Preliminary audited summarised consolidated results and cash dividend declaration for the year ended 1 October 2017 RHODES FOOD GROUP HOLDINGS LIMITED (Incorporated in the Republic of South Africa) Registration number: 2012/074392/06 JSE share code: RFG ISIN: ZAE000191979 PRELIMINARY AUDITED SUMMARISED CONSOLIDATED RESULTS AND CASH DIVIDEND DECLARATION FOR THE YEAR ENDED 1 OCTOBER 2017 KEY FEATURES GROUP TURNOVER UP 10.8% TO R4.6 BILLION REGIONAL TURNOVER UP 21.4% INTERNATIONAL TURNOVER DOWN 18.1% HEADLINE EARNINGS 19.1% LOWER AT R237 MILLION DILUTED HEPS* 27% DOWN AT 93.4 CENTS DIVIDEND OF 31.1cps Pakco and Ma Baker acquisitions successfully integrated * Impacted by increase in weighted average number of shares COMMENTARY PROFILE Rhodes Food Group is a leading producer of fresh, frozen and long life convenience meal solutions for customers and consumers across South Africa, sub-Saharan Africa and major global markets. The growing portfolio of market leading brands, which includes Rhodes, Bull Brand, Magpie, Squish, Bisto, Hinds and Pakco, is complemented by private label product ranges packed for major South African and international retailers. TRADING AND FINANCIAL PERFORMANCE Group turnover increased by 10.8% to R4.6 billion with strong growth in the regional segment (South Africa and sub-Saharan Africa) and lower international revenue. The regional segment accounted for 80% (2016: 73%) of group revenue. Regional turnover increased by 21.4%, with organic growth of 12.7%. The group's two largest acquisitions to date, namely Pakco and Ma Baker, have been consolidated for six months in the year and contributed combined turnover of R230 million. - Fresh Foods sales increased by 30.1% (16.0% organic growth) with continued excellent growth in the pie category across all sales channels and good growth in ready meals. - Long Life Foods increased turnover by 15.9% (10.6% organic growth) with volume growth and market share gains in key product categories. Sales in sub-Saharan Africa (excluding South Africa) increased by 46.8%, driven by robust customer demand for canned meat and fruit juice. International turnover declined by 18.1% owing to the combined impact of the strengthening Rand in comparison to the prior year, significantly reduced global demand for industrial pulp and puree products, foreign pricing pressure and increasing costs on canned fruit as a result of the drought in the Western Cape. The group's gross profit margin was lower at 27.0% (2016: 29.3%) due mainly to the currency impact and slower sales in the International division, although the margin in the regional segment strengthened for the year. Operating costs, excluding the impact of the two acquisitions, grew by 10.5%. Expense growth reflects the higher depreciation charge from the increased level of capital expenditure in the past two years. Total operating costs increased by 17.8%. The group operating margin declined from 12.0% to 8.9%. The regional operating margin improved in the second half of the year relative to the first half but was lower for the full year at 9.6% (2016: 10.3%) owing to the tough consumer environment, particularly in the lower income consumer market, and dilution from the recent acquisitions. The strengthening currency, lower pricing, reduced volumes and increased product costs contributed to the international margin declining to 6.3% (2016: 17.1%), with the canned fruit margin being maintained close to the group margin and industrial products reporting a loss for the year. The gains in the regional segment were offset by the reduction in international profitability which resulted in group profit after tax declining by 20% to R234.8 million. Headline earnings were 19.1% lower at R237.0 million. Diluted headline earnings per share (HEPS) decreased by 27.0% to 93.4 cents, in line with the trading statement issued on 30 October 2017. The weighted average number of dilutive shares in issue has increased by 24.7 million or 10.8% over the prior year, mainly due to the issue of shares for the capital raise undertaken in November 2016 (refer below) and the acquisition of Pakco effective March 2017. A cash dividend of 31.1 cents per share has been declared, based on the group's dividend cover policy of three times diluted HEPS. Net working capital, excluding the take-on balances of Ma Baker and Pakco, increased by R214.0 million owing primarily to the 14.8% increase in inventory arising from higher regional sales activity, increased prices and the slower than expected export sales. The group generated strong cash flows of R347.1 million which were R44.9 million higher than the previous year. The group raised net equity capital of R648 million through the issue of 25 million shares in an accelerated book build in November 2016. The proceeds of the book build have been applied to funding capital expenditure as well as the acquisition of Ma Baker. The group's net debt to equity ratio improved to 48.0% (2016: 81.9%). The net overdraft at year-end reduced to R153.8 million (2016: R189.6 million). Capital investment was increased to R487 million (2016: R238 million). Projects undertaken during the year included the completion of the meat production plant upgrade, increasing production capacity at the fruit juice, fruit products, vegetable and pie facilities, the completion of the flexible packaging and baby foods factory at Groot Drakenstein, and production capacity expansion and efficiency improvement projects at Pakco and Ma Baker. OUTLOOK The focus in the regional segment in the year ahead will be to drive organic growth, maximise benefits from the recent acquisitions, grow brand shares and capitalise on the current sales momentum in sub-Saharan Africa. While the regional margin will remain under pressure in the short term due to the current constrained consumer environment, it is expected to show sustained improvement in the medium term as the margins of the recently acquired businesses improve. Following the completion of the Pakco and Ma Baker integration programmes, the focus in the year ahead will be on brand architecture, product upgrades and improved distribution. Both businesses are expected to be earnings accretive in the 2018 financial year. While the outlook for the international canned fruit market is positive, the continued drought in the Western Cape is expected to adversely impact input costs owing to poorer quality fruit, which will give rise to lower yields and higher labour costs. The market for industrial fruit products (fruit pulps and juice concentrates) remains weak, but fruit raw material prices are expected to decline. Currently approximately 20% of industrial products are used internally and the balance is exported or sold regionally. Management plans to increase the internal usage of these products to around 50% in the short term and up to 70% in the medium term, primarily in the fruit juice operation. This will result in reduced international revenue but increased regional revenue and margin. Capital investment of R350 million is planned for the new year with the major projects including the consolidation of certain production facilities acquired through recent acquisitions, capacity expansion at the pie and bakery facilities, and the installation of a clear juice concentrate plant at the Groot Drakenstein production hub to further vertically integrate the fruit juice operation. Any reference to future performance included in this announcement has not been reviewed or reported on by the auditors. DECLARATION OF ORDINARY DIVIDEND The board of directors has declared a gross dividend of 31.1 cents per share in respect of the year ended 1 October 2017 for holders of ordinary shares. The dividend has been declared out of income reserves. A dividend withholding tax of 20% will be applicable to all shareholders who are not exempt, resulting in a net dividend to these shareholders of 24.88 cents. Shareholders are advised of the following salient dates in respect of the dividend declaration: Last day to trade to receive a dividend Tuesday, 9 January 2018 Shares commence trading "ex" Wednesday, 10 January 2018 the dividend Record date Friday, 12 January 2018 Dividend payment to shareholders Monday, 15 January 2018 The number of ordinary shares in issue at the date of declaration is 253 762 018. The company's tax reference number is 9348/292/17/9. Share certificates may not be dematerialised or rematerialised between Wednesday 10, January 2018 and Friday, 12 January 2018, both days included. SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 1 October 2017 Restated* Restated* Audited Audited Audited 2017 2016 2015 Notes R'000 R'000 R'000 ASSETS Non-current assets 2 145 186 1 364 722 1 153 769 Property, plant and equipment 2 1 460 493 986 826 793 565 Intangible assets 207 282 81 587 79 908 Goodwill 457 183 287 607 271 775 Deferred taxation asset 9 294 - - Biological assets 10 664 8 702 8 521 Loan receivable 270 - - Current assets 1 964 903 1 744 857 1 324 194 Inventory 3 1 144 080 947 488 694 604 Accounts receivable 767 679 749 378 604 078 Biological assets 10 553 16 037 14 127 Loans receivable 6 170 3 000 2 758 Foreign exchange contract asset - 21 925 - Taxation receivable 32 193 - - Bank balances and cash on hand 4 228 7 029 8 627 Total assets 4 110 089 3 109 579 2 477 963 EQUITY AND LIABILITIES Capital and reserves 2 235 865 1 256 898 1 018 157 Share capital 4 1 565 509 720 205 720 205 Equity-settled employee benefits 8 779 2 773 - Accumulated profit 652 326 524 948 291 582 Equity attributable to owners of the company 2 226 614 1 247 926 1 011 787 Non-controlling interest 9 251 8 972 6 370 Non-current liabilities 877 883 786 544 692 533 Long-term loans 700 407 687 231 621 773 Deferred taxation liability 161 711 85 085 60 993 Employee benefit liability 15 765 14 228 9 767 Current liabilities 996 341 1 066 137 767 273 Accounts payable and accruals 534 590 531 596 430 352 Employee benefits accrual 75 324 126 008 114 927 Current portion of long-term loans 218 831 152 963 109 775 Taxation payable 2 732 58 918 29 820 Bank overdraft 158 077 196 652 72 448 Foreign exchange contract liability 6 787 - 9 951 Total equity and liabilities 4 110 089 3 109 579 2 477 963 *Refer to note 8. SUMMARISED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the year ended 1 October 2017 Restated* Audited Audited 2017 2016 R'000 R'000 Revenue 4 593 317 4 145 902 Cost of goods sold (3 355 146) (2 932 530) Gross profit 1 238 171 1 213 372 Other income 54 480 37 221 Operating costs (885 844) (752 265) Profit before interest and taxation 406 807 498 328 Interest paid (84 836) (89 066) Interest received 386 13 Profit before taxation 322 357 409 275 Taxation (87 566) (115 924) Profit for the year 234 791 293 351 Profit attributable to: Owners of the company 234 512 290 749 Non-controlling interest 279 2 602 234 791 293 351 Other comprehensive income Items that will not be reclassified subsequently to profit or loss 1 (622) Remeasurement of employee benefit liability 2 (857) Deferred taxation effect (1) 235 Total comprehensive income for the year 234 792 292 729 Total comprehensive income attributable to: Owners of the company 234 513 290 127 Non-controlling interest 279 2 602 234 792 292 729 Earnings per share (cents) 95.9 132.1 Diluted earnings per share (cents) 92.4 127.0 *Refer to note 8. SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 1 October 2017 Equity-settled Share employee Accumulated Non-controlling capital benefits profit interest Total Note R'000 R'000 R'000 R'000 R'000 Balance at 27 September 2015 720 205 - 291 582 6 370 1 018 157 Total comprehensive income for the year (restated)* - - 290 127 2 602 292 729 Recognition of share-based payments - 2 773 - - 2 773 Treasury shares dividend received - - 279 - 279 Dividend paid - - (57 040) - (57 040) Balance at 25 September 2016 (restated)* 720 205 2 773 524 948 8 972 1 256 898 Issue of ordinary share capital 4 845 304 - - - 845 304 Total comprehensive income for the year - - 234 513 279 234 792 Recognition of share-based payments - 6 006 - - 6 006 Treasury shares dividend received - - 475 - 475 Dividend paid - - (107 610) - (107 610) Balance at 1 October 1 565 509 8 779 652 326 9 251 2 235 865 *Refer to note 8. SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 1 October 2017 Restated* Audited Audited 2017 2016 Note R'000 R'000 Cash flows from operating activities Cash receipts from customers 5 263 596 4 849 840 Cash paid to suppliers and employees (4 916 482) (4 547 577) Cash generated from operations 347 114 302 263 Net interest paid (86 150) (88 613) Taxation paid (139 023) (63 899) Net cash inflow from operating activities 121 941 149 751 Cash flows from investing activities Purchase of property, plant and equipment (486 946) (238 051) Proceeds on disposal of property, plant and equipment 1 478 6 703 Acquisition of subsidiary and businesses less net cash acquired 7 (207 297) (123 110) Loans receivable advanced (3 732) (300) Loans receivable repaid 1 471 58 Dividends paid (107 610) (57 040) Treasury shares dividend received 475 279 Net cash outflow from investing activities (802 161) (411 461) Cash flows from financing activities Issue of ordinary share capital 648 304 - Loans raised 621 000 219 570 Loans repaid (556 742) (110 924) Government grant received 3 432 27 262 Net cash inflow from financing activities 715 994 135 908 Net increase/(decrease) in cash and cash equivalents 35 774 (125 802) Cash and cash equivalents at beginning of the year (189 623) (63 821) Cash and cash equivalents at end of the year (153 849) (189 623) *Refer to note 8. SUMMARISED CONSOLIDATED SEGMENTAL REPORT for the year ended 1 October 2017 PRODUCTS AND SERVICES FROM WHICH REPORTABLE SEGMENTS DERIVE THEIR REVENUES Information reported to the chief operating decision-maker for the purposes of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided, and in respect of the 'regional' and 'international' operations, the information is further analysed based on the different classes of customers. The executive management of the Group have chosen to organise the Group around the difference in geographical areas and operate the business on that basis. Specifically, the Group's reportable segments under IFRS 8: Operating segments are as follows: - Regional - International SEGMENT REVENUES AND RESULTS The following is an analysis of the Group's revenue and results by reportable segment. Segment revenue Restated* Audited Audited 2017 2016 R'000 R'000 Regional Fresh products sales 1 529 291 1 175 282 Long life products sales 2 151 307 1 856 695 3 680 598 3 031 977 International Long life products sales 912 719 1 113 925 Total 4 593 317 4 145 902 Segment profit Regional 358 254 311 440 International 57 553 190 090 Total 415 807 501 530 Impairment loss (3 321) - Acquisition costs (5 679) (3 202) Interest received 386 13 Interest paid (84 836) (89 066) Profit before taxation 322 357 409 275 Segment revenue reported above represents revenue generated from external customers. Intercompany sales amounted to R541.821 million (2016: R561.168 million). Included in the regional and international operating profit is depreciation of R92.435 million (2016: R64.137 million) and R18.113 million (2016: R22.729 million) respectively and amortisation of R5.791 million (2016: R2.688 million) and R0.748 million (2016: R0.633 million) respectively. The accounting policies of the reportable segments are the same as the Group's accounting policies described in note 1. Segment profit represents the profit before tax earned by each segment without allocation of impairment losses, acquisition costs, interest received and interest paid. This is the measure reported to the chief operating decision-maker for the purpose of resource allocation and assessment of segment performance. GEOGRAPHICAL INFORMATION The Group's non-current assets by location of operations (excluding goodwill and deferred taxation asset) and revenue are detailed below. The chief operating decision-maker does not evaluate any other of the Group's assets or liabilities on a segmental basis for decision-making purposes. Non-current assets Restated* Audited Audited 2017 2016 R'000 R'000 Republic of South Africa 1 558 125 973 684 Kingdom of Swaziland 129 878 103 431 1 688 003 1 077 115 Revenue Audited Audited 2017 2016 R'000 R'000 Republic of South Africa 4 472 594 3 935 282 Kingdom of Swaziland 120 723 210 620 4 593 317 4 145 902 INFORMATION REGARDING MAJOR CUSTOMERS Two customers (2016: two) individually contributed 10% or more of the Group's revenues arising from both regional and international sources. *Refer to note 8. NOTES TO THE SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS for the year ended 1 October 2017 1. BASIS OF PREPARATION Rhodes Food Group Holdings Limited is a company domiciled in the Republic of South Africa. These audited summarised consolidated financial statements ("preliminary financial statements") as at and for the financial year ended 1 October 2017 comprise the company and its subsidiaries (together referred to as the "Group"). The main business of the Group is the manufacturing and marketing of convenience meal solutions. These include fresh and frozen ready meals, pastry-based products, canned jams, canned fruits, canned and bottled salads and vegetables, canned meat, fruit purees and concentrates, juice and juice products, dairy products and dry packed foods. There were no major changes in the nature of the business for the Group during the periods ended September 2017 and 2016. The preliminary financial statements are an extract from the audited consolidated financial statements for the year ended 1 October 2017, and have been prepared in accordance with the framework concepts, the measurement and recognition requirements of International Financial Reporting Standards ("IFRS") and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the Financial Pronouncement as issued by the Financial Reporting Standards Council, and the requirements of the Companies Act of South Africa and the JSE Limited Listings Requirements. The preliminary financial statements contain, as a minimum, the information required by IAS 34: Interim Financial Reporting. The accounting policies and methods of computation applied in the presentation of the preliminary financial statements are consistent with those applied in the audited consolidated annual financial statements for the year ended 25 September 2016, except for the mandatory amendments to IAS 41: Agriculture. Therefor the prior years financial results have been restated for the effect of this amendment. These preliminary financial statements were prepared under the supervision of CC Schoombie, CA(SA), Chief Financial Officer. 2. PROPERTY, PLANT AND EQUIPMENT During the year ended the following transactions accounted for the movement in the property, plant and equipment balance: Opening Acquisition of Government Closing balance subsidiaries Additions grant received Disposals Impairment balance COST R'000 R'000 R'000 R'000 R'000 R'000 R'000 2017 1 197 797 105 644 486 946 (3 432) (17 788) (3 872) 1 765 295 2016 - Restated 938 330 79 253 238 051 (27 262) (29 446) (1 129) 1 197 797 Opening Closing balance Depreciation Disposals Impairment balance ACCUMULATED DEPRECIATION R'000 R'000 R'000 R'000 R'000 2017 210 971 110 548 (16 166) (551) 304 802 2016 - Restated 144 765 86 866 (19 785) (875) 210 971 Opening Closing balance balance NET ASSET VALUE R'000 R'000 2017 986 826 1 460 493 2016 - Restated 793 565 986 826 The disposal and impairment of property, plant and equipment resulted in a loss of R0.144 million (2016: R2.958 million) and R3.321 million (2016: R0.254 million) respectively which were recognised as part of 'operating costs' in the consolidated statement of profit or loss and other comprehensive income. During the year, the Group contracted R264.664 million (2016: R170.626 million) for future capital commitments. There has been no major change in the nature of property, plant and equipment, the policy regarding the use thereof, or the encumbrances over the property, plant and equipment. 3. INVENTORY The value of the inventory disclosed at net realisable value is R74.879 million (2016: R20.145 million). 4. SHARE CAPITAL On 29 November 2016 the company raised net capital of R648.304 million through the private placement of 25 million ordinary shares. A further 7.762 million shares were issued on 22 March 2017 in order to settle the full purchase price of R197.000 million for the acquisition of Pakco Proprietary Limited. 5. HEADLINE EARNINGS PER SHARE Restated 2017 2016 R'000 R'000 5.1 HEADLINE EARNINGS PER SHARE Reconciliation between profit attributable to owners of the parent and headline earnings: Profit attributable to owners of the parent 234 512 290 749 Adjustments to profit attributable to owners of the parent 2 495 2 313 Loss on disposal of property, plant and equipment 144 2 958 Impairment of property, plant and equipment 3 321 254 Taxation effect (970) (899) Headline earnings 237 007 293 062 Headline earnings per share (cents) 96.9 133.3 5.2 DILUTED HEADLINE EARNINGS PER SHARE Headline earnings 237 007 293 062 Diluted headline earnings per share (cents) 93.4 128.0 5.3 WEIGHTED AVERAGE NUMBER OF SHARES IN ISSUE Weighted average number of shares in issue 221 000 000 221 000 000 Ordinary shares issued 24 657 869 - Treasury shares (1 125 000) (1 125 000) Weighted average number of shares in issue 244 532 869 219 875 000 Effect of convertible preference shares 9 000 000 9 000 000 Effect of share offers 189 081 92 414 Weighted average number of dilutive shares in issue 253 721 950 228 967 414 6. CONTINGENT LIABILITIES The Group has entered into guarantees in favour of South African Revenue Services, for import and export activities as well as various municipalities for operational activities. The guarantees from import and operational activities outstanding at year-end amounted to R6.560 million (2016: R5.872 million). There were no other changes in the contingent liabilities during the current financial year. 7. ACQUISITION OF SUBSIDIARIES Pakco Proprietary Limited On 22 March 2017 the Group acquired 100% of the issued share capital and all voting rights of Pakco (Pty) Ltd ("Pakco") through the issue of 7.762 million shares calculated on a weighted average share price. The Group obtained control based on the voting rights acquired. Pakco manufactures and markets dry packed, bottled and canned foods under its own brands and private label. The board is of the opinion that the acquisition presents an attractive investment opportunity which is aligned with the Group's strategy to grow through value accretive acquisitions. The goodwill recognised anticipates the expected future revenues to be derived from expanding the Group's existing operations, product categories and trademarks, thereby strengthening the Group's product basket to customers. Included in the profit before tax for the year is a profit of R17.255 million attributable to the Pakco operations. In order to provide a better measure of performance for future comparison, the profit adjusted for related party transactions is R6.423 million.# Revenue for the year includes R97.069 million in respect of the acquisition. At the reporting date the Group is unable to quantify the revenue and profit or loss as if the business was acquired at the beginning of the financial year as we are unable to quantify the impact of the synergies that would have resulted from the beginning of the period. 2017 R'000 Assets and liabilities acquired Property, plant and equipment 28 502 Intangible assets 70 266 Inventory 38 169 Accounts receivable* 33 852 Bank overdraft (18 277) Deferred taxation liability (4 533) Accounts payable and accruals (42 449) Employee benefit accrual (5 024) Fair value of assets acquired 100 506 Purchase price - settled through issue of ordinary shares 197 000 Goodwill 96 494 # The pro forma financial information has been prepared for illustrative purposes only to provide information on the impact of the related party transactions on the profit for the period of the Pakco operations to the consolidated profit for the year. Because of its nature, the pro forma financial information may not be a fair reflection of the Group's results of operation, financial position, changes in equity or cash flows. There are no events subsequent to the reporting date which require adjustment to the pro forma information. The directors are responsible for compiling the pro forma financial information in accordance with the JSE Limited Listings Requirements and in compliance with the SAICA Guide on Pro Forma Financial Information. The underlying information used in the preparation of the pro forma financial information has been prepared using the accounting policies in place for the year ended 1 October 2017. The pro forma information should be read in conjunction with the unqualified Deloitte & Touche independent reporting accountants' report thereon, which is available for inspection at the company's registered offices (Pniel Road, Groot Drakenstein, 7680), at no charge, during normal business hours. * The accounts receivable acquired (which principally comprised trade receivables) with a fair value of R33.852 million included gross contractual amounts of R36.057. The best estimate at acquisition date of the contractual cash flows not expected to be collected is R2.205 million. Ma Baker Group of companies On 31 March 2017 the Group acquired 100% of the issued share capital and all voting rights of Ma Baker Xpress (Pty) Ltd, Ma Baker Foods (Pty) Ltd, Ma Baker Properties (Pinetown) (Pty) Ltd, Ma Baker Properties (Pietermaritzburg) (Pty) Ltd and Ma Baker Pies (Pty) Ltd (collectively the "Ma Baker Group of Companies"). The Group obtained control based on the voting rights acquired. The Ma Baker Group of Companies operates manufacturing plants in Pinetown and Pietermaritzburg where it manufactures, markets and distribute pie and pastry-based products under the Ma Baker brand. The board is of the opinion that the acquisition presents an attractive investment opportunity which is aligned with the Group's strategy to grow through value accretive acquisitions. The goodwill recognised anticipates the expected future revenues to be derived from expanding the Group's existing pies and pastries operations and thereby strengthening the Group's position in those categories, particularly in the convenience channel. Included in the profit before tax for the year is a profit of R8.954 million attributable to the Ma Baker operations. Revenue for the year includes R132.670 million in respect of the acquisition. At the reporting date the Group is unable to quantify the revenue and profit or loss as if the business was acquired at the beginning of the financial year as we are unable to quantify the impact of the synergies that would have resulted from the beginning of the period. 2017 R'000 Assets and liabilities acquired Property, plant and equipment 77 142 Intangible assets 61 968 Inventory 18 588 Accounts receivable* 19 647 Loans receivable 1 179 Bank balances and cash on hand 3 615 Deferred taxation liability (23 744) Accounts payable and accruals (19 396) Employee benefit accrual (2 528) Current portion of long-term loans (14 786) Taxation payable (2 132) Fair value of assets acquired 119 553 Purchase price - settled in cash 192 635 Goodwill 73 082 * The accounts receivable acquired (which principally comprised trade receivables) with a fair value of R19.647 million included gross contractual amounts of R22.485. The best estimate at acquisition date of the contractual cash flows not expected to be collected is R2.838 million. 8. CHANGE IN ACCOUNTING POLICY The Group has applied the mandatory amendments to IAS 41: Agriculture (effective for annual periods beginning on or after 1 January 2016) in the current financial year. Previously bearer plants were recognised as biological assets where they were measured at fair value. Due to the amendments per IAS 41: Agriculture bearer plants were retrospectively reclassified to Property, Plant and Equipment under IAS 16 Property, plant and equipment under the cost model. Change in Previously accounting reported policy Restated R'000 R'000 R'000 Year ended 27 September 2015 Statement of financial position Non-current assets 816 213 (14 127) 802 086 Property, plant and equipment 785 462 8 103 793 565 Biological assets 30 751 (22 230) 8 521 Current assets - 14 127 14 127 Biological assets - 14 127 14 127 Year ended 25 September 2016 Statement of financial position Non-current assets 1 006 715 (11 187) 995 528 Property, plant and equipment 974 642 12 184 986 826 Biological assets 32 073 (23 371) 8 702 Current assets - 16 037 16 037 Biological assets - 16 037 16 037 Capital and reserves 530 404 3 516 533 920 Accumulated profit attributable to owners of the company 521 597 3 351 524 948 Non-controlling interest 8 807 165 8 972 Non-current liabilities 83 751 1 334 85 085 Deferred taxation liability 83 751 1 334 85 085 Statement of profit or loss and other comprehensive income Other income 36 451 770 37 221 Operating cost (756 345) 4 080 (752 265) Profit before taxation 404 425 4 850 409 275 Taxation (114 590) (1 334) (115 924) Profit for the year 289 835 3 516 293 351 Profit after taxation attributable to owners of the company 287 398 3 351 290 749 Profit after taxation attributable to non-controlling interest 2 437 165 2 602 Earnings per share (cents) 130.6 1.5 132.1 Diluted earnings per share (cents) 125.5 1.5 127.0 Headline earnings per share (cents) 131.8 1.5 133.3 Diluted headline earnings per share (cents) 126.5 1.5 128.0 Statement of cash flows Net cash inflow from operating activities 140 253 9 498 149 751 Cash flows form investing activities (228 553) (9 498) (238 051) Purchase of property, plant and equipment (228 553) (9 498) (238 051) 9. RELATED PARTY TRANSACTIONS The Group generated sales from Peaty Mills Plc for R182.483 million (2016: R269.020 million). Included in trade receivables are amounts due from Peaty Mills Plc for R43.143 million (2016: R53.638 million). There were no other significant related party transactions during the year under review. 10. DIVIDENDS On 16 January 2017, a dividend of 42.2 cents (2016: 24.7 cents) per share was paid amounting to a total dividend of R107.6 million (2016: R57.0 million). 11. EVENTS SUBSEQUENT TO REPORTING DATE The Group entered into a sale of shares agreement to dispose of 50.83% of the shares in Ma Baker Xpress Proprietary Limited for a consideration of R6.1 million. The board of directors is of the opinion that the buyer of the shares is more experienced in the retail business market, seeing as this does not form part of the Group's core business. The board of directors has declared a gross cash dividend of 31.1 cents (2016: 42.2 cents) per share on 17 November 2017 in respect of the year ended 1 October 2017. The board of directors is not aware of any other matter or circumstance of a material nature arising since the end of the financial year, otherwise not dealt with in the financial statements, which significantly affects the financial position of the Group or the results of its operations. 12. FINANCIAL YEAR-END The Group's financial year ends in September which reflects 52 weeks of trading, and as a result the reporting date may differ year on year. The 2017 financial year, however, includes a 53rd week of trading. References to "financial year" are to the 53/52 weeks ended on or about 30 September. As a result the financial statements were prepared for the year ended 1 October 2017 (2016: 25 September). 13. APPROVAL OF PRELIMINARY SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS The preliminary summarised consolidated annual financial statements were approved by the board of directors on 17 November 2017. 14. AUDIT OPINION These audited preliminary summarised consolidated financial statements have been derived from the consolidated financial statements and are consistent, in all material respects, with the consolidated financial statements. The Group's auditors, Deloitte & Touche, have issued unmodified audit reports on the preliminary summarised consolidated financial statements and the consolidated financial statements. Both reports are available for inspection along with the full set of consolidated financial statements, on the group's website (http://www.rfg.com) and at the group's registered office. The auditor's report does not necessarily report on all of the information contained in these 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. CORPORATE INFORMATION Registered address Pniel Road, Groot Drakenstein, 7680 Private Bag X3040, Paarl, 7620 Directors Dr YG Muthien* (Chairperson) MR Bower* BAS Henderson (Chief Executive Officer) TP Leeuw* LA Makenete* B Njobe* (appointed to the board of directors on 28 September 2017) CC Schoombie (Chief Financial Officer) CL Smart** GJH Willis** * Independent non-executive ** Non-executive Company secretary Statucor Proprietary Limited Transfer secretaries Computershare Investor Services Proprietary Limited Auditors Deloitte & Touche Bruce Henderson Chief Executive Officer Tiaan Schoombie Chief Financial Officer Groot Drakenstein 21 November 2017 Sponsor Rand Merchant Bank, a division of FirstRand Bank Limited Date: 21/11/2017 07:05:00 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 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