annual report - gwkcms.gwk.co.za/documents/annual-report_eng.pdferic ramongalo piet roux frans wiid...

Annual Report 2015

3 Annual Report 2015

2 Three-yearfinancialoverview

6 ReportbytheChairmanoftheBoard

8 GWKBoardofDirectors

12 CorporateGovernance

16 ReportbytheAuditCommittee

18 RemunerationandHumanCapital

20 SocialResponsibility

21 ReportbytheSocialandEthicsCommittee

23 ReportbytheIndependentAuditors

26 ReportbytheManagingDirector

32 GWKGeneralManagement

34 Responsibilityof,andApproval bytheDirectors

35 CertificatefromtheCompanySecretary

36 ReportbytheBoardofDirectors

40 StatementofFinancialPosition

42 StatementofFinancialPerformance

43 StatementofComprehensiveIncome

46 StatementofChangeinEquity

48 StatementofCashflow

50 AccountingPolicy

64 NotestotheAbridgedFinancialStatements

72 GeneralInformation

Table of Contents

The place of discovery Innovation andgrowth happen in various places in nature,wheredifferentelementscometogethertocreatesomethingbetter. The centre of our brand icon indicates this point of discoverywhereGWKandfarmerscometogethertoinnovate agriculture.Weareacompanyownedby farmersand thepointof innovation inourbrand icondescribes the intimaterelationshipbetweenGWKand farmers.Ourorigin ison thefarm.

Theworldneedsfarmerswhoworkinwaysthatnooneeverthoughtpossible,inordertomeetthegrowingneedforfood.AtGWK, thework of these farmers inspires us to constantly innovateandtodiscovernewandbetterways,withthemonthefarmandwhenweensurethebestchannelstomarketfortheirproducts.

Together with these farmers we move the boundaries for sustainablefoodsupplytotheworld–alwaysdiscoveringthebestwaystolinkconsumerswithfarmersandallthepossibilities andaddedvaluethatagricultureoffers.

Annual Report 2015 2 3 Annual Report 2015

Inventory(R’000)

TotalAssets(R’000)NetAssetValuepershare(incents)

Debtors(R’000)EquitytoTotalAssets(%)

Shareholders’equity(R’000)

2013 2014 2015R'000 R'000 R'000

AssetsNon-currentassets 528,835 780,551 1,174,059

CurrentAssets 2,192,658 2,055,981 1,719,132

TotalAssets 2,721,493 2,836,532 2,893,191

EquityandliabilitiesIssuedsharecapital 12,023 12,743 13,433

Reserves 51,908 44,457 111,956

Shareholders’loans 596,784 694,929 785,952

Non-controllinginterest - - 12,959

Shareholders’ Equity 660,715 752,129 924,300

Non-currentliabilities 154,101 118,975 128,039

Currentliabilities 1,906,677 1,965,428 1,840,852

Totalequityandliabilities 2,721,493 2,836,532 2,893,191

20132013 201320142014 201420152015 2015

20132013 201320142014 201420152015 2015

2,721,493

5500

1,163,975

24.3

660,715

900,428

2,836,532

5900

1,171,056

26.5

752,129

780,221

2,893,191

6800

446,468

31.9

924,300

1,158,313

GWK Group: three-yearfinancialreviewStatementoffinancialposition

Turnover(R’000)Netprofitbeforeallocations toshareholders(R’000)

NetprofitasPercentageofTurnover(%)

2013 2014 2015

R'000 R'000 R'000

Turnover 6,331,043 7,126,963 7,965,348

Operatingincomepriortotakingthefollowingintoaccount: 203,340 217,527 320,855

Interestpaid:Externalsources 93,597 113,384 157,038

Profit before allocations to shareholders 109,743 104,143 163,817

Allocations to shareholders 113,753 117,941 117,846

Rebates 86,266 83,625 81,768

Interestpaid 27,487 34,316 36,078

Profitbeforetax -4,010 -13,798 45,971

Tax 28,003 194 7,413

Profitfortheyear -32,013 -13,604 53,384

Lossofterminatedoperations 0 0 -519

Profitfortheyear -32,013 -13,604 52,865

20132013 201320142014 201420152015 2015

2013 20132013 20132013 20132014 20142014 20142014 20142015 20152015 20152015 2015

11,375

18.2

109,743

1.7

113,753

6,331,043

11,794

15.8

104,143

1.5

117,941

7,126,963

11,785

21.8

163,817

2.1

117,846

7,965,348

GWK Group: three-yearfinancialreview

Cashdistributiontoshareholders(R’000)

Returnon openingEquity(%)

Distributiontoshareholders(R’000)

Statementoffinancialperformance


Reportbythe Chairman of the Board


enterprises in the value-adding segment, where ourproducersarestillinthepositiontoinfluencedecisions.

Everything that GWK does, is done with a view tostrengthenthepositionofourshareholdersandtohelpestablishafuturefortheirfarmingoperations.Theinti-materelationshipthatwefosterwiththeproducer, ischaracteristicofourDNAandrightofexistence.Natu-rally,wecannotachievethiswithoutknowledgeablemanagementand staff – thereforewe regard themas partners in our visionandwe shareGWK’s profitswithourstaffmembers.This iswhereourheart isandtheway inwhichweoperate.Furthermore, therela-tionshipsandagreements thatwe fosterwithall ourpartners are of equal importance forGWK’s contin-uedsurvival.

It isalsosignificant thatapproximately48%ofGWK’sprofit was earned outside our shareholder base thisyear. This isofmajorbenefit toour shareholdersandtheaimistoexpandthisfundamentally.Itisafamiliar scenarioinSouthAfricathatcompaniesclingtoma-jor money reserves. Fear or being overly cautiouspreventsthemfrommakingfurtherinvestmentsordofurtherexpansionsinourcountry.Thisisnotcharacter-isticofGWK.Webelieveinthecountry’sfuture,aswellas in the futureofagriculture,because this iswheretheownersofourcompanyfarm.Wedonotsitback,“waiting forbetter times”. That is far toodangerous!Tolosemomentumatthisstageisequaltolosingtherace.Webelievethatnowisthetimetobebraveandto investigate and implement well-considered andwell-plannedgrowthstrategies.

GWK isoneof themostdiversifiedagriculturalenter-prises inthecountry.Wearefacingmanyopportuni-ties,butalsomanychallenges.Themajorstepthatwetookinthevaluechainand,especiallywithGWKFarmFoods,remindedusofthefactthatthesechallengesareontheincrease.Forthisreason,theBoardofDirec-torsandManagementpayagreatdealofattentioninfocusingontherightskillsandtopositionourselvesin the rightplaces. Thisalsomeans that the requiredchangeswillbeimplementedifandwhennecessary.Notwithstanding our positive stance, as explainedabove,wedorealisethattheeconomicandpoliticalclimateareveryvolatile.Withregardtopolitics,weareexposed toagovernment that struggles toestablishthe resoluteness of policies. This creates tremendousuncertainty,whichisreflectedintherecordlowonthebusinessconfidenceindex.Furthermore,servicedeliv-eryisnotuptostandardandtheinfrastructureisfallingapart.Allthesefactors,inconjunctionwithcorruption,impedeprogress.Ontheotherhand, therearedefi-nitely stillmajor opportunities in the country andwetrustthatourfellow-citizenswillutilisetheseopportuni-tiestothefull.

Economically, there are also difficulties. Period. Tomake predictions is the field of experts, but we areawareofthefactthateverybusinessenterprisemustbemanagedwellandscrupulously.Thereisnoroomforinefficiencyandpointlessdecisions.

We furthermore fully realise that the biggest threatsfacingthecountry,arethefollowing:Poverty;unem-ployment;andthegapbetweentherichandthepoor.

Thesethreatscouldonlybeaddressedand reduced via education andeconomicgrowth,andGWKalsohasaroletofulfilinthisregard.Agricultureandtheagriculturalprocessingindus-triesareregardedbygovernmentaskeysectorsforeconomicgrowth.Weagreewiththatpointofviewandhelpto establish it, but in the meantimewearedoingalotofgroundworkto ensure that government does notoverestimate agriculture’s capacity.This could result in unnecessary frus-tration.

It gives me great pleasure to statethat GWK’s Board of Directors fully trusts in the ethical and sustainableway inwhich thecompany isbeingmanaged.GWK’sBoardofDirectorsisgratefulforthecontributionofeachindividualinthecompany.

Iwouldliketothankmyfellow-direc-tors for their commitment and theoutstandingway inwhich they exe-cutetheirduties.

Ialsowish to thankGWK’sManage-mentandstaffforthepassionthatisclearlyvisibleintheworkthatyoudo.Above all, we are grateful for thegracefromAbovethatwearebless-edwitheveryday.

Frank LawrenceChairmanDouglas9September2015

ItisonceagainaprivilegetoreportonGWK’sachieve-mentsoverthepastyearandonourdreamsfor thefuture. Not only did GWK deliver excellent financialresults,butwealsosuccessfullyrolledoutourvisiontotaketheleadinaddingvalueintheagriculturalenvi-ronment.

GWKreacheditsstretchtargetwithaprofitofR163,8million and accruals to shareholders of R117,8 mil-lion. The excellent profits resulted in GWK’s own capitalincreasingfromalowof24,3%toamuchhigher 31,9%.Thisisimportantbecauseexpansioninthevalue chainisonlypossiblewithahealthybalancesheet.

These excellent results were reached during a yearin which we made material investments in various businessenterprises.Thiswasmadepossiblebyasolid performance on a broad base by all the business enterprises that formpart ofGWK,aswell asa verysuccessfulefforttoincreaseefficiencyandtomanagecostsdownwards.

Once again there were a number of achievers. WestraMills inChristiana,Grain,Oil Seeds,Mechani- sation, Insurance and GWK Meat all performed exceptionallywell.GWKalsoachievedmajorsuccessin turningaround under-performingbusinesses and IamtrulyproudtoreportthatSidiParani(fertiliser)andMVW(stockremediesandanimalhealth)implemented and executed material turn-around strategies to ensuretheirfutureprofitability.

Threeyearsago,GWKdecidedtofollowthepathofaddedvalueandtheBoardofDirectorsandManage-mentareinfullagreementthatthisisstilltherightroadtofollow.

Thisisnotunfamiliarintheagriculturalenvironmentanditisnotalwayssuc-cessful,butatGWKwebelieve thatwepossesstheunderlyingdriversandreasonstomakearealdifference inthisregard.

We havea stable production envi-ronmentthatcandelivertopquality products. At the same time,wearerestricted by the expansion possibili- ties in our immediate geographicalarea.Therefore,weshouldratherutili- seopportunitiesinthevaluechainin ordertogrow.Furthermore,thisisnotonlyasinglestepthatwearetaking,but a continuous growth process toensure that we always remain rele-vantwithregardtomarketneeds.

We can not turn back! We could ask one another what GWK wouldhave looked like should we havefailed to take these decisions andwhatinfluenceitwouldhavehadonour farming operations. The actionsimplemented by GWK with regardto meat, feeding lots, cotton, pea-nuts, lucerne,pecannuts,potatoes,technical services, researchRTKandmanyotherexamples,allcontributed totheaffluenceofourenvironment.

Ialsowishtoemphasiseonceagainthat producers are the owners ofGWK.Itisoneofamerefewbusiness

ReportbytheChairman of the Board


HennieCoetzee

FransLubbe

DoepieduPlessis

TertiusMaraisWynandHuman

FrankLawrenceChairman

JohannKlopperFinancialDirector

JohanJacobsViceChairman

GWKBoard


KoosvanderRyst

PietRouxEricRamongalo

FransWiid

MattheusMaree

RonnieStadhouer

GWKBoard(continued)

PieterSpiesManagingDirector

WillemMülke


executive directors and General Management to implement the decisions taken by the Board of Directors. Divisional Boards of Directors exist for ev-ery operational division in GWK and this enablesthe Board of Directors to establish more expertknowledge in a diversified company such as GWK.

FrankLawrence*

JohanJacobs*

FransLubbe*

HennieCoetzee*

WynandHuman*

JohannKlopper#

TertiusMarais*

MattheusMaree*

JPduPlessis*

WillemMülke*

EricRamongalo*

PietRoux*

RonnieStadhouer*

Koosva

nderR

yst*

FransWiid*

PieterSpies#

GWKBoardofDirectors V O X X X X X X X X X X X X X X

ExecutiveCommittee V X X X X

AuditCommittee X V X X

RiskCommittee X V X X

RemunerationCommittee V X X X X

SocialandEthicsCommittee V X X X X

GWKTradeDivisionBoardofDirectors V X X X X X X

GWKAuctionandMeatDivisionBoardofDirectors V X X X X X X

GWKGrainDivisionBoardofDirectors X X X V X X

GWKSpecialistProductsDivisionBoardofDirectors X X X V X X

GWKPrimaryProductsDivisionBoardofDirectors X X V X X X X

GWKCorporateServicesDivisionBoardofDirectors X X V X X X X

Portfolios of theBoard of Directors

*Independent,Non-executive#ExecutiveV Chairman ODeputyChairmanX Member

Corporate Governance

GWK’s innovative thinking and entrepreneurial wayofoperatingareandhavealwaysbeencrucialforitssuccess,itssurvival,aswellastheaddedvaluethatitoffersinthisregardtoclients’businessenterprises,asstipulatedintheKingCodeofCorporateGovernance2009(KingIII).

The Board of Directors and Management actually underwritetheseinnovateprocessesandthinkingthatformpartCorporativeGovernance,2009(KingIII).

Itformsapartofthewayinwhichweconductbusi-ness on a daily basis, which is based upon GWK’s value system. It is a sustainable principle atGWK tobuild a sustainablebusiness entity, taking into consi- derationeconomicprinciples,aswellasthe interestsof the communities and the natural surroundings inwhichtheyfunction.

When a business enterprise belongs to producers,GWKactsasanextensionofsuchenterprisesinordertocreate sustainablewealth forparticipating share-holders and other interested parties. GWK does its utmost to retaingenerationsof successfulproducersaspartofagriculture.

GWK Value System

CorperateGovernanceisentrenchedinGWK’svaluesystem,whichentailsthefollowing:

•Clientorientation•Teamfocus•Integrity•Humandignity

•Transparency•Excellence•Jointownership•Socialresponsibility

Board of Directors

GWKhasaunitaryBoardofDirectors,comprising 14 independent, non- executive directors, and two executive directors. During the period underreview,thereweretwoexecutive directorsontheBoardofDirectors.

Twelve directors are nominated in regional context by shareholdersand electedat theAnnualGeneral Meeting.

TheBoardofDirectorsiseffectivelyincontrolofthecompanyanditsMan-agement is involved in all decisionsthatareessentialforthecompanyinordertoensureitssustainability.

There is a formal Directors’ Policythat clearly explains the frameworkin which directors must function. Capacityandpowers, in termsof aformalDelegationofCapacitymatrix, are delegated to Management bytheBoardofDirectors.

Material powers are reserved for decision-making by the Board of Directors.Itistheresponsibilityofthe


Board of Directors Committees

The Board of Directors has four sub-committees toassist them in fulfilling their responsibilities. The com-mittees mentioned below play an important roleto ensure that the principles of good Corporative Governanceareadheredto;monitoringcontrols;andthatGWKactslikeagoodandresponsiblecorporate citizeninthecommunitiesinwhichitfunctions.

Special responsibilities were delegated to the com-mitteeswithclearlyspecifiedframesofreference.No executive director acts as Chairman of any of theBoardofDirectorsCommitteesmentionedbelow.Allthe Board of Directors Committees have access toexternalexpertadviceand thecostsarecarriedbyGWK.

Audit Committee

TheAuditCommittee plays an important role in themonitoring system of internal controls. ThemembersoftheAuditCommitteehavesufficientfinancialandcommercial skills to successfully execute their dutiesandresponsibilities.

The report by the Audit Committee for the past financialyearformspartoftheAnnualReport.

Risk Committee

Thecompany’sRiskCommitteecomprises four inde-pendentnon-executivedirectors.Theexecutivedirec-tors;generalmanagers; theExecutiveManager:RiskManagementandtheManager:InternalAuditattendmeetingsbyinvitation.TheCommitteemeetsatleastfourtimesayear.

The Risk Committee has a formal charter that hasbeenapprovedbytheGWKBoardofDirectors. TheCommitteeisresponsibleforreviewingthecompany’srisk philosophy, strategies and policies, as well as toevaluatetheeffectivenessoftheGWK’sriskmanage-mentplan.

During the period under review, the focus was onre-evaluatingGWK’sriskanalysismethodologyandriskreportingandtobringtheseinlinewithbestpracticeinriskmanagement.

Remuneration Committee

The Remuneration Committee comprises four in-dependent, non-executive directors, as well as theManaging Director. The Financial Director attendsthemeetingsbyinvitation.TheCommitteemettwiceduringthepastfinancialyear.

TheRemunerationCommittee’sobjectiveis,interalia,toensurethatGWK’sremunerationpracticesrewardviable commercial practices in order to retain ourmosttalentedperformers.

Social andEthics Committee

The Social and Ethics Committeecomprises four independent, non- executive directors, the Managing DirectorandtheFinancialDirector.

The Social and Ethics Committeemonitors the GWKGroup’s activitiesin the communities inwhich it func-tions and evaluates GWK’s role ascorporate citizen, as well as GWK’sBEEstatus.

Corporate Citizenship

GWKregardsitselfasafullandequalmemberofthecommunitiesinwhichitsbusinessenterprisesoperateandisfullyawareofthecompany’srespon-sibilitiestowardsitsrole-players.


Meetings

Duringtheperiodunderreview,theAuditCommitteemetfourtimes,whichmeetingswerealsoattendedbyinvitation,bytheindependentexternalauditors;executivedirectors;GeneralManagement;theExecutiveManager:SecretariatandRiskManagement;aswellas theManager: Internal Audit. Personswhoattendmeetingsoninvitation,donothavevotingrights.

The Audit Committee has the opportunity to meetwith the independent external auditors; the Execu-tiveManager:RiskManagement; andtheManager InternalAudit,withoutanyothermanagementmem-bersbeingpresent.

Access to the Audit Committee

Both the independent external auditors and the internal auditors have unlimitedaccess to theAuditCommitteeandtheChairmanoftheAuditCommittee.

Statutory Duties

In adhering to the stipulations of the Act, the AuditCommittee:• confirmedtheappointmentofEnslins(Bethlehem) asindependentexternalauditorsandMrEBakker astheregisteredauditorresponsiblefortheaudit;• satisfiedthemselvesthattheexternalauditorswere independentfromthecompany;• agreedonthetermsofappointmentandthefees payablewiththeindependentexternalauditors; and

• confirmedthatithadnotreceived anycomplaint,neitherfromin sidenoroutsidethecompany, withregardtoaccountingpractice; theexternalandinternalauditof thecompany;thecontentsorau ditoftheannualfinancialstate- ments;oranyrelatedmatter.

The Audit Committee recommendsthat the shareholders approve the appointment of Enslins (Bethlehem)Inc. asGWK’s independent externalauditors for theyearending31May2016,andMrEBakkerastheregisteredauditor, responsible for the audit.

Annual Financial Statements

After thorough consideration of thefinancial statements, included in theAnnualReport,anacceptable levelof disclosureanda reasonable sub-mission were adhered to, the AuditCommittee recommended to theBoard of Directors that the annual financialstatementsbeapproved.

Frans LubbeChairmanoftheAuditCommittee27August2015

Report by the Audit CommitteeThisreportincorporatestherequirementsregardingthestatutoryresponsibilitiesofAuditCommittees,ascontainedinsection94oftheCompaniesAct,Act71of2008(theAct).

Composition of theAudit Committee

The Audit Committee comprises four independentnon-executive directors, in accordance with theguidelinesoftheKing IIIReport. IntheopinionoftheCommittee, the members have the necessary skillsandexperiencetofulfiltheirdutiesandresponsibilitiesintermsoftheAct.

During the year under review, the following peopleservedontheAuditCommittee:

Audit CommitteeMember’s QualificationFJLubbe B.Compt(Hons), CA(SA),CFP®FJLawrence B.Sc(Hons) AgriculturalEconomicsTCJMarais B.Com(Hons),MBAJHCoetzee B.Sc(Agriculture) (until5November2014)FGJWiid B.Sc(Agriculture) (from5November2014)

Responsibilities of the Audit Committee

The Audit Committee has a charter, which was ap-provedby the BoardofDirectors. ThecharterdetailsthedutiesresponsibilitiesanddelegatedpowersoftheCommittee.

TheCommitteealsoservesastheAuditCommitteeofGWK’ssubsidiaries.

TheAuditCommittee’sgeneral responsibilitiesincludethefollowing:

• Itservesasalinkbetweentheexternal auditorsandtheBoardofDirectors.• ItadvisestheBoardofDirectorswhether therearesufficientinternalandfinancial controlsinplace.• Thereviewandapprovalofthe annualinternalauditplan.• Thereviewandapprovalofthe annualexternalauditplan.• Thereviewofinternalauditreports,aswell asmanagementcommentonthese.• Thereviewofexternalauditreports,aswell asmanagementcommentonthese.• Determiningtheefficiencyofboththe externalandinternalauditors.• Determiningapolicy,forapproval byboththeexternalandinternal auditors,pertainingtotheprovision ofnon-auditservicesbytheexternal directors.• Makearecommendationtothe shareholdersforapproval,regarding theappointmentofindependent externalauditors,aswellastheapproval oftheexternalauditors’remuneration.• Ensurethatallmaterialfinancialriskshave beenidentifiedandthattheyarebeing managed.


pendentonit.

Staff Development

StaffdevelopmentatGWK focusesoncompetencemanagement; various forms of learnerships and internships; focused training; and development pro-grammesfor leaders. Intotal,R4,72millionwasspentontrainingduringtheperiodunderreview.Duringthistime, 1 398 training interventions took place. GWK’smanagement and staff are continuously involved indeterminingeducational,traininganddevelopmental needs,aswellaswiththeimplementationandmoni-toringofaccompanyingskillsplans.

Special attention is paid to groupswho, due to his-torical reasons,maybedisadvantaged.Major focusis placed on black economic empowerment (BEE)in the implementation of training. During the period under review, staff members from the designatedgroups were identified for participation in various learner- and internships that could be finished. Year-on-yeargrowthisensuredthroughthisinitiative.

Various courses (including ABET and PIVOTAL pro-grammes)arepresentedtogrowthe generalwork-force’s skills and thus, capacity. A targeted leader-shipdevelopmentprogrammewas implemented.Aspartofthis,sixemployeesparticipatedatNorth-WestUniversity’sManagementSchool in theFundamentalManagement Development Programme and theyachieveda100%passrate.Thesestaffmemberscon-stitutethesourceforGWK’smanagementpipeline.

ThreeofGWK’sexecutivemanagersareenrolled forthe University of Stellenbosch’s Executive Manage-mentProgramme.Withregardtocompetencyman-agementGWKawarded16 internaland32externalbursariesduringtheperiodunderreview.

Remuneration

AtGWK,remunerationisreviewedannuallyontheba-sisofindividualaswellascompanyperformance,whiletaking comparisons formarket relatedness into con-sideration.

GWK’s Remuneration Committeecomprises four non-executive direc-tors,theManagingDirector,andtheExecutiveManager:HumanCapital.TheirfocusistoensurethatGWKstaffmembers, as is currently the case,areremuneratedinamarket-relatedway; that remuneration scales arecontinuously compared to national standards; and to attract talented employees. GWK also promotesachievementbyrewardingentrepre-neurialbehaviour.

Performance Management

At GWK, the objective of perfor-mance management is to optimiseevery employee’s outputs in termsofquality,quantityandproductivity. In this way we ensure that objec-tives are consistently, effectivelyandpurposefullyachievedand thattheperformanceofevery individualand that of the company improvesin general. The GWK performancemanagement system is guided bya balanced score-card approach. Performancescoresareusedfortheformulation of individual develop-mentplans,aswellasforthecalcula-tionofperformance-linked remuner-ation.

Collective Bargaining

GWKisoneofsevenorganisationsinthe grain industry and forms part ofthecollectiveagreementoftheBar-gainingCouncilfortheGrainIndustryof South Africa. GWK’s policy andprocesseswithregardtolabourrela-tions, also reflect thecharacterandspiritoftheLabourRelationsAct.

As an employer of choice, the relationship with ouremployees remains one of GWK’s most important areasof focusbecausewebelieve thatourpeoplearethecompany’ssuccess.Wecontinuouslystrivetobethekindofemployerwhereemployees:

•dotheirbestwork;•canmakeauniquecontribution;•feelrespectedasahumanbeing;•wanttogrowanddevelop;•aretrusted;•formpartofdecision-makingthatconcernsthem;and •areamongstfriends.

Ourhumancapitalstrategy is tobeanemployer forthebesttalentandtopromoteacultureoflearning,in which employees are empowered to successfullymeetclientexpectations.

Our Staff Complement

Our leadership philosophy

AtGWK,entrepreneurshipformspartof our leadership philosophy. We therefore expect our leaders to ac- ceptaccountabilityforthingstohap-penandtostayfocusedonthefuturethatwedeliberatelycreate.However, mostimportantofall,arethepartner-ships that we are building: With ourshareholders,ourclients,ourstaffandall whose lives are touched by theworkthatwedo.

Our culture

It ischaracteristicofus tomove for-wardtogether.AsOne.Thisishowwewin as the strongest producer busi-nessinSouthAfrica.

We focus on performance. We arepassionate, we take risks, we com-pete hard but fair. We cooperateandallowourvaluestoleadus.

Wedeliverqualitywork.Theheartofeverythingthatwedoisseatedinthestandards that we set for ourselves.Higher standards force us to workharderandbetter.

We respect cooperation. Coopera-tionwithourteamandwithourpart-ners.Werepresentlinksinachain.Weare connected. We care, we listenandweareaccessible.Weactwithintegrity. We are dependable andprofessional.Whenwemakepromis-es,wekeepthem.Therefore,wealsomadeapromise to act responsiblywhereourenvironmentisconcerned.We respect nature as the source oflife,aswellasthepeoplewhoarede-

Remuneration and Human Capital

Peopleinservice:

Permanent Seasonal

2014 20142015 2015

1 78

3

268

1 70

2

457


Report by theSocial and Ethics Committee

The Social and EthicsCommitteewas established inordertoassisttheGWKBoardofDirectorsinensuringthattheGWKGroupfunctionsasgoodcorporatecit-izens.TheCommitteealsoexecutesthestatutoryfunc-tions,asrequiredintermsoftheCompaniesAct,Act71of2008(asamended).

This report is submitted in order to indicate how theCommittee fulfilled itsduties in termsof theCompa-niesAct,aswellasanyadditionaldutiesthattheGWKBoardofDirectorshaddelegatedtotheCommittee.

Composition of theSocial and Ethics Committee

The Committee comprises the Company Secretary,four independent non-executive directors and twoexecutive directors. The Company Secretary; the ExecutiveManager:HumanCapital;andtheExecu-tiveManager:CorporateMarketingattendmeetingsbyinvitationanddonothaveanyvotingrights.

ThefollowingpersonsserveontheCommittee:

Audit CommitteeMember Executive/Non-executiveFJLawrence(Chairman) Non-executive JGJacobs Non-executiveJHCoetzee Non-executive*TCJMarais Non-executivePWSpies ExecutiveJJKlopper Executive

*From5November2014

Responsibilities of theSocial and Ethics Committee

TheCommitteehasaCharterthatwasapprovedbytheBoardofDirectors,inwhichtheduties,responsibil-itiesanddelegatedcompetenciesoftheCommitteeareexplained.

TheCommitteealso servesas the SocialandEthicsCommitteeofthesubsidiariesintheGWKGroup.

TheCommittee’s functions include the following,asstipulatedbytheCompaniesActandtheapprovedCharter:

The monitoring of the GWK Group’s activities, with regard to social and economic development, with a specific reference to the Group’s performance in terms of: • thepromotionofgoodcorporatecitizenshipof theGWKGroup;• adheringtoenvironmental,healthandsafetynorms,whichincludetheimpactoftheGWK Group’sproductsandservices;• clientrelationships,whichincludeadvertise- ments,publicrelationsandadheringtocon- sumerlegislation;and• thepromotionoftheGWKGroup’sBEEstatus.

Access to Information

TheCommitteehasfullaccessto:

• internalauditreports;• reportsfromtheexternalauditors;

Thepositiveinfluenceofagricultureandofthepeoplewhoareinvolvedintheindustry,reachesmuchfurtherthanthemeredailyprovisionoftotheworld.

Agricultureformspartofthesustainabilityandstabilityof the communities where food is being producedand sustains lifewherever food isbeingmadeavail-abletotheworld.ThatiswhyitisimportantforGWKtosupportthepeopleinvolvedinagricultureandtoassisttomake itpossible for them todo theirword. In thiswayagricultureensuresthesustainabilityofthecom-munitieswhereweliveandwork.

Wedon’tregardoursocialinvolvementasanobliga-tion.Wedo itbecausebothweandour sharehold-erscarefortheenvironment.Weactresponsibly.We respectnatureasthesourceoflife,aswellasthepeo-plewhoaredependentonit.

Itisimportanttous,aswellastoourshareholders,thatourcompanyisrepresentativeofthecommunity,be-causeitistherightthingtodo.

Therefore,wearesuccessfullyinvolvedintheestablish-mentofemergingproducersascommercialfarmers.Togetherwithourshareholdersweimplementedsolu-tionsthathavealreadycontributedtoemergingfarm-ers, in somecases,beingestablishedascommercialfarmersand inothercasesbeing lessdependantoncontinued support.More than800people, includingemerging producers and their dependants annuallybenefit from projects in which GWK, in conjunctionwith partners, such as the Northern Cape Depart-mentofAgriculture,viamentorships, is involvedwith accreditedtraining;farmplanning;thedevelopmentofsustainablebusinessplans;andagriculturalsupport.

Our focus is on improved quality oflifeandinvestinginorganisationsthataredeartoourcommunities,aswellas themaintenanceofcrucial infra-structure in rural areas where uplift-ment is reallyessential,be itonly forbasicneeds.

We also realise that communitiesare healthywhen real care is takenof people who really cannot takecare of themselves – especially ourchildren and the elderly. Therefore,we also involve business partners toincrease the impactofprojects thatare focused on positive change.During thenext financial year, theseprojectswillbeexpandedfurtherandfocused,notonlyonactivelyhelpingtodevelop talent for the future,butalso to find ways to promote andexpand the talent that isalready in-volvedinagriculture.

GWKalsocontinuestoreinvest inor-ganised agricultural structures, be-causethesestructuresare importantto help ensure sustainability for ourshareholders.

Our company endorses the princi-plesascontained in theAgriculturalCharter forBlackEconomicEmpow-ermentandBEEisregardedasbeingofstrategicimportance.

Social Responsibility


To the shareholders of GWK Limited

The accompanying Abridged Financial Statements,which comprise the consolidated and individualAbridgedStatementofFinancialPositionason31May2015,theconsolidatedandindividualAbridgedState-mentsofComprehensive Income,changes inequity and cash flows for the year ended on that date, a summaryofsignificantaccountingpoliciesandother explanatory notes were compiled from information obtained from the audited Group and company financialstatementsofGWKLimitedfortheyearended 31May2015. Inour reportdated9 September 2015wehaveexpressedanunqualifiedopinioninrespectof thosefinancial statements. TheabridgedfinancialstatementsdonotcontainallthedisclosuresrequiredintermsoftheSouthAfricanStatementsofGenerallyAcceptedAccountingPracticeandoftheCompanies Act.Thereadingoftheabridgedfinancialstatementsthereforeisnotthesameastoreadtheauditedfinancial statementsofGWKLimited.

Management’s responsibility forFinancial Statements

Management is responsible for the preparation ofthese abridged financial statements based on the audited financial statements, as permitted in theCompaniesActofSouthAfrica.

Auditor’s responsibility

It isourresponsibilitytoexpressanopinionaboutthe abridgedfinancialstatementsonthegroundsofpro-cedurescarriedoutintermsofInternationalStandards

on Auditing, specifically ISA 810, “Engagements to reportonSummaryFinancialStatements”.

Opinion

In our opinion, these abridged financial statements areinallsignificantrespectsareasonablesummaryof theauditedGroupandcompanyfinancialstatements ofGWKLimited.

Other reports included

Aspartofourauditofthefinancialstatementsfortheyear ended 31 May 2015, we included the other statutory reports, as well as additional information included in this Annual Report and it was read to determinewhethertherearesubstantialdiscrepancies betweenthereportsandtheauditedfinancialstate-ments.Thesereportsaretheresponsibilityofthevari-ouswriters.Basedonourreadingofthesereportsandadditional information we have not identified any material inconsistencies with the audited financialstatements.Wehavenotaudited these reportsand informationandaccordinglydonotexpressanopinion thereon.

Enslins Bethlehem IncorporatedRegisteredAuditors9September20153Pres.BoshoffStreet,Bethlehem|9700

Report of the independent Auditorsabout the Abridged Financial Statement

• safetyreportsandminutes;• reportswithregardtoGWK’shumancapital,with specific reference to training and disciplinary actions;• anyotherinformationthattheCommitteeneeds withinreasonfortheexecutionofitsduties.

Material Actions

GWK’sactivities,withregardtosocialandeconomic development, are reported in detail in the Social ResponsibilityReport.

At present, GWK participates in Deloitte & Touch’s Employer of Choice Survey. The results will enableGWK’s Management to receive independent feed-back on employee morale and disposition towardsGWKasanemployer.

The online reporting of fraud on the GWK websiteprovides bothGWKemployers and clientswith theopportunitytoreportfraudanonymouslywithoutfearofintimidation.

TheimprovementinGWK’sscore-cardisofcardinalimportance for sustainable business. A BEE score-card improvement strategy has been acceptedandisbeingimplementedinordertoaccomplishan optimalscoreforGWK.

OnbehalfoftheSocialandEthicsCommittee

Frank LawrenceChairmanoftheSocialandEthicsCommittee,9September2015

Report by theSocial and Ethics Committee (continued)


Reportbythe Managing Director


cropsevenfurther.Wealsoremainfocusedongrow-ing our already substantial national market share inmutton.ThiswillfurtherstrengthenoursignificanceinthevaluechainformeatinSouthAfricatothebenefitofourshareholders.

Ourpartnershipapproachwill,inthemeantime,bringabout benefits of scale in the new financial year inordertoensurethesustainabilityofdeliveringqualityinputsatmarket-relatedpricestoproducers.

GWK’s success during the past year was broughtaboutbygoodleadership,whichincludesourBoardofDirectorsandGeneralManagement.Weareespe-ciallyprivilegedwithregardtothetalentofpeopleinthecompany.Ourability toattract the rightpeoplefortherightposisions,willbestrengthenedfurtherwithsharpfocusonourcompanycultureandstatusasanemployerofchoiceinthenewfinancialyear.

Grain Products

The past summer seasonwas characterised by veryhighpricesonthelocalmarket,duetoadecreaseinmaizeproduction.Maizepricestradedatimportcapa- city,due to thedrought thathamperedproduction.Thisyear,themaizecroponceagaincameinmuchearlierthanusual,whichresultedinfacilitiesperform-ing well in 2015. GWK producers had an averagewheatproductionseason.

Local production continue to decrease, due to thecompetitiveness of other crops, such as soy beans.The largest part of local consumption is still being imported.GWK’sproductionwasofveryhighqualityandthebiggestpercentageofB1wheatinourhistory wasreceived.GWKremainsfocusedonenablingourshareholders to produce in a sustainable manner.Thecultivationofnichemarketgrainproductsenjoys majorattentionandgoodprogressisbeingmadewithcultivarimprovement.

Projectstoexpandsilocapacity inPrieskaandMod-derrivierwerecompletedsuccessfully.Twonewbun-kerswerebuiltatHopetownandJanKempdorpandworkhasstartedonbuildinganewsilobagdepotatStoffelshoeknearHopetown.

OntheconsumersideoftheGrainProductsDivision,Westra’snameisbeingchangedtoGWKFarmGoodstofitintoGKW’soverallbrandstrategyandtounlockmaximummarketingvalue.

Constructionworkon thenewwheatmill,aswellasthebiscuitandpastafactoriesatModderrivieriscom-pleted and production starts in October 2015. Thetrademarkforournewproducts,aswellasourprod-uctrange,willbelaunchedinFebruary2016.Thestrat-egy is focusedonorigin,aswellas themarketingoflocalproducers’productsintheconsumermarket.

ThemaizemillatChristianaperformedexceptionallywellduring thepastyear,which resulted ina recordyearforthebusiness.Automationofthepackingplantatthemillwascompleted,newmarketchannelswereopened and continuous product development is beingdonetoexpandtheproductrange.

Specialist Products

GWK Oilseeds repeated the previous year’s per-formance and again showed strong growth in the directexportsofpeanuts.Arecordintakeofpeanutsin 2015 resulted inourdrying facilitiesbeingutilisedeffectively.Inthemeantime,GWKstrivestoimproveseedquality,yieldandgradingviaextensivetrialsinSouthAfrica, in conjunctionwith international seedgrowers.

GWK Potatoes’ performance can be attributed toeffective production, early identification of marketopportunitiesandeffectivecostmanagement. Thelargervolumeof seedpotatoeshandled increasedmovementinourcoldroomandalsocontributedtoincreasedrevenue.Themarketingteamrecognisedan opportunity in the market for larger seed po-tatoes, which were produced and traded at theirownriskforadditionalvalue.Theexpansionofexter-nal growers in other regionsalsocontributed toan increase in seedpotatoesand tradeopportunities.ThedemandforLanormaseedincreasedmaterially and hard work is being done to produce enoughseed-potatoestomeetdemand.

Lucerneagainshowedgoodgrowthandthemarket andtradinghaslargelystabilised.Exportsofapproxi- mately30000tonandthedrought intheSouthern, WesternandNorthernCapestimulatedthemarket.Theweakeningof theRandandastrongemphasison quality management had a positive effect onprofits.ThedevelopmentofexportmarketsbyGWKresulted in a revolution in the alfalfa industry, withlargermarketsforourshareholders.

SAFeedPhosphates,whichisGWK’sfeedphosphateand lickmanufacturer, showed a smaller net profitfortheperiodunderreview,comparedtotheprofitachievedinthepreviousfinancialyear.Exceedingly high increases in phosphoric acid prices occurred recently, which had an effect on the market andprofitability.Significantinvestmentsintheproductionplantweremadeinthepastfinancialyearanditwillbecompleted in thenew financial year,whichwillresultingreatercost-effectivenessandqualityprod-ucts.

In recent years, GWK Cotton saw unprecedentedgrowth in the cultivation of cotton and our cottonginneryatModderrivierwilloperateclosetocapacity fortheveryfirsttime.GWKalsoactedasthirdpartyginnerytoutilise logisticalbenefitsandunlockalter-nativemarketingchannels.

Our ginning percentage remains better than the industrystandard,whileconsiderableefficiencywasunlockedatthefacility.Wealsomanagedtoutilisealternativehedgingopportunitiesandwassuccessfulinestablishingcustomisedfinancing facilities for theunit.

Ourcontractingbusinesswasanexcellentfacilitatorfor thegrowth inalfalfaexports, thanks toour spe-cialistbalingequipment.Theunitwassuccessfulwithproductionandstrawservices.

GWK’suniquepositioningenabledustotakethebig-gestsingleleapever inthecompany’shistoryinnett profit and performance outside primary agriculture.A strong entrepreneurial approach, successful geo-graphic expansion and higher outputs by our pro- ducersallowedGWKtoexceeditsobjectives.

Volatility in the world economy and the drought inour country had a limited influence on GWK andthedemandforourproductsandservices.Thedrive towardsnewopportunitiesandmarketslargelyhedgedGWKagainsttheseelements.Thegrowthinnettprofit was also engineered with effiencies with which wecouldprevent internal inflation. This isbackedupbygoodwork,inconjunctionwithourfinancialpartners,toensurenewalternativesforsustainablefinancingofthecompany’sgrowth.

ThesaleofGWK’sdebtorsbooktotheLandBankwassuccessfullyfinalised.Thetransactionwillhaveafurtherpositiveinfluenceonourgrowthpotentialandenableustoofferourshareholdersnew,innovativeproducts.Wearefunctioningwell inaproducermarketthatisgettingmoresophisticatedwithproducerswhocon-solidateataquickerpace.Ourdiverseofferingandourfocusonpartnerships, inordertomakespecialistservicesareality,areinlinewiththis.

Agriculture in SouthAfrica remains stable. Theworldpopulationand themiddle class in SouthAfricaaregrowing.Thedemandforagriculturalproductsthere-forecontinuestogrow,andinSouthAfricawehaveknowledgeable farmers, good soil, the right technology,therightinfrastructureandtheabilitytoplancorrectly.

Expansion, the development of scale and further involvementwithmorerelatedimportantforaneven strongerdrive forchanneldevelopment, inorder to continuously accomplish increasingly improvedmarkets for agricultural products. Our service andperformance-driven orientation will continue to intensify, in order to further strengthen the bondbetween GWK and South African producers.

The implementation of our new brand positioning inthenewfinancialyearwillstrengthenthisallianceeven further and will also position us correctly with regardtoourconsumerfocusandcompetitivenessininternationalmarkets.

Thefirsttruefarmers’brandforconsumergoodswithoriginonthefarm,formspartofourbrandstrategy.ItisagreatpositionforGWKandourproducersontheeveof taking thenext stepcloser to theconsumermarketwiththelaunchofourwheatmill,biscuitfac-toryandpastafactoryatModderrivier.

GWKiswellpositionedwithGWKFarmFoodsinreali-tyofwhichtheoriginsoffoodbecomingincreasinglyimportanttotheconsumer.Goodchoices,supportedby the right strategyandbrilliantexecutionwill sup-portourmainfocusongrowthinfuture.ThisincludesGWKFarmFoodsandfurtherdevelopmentswithre-gardtograin,meat,oilseeds,pecannutsandcotton.

Goodworkhasalreadybeendonetoensurethatawell-designedstrategyandimplementationplanarein placeforeachofthedivisionsandproducts.Itformspartofourstrategytopositionourselvesasaleaderinthe processingandtradingofproducts suchaspe-cannuts,inordertoenlargeourfocusonlong-term

ReportbytheManaging Director


Specificbrancheswereclosedand the turnover lostas a result, has been made up during the year bythewholesaledistributionbranches inGautengand KwaZulu-Natal.Anexclusiveagreementwassecuredfor the distribution of a specialised dog food rangefrom the Netherlands. This range will be distributedfrom2016.Inventorymanagementenjoyshighprioritytoachievebetter stock turnover.whilediscountsandrebateswerenegotiatedwithstrategicsuppliers.

Insuranceagain showedgoodgrowth year-on-year.Our life insurance and investment products arewellestablished and performed better than budgeted for.NewopportunitiesarebeinginvestigatedtogiveGWK Insurance a national footprint. A branch was established inKwaZulu-Nataland italreadymadeapositivecontributiontotheresultsinthefirstyear.

Flotank,ourlogisticsbroker,madeapositivecontribu-tion to theGroup’s results. Thedevelopmentofnewsoftware for service improvement was started andwill be fully implemented by the second quarter ofthe new year. Several new opportunities are beingexplored.Therailbusinessagainperformedverywelland the service is locallydelivered tooutside institu-tions,aswellasforexportsinAfrica.

DirectInputsbusinessexperiencedanexcellentyear.GrowthtookplaceinnewdevelopmentsinCradockand the North West Province. In the new year, theEastern Free State office will also be placed underthe management of this business. The business is asourceof informationforGWKandservicedeliveryis improved by the timely awareness of customers’needs.

TheperiodunderreviewshowedthattheexpansionsinKwaZulu-Natalwerejustified–withexcellentresultsbe-ingobtained.Thisregionalfocusalsobringsotherop-portunitiestotheGroup,includingthepotato,alfalfaandfertilisermarket.Theprospectsarepromisingandthepossibilityoffurtherexpansioninthisregionisbeing investigated.

Seedprocessingandmarketingmadeapositivecon-tributiontothedivision.Reducedwheatplantingisaconcern for the business and we therefore enteredintoanagreementwithZaadtodevelopnewoppor-tunitiesfortheprocessingofotherseed.

The businesses for precision farming and productionresearch distinguish GWK from any other agricultur-al business. Thegoal is to remain at the forefront ofthelatestfarmingpracticesandmethods.Participat-ingproducersgainvalue through seasonalplanningdiscussions where other divisions of the Group areinvolved toadd value. The focus in the new year isaimed at the cultivation practices of pecan nuts inparticular,andexpertsareinvolvedtoassistproducers toobtainoptimisedresults.

SidiParanifacedachallengingyearandthefertiliser industry in South Africa is facing many challenges. The supply channel remains the single biggest challenge and therefore Sidi Parani identified a partnertoaddressthisrisk.

Negotiationsareatanadvanced stage,wherean international companywill gain aminority stake inSidiParani to unlock benefits of scale for both parties. FertiliserisresponsibleforthelargestinputcostsfortheproducerandSidiParani iscommittedtodeliveringqualityproductsatcompetitiveprices.

The business for Emerging Producers started a suc-cessfullucerneprojectinTaungincollaborationwiththeLandBankandadditionalhectareswillbeestab-lishedinthecomingyears.Trainingisrunningsmoothly and further expansion is also investigated to put afarmmanagertrainingprogrammeinplace.

Corporate Services

The Group’s debtors grew with 37%, year-on-year,ofwhich23%was theproducers’ share. It indicatesthe priority given to the financing of shareholders.This was achieved without a negative impact on arrears that decreased by 2.58%. Due to the con-tinuedgrowth in theGroup’sdiversity, the focusoninformation systems and robust financial processesbecameincreasinglyimportant.

In closing

Wearegratefultoourclients,shareholdersandbusi-ness partners, who all contribute to the success ofGWK.Webelieveourstaffisthedrivingforcebehindthecontinuing successof thecompany. ThankyoutotheGWKteamforthededicationandpassionthateveryonedisplaysdaily.ThanksyoutotheBoardofDirectors for their guidance and insight, which areavailabletothemanagementteam.TotheHeavenly Father,allthegloryfortheblessingsweexperienceinourcompanyeveryday.

Pieter SpiesManagingDirector9September2015

Weexperienced somechallengeswithpeanutsandcottonmachinery,whichplacedourharvestservicesunder pressure. Alternative solutions could howeverbe implementedwhileworking closelywith our pro-ducers.

GWKPecanNutscompletedanewpecannutplantinDouglastobeabletohandlethegrowthinthein- dustry. The business managed to grow its market share and delivered good financial results, despite the competitive market conditions and the cost of the factory expansion. The industry focused on expanding agricultural services and, with the help of GWK’s precision farming team, also focused on delivering an irrigation scheduling service andmoreextensiveagriculturalservices.

GWK Wine repeated the previous two years’ per-formance and again showed a good profit for the period under review. Landzicht Wines also excelledbywinninga silvermedal for a redwineat theOld Mutual Trophy Wine Show. And our red muscadelwon a goldmedal at the SAMuscadel Associationawards. This yearwealsogrew the intake toalmost7000ton.GWKGlobalMarketsperformedextremelywell.Growthwasachieved inthevolumesofalfalfa,peanuts,pecannutsandcottonthatwereexported.

Variousotherproductswerealsoimportedandexpor- tedsuccessfully.

Ourbusinessandmarket share in theWesternCapeindicatedstronggrowth.

Auctions, Meat and Supermarkets

The ongoing focus ofGWKAuctions ongeographic expansionandincreasedprofitabilityonceagainpaidoffwithexcellentfinancialresults.Marketshareforthebusinesswasfurther increasedandarecordnumberof animals were handled. The business will expandtoothergeographicareas.Furtherprofitgrowthwas realised,whichonceagainplaces thebusiness in apositiontodeclarerebatestomeatproducers.

ItwasparticularlythecattlesectionandTri-StarCustomFeeders thatcontributed to thegoodperformance,whilethesheepsectionsufferedalossduetolowhidepricesduringthefirstsixmonthsofthefinancialyear.Cattleandsheepslaughteringnumbersshowedrealgrowthand the feedlot strategywas successful. Thesheep feedlot strategywillcontinue tobedeployedduringthenewfinancialyear.Tri-Star’sfeedlotswillalsobeexpandedinthenewfinancialyeartohousemoreanimals, with the main purpose of ensuring furtherthroughputforthecattlesection.

GWKPropertiesshowedfurthergrowthandsurpassedprofit goals. The business activities were successfullyexpandedtotheFreeStateandWesternCape.

Trade

GWKRetailachievedgoodfinancialresults.OurretailbranchesinMarydaleandGriquatownarenowope-

rated as franchises, with good results. A retailbranch was also established in Magogong. The KimberleybranchwasupgradedandadeliandJohnDeereclothingsectionwerealsoestablished.Duringthefinancialyear,theNashuaMobilebrancheswereclosedafterthenationalbusinesshadcloseditsdoors.

Financialchallengesinthefuelindustrybroughtmanyopportunities toGWKduring thepast year. The netdecreaseofR1,83perlitrefordieselduringthefinan-cial year forced GWK to optimally utilise the avail-abletankcapacity.Thestoragefacilitiessucceededvia focusedmanagement and good business rela-tionships toconclude theyear4.6%abovebudget. Regardless of decreasing fuel prices, the service stationsinPrieskaandDouglasmanagedtoexceedthegoalfortheyearby14.3%.Productofferingsintheconveniencestoresand,especiallyfromthekitchen, receivedalotofattentionandGWKislookingforwardto offering new buying experiences to customers inthecomingyears.LookoutforthenewEngenTruckStop just outside Upington that is emerging on theGroblershooproad!

TheirrigationshopatDouglasperformedwellinitsfirstfullyear.WeacquiredtheValleyagencyinCradockandweestablishedatradeactivityandmovedtheofficestothesite.

Mechanisationagainperformedexcellently,despiterisingpricesofequipmentmorecompetitorsenteringinourregion.Abigincreaseinthesaleoftractors,com-binesanddiverseimplementswereachieved,whichwasbackedbythenewJohnDeere6MSeriestractors.GWK’smarketshare,measuredinunitsoftractorssold, increasedby70%attheendofthefinancialyear.Inthepastyear,GWKMechanisationacquiredapower generator agency, New Way, which can providegeneratorsfrom20KVAto2200KVA,andwhichwilljoin theLemken implementsandTaillift forkliftagen-ciesthatarealreadyinourstable.UpgradingofourfacilitiesatLuckhoffandHopetownwerecompletedtoensurethatallequipmentarehousedunderroof.Weplantoexpandthisinthecomingyeartotheoth-ermechanisationpremises.

Equip (integrated IT system)was implementedwiththe focuson stockcontroland interactivecommu-nication between agencies and John Deere SA,backedbytheRTKprojectthatcanprovideourcus-tomerswithinouragencyagreementwith“GPS”AMS(managementsystem)networkforprecisionfarmingpurposes.

GWKTyresproducedgoodresults.WeplantoenlargethisbusinessatModderriviertobegearedforthein-creaseinheavyvehicletrafficatthenewwheatmillandbiscuitandpastafactories.

Primary Production

Duringtheperiodunderreview,thedivisionfocusedon entering into partnerships to unlock benefits ofscaleinfuture.Structuralchangeswerealsomadetosomeofthebusinessesinthedivision.MVW,ourani-malhealthbusiness’s focuswasalignedtofocusonthewholesalemarketareaofveterinaryproducts.


Weexpectourleaderstoaccept

responsibilitytomakethingshappen.

-GWKLeadershipPhilosophy


TomMeintjesGrainProduction

JohannKlopperFinancialDirector

WimvanRooyenAuctions,MeatandSupermarkets

PieterBekkerPrimaryProduction

PieterSpiesManagingDirector

LlewellynBrooksSpecialistProducts

MarkduPlessisTrade

GWK General Management


Theindependentauditorsareresponsiblefortheinde-pendentauditoftheGWKGroup’sfullfinancialstate-mentsand to reporton it.An independentauditonthesefinancial statementswasdoneby theGroup’sindependentauditors.

Theauditors’ reporton theabridged financial state-mentsispresentedonpage23.

Thefinancialstatementsandabridgedfinancialstate-mentswereapprovedbytheBoardon9September2015andsignedonitsbehalfby:

Certificate fromthe Company Secretary

InmycapacityasCompanySecretary, I confirm under the Companies Act2008, that all returns as required hasbeen submitted to the company fortheyearended31May2015atCIPC,andthatsuchreturnsaretrue,correctanduptodate.

John BellDouglas9September2015

Frank LawrenceChairman

Johann KlopperFinancialDirectorDouglas9September2015

Director’s responsibilityand approval

ThedirectorsarerequiredintermsoftheCompanies Act 71 of 2008 to maintain adequate accounting recordsandareresponsibleforthecontentandinteg-rity of the financial statements and related financial informationincludedinthisreport.Itistheirresponsibility toensure that the financial statements fairlypresentthestateofaffairsofthegroupasattheendofthe financialyearandtheresultsofitsoperationsandcashflows for the period then ended, in conformity with InternationalFinancialReportingStandards.Theexter-nalauditorsareengagedtoexpressanindependent opiniononthefinancialstatements.

Thefinancialstatementsarepreparedinaccordancewith International FinancialReportingStandardsand arebaseduponappropriateaccountingpoliciescon-sistently applied and supported by reasonable andprudentjudgementsandestimates.

The directors acknowledge that they are ultimately responsibleforthesystemofinternalfinancialcontrolestablishedbythegroupandplaceconsiderableim-portanceonmaintainingastrongcontrolenvironment. Toenablethedirectorstomeettheseresponsibilities,theboardsetsstandardsforinternalcontrolaimedatreducingtheriskoferrororlossinacosteffectiveman-ner. The standards include theproper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequatesegregationofduties toensureanacceptable levelof risk. These controls aremonitored throughout thegroupandallemployeesarerequiredtomaintainthehighestethicalstandardsinensuringthegroup’sbusi-ness isconductedinamannerthatinallreasonablecircumstancesisabovereproach.

The focusof riskmanagement in the groupisonidentifying,assessing,man-agingandmonitoringallknownformsofriskacrossthegroup.

While operating risk cannot be fully eliminated, thegroupendeavours to minimiseitbyensuringthatappropriate infrastructure, controls, systems andethical behaviour are applied andmanagedwithin predetermined pro-ceduresandconstraints.

Thedirectorsareoftheopinion,basedon the information and explanations given by management, that the systemofinternalcontrolprovidesrea-sonable assurance that the financial records may be relied on for thepreparation of the financial state-ments.However,anysystemofinternalfinancialcontrolcanprovideonlyrea-sonable,andnotabsolute,assuranceagainstmaterialmisstatementor loss.

The directors have reviewed thegroup’s cash flow forecast for theyear to31May2016and, in the lightof this review and the current finan-cialposition,theyaresatisfiedthatthegrouphasorhasaccesstoadequateresources to continue in operationalexistence for the foreseeable future.Group’sfinancialstatements,theyarebeingsupportedbytheGroup’sinde-pendentauditors.


5. Interest in subsidiaries, associates andjoint agreement

Details of material interests in subsidiary companies,associates and joint arrangements are presented inthe abridged consolidated financial statements innotes4,5and6.

6. Events after the reporting period

The directors are not aware of any material eventwhichoccurredafterthereportingdateanduptothedateofthisreport,exceptforthemattersassetoutinnote19.

7. Auditors

Enslins Bethlehem Incorporated continue in officeas auditors for the company and its subsidiaries for2015.

TCJ Marais

MC Maree

WG Mülke

KEE Ramongalo

PF Roux

IWJ Stadhouer

JC van der Ryst

FGJ Wiid

8. Secretary

TheCompanySecretaryisMr.JWBell(B.AccLLB).

Postal addressPOBox47Douglas8730

9. Liquidity and Solvency

The directors have performed the required liquidity and solvency tests requiredbytheCompaniesAct71of2008.

Business addressDeVilliersStreetDouglas8730

Directors’ ReportTheDirectorsherebypresenttheirreportontheGWKLimitedGroupfinancialstatementsended31May2015.

1. Main business and operations

The GWK Group is involved in agriculture-related industries and operates principally in South Africa.TherewasnosignificantchangeinthenatureoftheGroup’sbusinessfromthepreviousyear.

The consolidated financial statements have beenpreparedinaccordancewithInternationalReporting StandardsandtheprovisionsoftheCompaniesAct71 of 2008. The accounting policies have been consis-tentlyappliedsincethepreviousyear.

TheCompanyandGroup’soperatingresultsandstateofaffairsissetoutinfullintheattachedfinancialstate-mentsand inouropinionrequirenoadditionalcom-ment.

TheGroup’sprofitwasR52864801(2014:lossof(R13 604 462)) after tax of R 7,413,333 (2014: R193 643) is factoredin.

RebatesofR81768472andinterestofR36077560forthe year accrued to the shareholders. Of the total,10%waspaidtoshareholders,1%ofthegrossdiscountwillbeconvertedintopreferencesharesandthebal-ancewill be regardedas loansofwhich the repay-mentswill takeplaceondiscretionof theBoardbutalsosubjecttotheprovisionssetoutinnote12.

2. Authorised and issued share capital

56400ordinaryshareswereissuedatanominalvalue ofR1pershare.Atotalof7400shareswereredeemedduringtheyear.Preferencesharecapitalincreasedby817685 shares.A totalof 176824preference shares

preferenceshareswereredeemedduringtheyear.

3. Dividends

Nodividendsweredeclaredorpaidtotheshareholdersduringtheyear.

4. Directors

Thedirectorsinofficeatthedateofthisreportareasfollows:

Non-executive:

FJ Lawrence - Chairman

JG Jacobs - Vice-Chairman

JH Coetzee

JP du Plessis

WJ Human

FJ Lubbe

Executive:

PW Spies - Managing Director

JJ Klopper - Financial Director


Theabridgedauditedfinancialstatementsfor the year ended 31 May 2015AcopyofthecompletefinancialstatementscanbeobtainedfromthecompanySecretary,Mr.JuanKotze.

Tel.0532988200|[email protected]

TheabridgedfinancialstatementshavebeenpreparedunderthesupervisionofJJKlopperCA(SA),FinancialDirectoroftheGroup.


Group CompanyFigures in Rand Note(s) 2015 2014 2015 2014

Equity and Liabilities Equity

Equity Attributable to Equity Holders of Parent

Sharecapital 11 13,433,002 12,743,141 13,433,002 12,743,141

Reserves 53,107,820 36,449,520 49,273,963 37,460,566

Retainedincome 58,847,577 8,006,923 60,690,836 49,400,441

125,388,399 57,199,584 123,397,801 99,604,148

Non-controllinginterest 12,959,131 - - -

Loansfromshareholders 12 785,952,431 694,928,847 785,952,431 694,928,847

924,299,961 752,128,431 909,350,232 794,532,995

Liabilities Non-Current Liabilities

Loansfromgroupcompanies 7 - - 201,318 176,947

Otherfinancialliabilities 13 73,769,635 75,951,686 67,241,668 72,955,741

Retirementbenefitobligation 12,433,735 11,965,678 12,433,735 11,965,678

Deferredtax 41,835,418 31,058,409 17,881,616 12,374,056

128,038,788 118,975,773 97,758,337 97,472,422

Current Liabilities

Otherfinancialliabilities 13 1,262,669,728 1,429,229,774 1,078,241,928 1,289,129,786

Tradeandotherpayables 14 358,988,536 459,042,779 592,374,326 472,476,355

Levies 1,853,984 1,804,619 1,853,984 1,804,619

Unfinishedpoolspayable 6,142,126 2,523,739 6,142,126 2,523,739

Bankoverdraft 10 211,197,720 72,827,616 162,518,854 -

1,840,852,094 1,965,428,527 1,841,131,218 1,765,934,499

Total Liabilities 1,968,890,882 2,084,404,300 1,938,889,555 1,863,406,921

Total Equity and Liabilities 2,893,190,843 2,836,532,731 2,848,239,787 2,657,939,916

StatementofFinancial Position


AssetsNon-Current Assets

Property,plantandequipment 2 986,446,100 666,413,418 506,769,706 424,349,542

Biologicalassets 3 - 6,976,735 - -

Goodwill 52191035 52966409 17 361 604 17 470 00

Intangibleassets 5 5 - -

Investmentsinsubsidiaries 4 - - 66,003,021 66,003,021

Investmentsinjointventure 5 9,492,704 846,714 9,492,644 846,654

Investmentsinassociates 6 36,520,851 1 36,520,851 1

Loanstogroupcompanies 7 200,000 200,000 133,517,656 122,217,103

Otherfinancialassets 25,972,448 15,029,190 25,949,970 14,777,420

Deferredtax 63,235,967 38,118,890 30,805,939 31,084,897

1,174,059,110 780,551,362 826,421,391 676,748,638

Current Assets

Biologicalassets 3 34,707,137 16,806,393 - -

Inventories 8 1,158,312,536 780,221,290 937,789,747 564,209,306

Loanstogroupcompanies 7 3,877,605 1,856,731 - -

Tradeandotherreceivables 9 446,467,770 1,171,055,602 1,031,521,509 1,377,055,180

Otherfinancialassets 80,658 323,491 - -

Currenttaxreceivable 5,612,098 6,785,625 901,065 699,411

Unfinishedpoolsreceivable - 5,803,043 - 5,803,043

Cashandcashequivalents 10 70,073,929 73,129,194 51,606,075 33,424,338

1,719,131,733 2,055,981,369 2,021,818,396 1,981,191,278

Total Assets 2,893,190,843 2,836,532,731 2,848,239,787 2,657,939,916


StatementofComprehensive Income


Profit/(loss) for the year 52,864,801 (13,604,462) 11,290,395 11,111,028

Other comprehensive income:Items that may be reclassified to profit or loss:

Generalreserves 1,821,982 2,050,525 1,821,982 2,050,526

Available-for-salefinancialassetsadjustments 12,571,008 5,025,813 11,487,832 3,324,467

Incometaxrelatingtoitemsthatmaybereclassified (4,030,037) (1,511,360) (3,726,748) (1,194,095)

Total items that may be reclassified to profit or loss 10,362,953 5,564,978 9,583,066 4,180,898

Other comprehensive income for the yearnet of taxation

10,362,953 5,564,978 9,583,066 4,180,898

Total comprehensive income/(loss) for the year 63,227,754 (8,039,484) 20,873,461 15,291,926

Total comprehensive income/(loss) attributable to:

Ownersoftheparent 61,203,607 (8,039,484) 20,873,461 15,291,926

Non-controllinginterest 2,024,147 - - -

63,227,754 (8,039,484) 20,873,461 15,291,926

StatementofFinancial Performance


Continuing operations

Revenue 15 7,965,347,929 7,126,963,341 6,011,209,029 5,351,574,402

Costofsales 16 (6,987,635,117) (6,219,535,957) (5,386,176,476) (4,714,614,661)

Gross profit after rebates to shareholders 977,712,812 907,427,384 625,032,553 636,959,741

Rebatestoshareholders 81,768,472 83,625,312 74,559,645 83,625,312

Gross profit before rebates to shareholders 1,059,481,284 991,052,696 699,592,198 720,585,053

Otherincome 534,014,782 277,621,233 509,289,493 256,378,804

Operatingexpenses (1,281,754,802) (1,064,223,563) (959,423,079) (796,265,001)

Operating profit 311,741,264 204,450,366 249,458,612 180,698,856

Investmentrevenue 17 2,725,343 2,434,265 7,666,851 33,773,494

Fairvalueadjustments 200,000 - - 304,681

Gainfromchangesoffairvalueofbiologicalassetsandagriculturalproduce

7,263,679 10,578,039 - -

Incomefromequityaccountedinvestments (1,075,750) 64,689 - -

Financecosts 18 (157,037,975) (113,384,377) (131,482,900) (91,605,024)

Profit before allocation to shareholders 163,816,561 104,142,982 125,642,563 123,172,007

Financecostspaidtoshareholders 18 (36,077,560) (34,315,775) (36,077,560) (34,315,775)

Rebatestoshareholders (81,768,472) (83,625,312) (74,559,645) (83,625,312)

Profit/(loss) before taxation 45,970,529 (13,798,105) 15,005,358 5,230,920

Taxation 7,413,333 193,643 (3,714,963) 5,880,108

Profit/(loss) from continuing operations 53,383,862 (13,604,462) 11,290,395 11,111,028

Discontinued operations

Lossfromdiscontinuedoperations (519,061) - - -

Profit/(loss) for the year 52,864,801 (13,604,462) 11,290,395 11,111,028

Profit/(loss) attributable to:

Owners of the parent:

Fromcontinuingoperations 51,359,715 (13,604,462) 11,290,395 11,111,028

Fromdiscontinuedoperations (519,061) - - -

50,840,654 (13,604,462) 11,290,395 11,111,028

Non-controllinginterest:

Fromcontinuingoperations 2,024,147 - - -


Statementof changes in Equity


Statementof c

hang

es

in e

qui

ty (c

ontinued)

AnnualReport2015

47

Fig

ure

s in

Ra

ndSh

are

ca

pita

lG

ene

ral

rese

rve

Reva

lua

tion

rese

rve

Sha

re

rep

urc

hase

re

serv

e

Cha

nge

in

ow

ners

hip

Ben

Scho

ltzTo

tal

rese

rve

sRe

tain

ed

in

co

me

Tota

l attr

ibut

ab

le

to e

qui

ty h

old

ers

o

f the

gro

up /

c

om

pa

ny

No

n-c

ont

rolli

ngin

tere

st

Tota

le

qui

ty

Gro

upBa

lanc

e a

t 01

June

201

3 1

2,02

2,99

3 1

3,38

3,03

7 1

1,48

9,88

3 4

,123

,216

-

1

,301

,348

3

0,29

7,48

4 2

1,61

1,38

5 6

3,93

1,86

2 -

6

3,93

1,86

2

Lossfo

rtheyear

-

-

-

-

-

-

-

(13,604,462)

(13,604,462)

(13,604,462)

Otherc

omprehensiveincome

-

1,476,378

4,088,600

-

-

-

5,564,978

-

5,564,978

-

5,564,978

Tota

l co

mp

rehe

nsiv

e L

oss

for t

he y

ea

r -

1

,476

,378

4

,088

,600

-

-

-

5

,564

,978

(

13,6

04,4

62)

(8,

039,

484)

-

(8,

039,

484)

Issueofshares

864,253

-

-

-

-

-

-

-

864,253

-

864,253

Purchaseofo

wn/treasuryshares

(144,105)

-

-

-

-

-

-

-

(144,105)

-

(144,105)

NetmovementBe

nScholtz

-

-

-

-

-

510,990

510,990

-

510,990

-

510,990

Sharere

purchasere

serve

-

-

-

76,068

-

-

76,068

-

76,068

-

76,068

Tota

l co

ntrib

utio

ns b

y a

nd d

istr

ibut

ions

to o

w-

ners

of c

om

pa

ny re

co

gni

sed

dire

ctly

in e

qui

ty

720

,148

-

-

7

6,06

8 -

5

10,9

90

587

,058

-

1

,307

,206

-

1

,307

,206

Bala

nce

at 0

1 Ju

ne 2

014

12,

743,

141

14,

859,

414

15,

578,

483

4,1

99,2

84

-

1,8

12,3

38

36,4

49,5

20 8

,006

,923

5

7,19

9,58

4 -

5

7,19

9,58

4

Profitfo

rtheyear

-

-

-

-

-

-

-

50,840,654

50,840,654

2,024,147

52,864,801

Otherc

omprehensiveincome

-

1,311,827

9,051,126

-

-

-

10,362,953

-

10,362,953

-

10,362,953

Tota

l co

mp

rehe

nsiv

e p

rofit

for t

he y

ea

r -

1

,311

,827

9

,051

,126

-

-

-

1

0,36

2,95

3 5

0,84

0,65

4 6

1,20

3,60

7 2

,024

,147

6

3,22

7,75

4

Issueofshares

874,085

-

-

-

-

-

874,085

-

874,085

-

874,085

Purchaseofo

wn/treasuryshares

(184,224)

-

-

-

-

-(184,224)

-

(184,224)

-

(184,224)

Changesinownershipinterest-controlnotlost

-

-

-

-

4,065,016

-

4,065,016

-

4,065,016

10,934,984

15,000,000

NetmovementBe

nScholtz

-

-

-

-

-

2,230,332

2,230,332

-

2,230,332

-

2,230,332

Tota

l co

ntrib

utio

ns b

y a

nd d

istr

ibut

ions

to o

w-

ners

of c

om

pa

ny re

co

gni

sed

dire

ctly

in e

qui

ty 6

89,8

61

-

-

-

4,0

65,0

16

2,2

30,3

32

6,98

5,20

9 -

7,

675,

070

10,

934,

984

18,6

10,0

54

Bala

nce

at 3

1 M

ay

2015

13,

433,

002

16,

171,

241

24,

629,

609

4,1

99,2

84

4,0

65,0

16

4,0

42,6

70

53,

107,

820

58,

847,

577

125

,388

,399

1

2,95

9,13

1 1

38,3

47,5

30

Note(s)

11

Statementof c

hang

es

in e

qui

ty

AnnualReport2015

46

Fig

ure

s in

Ra

ndSh

are

ca

pita

lG

ene

ral

rese

rve

Reva

lua

tion

rese

rve

Sha

re

rep

urc

hase

re

serv

e

Cha

nge

in

ow

ners

hip

Ben

Scho

ltzTo

tal

rese

rve

sRe

tain

ed

in

co

me

Tota

l attr

ibut

ab

le

to e

qui

ty h

old

ers

o

f the

gro

up /

c

om

pa

ny

No

n-c

ont

rolli

ngin

tere

st

Tota

le

qui

ty

Co

mp

any

Bala

nce

at 0

1 Ju

ne 2

013

12,

022,

993

13,

383,

037

13,

885,

009

4,1

23,2

16

-

1,3

01,3

48

32,

692,

610

38,

289,

413

83,

005,

016

-

83,

005,

016

Profitfo

rtheyear

-

-

-

-

-

-

-

11,111,028

11,111,028

-

11,111,028

Otherc

omprehensiveincome

-

1,476,378

2,704,520

-

-

-

4,180,898

-

4,180,898

-

4,180,898

Tota

l co

mp

rehe

nsiv

e lo

ss fo

r the

ye

ar

-

1,4

76,3

78

2,7

04,5

20

-

-

-

4,1

80,8

98

11,

111,

028

15,

291,

926

-

15,

291,

926

Issueofshares

864,253

-

-

-

-

-

864,253

-

864,253

-

864,253

Purchaseofo

wn/treasuryshares

(144,105)

-

-

-

-

-

(144,105)

-

(144,105)

-

(144,105)

NetmovementBe

nScholtz

-

-

-

-

-

510,990

510,990

-

510,990

-

510,990

Sharere

purchasere

serve

-

-

-

76,068

-

-

76,068

-

76,068

-

76,068

Tota

l co

ntrib

utio

ns b

y a

nd d

istr

ibut

ions

to o

w-

ners

of c

om

pa

ny re

co

gni

sed

dire

ctly

in e

qui

ty 7

20,1

48

-

-

76,

068

-

510

,990

1,

307,

206

-

2,02

7,35

4 -

2,

027,

354

Bala

nce

at 0

1 Ju

ne 2

014

12,

743,

141

14,

859,

414

16,

589,

529

4,1

99,2

84

-

1,8

12,3

38

37,

460,

566

49,

400,

441

99,

604,

148

-

99,

604,

148

Profitfo

rtheyear

-

-

-

-

-

-

-

11,290,395

11,290,395

-

11,290,395

Otherc

omprehensiveincome

-

1,311,827

8,271,239

-

-

-

9,583,066

-

9,583,066

-

9,583,066

Tota

l co

mp

rehe

nsiv

e in

co

me

for t

he y

ea

r -

1

,311

,827

8

,271

,239

-

-

-

9

,583

,066

1

1,29

0,39

5 2

0,87

3,46

1 -

2

0,87

3,46

1

Issueofshares

874,085

-

-

-

-

-874,085

-

874,085

-

874,085

Purchaseofo

wn/treasuryshares

(184,224)

-

-

-

-

-(184,224)

-

(184,224)

-

(184,224)

NetmovementBe

nScholtz

-

-

-

-

-

2,230,332

2,230,332

-

2,230,332

-

2,230,332

Tota

l co

ntrib

utio

ns b

y a

nd d

istr

ibut

ions

to o

w-

ners

of c

om

pa

ny re

co

gni

sed

dire

ctly

in e

qui

ty 6

89,8

61

-

-

-

-

2,2

30,3

32

2,92

0,19

3 -

3,

610,

054

-

3,61

0,05

4

Bala

nce

at 3

1 M

ay

2015

13,

433,

002

16,

171,

241

24,

860,

768

4,1

99,2

84

-

4,0

42,6

70

49,

273,

963

60,

690,

836

123

,397

,801

-

1

23,3

97,8

01

Note(s)

11


AccountingPolicies


Cash flows from operating activitiesCashgeneratedfrom/(usedin)operations 525,631,960 414,969,380 304,643,798 155,460,617

Interestincome 2,440,955 2,117,563 7,196,634 3,466,924

Dividendsreceived 284,388 317,041 470,217 30,306,569

Financecosts (192,927,365) (147,700,492) (167,424,056) (125,920,799)

Taxpaid (7,853,301) (7,418,807) (230,192) (700,000)

Net cash from operating activities 327,576,637 262,284,685 144,656,401 62,613,311

Cash flows from investing activitiesPurchasesofproperty,plantandequipment 2 (371,796,332) (271,514,553) (121,874,675) (129,613,148)

Saleofproperty,plantandequipment 2 7,666,252 8,943,799 6,156,129 991,744

Purchaseofproperty,plantandequipmentthroughbusinesscombination

- 24,334,125 - -

Proceedsonsaleoflistedshares - 194,803 - 194,803

Proceedsfrom/(loansgrantedto)groupcompanies 3,431,125 (509,903) (5,824,183) (46,543,219)

Purchaseofbiologicalassets 3 (93,340,275) (48,181,507) - -

Disposalonbiologicalassets 3 89,679,944 41,868,366 - -

Acquisitionofbusinesses (30,968,058) (52,642,857) (45,968,058) (31,770,000)

Net cash utilised in investing activities (395,327,344) (297,507,727) (167,510,787) (206,739,820)

Cash flows from financing activitiesProceedsonshareissue 11 49,000 18,600 49,000 18,600

Proceedsfromissueofredeemablepreferenceshares

11 640,861 701,548 640,861 701,748

Repaymentofotherfinancialliabilities (168,742,097) (122,534,089) (216,601,931) (20,663,844)

Netcashmovementinfunds 3,542,159 - 3,542,159 -

Netmovementonshareholdersloan 91,023,584 98,145,622 91,023,584 98,145,622

Financeleasepayments (188,170) - (136,404) -

Acquisitionofadditionalborrowingsandloans - (11,826,255) - -

Net cash from financing activities (73,674,663) (35,494,574) (121,482,731) 78,202,126

Total cash movement for the year (141,425,370) (70,717,616) (144,337,117) (65,924,383)

Cashatthebeginningoftheyear 301,579 71,019,194 33,424,338 99,348,721

Total cash at end of the year 10 (141,123,791) 301,578 (110,912,779) 33,424,338

Cashflowstatement


Under the equity method, investments in associatesarecarriedintheconsolidatedstatementoffinancialpositionatcostadjustedforpostacquisitionchangesinthegroup’sshareofnetassetsoftheassociate,lessanyimpairmentlosses.Losses in an associate in excess of the group’s inte- restinthatassociatearerecognisedonlytotheextentthatthegrouphasincurredalegalorconstructiveob-ligationtomakepaymentsonbehalfoftheassociate.Anygoodwillonacquisitionofanassociateisincludedinthecarryingamountoftheinvestment,however,againonacquisitionisrecognisedimmediatelyinprofitorloss.

Profits or losses on transactions between the groupandanassociateareeliminatedtotheextentofthegroup’sinteresttherein.

When the group reduces its level of significant influ-ence or loses significant influence, the group pro-portionately reclassifiestherelated itemswhichwerepreviouslyaccumulatedinequitythroughothercom-prehensiveincometoprofitorlossasareclassificationadjustment. In such cases, if an investment remains,thatinvestmentismeasuredtofairvalue,withthefairvalueadjustmentbeingrecognisedinprofitorlossaspartofthegainorlossondisposal.

Joint ventures

An interest in a joint venture is accounted for usingthe equity method, except when the investment isclassified as held-for-sale in accordancewith IFRS 5Non-current assets held-for-sale and discontinuedoperations.Undertheequitymethod,interestsinjointventuresarecarriedintheconsolidatedstatementoffinancialpositionatcostadjustedforpostacquisitionchangesinthecompany’sshareofnetassetsofthejointventure,lessanyimpairmentlosses.Profitsorloss-esontransactionsbetweenthecompanyandajointventureareeliminatedtotheextentofthecompany’sinteresttherein.

Whenthecompanylosesjointcontrol,thegrouppro-portionately reclassifiestherelated itemswhichwerepreviouslyaccumulatedinequitythroughothercom-prehensiveincometoprofitorlossasareclassificationadjustment. In such cases, if an investment remains,thatinvestmentismeasuredtofairvalue,withthefairvalueadjustmentbeingrecognisedinprofitorlossaspartofthegainorlossondisposal.

1.2 Significant judgements and sourcesof estimation uncertainty

In preparing the financial statements, managementis required tomake estimates and assumptions thataffecttheamountsrepresentedinthefinancialstate-mentsandrelateddisclosures.Useofavailable infor-mationandtheapplicationofjudgementisinherentintheformationofestimates.Actualresultsinthefuturecoulddifferfromtheseestimateswhichmaybemate-rialtothefinancialstatements.Significantjudgementsinclude:

Trade receivables, Held to maturity in-vestments and Loans and receivables

The group assesses its trade receiv-ables, held to maturity investmentsandloansandreceivablesforimpair-ment at the end of each reportingperiod. In determining whether animpairment loss should be recordedinprofitor loss,makes judgementsasto whether there is observable dataindicatingameasurabledecrease intheestimatedfuturecashflowsfromafinancialasset.

Theimpairmentfortradereceivables,heldtomaturityinvestmentsandloansand receivables is calculated on aportfoliobasis,basedonhistoricallossratios,adjustedfornationalandindus-try-specificeconomicconditionsandother indicatorspresentat the repor- tingdate thatcorrelatewithdefaultsontheportfolio.Theseannual lossra-tios are applied to loan balances inthe portfolio and scaled to the esti-matedlossemergenceperiod.

Available‑for‑sale financial assets

The group follows the guidance ofIAS 39 to determine when an available-for-sale financial asset is im-paired.Thisdeterminationrequiressig-nificantjudgment.Inmakingthisjudg-ment, the group evaluates, amongotherfactors,thedurationandextentto which the fair value of an invest-mentislessthanitscost;andthefinan-cialhealthofandnear-termbusinessoutlookfortheinvestee,includingfac-torssuchasindustryandsectorperfor-mance, changes in technology andoperationalandfinancingcashflow.

Allowance for slow moving,damaged and obsolete stock

Anallowanceforstocktowritestockdowntothelowerofcostornetrealis-ablevalue.Managementhavemadeestimates of the selling price anddi-rect cost to sell on certain inventoryitems.Thewritedownisincludedintheoperatingprofitnote.

Fair value estimation

The fair value of financial instrumentstraded inactivemarkets (suchas tra- dingandavailable-for-salesecurities)isbasedonquotedmarketpricesattheendofthereportingperiod.Thequoted market price used for financial assetsheld by the group is the current bidprice.

1. Presentation of abridgedfinancial statementsThe abridged financial statements have been pre-pared in accordance with International Financial Reporting Standards, and theCompanies Act 71 of2008. The financial statements have been preparedon thehistorical cost basis, except for themeasure-mentofbiologicalassets, investmentpropertiesandcertainfinancialinstrumentsatfairvalue,andincorpo-ratetheprincipalaccountingpoliciessetoutbelow.TheyarepresentedinSouthAfricanRands.

Theseaccountingpoliciesareconsistentwiththepre-viousperiod.

1.1 Consolidation

Basis of consolidation

The consolidated financial statements incorporatethefinancialstatementsofthegroupandallinvesteeswhicharecontrolledbythegroup.

Thegrouphascontrolofaninvesteewhenithaspow-erover the investee; it isexposed toorhas rights tovariable returns from involvement with the investee;andithastheabilitytouseitspowerovertheinvest-eetoaffecttheamountoftheinvestor’sreturns.Theresultsofsubsidiariesareincludedintheconsolidatedfinancialstatementsfromtheeffectivedateofacqui-sitiontotheeffectivedateofdisposal.

Adjustmentsaremadewhennecessary to thefinan-cialstatementsofsubsidiariestobringtheiraccountingpoliciesinlinewiththoseofthegroup.Allintra-grouptransactions, balances, income and expenses areeliminatedinfullonconsolidation.Non-controllingin-terestsinthenetassetsofconsolidatedsubsidiariesareidentifiedandrecognisedseparatelyfromthegroup’sinterest therein, and are recognised within equity. Losses of subsidiaries attributable to non-controllinginterestsareallocatedtothenon-controllinginterest

evenifthisresultsinadebitbalancebeing recognised fornon-controllinginterest.

Transactionswhich result inchangesinownership levels,wherethegrouphascontrolofthesubsidiarybothbe-foreandafterthetransactionarere-gardedasequitytransactionandarerecogniseddirectly in the statementofchangesinequity.

The difference between the fair va- lueofconsiderationpaidorreceivedandthemovementinnon-controllinginterest for such transactions is re- cognisedinequityattributabletotheownersoftheparent.

Whereasubsidiaryisdisposedofanda non-controlling shareholding is re-tained, the remaining investment ismeasured to fair valuewith the ad-justment to fair value recognised inprofitorlossaspartofthegainorlossondisposalofthecontrollinginterest.

Investment in associates

Anassociate isanentityoverwhichthe group has significant influenceandwhich isneitherasubsidiarynorajointventure.Significantinfluenceisthepowertoparticipateinthefinan-cialandoperatingpolicydecisionsoftheinvesteebutisnotcontrolorjointcontroloverthosepolicies.

Aninvestmentinassociateisaccoun- ted forusing theequitymethod,ex-ceptwhentheinvestmentisclassifiedas held-for-sale in accordance withIFRS5Non-currentassetsheld-for-saleanddiscontinuedoperations.

AccountingPolicies


that future economic benefits associated with theexpenditurewill flow to thegroupand thecostcanbemeasuredreliably.Daytodayservicingcostsareincludedinprofitorlossintheyearinwhichtheyareincurred.

Majorinspectioncostswhichareaconditionofcon-tinuinguseofanitemofproperty,plantandequipmentandwhichmeettherecognitioncriteriaareincludedasareplacementinthecostoftheitemofproperty,plantandequipment.Anyremaininginspectioncostsfrom the previous inspection are derecognised. Pro- perty,plantandequipmentissubsequentlystatedatcostlessaccumulateddepreciationandanyaccumu-latedimpairmentlosses,exceptforlandwhichissta- tedatcost lessanyaccumulated impairment losses.

Depreciation of an asset commenceswhen the as-setisavailableforuseasintendedbymanagement. Depreciationischargedtowriteofftheasset’scarry-ingamountoveritsestimatedusefullifetoitsestimat-ed residual value, usingamethod that best reflectsthepatterninwhichtheasset’seconomicbenefitsareconsumedbythegroup.Leasedassetsaredepreciat-edinaconsistentmannerovertheshorteroftheirex-pectedusefullivesandtheleaseterm.Depreciationisnotchargedtoanassetifitsestimatedresidualvalueexceedsorisequaltoitscarryingamount.Deprecia-tionofanassetceasesattheearlierofthedatethattheassetisclassifiedasheldforsaleorderecognised.The residual value, useful life and depreciation me- thodofeachassetarereviewedattheendofeachreportingyear.Iftheexpectationsdifferfrompreviousestimates,thechangeisaccountedforprospectivelyasachangeinaccountingestimate.

Thedepreciationchargeforeachyearisrecognisedinprofitorlossunlessitisincludedinthecarryingamountofanotherasset. Impairmenttestsareperformedonproperty,plantandequipmentwhenthereisanindi-catorthattheymaybeimpaired.Whenthecarryingamountofanitemofproperty,plantandequipmentisassessedtobehigherthantheestimatedrecoverableamount,animpairmentlossisrecognisedimmediatel

annual report - gwkcms.gwk.co.za/documents/annual-report_eng.pdferic ramongalo piet roux frans wiid...

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