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ZEDER INVESTMENTS LIMITED - Summary Preliminary Consolidated Financial Results For The Year Ended 29 February 2016

Release Date: 11/04/2016 15:30
Code(s): ZED     PDF:  
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Summary Preliminary Consolidated Financial Results For The Year Ended 29 February 2016

Zeder Investments Limited
Incorporated in the Republic of South Africa
(Registration number: 2006/019240/06)
JSE share code: ZED
ISIN number: ZAE000088431
("Zeder" or "the group" or "the company")

SUMMARY PRELIMINARY CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2016

HIGHLIGHTS
- Recurring headline earnings up 20% to 42.4 cents per share 
- Recurring headline earnings from investments up 17% to 54 cents per share
- SOTP value of R8.37 per share as at 31 March 2016
- Dividend up 64% to 9 cents per share

OVERVIEW
Zeder is an investor in the broad agribusiness industry, with a specific focus on the food and beverage
sectors. Its underlying investment portfolio was valued at R12.4bn on 29 February 2016. Zeder's 27.2%
interest in Pioneer Foods remains its largest investment, representing 60.9% (2015: 71.4%) of the
portfolio.

STRATEGY
Zeder is a long-term investor that owns large, strategic stakes in companies. This allows management to
play an active role in the underlying portfolio companies and assist with the determination of
appropriate strategies. During the year under review, Zeder maintained its strategy of "Internal Focus"
and dedicated most of its efforts to existing investments. This strategic focus has delivered
satisfactory results over the past three years and will largely be maintained as Zeder seeks to drive
for growth from its existing investment platform. New investments will be made when opportune.

NOTEWORTHY TRANSACTIONS
Capespan scheme of arrangement
During the year under review, Zeder concluded the Capespan scheme of arrangement in terms of which it
acquired the remaining 25% interest held by minority shareholders other than management in a
transaction valued in excess of R500m.

FINANCIAL RESULTS
The two key benchmarks which Zeder believes to measure performance by are sum-of-the-parts ("SOTP")
value per share and recurring headline earnings per share.

SOTP
Zeder's SOTP value per share, calculated using the quoted market prices for all JSE-listed investments,
and market-related valuations for unlisted investments, decreased by 13% during the reporting period to
R8.03 as at 29 February 2016 following predominantly a 21% decline in Pioneer Foods' share price. At
the close of business on Thursday, 31 March 2016, Zeder's SOTP value per share was R8.37.

                                        28 Feb 2015             29 Feb 2016             31 Mar 2016
                                  Interest                Interest                Interest
Company                                 (%)         Rm          (%)         Rm          (%)         Rm

Pioneer Foods                         27.3       9 533        27.2       7 574        27.2       8 099
Capespan                              71.1       1 463        96.6       2 027        96.6       2 027
Zaad                                  92.0         885        92.3       1 246        92.3       1 246
Kaap Agri                             37.9         629        39.4         758        39.4         758
Agrivision                            76.5         563        55.9         614        55.9         614
Quantum Foods                         26.4         231        26.4         168        26.4         179
Other                                               52                      44                      43

Total investments                               13 356                  12 431                  12 966
Cash                                               338                     118                      34
Other net liabilities                             (439)                   (324)                   (257)

SOTP value                                      13 255                  12 225                  12 743

Number of shares in issue (m)                    1 444                   1 523                   1 523

SOTP value per share (rand)                       9.18                    8.03                    8.37

Recurring headline earnings
Zeder's consolidated recurring headline earnings is the sum of its effective interest in that of each
of its underlying investments. The result is that investments in which Zeder holds less than 20% and
are generally not equity accountable in terms of accounting standards, are included in the calculation
of consolidated recurring headline earnings, whilst once-off (i.e. non-recurring) income and expenses
are excluded. This provides management and investors with a more realistic and transparent way of
evaluating Zeder's earnings performance.

                                                                                   Audited
                                                                   28 Feb 2015      Change 29 Feb 2016
                                                                            Rm          (%)         Rm

Recurring headline earnings from investments                               541          49         805
Management (base) fee                                                     (118)                   (155)
Net interest, taxation and other income and expenses                        (9)                    (18)

Recurring headline earnings                                                414          53         632
Non-recurring headline earnings
  Management (performance) fee                                            (118)
  Other                                                                    (39)                    (87)

Headline earnings                                                          257         112         545
Non-headline items                                                         (15)                    237

Attributable earnings                                                      242         223         782

Weighted average number of shares in issue (m)                           1 172                   1 490

Recurring headline earnings from investments per share (cents)            46.1          17        54.0
Recurring headline earnings per share (cents)                             35.3          20        42.4
Headline earnings per share (cents)                                       22.0          66        36.5
Attributable earnings per share (cents)                                   20.6         155        52.5

Following improved earnings contributions from the majority of Zeder's underlying investments,
recurring headline earnings from investments per share and recurring headline earnings per share
increased by 17% to 54 cents and by 20% to 42.4 cents, respectively.

Headline earnings per share increased by 66% to 36.5 cents as a result of the aforesaid and no
performance fee being payable in respect of the year under review.

Attributable earnings per share increased by a higher percentage than headline earnings per share
mainly due to a dilution gain made by Capespan following Golden Wing Mau's, an associate, merger with
Joyvio. Both Golden Wing Mau and Joyvio are leading players in China's fresh fruit business.

Management fees
Management fees are payable to a wholly-owned subsidiary of PSG Group Ltd ("PSG Group") in terms of
a management agreement, whereby the PSG Group subsidiary provides all investment, administrative,
advisory, financial and corporate services to Zeder Investments Corporate Services (Pty) Ltd, a
wholly-owned subsidiary of Zeder. The management fees payable in respect of services rendered consist
of a base fee and a performance fee element in terms of the relevant contractual rights. The base fee
is calculated at the end of every half-year as 1.5% p.a. of Zeder's volume weighted average market
capitalisation for that half-year. The performance fee is calculated at the end of the financial year
as 20% p.a. of Zeder's share price outperformance of the GOVI-index yield plus 4%, adjusted for
dividends, and is limited to the amount of the base fee in any specific financial year. 

Following the aforementioned increase in Zeder's market capitalisation resulting from the increased
number of Zeder shares in issue following the Agri Voedsel scheme of arrangement in October 2014 and
the Capespan scheme of arrangement in July 2015, the recurring base fee payable in respect of the year
ended 29 February 2016 amounted to R155m (2015: R118m). However, given the decline in Zeder's share
price, there was no non-recurring performance fee payable in respect of the year under review
(2015: R118m). The starting hurdle Zeder share price for performance fee determination purposes for
the ensuing financial year is R5.65 (2015: R4.95).

PSG Group has informed Zeder that it is investigating various alternatives to the current management
fee agreement, which will be formally proposed once feedback has been obtained from a regulatory
perspective. Once a formal proposal has been received from PSG Group, Zeder will communicate it to
the market.

Pioneer Foods
Pioneer Foods delivered commendable results for the year ended 30 September 2015, with adjusted
headline earnings per share from continuing operations increasing by 30%. The core divisions have
been strengthened and continue to perform well. Improvements were reported in volumes, revenue,
market share and operating margin. Pioneer Foods remains one of the leading food producers in
South Africa and is well positioned to benefit from the growing demand for food and beverages,
both in South Africa and select international markets.

Pioneer Foods is listed on the JSE and further information is available at www.pioneerfoods.co.za.

Capespan
Capespan is an unlisted fruit and logistics group with a history spanning more than 70 years. Its
core business activities are focused on the production, procurement, distribution and marketing of
fruit worldwide, while it also owns and operates a number of strategic logistical and terminal assets
in Southern Africa. The overall industry remains in a challenging cycle, but Capespan's strategy of
product, market and sector diversification has served the group well. Despite delivering strong
operating results, Capespan reported a modest 8% increase in recurring headline earnings for the year
ended 31 December 2015 as the rand weakness was not fully capitalised on. During the year under
review, Capespan invested a further R53m in an associate in Germany, while also expanding its
farming and packing operations in South Africa. The aforementioned Golden Wing Mau merger resulted
in Capespan's interest diluting from 25% to 11.3%.

Further information about Capespan can be viewed at www.capespangroup.com.

Kaap Agri
Kaap Agri is an unlisted retail, trade and services group that supplies a variety of products and
services to the agri sector and the general public. It has been in existence for more than 100 years
with 177 operating points throughout South Africa. Despite a challenging macro environment for
agriculture, Kaap Agri delivered encouraging results and reported a 16% increase in headline earnings
for the year ended 30 September 2015. Its strategy of product and geographic diversification should
assist it in managing cyclicality in this sector. The recent focus on introducing non-agri income
streams to complement its core agribusiness is gaining traction.

Kaap Agri's results can be viewed at www.kaapagri.co.za.

Zaad 
Zaad operates in the specialised agri-inputs industry and currently owns, develops, imports and
distributes a broad range of agri seeds in Africa, Europe and other international markets. Through
Agricol, Klein Karoo Seed Marketing and Gebroeders Bakker, it has a proud history spanning more than
50 years exporting to more than 90 countries. Its portfolio, product and geographic mix have been
structured to mitigate agri cyclicality. Zaad invested in numerous growth initiatives during the
year which should yield positive results in the medium to long term. The specialised agri-inputs
market, and in particular the seed segment, remains attractive and Zaad is well positioned to
benefit from it. Zaad reported a 20% increase in recurring headline earnings for the year ended
29 February 2016. 

Further information can be viewed at www.agricol.co.za, www.seedmarketing.co.za and
www.bakkerbrothers.nl, respectively.

Agrivision
Agrivision currently owns and operates two large-scale commercial farming operations and a milling
business in Zambia. It has developed 4 635 hectares irrigated productive farmland since starting in
2011, and is continuously evaluating expansion opportunities. Agrivision's balance sheet was
strengthened during the year under review through a US$30m equity investment, the majority of which
was contributed by new strategic shareholder, the International Finance Corporation (IFC), and the
balance by Zeder and Norfund. 

Agrivision's operating divisions performed to expectation; however, it reported a US$7m recurring
headline loss for its financial year ended 31 December 2015. Although anticipated, it was exacerbated
by a third consecutive year of drought, electricity shortages and a weakening local currency. Excluding
foreign currency exchange losses and once-off items recognised in the income statement, Agrivision made
a headline profit of US$1.9m for its financial year ended 31 December 2015 as opposed to a US$0.7m loss
in the previous year.

Further information about Agrivision can be viewed at www.agrivisionafrica.com.

Quantum Foods
Quantum Foods is a diversified feeds and poultry business providing quality animal protein to select
South African and African markets. Having weathered adverse market conditions the past couple of years,
Quantum Foods released strong results for the financial year ended 30 September 2015, reporting a 390%
increase in headline earnings per share. Although it remains exposed to a highly cyclical industry, it
has restructured its business and embarked on a clearly defined growth strategy that should see it
generate sustainable profits and cash flows from its established South African operations, while
growing its footprint in the rest of Africa.

Quantum Foods is listed on the JSE and its results can be viewed at www.quantumfoods.co.za.

PROSPECTS
Zeder remains actively involved with its underlying portfolio of companies and continuously seeks new
investment opportunities. We believe that, despite inevitable cyclicality, investing in the
agribusiness industry offers attractive returns.

DIVIDEND
The directors have resolved to declare a gross final dividend of 9 cents (2015: 5.5 cents) per share
from income reserves in respect of the year ended 29 February 2016, which represents an increase of
64%. The dividend was calculated in accordance with Zeder's policy of paying up to 100% of free
cash flow as a final ordinary dividend. The final dividend amount, net of South African dividend tax
of 15%, is 7.65 cents per share for those shareholders that are not exempt from dividend tax. The
number of ordinary shares in issue at the declaration date is 1 522 852 890 and the income tax number
of the company is 9406891151.
 
The salient dates of this dividend distribution are:

Last day to trade cum dividend                                                 Thursday, 28 April 2016
Trading ex dividend commences                                                    Friday, 29 April 2016
Record date                                                                         Friday, 6 May 2016
Date of payment                                                                     Monday, 9 May 2016

Share certificates may not be dematerialised or rematerialised between Friday, 29 April 2016 and
Friday, 6 May 2016, both days inclusive.

SUMMARY CONSOLIDATED INCOME STATEMENT

                                                                                      Audited  Audited
                                                                                         2016     2015
                                                                                           Rm       Rm

Revenue                                                                                 9 318    8 692
Cost of sales                                                                          (7 759)  (7 424)

Gross profit                                                                            1 559    1 268

Income
Change in fair value of biological assets                                                 244      144
Investment income                                                                          47       75
Net fair value (losses)/gains                                                             (53)      38
Other operating income                                                                     51       45

Total income                                                                              289      302

Expenses
Management fees (note 2)                                                                 (155)    (236)
Marketing, administration and other expenses                                           (1 430)  (1 130)

Total expenses                                                                         (1 585)  (1 366)

Net income from associates and joint ventures
Share of profits of associates and joint ventures                                         569      300
Net profit on dilution of interest in associates                                          258

Net income from associates and joint ventures                                             827      300

Profit before finance costs and taxation                                                1 090      504
Finance costs                                                                            (180)    (143)

Profit before taxation                                                                    910      361
Taxation                                                                                 (122)     (77)

Profit for the year                                                                       788      284

Attributable to:
  Owners of the parent                                                                    782      242
  Non-controlling interests                                                                 6       42
                                                                                          788      284
EARNINGS PER SHARE AND NUMBER OF SHARES IN ISSUE

Earnings per share (cents)
  Recurring headline from investments                                                    54.0     46.1
  Recurring headline                                                                     42.4     35.3
  Headline (basic) (note 3)                                                              36.5     22.0
  Headline (diluted)                                                                     33.8     22.0
  Attributable (basic)                                                                   52.5     20.6
  Attributable (diluted)                                                                 49.4     20.6

Number of shares (m)
  In issue                                                                              1 523    1 444
  Weighted average in issue during the year (basic and diluted)                         1 490    1 172

SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                                                      Audited  Audited
                                                                                         2016     2015
                                                                                           Rm       Rm

Profit for the year                                                                       788      284

Other comprehensive loss for the year, net of taxation                                   (132)     (31)

  Items that may be reclassified to profit or loss
    Currency translation adjustments                                                     (131)     (19)
    Share of other comprehensive losses of associates                                      (8)     (13)
    Cash flow hedges                                                                       (2)      (6)
    Reclassification of cash flow hedges                                                            25

  Items that may not be reclassified to profit or loss
    Gains/(losses) from changes in financial and demographic assumptions
      of post-employment benefit obligations                                                9      (18)

Total comprehensive income for the year                                                   656      253

Attributable to:
  Owners of the parent                                                                    765      218
  Non-controlling interests                                                              (109)      35
                                                                                          656      253

SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                                                      Audited  Audited
                                                                                         2016     2015
                                                                                           Rm       Rm
Assets

Non-current assets                                                                      9 182    7 952

Property, plant and equipment                                                           1 562    1 223
Intangible assets                                                                         657      601
Biological assets (bearer plants)                                                         279      182
Investment in ordinary shares of associates and joint ventures                          6 456    5 704
Loans granted to associates and joint ventures                                                      30
Equity securities                                                                          50       51
Loans and advances                                                                         65       62
Deferred income tax assets                                                                 70       64
Employee benefits                                                                          43       35

Current assets                                                                          3 722    3 184

Biological assets (agricultural produce)                                                  127       93
Inventories                                                                             1 291      988
Debt securities                                                                            23
Trade and other receivables                                                             1 575    1 260
Loans and advances                                                                          2       52
Current income tax assets                                                                  20       21
Cash, money market investments and other cash equivalents                                 684      770

Non-current assets held for sale (note 5)                                                           30

Total assets                                                                           12 904   11 166

Equity and liabilities
Ordinary shareholders' equity                                                           8 251    7 133
Non-controlling interests                                                                 442      608

Total equity                                                                            8 693    7 741

Non-current liabilities                                                                 1 474    1 275

Deferred income tax liabilities                                                           102      106
Borrowings                                                                              1 166      970
Derivative financial liabilities                                                           65       64
Employee benefits                                                                         141      135

Current liabilities                                                                     2 737    2 150

Borrowings                                                                              1 276      902
Trade and other payables                                                                1 328    1 153
Current income tax liabilities                                                             62       31
Employee benefits                                                                          71       64

Total liabilities                                                                       4 211    3 425

Total equity and liabilities                                                           12 904   11 166

Net asset value per share (cents)                                                       541.8    494.0
Tangible net asset value per share (cents)                                              498.6    452.4

SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                                                      Audited  Audited
                                                                                         2016     2015
                                                                                           Rm       Rm

Ordinary shareholders' equity at end of the year                                        8 251    7 133

Ordinary shareholders' equity at beginning of the year                                  7 133    3 620
Shares issued                                                                             610    3 347
Total comprehensive income for the year                                                   765      218
Transactions with non-controlling interests                                              (181)     (19)
Other movements                                                                             3       11
Dividends paid                                                                            (79)     (44)

Non-controlling interests at end of the year                                              442      608

Non-controlling interests at beginning of the year                                        608      545
Shares issued                                                                             365
Total comprehensive (loss)/income for the year                                           (109)      35
Transactions with non-controlling interests                                              (413)      32
Other movements                                                                            11       11
Dividends paid                                                                            (20)     (15)

Total equity                                                                            8 693    7 741

Dividend per share (cents)                                                                9.0      5.5

SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                                      Audited  Audited
                                                                                         2016     2015
                                                                                           Rm       Rm

Cash generated from/(utilised by) operations (note 6)                                     107      (77)
Investment income                                                                         267      202
Finance cost and taxation paid                                                           (254)    (234)

Cash flow from operating activities                                                       120     (109)

Acquisition of subsidiaries (note 4)                                                     (275)    (300)
Acquisition of associates and joint ventures                                              (58)    (265)
Acquisition of equity securities                                                           (7)
Additions to property, plant and equipment                                               (359)    (257)
Additions to intangible assets                                                            (95)     (76)
Proceeds from disposal of non-current assets held for sale                                 13      194
Proceeds from disposal of property, plant and equipment                                    48        9
Other                                                                                      (9)     (46)

Cash flow from investment activities                                                     (742)    (741)

Capital contributions by non-controlling interests                                        365        7
Dividends paid to group shareholders                                                      (79)     (44)
Dividends paid to non-controlling interests                                               (20)     (15)
Borrowings repaid                                                                        (396)     (79)
Borrowings drawn                                                                          694      721
Other                                                                                      (6)     (10)

Cash flow from financing activities                                                       558      580

Net decrease in cash and cash equivalents                                                 (64)    (270)
Exchange differences on cash and cash equivalents                                         (22)      25
Cash and cash equivalents at beginning of the year                                        770    1 015

Cash and cash equivalents at end of the year                                              684      770

NOTES TO THE SUMMARY CONSOLIDATED FINANCIAL STATEMENTS     

1. Basis of presentation and accounting policies      

These summary consolidated financial statements have been prepared in accordance with the recognition
and measurement principles of International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board, including IAS 34 Interim Financial Reporting; the SAICA
Financial Reporting Guides, as issued by the Accounting Practices Committee; the Financial Reporting
Pronouncements, as issued by the Financial Reporting Standards Council; the requirements of the South
African Companies Act; and the Listings Requirements of the JSE for preliminary reports. 

The accounting policies applied in the preparation of these summary consolidated financial statements
are consistent in all material respects with those used in the prior year's consolidated annual
financial statements. The group adopted the various revisions to IFRS which were effective for its
financial year ended 29 February 2016, however, these revisions have not resulted in material changes
to the group's reported results or disclosures in these summary consolidated financial statements. 

In preparing these summary consolidated financial statements, the significant judgements made by
management in applying the group's accounting policies and the key sources of estimation uncertainty
were consistent with those disclosed in the consolidated annual financial statements for the year
ended 28 February 2015. 

2. Management fees      

The base and performance fees are payable to PSG Corporate Services (Pty) Ltd ("PSGCS"), a subsidiary
of PSG Group, Zeder's ultimate holding company, in terms of a management agreement. In accordance with
the management agreement, PSGCS provides management services, including corporate, secretarial,
advisory, investment and financial services and all related aspects thereto to the Zeder group of
companies. 

The base management fee is calculated at the end of every half-year as 1.5% p.a. (exclusive of VAT) of
the company's volume weighted average market capitalisation for that half-year. The performance
management fee is calculated at the end of the financial year as 20% p.a. of the company's share price
outperformance of the GOVI-index (comprising the most liquid government bonds, being the government
bonds within the top 10 of the All Bond Index) yield plus 4%, adjusted for dividends ("hurdle share
price"). The performance management fee pertaining to a financial year may not exceed that year's base
management fee. If the performance management fee exceeds the base management fee, the excess
performance management fee is carried forward to the following financial year, by adjusting the
starting hurdle share price of the following year accordingly. The excess performance management fee
at year-end amounted to Rnil (2015: R634m). Consequently, the starting hurdle share price for
performance determination purposes at 1 March 2016 is R5.65 (2015: R4.95). 

3.  Headline earnings

                                                                                      Audited  Audited
                                                                                         2016     2015
                                                                                           Rm       Rm

Profit for the year attributable to owners of the parent                                  782      242

Non-headline items                                                                       (237)      16
  Gross amounts
    Non-headline items of associates and joint ventures                                    20       20
    Net profit on dilution of interest in associates                                     (258)
    Fair value gains on step-up from associates and joint ventures to subsidiaries         (4)      (3)
    Reversal of impairment on property, plant and equipment                                        (12)
    Net profit on sale of property, plant and equipment                                   (30)      (4)
    Impairment of property, plant and equipment                                            14
    Impairment of intangible assets (incl. goodwill)                                        8       19
    Other                                                                                   2       (9)
  Non-controlling interests                                                                11        3
  Taxation                                                                                           2

Headline earnings                                                                         545      258

During the year, Golden Wing Mau, an associate of Capespan Group Ltd ("Capespan"), merged as equals
with Joyvio. Both companies are leading players in China's fresh fruit business and the merger
resulted in the group's interest in Golden Wing Mau diluting from 25% to 11.3%. The group continues
to exercise significant influence through, inter alia, board representation. The dilution gain of
R277m consequently recognised by the group was determined with reference to the fair value at which
the merger was concluded being above the carrying value of the investment. The fair value was
determined by the appointed appraiser using the discounted cash flow method and price-to-sales ratios.

4. Subsidiaries acquired

Aspen Logistics (Pty) Ltd ("Aspen Logistics")

During March 2015, the group, through Capespan, acquired 75% of the issued share capital of Aspen
Logistics for a cash consideration of R5m. Capespan South Africa's fruit logistical operations were
integrated with Aspen Logistics and subsequently rebranded as Contour Logistics. Contour Logistics is
a logistical solutions service provider supporting Capespan's operations. Goodwill arose in respect of,
inter alia, synergies pertaining to the integration of the logistical activities. Accounting for
Contour Logistics' business combination has been finalised.

Novo Packhouse business operations ("Novo Packhouse")

During March 2015, the group, through Capespan, acquired the business operations of Novo Packhouse,
including its coldstores, equipment and inventory, for a cash consideration of R120m. Novo Packhouse
complements the group's existing coldstore operations in South Africa. No goodwill arose in respect
of this business combination. Accounting for Novo Packhouse's business combination has been finalised.

Theewaterskloof farming operations ("Theewaterskloof")

During March 2015, the group, through Capespan, acquired the farming operations of Theewaterskloof, a
pome fruit farm, for a cash consideration of R120m. Theewaterskloof complements the group's existing
farming operations in South Africa. No goodwill arose in respect of this business combination.
Accounting for Theewaterskloof's business combination has been finalised.

Agriseeds Pvt Ltd ("Agriseeds") 

During October 2015, the group, through Zaad Holdings Ltd ("Zaad"), acquired 80% of the issued share
capital of Agriseeds for a cash consideration of R33m. Agriseeds operates in the seed marketing
industry and goodwill arose in respect of, inter alia, expected synergies. Accounting for Agriseeds'
business combination has been finalised.

Klein Karoo Seed Marketing Zimbabwe Pvt Ltd ("KKSM Zimbabwe")

During October 2015, the group, through Zaad, acquired an additional 25% of the issued share capital
of KKSM Zimbabwe, previously an associate, for a cash consideration of less than a R1m. KKSM Zimbabwe
operates in the seed marketing industry and goodwill arose in respect of, inter alia, expected
synergies. The goodwill was subsequently impaired in full following management's reassessment of same.
Accounting for KKSM Zimbabwe's business combination has been finalised. The remeasurement of the
previously held interest in the associate resulted in a non-headline gain of R4m. Accounting for
KKSM Zimbabwe's business combination has been finalised.

The summarised assets and liabilities recognised at the respective acquisition dates were:

                                Aspen         Novo   Theewaters-                     KKSM   
                            Logistics    Packhouse        kloof    Agriseeds     Zimbabwe        Total
Audited                            Rm           Rm          Rm            Rm           Rm           Rm
       
Property, plant and equipment       1          118          58            46            5          228
Intangible assets                                                          2            2            4
Biological assets (bearer plants)                           62                                      62
Loans and advances                                                        20                        20
Inventories                                      1                        21           36           58
Trade and other receivables        43            5                        34           35          117
Cash, money market investments
 and other cash equivalents         1                                      2                         3
Borrowings                                                               (69)         (46)        (115)
Deferred tax liabilities                                                  (4)                       (4)
Trade and other payables          (52)          (4)                      (19)         (36)        (111)
Total identifiable net 
  (liabilities)/assets             (7)         120         120            33           (4)         262
  Non-controlling interests         2                                     (6)                       (4)
  Goodwill recognised              10                                      6            4           20
Total consideration                 5          120         120            33            -          278

Cash consideration paid            (5)        (120)       (120)          (33)                     (278)
Cash and cash equivalents
 acquired                           1                                      2                         3
Net cash outflow
 from subsidiaries acquired        (4)        (120)       (120)          (31)           -         (275)

The aforementioned business combinations do not contain any contingent consideration or indemnification
asset arrangements, and the acquisition-related costs expensed were insignificant.

Had Agriseeds and KKSM Zimbabwe been consolidated with effect from 1 March 2015 instead of their
respective acquisition dates, the group income statement would have reflected additional revenue of
R134m and profit after tax of R15m.

5. Non-current assets held for sale

At 28 February 2015, non-current assets held for sale comprised the assets of Addo Cold Storage (Pty)
Ltd (a subsidiary). The disposal was concluded during the year under review for cash proceeds of R13m,
and non-controlling interests of R17m was derecognised.

6. Cash generated from/(utilised by) operations

                                                                                      Audited  Audited
                                                                                         2016     2015
                                                                                           Rm       Rm

Profit before taxation                                                                    910      361
Share of profits of associates and joint ventures                                        (569)    (300)
Depreciation and amortisation                                                             167      132
Changes in fair value of biological assets                                               (244)    (144)
Net profit on dilution of interest in associates                                         (258)
Investment income                                                                         (47)     (75)
Finance costs                                                                             180      143
Net harvest short-term biological assets                                                   44       44
Other non-cash items                                                                       74      (38)
                                                                                          257      123
Change in working capital and other financial instruments                                  26     (126)
Additions to biological assets                                                           (176)     (74)
Cash generated from/(utilised by) operations                                              107      (77)

7. Financial instruments      

7.1 Financial risk factors      

The group's activities expose it to a variety of financial risks; market risk (including currency risk,
cash flow and fair value interest rate risk, and price risk), credit risk and liquidity risk. 

The summary consolidated financial statements do not include all financial risk management information
and disclosures as set out in the consolidated annual financial statements, and therefore they should
be read in conjunction with the consolidated annual financial statements for the year ended
29 February 2016. Risk management continues to be carried out throughout the group under policies
approved by the respective boards of directors. 

7.2 Fair value estimation      

The information below analyses financial assets and financial liabilities, which are carried at fair
value, by level of hierarchy as required by IFRS 13. The different levels in the hierarchy are defined
below: 

Level 1      

The fair value of financial instruments traded in active markets is based on quoted market prices at
the reporting 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 the group is the current bid price.

Level 2      

Financial instruments that trade in markets that are not considered to be active but are valued (using
valuation techniques) based on quoted market prices, dealer quotations or alternative pricing sources
supported by observable inputs are classified within level 2. These include over-the-counter traded
financial instruments. As level 2 investments include positions that are not traded in active markets
and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or
non-transferability, which are generally based on available market information. If all significant
inputs in determining an instrument's fair value are observable, the instrument is included in 
level 2. 

Level 3      

If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3. Investments classified within level 3 have significant unobservable inputs, as
they trade infrequently. 

The fair value of financial assets and liabilities carried at amortised cost approximates their fair
value, while those measured at fair value in the statement of financial position can be summarised as
follows: 

                                                           Level 1     Level 2     Level 3       Total
Audited                                                         Rm          Rm          Rm          Rm

29 February 2016

Assets
  Equity securities                                                          1          49          50
  Debt securities                                                                       23          23
  Closing balance                                                            1          72          73
    Opening balance                                                                     80
    Additions                                                                           30
    Disposal                                                                           (29)
    Fair value losses                                                                   (9)

Liabilities
  Derivative financial liabilities                                                      65          65
    Opening balance                                                                     64
    Fair value gains                                                                    (4)
    Finance costs                                                                        5

28 February 2015

Assets
  Equity securities                                                          1          50          51
  Non-current assets held for sale (note 5)                                             30          30
  Closing balance                                                            1          80          81
    Opening balance                                                                     42
    Transfer to non-current assets held for sale                                        30
    Fair value gains                                                                     8

Liabilities
  Derivative financial liabilities                                                      64          64
    Opening balance                                                                     46
    Additions                                                                           20
    Fair value gains                                                                    (5)
    Finance costs                                                                        3

8. Segmental reporting      

The group is organised into four reportable segments, namely i) food, beverages and related services, 
ii) agri - related retail, trade and services, iii) agri - inputs and iv) agri - production. 

The segments represent different sectors in the broad agribusiness industry. 

Headline earnings comprise recurring and non-recurring headline earnings. Recurring headline earnings
(being a measure of segment profit) is calculated on a see-through basis. Zeder's recurring headline
earnings is the sum of its effective interest in that of each of its underlying investments.
The result is that investments which Zeder do not equity account or consolidate in terms of accounting
standards, are included in the calculation of recurring headline earnings. 

Non-recurring headline earnings include the elimination of equity securities' see-through recurring
headline earnings not equity accounted, the related net fair value gains/losses and investment income
(as recognised in the income statement). Associates' and subsidiaries' once-off gains/losses are
excluded from recurring headline earnings and included in non-recurring headline earnings. 

Segmental income comprises revenue and investment income, as per the income statement. 

Sum-of-the-Parts ("SOTP") is a key valuation tool used to measure Zeder's performance. The SOTP value
is calculated using the quoted market prices for all JSE-listed investments, and market-related
valuations for unlisted investments. These values will not necessarily correspond with the values per
the statement of financial position since the latter are measured predominantly using the relevant
accounting standards which include historical cost and the equity accounting method. 

The chief operating decision-maker (the executive committee) evaluates the following information to
assess the segments' performance: 

                                                                                      Audited  Audited
                                                                                         2016     2015
                                                                                           Rm       Rm

Recurring headline earnings segmental analysis:

Segments
  Food, beverages and related services                                                    662      417
  Agri-related retail, trade and services                                                  79       64
  Agri-inputs                                                                             101       74
  Agri-production                                                                         (37)     (14)
Recurring headline earnings from investments                                              805      541
Management (base) fee                                                                    (155)    (118)
Net interest, taxation and other income and expenses                                      (18)      (9)
Recurring headline earnings                                                               632      414
Non-recurring headline earnings  
  Management (performance) fee                                                                    (118)
  Other                                                                                   (87)     (38)
Headline earnings                                                                         545      258
Non-headline items (note 3)                                                               237      (16)
Attributable earnings                                                                     782      242

SOTP segmental analysis:

Segments
  Food, beverages and related services                                                  9 768   11 227
  Agri-related retail, trade and services                                                 802      681
  Agri-inputs                                                                           1 246      885
  Agri-production                                                                         614      563
Cash and cash equivalents                                                                 118      338
Other net liabilities                                                                    (323)    (439)
SOTP value                                                                             12 225   13 255

SOTP value per share (rand)                                                              8.03     9.18

Profit before tax segment analysis:

Segments
  Food, beverages and related services                                                    913      359
  Agri-related retail, trade and services                                                  76       58
  Agri-inputs                                                                             134       71
  Agri-production                                                                         (46)     (30)
Management fees and other income and expenses                                            (167)     (97)
                                                                                          910      361

IFRS revenue (revenue and investment income) segmental analysis:

Segments
Food, beverages and related services                                                    7 720    7 438
  Revenue                                                                               7 688    7 392
  Investment income                                                                        32       46
Agri-inputs                                                                             1 231      952
  Revenue                                                                               1 226      947
  Investment income                                                                         5        5
Agri-production
  Revenue                                                                                 404      353
Unallocated investment income (mainly head office interest income)                         10       24
                                                                                        9 365    8 767

9. Events subsequent to the reporting date      

The directors are unaware of any matter or event which is material to the financial affairs of the
group that has occurred between the reporting date and the date of approval of these summary
consolidated financial statements.

10. Preparation      

These summary consolidated preliminary financial statements were compiled under the supervision of
the group financial director, Mr WL Greeff, CA(SA), and have been audited by PricewaterhouseCoopers
Inc., who expressed an unmodified opinion thereon. The auditor also expressed an unmodified opinion
on the consolidated annual financial statements from which these summary consolidated financial
statements were derived. 

A copy of the auditor's report on the summary consolidated preliminary financial statements and of
the auditor's report on the consolidated annual financial statements are available for inspection
at the company's registered office, together with the financial statements identified in the
respective auditor's reports.

The auditor's report does not necessarily report on all of the information contained in this
announcement and/or financial results. Shareholders are therefore advised that in order to obtain
a full understanding of the nature of the auditor's engagement they should obtain a copy of the
auditor's report together with the accompanying financial information from the issuer's registered
office.

11. Changes to the board of directors

Prof Mohammad Karaan was appointed as an independent non-executive director on 6 April 2016.

On behalf of the board

Jannie Mouton                               Norman Celliers
Chairman                                    Chief executive officer

Stellenbosch
11 April 2016

DIRECTORS
JF Mouton (Chairman), N Celliers* (CEO), WL Greeff* (FD), GD Eksteen#, WA Hanekom#, AE Jacobs,
ASM Karaan#, PJ Mouton, CA Otto#

*  executive
#  independent non-executive

APPOINTED MANAGER, SECRETARY AND REGISTERED OFFICE
PSG Corporate Services (Pty) Ltd
1st Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600
PO Box 7403, Stellenbosch, 7599

TRANSFER SECRETARY
Computershare Investor Services (Pty) Ltd
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107

SPONSOR
PSG Capital

AUDITOR
PricewaterhouseCoopers Inc.

Date: 11/04/2016 03:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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