market access credit extension input suppl y sundry … · market as wel as bulk sales • seed...

1SENWES ANNUAL REPORT 2008

EXPANSIONEXPANSIONEXPANSION in market share and business base in market share and business base in market share and business base with consequential with consequential with consequential INCREASE IN INCREASE IN INCREASE IN

INVESTMENTINVESTMENTINVESTMENT in receivables and inventory in receivables and inventory in receivables and inventoryINVESTMENT in receivables and inventoryINVESTMENTINVESTMENTINVESTMENT in receivables and inventoryINVESTMENT in receivables and inventoryINVESTMENT in receivables and inventoryINVESTMENTINVESTMENTINVESTMENT in receivables and inventoryINVESTMENT

SHARP INCREASE SHARP INCREASE SHARP INCREASE in commodity prices, in commodity prices, in commodity prices, production cost and interest ratesproduction cost and interest ratesproduction cost and interest rates

RECORD PROFITS RECORD PROFITS RECORD PROFITS by Mechanisation and Input Supplyby Mechanisation and Input Supplyby Mechanisation and Input Supply

Satisfactory profit by Market Access division despite Satisfactory profit by Market Access division despite Satisfactory profit by Market Access division despite LOW GRAIN VOLUMESLOW GRAIN VOLUMESLOW GRAIN VOLUMES

Substantial Substantial Substantial VALUE CREATIONVALUE CREATIONVALUE CREATION and and and VALUE UNLOCKINGVALUE UNLOCKINGVALUE UNLOCKING for shareholders for shareholders for shareholders

SALIENTFEATURES

OPERATIONSOVERVIEW

SENWESGROUP STRUCTURE

BOARD OF DIRECTORS

MANAGEMENTSTRUCTURE

SENWESFOOTPRINT

Important events

2008 2007

Net profi t (R'm) 175,0 127,0

Operating profi t from continuing operations (R'm) 350,0 264,0

Earnings per share (c/share) 95,7 69,1

Share trading price (c/share) 525,0 400,0

Return on opening equity 22,4% 18,3%

Dividend yield on opening market price (including special dividends) 13,5% 9,2%

Total dividend per share (c/share) 54 23

Final normal dividend proposed Normal interim dividend paid Special dividend paid

14 10 30

17 6 -

Key figures37,8%37,8%37,8%

32,5%32,5%32,5%

38,4%38,4%38,4%

31,3%31,3%31,3%

EXPANSIONEXPANSIONEXPANSION

INVESTMENTINVESTMENTINVESTMENT

SHARP INCREASE SHARP INCREASE SHARP INCREASE

Satisfactory profit by Market Access division despite Satisfactory profit by Market Access division despite Satisfactory profit by Market Access division despite

Operations’ contribution to profit before tax

market access

52%input supply

31%credit extension

16 %sundry operations

operations aimed at the extension

of the value chain

• Processingandmarketingofvariouswineproducts

• Processingofseedproducts,aspartoftheproductioninputchain

• Varioustailor-madeinsuranceproductsaimedatthelongterm,shorttermandcropinsurancemarketareofferedaspartofbrokingservices

Div

ision

Nat

ure

of

busin

ess

Key

finan

cial

in

dica

tors

MARKET ACCESS CREDIT EXTENSION• Grainsilooperations• LogisticalServices• GrainMarketing

supply of production inputs, requisites and

mechanisation to the agricultural producer

• Distributionnetworkofretailstoresforthesupplyofproductioninputsandgeneralfarmingrequisites

• Networkofserviceoutletsforsellingandmaintenanceofagriculturalequipmentandparts

• Directbulkinputssupply• Retailstores• Mechanisation

the creation of market access for grain producers.

the marketing of grain products to the major buyers in

southern africa

• Handlingandstorageofgrain• Logisticalservicesfortheprocurementanddistributionofgrain

• Marketingofgraincommodities

2008R’m

2007R’m

Revenue 5902 4273Profitbeforetax 138 166Returnontotalassets 25 27

2008R’m

2007R’m


• Creditextension• Financingofgrainbuyers• Long/mediumtermfinancing

rendering of financing products to the producer

and grain buyer

• Financingofallagriculture-relatedinputs

• Financingofgrainmarketedbymeansofvariousfinancingproducts

• WineCellar• Seed• Insurance

2008R’m

2007R’m


2008R’m

2007R’m


1%

Operations overviewBu

sines

sun

its 69 Grainsilocomplexes24 Grainprocurementoffices

29 Retailstores11 Mechanisationworkshops

CentralisedfinancingandGrainfinancing

14 Insuranceserviceoutlets1 HartswaterWineCellar2 Seedprocessingplants

salientfeatures

operationsoverview

senwesgroup structure

board ofdirectors

managementstructure

senwesfootprint

INPUT SUPPL Y SUNDR Y OPERATIONS

2 SENWES ANNUAL REPORT 2008 3SENWES ANNUAL REPORT 2008

OPERATIONSOVERVIEW


BOARD OFDIRECTORS

MANAGEMENTSTRUCTURE

SENWESFOOTPRINT

Senwes group structure

• Corporate strategy and BEE• Risk management• Group fi nance• Treasury• Information technology• Human resources• Head offi ce services• Properties management• Fleet management• Secretariat• Internal audit• Corporate marketing• Agri services

Business units• Wine cellar• Seed processing• Insurance

Market and activities• Bulk wine making• Supply of wine to retail

market as wel as bulk sales• Seed processing for third

parties• Insurance – brokerage

service of wide product offering including long- term, short-term and crop insurance

Business units• Credit extension• Grain fi nancing• Long and medium-term fi nancingMarket and activities• Agri fi nancing• Grain buyers’ fi nancing

Business units• Credit extension• Grain fi nancing• Long and medium-term fi nancingMarket and activities• Agri fi nancing• Grain buyers’ fi nancing

Business units• Direct bulk inputs supply• Retail stores• Mechanisation

Market and activities• Farming and related goods - Bulk and retail - DIY, gardening &

irrigation products - Groceries - Fuels & lubricants• Mechanisation activities,

including: - Parts, workshop services,

precision farming & whole goods

Business units• Direct bulk inputs supply• Retail stores• Mechanisation

Market and activities• Farming and related goods - Bulk and retail - DIY, gardening &

- Groceries - Fuels & lubricants• Mechanisation activities,

- Parts, workshop services,

Business units• Grain silo operations• Grain marketing• Logistical services

Market and activities• Procurement of grain• Grain stock management,

handling and storage• Marketing and price

management• Logistical contracts and

solutions for grain buyers

Senwes Graanmakelaars(Pty) Ltd

Silo Certs (Pty) LtdT/A Electronic Silo Certifi cates

Graansilo Industrie (Pty) Ltd

80,0

%42

,5%

26%

Hartswater Wynkelder(Pty) Ltd

Univision Financial Services(Pty) Ltd

Univision Broker Services (Pty) Ltd

100% interest

100% Charel de Klerk Street

Properties (Pty) Ltd

Grasland Ondernemings(Pty) Ltd38

,5%

100%

INPUT SUPPLINPUT SUPPLINPUT SUPPLMARKET ACCESSMARKET ACCESSMARKET ACCESS CREDIT EXTENSIONCREDIT EXTENSIONCREDIT EXTENSION SUNDRY OPERATIONSSUNDRY OPERATIONSSUNDRY OPERATIONS SERVICE DEPARTMENTSSERVICE DEPARTMENTSSERVICE DEPARTMENTS

100%

22,0% 35,5% 32,6% 9,9%

YYY

100%

SALIENTFEATURES


Board of Directors

JAPIE GROBLERCHAIRMAN

B.Juris, LLB

Age: 56Board member since April 1997

COMMITTEESStandards Committee (chairman) All board committees: ex offi cio access

DANIE MINNAAR VICE-CHAIRMAN

B.Com

Age: 43Board member since September 1999

COMMITTEESHuman Resources Committee (chairman)Audit CommitteeStandards Committee

JOHAN DIQUE MANAGING DIRECTOR

BCom(Hons), CA(SA)

Age: 52Appointed on

1 August 2001

JOHAN ALBERTS

SSAF, B.Com (Econ), CTA, CA(SA)

Age: 65Board member since January 2001

COMMITTEESAudit Committee (chairman)

JANNIE ELS

Agricultural Diploma

Age: 62Board member since October 2000

COMMITTEESHuman ResourcesCommittee

DRIES KRUGER

BCompt(Hons), CA(SA)


COMMITTEESAudit Committee

GEORGE MAGASHULA

B.Sc(Chem), Post Gra duate degree (Business Management)


COMMITTEESHuman Resources Committee

JACOB MASHIKE

B.Sc(Eng) Chem, MBL

Age: 41Board member since

February 2006

COMMITTEESRisk Committee

BERT MOSTERT

BProc

Age: 42Board member since

October 2003

COMMITTEESAudit CommitteeRisk Committee

MPUELENG POOE

BProc, Attorney of the High Court

Age: 48Board member since March 2007

COMMITTEESHuman Resources Committee

WH VAN ZYL


COMMITTEESRisk Committee (chairman)Standards Committee STEVEN ALBERTS

DIRECTOR FINANCE

BAcc, BCompt(Hons), CA(SA)

Age: 42Appointed on 1 March 2005

FRANCOIS STRYDOM DIRECTOR OPERATIONS

BScAgric(Hons)

Age: 48Appointed on 21 May 2001

ELMARIE JOYNTCOMPANY SECRETARY

BCom(Law), LLBAttorney of the High Court, FCIS, FCIBM

Age: 38Appointed on

1 February 2002

* Alternate director:LUCAS NDALA

B.Com, PGDM and B.Com(Hons), CA(SA)

Age: 33 Board member since February 2006

JESMANE BOGGENPOEL

B.Com, BAcc, CA(SA)

Age: 35Board member since April 2008

COMMITTEESAudit Committee

*

GEORGE MAGASHULAGEORGE MAGASHULA

SENWESBEL REPRESENTATIVES

JANNIE ELS JANNIE ELS JANNIE ELS JANNIE ELS

WH VAN ZYL


COMMITTEESRisk Committee (chairman)Standards Committee

RBF CONSORTIUM REPRESENTATIVES

INDEPENDENT REPRESENTATION

EXECUTIVE DIRECTORS COMPANY SECRETARY

SALIENTFEATURES

OPERATIONSOVERVIEW


BOARD OFDIRECTORS

MANAGEMENTSTRUCTURE

SENWESFOOTPRINT

DRIES KRUGER DRIES KRUGER

US

6 SENWES ANNUAL REPORT 2008 7SENWES ANNUAL REPORT 2008SENWES ANNUAL REPORT 2008

Managing Managing Managing DirectorDirectorDirector

Director Director Director FinanceFinanceFinanceFinanceFinanceFinance

Director Director Director OperationsOperationsOperationsOperationsOperationsOperations

General Manager: General Manager: General Manager: General Manager: General Manager: General Manager: GrainGrainGrain

General Manager: General Manager: General Manager: General Manager: General Manager: General Manager: TradeTradeTrade

General Manager: General Manager: General Manager: General Manager: General Manager: General Manager: Corporate ServicesCorporate ServicesCorporate ServicesCorporate ServicesCorporate ServicesCorporate Services

PIETER ESTERHUYSEN FRANS DU PLESSIS JOE MASWANGANYI

SUNDRYSUNDRYSUNDRYOPERATIONSOPERATIONSOPERATIONSOPERATIONSOPERATIONSOPERATIONS

FINANCEFINANCEFINANCEFINANCEFINANCEFINANCE& IT& IT& IT& IT& IT& IT

TRADETRADETRADE SECRETARIAT/SECRETARIAT/SECRETARIAT/LEGALLEGALLEGAL

GRAINGRAINGRAIN CORPORATECORPORATECORPORATECORPORATECORPORATECORPORATESERVICESSERVICESSERVICES

CHRISTO BOOYENSAssistant General Manager

Grain Marketing

HENCO DE JAGERAssistant General Manager

Human Resources

JAN COETZEEAssistant General Manager

Retail

ELMARIE JOYNTCompany Secretary

& Legal Services

DEON TRUTERManager

Wine Cellar

CORNÉ KRUGERAssistant General Manager

Finance & Treasury

ANDRÉ ERASMUSAssistant General Manager

Grain Operations

JOHAN GROBLERAssistant General Manager

Corporate Marketing

SAREL GREYLINGAssistant General Manager

Mechanisation

BEN KLEINHANSManager Seed

(Acting)

GERRIT VAN ZYLAssistant General Manager

Credit Extension

WIKUS GROBLERAssistant General ManagerFinance & Administration

JOHAN DU TOITManager

Agri Services

MARLO KOTZEAssistant General Manager

Trade Finance

DAWIE BARNARDManagerInsurance

Management structure

BEN KLEINHANS

SALIENTFEATURES

OPERATIONSOVERVIEW

BOARD OFDIRECTORS

MANAGEMENTSTRUCTURE

SENWESFOOTPRINT

FRANCOIS STRYDOM STEVEN ALBERTS

JOHAN DIQUE

MOLEMO MALIEHEGroup Internal Auditor

MOLEMO MALIEHE

MARTIN VAN ZYLManager IT



Chairman’s report

Volatility and agriculture are synonymous. However, the determining factor for success is the ability of an agri-business to operate effectively within this volatility and to perform well by being flexible and adaptable.

CHAIRMAN’SREPORT

MANAGINGDIRECTOR’S

REPORTFINANCIAL

REVIEW

SENWES ONCE AGAIN DEMONSTRATED these dynamics during the past fi nancial year by delivering excellent results under diffi cult and challenging market and agricultural conditions.

The mechanisation, direct bulk inputs and credit extension business units experienced an excellent business cycle. Under the circumstances, the grain division performed relatively well, although the fi nal result still did not compare favourably with the division’s traditional results during a normal year.

Further progress was made in respect of Senwes’s value unlocking strategy – as presented to shareholders previously. The gap between the net asset value and trading value has been bridged successfully and shares are already trading at a premium above net asset value of approximately 29%. Measured against the company’s continued fi nancial performance, this is probably still not the full value and further share price growth is being pursued.

BROAD BUSINESS AND AGRICULTURAL ENVIRONMENTThe year under review was characterised by fl uctuations in the rand/dollar exchange rate and increa-sing pressure on the economy. Other factors which had an impact on commercial agriculture, include the following:• Infl ation rate increases continued throughout the year and the CPIX-index increased from levels of

6,4% in May 2007 to 10,8% recently.• Prime lending rates increased to a level of 15% - which translates to an increase of 4,5% over the

past two years. Further increases are expected.• As expected, the economy slowed down and M3 money supply started to decrease, whilst motor

vehicle sales and retail turnover followed this trend.• Production costs came under pressure. The cost of energy increased dramatically world-wide and

the Brent crude-oil price increased from $66 at the beginning of the fi nancial year to as high as $115 per barrel and record levels of as high as $142 per barrel have been recorded at the time of going to press. This naturally resulted in increased fuel and fertiliser prices.

• The momentum given to the bio-fuel strategy of the USA, boosted the additional international demand for grain commodities to unprecedented levels.

• New price levels also affected the demand for input products and the manufacturers of whole goods were caught unprepared in that demand increased at a higher rate than the planned manu-facturing capacity, which resulted in non-availability of certain imported products.

• The new market opportunities which would supposedly have been created for producers by local bio-fuel, did not realise due to the government’s decision to put food security fi rst by excluding maize from the production of bio-fuel.

• The maize balance sheet was decreased to uncomfortably low levels over the past two production

SALIENTFEATURES

OPERATIONSOVERVIEW


BOARD OFDIRECTORS

MANAGEMENTSTRUCTURE

SENWESFOOTPRINT

Klerksdorp – Head offi ce

Senwes operations

Senwes current footprint

JAPIE GROBLER

FINANCIALHIGHLIGHTS

FIVE-YEAR REVIEW& DEFINITIONS

BUSINESSREVIEW


seasons (due to lower planting levels and drought) and the performance of silo owners came under pressure due to the low stock levels.

• National prices are low in the price band and even linger below export parity, and logistics to effectively utilise export opportunities are a limiting factor.

• Record land prices are at the order of the day - balance sheets of producers increased materially, as did the debt capacity of producers.

• The business confi dence index in respect of agriculture was very positive at the end of 2007, but it started to recede due to increasing input costs and the fact that commodity prices did not increase to the same degree - however, it remains positive.

• Unstable electricity supply by Eskom and consequent load shedding affected economical growth.

CORPORATE GOVERNANCEThe adherence to of corporate governance in terms of accepted principles is non-negotiable and is endorsed by the Board of Directors. This policy is implemented on ground level by means of strict application of King II principles and offers reassurance that the Board looks after the interests of all stakeholders of Senwes on a continuous basis.

I am satisfi ed that good and effective governance principles are applied. Amidst the challenging agricultural and business conditions, Senwes continuously move the goal posts in respect of economic profi t, stable profi tability levels having been established and are improved annually.

BOARD MATTERSThe terms of offi ce of Messrs Jimmy Shahim and Jan Botma expired during the year. Both directors served on the Board since 2000 and made noteworthy contributions on board level. They also formed part of the team which effected the turnaround of Senwes and we wish to thank them for the role which they played.

Mr Dries Kruger was elected to the board by shareholders. As chartered accountant he has proved himself a valuable addition to the board in terms of his fi nancial and business acumen. An additional independent director, Ms Jesmane Boggenpoel, has been appointed. She is a chartered accountant with extensive commercial experience.

Good progress has been made over the past few years in respect of the composition of a well-balanced and representative board, which is able to face the challenge.

PROSPECTSProducers can expect the current economic conditions and trends to continue in the new fi nancial year. It is estimated that input costs will increase drastically to unprecedented levels. In view of the high cor-relation between international maize commodity prices and the oil price, expectations are that there will be a natural hedge to a large extent against these bulk input cost increases, which should be a bit of good news. Consequently, one would expect good planting cycles to prevail in the near future. It would impact the input supply business positively.

The current summer crop looks promising and indications are that there should be a return to

AMIDST THE CHALLENGING AGRICULTURAL AND BUSINESS CONDITIONS, SENWES CONTINUOUSLY MOVE THE GOAL POSTS IN RESPECT OF ECONOMIC PROFIT, SUSTAINABLE PROFITABILITY LEVELS HAVING BEEN ESTABLISHED AND WHICH ARE MAINTAINED AND IMPROVED ANNUALLY.

SENWES CONTINUOUSLY MOVE THE GOAL POSTS IN RESPECT OF ECONOMIC PROFIT, SUSTAINABLE PROFITABILITY LEVELS HAVING BEEN ESTABLISHED AND

normal grain volumes. Increased planting of winter grain crops during the coming year is expected. It should increase the potential performance of the Grain division in the next year. The utilisation of new opportunities in other markets could also create additional value. Due to the aforementioned, share-holders can look forward to continuing good results on the back of the positive agricultural cycle and the recovery of the grain business profi tability.

LISTINGThere is an expectation amongst shareholders that the fi nal step in respect of value unlocking relating to the share, should be taken. Shareholders were previously advised that this step could possibly be taken by 2008.

Although Senwes delivered excellent results, it is important to list for the right reasons and to ensure the long-term success of such a step. Senwes has a very focused and concentrated portfolio. Possible geographic distribution could be important in respect of risk distribution. However, these aspects, to-gether with other aspects such as favourable economic listing conditions, call for further assessment and the necessary recommendations regarding listing will still be made during this year.

ACKNOWLEDGEMENTSI would like to give acknowledgement to all stakeholders, producers and suppliers for continued good business relationships. I would also like to thank our shareholders for their confi dence in Senwes’s strategic direction. Senwes is well on its way of becoming the most admired agri-business in South Africa.

The board of directors, executive management team and personnel deserve mention for their tire-less efforts to ensure that innovation and value creation is achieved. It is a privilege to experience fi rst-hand how strategy is converted into plans of action. It is refl ected time and again in outstanding results.

Above all we thank our Creator, without whom we are capable of nothing.

JAPIE GROBLERCHAIRMAN

CHAIRMAN’SREPORT


REPORTFINANCIAL

REVIEWFINANCIAL

HIGHLIGHTSFIVE-YEAR REVIEW

& DEFINITIONSBUSINESSREVIEW


Managing Director’s report

IRRESPECTIVE OF ECONOMY, CLIMATE OR MARKET CONDITIONS, any enterprise is measured in terms of its fi nancial score board at year-end. Senwes’s excellent fi nancial results for the year ended 30 April 2008 are once again announced with gratitude and humility.A few highlights which deserve mention, are the following:• An after-tax profi t attributable to shareholders of R173 million – a 38% improvement• Earnings per share of 95,7 cents – a 38% increase compared to last year’s 69,1 cents per share• Return on opening equity of 22%• Shareholders earned 45% growth on opening price, made up of 31% growth in the share price and

14% dividends• A fi nal dividend of 14 cents per share is proposed

OPERATIONAL REVIEWThe positive commodity price levels during the fi nancial year gave rise to good planting levels, that also led to a positive business cycle for the Input Supply and Credit Extension businesses. The drive to grow market share by means of product offer and excellent customer service to the producer, was aimed at moving closer to the customer. This strategy proved to be very successful.

Senwes is strongly committed to the growth of its business and customer base, which resulted in the balance sheet increasing in relative terms. This was underpinned by growth in market share and strong product price infl ation. Increasing commodity prices also led to an increased balance sheet position.

The Input Supply division reached maturity and economic services are delivered. The Trade and Mechanisation business units demonstrated the potential of the Input Supply division. After fi nalisation of the turnaround-strategy in previous years and on the back of the momentum of a positive business cycle, it yielded excellent results.

Despite serious pressure on the grain throughput channel due to low volumes of available grain, the division performed relatively well. The conditions sparked a new drive to elevate and further exploit the focus on market access in all respects.

The sundry operations performed according to expectations. Corporate support services were managed in a cost-effi cient manner, whilst operational effi ciency was maintained.

STAKEHOLDERSSenwes’s management is focused on continuously integrating economic performance, environmental responsibility and corporate citizenship into the company culture. A sustainability report is included elsewhere in this annual report.

In a rugby test match, a team has to consider factors such as territorial advantage, ball possession, handling and game tactics – but in the end the score board has the final say.

SHAREHOLDERSGood value was created for shareholders this year. The share price increased from R4,00 to R5,25. Value was further unlocked by a sustained dividend policy and a 13,5% dividend yield (54 cents in total) was realised.

A rate of return of 22,4% on opening equity was attained - which is regarded as one of the best in the agricultural sector.

CLIENTSSenwes’s drive to be the supplier of preference of clients, was continued during the past year. The ob-jective is to support clients by means of innovative products and to understand and meet their require-ments in respect of products, service, price and delivery mechanism. The growth in market share which took place during the past few years, demonstrates Senwes’s success in this regard.

EMPLOYEESIn pursuit of becoming an employer of preference in the agricultural sector, Senwes again participated in the “Best company to work for” survey this year, in order to evaluate our human resource practices. Senwes was third in the agricultural sector category and 14th in the category for medium sized compa-nies – in which 62 businesses from all sectors participated.

The Company introduced a new short-term incentive scheme (STI) during 2007, which is applicable to all permanent employees. The scheme is structured in such a manner that it motivates individuals as well as teams to be hard-working and innovative, which means that personnel can share in the wealth created for stakeholders.

Various leadership programmes – focused on designated groups, supervisors and junior and mid-dle management – were launched during the year. The programmes are aimed at meeting business objectives and contributing towards the establishment of a winning culture. Good progress has been made with formal learnerships and groups of candidates successfully completed various core and fundamental modules.

COMMUNITYIn addition to the important economic impact that Senwes has on the rural areas in particular, it is ac-cepted that community involvement on other levels is of the utmost importance.

A BEE transformation charter was approved by the board in 2004, that has since been aligned with the draft Agri-BEE charter and the code of good practices. Senwes believes that black economic em-powerment (BEE) is a vital component in the facilitation of meaningful participation of black people on all levels of the South African economy, thereby ensuring social, socio-political and economic stability as well as a contribution towards economic growth and development. Senwes is a level 6 contributor to BEE at present.

The association with sports development continued with a second year as sponsor of the Senwes Spinners cricket development programme for the youth of the Northwest Province. The programme is aimed at farm schools.

Another social responsibility project involves the support of two youth coaches, who offer immediate support to learners and who are role models whom teenagers can identify with.

JOHAN DIQUE

CHAIRMAN’SREPORT


REPORT

FINANCIALREVIEW

FINANCIALHIGHLIGHTS


BUSINESSREVIEW


The coaches were also involved in tournaments where ten Spinners schools competed against each other during the year.

A successful entrepreneurs competition was continued this year and it is wonderful to see how the youth is encouraged to think innovatively, something which Senwes claims as part of its culture.

A number of emerging farmer projects were successfully launched in the Vereeniging and Vaalharts areas. Assistance in respect of fi nancing and agricultural extension was rendered with great success.

SENWES’S BROAD STRATEGYA new strategic process commenced on corporate leadership level. All persons on the strategic ses-sion accepted ownership thereof and a renewed focus was established - which was accepted by the board of directors as well. This became the road map to new innovation and progress.

Senwes’s focus on its core activities on an integrated basis to the client, supports the strive towards realising the vision to become the most admired agricultural business in South Africa. Progress is being made in respect hereof, based on good business principles and by delivering good and sustainable fi nancial performance.

Senwes still believes that consolidation within agriculture is an essential aspect which will become a reality over time. The country’s eastern summer production areas have been considerably more successful in this regard, whilst the western production areas remain unconsolidated. The Western Cape has also made progress as far as the consolidation of the winter grain production areas are concerned.

Discussions with other parties are held on a continuous basis, with no tangible success thus far.The core objective of the value unlocking strategy is to eventually establish Senwes as a listable

entity. Goals in this regard were to ensure that the market value of the shares would exceed the net asset value and to prove that the economic profi t is sustainable, both of which were attained. However, successful listing requires more than this. Factors such as the risk profi le, critical mass, reasons for list-ing such as specifi c capital requirements, as well as advantages and disadvantages for stakeholders and the organisation itself, require further clarifi cation.

Listing on the JSE securities exchange offers an opportunity of further value unlocking for the shareholder or to attract additional capital for the company, should current shareholders be unable to supply such capital. The step will be carefully considered and discussed with shareholders in a suitable manner, should the requirement exist.

From a Senwes perspective, listing seems to be unnecessary at this stage, although there seems to be a need in this regard, particularly amongst the older shareholders.

Attempts were made by the main blocks of shareholders (both the empowerment partner and Sen-wesbel) to strengthen their interests in the company. Senwesbel currently has a 35,5% shareholding and its empowerment partner, the Bafokeng Consortium, has a 32,6% shareholding, whilst approxi-mately 32% of the shares are still in the hands of the minorities.

The fact that Senwes is an empowered company, has not been fully exploited, despite various initia-tives and hard work in this regard. Expectations are that this will become increasingly important in the future, particularly from the point of view of the buyers of grain.

SENWES’S FOCUS ON ITS CORE ACTIVITIES ON AN INTEGRATED BASIS TO THE CLIENT, SUPPORTS THE STRIVE TOWARDS REALISING THE VISION TO BECOME THE MOST ADMIRED AGRICULTURAL BUSINESS.

PROSPECTSSustainability conditions for the next three years seem promising, with a bullish market which should provide the necessary driving power.

A larger offer of innovative products and a more aggressive approach to the fi nancing market, should continue the sound business base and cycle for both the Credit Extension and Trade business during the summer planting cycle – still against the background of sound credit extension practices.

Senwes is still in strong pursuit of being the best in our existing area of service before aggressive expansion of our footprint – at a premium – is further pursued. Nonetheless, new opportunities are investigated on a continuous basis, particuarly in respect of African markets.

Increasing pressure is being placed on the grain handling channel due to farm-loading actions, alternative storage structures and storage facilities on farms. We are of the opinion that sustainable, logistical solutions are the answer to remain part of the grain supply chain and Senwes has made a lot of progress in this regard.

The Senwes community is committed to the future of our country, its community, our business and its strategy and the success which we will achieve therewith. The integrated business model which we use, is seen as the vehicle with which Senwes will reach the end distination as the most admired agri-business in South Africa.

ACKNOWLEDGEMENTSI have the need to thank each client who chooses Senwes as his/her indispensable specialist partner in agriculture. Together we can always make better plans, aimed at sustainability and continuity in agriculture.

The suppliers and trade colleagues who enable us to offer a menu of innovative products and services, also deserve mention. May the year ahead once again be a continuation of a successful partnership.

Points on the score board are defi nitely scored by a team with a communal vision but which remains a group of dynamic individuals. It has been proved on more than one level that this is the cha racter of the Senwes personnel corps. On behalf of the executive management team and myself, we would like to thank you.

The vision and guidance received from our Chairman and the Board, are inspirational.Amidst the challenges which we face, we are excited about the task which we have to perform in

the most southern point of Africa. It is a decision of will to stay and to make a difference – as part and parcel of the free gift of our Father’s love and grace which we receive.

JOHAN DIQUEMANAGING DIRECTOR

CHAIRMAN’SREPORT


REPORT

FINANCIALREVIEW

FINANCIALHIGHLIGHTS


BUSINESSREVIEW


Financial review

APART FROM THE USUAL DYNAMIC THAT BUSINESSES OPERATE WITHIN, an agri-cultural undertaking, together with the farming community it serves, is exposed to the volatility of weather patterns and signifi cant market movements. In recent years this has been extensively demonstrated where, due to market fl uctuations, a 50% reduction in normal planting cycles was experienced. The drought that followed impacted grain yields to the extent that deliveries once again averaged approximately only 50% of usual levels. In essence one entire crop yield was lost. It is the task of the board and management to ensure that extraordinary results are delivered despite these challenging issues. An extraordinary team effort is consequently required as well as outstanding risk management practices to transform these risks into opportunities.

GROUP RESULTSThe turnover increased by 38% to R7,6 billion due to mainly two reasons. Firstly, both commodity prices and input costs increased drastically and secondly, Senwes succeeded in increasing market share with approximately 10%. Operating profi t before interest rose by 41% to R376 million, resulting in a net income attributable to shareholders of R173 million. A very pleasing outcome representing a 38% improvement during a diffi cult year of reduced grain volumes available that negatively impacted the entire grain industry. This also represents an increased yield on opening equity balance of 22,4%, an improvement from last year’s 18,3%.

The Market Access division results were gravely impacted by the lower volumes as discussed above. Nonetheless, superior effort ensured that this division continued to contribute positively to the bottom line, with a pre-tax result of R138 million in comparison with the previous year’s R166 million.

The star performer was the Input Supply division. Input Supply showed a pre-tax profi t of R83 million in comparison with R42 million last year – a 98% improvement. Revenue showed a simi-larly positive trend and grew by 36%. Many opportunities were present in the marketplace, following an upswing in the business cycle, which the Mechanisation division in particular utilised fully. Bulk direct inputs similarly experienced a positive cycle and revenue improved by 57%. The Retail stores maintained its position despite growing economic pressure caused by interest rate hikes that nega-tively impact on consumer spending. This has further emphasised the need to right-size the business and infrastructure capacity with spending capability – an exercise completed a few years ago.

Performance of Input Supply was well supported by the Credit Extension division. Credit Exten-sion maintained healthy growth with a book managed by stringent control policies.

Senwes is proud to announce its excellent operational results that continue to display phenomenal growth for the third year running regardless of difficult circumstances. This proves both the resilience of the business model and thetenacity of the management team, leading to exceptional benefits for the shareholder.

STEVEN ALBERTS

BALANCE SHEETThe Group’s asset base was increased due to the aforementioned growth in the business base, and this is demonstrated in growth in receivables. On top of this, growth in commodity prices impacted on inventory held fi gures and added to the additional inventory held in Input Supply. As a result, total assets excluding cash, rose by 24% to R2 340 million.

The Group maintains a healthy gearing with active balance sheet management seen as a critical performance area. Productivity of the balance sheet has risen signifi cantly during the last two years. This is represented in a total asset turn of more than three times annually, and a revenue to equity ratio of more than nine.

Own capital funding of total assets amounted to 35% – an amount regarded as healthy for the business base and its associated risks. This is emphasized by an interest rate cover by cash profi ts of more than three.

CASH FLOWThe large degree of business growth would be expected to result in negative balance sheet and cash fl ow fi gures due to the increased investment in operating capital (R348 million). However, the cash fl ow analysis indicates healthy underlying cash generated by operating activities of R438 million – an increase of 42%. This serves to underscore Senwes’s considerable future potential.

SHAREHOLDERSDuring the year under review the primary stakeholder – the shareholder, was benefi ted by a share price that showed a growth of 31%. An opening trading price of R4,00 per share was followed with a closing value of R5,25. On top of this a dividend of 54 cents per share was received. In the interim 40 cents was paid and a fi nal dividend of 14 cents per share is proposed. It represents a dividend yield of 13,5%. This increased the shareholder haul to a return of 45% on opening value. Growth in earnings per share rose by 38,5%, up from 69,1 cents per share to 95,7 cents.

The price-book-ratio amounts to 114% and it is Senwes’s aim to strengthen this ratio even further. The price-earnings-ratio calculated on headline earnings stabilised at about six after constantly increa-sing the last fi ve years. This still displays good value and potential growth for prospective investors.

PROSPECTSThe agricultural industry is currently experiencing a very positive upward trend. This is fortifi ed by an increased pressure for resources caused by growing population fi gures; and by growth in the emerging economies of India, Brazil, China and Russia. These additional demands have resulted in escalation in energy use and price hikes. Bio-fuel as a promising industry has taken its cue from these factors, and has been further stimulated by an increased awareness of environmental issues. The above aspects have contributed to higher local and international commodity prices. The aforementioned will result in producers feeling the pinch of mounting input costs, particularly with regards to fuel and fertiliser expenditure. Producers will also need to review the planting of marginal lands. However, producers will on the whole form part of the positive cycle and benefi t from continued higher commodity prices.

Senwes therefore feels confi dent that it will be able to build on the results of the past year and that it will continue to capitalise on this cycle and produce excellent results.

STEVEN ALBERTSDIRECTOR FINANCE

CHAIRMAN’SREPORT


REPORT

FINANCIAL REVIEW

FIVE-YEAR REVIEW & DEFINITIONS

BUSINESSREVIEW

FINANCIAL HIGHLIGHTS


Financial highlights

INCOME STATEMENT

Interest-bearing debt (R‛m)

2004

802

2005 2006 2007 2008

771

606

815

1 071

2004

175

2005 2006 2007 2008

127107

195168

Profi t after tax (R‛m)

2004

7 640

2005 2006 2007 2008

5 554

3 6223 8343 450

Revenue from continuing operations (R‛m)

BALANCE SHEET

Own capital ratio to net assets (%)

2004

51

2005 2006 2007 2008

5053

4335

2004

250

2005 2006 2007 2008

183

97

140164

Profi t from continuing operations (R‛m)

Balance sheet velocity (times)

2004

3,4

2005 2006 2007 2008

3,0

2,32,12,0

EFFICIENCY AND PRODUCTIVITY

Operating profi t per employee (R‛000)

2004

168

2005 2006 2007 2008

137

7382

112

CASH FLOW STATEMENT

438308

242262348

Cash from operations generated vs net cash fl ow (R‛m)

Cash generated from operations

Net cash flow

2004 2005 2006 2007 20080

Cash generated from operationsCash generated from operations

Net cash flow

SENWES IS PROUD TO ANNOUNCE ITS EXCELLENT OPERATIONAL RESULTS THAT

CONTINUE TO DISPLAY PHENOMENAL GROWTH FOR THE THIRD YEAR

RUNNING, REGARDLESS OF DIFFICULT CIRCUMSTANCES.

/

CHAIRMAN’SREPORT


REPORT

FINANCIAL REVIEW


BUSINESSREVIEW



2008 2007 2006 2005 2004 #

R’m R’m R’m R’m R’m

BALANCE SHEETAssets

Non-current assets 376 331 254 269 381Current assets 1 999 1 777 1 386 1 595 1 771Assets of discontinued operations – held for sale - 14 3 - -Total assets 2 375 2 122 1 643 1 864 2 152

Equity and liabilitiesTotal shareholders interest 843 773 683 622 569Non-current liabilities 79 106 89 80 60Current liabilities 1 453 1 243 870 1 162 1 523Liabilities associated with assets – held for sale - - 1 - -Total liabilities 2 375 2 122 1 643 1 864 2 152Interest-bearing liabilities included in current liabilities 802 771 606 815 1 071

INCOME STATEMENT *Revenue

Credit Extension 120 80 78 87 118Input Supply 1 573 1 155 821 850 960Market Access 5 902 4 273 2 662 2 849 2 307Sundry operations 39 40 31 38 53Normal operating activities 7 634 5 548 3 592 3 824 3 438Other non-apportionable 6 6 30 10 12Continuing operations 7 640 5 554 3 622 3 834 3 450Discontinued operations – held for sale - 24 426 523 1 114Inter-segmental sales - - (69) (107) (85)Total income for the year 7 640 5 578 3 979 4 250 4 479

Profi t/(loss) Credit Extension 44 24 23 32 21Input Supply 83 42 (36) (35) (62)Market Access 138 166 177 175 194Sundry operations 3 2 4 8 9Normal operating activities 268 234 168 180 162Corporate and non-apportionable cost (44) (53) (76) (54) (12)Investment income 26 2 5 14 14Continuing operations 250 183 97 140 164Discontinued operations – held-for-sale - (1) 28 98 36

Profi t before tax 250 182 125 238 200Taxation (75) (55) (18) (43) (32)

Profi t for the period 175 127 107 195 168

Minority interest 2 2 - - -Finance charges included above (126) (83) (62) (84) (135)

CASH FLOW STATEMENTNet cash from operating activities

Cash profi t 218 202 169 192 227Dividends paid (103) (24) (29) (12) -Movement in operating capital (348) (107) 10 (25) (434)Net cash generated/(invested) through investment activities - (21) 56 92 231Net cash generated (233) 50 206 247 24Cash fl ow from fi nancing activities 1 (1) 9 (1) (2)

Net cash fl ow (232) 49 215 246 22

* For comparative purposes the segmental revenue and results of previous periods have been restated for discontinued operations to ensure comparability.

# The 2004 fi gures represent the opening balances for the 2005 fi gures, and were restated to account for IFRS. IFRS was adopted from the 2004/2005 fi nancial year onwards.

SENWES GROUP – FIVE-YEAR REVIEWSENWES GROUP – FIVE-YEAR REVIEWSENWES GROUP – FIVE-YEAR REVIEW

Value creation and value unlocking forshareholders by capital and dividends (c/share)

Cumulative dividends

SHAREHOLDERS

Dividends (c/share)

2004

54,0

2005 2006 2007 2008

23,0

35,0

47,5

5,5

2004 2005 2006 2007 2008

250

165

344315

Share price: Trading value vs net asset value (c/share)

2004

96

2005 2006 2007 2008

695954

70

Earnings per share (c/share)

Price earnings ratio calculated onheadline earnings (times)

2004

6,2

2005 2006 2007 2008

6,1

4,3

3,0

1,1

690

511338

218

86

2004 2005 2006 2007 2008

24,0

30,0

23,0

2006

35,035,0

37,5

10,05,5

20,0

15,0

Normal dividends

Special dividends

80

378427

400

525

465

Trading value

Net asset value

10892

85

Earnings per share

Headline earnings per share

Base price – 2003

Cumulative capital growth

58

165

465

60

111

340

60

88

190

60

53

105

606020

66

CHAIRMAN’SREPORT


REPORT

FINANCIAL REVIEW


BUSINESSREVIEW


CHAIRMAN’SREPORT


REPORTFINANCIAL

REVIEWFIVE-YEAR REVIEW




Defi -nition 2008 2007 2006 2005 2004

NUMBER OF ORDINARY SHARES (‘m)Weighted average number in issue * 180,79 180,79 180,79 180,79 181,79Number in issue at year-end * 180,79 180,79 180,79 180,79 180,79

PERFORMANCE OF ORDINARY SHARES Cents per share

Earnings 1 95,7 69,1 59,2 107,9 92,4Headline earnings 2 85,2 65,8 58,1 54,2 70,4Net asset value 3 465,2 426,5 377,8 344,0 314,7Closing market price 4 525,0 400,0 250,0 165,0 80,0Total dividends for the year 5 54,0 23,0 35,0 47,5 5,5

Final dividend 6 14,0 17,0 15,0 5,5 5,5Interim dividend paid 7 10,0 6,0 0,0 4,5 0,0Special dividend paid in the interim 8 30,0 0,0 20,0 37,5 0,0

PercentPrice-book ratio 9 114 94 66 48 25Dividend yield on opening market price

(normal dividends) 10 6,0 9,2 9,1 12,5 9,2Dividend yield on opening market price, including special dividends 11 13,5 9,2 21,2 59,4 9,2

TimesPrice-earnings ratio 12 5,5 5,8 4,2 1,5 0,9Dividend cover from normal dividends 13 4,0 3,0 3,9 10,8 16,8Dividend cover, including special dividends 14 1,8 3,0 1,7 2,3 16,8

RETURN (%)Return on opening balance of equity 15 22,4 18,3 17,2 34,3 45,2Return on average equity 16 21,5 17,2 16,4 32,7 35,7Return on total assets – continuing operations - EBIT 17 15,8 12,6 9,7 12,0 13,9Operating profi t from continuing operations as % of income 18 4,6 4,8 4,3 5,5 8,3Effective tax rate 19 30 31 15 18 16

PRODUCTIVITYBalance sheet turn (times) 20 3,4 3,0 2,3 2,1 2,0Revenue/equity (times) 21 9,1 7,2 5,8 6,8 7,9Operating profi t per employee (R’000) 22 168 137 73 82 112

SOLVENCY AND LIQUIDITYEquity as % net assets 23 51 50 53 43 35Equity as % of total assets 24 35 36 42 33 26Interest cover (times) 25 3,2 3,5 3,0 3,1 2,4Gearing ratio % 26 91 69 86 129 185Non-interest-bearing liabilities as % of equity 27 87 75 52 69 90Current ratio 28 1,4 1,4 1,6 1,4 1,2Quick asset ratio 29 0,9 0,9 0,9 1,1 0,7

* Senwes has dissolved its Personnel Share Trust in the 2005/06 fi nancial year. According to IFRS this fi gure has to be adjusted from 2004 against equity as if the Trust was previously consolidated.

1. Earnings per share Earnings attributable to shareholders di-

vided by the weighted average number of shares in issue during the year.

2. Headline earnings per share Earnings per share attributable to share-

holders, excluding: - profi t/(loss) on disposal form discon-

tinued operations,- profi t/(loss) on disposal of fi xed assets,- restructuring costs,- profi t/(loss) on disposal of investments,- profi t/(loss) on disposal of subsidiaries,- provision for impairment of assets,- amortisation of goodwill,divided by the weighted average number of shares in issue during the year.

3. Net asset value per share Capital and reserves, reduced by intangible

assets, divided by the number of shares in issue at year-end.

4. Closing market price Trading price of the last share trading trans-

action in the fi nancial year.

5. Total dividends for the year Total of normal and special dividends for the

year.

6. Final dividend per share Final dividend proposed divided by the nor-

mal number of shares in issue at year-end.

7. Interim dividend per share Interim dividend paid divided by the total

number of shares in issue at interim date.

8. Special dividend per share Self-explanatory.

9. Price-book ratio Closing market price per share divided by

the net asset value per share.

10. Dividend yield on opening market price Total normal dividend per share divided by

opening market price per share.

11. Dividend yield on opening market price, including special dividend

Total normal dividend per share, including the special dividends, divided by the ope-ning market price per share.

12. Price-earnings ratio Closing market price per share divided by

the earnings per share.

13. Dividend cover from normal dividends Earnings attributable to shareholders divi-

ded by the total normal dividend.

14. Dividend cover, including special dividends Earnings attributable to shareholders divi ded

by the total of normal and special dividends for the year.

15. Return on opening balance of equity Earnings attributable to shareholders ex-

pressed as a % of the opening balance of capital and reserves.

16. Return on average equity Earnings attributable to shareholders ex-

pressed as a % of average capital and re-serves.

17. Return on total assets – continuing operations – EBIT

Profi t before taxation and fi nance cost from continuing operations as % of total assets less assets of discontinued operations – held-for-sale.

DEFINITIONSDEFINITIONSDEFINITIONS

CHAIRMAN’SREPORT


REPORT

FINANCIAL REVIEW


BUSINESSREVIEW



18. Profi t before tax from continuing operations as a % of income Profi t before taxation (adjusted with dis-

continued operations) divided by revenue (adjusted with discontinued operations).

19. Effective tax rate Income tax expense as per the fi nancial

statements as a % of profi t before tax.

20. Balance sheet turn (velocity) Income divided by average total assets.

21. Revenue/equity Revenue divided by equity.

22. Operating profi t per employee Profi t before tax from continuing operations,

adjusted with fi nance cost, investment in-come and abnormal items, divided by the total number of employees at year-end.

23. Equity as a % of net assets Capital and reserves expressed as a % of

total assets less non-interest-bearing debt.

24. Equity as % of total assets Capital and reserves expressed as a %

of total assets.

25. Interest cover Operating profi t from continuing operations,

adjusted with depreciation and amortisation (EBITDA), divided by fi nance cost.

26. Gearing ratio Interest-bearing debt, reduced by cash, divided by capital and reserves. 27. Non-interest-bearing liabilities as %

of equity Non-interest-bearing liabilities and provi-

sions divided by equity.

28. Current ratio Current assets divided by current liabilities.

29. Quick asset ratio Current assets less inventory divided by

current liabilities.

CHAIRMAN’SREPORT


REPORT

FINANCIAL REVIEW


BUSINESSREVIEW


Business reviewMARKET ACCESS1. The Market Access division is a relevant role player in the

grain supply industry of Southern Africa which conducts busi-ness through the following operational structures:

• GRAIN PROCUREMENT - Market information services - Extended range of grain contracts - Grain pricing mechanism

• GRAIN HANDLING AND STORAGE - Handling and storage of grain in a safe and hygienic environment - Preparation of grain for the market through the grading, drying and

cleaning thereof

• GRAIN MARKETING - Providing market access for grains through various market instruments and

processes

• GRAIN LOGISTICS - Logistical and transport services

• GRAIN FINANCE AND ADMINISTRATION - Funding of grain - Administrative services to role players and grain buyers

PIETER ESTERHUYSENGENERAL MANAGER:

GRAIN

PIETER ESTERHUYSEN

Grain• GRAIN OPERATIONS• GRAIN MARKETING• GRAIN FINANCE & ADMINISTRATION

2. KEY DEVELOPMENTS • Low carry over opening stock due to downscaled plantings two years ago and drought conditions

last year• With less grain received, lower utilisation of silo capacity occurred• Limited opportunities for grain stock management and blending• Extraordinary low closing inventory carried over to new fi nancial year but which should be negated

by the good crop expected• Increase in alternative storage facilities such as farm silos and silo bags, whose business model is

not focused on generating income from storage• Farm loading directly to usage points is also becoming increasingly popular• Aggressive competition across traditional competitor boundaries by means of new receiving points

and farm loading • Senwes is the fi rst commercial grain silo operator in South Africa to receive HACCP accreditation at

all silo complexes and are authorised to export grains in terms of food safety• International grain commodity prices are at new record levels due to the usage of maize for ethanol

production as well as all time high levels of the Brent crude oil price. Local grain prices followed suit with record price levels recorded

CHAIRMAN’SREPORT


REPORTFINANCIAL

REVIEWFINANCIAL




GRAIN MARKETING

Objectives set Performance against objectives

• Maintain profi tability despite a second con-secutive below average crop

• Protected the income base through innova-tive marketing activities

• Develop an effective strategy to mitigate the effect of alternative storage structures

• Managed to retain market share through innovative products. In so doing limited the effect thereof

• Expand the product offering aimed at both producers and the grain buyer customer base

• Farm-loading component, which focuses on the “farm to buyer directly” logistical solu-tion, was expanded substantially

• Innovative new products, including price man agement models, logistical solutions and fi nan cing products, developed for cus-tomer base

• Effective management of inherent market environment risks

• Risk related to non-performance on grain contracts in a sharp rising market was man-aged effectively

• The risk of non-suffi cient interest recovery due to a sharp rise in Safex margin require-ments following severe price increases was managed effectively

• Logistical risks caused by sharp increase in fuel price were managed effectively

• Enhance communication with client base • Price information disseminated to clients through electronic media communication (sms message system) on a daily basis

• Senwes Mobile (an online cell phone price request service) was rolled out further to client base

• Presented two series of information meetings on the grain market situation during April and October in 30 towns throughout the Senwes area of operation

• Market review presented daily at 13:00 du-ring weekdays on regional radio station

• Operational information also communicated to customers through frequently published articles in Senwes publications

• Training • Contracted training service providers to train relevant personnel in the following topics:

- The basic working of grain markets - Technical analysis

GRAIN OPERATIONS


• Increase product development and value ad ding

• Grain laboratory equipped with latest tech-nology in order to analyse and quantify grain qualities for upgrading purposes. Identity pre servation (IP) of GM-free grain is a grow-ing focus area

• Improve quality analysis and grain control at silo level

• 10 state of the art grading instruments were installed

• Implement food safety and food hygiene plan • Senwes is the fi rst grain silo operator in South ern Africa to receive HACCP accredita-tion at all its silo complexes

• Optimise management of stored grain • Limited value adding opportunities (due to abnormally low levels of stored grain) were utilised

• Maintain silo infrastructure to support optimal operational effi ciency

• Silo operation and maintenance were con-ducted effi ciently. A prioritised expenditure programme was put in place to retain effi -ciency and to enhance capacity

• 15 largest silo complexes equipped with generators

• Electricity action plan launched to alleviate pressure during the harvesting season and to utilise infrastructure

• Effi cient training and development of person-nel and learnerships, through Senwes Silo Academy

• Designated employees are making good progress with training

• Improved skills are applied at operational level

3. ACHIEVEMENT OF OBJECTIVES

• Increased demand for capital and risks associated with contracting grain and concomitant higher demands on interest management

• Non-traditional competition more evident through alternative storage facilities; input insurance schemes; commercial banks and increased formation of alliances

• Financing of grain further along the value chain is becoming more important as a prerequisite from grain buyers

• Logistical capacity becoming more important due to a sharp rise in the volume of farm loading. Impact of fuel prices is severe on this activity

• Traditional geographic operating areas of silos are disappearing in the grain market and role play-ers enter different areas with different business models, with the market becoming more mature and different options being available for producers

• Certain risks and opportunities are created by the regulatory environment, with regards to legisla-tion on competitiveness, FICA, Food Safety Act and the Road Transport Act

CHAIRMAN’SREPORT


REPORTFINANCIAL

REVIEWFINANCIAL




INPUT SUPPLY1. The Input Supply division actively supports the producer’s

agricultural enterprise through the following units:

• RETAIL - Supply of farming goods (inputs and general requisites) - DIY, Gardening and Irrigation products - Outdoor products - Fuels and lubricants - Supply of groceries in rural areas (Village Grocer stores)

• MECHANISATION - New John Deere equipment - Parts stores - Workshop services - Precision farming - Previously-owned farming equipment

• DIRECT INPUT MARKETING - Marketing of bulk farming inputs to the commercial farmer

2. KEY DEVELOPMENTS • The current positive agricultural cycle supported the profi tability of the

strategic business units• Progress made in terms of customer and employee loyalty• Progress made with BEE objectives regarding recruitment of previously

disadvantaged individuals and preferential procurement• Growth in market share in key performance areas• “Village Grocer” stores in rural areas• Public sector tenders participation• Upgrading of retail stores• Growth of fuel business• Development of business model for rural townships

FRANS DU PLESSISGENERAL MANAGER:

TRADE

FRANS DU PLESSIS

Trade• RETAIL• MECHANISATION• DIRECT INPUT MARKETING

4. FUTURE PROSPECTS

GENERAL• Establish a Senwes footprint in broader South Africa and Southern African Development

Community (SADC)• Further development of information systems and technological platforms• Revision of the role of the silo in our business model• Optimise opportunities created by speciality products• A normal to above-normal harvest is expected which will offer adequate grain volumes

to handle, store and trade on

GRAIN OPERATIONS• Increased demand for speciality products demands alternative solutions for the handling and

storage thereof• Establish additional storage facilities in South Africa and SADC• Develop innovative tariff models based on value adding services• Implement grain aeration facilities• Apply latest technology to review business models• Increase service levels and client relations at points of operations

GRAIN MARKETING• Focus on retaining and growing of our market share with producers who deliver and store

their grain at Senwes silos• Grow market share in the farm loading market within traditional Senwes service area• Ensure organic growth regarding die procurement of grain on a national basis through

establishment of a country wide operational procurement network• Investigate the possibility of joint ventures in certain markets• Expand market share in the milldoor market• Develop a model to fi nance grain buyers amidst possible balance sheet challenges,

without attracting abnormal risks• Develop procurement capacity in order to tender on a competitive basis• Establish logistical capacity to counter on-farm storage facilities and to effectively utilise

milldoor transactions• Exploit opportunities in Sub-Sahara Africa• Attract, retain and train talented entrepreneurs• Develop systems in order to quickly adapt to transactions in non-traditional areas of operation• Continuous and enhanced focus on the risks and aspects of the business which have

a substantial impact on the fi nancial results

CHAIRMAN’SREPORT


REPORTFINANCIAL

REVIEWFINANCIAL




4. FUTURE PROSPECTS

RETAIL• Focus on new business development and organic growth• Improve customer satisfaction - Optimise stock levels and product ranges - Training on product knowledge - Skills development

DIRECT INPUT MARKETING• Grow market share through improved strategic supplier relationships• Improve customer relationships through provision of value-adding services• Further expansion of geographic service area

MECHANISATION• Ensure sustainable profi tability• Expansion of geographic area• Continuous growth in market share• Strive towards excellence in customer services• Optimise stock levels• Increase capacity on technical support

MECHANISATION

Objectives set Performance against objectives• Sustainable profi tability • Revised business model successfully imple-

mented• Geographic expansion • Market share gained regarding John Deere

products in market areas entered in the pre-vious year

• Expansion of technical infrastructure and technician capacity

• Further expansion of marketing structure• Increase in market share and customer

satisfaction• Despite higher volumes and new entrants to

the traditional market – the market share was sustained

• Independent evaluation confi rmed substan-tial increase in customer satisfaction

• Improved technical support • Recruitment of qualifi ed technicians and apprenticeships set up

• Continuous training in collaboration with John Deere academy

RETAIL

Objectives set Performance against objectives• Optimal utilisation of existing infrastructure • More diversifi cation and expansion of

product ranges implemented• Increased sales volumes and market share

established• Improved stock management esta blished

• Access to new markets • First own branded grocery store established• Specialisation of product offering to selected

geographic areas and customers

• Geographic expansion • Initial infrastructure expansion into new mar-kets occured last year. Further expansion of product offering and input supplies in con-junction with the mechanisation proposition occured this year


DIRECT INPUT MARKETING

Objectives set Performance against objectives• Increased market share • Growth in market share in a very competitive

environment• Geographic expansion • Agency agreements in Mpumalanga and

Gauteng areas for specifi c product lines added

• Expansion of existing marketing structure in the North West and Northern Cape and Free State areas outside of Senwes’s traditional area of operation

CHAIRMAN’SREPORT


REPORTFINANCIAL

REVIEWFINANCIAL



33SENWES ANNUAL REPORT 200832 SENWES ANNUAL REPORT 2008

Statement of responsibility by the Board of DirectorsThe directors are responsible for the preparation, integrity and reasonableness of presentation of the fi nancial statements of Senwes Ltd and its subsidiaries. The fi nancial statements set out on page 35 to 92 have been prepared in accordance with International Financial Reporting Standards (IFRS). The Board also prepared all other information included in this annual report and is responsible for both the accuracy and the consistency of the fi nancial statements.

The Board is also responsible for the Company’s internal fi nancial control system and risk man-agement, which are both reviewed regularly. These controls are designed to provide reasonable but not absolute assurance with regard to the reliability of the fi nancial statements, to provide adequate safeguarding and control of assets and to prevent and identify misrepresentations and losses. Nothing has come to the attention of the Board which could indicate a material defi ciency in the functioning of these controls, procedures and systems during the year under review.

The fi nancial statements were prepared on a going concern basis. The directors have no reason to believe that the Group or any company in the Group will not be a going concern in the foreseeable future, based on results, operational tendencies, market tendencies, estimates and forecasts, risks, capital structure and available cash and fi nance resources.

The fi nancial statements were audited by the independent auditors, Ernst & Young Inc. The inde-pendent auditors had unrestricted access to all fi nancial records, including all minutes of board, board committee, management and shareholder meetings. The Board believes that all representations made to the independent auditors during the audit were valid and proper.

The annual fi nancial statements of the Company and the Group annual fi nancial statements for the year ended 30 April 2008, set out on page 35 to 92, were approved by the Board.

JE GROBLER JJ DIQUE SH ALBERTSCHAIRMAN MANAGING DIRECTOR DIRECTOR FINANCE

20 June 2008

In terms of section 268G(d) of the Companies Act, as amended, the Company Secretary hereby certifi es that all returns, as prescribed by the said Act, have been submitted to Companies and Intellectual Property Registration Offi ce (CIPRO) and that the said returns are true, correct and up to date.

EM JOYNTCOMPANY SECRETARY

20 June 2008

Statement by the Company Secretary

AUDITORSREPORT

FINANCIAL STATEMENTS

STATUTORY DIRECTORS’

REPORTACCOUNTING

POLICIESDIRECTORS’ & SECRETARY’SSTATEMENT

NOTES TO THE FINANCIAL

STATEMENTS

CREDIT EXTENSION

1. As business enabler to the Market Access and Input Supply divisions, Credit Extension fulfi lls a key role of support to these divisions to realise objectives and successfully implement strategies. The following products and services are available:

• A comprehensive range of competitive fi nancing products for the producer• Financing of grain buyers such as milling businesses• Market oriented service• In depth client relationship management on personal basis

2. KEY DEVELOPMENTS • Finalised a revised business model adaptable to different areas and markets

ensuring acceptable return achievement• Signifi cant growth in market share occurred• Successful implementation of the requirements of the National Credit Act• High agricultural input infl ation impacting risk management practices and

profi les and was successfully managed• Streamlined credit assessment processes with short turn-around times

GERRIT VAN ZYLASSISTANT GENERAL

MANAGER:CREDIT EXTENSION

GERRIT VAN ZYL

CREDIT EXTENSION


• Signifi cant but sound growth in fi nancing book

• The book has grown with 49%

• Provision for bad debt of less than 0,5% on credit extended

• Targets exceeded through management of clientele profi le

• Geographical expansion to selected areas • Growth in market share achieved

• Focus on capacity building and review of our structure to support growth strategy

• The necessary appointments and structural changes were completed


Credit Extension• SEASONAL CROP FINANCE• MECHANISATION FINANCE• LONG-TERM FINANCE• MONTHLY ACCOUNTS FOR INPUT SUPPLY• GRAIN BUYERS FINANCE

4. FUTURE PROSPECTS• Provide further momentum to focused geographical expansion into selected areas• Optimise fi nancing model for grain buyers and establish signifi cant growth of grain fi nancing book• Positive agricultural cycle expected to enhance business opportunities• Diligent management of the impact of the rising input cost on the new season crop production and

concomitant increase on risk profi le

CHAIRMAN’SREPORT


REPORTFINANCIAL

REVIEWFINANCIAL




Report of the Independent Auditors

To the members of

SENWES LIMITED

REPORT ON THE FINANCIAL STATEMENTSWe have audited the annual fi nancial statements and group annual fi nancial statements of Senwes Limited, which comprise the directors’ report, the balance sheet as at 30 April 2008, the income statement, the statement of changes in equity and cash fl ow statement for the year then ended, a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 35 to 92. DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL STATEMENTSThe company’s directors are responsible for the preparation and fair presentation of these fi nancial statements in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of fi nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

AUDITOR’S RESPONSIBILITYOur responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclo-sures in the fi nancial statements. The procedures selected depend on the auditor’s judgement, inclu-ding the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

OPINIONIn our opinion, the fi nancial statements present fairly, in all material respects, the fi nancial position of the Company and the Group as of 30 April 2008, and of the fi nancial performance and its cash fl ows for the year then ended in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa.

REGISTERED AUDITOR

23 June 2008Johannesburg

Statutory directors’ report

1. MAIN OBJECTIVES The main objectives of the Company are as follows:

1.1 To supply primary agricultural inputs.1.2 To provide market access for agricultural produce.

2. CHANGE IN NATURE OF ACTIVITIESThere were no material changes during the year in the nature of property, plant and equipment.

3. SUBSIDIARIES AND OTHER FINANCIAL ASSETSDetails of the company’s interest in subsidiaries, joint ventures and other fi nancial assets are set out in notes 3, 4 and 5 to the fi nancial statements.

4. RESULTSThe net profi t after tax (including minority interest) of the Group for the year under review amounted to R175 million (2007 – R127 million).

The summarised results are as follows:

GROUP COMPANY2008 2007 2008 2007R’m R’m R’m R’m

Revenue 7 640 5 578 7 596 5 539 Continuing operations 7 640 5 554 7 596 5 515 Discontinued operations - 24 - 24

Operating profi t – continuing operations 350 264 343 256Net profi t after tax 175 127 172 122

Refer to note 1 of the fi nancial statements for a full segmental analysis.

The revenue of continuing operations increased by 38% to R7 640 million due to the higher turnover generated by the Input Supply division and higher grain prices as well as higher marketed tonnage for the Market Access division. Due to higher direct input and mechanisation sales caused by an increase in plantings in the area (due to an increased grain price cycle) the turnover of the Input Supply division was 36% higher.

An increase of R86 million (33%) in operating profi t from continuing operations is refl ected primarily due to the drastic increase in profi ts from the Input Supply division.

Univision Financial Services, Hartswater Wynkelder and Senwes Seed, showed positive results.

The summarised balance sheet is as follows:


Total assets 2 375 2 122 2 363 2 113Total interest-bearing debt 802 771 806 778

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The increase in the total assets is the result of the higher investment in fi nancing debtors and agency grain debtors. A full review of the results for the year is set out in the fi nancial review on page 16.

5. DIVIDENDSThe directors propose that a fi nal dividend of 14 cents per share (2007 – 17 cents) be declared. An interim dividend of 10 cents (2007 – 6 cents) and a special dividend of 30 cents (2007 – nil cents) was paid during the year. All shareholders registered as such in the share register on 21 August 2008, will receive dividends payable on approximately 4 September 2008, after confi rmation thereof by the shareholders at the annual general meeting on 21 August 2008.

6. DIRECTORS AND SECRETARY6.1 THE NAMES OF THE DIRECTORS ARE SET OUT ON PAGE 4 AND 5.

The following resignations and retirements did occur: JD Shahim (2 October 2007) JP Botma (2 October 2007)

The following appointments were made: JA Boggenpoel (14 April 2008) AJ Kruger (2 October 2007)

The independent non-executive directors are chosen every three years by the Board after ratifi cation on the subsequent annual general meeting. The current independent non-executive directors are Messrs JPL Alberts and GNV Magashula and Me JA Boggenpoel.

6.2 SECRETARY EM Joynt

Registered address – 1 Charel de Klerk Street, Klerksdorp.

6.3 PUBLIC OFFICER SH Alberts (Appointed 15 February 2005)

7. SHARE CAPITALNo shares were issued during the year under review.

8. BUYBACK OF SHARESNo shares were bought back (2007 – nil).

9. SUBSEQUENT EVENTS AFTER THE BALANCE SHEET DATENone

10. SPECIAL RESOLUTIONSNo special resolution was taken by the previous annual general meeting.

Financial statementsACCOUNTING POLICIES1. ACCOUNTING POLICIES

The Senwes Group’s fi nancial statements are prepared in accordance with and comply with the requirements of International Financial Reporting Standards (IFRS). In addition, the fi nancial state-ments comply with the relevant sections of the South African Companies Act of 1973, as amended. The accounting policies and basis of presentation have been applied consistently with the previ-ous years.

1.1 BASIS OF PRESENTATIONThe fi nancial statements of the Senwes Group and all its subsidiaries have been compiled in accordance with and in compliance with IFRS. The fi nancial statements are prepared on the historical-cost basis except for derivative fi nancial instruments and available-for-sale fi nancial assets shown at fair values. The carrying values of hedged assets and liabilities are adjusted to refl ect changes in the fair values resulting from the hedged risks. The fi nancial statements are compiled in rands and all values are rounded to the nearest million (R’ 000 000), except where otherwise indicated.

1.2 CONSOLIDATION POLICY AND SUBSIDIARIESSubsidiaries are entities where control can be exercised over their operating and fi nancial policies in order to benefi t from their activities or where the Group has the majority of the voting rights.

Special purpose entities are entities where the Group is entitled to control the entities and they are consolidated into the group fi nancial statements. Included in the consolidated annual fi nancial statements are the assets and liabilities of all the subsidiaries and their results for the period. In the case of an acquisition or a change in interest during the year, the results of the relevant subsidiaries are included as from the date of effective control or to the effective date when effective control ended. Intergroup transactions, balances and unrealised profi ts and losses among entities in the Group are eliminated. All the subsidia-ries have the same fi nancial year-end and accounting policy as the holding company.

Any provisions for investment write-offs on account of accumulated losses arising in the entity are written back on consolidation. Where impairments occur, these are accounted for against the relevant class of assets. Investments in subsidiaries at company level are shown at cost less any provisions for impairments.

1.3 JOINT VENTURESJoint ventures are businesses where the Group, together with one or more other entities, performs an economic activity which is subject to joint control. The Group’s interest in joint ventures is accounted for by the proportional consolidation method. The income statement, balance sheet, cash fl ow statement and statement of changes in equity include the Group’s share of income, expenditure, assets, liabilities and cash fl ows of these joint ventures on a line-for-line basis.

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1.4 OTHER INVESTMENTS All investments are recognised at fair value, including any acquisition costs associated with the investment. After initial recognition, investments classifi ed as available-for-sale are adjusted to fair value. Profi ts or losses arising from fair value adjustments on these investments are taken directly to equity. Once the investment is sold or disposed of, the accumulated profi t or loss previously adjusted to equity is included as part of net profi t or loss in the income statement. Other Investments are, after initial recognition, measured at amortised cost.

1.5 PROPERTY, PLANT AND EQUIPMENTProperty, plant and equipment are held with a view to extract economic benefi t from it over more than one period and are not acquired for resale purposes.

All property, plant and equipment are initially recognised at cost. Thereafter it is measured with reference to the cost of the asset less accumulated depreciation and impairments. • The cost of property, plant and equipment includes the following: purchase price inclu-

ding import duties, non-refundable purchase taxes, less trade discounts and rebates. • Costs directly attributable to bringing an asset to the location and condition necessary

to operate as intended by management.• Property, plant and equipment with a cost of more than R5 000 are capitalised, assets

less than R5 000 are written off against operating profi t.• Profi ts and losses on sale of property, plant and equipment are calculated on the basis

of their carrying values and are accounted for in operating profi t. With the replacement of a part of an item of property, plant and equipment, the replaced part is derecognised. None the less shall the replacement part be recognised according to the criteria of the accounting statements.

The carrying values of property, plant and equipment are considered for impairment when the events or changes in circumstances indicate that the carrying values are no longer recoverable from its future earning or realisation of the assets.

Depreciation is calculated on a fi xed instalment basis over the expected useful life at the following rates:

%• Land -• Buildings and improvements 2,5 - 2,85• Plant and equipment 7,5 - 33,3• Vehicles 20

Depreciation begins when an asset is available for use, even if it is not yet brought into use. Each part of an item of property, plant and equipment with a cost which is signifi cant in

relation to the total cost of the item is depreciated separately. Land is not depreciated as it is deemed to have an unlimited life.

The useful life and residual value of property, plant and equipment are reviewed annually. The evaluations in respect of the useful life and residual value of assets can only be determined accurately when items of property, plant and equipment approach the end of their lives. Useful life and residual value evaluations can result in an increased or decreased depreciation expense. (Where the residual value of an asset equals its carrying value, depreciation is suspended until the carrying value of the asset once again exceeds the residual value). If the residual value of an asset equals its carry amount, there will be a change in the write-down period of depreciation.

1.6 INVENTORY

Inventory represents assets held for resale in the normal course of business, to produce assets for sale, or for use in production processes or the provision of services. Included in cost of inventory are the cost price, production costs and any costs incurred in bringing the inventory to its current position and condition, ready for the intended purpose. Cost of inventory does not include interest, which is accounted for as an expense in the period when incurred.

Included in cost of production are costs directly attributable to units produced, and direct costs such as direct wages and salaries and variable overheads as well as the sys-tematic allocation of fi xed production overheads based on the normal capacity of the pro-duction facility.

Cost of inventory items is determined in accordance with the weighted average cost method, unless it is appropriate to apply another basis on account of the characteristics of the inventory. Cost of inventory determined on a basis other than weighted average cost is as follows:

• Mechanisation whole goods – Purchase price • Own grain commodities – Specifi c contract price/fair value • Other inventory – First-in, fi rst-out (FIFO)

Inventory is stated at the lower of cost or net realisable value. Net realisable value is the estimated selling price in the normal course of business less estimated costs necessary to make the sale. Cost of inventory items is determined on the basis of their characteristics in terms of their nature and use.

1.7 AGENCY GRAIN DEBTORSAgency grain debtors represents payments made on behalf of third parties in respect of agricultural produce received from producers, which are payable by the third party on de-livery of such agricultural produce to them. This includes sales in terms of sales contracts secured by inventory.

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1.8 DEFERRED TAXProvision is made for deferred tax using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying values for purposes of fi nancial reporting, by applying the tax rate applicable at year-end. The liability for deferred tax or deferred tax assets are adjusted for any changes in the income tax rate.

In accordance with this method, the Group has to provide for deferred income tax on the revaluation of certain non-current assets and on the difference between fair values and the tax base of assets at acquisition. Deferred tax assets arising from all deductible temporary differences are limited to the extent that future taxable income will probably be available against which the temporary differences can be charged.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that suffi cient taxable profi t will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable income will allow the deferred tax asset to be recovered.

1.9 LIABILITY FOR LONG-TERM EMPLOYEE BENEFITS

1.9.1 Retirement liabilityThe retirement liability comprises a defi ned contribution fund registered in terms of the Pension Funds Act, 1956, and the assets are administered separately by trust -ees. Funding is in terms of conditions of employment by means of contributions by the Company, participating subsidiaries as well as employees. Contributions are re cognised in the income statement in the period to which they relate. As the funds are defi ned contribution funds, any under funding that may occur when the value of the assets drop below that of the contributions, are absorbed by the members by means of decreased benefi ts.

1.9.2 Post-retirement medical care liability Provision for future costs of post-retirement medical care is made against income, based on an annual independent actuarial valuation. Actuarial profi ts and losses are recognised in the year they originated. At balance sheet date the provision amoun-ted to 100% of the obligation, based on certain accepted changes in benefi ts and assumptions.

1.9.3 Share-based paymentsProfi t-sharing and bonus payments that are not payable within twelve months of year-end are shown as long-term employee benefi ts.

Certain employees (including senior executives) of the Group receive remu-neration in the form of share-based payment transactions, whereby employees render services as consideration for share appreciation rights that are “cash-settled transactions”.

The cost of cash-settled transactions is measured initially at fair value at the grant date using an economic forecasting model, taking into account the terms and conditions upon which the instruments were granted (see note 18). This fair value is expensed over the period until vesting with recognition of a corresponding liability. The liability is remeasured at each balance sheet date up to and including the settlement date with changes in fair value recognised in profi t or loss.

1.10 SHORT-TERM EMPLOYEE BENEFITSThese include normal benefi ts such as salaries, wages, paid leave, sick leave, profi t-sharing and other bonuses as well as fringe benefi ts in respect of existing employees, and are charged to income in the period in which they were incurred. A provision is raised for the expected costs of incentive bonuses where a legal or constructive liability exists and an ac-curate estimate of the liability can be made.

A provision is raised for the expected cost of the liability in respect of both normal leave days and long-service leave days accumulated, converted to a rand value at year-end, based on the cash equivalent thereof. The required adjustment is set-off against income in the income statement.

A provision is raised for normal thirteenth cheque bonuses accrued, as a pro rata pay-out is made where resignation occurs prior to the employee’s normal elected date of pay-out.

Termination of service benefi ts are recognised as a liability and expense where the busi-ness is committed to terminating the position prior to the employee’s normal retirement, or where benefi ts are offered to encourage voluntary termination of service by redundant employees. However, only a contingent liability is disclosed where it is uncertain by whom the offer would be accepted.

1.11 REVENUE RECOGNITION Revenue represents the net invoiced value of goods and services and any commission received from activities as a grain handler and provider of insurance and fi nancial services. Interest received as a result of credit extension is also stated as income but only to the extent that collection is reasonably assured. Revenue is stated net of value-added tax. Re-venue is measured at the fair value of the consideration received or receivable. Intergroup sales are eliminated.

Revenue from sales of goods is recognised when the material risks and rewards of own-ership of the goods are transferred to the buyer and reasonable assurance exists that the economic benefi ts of the transaction will fl ow to the business. Revenue from agency grain debtors is recognised on a time apportioned basis as and when services are rendered.

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Revenue from services provided is recognised by taking into account the stages of comple-tion at balance sheet date and/or if results can be determined with reasonable accuracy. If revenue can not be determined with reasonable accuracy, it is only recognised to the extent of recoverable expenses incurred.

In grain selling transactions, price risk exposure with regard to purchases is hedged by selling on the futures exchange, Safex. Where the objective is hedging, rather than delivery to Safex, these transactions are eliminated from revenue.

Direct delivery transactions with regard to fuel, fertiliser, seed and other farming inputs are eliminated from revenue, since their nature is in line with agency principles rather than acting as principal. The underlying reason for the transactions is credit extension. Commis-sion earned on the transactions is accounted for as revenue.

Dividends received from investments are recognised when the last date for registration has expired.

1.12 FINANCIAL ASSETS, INSTRUMENTS AND FAIR VALUEFinancial assets are recognised when the Group has the right or access to receive eco-nomic benefi ts. Such assets consist of cash, a contractual right to receive cash or any other fi nancial asset. Financial liabilities are recognised where there is an obligation to transfer economic benefi ts and that obligation is a contractual obligation to transfer cash or any other fi nancial asset or a fi nancial instrument to another entity.

1.12.1 Financial assets at fair value through profi t or lossFinancial assets within the scope of IAS 39 are classifi ed as fi nancial assets at fair value through profi t or loss, loans and receivables, held-to-maturity investments, or available-for-sale fi nancial assets as appropriate. Initial recognition of fi nancial as-sets is at fair value. The group determine the classifi cation of its fi nancial assets on initial recognition.

1.12.2 Held-to-maturity investmentsNon-derivative fi nancial assets with fi xed or determinable payments and fi xed maturi-ties are classifi ed as held-to-maturity when the Group has the positive intention and ability to hold to maturity. Gains and losses are recognised in profi t or loss when the investments are derecognised or impaired, as well as through the amortisation process.

1.12.3 Loans and receivablesLoans and receivables are non-derivative fi nancial assets with fi xed or determ inable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than twelve months after the balance sheet date.

These are classifi ed as non-current assets. Loans and receivables are classifi ed as trade and other receivables and or trade and other receivables fi nanced by a com-mercial fi nancier in the balance sheet.

1.12.4 Available-for-sale fi nancial investmentsAvailable-for-sale fi nancial assets are those non-derivative fi nancial assets that are designated as available-for-sale or are not classifi ed in any of the three preceding categories. After initial measurement, available-for-sale fi nancial assets are mea-sured at fair value with unrealised gains or losses recognised directly in equity un-til the investment is derecognised or determined to be impaired at which time the cumulative gain or loss previously recorded in equity is recognised in profi t or loss.

Financial assets are initially valued at cost price plus transaction costs. Transaction costs in respect of fi nancial assets classifi ed at fair value by profi t or loss, are dealt with as an expenditure. Transaction costs are incremental costs, directly attributable to the purchase of the fi nancial asset, in other words costs which would not have been incurred should the asset not have been purchased. Financial assets are derecognised as soon as the right to receive cash fl ow from investments expires or is transferred and when the Group has substantially transferred all risk and return of ownership.

Cash and cash equivalents are valued at fair value and changes in fair value which are recognised in the income statement.

1.13 DERIVATIVE FINANCIAL INSTRUMENTS Derivative instruments are used by the Group in the management of business risks. They are initially recognised in the balance sheet at cost (which is the fair value on that date) and are thereafter remeasured to fair value. The method of recognising the resultant profi t or loss depends on the type of item being hedged. The Group allocates certain fi nancial instruments as:• a hedge of the exposure to changes in fair value of a recognised asset or liability or, an

unrecognised fi rm commitment (fair value hedge); or• a hedge of the exposure to variability in cash fl ows that is attributable to a particular risk

associated with a recognised asset or liability or a highly probable forecast transaction (cash fl ow hedge).

Changes in the fair value of derivative instruments which have been allocated, and qualify as fair value hedges, which are highly effective, are accounted for in the income statement together with any change in the fair value of the hedged asset or liability that is attributable to the hedged risk, and is therefore effectively set-off against one another. Changes in the fair value of derivative instruments which have been allocated and qualify as cash fl ow

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hedges, which are also highly effective, are accounted for in equity. The ineffective portion of a cash fl ow hedge is recognised immediately in the income statement. If the forward transaction results in the recognition of an asset or a liability, the profi t or loss that was deferred earlier to equity, is transferred from equity and included in the initial determination of the cost of the asset or liability. Otherwise, amounts deferred to equity are transferred to the income statement and classifi ed as revenue or expenditure during the same period as the hedged fi xed commitment or forward transaction has an infl uence on the income statement.

Changes in the fair value of any derivative instrument that does not qualify for hedge accounting with reference to IAS 39, are immediately recognised in the income statement. If the hedging instrument lapses or is sold, or if the hedge no longer meets the criteria for hedge accounting with reference to IAS 39, any cumulative profi t or loss that exists at that point in equity, is retained in equity and recognised when the forward transaction is fi nally recognised in the income statement. If it is expected that the forward transaction will no longer realise, the reported cumulative profi t or loss is immediately transferred to the income statement.

From the inception of the transaction, the Group documents the relationship between the hedging instrument and the hedged item, as well as the risk management aim and strategy for entering into the hedging transaction. As part of this process, all derivative instruments are allocated as hedges to specifi c assets and liabilities or to specifi c fi xed commitments or forward transactions. The Group also documents valuations, both at the outset and continuously, in order to determine whether the derivative instrument being used in hedging transactions, is indeed highly effective to set-off the changes in fair value or cash fl ows of the hedged items.

Commodity term contracts (futures)The Group participates in various over-the-counter (OTC) future buying and selling con-tracts for the buying and selling of commodities. Although certain contracts are cover ed by the physical provision or delivery during normal business activities, OTC-contracts are regarded as a fi nancial instrument. In terms of IAS 39, it is recorded at fair value, where the Group has a long history of net fi nalisation (either with the other party or to participate in other off-setting contracts).

Such contracts are initially recognised in the balance sheet at contract price, and are revalued at fair value thereafter. These derivative instruments constitute an effective economic hedge within the Group’s risk management policy, and qualify to be recognised in accordance with the specifi c hedging accounting rules in terms of IAS 39. Changes in the fair value of any hedging instrument which do not qualify to be set-off in accordance with IAS 39, are recognised immediately in the income statement.

Set-offWhere a legal right to set-off exists for recognised fi nancial assets and liabilities and where it is intended to settle the relevant assets and liabilities simultaneously or on a net basis, the amounts are set-off. Financial instruments to which the Group is a party are disclosed in note 23.

1.14 FOREIGN EXCHANGE TRANSACTIONSTransactions in foreign currencies are converted at spot rates applicable on the transaction dates. Monetary assets and/or liabilities in foreign currencies are converted to South African rand at spot rates applicable at the fi nancial year-end. Profi ts and losses arising on settle-ment or recovery of such transactions are recognised in the income statement.

1.15 CASH AND CASH EQUIVALENTSIncluded in cash and cash equivalents, which form an integral part of cash management, are cash at hand and bank overdraft balances. Bank overdraft balances are stated as cur-rent liabilities. For the purposes of the cash fl ow statement, cash and cash equivalents comprise of cash and cash equivalents as defi ned above, net of bank overdrafts.

1.16 OPERATING LEASESLeases in respect of property, plant and equipment, where essentially all the risks and rewards attached to property rights to an asset are retained by the lessor, are classifi ed as operating leases. Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Future escalations in terms of the lease agreement are calculated and the average lease expenditure is recognised over the lease period in equal amounts, only if a fi xed escalation rate has been agreed to contractually.

1.17 TRADE AND OTHER DEBTORSDebtors are stated at an expected realisable value; which is the original invoiced amount less any provisions created by way of impairments. An impairment provision will be calculated if there is proof that the Group will not be able to collect all amounts from the debtor, as set out in the original terms of payment. The amount of the provision is the dif-ference between the carrying value and the recoverable amount, which is the current value of future cash fl ows (excluding future credit losses not yet exposed to), discounted against the fi nancial asset’s original effective rate of interest, as calculated at the recognition of the asset. Bad debts are written off in the year in which they occur or are identifi ed.

1.18 IMPAIRMENT OF ASSETSAll categories of assets are reviewed for impairment at the time of reporting. (See notes 2, 3.)

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AssetsOn each reporting date, the Group considers whether there are any indications of impairment of an asset. If such an indication exists, the Group prepares an estimate of the re coverable amount of the asset. The recoverable amount of an asset or the cash genera-ting unit, within which it and other assets operate, is the greater of the fair value less the cost of selling or the value in use of the asset. Where the carrying amount of an asset exceeds the recoverable amount, the impairment is determined and the carrying amount written off to the recoverable amount. Where the value in use is determined, the expected future cash fl ow is discounted to a current value by using a pre-tax discounting rate refl ecting the cur-rent market rating of the time value of money and specifi c risks associated with the asset. Impairment losses of continuing operations are recognised in the income statement.

If there is an indication that previously recognised impairment losses no longer exist or that they have decreased, an estimate is once again made of the recoverable amount of the asset in question and, if necessary, the impairment is written back to the recoverable amount. The write-back may not cause the carrying value to exceed the value it would have been if it was not previously impaired. After such a write-back, the depreciation expense in future periods is adjusted to apportion the adjusted carrying amount of the asset, less its residual value, systematically over the remaining useful life.

Accounts receivableAn assessment is made at each balance sheet date whether there is objective evidence that a fi nancial asset or group of fi nancial assets is impaired. Objective evidence for impairment includes observable data that comes to the attention of the Group in relation to the asset about the following loss events:• signifi cant fi nancial diffi culty of the issuer, or• a breach of contract, such as a default in payment, or• probability that the borrower will enter bankruptcy or other fi nancial reorganisation, or• disappearance of an active market for that fi nancial asset because of fi nancial diffi cul-

ties, or• indications that there is a measurable decrease in the estimated future cash fl ows from

the group of fi nancial assets since the initial recognition of that assets.

The impairment is determined as the difference between the carrying amount and the re-coverable amount. This is done on the basis of discounting the future cash fl ows to present value using a calculated-weighted average rate. This rate is the rate of the fi nancial debtor or group of debtors contracted.

1.19 PROVISIONS AND CONTINGENT LIABILITIES

Provisions and other liabilitiesProvisions are liabilities of which the timing or amount are uncertain and can therefore be distinguished from other creditors. Provisions are only recognised if:• a currently constructive or legal obligation exists due to a past event; • an outfl ow of economic benefi ts is probable in order to meet the commitment; and • a reliable estimate of the amount is made.

Provisions are measured at the best estimate of the expenditure required to settle the pre sent obligation at the balance sheet date. Provisions are disclosed in note 18.

Liabilities are current obligations arising from past events, which are expected to result in economic benefi ts fl owing from the business, when met, and are accounted for directly after the occurrence of the event giving rise to the obligation. Liabilities form part of credi-tors in the balance sheet.

Contingent liabilitiesContingent liabilities are potential obligations arising from past events, the existence of which will only be confi rmed upon the occurrence or non-occurrence of one or more uncer-tain future events beyond the full control of the business.

Contingent liabilities may also arise from a current obligation arising from past events but are not recognised because:• it is improbable that an outfl ow of economic resources will occur; and/or• the amount can not be measured or estimated reliably.

Contingent liabilities are not recorded but are merely disclosed by way of a note in the fi nancial statements. (See note 20).

1.20 NON-OPERATING ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONSA discontinued operation is a component of an entity which has been sold or classifi ed as held-for-sale and:• represents a separate important business component or geographical area of activities; • forms part of a single co-ordinated plan to sell a separate important business segment

or geographical area of activities; or • is a subsidiary acquired with the sole purpose of selling it.

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An item is classifi ed as held for sale if the carrying amount of such item will largely be reco vered through a transaction of sale rather than through continued use. Upon disconti-nuance the after-tax profi t or loss is shown in the income statement.

1.21 SEGMENTAL REPORTINGThe primary format of the Group for segmental reporting comprises of the following busi-ness segments: Credit Extension, Input Supply, Market Access, Sundry Operations and Corporate items.• Intersegmental transfers: Included in segmental income, segmental expenditure and

segmental results are transfers among business segments. These transfers occur at arm’s length but are eliminated on consolidation.

• Segmental income and expenditure: Income and expenditure directly related to seg-ments are allocated specifi cally to those segments.

• Segmental assets and liabilities: Included in segmental assets are all current assets uti-lised by a segment, including mainly cash, amounts receivable, inventory and property, plant and equipment, all net of provisions.

• Included in segmental liabilities are all current liabilities, comprising mainly of amounts payable.

1.22 BORROWING COSTSBorrowing costs are recognised as an expense when incurred.

1.23 INTEREST-BEARING LOANS AND BORROWINGSAll loans and borrowings are initially recognised at the fair value of the consideration re-ceived less directly attributable transaction costs. After recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through an amortisation process.

1.24 SIGNIFICANT ACCOUNTING JUDGEMENT AND ESTIMATES

In the process of implementing the accounting policy of the Group, management made the following judgements, in the following areas:

1.24.1 Provision for post-retirement medical obligations Refer to note 14.

1.24.2 Provision for bad debts Refer to notes 8 and 10.

Key assumptions: A decision framework was implemented, which includes the following: • indicators of impairment; • an individual or group assessment (depending on materiality); • expected cash fl ow is estimated according to the history and is adjusted with

current factors; and • discounted against the average contracted rate for the relevant individual or group.

1.24.3 Provision for slow-moving inventory Refer to note 7.3. Key assumptions:

• Trade inventories are provided according to the age and realisability of inventory.

1.24.4 Income tax and deferred tax provisions Refer to note 19.5.

1.24.5 Provision for non-compliance on pre-season grain contracts Calculations with the following key assumptions:

• default rate on current deliveries extrapolated to the total exposure. • a fi xed recovery rate on defaults. • compensating fi nancial instruments.

1.25 STANDARDS AND INTERPRETATIONS ISSUED, RELEVANT TO THE GROUP, BUT NOT YET IN FORCEIFRIC 8 – Operating Segments (1 January 2009)*IAS 1(AC101) – Presentation of Financial Statements (1 January 2009)*IAS 23 (AC 114) – Borrowing Costs (1 January 2009)*IFRS 8 (AC145) – Operating Segments (1 January 2009)*

* Financial years beginning on or after this date.

Except for additional disclosures in the fi nancial statements, the adoption of these stan-dards and amendments is not expected to materially affect the results of the fi nancial posi-tion of the Group.

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


BALANCE SHEETBALANCE SHEETBALANCE SHEET

GROUP COMPANY

Notes2008R’m

2007R’m

2008R’m

2007R’m

ASSETSNon-current assetsProperty, plant and equipment 2 190 182 172 163Investment in subsidiaries 3 - - 20 19Financial assets 4 4 2 4 2Term debtors 6 115 * 73 115 * 73Deferred tax 19.1 67 74 67 74

376 331 378 331

Current assetsInventory 7 734 631 729 625Trade and other debtors 8 999 * 663 997 * 661Short-term loans 9 1 - - 2Agency grain debtors 10 230 247 230 247Cash and cash equivalents 13.7 35 236 29 233

1 999 1 777 1 985 1 768

Non-current assets – held for sale - 14 - 14

TOTAL ASSETS 2 375 2 122 2 363 2 113

EQUITY AND LIABILITIES

Capital and reservesShare capital 11 1 1 1 1Share premium 12.1 67 67 67 67Non-distributable reserve 12.2 67 315 67 314Retained earnings 706 388 697 381

841 771 832 763Minority interest 2 2 - -

843 773 832 763

Non-current liabilitiesLong-term employee benefi ts 18 3 2 3 2Post-retirement liabilities 14 76 104 76 104

79 106 79 106

Current liabilitiesTrade and other creditors 15 568 335 562 331Interest-bearing short-term loans 16 761 735 761 735Tax payable 17 11 63 11 61Loans from related parties 13.2 42 37 47 44Shareholders for dividends - 1 - 1Provisions 18 71 72 71 72

1 453 1 243 1 452 1 244

Liabilities associated with non-current assets – held for sale - - - -

TOTAL EQUITY AND LIABILITIES 2 375 2 122 2 363 2 113

* Amounts restated due to an improved classifi cation of the 2007 fi nancial statements. See note 6 and 8.

INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT

GROUP COMPANY

Notes2008R’m

2007R’m

2008R’m

2007R’m

Services provided 447 379 419 365Interest received 21.4 120 81 120 81Other operating activities 7 073 5 094 7 057 5 069

Total revenue 7 640 5 554 7 596 5 515

Cost of sales (6 713) (4 800) (6 699) (4 783)

Gross profi t 927 754 897 732

Distribution, sales and administrative expenses (577) (490) (554) (476)

Operating profi t – continuing operations 350 264 343 256

Finance charges 21.2 (126) (83) (126) (83)

Profi t after fi nance charges 224 181 217 173

Investment income 22 26 2 28 3

Profi t before tax 250 183 245 176

Taxation 19 (75) (55) (73) (53)

Profi t from continuing operations 175 128 172 123

Profi t/(loss) from discontinued operations - (1) - (1)

Profi t for the year 175 127 172 122

Attributable to:

Shareholders 173 125Minority interest 2 2

175 127

Earnings per share (cents) 24.4 95,7 69,1

Headline earnings per share (cents) 24.4 85,2 65,8

Dividends per share paid during the year (cents) 57,0 21,0 Final dividend previous year 17,0 15,0 Interim dividend 40,0 6,0

Final dividend per share proposed (cents) 14,0 17,0

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


STATEMENT OF CHANGES IN EQUITY STATEMENT OF CHANGES IN EQUITY STATEMENT OF CHANGES IN EQUITY

Share capital

Share pre-

mium

Non-distri-

butable reserve

Retained earnings

Minority interest Total

R’m R’m R’m R’m R’m R’m

GROUP

Balance at 30 April 2006 1 67 303 312 - 683

Profi t for the year - - - 125 2 127Dividends paid - - - (38) - (38)Transfer of reserve - - 12 (12) - -Fair value adjustment - - - 1 - 1

Balance at 30 April 2007 1 67 315 388 2 773

Profi t for the year - - - 173 2 175Dividends paid - - - (103) (2) (105)Transfer of reserve - - (248) 248 - -

Balance at 30 April 2008 1 67 67 706 2 843

COMPANY

Balance on 30 April 2006 1 67 302 308 - 678

Profi t for the year - - - 122 - 122Dividends paid - - - (38) - (38)Transfer of reserve - - 12 (12) - -Fair value adjustment - - - 1 - 1

Balance on 30 April 2007 1 67 314 381 - 763

Profi t for the year - - - 172 - 172Dividends paid - - - (103) - (103)Transfer of reserve - - (247) 247 - -

Balance on 30 April 2008 1 67 67 697 - 832

CASH FLOW STATEMENTCASH FLOW STATEMENTCASH FLOW STATEMENT

GROUP COMPANY2008 2007 2008 2007

Notes R’m R’m R’m R’m

Cash from operations activities 26 438 308 431 303Investment income 22 26 2 28 3Finance cost paid 21.2 (126) (83) (126) (83)Tax paid 28 (120) (25) (116) (25)Cash profi t 218 202 217 198Dividends paid 29 (103) (24) (103) (24)Increase in operating capital 27 (348) (107) (349) (114)Net cash fl ow from operating activities (233) 71 (235) 60

Net cash fl ow from investment activities - (21) 1 (20)

Acquisition of property, plant and equipment 30 (31) (31) (31) (30)Proceeds on disposal of property, plant and equipment 31 32 10 30 10(Decrease)/increase in short-term loans granted (1) - 2 -

Net cash fl ow before fi nancing activities (233) 50 (234) 40

Net cash fl ow from long-term fi nancing activities

Increase/(decrease) in long-term loans 32 1 (1) 1 (1)

Net increase/(decrease) in cash and cash equivalents (232) 49 (233) 39

Net short-term loans after taking into account cash – beginning of the period (536) (585) (546) (585)

Net short-term loans after taking cash into account – end of the period 13.1 (768) (536) (779) (546)

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

GROUP GROUPSegmental

incomeSegmental

results2008 2007 2008 2007R’m R’m R’m R’m

Credit Extension 120 80 44 24Input supply 1 573 1 155 83 42Market Access 5 902 4 273 138 166Sundry operations 39 40 3 2Normal operational activities 7 634 5 548 268 234Other non-apportionable income/(cost) 6 6 (44) (53)Investment income - - 26 2Continuing operations 7 640 5 554 250 183Discontinued operations - 24 - (1)Total revenue 7 640 5 578Profi t before tax 250 182Taxation (75) (55)Result after tax 175 127Minority interest (2) (2)Profi t attributable to the shareholders 173 125

1. SEGMENTAL ANALYSIS 1.1 SEGMENTAL REVENUE AND RESULTS

1.2 NET SEGMENTAL ASSETS

GROUP GROUP GROUPAssets Liabilities Net

2008 2007 2008 2007 2008 2007R’m R’m R’m R’m R’m R’m

Credit Extension 907 772 (428) (385) 479 387Input Supply 353 284 (318) (246) 35 38Market Access 969 911 (606) (499) 363 412Sundry operations 9 13 (9) (9) - 4Assets/(liabilities) held for sale - 14 - - - 14

2 238 1 994 (1 361) (1 139) 877 855

Non-apportionable and corporate 62 47 (91) (100) (29) (53)Investments 8 7 (4) (4) 4 3

2 308 2 048 (1 456) (1 243) 852 805Deferred tax 67 74 - - 67 74Provision for post-

retirement medical aid and other long-term employee benefi ts - - (76) (106) (76) (106)

2 375 2 122 (1 532) (1 349) 843 773

1.3 SEGMENTAL DISCLOSABLE ITEMS

GROUP GROUPCapital

expenditure Depreciation2008 2007 2008 2007R’m R’m R’m R’m

Credit Extension - - - -Input Supply 3 1 1 1Market Access 17 12 11 12Sundry operations - - 1 1Discontinued operations - 1 - 1Corporate 11 17 11 8

31 31 24 23

Non-cash transactions2008 2007R’m R’m

Credit Extension 16 8Input Supply 11 (9)Market Access - 9Sundry operations (1) 1Corporate 56 84

82 93

1.4 An analysis of geographical segments is not provided as no material segment operates in a separate geographical location.

1.5 An analysis of the revenue and results of each segment is as fol lows:

Credit Extension Credit extension to farmers and grain buyers.

Input Supply Sales at the retail shops, direct sales of farming inputs and mechanisation goods and parts.

Market Access Income received for the handling and storing of agricultural produce and the total revenue of grain sold including as commission earned on grain marketing.

Sundry operations The wine and seed processing income as derived from sales of

fi nished goods. Income received consists of commission received on premiums received from insurance broker service to the short-term, long-term and crop insurance market.

Corporate Agri services, head offi ce services, information technology, human resources, properties, fl eet management, secretariat, corporate marketing, risk management, internal audit, strategic development, group fi nance and directors.

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


2. PROPERTY, PLANT AND EQUIPMENT

2.1 Registers of land and buildings are available for inspection at the registered offi ces of the relevant companies.

2.2 Certain assets are encumbered as set out in note 16.2.

2.3 The capital commitments of the Group are set out in note 20.


Cost 510 511 483 484Land 2 2 2 2Buildings and improvements 199 203 179 181Plant and equipment 274 274 268 269Vehicles 35 32 34 32

Accumulated depreciation and impairments (320) (315) (311) (307)Land - - - -Buildings and improvements (89) (95) (87) (92)Plant and equipment (207) (198) (201) (193)Vehicles (24) (22) (23) (22)

Total carrying value 190 196 172 177Held for sale - (14) - (14)

Carrying value – continuing operations 190 182 172 163

Carry ing amount at begin ning of period

Pur-chases

and adjust-ments Dis posals

Depre-ciation

Carry ing amount

at end of period


GROUP – 2008

Land 2 - - - 2 Buildings and improvements 108 11 (5) (4) 110 Plant and equipment 76 15 (8) (16) 67 Vehicles 10 5 - (4) 11

196 31 (13) (24) 190Held for sale (14) - - - -Carrying value – continuing operations 182 31 (13) (24) 190

COMPANY – 2008

Land 2 - - - 2 Buildings and improvements 89 11 (4) (4) 92 Plant and equipment 76 15 (8) (16) 67 Vehicles 10 5 - (4) 11

177 31 (12) (24) 172Held for sale (14) - - - -Carrying value – continuing operations 163 31 (12) (24) 172

RECONCILIATION OF MOVEMENTS ON PROPERTY, PLANT AND EQUIPMENT FOR 2008

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


RECONCILIATION OF MOVEMENTS ON PROPERTY, PLANT AND EQUIPMENT FOR 2007

Carry ing amount at begin ning of period

Pur-chases

and adjust-ments Dis posals

Depre-ciation

Carry ing amount

at end of period


GROUP – 2007

Land 3 - (1) - 2 Buildings and improvements 114 (1) (1) (4) 108 Plant and equipment 68 26 (2) (16) 76 Vehicles 8 6 (1) (3) 10

193 31 (5) (23) 196Held for sale (3) - - - (14)Carrying value – continuing operations 190 31 (5) (23) 182

COMPANY – 2007

Land 3 - (1) - 2 Buildings and improvements 95 (1) (1) (4) 89 Plant and equipment 68 26 (2) (16) 76 Vehicles 8 5 - (3) 10

174 30 (4) (23) 177Held for sale (3) - - - (14)Carrying value – continuing operations 171 30 (4) (23) 163

2. PROPERTY, PLANT AND EQUIPMENT (CONTINUED) 3. INVESTMENT IN UNLISTED SUBSIDIARIES

COMPANY – 2008

Total number

of shares in issue

% interest Shares

Shares pro vision

Short-term

loans

Loans pro-

vision

Total net invest-

mentR’m R’m R’m R’m R’m

Charel de Klerk Str Properties (Pty) Ltd 11 054 100 25 (5) - - 20

Hartswater Wynkelder (Pty) Ltd 4 500 000 100 - - 2 (2) -

Senwes Graanmake - laars (Pty) Ltd 100 80 - - - - -

Univision Broker Services (Pty) Ltd 100 100 - - - - -

Univision Financial Services (Pty) Ltd 100 100 - - - - -

25 (5) 2 (2) 20Net investment in shares 20Net investment in short-term loans -Net investment 20

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


COMPANY – 2007

Total number

of shares in issue

% interest Shares

Shares pro vision

Short-term

loansLoans

pro vision

Total net invest-


Charel de Klerk Str Properties (Pty) Ltd 11 054 100 25 (6) - - 19

Hartswater Wynkelder (Pty) Ltd 4 500 000 100 - - 5 (5) -

Senwes Graanmake - laars (Pty) Ltd 100 80 - - - - -

Univision Broker Services (Pty) Ltd 100 100 - - - - -

Univision Financial Services (Pty) Ltd 100 100 - - 2 - 2

25 (6) 7 (5) 21Net investment in shares 19

Net investment in short-term loans 2

Net investment 21

COMPANY – MOVEMENT DURING 2008

Shares

Sharespro-

vision

Short-term

loans

Loans pro-

vision

Total net invest-


Charel de Klerk Str Properties (Pty) Ltd - 1 - - 1Hartswater Wynkelder (Pty) Ltd - - (3) 3 -Univision Financial Services (Pty) Ltd - - (2) - (2)

- 1 (5) 3 (1)Net movement in shares 1Net movement in short-term loans (2)Net movement in investments (1)

3. INVESTMENT IN UNLISTED SUBSIDIARIES (CONTINUED) 3.1 Unless specifi cally indicated otherwise, the short-term loans are unsecured, bear interest at varying rates with an applicable rate of 12,55% at year-end (2007 – 10,07%) and there are no fi xed terms of repayment.

3.2 Absa has a cession over the shares of Charel de Klerk Street Properties (Pty) Ltd.

3.3 Results of subsidiaries after tax (100%)

COMPANY2008 2007R’m R’m

Hartswater Wynkelder (Pty) Ltd 2 1Univision Financial Services (Pty) Ltd 2 1Senwes Graanmakelaars (Pty) Ltd 4 5

3.4 NATURE OF BUSINESS AND DIRECTORS’ VALUATION #:


Charel de Klerk Street Properties (Pty) Ltd - Property company 20 19Hartswater Wynkelder (Pty) Ltd - Wine cellar 3 -Univision Financial Services (Pty) Ltd - Insurance broker and

administrative services 2 1Senwes Graanmakelaars (Pty) Ltd - Option writing – fi nancial

instruments 4 5

# - Directors’ valuations are based on the net asset value according to the latest available fi nancial statements.

4. FINANCIAL ASSETS

GROUP COMPANY 2008 2007 2008 2007


Available-for-sale fi nancial assets 4.1 4 2 4 2 Unlisted public companies 4.2 3 1 3 1 Other investments 4.3 1 1 1 1

4 2 4 2

4.1 AVAILABLE-FOR-SALE FINANCIAL ASSETS

Available-for-sale fi nancial assets comprise of investments in unlisted ordinary shares and therefore have no maturity date or coupon rate.

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


GROUP COMPANY 2008 2007 2008 2007

R’m R’m R’m R’m

Sundry shares at cost 1 * - 1 * -Fair value adjustment 2 1 2 1

3 1 3 1

4.2 UNLISTED PUBLIC COMPANIES

GROUP COMPANYDirectors’ valuation

Directors’ valuation

2008 2007 2008 2007R’m R’m R’m R’m

Shares in unlisted companies 4 1 4 14 1 4 1

* Amount is less that R1 million and comprises investments in Suidwes Investments Ltd, Suidwes Beherend Ltd, Outspan Ltd and JSE Ltd.

GROUP COMPANY2008 2007 2008 2007


Other shares 4.3.1 1 1 1 1

4.3 OTHER INVESTMENTS

5. INVESTMENT IN JOINT VENTURES

GROUP2008 2007

Silo Certs (Pty) Ltd 42,5% 42,5%

Silo Certs (Pty) Ltd deals with the issuing of Silo certifi cates on an electronic system.

Although the year-end of the joint venture is on 29 February, the fi nancial statements on which an audit review has been conducted, was compiled on 30 April 2008. The latter was used in compiling the Group statements.

4. FINANCIAL ASSETS (CONTINUED)

4.3.1 Registers of shares and loans in private companies involving minimal amounts are available at the registered offi ce of the Company.

GROUP2008 2007R’m R’m

Assets - -Liabilities 3 2

The proportional interest of the Group in the assets and liabilities of the joint venture, included in the consolidated fi nancial statements, is as follows:


Revenue - 1Net loss - -


Cash fl ow from operating activities (1) (1)Cash fl ow from investment activities - -Cash fl ow from fi nancing activities 1 1

COMPANY2008 2007

INVESTMENT SILO CERTS (PTY) LTD R’m R’m

Shares 2 2Provision for write-off shares (2) (2)Loan 2 2Provision for write-off loan (2) (2)

- -

The proportional interest of the Group in the revenue and expenditure of the joint venture is as follows:

The proportional interest of the Group in the cash fl ow of the joint venture is as follows:

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


6. TERM DEBTORS

Represents debtors for items sold under an instalment sale agreement and mortgage loans extended over varying terms of up to 120 months. The underlying asset acts as security for the transaction. Interest rates are market related and can be variable or fi xed according to the specifi c agreements.

GROUP COMPANY2008 2007 2008 2007R’m * R’m R’m * R’m

Gross investment in instalment sale agreements and mortgage loans 267 162 267 162Less: unearned fi nance income (96) (45) (96) (45)Carrying amount 171 117 171 117

6.1 THE MORTGAGE LOANS ARE AS FOLLOWS


Within one year 48 17 48 17More than one year and within fi ve years 66 28 66 28More than fi ve years 44 21 44 21

158 66 158 66

Less: short term portion (48) (17) (48) (17)110 49 110 49


Within one year 8 27 8 27More than one year and within fi ve years 5 24 5 24

13 51 13 51

Less: short term portion (8) (27) (8) (27)5 24 5 24

6.2 INSTALMENT SALE AGREEMENTS

* Amounts restated due to an improved classifi cation in the 2007 fi nancial year fi gure.

6.3.1 Terms and conditions

Instalment sale agreements are payable over two to fi ve years after initial date of contract. These contracts bear interest at competitive rates.

6.3.2 Fair value

The directors are of the opinion that the carrying-amount of the instalment sale agreement is represented at fair value.

7. INVENTORY

GROUP COMPANY 2008 2007 2008 2007


Raw materials and work-in-progress 3 5 - -Merchandise 7.1,7.3 297 228 296 227Consumables 7 5 6 5Grain commodities 7.5 427 393 427 393 7.2, 7.4 734 631 729 625

7.1 Included is fl oor plan inventory of R50,4 million (2007 – R77,8 million), which is subject to encumbrance in terms of an agreement with the relevant manufacturers of farming equipment.

7.2 Inventory is valued as follows:

GROUP2008 2007R’m R’m Valuation method

Grain inventory and merchandise 227 131 Weighted averageMechanisation whole goods 76 101 Purchase priceGrain commodities 427 393 Specifi c contract price/fair valueOther inventory 4 6 First-in, fi rst out (FIFO)

734 631

6.3 TOTAL OF INSTALMENT SALES AGREEMENT AND MORTAGE LOANS


Total carrying amount 171 117 171 117Short term portion (56) (44) (56) (44)Long term portion 115 73 115 73

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


8. TRADE AND OTHER DEBTORS

8.1 Production account debtors mainly include the extension of credit to producers on a seasonal basis for purposes of procuring input goods from or via Senwes. These debtors bear interest at competative rates.

8.2 Current accounts include 30-day monthly accounts, silo cost accounts and other accounts for specifi c products.

These accounts bear interest as follows: Monthly account Interest free for fi rst 30 days after statement Silo cost account Interest free period that varies from season to season

(determined before every season) Deferred payment arrangement Interest free period that varies according to transactions Interest is levied when these debtors are in arrears at rates prescribed by the Usury Act. 8.3 This represents credit supplied to producers on an advance payment basis in order to

utilise price oppertunities which occur in the commodity market. As soon as the position is liquidated, the amount due bears interest at rates according to the Usury Act. Open positions by Grain Cash advance debtors bear no interest.

GROUP COMPANY 2008 2007 2008 2007


Trade debtors 900 624 898 622 Production accounts 8.1 758 494 758 494 Current accounts 8.2 120 111 118 109 Grain cash advances 8.3 22 19 22 19Term debtors – short term portion 6.1, 6.2 56 44 56 44Sundry debtors 103 54 103 54Less: Provision for impairment 8.4 (60) (59) (60) (59)Total carrying amount 8.5 999 663 997 661

7.3 Included under merchandise for the Company and Group is a provision for slow-moving and obsolete stock of R13,4 million (2007 – R13,5 million).

7.4 Inventory of R427 million (2007 – R527 million) of the Company and the Group has been pledged as security for loans granted by fi nancers.

7.5 These amounts represent grain stock purchased from producers, the prices of which are hedged on the South African Futures Exchange (Safex). Variation margins are also set-off against this item. Consequently the carrying value equals the fair value thereof.

7. INVENTORY (CONTINUED)


Balance (40) (52) (40) (52) Provided for the year (increase) (4) (1) (4) (1) Appropriated during the year 6 12 6 12Specifi c impairment (38) (41) (38) (41)

Portfolio impairment: Balance (18) (9) (18) (9) Provided for the year (increase) (4) (9) (4) (9) Appropriated during the year - - - -Total provision for impairment (60) (59) (60) (59)

8.4 A provision of R60 million was made in respect of trade and other debtors as at 30 April 2008, which is compiled as follows:

GROUP 2008

CurrentDebt out of terms Total

R’m R’m R’m

Trade debtors 837 63 900 Production loans 731 27 758 Current accounts 106 14 120 Grain cash advances - 22 22

Term debtors – short term portion 52 4 56

Sundry debtors 100 3 103Less: Provision for doubtful debt (41) (19) (60)

948 51 999

8.5 The debt analysis is summarised as follows:

8.5.1 Current debtors are debtors classifi ed as debtors within current credit terms.8.5.2 Debtors in arrears are debtors classifi ed as debtors which defaulted on their credit

terms.

8.6 Debtors of the company are pledged as security for loans extended by ABSA, see note 16.1. Senwes holds collateral of R825 million. Collateral security value of R507 million can be applied against debt on 30 April 2008.

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


9. SHORT-TERM LOANS

9.1 This loan is unsecured, bears no interest and there is no fi xed terms of repayment. The total loan is subordinated to the claims from other creditors.

9.2 Other comprises a loan to Botle-Ba-Kopano Cleaning and Gardening Services (Pty) Ltd. This loan is unsecured, bears no interest and is repayable over 36 months. The loan in total amounts to less than R100 000.

GROUP COMPANY 2008 2007 2008 2007


Subsidiaries’ net short-term loans 1 - - 2Vaalharts Co-op Ltd - - - - Loan - 4 - 4 Provision for write-off - (4) - (4)Silo Certs (Pty) Ltd - - - - Loan 9.1 2 2 2 2 Provision for write-off (2) (2) (2) (2)Other loans 9.2 - - - -

1 - - 2

10.1 Agency grain debtors’ represents payments made on behalf of third parties in respect of agricultural produce received from producers which are repayable on delivery of such agricultural produce to these third parties. This includes sales in terms of sale agreements secured by inventory. These debtors also serve as security in respect of loans granted by ABSA (See note 16.1). A provision for impairment of R25,2 million (2007 – R12,2 million) is included in the balance.

10.2 Included in this amount is a net amount of R26 million regarding Premier Milling (Pty) Ltd. Senwes is currently involved in a dispute by means of an arbitration process related to the tonnage of grain sold to Premier in terms of a mill door agreement. Senwes’s claim, including capital and interest, amounts to R50 million. Given the credit risk attached to the amount, the difference between the two amounts is accounted for as potentially uncollectible. During the proceedings, Premier pleaded and instituted a counterclaim of R8 million against Senwes. This claim is regarded by Senwes as unfounded and is opposed. During the proceedings and in an attempt to reduce the matters in dispute, the parties agreed to a voluntary mediation process, which is underway. Afterwards, the arbitration would continue on the main areas of dispute.

10.3 Senwes holds collateral of R115 million. Collateral security value of R115 million is applied against debt as at 30 April 2008.

10. AGENCY GRAIN DEBTORSGROUP COMPANY

2008 2007 2008 2007Notes R’m R’m R’m R’m

Agency grain debtors 10.1, 10.2 230 247 230 247

11. SHARE CAPITAL

The unissued shares are under the control of the directors until the forthcoming annual meeting.


Authorised581 116 758 ordinary shares (2007 – 581 116 758) of 0,516 cents each 3 3 3 3Issued180 789 308 ordinary shares (2007 – 180 789 308) of 0,516 cents each 1 1 1 1

GROUP COMPANYNumber of shares Number of shares

2008 2007 2008 2007

Reconciliation of shares in issue:Balance for the period 180 789 308 180 789 308 180 789 308 180 789 308

12. RESERVES

GROUP COMPANY

2008 2007 2008 2007R’m R’m R’m R’m

Comprised of:On issue of shares 74 74 74 74Buyback of own shares (7) (7) (7) (7)

67 67 67 67


Comprised of:Transfer of funds – scheme of arrangement 273 273 272 272Defi cit on buyback of own shares (32) (32) (32) (32)

241 241 240 240Transfer of funds – retained income (241) - (240) -Unrealised deferred tax assets 67 74 67 74

67 315 67 314

12.1 SHARE PREMIUM

12.2 NON-DISTRIBUTABLE RESERVE

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


The non-distributable reserve was established when the company was transferred from a co-operative. There is no merit in classifying this reserve separately, but rather places a limitation on the trading on equity and restructuring of capital. This reserve is thus carried over to retained earnings.

13. NET SHORT TERM LIABILITIES (AFTER TAKING CASH INTO ACCOUNT)

GROUP COMPANY2008 2007 2008 2007


13.1 SHORT-TERM LOANS Interest-bearing short-term loans 16 761 735 761 735 Loans from related parties

– interest-bearing 13.2 41 36 45 43

Loans from related parties – non-interest-bearing 13.2 1 1 2 1

Cash and cash equivalents 13.7 (35) (236) (29) (233) Net interest-bearing after taking cash and cash equivalents into account 768 536 779 546

GROUP COMPANY2008 2007 2008 2007


13.2 LOANS FROM RELATED PARTIES Interest-bearing Senwesbel Ltd 13.3 39 36 39 36 Senwes Graanmakelaars (Pty) Ltd 13.4 - - - 3 Univision Broker Services (Pty) Ltd 13.5 2 - 5 4 Univision Financial Services (Pty) Ltd - - 1 - Non-interest-bearing Silo Certs (Pty) Ltd 13.6 1 1 - - Charel de Klerk Street Properties (Pty) Ltd 13.7 - - 2 1

42 37 47 44

12. RESERVES (CONTINUED)

13.3 This loan is unsecured, bears interest according to the variable prime rate of ABSA Bank, which was prime rate less 2,5% at year-end. There are no fi xed terms of repayment.

13.4 This unsecured loan from Senwes Graanmakelaars (Pty) Ltd. bears interest, which was 12,55% at year-end. The full amount is repayable after each fi nancial year-end.

PENSIONThe Group has a defi ned contribution plan which essentially covers all the employees in the Group. For contributions to the pension fund, see note 21.3.

HEALTH CAREPost-retirement health care contributions are provided for against income (future expenditure).

An actuarial valuation is carried out every year and the most recent valuation was on 30 April 2008.

The calculation is based on the current value of future medical scheme subsidies in respect of existing pensioners, by using actuarial techniques to make a reliable estimate of benefi ts. These benefi ts are discounted using the Projected Unit Credit Method to determine the present value of the obligation.

A cash offer was made to pensioners during the year which 160 pensioners accepted, and that led to a cash pay-out of R26 million. The liability was reduced with the same amount.

14. POST-RETIREMENT LIABILITIES


The movement in post-retirement health care liabilities:

Beginning of year 104 88 104 88Cash offer (26) - (26) -Net provision raised 8 26 8 26Contributions paid (10) (10) (10) (10)End of year 76 104 76 104

13.5 This loan is unsecured, bears interest according to the variable prime rate of ABSA Bank, which was 12,55% at year-end. There are no fi xed terms of repayment.

13.6 This loan is unsecured, bears no interest and there is no fi xed terms of repayment.

13.7 Cash bears interest daily at varying rates in the group of bank accounts.

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


In determining the liability, the calculation is based on the assumption of an expected rate of return (discount rate) of 9% (2007 – 8,8%) on investments and an escalation of 4% (2007 – 4%) which will yield a real rate of return of 4,81% (2007 – 4,8%) and mortality rates in accordance with generally accepted mortality tables.

SENSITIVITY ANALYSIS Variation% change in liability

% change in service cost plus

interest cost

liability

Escalation increase + 1 % + 7,5 % + 7,8 %Escalation decrease - 1 % - 6,7 % - 7,1 %Discount rate decrease + 1 % - 6,1 % - 4,7 %Discount rate decrease - 1 % + 6,9 % + 4,0 %

BALANCE OF OBLIGATION FOR PREVIOUS FINANCIAL PERIODS

GROUP COMPANYR’m R’m

2006 (100% phased in) 88 882005 (80% phased in) 66 652004 (60% phased in) 56 55

15. TRADE AND OTHER CREDITORS

Terms and conditions in respect of trade and other creditor obligations:• Trade creditors are generally payable 30 days after date of statement and are not interest-

bearing.• Other creditors have varying payment dates – See note 23.5.• Leave and thirteenth bonus provisions are provided for monthly.


Trade creditors 439 259 434 257Other amounts payable 110 58 110 57Leave and bonus accruals 19 18 18 17

568 335 562 331

14. POST-RETIREMENT LIABILITIES (CONTINUED)

16.1 SHORT-TERM LOANS

All amounts due to the company in respect of debtors or which may become due in the future, are ceded and pledged. Certain grain commodity stocks as well as trade stock are secured in terms of a collateral notarial bond. (See notes 2, 7.4, 8.6 and 10.1). The ABSA loan is renewed annually and the current bridging facilities bear interest at prime less 2,29%.

16.2 OVERDRAFT FACILITY

This amount formed part of the ABSA overdraft facility and is secured by the properties registered in Charel de Klerk Street Properties (Pty) Ltd. The loan was paid in full at year-end as part of the refi nancing agreement with ABSA.

16.3 COMMODITY FINANCING

The carrying value of the fi nancing is in accordance with the fair value of the underlying commodities. Unutilised commodity fi nancing amounts to R1 billion (2007 – R1 billion) as at 30 April 2008.

16. INTEREST-BEARING SHORT-TERM LOANS

GROUP COMPANY 2008 2007 2008 2007


Short-term loan 16.1 649 695 649 695Overdraft facility 16.2 - 40 - 40Commodity fi nancing 16.3 112 - 112 - 761 735 761 735

17. TAX PAYABLE


Income tax and capital gains tax 11 63 11 61

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


18. PROVISIONS

18.1 GRAIN RISKS

The Group is exposed to risks in the grain industry, including the physical risk of holding inventory and non-compliance with grain contracts by counter-parties. Estimates for these risks are based on potential shortfalls and non-compliance with contracts at current market prices.

18.2 STRAIGHT-LINE RECOGNITION OF OPERATING LEASES

In terms of IAS 17, the expenditure on operating leases with a fi xed term and fi xed escalation rate has to be recognised on a straight-line basis. Subsequently a provision needs to be raised, which will only be utilised later over the duration of the contract term.

18.3 INCENTIVE BONUSES

The Group has short-term and long-term incentive schemes in place for employees. The objective is to promote profi tability by subjecting a portion of the remuneration to risk. Provision is only made if the objectives have been achieved.

18.3.1 Short-term incentives The short-term incentive scheme is paid in full each year to employees on this

scheme. The calculation is based on the performance of the Group, the division where the worker is employed as well as an individual evaluation of the employee.

18.3.2 Share-based payment plan The long-term incentive scheme is calculated over a three year period based on the

performance of the Group’s shares regarding growth in share price and net asset value on a phantom share basis.

Grainrisk

Straight-line

recog-nition of

ope rating leases

Incen tivebonuses Total

GROUP AND COMPANY R’m R’m R’m R’m

Balance at 30/04/2006 14 6 32 52Increase in provision for the year 17 - 35 52Utilised during the year - - (28) (28)Unutilised amounts written back (2) - - (2)Transferred to long-term liabilities - - (2) (2)Balance at 30/04/2007 29 6 37 72Increase/(decrease) in provision for the year (17) - 54 37Utilised during the year - - (35) (35)Transferred to long-term liabilities - - (3) (3)Balance at 30/04/2008 12 6 53 71

Cash settled share based transactionThe table below indicates the number and weighted average exercise price and movement in cash settlement transaction:

GROUP GROUP2008 2007

Market value

Net asset value

Market value

Net asset value

Number of shares

Number of shares

Number of shares

Number of shares

Outstanding value at the beginning of the year 837 724 546 632 - -Allocated during the year 2 077 933 544 016 837 724 546 632Forfeited during the year (115 308) (75 241) - -Exercised during the year - - - -Outstanding value at the end of the year 2 800 349 1 015 407 837 724 546 632

Date of grant 1 May 2007 1 May 2006Market

valueNet asset

valueMarket

valueNet asset

value

Issue price of phantom share R4,01 R4,26 R2,46 R3,77Expiry date 30/04/2010 30/04/2010 30/04/2009 30/04/2009Price of the phantom shares at 30 April 2008 (rand) R5,57* R4,66 R5,57* R4,66Accumulated dividend per share R0,57 R0,57 R0,78 R0,78

The average growth in market price was 28,5% and the discount rate of phantom share options was 12,08%.

The carrying value of the liability in relation to the cash amount as at 30 April 2008 is R6,6 million (2007 – R1,5 million).

* The price is calculated on an average price of 30 trading days before 30 April 2008 and 20 trading days after 30 April 2008.

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


19. TAXATION

The current tax rate changed from 29% to 28% for fi nancial years ending between 1 April 2008 to 31 March 2009.


SA normal tax – current year (59) (63) (57) (61)(Increase)/decrease of deferred tax (7) 12 (7) 12Capital gains tax (1) - (1) -Secondary tax on companies (8) (4) (8) (4)

(75) (55) (73) (53)


19.1 DEFERRED TAX

The main temporary differences at the statutory rate are: Property, plant and equipment (9) (7) (9) (7) Inventory 3 4 3 4 Trade and other debtors 13 10 13 10 Provisions 60 67 60 67

67 74 67 74

Reconciliation of deferred tax balance: Balance at beginning of the period 74 62 74 62 Temporary differences - movements during the period (7) 12 (7) 12

Balance at the end of the period 67 74 67 74

19.5 CRITICAL ESTIMATES AND ASSUMPTIONS REGARDING INCOME TAX The Group is subject to tax in South Africa. There may be transactions and calculations

for which the ultimate tax determination has an element of uncertainty during the ordinary course of business. The Group recognises liabilities based on objective estimates of the amount of tax that may be due. Where the fi nal tax determination is different from the amounts that were initially recorded, such difference will impact the income tax and deferred tax provisions in the period in which such determination was made. The corporate tax rate in South Africa is 28% as announced by the Minister effective from 1 April 2008, for the year end ending there after.

GROUP COMPANY2008

%2007

%2008

%2007

%

19.2 RECONCILIATION OF TAX RATE

Standard tax rate 29,0 29,0 29,0 29,0 Decrease in rate effective 1 April 2008 (1,0) - (1,0) -

Adjusted for: Non-taxable income (5,4) (4,6) (5,4) (4,7) Non-deductable items 1,5 13,5 1,5 13,7 Other 0,9 (2,2) 0,8 (2,7) Temporary differences 1,9 (7,5) 1,7 (7,6) Capital gains tax 0,3 0,2 0,3 0,2 Secondary tax on companies 3,1 2,2 3,0 2,2 Effective tax rate 30,3 30,6 29,9 30,1


19.3 UNUTILISED AMOUNTS – INCOME TAX

Unutilised estimated assessed losses available for set-off against income at the beginning of the year 7 9 - - Utilised by taxable income (2) (2) - -

Net unutilised amounts 5 7 - -

GROUP COMPANY2008 2007 2008 2007R’m R’m R’m

19.4 UNUTILISED AMOUNTS – SECONDARY TAX ON COMPANIES

Unutilised secondary tax on companies credits available for utilisation 5 - 5 -

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


20.1 GUARANTEES

Guarantees amounting to R224 300 (2007 – R233 300) were provided to various fi nancial institutions on behalf of personnel in respect of housing loans.

20.2 PROVISIONAL LIABILITIES

A complaint involving uncompetitive practices was lodged at the Competition Commission against Senwes by a grain trader. Senwes is of the opinion that there is no basis for the allegations and is opposing the action.

20.3 OBLIGATIONS IN RESPECT OF CAPITAL PROJECTS

20. CAPITAL OBLIGATIONS AND PROVISIONAL LIABILITIES


Capital commitments in process:Commitments 29 1 29 1Authorised by the Board but not yet contracted 3 1 3 1

Total future capital expenditure 32 2 32 2

Approved capital commitments which were uncompleted at year-end, mainly involve expenditure in respect of machinery and equipment and include various power generators and the replacement of the air conditioning system in the Head Offi ce building.

20.4 OPERATIONAL RENTAL – MINIMUM RENTAL PAYMENTS

The Group has certain operational rental obligations (fi xed rental contracts) in respect of equipment and properties with an average period of between one and six years.


Within one year 4 3 4 3More than one year and within fi ve years 10 10 10 10More than fi ve years 6 9 6 9

20 22 20 22

The above notes 20.3 and 20.4, will be fi nanced from net cash fl ow from operations and/or loans from fi nancial institutions.

21. OPERATING PROFIT


21.1 DISCLOSABLE ITEMS

Profi t from operations is stated net of the following:

Operating lease expenses (4) (5) (4) (5) Property (2) (3) (2) (3) Plant and equipment (2) (2) (2) (2)Depreciation (24) (23) (24) (23)Profi t from Treasury Option Instruments 1 15 1 15Net profi t on realisation of property, plant and equipment 19 6 18 6Auditor’s remuneration (4) (6) (4) (6) For audit fees (4) (5) (4) (5) Other services - (1) - (1)

Bad debts written off/(not set-off against provision) (3) (2) (3) (2)Bad debts recovered 7 6 7 6Write back of doubtful debts - 4 - 4Write back/(provision) for grain risk 17 (10) 17 (10)Write back/(write-off) of inventory - 4 - 4Provisions on agency debtors (6) - (6) -


21.2 FINANCE COST

Short-term loans and overdraft facilities (98) (57) (98) (57) Commodity fi nancing (19) (14) (19) (14) Other (9) (12) (9) (12)

(126) (83) (126) (83)

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


* Amounts restated/reclassifi ed to improved disclosure.


21.3 EMPLOYEE COSTS

Remuneration (270) (251) (259) (241) Normal remuneration and benefi ts (226) (219) (215) (209) Incentive scheme (44) (32) (44) (32) Pension costs – defi ned contribution plan (18) (17) (17) (16)

(288) (268) (276) (257)

Number Number Number Number

Permanent employees 1 837 1 770 1 751 1 692 Temporary employees 250 163 246 158

Employees at the end of the year 2 087 1 933 1 997 1 850


21.4 INTEREST RECEIVED

Interest received from fi nancing activities of debtors 120 81 120 81


Unlisted investmentsDividends 26 2 26 2Interest received - subsidiaries - - 2 1

26 2 28 3

22. INVESTMENT INCOME

21. OPERATING PROFIT (CONTINUED) 23. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Exposure to exchange rates, interest rates, commodity prices, credit and liquidity risk arises in the normal course of business of the Group.

Derivative instruments are used to reduce exposure due to fl uctuations in interest rates, exchange rates, commodity price risk, etcetera.

23.1 FOREIGN EXCHANGE RISK

The Group is minimally exposed to fl uctuations in mainly the rand/USD exchange rate regarding imports and exports. Transactions in foreign currencies are mainly contracted for the purchase of sale of inventory.

Foreign exchange contracts are contracted for specifi c transactions to hedge against fl uctuations in exchange rates.

At year-end no foreign exchange contracts were entered in order to hedge expected payments (2007 – nil).

There were no contracts entered in order to hedge expected cash infl ows (2007 – nil).

23.2 COMMODITY PRICE RISK

The Group utilises derivative instruments to manage and hedge commodity price risks. In accordance with the Group’s risk management policy, only minimal uncovered market positions may exist at any time. The net position in the value of available commodities, the net value of futures and option contracts and the net position of the value of pre-season contracts, indicate effective hedging as set out in IAS 39. The total value of the futures contracts is regarded as sensitive information and is therefore not disclosed.

The hedging instruments used consist of futures and option contracts. The net fair value of hedged futures at year-end was an exposure of R132,1 million (2006 – R128,5 million). The net revaluation difference of the instruments used for hedging is taken into account against the value of commodities and the fair value of pre-season contracts. The value of commodities on the balance sheet is therefore refl ected as the market value thereof, and the futures, options and pre-season contracts are also included in the balance sheet at fair value.

All contracts expire within eleven months. At year-end the uncovered inventory, valued at closing price, amounted to R1,6 million (2007 – R3,2 million).

23.3 INTEREST RATE RISK

23.3.1 Balance sheet fundingThe Group is hedged against fl uctuating interest rates because interest bearing liabilities are mainly used to fund assets that have an interest related income stream.

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


Total current assets

Non-inte rest earningassets

Interest earningassets

INTEREST RATE RISK R’m R’m R’m

Stock 734 734 -Debtors 1 159 176 983Agent debtors 230 - 230Bank 35 - 35

2 158 910 1 248

Interest bearing liabilities (761)Interest rate risk -

Interest cost is naturally hedged where interest earning assets exceed interest bearing liabilities. In times of volatility or interest bearing liabilities exceeding interest earning assets signifi cantly, interest rate exposure is generally managed by means of fi nancial instruments to convert fl uctuating rates to fi xed rates.

23.3.2 Sensitivity of interest ratesInterest rate increase impact on the gross interest cost:

In crease/ (de crease)

in basis points

(Increase)/decrease

on inte rest cost

% R’m

2008 Commodity fi nancing + 2 % - 4

+ 1 % - 2 - 1 % 2- 2 % 4

Short-term + 2 % - 19+ 1 % - 10- 1 % 10- 2 % 19

2007 Commodity fi nancing + 2 % - 3

+ 1 % - 1 - 1 % 1- 2 % 3

Short-term + 2 % - 14+ 1 % - 7- 1 % 7- 2 % 14

23. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) 23.4 CREDIT RISK

23.4.1 Concentration riskThe potential concentration of credit risk relates mainly to trade debtors. Trade debtors consist of a large number of clients, spread over different geographic areas and credit is extended in accordance with the credit policies of the Group. Credit evaluation processes are meticulously carried out.

Low concentration risk is applicable due to wide spread geographical area mainly in the Free State and North West. A broad client base with no concentration on a specifi c group is applicable.

Distribution in client size:

23.4.2 Credit extension book by risk category:

STRATIFICATION OF CREDIT EXTENSION CLIENT BASE % exposureR1 – R500 000 17%

R500 000 – R1 250 000 24%R1 250 000 – R3 000 000 33%R3 000 000 – R5 000 000 16%

Above R5 000 000 10%100%

GROUP GROUP2008 2007

DISTRIBUTION OF DEBTORS BY CATEGORY

Tradedeb tors

Com-modity

deb tors TotalTrade

deb tors

Com-modity

deb tors Total

Category 1 33% - 30% 31% - 27%Category 2 53% - 47% 55% - 49%Category 3 3% - 3% 6% - 6%Category 4 1% - 1% 1% - 1%Other 10% 100% 19% 7% 100% 17%

100% 100% 100% 100% 100% 100%

The different categories are defi ned as follows:

Category 1 client: Top clients in the market with an excellent credit history and an excellent balance sheet, fi nancial position and repayment ability.

Category 2 client: Top quartile clients (with the exclusion of category 1 clients) of the market with a good credit history and a sound balance sheet, fi nancial position and repayment ability.

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


Category 3 and 4 client: The broad client base which includes some beginner farmers with relatively poor balance sheets as well as higher risk producers. Senwes’s policy only provides for this category in circumstances which include a high security position, specifi c tailor-made lower risk fi nancing products and where Senwes is of the opinion that the client should be able to recover to a stronger position.

23.5 LIQUIDITY RISK

The Group monitors its risk in respect of a shortage of funds by means of a cash fl ow planning and sensitivity model. The Group takes into account the expiry date of its various assets applied and funds its activities by obtaining a balance between the optimal fi nancing mechanism and the different fi nancing products, which includes utilisation of bank overdrafts, short term loans, commodity fi nancing and other creditors. The different debt expiry dates are as follows:

Total

Due within

1 month

Due within

1 - 2 months

Due within

2 - 6 months

Due within6 - 12

months

Due within1 year

and older

GROUP R’m R’m R’m R’m R’m R’m

Debt – 2008Short-term loans 649 - - - 649 -Commodity fi nancing 112 112 - - - -Creditors 568 348 181 6 16 17Other 124 - 54 10 12 48

1 453 460 235 16 677 65

Debt – 2007Short-term loans 735 - - - 735 -Commodity fi nancing - - - - - -Creditors 336 200 101 6 13 16Other 172 - 37 63 17 55

1 243 200 138 69 765 71

23.6 CAPITAL MAINTENANCE GUIDELINES

The Group maintains its own capital ratio within the following set targets: 23.6.1 Own capital ratio to total assets (Equity to total assets) between 30% - 40% 23.6.2 Own capital ratio to net assets (Equity to net assets less interest free liabilities)

between 40% - 50% 23.6.3 Own capital ratio to net assets excluding cash (equity to total assets decreased by

cash and interest free liabilities) between 40% - 55% 23.6.4 Interest cover of higher than 3 is set as a target.

23. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)

Own capital

ratio(total

assets)

Own capital

ratio(net

assets)

Own capital

ratio(net assets

– cash)OWN CAPITAL RATIO 30% - 40% 40% - 50% 40% - 55%

Total assets 2 375 2 375 2 375Interest free liabilities - 635 635Cash - - 35Net assets 2 375 1 740 1 705Equity 843 843 843Net liabilities 1 532 897 862

2 375 1 740 1 705

Calculated rate 35% 48% 49%Set target 30% - 40% 40% - 50% 40% - 55%

Interest cover

INTEREST COVER R’m

Earnings before interest, tax, depreciation and amortisation (EBITDA) 401Interest 126

Calculated rate (times) 3.18Target set > 3

The board of directors is of the opinion that the optimal capital structure is within set norms. It manages and monitors the balance sheet within these norms.

23.7 NON-COMPLIANCE WITH CONTRACTS

The Group manages the risk of non-compliance by concluding contracts with approved and selected suppliers and producers. Pre-season contracts were concluded with producers. These instruments are included with the values indicated in note 23.2. Should the risk be material or should the probability increase, it is managed by means of commodity option contracts (fi nancial instruments).

23.8 FAIR VALUE

Financial instruments are refl ected at their fair value.

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


24. EARNINGS PER SHARE

The following calculations are based on a weighted average number of 180 789 308 (2007 – 180 789 308) shares in issue. The earnings were calculated on profi t attributable to shareholders.

24.1 Earnings per share is calculated on a profi t of R173 million (2007 – R125 million) attributable to ordinary shares.

24.2 Earnings per share from continuing operations is calculated on a profi t of R173 million (2007 – R126 million).

24.3 Headline earnings per share is calculated on a profi t of R154 million (2007 – R119 million).

24.4 Reconciliation between earnings and headline earnings:

GROUP% 2008 2007

change R’m R’m

Earnings per fi nancial statements + 38,4 % 173 125Adjustments:Profi t on sale of property, plant and equipment (19) (6)Headline earnings + 29,4 % 154 119

Earnings per share (cents) 95,7 69,1Earnings per share from continuing operations (cents) 95,7 69,7Headline earnings per share (cents) 85,2 65,8

All adjustments are stated after tax has been raised against it.

25. RELATED PARTY TRANSACTIONS

25.1 Signifi cant infl uence is exerted by Senwesbel Limited who owns 35,5% and the Royal Bafokeng Consortium who owns 32,6% of the Company’s shares. Interest of R4 million (2007 – R3,4 million) was paid into the loan account of Senwesbel.

25.2 Loans to subsidiaries, associates and joint ventures are disclosed in notes 3, 4 and 5 respectively.

25.3 No material sales to associated entities realised. A management fee agreement exists with the Univision Group in respect of operational services and assets and other services rendered.

25.4 There are no signifi cant balances outstanding with regard to the sale of goods and services provided.

25.5 Loans to executive directors – R’nil.


Related parties – trade debtors 9 9 9 9

25.6 TRADE DEBTORS – DIRECTORS AND EXECUTIVE MANAGEMENT


Salaries (7) (6)Incentive schemes (10) (5)Executive directors (17) (11)Non-executive directors (2) (2)Directors’ remuneration (19) (13)

This comprises of production credit and other accounts for which customers of the Company qualify. Credit extension terms and interest rates in respect of loans are in line with company policy.

25.7 DIRECTORS’ REMUNERATION

The directors’ remuneration is not included in the employee costs, as stated in note 21.3.

25.8 OTHER KEY MANAGEMENT PERSONNEL


Salaries (19 ) (14) (18) (13)Incentive Schemes (7) (4) (7) (4)

(26) (18) (25) (17)Number of key management personnel at year-end 18 18 16 17

The remuneration of these employees is included in employee costs, as stated in note 21.3 and the long-term incentive bonuses is stated in note 18. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


Director Date of retirement Position held

WH van Zyl 21 August 2008 Non-executive directorJA Mostert 21 August 2008 Non-executive director

Non-executive directors with a remaining term of offi ce of more than one year:

Director Date of retirement Position held

J Mashike * 2009 Non-executive directorJDM Minnaar # 2009 Non-executive directorOME Pooe * 2010 Non-executive directorJA Boggenpoel 2011 Non-executive directorJE Grober 2009** Non-executive directorJAE Els 2009** Non-executive directorAJ Kruger 2009** Non-executive director

* The terms of offi ce of the alternate directors appointed for these persons will expire on the dates noted above.

# Subject to the rotation provision of the Articles of Association.** Two out of the three must retire. It will be determined in the future.

25. RELATED PARTY TRANSACTIONS (CONTINUED)

25.9 INFORMATION ON DIRECTORS’ TERMS OF OFFICE

Non-executive directors with a remaining term of offi ce of less than one year:

Executive directors:

DirectorService contractexpiry date Position held

JJ Dique 31 July 2011 Managing DirectorF Strydom † Director OperationsSH Alberts † Director Finance

† No new service contracts currently in place. Continuation of service is currently under normal employer/employee terms. Renegotiation will occur.

Interest of the directors in shares of the Company

COMPANY2008 2007

Number ofshares

Number of shares

DirectNon-executive directors 619 638 1 014 246

Executive directors 406 657 1 395 272

Indirect

Non-executive directors 338 786 409 922

Executive directors - -

Related party – Senwesbel

Direct

Non-executive directors 11 091 192 6 573 309

Executive directors 125 768 -

Indirect

Non-executive directors 2 839 670 1 458 136

Executive directors - -

15 421 711 10 850 885

26. RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED FROM OPERATIONS


Profi t before tax 250 182 245 175

Adjusted for: 188 126 186 128 Depreciation 24 23 24 23 Profi t on sale of fi xed assets (19) (6) (18) (6) Investment income (26) (2) (28) (3) Finance charges 126 83 126 83 Increase in provisions and non-cash items 83 28 82 31

Cash generated from operations 438 308 431 303

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


27. INCREASE IN OPERATING CAPITAL


(Increase)/decrease in inventory (96) 2 (96) 2(Increase)/decrease in debtors (385) (141) (384) (140)(Increase)/decrease in agency grain debtors 11 (116) 11 (116)Increase in creditors 122 148 120 140Increase in operating capital (348) (107) (349) (114)

28. TAXATION PAID


Amounts payable at the beginning of the period (63) (21) (61) (21)Deffered tax receivable at the beginning of the period 74 62 74 62Amounts debited in the income statement (75) (55) (73) (53)Deferred tax receivable at the end of the period (67) (74) (67) (74)Amounts payable at the end of the period 11 63 11 61Amounts paid (120) (25) (116) (25)

29. DIVIDENDS PAID


Amounts payable at the beginning of the period - - - -Amounts debited against equity (103) (38) (103) (38)Amounts debited against debtors and loan accounts - 13 - 13Amounts payable at the end of the period - 1 - 1Amounts paid (103) (24) (103) (24)

30. ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT


Buildings and improvements (11) (1) (11) (1)Plant and equipment (15) (24) (15) (24)Vehicles (5) (6) (5) (5)Total acquisition of property, plant and equipment (31) (31) (31) (30)

(31) (31) (31) (30) Acquisition to increase operating capacity (18) (25) (18) (24) Acquisition to maintain operating capacity (13) (6) (13) (6)

31. PROCEEDS ON DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT


Carrying value of assets sold 13 4 12 4Profi t on disposal 19 6 18 6Proceeds on disposal 32 10 30 10

32. LONG-TERM LOANS


Loans taken up/(repaid) 1 (1) 1 (1)

AUDITORSREPORT



REPORTACCOUNTING



STATEMENTS


CORPORATEGOVERNANCE

REPORT

GROUP RISK MANAGEMENT

REPORT

SUSTAINABILITYREPORT

COMMITMENT TO CORPORATE GOVERNANCEThe Board of Directors of Senwes is committed to the best principles of effective and sound govern-ance and strives for the highest standards of integrity and ethics.

At all levels of the business, good corporate governance and ethical behaviour are entrenched, resulting in continued stakeholder confi dence.

The Board is satisfi ed that Senwes has made and continues to make every practical effort to conform to the best corporate practices in all material aspects.

DIRECTORS AND BOARD COMMITTEESThe Board of Directors is responsible for the total and effective control over the Group. The Board con-sists of 14 directors including non-executive, independent non-executive and executive directors. The Chairman is a non-executive director and is elected annually by the Board. The roles of the chairman and the managing director are separated.

Changes to the Board during the year:• The retirement of Messrs Jan Botma and Jimmy Shahim on 2 October 2007;• The appointment of Mr Dries Kruger on 2 October 2007, as well as the appointment of Ms Jesmane

Boggenpoel on 14 April 2008.

In terms of the Articles of Association of the Company, non-executive directors have a term of three years and are required to retire by rotation. Retiring directors may be re-elected.

POWERS AND RESPONSIBILITIESThe composition of the Board allows for appropriate and effi cient decision-making which ensures that no one individual has undue infl uence over the said process. The Board’s primary responsibilities, based on an agreed assessment of levels of materiality, include giving strategic direction, identifying key risk areas and key performance indicators of the business, monitoring decisions and performance of execu-tive and senior management, whilst considering signifi cant fi nancial and non-fi nancial matters.

The responsibilities of the Board are set out in detail in the Board Charter, which was approved by the Board on 24 June 2004 and is reviewed regularly. The charter also provides for access to indepen-dent professional advice to directors at the company’s expense in all matters related to the company.

The powers of the Board are conferred upon it by the Company’s Memorandum and Articles of Association and the Board has specifi cally reserved certain matters for itself in a revised reservation of authority document.

GOING CONCERNThe Board has considered and recorded the facts and assumptions on which it relies to conclude that the business will continue as a going concern in the fi nancial year ahead. The key factors and assump-tions on which the Board reaches this conclusion have been properly recorded.

Corporate governance report

34. UNUTILISED BORROWING FACILITIES

33. SHORT-TERM LOANS


Net (increase)/decrease in other short-term loans (5) 3 (3) (4)Net (increase)/decrease in commercial bank loans (26) (170) (26) (170)

(31) (167) (29) (174)

The Group has unutilised facilities of R551 million, the total amount of which is subject to surety-ship in respect of inventory and debtors. The Group also has available unutilised commodity fi nance that is only limited by the security itself and R55 million in respect of undrawn overdraft facilities.

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Attendance of Board meetings and committee meetings:During the year under review 8 Board meetings were held and most of these were fully attended. The details are as follows:

Name of director BoardAudit

CommitteeRisk

CommitteeHuman Resources

CommitteeStandards

CommitteeNumber of meetings 8 3 4 3 4Non-executive:

JE Grobler (Chairman) 7/8 4/4JDM Minnaar (Vice-Chairman) 7/8 3/3 3/3 4/4

JPL Alberts 6/8 3/3JP Botma (until 2/10/2007) 3/3 1/1

JAE Els 8/8 3/3

AJ Kruger (from 2/10/2007) 6/6 2/2

GNV Magashula 3/8 2/3

J Mashike 8/8 4/4

JA Mostert 7/8 3/3 3/4JA Boggenpoel (from 14/04/2008) 1/1

M Pooe 6/8 3/3JD Shahim (until 2/10/2007) 3/3 1/1

WH van Zyl 8/8 3/4 4/4

Executive:

JJ Dique 8/8 4/4 3/3 4/4

SH Alberts 8/8 4/4

F Strydom 7/8 4/4

# – Chairman of Board/CommitteeIn all instances of absence apologies were offered in advance.

INTERESTS OF BOARD MEMBERSA number of non-executive directors have direct and indirect interests in the Company, the details of which are schedule below. The Board is mindful of this and the potential confl ict of interests that might arise as a result are, however, remote. A regular policy of disclosure of interests and exclusion from discussions in which a director has an interest, is adhered to in order to mitigate any such confl icts.

In addition the Board has adopted a code of conduct for trading in shares in the Group which strictly regulate the board and senior management’s dealing in shares. Certain annual closed and open periods for trading apply and are set out on page 95:

Certain Board members also conduct business with the company on an arms’ length basis as part of Senwes’s normal business. The Credit Extension division has also provided credit to certain of the non-executive directors on terms of the company’s normal business operations practices. These transactions are continuously assessed and scrutinised to ensure adherence to company policies on an operational level.

COMMITTEES

FUNCTIONS AND MANDATESThe Board is supported by a number of key board committees in ensuring the execution of its duties. Each of the committees have functions in accordance with specifi c mandates of the Board.

AUDIT COMMITTEECompositionThe Audit Committee consists of fi ve non-executive directors, two of which are independent non-exe-cutive directors, including the chairman.

Mandate and responsibilitiesIn terms of its mandate this Committee is required inter alia to:• Make recommendations on the appointment of external auditors;• Evaluate the independence and effectiveness of the external auditors and consider any non-audit

services by such auditors and whether the rendering of such services would substantially affect their independence;

• Review the fi nancial statements of the company and its subsidiaries, both interim and annual;• Ensure that the fi nancial statements are prepared in accordance with appropriate accounting poli-

cies and International Financial Reporting Standards;• Review the accounting policies and procedures adopted by Senwes and any changes thereto;• Accept the annual audit plan and to recommend the audit budget and fees to the Directors;• Review the effectiveness of management information, the annual audit, the internal audit function

and the internal system of controls;

Date Status Reason

27 June 2007 Open Announcement of annual results

7 September 2007 Closed Preparation and fi nalisation of offer bid

21 September 2007 Open Announcement of bid

28 September 2008 Closed Interim Financial statements

5 December 2007 Open Announcement of Interim Financial Results

31 January 2008 Closed For Senwes executive directors and offi cials providing support for Senwesbel corporate action

29 February 2008 Open Senwesbel corporate action published

31 March 2008 Closed Preparation of annual fi nancial statements

#

#

#

#

#

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• Ensure that the roles of internal audit and external audit are suitably clarifi ed and distinguished;• Ensure compliance of applicable legislation.

The internal and external auditors have unlimited access to the chairman of the committee and also report to the Financial Director and the Managing Director respectively on day-to-day matters.

The chairman of the committee and the external auditors attend the Annual General Meetings to respond to any questions related to the company’s fi nancial affairs and annual statements.

Key developmentsDuring the year under review:• The composition of the committee was changed to ensure compliance to the Corporate Laws Re-

form Act. The independent non-executive members were increased to two and the executive direc-tors were removed as members. Executive directors are, however required to attend all meetings.

• The Group Internal Auditor now reports directly to the Financial Director (previously to the Manag-ing Director).

HUMAN RESOURCES COMMITTEECompositionThe Human Resources Committee consists of fi ve members, being four non-executive directors and one executive, being the Managing Director.

The General Manager Corporate Services and the Assistant General Manager: Human Resources attend these meetings on all occasions. The Committee meets at least 3 times a year.

MandateThe committee is responsible for the following:• Approving and maintaining appropriate human resources and remuneration policies;• Executive management succession planning;• Monitoring the implementation of relevant labour legislation;• Monitoring transformation policies in terms of Employment Equity;• Recommendations regarding non-executive and executive remuneration;• Designing and recommending market related and appropriate incentive schemes.

EXECUTIVE DIRECTORSThe service contracts of the executive directors are generally for a fi xed term. The Managing Director’s service contract has been renewed and expires in June 2011, whilst the other executive directors’ con-tracts are currently being re-negotiated.

Remuneration of directorsThe committee also recommends the level of non-executive director’s remuneration to the Board. Non-executive directors are remunerated for their membership of the board and board appointed commit-tees.

The remuneration level refl ects the size and complexity of the company as well as the time spent dealing with the affairs of the company. Market practices and remuneration surveys are taken into account in the determination of directors’ remuneration. The elements of non-executive directors’ remuneration are:• A basic fee;

• A fee as a member of a board committee;• Travelling and actual expenses.

Executive directors are remunerated similarly with additional short and long term incentive bonuses, which are approved by the directors, based on the achievement of strict pre-determined annual tar-gets.

For the year under review the remuneration was:

TotalR

RemunerationR

Travel & expenses

RCommittees

R

Non-executive directors:JE Grobler (Chairman) 408 063 270 219 56 797 81 047JDM Minnaar (Vice-Chairman) 322 506 189 465 60 095 72 946

JPL Alberts 175 523 117 325 27 513 30 685

JP Botma (until 2/10/2007) 53 247 44 832 3 185 5 230

JAE Els 166 845 113 844 36 771 16 230

AJ Kruger (from 2/10/2007) 98 601 69 825 17 776 11 000

GNV Magashula 140 966 117 325 12 641 11 000

J Mashike *(Treacle) 193 928 136 575 30 663 26 690

JA Mostert 150 244 113 844 14 670 21 730

JA Boggenpoel (from 14/04/2008) 16 563 9 975 6 588 -

M Pooe**(RBH) 166 845 113 844 36 771 16 230

JD Shahim (until 2/10/2007) 59 305 44 832 4 013 10 460

WH van Zyl 182 504 113 844 23 764 44 896

TotalR

Remuneration and travel

R

Short-term incentives

R

Share appreciation scheme***

R

Executive directors:

JJ Dique 7 754 059 2 914 886 2 910 000 1 929 173

SH Alberts 4 110 535 1 712 485 1 340 183 1 057 867

F Strydom 5 180 655 1 832 873 2 222 068 1 125 714

* Renumeration paid per invoice to “Treacle Private Equity”, only travel expenses are paid to director. ** Renumeration paid per invoice to “Royal Bafokeng Holdings”.*** Renumeration vests over long term. First payment due 30 April 2009.

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RISK COMMITTEECompositionThe Risk Committee comprises of three non-executive directors and the three executive directors. Four meetings were held during the year.

Mandate and responsibilitiesThe Committee assists the Board with the identifi cation, assessment, evaluation, mitigation and moni-toring of actual and potential risks as they pertain to the company. These risks encompass short, medium and long-term risks.

The Committee fullfi ls an essential function in ensuring that the Board effectively takes responsibility for risk management. It plays a strategic role in the identifi cation, removal and action plans to proac-tively address the risks that face the group.

Key developmentsInternally the risk management structure reports to the Financial Director. The Group Risk Manager po-sition has been vacant for the last six months and alternative management measures had to be made.

STANDARDS COMMITTEECompositionThe Standards Committee consists of three non-executive directors and the Managing Director. During the year under review the Committee met four times.

Mandate and responsibilitiesThe Committee functions similar to a nomination committee and is responsible for recommendations regarding the size, composition and skills of the Board and its board committees.

It also assists the Chairman in his task to evaluate the performance of the Board as a whole as well as the performance of the individual board members.

Nomination of Board membersThe directors to the Board are elected on the basis of their skills and experience appropriate to the strategic direction of the company and necessary to secure its sound performance.

Procedures for the nomination of independent and executive board members are formal and trans-parent. The Standards Committee makes recommendations to the Board.

Key developmentsDuring the year under review, the committee recommended a formal performance evaluation process for the Board as a whole and the individual board members. The Board accepted this process, which is currently being undertaken by an independent facilitator.

The details of directors’ interest in the company and its related company, as at year-end, are as follows:

SHAREHOLDING OF DIRECTORS AT 30 APRIL 2008

2008 2007

Senwes Senwesbel Senwes Senwesbel

Name of director* Number % Number % Number % Number %

Non-executive:

JPL Alberts - 0,00% 55 862 0,07% - 0,00% 88 356 0,11%

JAE Els 1 345 0,00% 1 005 000 1,20% 25 045 0,01% 500 000 0,62%

JE Grobler - 0,00% 3 949 794 4,70% 239 722 0,13% 2 023 667 2,49%

AJ Kruger 112 386 0,06% 74 294 0,09% - 0,00% - 0,00%

AJ Kruger** (Kingston Boerdery)

17 887 0,01% 327 941 0,39% - 0,00% - 0,00%

J Mashike** (Treacle Private Equity)

9 861 0,01% - 0,00% - 0,00% - 0,00%

J Mashike** (Treacle Nominees)

161 038 0,09% - 0,00% 101 990 0,06% - 0,00%

JDM Minnaar - 0,00% 1 600 000 1,90% 7 143 0,00% 1 042 947 1,29%

JDM Minnaar (Lerna Boerdery)

100 000 0,06% 1 600 000 1,90% 125 011 0,07% 1 000 000 1,23%

JDM Minnaar (Robyn Trust)

50 000 0,03% 911 729 1,08% - 0,00% 230 000 0,28%

JA Mostert 5 907 0,00% 21 110 0,03% 5 907 0,00% 21 110 0,03%

WH van Zyl 500 000 0,28% 4 385 132 5,21% 600 000 0,33% 2 443 135 3,01%

Executive:

JJ Dique - 0,00% 31 442 0,04% 1 000 000 0,55% - 0,00%

F Strydom 295 731 0,16% 62 884 0,07% 295 731 0,16% - 0,00%

SH Alberts 110 926 0,06% 31 442 0,04% 99 541 0,06% - 0,00%

Subtotal for Board (without retirees)

1 365 081 0,75% 14 056 630 16,72% 2 500 090 1,38% 7 349 215 9,05%

Non-executive retired:

JP Botma 43 848 0,02% 128 118 0,15% 136 429 0,08% 454 094 0,56%

Jan Botma Trust 43 848 0,02% 128 118 0,15% 17 969 0,01% 27 557 0,03%

JD Shahim (Maizefi eld Trust)

164 952 0,09% 200 579 0,24% 164 952 0,09% 200 579 0,25%

Subtotal for Board of Directors **

1 617 729 0,89% 14 513 445 17,26% 2 819 440 1,56% 8 031 445 9,90%

Remainder of shareholders

179 171 579 99,11% 69 576 621 82,27% 177 969 868 98,44% 73 090 197 90,10%

TOTAL 180 789 308 100,00% 84 090 066 100,00% 180 789 308 100,00% 81 121 642 100,00%

* Directors who have no shares are not listed.** Total share is appropriated to extent of the director’s interest in the applicable company.

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COMPANY SECRETARYThe Board is assisted in complying with its ongoing responsibilities and obligations by the Company Secretary. Newly appointed directors are provided with an appropriate induction by the Company Sec-retary, which includes a briefi ng of their duties and responsibilities. All directors have unlimited access to the advice and services of the Company Secretary who inter alia is responsible for ensuring that Board procedures and applicable legislation and regulations are fully observed.

A formal orientation programme has also been adopted and during the year the Board reviewed several actuality issues.

The Company Secretary also oversees compliance of applicable legislation throughout the Group. During the year, the structure for compliance was expanded and a compliance committee was estab-lished consisting of senior management throughout the company. In this manner, comfort is being provided that regulatory compliance is afforded the necessary attention that it deserves in the highly regulated business environment.

Access to informationThe Company complies with the Promotion of Access of Information Act 2000 and the manual in this regard is available on the Company’s website.

Members also have access to the share register, minutes of members’ meetings and information on bids and offers, as published on the website. Any queries regarding the Company may be directed to the Company Secretary.

EXECUTIVE COMMITTEEComposition and responsibilitiesThe committee consists of the executive directors whilst the heads of the various divisions attend all meetings. It is primarily responsible for the operational activities of the Company and for the develop-ment of strategy and policy proposals for consideration by the Board. The Committee is also responsi-ble for implementing Board instructions.

The Committee meets weekly at operational level and with senior management, on a monthly basis.

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RISK TAKING, IN AN APPROPRIATE manner, is an integral part of the business. Success of the business relies to a great extent on optimising the trade-off between risk and reward. In the normal course of conducting its business, the Group is exposed to a variety of risks, inter alia operational risks, fi nancial risk, credit risk and market risk. The long-term sustained growth, continued success and the reputation of the Group are critically important and dependent on the quality of risk management and good corporate governance.

Risk management is one of the Group’s core competencies and management and the board is committed to applying international best practices and standards in this regard.

The Group’s risk philosophy is underpinned by its objective of shareholder value creation on a sustainable basis that is consistent with shareholder’s expectations and is in line with the Group’s risk bearing capacity and consequential risk appetite.

It is the Group’s objective to ensure that a quality risk management culture is sustained throughout its operations. This culture is built on the following main elements:• Adherence to the core values of the Group;• An integrated and holistic risk management approach to achieve optimal business decision-making;• A risk awareness culture through management and the business units and adherence to risk

management standards and limits;• Pro-active risk management through appropriate risk management structures and risk management

model;• Disciplined and effective risk management processes and controls;• Compliance with the relevant statutory, regulatory and supervisory requirements.

The management of risk is fundamental to the Group’s business and allows management to operate more effectively in an environment characterized by uncertainty and risk.

RISK MANAGEMENT APPROACH• All signifi cant risks must be identifi ed and managed appropriately and returns must be commensu-

rate with the risks taken, relative to the Group’s risk appetite. • Risk management in the Group is guided by several important principles, the most relevant being:

- Integrity and reliability of the fi nancial and operational information that is used internally and for public reporting;- Safeguarding and maintenance of assets;- Detection and minimisation of potential loss, liability, fraud and material misstatement;- Compliance with applicable laws, regulations and policies;- Effi cient and effective operations;- The assignment of appropriate responsibility and accountability;- The adoption of a risk management framework that addresses risks in an integrated and holistic manner;- Comprehensive risk assessment, measurement and reporting; and- Independent review by a risk committee.

Group risk management report


RESPONSIBILITY AND ACCOUNTABILITYExcellence in risk management is based on our culture in which management makes risk identifi ca-tion, risk management and the establishment and maintenance of an effi cient control environment, an integral part of its regular activities. Overall risk management policies, risk appetite and tolerances are set on a comprehensive group wide basis by senior management, and reviewed with the appropriate board risk committee. These policies, appetites and tolerances are clearly communicated throughout the Group and apply to the various divisions and subsidiaries.

The Board is responsible for the Group’s risk appetite on an annual basis having regard for an appropriate risk and return. The risk appetite is translated into risk limits per division / subsidiary ac-cording to type. Adherence to these limits is monitored regularly and culminates into a risk profi le for the Group.

The Board is responsible for the Group’s system of fi nancial and operational internal controls. To fulfi l this responsibility, the executive directors and senior management ensure that management main-tains appropriate accounting records and continually develops internal controls.

RISK APPETITEThe basis for establishing an appropriate risk appetite for the business is the equity of the shareholders and the relevant return they seek on it in relation to the risk appetite. This is then cascaded down to the various divisions. Returns are primarily sought on a long-term sustainable basis rather than quick once-off opportunities. It does, however, not exclude the latter from operational decision-making, as long as it falls within the ambit of the risk appetite.

An appropriate value at risk model is established in relation to the equity of the shareholders and is regularly monitored. This is applied to all major business units.

No singular activity or business unit will place at risk in its value at risk model more than 50% of the shareholders’ interests.

YEAR UNDER REVIEWThe following were some of the major risks identifi ed and managed:

FINANCIAL RISKSCounter party riskTraditionally Senwes placed most of its operating capital external funding needs with Land Bank. The situation had unfortunately become untenable and had led to an unacceptable counterparty and con-sequently liquidity risk. Hence, funding was placed with commercial bank funding and alternative fund-ing products to alleviate this risk.

Interest rate riskThe interest rate risk is the risk of a reduction in net earnings due to interest rates movements. The bal-ance sheet of the Group is naturally hedged to a large extent for this risk as most of the items on the balance sheet generate revenues and costs that are interest rate related. The decision to hedge interest

rates for the remainder of the balance sheet or to remain unhedged is reviewed regularly in order to manage this risk effi ciently.

CREDIT RISKS• The necessary processes are in place to measure, monitor, control and report on credit risk.• The most signifi cant credit risk for Senwes is counter party risk and therefore strict credit extension

policies are applied when credit is granted. Proper securities, the balance sheet of the counter-party, pay-back capacity and long-term yield of farming units are crucial factors that play a role in mitigating risks.

• The impact of internal and external factors on transactions and positions are monitored regularly to ensure timely reaction to these factors and effective management thereof.

OPERATIONAL RISKSNon-compliance with contractsThe fact that Senwes contracts with both producers and buyers presents a risk when prevailing condi-tions create circumstances of inability or the temptation not to comply with contractual obligations. These conditions might arise through drought or signifi cant price movements. Proper counter party evaluation and accreditation as well as the monitoring of the fl ow of the harvest play important roles in addressing this risk. Limiting contract volumes per counter party reduces risk. Market conditions that might lead to non-compliance with contracts are monitored closely and strategies to hedge this risk on the Safex market are used when deemed necessary.

Access to grainThe risk that Senwes can not maintain and/or increase volumes of grain within its geographic base where it operates and the concomitant impact on its grain income stream, can be signifi cant. Reduced access to grain crops could be the result of a number of causes such as:• Downscaled plantings – models were developed and are managed to reduce the impact of signifi -

cant downscaled plantings as single season occurrences.• Alternative storage structures – alternative storage structures are addressed by innovative market

transactions and the maintenance of close producer relationships. Differences between product of-ferings are also highlighted in the market place. Logistical solutions and funding of grain users are additional risk mitigating measures.

• Droughts – models were developed and fi nancial instruments utilised to manage and reduce the impact of droughts.

• Improper management of transformation and land reform may have a signifi cant impact on produc-tion. Senwes works in conjunction with all applicable government departments in seeking viable options and implementation of such options with regards to the BEE imperative.

Inadequate agreementsLosses could be suffered due to incorrect and/or defi cient older, existing contracts which were drafted

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without the necessary legal advice. To protect Senwes against this risk, timely advice is now provided by legal experts within the Secretariat department. Procedures, regarding the drafting and reviewing of contracts ensure that the intent of the parties are properly captured in such contracts. Implementing risk is reduced through monitoring on project basis that all the necessary steps have been followed.

Human capital – scarcity and retention of talentOne of the cornerstones of good performance is the access to and retention of excellent personnel. South Africa is currently broadly struggling with a scarcity of talent due to various reasons. Further-more, Senwes itself has a relatively young talent profi le which in itself brings about diffi culty to retain talent because of mobility. Added to this is the fact that Senwes is predominantly situated in rural areas and many young people relocate to the larger metropoles where there are more career opportunities. In order to curtail this risk and as part of a comprehensive strategy for retention, appropriate remunera-tion and incentivisation schemes as well as providing ample opportunities for growth through training opportunities have been provided. Suffi cient succession plans have been drawn up.

Power failuresSince January, South Africa has been in the grips of power shortages and outages. In order to mini-mise this risk, Senwes has invested in alternative power supply units for critical operating points and administrative areas such as certain silos for grain delivery and receiving, certain retail stores and its Head Offi ce. These units are to be installed in a controlled program during the latter six months of the calendar year of 2008.

MARKET RISKSGrain market risks• Trading risk Market risk with regards to trading relates to the potential losses in the trading portfolio due to mar-

ket fl uctuations such as interest rates, spread between current and future prices of commodities, volatility of these markets and changes in market liquidity. Risk limits are set to govern the trading within the risk appetite of the Group.

• Unhedged commodities positions Positions that are not hedged on the Safex market leave Senwes with an exposure to price move-

ments. This risk is exacerbated during low market liquidity. Senwes applies a very strict policy and limits are set at very low levels with regard to open positions, whether speculative or operational in nature. The status of open positions are monitored daily and reported to appropriate senior man-agement.

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Sustainability report

THE SUSTAINABILITY REPORT PROVIDES a broad overview of the policies, strategies, pro-grammes and performance of the Group with regard to economic, social and environmental activities. Whilst the report highlights remarkable achievements in some areas, it also pinpoints some areas that require improvement and focused and dedicated effort in the coming year.

Senwes has in its continual strive towards improved reporting and transparancy, adopted the GRI guidelines. This report has drawn on the G3 GRI guidelines as a broad reporting framework.

COMMITMENT TO OUR STAKEHOLDERSAs a company that seeks to be the most admired agribusiness in South Africa, Senwes focuses on creating value for all its stakeholders in accordance with their needs and expectations:

Stakeholder Performance objective• Shareholders • Sustainable high returns and value created commensurate with risk.• Customers • Supplier of choice who understands and satisfy customer needs in terms of

products, service, quality, relationships and delivery mechanism.• Employees • Employer of choice who provides an enabling, supportive working environ-

ment, where diversity is embraced and employees are developed, engaged, recognised and rewarded accordingly.

• Suppliers • Preferred partner for market access.• Community • A caring corporate citizen who contribute towards the development of the

community.• Regulators and Government

• A law abiding, loyal and responsible corporate citizen who contributes to the transformation of the agricultural sector and the national and local economy.

ACHIEVEMENT HIGHLIGHTS – 2007/08• Sustained high returns that exceed the risk profi le were delivered to shareholders.• Increased profi le as preferred supplier demonstrated by market share growth.• Signifi cant improvement in employer of choice survey with particular reference to:

- Increased remuneration benefi ts and incentivisation.- Signifi cant reduction in the number of workplace injuries and number of days lost due to injuries.- Maintaining of healthy labour relations with no operational days lost due industrial action.- Increased awareness and enforcement of human rights in the work place.- Increase in skills development investment and training.

• Maintained high levels of food safety standards in accordance with HACCP requirements.• Implementation of new initiatives targeted at reducing energy and water consumption.

SUSTAINABILITY OBJECTIVES – 2008/09• Finalise an integrated sustainability strategy and priorities for implementation.• Develop a sustainability information management system.

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• Establish a framework for management and governance of strategy.• Develop and roll out a sustainability management communication strategy.• To strengthen sustainability and balanced scorecard reporting and benchmarking processes

throughout the Group.• To undertake training and awareness programmes on sustainability throughout the group.• Complete the implementation of energy and water conservation as well as waste minimisation

initiatives.

2008 2007

Value created/added R’m R’m

• Revenue 7 640 5 578

• Investment activities (Interest and Dividends received) 26 2

• Amounts paid to suppliers of goods and services (6 844) (4 955)

822 625

Value distributed/utilised % %

• Employees and directors salaries, wages and benefi ts 308 38 283 45

- Salaries, wages and benefi ts 254 31 244 39

- Incentive schemes 54 7 39 6

• Authorities and taxation 85 10 71 12

• Interest paid 126 15 83 13

• Available to shareholders 303 37 188 30

- Retained for expansion and growth 175 21 127 20

- Dividends paid 103 13 38 6

- Provision for replacement of assets 25 3 23 4

822 100 625 100

ECONOMIC IMPACT

VALUE ADDED STATEMENT

SOCIAL IMPACTPRODUCT RESPONSIBILITY• All 69 Senwes Silos went through an HACCP (Hazard Analysis and Critical Control Points) audits

and are certifi ed accordingly.• PPECB (Perishable Products Export Control Board) audits were undertaken at all the silos and were

certifi ed by the Department of Agriculture as Food Business Operators.

LABOUR PRACTICE AND LABOUR RELATIONS• Senwes employees enjoy their right to freedom of association and there are three recognised

unions operating in the company. • 36% of all our permanent employees were affi liated to a union.• No labour unrests or strikes were reported during the fi nancial year.• No trading or operational days were lost due to industrial action.• Collective bargaining processes were utilised effectively to ensure smooth negotiations and speedy

conclusion of wage increase agreements.• All disputes were amicably resolved either internally or in the Bargaining Council.

CORPORATE SOCIAL INVESTMENT• Senwes Spinners Cricket Programme

- Purpose: to introduce cricket to the rural schools in the Senwes area.- Partners: Programme run in conjunction with North West Cricket and the Department of Educa- tion.- Term and regularity: it was run successfully for the third year.- Target group: programme was extended to include additional rural schools in area of operation.- Participation: 16 schools participated in the programme.- Impact: 120 players were trained and 20 teachers were trained as coaches, resulting in over 400 players and 40 teachers trained over a three year period.

• Senwes entrepreneurship competition- Purpose: to encourage the spirit of entrepreneurship, as well as develop basic entrepreneurial skills.- Partners: Faculty of Business Science of the University of the Free State. - Term and regularity: second year running.- Target group: school going children at primary and high school. - Participation: 75 schools participated and 925 business plans were received.- Impact: Business plans receive attention and are evaluated by the University of the Free State. Participants are exposed to all spheres of business and entrepreneurship. Both individuals and schools receive prize money for winning. Individuals also receive scholarships.

Wealth created distribution

Wealth distribution 2008 – R822 million

Wealth distribution 2007 – R625 million

Shareholders Personnel External Funders Taxation

37%R303 m

R188 m R283 m R83 m R71 m

R308 m R126 m R85 m38% 15% 10%

30% 45% 13% 12%

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• Dreamfi elds Football Project- Purpose: further development of sport – specifi cally soccer with a view to world cup.- Partners: Matlosana Municipality- Term and regularity: fi rst year- Target group: primary schools that participated in the Dreamfi elds football tournament- Participation: six teams were sponsored with bags consisting of a full soccer kit for 15 players as well as kit for the coach.- Impact: A Senwes sponsored team won the fi nals and became the champions of the tournament.

• Senwes Trade Golf Day- Purpose: benefi t golf day for charity- Partners: regular suppliers of Senwes- Term and regularity: 7th year running- Target group: various charities- Participation: fi eld of 120 participants- Impact: an amount of R86 000 was raised. The following projects benefi ted from the event:

▼ Home Maranata▼ Evans Home▼ Bultfontein Care Centre▼ Janie Schneider School

• Transport for the Disabled- Purpose: provision of transportation for needy.- Impact: sponsored the Adonai Care Centre with a microbus for the daily transport of the disabled students between home and school and to other special events.

• Ottosdal Night Marathon - Purpose: development of marathon athletes - Term and regularity: three years running - Target group: development athletes - Participation: over 6 000 athletes participated in the race - Impact: the runners qualify to participate in major marathon events like the Two Oceans marathon. Five runners sponsored by Senwes qualifi ed to run the Comrades marathon.

SPONSORSHIPS• Senwes Young Farmers Future Focus

- Purpose: developing and encouraging interest in the fi eld of farming as well as sharing trends and developments in farm management. - Term and regularity: annual event for the past three years.- Target group: young farmers and prospective young farmers.

- Participation: 220 young farmers from the Free State and North West participated in the event for the year under review.

• Sectoral sponsorships- Senwes was the main sponsor for the annual congresses of the following industry bodies: ▼ AgriSA ▼ NAFU ▼ Agri North West ▼ Free State Agri ▼ Young Farmers

HUMAN RIGHTS• Human rights are continuously monitored.• Violations are dealt with through the company’s disciplinary processes. • One incident of human rights abuse resulted in disciplinary action taken.• A policy of non engagement of child labour is in place and is enforced and monitored constantly.

Incidents of child labour reported during the year led to appropriate action.• There was no reported incidence of sexual harassment.

IMPACT ON EMPLOYEES

SAFETY, HEALTH AND ENVIRONMENTAL INCIDENTS (SHE) Occupational HygieneThe main purpose of an Occupational Hygiene programme is to protect the health and safety of workers at operations, which could be affected by process and production activities. The focus of this programme is:• The reduction of occupational exposures (the principal health hazards associated with grain pro-

cessing has been identifi ed as noise and dust).• Audiometric examinations are carried out on employees working in noise zones on a yearly basis,

employees are provided with appropriate hearing protection devices and compliance monitoring has been implemented.

• Zero Hearing Loss Incidents were reported compared to 10 that were reported during the previous year.

• All persons working in areas where the concentration of dust was determined to be above the oc-cupational exposure limit are provided with proper personal dust protection tools.

• Lung function tests are conducted on employees to check if their health is not deteriorating due to exposure to dust.

CORPORATEGOVERNANCE

REPORT



REPORT


Safety performance to ensure accomplishment of long term objectives and sustainable stakeholder value creation. Participation in the scheme is considered by the Human Resources committee annually, at the recommendation of the Managing Director and approved by the Board.

Employee RecognitionSenwes continues to acknowledge and reward the performance of high performers through the provision of awards and cash incentives at an appropriate ceremony. A total of 18 awards given to individuals and teams.

Human Resources DevelopmentA talent strategy has been developed with focus on:• Developing talent pool in the critical talent segments.• Diversifying our talent resources.• Attracting the best talent.• Increasing employee engagement and productivity.• Retaining high performers in the organisation.• Creating an enabling and supportive work environment that embraces diversity.• Developing leadership for the future.

Performance indicator Performance outcome• Average number of employees for the year 2 014

• Employee turnover 11,4% • Investment in skills development R3,04 million• Skills development as a % of taxable payroll 1,2%• Total number of participants in skills development programmes 235

Programme Participants• Executive development (Harvard) 3• Middle Management Programme (NWU) 7• Emerging Managers Programme (NWU) 5• Department of Agriculture 2• International exposure programmes (Insead) 2• Accelerated Leadership Development Programme 10• Supervisory programme 22

Human Resources Provisioning

Human Resources Development

Performance indicator Performance outcome• Lost Time Injuries (injuries requiring time off) • Reduced from 51 to 20 • DIFR (disabling injuries) • Reduced from 2,43% to 0,91%• Man-days lost • Reduced from 545 to 154 days• Non Lost Time Injuries • Reduced from 35 to 19• Training • 101 employees received formal SHE and fi re

prevention training• SHE Induction training for all new employees

REMUNERATION AND AWARDSRemuneration PhilosophySenwes’s remuneration philosophy and strategy is geared towards the attraction, motivation, engage-ment and retention of talented and high performing staff, to achieve the group’s strategic objectives. The Senwes philosophy is to encourage sustainable long-term performance that is consistently aligned with the strategic direction and objectives of the business.

Remuneration Policy and Structure The group’s remuneration structure consists of four key elements designed to balance short-term and long-term objectives:

• Guaranteed fi xed pay - Senwes’s guaranteed remuneration is based on a total cost to company approach, which includes all benefi ts, and is reviewable on an annual basis. - It is benchmarked against the relevant labour market nationally, provincially and various sectors, and takes into account agreements of collective bargaining processes.

• Performance based variable pay- These include performance pay structures like commission and incentive scheme based on preset performance targets.

• Short-term incentives - This is a performance based incentive scheme applicable to all employees, excluding employees participating in other performance based variable pay. - The scheme is contingent on the group and relevant division or individual achieving fi nancial and other relevant performance goals. - The scheme incorporates a profi t share component in the event that the group fi nancial targets are exceeded.

• Long-term incentives The scheme is targeted at top management who provides strategic direction to the organisation

CORPORATEGOVERNANCE

REPORT



REPORT


Performance indicator 2008 2007

Weighted points

Senwes performance

Weighted points

Senwes performance

Equity ownership 23 20,02 23 23,00Management control 11 3,23 11 3,03Employment equity 15 - 10 0,88Skills development 15 1,89 20 6,88Preferential procurement 20 12,13 20 9,88Enterprise development 15 7,05 11 1,83Social development 6 2,26 11 2,33Total score 106 46,58 106 47,03Contributor level 6 6

Learnerships and Accredited Programmes

Performance indicator Performance outcome +/- %• Total energy utilisation • 25,230,931 kW/h -6,5%• Water Consumption • 111,442 kl -135%• Waste • 27,433 kg -23%• Environmental related complaints/incidents • None None

EMPOWERMENT Highlights• Continued focus on the transformation of the company internally as well as contribute to national

transformation through industry and community development initiatives is maintained. • Broad Based Black Economic Empowerment (BBBEE) scorecard on the same level. • The changes in the scorecard and weightings announced in the fi nal and promulgated Codes of

Good Practice in February 2007 were adopted in this report and resulted in changes in weightings, targets and indicators, which also impacted on the reported scores, and inconsistent year-on-year comparison.

• Senwes remains a level six contributor to broad based economic empowerment. • The AgriBEE sectoral charter was promulgated during the year under review. Whilst taking into

consideration the stipulations of the sectoral charter, Senwes has decided to maintain its reporting in accordance with the Codes of Good Practice.

• Energy consumption reduced by 6,5% due to disposal of industrial facilities as well as a concerted conservation programme.

• Water consumption reduced by 135% mainly due to the disposal of high water consuming industrial facilities.

• A major capital project has been undertaken to replace the cooling system in Head Offi ce building which is estimated to result in a 40% reduction in the utilization of energy and a 25% in water consumption.

• Capital projects have been approved to ensure standby energy provision to selected strategic locations, including Head Offi ce, selected Silo’s and retail stores, as well as fuel stations.

Programme Participants• National Certifi cate in Agri Trade Processes 9• National Certifi cate in Agri Sales and Services 5• National Certifi cate in Grain Handling Processes 14• National Certifi cate in Grain Handling Management 10• Apprentice programmes 14

Enabling Work Environment• Efforts to improve the work environment and provide a superior value proposition to employees

continue. • Focus is on:

- the creation on an enabling work environment- providing of challenging jobs and growth opportunities- engaging and motivating employees- creating a well renowned brand - providing competitive rewards

• Senwes participated in the Deloitte best company to work for survey for the third consecutiveyear and the results were as follows:- Achieved an overall 47th position out of 131 participants compared to positions 77 in 2006 and 105 in 2005 respectively.- Achieved position 14 in the medium size companies category out of 62 participants.- Achieved position 3 out of 5 participants in the Agricultural sectoral category.

ENVIRONMENTAL IMPACT

BBBEE Scorecard at the end of April 2008

• Signifi cant progress made in enterprise development and preferential procurement.• Strategic focus for Senwes has shifted to employment equity and skills development which

remains a challenge, and strategies have been adopted and are being implemented to achieve set objectives.

• The junior and middle management categories present the most challenge for transformation. This is an area in which the effect of scarce skills and talent war is most felt in the industry.

CORPORATEGOVERNANCE

REPORT



REPORT


SHAREHOLDERMATTERS

ANNUAL GENERALMEETING

CORPORATEINFORMATION

Employment Equity

Governance and management level Black representation Black female representation• Board 31% 8%• Senior management 19% 0%• Middle management 13% 2%• Junior management and specialist 10% 2%

Enterprise Development• Enterprise development efforts have been targeted at emerging and developing farming enter-

prises. • Total hectares planted by emerging farmers supported by Senwes exceeded 750 Hectares.• Agricultural technical support in the form of Agronomist, Soil Scientist, Agricultural Scientist, and

Live Stock Specialist were provided to the farmers. • Training and exposure programmes were conducted.• Production facilities and crop insurance were provided. • Grain storage and off-take agreements were signed with the farmers to ensure market access.• Experienced commercial farmers were secured as mentors.• Seven emerging farmers were sponsored to attend the 2007 Agri Outlook conference.

2004 2005 2006 2007 2008

465

Trading value Net asset value

315378

344427

525

250

400

165

80

c/sh

are

Share price: trading value vs. net asset value

Financial year-end 30 April 2008Announcement of results 26 June 2008Information road show During July & August (dates will be announced)Annual General Meeting 21 August 2008Payment of fi nal dividends 4 September 2008

2008 2007

Portfolio sizeShare-

holders %Number of

shares %Share-

holders %Number of

shares %

1 - 1 000 1 079 31,0 385 653 0,2 1 139 29,7 407 125 0,2

1 001 - 5 000 762 21,9 1 929 785 1,1 834 21,7 2 111 475 1,2

5 001 - 30 000 1 210 34,8 16 957 601 9,4 1 369 35,7 19 200 688 10,6

30 001 - 100 000 365 10,5 17 610 613 9,7 411 10,7 20 148 677 11,1

100 001 and more 66 1,9 143 905 656 79,6 86 2,2 138 921 343 76,8

TOTAL 3 482 100 180 789 308 100 3 839 100 180 789 308 100

DISTRIBUTION OF SHARES

FIVE LARGEST SHAREHOLDERS

SHARE PRICE PERFORMANCE

SHAREHOLDER’S DIARY

Senwesbel Limited 64 126 004 35,5%

Royal Bafokeng Agri Investments (Pty) Ltd 31 896 503 17,6%

Treacle Nominees (Pty) Ltd 27 118 715 15,0%

Treacle Capital (Pty) Ltd 3 700 087 2,0%

Gardenview Nominees (Pty) Ltd 3 750 680 2,1%

RBF Consortium

Shareholder matters

CORPORATEGOVERNANCE

REPORT



REPORT


NOTICE IS HEREBY GIVEN that the twelfth Annual General Meeting of shareholders of the Company will be held in the Board Room, Senwes Head Offi ce, 1 Charel de Klerk Street, Klerksdorp on Thurs day, 21 August 2008 at 11:00 to dispose of the following matters:

A. PRESENTATION OF FINANCIAL STATEMENTS To present to the meeting the fi nancial statements of the Company for the period ended 30 April

2008, as approved by the Board of Directors.

B. ORDINARY RESOLUTION 1. To consider and approve the re-appointment of the auditors, Ernst & Young Inc., until the next

annual general meeting.

2. To consider and approve the auditors’ remuneration as set out in the fi nancial statements (page 79).

3. To consider and approve the remuneration of the non-executive directors in terms of Article 28.5 of the Company’s Articles of Association as from 1 October 2008, as contained in the explanatory notes, set out below.

4. To place the authorised but unissued shares of the Company under the control of the Board of Directors with authority to issue and allot the shares or part thereof, as they deem fi t, but subject to the provisions of section 221 of the Companies Act, 1973, (“the Act”) as amended.

5. To accept the recommendation of the Board of Directors that a dividend of 14 cents per share be declared in terms of Article 38.1 of the Company’s Articles of Association. (In terms of Article 38.7 of the Company’s Articles of Association, the general meeting may not declare a larger dividend than the dividend recommended by the Board of Directors). (See explanatory notes and important dates hereunder).

6. ELECTION OF NON-EXECUTIVE DIRECTORS To elect directors in the stead of the non-executive directors who will be retiring at the meeting in

terms of the rotation provisions of the Articles of Association.

In terms of the Memorandum and Articles of Association, both Mr JPL (Johan) Alberts and Mr GNV (Oupa) Magashula as independent non-executive directors, as well as Messrs JA (Bertus) Mostert and WH van Zyl have to retire by rotation.

Messrs Magashula and Mostert were not available for re-election for a further term of offi ce, whilst both Messrs Alberts and Van Zyl are available.

SENWES LIMITED(Registration number 1997/005336/06)

(“the Company”)

Notice of Annual General Meeting

Messrs Nico Liebenberg and Rudolf Pretorius were also furthermore nominated as candidates by the members and are therefore available for election. Subsequently four candidates have been nominated for the existing four vacancies on the board.

The details of the candidates are as follows:

6.1 Resolution 6.1: Resolved that Mr JPL Alberts be re-elected as independent non-executive direc-tor.

Abridged curriculum vitaeFull names and surname Johannes Petrus Lourens (Johan) AlbertsAddress 3 Blue Gum Bend, Eldoraigne Extention 3, Centurion, 0157Age 65 yearsYears of service 7 years. Served as director since 1 January 2001. He is presently the Chairman of the Senwes Audit Committee.

Qualifi cations B.Comm (Economics), University of Pretoria in 1964; CTA Certifi cate, Unisa in 1969; CA (SA) in 1970; IMI (International Advanced Manage- ment Programme), Management School in Geneve, Switzerland in 1987; Various management courses.

Experience Johan started his career as clerk and later chief bookkeeper at the Government Printer in 1961. He was appointed as Senior Internal Auditor at Armscor in 1971, after which he held the position of Chief Accountant at Pretoria Metal Pressing in 1972 and was promoted to Head Production and Development in 1974 and Chief Executive Of- fi cer, Financing and Planning at the same company from 1980 to 1989. Johan was appointed as Senior Executive Manager, Finan- cing and Planning at Armscor in 1990 and was promoted to Chief Executive Offi cer of the Armscor Group in 1991. He was appointed as Chief Executive Offi cer of Denel (Pty) Limited in 1992, which position he held until 1997. Johan has been running his own business and farming interests since 1998.

Current directorships Senwes Limited, Theabert Trading (Pty) Limited, Chrilinda Beleggingsand other positions CC, Bluebend Investments CC, Aquasand Investments CC, Al berts Trust.

Contact details Tel no: (012) 653-2210

6.2 Resolution 6.2: Resolved that Mr WH van Zyl be re-elected as non-executive director.

Abridged curriculum vitaeFull names and surname Wilhelmus Hendrikus van Zyl (WH)Address Visagieskuil, PO Box 254, Wesselsbron, 9680Date of birth and age 16 May 1942, 66 yearsYears of service 6 years (served on the board since October 2002)

SHAREHOLDERMATTERS




Qualifi cations -

Experience/ WH was a founder member and Chairman of the Losdoorns Study previous positions Group in 1963. He was closely involved in the development of “rip on row” and surface layer cultivation.

He represented the Wesselsbron and Hoopstad regions on the exe cutive management of NAMPO/Grain SA from 1988-2001 and served on the Maize Board from 1992-1993. He was also the chairman of the Production Working Group and served on the executive of GSA and on the Planning Committee of the ARC’s Summer Grain Centre in Potchefstroom. He was a director of the South African Grain Laboratory and is a life-long contributor to the Free State Agricultural Union.

He served on various levels of the local management and was a member of the Gold Fields Urban Transitional Council.

Current directorships Director of Senwes Limited, Senwesbel Limited, W & A Saaiboer-and other positions dery, Bothaville Milling, WH & Seuns, Anita Trust, Visagieskuil Trust, Rietgat Trust, Van Zyl Beleggings Trust and Katani Trust.

Senwes Board committees Chairman of the Senwes Risk Committee and member of the Stan - dards Committee

Additional information He was elected as the Nampo/Foskor Maize Man of the Year in 1990.

Contact details Tel no: (057) 899-1277 Cell no: 083 269 5330 e-mail: [email protected]

6.3. Resolution 6.3: Resolved that Mr NDP Liebenberg be elected as non-executive director.

Abridged curriculum vitae Full names and surname Nico Daniël Pieter Liebenberg (Nico)Address Fraaiuitzicht, PO Box 345, Bothaville, 9660Date of birth and age 5 December 1968, 39 yearsYears of service NoneQualifi cations B.Comm (Hons)

Experience/ Nico commenced farming at the end of 1991 in Bothaville and es-previous positions tablished a diversifi ed farming unit, consisting of dry land grain, cat- tle and vegetables under irrigation.

The vegetable unit has grown to the national, sole supplier of, inter alia, carrots to Woolworths and employs more than 200 full-time employees.

Current directorships Director of a number of private family entitiesand other positions

Senwes Board committees None

Additional information Nico has been farming full-time in the Bothaville district since 1991.

Contact details Tel no: (056) 515-2712 Cell no: 073 167 3352 e-mail: [email protected]

6.4 Resolution 6.4: Resolved that Mr PR Pretorius be elected as non-executive director.

Abridged curriculum vitae Full names and surname Pieter Rudolf (Rudolf) Pretorius Address 54 Eccleston Crescent, Bryanston, 2021 Date of birth and age 15 February 1962, 46 years Years of service None Qualifi cations B.Compt (Hons) CA(SA) Experience/ Prior to joining Treacle, Rudolf spent 12 years gaining extensive ex-

previous positions perience in corporate fi nance, asset management, insurance and investment banking as a senior executive of Rand Merchant Bank.

Rudolf has extensive operational experience in starting of new businesses as he headed up Origin, the private banking operation esta - blished by the First Rand Group, from inception. He also had been intimately involved in the creation of Outsurance.

Current directorships Director of Treacle Private Equity and holds various directorships

and other positions such as Momentum Short-term Insurance Company and Sourcecode Technology Holdings Limited

Senwes Board committees None

Contact details Tel no: (011) 463-7476

During the year, the Board also appointed an additional independent non-executive director, Ms JA (Jesmane) Boggenpoel. In terms of the Memorandum and Articles, members are also required to confi rm her appointment.

6.5 Resolution 6.5: Resolved to confi rm the appointment of Ms JA Boggenpoel as independent, non-executive director in terms of Article 28.2.2 of the Company’s Articles of Association.

SHAREHOLDERMATTERS




Abridged curriculum vitaeFull names and surname Jesmane Arnel Boggenpoel (Jesmane)Address 37 Lavender Lane, Paulshof, 2191Date of birth and age 20 June 1973, 35 yearsYears of service None

Qualifi cations B.Comm, B.Acc, Chartered Accountant (CA)

Experience/ Jesmane started her career in 1996 as an article clerk with KPMG,previous positions from thereon becoming a manager in the corporate fi nance department. She also was an Analyst at Anglo American PLC, Deal Execu- tive at Brait Private Equiy. She currently acts as independent consultant and provides strategic and corporate fi nancial advice.

Current directorships Non-executive director of Land Bank, Chairperson of SA Instituteand other positions of Tax Practitioners, Non-executive director of African Women Char- tered Accountants Investment Holdings.

Senwes Board committees Member of the Audit Committee

Additional information Jesmane acts as member of the Audit Committee of various organi- sations such as the Johannesburg Development Agency and the Marine Living Resources Fund.

Contact details e-mail: [email protected]

IMPORTANT INFORMATIONNo person, other than the director retiring at the meeting, may be elected as director, unless such person has been previously nominated in terms of article 30.7 of the Articles of Association. Nominations of persons, who are eligible to serve as directors in terms of the Companies Act and the Articles of Association of the Company, can be made on the prescribed form, which is available from the Company Secretary.

Completed nomination forms must be handed in at the registered offi ce of the Company (for at-tention: The Company Secretary) at least 30 days before the date of the meeting.

C. SPECIAL RESOLUTIONS

1. GENERAL AUTHORISATION FOR THE REPURCHASE OF SHARES

“Special resolution no. 1

THAT the company be authorised, by way of general authorisation as meant in articles 85(2) and 85(3) of the Companies Act, 1973 as amended (“the Act“), to –

• repurchase issued shares in the share capital of the company; • purchase shares in the company’s holding company (if any);

• allow the purchase of shares in the company by a subsidiary of the company,

as and when deemed necessary, and on such terms and conditions and in such amounts as the directors of the company may determine from time to time, but subject to the Articles of Association of the company and provisions of the Act.”

The reason for and effect of special resolution no. 1 are to provide a renewable general authorisa-tion to the company to repurchase issued shares of the company, to allow the purchase of shares in the company by a subsidiary of the company, and to allow the company to purchase shares in a holding company of the company.

D. EXPLANATORY NOTES REGARDING ORDINARY RESOLUTIONS

ORDINARY RESOLUTION 3: DIRECTORS’ REMUNERATION TO NON–EXECUTIVE DIRECTORS

Members are requested to consider and approve the proposed remuneration payable to non-executive directors with effect from 1 October 2008, as set out below. The proposed remuneration entails an increase of an average of 5% on the previous year’s remuneration.

In accordance with the provisions of article 28.5 of the Articles of Association, directors are entitled to such remuneration as the company may determine from time to time in general meeting. The details of the remuneration paid in 2007 are available in the fi nancial statements.

The remuneration is being recommended by the board of directors for approval by members after comprehensive market research and recommendation by the Human Resources Committee of the board:

CATEGORY

Proposedremuneration

2008R

Chairman (per annum) 289 500

Vice-Chairman (per annum) 203 000Directors (per annum) 125 700Board committees (per meeting attended) 5 780Special projects 2 400

Chairman (per meeting attended):

Audit committee 10 900Other board commitees 8 500

Actual travelling and accommodation costs are remunerated within predetermined guidelines.

SHAREHOLDERMATTERS




ORDINARY RESOLUTION 5: PROPOSED DIVIDEND

Members are requested to approve the recommendation of a fi nal dividend of 14c per share. Important dates for members of ordinary shares

I/We (block letters)(name of shareholder)

Shareholders and/or Senwes client no: Tel and/or Cell no:

of (address)

being a member/members of the Company, do hereby appoint:

(name of proxy)

of (address)

or failing him(name of proxy)

of (address)

or failing him, the chairman of the meeting as my/our proxy to represent me/us at the Annual General Meeting of the Company to be held on 21 August 2008, or any adjournment thereof, to vote as follows on my behalf:

IN FAVOUR

OF AGAINST ABSTAIN1. Ordinary resolution no. 1 (appointment auditors)2. Ordinary resolution no. 2 (auditors’ remuneration)3. Ordinary resolution no. 3 (directors’ remuneration)4. Ordinary resolution no. 4 (unissued shares under board

control)5. Ordinary resolution no. 5 (approval of dividend)6.1 Ordinary resolution no. 6.1 (re-election of JPL Alberts)6.2 Ordinary resolution no. 6.4 (re-election of WH van Zyl)6.3 Ordinary resolution no. 6.2 (election of NDP Liebenberg)6.4 Ordinary resolution no. 6.3 (election of PR Pretorius)

6.5 Ordinary resolution no. 6.5 (confi rmation of appointment of JA Boggenpoel)

7. Special resolution no. 1 (general repurchase of shares)

(Indicate instruction to proxy by way of a cross in the space provided above.)Unless instructed otherwise, my/our proxy may vote at will. This proxy will also serve as ballot during the meeting.

SIGNED at on this day of 2008.

Assisted by (where applicable) Signature If proxy is signed on behalf of a legal entity, indicate capacity, e.g. Director, Member of CC, Trustee of a Trust

SENWES LIMITEDReg no. 1997/005336/06

(“the Company”)

ANNUAL GENERAL MEETING: 21 AUGUST 2008PROXY

SIGNED at on this day of 2008.

Shareholders and/or Senwes client no: Tel and/or Cell no:

SIGNED at on this day of 2008.SIGNED at on this day of 2008.

Date 2008Confi rmation of dividend Thursday, 21 August Record date of dividend Thursday, 21 August at 11:00Payment date of dividend Thursday, 4 September

IMPORTANT GENERAL NOTES

• All members are entitled to attend the meeting and to vote thereat. The shares register of the Company as at Tuesday, 19 August 2008 will, for the purpose of the meeting, determine who the eligible members are.• A member, who is unable to attend the meeting, may appoint a proxy to represent him/her at the meeting and to speak and vote on his/her behalf.• A proxy need not be a member of the Company.• A proxy form is included herewith. Proxy forms may also, at the choice of the member, be submitted electronically. • Members who prefer to be represented and to vote by means of a proxy - i) may complete a hard copy proxy form in terms of the instructions on the reverse of the docu ment and return it to the Company Secretary at the registered offi ce of the Company at 1 Charel de Klerk Street, Klerksdorp, 2571 or by means of a fax or by mail, for attention of the Company Secretary on or before Tuesday, 19 August 2008 at 11:00. Postal address: PO Box 31, Klerksdorp, 2570. Fax numbers (018) 464 2228 or 086 680 3124.

OR

ii) May also submit proxies electronically via the Internet. For this purpose the following website should be accessed: www.senwes.co.za/agm. The notes regarding the completion of proxies contained at the reverse of the proxy form hereby included are mutatis mutandis applicable to electronic proxies.

• Nomination forms for the election of directors will be available and can be obtained from the Company Secretary as from 22 July 2008.

By order of the Board of Directors of the Company.

EM Joynt (Mrs)COMPANY SECRETARY Tel no. (018) 464-7104KLERKSDORP

20 June 2008

SHAREHOLDERMATTERS




NOTES:

1. A member is entitled to insert the names of two alternative proxies of the member’s choice in the applicable space on the reverse hereof, with or without deleting “the chairman of the meeting”, but each such deletion must be initialled by the member. The person whose name appears fi rst on the form of proxy and who is present at the general meeting, shall be entitled to act as proxy to the exclusion of those whose names follow. Should no name of any proxy be inserted in the blank spaces, it shall be deemed that the chairman of the meeting shall be authorised to act on behalf of the member.

2. To the extent that no voting instruction is indicated by the member in the applicable space(s), it shall be deemed that the proxy, which may also be the Chairman, may act as he deems fi t.

3. Any modifi cation or addition to the form of proxy must be initialled by the signatory(ies).

4. Documentary evidence establishing the authority of the person signing this form of proxy in repre-sentative capacity, may be required.

5. A minor must be assisted by his/her parents and/or guardian, unless the relevant documents establishing his/her capacity are produced or have been registered with the company.

6. The voting power of estates appearing on the voting list may only be exercised by the relevant executor/liquidator/curator on behalf of the estate, provided that proof of appointment by the Mas-ter of the High Court is submitted. Should voting take place by means of a proxy, the above-mentioned proof must accompany the proxy.

7. In the case of joint holders of shares:

7.1 any one of the joint holders may sign the form of proxy; and

7.2 the vote of the senior joint holder (for this purpose seniority will be determined by the order in which the names of the joint members appear in the company’s members register) who tenders a vote (whether in person or by proxy) will be accepted to the exclusion of the other joint holder(s).

8. The completion and lodging of this form of proxy shall not preclude the relevant member from attending the general meeting and speaking and voting in person thereat, to the exclusion of any proxy appointed in terms hereof.

9. Forms of proxy must be lodged with or posted to the Company Secretary of the Company, Mrs EM Joynt, at the registered offi ce of the Company at 1 Charel de Klerk Street, Klerksdorp, 2571 (PO Box 31, Klerksdorp, 2570) to reach her by no later than 11:00 on Tuesday, 19 Au-gust 2008. Proxy forms can also be faxed to the Company Secretary (018) 464 2228 or 086 680 3124 by no later than the above date.

SHAREHOLDERMATTERS



SENWES LTDReg no: 1997/005336/06

POSTAL ADDRESSPO Box 31, KLERKSDORP, 2570

REGISTERED OFFICE1 Charel de Klerk Street, KLERKSDORP, 2571Telephone: (018) 464-7800Telefax: (018) 464-2228

AUDITORSErnst & Young Inc.PO Box 2322JOHANNESBURG2000

SHARE TRADING DESKAttention: The Company SecretarySenwes LtdPO Box 31KLERKSDORP2570Telephone: (018) 464-7105

Corporate informationTRANSFER SECRETARIESAttention: The Company SecretarySenwes LtdPO Box 31KLERKSDORP2570Telephone: (018) 464-7121

FINANCIER PARTNERSABSA Bank Ltd (ABSA)Standard Bank Ltd (SBSA)Rand Merchant Bank (RMB)Wesbank

WEBSITEwww.senwes.com

TOL FREE NUMBER080 941 4011

SHAREHOLDERMATTERS



126 SENWES ANNUAL REPORT 2008

NOTES

market access credit extension input suppl y sundry … · market as wel as bulk sales • seed...

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