloele (51) Dipl. Business Management,
CA Apsey (59) BSc, MBA, JJ Claassen (57), DD de Beer (66), CA(SA),
JJ Ferreira (54), BSc (Hons) (Civ Eng),
JPR Mbau (56) Banking Diploma - Citi Corp College; Business Management Diploma -
Pretoria University; Executive Management Programme - Stellenbosch University,
KL Thoka (43) B&Admin, Hons (BA) MBA,
FJ van der Merwe (49) LLB, MA
Executive: JD Wright (49) BAcc, CA(SA), DM Sewela (41) BSc Chem Eng,
I de W Goosen (59) BCom, CA(SA)
Alternate Director: JH Mooney (59) BCom, CA(SA)
ADMINISTRATION
Business address and registered office: 33 Sloane Street, Knightsbridge Manor,
Block B2, Bryanston Fax (011) 463 4139 Tel (011) 549 0600 Company Secretary:
SL Reynolds, PO Box 3559, Cramerview 2060
Bankers: ABSA Bank Limited, First National Bank Limited; Land and Agricultural
Development Bank of SA Limited, Nedcor Bank Limited; Standard Bank of SA Limited
Auditors: PricewaterhouseCoopers Incorporated
Transfer secretaries: Computershare Investor Services 2004 (Proprietary)
Limited, 70 Marshall Street, Johannesburg 2001
PO Box 61051, Marshalltown 2107, Tel (011) 370 5320
Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited), 1 Merchant
Place, Cnr Fredman Drive & Rivonia Road, Sandton 2196, PO Box 786273, Sandton
2146
THIS ANNOUNCEMENT IS AVAILABLE ON SENS AND AFGRI`S WEBSITE AT:
www.afgri.co.za
Date: 16/05/2007 11:50:01 Produced by the JSE SENS Department.
