Agra (CO-OPERATIVE) LTD ANNUAL REPORT JULY 2012

Agra (CO-OPERATIVE) LTD ANNUAL REPORT JULY 2012

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 12011 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

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

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 21-22 Directors' Report 23-24 Statement of Financial Position 25-26 Statement of Comprehensive Income 27 Statement of Changes in Equity 28-29 Statement of Cash Flows 30 Accounting Policies 31-46 Notes to the Annual Financial Statements 47-84 The following supplementary information does not form part of the annual financial statements and is unaudited: Detailed Statement of Comprehensive Income 85-86 3

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

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 2012. 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

Report of the chairman Agra converts to a public company on 1 February 2013. 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

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 2013. 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 2013. 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 2012. Net profit before tax for the group improved by 22% from N$36,3 million in 2011 to N$44,4 million in 2012. Net profit after tax for the group improved by 28% from N$24,5 million in 2011 to N$31,4 million in 2012. 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 2012. Netto wins voor belasting vir die groep het verbeter met 22%, van N$36,3 miljoen in 2011 tot N$44,4 miljoen in 2012. Netto wins na belasting vir die groep het verbeter met 28%, van N$24,5 miljoen in 2011 tot N$31,4miljoen in 2012. 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

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: 2012 2011 % verandering Heads Heads Cattle 106,603 151,037 (29,4%) Beeste Sheep 182,650 193,328 (5,5%) Skape Goat 73,045 92,611 (21,1%) Bokke Game 1,830 660 177,3% 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: 2012 2011 % verandering N$/Head N$/Head Cattle 4,947 4,099 20,7% Beeste Sheep 710 630 12,7% Skape Goat 711 686 3,6% 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

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 2012. 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 2012. 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 2011. 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$422.37 in the previous financial period to N$594.95 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$763.29 with the highest price at N$2,348.55. Eenheidspryse per pels het gestyg vanaf n gemiddeld van N$422.37 in die vorige finansiële periode tot N$594.95 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$763.29 en die hoogste prys N$2,348.55. 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

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 2012. The operating surplus thus decreased from N$14,5 million in 2011 to N$8,1 million in 2012. Die bedryfsurplus het gedaal vanaf N$14,5 miljoen in 2011 tot N$8,1 miljoen in 2012. 4. 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

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$910 000 by N$ 241 000 to end at a net loss figure of N$669 000. 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$910 000 wat begroot is, met N$241 000 te verminder tot n verliessyfer van N$669 000. 5. 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 2012. Die toedeelbare wins na belasting het gedaal van N$394,274 in 2011 tot N$264,223 in 2012. 5.2 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 2010. The gross income of this company increased from N$71,334 in 2011 to N$489,406 in 2012. Die bruto inkomste van die maatskappy het gestyg van N$71,334 in 2011 tot N$489,406 in 2012. 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 2012. 5.3 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 2011. Hierdie maatskappy, waarin Agra 84% van die uitgereikte aandele hou, is gestig in Februarie 2011. The company has not traded for the period ending 31 July 2012. Die maatskappy het tot en met 31 Julie 2012 nog geen handel gedryf nie. 11

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

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 7.1.1 Property, plant and equipment 7.1.1 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 7.1.2 Investment properties 7.1.2 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

Report of the Chief Executive Officer 7.1.3 Current assets 7.1.3 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

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 2013. 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 2013. 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$403 000 in Agra Cooperative Limited to N$102 million in Agra Limited. Die balansstaat van Agra sal aansienlik versterk word van n aandeelhouersbasis van N$403 000 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 2012. 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 2012. 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 2013. 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 2013. 15

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 10 500 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 10 500 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 2013 9. BEGROTINGS VIR DIE 2012/2013 JAAR GEËINDIG 31 JULIE 2013 9.1 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

Report of the Chief Executive Officer 2012/2013 2011/2012 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 16,3 334.4% Professionele dienste Total turnover 1 810,6 1 814,2 (0.2)% Totale omset Cost of sales 1 630,4 1 649,5 (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

Report of the Chief Executive Officer Profit before finance charges 29,0 37,6 (22.9)% Wins voor finansieringskostes Finance charges 8,1 0,6 1 250.0% 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

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

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 2012 20

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

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) 284 1000, F: +264 (61) 284 1001, www.pwc.com/na 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

Directors' Report The directors submit their report for the year ended 31 July 2012. 1. Review of activities Main business and operations 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. The operating results and state of affairs of the co-operative are fully set out in the attached annual financial statements and do not in our opinion require any further comment. Net profit of the group was N$ 31.4 million (2011: N$ 24.5 million profit), after taxation of N$ 13 million (2011: N$ 11.7 million). Net profit of the co-operative was N$ 31.5 million (2011: N$ 23.1 million profit), after taxation of N$ 12.4 million (2011: N$ 11.1 million). 2. Going concern The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. 3. Events after the reporting period The members of the co-operative instructed the board of directors to convert the co-operative into a public company. The Ministry announced the approval of the coversion of the co-operative into a public company during October 2012. The conversion is effective 1 February 2013. Apart from the above, no circumstances have arisen, or events occurred, between the financial year end date and the date of this report in respect of matters which would require adjustment to, or disclosure in, the annual financial statements of the co-operative and the group, or which should be disclosed to the members through some other medium, except as disclosed elsewhere in the financial statements. 4. Authorised and issued share capital Share capital of N$ 0 (2011: N$0,00) was raised and N$ 3,000 (2011: N$3,000 ) has been redeemed during the year. 23

Directors' Report 5. Directors The directors of the co-operative during the year and to the date of this report are as follows: Name R van der Merwe (Chairman) BH Mouton (Vice chairman) LC van Wyk P Schonecke S Wilckens JW Visagie 6. Supervisory committee Name JH Niewoudt (Chairman) SK Shikongo H Stroh 7. Interest in subsidiaries Name of subsidiary Nature of business Percentage holding Ondangwa Service Station (Pty) Ltd Selling of retail products and fuel. 70 % Auas Veterinary and Medical Suppliers (Pty) Retailing and wholesale of 100 % Ltd veterinary products. "A" Shares in Guard Risk Cell Insurance 100 % Agra Properties (Pty) Ltd Estate agency, auctioneering of 100 % property and property investors. Agra Oshivelo Retail (Pty) Ltd General retail. 84 % The co-operative s interest in the net profit after tax of the subsidiaries amounted to N$ 1.8 million (2011: N$ 0.4 million). Please refer to note of the financial statements for more information concerning investments in subsidiaries. 8. Auditors PricewaterhouseCoopers will continue in office in accordance with section 278(2) of the Companies Act of Namibia. 24

Assets Agra () Limited and its subsidiaries Statement of Financial Position Group 2012 2011 2012 2011 Note(s) N$ '000 N$ '000 N$ '000 N$ '000 Non-Current Assets Investment property 4 15,142 15,104 15,142 15,104 Property, plant and equipment 5 95,318 85,523 95,214 85,452 Intangible assets 6 743 622 743 622 Investments in subsidiaries 7 - - 830 144 Financial assets measured at fair value 8 16,596 4,486 16,596 4,486 through profit or loss Deferred tax 9 23,573 19,924 23,480 19,840 151,372 125,659 152,005 125,648 Current Assets Inventories 12 116,095 93,002 115,314 92,463 Current tax receivable 21&30 619 643 532 629 Trade and other receivables 13 64,781 79,862 64,063 79,130 Prepayments 11 3,681-3,681 - Cash and cash equivalents 14 33,002 35,528 32,247 33,401 218,178 209,035 215,837 205,623 Total Assets 369,550 334,694 367,842 331,271 Equity and Liabilities Equity Equity Attributable to Equity Holders of Parent Share capital 15 403 406 403 406 Other reserves 16 21,532 21,532 21,532 21,532 Retained income 112,106 80,779 109,665 78,147 134,041 102,717 131,600 100,085 Non-controlling interest 133 173 - - 134,174 102,890 131,600 100,085 25

Liabilities Agra () Limited and its subsidiaries Statement of Financial Position Group 2012 2011 2012 2011 Note(s) N$ '000 N$ '000 N$ '000 N$ '000 Non-Current Liabilities Borrowings 17 2,296 5,216 2,296 5,216 Retirement benefit obligation 10 36,161 34,171 36,161 34,171 Deferred tax 9 21,827 19,636 21,805 19,614 60,284 59,023 60,262 59,001 Current Liabilities Borrowings 17 14,499 19,330 16,714 20,854 Current tax payable 21&30 379 462 - - Trade and other payables 22 116,807 109,138 115,859 107,480 Severance pay provision 18 973 961 973 961 Members' funds 19 41,272 41,704 41,272 41,704 Bonus share 20 1,162 1,186 1,162 1,186 175,092 172,781 175,980 172,185 Total Liabilities 235,376 231,804 236,242 231,186 Total Equity and Liabilities 369,550 334,694 367,842 331,271 26

Statement of Comprehensive Income Group 2012 2011 2012 2011 Note(s) N$ '000 N$ '000 N$ '000 N$ '000 Revenue 1,073,052 953,325 1,031,738 917,800 Cost of sales (887,550) (782,010) (849,181) (749,078) Gross profit 185,502 171,315 182,557 168,722 Other income 28 30,513 22,100 28,417 19,232 Operating expenses (176,232) (160,787) (171,659) (157,338) Operating profit 23 39,783 32,628 39,315 30,616 Investment income 24 5,287 4,504 5,223 4,454 Finance costs 25 (656) (880) (656) (876) Profit before taxation 44,414 36,252 43,882 34,194 Income tax expense 26 (13,009) (11,722) (12,364) (11,143) Profit for the year 31,405 24,530 31,518 23,051 Other comprehensive income - - - - Total comprehensive income 31,405 24,530 31,518 23,051 Total comprehensive income attributable to: Owners of the parent 31,327 24,461 31,518 23,051 Non-controlling interest 78 69 - - 31,405 24,530 31,518 23,051 Profit attributable to : Owners of the parent 31,327 24,461 31,518 23,051 Non-controlling interest 78 69 - - 31,405 24,530 31,518 23,051 27

Statement of Changes in Equity Share capital Other NDR Retained income Total attributable to equity holders of the group / co-operative Noncontrolling interest Total equity N$ '000 N$ '000 N$ '000 N$ '000 N$ '000 N$ '000 Group Balance at 01 August 2010 408 17,881 59,970 78,259 170 78,429 Changes in equity Total comprehensive income for the year - - 24,461 24,461 69 24,530 Transfer between reserves - 3,652 (3,652) - - - Shares redeemed (2) - - (2) - (2) Dividend received - - - - (66) (66) Total changes (2) 3,652 20,809 24,459 3 24,462 Balance at 01 August 2011 406 21,533 80,779 102,718 173 102,891 Changes in equity Total comprehensive income for the year - - 31,327 31,327 78 31,405 Shares redeemed (3) - - (3) - (3) Dividend paid - - - - (118) (118) Total changes (3) - 31,327 31,324 (40) 31,284 Balance at 31 July 2012 403 21,533 112,106 134,042 133 134,175 Note(s) 15 16 28

Statement of Changes in Equity Share capital Other NDR Retained income Total attributable to equity holders of the group / co-operative Minority interest Total equity N$ '000 N$ '000 N$ '000 N$ '000 N$ '000 N$ '000 Balance at 01 August 2010 408 17,881 58,748 77,037-77,037 Changes in equity Total comprehensive income for the year - - 23,051 23,051-23,051 Transfer between reserves - 3,652 (3,652) - - - Shares redeemed (2) - - (2) - (2) Total changes (2) 3,652 19,399 23,049-23,049 Balance at 01 August 2011 406 21,533 78,147 100,086-100,086 Changes in equity Total comprehensive income for the year - - 31,518 31,518-31,518 Shares redeemed (3) - - (3) - (3) Total changes (3) - 31,518 31,515-31,515 Balance at 31 July 2012 403 21,533 109,665 131,601-131,601 Note(s) 15 16 29

Statement of Cash Flows Group 2012 2011 2012 2011 Note(s) N$ '000 N$ '000 N$ '000 N$ '000 Cash flows from operating activities Cash receipts from customers 1,058,710 961,106 1,017,073 926,089 Cash paid to suppliers and employees (1,026,072) (916,283) (984,676) (883,920) Cash generated from/ (used in) 29 32,638 44,823 32,397 42,169 operations Investment income 5,287 4,504 5,223 4,454 Dividends paid to Minority Shareholders (118) (66) - - Finance costs (656) (880) (656) (876) Income tax paid 30 (14,526) (10,441) (13,716) (10,313) Net cash from operating activities 22,625 37,940 23,248 35,434 Cash flows from investing activities Purchase of property, plant and 5 (12,519) (11,377) (12,459) (11,372) equipment Proceeds on sale of property, plant and 5 40 68 40 68 equipment Purchase of investment property 4 (39) - (39) - Proceeds on sale of investment property 4-735 - 736 Purchase of other intangible assets 6 (347) (163) (347) (162) Purchase of financial assets 8 (4,076) - (4,076) - Net cash from investing activities (16,941) (10,737) (16,881) (10,730) Cash flows from financing activities Reduction of share capital or shares 15 (3) (2) (3) (2) redeemed Repayment of borrowings (7,751) (15,080) (7,062) (13,549) Movement in members' funds (432) (442) (432) (442) Movement in bonus share (24) (23) (24) (23) Net cash from financing activities (8,210) (15,547) (7,521) (14,016) Total cash and cash equivalents movement for the year Cash and cash equivalents at the beginning of the year Total cash and cash equivalents at end of the year (2,526) 11,656 (1,154) 10,688 35,528 23,870 33,401 22,713 14 33,002 35,526 32,247 33,401 30

Accounting Policies 1. Basis of preparation The consolidated annual financial statements have been prepared in accordance with International Financial Reporting Standards, and IFRIC Interpretations. The consolidated annual financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below. They are presented in Namibian Dollars. These accounting policies are consistent with the previous period. 1.1 Consolidation Basis of consolidation The consolidated annual financial statements incorporate the annual financial statements of the co-operative and all entities, including special purpose entities, which are controlled by the co-operative. Control exists when the co-operative has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Subsidiaries Subsidiaries are all entities (including special purpose entities) over which the group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are de-consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries by the group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the group s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. The results of subsidiaries are included in the consolidated annual financial statements from the effective date of acquisition to the effective date of disposal. Transactions and minority interests The group applies a policy of treating transactions with minority interests as transactions with parties external to the group. Disposals to minority interests result in gains and losses for the group and are recorded in the income statement. Purchases from minority interests result in goodwill, being the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary. Adjustments are made when necessary to the annual financial statements of subsidiaries to bring their accounting policies in line with those of the group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. Non-controlling interests in the net assets of consolidated subsidiaries are identified and recognised separately from the group's interest therein, and are recognised within equity. Percentages of subsidiaries attributable to non-controlling interests are allocated to the non-controlling interest even if this results in a debit balance being recognised for non-controlling interest. 31

Accounting Policies 1.1 Consolidation (continued) Transactions which result in changes in ownership levels, where the group has control of the subsidiary both before and after the transaction are regarded as equity transactions and are recognised directly in the statement of changes in equity. The difference between the fair value of consideration paid or received and the movement in non-controlling interest for such transactions is recognised in equity attributable to the owners of the parent. Where a subsidiary is disposed of and a non-controlling shareholding is retained, the remaining investment is measured to fair value with the adjustment to fair value recognised in profit or loss as part of the gain or loss on disposal of the controlling interest. Business combinations The group accounts for business combinations using the acquisition method of accounting. The cost of the business combination is measured as the aggregate of the fair values of assets given, liabilities incurred or assumed and equity instruments issued.costs directly attributable to the business combination are expensed as incurred, except the costs to issue debt which are amortised as part of the effective interest and costs to issue equity which are included in equity. Contingent consideration is included in the cost of the combination at fair value as at the date of acquisition. Subsequent changes to the assets, liabilities or equity which arise as a result of the contingent consideration are not affected against goodwill, unless they are valid measurement period adjustments. The acquiree's identifiable assets, liabilities and contingent liabilities which meet the recognition conditions of IFRS 3 Business Combinations are recognised at their fair values at acquisition date, except for non-current assets (or disposal group) that are classified as held-for-sale in accordance with IFRS 5 Non-current Assets Held-For-Sale and discontinued operations, which are recognised at fair value less costs to sell. Contingent liabilities are only included in the identifiable assets and liabilities of the acquiree where there is a present obligation at acquisition date. On acquisition, the group assesses the classification of the acquiree's assets and liabilities and reclassifies them where the classification is inappropriate for group purposes. This excludes lease agreements and insurance contracts, whose classification remains as per their inception date. Non-controlling interest arising from a business combination is measured either at their share of the fair value of the assets and liabilities of the acquiree or at fair value. The treatment is not an accounting policy choice but is selected for each individual business combination, and disclosed in the note for business combinations. In cases where the group held a non-controlling shareholding in the acquiree prior to obtaining control, that interest is measured to fair value as at acquisition date. The measurement to fair value is included in profit or loss for the year. Where the existing shareholding was classified as an available-for-sale financial asset, the cumulative fair value adjustments recognised previously to other comprehensive income and accumulated in equity are recognised in profit or loss as a reclassification adjustment. Goodwill is determined as the consideration paid, plus the fair value of any shareholding held prior to obtaining control, plus non-controlling interest and less the fair value of the identifiable assets and liabilities of the acquiree. Goodwill is not amortised but is tested on an annual basis for impairment. If goodwill is assessed to be impaired, that impairment is not subsequently reversed. Goodwill arising on acquisition of foreign entities is considered an asset of the foreign entity. In such cases the goodwill is translated to the functional currency of the group at the end of each reporting period with the adjustment recognised in equity through to other comprehensive income. 32

Accounting Policies 1.2 Significant judgements and sources of estimation uncertainty In preparing the consolidated annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the consolidated annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the consolidated annual financial statements. Significant judgements include: Trade receivables The group assesses its trade receivables for impairment at each balance sheet date. In determining whether an impairment loss should be recorded in the profit or loss, the group makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset. The impairment for trade receivables is calculated on a portfolio basis, based on historical loss ratios, adjusted for national and industry-specific economic conditions and other indicators present at the reporting date that correlate with defaults on the portfolio. These annual loss ratios are applied to loan balances in the portfolio and scaled to the estimated loss emergence period. Financial assets If the market for a financial instrument is not active, an group establishes fair value by using a valuation technique. Valuation techniques include using recent arm s length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and net asset value. The subsequent measurement of the financial asset and the subsequent recognition of gains and losses is consistent with the requirements of IFRS 9. The same information may not be available at each measurement date. For the valuation of the investment in unlisted shares, the company used the net asset value of the company for valuation purposes. Allowance for slow moving, damaged and obsolete inventory An allowance for inventory to write inventory down to the lower of cost or net realisable value. Management have made estimates of the selling price and direct cost to sell on certain inventory items. The write down is included in the operation profit note. Fair value estimation The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the group is the current bid price. The fair value of financial instruments that are not traded in an active market (for example, over-the counter derivatives) is determined by using valuation techniques. The group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt. Other techniques, such as estimated discounted cash flows or net asset value, are used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates at the end of the reporting period. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the group for similar financial instruments. 33

Accounting Policies 1.2 Significant judgements and sources of estimation uncertainty (continued) Impairment testing The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value-in-use calculations and fair values less cost to sell. These calculations require the use of estimates and assumptions. It is reasonably possible that the assumption may change which may then impact our estimations and may then require a material adjustment to the carrying value of goodwill and tangible assets. The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could materially change over time. They are significantly affected by a number of factors. Provisions Provisions were raised and management determined an estimate based on the information available. Expected manner of realisation for deferred tax Deferred tax is provided for on the fair value adjustments of investment properties based on the expected manner of recovery, i.e. sale or use. This manner of recovery affects the rate used to determine the deferred tax liability. Refer note 9 Deferred tax. Taxation Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the group to realise the net deferred tax assets recorded at the end of the reporting period could be impacted. 34

Accounting Policies 1.2 Significant judgements and sources of estimation uncertainty (continued) Members' Funds The directors have discounted the members' fund at 5.6% (2011: 5.7%) which equals the government bond yield in South Africa. Given that there is no well developed bond market in Namibia, the directors deem this rate appropriate in Namibia as well, since a liability is being valued, an adjustment for risk is not necessary. Date and demographic assumptions Number of members 4,397 4,549 Average Age 55 55 Mortality 2 % pa 2 % pa Discount rate 5.6 % 5.7 % Time before cessation of farming 4 yrs 4 yrs activities Settlement note for next 5 years as a result of resignation, cessation and redemption 0% 0% Post employment medical obligation The provision for the post-retirement medical obligation is actuarially determined. A new valuation was obtained from Strategic Actuarial Partners Namibia (Pty) Ltd during July 2012. The valuation is dependent on the life expectancy, as well as deaths and resignations of employees during the financial year. The healthcare inflation factor also effected the valuation, which will also change over time, thus influencing future valuations. Severance pay The provision for severance pay, as required by the labour act was raised during the year and is actuarially determined. A new valuation was obtained from Strategic Actuarial Partners Namibia (Pty) Ltd during July 2012. The valuation is dependent on the life expectancy, as well as deaths and resignations of employees during the financial year. The provision is required in respect of retirements or resignations at the age of 65, unfair dismissal and death. 1.3 Investment property The co-operative owns property that is held to earn long-term rental income and for capital appreciation. This property is not occupied by the co-operative. Investment property is recognised as an asset when, and only when, it is probable that the future economic benefits that are associated with the investment property will flow to the enterprise, and the cost of the investment property can be measured reliably. Investment property is initially recognised at cost. Transaction costs are included in the initial measurement. Costs include costs incurred initially and costs incurred subsequently to add to, or to replace a part of, or service a property. If a replacement part is recognised in the carrying amount of the investment property, the carrying amount of the replaced part is derecognised. Fair value Subsequent to initial measurement investment property is measured at fair value representing the open market value determined annually by external valuers/directors. Fair value is based on active market prices, adjusted, if necessary, for any differences in the nature, location or condition of the specific asset. If this information is not available, the co-operative uses alternative valuation methods such as recent prices on less active markets or discounted cash flow projections. These valuations are reviewed annually. 35

Accounting Policies 1.3 Investment property (continued) A gain or loss arising from a change in fair value is included in net profit or loss for the period in which it arises. There are no property interests held under operating leases which are recognised as investment property. 1.4 Property, plant and equipment The cost of an item of property, plant and equipment is recognised as an asset when: it is probable that future economic benefits associated with the item will flow to the co-operative; and the cost of the item can be measured reliably. Property, plant and equipment is initially measured at cost. Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost of property, plant and equipment, where the entity is obligated to incur such expenditure, and where the obligation arises as a result of acquiring the asset or using it for purposes other than the production of inventories. Major spare parts and stand by equipment which are expected to be used for more than one period are included in property, plant and equipment. In addition, spare parts and stand by equipment which can only be used in connection with an item of property, plant and equipment are accounted for as property, plant and equipment. Major inspection costs which are a condition of continuing use of an item of property, plant and equipment and which meet the recognition criteria above are included as a replacement in the cost of the item of property, plant and equipment. Any remaining inspection costs from the previous inspection are derecognised. Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses. Land is not depreciated. Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value. The useful lives of items of property, plant and equipment have been assessed as follows: Item Buildings Motor vehicles Office and other equipment Average useful life 50 years 5 years 3-10 years The residual value, useful life and depreciation method of each asset are reviewed, and adjusted if appropriate, at the end of each reporting period. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset. 36

Accounting Policies 1.4 Property, plant and equipment (continued) The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item. An asset s carrying amount is written down immediately to its recoverable amount if the asset s carrying amount is greater than its estimated recoverable amount. 1.5 Intangible assets An intangible asset is recognised when: it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and the cost of the asset can be measured reliably. Intangible assets are initially recognised at cost. Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred. An intangible asset arising from development (or from the development phase of an internal project) is recognised when: it is technically feasible to complete the asset so that it will be available for use or sale. there is an intention to complete and use or sell it. there is an ability to use or sell it. it will generate probable future economic benefits. there are available technical, financial and other resources to complete the development and to use or sell the asset. the expenditure attributable to the asset during its development can be measured reliably. Intangible assets are carried at cost less any accumulated amortisation and any impairment losses. An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows. Amortisation is not provided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible assets amortisation is provided on a straight line basis over their useful life. The amortisation period and the amortisation method for intangible assets are reviewed every period-end. Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life. Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets. Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows: Item Computer software Useful life 5 years 37

Accounting Policies 1.6 Investments in subsidiaries annual financial statements In the co-operative s separate annual financial statements, investments in subsidiaries are carried at cost less any accumulated impairment. The cost of an investment in a subsidiary is the aggregate of: the fair value, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the co-operative; plus any costs directly attributable to the purchase of the subsidiary. An adjustment to the cost of a business combination contingent on future events is included in the cost of the combination if the adjustment is probable and can be measured reliably. 1.7 Financial instruments IFRS 9, Financial instruments, addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The group has adopted IFRS 9 from 1 August 2009, as well as the related consequential amendments to other IFRSs, because this new accounting policy provides reliable and more relevant information for users to assess the amounts, timing and uncertainty of future cash flows. As from 1 August 2009, the group classifies its financial assets in the following categories: those to be measured subsequently at fair value, and those to be measured at amortised cost. This classification depends on whether the financial asset is a debt or equity investment. Debt investments (a) Financial assets at amortised cost A debt investment is classified as amortised cost only if both of the following criteria are met: the objective of the group s business model is to hold the asset to collect the contractual cash flows; and the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding. The nature of any derivatives embedded in the debt investment are considered in determining whether the cash flows of the investment are solely payment of principal and interest on the principal outstanding and are not accounted for separately. 38

Accounting Policies 1.7 Financial instruments (continued) (b) Financial assets at fair value If either of the two criteria above are not met, the debt instrument is classified as fair value through profit or loss. The group has not designated any debt investment as measured at fair value through profit or loss to eliminate or significantly reduce an accounting mismatch. All equity investments are measured at fair value. All equity investments are measured at fair value through profit or loss. Regular purchases and sales of financial assets are recognised on the trade-date the date on which the group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the group has transferred substantially all risks and rewards of ownership. At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value though profit or loss are expensed in the income statement. A gain or loss on a debt investment that is subsequently measured at fair value and is not part of a hedging relationship is recognised in profit or loss and presented in the income statement within other (losses)/gains net in the period in which they arise. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the financial asset is derecognised or impaired and through the amortisation process using the effective interest rate method. The group subsequently measures all equity investments at fair value. Where the group s management has elected to present unrealised and realised fair value gains and losses on equity investments in other comprehensive income, there is no subsequent recycling of fair value gains and losses to profit or loss. Dividends from such investments continue to be recognised in profit or loss as long as they represent a return on investment. The group is required to reclassify all affected debt investments when and only when its business model for managing those assets changes. Impairment of financial assets Assets carried at amortised cost The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets measured at amortised cost is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a loss event ) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. Loans to (from) group companies These include loans to and from holding companies, fellow subsidiaries, subsidiaries, joint ventures and associates and are recognised initially at fair value plus direct transaction costs. Loans to group companies are classified as loans and receivables. Loans from group companies are classified as financial liabilities measured at amortised cost. 39

Accounting Policies 1.7 Financial instruments (continued) Trade and other receivables Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss. Trade and other receivables are classified as loans and receivables. Trade and other payables Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value. Bank overdraft and borrowings Bank overdrafts and borrowings are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the group s accounting policy for borrowing costs. Bank overdrafts and borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position date. Preference shares, which are mandatorily redeemable on a specific date, are classified as liabilities. The dividends on these preference shares are recognised in profit or loss as interest expense. The fair value of the liability portion of a convertible instrument is determined using a market interest rate for an equivalent non-convertible instrument. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the instrument. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders equity, net of income tax effects. 1.8 Income tax Current tax assets and liabilities Current income tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset. 40

Accounting Policies 1.8 Income tax (continued) Current income tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred tax assets and liabilities A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Income tax expenses Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from: a transaction or event which is recognised, in the same or a different period, to other comprehensive income, or a business combination. Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income. Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity. 1.9 Leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. Operating leases - lessor Operating lease income is recognised as an income on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset. This asset is not discounted. Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease income. 41

Accounting Policies 1.9 Leases (continued) Income for leases is disclosed under revenue in the statement of comprehensive income. 1.10 Inventories Inventories are measured at the lower of cost and net realisable value. Inventories are measured at the lower of cost and net realisable value on the first-in-first-out basis. Net realisable value is the estimated selling price in the ordinary course of business less applicable variable selling expenses. The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects is assigned using specific identification of the individual costs. The cost of inventories is assigned using the weighted average cost formula. The same cost formula is used for all inventories having a similar nature and use to the entity. When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs. 1.11 Non-current assets held for sale Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. Non-current assets held for sale (or disposal group) are measured at the lower of its carrying amount and fair value less costs to sell. A non-current asset is not depreciated (or amortised) while it is classified as held for sale, or while it is part of a disposal group classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale are recognised in profit or loss. 1.12 Impairment of non-financial assets The group assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset. Irrespective of whether there is any indication of impairment, the group also: tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same time every period. tests goodwill acquired in a business combination for impairment annually. 42

Accounting Policies 1.12 Impairment of non-financial assets (continued) If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss. Any impairment loss of a revalued asset is treated as a revaluation decrease. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cashgenerating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination. An impairment loss is recognised for cash-generating units if the recoverable amount of the unit is less than the carrying amount of the units. The impairment loss is allocated to reduce the carrying amount of the assets of the unit in the following order: first, to reduce the carrying amount of any goodwill allocated to the cash-generating unit and then, to the other assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit. An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated. The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods. A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss. Any reversal of an impairment loss of a revalued asset is treated as a revaluation increase. 1.13 Share capital and equity Ordinary shares are classified as equity. 1.14 Bonus shares Bonus shares consist of ordinary shares converted to bonus shares where members shareholding exceeded 50 shares and allocation of profits according to the directors discretion in terms of paragraph 23.7 of the By-laws of the co-operative. Any bonus share may not be repaid, transferred or withdrawn unless a period of at least five years have expired since allocation and as may be approved in the discretion of the board, or in terms of the provisions of section 54 of the s Act, or unless a member s estate is sequestrated or wound up or a member dies. Bonus shares are recognised initially at fair value, net of transaction costs incurred. Bonus shares are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method. 43

Accounting Policies 1.15 Members' funds The co-operative may declare bonuses to members. The bonuses not paid out are deemed to be a source of finance. Members funds are recognised initially at fair value, net of transaction costs incurred. Members funds are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method. 1.16 Employee benefits Short-term employee benefits The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted. The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. The expected cost of profit sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance. Defined contribution plans A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. The co-operative has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. The cooperative has no further payment obligations once the contributions have been paid. Defined benefit plans Profit-sharing and bonus plans The group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profit attributable to the co-operative s members after certain adjustments. The group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation. Termination benefits The group applies the provisions of IAS 19 that cover the post-employment benefits to severance payments (or portion thereof) that are payable both upon normal retirement, involuntary early retirement and retirement or resignation after the normal retirement age (in cases requested by the employer to remain in service after retirement). Actuarial gains and losses arising from experience adjustments, and changes in actuarial assumptions are charged or credited to income over the expected average remaining working lives of the related employees. 1.17 Provisions and contingencies Provisions are recognised when: the group has a present obligation as a result of a past event; 44

Accounting Policies 1.17 Provisions and contingencies (continued) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the obligation. The amount of a provision is the present value of the expenditure expected to be required to settle the obligation. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the provision. Provisions are not recognised for future operating losses. If an entity has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision. A constructive obligation to restructure arises only when an entity: has a detailed formal plan for the restructuring, identifying at least: - the business or part of a business concerned; - the principal locations affected; - the location, function, and approximate number of employees who will be compensated for terminating their services; - the expenditures that will be undertaken; and - when the plan will be implemented; and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it. After their initial recognition contingent liabilities recognised in business combinations that are recognised separately are subsequently measured at the higher of: the amount that would be recognised as a provision; and the amount initially recognised less cumulative amortisation. Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note. 1.18 Revenue Revenue from the sale of goods is recognised when all the following conditions have been satisfied: the group has transferred to the buyer the significant risks and rewards of ownership of the goods; the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the group; and the costs incurred or to be incurred in respect of the transaction can be measured reliably. When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the end of the reporting period. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the group; the stage of completion of the transaction at the end of the reporting period can be measured reliably; and the costs incurred for the transaction and the costs to complete the transaction can be measured reliably. 45

Accounting Policies 1.18 Revenue (continued) When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable. Service revenue is recognised by reference to the stage of completion of the transaction at the end of the reporting period. Stage of completion is determined by services performed to date as a percentage of total services to be performed. Contract revenue comprises: the initial amount of revenue agreed in the contract; and variations in contract work, claims and incentive payments: - to the extent that it is probable that they will result in revenue; and - they are capable of being reliably measured. Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax. Interest is recognised, in profit or loss, using the effective interest rate method. Dividends are recognised, in profit or loss, when the co-operative s right to receive payment has been established. 1.19 Turnover Turnover comprises of sales to customers and service rendered to customers. Turnover is stated at the invoice amount and is exclusive of value added taxation. 1.20 Cost of sales When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs. The related cost of providing services recognised as revenue in the current period is included in cost of sales. Contract costs comprise: costs that relate directly to the specific contract; costs that are attributable to contract activity in general and can be allocated to the contract; and such other costs as are specifically chargeable to the customer under the terms of the contract. 1.21 Borrowing costs Borrowing costs are recognised as an expense in the period in which they are incurred. 46

Notes to the Annual Financial Statements 2. New standards and interpretations 2.1 Standards and interpretations effective and adopted in the current year In the current year, the group has adopted the following standards and interpretations that are effective for the current financial year and that are relevant to its operations: IAS 24 Related Party Disclosures (Revised) The revisions to IAS 24 include a clarification of the definition of a related party as well as providing a partial exemption for related party disclosures between government-related entities. In terms of the definition, the revision clarifies that joint ventures or associates of the same third party are related parties of each other. To this end, an associate includes its subsidiaries and a joint venture includes its subsidiaries. The partial exemption applies to related party transactions and outstanding balances with a government which controls, jointly controls or significantly influences the reporting entity as well as to transactions or outstanding balances with another entity which is controlled, jointly controlled or significantly influenced by the same government. In such circumstances, the entity is exempt from the disclosure requirements of paragraph 18 of IAS 24 and is required only to disclose: The name of the government and nature of the relationship Information about the nature and amount of each individually significant transaction and a quantitative or qualitative indication of the extent of collectively significant transactions. Such information is required in sufficient detail to allow users to understand the effect. The effective date of the amendment is for years beginning on or after 01 January 2011. The group has adopted the amendment for the first time in the 2012 annual financial statements. The impact of the amendment is not material. Amendments to IFRS 7 Disclosures - Transfers of financial assets Amended the required disclosures to help users of financial statements evaluate the risk exposures relating to transfers of financial assets and the effect of those risks on an entity s financial position. The effective date of the amendment is for years beginning on or after 01 July 2011. The group has adopted the amendment for the first time in the 2012 annual financial statements. The impact of the amendment is not material. 47

Notes to the Annual Financial Statements 2. New standards and interpretations (continued) Amendments to IFRS, 'First time adoption' on hyperinflation and fixed dates The first amendment replaces references to a fixed date of 1 January 2004 with the date of transition to IFRSs, thus eliminating the need for companies adopting IFRSs for the first time to restate derecognition transactions that occurred before the date of transition to IFRSs. The second amendment provides guidance on how an entity should resume presenting financial statements in accordance with IFRSs after a period when the entity was unable to comply with IFRSs because its functional currency was subject to severe hyperinflation. The effective date of the amendment is for years beginning on or after 01 July 2011. The group has adopted the amendment for the first time in the 2012 annual financial statements. The impact of the amendment is not material. Amendments to IFRS 9 - Financial Instruments The co-operative has early adopted IFRS 9 the first time for the 31 July 2010 year end. 2.2 Standards and interpretations not yet effective The group has chosen not to early adopt the following standards and interpretations, which have been published and are mandatory for the group s accounting periods beginning on or after 01 August 2012 or later periods: IFRS 10 Consolidated Financial Statements Standard replaces the consolidation sections of IAS 27 Consolidated and Separate Financial Statements and SIC 12 Consolidation Special Purpose Entities. The standard sets out a new definition of control, which exists only when an entity is exposed to, or has rights to, variable returns from its involvement with the entity, and has the ability to effect those returns through power over the investee. The effective date of the standard is for years beginning on or after 01 January 2013. The group expects to adopt the standard for the first time in the 2014 annual financial statements. It is unlikely that the standard will have a material impact on the group's annual financial statements. IAS 27 Separate Financial Statements Consequential amendment as a result of IFRS 10. The amended Standard now only deals with separate financial statements. The effective date of the amendment is for years beginning on or after 01 January 2013. The group expects to adopt the amendment for the first time in the 2014 annual financial statements. It is unlikely that the amendment will have a material impact on the group's annual financial statements. IFRS 11 Joint Arrangements The standard replaces IAS 31 Interests in Joint Ventures and SIC 13 Jointly Controlled Entities Non Monetary Contributions by Venturers. The standard defines a Joint arrangement as existing only when decisions about relevant activities requires the unanimous consent of the parties sharing joint control in terms of a contractual arrangement. The standard identifies two types of joint arrangements as: 48

Notes to the Annual Financial Statements 2. New standards and interpretations (continued) Joint operations which exist when the entities sharing joint control have direct rights to the assets and obligations for the liabilities of the joint arrangements. In such cases the joint operators recognise their share of the assets and liabilities and profits and losses of the joint arrangements in their financial statements. Joint operations which exist when the entities sharing joint control have direct rights to the assets and obligations for the liabilities of the joint arrangements. In such cases the joint operators recognise their share of the assets and liabilities and profits and losses of the joint arrangements in their financial statements. The effective date of the standard is for years beginning on or after 01 January 2013. The group expects to adopt the standard for the first time in the 2014 annual financial statements. It is unlikely that the standard will have a material impact on the group's annual financial statements. IFRS 12 Disclosure of Interests in Other Entities The standard sets out disclosure requirements for investments in Subsidiaries, associates, joint ventures and unconsolidated structured entities. The disclosures are aimed to provide information about the significance and exposure to risks of such interests. The most significant impact is the disclosure requirement for unconsolidated structured entities or off balance sheet vehicles. The effective date of the standard is for years beginning on or after 01 January 2013. The group expects to adopt the standard for the first time in the 2014 annual financial statements. It is unlikely that the standard will have a material impact on the group's annual financial statements. IFRS 13 Fair Value Measurement New standard setting out guidance on the measurement and disclosure of items measured at fair value or required to be disclosed at fair value in terms of other IFRS s. The effective date of the standard is for years beginning on or after 01 January 2013. The group expects to adopt the standard for the first time in the 2014 annual financial statements. It is unlikely that the standard will have a material impact on the group's annual financial statements. IAS 1 Presentation of Financial Statements The amendment now requires items of other comprehensive income to be presented as: Those which will be reclassified to profit or loss Those which will not be reclassified to profit or loss. The related tax disclosures are also required to follow the presentation allocation. In addition, the amendment changed the name of the statement of comprehensive income to the statement of profit or loss and other comprehensive income. The effective date of the amendment is for years beginning on or after 01 July 2012. The group expects to adopt the amendment for the first time in the 2013 annual financial statements. It is unlikely that the amendment will have a material impact on the group's annual financial statements. 49

Notes to the Annual Financial Statements 2. New standards and interpretations (continued) IAS 12 Income Taxes: Amendment: Deferred Tax: Recovery of Underlying Assets The amendment now provides that for investment property measured at fair value, the recovery of the carrying amount is assumed to be through sale, with the result that deferred tax arising on the valuation is measured using the prevailing tax rate for capital gains. The effective date of the amendment is for years beginning on or after 01 January 2012. The group expects to adopt the amendment for the first time in the 2013 annual financial statements. It is unlikely that the amendment will have a material impact on the group's annual financial statements. IAS 19 Employee Benefits Revised Require recognition of changes in the net defined benefit liability (asset) including immediate recognition of defined benefit cost, disaggregation of defined benefit cost into components, recognition of remeasurements in other comprehensive income, plan amendments, curtailments and settlements Introduce enhanced disclosures about defined benefit plans Modify accounting for termination benefits, including distinguishing benefits provided in exchange for service and benefits provided in exchange for the termination of employment and affect the recognition and measurement of termination benefits Clarification of miscellaneous issues, including the classification of employee benefits, current estimates of mortality rates, tax and administration costs and risk-sharing and conditional indexation features The effective date of the amendment is for years beginning on or after 01 January 2013. The group expects to adopt the amendment for the first time in the 2014 annual financial statements. It is unlikely that the amendment will have a material impact on the group's annual financial statements. Amendment to IFRS 7 Financial Instruments: Disclosure The IASB has published an amendment to IFRS 7, Financial instruments: Disclosures, reflecting the joint requirements with the FASB to enhance current offsetting disclosures. These new disclosures are intended to facilitate comparison between those entities that prepare IFRS financial statements to those that prepare financial statements in accordance with US GAAP. The effective date of the amendment is for years beginning on or after 01 January 2013. The group expects to adopt the amendment for the first time in the 2014 annual financial statements. It is unlikely that the amendment will have a material impact on the group's annual financial statements. IAS 28 (revised 2011) - Associates and joint ventures This standard includes the requirements for joint ventures, as well as associates, to be equity accounted following the issue of IFRS 11. The effective date of the standard is for years beginning on or after 01 January 2013. The group expects to adopt the standard for the first time in the 2014 annual financial statements. It is unlikely that the standard will have a material impact on the group's annual financial statements. Amendments to IAS 32 - Financial Instruments: Presentation 50

Notes to the Annual Financial Statements 2. New standards and interpretations (continued) The IASB has issued amendments to the application guidance in IAS 32, Financial instruments: Presentation, that clarify some of the requirements for offsetting financial assets and financial liabilities on the balance sheet. However, the clarified offsetting requirements for amounts presented in the statement of financial position continue to be different from US GAAP. The effective date of the amendment is for years beginning on or after 01 January 2014. The group expects to adopt the amendment for the first time in the 2015 annual financial statements. It is unlikely that the amendment will have a material impact on the group's annual financial statements. 3. Risk management Capital risk management The group's objectives when managing capital are to safeguard the group's ability to continue as a going concern in order to provide returns for shareholder and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The capital structure of the group consists of debt, which includes the borrowings (excluding derivative financial liabilities) disclosed in note 17, and cash and cash equivalents disclosed in note 14, and equity as disclosed in the statement of financial position. Financial risk management The group s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. Liquidity risk Cash flow forecasting is performed in the operating entities of the group and aggregated by co-operative finance. finance monitors rolling forecasts of the co-operative s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the co-operative does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the co-operative s debt financing plans, covenant compliance, compliance with internal statement of financial position ratio targets and, if applicable external regulatory or legal requirements. The co-operative has an overdraft facility of N$ 29 million which will be reviewed on 15 March 2013. The table below analyses the group s financial liabilities and net-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Comparative information has been restated as permitted by the amendments to IFRS 7 for the liquidity risk disclosures. Group 51

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 At 31 July 2012 Less than 1 Between 1 Between 2 Over 5 years year and 2 years and 5 years Bonus shares 1,162 - - - Membership funds 41,272 - - - Borrowings 11,266 2,921 2,296 - Trade and other payables 116,807 - - - At 31 July 2011 Less than 1 Between 1 Between 2 Over 5 years year and 2 years and 5 years Bonus shares 1,186 - - - Membership funds 41,704 - - - Borrowings 19,330 2,296 2,920 - Trade and other payables 109,138 - - - At 31 July 2012 Less than 1 Between 1 Between 2 Over 5 years year and 2 years and 5 years Bonus shares 1,162 - - - Membership funds 41,272 - - - Borrowings 11,266 2,921 2,296 - Trade and other payables 115,859 - - - At 31 July 2011 Less than 1 Between 1 Between 2 Over 5 years year and 2 years and 5 years Bonus shares 1,186 - - - Membership funds 41,704 - - - Borrowings 19,330 2,296 2,920 - Trade and other payables 107,480 - - - 52

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 Interest rate risk Cash flow interest rate risk The group's interest rate risk arise from current and non-current borrowings. Borrowings at variable rates expose the group to cash flow interest rate risk which is partially off set by cash held at variable rates. Consolidated As at 31 July 2012 Non-current Current Total Cash and cash equivalents - 33,002 33,002 Non-current borrowings (2,296) - (2,296) Current borrowings - (14,499) (14,499) (2,296) 18,503 16,207 As at 31 July 2011 Non-current Current Total Cash and cash equivalents - 35,528 35,528 Non-current borrowings (5,216) - (5,216) Current borrowings - (19,330) (19,330) (5,216) 16,198 10,982 As at 31 July 2012 Non-current Current Total Cash and cash equivalents - 32,247 32,247 Non-current borrowings (2,296) - (2,296) Current borrowings - 14,499 14,499 (2,296) 46,746 44,450 As at 31 July 2011 Non-current Current Total Cash and cash equivalents - 33,401 33,401 Non-current borrowings (5,216) - (5,216) Current borrowings - (20,855) (20,855) (5,216) 12,546 7,330 The co-operative's and group s trade and other receivables and trade and other payables and short term loans do not expose the co-operative or the group to any significant interest rate risks due to their short term nature. Cash flow sensitivity analysis for floating interest rate bearing instruments. A change of 100 basis points in interest rates at the reporting date would have increased or decreased accumulated funds and surplus by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2011. Consolidated Effect on profit 2012 Effect on profit 2011 100bp 100bp decrease in increase in market market 100bp increase in market 100bp decrease in market 53

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 Cash and cash equivalents 23 (23) 20 (20) Bank overdrafts (12) 12 (11) 11 Borrowings (2) 2 (3) 3 Effect on profit 2012 Effect on profit 2011 100bp 100bp decrease in increase in market market 100bp increase in market 100bp decrease in market Cash and cash equivalents 21 (21) 18 (18) Bank overdrafts (12) 12 (11) 11 Borrowings (3) 3 (3) 3 Credit risk Credit risk is managed on a group basis. Credit risk consists mainly of cash deposits, cash equivalents, trade debtors. The co-operative only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party. Financial assets exposed to credit risk at year end were as follows: ` Financial instrument Group - 2012 Group - 2011-2012 - 2011 Trade and other receivables 64,781 79,863 64,063 79,130 Cash and cash equivalents 33,002 35,528 32,247 33,401 97,784 115,391 96,412 112,531 54

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 Financial Instrument Analysis: Financial assets measured at fair value through profit or loss CONSOLIDATED 2012 Financial Financial assets held at Liabilities at amortised amortised cost cost Not included in definition of IFRS 9 Property, plant and equipment - - - 95,318 Intangible assets - - - 743 Investment property - - - 15,142 Deferred tax asset - - - 23,573 Financial assets measured at fair value 16,596 - - - through profit or loss Non-current assets held for sale - - - - Inventories - - - 116,095 Current tax asset - - - 619 Trade and other receivables - 64,781 - - Prepayments - - - 3,681 Cash and cash equivalents - 33,002 - - Sub total 16,596 97,783-255,171 Bonus shares - - (1,162) - Members' funds - - (41,272) - Retirement benefit obligations - - - (36,161) Trade and other payables - - (116,807) - Taxation payable - - - (379) Severance pay provision - - - (973) Deferred tax liability - - - (21,827) Borrowings - - (16,795) - Sub total - - (176,036) (59,340) TOTAL - NET 16,596 97,783 (176,036) 195,831 55

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 Financial Instrument Analysis: Financial assets measured at fair value through profit or loss CONSOLIDATED 2011 Financial Financial assets held at Liabilities at amortised amortised cost cost Not included in definition of IFRS 9 Property, plant and equipment - - - 85,523 Intangible assets - - - 622 Investment property - - - 15,104 Deferred tax asset - - - 19,924 Financial assets measured at fair value 4,506 - - - through profit or loss Non-current assets held for sale - - - - Inventories - - - 93,002 Current tax asset - - - 643 Trade and other receivables - 79,863 - - Cash and cash equivalents - 35,528 - - Sub total 4,506 115,391-214,818 Bonus shares - - (1,186) - Members' funds - - (41,704) - Retirement benefit obligations - - - (34,171) Trade and other payables - - (109,138) - Taxation payable - - - (462) Severance pay provision - - - (961) Deferred tax liability - - - (19,636) Borrowings - - (24,546) - Sub total - - (176,574) (55,230) TOTAL - NET 4,506 115,391 (176,574) 159,588 56

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 Financial Instrument Analysis: Financial assets measured at fair value through profit or loss CO-OPERATIVE 2012 Financial Financial assets held at Liabilities at amortised amortised cost cost Not included in definition of IFRS 9 Property, plant and equipment - - - 95,214 Intangible assets - - - 743 Investment property - - - 15,142 Deferred tax asset - - - 23,480 Investment in subsidiaries - - - 830 Financial assets measured at fair value 16,596 - - - through profit or loss Non-current assets held for sale - - - - Inventories - - - 115,314 Current tax asset - - - 532 Trade and other receivables - 64,063 - - Prepayments - - - 3,681 Cash and cash equivalents - 32,247 - - Sub total 16,596 96,310-254,936 Bonus shares - - (1,162) - Members' funds - - (41,272) - Retirement benefit obligations - - - (36,161) Trade and other payables - - (115,859) - Taxation payable - - - - Severance pay provision - - - (973) Deferred tax liability - - - (21,805) Borrowings - - (19,010) - Sub total - - (177,303) (58,939) TOTAL - NET 16,596 96,310 (177,303) 195,997 57

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 Financial Instrument Analysis: Financial assets measured at fair value through profit or loss CO-OPERATIVE 2011 Financial Financial assets held at Liabilities at amortised amortised cost cost Not included in definition of IFRS 9 Property, plant and equipment - - - 85,452 Intangible assets - - - 622 Investment property - - - 15,104 Deferred tax asset - - - 19,840 Investment in subsidiaries - - - 144 Financial assets measured at fair value 4,506 - - - through profit or loss Non-current assets held for sale - - - - Inventories - - - 92,463 Current tax asset - - - 630 Trade and other receivables - 79,130 - - Cash and cash equivalents - 33,401 - - Sub total 4,506 112,531-214,255 Bonus shares - - (1,186) - Members' funds - - (41,704) - Retirement benefit obligations - - - (34,171) Trade and other payables - - (107,479) - Taxation payable - - - - Severance pay provision - - - (961) Deferred tax liability - - - (19,614) Borrowings - - (26,071) - Sub total - - (176,440) (54,746) TOTAL - NET 4,506 112,531 (176,440) 159,509 58

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 Exposure to insurance risk The co-operative underwrites risks regarding cattle in transit. As such the co-operative is exposed to uncertainty surrounding the timing, frequency and severity of claims under insurance contracts. The principal risk is that the frequency and/or severity of claims are greater than expected. Insurance events are by nature random and the actual size and number of the events in any one year may vary from those estimated and experienced in prior periods. The primary insurance activity carried out by the co-operative assumes the risk of loss from policyholders that are directly subject to risk. These risks relate to specific perils as defined in the policy wording. As such the co-operative is exposed to the uncertainty surrounding the timing and severity of claims under contracts. The co-operative has exposure to market risk through its insurance and investment activities. The co-operative has not reinsured its risk for cattle in transit. 59

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 Fair value estimation The fair value of financial instruments traded in active markets is based on quoted market prices at the financial year end date. The quoted market price used for financial assets held by the group is the current bid price. The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. The group uses a variety of methods and makes assumptions that are based on market conditions existing at each financial year end date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates at the financial year end date. The following table summarises the carrying amounts and fair values of those financial assets and liabilities. Bid prices are used to estimate fair values of assets, whereas offer prices are applied for liabilities. Consolidated Carrying value Fair value FINANCIAL ASSETS 2012 2011 2012 2011 N$ 000 N$ 000 N$ 000 N$ 000 Financial assets measured at fair value 16,596 4,506 16,596 4,506 through profit or loss Loans - - - - Trade and other receivables 64,781 79,863 64,781 79,841 Cash and cash equivalents 33,002 35,528 33,002 35,528 114,379 119,897 114,379 119,875 FINANCIAL LIABILITIES Bonus shares (1,162) (1,186) (1,162) (1,186) Member's funds (41,272) (41,704) (41,272) (41,704) Trade and other payables (116,807) (109,138) (116,807) (109,138) Borrowings (16,795) (24,546) (16,795) (24,546) (176,036) (176,574) (176,036) (176,574) ITEMS NOT RECORDED ON THE STATEMENT OF FINANCIAL POSITION Guarantees and other financial (572) (644) (572) (644) facilities Lease payable commitments (8,140) (2,077) (8,140) (2,077) Lease receivable commitments 13,277 11,564 13,277 11,564 4,565 8,843 4,565 8,843 60

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 Carrying value Fair value FINANCIAL ASSETS 2012 2011 2012 2011 N$ 000 N$ 000 N$ 000 N$ 000 Financial assets measured at fair value 16,596 4,506 16,596 4,506 through profit or loss Loans - - - - Trade and other receivables 64,063 79,130 64,063 79,110 Cash and cash equivalents 32,247 33,401 32,247 33,401 112,906 117,037 112,906 117,017 FINANCIAL LIABILITIES Bonus shares (1,162) (1,186) (1,162) (1,186) Member's funds (41,272) (41,704) (41,272) (41,704) Trade and other payables (115,859) (107,479) (115,859) (107,479) Borrowings (16,795) (26,071) (16,795) (26,071) (175,088) (176,440) (175,088) (176,440) ITEMS NOT RECORDED ON THE STATEMENT OF FINANCIAL POSITION Guarantees and other financial (572) (644) (572) (644) facilities Lease payable commitments (7,333) (958) (7,333) (958) Lease receivable commitments 13,277 11,564 13,277 11,564 5,372 9,962 5,372 9,962 61

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 Financial assets designated at fair value through profit or loss The fair value of unlisted shares has been determined according to most recent trading prices and net asset value. Loans The nominal value less impairment provision is assumed to approximate the fair value. Trade and other receivables and payables The nominal value less impairment provision of trade receivables and payables are assumed to approximate their fair value, due to the short-term nature of these assets and liabilities. Cash and cash equivalents Due to its short-term nature, the carrying amount approximates the fair value of these financial assets. Bonus shares and members funds The fair value of these financial liabilities is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the group for similar financial instruments. Borrowings The estimated fair value of borrowings with no stated maturity is the amount repayable on demand, whereas the fair value of borrowings with a stated maturity is estimated using discounted cashflow analysis. Financial instruments not recorded on the statement of financial position The estimated fair values of the financial instruments not recorded on the statement of financial position are based on market prices for similar facilities. When this information is not available, fair value is estimated using discounted cashflow analysis. Foreign exchange risk The co-operative and group are not exposed to foreign exchange risk as all sales are invoiced and collected in Namibian dollar. Price risk The co-operative and the group are not exposed to the risk of fluctuating prices. 62

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 4. Investment property Group 2012 2011 Cost / Valuation Accumulated depreciation Carrying value Cost / Valuation Accumulated depreciation Carrying value Investment property 15,142-15,142 15,104-15,104 2012 2011 Cost / Valuation Accumulated depreciation Carrying value Cost / Valuation Accumulated depreciation Carrying value Investment property 15,142-15,142 15,104-15,104 Reconciliation of investment property - Group - 2012 Opening Additions Total balance Investment property 15,103 39 15,142 Reconciliation of investment property - Group - 2011 Opening Disposals Fair value Total balance adjustments Investment property 12,208 (756) 3,652 15,104 Reconciliation of investment property - - 2012 Opening Additions Total balance Investment property 15,103 39 15,142 Reconciliation of investment property - - 2011 Opening Disposals Fair value Total balance adjustments Investment property 12,208 (757) 3,652 15,103 The investment properties were valued, according to the accounting policy, by the directors on 31 July 2011 at open market value, taking into account external valuations and municipality valuations. It was decided at a directors meeting, held on 30 August 2012, that the value as per the register is accepted as the market value for 31 July 2012. Rent received from investment properties amounted to N$ 1,46 million (2011: N$ 1.31 million). 63

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 5. Property, plant and equipment Group 2012 2011 Cost / Valuation Accumulated depreciation Carrying value Cost / Valuation Accumulated depreciation Carrying value Land and buildings 85,503 (4,567) 80,936 79,087 (4,501) 74,587 Motor vehicles 7,982 (4,384) 3,598 6,806 (4,086) 2,720 Office equipment 27,790 (17,006) 10,784 23,698 (15,483) 8,216 Total 121,275 (25,957) 95,318 109,591 (24,070) 85,523 2012 2011 Cost / Valuation Accumulated depreciation Carrying value Cost / Valuation Accumulated depreciation Carrying value Land and buildings 85,503 (4,567) 80,936 79,088 (4,501) 74,587 Motor vehicles 7,882 (4,342) 3,540 6,756 (4,046) 2,710 Office equipment 27,564 (16,826) 10,738 23,477 (15,322) 8,155 Total 120,949 (25,735) 95,214 109,321 (23,869) 85,452 Reconciliation of property, plant and equipment - Group - 2012 Opening Additions Disposals Depreciation Total balance Land and buildings 74,586 6,416 - (66) 80,936 Motor vehicles 2,720 1,503 (82) (543) 3,598 Office equipment 8,215 4,600 (10) (2,021) 10,784 Reconciliation of property, plant and equipment - Group - 2011 85,521 12,519 (92) (2,630) 95,318 Opening Additions Disposals Depreciation Total balance Land and buildings 68,317 6,949 - (679) 74,587 Motor vehicles 2,101 1,052 (23) (410) 2,720 Office equipment 6,599 3,376 (55) (1,704) 8,216 77,017 11,377 (78) (2,793) 85,523 64

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 5. Property, plant and equipment (continued) Reconciliation of property, plant and equipment - - 2012 Opening Additions Disposals Depreciation Total balance Buildings 74,587 6,415 - (66) 80,936 Motor vehicles 2,710 1,453 (82) (541) 3,540 Office equipment 8,155 4,591 (10) (1,998) 10,738 Reconciliation of property, plant and equipment - - 2011 85,452 12,459 (92) (2,605) 95,214 Opening Additions Disposals Depreciation Total balance Land and buildings 68,317 6,949 - (679) 74,587 Motor vehicles 2,091 1,052 (24) (409) 2,710 Office equipment 6,497 3,371 (54) (1,659) 8,155 76,905 11,372 (78) (2,747) 85,452 Rent received from properties classified as property, plant and equipment amounted to N$ 6,8 million (2011: N$6.18million). Land and buildings comprise numerous properties spread throughout Namibia. Detailed information is maintained in a register which is open for inspection by members and their authorised agents at the co-operative s registered office. Certain of the land and buildings have been encumbered as set out in note 17. 6. Intangible assets Group 2012 2011 Cost / Valuation Accumulated amortisation Carrying value Cost / Valuation Accumulated amortisation Carrying value Computer software, other 1,125 (382) 743 779 (157) 622 2012 2011 Cost / Valuation Accumulated amortisation Carrying value Cost / Valuation Accumulated amortisation Carrying value Computer software, other 1,125 (382) 743 779 (157) 622 65

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 6. Intangible assets (continued) Reconciliation of intangible assets - Consolidated and - 2012 Opening Additions Amortisation Total balance Computer software, other 621 347 (225) 743 Reconciliation of intangible assets - Consolidated and - 2011 Opening Additions Disposals Amortisation Impairment Total balance loss Computer software, other 1,097 162 (44) (246) (348) 621 7. Investments in subsidiaries Name of company Carrying amount 2012 Carrying amount 2011 Agra Properties (Pty) Ltd - 4 "A" Shares in Guard Risk Cell 150 150 Agra Oshivelo Retail (Pty) Ltd 181 3 Ondangwa Service Station (Pty) Ltd 499 (13) Auas Veterinary and Medical Suppliers (Pty) Ltd - - The carrying amounts of subsidiaries are shown net of impairment losses. 830 144 During the current year under review, dividends of N$275,991 (70% interest) (2011: N$ 154,558) were declared by Ondangwa Service Station (Pty) Ltd. Subsidiary name Share capital Holding Share N$ Loan N$ (Number of shares) Agra Properties (Pty) Ltd 100 100 % 0.1 - "A" Shares in Guard Risk Cell 4,000,000 25 shares 150 - Agra Oshivelo Retail (Pty) Ltd 100 84 % 0.084 180 Ondangwa Service Station (Pty) Ltd 1,000 70 % 0.7 499 Auas Veterinary and Medical Suppliers (Pty) Ltd 1 100 % 0.001 - The loans carry no interest and there are no fixed terms of repayment. 8. Financial assets measured at fair value through profit or loss 151 679 At fair value through profit or loss - designated Shares at fair value 16,596 4,486 16,596 4,486 66

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 8. Financial assets measured at fair value through profit or loss (continued) Non-current assets At fair value through profit or loss - designated 16,596 4,486 16,596 4,486 Fair value information Financial assets at fair value through profit or loss are recognised at fair value, which is therefore equal to their carrying amounts. The fair value of listed shares has been determined by reference to the bid prices on the Johannesburg Securities Exchange at year-end. The fair value of unlisted shares has been determined according to most recent trading prices or net asset value. This hierarchy requires the use of observable market data when available. The group considers the relevant and observable market prices in its valuations where possible. Fair value hierarchy of financial assets at fair value through profit or loss For financial assets recognised at fair value, disclosure is required of a fair value hierarchy which reflects the significance of the inputs used to make the measurements. Level 1 represents those assets which are measured using unadjusted quoted prices for identical assets. Level 2 applies inputs other than quoted prices that are observable for the assets either directly (as prices) or indirectly (derived from prices). Level 3 applies inputs which are not based on observable market data. Level 1 Equity securities 14 14 14 14 Level 3 Equity securities 16,582 4,472 16,582 4,472 16,596 4,486 16,596 4,486 67

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 8. Financial assets measured at fair value through profit or loss (continued) Reconciliation of financial assets at fair value through profit or loss measured at level 3 Reconciliation of financial assets at fair value through profit or loss measured at level 3 - Co-operate and group - 2012 Opening balance Fair value gains or losses in profit or loss Addition Closing balance Class 1 14 - - 14 Class 3 4,472 8,035 4,075 16,582 4,486 8,035 4,075 16,596 Reconciliation of financial assets at fair value through profit or loss measured at level 3 - Co-operate and group - 2011 Opening balance Fair value gains or losses in profit or loss Reclassificati on to trade receivables Closing balance Class 1 14 - - 14 Class 3 4,497 (5) (20) 4,472 9. Deferred tax Deferred tax asset/(liability) 4,511 (5) (20) 4,486 Amounts received in advance 655 509 655 500 Consumables (328) (366) (328) (366) Impairment and other allowances 10,292 7,471 10,199 7,396 Retirement benefit obligation 12,626 11,945 12,626 11,945 Leasehold Improvements (317) (241) (317) (241) Actuarial adjustment on members fund (197) (203) (197) (203) valuation Capital allowances (20,985) (18,826) (20,963) (18,804) Reconciliation of deferred tax asset (liability) 1,746 288 1,675 226 At beginning of the year 288 701 226 635 Income statement charge 1,458 (445) 1,449 (409) Prior period adjustment - 32 - - 1,746 288 1,675 226 68

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 10. Retirement benefits Post-employment medical benefits - and group The group operates a post-employment medical benefit scheme. The method of accounting, assumptions and the frequency of valuations are similar to those used for defined benefit pension schemes. The valuation on postretirement benefits is based on generally accepted actuarial methodology and long-term valuation assumptions. Movements for the year Opening balance 34,171 33,652 Benefits paid (3,072) (2,891) Net expense recognised in profit or loss 5,062 3,410 Net expense recognised in the income statement 36,161 34,171 Current service cost 1,323 38 Interest cost 3,039 2,903 Actuarial (gains) losses 700 469 5,062 3,410 69

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 10. Retirement benefits (continued) Key assumptions used The subsidy is based on the Express Care Option on the date of actual retirement and is increased with inflation. The increase is not linked to Medical Aid contribution increase but are only increased for price inflation. The principal actuarial assumptions used for accounting purposes were: The principal actuarial assumptions used for accounting purposes were: Real rate of return 3.20 % 3.50 % Discount rate 8.00 % 9.30 % Price inflation rate 4.80 % 5.80 % Sensitivity analysis If rates changed by one percentage point, the retirement benefit obligation would have been as follows: Real rate of return decrease to 2.2% N$ 39.1m N$ 37.1m Real rate of return increase to 4.2% N$ 33.6m N$ 31.7m Accrued liabilities Real interest rate (N$'000) 4.2% 3.2% 2.2% (Valuation basis) - Current employees members 252 284 322 - Current pensioner members 33,371 35,874 38,750 33,627 36,161 39,074 The above table show the financial position of the PRMA scheme liability is sensitive to changes in financial assumptions. If the main actuarial assumptions made in the valuation of the PRMA scheme hold true, then the expected liability as at 31 July 2013 is set out in the table below: N$ 000 Accrued liability: 31.07.2012 36,161 Interest cost (8.0%) 2,893 Current service cost 7 Benefits paid (estimate) (3,270) Accrued liability: 31.07.2013 35,791 Particulars in respect of the current employee members belonging to the medical aid for which Agra has a postretirement medical aid liability as at the financial year end date are as follows: Current employee members: 70

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 10. Retirement benefits (continued) Number of employees 1 3 Average age (years) 62 62 63 65 Current pensioner members: Number of employees 101 102 Average age (years) 74 73 Employees who have joined Agra after 1 August 1998 do not receive any post-retirement medical aid benefits. The mortality assumption was based on, for both before and after retirement, the British derived a(55) life table less a 3 year age adjustment. This is consistent with the pensioner mortality assumption that are used for valuing retirement funds in Namibia. 11. Prepayments The board approved the N$ 26mil purchase of erven 200, 201 and 202 in the Trustco Industrial Park in the Lafrenz Industrial area in Windhoek. Contracts were signed on the 13 April 2012 but as at 31 July 2012 the properties were not yet transferred to Agra. Prepayments 3,681-3,681-12. Inventories Finished goods 117,369 92,911 116,579 92,371 Consumables 359 1,078 359 1,078 117,728 93,989 116,938 93,449 Provision for obsolete stock (1,633) (987) (1,624) (986) 13. Trade and other receivables 116,095 93,002 115,314 92,463 Trade receivables 74,058 89,082 73,797 88,882 VAT 5,152 1,668 4,741 1,446 Provision for doubtful debts (22,360) (21,167) (22,325) (21,130) Other receivables 7,931 10,279 7,850 9,933 Trade and other receivables pledged as security 64,781 79,862 64,063 79,130 The trade receivables balance has been ceded to Bank Windhoek Limited as security for the bank overdraft facilities. On year-end the bank overdraft facilities utilised by the group amounted to N$ 11.9 million and the cooperative amounted to N$ 14.1 million (2011: group - N$17.2 million and co-operative - N$18.7 million), refer to note 17. No other specific terms and conditions relate to the pledge. Interest is charged on overdue trade debtors at a rate of prime plus 3% (2011: prime plus 3%) and on overdue livestock debtors at a rate of prime plus 3% (2011: prime plus 3%). 71

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 13. Trade and other receivables (continued) At year-end the carrying amounts of the accounts receivable approximate their fair values due to the short-term maturities of these assets. Credit quality of trade and other receivables Trade receivables Counterparties without external credit rating Trade receivables 59,629 78,194 59,322 77,684 Fair value of trade and other receivables Trade and other receivables 64,781 79,862 64,063 79,130 72

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 13. Trade and other receivables (continued) Credit risk and credit quality of trade and other receivables The co-operative's and group s standard credit terms are 30 days after statement for trade and other receivables and 7 days for livestock receivables. The ageing of the components of trade receivables at year end was: Consolidated Retail receivables Gross 2012 N$'000 Impairment 2012 N$'000 Gross 2011 N$'000 Impairment 2011 N$'000 Not past due 23,382 (37) 20,969 - Past due 0 to 30 days 6,773 (26) 5,225 (5) Past due 31 to 60 days 2,357 (28) 1,689 (91) Past due 61 to 180 days 1,859 (191) 938 (204) More than 181 days 5,776 (3,747) 3,652 (2,489) Total 40,147 (4,029) 32,473 (2,789) Livestock receivables Not past due 12,330 (754) 23,679 - Past due 0 to 30 days 2,657 (78) 12,753 (377) Past due 31 to 60 days 215 (72) 1,578 (326) Past due 61 to 180 days 4,459 (2,981) 6,079 (5,322) More than 181 days 14,250 (14,446) 12,521 (12,340) Total 33,911 (18,331) 56,610 (18,365) Other receivables Not past due - - - (11) Past due 0 to 30 days - - - - Past due 31 to 60 days - - - - Past due 61 to 180 days - - - - More than 181 days - - - - Total - - - (11) Total trade receivables 74,059 (22,360) 89,083 (21,167) 73

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 13. Trade and other receivables (continued) Retail receivables Gross 2012 N$'000 Impairment 2012 N$'000 Gross 2011 N$'000 Impairment 2011 N$'000 Not past due 23,363 (37) 20,842 - Past due 0 to 30 days 6,740 (26) 5,173 (5) Past due 31 to 60 days 2,206 (28) 1,689 (91) Past due 61 to 180 days 1,838 (191) 937 (204) More than 181 days 5,740 (3,712) 3,628 (2,464) Total 39,887 (3,994) 32,269 (2,764) Livestock receivables Not past due 12,330 (754) 23,679 - Past due 0 to 30 days 2,657 (78) 12,753 (378) Past due 31 to 60 days 215 (72) 1,578 (326) Past due 61 to 180 days 4,459 (2,981) 6,079 (5,322) More than 181 days 14,250 (14,446) 12,521 (12,340) Total 33,911 (18,331) 56,610 (18,366) Other receivables Not past due - - - - Past due 0 to 30 days - - - - Past due 31 to 60 days - - - - Past due 61 to 180 days - - - - More than 181 days - - - - Total - - - - Total trade receivables 73,799 (22,325) 88,879 (21,130) No trade and other receivables are denominated foreign currencies: Reconciliation of provision for impairment of trade and other receivables Opening balance 21,167 16,164 21,130 15,961 Written off (1,621) (1,344) (1,621) (1,159) Additional provision (reversed)/raised 2,813 6,347 2,815 6,328 22,359 21,167 22,324 21,130 The co-operative and group have not renegotiated the term of receivables and do not hold any collateral or guarantees as security. 74

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 14. Cash and cash equivalents Cash and cash equivalents consist of: Cash on hand 4,329 6,013 4,209 5,823 Bank balances 28,618 29,496 27,983 27,559 Other cash and cash equivalents 55 19 55 19 Credit quality of cash at bank and short term deposits, excluding cash on hand 33,002 35,528 32,247 33,401 The credit quality of cash at bank and short term deposits, excluding cash on hand that are neither past due nor impaired can be assessed by reference to external credit ratings or historical information about counterparty default rates: Credit rating Standard Bank Group Limited F1+ (ZAF) 365 729 322 699 Bank Windhoek Limited A1+ 16,840 27,891 16,376 25,984 First National Bank Namibia Limited F1+ (ZAF) 11,413 876 11,285 876 15. Share capital 28,618 29,496 27,983 27,559 Reconciliation of number of shares issued: Reported as at 01 August 2011 406 408 406 408 Shares redeemed (3) (2) (3) (2) 403 406 403 406 The nominal value of each ordinary share is N$1, payable in full on application and is limited to 500 shares per member. 16. Other reserves Consolidated and : Fair value reserve 6,622 6,622 6,622 6,622 General reserve 10,917 10,917 10,917 10,917 Deferred expenditure fund 3,994 3,994 3,994 3,994 21,533 21,533 21,533 21,533 The group transfers all fair value adjustments in respect of investment properties to a fair value reserve. 75

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 17. Borrowings Held at amortised cost Long term bank borrowings 2,296 5,216 2,296 5,216 Short term bank borrowings 2,921 2,114 2,921 2,114 Bank overdraft 11,538 17,176 13,753 18,701 Other loans 40 40 40 40 16,795 24,546 19,010 26,071 Bank borrowings are due to Bank Windhoek Limited and are secured by a first continuing covering mortgage bond of N$20 million (2011: N$20 million) over certain land and buildings, Erf 2225 Windhoek, included in property, plant and equipment with a net book value of N$ 41,435,672 (2011: N$41,435,672). The loans bear interest at a rate of 8.29% p.a. (85% of prime overdraft rate) (2011: 8.29% p.a. (85% of prime overdraft rate)) compounded monthly, payable on a monthly basis. The capital is repayable in 27 (2011: 39) monthly instalments of N$ 220,237 (2011: N$220,237). Non-current liabilities At amortised cost 2,296 5,216 2,296 5,216 Current liabilities At amortised cost 14,499 19,330 16,714 20,855 16,795 24,546 19,010 26,071 The carrying amounts and fair value of the non-current borrowings and current borrowings approximates its fair value. The bank overdraft is secured by means of a cession of trade and livestock debtors to Bank Windhoek Limited. The maturity of bank borrowings is as follows: Not later than one year 2,921 2,115 Later than one year, but not later than 2,296 5,216 five years Later than five years - - 5,217 7,331 76

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 18. Severance pay provision Reconciliation of severance pay provision - and group - 2012 Opening balance Interest charged Service costs Actuarial gains and losses Benefits paid Provision for severance pay 961 78 61 (43) (84) 973 Reconciliation of severance pay provision - and group - 2011 Opening balance Interest charged Service costs Actuarial gains and losses Provision for severance pay 836 80 102 (57) 961 The principle actuarial assumptions used for the valuation are as follows: 2012 2011 Discount rate 8.00% 9.30% Price inflation rate 6.30% 7.30% Mortality SA 56-62 SA 56-62 Mortality table Mortality table 19. Members' funds Consolidated and 2012 2011 N$'000 N$'000 Opening balance 41,704 41,187 Repaid due to resignation (448) (442) Actuarial fair value adjustment 16 959 41,272 41,704 If the financial structure of the co-operative justifies the refund of contributions, such refunds shall be made on rotation or on death of the member or when member ceases farming activities and refund is approved by the members at a general meeting on recommendation of the board. There is no interest payable on members funds. The members funds are discounted since it does not contain a demand feature. Also refer to note 1.2 significant judgements and sources of estimation uncertainty regarding the assumptions used to calculate the fair value of the members funds. Total Total 77

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 20. Bonus share Consolidated and 2012 2011 N$ 000 N$ 000 At the beginning of the year 1,186 1,207 Shares redeemed (25) (23) Other movements 1 2 At the end of the year 1,162 1,186 The fair value of the bonus shares equal their carrying amount, as the impact of discounting is immaterial. 21. Current tax receivable / (payable) The current tax balance is made up as follows: Current tax receivable Current tax receivable 619 643 532 629 Current tax payable Current tax payable (379) (462) - - Total current tax receivable / (payable) 240 181 532 629 22. Trade and other payables Trade payables 80,838 77,521 80,429 75,958 Accrued leave pay 5,767 5,207 5,641 5,106 Accrued bonus 20,254 16,383 20,137 16,262 Other payables 9,948 10,027 9,652 10,154 Fair value of trade and other payables 116,807 109,138 115,859 107,480 Trade payables 116,807 109,138 115,859 107,480 At year-end the carrying amounts approximate their fair value due to the short-term maturities of these liabilities. 78

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 23. Operating profit Operating profit for the year is stated after accounting for the following: Operating lease charges Premises Contractual amounts 1,165 833 853 521 Equipment Contractual amounts 8 12 - - 1,173 845 853 521 (Loss) profit on sale of property, plant (52) (9) (52) (9) and equipment Depreciation on property, plant and 2,855 3,388 2,830 3,341 equipment Employee costs 104,730 89,598 103,703 88,662 Expenses by nature Cost of sales 887,550 782,010 849,181 749,078 Advertising 3,287 3,805 3,277 3,787 Bad debts 3,728 6,035 3,730 6,016 Computer expenses 4,323 4,059 4,221 3,976 Commission paid 15,540 19,684 15,514 19,544 Depreciation, amortisation and 2,855 3,387 2,830 3,341 impairments Directors costs 1,036 902 1,036 902 Employee costs 104,730 89,598 103,703 88,662 Insurance 2,078 2,103 2,032 2,055 Utilities 5,697 4,724 5,354 4,438 Transport and freight 1,266 1,011 1,266 1,011 Motor vehicle expenses 2,196 1,783 2,170 1,759 Printing and stationery 1,392 1,519 1,371 1,505 Repairs and maintenance 4,318 2,539 4,271 2,522 Other expenses 23,786 19,638 20,884 17,820 Total distribution costs and administrative expenses 176,232 160,787 171,659 157,338 Total cost of sales, distribution costs and administrative expenses 1,063,782 942,797 1,020,840 906,416 79

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 24. Investment income Interest income Interest income on current bank account 1,834 1,226 1,770 1,177 Accounts receivable 3,429 3,262 3,429 3,261 Other interest income 24 16 24 16 25. Finance costs 5,287 4,504 5,223 4,454 Trade and other payables 8 (326) 8 (330) Bank 648 1,206 648 1,206 26. Income tax expense Major components of the income tax expense 656 880 656 876 Current Current tax 14,467 11,277 13,813 10,734 Deferred Deferred tax (1,458) 445 (1,449) 409 Reconciliation of the income tax expense Reconciliation between accounting profit and tax expense. 13,009 11,722 12,364 11,143 Accounting profit 44,414 36,252 43,882 34,194 Tax at the applicable tax rate of 34% (2011: 34%) 15,563 12,162 14,918 11,626 Tax effect of adjustments on taxable income Non-taxable income (2,554) 20 (2,554) (138) Deferred tax prior year tax adjustment - (460) - (345) 27. Auditors' remuneration 13,009 11,722 12,364 11,143 Fees 1,046 853 916 750 28. Other income Management fees 643 438 1,169 892 Fees earned 2,551 2,989 - - 80

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 28. Other income (continued) Revaluation of investment properties - 3,652-3,652 Revaluation of financial assets 8,035-8,035 - Rental income 8,324 7,511 8,324 7,511 Bonus received - 8-8 Bad debts recovered 1,251 1,202 1,251 1,017 Dividend income 442 1 718 156 Other income 9,267 6,299 8,920 5,996 30,513 22,100 28,417 19,232 29. Cash generated from (used in) operations Profit before taxation 44,414 36,252 43,882 34,194 Adjustments for: Depreciation and amortisation 2,855 3,387 2,830 3,341 Loss (profit) on sale of assets 52 9 52 9 Interest received (5,287) (4,504) (5,223) (4,454) Finance costs 656 880 656 876 Movements in operating lease assets - (3,652) - (3,652) and accruals Movements in retirement benefit assets 1,990 519 1,990 519 and liabilities Movements in provision for severance 12 125 12 125 pay Movement in fair value of financial (8,035) 5 (8,035) 5 assets Actuarial valuation on Members fund 16 959 16 959 Other non-cash items 623 230 (687) 230 Changes in working capital: Inventories (23,093) (10,869) (22,851) (11,064) Trade and other receivables 14,447 7,781 15,057 8,289 Prepayments (3,681) - (3,681) - Trade and other payables 7,669 13,701 8,379 12,792 30. Tax paid 32,638 44,823 32,397 42,169 Balance at beginning of the year 181 1,018 629 1,051 Current tax for the year recognised in (14,467) (11,277) (13,813) (10,734) profit or loss Balance at end of the year 240 182 532 630 (14,526) (10,441) (13,716) (10,313) 81

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 31. Commitments Authorised capital expenditure Capital expenditure approved by the directors, not yet contracted 160,602 8,082 160,602 8,082 The sharp increase in capital expenditure is due to the development of the Trustco property. See details in note 35. Operating lease commitments where a group company is the lessee The group leases various retail outlets under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights. The group also leases various plant and machinery under cancellable operating lease agreements. The group is required to give a six-month notice for the termination of these agreements. The future aggregate minimum lease payments under non-cancellable operating leases are as follows: - within one year 2,776 770 2,464 458 - in second to fifth year inclusive 5,364 1,307 4,869 500 - later than five years - - - - The future minimum lease receivables - - - - under operating leases are as follows: - within one year 5,199 4,953 5,199 4,953 - in second to fifth year inclusive 8,078 6,611 8,078 6,611 - later than five years - - - - Guarantees The co-operative has a contingent liability in favour of Bank Windhoek Limited in respect of guarantees supplied by the bank on behalf of the co-operative. These guarantees are: Ministry of Agriculture 500 500 500 500 Millennium Challenge 72 72 72 72 572 572 572 572 The co-operative has a contingent liability in favour of Standard Bank Namibia Limited in respect of guarantees supplied by the bank on behalf of the co-operative. Meatboard of Namibia 225-225 - Various - 572-572 Department of Finance 200-200 - Department of Water Affairs 293-293 - 82

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 32. Related parties ` Relationships Subsidiaries Refer to note 7 Related party balances Amounts included in Trade receivable regarding related parties "A" Shares in Guard Risk Cell 38 244 Amounts included in Trade Payable regarding related parties "A" Shares in Guard Risk Cell (87) (55) Related party transactions Management fees received from: Ondangwa Service Station (Pty) Ltd (subsidiary) Dividends received from: Ondangwa Service Station (Pty) Ltd (subsidiary) 516 454 276 155 Gross insurance premiums paid to "A" Shares in Guard Risk Cell 2,551 2,989 Administration fees to (received from) related parties "A" Shares in Guard Risk Cell 271 157 Claims paid to (received from) related parties "A" Shares in Guard Risk Cell 1,337 1,327 Interest paid to (received from) related parties "A" Shares in Guard Risk Cell (114) (53) Taxation paid to (received from) related parties "A" Shares in Guard Risk Cell 427 361 Compensation to directors and other key management Salaries and other short-term employee 6,224 5,052 benefits Allowances and other costs 2,696 2,222 Bonuses 2,675 1,574 Social security 6 5 83

Notes to the Annual Financial Statements Group 2012 2011 2012 2011 N$ '000 N$ '000 N$ '000 N$ '000 32. Related parties (continued) Pension costs defined contribution plan Medical aid fund contributions and allowances 739 582 207 172 12,547 9,607 33. Directors' emoluments Non-executive 2012 Honoraria Travel costs Total 829 207 1,036 2011 Honoraria Travel costs Total 618 284 902 34. Pension scheme All of the group s permanent employees are members of the Agra Retirement Fund which is a defined contribution fund governed by the Pension Funds Act of Namibia. A statutory actuarial valuation was carried out on 31 July 2012. In the actuary s opinion the fund was in a sound financial position. The employer is currently contributing at a rate of 15% of total salaries. 35. Contingent liability The board approved a N$ 26mil purchase of erven 200, 201 and 202 in the Trustco Industrial Park in the Lafrenz Industrial area on the 13 April 2012. The purchase is subject to an approval of the loan by the bank. A prepayment was made with regard to the above transaction before year end (See note 11). 84

Detailed Statement of Comprehensive Income Group 2012 2011 2012 2011 Note(s) N$ '000 N$ '000 N$ '000 N$ '000 Revenue Sale of goods 1,073,052 953,325 1,031,738 917,800 Cost of sales Opening stock (93,989) (82,461) (93,449) (82,461) Purchases (911,289) (793,538) (872,670) (760,066) Closing stock 117,728 93,989 116,938 93,449 (887,550) (782,010) (849,181) (749,078) Gross profit 185,502 171,315 182,557 168,722 Other income Management fees 643 438 1,169 892 Fees earned 2,551 2,989 - - Fair value adjustment on investment - 3,652-3,652 property Fair value adjustment on financial assets 8,035-8,035 - Rental income 8,324 7,511 8,324 7,511 Bonus received - 8-8 Bad debts recovered 1,251 1,202 1,251 1,017 Dividend income 442 1 718 156 Other income 9,267 6,300 8,920 5,996 Interest received 24 5,287 4,503 5,223 4,454 35,800 26,604 33,640 23,686 Expenses (Refer to page 86) (176,232) (160,787) (171,659) (157,338) Operating profit 23 45,070 37,132 44,538 35,070 Finance costs 25 (656) (880) (656) (876) Profit before taxation 44,414 36,252 43,882 34,194 Taxation 26 13,009 11,722 12,364 11,143 Profit for the year 31,405 24,530 31,518 23,051 85 The supplementary information presented does not form part of the annual financial statements and is unaudited

Operating expenses Advertising (3,287) (3,805) (3,277) (3,787) Auditors remuneration 27 (1,046) (853) (916) (750) Bad debts (3,728) (6,035) (3,730) (6,016) Bank charges (3,519) (3,274) (3,353) (3,161) Cleaning (370) (390) (355) (378) Commission paid (15,540) (19,684) (15,514) (19,544) Computer expenses (4,323) (4,059) (4,221) (3,976) Consumables (12) (25) (12) (25) Depreciation, amortisation and (2,855) (3,388) (2,830) (3,341) impairments Director's cost (1,036) (902) (1,036) (902) Employee costs (104,730) (89,598) (103,703) (88,662) Entertainment and promotions (44) (144) (44) (144) Fees paid (1,024) (1,740) - - Health & Safety (6) - (6) - Insurance (2,078) (2,103) (2,032) (2,055) Lease rentals on operating lease (1,173) (845) (853) (521) Legal expenses (401) (447) (400) (447) Levies (65) 4 (62) 5 Loss on disposal of assets (52) (9) (52) (9) Motor vehicle expenses (2,196) (1,783) (2,170) (1,759) Other consulting and professional fees (2,520) (1,414) (2,497) (1,387) Other expenses (6,807) (4,759) (5,706) (5,376) Packaging (830) (683) (830) (683) Postage (397) (402) (397) (402) Printing and stationery (1,392) (1,519) (1,371) (1,505) Repairs and maintenance (4,318) (2,539) (4,271) (2,522) Security (1,801) (1,720) (1,716) (1,645) Staff welfare (3) (3) - - Subscriptions (215) (187) (213) (182) Telephone and fax (1,576) (1,483) (1,551) (1,453) Training (1) - - - Transport and freight (1,266) (1,011) (1,266) (1,011) Travel - local (1,777) (1,122) (1,774) (1,121) Travel - overseas (147) (141) (147) (141) Water and Electricity (5,697) (4,724) (5,354) (4,438) (176,232) (160,787) (171,659) (157,338) 86