notes to the Consolidated financial statementsfor the year ended 30 June 2013

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
		11.	Property, plant and equipment
			11.1	Freeholdsss land and buildings
				Cost
504 886	472 618			Balance at the beginning of the year	679	679
82 292	33 521			Additions capitalised
11 027	–			Acquisition of subsidiary
(3 274)	–			Transfer to assets classified as held-for-sale
(2)	(1 253)			Disposals
(5 009)	–			Transfer to investment property
589 920	504 886			Balance at the end of the year	679	679
				Accumulated depreciation and impairment
(168 584)	(153 773)			Balance at the beginning of the year	(13)	(12)
(15 531)	(15 443)			Depreciation for the year	(1)	(1)
–	632			Disposals
2 940	–			Transfer to investment property
(1 695)	–			Acquisition of subsidiary
1 969	–			Transfer to assets classified as held-for-sale
(180 901)	(168 584)			Balance at the end of the year	(14)	(13)
				Carrying amounts
336 302	318 845			Balance at the beginning of the year	666	667
409 019	336 302			Balance at the end of the year	665	666
			11.2	Leasehold properties
				Cost
21 532	20 727			Balance at the beginning of the year
3 613	–			Additions capitalised
1 811	805			Foreign exchange differences
26 956	21 532			Balance at the end of the year
				Accumulated depreciation and impairment
(2 219)	(1 688)			Balance at the beginning of the year
(633)	(465)			Depreciation for the year
(186)	(66)			Foreign exchange differences
(3 038)	(2 219)			Balance at the end of the year
				Carrying amounts
19 313	19 039			Balance at the beginning of the year
23 918	19 313			Balance at the end of the year

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
			11.3	Plant, equipment and vehicles
				Cost
1 222 729	1 110 550			Balance at the beginning of the year	65	65
306 960	136 726			Additions capitalised
25 164	–			Acquisition of subsidiary
(42 675)	(25 897)			Disposals	(65)
3 166	1 350			Foreign exchange differences
1 515 344	1 222 729			Balance at the end of the year	–	65
				Accumulated depreciation and impairment
(562 052)	(503 174)			Balance at the beginning of the year	(65)	(65)
(77 849)	(77 588)			Depreciation for the year		–
(3 803)	(4 783)			Impairment	–	–
(19 988)	–			Acquisition of subsidiary
38 828	23 746			Disposals	65	–
(386)	(253)			Foreign exchange differences
(625 250)	(562 052)			Balance at the end of the year	–	(65)
				Carrying amounts
660 677	607 376			Balance at the beginning of the year	–	–
890 094	660 677			Balance at the end of the year	–	–

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
			11.4	Total property, plant and equipment
				Cost
1 749 147	1 603 895			Balance at the beginning of the year	744	744
392 865	170 247			Additions capitalised
(3 274)	–			Transfer to assets classified as held-for-sale
36 191	–			Acquisition of subsidiary
(42 677)	(27 150)			Disposals	(65)	–
4 977	2 155			Foreign exchange differences
(5 009)	–			Transfer to investment property
2 132 220	1 749 147			Balance at the end of the year	679	744
				Accumulated depreciation and impairment
(732 855)	(658 635)			Balance at the beginning of the year	(78)	(77)
(94 013)	(93 496)			Depreciation for the year	(1)	(1)
(3 803)	(4 783)			Impairment	–	–
1 969	–			Transfer to assets classified as held-for-sale
(21 683)	–			Acquisition of subsidiary
2 940	–			Transfer to investment property
38 828	24 378			Disposals	65	–
(572)	(319)			Foreign exchange differences
(809 189)	(732 855)			Balance at the end of the year	(14)	(78)
				Capital work-in-progress
151 755	68 029			Balance at the beginning of the year
961	(638)			Foreign exchange differences
434 351	254 309			Additions: current year
(392 865)	(169 945)			Amounts capitalised
194 202	151 755			Balance at the end of the year
				Total property, plant and equipment including work-in-progress
				Carrying amounts
1 168 047	1 013 289			Total property, plant and equipment at the beginning of the year	666	667
1 517 233	1 168 047			Total property, plant and equipment at the end of the year	665	666

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
				The estimated fair value of property, plant and equipment at 30 June 2013 is R2 308,6 million (2012: R1 971,9 million). During the year under review the Group has written off or impaired plant and equipment to the value of R4,4 million (2012: R4,8 million). The fair value of property, plant and equipment has been determined based on valuations performed by ‘The Property Partnership’, an accredited independent valuer, as at 30 June 2013 and 30 June 2012 respectively. ‘The Property Partnership’ is an industry specialist in valuing property, plant and equipment. The fair value has been determined as follows: Land and buildings: This category has either been assessed on a capitalised rental income basis or, where specialised facilities are involved, by way of a depreciated replacement cost basis. Plant and machinery: This category has been assessed on a net current replacement cost/depreciated replacement cost basis. Registers containing details of land are available for inspection at the registered office. The carrying value of plant and equipment held under finance leases and hire purchase contracts at 30 June 2013 was R8.8 million (2012: R9,2 million). Additions during the year were R1,1 million (2012: R6,5 million) of plant and equipment held under finance lease and hire purchase agreements. Leased assets and assets bought under hire purchase contracts are pledged as security for the related finance lease and hire purchase liabilities.

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
		12.	Investment properties
			Cost
2 379	2 379		Balance at the beginning of the year
–	–		Additions capitalised
5 009	–		Transfer to investment property
(1 292)	–		Transfer to assets held-for-sale
6 096	2 379		Balance at the end of the year
			Accumulated depreciation
(1 887)	(1 418)		Balance at the beginning of the year
(114)	(46)		Depreciation for the year
(2 940)	–		Transfer to investment property
848	(423)		Transfer to assets held-for-sale
(4 093)	(1 887)		Balance at the end of the year
			Carrying amounts
492	961		Balance at the beginning of the year
2 003	492		Balance at the end of the year
779	877		Rental income derived from investment properties
–	–		Direct operating expenses generating rental income
779	877		Net profit arising from investment properties carried at net book value
			The fair value of these properties is R3,4 million (2012: R4,7 million). The fair value of investment properties has been determined based on valuations performed by ‘The Property Partnership’, an accredited independent valuer, for the current and previous years. ‘The Property Partnership’ is an industry specialist in valuing investment properties. The fair value has been determined as follows: Land and buildings: This category has either been assessed on a capitalised rental income basis or, where specialised facilities are involved, by way of a depreciated replacement cost basis.

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
		13.	Intangible assets
			13.1	Goodwill
				Cost
304 785	304 785			Balance at the beginning of the year
23 965	–			Acquisitions
328 750	304 785			Balance at the end of the year
				Impairment losses
(1 311)	(1 311)			Balance at the beginning of the year
(1 311)	(1 311)			Balance at the end of the year
				Carrying amounts
303 474	303 474			Balance at the beginning of the year
327 439	303 474			Balance at the end of the year
			13.2	Trademarks, patents and customer lists
				Cost
13 500	13 500			Balance at the beginning of the year
59 004	–			Acquisitions
(3 500)	–			Disposals
69 004	13 500			Balance at the end of the year
				Accumulated amortisation and impairment
(1 284)	(660)			Balance at the beginning of the year
(3 819)	(680)			Amortisation for the year
466	56			Disposals
(4 637)	(1 284)			Balance at the end of the year
				Carrying amounts
12 216	12 839			Balance at the beginning of the year
64 367	12 216			Balance at the end of the year

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
			13.3	Software licences
				Cost
71 891	64 769			Balance at the beginning of the year
17 766	7 978			Additions
(4 548)	(856)			Disposals
85 109	71 891			Balance at the end of the year
				Accumulated amortisation and impairment
(46 937)	(39 683)			Balance at the beginning of the year
(7 911)	(8 094)			Amortisation for the year
(574)	(13)			Impairment
4 397	853			Disposals
(51 025)	(46 937)			Balance at the end of the year
				Carrying amounts
24 954	25 086			Balance at the beginning of the year
34 084	24 954			Balance at the end of the year

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
			13.4	Total intangible assets
				Cost
390 176	383 054			Balance at the beginning of the year
100 735	7 978			Additions
(8 048)	(856)			Disposals
482 863	390 176			Balance at the end of the year
				Accumulated amortisation and impairment
(49 532)	(41 654)			Balance at the beginning of the year
(11 730)	(8 774)			Amortisation for the year
(574)	(13)			Impairment
4 863	909			Disposals
(56 973)	(49 532)			Balance at the end of the year
				Capital work-in-progress
17 123	5 702			Balance at the beginning of the year
–	26			Foreign exchange differences
103 005	19 373			Additions
(100 735)	(7 978)			Amounts capitalised
19 393	17 123			Balance at the end of the year
				Carrying amounts
357 767	347 102			Total intangible assets at the beginning of the year
445 283	357 767			Total intangible assets at the end of the year
				An impairment test is done annually at the Group’s financial year end on goodwill acquired through business combinations. The present value of future cash flows generated by the businesses is estimated for a five-year period and is based on: Current net profit before tax, projected forward for average growth of 6% (2012: 6%) and adjusted for non-cash items; an effective tax rate of 28%; required capital expenditure; movements in working capital; and a before tax discount rate of 19,24% (2012: 19,24%). Goodwill has been allocated to Clover Industries as the smallest separately identifiable cash-generating unit due to income, cost, assets and liabilities not being able to be split into smaller cash-generating units. Refer to note 5. Goodwill has been allocated to the following cash-generating units for purposes of the impairment review:
327 439	303 474			Clover Industries

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
		14.	Other financial assets and financial liabilities
			14.1	Other financial assets
				Financial instruments at fair value through profit or loss
				Derivatives not designated as hedges
132	173			Foreign exchange contracts
132	173			Total financial instruments at fair value
132	173			Total other financial assets
132	173			Total current
–	–			Total non-current
				Financial assets at fair value through profit or loss are those foreign exchange forward contracts the are not designated in hedge relationships as they are intended to reduce the level of foreign currency risk for expected sales and purchases. The Group uses foreign exchange forward contracts to manage some of its transaction exposures.
			14.2	Other financial liabilities
				Financial liabilities at fair value through profit or loss
				Derivatives not designated as hedges
–	639			Diesel Zero Cost Collar hedges
250	3 669			Clover Industries shares forward purchases
250	4 308			Total financial instruments at fair value
250	4 308			Total other financial liabilities
250	4 308			Total current
–	–			Total non-current
				Due to the Group being exposed to changes in the price of diesel, it has entered into a diesel hedge relationship for Zero Cost Collars. The forward contract does not result in physical delivery of diesel. The Group hedged 6 million litres of diesel, this equals its diesel usage for six months. The hedge commenced 3 February 2012 and expired on 26 July 2012. The Group entered into a forward contract to purchase 2 132 695 Clover Industries shares at R17,90 per share on 30 June 2014. This transaction was entered into to hedge a portion of the share appreciation rights issued to management.

14.3 Fair value hierarchy

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique;

Level 1: quoted prices in active market for identical assets or liabilities.

Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

As at 30 June 2013, the Group held the following financial instruments carried at fair value in the statement of financial position:

	30 June2013 R’000	Level 1 R’000	Level 2 R’000	Level 3 R’000
Assets measured at fair value
Derivatives not designated as hedging instruments:
Foreign exchange contracts	132		132
Liabilities measured at fair value
Derivatives not designated as hedging instruments:
Diesel Zero Cost Collar hedges	–		–
Clover Industries shares forward purchases	250		250
During the reporting period ended 30 June 2013, there were no transfers between Level 1 and Level 2 fair value measurements.
	30 June2012 R’000	Level 1 R’000	Level 2 R’000	Level 3 R’000
Assets measured at fair value
Derivatives not designated as hedging instruments:
Foreign exchange contracts	173		173
Liabilities measured at fair value
Derivatives not designated as hedging instruments:
Diesel Zero Cost Collar hedges	639		639
Clover Industries shares forward purchases	3 669		3 669
During the reporting period ended 30 June 2012, there were no transfers between Level 1 and Level 2 fair value measurements

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
		15.	Deferred taxation
(116 458)	(28 755)		Balance at the beginning of the year		86	88
(13 405)	(87 703)		Movements during the year		(58)	(2)
(129 863)	(116 458)		Balance at the end of the year		28	86
			The balance is constituted as follows:
			Deferred tax assets
870	368		Bad debts provision		89	89
2 266	2 215		Provision: Credit notes
–	106		Consumable stores
8 135	8 691		Long-service bonus
–	1 154		Provision: Special bonus
14 170	11 654		Leave pay provision
–	1 027		Share-based payments
608	786		In-plant building
4 559	–		Incentive bonus
9 080	–		Individual performance bonus
7 526	–		Guaranteed bonuses
4 480	–		Income received in advance
1 814	1 785		Leases
6 155	5 680		Provisions
6 635	58		Assessed loss carried forward
2 022	465		Other
68 320	33 989		Total deferred tax assets		89	89

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
			Deferred tax liabilities
(194 591)	(148 250)		Property, plant and equipment		(2)	–
(3 102)	(379)		Prepayments		(59)	(3)
(490)	(1 818)		Other
(198 183)	(150 447)		Total deferred tax liabilities		(61)	(3)
(129 863)	(116 458)		Net deferred tax liability		28	86
			Reflected in the statement of financial position as follows:
7 449	492		Deferred tax assets		28	86
(137 312)	(116 950)		Deferred tax liabilities
(129 863)	(116 458)		Net deferred tax (liability )/asset		28	86
			In assessing the availability of sufficient future taxable profit for utilisation against unu sed tax losses, cognisance was taken of the Group’s vision, goals and strategies. The Board is of the opinion that future taxable profits would be adequate to utilise the unused tax losses. The statement of financial position disclosure for deferred tax assets is the total amount for all Group companies with net deferred tax assets. Likewise the deferred tax liability represents the total of all companies with net deferred tax liabilities. Note 15 however groups all deferred tax assets and liabilities in the Group, irrespective of the net position of individual Group companies. No deferred tax asset has been provided on the tax loss of entities which are loss making since inception of business to date.

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
		16.	Inventories
5 800	5 800		Delivery agreements
85 374	91 120		Raw materials
82 715	50 017		Work-in-progress
78 962	60 595		Consumable stores
480 572	394 521		Finished goods
733 423	602 053		Total inventories
			The amount of the write-down of inventories recognised as an expense is R18,9 million (2012: R11.9 million). This expense is included in the cost of sales line item as a cost of inventories.
		17.	Trade and other receivables
907 140	874 476		Trade receivables
64 465	74 633		Other receivables and advance payments		501	771
34 848	57 874		Loans to Executive Directors and other Executives		34 848	57 874
			Inter-company loan: Clover SA		380 789	581 051
			Loan: CIL Share Purchase Plan Trust		6	1 480
(3 309)	(1 539)		Allowance for impairment		(317)	(317)
(8 095)	(8 449)		Credit note accrual		–	–
995 049	996 995		Total trade and other receivables		415 827	640 859
			The loans to Directors and other Executives were made to finance ordinary shares in CIL issued to them on 31 May 2010. The terms of the loans are as follows: they will bear interest at 90% of the prime rate of Absa Bank, interest will be capitalised on a monthly basis, repayable by management on the sale of the ordinary shares or within two months of leaving the employment of Clover or within six months in the case of death. All proceeds of the ordinary shares are ceded to CIL as security for the loans, in addition to all proceeds on the Clover Industries preference shares that were held by them. The loan agreements have been amended to make provision for a final repayment date of the respective loans linked to the normal retirement date for each of the Executives. See note 29.4 for further details. Clover SA securitised its trade debtors, excluding debtors generated from export sales, through a special-purpose entity, Clover Capital. Clover Capital is consolidated into the results of the Group.

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
			See note 30.5 for age analysis on trade receivables and on credit risk of trade receivables to understand how the Group manages and measures credit quality of trade receivables that are neither past due nor impaired.
			Trade receivables are non-interest-bearing and the payment terms are 30 days after the end of the month in which the goods were delivered.
			As at 30 June 2013, trade receivables of an initial value of R3,3 million (2012: R1.5 million) were impaired and fully provided for. See below for the movement in the provision for impairment of receivables.
1 539	1 325		Balance at the beginning of the year		317	317
2 555	214		Charge for the year		–	–
(785)	–		Impairment loss written off/Unused amounts reversed		–	–
3 309	1 539		Balance at the end of the year		317	317
		18.	Cash and short-term deposits
			Cash at bank earns interest at floating rates based on daily deposit rates. Short-term deposits are made for periods varying between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. At 30 June 2013, the Group had available R100 million (2012: R100 million) of unutilised committed borrowing facilities in respect of which all conditions precedent had been met.
			For the purpose of the consolidated cash flow statements, cash and short-term deposits comprise the following:
			Cash at bank and on hand
279	272		On hand
276 934	119 591		Outstanding deposits
28 275	216 815		Call loans and money market investments		5 499	33 534
412 574	374 792		Cash in banks		16 499	9 421
718 062	711 470		Total cash and short-term deposits		21 998	42 955

Group					Company
2013	2012				2013	2012
Number of shares	Number of shares				Number of shares	Number of shares
		19.	Share capital and share premium
			19.1	Ordinary shares
				Authorised
				2 billion (2012:2 billion) ordinary shares with a par value of 5 cents (2012: 5 cents) each
				Shares issued
179 111 867	179 111 867			Ordinary shares in issue at the beginning of the year	179 111 867	179 111 867
2 106 282	–			Issued on 3 June 2013	2 106 282	–
181 218 149	179 111 867			Ordinary shares in issue at the end of the year	181 218 149	179 111 867

2013 R’000	2012 R’000				2013 R’000	2012 R’000
				Ordinary share capital
9 061	8 955			181,2 million (2012: 179,1 million) ordinary shares of 5 cents (2012: 5 cents) each	9 061	8 955
				Ordinary share premium
713 263	674 635			Ordinary share premium on 181,2 million (2012: 179,1 million) ordinary shares	713 263	674 635
–	–			Share issue cost	–	–
722 324	683 590			Total ordinary share capital and ordinary share premium	722 324	683 590

Group					Company
2013	2012				2013	2012
Number of shares	Number of shares				Number of shares	Number of shares
			19.2	Preference shares
				Authorised
				100 million redeemable cumulative preference shares with a par value of 10 cents each
				Shares issued
89 442 022	89 442 022			Preference shares in issue at the beginning of the year	89 442 022	89 442 022
(89 442 022)	–			Redeemed on 3 June 2013	(89 442 022)	–
–	89 442 022			Preference shares in issue at the end of the year	–	89 442 022

2013 R’000	2012 R’000				2013 R’000	2012 R’000
				Preference share capital
–	8 944			Nil (2012: 89,4 million) preference shares at 10 cents each	–	8 944
				Preference share premium
708	251 146			Premium on NIL preference shares (2012: 89,4 million)	708	251 146
(478)	–			Transfer to other capital reserves	(478)	–
(230)	(230)			Share issue cost	(230)	(230)
–	259 860			Total preference share capital and premium	–	259 860
				Holders of preference shares were entitled to a preference dividend payable on a quarterly basis, calculated over the dividend period at 99% of Absa’s prime rate multiplied by the subscription price of the preference share. The preference shares were redeemed on 3 June 2013. The preference shares had no voting rights .

Group					Company
2013 R’000	2012 R’000				2013 R’000	2012 R’000
			19.3	Total issued ordinary and preference share capital
9 061	17 899			Total issued ordinary and preference share capital	9 061	17 899
–	(8 944)			Debt portion of preference share capital	–	(8 944)
9 061	8 955			Total ordinary share capital	9 061	8 955
713 263	925 551			Total ordinary and preference share premium	713 263	925 551
–	(250 438)			Total debt portion of preference share premium	–	(250 438)
713 263	675 113			Total share premium net of debt portion	713 263	675 113
				The total redeemable preference share capital and share premium are reflected as debt .
				Shares were issued as follows during the year
				Ordinary shares:
105	–			Ordinary shares of 0,5 cents (2012: Nil cents) each	105	–
38 629	–			Ordinary share premium of R18,34 (2012: R Nil) per share	38 629	–
38 734	–			Total ordinary share capital raised during the year	38 734	–
			19.4	Debt portion of preference share capital
–	(259 382)			Debt portion of preference shares	–	(259 382)

		20.	Other reserves
62 247	52 681		Share-based payments reserve		35 051	25 485
209 958	209 480		Other capital reserves		478	–
272 205	262 161				35 529	25 485
(8 147)	(7 875)		Foreign currency translation reserve
264 058	254 286		Total at the end of the year		35 529	25 485

notes to the Consolidated financial statementsfor the year ended 30 June 2013

11.

Property, plant and equipment

11.1

Freeholdsss land and buildings

11.2

Leasehold properties

11.3

Plant, equipment and vehicles

11.4

Total property, plant and equipment

12.

Investment properties

13.

Intangible assets

13.1

Goodwill

13.2

Trademarks, patents and customer lists

13.3

Software licences

13.4

Total intangible assets

14.

Other financial assets and financial liabilities

14.1

Other financial assets

14.2

Other financial liabilities

14.3

Fair value hierarchy

15.

Deferred taxation

16.

Inventories

17.

Trade and other receivables

18.

Cash and short-term deposits

19.

Share capital and share premium

19.1

Ordinary shares

19.2

Preference shares

19.3

Total issued ordinary and preference share capital

19.4

Debt portion of preference share capital

20.

Other reserves