Wrap Text
Summarised audited consolidated financial statements for the twelve months ended 30 June 2013 and cash dividend
Clover Industries Limited
Company registration number: 2003/030429/06
Ordinary share code: CLR
ISIN: ZAE000152377
Clover Industries Limited
Summarised audited
consolidated financial statements
for the twelve months ended 30 June 2013
and cash dividend declaration
KEY FINANCIAL INDICATORS
- Revenue increased by 10,7% to R8 billion
- Operating profit increased by 5,4% to R391,4 million
- Earnings per share increased by 16,1% from 133,1 cents
- Headline earnings increased by 3,4% to R214,9 million
- Headline earnings per share increased by 3,4% to 119,9 cents
- Total dividend per share increased by 12,7% to 32,0 cents
- Net asset value per share increased by 10,3 % to 1 166,1 cents
DIRECTORATE
AND STATUTORY
INFORMATION
Directors: Non-executive
WI Büchner** (Chairman)
TA Wixley* (Lead Independent)
SF Booysen (Dr)*
JNS du Plessis*
MG Elliott
JC Hendriks (Dr)
NP Mageza*
NA Smith
JAH Bredin***
HPF du Preez***
* Independent
** Appointed as Chairman on 30 November 2012
*** Resigned on 30 November 2012
Directors: Executive
JH Vorster (Chief Executive)
LJ Botha (Chief Financial Officer)
CP Lerm (Dr)
HB Roode (Deputy Chief Executive)*
* Retired on 30 June 2013
Company secretary:
J van Heerden (Appointed 1 October 2012)
HB Roode (Resigned 1 October 2012)
Ordinary share code: CLR ISIN: ZAE000152377
Registered office: 200 Constantia Drive, Constantia Kloof, 1709
Postal address: PO Box 6161, Weltevredenpark, 1715
Telephone: (011) 471 1400
Registration number: 2003/030429/06
Tax number: 9657/002/71/4
Transfer secretary:
Computershare Investment Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001
Auditors: Ernst & Young Inc.
Bankers: The Absa Group, First National Bank, Investec Bank
Sponsor: Rand Merchant Bank (a division of FirstRand Bank Limited)
COMMENTARY
Financial review
Clover is pleased with the results achieved during a year which included some substantial investments in new products and platforms as well as the
continuing roll-out of Project Cielo Blu which is now nearing completion.
Although the financial performance achieved during the first half of the financial year was weaker than expected, the recovery achieved in the last six
months was very pleasing. Some of the factors which enabled the recovery can be ascribed to:
- Aggressive cost controls;
- Successful selling price increases to the trade;
- Lesser spend on new product launches during the last six months;
- Implementing only selected promotional activities following the selling price increases;
- Agility and robustness of Clover's new structures; and
- Ability to convince Clover's consumers of its value proposition.
Revenue increased by 10,7% to R7 997 million from R7 224 million, operating profit increased by 5,4% to R391,4 million from R371,2 million, whilst
operating margin decreased slightly from 5,1% to 4,9%.
The increase in headline earnings of 3,4% (R7,1 million) to R214,9 million is made up of a 2,1% reduction in headline operating profit (R7,8 million),
a 95,8% (R22,9 million) increase in net finance costs, a 24,9% (R34,6 million) decrease in headline income tax and a 72,1% (R3,2 million) reduction in
non-controlling interest in profit.
Headline earnings per share increased by the same margin.
Gross margin decreased slightly from 27,6% to 27,0%.
Operating profit increased by 5,4% to R391,4 million. Included in operating profit are capital profits of R24,1 million of which R7,3 million are profits and
losses on the sale, scrapping and impairment of assets. R16,8 million relates to a profit on the gaining of control of the Clover Manhattan joint venture.
Excluding these capital profits, headline operating profit reduced by 2,1% to R367,3 million. However, the Group also incurred R26,2 million more of
restructuring costs relating to the relocation of equipment that could not be capitalised and retrenchment costs as part of Project Cielo Blu. Normalised
operating profit, after taking this into account, increased by 4,9% to R398,7 million.
At 4,9% the operating margin was slightly lower than the previous year's 5,1% and the normalised operating margin was 5,0% compared to 5,3% in the
previous year.
During the second half of 2011/12 farm gate milk prices were increased approximately 20% and although partially reduced again early in 2012/13, the full
year effect of the increased cost could not be fully recovered from the market due to the oversupply of UHT milk in the market. This caused the operating
margin to contract.
Revenue from the sale of products increased by 10,8% with 5,9% coming from sales volume increases and 4,9% from selling price inflation increases.
Compared to the prior year, revenue from the rendering of services was marginally higher at 4,6%. The previous year benefitted from a specific once-
off contract manufacturing arrangement. In addition, during the year under review, Clover was temporarily unable to service a contract manufacturing
customer during the relocation of its UHT plant to Port Elizabeth and a contract manufacturing agreement with Foodcorp for Mageu came to an end. This
resulted in a 26,2% reduction in contract manufacturing income. Income from sales, warehousing, distribution and related services increased by 11% after
the inclusion of the additional Epic Foods, Red Bull and Enterprise business. After the purchase of the minority shares in Clover Manhattan, this revenue
also reduced by the fees previously recovered from the Clover Manhattan minority shareholders.
Gearing at 30 June 2013 was 39,7% (2012: 23,4%). The group's gearing is well within its ability to service interest and repayments. In line with the
recapitalisation programme embarked on during 2010, all preference shares were redeemed during June 2013, effectively simplifying Clover's capital
structure and marking the final chapter on the legacy structure of the pre-listing days.
Following the rolling of the debtors' securitisation funding for medium-term periods, the net current assets position improved from R576,4 million to
R1 017,9 million. Excluding inventory, the position improved from a net current liability position of R25,6 million to net current assets of R284,5 million.
Cash generated from operations, before working capital changes, was R417,1 million compared to R444,6 million reported in the prior year. During the
year under review, working capital absorbed R181,2 million of cash mainly resulting from a high decrease in trade payables which was abnormally high
at 30 June 2012 as explained in the 2012 integrated annual report.
Operational review
High cost inflation continued into the financial year under review, with upward pressures on fuel and packaging costs exacerbated by the weaker rand.
Cost inflation could only be partially recovered through price increases during the second half of the year due to an oversupply of UHT milk in the market.
The UHT market grew by 8% year-on-year, following establishment of a number of new plants in the country which diverted drinking milk from fresh to
UHT milk. The market for fresh milk correspondingly declined by 6,3%. The additional national UHT capacity saw a larger volume of peak season milk
(produced in September to December) being carried forward into the second half of the financial year due to the long shelf life of UHT milk. This resulted
in continued pressure on UHT selling prices throughout the year and Clover's price increases during January 2013 impacted on its UHT volumes and
market share.
Whilst the widespread industrial action in the mining sector undoubtedly slowed consumption of the group's products during the first part of the year,
Clover also experienced seven days of industrial action at the start of its financial year with the national transport strike also indirectly impacting on the
group's supply chain. All these labour-related events had an impact on sales volumes across all segments.
Initial efficiency problems with the new UHT Prisma pack platforms and delays in the importation of product to supplement own production during the
relocation of equipment resulted in Clover's 3,1% growth in the UHT market not correlating with overall market growth. Similar to the market, Clover's
fresh and ultra-pasteurised milk volumes also declined albeit at only 1,2% compared to the market decline of 6,3%. Overall the dairy fluids segment
volumes grew by 1,6% aided by the launch of Clover's new maas product early in 2013.
Clover's strategy to focus on value-added branded products, and exit from commodity bulk products, had some impact on volumes, including a 3%
decline in concentrated segment volumes. If the volume loss resulting from the bulk mozzarella exit is excluded, segment volumes actually increased
by 14,5%. Pre-packed natural cheese volumes increased by 26,2%, feta cheese by 10,4% and condensed milk by 4,2%. Butter volumes decreased by 0,8%
mostly due to a substantial buy-in from customers shortly before the start of the financial year in response to Clover's promotional activity at the time.
Beverage volumes again showed strong growth of 15,4% (7,7% excluding the effect of The Real Juice Co Holdings (Pty) Ltd ("RJC") acquisition) largely
underpinned by Tropika growth of 6,6%, fruit juice growth of 34,1% (7,4% excluding the effect of the RJC acquisition), Danao growth of 26,5% and Aquartz
water growth of 35,3%. Super M volumes declined by 9,2% in the face of a very aggressive performance by its major competitor whilst Manhattan Ice Tea
volumes and Capri-sun volumes declined by 10,4% and 40,8% respectively amidst fierce competition.
Clover acquired RJC from AVI Limited and also concluded a transaction with Nestlé to establish a new beverage company called Clover Waters. In terms
of the transaction, Clover Waters will manufacture and distribute both Clover and Nestlé's range of water and iced tea products from August 2013. For a
local African company such as Clover to be entrusted with global brands including Nestlé Pure Life(R) and Nestea(R) is an accolade that the Group is very
proud of.
Industry overview
High maize prices and a weakening rand impacted negatively on the cost of animal feeds during the year under review. In addition fuel and electricity
inflation was at a much higher level than CPI. Lacklustre market conditions further exacerbated the negative effect on farm productivity. Inflationary costs
will have an impact on food inflation in the coming year as costs filter through to consumers.
Increased local competition, especially in the UHT market, has led to reduced selling prices. It is believed that these factors will contribute to continued
on-farm pressures which will impact supply for the foreseeable future. As the country's largest buyer of dairy, Clover continues to monitor the situation
and will react responsibly.
During the year international supply from New Zealand was lower and dairy commodities commanded high prices which assisted Clover to reduce its
commodity inventory levels built up during the first half of the year.
The South African dairy exports to the sub-Sahara region have grown strongly, partly driven by the expansion of South African retailers into the
rest of Africa. Apart from these markets, Clover has established a presence and relationships in Nigeria over a number of years and continues to explore
opportunities in Angola. The Board believes that sufficient local knowledge and experience has been gained to take more decisive steps in these
markets and Clover has begun considering various options in that regard. In the longer term, it is envisaged that these initial countries will be used as
springboards into other countries.
OUTLOOK
The successful implementation of Project Cielo Blu will deliver benefits for Clover now and over the long term and will help to mitigate input and
high transportation costs. Factors that impacted on Clover during the first six months of the financial year do not negatively affect its long-term strategy;
to the contrary, these continuous investments ensure the relevance of Clover's brands in the minds and hearts of consumers.
New principal business, synergies from the Clover Waters and RJC transactions and new product development will further drive revenue as Clover
continues to invest and explore areas where it has a competitive advantage, both in South Africa and selected sub-Saharan emerging markets.
The Board is convinced that the investment in well needed infrastructure will provide Clover with a time-to-market advantage in its defined market space.
Clover has set itself ambitious targets which include not only volume and market share growth, but also to reduce supply chain costs, invest in market
expansion into the rest of Africa, and in human capital. It has also launched an initiative to align itself with the different visions of its main customers.
In this regard, Clover is working closely with its customers to develop integrated business platforms and procedures that will add long-term value for
Clover and its customers.
Consumer spending remains under pressure and coupled with continuous inflationary increases, it will be a challenge to balance short-term profits with
long-term growth investments which are paramount to take Clover to the next level of growth.
Clover is focused on maintaining an optimal equilibrium to grow its existing business while exploring new possibilities and territories, even if this approach
puts some pressure on short-term profits and cash flows.
Clover's main overall objectives for the current financial year are:
- To recover cost increases in the market.
- To finalise Cielo Blu and other expansion projects.
- To redesign its supply chain network.
- To develop new products.
- To enter new geographies.
Clover remains confident that the investments made since listing will begin to pay off and lay a solid platform for the future.
+ In accordance with standard practice, it is noted that this information has not been reviewed and reported on by the company's auditors.
Declaration of dividend number 7
Notice is hereby given that the Directors have declared a final gross cash dividend of 22,00000 cents (18,70000 cents net of dividend withholding tax)
per ordinary share for the year ended 30 June 2013.
The dividend has been declared from income reserves and no secondary tax on companies credits has been used.
A dividend withholding tax of 15% will be applicable to all shareholders who are not exempt.
The company income tax number is 9657/002/71/4.
The issued share capital at the declaration date is 182 478 589 ordinary shares.
The salient dates will be as follows:
Last day to trade to receive a dividend Friday, 4 October 2013
Shares commence trading "ex" dividend Monday, 7 October 2013
Record date Friday, 11 October 2013
Payment date Monday, 14 October 2013
Share certificates may not be dematerialised or rematerialised between Monday, 7 October 2013 and Friday, 11 October 2013, both days inclusive.
On behalf of the Board
WI Büchner JH Vorster
Chairman Chief Executive
17 September 2013
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 30 June
2013 2012
R'000 R'000
Sales of products 6 771 888 6 109 268
Rendering of services 798 773 763 723
Sale of raw milk 420 508 346 287
Rental income 5 292 4 585
Revenue 7 996 461 7 223 863
Cost of sales (5 840 249) (5 233 222)
Gross profit 2 156 212 1 990 641
Other operating income 61 939 14 716
Selling and distribution costs (1 574 424) (1 422 643)
Administrative expenses (204 018) (191 382)
Restructuring expenses (35 750) (9 573)
Other operating expenses (12 571) (10 527)
Operating profit 391 388 371 232
Finance income 9 706 28 598
Finance cost (56 437) (52 460)
Profit before tax 344 657 347 370
Taxes (104 798) (137 654)
Profit for the year (104 798) 209 716
Other comprehensive income
Exchange differences on translations of foreign operations (272) (822)
Total comprehensive income for the year, net of tax 239 587 208 894
Profit attributable to:
Equity holders of the parent 238 626 205 290
Non-controlling interests 1 233 4 426
239 859 209 716
Total comprehensive income attributable to:
Equity holders of the parent 238 354 204 388
Non-controlling interests 1 233 4 506
239 587 208 894
Issued ordinary shares 181 218 149 179 111 867
Number of ordinary shares used in the calculation of:
Earnings per share weighted average 179 267 674 179 111 867
Diluted earnings per share weighted average 192 750 186 191 127 152
Earnings per share attributable to ordinary equity holders of the parent
Earnings per share (cents) 133,1 114,6
Diluted earnings per share (cents) 123,8 107,4
Headline earnings calculation
Profit for the year attributable to shareholders of the parent company 238 626 205 290
Profit on sale and scrapping of property, plant and equipment (11 680) (878)
Gain on fair valuing of investment in joint venture after gaining control (16 747)
Impairment of plant and equipment 4 377 4 796
Taxation effects of remeasurements 318 (1 408)
Headline earnings attributable to shareholders of the parent company 214 894 207 800
Headline earnings per share (cents) 119,9 116,0
Diluted headline earnings per share (cents) 111,5 108,7
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 30 June
2013 2012
R'000 R'000
Assets
Non-current assets
Property, plant and equipment 1 517 233 1 168 047
Investment properties 2 003 492
Intangible assets 445 283 357 767
Deferred tax assets 7 449 492
1 971 968 1 526 798
Current assets
Inventories 733 423 602 053
Trade and other receivables 995 049 996 995
Prepayments 15 274 25 631
Other current financial assets 132 173
Cash and short-term deposits 718 062 711 470
2 461 940 2 336 322
Assets classified as held-for-sale 359 423
2 462 299 2 336 745
Total assets 4 434 267 3 863 543
Equity and liabilities
Equity
Issued share capital 9 061 8 955
Share premium 713 263 675 113
Other reserves 264 058 254 286
Retained earnings 1 126 734 955 890
Equity attributable to equity holders of the parent 2 113 116 1 894 244
Non-controlling interests 2 309 1 796
Total equity 2 115 425 1 896 040
Liabilities
Non-current liabilities
Interest-bearing loans and borrowings 666 640 21 686
Provisions 61 222 61 637
Deferred tax liability 137 312 116 950
Trade and other payables 9 267 6 904
874 441 207 177
Current liabilities
Trade and other payables 1 234 095 1 316 794
Interest-bearing loans and borrowings 172 646 421 376
Other current financial liabilities 250 4 308
Income tax payable 17 397 5 672
Provisions 20 013 12 176
1 444 401 1 760 326
Total liabilities 2 318 842 1 967 503
Total equity and liabilities 4 434 267 3 863 543
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 30 June
2013 2012
R'000 R'000
Balance at 1 July 1 896 040 1 751 795
Profit for the year 239 859 209 716
Other comprehensive income (272) (822)
Total comprehensive income 239 587 209 894
Acquisition of non-controlling interest (20 792)
Share-based payment reserve accrued 18 407 13 115
Share appreciation rights exercised (49 169) (4 440)
Tax on portion of share appreciation right exercised 12 035
Ordinary shares issued 38 734
Dividends of subsidiaries non-controlling interest (720) (349)
Dividends (41 912) (53 734)
Dividends forfeited 2 423 1 551
Balance at end of the year 2 115 425 1 896 040
Consists of:
Share capital and premium 722 324 684 068
Other capital reserves 264 058 254 286
Retained earnings 1 126 734 1 894 244
Shareholder equity 2 113 116 1 894 244
Non-controlling interest 2 309 1 796
Total equity 2 115 425 1 896 040
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 30 June
2013 2012
R'000 R'000
Operating activities
Profit before tax 344 657 347 370
Adjustment for non-cash items 138 446 141 710
Working capital adjustments (181 159) (28 202)
Income tax paid (65 981) (44 519)
Net cash flow from operating activities 235 963 416 359
Investing activities
Proceeds from sale of property, plant and equipment 17 599 4 181
Interest received 9 706 28 598
Acquisition of non-controlling interest (24 700) (20 792)
Acquisition of subsidiary (70 556)
Capital expenditure: tangible and intangible assets (454 400) (273 682)
Net other investing activities 6 259 5 545
Net cash flows used in investing activities (516 092) (256 150)
Financing activities
Interest paid (56 437) (52 460)
Dividends paid (41 912) (53 734)
Dividends forfeited 1 551
Share appreciation rights paid out (10 435) (4 440)
Repayment of preference share liability (259 382)
Net increase/(repayment) of borrowings 655 607 (163 599)
Net other financing activities (720) (269)
Net cash flows from/(used in) financing activities 286 721 (272 951)
Net (decrease)/increase in cash and cash equivalents 6 592 (112 742)
Cash and cash equivalents at the beginning of the year 711 470 824 212
Cash and cash equivalents at the end of the year 718 062 711 470
ACCOUNTING POLICIES AND NOTES
1. Corporate information and basis of preparation
Clover Industries Limited is a company incorporated and domiciled in South Africa.
Nature of business
The procurement, production, marketing, sales and distribution of branded consumer goods to customers on the African continent.
Basis of preparation
These summarised consolidated financial statements were prepared in accordance with IAS 34: Interim Financial Reporting, the Listings Requirements
of the JSE Limited ("JSE") and the Companies Act, 2008 (Act 71 of 2008), as amended.
These summarised consolidated financial statements are presented in Rands, rounded off to the nearest thousand. They are prepared on the
historical-cost basis unless otherwise stated.
The accounting policies adopted in the preparation of these summarised consolidated financial statements are in accordance with International
Financial Reporting Standards (IFRS) and are consistent with those followed in the preparation of the annual financial statements for the year ended
30 June 2012, except for the adoption of the following new and amended Standards:
- IAS 1 Financial Statement Presentation Presentation of Items of Other Comprehensive Income (amendment), effective date 1 July 2012
- IAS 12 Deferred tax Recovery of Underlying assets (amendments), effective 1 January 2012.
2. Segment reporting
Segment information is presented in respect of the Group's operating segments. The operating segments are based on the Group's management and
internal reporting structure.
The Group comprises the following operating segments:
- Dairy fluids segment is focused on providing the market with quality dairy fluid products;
- The dairy concentrated products consist of cheese, butter, condensed milk and retail milk powders;
- The ingredients products consist of bulk milk powders, bulk butter, bulk condensed milk, bulk creamers, calf feed substitutes, whey powder and
buttermilk powder;
- The non-alcoholic beverages segment focuses on the development and marketing of non-alcoholic, value-added branded beverages products;
and
- Other consists of Clover's holding company and Lactolab Proprietary Limited that renders laboratory services.
SEGMENTAL REPORT
For the year ended 30 June 30 June
2013 2012
R'000 R'000
External revenue
Dairy fluids 3 404 737 3 092 413
Dairy concentrated products 1 054 741 1 020 961
Ingredients 413 594 428 494
Non-alcoholic beverages 1 888 244 1 557 476
Other 10 572 9 924
6 771 888 6 109 268
Margin on material
Dairy fluids 1 311 959 1 225 251
Dairy concentrated products 327 440 300 797
Ingredients 89 885 83 903
Non-alcoholic beverages 986 939 805 551
Other 8 157 7 418
2 724 380 2 422 920
The Group operates mainly in the geographical area of South Africa. The revenue and assets of the operations outside South Africa are insignificant.
3. Earnings per share
The difference between earnings per share and diluted earnings per share is due to the impact of unexercised share appreciation rights.
4. Property, plant and equipment and intangible assets
During the 12 months under review the group acquired property, plant and equipment to the value R434,3 million (2012: R254,3 million) and acquired
intangible assets at a cost of R103,0 million (2012: R19,4 million).
5. Share capital and share premium
The share premium account increased by R38,2 million from the prior financial year after the settlement of vested executive management share
appreciation rights by the issue of new ordinary shares.
6. Non-current liabilities
The preference shares were redeemed in June 2013. In addition, the last tranche of the previous debtors' securitisation funding matured during
March 2013 and the Board decided to utilise this vehicle to its full extent to take advantage of the current low interest rates. R250 million was therefore
borrowed for a 3-year period at floating rates and R400 million for a 5 year period at fixed rates. Both tranches will run from 30 June 2013 and will
mature on 30 June 2016 and 30 June 2018 respectively. In the 2011/12 financial statements both the preference shares and the debtors' securitisation
debt were disclosed as current liabilities.
7. Acquisition of Real Juice Co Holdings
On 1 October 2012, the Group acquired 100% of the issued shares of The Real Juice Co Holdings Proprietary Limited. A cash consideration of
R73,7 million was paid to AVI Limited and was funded from own resources.
The primary motivation for the acquisition was to extend the Clover Group's footprint in the Western Cape and grow Clover's presence as one of the
market-leading beverage businesses in the South Africa.
The fair value of the identifiable assets and liabilities of The Real Juice Co Holdings Proprietary Limited as at the date of acquisition was:
R'000
Assets
Property, plant and equipment 14 511
Intangible assets 30 511
Deferred tax asset 9 713
Inventories 7 611
Trade and other receivables 29 635
Cash and cash equivalents 3 130
95 111
Liabilities
Trade and other payables (21 425)
(21 425)
Total identifiable net assets at fair value 73 686
Goodwill arising at acquisition
Consideration, settled in cash 73 686
Cash flow on acquisition
Net cash acquired with subsidiary 3 130
Cash paid (73 686)
Net cash outflow (70 556)
No goodwill was recognised on the acquisition; however, expected synergies include supply chain efficiencies, administration and shared service
efficiencies, optimisation of sourcing arrangements and distribution channels.
8. Acquisition of additional interest in Clover Manhattan
On 1 November 2012, Clover acquired the remaining 49,9% interest in Clover Manhattan -Proprietary Limited and -Unincorporated JV. A cash
consideration of R24,7 million was paid to Sportsade Proprietary Limited.
As communicated during the listing of the Clover Group, part of the listing would be utilised to buy out non-controlling interest holders in Clover's
businesses where possible.
The fair value of the identifiable assets and liabilities of Clover Manhattan as at the date of acquisition was:
R'000
Assets
Intangible assets 28 494
28 494
Liabilities
Deferred tax liability (7 979)
(7 979)
Total identifiable net assets at fair value 20 515
Goodwill arising at acquisition 23 966
Original investment at cost (3 034)
Gain on fair valuing existing investment due to gaining control (16 747)
Consideration for additional 49,9% interest, settled in cash 24 700
Cash flow on acquisition
Net cash acquired with subsidiary
Cash paid (24 700)
Net cash outflow (24 700)
Goodwill arising on acquisition represents the value paid for Clover Manhattan in excess of the fair value of its net assets at acquisition date. Goodwill
consists largely of the synergies expected from the combining of operations of Clover and Clover Manhattan. Expected synergies include production
efficiencies and optimisation of sourcing arrangements.
9. Capital commitments
30 June 30 June
2013 2012
R'000 R'000
Capital expenditure authorised and contracted for 127 854 223 603
Capital expenditure authorised but not contracted for 84 126 41 558
Commitments will be spent within the next three to four years. The capital expenditure will be funded from Group funds.
10. Related party transactions
The Group in the ordinary course of business, entered into various transactions on an arm's length basis during the period under review.
11. Events after the reporting period
On 6 March 2013 Clover SA entered into an agreement with Nestle (South Africa) Proprietary Limited to form a new entity, Clover Waters Proprietary
Limited, that acquired Nestle's Gauteng based Doornkloof property, bottled water manufacturing facility and water rights. This newly formed entity will
have the right by way of licence, to manufacture, distribute, market and sell bottled mineral water under Nestlés Pure Life(R), Valvita(R) and Schoonspruit(R)
brands as well as ice tea under the Nestea brand. These brands will complement Clover SA's Aquartz bottled water and Manhattan ice tea brands
which was also manufactured, distributed, marketed and sold by Clover Waters. Clover SA effectively holds 70% of the shares in Clover Waters and
Nestle (South Africa) 30%. The transaction was approved by the competition authorities on 24 May 2013. The newly-formed entity commenced
business on 1 August 2013.
12. Going concern
The Directors are satisfied that the Group is a going concern and has therefore continued to adopt the going concern basis in preparing the
summarised consolidated financial statements.
13. Preparation of summarised consolidated financial statements
These summarised consolidated financial statements is extracted from audited information, but is not itself audited. The directors take full responsibility
for the preparation of the summarised consolidated financial statements and ensured that the financial information has been accurately extracted
from the underlying audited consolidated annual financial statements, which is available on the Clover website: www.clover.co.za.
The audited financial statements summarised in this section were prepared under the supervision of Louis Jacques Botha, CA(SA), in his capacity as
Chief Financial Officer of the Group.
14. Independent audit by auditors
The annual financial statements from which the summarised consolidated financial statements were derived, have been audited by the Group's
independent auditors, Ernst & Young Inc. A copy of their unmodified report is available for inspection at the Company's registered office.
15. Annual General Meeting
The Annual General Meeting of the company will be held at 200 Constantia Drive, Constantia Kloof, Roodepoort, 1709 on Tuesday,
26 November 2013, at 10:00 to transact the business as stated in the Annual General Meeting notice which will be distributed to shareholders
on 27 September 2013.
Record date to determine which shareholders are entitled to receive the notice of Annual General Meeting Friday, 20 September 2013
Last day to trade in order to be eligible to attend and vote at the Annual General Meeting Friday, 8 November 2013
Record date to determine which shareholders are entitled to attend and vote at the Annual General Meeting Friday, 15 November 2013
Forms of proxy for the Annual General Meeting to be lodged by 10:00 on* Monday, 25 November 2013
* Any proxies not lodged by this time must be handed to the Chairperson of the Annual General Meeting immediately prior to the Annual General
Meeting.
Date: 17/09/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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