notes to the Consolidated financial statementsfor the year ended 30 June 2015

2015 
R’000 		 2014 
R’000 		     2015 
R’000 		 2014 
R’000 
   

21 

foreign currency translation reserve

    
(2 314) (5 582)   Foreign currency translation reserve related to Clover Botswana and Clover West Africa    
GROUP     COMPANY
2015 
R’000 		 2014  R’000          2015 
R’000 		 2014 
R’000 
   

22 

Interest-bearing loans and borrowings

    
     

22.1 

Secured liabilities

    
900 000  650 000      (a) Secured by securitisation of trade debtors (refer to note 17). The first tranche of R250 million is repayable on 30 June 2016, and is charged a floating interest rate of 185 bps above 3 month Jibar. The second tranche of R400 million is repayable 30 June 2018, and is charged a fixed interest rate of 9,28%. The third tranche of R250 million is repayable on 30 June 2019, and is charged a floating interest rate of 160 bps above 3 month Jibar    
36 247  22 003      (b) Secured by plant and equipment with a book value of R31,9 million (2014: R30,5 million). Repayable in monthly instalments. Payments due within the next year are R5,1 million (2014: R11,4 million). Variable interest rate portion: 8,5% (2014: 6,05%). Maturity: between July 2014 and March 2022. Fixed interest rate portion 9,0% and 10,5% (2014: 9,0% and 10,5%)    
936 247  672 003     
Total secured liabilities
    
     

22.2 

Unsecured liabilities

    
688  3 348      (a) Unsecured loan from Merchant West, interest is charged at 6,96% (2014: 6.96%), and is repayable in quarterly instalments with a final payment on 1 October 2015     
1 938  6 476      (b) Bank overdraft    
          Repayable on demand. The full outstanding amount is repayable within one year
Variable interest rate: 9% – 9,25% (2014: 9,0%)		    
316 304  195 025      (c) Call loans    
          Variable interest rate: 6,75% – 7,8% (2014: 6,25% – 6,8%)    
318 930  204 849        Total unsecured liabilities    
1 255 177  876 852        Total secured and unsecured liabilities    
          Current portion transferred to current liabilities:    
254 646  9 646       
  • Secured liabilities
    
318 930  204 849       
  • Unsecured liabilities
    
573 576  214 495        Total current portion transferred to current liabilities    
681 601  662 357        Total non-current interest-bearing borrowings    
1 255 177  876 852        Total current and non-current interest-bearing loans and borrowings    
 
GROUP   COMPANY
2015  2014        2015  2014 
R’000  R’000        R’000  R’000 
   

23 

employee-related obligations

    
     

23.1 

Long-service bonus

    
        The projected-credit method is used for the calculation of the long-service bonus provision.
Payments are recognised as utilisations.		    
       
The determination of the long-service bonus is based on the following assumptions:
    
6 976  6 435      Active members    
6,8% 8,2%     Salary escalation ratio    
7,8% 9,0%     Discounting rate    
65  65      Normal retirement age    
26 376  28 909      Balance at the beginning of the year    
9 198  5 224      Amounts provided    
(10 706) (7 757)     Amounts utilised    
24 868  26 376     
Total long-service bonus provision
    
      Refer to note 33 for further detail on the long-service bonus provision .    
     

23.2 

Leave pay

    
        A provision for leave pay is recognised for the number of days leave due to employees at
30 June valued at a rate per day based on the basic salary of each employee at 30 June.
Leave payments and leave days taken are recognised as utilisations.		    
61 251  51 918      Balance at the beginning of the year    
10 413  15 609      Amounts provided    
(7 203) (6 276)     Amounts utilised    
64 461  61 251    Total leave pay provision    
     

23.3 

Total provisions

    
74 901  67 615      Long-term portion    
14 428  20 013      Short-term portion transferred to current liabilities    
89 329  87 628      Total long-term and short-term provisions    
GROUP       COMPANY
2015  2014        2015  2014 
R’000  R’000      R’000  R’000 
   

24 

Trade and other payables

    
1 072 019  1 000 205    Trade payables 8 392  9 883 
230 972  157 300    Other payables 1 335  1 359 
346  1 009    Interest payable 346  1 009 
48 507  32 511    Payable to joint ventures    
1 351 844  1 191 025   
Total trade and other payables
 10 073  12 251 
21 459  4 351    Non-current portion included in other payables transferred to non-current liabilities –  – 
1 330 385  1 186 674    Current portion 10 073  12 251 
1 351 844  1 191 025   
Total trade and other payables
 10 073  12 251 
    The terms for trade payables and other payables range from seven days after date of invoice to 45 days after month-end. Interest is payable on a monthly basis. Payables to joint ventures range from 30 days to 45 days after the end of the month in which the transaction took place.    
   

25 

Notes to the statement of cash flows

    
   

25.1 

Tax paid

    
33 877  (16 723)     Amount receivable/(due) at the beginning of the year 1 328  807 
(124 741) (36 717)     Taxation charged in statement of comprehensive income and other adjustments, excluding
deferred taxation		 (10 434) (10 652)
24 940  7 078      Taxation charged through statement of changes in equity, excluding deferred taxation    
(40 330) (33 877)     Amount (receivable)/due at the end of the year (2 157) (1 328)
(106 254) (80 239)    
Total tax paid
 (11 263) (11 173)
 
GROUP   COMPANY
2015  2014        2015  2014 
R’000  R’000        R’000  R’000 
   

26 

Pensions and other post-employment benefit plans

    
     

26.1 

Defined-benefit fund

    
9 277  15 613      Value of fund assets    
(4 452) (10 839)     Value of fund liabilities    
4 825  4 774      Net surplus (recognised in other receivables)    
       
Funding level
    
        All of the fund’s assets are indirectly invested in a quoted market by the utilisation of unit trusts.    
8,8% 9,0%     Expected rate of return    
8,8% 9,0%     Discount rate    
8,1% 8,2%     Future salary increases    
6,8  1,9      Expected average remaining working life in years    
        The fund is a defined-benefit fund and was actuarially valued on 30 June 2015. The actuarial method used in determining the cost of the retirement benefits is the same as those used in previous calculations. The assumptions regarding deaths, interest rates, salary increases, retirements, resignations and administration costs were all based on generally accepted standards for the industry.    
     

During the current financial year the Board of Clover and the Trustees of the Clover Pension fund approved the move of the Clover Pension fund to the Sanlam Umbrella fund, with effect from 1 July 2015. As part of this transfer, all defined benefit members will become defined contribution members. As per the fund rules the net surplus of the fund will be available to the Group to be utilised as a reduction of future company contributions towards the defined contribution pension fund. Accordingly a pre-payment asset was raised during the 2014 financial year for R4,8 million. The Group policy is still to fund any deficit in accordance with the Pension Fund Act of 1956 and published regulations issued by the Registrar of Financial Services from time to time.

The fund is subject to the same Act which requires an actuarial valuation every three years. Number of members on 30 June 2015: 4 (30 June 2014: 5).

The fund closed for new entrants on 1 July 1994.

    
     

26.2 

Defined-contribution funds

    
       
26.2.1 Clover SA pension fund
    
        This is a defined-contribution fund. The value of this fund determines the benefits which accrue to members. The Group has no obligation other than its normal contributions. Number of members on 30 June 2015: 1 102 (30 June 2014: 990).    
       
26.2.2 Clover SA provident fund
    
      This is a defined-contribution fund. The value of the fund determines the benefits which accrue to members. The Group has no obligation other than its normal contributions. Number of members on 30 June 2015:6 143 (2014: 5 415).    
     

26.3 

Amounts recognised in profit or loss

    
        Contributions for the Group for the current year:    
105  101      Defined-benefit fund    
34 985  32 008      Pension fund    
53 749  44 856      Provident fund    
88 839  76 965     
Total contributions recognised in profit or loss
    
GROUP   COMPANY
2015  2014        2015  2014 
R’000  R’000        R’000  R’000 
   

27 

Commitments and contingencies

    
       
27.1.1 Operating lease commitments – Group as lessee
    
        The Group entered into an outsourcing agreement whereby the Group is provided with distribution and milk collection vehicles. The Group also entered into commercial leases on motor vehicles and machinery. These leases have an average life of between three and ten years, with renewal options included on some of the contracts. There are no restrictions placed upon the lessee by entering into these lease contracts.    
       
Future minimum lease payments are as follows:
    
289 823  286 374      Within one year    
847 451  1 003 852      After one year but not more than five years    
535 302  1 450 868      More than five years    
1 672 576  2 741 094     
Total lease payments payable
    
       
27.1.2 Operating lease commitments – Group as lessor
    
        The Group has entered into commercial property leases on its investment property portfolio, consisting of the Group’s surplus offices and manufacturing buildings. These non-cancellable leases have remaining terms of between one and five years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions.    
       
Future minimum rentals receivable under non-cancellable operating leases as at 30 June 2015 are as follows:
    
7 609  2 993      Within one year    
8 607  9 387      After one year, but not more than five years    
16 216  12 380     
Total lease payments receivable
    
GROUP
2015 		       GROUP
2014 
Minimum payments Present
value of 
payments		       Minimum payments Present
value of 
payments
R’000  R’000        R’000  R’000 
       
27.1.3 Finance leases and hire purchase agreements
    
        The Group has finance leases and hire purchase contracts for various items of plant, machinery
and vehicles. These leases have no terms of renewal, purchase options or escalation clauses.		    
       
Future minimum lease payments with the present value of the net minimum lease payments
are as follows:
    
8 248  5 196      Within one year 14 195  12 752 
41 488  31 739      After one year but not more than five years 17 836  12 599 
49 736  36 935     
Total minimum lease payments
 32 031  25 351 
(12 801)       Less: Amounts representing finance charges (6 680)  
36 935  36 935     
Present value of minimum lease payments
 25 351  25 351 
 
GROUP         COMPANY
2015  2014          2015  2014 
R’000  R’000          R’000  R’000 
       
27.1.4 Capital commitments
    
146 225  286 966      Capital expenditure authorised and contracted for    
29 305  53 787      Capital expenditure authorised but not contracted for    
175 530  340 753     
Total capital commitments
    
        Commitments will be spent within the next three to four years. The capital expenditure will be funded from Group funds. Included in the prior year capital expenditure authorised and contracted for is R150 million for the acquisition of Dairybelle.    
GROUP       COMPANY
2015  2014          2015  2014 
R’000  R’000          R’000  R’000 
   

28 

Related party disclosure

    
    Transactions with related parties are made at market related prices. Outstanding balances at the year-end are unsecured. No interest is paid on current accounts. There have been no guarantees provided or received for any related party receivables or payables except for a sub-ordination agreement with Clover Namibia and Clover West Africa. During the year under review, additional impairment was raised on the loan from Clover SA to Clover West Africa of R5,9 million (2014: R9,1 million) and a reversal of the prior year impairments on the loan to Clover Namibia of R5,5 million (2014: R5,4 million – impairment). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.    
     

28.1 

With regard to operating activities with subsidiaries and joint ventures, the following transactions took place during the year:

    
        (a) Fees earned by CIL for services rendered to Group Companies    
          Clover SA – Subsidiary 49 369  45 892 
         
Total fees earned by CIL for services rendered to Group Companies
 49 369  45 892 
        (b) Amounts due to CIL from Group Companies    
          Clover SA – Subsidiary 502 298  401 925 
         
Total amounts due to CIL from Group Companies
 502 298  401 932 
        (c) CIL received the following dividends during the year from Group Companies    
          Clover SA – Subsidiary 50 000  45 000 
       
Total dividends received by CIL from Group Companies
 50 000  45 000 
     

28.2 

With regard to business done with Non-Executive Directors or legal entities that are related to them, the following transactions took place:

    
        Milk purchased from the following Non-executive Directors by Clover SA:    
–  2 009      MG Elliott (resigned 26 November 2013)    
–  20 078      JC Hendriks (Dr) (resigned 13 March 2014)    
118 495  92 409      WI Büchner    
42 870  31 527      NA Smith    
11 888  3 598      PR Griffin (appointed 13 March 2014)    
173 253  149 621     
Total milk purchased from Non-executive Directors
    
      Refer to note 32 for more information regarding compensation of Directors and key management personnel.    
     

28.3 

Loans advanced to Directors and senior management outstanding

    
        Executive Director    
13 019  14 238      JH Vorster 13 019  14 238 
       
Other Executives
    
2 625  2 573      JHF Botes (Dr) 2 625  2 573 
15 644  16 811     
Total
 15 644  16 811 
      Refer to note 17 for more details around the terms of the loans.    
 

29 

Financial instruments
The Group treasury function does not operate as a profit centre, but rather provides financial services to the divisions and Group companies, coordinates access to credit and loan facilities and manages the financial risks relating to the Group’s operations. The Group’s objective in using financial instruments is to reduce the uncertainty over future cash flows arising from movement in currency and interest rates. Currency and interest rate exposure is managed within Board-approved policies and guidelines which restrict the use of derivatives to the hedging of specific underlying currency and interest rate exposures.
 

29.1 

Financial risk management
    The Group has exposure to the following risks from its use of financial instruments:
– credit risk
– liquidity risk
– market risk: foreign currency, interest rate and share price risk

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk and the Group’s management of capital. Further quantitative disclosures are included throughout these consolidated and separate financial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Audit and Risk Committee, is responsible for developing and monitoring the Group’s risk management policies. The Committee reports regularly to the Board of Directors on its activities.

The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Audit and Risk Committee is assisted in its oversight role by Clover Risk Management, assisted by Deloitte Risk Management. Risk Management undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Committee.
   
a.
Credit risk management
      Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s receivables from customers and investment securities.

Credit risk primarily relates to potential exposure on bank and cash balances, investments, derivatives and trade receivables. The Group limits its exposure arising from money market and derivative instruments by only dealing with well-established financial institutions of high credit standing. The Group is exposed to credit risk in the form of trade receivables. The maximum exposure is the carrying amount as disclosed in note 29.5. Historically, Group bad debts have been negligible and the management of debtors payment terms have been very successful. Trade receivables comprise a large number of debtors, but with significant concentration in value on the country’s major retail and wholesale chains, credit is extended in terms of the Group’s credit policies. In the opinion of the Board there was no significant credit risk at year-end which had not been adequately provided for.

The Group limits its exposure to credit risk by only investing in reputable institutions with high credit ratings.

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group’s customer base, including the default risk of the industry and country in which customers operate, has less of an influence on credit risk. Approximately 79,5% (2014: 73,6%) of the Group’s credit sales is attributable to sales transactions with the major national chain stores of good credit standing. However, geographically there is no concentration of credit risk.

The responsibility for effective credit management rests with the Chief Financial Officer. The granting of credit is governed by a policy for the approval and authorisation levels for new credit applications and revision of credit limits.

The credit policy requires that each new customer is analysed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. Any variations in authorisation levels must be approved in terms of the credit policy. The review includes obtaining and evaluating trade references, bank codes, financial statements and trade history. Depending on the customer profile and credit limit required, further information on Directors and a credit bureau report will be obtained. With the exception of the major national chain stores, where credit risks are assessed as low, credit limits are established for each customer, which represents the maximum open amounts. Most of the Group’s customers have been transacting with the Group for many years and the Group has had a steady customer base. In monitoring customer credit risk, customers are grouped accordingly to their credit characteristics, including whether they are chain stores, general trade or wholesalers.

Additional credit is withheld from customers, excluding the major national chain stores, that have defaulted on their payments, until the situation has been resolved.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments. The main component of this allowance is a specific loss component that relates to individually significant exposures.

As a general rule, sureties must be obtained for all new accounts, unless the Group waives its rights in this regard, backed by a low credit risk assessment.
   
b.
Liquidity risk management
      Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions. Refer to note 29.4 for detailed analysis of liquidity exposure.

The Group manages liquidity risk by monitoring actual and budgeted cash flows and ensuring that adequate borrowing facilities are maintained.

The Group ensures that it has sufficient cash on demand to meet expected operational demands, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition the Group maintains the lines of credit as can be viewed in note 22.

The Group monitors the liquidity risk using a recurring liquidity planning tool. This tool considers the maturity of both its financial investments and financial assets and projected cash flows from operations.

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, finance leases, funding through securitisation of debtors book and hire purchase contracts.

The Group’s policy is that not more than 25% (2014: 25%) of long-term borrowings should mature in the next 12-month period. In less than one year, the Group’s long-term debt of 20,3% (2014: 1,5%) will mature at year-end based on the carrying value of borrowings reflected in the financial statements. Trade creditors form an important part of the short-term financing of the Group’s working capital. Careful management and control of trade creditors is applied to ensure maximum use of what is viewed as interest-free debt. The following guarantees were in place:
     
Guarantees 2015 
Rm 		 2014 
Rm 
Municipalities 15,60  15,29 
Other 0,42  0,35 
  16,02  15,64 
   
c.
Market risk management
      Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return of risk.

The Group buys and sells derivatives in the ordinary course of business in order to manage market risks. All such transactions are carried out within the guidelines set by the Risk Management Policy.
     
(i) Foreign currency risk management
  The Group is exposed to currency risk on sales and purchases that are denominated in a currency other than the respective functional currencies of Group entities. Currencies primarily exposed to from time to time are the Euro, US Dollar, Botswana Pula, British Pound and the Nigerian Naira. Certain exchange rate exposures are hedged through the use of forward exchange contracts. No forward exchange contracts were in place at year end.

The Group hedges amounts greater than R2 million (2014: R2 million) denominated in a foreign currency. Forward exchange contracts are used to hedge currency risk, when applicable, most with a maturity of less than one year from the reporting date. When necessary, forward exchange contracts are rolled over at maturity.

Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in exchange rates of the Euro, US Dollar and the Pula. The Group’s exposure to foreign currency changes for all other currencies is not material.
GROUP 2015        GROUP 2014 
Change 
in rate 		 Effect on 
profit 
before tax 
R’000 		 Effect on 
equity 
R’000 		       Change 
in rate 		 Effect on 
profit 
before tax 
R’000 		 Effect on 
equity 
R’000 
         
Foreign subsidiaries – equity
      
+10%        
Rand – strengthening
 +10%    
    (17 134)     Loss on Pulas     (13 078)
    5 066      Profit on Naira     4 472 
-10%        
Rand – weakening
 -10%    
    17 134      Profit on Pulas     13 078 
    (5 066)     Loss on Naira     (4 472)
(ii)
Interest rate risk management
  The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s interest-bearing loans and borrowings with fixed and variable rates. The risk is managed by maintaining an appropriate mix of fixed and floating rates.
 
GROUP 
2015 
R’000 		     GROUP 
2014 
R’000 
    At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:  
400 000    Fixed-rate instruments 416 755 
855 177    Variable-rate instruments 460 097 
1 255 177      876 852 
   
Interest rate sensitivity
  
    An increase/decrease of 100 basis points (2014: 100 basis points) in interest rates at the reporting date would have affected profit before taxation, by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for the prior year.  
   
Increase of 100 basis points
  
(8 552)   Decrease in profit before tax (4 601)
   
Decrease of 100 basis points
  
8 552    Increase in profit before tax 4 601 
   
(iii)
Share price risk management
  The Group is affected by the movement in its share price due to the share appreciation rights issued to management. The Group entered into forward share purchases to hedge 2 132 695 of the share appreciation right issued to management. Refer to note 14 for more detail.
 
   
Forward share purchases sensitivity
  
    An increase/decrease of 10 percent (2014: 10 percent) in the share price at the reporting date would have affected profit before taxation by the amounts shown below. This analysis assumes that all other variables remain constant.  
   
Increase of 10 percent in share price
  
3 754    Increase in profit before tax 3 585 
   
Decrease of 10 percent in share price
  
(3 754)   Decrease in profit before tax (3 585)
   
(iv) Fuel price risk management
  
    The Group is effected by the volatility of the diesel price. Its operating activities require the ongoing purchase of diesel for logistic purposes.  
    Based on an 11 month forecast about the required diesel supply, the Group hedged the purchase price of diesel using a futures contract linked to the Rand Ice Gas Oil Price. The Group hedged 18 150 000 litres of diesel, which is equivalent to 11 months diesel usage. The hedge commenced on 26 June 2015 and expires on 26 May 2016.  
   
Diesel hedge sensitivity
  
    An increase/decrease of 10 percent in the diesel price at the reporting date would have effected profit before taxation, by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for the prior year.  
   
Increase of 10 percent in diesel price
  
21 344    Increase in profit before tax – 
   
Decrease of 10 percent in diesel price
  
(21 344) Decrease in profit before tax – 
 

29.2 

Capital management

  
    Capital consists of ordinary share capital, as well as ordinary share premium.  
    A combination of retained earnings, senior debt, term asset finance, commodity finance and general banking facilities are used to fund the business. The bulk of the Group’s debtors forms part of a securitisation programme. This programme came into effect during 2001. Senior debt raised by the programme currently amounts to R900 million (2014: R650 million). The securitisation provides access to senior debt equal to 74,5% (2014: 74,5%) of the debtors’ book.  
  The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings. The Group’s target is to achieve a return on shareholders’ equity of at least 20% in the medium to long term. A return of 14,5% (2014: 8,6%) was achieved. In comparison the weighted average interest expense on interest-bearing borrowings was 7,8% (2014: 7,6%).  
 

29.3 

Fair value

  
    The carrying amount of financial assets and liabilities are a reasonable approximation of fair value due to the short-term maturities of these financial statements.  
    Long-term fixed-rate and variable-rate borrowings are evaluated by the Group based on parameters such as interest rates and repayment periods as at year-end, the carrying amounts of the borrowings are not materially different from the calculated fair value.  
 
GROUP
2015 		  
0-6 
months 
R’000 		 6-12 
months 
R’000 		 1-2 
years 
R’000 		 2-5 
years 
R’000 		 5 
years 
R’000 		 Total 
R’000 		    
           

29.4 

Liquidity risk profile
              Maturity profile of financial instruments
              The maturity profile of the financial instruments is summarised as follows for the Group:
             
Financial liabilities
3 812  3 732  7 502  23 455  11 235  49 736    Secured loans
37 212  36 903  557 851  437 323  –  1 069 289    Secured by securitisation of trade debtors
317 008  –  –  –  –  317 008    Unsecured loans
–  16 023  –  –  –  16 023    Guarantees
2 338  –  –  –  –  2 338    Bank overdrafts
598  2 118  2 670  –  –  5 386    Financial liabilities
1 284 506  45 878  10 730  10 730  –  1 351 844    Trade and other payables
1 645 474  104 654  578 753  471 508  11 235  2 811 624   
Total financial liabilities
               
GROUP
2015 		    
0-6 
months 
R’000 		 6-12 
months 
R’000 		 1-2 
years 
R’000 		 2-5 
years 
R’000 		 5 
years 
R’000 		 Total 
R’000 		    
             
Financial liabilities
6 058  5 320  1 899  7 531  7 831  28 639    Secured loans
28 207  27 850  307 768  474 443  –  838 268    Secured by securitisation of trade debtors
196 434  1 408  704  –  –  198 546    Unsecured loans
–  15 632  –  –  –  15 632    Guarantees
6 476  –  –  –  –  6 476    Bank overdrafts
1 140 089  46 585  4 351  –  –  1 191 025    Trade and other payables
1 377 264  96 795  314 722  481 974  7 831  2 278 586   
Total financial liabilities
              At 30 June 2015, the Group had available R30 million (2014: R120 million) of unutilised committed borrowing facilities in respect of which all conditions precedent had been met.
 
COMPANY
2015 		    
0-6 
months 
R’000 		 6-12 
months 
R’000 		 1-2 
years 
R’000 		 2-5 
years 
R’000 		 5 
years 
R’000 		 Total 
R’000 		    
              The maturity profile of the financial instruments is summarised as follows for the Company:
             
Financial liabilities
10 073  –  –  –  –  10 073    Trade and other payables
10 073  –  –  –  –  10 073   
Total financial liabilities
               
COMPANY
2014 		    
0-6 
months 
R’000 		 6-12 
months 
R’000 		 1-2 
years 
R’000 		 2-5 
years 
R’000 		 5 
years 
R’000 		 Total 
R’000 		    
             
Financial liabilities
12 251  –  –  –  –  12 251    Trade and other payables
12 251  –  –  –  –  12 251   
Total financial liabilities
               
GROUP     COMPANY
Carrying 
value 
2015 
R’000 		 Carrying 
value 
2014 
R’000 		       Carrying 
value 
2015 
R’000 		 Carrying 
value 
2014 
R’000 
     

29.5 

Credit risk

    
       
Exposure to credit risk
    
        The carrying amount of financial assets represents the maximum exposure to credit risk.    
       
Financial assets per class
    
1 137 640  870 514      Trade receivables –  – 
95 469  168 673      Other receivables 522 334  418 745 
475 436  653 889      Cash and short-term deposits 40 015  35 237 
1 708 545  1 693 076     
Total financial assets
 562 349  453 982 
       
Trade receivables
    
        The maximum exposure to credit risk for trade receivables at the reporting date by customer type was as follows:    
904 841  640 624      Retail chain stores    
68 246  71 987      Wholesale chain stores    
164 553  157 903      Industrial/Catering/General trade    
1 137 640  870 514     
Total
    
       
The ageing of trade receivables at the reporting date is as follows:
    
1 059 421  821 246      Neither past due not impaired    
56 454  40 324      Past due, but not impaired 0 – 30 days    
12 157  6 084      Past due but not impaired 31 – 120 days    
9 608  2 860      Past due but not impaired 120 days    
1 137 640  870 514     
Total
    
       
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
    
3 849  3 309      Balance at the beginning of the year    
–  2 428      Increases in impairments    
(1 324) (1 888)     Impairment loss written off    
2 525  3 849     
Balance at the end of the year
    
        The allowance accounts in respect of trade receivables are used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible; at that point the amount considered irrecoverable is written off against the financial asset directly.    
        The impairment loss written off relates to customers defaulting on payments and being handed over to lawyers for recovery.    
             
GROUP   COMPANY
2015 
R’000 		 2014 
R’000 		   2015 
R’000 		 2014 
R’000 
   

30 

Investment in subsidiary and joint venture

    
      Investment in subsidiary company    
      Clover SA 326 735  326 735 
      Share-based payment investment in Clover SA 8 084  26 551 
     
Total investment in subsidiary
 334 819  353 286 
     
Share of investment in a joint venture
    
(253) –    Clover Futurelife    
31 878  35 066    Clover Fonterra    
31 625  35 066         
Subsidiary and joint venture   Effective interest 
in capital		 Gross investment
in subsidiaries and joint ventures1 		 Profit/(loss)
after taxation3 
Name of company Country of
incorporation		 Nature of business 2015 
%		 2014 
%		 2015 
R’000 		 2014 
R’000 		 2015 
R’000 		 2014 
R’000 
Clover SA2  South Africa Dairy manufacturing, distribution, sales 100  100  334 818  353 286  282 443  97 405 
Real Beverage Company South Africa Manufacturing and sales of fruit juices 100  100  361 458  190 642  (3 231) 12 581 
Clover Botswana Botswana Dairy manufacturing, distribution, sales 100  100  23 111  23 111  39 488  41 892 
Clover MilkyWay South Africa Dairy manufacturing and sales 100  –  50 050  –  615  – 
Clover Swaziland Swaziland Distribution and sales of dairy products in Swaziland 100  100  1  1  561  1 964 
Lactolab South Africa Testing of dairy products 100  52  5 500  * 1 317  1 935 
Clover Fonterra# South Africa Marketing, selling and distribution of dairy and related ingredient products 51  51  31 878  35 066  11 192  14 306 
Clover West Africa Nigeria Marketing of non-alcoholic beverage products 100  100  468  468  (8 139) (7 871)
Clover Namibia Namibia Distribution and sales of dairy products in Namibia 100  100  * * 5 641  (4 169)
Clover Waters South Africa Marketing, sales, distribution and production of water and Iced Tea 70  70  69 392  34 997  (15 939) 4 811 
Clover Futurelife$# South Africa Manufactures, distributes, sells and markets a range of functional food products 50  50  (253) –  (253) – 
# Joint venture.
* Amounts less than R1 000.
$ The company has not yet commenced trading.
1 Held by Clover SA.
2 Held by CIL.
3 Before inter company eliminations.
GROUP   COMPANY
2015 
R’000 		 2014 
R’000 		 2015 
R’000 		 2014 
R’000 
   

Lactolab

    
    With effect 1 July 2014 Clover SA bought the remaining 48% issued ordinary shares of Lactolab from Taurus Stock Improvement Co-operative Ltd for an amount of R5,5 million. Therefore, in the 2015 financial year, Clover SA held the entire equity stake in Lactolab and there was no non-controlling interest.    
   
Subsidiary’s statement of financial position
    
  3 541  Current assets including cash and cash equivalents R1,9 million and inventory
R0,3 million		    
  2 665  Non-current assets including property, plant and equipment R2,6 million    
  (1 462) Current liabilities including trade and other payables of R0,6 million    
  4 744  Equity (Net asset value)    
  52% Portion of the Group’s ownership    
  2 467  Net asset value of the investment    
   
Subsidiary’s revenue and profit
    
  9 358  Revenue    
  (2 012) Cost of sales    
  (4 259) Sales, marketing, distribution and administrative expenses    
  (325) Other operating income/(expenses)    
  (63) Net finance income/(cost)    
  2 699  Profit before taxation    
  (764) Income tax expense    
  1 935 
Profit for the year
    
  52% Portion of the Group’s ownership    
  1 006  Group’s share of profit for the year    
  1 040  Dividend received    
GROUP   COMPANY
2015 
R’000 		 2014 
R’000 		 2015 
R’000 		 2014 
R’000 
   

Clover Waters

    
   
Subsidiary’s statement of financial position
    
83 513  62 383  Current assets including cash and cash equivalents Rnil (2014: R11,5 million) and inventory R28,3 million (2014: R23,0 million)    
89 149  93 395  Non-current assets including property, plant and equipment R52,8 million (2014: R55,5 million)    
(5 887) (10 319) Non-current liabilities including deferred tax R3,9 million (2014: R10,3 million)    
(121 882) (84 626) Current liabilities including trade and other payables of R121,4 million (2014: R84,6 millions)    
44 893  60 833  Equity (Net asset value)    
70% 70% Portion of the Group’s ownership    
31 425  42 583  Net asset value of the investment    
   
Subsidiary’s revenue and profit
    
255 730  215 609  Revenue    
(174 730) (103 951) Cost of sales    
(85 231) (117 183) Sales, marketing, distribution and administrative expenses    
(14 578) 6 773  Other operating (expenses)/income    
(3 500) (2 629) Net finance cost    
(22 309) (1 381) Loss before taxation    
6 370  6 192  Income tax    
(15 939) 4 811 
(Loss)/profit for the year
    
70% 70% Portion of the Group’s ownership    
(11 157) 3 368  Group’s share of (loss)/profit for the year    
–  –  Dividend received    

Refer to note 4 for the joint ventures namely Clover Fonterra Ingredients and Clover Futurelife.