Agra (CO-OPERATIVE) LTD ANNUAL REPORT JULY 2012

Transcription

1 Agra (CO-OPERATIVE) LTD ANNUAL REPORT JULY 2012

2 General Information Country of incorporation and domicile Nature of business and principal activities Directors Supervisory committee Registered office Namibia Agra () Limited is the largest multipurpose agricultural co-operative in the country. Agra has branches throughout Namibia providing farming inputs and equipment as well as pet accessories, camping equipment, gardening and household goods. Agra is also the largest livestock organisation in Namibia. R van der Merwe (Chairman) BH Mouton (Vice chairman) LC van Wyk P Schonecke S Wilckens JW Visagie JH Niewoudt (Chairman) H Stroh SK Shikongo 8 Bessemer Street Windhoek Namibia Postal address Private Bag Windhoek Namibia Bankers Auditors Bank Windhoek Limited Standard Bank Namibia Limited First National Bank of Namibia Limited PricewaterhouseCoopers Registered Accountants and Auditors Chartered Accountants (Namibia) PwC, a partnership duly organised according to the laws of the Republic of Namibia (hereafter referred to as "PwC", "we", "us", our") registration number F02/98 1

3 General Information Management PM Kazmaier (Chief Executive Officer) PL de Bruyn (Finance) A Klein (Retail and Wholesale) G Beukes (Human Resources) T Koen (Livestock) H Tiemann (Properties and Business Development) D Grobler (Marketing) 2

4 Contents The reports and statements set out below comprise the annual financial statements presented to the shareholders: Contents Page Report of the Supervisory Committee 4 Report of the Chairman 5-6 Report of the Chief Executive Officer 7-19 Directors' Responsibilities and Approval 20 Independent Auditors' Report Directors' Report Statement of Financial Position Statement of Comprehensive Income 27 Statement of Changes in Equity Statement of Cash Flows 30 Accounting Policies Notes to the Annual Financial Statements The following supplementary information does not form part of the annual financial statements and is unaudited: Detailed Statement of Comprehensive Income

5 Report of the Supervisory Committee Report of the supervisory committee The year under review, much like the previous number of years, consisted of mostly good rainfall for farmers and good financial performance for Agra. Taking an analytical look however, it becomes clear that it did not go too well with farmers. The pressure on production costs increased while income decreased amongst others as a result of problems in the international economy. Agra also had its challenges, especially in the livestock division. During the year under review all three supervisory committee members attended all the meetings of the board of directors and were thus informed and had input into all matters discussed. In the competitive business environment in which we operate it is crucial to get maximum inputs and support of those who have been elected by members to serve on the board of directors. The supervisory committee can confirm that the essential research for business development and all the relevant actions are well considered, and are done with prudence. The board and management are congratulated with the financial performance of the past year. Members should take cognisance of the fact that it was not only business with members resulting in these achievements, but that diversification largely contributed to the success, for the benefit of the members. Lastly, I would like to state: business development does not only require innovation and planning it also calls for financial inputs of a magnitude that is sometimes difficult to comprehend. As farmers, we know that you first have to sow before you can harvest; you first need to invest in a good quality herd of cattle or sheep, before you can market calves or lambs. Agra is at the point where new developments need to be done to be able to reap a good harvest in a number of years. We wish the board of directors, management and staff all the best for the exciting times ahead. Verslag van Toesighoudende Komitee (TK) Die jaar onder oorsig het verloop soos die afgelope paar jare, met meestal goeie reëns vir boere en goeie prestasie op finansiële gebied vir Agra. Kyk mens egter analities daarna dan is dit duidelik die boere nie te goed gegaan het nie. Die druk op produksiekoste het toegeneem terwyl inkomste gedaal het, ondermeer as gevolg van probleme in die internasionale ekonomie. Agra het ook sy uitdagings gehad, veral in die lewende hawe afdeling. Gedurende die jaar het al drie TK lede al die direksie vergaderings bygewoon, en het dus insae gehad en insette gelewer in al die sake onder bespreking. In die kompeterende besigheids-omgewing waarin ons beweeg is dit nodig om maksimum insette en ondersteuning te kry van hulle wat deur lede aangewys is om op die direksie te dien. Die TK kan getuig dat die voetwerk wat nodig is met besigheidsontwikkeling en al die aksies wat daarmee gepaard gaan, werklik goed deurdag en beredeneerd gedoen word. Die bestuur en direksie word gelukgewens met die finansiële prestasie van die afgelope jaar. Dit is egter belangrik dat lede kennis neem van die feit dat dit nie net besigheid met lede was wat hierdie prestasies tot gevolg het nie, maar dat diversifikasie grootliks gehelp het om die boeke so goed te laat klop tot die voordeel van lede. Ten slotte net dit: besigheidsontwikkeling verg nie net innovasie en beplanning nie; dit vra ook finansiële insette van n omvang wat mens soms laat duisel. Ons boere weet egter dat jy eers moet plant en saai voordat jy kan oes; dat jy eers in n goeie kuddebeeste of skape moet belê voordat jy kalwers of lammers kan bemark. Agra is op daardie punt waar nuwe ontwikkelings noodsaaklik is om oor n paar jaar goeie oeste te kan insamel. Baie sterkte en voorspoed word direksie, bestuur en personeel toegewens in die opwindende tye wat voorlê. J H Nieuwoudt SUPERVISORY COMMITTEE TOESIGHOUDENDE KOMITEE 4

6 Report of the chairman Report of the chairman As far as market-and price fluctuations are concerned, Namibia is not isolated from international tendencies. The financial crisis in certain countries has a negative effect on especially the hunting and tourism industry. The below average production conditions in certain stock farming areas of South Africa resulted in forced marketing. The increasing grain prices place the profitability of feedlots under pressure. The impact of the above mentioned factors caused a drastic decrease in prices of livestock at the beginning of Prices for swakara pelts, charcoal and agronomy products are high while dairy producers profit margins are under pressure due to high input costs. In addition to producer prices, market access and the factors affecting it, are equally important. The animal health status of Namibia is absolutely crucial. During the year under review Agra has redefined its reason for existence by means of the following purpose statement: To create prosperity and improve quality of life is a noble purpose if: - we contributes towards socio-economic quality of life - we cares for the environment - we creates conditions for people to succeed and - we builds innovative and sustainable businesses There is huge potential in the agricultural sector which can be explored and developed to create employment and reduce poverty. Because 70% of Namibia s population is directly or indirectly dependent on agriculture for their survival, this sector needs to be acknowledged and supported. Undeveloped and underdeveloped areas need to be a priority, integrated rural development programmes need to be implemented, natural resources need to be used sustainably and certainty with regard to land ownership and rights need to be created. Safety and security is a prerequisite for peace and stability and earns the trust of potential investors to invest locally. The Namibian Government has a huge responsibility to provide transparent investment policies and create a well regulated environment in which the private sector can do business. Verslag van die Voorsitter Ten opsigte van mark- en prysskommelings is Namibië nie geïsoleer van internasionale tendense nie. Die finansiële krisis in sekere lande het n negatiewe invloed op veral die jag- en toerismebedryf. Die ondergemiddelde produksie-omstandighede in sekere veeboerderystreke van Suid-Afrika het drukbemarking tot gevolg gehad. Die stygende graanpryse plaas die winsgewendheid van voerkrale onder druk. Die impak van bogenoemde faktore het n drastiese daling in lewende hawepryse aan die begin van 2012 tot gevolg gehad. Pryse vir Swakara pelse, houtskool- en akkerbouprodukte is hoog terwyl suiwel`-produsente se winsmarges as gevolg van hoë insetkostes onder druk verkeer. Behalwe vir pryse is marktoegang en die faktore wat dit beïnvloed net so belangrik. Die dieregesondheidstatus van Namibië is ononderhandelbaar. Agra het gedurende die afgelope jaar die rede vir sy bestaan herformuleer en stel sy doel: Om welvaart te skep en lewenskwaliteit te verbeter. Dit is n edel doel as ons: - bydra tot sosio-ekonomiese lewenskwaliteit - die omgewing in ag neem - omstandighede skep vir mense om sukses te behaal en - innoverende en volhoubare besighede bou. Daar is baie potensiaal in die landbousektor wat ontwikkel en ontgin kan word om werk te skep en armoede te verlig. Omdat 70% van Namibië se bevolking direk of indirek afhanklik is van landbou vir hul voortbestaan, moet die sektor erkenning en ondersteuning kry. On- en onderontwikkelde gebiede behoort n prioriteit te wees, geïntegreerde landelike ontwikkelingsprogramme moet implementeer word, natuurlike hulpbronne moet volhoubaar benut word en sekerheid oor grondeienaarskap en regte moet uitgeklaar word. Veiligheid en sekuriteit is n voorvereiste vir vrede en stabiliteit en skep vertroue by potensiële beleggers om te investeer. Die Namibiese regering het n groot verantwoordelikheid om deursigtige beleggingsbeleide te voorsien en n goed gereguleerde omgewing te skep waarbinne die privaatsektor besigheid kan doen. 5

7 Report of the chairman Agra converts to a public company on 1 February Agra will continue to invest in the Namibian Agriculture sector and will also continue its efforts to improve the knowledge and skills in the various agricultural disciplines by providing training, assistance and support through our Professional Services Division and our support of agricultural projects and initiatives. The opening of the Oshivelo retail branch on 3 August 2012 was a huge milestone in the history of Agra. This shows Agra s confidence of investing into the rural areas of Namibia and its endeavours to create opportunities for the community to benefit from both the availability of products as well as advice and expertise regarding the optimal use of the various products. Agra is an important partner in the Namibian economy to create employment, offer training, support projects and provide products and services to clients in order to create prosperity. We are however aware that agriculture is of a cyclic nature due to the climate, prices and input costs. Our producers must, in the good years such as the past number of year, make provision for the more difficult times. Agra must position itself strategically for this. Thank you very much to my co-directors and members of the supervisory committee for your sincerity and dedication to make Agra a successful business. Thank you to all loyal clients who conducted business with Agra. The board of directors takes pride in the financial results of the past year. It was a challenging budget, which could only have been achieved as a result of a motivated and focused team. I would like to congratulate Mr. Peter Kazmaier, Chief Executive Officer, the management team and staff of Agra, with the excellent financial results. We are proud of the contribution of each employee to the success of Agra. Agra omskep op 1 Februarie 2013 in n openbare maatskappy. Agra sal voortgaan om in die Namibiese landbousektor te belê en ons sal ook ons pogings voortsit om die kennis en vaardighede van verskeie landboudissiplines te verbeter deur opleiding, leiding en ondersteuning te verskaf deur middel van ons Professionele Dienste Afdeling en ons ondersteuning aan landbouprojekte en inisiatiewe Die opening van Oshivelo handelstak op 3 Augustus 2012 is a groot mylpaal in die geskiedenis van Agra. Dit is n bewys van Agra se vertroue om in die landelike gebiede van Namibië te belê en Agra se pogings om geleenthede te skep vir gemeenskappe om toegang te hê tot produkte sowel as raad en kundigheid vir die optimale gebruik van die onderskeie produkte. Agra is n belangrike vennoot in die namibiese ekonomie om werk te skep, opleiding te verskaf, projekte te ondersteun en n diens en produkte te verskaf aan kliënte om sodoende welvaart te skep. Ons is egter bewus dat landbou as gevolg van die klimaat, pryse en insetkostes, siklies van aard is. Ons produsente moet in goeie jare soos die afgelope paar jaar, voorsiening maak vir moeiliker tye. Agra moet homself hiervoor strategies posisioneer. Baie dankie aan die mededirekteure en lede van die toesighoudende komitee vir die toegewydheid en erns om van Agra n suksesvolle besigheid te maak. Dankie aan lojale kliente wat met Agra besigheid gedoen het. Die direksie is trots op die afgelope jaar se finansiële resultate.dit was n uitdagende begroting wat slegs bereik kon word deur n gemotiveerde span wat gefokus is. Ek wil namens die direksie vir mnr. Peter Kazmaier, Hoof Uitvoerende Beampte, die bestuurspan en personeel gelukwens met die puik finansiële resultate. Ons is trots op die bydrae van elke werknemer tot Agra se sukses. R VAN DER MERWE CHAIRMAN OF THE BOARD OF DIRECTORS (VOORSITTER VAN DIE RAAD VAN DIREKTEURE) 6

8 Report of the Chief Executive Officer Report of the Chief Executive Officer Verslag van die Hoof Uitvoerende Beampte INTRODUCTION INLEIDING This will be the last report of the Chief Executive Officer of Agra, seeing that conversion into a public company will take place on 1 February With great pride and gratitude we therefore report that Agra has once again experienced good growth and improved results. Hierdie sal die laaste verslag van die Hoof Uitvoerende Beampte van Agra Koöperatief wees, gesien die omskepping na n openbare maatskappy op 1 Februarie Dit is dus met groot trots en dankbaarheid dat ons rapporteer dat Agra weer eens goeie groei getoon het en verbeterde resultate behaal het. Group turnover grew by 13,6% in the Retail division. This exciting growth was achieved against fierce competition from South African based companies. Our thanks go to our motivated staff who delivered great service, and to our loyal customers who made this possible. In the Livestock division turnover declined by 14.9%, mostly as a result of a lower number of cattle marketed. Die groepomset in die handelsafdeling het met 13,6% gegroei. Hierdie opwindende groei is bereik ondanks sterk kompetisie van Suid-Afrikaans gebaseerde maatskappye. Ons dank gaan aan ons gemotiveerde personeel wat uitstaande diens gelewer het en aan ons lojale kliënte wat dit moontlik gemaak het. In die lewende hawe afdeling het omset verminder met 14,9%, hoofsaaklik as gevolg van n laer getal beeste wat bemark is. Total gross group turnover increased by 3% to N$1,83 billion. Totale bruto omset vir die groep het met 3% toegeneem tot N$1,83 biljoen. FINANCIAL OVERVIEW FINANSIËLE OORSIG It is once again a pleasure to report on remarkable results achieved. Net turnover for the group increased by 13% from N$953 million in 2011 to N$1,073 million in Net profit before tax for the group improved by 22% from N$36,3 million in 2011 to N$44,4 million in Net profit after tax for the group improved by 28% from N$24,5 million in 2011 to N$31,4 million in No dividend has been declared due to the fact that various capital expenditure projects are envisaged for the 2012/2013 financial year and beyond. Some of these projects will be financed from own resources. Dit is weer eens n plesier om te kan verslag gee oor merkwaardige resultate wat behaal is. Netto omset vir die groep het met 13% toegeneem, van N$953 miljoen in 2011 tot N$1,073 miljoen in Netto wins voor belasting vir die groep het verbeter met 22%, van N$36,3 miljoen in 2011 tot N$44,4 miljoen in Netto wins na belasting vir die groep het verbeter met 28%, van N$24,5 miljoen in 2011 tot N$31,4miljoen in Geen dividende is verklaar nie vanweë die feit dat verskeie kapitaalprojekte in die vooruitsig gestel is vir die 2012/2013 finansiële jaar en daarna. Sommige van hierdie projekte sal uit eie bronne finansier word. Total equity now amounts to N$134 million. Totale ekwiteit beloop tans N$134 miljoen. 7

9 Report of the Chief Executive Officer 1. LIVESTOCK DIVISION 1. LEWENDE HAWE AFDELING The number of animals marketed during the 2011/12 year were as follows: Die aantal diere wat bemark is gedurende die 2011/12 jaar was soos volg: % verandering Heads Heads Cattle 106, ,037 (29,4%) Beeste Sheep 182, ,328 (5,5%) Skape Goat 73,045 92,611 (21,1%) Bokke Game 1, ,3% Wild Average prices per head achieved in the various categories were as follows: Gemiddelde pryse per kop behaal in die verskeie kategorieë was soos volg: % verandering N$/Head N$/Head Cattle 4,947 4,099 20,7% Beeste Sheep ,7% Skape Goat ,6% Bokke Game 7,402 7,059 4,9% Wild Total gross N$ turnover achieved for the various categories was as follows: Totale N$ omset vir die verskillende kategorieë was soos volg: 2012 N$ 2011 N$ % verandering (million) (million) Cattle 527,4 619,1 (14,8%) Beeste Sheep 129,6 121,8 6,4% Skape Goat 51,9 63,6 (18,4%) Bokke Game 13,5 4,7 185,1% Wild Total 722,4 809,2-10,7% Totaal Net turnover achieved for the livestock division amounted to N$39,1 million compared to N$43,6 million in 2011, a decrease of 10,3%. Netto omset behaal in die lewende hawe afdeling, het N$39,1 miljoen beloop vergeleke met N$43,6 miljoen in 2011, n daling van 10,3% 1.1 Overall Livestock Division 1.1 Algehele lewende hawe afdeling Livestock marketing and selling remains a huge credit risk for the organisation due to the informal way in which this industry operates. Provision for bad debts for the year under review totalled N$2,5 million. Much stricter controls have been implemented toward the end of the financial year in order to manage the credit risk. Lewende hawe bemarking en verkope bly n groot kredietrisiko vir die organisasie as gevolg van die informele manier waarop die industrie werk. Voorsiening vir slegte skulde vir die jaar onder oorsig beloop N$2,5 miljoen. Baie strenger beheermaatreëls is geimplementeer teen die einde van die finansiële jaar om die kredietrisiko te beheer. 8

10 Report of the Chief Executive Officer Notwithstanding the fact that turnover decreased by 10,7% the net profit before head office costs for this division improved dramatically from N$2,6 million in 2011 to N$9,2 million in This is mostly as a result of lower costs incurred for livestock agents in the Central Region. Nieteenstaande die feit dat die omset verminder het met 10,7%, het die netto wins vir hierdie afdeling, voor hoofkantoorkostes, dramaties verhoog van N$2,6 miljoen in 2011 tot N$9,2 miljoen in Dit is hoofsaaklik as gevolg van laer onkostes vir agente in die Sentraalstreek. 1.2 Swakara 1.2 Swakara Pelt quantities sold at the two auctions in Copenhagen during September 2011 and April 2012 amounted to 114,618 pelts, which reflects a decrease of 8% compared to 124,261 pelts sold during the year ending July n Totaal van 114,618 pelse is by die twee veilings in Kopenhagen gedurende September 2011 en April 2012 verkoop, wat n afname van 8% is in vergelyking met die 124,261 pelse wat gedurende die jaar geëindig Julie 2011 verkoop is. Unit prices per pelt increased from an average of N$ in the previous financial period to N$ in 2012, an increase of 41%, mainly as a result of the demand for white Swakara pelts. The average price of white pelts amounted to N$ with the highest price at N$2, Eenheidspryse per pels het gestyg vanaf n gemiddeld van N$ in die vorige finansiële periode tot N$ in 2012, n styging van 41%, hoofsaaklik as gevolg van die hoë vraag na wit Swakara pelse. Die gemiddelde prys vir wit pelse was N$ en die hoogste prys N$2, RETAIL AND WHOLESALE DIVISION 2. KLEIN- EN GROOTHANDELSAFDELING This division comprises the Agra retail branches, Auas Wholesalers, Auas Vet Med and Safari Den. Hierdie afdeling bestaan uit die Agra kleinhandelstakke, Auas Wholesalers, Auas Vet Med en Safari Den. We are proud to report an improvement in turnover from N$872,7 million in 2011 to N$991,1 million in 2012, an increase of 13,6%. Ons is trots om te rapporteer dat die omset verbeter het vanaf N$872,7 miljoen in 2011 tot N$991,1 miljoen in 2012, n verhoging van 13,6%. At the same time gross profit increased from N$107,4 million in 2011 to N$121,8 million in 2012 (13,4%). Terselftertyd het bruto winste toegeneem vanaf N$107,4 miljoen in 2011 tot N$121,8 miljoen in 2012 (13,4%). Operational expenses increased from N$79,1 million in 2011 to N$87,4 million in 2012, an increase of 10,5%. Operasionele uitgawes het toegeneem vanaf N$79,1 miljoen in 2011 tot N$87,4 miljoen in 2012, n verhoging van 10,5%. As a result the net operating surplus before head office expenses increased from N$49,3 million in 2011 to N$58,2 million in 2012, a percentage improvement of 18%. Die netto bedryfssurplus het dienooreenkomstig toegeneem vanaf N$49,3 miljoen in 2011 tot N$58,2 miljoen in 2012, n persentasieverbetering van 18%. 9

11 Report of the Chief Executive Officer 3. PROPERTY DIVISION 3. EIENDOMSAFDELING Gross income declined from N$24,6 million in 2011 to N$19,6 million in the year under review. Bruto inkomste vir hierdie afdeling beloop N$19,6 miljoen in vergelyking met N$24,6 miljoen in 2011 ( n daling van 20%). The major reason for this decline is the fact that in 2011 a fair value adjustment of N$3.7 million was included in the gross income for that year. Die bruto inkomste van 2011 sluit egter n billike waarde aanpassing op beleggingseiendomme in van N$3,7 miljoen. It is important to mention that the Auas Valley Shopping Mall complex in Windhoek was fully let for the full period. A number of vacancies existed in the rural areas. Dit is ook belangrik om te wys daarop dat die Auas Valley inkoopsentrum ten volle verhuur was gedurende die finansiële jaar. In die platteland was n aantal eiendomme vakant. Total expenses for the division increased from N$10,1 million in 2011 to N$11,5 million in 2012, an increase of 11,8%. Die totale uitgawes van hierdie afdeling het n styging getoon van 11,8%, vanaf N$10.1 miljoen in 2011 tot N$11,5 miljoen in The operating surplus thus decreased from N$14,5 million in 2011 to N$8,1 million in Die bedryfsurplus het gedaal vanaf N$14,5 miljoen in 2011 tot N$8,1 miljoen in PROFESSIONAL SERVICES (PSD) 4. PROFESSIONELE DIENSTE (PSD) This division was established in 2009 as an integral part of Agra, with the aim of growing Agra s market by being the prime provider of professional support services to the agricultural sector in Namibia. Hierdie afdeling is in 2009 daargestel as n integrale deel van Agra, met die doel om Agra se mark te groei deur die vernaamste voorsiener van professionele onder-steuningsdienste aan die landbousektor in Namibië te wees. PSD has been focusing on four objectives namely: PSD fokus op vier doelwitte naamlik: (i) to enhance the competence, knowledge, skills (i) om die bevoegdheid, kennis, vaardighede en and attitudes of farmers, Agra staff and others gesindheid van boere, Agra personeel en related to agriculture ander landboubelanghebbendes, te verbeter. (ii) to position PSD in the sector in such a way that (ii) om PSD so te posisioneer in die sektor dat dit it is visible, recognized, accepted and relevant sigbaar, gereken, aanvaar en relevant is (iii) to conduct consultancy services in order to generate income, focusing on donor/ government funded development projects and (iii) om konsultasiedienste te verrig om sodoende n inkomste te genereer, gefokus op skenker/ regeringbefondste projekte en (iv) to render support to the Swakara industry. (iv) om ondersteuning te verleen aan die Swakara industrie 10

12 Report of the Chief Executive Officer This division continued to grow its activities during the year under review in all subdivisions (consultancies, training, research, Swakara services and networking) managing to conclude the year by reducing the budgeted year to date loss of N$ by N$ to end at a net loss figure of N$ Hierdie afdeling se aktiwiteite het in al hul onderafdelings (konsultasies, opleiding, navorsing, Swakaradienste- en skakeling) deurlopend toegeneem gedurende die jaar in oënskou, en kon daarin slaag om die jaar af te sluit deur die jaar-totdatum verlies van N$ wat begroot is, met N$ te verminder tot n verliessyfer van N$ SUBSIDIARIES AND OTHER INVESTMENTS 5. FILIALE EN ANDER BELEGGINGS 5.1 Ondangwa Service station (Pty) Ltd 5.1 Ondangwa Diensstasie (Edms) Bpk The turnover of this company, in which Agra holds 70% of the issued share capital, increased from N$35,5 million to N$41,3 million (16,3%). Hierdie maatskappy, waarin Agra 70% van die uitgereikte aandele hou, se omset het gestyg vanaf N$35,5 miljoen na N$41,3 miljoen (16,3%) The attributable profit after tax decreased from N$394,274 in 2011 to N$264,223 in Die toedeelbare wins na belasting het gedaal van N$394,274 in 2011 tot N$264,223 in Agra Properties (Pty) Ltd 5.2 Agra Eiendomme (Edms) Bpk The company, in which Agra holds 100% of the issued share capital, was established during September 2010 Hierdie maatskappy, waarin Agra 100% van die uitgereikte aandele hou, is gestig in September The gross income of this company increased from N$71,334 in 2011 to N$489,406 in Die bruto inkomste van die maatskappy het gestyg van N$71,334 in 2011 tot N$489,406 in The attributable profit after tax increased from N$24,488 in 2011 to N$240,020 in 2012 Die toedeelbare wins na belasting het toegeneem van N$24,488 in 2011 tot N$240,020 in Hartlief Corporation Ltd 5.3 Hartlief Korporasie Bpk Agra holds 11% of the shares in this company. Dividends of N$89,439 were received during the year under review. Agra hou 11% van die aandele in hierdie maatskappy. Dividende ter waarde van N$89,439 is ontvang gedurende die oorsigjaar. 5.4 Agra Oshivelo Retail (Pty) Ltd 5.4 Agra Oshivelo Handel (Edms) Bpk The company, in which Agra holds 84% of the issued share capital, was established during February Hierdie maatskappy, waarin Agra 84% van die uitgereikte aandele hou, is gestig in Februarie The company has not traded for the period ending 31 July Die maatskappy het tot en met 31 Julie 2012 nog geen handel gedryf nie. 11

13 Report of the Chief Executive Officer 6. FINANCIAL RESULTS 6. FINANSIELE RESULTATE Gross profits increased by 8,3% for the group and by 8,2% for the co-operative to N$185,5 million and N$182,6 million respectively. Brutowinste het met 8,3% vir die groep en met 8,2% vir die koöperasie toegeneem tot N$185,5 miljoen en N$182,6 miljoen onderskeidelik. The Agra group achieved an increase of 22% in net profit before tax and distribution to members, of N$44,4 million (2011: N$36,3 million) and the cooperative an increase of 28% in net profit of N$43,9 million (2011: N$34,2 million). Die Agra groep het n nettowins voor belasting en toedeling aan lede, van N$44,4 miljoen (2011: N$36,3 miljoen) behaal en die koöperasie n netto wins van N$43,9 miljoen (2011: N$34,2 miljoen). 6.1 Other income 6.1 Ander inkomste Increased by N$9,2 million as a result of: n Styging van N$9,2 miljoen as gevolg van: (Decrease)/Increase 2012 N$ 2011 N$ Difference (million) (million) Members loan adjustments 0,0 (0,9) 0,9 Ledefondse aanpassings Fair value adjustment on Billike waarde aanpassing op properties 0,0 3,7 (3,7) eiendomme Fair value adjustment on Billike waarde aanpassing op financial assets 8,0 0,0 8,0 finansiele bates Rent received 8,3 7,5 0,8 Huur ontvang Interest received 5,3 4,5 0,8 Rente ontvang Bad debts recovered 1,3 1,2 0,1 Slegte skulde verhaal Other income 12,9 10,6 2,3 Ander inkomste 35,8 26,6 9,2 6.2 Selling and marketing expenses 6.2 Verkoops- en bemarkingskoste Group selling and marketing expenses decreased by 12% (2011: an increase of 16%). Die groep se verkoops- en bemarkingskostes het afgeneem met 12% (2011: n toename van 16%). 6.3 Administrative Expenses 6.3 Administratiewe uitgawes Administration costs which consists mainly of computer, printing and administrative costs, increased by 14% (2011: 14%). Administratiewe uitgawes wat meestal bestaan uit rekenaar-, drukwerk- en administratiewe koste het gestyg met 14% (2011: 14%). 6.4 Income tax 6.4 Inkomstebelasting The income tax charges amount to N$13,0 million for the group (2011: N$11,7 million) and N$12,4 million for the co-operative (2011: N$11,1 million). Die inkomstebelastingkoste beloop N$13,0 miljoen vir die groep (2011: N$11,7 miljoen) en N$12,4 miljoen vir die koöperasie (2011: N$11,1 miljoen). 12

14 Report of the Chief Executive Officer 6.5 Declaration of bonuses to members 6.5 Verklaring van bonusse aan lede In accordance with the decision taken by the board of directors in November 2009, the full amount of net profit after tax is to be retained as part of the reserves which will be transferred to the public company Agra Limited, during the conversion process. Volgens die besluit van die raad van direkteure in November 2009, is die volle bedrag van nettowins na belasting, behou as deel van reserwes en sal oorgedra word na die openbare maatskappy Agra Beperk, wanneer die omskeppingsproses afgehandel is. 7. CONSOLIDATED BALANCE SHEET 7. GEKONSOLIDEERDE BALANSSTAAT 7.1 Assets 7.1 Bates Property, plant and equipment Eiendom, aanleg en toerusting The net value of property, plant and equipment for the group increased by N$9,8 million as a result of: Die netto waarde van die eiendom, aanleg en toerusting vir die groep het toegeneem met N$9,8 miljoen as gevolg van: Additions to land and buildings: Auas Valley shopping mall Oshivelo branch Okahandja auction pens Otjiwarongo branch Keetmanshoop branch Other retail branches Tsumeb branch 2012 N$ (million) 0,2 3,9 0,5 1,0 0,2 0,3 0,2 6,3 Toevoegings tot grond en geboue: Auas Valley inkoopsentrum Oshivelo tak Okahandja veilingskrale Otjiwarongo tak Keetmanshoop tak Ander handelstakke Tsumeb tak Additions to vehicles Additions to operational equipment (shelving) Less depreciation charges Net additions 1,5 4,6 (2,6) 9,8 Toevoeging tot voertuie Toevoegings tot operasionele toerusting (rakke) Minus waardeverminderingskostes Netto toevoegings Investment properties Beleggingseiendomme The value of investment properties increased by N$0,04 million to N$15,14 million (2011 N$15,1 million.) Die waarde van beleggingseiendomme het verhoog met N$0,04 miljoen na N$15,14 miljoen (2011 N$15,1 miljoen). 13

15 Report of the Chief Executive Officer Current assets Bedryfsbates Inventories: Voorraad: Stock on hand increased by N$23,1 million for the group and N$22,9 million for the co-operative in line with increased turnover figures and improved stock availability. Voorraad het toegeneem met N$23,1 miljoen vir die groep en met N$22,9 miljoen vir die koöperasie in ooreenstemming met verhoogde omsetsyfers en verbeterde voorraad op hande. Trade and other receivables: Handelsrekeninge ontvangbaar: Trade and other receivables decreased by N$15,1 million for the group and N$15,1 million for the cooperative due to an improvement in credit control mechanisms. Die afname in handelsrekeninge ontvangbaar met N$15,1 miljoen vir die groep en N$15,1 miljoen vir die koöperasie was grootliks weens n verbetering in die terugbetaling van debiteure voor jaareinde en die afname in omset van die lewende hawe afdeling vir die jaar. 7.2 Equity 7.2 Ekwiteit The group s debt to equity ratio at 13% compared to 24% for the previous year reflects a great improvement on last year. Cognisance must be taken of the envisaged Capital Expenditure for the new year which will have a major influence on this Ratio. Die groep se skuld tot ekwiteitsverhouding is 13% vergeleke met 24% die vorige jaar. Dit is n verbetering op die vorige jaar. Die voorgenome kapitaaluitgawe vir die nuwe jaar moet in ag geneem word aangesien dit n groot invloed het op hierdie verhouding. 7.3 Cash Flow 7.3 Kontantvloei The Agra group reports a negative cash flow for 2012 of N$2,5 million, compared to a positive cash flow in 2011 of N$11,7 million. This is mainly as a result of an increased investment in inventories of N$23 million, an additional investment in Hartlief of N$4 million and a prepayment on the Lafrenz property of N$3,6 million made during the year. Die Agra groep rapporteer n negatiewe kontantvloei vir 2012 van N$2,5 miljoen, in vergelyking met n positiewe kontantvloei in 2011 van N$11,7 miljoen. Dit is hoofsaaklik as gevolg van verhoogde investering in voorraad van N$23 miljoen, n addisionele belegging van N$4 miljoen in Hartlief en n vooruitbetaling van N$3,6 miljoen op die Lafrenz eiendom gedurende die jaar. 14

16 Report of the Chief Executive Officer 8. FUTURE OUTLOOK 8. TOEKOMSVERWAGTINGE The most important issue facing us in the near future is the conversion of Agra Cooperative Limited into a public company on 1 February Challenges are the physical handover of the share certificates to each and every Agra member who will be a shareholder of Agra Limited as from the date of conversion, as well as putting processes into place to identify those members whose address and other details have changed without informing Agra. Die belangrikste aangeleentheid wat in die nabye toekoms voorlê, is die omskepping van Agra Koöperatief in n openbare maatskappy op 1 Februarie Uitdagings sluit in die fisiese oorhandiging van die aandelesertifikate aan elke enkele Agra lid wat n aandeelhouer van Agra Beperk sal wees vanaf die datum van omskepping, sowel as om prosesse daar te stel om die lede op te spoor wie se addresse en ander besonderhede verander het sonder dat Agra ingelig is. The balance sheet of Agra will be strengthened considerably from a shareholders base of N$ in Agra Cooperative Limited to N$102 million in Agra Limited. Die balansstaat van Agra sal aansienlik versterk word van n aandeelhouersbasis van N$ in Agra Koöperatief Beperk tot N$102 miljoen in Agra Beperk. It is also very important to realise that the net asset value of one Agra share has improved from an amount of N$1.17 in 2009 to N$1.70 at 31 July Dit is ook baie belangrik om te besef dat die netto bate waarde van een Agra-aandeel verbeter het van n bedrag van N$1.17 in 2009 tot N$1.70 op 31 Julie Due to the very satisfactory growth of Agra s operations in all divisions, it has become necessary to enlarge and upgrade most of our facilities, as most of our branches have outgrown their current available space. This means that major investments need to be initiated to ensure that our customer service and customer satisfaction is maintained and improved. Die bevredigende groei in Agra se bedrywe in alle afdelings, het dit genoodsaak om die meeste van ons fasiliteite te vergroot en te verbeter, aangesien die meeste van ons takke uit hul huidige beskikbare spasie gegroei het. Dit beteken dat grootskaalse beleggings geinisieer moet word om kliëntetevredenheid te handhaaf en te verbeter. The first of such major investments has been made as a consequence of the Windhoek branch having outgrown its existing facilities in the Auas Valley Shopping Mall. The fact that no more land could be acquired at acceptable costs, led to the decision to relocate the Windhoek branch to the Lafrenz extension in the North of Windhoek. Agra has purchased four erven, which will be consolidated and a brand new structure will be erected with adequate expansion possibilities and a design which will ensure a much improved service to all our customers. The completion date is expected to be November Die eerste van hierdie groot beleggings is reeds geoden as gevolg van die feit dat die Windhoek-tak uit sy bestaande fasiliteite in die Auas Valley Inkoopsentrum gegroei het. Die feit dat geen grond verkry kon word teen aanvaarbare kostes nie, het gelei tot die besluit om die Windhoek-tak te verskuif na die Lafrenz uitbreiding in die noorde van Windhoek. Agra het vier erwe gekoop wat saamgevoeg sal word en n nuwe struktuur sal opgerig word met voldoende uitbreidingsmoontlikhede en n uitleg wat n baie beter diens aan al ons kliënte moontlik maak. Die verwagte voltooiingsdatum is November

17 Report of the Chief Executive Officer Agra is and will remain an agriculturally oriented organisation, which also means that it is very susceptible to changing climate conditions and its effect on the agricultural producer of Namibia. Weather patterns change each year and cycles of good rainfall and good producer prices, are followed by drier periods with lower producer prices. It has been Agra s strategy for the last twelve years to diversify some of its business interests in nonagricultural investments, so as to counteract the agricultural cycles with steady income streams not dependant on the weather conditions. Agra is en sal n landbougeoriënteerde organisasie bly, wat ook beteken dat dit baie onderhewig is aan veranderende klimaatsomstandighede en die effek daarvan op die landbouprodusent van Namibië. Weerpatrone verander elke jaar en siklusse van goeie reënval en goeie produsentepryse word gevolg deur droër periods met laer produsentepryse. Dit was Agra se strategie vir die afgelope twaalf jaar om sommige van ons besigheidsbelange te diversifiseer in nie-landbou beleggings, om landbousiklusse teen te werk met inkomstebronne wat nie afhanklik is van die weersomstandighede nie. The upgrading project of the Auas Valley Shopping Mall in 1999 was one of those non-agricultural Investments which ensured a steady income for Agra over the last 12 years. It has now once again become necessary to embark on a major upgrading exercise for the Auas Valley Shopping Mall, so as to retain our current anchor tenants and to ensure the future existence of the mall. Die opgradering van die Auas Valley Inkoopsentrum in 1999 was een van die nielandboubeleggings wat vir Agra oor die afgelope 12 jaar n konstante inkomste ingebring het. Dit het nou weer eens nodig geword om n grootskaalse opgraderingspoging vir die Auas Valley Inkoopsentrum aan te pak, om sodoende ons huidige ankerhuurders te behou en die voortbestaan van die sentrum te verseker. This major upgrade will add about square meters of trading space. In addition it is envisaged to build a brand new six-storey office block to accommodate some of our existing tenants and to provide up-market office accommodation for new tenants, who are looking for space outside the city centre. Hierdie grootskaalse opgradering sal ongeveer vierkante meter handelspasie byvoeg. Bykomend word beplan om n splinternuwe sesverdieping kantoorblok te bou wat sommige van ons huidige huurders sal akkommodeer en modern kantoorakkommodasie beskikbaar sal maak vir nuwe huurders wat spasie buite die middestad soek. Agra is currently in the process of obtaining the necessary funding for this very ambitious project, which will commence during February/March 2013 Agra is tans in die proses om die nodige befondsing te kry vir hierdie baie ambisieuse projek wat gedurende Februarie/Maart 2013 sal begin. 9. BUDGETS FOR THE 2012/2013 YEAR ENDING 31 JULY BEGROTINGS VIR DIE 2012/2013 JAAR GEËINDIG 31 JULIE Capital expenditure budget 9.1 Kapitale uitgawe begroting Fixed property upgrading and extensions to existing branches, Auas Valley Shopping mall and the new branch in the Lafrenz industrial area make up the bulk of Agra s capital expenditure budget. Below the summary of the capital expenditure budget: Die opgradering en uitbreiding van vaste eiendom, van bestaande takke, Auas Valley Inkoopsentrum en die nuwe tak in die Lafrenz industriële area, maak die grootste gedeelte uit van Agra se kapitale uitgawebegroting. Hier volg n opsomming van die kapitale uitgawebegroting: 16

18 Report of the Chief Executive Officer 2012/ /2012 N$ million N$ million Opgradering en ontwikkeling Upgrading and development of fixed property 147,0 33,0 van vaste eiendom Information technology 1,9 2,5 Inligtingstegnologie Commercial vehicles 1,9 0,2 Handelsvoertuie Office furniture and equipment 0,3 0,2 Kantoormeubels en toerusting Operational assets 9,5 4,7 Operasionele bates Total 160,6 40,6 Totaal 9.2 Operational budget 9.2 Operasionele begroting The proposed operational budget for the year 2012/2013 can be summarised as follows: Die voorgestelde operasionele begroting vir die jaar 2012/2013 kan soos volg opgesom word: 2012/ 2013 N$ Million 2011/ 2012 N$ Million Change Gross value of livestock transactions 667,2 958,2 (30.4)% Bruto waarde van lewendehawe transaksies Retail/wholesale/division 1072,6 839,7 27.7% Klein-/groothandel/afdeling Professional services 70,8 16, % Professionele dienste Total turnover 1 810, ,2 (0.2)% Totale omset Cost of sales 1 630, ,5 (1.2)% Koste van verkope Gross profit 180,2 164,7 9.4% Bruto wins Other income 59,2 56,4 5.0% Ander inkomste Gross income 239,4 221,1 8.3% Bruto inkomste Less: Minus: Inventory costs 6,0 3,4 76.5% Voorraadkoste Marketing costs 4,9 4,3 14.0% Bemarkingskoste Selling and distribution cost 14,6 20,8 (29.8)% Verkoop en verspreidingskoste Building costs 32,0 26,6 20.3% Gebouekoste Transport costs 12,3 8,8 39.8% Vervoerkoste Personnel costs 115,1 95,1 21.0% Personeelkoste Directors costs 1,1 0,9 22.2% Direkteurskoste Administration costs 24,4 23,6 3.4% Administratiewe koste Total expenses 210,4 183,5 14.7% Totale uitgawes 17

19 Report of the Chief Executive Officer Profit before finance charges 29,0 37,6 (22.9)% Wins voor finansieringskostes Finance charges 8,1 0, % Finansieringskostes Net profit before tax 20,9 37,0 % Netto wins voor belasting 10. CONCLUSION 10. SLOT Agra has once again been able to report satisfactory results to its members and shareholders. One of the highlights of the period under review was the opening of a fully-fledged Agra Branch in Oshivelo, which is the second Agra branch north of Tsumeb, the other being Opuwo, where a major upgrade is planned for the next financial year. Agra het weer eens daarin geslaag om bevredigende resultate aan sy lede en aandeelhouers te rapporteer. Een van die hoogtepunte in die jaar onder oorsig was die opening van 'n volwaardige Agra tak in Oshivelo, wat die tweede Agra tak noord van Tsumeb is die ander tak is Opuwo, waar grootskaalse opgradering beplan word vir die volgende finansiële jaar. The year ahead will once again be full of challenges but also opportunities. As management and staff of Agra we are prepared to live up to Agra s newly defined purpose: Die jaar vorentoe sal ook weer vol uitdagings wees, maar ook vol geleenthede. As bestuur en personeel van Agra is ons bereid om te streef na Agra se nuutgeformuleerde doel: Creating Prosperity, improving quality of life Om welvaart te skep en lewenskwaliteit te verbeter, and our Vision 2015: en ons Visie 2015: to be a Resource for Growth om 'n hulpbron vir groei te wees gives us the direction and motivation to achieve our targets for 2015 : gee ons die rigting en motivering om ons doelwitte vir 2015 te bereik nl.: Group turnover of N$3 600 million Earnings before interest and tax of N$126 million Increasing the number of employees to 850 Being among the top 3 Best Company to Work For in Namibia Utilising 0.2% of turnover for corporate social investment n Groepsomset van N$3 600 miljoen Verdienste voor rente en belasting van N$126 miljoen Die aantal werknemers te vermeerder tot 850 Om binne die BCTWF (Beste Maatskappy om Voor te Werk) se Top 3 in Namibië te wees Om 0,2% van ons omset in sosiale beleggings te herbelê 18

20 Report of the Chief Executive Officer Last but not least we would like to thank our members and customers for their support. Without you Agra would not have been able to achieve another year of substantial growth. Ten laaste wil ons, ons lede en kliënte bedank vir u ondersteuning. Sonder u sou Agra nie in staat wees om nog n jaar van aansienlike groei te behaal nie. We are looking forward to being of service to you once again in the years to come. I would also like to thank the Agra Board of Directors for their input and guidance as well as my management team members, who were a continual source of inspiration and support. Ons sien uit daarna om u voorts tot diens te wees in die komende jare. Ek wil ook die Agra Raad van Direkteure bedank vir hul insette en leiding asook my bestuurspanlede, wat n deurlopende bron van inspirasie en ondersteuning was. PM KAZMAIER CHIEF EXECUTIVE OFFICER (HOOF UITVOERENDE BEAMPTE) 19

21 Directors' Responsibilities and Approval The directors are responsible for the preparation, integrity and fair presentation of the financial statements of Agra () Limited and its subsidiaries. The annual financial statements are prepared in accordance with International Financial Reporting Standards and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgments and estimates. The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the group and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board set standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the group and all employees are required to maintain the highest ethical standards in ensuring the group s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the group is on identifying, assessing, managing and monitoring all known forms of risk across the group. While operating risk cannot be fully eliminated, the group endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints. The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss. The directors have reviewed the group s cash flow forecast for the year to 31 July 2013 and, in the light of this review and the current financial position, they are satisfied that the group has or has access to adequate resources to continue in operational existence for the foreseeable future. The external auditors are responsible for independently reviewing and reporting on the group's annual financial statements. The annual financial statements have been examined by the group's external auditors and their report is presented on pages 21 to 22. The annual financial statements set out on pages 23 to 86, which have been prepared on the going concern basis, were approved by the board and were signed on its behalf by: Director Director Windhoek 30 October

22 To the members of Agra () Limited Independent Auditors' Report We have audited the consolidated annual financial statements of Agra () Limited and its subsidiaries which comprise the consolidated and separate statement of financial position as at 31 July 2012, and the consolidated and separate statement of comprehensive income, statement of changes in equity and consolidated and separate statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes, and the directors' report, as set out on pages 23 to 84. Directors' Responsibility for the Annual Financial Statements The co-operative s directors are responsible for the preparation and fair presentation of these annual financial statements in accordance with International Financial Reporting Standards, and for such internal control as the directors determine is necessary to enable the preparation of annual financial statements that are free from material misstatements, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these annual financial 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 annual financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual financial statements. The procedures selected depend on the auditors' judgement, including the assessment of the risks of material misstatement of the annual financial 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 annual financial 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 management, as well as evaluating the overall presentation of the annual financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the annual financial statements present fairly, in all material respects, the consolidated and separate financial position of Agra () Limited and its subsidiaries as at 31 July 2012, and its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards, and the requirements of the Companies Act of Namibia. Other matter Without qualifying our opinion, we draw attention to the fact that supplementary information set out on page 72 to 73 does not form part of the annual financial statements and is presented as additional information. We have not audited this information and accordingly do not express an opinion thereon. 21

23 Independent Auditors' Report (continued) PricewaterhouseCoopers Registered Accountants and Auditors Chartered Accountants (Namibia) Per: Louis van der Riet Partner Windhoek, 30 October 2012 PricewaterhouseCoopers, 344 Independence Avenue, Windhoek, P O Box 1571, Windhoek, Namibia Practice Number 9406, T: 264 (61) , F: +264 (61) , Managing Partner: R Nangula Uaandja Partners: Stephen D Viljoen, Carl P van der Merwe, Louis van der Riet (Chief Operating Officer), Ansie EJ Rossouw, Seretta N Lombaard, Stefan Hugo, Chantell N Husselmann 22