RCL FOODS LIMITED...CORPORATE INFORMATION AND ADVISORS Company secretary and registered office JMJ...

The definitions and interpretations commencing on page 6 of this Circular apply to this Circular including this cover page.

RCL FOODS LIMITEDPreviously known as Rainbow Chicken LimitedIncorporated in the Republic of South Africa(Registration number 1966/004972/06)Share Code: RCL ISIN: ZAE000179438(“RCL Foods” or the “Company”)

Circular to RCL Foods Shareholders regarding the proposed:• acquisition by RCL Foods of the entire issued share capital of TSB Sugar RSA and

TSB Sugar International from TSB Sugar Holdings and the issue of 230 946 882 RCL Foods Shares to TSB Sugar Holdings as consideration for the TSB Acquisition;

• issue of 6 928 406 RCL Foods Shares to TSB BEE Co pursuant to the TSB BEE Transaction;

• restructure of the Current RCL Foods BEE Structure involving the participation of the RCL Foods Strategic Partners and the ESOP Trust, and in relation thereto:– the unwinding of the Current RCL Foods BEE Structure through a specific repurchase

of 51 177 217 RCL Foods Shares held by Eagle Creek;– the issue of 63 830 231 RCL Foods Shares pursuant to the New RCL Foods BEE

Transaction;

• Equity Capital Raising in an amount of up to R2 500 000 000 to be implemented by way of: (i) the Pro Rata Offer of 74 214 642 RCL Foods Shares to Qualifying RCL Foods Minority Shareholders in the ratio of 53.10646 Pro Rata Offer Shares for every 100 RCL Foods Shares held on the Record Date and (ii) the Placement; and

• increase in the number of the Company’s authorised Shares and the corresponding amendment to the Company’s M OI;

and including:

• Revised Listing Particulars;

• the notice of General Meeting;

• a form of proxy (blue) (for use by Certificated Shareholders and Dematerialised Shareholders with “own name” registration only); and

• a Form of Acceptance (where applicable).

The distribution of the Circular or the making of the Pro Rata Offer in certain jurisdictions other than South Africa may be restricted by law and a failure to comply with any of those restrictions may constitute a violation of the securities laws of any such jurisdictions. Refer to Section C, paragraph 2.2.9 of the Circular for further details.

Date of issue: 12 December 2013

Reporting Accountants and Auditors

Financial advisor and sponsor to RCL Foods

Attorneys to RCL Foods

Independent Expert Attorneys to TSB Sugar Holdings

CORPORATE INFORMATION AND ADVISORS

Company secretary and registered office

JMJ MaherRCL Foods LimitedSix The BoulevardWestway Office ParkWestville, 3629(PO Box 2734, Westway Office Park, 3635)

Attorneys to RCL Foods

Cliffe Dekker Hofmeyr Inc.(Registration number 2008/018923/21)1 Protea PlaceSandton, 2196(Private Bag X7, Benmore, 2010)

Transfer Secretary

Computershare Investor ServicesProprietary Limited(Registration number 2004/003647/07)70 Marshall StreetJohannesburg, 2001(PO Box 61051, Marshalltown, 2107)

Financial advisor and sponsor to RCL Foods

Rand Merchant Bank(A division of FirstRand Bank Limited)(Registration number 1929/001225/06)1 Merchant PlaceCorner Fredman Drive and Rivonia RoadSandton, 2196(PO Box 786273, Sandton, 2146)

Date of incorporation of RCL Foods

17 June 1966

Place of incorporation of RCL Foods

South Africa

The Circular is available in English only. Copies may be obtained from the registered offices of the Company, the Transfer Secretary and Rand Merchant Bank at the addresses set out in the “Corporate Information and Advisors” section of the Circular from Thursday, 12 December 2013 until Thursday, 16 January 2014, both days inclusive.

Independent Expert

Deloitte & Touche(Practice number 902276)Deloitte Place, Building 6The Woodlands 20 Woodlands DriveWoodmeadSandton, 2196(Private Bag X 6, Gallo Manor, 2052)

Reporting Accountants and Auditors

PricewaterhouseCoopers Inc.(Registration number 1998/012055/21)102 Stephen Dlamini RoadBerea, 4001(PO Box 1049, Durban, 4000)

Attorneys to TSB Sugar Holdings

Webber Wentzel10 Fricker RoadIllovo BoulevardJohannesburg, 2196(PO Box 61771, Marshalltown, 2107)

Holding company of RCL Foods

Remgro Limited(Registration number 1968/006415/06)Millennia Park16 Stellentia AvenueStellenbosch, 7600(PO Box 456, Stellenbosch, 7599)

TSB Sugar Holdings, TSB Sugar RSA and TSB Sugar International

TSB Mill OfficeMhlati FarmMalalane, 1320(PO Box 47, Malalane, 1320)

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ACTION REQUIRED BY SHAREHOLDERS

Th e Circular incorporates Revised Listing Particulars and is issued in compliance with the Listings Requirements, for the purpose of providing information regarding the Company. Unless otherwise apparent from the context, the definitions and interpretations commencing on page 6 of the Circular apply to this section and throughout th e Circular.

TH E CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to what action to take, please consult your Broker, CSDP, banker, attorney, accountant or other professional advisor immediately. If you have disposed of all your RCL Foods Shares, please forward th e Circular to the person to whom you disposed of such Shares or to the Broker, CSDP, banker or other agent through whom you disposed of such Shares.

1. PLEASE TAKE NOTE OF THE FOLLOWING PROVISIONS REGARDING THE ACTION REQUIRED BY SHAREHOLDERS IN RESPECT OF THE GENERAL MEETING:

A General Meeting of RCL Foods Shareholders will be held at the Company’s registered office, Six The Boulevard, Westway Office Park, Westville, Durban at 13:30 on Thursday, 16 January 2014 for the purpose of considering and, if deemed fit, passing, with or without modification, the ordinary and special resolutions set out in the attached notice of General Meeting.

1.1 If you are a Dematerialised Shareholder without “own name” registration:

Voting at the General Meeting

Your CSDP or Broker should contact you to ascertain how you wish to cast your vote at the General Meeting and thereafter cast your vote in accordance with your instructions.

If you have not been contacted, it would be advisable for you to contact your CSDP or Broker and furnish it with your voting instructions.

If your CSDP or Broker does not obtain voting instructions from you, it will be obliged to vote in accordance with the instructions (if any) contained in the agreement concluded between you and your CSDP or Broker.

You must not complete the attached form of proxy (blue).

Attendance and representation at the General Meeting

In accordance with the agreement between you and your CSDP or Broker, you must advise your CSDP or Broker if you wish to attend the General Meeting in person and your CSDP or Broker will issue the necessary letter of representation in order to enable you to attend the General Meeting.

1.2 If you are a Certificated Shareholder or a Dematerialised Shareholder with “ own name” registration:

Voting, attendance and representation at the General Meeting

You may attend and vote at the General Meeting in person.

Alternatively, you may appoint a proxy to represent you at the General Meeting by completing the attached form of proxy (blue) in accordance with the instructions contained therein, which form must be delivered or posted to the Transfer Secretary so as to be received by no later than 1 3: 30 on Tuesday, 14 January 2014 . Any form of proxy not delivered to the Transfer Secretary by this time may be handed to the chairperson of the General Meeting at any time before the appointed proxy exercises any of your Shareholder’s rights at the General Meeting.

2. PLEASE TAKE NOTE OF THE FOLLOWING PROVISIONS REGARDING THE ACTION REQUIRED BY SHAREHOLDERS IN RESPECT OF THE PRO RATA OFFER:

2.1 If you are a Qualifying Dematerialised Shareholder:

You will not receive a Form of Acceptance and you should receive notification from your CSDP or Broker regarding your right to subscribe for Pro Rata Offer Shares in accordance with your Entitlements.

You will be required to notify your CSDP or Broker whether you wish to subscribe for Pro Rata Offer Shares and if so, the number of Pro Rata Offer Shares for which you wish to subscribe. If you wish to subscribe for all or some of the Pro Rata Offer Shares to which you are entitled, you will be required to notify your CSDP or Broker of your acceptance of the Pro Rata Offer in the manner and

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within the time stipulated in the agreement governing the relationship between you and your CSDP or Broker. If you are not contacted, you should contact your CSDP or Broker and provide them with your instructions. If your CSDP or Broker does not obtain instructions from you, it is obliged to act in terms of the mandate granted to them by you, or if the mandate is silent in this regard, it shall not subscribe for Pro Rata Offer Shares on your behalf in terms of the Pro Rata Offer and your Entitlements will lapse. RCL Foods does not accept responsibility and will not be held liable for any failure on the part of your CSDP or Broker to notify you of the Pro Rata Offer and/or to obtain instructions from you to subscribe for Pro Rata Offer Shares.

CSDPs effect payment in respect of Dematerialised Shareholders on a delivery versus payment basis. You must ensure that you have sufficient funds in your account to settle the aggregate Pro Rata Offer Subscription Price payable in respect of the Pro Rata Offer Shares for which you wish to subscribe.

Applications for excess Pro Rata Offer Shares will not be permitted.

If you do not wish to subscribe for all or some of the Pro Rata Offer Shares to which you are entitled, you will not be entitled to sell or renounce such Pro Rata Offer Shares and your Entitlements will lapse.

2.2 If you are a Qualifying Certificated Shareholder:

A Form of Acceptance is enclosed with th e Circular, and the relevant procedure for participation in the Pro Rata Offer is set out below .

If you wish to subscribe for all or some of the Pro Rata Offer Shares to which you are entitled, you must complete the enclosed Form of Acceptance in accordance with the instructions contained therein and deliver it to the Transfer Secretary, to be received by the Transfer Secretary (at the physical or postal address or at the fax number or e-mail address set out below), together with a bank-guaranteed cheque, a bankers’ draft or an electronic funds transfer into the designated bank account (refer to Section C , paragraph 2.2.5.1 for further details) for the aggregate Pro Rata Offer Subscription Price payable in respect of the Pro Rata Offer Shares for which you wish to subscribe.

By hand or courier: By post:

RCL Foods Limited – Pro Rata Offer RCL Foods Limited – Pro Rata OfferC/o Computershare Investor Services C/o Computershare Investor ServicesProprietary Limited Proprietary Limited70 Marshall Street PO Box 61763Johannesburg 2001 Marshalltown 2107

By fax By email

+27 11 688 5210 [email protected]

To the extent that you subscribe for Pro Rata Offer Shares, you will receive such Pro Rata Offer Shares in certificated form. You will only be able to sell your Pro Rata Offer Shares on the JSE once such Pro Rata Offer Shares have been Dematerialised.

If the required documentation and payment have not been received by the Transfer Secretary in accordance with the instructions contained in the Circular and the Form of Acceptance by 12: 00 on Tuesday, 4 February 2014 , then your right to subscribe for Pro Rata Offer Shares in accordance with the Entitlements will be deemed to have been declined and your Entitlements will lapse.


If you do not wish to subscribe for all or some of the Pro Rata Offer Shares to which you are entitled, you will not be entitled to sell or renounce such Pro Rata Offer Shares and your Entitlements will lapse.

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TABLE OF CONTENTS

Page

CORPORATE INFORMATION AND ADVISORS Inside front cover

ACTION REQUIRED BY SHAREHOLDERS 1

SALIENT DATES AND TIMES 5

DEFINITIONS AND INTERPRETATIONS 6

CIRCULAR TO RCL FOODS SHAREHOLDERS

1. Introduction 1 8 2. Rationale 1 9 3. Purpose of the Circular 204. General Meeting 20

A. INFORMATION RELATING TO THE TSB TRANSACTIONS 2 11. Information on the Ancillary Transaction 2 12. Rationale for the TSB Acquisition 2 13. Information on TSB Sugar Holdings 2 24. Information on the TSB Acquisition 2 35. Information on the TSB BEE Transaction 2 4

B. INFORMATION RELATING TO THE RCL FOODS BEE TRANSACTIONS 2 81. Details of the Specific Repurchase and unwinding of the Current RCL Foods BEE Structure 2 82. Details of the New RCL Foods BEE Transaction 2 8 3. ESOP Trust salient features 3 3 4. SPV 2 salient features 34 5. Estimated costs 34 6. Specific authority to issue the RCL Foods BEE Shares and to provide financial assistance to

the RCL Foods BEE Vehicles 35

C. INFORMATION RELATING TO THE PROPOSED EQUITY CAPITAL RAISING 3 61. Introduction and rationale 3 6 2. Pro Rata Offer 3 6 3. Placement 4 3

D. FINANCIAL INFORMATION RELATING TO THE TSB TRANSACTIONS AND THE RCL FOODS BEE TRANSACTIONS 4 4

1. Adequacy of capital 4 42. Pro forma financial information 4 43. Transaction costs 4 6

E. COMPANY INFORMATION 4 71. Background information 4 72. Financial information 4 83. Information on the Directors and executive management 4 84. Information on the Share Capital of the RCL Foods Group 5 55. Major Shareholders 6 16. Advisors’ interests 6 17. Additional information 6 18. Material acquisitions and disposals 6 19. Material change 6 210. History of changes 6 2

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Page

11. Promoters 6 212. Material contracts 6 213. Corporate Governance 6 314. Litigation statement 6 315. Third party management under contract or arrangement 6 416. Related parties 6 417. Directors’ responsibility statement 6 418. Consents 6 419. Documents available for inspection 6 4

ANNEXURE 1(a) Fairness opinion on the Related Party Acquisition 6 5

ANNEXURE 1(b) Independent Expert’s report on the Proposed Specific Repurchase 6 9

ANNEXURE 2 Pro forma statement of financial position and pro forma income statement 7 3

ANNEXURE 3 Independent Reporting Accountants’ Assurance Report 7 8

ANNEXURE 4 Trading history of RCL Foods Shares on the JSE 80

ANNEXURE 5 Historical financial information of TSB Sugar Holdings 8 2

ANNEXURE 6 Independent Reporting Accountants’ Audit Report on the Consolidated Historical Financial Information of TSB Sugar Holdings 1 5 7

ANNEXURE 7 Historical financial information of RCL Foods 1 59

ANNEXURE 8 Material liabilities and commitments – RCL Foods 22 1

ANNEXURE 9 Material liabilities and commitments – TSB Sugar Holdings 22 3

ANNEXURE 10 Information on the Directors and executive management of RCL Foods and its major subsidiaries 22 5

ANNEXURE 11 Extracts from the RCL Foods MOI relating to the Directors 2 3 8

ANNEXURE 12 Investments in subsidiaries 24 1

ANNEXURE 13 Principal immovable properties owned or leased 243

ANNEXURE 14 Corporate Governance 244

ANNEXURE 15 Table of Entitlement 262

ANNEXURE 16 Foodcorp vendor details 264

Notice of General Meeting 265

Form of proxy (blue) Attached

Form of Acceptance Enclosed (where applicable)

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SALIENT DATES AND TIMES

2013

Record date to determine which RCL Foods Shareholders are entitled to receive the Circular on Friday, 6 December

Circular posted to RCL Foods Shareholders on or about Thursday, 12 December

2014

Last day to trade in RCL Foods Shares in order to be recorded in the Register in order to participate in and vote at the General Meeting on Friday, 3 January

Record date to be entitled to participate in and vote at the General Meeting on Friday, 10 January

Last day to submit forms of proxy in respect of the General Meeting to the Transfer Secretary by 1 3: 30 on Tuesday, 14 January

General Meeting to be held at the Company’s registered office, Six The Boulevard, Westway Office Park, Westville, Durban at 13:30 on Thursday, 16 January

Results of the General Meeting to be released on SENS on Thursday, 16 January

Results of the General Meeting to be published in the press on Friday, 17 January

Finalisation date for the Pro Rata Offer on Friday, 17 January

Expected date for issue and listing of the TSB Consideration Shares on or around Friday, 17 January

Expected date for implementation of the Specific Repurchase and the delisting of the Current RCL Foods BEE Shares on Monday, 20 January

Last day to trade in RCL Foods Shares in order to participate in the Pro Rata Offer on Friday, 24 January

RCL Foods Shares trade ex-Entitlements on Monday, 27 January

Record Date at 17:00 on Friday, 31 January

For Qualifying Certificated Shareholders wishing to subscribe for Pro Rata Offer Shares, payment to be made and Forms of A cceptance to be delivered to the Transfer Secretary by 12 :00 on Tuesday, 4 February

Pro Rata Offer closes at 1 2 :00 on Tuesday, 4 February

Expected issue and listing of Pro Rata Offer Shares on Monday, 10 February

CSDP or Broker accounts in respect of Qualifying Dematerialised Shareholders debited with the aggregate Pro Rata Offer Subscription Price due in terms of the Pro Rata Offer and credited with Pro Rata Offer Shares, and Share certificates in respect of the Pro Rata Offer Shares posted to Qualifying Certificated Shareholders on or about Monday, 10 February

Expected issue and listing of TSB BEE Shares on or around Monday, 31 March

Expected issue and listing of RCL Foods BEE Shares on or around Monday, 31 March

Notes:

1. The abovementioned times are South African times and dates and are subject to change. Any such change will be released on SENS and published in the South African press.

2. Any form of proxy not delivered to the Transfer Secretary by the stipulated time may be handed to the chairperson of the General Meeting any time before the appointed proxy exercises any of the Shareholder rights at the General Meeting.

3. RCL Foods Shares may not be Dematerialised or rematerialised between Monday, 27 January 2014 and Friday, 31 January 2014 , both days inclusive.

4. Qualifying Dematerialised Shareholders are required to notify their duly appointed CSDPs or Brokers of their acceptance of the Pro Rat a Offer Shares in the manner and within the time stipulated in the agreement governing the relationship between the them and their CSDPs or Brokers.

5. The CSDP or Broker accounts of Qualifying Dematerialised Shareholders will be automatically credited with Pro Rata Offer Shares to the extent to which they have accepted the Pro Rata Offer.

6. CSDP s effect payment in respect of Qualifying Dematerialised Shareholders on a delivery versus payment basis .

7. If applicable, share certificates will be posted, by registered post, to Qualifying Certificated Shareholders at their own risk in respect of the Pro Rat a Offer Shares which have been subscribed for.

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DEFINITIONS AND INTERPRETATIONS

Throughout th e Circular, unless the context indicates otherwise, the words in the column on the left below shall have the meaning stated opposite them in the column on the right below, reference to the singular shall include the plural and vice versa, words denoting one gender include the other, and words and expressions denoting natural persons include juristic persons and associations of persons:

“Ancillary Transaction” the internal re-organisation and restructur ing of Remgro’s investment in RCL Foods and TSB Sugar Holdings, as more fully described in Section A, paragraph 1 of the Circular;

“Announcement Date” 21 November 2013;

“Authorised Dealer” a person authorised to deal in foreign exchange as contemplated in the Exchange Control Regulations;

“BBBEE Act” Broad-Based Black Economic Empowerment Act, No. 53 of 2003, as amended;

“BEE” black economic empowerment as contemplated in the BBBEE Act;

“BEE Codes” the Codes of Good Practice on BBBEE as contemplated in section 9 of the BBBEE Act;

“Black People” shall have the meaning ascribed thereto in th e BBBEE Act as read together with the BEE Codes and “Black Person” shall have a corresponding meaning;

“BlueBay” BlueBay Asset Management LLP, a limited liability partnership incorporated under the laws of England and Wales with registered number OC370085 and whose registered office is 77 Grosvenor Street, London W1K 3JR, United Kingdom;

“BlueBay Funds” collectively, the following UK -based funds: BlueBay High Yield Bond Fund; BlueBay Structured Funds; High Yield Enhanced Fund; BlueBay Specialised Funds; Credit Opportunity (Master) Fund; BlueBay Funds – BlueBay High Yield Corporate Bond Fund; The BlueBay Distressed Opportunities (Master) Fund Limited; BlueBay Funds – BlueBay High Yield Bond Fund and BlueBay Structured Funds – High Yield Institutional Credit Select Fund;

“Board” or “Directors “ the board of directors of RCL Foods, which, as at the Last Practicable Date, is comprised of the persons whose names appear on page 1 8 of the Circular;

“Booker Tate” Booker Tate Holdings Limited, registration number 4048624, a company duly incorporated and registered with limited liability in accordance with the laws of England and Wales, being a wholly-owned subsidiary of TSB Sugar International;

“Broker” a “stockbroker” as defined in the Financial Markets Act;

“Business Day” any day other than Saturday, Sunday or any official public holiday in South Africa;

“Capitau Holdings” Capitau Holdings Limited, registration number 2006/030178/06, a public company duly incorporated and registered with limited liability in accordance with the laws of South Africa;

“Capitau Investment Management” Capitau Investment Management Limited, registration number 2006/030161/06, a public company duly incorporated and registered with limited liability in accordance with the laws of South Africa;

“Capitau Partnership” Capitau Investment Management, in its capacity as the general partner of Capitau SA Partnership, an en commandite partnership established in South Africa;

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“Capitau SPV” Capitau FC Investment Proprietary Limited (previously Iningi Investments 195 Proprietary Limited), registration number 2011/117650/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa;

“Certificated Shareholders” holders of Certificated Shares;

“Certificated Shares” RCL Foods Shares that have not been Dematerialised, and are represented by a share certificate;

“CIPC” Companies and Intellectual Property Commission;

“Circular” this document to RCL Foods Shareholders, dated 12 December 2013 including its annexures and incorporating the Revised Listing Particulars, a notice of General Meeting , a form of proxy (blue) and enclosing a Form of Acceptance (where applicable);

“Common Monetary Area” collectively, South Africa, the Republic of Namibia and the Kingdoms of Lesotho and Swaziland;

“Companies Act” Companies Act, No. 71 of 2008, as amended;

“CPIX” consumer price index excluding interest rates on mortgage bonds;

“CSDP” a “participant”, as defined in section 1 of the Financial Markets Act, being a person authorised by a licenced central securities depository to perform custody and administration services or settlement services or both in terms of the central depository rules;

“Current RCL Foods BEE Shares” the 51 177 217 (fifty one million one hundred and seventy seven thousand two hundred and seventeen) RCL Foods Shares issued to Eagle Creek pursuant to the Current RCL Foods BEE Structure;

“Current RCL Foods BEE Structure” the RCL Foods BEE ownership structure, approved by RCL Foods Shareholders in terms of a circular dated 25 February 2008, in terms of which Eagle Creek subscribed for the Current RCL Foods BEE Shares, which represented 15% (fifteen percent) of the issued RCL Foods Shares at the time;

“Dematerialisation” or “Dematerialised” the process by which securities which are evidenced by a certificate are converted to securities that are held in collective custody by a central securities depository or its nominee in a separate central securities account and are transferrable by entry without a certificate or written instrument;

“Dematerialised Shareholders” holders of Dematerialised RCL Foods Shares;

“Distribution” has the meaning set out in section 1 of the Companies Act;

“Eagle Creek” or “ECI” Eagle Creek Investments 620 (Proprietary) Limited, registration number 2006/030409/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, the issued shares in which are owned by the Rainbow Trust (42.7% (forty two point seven percent)) and the RCL Foods Strategic Partners (57.3% (fifty seven point three percent));

“Eagle Creek Preference Shares” 51 177 217 (fifty one million one hundred and seventy seven thousand two hundred and seventeen) cumulative redeemable preference shares of R0.01 (one cent) each in the share capital of Eagle Creek, subscribed for and held by RCL Foods pursuant to the Current RCL Foods BEE Structure;

“Employer Companies” RCL Foods and any other company, body corporate or other undertaking in South Africa which is or would be deemed to be a subsidiary or associate of RCL Foods in terms of the Listings Requirements;

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“Entitlements” RCL Foods Minority Shareholders’ entitlements to subscribe for Pro Rata Offer Shares in terms of the Pro Rata Offer, details of which entitlements are tabled in Annexure 15 and calculated in the ratio of 53.10646 (fifty three point one zero six four six) Pro Rata Offer Shares for every 100 (one hundred) RCL Foods Shares held on the Record Date;

“EPS” earnings per share;

“Equity Capital Raising” collectively the Pro Rata Offer and the Placement by RCL Foods with a view to raising additional capital in an amount of up to R2 500 000 000 (two billion five hundred million Rand);

“ESOP Trust” the RCL Employee Share Trust, Master’s reference number IT1264/2013 /(DBN) , a BEE trust created by RCL Foods for the benefit of all Qualifying Employees for purposes of the New RCL Foods BEE Transaction, or the trustees for the time being of the said trust, as the context may require;

“ESOP Trust Deed” the trust deed establishing and governing the ESOP Trust;

“Exchange Control Regulations” the Exchange Control Regulations, 1961, as amended, promulgated in terms of section 9 of the South African Currency and Exchanges Act, No. 9 of 1933, as amended;

“File” shall have the meaning ascribed to “file” in the Companies Act;

“Financial Markets Act” Financial Markets Act, No. 19 of 2012;

“Foodcorp” New Foodcorp Holdings (Proprietary) Limited, registration number 2009/022279/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, being a wholly -owned subsidiary of RCL Foods;

“Foodcorp Acquisition” the initial acquisition by RCL Foods on 15 May 2013 of an effective 64.2% (sixty four point two percent) of the issued Foodcorp Shares, and the subsequent acquisitions by RCL Foods of the remaining Foodcorp Shares held by minorities which resulted in Foodcorp becoming a wholly -owned subsidiary of RCL Foods;

“Foodcorp Shares” ordinary shares in Foodcorp having no par value;

“Form of Acceptance” a printed, personalised form of acceptance in respect of the Pro Rata Offer on which Qualifying Certificated Shareholders are entitled to subscribe for Pro Rata Offer Shares in accordance with their Entitlements;

“General Meeting” the general meeting of RCL Foods Shareholders to be held at the Company’s registered office, Six The Boulevard, Westway Office Park, Westville, Durban at 13:30 on Thursday, 16 January 2014 to consider and, if deemed appropriate, pass (with or without modification) the ordinary and special resolutions set out in the notice of General Meeting forming part of the Circular, and including any postponement or adjournment of such meeting;

“HEPS” headline earnings per share;

“HL&H” Hunt Leuchars & Hepburn Holdings (Proprietary) Limited, registration number 1924/001164/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, being an indirect wholly -owned subsidiary of Remgro;

“IFRS” International Financial Reporting Standards;

“IPI” Industrial Partnership Investments (Proprietary) Limited, registration number 1968/006415/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, being a wholly -owned subsidiary of Remgro;

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“Income Tax Act” the Income Tax Act, No . 58 of 1962, as amended;

“Independent Expert” or “Deloitte” Deloitte & Touche, a professional partnership established in accordance with the laws of South Africa with IRBA practice number 902276;

“JIBAR” Johannesburg Interbank Agreed Rate;

“JSE” the securities exchange operated by the JSE Limited;

“JSE Limited” JSE Limited, registration number 2005/022939/06 , a public company duly incorporated and registered with limited liability in accordance with the laws of South Africa, and licensed to operate an exchange in terms of the Financial Markets Act;

“King III Report” the King III Report on Corporate Governance for South Africa 2009;

“Last Practicable Date” Monday, 2 December 2013 , being the last practicable date prior to the finalisation of the Circular;

“Listings Requirements” the JSE Limited Listings Requirements, as amended;

“MAI” Massingir Agro Industrial SA, registration number 100333856, a public limited company incorporated in accordance with the company laws of Mozambique, being a wholly-owned subsidiary of TSB Sugar International;

“MOI” the memorandum of incorporation of RCL Foods adopted by Shareholders at the annual general meeting of RCL Foods Shareholders held on 20 November 2012;

“MTM Family Trust” the MTM Family Trust, Master’s reference number IT 8006/05, or the trustees of the said trust, as the context may require;

“ Net Asset Value Per Share” or “NAV Per Share”

net asset value per share;

“New RCL Foods BEE Transaction” the proposed BEE ownership transaction in terms of which the RCL Foods Strategic Partners and the ESOP Trust will collectively subscribe for the RCL Foods BEE Shares, which will collectively constitute 6.68% (six point six eight percent) (post -issuance) of the issued Shares of RCL Foods (prior to the Equity Capital Raising);

“Non-resident” a person whose normal place of residence, domicile or registration is outside of the Common Monetary Area;

“Participant” a Qualifying Employee who has been allocated Units in the ESOP Trust ;

“Participation Percentage” in respect of each Participant, the aggregate number of Units which have been allocated to and are held by that Participant, divided by the total number of Units which have been allocated and are held by all Participants, expressed as a percentage;

“Placement” the proposed placement of RCL Foods Shares to qualifying South African and international investors, as part of the Equity Capital Raising, details of which are set out in Section C , paragraph 3 of the Circular;

“Placement Shares ” the new RCL Foods Shares to be offered for subscription pursuant to the Placement;

“Placement Subscription Price” in respect of the Placement, the subscription price payable in respect of each Placement Share, to be determined in terms of an accelerated bookbuild price;

“Prime Rate” the publicly quoted basic rate of interest, compounded monthly in arrears and calculated on a 365 (three hundred and sixty five) day year, published by FirstRand Bank Limited as being its prime overdraft rate from time to time;

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“Project” the greenfield sugar cane development project to be developed by MAI, located in the Massingir District of Mozambique, c.310km from Maputo, the feasibility study for which is being conducted by TSB Sugar International and SIAL, as shareholders of MAI;

“Proposed RCL Foods Share Capital Increase”

the proposed increase in the number of authorised RCL Foods Shares from 1 000 000 000 (one billion) RCL Foods Shares to 2 000 000 000 (two billion) RCL Foods Shares by the creation of an additional 1 000 000 000 (one billion) RCL Foods Shares;

“Pro Rata Offer” the proposed pro rata offer by RCL Foods to RCL Foods Minority Shareholders in terms of which RCL Foods Minority Shareholders will be entitled to subscribe for Pro Rata Offer Shares in the ratio of 53.10646 (fifty three point one zero six four six) Pro Rata Offer Shares for every 100 (one hundred) RCL Foods Shares held on the Record Date, in order to enable RCL Foods Minority Shareholders to maintain their respective shareholding percentages in RCL Foods post implementation of the TSB Acquisition;

“Pro Rata Offer Shares ” a maximum of 74 214 642 (seventy four million two hundred and fourteen thousand six hundred and forty two) new RCL Foods Shares to be offered for subscription by RCL Foods pursuant to the Pro Rata Offer;

“Pro Rata Offer Subscription Price” in respect of the Pro Rata Offer, the subscription price payable in respect of each Pro Rata Offer Share, to be announced on the finalisation date for the Pro Rata Offer, which is expected to be Friday, 17 January 2014;

“Prospectus Directive” Directive 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading and Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market as amended by Directive 2010/73/EU of the European Parliament and of the council of 24 November 2010;

“Qualifying Certificated Shareholders” Qualifying RCL Foods Minority Shareholders who hold Certificated Shares;

“ Qualifying Dematerialised Shareholders”

Qualifying RCL Foods Minority Shareholders who hold Dematerialised Shares;

“Qualifying Employees” persons who are permanently employed by an Employer Company and who do not currently participate in any of RCL Foods’ other share incentive schemes, other than the Rainbow Trust;

“ Qualifying RCL Foods Minority Shareholders”

RCL Foods Shareholders entitled to participate in the Pro Rata Offer, being those RCL Foods Minority Shareholders that are recorded on the Register on the Record Date;

“Quality Sugars” Quality Sugars (Proprietary) Limited, registration number 2009/005469/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, being a 25% (twenty five per cent) held associate of The Royal Swaziland Sugar Corporation Limited (Swaziland) and 75% (seventy five per cent) held by TSB Sugar International;

“Rainbow Farms” or “Rainbow” Rainbow Farms Proprietary Limited, registration number 1960/002377/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, being a wholly -owned subsidiary of RCL Foods;

“Rainbow Trust” Rainbow Employee Trust, Master’s reference IT824/2008 /PMB , the employee share ownership trust established by the Company for purposes of the Current RCL Foods BEE Structure;

“Rand” or “R” or “ZAR” and “cents” South African Rand and cents, the official currency of South Africa;

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“Rand Merchant Bank” Rand Merchant Bank, a division of FirstRand Bank Limited, registration number 1929/001225/06, a public company duly incorporated and registered with limited liability in accordance with the laws of South Africa, and registered as a bank under the Banks Act, 1990;

“RCL Foods BEE Common Shares” 13 962 863 (thirteen million nine hundred and sixty two thousand eight hundred and sixty three) RCL Foods Shares to be issued to the ESOP Trust, and 5 984 084 (five million nine hundred and eighty four thousand and eighty four) RCL Foods Shares to be issued to SPV 2 in terms of the New RCL Foods BEE Transaction, at a subscription price of R17.32 (seventeen Rand and thirty two cents) per RCL Foods Share;

“ RCL Foods BEE Compulsory Subscription Right”

the right of RCL Foods to, at any time during the RCL Foods BEE Repurchase Option Period, require each relevant RCL Foods BEE Vehicle to subscribe for a number of RCL Foods Shares, if the RCL Foods BEE Notional Outstandings in respect of the RCL Foods BEE Nominal Shares held by that RCL Foods BEE Vehicle is not equal to zero at the end of the RCL Foods BEE Transaction Term, further details of which are set out in Section B , paragraph 2.1.2.1 of the Circular;

“RCL Foods BEE Implementation Date” the later of: (i) the 5th (fifth) Business Day following the date on which all of the conditions precedent to the RCL Foods BEE Relationship Agreement (further details of which are set out in Section B, paragraph 3 of the Circular) are fulfilled or waived, as the case may be, and (ii) if RCL Foods Shareholders authorise the Pro Rata Offer, the 1st (first) Monday following the date on which the Pro Rata Offer closes;

“RCL Foods BEE Nominal Shares” 30 718 299 (thirty million seven hundred and eighteen thousand two hundred and ninety nine) RCL Foods Shares to be issued to the ESOP Trust and 13 164 985 (thirteen million one hundred and sixty four thousand nine hundred and eighty five) RCL Foods Shares to be issued to SPV 2 in terms of the New RCL Foods BEE Transaction, at a nominal subscription price of R0.01 (one cent) per RCL Foods Share;

“RCL Foods BEE Notional Amount” the difference between the nominal subscription price paid in respect of an RCL Foods BEE Nominal Share and the VWAP per RCL Foods Share over the 30 (thirty) Business Days immediately preceding the date on which the RCL Foods BEE Subscription Agreements were executed, being an amount of R17.31 (seventeen Rand and thirty one cents) per RCL Foods BEE Nominal Share;

“ RCL Foods BEE Notional Outstandings”

the RCL Foods BEE Notional Amount as increased and accumulated with a notional interest rate equal to the Prime Rate from the RCL Foods BEE Implementation Date until the end of the RCL Foods BEE Transaction Term;

“RCL Foods BEE NVF” the notional vendor facilitation to be provided by the Company to the ESOP Trust and SPV 2 in order to facilitate the subscription for the RCL Foods BEE Nominal Shares pursuant to the New RCL Foods BEE Transaction;

“RCL Foods BEE Parties” collectively, the RCL Foods Strategic Partners and: (i) in relation to the Current RCL Foods BEE Structure, the beneficiaries of the Rainbow Trust and (ii) in relation to the New RCL Foods BEE Transaction, the beneficiaries of the ESOP Trust;

“ RCL Foods BEE Preference Share Subscription Agreements”

each of the agreements headed “Preference Share Subscription Agreement” entered into between RCL Foods on the one hand and each of SPV 1 and SPV 2 on the other, on 20 November 2013, in terms of which RCL Foods will subscribe for the SPV 1 Preference Shares and the SPV 2 Preference Shares, respectively, in order to fund the subscription for the RCL Foods BEE Common Shares pursuant to the New RCL Foods BEE Transaction;

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“RCL Foods BEE Preference Shares” the SPV 1 Preference Shares and the SPV 2 Preference Shares;

“ RCL Foods BEE Relationship Agreement”

the agreement headed “Relationship Agreement” entered into between RCL Foods, the ESOP Trust, SPV 1, SPV 2 and the RCL Foods Strategic Partners on 20 November 2013, in terms of which the relationship between the RCL Foods BEE Parties, the RCL Foods BEE Vehicles and RCL Foods and, in particular, the RCL Foods BEE NVF, shall be governed ;

“RCL Foods BEE Repurchase Option” the option held by RCL Foods to, at any time during the RCL Foods BEE Repurchase Option Period, repurchase from each relevant RCL Foods BEE Vehicle a number of the RCL Foods BEE Nominal Shares held by that RCL Foods BEE Vehicle, at a nominal amount, if the RCL Foods BEE Notional Outstandings in respect of the RCL Foods BEE Nominal Shares held by that RCL Foods BEE Vehicle is not equal to zero at the end of the RCL Foods BEE Transaction Term, further details of which are set out in Section B , paragraph 2.1.2.1 of the Circular;

“ RCL Foods BEE Repurchase Option Period”

the period commencing at the end of the RCL Foods BEE Transaction Term and ending on the 70th (seventieth) Business Day thereafter;

“RCL Foods BEE Shares” collectively, the RCL Foods BEE Common Shares and the RCL Foods BEE Nominal Shares;

“ RCL Foods BEE Subscription Agreements”

the agreements headed “Ordinary Share Subscription Agreement” entered into between RCL Foods and each of the ESOP Trust and SPV 2 on 20 November 2013, in terms of which the ESOP Trust and SPV 2 will subscribe for the RCL Foods BEE Shares;

“RCL Foods BEE Subscription Option” the option held by the relevant RCL Foods BEE Vehicles to, from time to time and for so long as the RCL Foods BEE Notional Amount in respect of the RCL Foods BEE Nominal Shares held by the relevant RCL Foods BEE Vehicle does not equal zero, subscribe for additional RCL Foods Shares in order to reduce the RCL Foods BEE Notional Outstandings further details of which are set out in Section B , paragraph 2.1.2 .1 of the Circular;

“ RCL Foods BEE Transaction Agreements”

collectively, the RCL Foods BEE Relationship Agreement; the RCL Foods BEE Subscription Agreements; the ESOP Trust Deed; the RCL Foods BEE Preference Share Subscription Agreements; the SPV 2 reversionary pledge and cession in security envisaged in Section B, paragraph 2.1.2.1.7 of the Circular ; the RCL Foods Strategic Partners pledge and cession in security envisaged in Section B, paragraph 2.1.2.1.8 of the Circular; the ESOP Trust guarantee and pledge and cession in security envisaged in Section B, paragraph 2.1.2.2.4 of the Circular; the SPV 1 cession in security of the SPV 1 bank account envisaged in Section B, paragraph 2.1.2.2.4 of the Circular; the SPV 2 pledge and cession in security and the SPV 2 cession in security of the SPV 2 bank account envisaged in Section B, paragraph 2.1.2.2.5 of the Circular, entered into on 20 November 2013;

“RCL Foods BEE Transactions” collectively, the Specific Repurchase and the New RCL Foods BEE Transaction;

“RCL Foods BEE Transaction Term” a period of 8 (eight) years commencing on the RCL Foods BEE Implementation Date;

“RCL Foods BEE Trigger Event” if at any time during the RCL Foods BEE Transaction Term: (i) an insolvency event occurs in respect of any of the RCL Foods BEE Vehicles or any of the RCL Foods Strategic Partners; or (ii) in the case of an RCL Foods Strategic Partner that is a natural person, that RCL Foods Strategic Partner dies or is placed under curatorship or (iii) any of the RCL Foods BEE Vehicles or any of the RCL Foods Strategic Partners breaches certain BEE principles applicable to it, as set out in the RCL Foods BEE Relationship Agreement;

“RCL Foods BEE Vehicles” the ESOP Trust, SPV 1 and SPV 2, or any one or more of them as the context may require;

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“RCL Foods Group” RCL Foods and all its subsidiaries and associates;

“RCL Foods Minority Shareholders” all RCL Foods Shareholders excluding IPI, TSB Sugar Holdings and ECI and, subject to certain exceptions, Restricted Shareholders;

“RCL Foods Shares” or “Shares” ordinary shares of no par value in RCL Foods;

“RCL Foods Strategic Partners” collectively, the following entities:

• in respect of the Current RCL Foods BEE Structure, Imbewu Consortium SPV 3 (Proprietary) Limited, registration number 2007/014778/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, and in respect of the New RCL Foods BEE Transaction, Imbewu SPV 8 Proprietary Limited, registration number 2012/191568/07, a private company duly incorporated and registered which will hold 69.76% (sixty nine point seven six percent) of the shares in SPV 2 with limited liability in accordance with the laws of South Africa; and

• the trustees for the time being of the Ikamva Labantu Empowerment Trust, Master’s reference number IT 4485/200 4, which will hold 29.07% (twenty nine point zero seven percent) of the shares in SPV 2;

• Mrs Manana Margaret Nhlanhla, identity number 5206090773084, who is a non-executive director of RCL Foods and a Black Person who will hold 1.17% (one point one seven per cent) of the shares in SPV 2 ;

“Record Date” the last day for RCL Foods Minority Shareholders to be recorded in the Register in order to participate in the Pro Rata Offer, being close of business on Friday, 31 January 2014 ;

“ Redemption and Repurchase Agreement”

the agreement headed “Preference Share Redemption and Share Repurchase Agreement” entered into between RCL Foods and Eagle Creek on 21 November 2013, in terms of which Eagle Creek agreed to redeem the Eagle Creek Preference Shares and RCL Foods agreed to repurchase the Current RCL Foods BEE Shares from Eagle Creek, in order to unwind the Current RCL Foods BEE Structure;

“Register” collectively, the register of Certificated Shareholders maintained by the Transfer Secretary and the sub-register of Dematerialised Shareholders maintained by the relevant CSDPs in accordance with section 50 of the Companies Act;

“Relevant Member State” each member state of the European Economic Area which has implemented the Prospectus Directive;

“Remgro” Remgro Limited, registration number 1968/006415/06, a public company duly incorporated and registered with limited liability in accordance with the laws of South Africa;

“Remgro Management Services” Remgro Management Services Limited, registration number 1969/001100/06, a public company duly incorporated and registered with limited liability in accordance with the laws of South Africa, being an indirect wholly-owned subsidiary of Remgro;

“Reporting Accountants and Auditors” PricewaterhouseCoopers Inc., registration number 1998/012055/21, registered accountants and auditors, a private company duly incorporated and registered with limited liabilityin accordance with the laws of South Africa, with IRBA practice number 901121;

“Restricted Shareholders” RCL Foods Minority Shareholders with registered addresses in, or who are resident or located in, a Restricted Territory;

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“Restricted Territories” subject to certain exceptions, the United Kingdom, the European Economic Area, Canada, the United States of America, Japan, Australia and Hong Kong and any other jurisdiction wherein the Pro Rata Offer Shares may not be offered, subscribed for or delivered, and where to do so may constitute a violation of local securities laws or regulations;

“Revised Listing Particulars” the revised listing particulars of RCL Foods contained in the Circular;

“SENS” the Stock Exchange News Service of the JSE;

“ Shareholders” or “RCL Foods Shareholders”

registered holders of RCL Foods Shares;

“SIAL” Sociedade de Investimentos Agroindustriais de Limpopo, SA (registration number 100276879 , a public limited company incorporated in accordance with the company laws of Mozambique and currently comprising a consortium of Mozambican investors and incorporated as the local Mozambican investors in the Project;

“South Africa” the Republic of South Africa;

“Specific Repurchase” the proposed specific repurchase of the Current RCL Foods BEE Shares by RCL Foods from ECI, at a repurchase price per Current RCL Foods BEE Share equal to the VWAP per RCL Foods Share over the 30 (thirty) trading days ending on the date on which the ECI Preference Shares are redeemed in terms of the Redemption and Repurchase Agreement;

“SPV 1” Business Ventures Investments No 1762 Proprietary Limited, registration number 2013/145414/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, which will be wholly-owned by the ESOP Trust;

“SPV 2” Business Ventures Investments No 1763 Proprietary Limited, registration number 2013/145777/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, which will be wholly- owned by the RCL Foods Strategic Partners;

“SPV 1 Preference Shares” 241 837 (two hundred and forty one thousand eight hundred and thirty seven) cumulative, redeemable preference shares in the authorised preference share capital of SPV 1 to be issued by SPV 1 to RCL Foods in order to fund a portion of the New RCL Foods BEE Transaction;

“SPV 2 Preference Shares” 103 645 (one hundred and three thousand six hundred and forty five) cumulative, redeemable preference shares in the issued preference share capital of SPV 2 to be issued by SPV 2 to RCL Foods in order to fund a portion of the New RCL Foods BEE Transaction;

“Strate” Strate Limited, registration number 1998/022242/06, a public company duly incorporated and registered with limited liability in accordance with the laws of South Africa, licensed to operate a central securities depositary in terms of the Financial Markets Act;

“ Tangible Net Asset Value Per Share” or “TNAV Per Share”

net asset value per RCL Foods Share excluding intangible assets and goodwill;

“Transfer Secretary” or “Computershare”

Computershare Investor Services (Proprietary) Limited, registration number 2004/003647/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa;

“TSB Acquisition” the acquisition by RCL Foods of the TSB Acquisition Shares from TSB Sugar Holdings in exchange for the issue of the TSB Consideration Shares in settlement of the TSB Acquisition Consideration;

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“TSB Acquisition Consideration” R4 000 000 000 (four billion Rand), being the aggregate purchase consideration for the TSB Acquisition Shares;

“TSB Acquisition Shares” collectively, 100 (one hundred) ordinary shares in TSB Sugar International held by TSB Sugar Holdings, constituting 100% (one hundred percent) of the total issued share capital of TSB Sugar International and 767 (seven hundred and sixty seven) ordinary shares in TSB Sugar RSA held by TSB Sugar Holdings, constituting 100% (one hundred percent) of the total issued share capital of TSB Sugar RSA;

“TSB BEE Exit Call Option” the right of RCL Foods to, at any time after the TSB BEE Release Date and for a period of 1 (one) calendar year thereafter, repurchase all or some of the TSB BEE Shares from TSB BEE Co further details of which are set out in Section A , paragraph 5. 5 of the Circular ;

“TSB BEE Co” Malongoana Investment RF Proprietary Limited, registration number 2013/030598/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, being a wholly -owned subsidiary of the MTM Family Trust;

“TSB BEE Implementation Date” the later of: (i) the 1st (first) Business Day after the date on which all of the conditions precedent to the TSB Sale of Shares Agreement (as set out in Section A, paragraph 5.8 of the Circular) are fulfilled or waived, as the case may be, and (ii) if RCL Foods Shareholders authorise the Pro Rata Offer, the 3rd (third) Business Day after the date on which the Pro Rata Offer closes;

“TSB BEE Maturity Call Option” the right of RCL Foods to, upon the expiry of the TSB BEE NVF Period, repurchase a number of the TSB BEE Shares from TSB BEE Co at a repurchase consideration of R0.01 (one cent) per TSB BEE Share, further details of which are set out in Section A paragraph 5. 5 of the Circular ;

“TSB BEE Notional Amount” R120 000 000 (one hundred and twenty million Rand);

“TSB BEE Notional Outstandings” the TSB BEE Notional Amount as increased and accumulated with a notional interest equal to the Prime Rate plus 1% (one percent) from 31 July 2013 and notionally reduced by any Distributions in respect of the TSB BEE Shares;

“TSB BEE NVF” the notional vendor facilitation to be provided by the Company to TSB BEE Co in order to facilitate the TSB BEE Transaction;

“TSB BEE NVF Period” the period commencing on 1 July 2013 and terminating on the 8th (eighth) anniversary thereof, being 1 July 2021;

“TSB BEE Pre-emptive Right” the right of RCL Foods to, in the event that TSB BEE Co wishes to dispose of a number of the TSB BEE Shares held by it to a third party, repurchase that number of TSB BEE Shares from TSB BEE Co, further details of which are set out in Section A , paragraph 5. 5 of the Circular ;

“TSB BEE Release Date” in respect of the TSB BEE Transaction, the earlier of: (i) the date on which the TSB BEE Notional Outstandings equal zero and (ii) the date of implementation of the TSB BEE Maturity Call Option or the TSB BEE Trigger Event Call Option;

“TSB BEE Shares” 6 928 406 (six million nine hundred and twenty eight thousand four hundred and six) RCL Foods Shares to be issued to TSB BEE Co in terms of the TSB BEE Transaction;

“ TSB BEE Subscription and Relationship Agreement”

the agreement headed “Subscription and Relationship Agreement” entered into between RCL Foods, the MTM Family Trust, Dr N M Phosa and TSB BEE Co on 21 November 2013, in terms of which, inter alia, TSB BEE Co agreed to subscribe for the TSB BEE Shares, as amended ;

“TSB BEE Transaction” the proposed TSB BEE transaction whereby TSB BEE Co will subscribe for the TSB BEE Shares;

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“TSB BEE Trigger Event” if at any time: (i) any of TSB BEE Co, the MTM Family Trust and/or Dr N M Phosa breaches any of the warranties and/or undertakings provided in the TSB BEE Subscription and Relationship Agreement; (ii) an insolvency event occurs in respect of TSB BEE Co or TSB BEE Co compromises with its creditors; (iii) any of TSB BEE Co or a director thereof, the MTM Family Trust or a trustee thereof, or Dr N M Phosa is found guilty of any offence involving theft or fraud or any serious violation of any legislation applicable to it (including the BBBEE Act and/or the BEE Codes ) , or (iv) Dr N M Phosa holds or seeks political office or a position in local or national government on behalf of any political party, as more fully set out in the TSB BEE Subscription and Relationship Agreement;

“TSB BEE Trigger Event Call Option” the right of RCL Foods to, in the event that a TSB BEE Trigger Event occurs, repurchase the TSB BEE Shares from TSB BEE Co at a discount, further details of which are set out in Section A , paragraph 5. 5 of the Circular ;

“TSB Consideration Shares” 230 946 882 (two hundred and thirty million nine hundred and forty six thousand eight hundred and eighty two) RCL Foods Shares to be issued by RCL Foods to TSB Sugar Holdings in settlement of the TSB Acquisition Consideration, the number of which was determined by dividing the TSB Acquisition Consideration by the TSB Transaction Share Price;

“TSB Land Claimants” individuals or communities who have valid land claims in respect of properties from which cane is delivered to any TSB Sugar RSA mills pursuant to the restitution of land rights in terms of the Restitution of Land Rights Act, No. 22 of 1994, as amended, but to whom land cannot be or has not been restored;

“TSB Material Contracts” the contracts to which TSB Sugar RSA or TSB Sugar International are parties and which are material to the business of each of them, as listed in Annexure 4 of the TSB Sale of Shares Agreement;

“TSB Sale of Shares Agreement” the agreement headed “Sale of Shares Agreement” entered into between RCL Foods and TSB Sugar Holdings on 20 November 2013, regarding the TSB Acquisition;

“TSB Sugar Holdings” TSB Sugar Holdings (Proprietary) Limited, registration number 1994/002412/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, being an indirect wholly-owned subsidiary of Remgro;

“TSB Sugar International” TSB Sugar International (Proprietary) Limited, registration number 2004/010444/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, being a wholly-owned subsidiary of TSB Sugar Holdings;

“TSB Sugar RSA” TSB Sugar RSA (Proprietary) Limited, registration number 1947/026583/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, being a wholly-owned subsidiary of TSB Sugar Holdings;

“TSB Transaction Share Price” R17.32 (seventeen Rand and thirty two cents), being the VWAP per RCL Foods Share over the 30 (thirty) Business Days immediately preceding the date on which the TSB Sale of Shares Agreement was signed, being 20 November 2013;

“TSB Transactions” collectively, the TSB Acquisition and the TSB BEE Transaction;

“Unit” a unit in the ESOP Trust representing a vested right to receive: (i) a portion of the Distributions received by the ESOP Trust in respect of the RCL BEE Shares held by the ESOP Trust and (ii) a number of the remaining RCL Foods BEE Shares held by the ESOP Trust after the expiry of the RCL Foods BEE Transaction Term and once the SPV 1 Preference Shares have been redeemed and the RCL Foods BEE Repurchase Option has been exercised, in accordance with the Participant’s Participation Percentage;

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“USD” United States Dollar, the official currency of the United States of America;

“U.S. Securities Act” U.S. Securities Act of 1933, as amended;

“VAT” value-added tax, payable in terms of the Value-Added Tax Act, No. 89 of 1991, as amended;

“Vector” Vector Logistics ( Proprietary ) Limited, registration number 2002/009081/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa, being a wholly -owned subsidiary of RCL Foods; and

“VWAP” volume-weighted average traded price on the JSE.

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DIRECTORS

Executive Non-executive

M Dally (Chief Executive Officer) J J Durand (Chairman)R H Field (Chief Financial Officer) HJ Carse P R Louw J B Magwaza (Retired 18 November 2013) G C Zondi

Independent non-executive

R V Smither (Lead Independent Director) M Griessel (Retired 18 November 2013) N P Mageza D T V Msibi M M Nhlanhla G M Steyn

CIRCULAR TO RCL FOODS SHAREHOLDERS

1. INTRODUCTION

On 21 November 2013 RCL Foods announced on SENS that it intended to acquire 100% (one hundred percent) of the shares in TSB Sugar RSA and TSB Sugar International from TSB Sugar Holdings, an indirect wholly-owned subsidiary of Remgro. On the date of implementation of the TSB Acquisition, and subsequent to the implementation of the Ancillary Transaction (as outlined in Section A, paragraph 1 , of the Circular), TSB Sugar Holdings will hold 69.5% (sixty nine point five percent) of the Shares in RCL Foods . RCL Foods will settle the full TSB Acquisition Consideration through the issue of the TSB Consideration Shares to TSB Sugar Holdings. Simultaneously with the TSB Acquisition, RCL Foods has agreed to enter into a BEE ownership transaction with TSB BEE Co, a special purpose vehicle established for the benefit of the strategic equity partner of TSB Sugar Holdings.

In March 2008, RCL Foods implemented the Current RCL Foods BEE Structure which entailed the issue of the Current RCL Foods BEE Shares to ECI, amounting to a 15% (fifteen percent) shareholding in RCL Foods at the time, for the benefit of the RCL Foods BEE Parties. In terms of the Current RCL Foods BEE Structure, the RCL Foods BEE Parties, through their investment vehicle ECI, obtained bridge funding from an external funder to finance the subscription price of the Current RCL Foods BEE Shares. RCL Foods subsequently subscribed for the Eagle Creek Preference Shares in order to enable ECI to settle the external bridge funding. The Current RCL Foods BEE Structure is considered unlikely to deliver any equity value to the RCL Foods BEE Parties and as such, RCL Foods intends to implement the New RCL Foods BEE Transaction to sustain its BEE ownership and enable value creation for the RCL Foods BEE Parties.

In line with RCL Foods’ strategy to build a diversified food business of scale in sub-Saharan Africa, the Company seeks to raise up to R2 500 000 000 (two billion five hundred million Rand) via the Equity Capital Raising in order to fund future growth and expansion projects.

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2. RATIONALE

2.1 TSB Acquisition

RCL Foods is a consumer -focused business that seeks to add value for consumers and customers through its market leading brands. RCL Foods’ strategy is to build a diversified food business of scale in sub-Saharan Africa with compelling brands that deliver to consumer and customer needs. The Foodcorp Acquisition and the joint venture in Zambia with Zambeef are evidence of RCL Foods’ strategic intent. The TSB Acquisition provides a unique opportunity for RCL Foods to diversify across the food industry value chain.

Upon the successful completion of the TSB Acquisition, the equity value of the RCL Foods Group will be approximately R15 000 000 000 (fifteen billion Rand).

2.2 TSB BEE Transaction

In line with TSB Sugar Holdings’ long -term goal of value creation for shareholders, TSB Sugar Holdings was in the process of finalising a BEE ownership transaction to appropriately empower its shareholder base. TSB Sugar Holdings believes that this is in line with the spirit of the BBBEE Act and the overriding objective of wealth redistribution.

TSB Sugar Holdings has been developing and negotiating a BEE ownership transaction with key stakeholders for the past two years, in terms of which TSB BEE Co would be issued with c. 3% (three percent) of the equity of TSB Sugar Holdings.

As negotiations between TSB BEE Co and TSB Sugar Holdings were at a final stage, RCL Foods has undertaken to implement the TSB BEE transaction at the RCL Foods level, allowing TSB BEE Co to become a shareholder at the listed company level.

2.3 RCL Foods BEE Transactions

Since the inception of the Current RCL Foods BEE Structure, the share price of RCL Foods has not performed in line with original expectations in terms of capital appreciation and dividend flows. As a result, the Current RCL Foods BEE Structure is unlikely to deliver any value to the RCL Foods BEE Parties. Furthermore, in March 2013, RCL Foods concluded a rights offer, which resulted in the dilution of the RCL Foods BEE Parties’ shareholding in RCL Foods from 15% (fifteen percent) to 8.1% (eight point one percent).

The TSB Acquisition presents an opportune time to review the Current RCL Foods BEE Structure to ensure that RCL Foods continues to deliver on its empowerment objectives, with an overriding objective of creating long -term economic value for the RCL Foods BEE Parties. It also allows for the inclusion of eligible Foodcorp and TSB Sugar RSA and TSB Sugar International employees.

2.4 Equity Capital Raising

RCL Foods is currently considering significant growth and expansion projects in South Africa and the rest of sub-Saharan Africa in the broader food and fast moving consumer goods space. In order to capitalise fully on these opportunities, RCL Foods has determined that it requires additional capital.

The Board has accordingly resolved to propose an equity capital raising in an amount of up to R2 500 000 000 (two billion five hundred million Rand) via a combination of the Pro Rata Offer to Qualifying Minority Shareholders and the Placement.

2.5 The Proposed RCL Foods Share Capital Increase and the corresponding amendment to the MOI

The Board is proposing an increase in the number of the Company’s authorised shares from 1 000 000 000 (one billion) RCL Foods Shares to 2 000 000 000 (two billion) RCL Foods Shares as it believes that the current number of authorised RCL Foods Shares is insufficient to allow RCL Foods to raise adequate equity funding for strategic growth opportunities.

In order to give effect to the Proposed RCL Foods Share Capital Increase, it will be necessary for RCL Foods Shareholders to approve an amendment to the MOI.

If approved by RCL Foods Shareholders, the Proposed RCL Foods Share Capital Increase will become effective on the date on which the notice of amendment in respect of the corresponding amendment to the MOI is Filed with the CIPC, as contemplated in section 16(9)(b)(i) of the Companies Act.

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3. PURPOSE OF THE CIRCULAR

The purpose of the Circular is to: (i) provide RCL Foods Shareholders with information regarding the TSB Transactions, the RCL Foods BEE Transactions, the Proposed RCL Foods Share Capital Increase and the Equity Capital Raising in order to enable RCL Foods Shareholders to make an informed decision as to whether or not they should vote in favour of the ordinary and special resolutions to be proposed at the General Meeting and (ii) convene the General Meeting in order to propose the necessary resolutions to enable RCL Foods Shareholders to authorise:

3.1 the implementation of the TSB Acquisition and in relation thereto:

• the issue of the TSB Consideration Shares to TSB Sugar Holdings in settlement of the TSB Acquisition Consideration;

3.2 the implementation of the TSB BEE Transaction and in relation thereto:

• the specific issue of the TSB BEE Shares to TSB BEE Co;

• the specific repurchase of TSB BEE Shares pursuant to the TSB BEE Maturity Call Option, the TSB BEE Trigger Event Call Option, the TSB BEE Exit Call Option and/or the TSB BEE Pre-emptive Right; and

• the provision of financial assistance by the Company to TSB BEE Co in terms of section 44 of the Companies Act;

3.3 the implementation of the New RCL Foods BEE Transaction and in relation thereto:

• the unwinding of the Current RCL Foods BEE Structure by implementing the Specific Repurchase;

• the specific issue of the RCL Foods BEE Shares to the relevant RCL Foods BEE Vehicles ;

• the specific repurchase of the RCL Foods BEE Shares pursuant to the exercise of the RCL Foods BEE Repurchase Option , the RCL Foods BEE Compulsory Subscription Right and or the RCL Foods BEE Subscription Option;

• the provision of financial assistance by the Company to the RCL Foods BEE Vehicles in terms of section 44 of the Companies Act; and

• the issue of additional RCL Foods Shares to the relevant RCL Foods BEE Vehicles pursuant to the exercise of the RCL Foods BEE Compulsory Subscription Right ;

3.4 the Equity Capital Raising; and

3.5 the Proposed RCL Foods Share Capital Increase and the corresponding amendment to the MOI.

4. GENERAL MEETING

The General Meeting of RCL Foods Shareholders to consider and, if deemed fit, pass with or without modification the ordinary and special resolutions set out in the notice of General Meeting, will be held at the Company’s registered office, Six The Boulevard, Westway Office Park, Westville, Durban at 13:30 on Thursday, 16 January 2014 .

The notice of General Meeting and a form of proxy (blue) for use by Certificated Shareholders and Dematerialised Shareholders with “own name” registration who are unable to attend the General Meeting in person, are attached to the Circular. A duly completed form of proxy (blue) must be received by the Transfer Secretary by no later than 13:30 on Tuesday, 14 January 2014 or handed to the chairperson of the General Meeting before the appointed proxy exercises any of the relevant Shareholder’s rights at the General Meeting (or any postponement or adjournment of the General Meeting).

All the requisite resolutions are set out in the notice of General Meeting which forms part of the Circular.

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A. INFORMATION RELATING TO THE TSB TRANSACTIONS

1. INFORMATION ON THE ANCILLARY TRANSACTION As part of Remgro’s strategy to re-organise its food interests under a common, well managed platform, thereby simplifying its holding structures, IPI will, prior to the implementation of the TSB Acquisition, dispose of all of its RCL Foods Shares to TSB Sugar Holdings. TSB Sugar Holdings will discharge the consideration for the acquisition of the RCL Foods Shares through the issue of ordinary shares in TSB Sugar Holdings to IPI. Following the Ancillary Transaction, IPI and HL&H together will hold 100% (one hundred percent) of the ordinary shares of TSB Sugar Holdings which will, in turn, hold 69.5% (sixty nine point five percent) of the RCL Foods Shares prior to the implementation of the TSB Transactions, the Equity Capital Raising and the RCL Foods BEE Transactions.

The diagram below represents the resultant shareholding structure subsequent to the Ancillary Transaction but prior to the implementation of the TSB Transactions, the Equity Capital Raising and the RCL Foods BEE Transactions:

Remgro

HL&H

IPI

TSB SugarInternational

TSB SugarRSA

RCL Foods

RCL Foodsminorit y

shareholdersTSB SugarHoldings

Rainbow Farms Foodcorp Vector

LogisticsZam Chick

LimtedZamhatch

Limited

100.0%

34.7%

30.5% 69.5% 100.0% 100.0%

100.0% 100.0% 100.0% 49.0% 51.0%

65.3%100.0%

2. RATIONALE FOR THE TSB ACQUISITIONRCL Foods is a consumer -focused business that seeks to add value for consumers and customers through its market leading brands. RCL Foods’ strategy is to build a diversified food business of scale in sub-Saharan Africa that has compelling brands that deliver to consumer and customer needs. The Foodcorp Acquisition and the joint venture in Zambia with Zambeef are evidence of RCL Foods’ strategic intent. The TSB Acquisition provides a unique opportunity for RCL Foods to diversify across the food industry value chain.

The TSB Acquisition will further consolidate RCL Foods’ platform from which to harness and grow within the increasingly attractive African consumer food industry.

The TSB Acquisition represents an attractive opportunity for RCL Foods because it will, inter alia:• create a more broadly diversified revenue stream out of the combined RCL Foods and TSB Sugar

Holdings operations; • harness the selling, distribution and credit management synergies between Vector and Quality Sugars; • provide potential to consolidate the Group’s resources towards a holistic and focused food strategy

with enhanced scale and critical mass; and• establish an attractive, well capitalised agri-foods platform, which is well disposed to drive future sub-

Saharan Africa expansion opportunities.

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3. INFORMATION ON TSB SUGAR HOLDINGS

TSB Sugar Holdings, through its operating subsidiaries, is engaged in the business of sugar cane agriculture, sugar manufacturing, marketing, sales and distribution. TSB Sugar Holdings operates three mills in South Africa at Malalane, Komati and Pongola, which are all situated in the Lowveld of South Africa in close proximity to Mozambique. TSB Sugar Holdings has the capacity to produce 700 000 (seven hundred thousand) tonnes of sugar per annum, directly employing more than 3 500 (three thousand five hundred) people.

In addition, TSB Sugar Holdings supports c.1 800 (one thousand eight hundred) commercial and small-scale farmers on c.54 000 (fifty four thousand) hectares of irrigated land, from which farmers supply c. 85% (eighty five percent) of the sugar cane to TSB Sugar RSA’s mills. TSB Sugar Holdings is currently the lowest-cost sugar producer in the South African sugar industry. In addition to its sugar expertise, TSB Sugar Holdings produces animal feed from by-products of the sugar manufacturing process. During the 2013 financial year TSB produced c. 294 000 (two hundred and ninety four thousand) tonnes of animal feed.

3.1 Nature of the TSB Sugar Holdings business

TSB Sugar Holdings, through its subsidiaries, is one of South Africa’s leading producers of refined and raw sugar. Sugar is marketed nationally by Quality Sugars under the Selati brand. TSB Sugar Holdings also exports raw sugar through the South African Sugar Association and refined sugar to regional markets. TSB Sugar Holdings further sells animal feed through the Molatek business.

3.2 TSB Sugar Holdings trading results

The following table sets out the summarised trading results from continuing operations for TSB Sugar Holdings for the financial years ended 30 June 2011, 2012 and 2013 :

R’000 2013 2012 2011*

Revenue 5 021 848 4 621 220 4 905 358EBITDA1 455 816 593 722 412 561Operating profit 328 914 473 144 274 775Net finance costs (35 651) (37 078) (53 907)Profit after taxation 348 100 414 248 192 747

*Fifteen months

3.3 The Project

TSB Sugar International and SIAL have been awarded an exclusive right by the Government of Mozambique to develop a sugar cane project in the Massingir District of Mozambique. TSB Sugar International and SIAL are pursuing the Project using a newly established company, MAI. TSB Sugar International currently holds 51% (fifty one percent) of the shares in MAI with SIAL owning the balance.

The Project is a greenfield sugar cane development located in the Massingir District of Mozambique, c.310km (three hundred and ten kilometers) from Maputo. MAI has been granted exclusive use of approximately 31 300 ( thirty one thousand three hundred) hectares of land by the Government of Mozambique planned for development as a net 23 000 (twenty three thousand) hectares of sugar cane over an eight -year period. The balance of the MAI land will be used for social infrastructure, factory site, general roads and field layout. SIAL has applied for use of a further 14 500 (fourteen thousand five hundred) hectares, for its own benefit from which a net 12 000 (twelve thousand) hectares will be developed to produce sugar cane under a development agreement between MAI and SIAL. Under the Project’s social responsibility programme, MAI will facilitate the development of 2 500 (two thousand five hundred) net hectares of community land for sugar cane production for the community farmers. The overall land to be developed is approximately 37 500 (thirty seven thousand five hundred) net hectares of sugar cane.

With the assistance of Booker Tate as the Project’s technical expert, a detailed risk assessment for the Project has been completed and the Project’s feasibility study is anticipated to be completed by or about March 2014. In addition, the Project is expected to reach financial closure around November 2014. The Project is anticipated to produce sugar from sugar cane and ethanol from molasses for local and regional markets and for export to European markets.

Funding for the Project is expected to be sourced in two phases. Phase I of the fund raising process is expected to commence by mid-2014, whil st Phase II is expected to commence in 2018. Phase I is intended to be funded by a combination of debt and equity. TSB Sugar International will need to raise capital to fund its proportionate share of the equity required for Phase I. Conditional upon a favourable feasibility report for the Project, part of the proceeds from the proposed Equity Capital Raising (refer to Section C) will be utilised to fund Phase 1.1

1 The lower EBITDA in 2013 is due to the Project setup costs as well as lower throughput arising from the general transport strike in September 2012 and adverse weather conditions that delayed harvesting

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Subsequent to the funding process, it is expected that TSB Sugar International will hold controlling shareholding in MAI, with the balance of the equity being held between SIAL and new equity investors. The anticipated investment requirements for both phases of the Project (Phases I and II) are currently estimated to be in excess of USD1 200 000 000 (one billion two hundred million US D ).

4. INFORMATION ON THE TSB ACQUISITION

4.1 TSB Sale of Shares Agreement

TSB Sugar Holdings and RCL Foods entered into the TSB Sale of Shares Agreement on 20 November 2013. In terms of the TSB Sale of Shares Agreement, subject to the fulfil ment of certain conditions precedent, RCL Foods will purchase the TSB Acquisition Shares.

4.2 TSB Acquisition Consideration

The TSB Acquisition Shares (230 946 882 RCL Foods Shares) will be purchased at the TSB Acquisition Consideration which was calculated based on an independent valuation of TSB Sugar RSA and TSB Sugar International, and negotiation with Remgro and IPI. The TSB Acquisition Consideration will be settled through the issue of the TSB Consideration Shares. The number of RCL Foods Shares to be issued to TSB Sugar Holdings was determined by dividing the TSB Acquisition Consideration by the TSB Transaction Share Price.

4.3 TSB BEE Land Claimants

TSB Sugar RSA has been in discussions with the Department of Rural Development and Land Reform and the Land Claims Commission in respect of a potential BEE ownership transaction with the TSB Land Claimants in terms of which the acquisition by the TSB Land Claimants of up to 6% (six percent) of the issued share capital of TSB Sugar Holdings was considered.

Although several presentations were made to the Land Claims Commission and Department of Rural Development and Land Reform, no legal agreements have been concluded.

As part of the TSB Acquisition, RCL Foods has undertaken to implement the proposed transaction with the TSB Land Claimants through the issuance of RCL Foods Shares. The transaction with the TSB Land Claimants is still under discussion with key stakeholders and accordingly the time frame for implementation is uncertain. Further information will be provided to RCL Foods Shareholders when the BEE ownership transaction with the TSB Land Claimants is finalised.

4.4 Remgro management fee

Remgro Management Services provides management and support services to TSB Sugar RSA. As consideration for services rendered, Remgro Management Services receives a management fee of approximately R10 000 000 (ten million Rand) per annum.

Following the implementation of the TSB Acquisition, TSB Sugar RSA will continue to pay Remgro Management Services an annual management fee of approximately R10 000 000 (ten million Rand) as consideration for the management and support services provided. The management services agreement can be cancelled by either party upon three months’ written notice .

4.5 Conditions precedent

The implementation of the TSB Sale of Shares Agreement is subject to the fulfil ment of the conditions precedent that:

• by no later than 17 :00 on Friday, 28 February 2014: – RCL Foods Shareholders have passed all such resolutions as may be required to approve the

implementation of the TSB Acquisition; – the counterparties to the TSB Material Contracts have, to the extent necessary, consented in

writing to the change of control in TSB Sugar RSA and TSB Sugar International; – the Ancillary Transaction has been implemented; and

• within 30 (thirty) days after the signature date of the TSB Sale of Shares Agreement, RCL Foods has delivered to TSB Sugar Holdings a written notice stating that RCL Foods is satisfied with the contents of the disclosure bundle prepared by TSB Sugar Holdings in respect of the warranties given by it in terms of the TSB Sale of Shares Agreement.

4.6 Resultant structure post the TSB Acquisition

Post the implementation of the Ancillary Transaction, RCL Foods will, subject to the fulfil ment of the conditions precedent, acquire the TSB Acquisition Shares from TSB Sugar Holdings at the TSB Acquisition Consideration, which will be discharged through the issue of the TSB Consideration Shares.

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The diagram below depicts the resultant shareholding structure post the TSB Acquisition but prior to the implementation of the TSB BEE Transaction, the RCL BEE Transactions and the Equity Capital Raising:

4.7 Related party transaction and fairness opinion

Remgro is a material shareholder of both RCL Foods and TSB Sugar Holdings for purposes of the Listings Requirements. As a result, the TSB Acquisition is categorised as a “related party transaction” in terms of paragraph 10.1(b)(i) of the Listings Requirements. In terms of paragraph 10.4 (f) of the Listings Requirements, a fairness opinion is required from an independent professional expert, acceptable to the JSE , indicating whether the terms of the TSB Acquisition are fair to RCL Foods Shareholders.

In light of the above, Deloitte has been appointed as the independent professional expert to consider the terms and conditions of the TSB Acquisition. Deloitte has performed an assessment and is of the opinion that the terms and conditions of the TSB Acquisition, as contemplated above, are fair to RCL Foods Shareholders. The Board has been advised accordingly and a copy of the Deloitte opinion in this regard i s attached as Annexure 1(a) to the Circular.

In terms of paragraph 10.4(d) of the Listings Requirements, the approval of Shareholders (excluding related parties and their associates) is required in order to implement a “related party transaction”. In this regard, the Company will seek Shareholder consent at the General Meeting to implement the TSB Acquisition. IPI and its associates will be precluded from voting on the relevant resolutions.

4.8 Directors’ opinion

The Board has considered the opinion of the Independent Expert attached as Annexure 1(a) to the Circular, and is of the opinion that the TSB Acquisition is in the interests of RCL Foods Shareholders and is fair to all RCL Foods Shareholders and recommends that RCL Foods Shareholders vote in favour of the relevant resolutions at the General Meeting.

5. INFORMATION ON THE TSB BEE TRANSACTION

5.1 Introduction

In line with TSB Sugar Holdings’ long -term goal of value creation for shareholders, TSB Sugar Holdings has developed a BEE ownership transaction to appropriately empower its shareholder base. TSB Sugar Holdings has identified Dr Nakedi Mathews Phosa as a strategic partner to participate in the TSB BEE Transaction. In terms of the negotiations between TSB Sugar Holdings and TSB BEE Co, TSB BEE Co would be issued with c.3% (three percent) of the equity in TSB Sugar Holdings.

Remgro

RCL Foods minority

sharehold ers

IPI

RCL Foods

TSB SugarHoldings

100.0%

34.7%

30.5% 69.5%

100.0% 100.0% 100.0%100.0% 100.0% 51.0%49.0

6 5.3%

100%

Zam hatch Limited

Zam Chick Limited

Vector LogisticsFoodcorp

Rainbow Farms

TSB Sugar International

TSB Sugar RSA

HL&H

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As negotiations between TSB BEE Co and TSB Sugar Holdings were at a final stage, RCL Foods has undertaken to implement the proposed TSB BEE Transaction simultaneously with the TSB Acquisition at the RCL Foods level, allowing TSB BEE Co to become a shareholder at the listed company level.

Subject to the terms and conditions of the TSB BEE Subscription and Relationship Agreement, RCL Foods entered into the TSB BEE Transaction with the MTM Family Trust in terms of which it will acquire RCL Foods Shares via TSB BEE Co , with a transaction value of R120 000 000 (one hundred and twenty million Rand). The beneficiaries of the MTM Family Trust are Dr Nakedi Mathews Phosa and his family. Dr. Phosa is a director of TSB Sugar Holdings and has been a key participant in driving the strategic initiatives of TSB Sugar Holdings.

TSB BEE Co has been established for the sole purpose of subscribing for and holding TSB BEE Shares on behalf of the MTM Family Trust, subject to the rights and restrictions stipulated in the TSB BEE Subscription and Relationship Agreement.

5.2 Mechanism to implement the TSB BEE Transaction

On the TSB BEE Implementation Date, the Company will issue the TSB BEE Shares (6 928 406 RCL Foods Shares) to TSB BEE Co, the number of which was determined by dividing R120 000 000 (one hundred and twenty million Rand) by the TSB Transaction Share Price. The TSB BEE Shares will be subscribed for at a nominal subscription price of R0.01 (one cent) per TSB BEE Share. The value of the TSB BEE Shares (i.e. R120 000 000 (one hundred and twenty million Rand)) will be notionally funded by RCL Foods through the TSB BEE NVF over the TSB BEE NVF Period .

5.2.1 Details of the TSB BEE NVF

5.2.1.1 The TSB BEE Notional Amount will accrue notional interest at a rate equal to the Prime Rate plus 1% (one percent) from 1 July 2013 over the TSB BEE NVF Period. The TSB BEE Notional Outstandings will be reduced by any Distributions made in respect of RCL Foods Shares, subject to the waiver envisaged in paragraph 5.4.2 below.

5.2.1.2 At the end of the TSB BEE NVF Period, if the TSB BEE Notional Outstandings in respect of the TSB BEE Shares does not equal zero, RCL Foods will have the right to repurchase from TSB BEE Co at a nominal amount of R0.01 (one cent) per TSB BEE Share, such number of TSB BEE Shares as is calculated in accordance with the following formula :

N = NOA

Z

Where:

N = the number of TSB BEE Shares to be repurchased by RCL Foods;

NOA = the TSB BEE Notional Outstandings; and

Z = the VWAP of an RCL Foods Share for the 30 Business Days immediately prior to the date on which RCL Foods gives notice of its intention to exercise the TSB BEE Maturity Call Option.

5.2.1.3 As security for the discharge by TSB BEE Co of its obligations under the TSB BEE Subscription and Relationship Agreement, TSB BEE Co will pledge and cede in security its TSB BEE Shares to RCL Foods by way of a pledge and cession in security in favour of RCL Foods (“TSB BEE Pledge and Cession Agreement”).

5.3 Lock -in

TSB BEE Co may not dispose of or encumber the TSB BEE Shares during the TSB BEE NVF Period other than pursuant to the TSB BEE Subscription and Relationship Agreement and the TSB BEE Pledge and Cession Agreement.

5.4 Distributions

5.4.1 The TSB BEE Shares will, subject to the terms and conditions of the TSB BEE Subscription and Relationship Agreement, rank pari passu with the other RCL Foods Shares and, as such, would have, but for the waiver envisaged in paragraph 5.4.2 below, been entitled to receive Distributions made by RCL Foods in respect of RCL Foods Shares from time to time.

5.4.2 In order to notionally reduce the TSB BEE Notional Outstandings, TSB BEE Co will, in terms of the TSB BEE Subscription and Relationship Agreement, waive all its rights to receive the Distributions which would otherwise have accrued to the TSB BEE Shares until the TSB BEE Release Date.

5.4.3 From the TSB BEE Release Date, TSB BEE Co will be entitled to receive 100% (one hundred percent) of the Distributions attributable to the balance of the TSB BEE Shares held by it.

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5.5 TSB call options and pre-emptive rights

The Company has the option to repurchase TSB BEE Shares from TSB BEE Co in the following instances:

5.5.1 in the event that a TSB BEE Trigger Event occurs, RCL Foods will have the option to repurchase all the TSB BEE Shares at a repurchase consideration per Share equal to a discount of the difference between the VWAP per RCL Foods Share over the 30 (thirty) Business Day s prior to the date of exercise of the option and the TSB BEE Notional Outstandings;

5.5.2 for a period of 1 (one) calendar year after the TSB BEE Release Date (“TSB BEE Exit Call Option Period”), RCL Foods will be entitled to repurchase all or some of the TSB BEE Shares held by TSB BEE Co at a repurchase price per TSB BEE Share equal to the VWAP per RCL Foods Share over the 30 (thirty) Business Day s prior to the date of exercise of the repurchase option; and/or

5.5.3 in the event that TSB BEE Co wishes to dispose of a number of the TSB BEE Shares it holds to a third party after expiry of the TSB BEE Exit Call Option Period, TSB BEE Co will be obliged to first offer such TSB BEE Shares to RCL Foods and RCL Foods will have the option to repurchase such TSB BEE Shares at a repurchase consideration equal to either the closing price of the RCL Foods Shares on the JSE on the date on which the Company accepts the offer to acquire the TSB BEE Shares from TSB BEE Co or at a price equal to the third party offer (if any).

5.6 Voting

TSB BEE Co shall be entitled to exercise all the voting rights attached to the TSB BEE Shares held by it from time to time.

5.7 Effective date

The TSB BEE Shares shall be issued to TSB BEE Co on the TSB BEE Implementation Date. However, the TSB BEE NVF Period shall be calculated with reference to 1 July 2013 (being the date on which TSB Sugar Holdings and the MTM Family Trust agreed to implement a BEE ownership transaction).


The implementation of the TSB BEE Transaction is subject to the fulfil ment of the conditions precedent that, by not later than Friday, 28 February 2014:

• Shareholders approve:

o the provision of financial assistance by the Company TSB BEE Co for purposes of the TSB BEE Transaction in accordance with the provisions of section 44 of the Companies Act;

o the issue of RCL Foods Shares to TSB BEE Co in accordance with the TSB BEE Subscription and Relationship Agreement;

o the repurchase of RCL Foods Shares from TSB BEE Co pursuant to the TSB BEE Maturity Call Option, the TSB BEE Trigger Event Call Option, the TSB BEE Exit Call Option and/or the TSB BEE Pre-emptive Rights, as contemplated in the TSB BEE Subscription and Relationship Agreement;

• the TSB Sale of Shares Agreement is concluded and becomes unconditional in accordance with its terms;

• the MTM Family Trust, as sole shareholder of TSB BEE Co, passes a special resolution adopting the new memorandum of incorporation of TSB BEE Co and such new memorandum of incorporation is Filed with the CIPC; and

• the TSB BEE Pledge and Cession Agreement (envisaged in paragraph 5.2.1.3 above) is concluded and becomes unconditional in accordance with its terms.

5.9 Specific authority to issue the TSB BEE Shares and to provide financial assistance

The facilitation by the Company through the TSB BEE NVF will constitute the provision of financial assistance by the Company in terms of section 44 of the Companies Act. The Board may not authorise the provision of such financial assistance unless it is pursuant to a special resolution of Shareholders adopted within the previous two years, which approved the provision of such financial assistance either for a specific recipient or generally for a category of potential recipients and the specific recipient falls within that category. The Company will seek the approval of Shareholders at the General Meeting to provide financial assistance to TSB BEE Co by way of the TSB BEE NVF.

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The issue of the TSB BEE Shares constitutes an issue for cash for which specific authority is required from Shareholders in terms of paragraph 5.51(g) of the Listings Requirements. The Company will seek Shareholder approval at the General Meeting to issue the TSB BEE Shares to TSB BEE Co.

5.10 Estimated economic costs

RCL Foods has estimated the economic cost of implementing the TSB BEE Transaction for the Company to be approximately R25 000 000 (twenty five million Rand), as at the Announcement Date.

This represents approximately 0.23% (zero point two three percent) of the market capitalisation of RCL Foods as at the Last Practicable Date (c. R10 851 293 420 (ten billion eight hundred and fifty one million two hundred and ninety three thousand four hundred and twenty Rand)). This figure was calculated with reference to the requirements of IFRS, including IFRS 2 – Share -Based Payments.

IFRS 2 sets out the basis for calculating the economic cost shown above and the valuation uses the following key inputs or assumptions:

• the Black -Scholes model (option pricing model) for valuing options; and

• the use of available market-sourced data and an estimation of future dividend yields at given dates. This option pricing model determines expected future ordinary share prices.

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B. INFORMATION RELATING TO THE RCL FOODS BEE TRANSACTIONS

1. DETAILS OF THE SPECIFIC REPURCHASE AND UNWINDING OF THE CURRENT RCL FOODS BEE STRUCTURE

RCL Foods proposes to unwind the Current RCL Foods BEE Structure by implementing a redemption of the Eagle Creek Preference Shares and repurchasing the Current RCL Foods BEE Shares. Subject to RCL Foods Shareholders approving the Specific Repurchase, RCL Foods will acquire from Eagle Creek all of the Current RCL Foods BEE Shares for a purchase consideration per BEE Share equal to the VWAP per RCL Foods Share over the 30 (thirty) trading immediately preceding the day on which the Eagle Creek Preference Shares are redeemed, and will be funded out of sources other than contributed tax capital and will not require any external funding. The consideration payable to ECI pursuant to the Specific Repurchase will be utilised by ECI to settle the redemption amount payable in respect of the Eagle Creek Preference Shares.

The Current RCL Foods BEE Shares are expected to be repurchased on or about Monday, 2 0 January 2014. The Current RCL Foods BEE Shares will, pursuant to the Specific Repurchase, be delisted from the JSE and automatically cancelled in terms of section 35(5)(a) of the Companies Act.


The implementation of the Specific Repurchase is subject to the fulfilment of, inter alia, the conditions precedent that, by not later than 17 :00 on Friday, 28 February 2014:

• RCL Foods Shareholders approve the unwinding of the Current RCL Foods BEE Structure and, in particular, pass a special resolution in terms of section 48(8)(b) of the Companies Act authorising the Specific Repurchase; and

• the shareholders of Eagle Creek pass a special resolution pursuant to and in accordance with the provisions of section 112 as read with section 115 of the Companies Act, approving the sale of the Current RCL Foods BEE Shares by Eagle Creek to RCL Foods pursuant to the Specific Repurchase.

1.2 Independent Expert opinion and Shareholder approval

The Specific Repurchase will amount to a repurchase of 6% (six percent) of the RCL Foods Shares in issue post the TSB Acquisition and, as such, triggers the provisions of section 48(8) (read with section 114) of the Companies Act. In the circumstances, the Company is required to obtain a report from an independent expert concerning the Specific Repurchase and to obtain Shareholder approval to implement the Specific Repurchase. Deloitte, in its capacity as the Independent Expert, has considered the terms and conditions of the Specific Repurchase and is of the opinion that the terms and conditions of the Specific Repurchase, as contemplated above, are fair to RCL Foods Shareholders. Please refer to the Independent Expert’s report (Annexure 1(b)).

In terms of section 48(8)(b) of the Companies Act and paragraph 5.69(b) of the Listings Requirements, the Specific Repurchase must be approved by Shareholders by way of a special resolution. The Company will seek Shareholder approval at the General Meeting to implement the Specific Repurchase. Eagle Creek will be precluded from voting on the relevant resolution.

1.3 Directors’ opinion

The Board has considered the report of the Independent Expert attached as Annexure 1 (b) to the Circular and the Specific Repurchase in light of the rationale as set out above and is of the opinion that the Specific Repurchase is in the interests of RCL Foods Shareholders and that it is fair to all RCL Foods Shareholders and recommends that RCL Foods Shareholders vote in favour of the relevant resolutions at the General Meeting.

2. DETAILS OF THE NEW RCL FOODS BEE TRANSACTION

Following the unwinding of the Current RCL Foods BEE Structure, RCL Foods wishes to, subject to meeting the relevant conditions, implement a new BEE ownership transaction for the benefit of the existing RCL Foods Strategic Partners, the current RCL Foods employees who are beneficiaries of the Rainbow Trust, Foodcorp employees and future eligible RCL Foods Group employees (including eligible TSB Sugar RSA and TSB Sugar International employees, should the TSB Acquisition be implemented).

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2.1 General terms of the New RCL Foods BEE Transaction

2.1.1 Specific issue of the RCL Foods BEE Shares

The ESOP Trust and SPV 2 have been established for the purpose of, inter alia, subscribing for and holding the RCL Foods BEE Shares on behalf of the relevant RCL Foods BEE Parties, subject to the provisions of the RCL Foods BEE Transaction Agreements. The RCL Foods BEE Vehicles will be regarded as non-public RCL Foods Shareholders for purposes of the Listings Requirements.

2.1.2 Implementation mechanism

The New RCL Foods BEE Transaction will be facilitated by RCL Foods partly through the RCL Foods BEE NVF and partly through conventional preference share funding on commercial terms similar to those that would be required by third party debt providers. The Company will issue two tranches of Shares to the relevant RCL Foods BEE Vehicles: the RCL Foods BEE Nominal Shares at a nominal subscription price which will be funded through the RCL Foods BEE NVF, and the RCL Foods BEE Common Shares at full market value which will be facilitated through the subscription proceeds for the RCL Foods BEE Preference Shares.

2.1.2.1 Details of the RCL Foods BEE NVF

2.1.2.1.1 The RCL Foods BEE Nominal Shares will be subscribed for by the relevant RCL Foods BEE Vehicles at a nominal subscription price of R0.01 (one cent). The difference between the nominal subscription price of the RCL Foods BEE Nominal Shares and the market value of an equivalent number of RCL Foods Shares (i.e. the VWAP per RCL Foods Share over the 30 (thirty) Business Days immediately preceding the date on which the RCL Foods BEE Subscription Agreements were executed, being an amount of R17.3 1 (seventeen Rand and thirty one cents) per RCL Foods BEE Nominal Share) will be notionally funded by RCL Foods through the RCL Foods BEE NVF. The quantum of the RCL Foods BEE NVF represents the residual amount that cannot be funded through the issue of the RCL Foods BEE Preference Shares, being an aggregate amount of R759 619 646 (seven hundred and fifty nine million six hundred and nineteen thousand six hundred and forty six Rand)

2.1.2.1.2 The RCL Foods BEE Notional Amount will accrue notional interest equal to the Prime Rate from the RCL Foods BEE Implementation Date until the end of the RCL Foods BEE Transaction Term and will be reduced by the Distributions paid in respect of the RCL Foods BEE Nominal Shares only once RCL Foods BEE Preference Shares have been redeemed in full as detailed in Section A, paragraph 2.1.5 of the Circular .

2.1.2.1.3 At the end of the RCL Foods BEE Transaction Term, if the RCL Foods BEE Notional Outstandings in respect of the RCL Foods BEE Nominal Shares does not equal zero, RCL Foods will have the right to, during the RCL Foods BEE Repurchase Option Period, repurchase from the relevant RCL Foods BEE Vehicles at a nominal amount of R0.01 (one cent), such number of RCL Foods BEE Nominal Shares as is calculated in accordance with the following formula:

N = NO x A MV

Where:

N = the number of RCL Foods BEE Nominal Shares to be repurchased by RCL Foods;

NO = the RCL Foods BEE Notional Outstandings per RCL Foods BEE Nominal Share held by the relevant RCL Foods BEE Vehicle;

MV = the VWAP per RCL Foods Share over the 30 (thirty) trading days immediately preceding the date on which the RCL Foods BEE Repurchase Option is exercised; and

A = the number of RCL Foods BEE Nominal Shares held by the relevant RCL Foods BEE Vehicle.

2.1.2.1.4 The exercise of the RCL Foods BEE Repurchase Option is subject to the exercise of the RCL Foods BEE Subscription Option by each of the RCL Foods BEE Vehicles.

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2.1.2.1.5 In order to facilitate the notional settlement of the RCL Foods BEE Notional Outstandings, the relevant RCL Foods BEE Vehicles will have an option to, from time to time and for so long as the RCL Foods BEE Notional Outstandings in respect of the RCL Foods BEE Nominal Shares held by the relevant RCL Foods BEE Vehicle does not equal zero, subscribe for additional RCL Foods Shares at a subscription price per RCL Foods Share equal to the RCL Foods BEE Notional Outstandings per RCL Foods BEE Nominal Share held by the RCL Foods BEE Vehicle on the relevant date.

2.1.2.1.6 Upon exercise of the RCL Foods BEE Subscription Option by an RCL Foods BEE Vehicle, RCL Foods will repurchase an equal number of RCL Foods BEE Nominal Shares from the relevant RCL Foods BEE Vehicle at a nominal amount of R0.01 (one cent).

2.1.2.1.7 As security for the discharge by SPV 2 of its obligations under the RCL Foods BEE Relationship Agreement, RCL Foods and SPV 2 have entered into an agreement headed “Reversionary Pledge and Cession” in terms of which SPV 2 will pledge and cede in security its RCL Foods BEE Shares in favour of RCL Foods.

2.1.2.1.8 As security for the discharge by each of the RCL Foods Strategic Partners’ of their obligations under the RCL Foods BEE Relationship Agreement, RCL Foods has entered into an agreement headed “Pledge and Cession” with each of the RCL Foods Strategic Partners in terms of which each RCL Foods Strategic Partner will pledge and cede in security its shares in SPV 2 in favour of RCL Foods.

2.1.2.1.9 Furthermore, at the end of the RCL Foods BEE Transaction Term, if the RCL Foods BEE Notional Outstandings in respect of the RCL Foods BEE Nominal Shares on that date are not equal to zero, RCL Foods shall have the right to, at any time during the RCL Foods BEE Repurchase Option Period, demand that the relevant RCL Foods BEE Vehicle subscribe for a certain number of RCL Foods Shares at a subscription price per RCL Foods Share equal to the RCL Foods BEE Notional Outstandings per RCL Foods BEE Nominal Share held by the relevant RCL Foods BEE Vehicle on the relevant date . The number of RCL Foods Shares which the relevant RCL BEE Vehicle will be required to subscribe for will be limited by reference to the proceeds raised by the RCL BEE Vehicle disposing of its RCL BEE Common Shares in the open market.

2.1.2.2 Details of the RCL Foods BEE Preference Share funding

2.1.2.2.1 The RCL Foods BEE Common Shares will be subscribed for by the relevant RCL Foods BEE Vehicles at full market value (i.e. the VWAP per RCL Foods Share over the 30 (thirty) Business Days immediately preceding the date on which the RCL Foods BEE Subscription Agreements were executed). The subscription consideration payable by each of the RCL Foods BEE Vehicles will be funded through the issue of the RCL Foods BEE Preference Shares.

2.1.2.2.2 The RCL Foods BEE Preference Shares will be issued at a subscription price of R1 000 (one thousand Rand) per RCL Foods BEE Preference Share, equating to an aggregate subscription price of R345 482 000 (three hundred and forty five million four hundred and eighty two thousand Rand).

2.1.2.2.3 Each RCL Foods BEE Preference Share shall confer on the holder thereof the right to receive cumulative preferential cash dividends, calculated at the Prime Rate on the issue price of the RCL Foods BEE Preference Shares and payable on the 2nd (second) business day after the receipt of a Distribution in respect of the relevant underlying RCL Foods BEE Shares.

2.1.2.2.4 As security for the discharge by SPV 1 of its obligations under the relevant RCL Foods BEE Preference Share Agreement : (i) RCL Foods and the ESOP Trust have entered into an agreement headed “Guarantee” in terms of which the ESOP Trust will guarantee the performance by SPV 1 of its obligations under the relevant RCL Foods

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BEE Preference Share Agreement; (ii) RCL Foods and the ESOP Trust have entered into an agreement headed “Pledge and Cession” in terms of which the ESOP Trust will pledge and cede in security its RCL Foods BEE Shares in favour of RCL Foods as security for the performance of its obligations under the aforesaid Guarantee; and (iii) RCL Foods and SPV 1 have entered into an agreement headed “Cession of Redemption Reserve Account” in terms of which SPV 1 will cede in security the SPV 1 bank account in favour of RCL Foods.

2.1.2.2.5 As security for the discharge by SPV 2 of its obligations under the relevant RCL Foods BEE Preference Share Agreement : (i) RCL Foods and SPV 2 have entered into an agreement headed “Pledge and Cession” in terms of which SPV 2 will pledge and cede in security its RCL Foods BEE Shares in favour of RCL Foods; and (ii) RCL Foods and SPV 2 have entered into an agreement headed “Cession of Redemption Reserve Account” in terms of which SPV 2 will cede in security the SPV 2 bank account in favour of RCL Foods.

2.1.2.2.6 The RCL Foods BEE Vehicles will be ring fenced for the duration of the RCL Foods BEE Transaction Term and in particular, will be prohibited from incurring any debt or other financial obligation other than pursuant to the RCL Foods BEE Transaction or as permitted by RCL Foods.

2.1.3 Lock-in

The RCL Foods BEE Vehicles may not dispose of or encumber the RCL Foods BEE Shares during the RCL Foods BEE Transaction Term other than pursuant to the RCL Foods BEE Transaction Agreements.

2.1.4 Allocation of equity interests to the RCL Foods BEE Vehicles

After the issue of the RCL Foods BEE Shares, the effective shareholding of the RCL Foods BEE Vehicles in RCL Foods will be as follows:

Total

Number of RCL Foods

BEE Common Shares

Number of RCL Foods

BEE Nominal Shares

ESOP Trust 44 681 162 13 962 863 30 718 299RCL Foods Strategic Partners (through SPV 2) 19 149 069 5 984 084 13 164 985

Total 63 830 231 19 946 947 43 883 284

2.1.5 Distributions

2.1.5.1 Subject to the terms and conditions of the RCL Foods BEE Transaction Agreements, the RCL Foods BEE Shares will rank pari passu with the other RCL Foods Shares and, as such, will be entitled to receive Distributions made by RCL Foods in respect of RCL Foods Shares from time to time.

2.1.5.2 During the RCL Foods BEE Transaction Term, all Distributions paid in respect of the RCL Foods BEE Shares will be utilised by the RCL Foods BEE Vehicles as follows: (i) firstly, to pay for any tax liabilities incurred by the relevant RCL Foods BEE Vehicle; (ii) secondly, to pay for operational expenses; (iii) thirdly, subject to the relevant covenants under the RCL Foods BEE Preference Share Agreements being met and to the extent that there is sufficient cash to service the RCL Foods BEE Preference Shares, 20% (twenty percent) of the remaining cash will be distributed as a trickle dividend to the RCL Foods BEE Parties; and (iv) thereafter, any remaining cash will be used to pay accrued dividends on the RCL Foods BEE Preference Shares and to redeem RCL Foods BEE Preference Shares.

2.1.5.3 If the Preference Shares are redeemed in full at any time during the RCL Foods BEE Transaction Term, then that portion of the Distributions which would otherwise be utilised to pay accrued dividends on, or to redeem, the RCL Foods BEE Preference Shares, will be utilised for purposes of exercising the RCL Foods BEE Subscription Option in order to settle the RCL Foods BEE Notional Outstandings.

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2.1.5.4 Upon expiry of the RCL Foods BEE Transaction Term, the RCL Foods BEE Parties will be entitled to receive 100% (one hundred percent) of the Distributions made in respect of the remaining RCL Foods BEE Shares .

2.1.6 Voting

The RCL Foods BEE Vehicles will be entitled to exercise all voting rights attaching to the RCL Foods BEE Shares held by them.

2.1.7 Effective date

The New RCL Foods BEE Transaction will be implemented with effect from the RCL Foods BEE Implementation Date.

2.1.8 Corporate actions

2.1.8.1 In the event of a sub-division or consolidation of RCL Foods Shares, the RCL Foods BEE Shares will be deemed to include such RCL Foods Shares as sub-divided or consolidated and will be subject to the same rights and restrictions as the RCL Foods BEE Shares as stipulated in the RCL Foods BEE Relationship Agreement.

2.1.8.2 In the event of RCL Foods making any non-elective capitalisation award of RCL Foods Shares, the RCL Foods BEE Vehicles’ capitalisation shares will be subject to the same rights and restrictions as the RCL Foods BEE Shares. In the event that RCL Foods permits RCL Foods Shareholders to elect to receive a cash payment instead of an award of capitalisation RCL Foods Shares, the RCL Foods BEE Vehicles will not have the right to receive cash and will be required to elect to receive capitalisation RCL Foods Shares, on the basis that such RCL Foods Shares will be subject to the same rights and restrictions as the RCL Foods BEE Shares as stipulated in the RCL Foods BEE Relationship Agreement.

2.1.8.3 In the event of a general buyback, the RCL Foods BEE Vehicles will not have the right to elect to sell any of their RCL Foods BEE Shares to RCL Foods.

2.1.8.4 The RCL Foods BEE Vehicles will be entitled to participate in any rights offers during the RCL Foods BEE Transaction Term on the basis that such rights offer shares will be subject to the same rights and restrictions as the RCL Foods BEE Shares stipulated in the RCL Foods BEE Relationship Agreement.

2.1.8.5 In the event that RCL Foods reasonably anticipates a delisting of the RCL Foods Shares from the JSE or the acquisition of 100% (one hundred percent) of the issued RCL Foods Shares, RCL Foods shall be entitled to accelerate the expiry date of the RCL Foods BEE Transaction Term .

2.1.9 Conditions precedent

The implementation of the New RCL Foods BEE Transaction is subject to the fulfi lment of, inter alia, the conditions precedent that, by not later than 17 :00 on Monday, 31 March 2014:

• the board of directors of the relevant RCL Foods BEE Vehicles and the relevant RCL Foods Strategic Partners and the trustees of the ESOP Trust approve the execution of each of the relevant RCL Foods BEE Transaction Agreements;

• each of the RCL Foods BEE Transaction Agreements is entered into and becomes unconditional in accordance with its terms;

• the ESOP Trust passes a special resolution adopting the new memorandum of incorporation in respect of SPV 1 and such special resolution is Filed with the CIPC;

• the RCL Foods Strategic Partners pass a special resolution adopting the new memorandum of incorporation in respect of SPV 2 and such special resolution is Filed with the CIPC;

• the RCL Foods Shareholders pass all the resolutions necessary to implement the RCL Foods BEE Relationship Agreement and, in particular, approve:

• the Proposed RCL Foods Share Capital Increase;

• the allotment and issue of the RCL Foods BEE Shares to the relevant RCL Foods BEE Vehicles;

• the granting of financial assistance by the Company to the relevant RCL Foods BEE Vehicles in the form of the RCL Foods BEE NVF and the RCL Foods BEE Preference Share funding in terms of section 44 of the Companies Act;

• the repurchase of RCL Foods BEE Shares from the relevant RCL Foods BEE Vehicles pursuant to the exercise of the RCL Foods BEE Repurchase Option, the RCL Foods BEE Compulsory Subscription Right or the RCL Foods BEE Subscription Option;

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• allotment and issue of additional RCL Foods Shares to the relevant RCL Foods BEE Vehicles pursuant to the exercise of the RCL Foods BEE Compulsory Subscription Right or the RCL Foods BEE Subscription Option; and

the Redemption and Repurchase Agreement is entered into and implemented.

3. ESOP TRUST SALIENT FEATURES

3.1 Purpose of the ESOP Trust

The purpose of the ESOP Trust will be to provide a framework for the continued retention of, and to provide an incentive to, Qualifying Employees within the RCL Foods Group by being the vehicle through which a portion of the RCL Foods BEE Shares are held for the benefit of Qualifying Employees.

The ESOP Trust will further provide for the promotion of BEE by RCL Foods and increase broad-based and effective participation in the equity of the Company by Black Persons.

3.2 Allocation of Units

In terms of the ESOP Trust Deed, Units will be allocated to Qualifying Employees.

At inception, all Qualifying Employees will receive the same number of Units regardless of race, remuneration package or years of service. Thereafter, each year new Qualifying Employees will receive a proportionately reduced number of Units determined by reference to the date on which they bec ame employed with an Employer Company until the 7th (seventh) anniversary of the RCL Foods BEE Implementation Date.

The Participants will, through their Units, effectively enjoy RCL Foods Shareholder rights such as dividend rights and voting rights (through the ESOP Trust trustees).

At the end of the RCL Foods BEE Transaction Term, once the SPV 1 Preference Shares have been redeemed and the RCL Foods BEE Notional Outstandings has been settled, the remaining RCL Foods BEE Shares held by the ESOP Trust will be distributed to the Participants in accordance with their Participation Percentage, thereby enabling the Participants to become direct shareholders in RCL Foods.

3.3 Termination of employment

Should a Participant’s employment with an Employer Company terminate prior to the date on which the RCL Foods BEE Shares held by the ESOP Trust are distributed to Participants, then, in the case of:

3.3.1 a Participant’s early retirement, resignation or dismissal (i.e. a “ bad leaver”): all Units held by the Participant will be immediately forfeited and the Participant shall forthwith cease to be a Participant in the ESOP Trust; or

3.3.2 a Participant’s death, serious disability or incapacity, retrenchment for operational reasons, retirement or the relevant Employer Company ceasing to be part of the RCL Foods Group (i.e. a “ good leaver”): the Participant shall be deemed to remain employed by the Group , notwithstanding the cessation of the Participant’s employment and the Participant shall be entitled to retain all the Units held by him.

3.4 Election and appointment of trustees

The ESOP Trust and trust property will be managed by the trustees of the ESOP Trust. Half of the trustees will be elected by the Qualifying Employees in accordance with the nomination and election process set out in the ESOP Trust Deed and the Company will be entitled to appoint the remainder of the trustees.

RCL Foods appointed 2 (two) initial trustees for purposes of executing the relevant RCL Foods BEE Transaction Agreements, implementing the New RCL Foods BEE Transaction and making the initial allocation of Units to Qualifying Employees. Such trustees will facilitate the election of the additional trustees by the Participants as soon as practicably possible after the initial allocation of Units.

It is intended that half of the trustees will be independent from the management of the ESOP Trust and in the event of a voting deadlock, an independent expert will be appointed to make a binding determination. The decision of the independent expert will be final.

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3.5 Distributions

All Distributions received by the ESOP Trust from time to time shall, until and including the date on which the RCL Foods BEE Transaction Term expires, be applied in the following order of priority:

• firstly, to the full extent possible taking into account the amount of available cash, to pay and/or provide for the tax liabilities of the ESOP Trust (if any) which have accrued as a result of the relevant RCL Foods Distribution;

• thereafter, subject to the relevant covenants under the RCL Foods BEE Preference Share Agreements being met, 20% (twenty percent) of the remaining available cash will be distributed as a trickle dividend to the Participants , provided that there is sufficient cash to service the SPV 1 Preference Shares; and

• thereafter, the remaining cash will be distributed to SPV 1 for purposes of servicing the SPV 1 Preference Shares and redeeming the SPV 1 Preference Shares. Once the SPV 1 Preference Shares have been redeemed, the remaining cash will be utilised by the ESOP Trust to exercise the RCL Foods BEE Subscription Option in order to settle the RCL Foods BEE Notional Outstandings.

4. SPV 2 SALIENT FEATURES

4.1 Information on the RCL Foods Strategic Partners

• Imbewu Consortium is a broad-based consortium led by Imbewu Capital Partners Proprietary Limited and comprises the following key parties: Imbewu Capital Partners Proprietary Limited, Imogen Mkhize via Solegna, Monica Malunga, Omane Investments, J B Magwaza, Imbewu Development Trust and Siza Enterprise Development Fund.

• The Ikamva Labantu Empowerment Trust is a trust established for the benefit of the Ikamva Labantu Charitable Trust, a non-profit, non-governmental organisation that seeks to redress the damages of apartheid and support democracy in South Africa by providing educational means, economic empowerment and self-sufficiency to South African township communities.

• Mrs Manana Margaret Nhlanhla is a non-executive director of RCL Foods.

4.2 Allocation of shareholding in SPV 2

The shareholding of each of the Strategic Partners in SPV 2 has been determined in proportion to their participation under the Current RCL Foods BEE Structure. Based on this criteria, the RCL Foods Strategic Partners will hold the following shareholding percentages in SPV 2:

• Imbewu Consortium: 69.76% (sixty nine point seven six percent);

• Ikamva Labantu Empowerment Trust: 29.07% (twenty nine point zero seven percent); and

• Mrs Manana Margaret Nhlanhla: 1.17% (one point one seven percent).

5. ESTIMATED COSTS

RCL Foods has estimated the economic cost of implementing the New RCL Foods BEE Transaction for the Company to be approximately R276 000 000 (two hundred and seventy six million Rand), as at the Announcement Date, attributable to the RCL Foods BEE Vehicles as follows:

• R193 000 000 (one hundred and ninety three million Rand) relating to the ESOP Trust and SPV 1, to be amortised over the RCL Foods BEE Transaction Term; and

• R83 000 000 (eighty three million Rand) relating to SPV 2, to be expensed in full on the RCL Foods BEE Implementation Date

An accelerated charge of R16 900 000 (sixteen million nine hundred thousand Rand) will be incurred on the unwinding of the Current RCL Foods BEE Structure.

This represents approximately 2.7% (two point seven percent) of the market capitalisation of RCL Foods on the Last Practicable Date (c. R10 851 293 420 (ten billion eight hundred and fifty one million two hundred and ninety three thousand four hundred and twenty Rand)). This figure was calculated with reference to the requirements of IFRS, including IFRS 2 – Share -Based Payments.

IFRS 2 sets out the basis for calculating the economic cost shown above and the valuation uses the following key inputs or assumptions:

• the Black -Scholes model (option pricing model) for valuing options; and

• the use of available market-sourced data and an estimation of future dividend yields at given dates. This option pricing model determines expected future ordinary share prices.

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6. SPECIFIC AUTHORITY TO ISSUE THE RCL FOODS BEE SHARES AND TO PROVIDE FINANCIAL ASSISTANCE TO THE RCL FOODS BEE VEHICLES

The subscription for the RCL Foods BEE Preference Shares by RCL Foods to enable the RCL Foods BEE Vehicles to subscribe for the RCL Foods BEE Common Shares and the provision of the RCL Foods BEE NVF to enable the RCL Foods BEE Vehicles to subscribe for the RCL Foods BEE Shares constitutes the provision of financial assistance by RCL Foods in terms of section 44 of the Companies Act. The Board may not authorise the provision of such financial assistance unless such financial assistance is pursuant to a special resolution of Shareholders adopted within the previous 2 (two) years, which approved the provision of such financial assistance either for a specific recipient or generally for a category of potential recipients and the specific recipient falls within that category. The Company will seek the approval of Shareholders at the General Meeting to provide financial assistance to the RCL Foods BEE Vehicles by way of the RCL Foods BEE NVF and the RCL Foods BEE Preference Shares.

The issue of the RCL Foods BEE Shares constitutes an issue for cash for which specific authority is required from Shareholders in terms of paragraph 5.51(g) of the Listings Requirements. The Company will seek Shareholder approval at the General Meeting to issue the RCL Foods BEE Shares to the ESOP Trust and SPV 2.

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C. INFORMATION RELATING TO THE PROPOSED EQUITY CAPITAL RAISING

1. INTRODUCTION AND RATIONALE

RCL Foods is currently considering significant growth and expansion projects in South Africa and the rest of sub-Saharan Africa in the broader food and fast moving consumer goods space. In order to capitalise fully on these opportunities, RCL Foods has determined that it requires additional capital.

The Board has accordingly resolved to propose an equity capital raising in the amount of up to R2 500 000 000 (two billion five hundred million Rand) via a combination of a pro rata offer to RCL Foods Minority Shareholders and a specific issue of new Shares via a placement to qualifying investors.

It is the intention of the Board that the subscription proceeds from the Equity Capital Raising will be applied, inter alia, towards the future growth and expansion of RCL Foods’ operations in South Africa and sub-Saharan Africa.

2. PRO RATA OFFER

In light of the anticipated dilution of RCL Foods Minority Shareholders’ relative shareholdings pursuant to the implementation of the TSB Acquisition, the Company intends to make a pro rata offer to Qualifying RCL Foods Minority Shareholders in order to afford them the opportunity to subscribe for that number of Pro Rata Offer Shares as will enable them to maintain their respective shareholding percentages in RCL Foods following the implementation of the TSB Acquisition.

2.1 Terms of the Pro Rata Offer

In terms of the Pro Rata Offer, the Company will offer 74 21 4 642 (seventy four million two hundred and fourteen thousand six hundred and forty two) Pro Rata Offer Shares to RCL Foods Minority Shareholders in the ratio of 53.10646 (fifty three point one zero six four six) Pro Rata Offer Shares for every 100 (one hundred) Shares held by RCL Foods Minority Shareholders on the Record Date for the Pro Rata Offer, which is expected to be Friday, 31 January 2014.

The final terms of the Pro Rata Offer, including the Pro Rata Offer Subscription Price will be announced on the finalisation date of the Pro Rata Offer, which is expected to be Friday, 17 January 2014.

2.2 Offer mechanism

In terms of the Pro Rata Offer, Qualifying RCL Foods Minority Shareholders will be able to subscribe for that number of Pro Rata Offer Shares as will enable them to maintain their respective shareholding percentages in RCL Foods following the implementation of the TSB Acquisition.

2.2.1 Entitlement

The entitlement of each Qualifying RCL Foods Minority Shareholder under the Pro Rata Offer will be determined by reference to the number of RCL Foods Shares held on the Record Date and is set out in the Table of Entitlement in Annexure 15 to the Circular. Qualifying RCL Foods Minority Shareholders holding less than 100 (one hundred) RCL Foods Shares, or not holding a whole multiple of 100 (one hundred) RCL Foods Shares, will be entitled to participate in the Pro Rata Offer in respect of such holdings, in accordance with the Table of Entitlement in Annexure 15 to the Circular.

2.2.2 Fractional Entitlements

Pro Rata Offer Shares representing fractional Entitlements will not be issued to Qualifying RCL Foods Minority Shareholders. Entitlements to Pro Rata Offer Shares of 0.5 (zero point 5) or greater will be rounded up to the nearest whole number and Entitlements to Pro Rata Offer Shares of less than 0.5 (zero point 5) will be rounded down to the nearest whole number.

2.2.3 Lapsing of Entitlements

RCL Foods Minority Shareholders will not be entitled to sell or renounce their Entitlements under the Pro Rata Offer and the Entitlements of RCL Foods Minority Shareholders that do not elect to subscribe for Pro Rata Offer Shares will lapse.

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RCL Foods Minority Shareholders that do not elect to subscribe for Pro Rata Offer Shares in accordance with their Entitlements will continue to own the same number of RCL Foods Shares, but their percentage holding in RCL Foods will be diluted as a consequence of the issue of the TSB Consideration Shares and the acceptance of the Pro Rata Offer by other Qualifying RCL Foods Shareholders.

2.2.4 Excess applications

There will be no right to apply for excess Pro Rata Offer Shares.

2.2.5 Procedures f or the subscription for Pro Rata Offer Shares

2.2.5.1 Qualifying Certificated Shareholders

Qualifying Certificated Shareholders who wish to subscribe for all or some of the Pro Rata Offer Shares to which they are entitled, must complete the Form of Acceptance in accordance with the instructions contained therein and deliver it, together with payment of the aggregate Pro Rata Offer Subscription Price in respect of all the Pro Rata Shares for which they wish to subscribe, to the Transfer Secretary at the postal or physical address or to the fax number or email address set out in paragraph 2.2.6.1 below, so as to be received by the Transfer Secretary by no later than 12:00 on Tuesday, 4 February 2014 . Once received by the Transfer Secretary, the acceptance of Pro Rata Offer Shares is irrevocable and may not be withdrawn.

If payment is not received on or before 12:00 on Tuesday, 4 February 2014 , the Qualifying Certificated Shareholders concerned will be deemed to have declined the Pro Rata Offer Shares for which they are entitled to subscribe and their Entitlements will lapse.

Qualifying Certificated Shareholders are advised to take into consideration postal delivery times when posting their Forms of Acceptance, as no late postal deliveries will be accepted. Qualifying Certificated Shareholders are advised to deliver their completed Forms of Acceptance together with payment to the Transfer Secretary by hand or by courier, where possible.

2.2.5.2 Qualifying Dematerialised Shareholders

Qualifying Dematerialised Shareholders will not receive a Form of Acceptance. Instead, they should receive notification from their CSDP or Broker regarding their right to subscribe for Pro Rata Offer Shares in terms of the Pro Rata Offer in accordance with their Entitlements.

Qualifying Dematerialised Shareholders who wish to subscribe for all or some of the Pro Rata Offer Shares to which they are entitled are required to notify their duly appointed CSDP or Broker of their acceptance of the Pro Rata Offer in the manner and time stipulated in the agreement governing the relationship between themselves and their CSDP or Broker. If your CSDP or Broker does not obtain instructions from you, it is obliged to act in terms of the mandate granted to them by you, or if the mandate is silent in this regard, it shall not subscribe for Pro Rata Offer Shares on your behalf in terms of the Pro Rata Offer.

RCL Foods is not responsible and may not be held liable for any failure on the part of any CSDP or Broker to notify Qualifying Dematerialised Shareholders of the Pro Rata Offer and/or to obtain instructions from Qualifying Dematerialised Shareholders to subscribe for the Pro Rata Offer Shares.

2.2.6 Payment of the Pro Rata Offer Subscription Price

The Pro Rata Offer Subscription Price payable in respect of all the Pro Rata Offer Shares for which a Qualifying RCL Foods Minority Shareholder wishes to subscribe is payable in Rand.

2.2.6.1 Qualifying Certificated Shareholders

Qualifying Certificated Shareholders must, together with their duly completed Form of Acceptance, deliver a cheque (crossed, marked “not transfe rable” and with the words “or bearer” deleted) or a bankers’ draft (drawn on a bank registered in South Africa) made payable to “RCL Foods Limited – Pro Rata Offer” for the aggregate Pro Rata Offer Subscription Price payable in respect of all the Pro Rata Offer Shares for which they wish to subscribe to the Transfer Secretary, as follows:

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By hand or courier: By post:

RCL Foods Limited – Pro Rata Offer RCL Foods Limited – Pro Rata OfferC/o Computershare Investor Services C/o Computershare Investor ServicesProprietary Limited Proprietary Limited70 Marshall Street PO Box 61763Johannesburg, 2001 Marshalltown, 2107

By fax By email

+27 11 688 5210 [email protected]

so as to be received by the Transfer Secretary not later than 12:00 on Tuesday, 4 February 2014 .

Alternatively, the aggregate Pro Rata Offer Subscription Price may be paid by way of an electronic funds transfer into the designated bank account, details of which are available from the Corporate Actions department of the Transfer Secretary, contactable during ordinary business hours on +27 861 100 634 and quoting the account number (as printed on page 1 of the Form of Acceptance) as the payment reference.

Delivery of any bank guaranteed cheque or banker’s draft will be at the risk of the Qualifying Certificated Shareholder concerned.

All bank-guaranteed cheques or bankers’ drafts received by the Transfer Secretary will be deposited immediately for payment. Payment of the aggregate Pro Rata Offer Subscription Price will constitute an irrevocable subscription by the Qualifying Certificated Shareholder for the relevant number of Pro Rata Offer Shares upon the terms set out in the Circular and in the Form of Acceptance.

In the event that any cheque, bankers’ draft or electronic funds payment is dishonoured, RCL Foods may, in its sole discretion, treat the acceptance of Pro Rata Offer Shares and the completed Form of Acceptance as void or may tender delivery of the relevant Pro Rata Offer Shares to which such cheque banker’s draft or electronic funds payment relates, against payment, in cash, of the aggregate Pro Rata Offer Subscription Price in respect of such Pro Rata Offer Shares.

2.2.6.2 Qualifying Dematerialised Shareholders

Payment of the Pro Rata Offer Subscription Price payable by Qualifying Dematerialised Shareholders in respect of the Pro Rata Offer Shares for which they wish to subscribe will be effected on their behalf by their CSDP or Broker. The CSDP or Broker will make payment in respect of Qualifying Dematerialised Shareholders on a delivery versus payment basis. Qualifying Dematerialised Shareholders must ensure that they place their CSDP or Broker in sufficient funds so as to enable them to settle the aggregate Pro Rata Offer Subscription Price payable in respect of the Pro Rata Offer Shares for which they wish to subscribe.

Qualifying Dematerialised Shareholders that have validly subscribed for Pro Rata Offer Shares will have their accounts with their CSDP or Broker updated with the Pro Rata Offer Shares to which they are entitled, on Monday, 1 0 February 2014 .

2.2.7 Share certificates

New share certificates to be issued to Qualifying Certificated Shareholders in respect of those Pro Rata Offer Shares for which they have subscribed, will be posted to Qualifying Certificated Shareholders, by registered post, at their risk, on or about Monday, 1 0 February 2014 .

Qualifying Certificated Shareholders should note that Certificated Shares may not be traded on the JSE until they have been Dematerialised.

2.2.8 Exchange Control Regulations

The information below is not intended as legal advice and it does not purport to describe all of the considerations that may be relevant to Shareholders. Qualifying RCL Foods Minority Shareholders who are Non-resident s or emigrants from the Common Monetary Area should seek further professional advice with regard to the subscription for Pro Rata Offer Shares.

2.2.8.1 Non-residents

In terms of the Exchange Control Regulations, Non-resident Qualifying RCL Food Minority Shareholders, excluding former residents (emigrants) of the Common

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Monetary Area, will be allowed to elect to participate in the Pro Rata Offer, provided that payment is received in foreign currency or in Rand from a Non-resident Account.

All applications by Non-residents for the above purposes must be made through an Authorised Dealer. In the case of Non-resident Certificated Shareholders, certificates issued in respect of Pro Rata Offer Shares will be endorsed “non-resident” and in the case of Non- resident Dematerialised Shareholders, the securities account maintained for such Non-resident by the relevant CSDP will be designated as a “non-resident” account.

2.2.8.2 Emigrants

All applications by emigrants from the Common Monetary Area using blocked Rand for the above purposes must be made through the Authorised Dealer controlling such emigrant’s blocked assets.

In the case of Non-resident Certificated Shareholders, certificates issued in respect of Pro Rata Offer Shares will be endorsed “non-resident”. Such restrictively endorsed documents of title must be deposited with the Authorised Dealer controlling such emigrant’s blocked assets. In the case of Non-resident Dematerialised Shareholders, the securities account maintained for such emigrant by the relevant CSDP will be designated as an “emigrant” account.

Funds which may not, in terms of the Exchange Control Regulations, be remitted out of South Africa or paid into a bank account outside of South Africa (blocked Rand) may be used for the subscription for Pro Rata Offer Shares. Any amounts payable by RCL Foods in respect of the Pro Rata Offer Shares subscribed for with blocked Rand will be deposited into such emigrant’s blocked Rand account maintained by the relevant Authorised Dealer. Such proceeds and amounts are not freely transferable from the Common Monetary Area and may only be dealt with in terms of the Exchange Control Regulations.

2.2.9 Foreign Shareholders

The attention of Qualifying RCL Foods Minority Shareholders who are resident outside of South Africa, is drawn to this paragraph and to paragraph 2.2.8 of the Circular.

This section is intended as a general guide only, and any person outside of South Africa who is in doubt as to his position should consult his professional advisor without delay.

2.2.9.1 General

The making of the Pro Rata Offer and the distribution of the Circular and the Form of Acceptance to certain persons who have registered addresses outside of South Africa, or who are resident or located in, or who are citizens of, countries other than South Africa, may be restricted by the laws of the relevant jurisdictions and failure to comply with any of those restrictions may constitute a contravention of the laws of any such territories. Persons outside of South Africa should consult their professional advisors as to whether they require any governmental or other consents or need to observe any other formalities to enable them to subscribe for Pro Rata Offer Shares. It is the responsibility of any person (including, without limitation, custodians, nominees and trustees) outside of South Africa wishing to subscribe for Pro Rata Offer Shares to satisfy themselves as to the full observance of the laws of any relevant territory in connection therewith, including the obtaining of any governmental or other consents which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes due in such territories.

Receipt of the Circular or the Form of Acceptance will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those circumstances, the Circular and the Form of Acceptance must be treated as being sent for information purposes only and should not be copied or redistributed. The Pro Rata Offer is not and will not be made to Restricted Shareholders, except where RCL Foods is satisfied that such action would not result in a contravention of any registration or other legal requirement in any jurisdiction.

No person receiving a copy of the Circular and/or Form of Acceptance may treat the same as constituting an invitation or offer to him unless, in the relevant territory, such an invitation or offer could lawfully be made to him or the letter of allocation or Form of Acceptance could lawfully be used or dealt with without contravention

40

of any registration or other legal requirements. In such circumstances, the Circular and the Form of Acceptance are to be treated as being sent for information purposes only and should not be copied or redistributed.

Persons (including, without limitation, custodians, nominees and trustees) receiving a copy of the Circular and/or a Form of Acceptance should not, in connection with the Pro Rata Offer, distribute or send the same into any jurisdiction where to do so would or might contravene local security laws or regulations, including, but not limited to, the Restricted Territories. If a Form of Acceptance is received by any person in any such territory, or by his agent or nominee, he must not seek to subscribe for Pro Rata Offer Shares unless RCL Foods determines that such action would not violate applicable legal or regulatory requirements. Any person (including, without limitation, custodians, nominees and trustees) who does forward this document or a Form of Acceptance into any such territories (whether pursuant to a contractual or legal obligation or otherwise) should draw the recipient’s attention to the contents of this paragraph and paragraph 2.2.8 above. The Company reserves the right to treat as invalid any subscription or purported subscription for Pro Rata Offer Shares if:

(i) it appears to RCL Foods or its agents to have been executed or effected in, or dispatched from, a Restricted Territory or otherwise in a manner which may involve a breach of the laws of any jurisdiction, or if it believes the same may violate any applicable legal or regulatory requirement;

(ii) in the case of a Form of Acceptance, it provides an address for delivery of share certificates to a person who is a Restricted Shareholder or a Shareholder whose registered address is in a Restricted Territory; or

(iii) the warranties required by paragraph 2.2.9.6 below are purported to be excluded.

2.2.9.2 United States

The Pro Rata Offer Shares have not been approved by the U.S. Securities and Exchange Commission, any state securities commission in the United States (“U.S.”) or any other U.S. regulatory authority, nor have any of such regulatory authorities passed upon or endorsed the merits of the Pro Rata Offer or the accuracy or adequacy of the Circular. Any representation to the contrary is a criminal offence in the U.S. The Pro Rata Offer Shares have not been and will not be registered under the U.S. Securities Act nor with any securities regulatory authority of any state or other jurisdiction of the U.S. and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the U.S., except pursuant to an exemption from or, in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the U.S. Accordingly, RCL Foods is not offering the Pro Rata Offer Shares, or otherwise extending the Pro Rata Offer, into the U.S. unless an exemption from the registration requirements of the U.S. Securities Act is available and, subject to certain exceptions, the Circular does not constitute nor will it constitute an offer or an invitation to apply for, nor an offer or an invitation to acquire, Pro Rata Offer Shares in the U.S. Subject to certain exceptions, the Circular will not be sent to any RCL Foods Shareholder in, or with a registered address in, the U.S.

Subject to certain exceptions, any person who acquires Pro Rata Offer Shares will be deemed to have declared, warranted and agreed, by accepting delivery of the Circular, subscribing for Pro Rata Offer Shares or accepting delivery of the Pro Rata Offer Shares, that they are not, and that at the time of acquiring the Pro Rata Offer Shares they will not be, in the U.S. or acting on behalf of, or for the account or benefit of, a person on a non-discretionary basis in the U.S. or any state of the U.S. In addition, until 40 (forty) days after the commencement of the Pro Rata Offer, an offer, sale or transfer of the Pro Rata Offer Shares within the U.S. by a dealer (whether or not participating in the Pro Rata Offer) may violate the registration requirements of the U.S. Securities Act.

2.2.9.3 United Kingdom

Th e Circular and the Form of Acceptance (where applicable) are only being distributed to and are only directed at:

(i) persons who are outside the United Kingdom;

(ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (“Order”); or

41

(iii) persons who are high net worth entities falling within Articles 49(2)(a) to (d) of the Order (all such persons together being referred to as “Relevant Persons” ). The Form of Acceptance and the Pro Rata Offer Shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Pro Rata Offer Shares will only be engaged in with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on the Circular or the Form of Acceptance or any of their contents.

2.2.9.4 Member states of the European Economic Area

No prospectus which has been approved by the competent authority in a Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in the Relevant Member State in accordance with the Prospectus Directive, will be published in relation to the Pro Rata Offer Shares. Accordingly, in relation to each Relevant Member State, with effect from and including the date on which the Prospective Directive was implemented in the Relevant Member State (“Relevant Implementation Date”), no Pro Rata Offer Shares have been offered or will be offered pursuant to the Pro Rata Offer to the public in that Relevant Member State except that, with effect from and including the Relevant Implementation Date, offers of Pro Rata Offer Shares may be made to the public in that Relevant Member State at any time:

(i) to any person or legal entity which is a “qualified investor” as defined under the Prospectus Directive;

(ii) to fewer than 100 (one hundred), or, if the Relevant Member State has implemented the relevant provisions of the 2010 PD Amending Directive, 150 (one hundred and fifty) natural or legal persons (other than qualified investors as defined in the Prospectus Directive) in such Relevant Member State subject to obtaining the prior consent of the Company; or

(iii) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Pro Rata Offer Shares shall result in a requirement for RCL Foods to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression “an offer of Pro Rata Offer Shares” in relation to any Pro Rata Offer Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the Pro Rata Offer and the Pro Rata Offer Shares to be offered so as to enable an investor to decide to subscribe for the Pro Rata Offer Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that member state. In the case of any Pro Rata Offer Shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will be deemed to have represented, acknowledged and agreed that the Pro Rata Offer Shares acquired by it in terms of the Pro Rata Offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in a Relevant Member State in circumstances which may give rise to an offer of any Pro Rata Offer Shares to the public other than their offer or resale in a Relevant Member State to qualified investors as so defined or in circumstances in which the prior consent of the Company has been obtained for each such proposed offer or resale. The Company and its affiliates will rely upon the truth and accuracy of the foregoing representation, acknowledgement, and agreement. Notwithstanding the above, a person who is not a qualified investor and who has notified the Company of such fact in writing may, with the consent of the Company, be permitted to subscribe for Pro Rata Offer Shares pursuant to the Pro Rata Offer.

2.2.9.5 Restricted Territories

Subject to certain exceptions, the Pro Rata Offer Shares may not be offered, transferred, sold or delivered into or in the Restricted Territories. No offer of Pro Rata Offer Shares is being made into the Restricted Territories by virtue of the Circular or the Form of Acceptance. Although Forms of Acceptance may be posted to RCL Foods Shareholders:

(i) with a registered address, or resident, in one of the Restricted Territories; or

(ii) who hold RCL Foods Shares on behalf of persons located in Restricted Territories, such posting of the Form of Acceptance does not constitute an

42

offer to Restricted Shareholders and such Restricted Shareholders will not be entitled to subscribe for Pro Rata Offer Shares unless such action would not result in the contravention of any registration or other legal requirement in the relevant jurisdictions.

2.2.9.6 Representations and warranties

Any person subscribing for Pro Rata Offer Shares represents and warrants to RCL Foods that, except where proof has been provided to the Company’s satisfaction that such person’s subscription for Pro Rata Offer Shares will not result in the contravention of any applicable legal requirement in any jurisdiction, such person:

(i) is not subscribing for Pro Rata Offer Shares from within a Restricted Territory;

(ii) is not in any jurisdiction in which it is unlawful to make or accept the Pro Rata Offer or subscribe for Pro Rata Offer Shares;

(iii) is not subscribing for Pro Rata Offer Shares for the account of a person located within the U.S. unless:

(a) the instruction to accept or renounce was received from a person outside the U.S.; and

(b) the instructing person has advised such person that it has the authority to give such instruction and that either it: (A) has investment discretion or authority over such account or (B) is an investment manager or investment company and that in the case of each of (A) and (B), is acquiring the Pro Rata Offer Shares in terms of an exemption from the registration requirements of the U.S. Securities Act ;

(iv) is not acquiring Pro Rata Offer Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Pro Rata Offer Shares into a Restricted Territory.

The Company reserves the right to treat as invalid any subscription or purpo rted subscription for Pro Rata Offer Shares if it:

(i) appears to the Company or its agents to have been executed or effected in, or dispatched from, a Restricted Territory or otherwise in a manner which may involve a breach of the laws of any jurisdiction or if it believes the same may violate any applicable legal or regulatory requirement;

(ii) provides a securities account in a Restricted Territory for the crediting of Pro Rata Offer Shares or an address in a Restricted Territory for delivery of share certificates evidencing Pro Rata Offer Shares; or

(iii) purports to exclude the warrant ies required by this paragraph.

2.2.10 Tax consequences

Qualifying RCL Foods Minority Shareholders are advised to consult their tax and financial advisors regarding any taxation implications pertaining to them regarding the acceptance of their entitlements in terms of the Pro Rata Offer.

2.2.11 JSE listing

The Company will apply to the Issuer Regulation Division of the JSE for the listing of a maximum of 7 4 214 642 (seventy four million two hundred and fourteen thousand six hundred and fo rty two) Pro Rata Offer Shares with effect from the commencement of trade on Monday, 10 February 2014 .

2.3 Conditions precedent to the Pro Rata Offer

The implementation of the Pro Rata Offer is subject to the fulfil ment of the conditions precedent that:

• the TSB Acquisition is implemented; and

• Shareholders approv e the specific issue of Shares in terms of the Pro Rata Offer.

43

3. PLACEMENT

Market conditions permitting, it is the intention of the Board to offer the Placement Shares to qualifying South African and international investors in order to raise the balance of the R2 500 000 000 (two billion and five hundred million Rand) not raised pursuant to the Pro Rata Offer.

The quantum of the Placement will be determined post the implementation of the Pro Rata Offer and the Placement Subscription Price will be determined by way of an accelerated bookbuild process.

The Placement is intended to diversify the RCL Foods shareholder base, further increase the free float and improve liquidity in RCL Foods Shares.

3.1 Placement mechanism

The Placement Shares will be offered to new and existing qualifying investors by way of an accelerated bookbuild process. Qualifying investors will be invited to submit their price and volume indications into a book of demand. A single clearing price, being the Placement Subscription Price, will be established in this manner.

Existing RCL Foods Shareholders who are qualifying investors will be able to participate in the Placement.

No party has yet been approached to participate in the Placement.

3.2 Remgro participation in the Placement

Remgro is supportive of the Placement and the principles of increasing the free float and liquidity in RCL Foods Shares.

Remgro, through TSB Sugar Holdings, will continue to support the Company as a capital provider and, subject to the approval of RCL Foods Shareholders, may participate in the Placement.

If any Placement Shares are to be issued to TSB Sugar Holdings and if the Placement Subscription Price is at a discount to the VWAP per RCL Foods Share over the 30 (thirty) Business Days prior to the date on which the Placement Subscription Price is agreed, then the issue of Placement Shares to TSB Sugar Holdings shall be subject to the Board confirming whether such issue is fair insofar as other Shareholders are concerned based on the advice received from an independent expert which is acceptable to the JSE .

3.3 Conditions precedent to the Placement

The implementation of the Placement is subject to Shareholders approving the specific issue of Shares in terms of the Placement.

The issue of Placement Shares to TSB Sugar Holdings pursuant to the Placement is subject to Shareholders approving the specific issue of Shares to TSB Sugar Holdings in terms of the Placement.

44

D. FINANCIAL INFORMATION RELATING TO THE TSB TRANSACTIONS AND THE RCL FOODS BEE TRANSACTIONS

1. ADEQUACY OF CAPITAL

The Directors have considered the effect of the TSB Acquisition, TSB BEE Transaction and RCL Foods BEE Transactions and are of the opinion that the requirements of the Companies Act and the Listings Requirements have been complied with and that:

• the RCL Foods Group post the TSB Acquisition, TSB BEE Transaction and RCL Foods BEE Transactions will be able, in the ordinary course of business, to pay its debts for a period of 12 (twelve) months after the implementation of the above transactions (for this purpose the assets and liabilities were recognised and measured in accordance with the accounting policies used in the latest audited consolidated annual financial statements of RCL Foods);

• the assets of the RCL Foods Group post the TSB Acquisition, TSB BEE Transaction and RCL Foods BEE Transactions will be in excess of the liabilities of the RCL Foods Group for a period of 12 (twelve) months after the implementation of the above transactions;

• the share capital and reserves of the RCL Foods Group post the TSB Acquisition, TSB BEE Transaction and RCL Foods BEE Transactions will be adequate for ordinary business purposes (excluding the proposed Project) for a period of 12 (twelve) months after the implementation of the above transactions;

• the working capital of the RCL Foods Group post the TSB Acquisition, TSB BEE Transaction and RCL Foods BEE Transactions will be adequate for ordinary business purposes for a period of 12 (twelve) months after the implementation of the above transactions.

The Directors of RCL Foods have also undertaken to submit a working capital pack to the Company’s JSE sponsor prior to any repurchase resulting from the exercise of the RCL Foods BEE Repurchase Option, the RCL Foods BEE Compulsory Subscription Right or the RCL Foods BEE Subscription Option in terms of the RCL Foods BEE Relationship Agreement in terms of the New RCL Foods BEE Transaction and prior to any repurchase resulting from the exercise of the TSB BEE Maturity Call Option, the TSB BEE Trigger Event Call Option, the TSB BEE Exit Call Option or the TSB BEE Pre-emptive Right in terms of the TSB BEE Subscription and Relationship Agreement.

2. PRO FORMA FINANCIAL INFORMATION

The Company’s pro forma statement of financial position at 30 June 2013 and pro forma income statement for the year ended 30 June 2013 are set out in Annexure 2 to the Circular.

The pro forma financial effects set out below have been prepared to assist Shareholders in assessing the impact of the TSB Transactions , the RCL Foods BEE Transactions and the Equity Capital Raising on the EPS, HEPS, NAV and TNAV Per Share. Due to the nature of these pro forma financial effects, they are presented for illustrative purposes only and may not fairly present the Company’s financial position, results of its operations, changes in equity or cash flows after the TSB Transaction and the RCL Foods BEE Transactions.

The pro forma financial effects have been prepared in accordance with the Listings Requirements and the Guide on Pro Forma Financial Information issued by The South African Institute of Chartered Accountants. These pro forma financial effects are the responsibility of the Board and are provided for illustrative purposes only. The pro forma financial effects set out below should be read in conjunction with the independent reporting accountant’s assurance report, which is included as Annexure 3 to the Circular.

45

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46

3. TRANSACTION COSTS

The estimated costs of the TSB Acquisition, TSB BEE Transaction, RCL Foods BEE Transactions and the Equity Capital Raising (VAT exclusive) are set out below:

Service Service providerAmount (R’000)

Merchant Bank and Sponsor Rand Merchant Bank 17 000Legal Cliffe Dekker Hofmeyr Inc. 2 500Independent Expert Deloitte 1 050Reporting Accountants P ricewaterhouseCoopers Inc. 850Publishing and printing Ince (Pty) Ltd 350JSE listing fees JSE 671JSE documentation inspection fee JSE 97Transfer Secretary Computershare 143

Total 22 661

There have been no preliminary expenses in relation to the proposed transactions incurred by RCL Foods within the three years preceding the date of the Circular.

47

E. COMPANY INFORMATION

1. BACKGROUND INFORMATION

1.1 Incorporation

RCL Foods was incorporated in South Africa in June 1966 as a limited liability private company. RCL Foods was converted to a public company and its Shares were listed on the JSE in June 1989.

1.2 History and nature of business

RCL Foods is a subsidiary of Remgro. Remgro holds c. 70% ( seventy percent) of RCL Foods Shares via its wholly-owned subsidiaries. It is the holding company of three principal operating subsidiaries, Rainbow, Vector and Foodcorp .

Rainbow was founded by the late Stanley Methven on his father’s farm at Hammarsdale, outside Durban, in 1960. He first sold from a stall in central Durban. Demand for Rainbow’s chicken grew quickly, leading to the commissioning of the first processing plant at Hammarsdale in 1963. Today, Rainbow is South Africa’s largest processor and marketer of chicken and operates in the local retail, wholesale and foodservice channels. Its consumer brands are Rainbow and Farmer Brown and its business/service brands are Rainbow FoodSolutions, Cobb and Epol.

Vector’s origins lie within I&J (an AVI Limited company) where it was positioned as an in-house distribution arm. The growth of the distribution business was given significant impetus with the conclusion of a distribution arrangement with Rainbow Farms in 1966, although at the time this was limited to the Natal (KZN) area. Rainbow’s later expansion to sell and produce nationally had a direct and positive impact on the growth of the I&J distribution business. In July 2001, AVI Limited re-launched its distribution business as a separate company and it was subsequently renamed Vector Logistics. RCL Foods acquired Vector in July 2004 with the strategic intent of controlling and optimising Rainbow’s outbound supply chain. Vector’s key focus between 2004 and 2010 was to optimise Rainbow’s outbound supply chain whilst simultaneously growing and diversifying its menu of services with its existing customer base.

Foodcorp was delisted from the JSE in 1998 following a private equity buy-out and subsequently sold to Pamodzi Investment Holdings, management and employees in April 2004. In March 2010, Foodcorp completed a restructuring transaction whereby Pamodzi sold its entire interest to BlueBay, a UK -based fund manager, Capitau Partnership, a South African -based fund manager and to management and employees through a staff trust.

On 15 May 2013, RCL Foods acquired an effective 64.2% (sixty four point two percent) shareholding in Foodcorp, which is South Africa’s third largest food producer, which brought a number of leading brands into the RCL Foods stable. The remaining 35.8% (thirty five point eight percent) was acquired post 30 June 2013, thereby making Foodcorp a wholly -owned subsidiary of RCL Foods. Foodcorp manufactures, markets and distributes a diversified portfolio of food products ranging from basic essentials to top-end desserts and convenience meals. Many of the products are associated with South African tradition and heritage, and are therefore among the leading and best recognised brands in South Africa.

No government protection or investor encouragement is applicable to RCL Foods.

1.3 Prospects of the RCL Foods Group

The challenging state of the global and local economy is unlikely to see sustainable improvement in consumer sentiment and spending in the near future, which impacts across all operating subsidiaries. The poultry industry is at crisis point and anti-dumping protection will be key to the survival of the industry. The trading outlook for Vector is likely to remain under pressure, particularly in the retail business where Vector’s principals are coming under increased pressure from cheap imports. Vector will continue to seek new business to take advantage of the additional capacity created in 2013.

Considering the local chicken supply and demand imbalance and that raw material commodity prices are at record levels, the Board is of the view that operating margins are likely to remain under pressure.

Despite these factors, growth opportunities continue to be explored by the Board to meet the RCL Foods Group’s long-term strategic aspirations. The TSB Acquisition will help diversify the RCL Foods Group’s earnings and further consolidate a well-funded platform for future acquisitions and growth. This will further strengthen RCL Foods’ financial position and help lower the volatility in its earnings going forward.

48

1.4 Trading history of RCL Foods Shares on the JSE

A table setting out the trading history of RCL Foods Shares on the JSE has been included in Annexure 4 to the Circular.

2. FINANCIAL INFORMATION

2.1 Historical financial information

The historical financial information of RCL Foods for the three financial periods ended 30 June 2011, 30 June 2012 and 30 June 2013 is included in Annexure 7 to the Circular.

The Directors are responsible for the accuracy of the relevant information extracted from the year-end annual financial statements.

2.2 Material liabilities and commitments

Details of all material liabilities and commitments are set out in Annexure 8 to the Circular.

2.3 Dividends and dividend policy

The Directors intend to declare a semi-annual dividend. The dividend policy will be reviewed by the Directors from time to time in light of the prevailing circumstances and cash requirements of RCL Foods.

All unclaimed dividends that are due to Shareholders shall be held by the Company in trust until lawfully claimed by such Shareholders. If, after expiry of the relevant three -year period provided for in terms of the Prescription Act, No 68 of 1969, as amended, such monies remain unclaimed, such unclaimed monies may be declared by the Directors to be forfeited for the benefit of the Company. The Directors may at any time annul such forfeiture upon such conditions (if any) as they deem fit.

2.4 Material change

The Foodcorp Acquisition is the only material change in RCL Foods’ business.

3. INFORMATION ON THE DIRECTORS AND EXECUTIVE MANAGEMENT

The Directors have:

• been appointed in terms of RCL Foods’ MOI;

• confirmed that they do not have any conflict of interest between their duties as Directors and their private interests; and

• confirmed that they, collectively, have the appropriate expertise and experience for the management of the RCL Foods Group’s business.

3.1 Details and experience of Directors and executive management

The full names, positions, dates of appointment, ages, nationalities, business addresses, qualifications, experience and other directorships of the Directors and senior management of RCL Foods and its major subsidiaries are set out in Annexure 10 to the Circular.

3.2 Directors’ and executive managements’ declarations

None of the Directors and executive managers of RCL Foods have:

• ever been convicted of an offence resulting from dishonesty, fraud or embezzlement;

• ever been declared bankrupt, insolvent or sequestrated in any jurisdiction;

• at any time been a party to a scheme of arrangement or made any other form of compromise with their creditors;

• ever been found guilty in disciplinary proceedings by an employer or regulatory body, due to dishonest activities;

• ever been involved in any receiverships, compulsory liquidations or creditors’ voluntary liquidations;

• ever received public criticisms from statutory or regulatory authorities, including professional bodies, and have ever been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company;

• ever been barred from entry into a profession or occupation;

• ever been convicted in any jurisdiction of any criminal offence;

49

• ever been removed from an office of trust, on the grounds of misconduct and involving honesty;

• ever been involved in compulsory liquidations, administrations or partnership voluntary agreements of any partnerships where they were partners at the time of, or within the 12 (twelve) months preceding, any such event;

• ever received a court order declaring the Director a delinquent or placing the Director under probation in terms of section 162 of the Companies Act or prohibiting him to act as a director; or

• ever been involved, as a director or in an executive function, in any business rescue plans and/or resolution proposed by any entity to commence business rescue proceedings, application having been made for any entity to begin business rescue proceedings, notices having been delivered in terms of section 129(7) of the Companies Act, receiverships, compulsory liquidations, creditors’ voluntary liquidations, administrations, company voluntary arrangements or any compromise or arrangement with creditors generally or any class of creditors of any company within the last 12 (twelve) months.

All of the Directors have completed directors’ declarations in terms of Schedule 21 of the Listings Requirements upon their appointment and nothing, relative to the above, has changed since their appointment.

3.3 Qualification, remuneration, borrowing powers and appointment of Directors

3.3.1 Extracts from the RCL Foods MOI relating to the Directors

The relevant provisions of the MOI concerning the qualification, remuneration, borrowing powers and appointment of the Directors are set out in Annexure 11 to the Circular.

3.3.2 Borrowing powers

The MOI does not impose any limitation on the borrowing powers of Directors. No subsidiary of RCL Foods has exceeded its borrowing powers during the preceding three years. The borrowing powers of the Directors are disclosed fully in Annexure 11 to the Circular.

The MOI does not impose any limitations on the Directors in relation to exchange control.

3.3.3 Directors’ emoluments

The total remuneration, benefits and fees received by Directors for the year ended 30 June 2013 were as follows:

Basic salary R’000

Pension contribution

R’000

Other benefits*

R’000Total R’000

2013M Dally 5 344 387 118 5 849RH Field 2 595 258 64 2 917

7 939 645 182 8 766

2012M Dally 4 962 359 108 5 429RH Field 2 334 232 59 2 625

7 296 591 167 8 054

* Other benefits include Company contributions to disability insurance, medical aid and UIF.

50

2013R’000

2012R’000

Non-executives (for services as a director)Present directorsHJ Carse* 71JJ Durand* 189 172 M Griessel 307 278PR Louw* 189 172NP Mageza 335 304JB Magwaza 232 211MM Nhlanhla 232 186RV Smither 425 355GC Zondi** 406 313

2 386 1 991

Past directorsCM van den Heever* 109 9MH Visser* 172

109 181

Total 2 495 2 172

* Paid to Remgro Management Services Limited.

** Paid to Imbewu Capital Partners Consulting Proprietary Limited.

There have been no fees paid or accrued as payable to a third party in lieu of Directors’ fees. Other than disclosed above, no additional material benefits have been received by Directors during the years ended 30 June 2012 and 30 June 2013. No commissions or gains were received by Directors and no profit -sharing arrangements were in place relating to Directors for the periods ended 30 June 2012 and 30 June 2013.

3.3.4 Directors’ emoluments paid by Remgro

Fees

R’000Salaries

R’000

Retirement fund

R’000

Other benefits4


Fixed pay 2013 ExecutiveHJ Carse1 1 494 296 204 1 994JJ Durand 213 7 080 1 447 265 9 005PR Louw 1 209 240 204 1 653CM van den Heever2 1 322 262 207 1 791

Sub-total 213 11 105 2 245 880 14 443

Independent non-executiveNP Mageza 285 285

Sub-total 285 285

Total 498 11 105 2 245 880 14 728

Fixed pay 2012ExecutiveMH Visser3 166 7 311 1 696 534 9 707JJ Durand 199 5 030 1 037 248 6 514PR Louw 1 118 222 192 1 532CM van den Heever 1 233 245 192 1 670

Sub-total 365 14 692 3 200 1 166 19 423

Independent non-executiveNP Mageza 266 266

Sub-total 266 266

Total 631 14 692 3 200 1 166 19 689

51

Notes:

1. Mr HJ Carse was appointed as a director on 19 February 2013. The remuneration reflected is for 12 months ended 30 June 2013.

2. Mr CM van den Heever resigned as a director on 31 January 2013. The remuneration reflected is for 12 months ended 30 June 2013.

3. Mr MH Visser passed away on 26 April 2012.

4. Other benefits include medical aid contributions and vehicle benefits.

RCL Foods paid amounts of R6 700 000 (six million seven hundred thousand Rand) and R5 400 000 (five million four hundred thousand Rand) to Remgro for managerial and administration services for the 2013 and 2012 financial periods, respectively.

The remuneration receivable by any of the Directors will not be varied in consequence of the TSB Acquisition, the New RCL Foods BEE Transaction and/or the TSB BEE Transaction.

Terms of office and rights of RCL Foods Shareholders to appoint Directors are contained in the MOI, an extract of which has been included in Annexure 11 to the Circular.

Executive Directors have no fixed term service contracts and conditions of employment are governed by engagement letters. Executive Directors retire at the age of 60. Pension and provident fund payouts are based on period of service and no provision is made for restraint of trade payments or retrenchment packages.

The total remuneration, benefits and fees received by Directors for the years ended 30 June 2012 and 30 June 2013 are disclosed in Section E , paragraph 3.3.3 of the Circular.

The Audit Committee of RCL Foods is satisfied with the expertise and experience of the Financial Director.

There are no contractual secretarial or technical fees payable.

52

3.4

In

tere

sts

of D

irec

tors

3.4

.1

Dir

ecto

rs’ i

nte

rest

s in

Rem

gro

sh

ares

Bef

ore

the

TS

B A

cqu

isit

ion

Rem

gro

Equ

ity

Set

tled

Sh

are

App

reci

atio

n R

igh

ts (

“SA

Rs”

) S

chem

e –

2013

Pa

rtic

ipa

nt

Ba

lan

ce

of S

AR

s a

ccep

ted

a

s at

30

Ju

ne

201

2

SA

Rs

acc

epte

d

du

rin

g

the

per

iod

Off

er d

ate

Off

er

pri

ce2

Ra

nd

Nu

mb

er

of S

AR

s e

xer

cise

d

Date

ex

erci

sin

g S

AR

s

Sh

are

pri

ce

on e

xer

cise

d

ate

Incr

ease

in

va

lue 2

R’0

00

Ba

lan

ce

of S

AR

s a

ccep

ted

a

s at

30

Ju

ne

201

3

Gra

nt

date

fa

ir v

alu

e of

SA

Rs

gra

nte

d

du

rin

g

the

per

iod

Ex

ecu

tive

MH

Vis

ser1

54

2 4

24

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05

42

42

42

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4/2

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48

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55

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60

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91

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0 6

1378

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82 9

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55

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25

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ura

nd

162

35

478

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54 1

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4/2

013

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05

801

108

236

15 1

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75 .3

87

572

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08

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00

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013

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04

34

235 8

95

97 .

55

23

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271

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271

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10 7

62

613

PR

Lou

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06

66

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77

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58

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39

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01

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8

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99

56

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02

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95

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60

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28

86

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51

26

3

27

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97 .

55

27

432

22 6

46

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1/2

012

147 .

25

22

646

89

8 5

18

CM

van

den

Hee

ver

46

976

31 .4

346

976

30

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214

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55

431

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017

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80

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82

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0

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55

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92

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30

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59 6

93

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60

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31 5

23

Not

es:

1.

In t

erm

s of

th

e ru

les

of t

he

SA

Rs

sch

eme,

th

e ex

ecu

tor

of t

he

esta

te o

f th

e la

te M

r M

H V

isse

r w

as e

nti

tled

to

exer

cise

all

th

e S

AR

s g

ran

ted

to

him

at

any

tim

e w

ith

in 1

2 (

twel

ve)

mon

ths

afte

r th

e d

ate

of h

is d

eath

, or

bef

ore

the

exp

iry

of

the

SA

Rs

per

iod

(be

ing

sev

en y

ears

fro

m t

he

gra

nt

dat

e),

wh

ich

ever

was

th

e ea

rlie

r. T

his

rig

ht

was

ex

erci

sed

du

rin

g t

he

yea

r u

nd

er r

evie

w.

2.

It r

efer

s to

th

e in

crea

se i

n v

alu

e of

th

e S

AR

Sch

eme

shar

es o

f th

e in

dic

ated

par

tici

pan

ts f

rom

th

e of

fer

dat

e to

th

e d

ate

of p

aym

ent

and

del

iver

y. T

he

shar

e p

rice

use

d t

o ca

lcu

late

th

e d

eem

ed i

ncr

ease

in

val

ue

for

the

late

Mr

Vis

ser,

is

the

Rem

gro

sh

are

pri

ce o

n t

he

dat

e th

at h

e p

asse

d a

way

, n

amel

y 2

6 A

pri

l 2

01

2.

53

Rem

gro

Equ

ity

Set

tled

Sh

are

App

reci

atio

n R

igh

ts (

“SA

Rs”

) S

chem

e –

2012

Pa

rtic

ipa

nt

Ba

lan

ceof

SA

Rs

acc

epte

da

s at

30

Ju

ne

201

1

SA

Rs

acc

epte

ddu

rin

g t

he

per

iod

Off

er d

ate

Off

er p

rice

2

Ra

nd

Nu

mb

erof

SA

Rs

exer

cise

d

Date

exer

cisi

ng

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Rs

Sh

are

pri

ce o

nex

erci

sed

ate

Incr

ease

in v

alu

e3

R’0

00

Ba

lan

ce o

f S

AR

sa

ccep

ted

as

at

30

Ju

ne

201

2

Gra

nt

date

fair

va

lue

of S

AR

sg

ran

ted

du

rin

g t

he

per

iod

Ex

ecu

tive

MH

Vis

ser1

54

2 4

24

65 .5

05

42

42

4

48

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65

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55

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65

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ura

nd

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75

33

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54

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87

573

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75

258

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44

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62

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08

44

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75

23

04

22

0

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95

97 .

55

23

5 8

95

PR

Lou

w7

00

06

3 .9

77

00

0

9 0

58

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39

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26

99

56

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02

6 9

95

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60

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28

86

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55

27

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van

den

Hee

ver

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55

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292

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611

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75

Not

es:

1.

In t

erm

s of

th

e ru

les

of t

he

SA

Rs

sch

eme,

th

e ex

ecu

tor

of t

he

esta

te o

f th

e la

te M

r M

H V

isse

r w

as e

nti

tled

to

exer

cise

all

th

e S

AR

s g

ran

ted

to

him

at

any

tim

e w

ith

in 1

2 (

twel

ve)

mon

ths

afte

r th

e d

ate

of h

is d

eath

, or

bef

ore

the

exp

iry

of

the

SA

Rs

per

iod

(be

ing

sev

en y

ears

fro

m t

he

gra

nt

dat

e),

wh

ich

ever

was

th

e ea

rlie

r. T

his

rig

ht

was

ex

erci

sed

du

rin

g t

he

yea

r u

nd

er r

evie

w.

2.

In t

erm

s of

th

e ru

les

of t

he

SA

Rs

sch

eme,

th

e of

fer

pri

ce o

f S

AR

s th

at w

ere

awar

ded

pri

or t

o th

e u

nbu

nd

lin

g o

f th

e in

vest

men

t in

Im

pal

a P

lati

nu

m L

imit

ed, w

as r

edu

ced

by

bet

wee

n

R7

.58

an

d R

13

.19

(d

epen

din

g o

n t

he

offe

r d

ate)

to

ensu

re t

hat

th

e p

arti

cip

ants

wer

e p

lace

d i

n s

ubs

tan

tial

ly t

he

sam

e p

osit

ion

as

they

wer

e p

rior

to

the

un

bun

dli

ng

.

3.

It r

efer

s to

th

e in

crea

se i

n v

alu

e of

th

e S

AR

Sch

eme

shar

es o

f th

e in

dic

ated

par

tici

pan

ts f

rom

th

e of

fer

dat

e to

th

e d

ate

of p

aym

ent

and

del

iver

y.

54

Aft

er t

he

TS

B A

cqu

isit

ion

Rem

gro

Equ

ity

Set

tled

Sh

are

App

reci

atio

n R

igh

ts (

“SA

Rs”

) S

chem

e –

2013

Pa

rtic

ipa

nt

Ba

lan

ce

of S

AR

s a

ccep

ted

a

s at

30

Ju

ne

201

2

SA

Rs

acc

epte

ddu

rin

g t

he

per

iod

Off

er d

ate

Off

er p

rice

2

Ra

nd

Nu

mb

erof

SA

Rs

exer

cise

d

Date

exer

cisi

ng

SA

Rs

Sh

are

pri

ce o

nex

erci

sed

ate

Incr

ease

in v

alu

e 2

R’0

00

Ba

lan

ce

of S

AR

s a

ccep

ted

a

s at

30

Ju

ne

201

3

Gra

nt

date

fair

va

lue

of S

AR

sg

ran

ted

du

rin

g t

he

per

iod

Ex

ecu

tive

MH

Vis

ser1

54

2 4

24

65 .5

05

42

42

42

6/0

4/2

012

129 .6

03

4 7

69

48

6 4

65

97 .

55

48

6 4

65

26/0

4/2

012

129 .

60

15 5

91

HJ

Car

se2

0 6

1378

.30

20

613

2 9

33

75 .3

82 9

33

1 6

24

82 .6

01

62

4

38

062

97 .

55

38

062

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46

29/1

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012

147 .

25

7 5

46

29

9 4

00

JJ D

ura

nd

162

35

478

.30

54 1

180

3/0

4/2

013

185 .5

05

801

108

236

15 1

44

75 .3

87

572

03/0

4/2

013

185 .5

08

34

7 5

72

4 2

20

82 .6

04

22

00

3/0

4/2

013

185 .5

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34

235 8

95

97 .

55

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95

271

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147 .

25

271

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62

613

PR

Lou

w7

06

66

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77

06

6

9 0

58

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39

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185 .5

01

09

8

26

99

56

5 .5

02

6 9

95

8 8

60

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28

86

00

2/0

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51

26

3

27

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97 .

55

27

432

22 6

46

29/1

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147 .

25

22

646

89

8 5

18

CM

van

den

Hee

ver

46

976

31 .4

346

976

30

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214

7 .0

55

431

17 9

6178 .3

017

961

2 6

80

75 .3

82

68

0

1 4

198

2 .6

01

419

34

292

97 .

55

34

292

6 8

30

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147 .

25

6 8

30

270

99

2

1 6

92 4

73

30

8 2

80

1 1

59 6

93

65

221

841

06

012

231

523

Not

es:

1.

In t

erm

s of

th

e ru

les

of t

he

SA

Rs

sch

eme,

th

e ex

ecu

tor

of t

he

esta

te o

f th

e la

te M

r M

H V

isse

r w

as e

nti

tled

to

exer

cise

all

th

e S

AR

s g

ran

ted

to

him

at

any

tim

e w

ith

in 1

2 (

twel

ve)

mon

ths

afte

r th

e d

ate

of h

is d

eath

, or

bef

ore

the

exp

iry

of

the

SA

Rs

per

iod

(be

ing

sev

en y

ears

fro

m t

he

gra

nt

dat

e),

wh

ich

ever

was

th

e ea

rlie

r. T

his

rig

ht

was

ex

erci

sed

du

rin

g t

he

yea

r u

nd

er r

evie

w.

2.

It r

efer

s to

th

e in

crea

se i

n v

alu

e of

th

e S

AR

Sch

eme

shar

es o

f th

e in

dic

ated

par

tici

pan

ts f

rom

th

e of

fer

dat

e to

th

e d

ate

of p

aym

ent

and

del

iver

y. T

he

shar

e p

rice

use

d t

o ca

lcu

late

th

e d

eem

ed i

ncr

ease

in

val

ue

for

the

late

Mr

Vis

ser,

is

the

Rem

gro

sh

are

pri

ce o

n t

he

dat

e th

at h

e p

asse

d a

way

, n

amel

y 2

6 A

pri

l 2

01

2.

55

3.4.2 Directors’ interests in transactions

None of the Directors had any interest, direct or indirect, in any transaction effected by the Company during the current or immediately preceding financial year or in an earlier year and which remains in any respect outstanding or unperformed.

3.4.3 Directors’ interests in promotion and property of RCL Foods

None of the Directors had any interest, direct or indirect, in the promotion of RCL Foods or in any property acquired or proposed to be acquired as a result of the TSB Acquisition during the preceding three years and none of the Directors have any such interest currently.

No payments were made to, or have been agreed to be paid to, any Director or any company in which he is beneficially interested, directly or indirectly, or of which he is a director or to any partnership, syndicate or other association (an “Associate Company”) of which he is a member either to induce him to become, or to qualify him as a director or otherwise for the services rendered by him or by an associate Company in connection with RCL Foods within the preceding three years.

4. INFORMATION ON THE SHARE CAPITAL OF THE RCL FOODS GROUP

4.1 Authorised and issued RCL Foods Shares

The number of authorised and issued Shares as at the Last Practicable Date and the indicative effect of the TSB Acquisition, Specific Repurchase and increase in authorised share capital, Equity Capital Raising, TSB BEE Transaction and New RCL Foods BEE Transaction are set out below:

Before the TSB Acquisition, Specific Repurchase and Proposed RCL Foods Share Capital Increase

Number of authorised RCL Foods Shares

1 000 000 000 ordinary shares of no par value

Number of issued RCL Foods Shares 574 622 251 ordinary shares of no par value

Number of treasury RCL Foods Shares51 177 217 ordinary shares of no par value

Total

After the TSB Acquisition



Number of issued RCL Foods Shares

805 569 133 ordinary shares of no par value

Number of treasury RCL Foods Shares

51 177 217 Ordinary shares of no par value

After the TSB Acquisition and Specific Repurchase



Number of issued RCL Foods Shares

805 569 133 ordinary shares of no par value

Number of treasury RCL Foods Shares

0 Ordinary shares of no par value

56

After the TSB Acquisition, Specific Repurchase, Increase in Authorised Share Capital and the Equity Capital Raising




Number of treasury RCL Foods Shares 0 ordinary shares of no par value

After the TSB Acquisition, Specific Repurchase, Increase in Authorised Share Capital, the Equity Capital Raising, TSB BEE Transaction and New RCL Foods BEE Transaction.




Number of treasury RCL Foods Shares 70 758 637 ordinary shares of no par value

There are no other classes of securities listed and no securities of the Company are listed on any stock exchanges other than the JSE. In excess of 20% (twenty percent) of RCL Foods Shares are held by the public. Refer to Section E, paragraph 5 of the Circular for details of major beneficial S hareholders.

No other classes of Shares exist which have any preferential conversion and/or exchange rights of any securities.

No simultaneous issue of Shares will be issued in line with any specific issue of Shares in terms of this Circular.

4.1.2 Listings requirements

Subject to Shareholder approval of the requisite special and ordinary resolutions at the General Meeting and compliance with the relevant Listings Requirements, the JSE will approve the listing and delisting of RCL Foods Shares as follows:

(i) The listing of 230 946 882 Shares in terms of the TSB Acquisition;

(ii) The repurchase and the delisting of 51 177 217 Shares in terms of the Specific Repurchase;

(iii) The listing of 144 341 801 Shares in terms of the Equity Capital Rais ing;

(iv) The listing of 6 928 406 Shares in terms of the TSB BEE Transaction; and

(v) The listing of 63 830 231 Shares in terms of New RCL Foods BEE Transaction.

57

4.2 Changes to the number of issued Shares

The changes to issued RCL Foods Shares, net of treasury RCL Foods Shares, during the three financial periods ended 30 June 2011, 30 June 2012 and 30 June 2013 are summarised below:

Changes to issued Shares

Number of Shares issued

and allotted

2013Issued Shares at beginning of year 294 991 606Rights issue 276 964 802Shares issued in terms of share incentive plans 2 300 076

Issued Shares at end of year 574 256 484

2012Issued Shares at beginning of year 293 925 607Shares issued in terms of share incentive plans 1 065 999


2011Issued Shares at beginning of year 292 563 363

Shares issued in terms of share incentive plans 1 362 244


365 767 (three hundred and sixty five thousand seven hundred and sixty seven) RCL Foods Shares were issued by RCL Foods since 30 June 2013. As at the Last Practicable Date, no Shares have been issued by RCL Foods since 2 December 2013.

No Shares have been issued by RCL Foods subsidiaries in the preceding three years. The only Shares issued by RCL Foods during the preceding three years were as a result of the exercise of Share options and Share appreciation rights by RCL Foods employees and the rights offer process completed in March 2013.

No commissions, discounts or brokerages were incurred in connection with the issue of the RCL Foods Shares as a result of the exercise of share options and share appreciation rights.

There have been no other offers or issues of any securities by RCL Foods or any of its subsidiaries during the preceding three years.

There have been no Share repurchases, consolidations or sub-divisions by RCL Foods and its subsidiaries during the preceding three years.

4.3 Interests of Directors in RCL Foods Shares

The aggregate direct and indirect beneficial holdings as at 30 June 2013 of those Directors holding issued RCL Foods Shares are detailed below, including any directors of the Company having resigned in the preceding 18 months:

2013 2012

Directbeneficial

Indirectbeneficial

Directbeneficial

Indirectbeneficial

Executive directorsM Dally 1 201 653 964 000RH Field 250 000 378 000

Non-executive directors M Griessel 24 680 4 680NP Mageza 252JB Magwaza* 2 558 861 2 558 861MM Nhlanhla* 342 887 342 887GC Zondi* 3 766 643 3 766 643

1 451 653 6 693 323 1 342 000 6 673 071

* Assumes 100% vesting in terms of BEE transaction.

There has been no change in the interests of the Directors in the stated capital of the Company since the end of the financial year.

58

Refer to the RCL Foods rights offer circular dated 11 February 2013 for disclosure of Remgro directors’ interest in RCL Foods Shares.

4.4 Share options and share appreciation rights

The Company has the following share plans which may be affected by the TSB Acquisition, the New RCL Foods BEE Transaction, the TSB BEE Transaction and the Equity Capital Raising:

• the RCL Foods Share Incentive Scheme;

• the RCL Foods Share Appreciation Rights Scheme;

• the RCL Foods Conditional Share Plan; and

• the RCL Foods Employee Share Ownership Programme.

RCL Foods Share Incentive Scheme (“RFSIS”)

Within the limits imposed by Shareholders and the JSE , the Remuneration and Nominations Committee approved and granted Share options on an annual basis, as well as periodically when either an employee was promoted or a new appointment was made to an appropriate management position. The Share options were granted at the ruling closing share price on the trading days approved by the Remuneration and Nominations Committee.

Share options vest after stipulated periods and are exercisable up to a maximum of ten years from the grant dates (if granted prior to 31 March 2005) or seven years from the grant dates (if granted after 31 March 2005).

Share options granted vest as follows:

• first third – second anniversary of grant date;

• second third – third anniversary of grant date; and

• final third – fourth anniversary of grant date.

On resignation, Share options which have not yet vested will lapse and share options which have vested may be exercised before the last day of employment. On retirement, share options which have not yet vested will lapse and Share options which have vested may be exercised within six months from the date of retirement. On death, Share options which have not yet vested will lapse and Share options which have vested may be exercised by beneficiaries within six months from the date of death.

Options granted to executive directors and unexpired or unexercised as at 30 June 2013 are as follows:

Optionsexercisableat 30 June

2012

Issue priceprior to

rights issueRand

Options at30 June

2012

Rightsissue

adjustment*

Issueprice post

rightsissue*

Rand

Optionsexercised

duringthe year

Options at30 June

2013Exercise

price

Gain onoptions

exercisedR’000

M Dally 779 211 10 .39 779 211 58 442 9 .67 (837 653) 15 .05 4 506

1 101 317 16 .35 1 101 317 87 371 15 .21 1 188 688

504 245 14 .20 504 245 37 979 13 .21 542 224

2 384 773 2 384 773 183 792 (837 653) 1 730 912 4 506

RH Field 154 328 10 .39 154 328 11 575 9 .67 (165 903) 16 .80 1 167

573 639 16 .35 573 639 45 508 15 .21 619 147

264 404 14 .20 264 404 19 915 13 .21 284 319

992 371 992 371 76 998 (165 903) 903 466 1 167

Total 3 377 144 3 377 144 260 790 (1 003 556) 2 634 378 5 673

* The issue price and number of outstanding options were amended as a result of the rights issue in order to place the holders in the same position as they were before the rights issue . These amendments have no financial effect for the Group as they have placed the participants in the same economic position as they were before the rights issue.

No options were issued during the year, nor will any further options be issued under the RCL Foods Share Incentive Scheme, as this scheme was replaced by the RCL Foods Share Appreciation Rights Scheme approved at the 43rd annual general meeting of Shareholders held on 31 July 2009. The scheme will be simply allowed to run its course in respect of existing options.

59

Optionsexercisableat 30 June

2011

Issueprice prior

to rights issueRand

Options at30 June

2011

Issueprice post-

rights issueRand

Optionsexercised

duringthe year

Options at30 June

2012Exercise

price

Gain onoptions

exercisedR’000

M Dally 464 000 6 .65 464 000 (464 000) 15 .10 3 922

779 211 10 .39 779 211 779 211

734 211 16 .35 1 101 317 1 101 317

336 163 14 .20 504 245 504 245

2 313 585 2 848 773 (464 000) 2 384 773 3 922

RH Field 128 000 6 .65 128 000 (128 000) 15 .13 1 085

154 328 10 .39 154 328 154 328

382 426 16 .35 573 639 573 639

176 269 14 .20 264 404 264 404

841 023 1 120 371 (128 000) 992 371 1 085

Total 3 154 608 3 969 144 (592 000) 3 377 144 5 007

RCL Foods Share Appreciation Rights Scheme (“RFSARS”)

The new RFSARS provides executive directors and selected employees with conditional rights to receive RCL Foods Shares, referred to as Share appreciation rights (“SARs”). Within the limits imposed by Shareholders and the JSE , the Remuneration and Nominations Committee approves and awards SARs on an annual basis, as well as periodically when either an employee is promoted or a new appointment is made to an appropriate management position. Recipients of SARs become entitled to RCL Foods Shares having a value equal to the increase in the market value of a number of notional RCL Foods Shares. The market value of RCL Foods Shares for the purposes of determining award prices and exercise prices is the VWAP per RCL Foods Share traded on the JSE for the 5 (five) Business Days immediately preceding the award dates and exercise dates approved by the Remuneration and Nominations Committee.

SAR awards vest after stipulated periods and are exercisable up to a maximum of seven years from the award dates.

SAR awards vest as follows:• first third – third anniversary of award date;

• second third – fourth anniversary of award date; and

• final third – fifth anniversary of award date.

On resignation, SAR awards which have not yet vested will lapse and SAR awards which have vested may be exercised before the last day of employment. On retirement, unvested SAR awards vest immediately and all SAR awards may be exercised within 12 months from the date of retirement. On death, unvested SAR awards vest immediately and all SAR awards may be exercised by beneficiaries within 12 (twelve) months from the date of death.

Share appreciation rights awarded to executive directors and unexpired or unexercised as at 30 June 2013 are as follows:

Rights exer-

cisable at 30 June

2012

Issue price

prior to rights issue Rand

Issue price post-

rights issue*

Rand

Rights at

30 June 2012

Rights awarded

during the year

Adjust-ment in respect

of rights issue*

Rights exercised

during the year

Rights at 30 June

2013

Exercise priceRand

Gain on rights

exercised R’000

Grant date fair value of

rights awarded

during the year

R’000

M Dally 15 .34 14 .27 845 679 63 266 908 945

15 .83 14 .73 865 465 63 791 929 256

17 .68 16 .45 665 120 49 452 714 572

14 .19 13 .20 714 404 53 713 768 117 1 984

2 376 264 714 404 230 222 3 320 890 1 984

RH Field 15 .34 14 .27 397 932 29 770 427 702

15 .83 14 .73 401 989 29 629 431 618

17 .68 16 .45 339 739 25 260 364 999

14 .19 13 .20 348 317 26 188 374 505 968

1 139 660 348 317 110 847 1 598 824 968

60

Total 3 515 924 1 062 721 341 069 4 919 714 2 952

Rightsexercisable

at30 June

2011

Issueprice prior

to rights issueRand

Rights at30 June

2011

Rightsawarded

duringthe year

Rightsexercised

duringthe year

Numberof rights30 June

2012

ExercisepriceRand

Gain onrights

exercisedR’000

Grant datefair valueof rightsawarded

duringthe year

R’000

M Dally 15 .34 845 679 845 679

15 .83 865 465 865 465

17 .68 665 120 665 120

2 376 264 2 376 264

RH Field 15 .34 397 932 397 932

15 .83 401 989 401 989

17 .68 339 739 339 739

1 139 660 1 139 660

Total 3 515 924 3 515 924

* The issue price and number of outstanding rights were amended as a result of the rights issue in order to place the holders in the same position as they were before the rights issue. These amendments have no financial effect for the Group as they have placed the participants in the same economic position as they were before the rights issue.

RCL Foods Conditional Share Plan (“CSP”)

The salient features of the CSP were included in the 2012 annual report, and the adoption of the additional incentive plan was approved by Shareholders on 20 November 2012. The CSP was introduced to address the retention of executives in the RCL Foods Group. The CSP operates in conjunction with the current Share Appreciation Rights Scheme. The Company only intends using the CSP to make ad hoc allocations as and when the need arises to address retention or recruitment issues.

Under the CSP, participants will receive a conditional award of shares on the award date. Provided that they remain in the employment of the Company over the vesting period, Shares will be settled to the participants on the vesting date. Participants will have no Shareholder or dividend rights before the vesting date.

Conditional Shares awarded to executive directors and unsettled as at 30 June 2013 are as follows:

Conditional shares at

30 June 2012

Conditional shares

awarded during

the year

Adjustment in respect of rights issue*

Conditional shares settled during

the year

Conditional shares at

30 June 2013

M Dally 628 659 46 888 675 547RH Field 316 517 23 607 340 124

Total 945 176 70 495 1 015 671

* The number of outstanding conditional Shares was amended as a result of the rights issue in order to place the holders in the same position as they were before the rights issue. These amendments have no financial effect for the Group as they have placed the participants in the same economic position as they were before the rights issue.

Grant date fair value of conditional Shares awarded represents the total fair value of rights awarded during the year. This cost will be expensed over the right’s vesting period.

In terms of the rules of the CSP, the Remuneration and Nominations Committee may adjust the outstanding awards under the CSP or take such other action so as to ensure that participants are no worse off as a result of a rights offer.

The RCL Foods Employee Share Ownership Programme

Qualifying Employees will receive Units which will entitle the holders to a proportionate amount of any income or capital which may be distributed to unit holders from time to time. The beneficiaries will participate in any change in the fair value of the underlying Shares held by the Rainbow Trust via ECI.

4.5 Commissions

No commissions were paid to any persons within the preceding three years in relation to any of the transactions envisaged in the Circular or in relation to the issue of any RCL Foods securities.

An underwriting fee of R60 000 000 (sixty million Rand) was previously paid to Remgro for the RCL Foods rights offer performed in March 2013.

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4.6 Rights attaching to RCL Foods Shares and power to issue RCL Foods Shares

All the authorised and issued RCL Foods Shares are of the same class and rank pari passu in every respect. Any variation of rights attaching to such RCL Foods Shares will require a special resolution of Shareholders in a general meeting in accordance with the MOI. In accordance with the MOI, at any general meeting, every Shareholder present in person or by proxy (or if a body corporate, duly represented by an authorised representative) shall have one vote on a show of hands and on a poll shall be entitled to exercise one vote for every RCL Foods Share held.

All the authorised but unissued RCL Foods Shares are under the control of the Directors.

5. MAJOR SHAREHOLDERS

In so far as it is known to the Directors, the Shareholders (other than Directors) that, directly or indirectly, are beneficially interested in 2% (two percent) or more of the issued Shares, together with the amount of each such Shareholder’s interest as at the Last Practicable Date, are as follows:

ShareholderNumber of

Shares held

Direct beneficial

holding

Indirect beneficial

holdingBeneficial

shareholding

IPI 436 553 868 69.5% – 69.5%Oasis Asset Management Limited 68 457 752 10.9% – 10.9%

Eagle Creek Investments 620 (Proprietary) Limited 51 177 217 8.2% – 8.2%

After the TSB Acquisition, Specific Repurchase, TSB BEE Transaction and New RCL Foods BEE Transaction (but before the Equity Capital Raising)

Major beneficial shareholdings post the TSB Acquisition, Specific Repurchase, TSB BEE Transaction and New RCL Foods BEE Transaction (but before the Equity Capital Raising) will be as follows:

ShareholderNumber of

Shares held

Total beneficial

holding

Indirect beneficial

holdingBeneficial

shareholding

TSB Sugar Holdings 665 822 208 75.9% – 75.9%Oasis Asset Management Limited 68 457 752 7.8% – 7.8%ESOP Trust 44 681 162 5.1% – 5.1%

As at the Last Practicable Date, IPI is the controlling Shareholder of RCL Foods. There will be no change in the ultimate controlling Shareholder as a result of the TSB Acquisition, TSB BEE Transaction and New RCL Foods BEE Transaction.

6. ADVISORS’ INTERESTS

As at the Last Practicable Date, none of the advisors to the Company had any material interest in the issued Shares.

7. ADDITIONAL INFORMATION

7.1 Subsidiary companies

Details of RCL Foods’ principal subsidiary companies are set out in Annexure 12 to the Circular.

7.2 Principal immovable property

7.2.1 Principal immovable properties owned or leased

Details of the principal immovable properties owned or leased by RCL Foods and its subsidiaries are set out in Annexure 13 to the Circular.

8. MATERIAL ACQUISITIONS AND DISPOSALS

8.1 Material acquisitions

Apart from the Foodcorp Acquisition detailed in Section E, paragraph 1.2 of the Circular, no material acquisitions were concluded by RCL Foods or any of its subsidiaries in the preceding three years. The names of the vendors of the Foodcorp Shares are included in Section E paragraph 12 of the Circular detailing the material contracts relating to the Foodcorp Acquisition, as well as the purchase consideration payable for the Foodcorp Shares. The addresses of the vendors of the Foodcorp Shares are disclosed in Annexure 16 to the Circular.

62

The vendors of the Foodcorp Shares have not guaranteed the book debts or other assets of Foodcorp and standard warranties have been given in respect of the Foodcorp Shares. As a part of the Foodcorp Acquisition, a restraint of trade payment was made to certain members of Foodcorp management. No provisions for the settlement of any liability for accrued taxation have been included in the agreements entered into in relation to the Foodcorp Acquisition. No promoter or Director had any beneficial interest in the Foodcorp Acquisition. No amount in cash or securities has been transferred to any promoter in terms of the Foodcorp Acquisition. The Foodcorp Shares have neither been pledged nor ceded by RCL Foods.

Other than as stated above, there have been no material acquisitions effected by either RCL Foods or TSB Sugar Holdings within the preceding three years, nor are any such acquisitions proposed.

8.2 Material disposals

There have been no material disposals effected by either RCL Foods or TSB Sugar Holdings within the preceding three years, nor are any such disposals proposed (other than pursuant to the TSB Acquisition).

9. MATERIAL CHANGE

No material change in the financial or trading position of RCL Foods and its subsidiaries or TSB Sugar Holdings and its subsidiaries has occurred since the end of the last financial period for which audited financial statements have been published.

10. HISTORY OF CHANGES

No material change has occurred in the controlling Shareholders or trading objects of RCL Foods and its subsidiaries during the pre ceding five years.

11. PROMOTERS

No amounts were paid, or accrued as payable, within the preceding three years, or were proposed to be paid to any promoter, or to any partnership, syndicate or other association of which he/she/it is or was a member.

No promoter had any material beneficial interest, direct or indirect, in the promotion of RCL Foods and in any property acquired by RCL Foods as a result of the TSB Acquisition or during the three years preceding the date of the Circular.

12. MATERIAL CONTRACTS

Other than the contracts entered into in the ordinary course of business and the contracts in relation to the Foodcorp Acquisition and the TSB Acquisition, there were no material contracts entered into by RCL Foods, either verbally or in writing, within the preceding two years. Further, there were no contracts entered into at any time which contain an obligation or settlement that is material to RCL Foods or its subsidiaries as at the date of the Circular.

Details of the material contracts in relation to the TSB Acquisition are given below:

TSB Sale of Shares Agreement

TSB Sugar Holdings and RCL Foods entered into a sale of shares agreement on 20 November 2013. In terms of this agreement, subject to the fulfi lment of certain conditions precedent, RCL Foods purchased 100 (one hundred) issued ordinary shares in TSB Sugar International, constituting 100% (one hundred percent) of the total issued share capital of TSB Sugar International; and 767 (seven hundred and sixty seven) issued ordinary shares in TSB Sugar RSA, constituting 100% (one hundred percent) of the total issued share capital of TSB Sugar RSA; all of which are held by TSB Sugar Holdings, in exchange for the issue of 230 946 882 (two hundred and thirty million nine hundred and forty six thousand eight hundred and eighty two) RCL Foods Shares to TSB Sugar Holdings.

The implementation of the TSB Sale of Shares Agreement is subject to, inter alia, the fulfil ment of the conditions precedent that, by not later than 17 :00 on Friday, 28 February 2014:

• the RCL Foods Shareholders have passed all such resolutions as may be required to approve the implementation of the TSB Acquisition;

• the counterparties to the TSB Material Contracts have, to the extent necessary, consented in writing to the change of control of TSB Sugar RSA and TSB Sugar International; and

• the Ancillary Transaction is implemented.

63

Details of material contracts in relation to the Foodcorp Acquisition are set out below :

BlueBay Funds Sale

BlueBay (in its capacity as the general partner of the BlueBay Funds) and RCL Foods entered into a sale of shares agreement on 13 November 2012. In terms of this agreement, subject to the fulfil ment of certain conditions precedent, RCL Foods purchased 378 751 (three hundred and seventy eight thousand seven hundred and fifty one) Foodcorp Shares from the BlueBay Funds for an aggregate purchase consideration of R690 million, payable in cash (“BlueBay Funds Sale”). Notwithstanding the completion date, the effective date of the BlueBay Funds Sale was 1 September 2012. RCL Foods was entitled to assign its rights and obligations under the BlueBay Funds Sale to an affiliated entity. The BlueBay Funds Sale is not subject to any outstanding conditions precedent.

Foodcorp Staff Trust Sale

The Foodcorp Staff Trust and RCL Foods entered into a sale of shares agreement on 13 November 2012. In terms of this agreement, subject to the fulfil ment of certain conditions precedent, RCL Foods purchased 185 000 (one hundred and eighty five thousand) Foodcorp ordinary shares from the Foodcorp Staff Trust for an aggregate purchase consideration of R337 million, payable in cash (“Foodcorp Staff Trust Sale”). Notwithstanding the completion date, the effective date of the Foodcorp Staff Trust Sale was 1 September 2012. RCL Foods was entitled to assign its rights and obligations under the Foodcorp Staff Trust Sale to an affiliated entity. The Foodcorp Staff Trust Sale is not subject to any outstanding conditions precedent.

Foodcorp Management Holdings Sale

Foodcorp Management Holdings Proprietary Limited and RCL Foods entered into a sale of shares agreement on 13 November 2012. In terms of this agreement, subject to the fulfil ment of certain conditions precedent, RCL Foods purchased 23 810 (twenty three thousand eight hundred and ten) Foodcorp ordinary shares from Foodcorp Management Holdings Proprietary Limited for an aggregate purchase consideration of R43 million, payable in cash (“Foodcorp Management Holdings Sale”). Notwithstanding the completion date, the effective date of the Foodcorp Management Holdings Sale was 1 September 2012. RCL Foods was entitled to assign its rights and obligations under the Foodcorp Management Holdings Sale to an affiliated entity. The Foodcorp Management Holdings Sale is not subject to any outstanding conditions precedent.

Foodcorp Management Sale

Foodcorp Management Holdings Proprietary Limited and individual shareholders of Foodcorp (comprising persons who were, at the time, or previously, members of management) and RCL Foods entered into sale of shares agreements on 1 July 2013. In terms of these agreements, subject to the fulfil ment of certain conditions precedent, RCL Foods purchased the 23.9% stake in Foodcorp for a total cash consideration of R393 million (“Foodcorp Management Sale”). The Foodcorp Management Sale is not subject to any outstanding conditions precedent.

Capitau Sale

Post the implementation of the Foodcorp Management Sale, Capitau Holdings held 11.9% of Foodcorp directly and via Capitau Investment Management (collectively known as the “Capitau Controlled Entities”). The Capitau Controlled Entities and RCL Foods entered into a sale of shares agreement on 5 September 2013. In terms of this agreement, subject to the fulfil ment of certain conditions precedent, RCL Foods purchased the remaining Foodcorp Shares for a total cash consideration of R128 million. The Capitau Sale is not subject to any outstanding conditions precedent.

Material contracts in terms of the RCL Foods BEE Transaction Agreements are outlined in Section B and in the definitions and interpretations commencing on page 6 of the Circular.

No royalties or items of similar nature are payable in respect of the Company and its subsidiaries.

No material contracts have been entered into by TSB Sugar Holdings in the preceding two years.

13. CORPORATE GOVERNANCE

The Board accepts full responsibility for corporate governance and is committed to ensuring a high standard of discipline, independence, ethics, responsibility, equity, social responsibility, accountability, co-operation and transparency. The Board believes that the Group has complied in all material respects with the principles of the King III Report and with the Listings Requirements.

Annexure 14 to the Circular contains further information on RCL Foods’ Corporate Governance and disclosure of areas of non-compliance.

14. LITIGATION STATEMENT

There are no legal or arbitration proceedings, including any proceedings that are pending or threatened, of which RCL Foods or TSB Sugar Holdings are aware, that may have or have had in the recent past, being at least the previous 12 (twelve) months, a material effect on the financial position of the RCL Foods Group or TSB Sugar Holdings or any of its subsidiaries .

64

15. THIRD PARTY MANAGEMENT UNDER CONTRACT OR ARRANGEMENT

The business of RCL Foods and its subsidiaries will not be managed by a third party under a contract or arrangement.

16. RELATED PARTIES

IPI is classified as a related party to RCL Foods in terms of the Listings Requirements and, as such, IPI and all of its subsidiaries or associates are precluded from voting at the General Meeting on certain Shareholder resolutions.

17. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors, collectively and individually, accept full responsibility for the accuracy of the information given in the Circular and certify that, to the best of their knowledge and belief, there are no facts, the omission of which, would make any statement in the Circular false or misleading and that they have made all reasonable inquiries to ascertain such facts and that the Circular contains all information required by law and by the Listings Requirements.

18. CONSENTS

Each of the merchant bank and sponsor, reporting accountants and auditors, attorneys, communication advisor and the Transfer Secretary, have consented and have not, prior to the Last Practicable Date, withdrawn their written consent to the inclusion of their names and, where applicable, reports in the form and context in which they appear in the Circular.

19. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the registered offices of RCL Foods, the Transfer Secretary and Rand Merchant Bank at the addresses set out in the “Corporate Information and Advis ors” section of the Circular during normal business hours on Business Days from the date of issue of the Circular up to and including Thursday, 16 January 2014:• the Memorand a of Incorporation of RCL Foods and its major subsidiaries;• the audited annual financial statements of RCL Foods for the three financial periods ended 31 March

2011, 30 June 2012 and 30 June 2013;• the audited annual financial statements of TSB Sugar Holdings for the three financial periods ended

30 June 2011 (fifteen months), 30 June 2012 and 30 June 2013;• a copy of the standard directors’ letter of engagement;• a copy of the TSB Sale of Shares Agreement;• a copy of the TSB BEE Transaction Agreements (including the TSB BEE Subscription and Relationship

Agreement);• a copy of the Redemption and Repurchase Agreement;• a copy of the RCL Foods BEE Transaction Agreements;• a copy of the RCL Foods circular dated 25 February 2008 in respect of the Current RCL Foods

BEE Structure;• a copy of the list of all material properties owned by RCL Foods;• the signed independent reporting accountant’s report on the pro forma financial information of

RCL Foods;• the material contracts referred to in Section E, paragraph 12 of the Circular;• the written consents referred to in Section E, paragraph 18 of the Circular; and• a signed copy of the Circular as approved by the JSE .

Signed at Durban by and on behalf of RCL Foods on 12 December 2013, in terms of the resolutions of the Directors dated 19 November 2013.

For and on behalf of the Board

RCL Foods Limited

RH FieldChief Financial Officer

Durban 12 December 2013

65

ANNEXURE 1(a)

FAIRNESS OPINION ON THE RELATED PARTY ACQUISITION

The DirectorsRCL Foods Limited Six The BoulevardWestway Office ParkWestville3629

4 December 2013

Dear Sirs

FAIRNESS OPINION ON THE RELATED PARTY ACQUISITION BY RCL FOODS LIMITED (“RCL FOODS” OR “THE COMPANY”) OF THE ENTIRE ISSUED SHARE CAPITAL OF TSB SUGAR RSA PROPRIETARY LIMITED AND TSB SUGAR INTERNATIONAL PROPRIETARY LIMITED FROM TSB SUGAR HOLDINGS PROPRIETARY LIMITED (“TSB SUGAR HOLDINGS”), A SUBSIDIARY OF REMGRO LIMITED (“REMGRO”), IN EXCHANGE FOR THE ISSUE OF 230 946 882 ORDINARY SHARES IN RCL FOODS

Introduction

On 21 November 2013, RCL Foods released on SENS that it intended to acquire the entire issued share capital of TSB Sugar RSA Proprietary Limited (“TSB Sugar RSA”) and TSB Sugar International Proprietary Limited (“TSB Sugar International”) from TSB Sugar Holdings, an indirect wholly-owned subsidiary of Remgro. RCL Foods will settle the full purchase consideration of R4 000 000 000 (“the TSB Acquisition Consideration”) through the issue of ordinary shares in RCL (“RCL Foods Shares”) to TSB Sugar Holdings.

The acquisition by RCL Foods of the 767 issued ordinary shares in TSB Sugar RSA and 100 issued ordinary shares in TSB Sugar International (collectively, “the TSB Acquisition Shares”) in exchange for the issue of 230 946 882 RCL Foods Shares (“the TSB Consideration Shares”) in settlement of the TSB Acquisition Consideration is hereafter referred to as “the TSB Acquisition”. The number of RCL Foods Shares to be issued to TSB Sugar Holdings has been determined by dividing the TSB Acquisition Consideration of R4 000 000 000 by R17.32, being the volume weighted average price (“VWAP”) per RCL Foods Share over the 30 (thirty) days immediately preceding 19 November 2013, the date on which the sale of shares agreement was signed (“the TSB Transaction Share Price”).

Industrial Partnership Investments Proprietary Limited (“IPI”), a wholly -owned subsidiary of Remgro will, prior to the TSB Acquisition, dispose of all its RCL Foods Shares to TSB Sugar Holdings, another wholly-owned subsidiary of Remgro. TSB Sugar Holdings will discharge the consideration for the RCL Foods Shares by the issue of additional ordinary shares in TSB Sugar Holdings.

Scope

Remgro is a material shareholder of RCL Foods and TSB Sugar Holdings for purposes of the JSE Limited Listings Requirements, as amended (“the Listings Requirements”). As a result of Remgro being a related party, the TSB Acquisition is categorised as a related party transaction in terms of Section 10.1 (b) (i) of the Listings Requirements. Under Section 10.4 (f) of the Listings Requirements, a fairness opinion is required from an independent professional expert, acceptable to the securities exchange operated by the JSE Limited (“the JSE”), indicating whether or not the terms and conditions of the TSB Acquisition are fair to the shareholders of RCL Foods.

The Board of directors of RCL Foods has appointed the Corporate Finance division of Deloitte & Touche to act as the independent professional expert to provide the required opinion, indicating whether the terms and conditions of the TSB Acquisition are fair to the shareholders of RCL Foods.

For purposes of our opinion, our assessment of fairness is primarily based on quantitative issues. The TSB Acquisition would be considered fair to shareholders of RCL Foods if the number of TSB Consideration Shares to be issued is within the range implied by the range of fair values of both the TSB Acquisition Shares and the RCL Foods Shares.

Fairness opinions do not purport to cater for individual shareholders but rather the general body of shareholders. Also, an individual shareholder’s decision may be influenced by such shareholder’s particular circumstances and, accordingly, a shareholder should consult an independent advisor if in any doubt as to the merits or otherwise of the TSB Acquisition.

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Information considered

In arriving at our opinion we have considered the following information which has been provided by management of RCL Foods and TSB Sugar Holdings or obtained from publicly available sources:

Information relating to TSB Sugar Holdings and its subsidiaries:

• information on TSB Sugar Holdings and its subsidiaries, including the history, nature of business, products, key customers and competitor activity;

• audited financial information for TSB Sugar Holdings for the financial years ended 31 March 2010 to 30 June 2013;

• unaudited, abridged financial information for TSB Sugar Holdings for the period ended October 2013 ;

• projected financial information for TSB Sugar Holdings for the financial years ending 30 June 2014 to 30 June 2018 produced by Rand Merchant Bank (“Rand Merchant Bank”), a division of First Rand Bank Limited, and dated September 2013 ;

• recent share prices and other publicly available financial information on listed companies with operations similar to those of TSB Sugar Holdings (“TSB peer companies”);

• recent analysts’ reports on Remgro and TSB peer companies;

• publicly available information regarding the pricing of recent transactions in significant equity interests in unlisted companies with operations similar to those of TSB Sugar Holdings;

• other publicly available information relevant to the industry in which TSB Sugar Holdings operates.

Information relating to RCL Foods and its subsidiaries:

• information on RCL Foods and its subsidiaries, including the history, nature of business, products, key customers and competitor activity;

• audited financial information for RCL Foods for the financial years ended 30 June 2010 to 30 June 2013;

• unaudited, abridged financial information for RCL Foods for the period ended October 2013 ;

• projected financial information for RCL Foods for the financial years ending 30 June 2014 to 30 June 2016;

• recent share prices and other publicly available financial information on RCL Foods and listed companies with operations similar to those of RCL Foods (“RCL Foods peer companies”);

• recent analysts’ reports on RCL Foods and RCL Foods peer companies;

• publicly available information regarding the pricing of recent transactions in significant equity interests in unlisted companies with operations similar to those of RCL Foods;

• other publicly available information relevant to the industry in which RCL Foods operates;

• vendor due diligence report by PricewaterhouseCoopers Advisory Services Proprietary Limited on Foodcorp Proprietary Limited, an indirect subsidiary of RCL Foods (“Foodcorp Opco”), dated 31 August 2012;

• information and explanations obtained in discussions with management of RCL Foods and its subsidiaries.

Information regarding the TSB Acquisition:

• the agreement headed “Sale of Shares Agreement” between RCL Foods and TSB Sugar Holdings regarding the TSB Acquisition (“the TSB Sale of Shares Agreement”);

• the SENS announcement of 21 November 2013;

• the circular to RCL Foods Shareholders of which this report forms a part.

Where practical, we have corroborated the reasonability of the information provided to us for the purpose of our opinion, including publicly available information, whether in writing or obtained in discussion with the management of RCL Foods, TSB Sugar Holdings or their subsidiaries.

Our approach to considering the TSB Acquisition and procedures performed

In considering the terms and conditions of the TSB Acquisition we have performed indicative, sum-of-the-parts valuations of the ordinary shares of RCL Foods and the TSB Acquisition Shares at the most recent practicable date, being 31 October 2013. We considered significant events which occurred in RCL Foods and TSB Sugar Holdings and their subsidiaries subsequent to 31 October 2013 as discussed with management and we have considered market and economic conditions up to the date of issue of this report.

For the purposes of our valuation analysis we used the income approach (discounted cash flow) as our primary approach. In addition, we considered the market approach (based on publicly available financial data for comparable publicly traded companies and for recent transactions in significant equity interests in comparable companies) as an alternative valuation approach to support the results of our income approach analysis.

The valuation of RCL Foods was performed on a sum-of-the-parts basis, with separate income approach and market approach valuations performed for Rainbow Farms Proprietary Limited (“Rainbow Farms”), New Foodcorp Holdings Proprietary Limited (“Foodcorp”) and Vector Logistics Proprietary Limited, which are wholly-owned subsidiaries of RCL Foods. Zam Chick Limited and Zam hatch Limited, in which RCL Foods has 49% and 51% interests, respectively, were valued included at the cost of RCL Foods’ recent investment in these two entities. We also considered the net debt balances in other non-operating subsidiary companies of RCL Foods.

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We considered the fair value of RCL Foods’ debt and, in particular, the 8.75% Senior Secured Notes issued by Foodcorp Proprietary Limited (“Foodcorp Opco”), a subsidiary of RCL Foods, which are listed on the Irish Stock Exchange. We reviewed the market price history of the Senior Secured Notes and compared the income yields to yields on comparable listed debt instruments of other issuers with the same credit rating. We also considered the exchange rate between Euro and Rand and the sensitivity of our valuation of the RCL Foods ordinary shares to this exchange rate.

The valuation of the TSB Acquisition Shares was performed on a sum-of-the-parts basis, with separate income approach and market approach valuations performed for TSB Sugar RSA and TSB Sugar International.

In performing our valuation analysis of the RCL Foods Shares and the TSB Acquisition Shares, we considered the sensitivity of the valuations to changes in assumptions around key value drivers. We found that the key internal value drivers of the valuation of the ordinary shares of RCL Foods are estimates of revenue growth, particularly product volumes and the selling prices of certain products, movements in net working capital, and capital expenditure requirements. Free cash flow is sensitive to these assumptions. The key external value drivers relate to the rates of economic growth and inflation and prevailing interest rates in South Africa as well as market and industry conditions specific to the food processing sector, including the market’s expectations around changes to poultry import tariffs. The expected commodity prices of wheat and maize internationally are key external value drivers for Foodcorp Opco specifically as they impact expected volumes sold, input prices, selling prices and the net investment required in working capital. Maize and soya are the key ingredients in Rainbow Farms’ chicken feed and therefore these commodity prices impact the margins achieved by Rainbow Farms.

We found that the key internal value drivers of the valuation of the TSB Acquisition Shares are forecast production volumes, projected profit margins, movements in net working capital, and capital expenditure requirements. The key external value drivers relate to the rates of economic growth and inflation in South Africa and globally as well as market and industry conditions specific to the South African and Swazi sugar production sectors, including the market’s expectations around changes to the European Union’s policies around sugar production and imports. World market raw sugar prices and exchange rates are also key external value drivers.

Our valuation results are also sensitive to the weighted average cost of capital applied in the discounted cash flow valuation and sensitive to the enterprise value to EBITDA multiple applied under the market approach.

Finally, we compared the number of the TSB Consideration Shares to be issued to the number of shares implied by our ranges of fair values of the TSB Acquisition Shares and fair values of the RCL Foods Shares and we considered the terms and conditions of the TSB Sale of Shares Agreements .

Opinion

Based upon and subject to the foregoing, we are of the opinion that the terms and conditions of the TSB Acquisition are fair to the shareholders of RCL Foods.

Our opinion is based upon the market, regulatory and trading conditions as they currently exist and can only be evaluated as at the date of this letter. It should be understood that subsequent developments may affect our opinion, which we are under no obligation to update, revise or re-affirm .

Limiting conditions

Forecasts relate to uncertain future events and are based on assumptions, which may not remain valid for the whole of the forecast period. Consequently, forecast financial information cannot be relied upon to the same extent as that derived from audited financial statements for completed accounting periods. We express no opinion as to how closely actual results will correspond to the financial projections provided to us.

Our procedures and inquiries did not constitute an audit in terms of International Standards on Auditing. Accordingly, we cannot express an audit opinion on the financial data or other information used in arriving at our opinion .

Independence

We confirm that we have no financial interest in TSB Sugar Holdings and RCL Foods and in the outcome of the TSB Acquisition. Furthermore, we confirm that our professional fees are not contingent upon the successful conclusion of the TSB Acquisition.

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Consent

We hereby consent to this letter being included in the circular to RCL Foods Shareholders to be dated on or about 12 December 2013.

Yours faithfully

D McDuffPartner

Deloitte & ToucheCorporate FinanceRegistered AuditorsWoodlands DriveWoodmeadSandton2196

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ANNEXURE 1(b)

INDEPENDENT EXPERT’S REPORT ON THE PROPOSED SPECIFIC REPURCHASE

The DirectorsRCL Foods Limited Six The BoulevardWestway Office ParkWestville3629

4 December 2013

Dear Sirs

INDEPENDENT EXPERT’S REPORT ON THE PROPOSED SPECIFIC REPURCHASE OF RCL FOODS LIMITED (“RCL Foods”) ORDINARY SHARES HELD BY EAGLE CREEK INVESTMENTS 620 PROPRIETARY LIMITED (“Eagle Creek”)

Introduction

On 21 November 2013 , RCL Foods released on SENS that it intended to restructure the current RCL Foods black economic empowerment (“BEE”) ownership structure.

In terms of RCL Foods’ current BEE ownership structure implemented in March 2008, Eagle Creek subscribed for 51 177 217 ordinary shares in RCL Foods, which represented 15% of the issued ordinary shares in RCL Foods (“RCL Foods Shares”) at the time (“the Current RCL Foods BEE Structure”).

RCL Foods proposes to collapse and unwind the Current RCL Foods BEE Structure through a specific repurchase of the 51 177 217 RCL Foods Shares issued pursuant to the Current RCL Foods BEE Structure (“the Current RCL Foods BEE Shares”) and redemption of the 51 177 217 preference shares held by RCL Foods as funding for the Current RCL Foods BEE Structure (“the Eagle Creek Preference Shares”).

The proposed specific repurchase and cancellation of the Current RCL Foods BEE Shares by RCL Foods will be at a proposed repurchase price per Current RCL Foods BEE Share equal to the volume weighted average price (“VWAP”) per RCL Foods Share over the 30 (thirty) days ending on the date on which the Eagle Creek Preference Shares are redeemed (collectively, “the Specific Repurchase”). The consideration payable to Eagle Creek will be funded out of sources other than contributed tax capital and will not require any external funding.

The Current RCL Foods BEE Shares are expected to be repurchased on or about Monday, 27 January 2014. The Current RCL Foods BEE Shares will, pursuant to the Specific Repurchase, be delisted from the JSE and be cancelled in terms of section 35(5) read with section 48 of the Companies Act, No 71 of 2008, as amended (“the Companies Act”).

The Specific Repurchase will represent 5.9% of RCL Foods’ ordinary issued shares at the time and as such triggers the requirements of section 48(8) (read with section 114) of the Companies Act.

In terms of section 48(8) (b) of the Companies Act, the proposed specific repurchase is subject to the requirements of sections 114 and 115 of the Companies Act if the repurchase considered alone, or together with other transactions in an integrated series of transactions, involves the acquisition of more than 5% of the issued shares of any particular class of the Company’s shares. In this case the ordinary shares to be repurchased exceed 5% of the total issued shares and, accordingly, there is a requirement for RCL Foods to retain an independent expert in terms of sections 114(2), who is required to compile a report in accordance with section 114(3), read with Regulation 90 of the Companies Regulations, 2011 (“Regulations”). It is required that the independent expert’s report be addressed to the Board and distributed to all holders of the Company’s securities.

We have been appointed by the Board of RCL Foods to act as the independent expert in accordance with the requirements section 114 of the Companies Act.

Qualification and independence

For purposes of our appointment as the Independent Expert, we confirm that we meet the competence, experience, and impartiality requirements of section 114(2)(a) of the Companies Act and we confirm that we meet the independence requirements set out in section 114(2)(b) of the Companies Act and Regulation 90(3) (a).

Our aggregate fee payable for this engagement and for the provision of our separate fairness opinion on the proposed Specific Repurchase amounts to R 1 050 000 excluding value -added tax and is not contingent upon or related to the outcome of the Specific Repurchase.

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Scope of our work and report

Our report is provided to the Board of RCL Foods for the sole purpose of assisting the Board in forming and expressing an opinion on the terms and conditions of the proposed Specific Repurchase for the benefit of holders of ordinary shares in RCL Foods being the only type and class of security issued by RCL Foods and affected by the Specific Repurchase.

Our work and the contents of our independent expert report are regulated by section 114(3) of the Companies Act and Regulation 90. In short, we are required to consider the material effects that the proposed Specific Repurchase will have on the ordinary shareholders of RCL Foods, any reasonably probable beneficial and significant effect of the Specific Repurchase on the business and prospects of RCL Foods, material interests of any director of RCL Foods and the effect of the Specific Repurchase on those interests and persons.

We are required to express an opinion on the fairness and reasonableness of the proposed Specific Repurchase. Our assessment of fairness is primarily based on quantitative issues, whereas reasonableness includes a consideration of qualitative aspects.

The terms and conditions of the proposed Specific Repurchase would be considered fair to RCL Foods Shareholders if the measurable financial benefits of the transaction equal or exceed the cost thereof. Thus, the proposed Specific Repurchase would be considered fair if the fair market values of RCL Foods Shares were greater than or equal to the price per RCL Foods Share at which it is proposed they be repurchased. To form this opinion we have undertaken a valuation of the RCL Foods Shares.

Those factors which are difficult to quantify, or are unquantifiable but nonetheless may affect a shareholder’s assessment of the proposed specific share repurchase, are also taken into account in forming an opinion on the reasonableness of the proposed Specific Repurchase.

Sources of information

In arriving at our opinion we have considered information, inter alia, from the following sources:

• information on RCL Foods and its subsidiaries, including the history, nature of business, products, key customers and competitor activity;

• audited financial information for RCL Foods for the financial years ended 30 June 2010 to 30 June 2013;

• unaudited, abridged financial information for RCL Foods for the period ended October 2013 ;

• projected financial information for RCL Foods for the financial years ending 30 June 2014 to 30 June 2016;

• recent share prices and other publicly available financial information on listed companies with operations similar to those of RCL Foods (“RCL Foods peer companies”);

• recent analysts’ reports on RCL Foods peer companies;

• publicly available information regarding the pricing of recent transactions in significant equity interests in unlisted companies with operations similar to those of RCL Foods;

• other publicly available information relevant to the industry in which RCL Foods operates;

• vendor due diligence report by PricewaterhouseCoopers Advisory Services Proprietary Limited on Foodcorp Proprietary Limited (“Foodcorp Opco”), a subsidiary of RCL Foods, dated 31 August 2012;

• information disclosed in the circular to RCL Foods Shareholders of which this report forms a part;

• information and explanations obtained in discussions with management of RCL Foods and its subsidiaries .

Where practical, we have corroborated the reasonability of the information provided to us for the purpose of our opinion, including publicly available information, whether in writing or obtained in discussions with management of RCL Foods.

Procedures performed in arriving at our opinion

In order to assess the fairness and reasonableness of the terms and conditions of the Specific Repurchase, we have performed, amongst other, the following procedures:

• considered the background information on RCL Foods and its subsidiaries;

• reviewed the historical and forecast financial information of RCL Foods and its subsidiaries;

• considered information made available by and from discussions with management of RCL Foods and certain of its subsidiaries;

• prepared an indicative valuation of the ordinary shares of RCL Foods using a sum-of-the-parts approach;

• conducted appropriate sensitivity analyses on the valuation outcome based on a reasonable range of key assumptions;

• reviewed the agreement headed Preference Share Redemption and Share Repurchase Agreement between RCL Foods and Eagle Creek in terms of which Eagle Creek has agreed to redeem the Eagle Creek Preference Shares and RCL Foods has agreed to repurchase the Current RCL Foods BEE Shares from Eagle Creek (“the Redemption and Repurchase Agreement”);

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• considered the rationale for the Specific Repurchase;

• considered qualitative aspects of the Specific Repurchase.

V aluation

In considering the terms and conditions of the Specific Repurchase, we performed an independent indicative valuation at the most recent practical date, which was 31 October 2013. We considered significant events which occurred in RCL Foods and its subsidiaries subsequent to 31 October 2013 as discussed with management and we have considered market and economic conditions up to the date of issue of this report.

The valuation of RCL Foods was performed on a sum-of-the-parts basis, with separate income approach and market approach valuations performed for Rainbow Farms Proprietary Limited (“Rainbow Farms”), New Foodcorp Holdings Proprietary Limited (“Foodcorp”) and Vector Logistics Proprietary Limited, which are wholly-owned subsidiaries of RCL Foods. Zam Chick Limited and Zam Hatch Limited, in which RCL Foods has 49% and 51% interests, respectively, were included at the cost of RCL Foods’ recent investment in these two entities. We also considered the net debt balances in other non-operating subsidiary companies of RCL Foods.

Additionally, we performed sensitivity analyses by considering reasonable ranges for key assumptions in arriving at our valuation range. We found that the key internal value drivers of the valuation of the RCL Foods Shares are estimates of revenue growth, particularly product volumes and the selling prices of certain products, movements in net working capital, and capital expenditure requirements. Free cash flow is sensitive to these assumptions. The key external value drivers relate to the rates of economic growth and inflation and prevailing interest rates in South Africa as well as market and industry conditions specific to the food processing sector, including the market’s expectations around changes to poultry import tariffs. The expected commodity prices of wheat and maize internationally are key external value drivers for Foodcorp specifically as they impact expected volumes sold, input prices, selling prices and the net investment required in working capital. Maize and soya are the key ingredients in Rainbow Farms’ chicken feed and therefore these commodity prices impact the margins achieved by Rainbow Farms.

We considered the fair value of RCL Foods’ debt and, in particular, the 8.75% Senior Secured Notes issued by Foodcorp Opco which are listed on the Irish Stock Exchange. We reviewed the market price history of the Senior Secured Notes and compared the income yields to yields on comparable listed debt instruments of other issuers with the same credit rating. We also considered the exchange rate between Euro and Rand and the sensitivity of our valuation of the RCL Foods Shares to this exchange rate.

Our range of values for the business operations of Rainbow Farms is wide due to uncertainty over the outcome of the anti-dumping application against certain European countries. This has resulted in a relatively wide range of values for the shares of RCL Foods, compiled using our sum-of-the-parts approach.

Our valuation of RCL Foods resulted in an indicative valuation range of R16.00 to R18.40 per RCL Foods Share and a core value of R17.60 per RCL Foods Share. Our core value was established by assigning probability weightings to our low and high values for the business operations of Rainbow Farms and taking the simple averages of our low and high values for the other business operations of RCL Foods and the group’s net debt.

The proposed transaction would be considered fair if the proposed repurchase price per RCL Foods Share fell within our range of value for the RCL Foods Shares.

Assessment of qualitative and other factors

Our assessment of reasonableness includes considering the proposed repurchase price in relation to the prevailing trading price as at the time of finalising our opinion. We note that the market price of RCL Foods Shares closed on 3 December 2013 at R17.15 per RCL Foods Share.

We note that, due to unforeseen circumstances, RCL Foods management considers the Current RCL Foods BEE Structure unlikely to deliver any equity value to its investors and therefore RCL Foods management intends to implement a new BEE structure, pursuant to the Specific Repurchase, to sustain its BEE ownership and enable value creation for BEE investors in RCL Foods.

Opinion and limiting conditions

Based upon and subject to the foregoing, and taking account of the market price of RCL Foods Shares on 3 December 2013, we are of the opinion that the terms and conditions of the proposed transaction are fair and reasonable to the ordinary shareholders of RCL Foods. The proposed repurchase price will be established based on the VWAP per RCL Foods Share over the 30 days ending on the date of the Specific Repurchase, which is expected to be on or around Monday, 27 January 2014 and, accordingly, the repurchase price is not yet known. However, it should be noted that if the repurchase price, when established, were to exceed the upper end of our indicative valuation range, this would have no adverse effect on RCL Foods Shareholders as the entire repurchase consideration will be used to redeem the Eagle Creek preference shares held by RCL Foods.

Our opinion is addressed to the general body of shareholders. Because each shareholder’s decision may be influenced by their particular circumstances, we recommend that a shareholder should consult an independent advisor if they are in any doubt as to the merits of the Specific Repurchase considering their personal circumstances.

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Our opinion is based upon the market, regulatory and trading conditions as they currently exist and can only be evaluated as at the date of this letter. It should be understood that subsequent developments may affect our opinion, which we are under no obligation to update, revise or re-affirm.

Forecasts relate to uncertain future events and are based on assumptions, which may not remain valid for the whole of the forecast period. Consequently, forecast information cannot be relied upon to the same extent as that derived from audited financial statements for completed accounting periods. We express no opinion as to how closely actual results will correspond to projections made by the management of RCL Foods and made available to us during the course of our review.

Our procedures and inquiries did not constitute an audit in terms of International Standards on Auditing. Accordingly, we do not express an audit opinion on the financial data or other information used in arriving at our opinion.

Other matters

In accordance with sections 114(3) (e) and (f) of the Companies Act, we confirm that Directors’ interests in RCL Foods Shares are disclosed in the Circular, of which this report forms part, and from our enquiries we understand that the proposed Specific Repurchase of RCL Foods Shares has the same effect on such Directors that it has on other shareholders of RCL Foods.

Disclosure of statutory provisions for approval and relief

In accordance with the requirement of section 114(3) (g) of the Companies Act, we confirm that sections 115 and 164 of the Companies Act are included as Annexure “A” to the circular to RCL Foods Shareholders.

Consent

We hereby consent to the inclusion of this report and references thereto, in the form and context in which they appear, in the circular to RCL Foods Shareholders, dated on or around 12 December 2013.

Yours faithfully

D McDuffPartner

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–31

831

831

831

8In

vest

men

t in

joi

nt

ven

ture

s12

914

1270

270

270

Def

erre

d i

nco

me

tax

ass

et4

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44

Bio

log

ical

ass

ets

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710

710

710

7L

ong

-ter

m l

oan

s an

d r

ecei

vabl

es–

22

22

Inta

ng

ible

ass

ets

5 7

77

145

791

5 7

915

791

Cu

rren

t a

sset

s7

79

51

66

8(8

)(7

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44

8(2

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)9

441

2 4

97

11 9

38

Inve

nto

ries

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22

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20

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42

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42

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42

Bio

log

ical

ass

ets

537

–537

537

537

Tra

de

and

oth

er r

ecei

vabl

es2

112

50

52

617

2 6

172

617

Pre

fere

nce

sh

ares

rec

eiva

ble

130

–13

013

013

0D

eriv

ativ

e fi

nan

cial

in

stru

men

ts3

62

23

64

36

43

64

Tax

rec

eiva

ble

32

23

43

43

4In

vest

men

t in

mon

ey m

ark

et f

un

d450

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450

Ass

ets

of d

isp

osal

gro

up

cla

ssifi

ed

as

hel

d f

or s

ale

537

55

42

54

25

42

Cas

h a

nd

cas

h e

qu

ival

ents

2 3

1313

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432

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22

Tot

al

ass

ets

17 3

52

3 5

20

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20

857

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20

85

02

49

72

3 3

47

74

TS

B T

ran

sact

ion

sR

CL

Foo

ds

BE

E T

ran

sact

ion

s9-1

3

R’m

illi

ons

Pu

bli

shed

au

dit

ed

12 m

onth

s en

ded

3

0 J

un

e 2

013

2

TS

B S

ug

ar

Hol

din

gs

Au

dit

ed

12 m

onth

s en

ded

3

0 J

un

e 2

013

3

Adj

ust

men

ts

rela

tin

g

to t

he

TS

B

Acq

uis

itio

n4

, 6

TS

B B

EE

T

ran

sact

ion

7,8

Pro

for

ma

aft

er T

SB

T

ran

sact

ion

s

Rei

ntr

o-du

ctio

n o

f S

trate

gic

P

art

ner

s

Un

win

din

g

of C

urr

ent

RC

L F

ood

s B

EE

S

tru

ctu

re

an

d r

ein

tro-

du

ctio

n o

f a

n

ES

OP

Tru

st

Pro

for

ma

aft

er T

SB

T

ran

sact

ion

s a

nd

RC

L

Foo

ds

BE

E

Tra

nsa

ctio

ns

Adj

ust

men

ts

for

the

Eq

uit

y

Ca

pit

al

Ra

isin

g14

, 15

Pro

for

ma

aft

er T

SB

T

ran

sact

ion

s,

RC

L F

ood

s B

EE

T

ran

sact

ion

s a

nd E

qu

ity

Ca

pit

al

Ra

isin

g

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UIT

YS

tate

d c

apit

al5

079

4 0

00

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79

9 0

79

2 4

9 7

11 5

76

Sh

are-

base

d p

aym

ent

rese

rve

185

25

210

83

1731

031

0

Com

mon

con

trol

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erve

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22)

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22)

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22)

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22)

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er r

eser

ves

11

(1)

1

1

1

Ret

ain

ed e

arn

ing

s1

48

01

876

(1

88

5)

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39

(85)

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32

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32

Eq

uit

y a

ttri

bu

table

to

equ

ity

hol

der

s of

th

e co

mp

an

y6

74

51

87

7(8

)(7

)8

60

7(2

)(5

)8

60

02

49

711

09

7

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trol

lin

g i

nte

rest

s31

12

313

– –

313

313

Tot

al

equ

ity

7 0

56

1 8

79

(8)

(7)

8 9

20

(2)

(5)

8 9

132

49

711

41 0

LIA

BIL

ITIE

S

Non

-cu

rren

t li

abil

itie

s7

17

73

617

53

8–

–7

53

87

53

8

Inte

rest

-bea

rin

g l

iabi

liti

es5

515

120

5 6

35

––

5 6

35

5 6

35

Def

erre

d i

nco

me

tax

lia

bili

ties

1 4

09

138

1 5

47–

–1

547

1 5

47

Pre

fere

nce

sh

are

liab

ilit

ies

73

–73

––

73

73

Tra

de

and

oth

er p

ayab

les

24

38

62

––

62

62

Ret

irem

ent

ben

efi t

obl

igat

ion

s15

66

5221

––

221

221

Cu

rren

t li

abil

itie

s3

119

1 2

80

4 3

99

––

4 3

99

4 3

99

Tra

de

and

oth

er p

ayab

les

2 6

31623

3 2

54

––

3 2

54

3 2

54

Inte

rest

-bea

rin

g l

iabi

liti

es297

63

6933

––

933

933

Pre

fere

nce

sh

are

liab

ilit

ies

55

––

55

Der

ivat

ive

fi n

anci

al i

nst

rum

ents

621

27

––

27

27

Lia

bili

ties

of

dis

pos

al g

rou

p c

lass

ifi e

d

as h

eld

for

sal

e17

917

9–

–17

917

9

Cu

rren

t in

com

e ta

x l

iabi

liti

es1

–1

––

11

Tot

al

lia

bil

itie

s10

29

61

641

11 9

37

––

11 9

37

11 9

37

Tot

al

equ

ity

an

d l

iabil

itie

s17

35

23

52

0(8

)(7

)2

0 8

57

(2)

(5)

20

85

02

49

72

3 3

47

Not

es a

nd

ass

um

pti

ons:

1.

Th

e pr

o fo

rma

stat

emen

t of

fi n

anci

al p

osit

ion

was

pre

par

ed o

n t

he

assu

mpti

on t

hat

th

e T

SB

Tra

nsa

ctio

ns ,

th

e R

CL

Foo

ds

BE

E T

ran

sact

ion

s an

d t

he

Eq

uit

y C

apit

al R

aisi

ng

wer

e ef

fect

ive

30

Ju

ne

201

3.

2.

Th

e st

atem

ent

of fi

nan

cial

pos

itio

n o

f R

CL

Foo

ds

was

ex

trac

ted

fro

m i

ts a

ud

ited

fi n

anci

al s

tate

men

ts f

or t

he

yea

r en

ded

30

Ju

ne

201

3.

TS

B A

cqu

isit

ion

3.

Th

e st

atem

ent

of fi

nan

cial

pos

itio

n o

f T

SB

Su

gar

Hol

din

gs

was

ex

trac

ted

fro

m i

ts a

ud

ited

fi n

anci

al s

tate

men

ts f

or t

he

yea

r en

ded

30

Ju

ne

201

3.

4.

Th

e pu

rch

ase

con

sider

atio

n f

or t

he

TS

B A

cqu

isit

ion

is

R4

bil

lion

wh

ich

wil

l be

set

tled

by

th

e is

suan

ce o

f 23

0 9

46

88

2 S

har

es,

at a

n i

ssu

e pri

ce o

f R

17.3

2 p

er s

har

e, b

ein

g t

he

30

-day

vol

um

e w

eig

hte

d

aver

age

pri

ce p

er s

har

e to

19

Nov

embe

r 2

013.

75

5.

Th

e T

SB

Acq

uis

itio

n is

a tr

ansa

ctio

n u

nder

com

mon

con

trol

an

d t

her

efor

e ex

clu

ded

fro

m t

he

scop

e of

IF

RS

3. R

CL

Foo

ds

wil

l ap

ply

th

e pri

nci

ple

s of

pre

dec

esso

r ac

cou

nti

ng

wh

ich

res

ult

s in

th

e re

cord

ing

of

fi n

anci

al i

nfo

rmat

ion

bei

ng

con

soli

dat

ed a

t h

isto

rica

l bo

ok v

alu

es a

nd

giv

es r

ise

to a

n a

ssu

med

com

mon

con

trol

res

erve

of

appro

xim

atel

y R

2.1

bil

lion

.

6.

Tra

nsa

ctio

n c

osts

of

R8

mil

lion

hav

e be

en a

ssu

med

.

TS

B B

EE

Tra

nsa

ctio

n

7.

In t

erm

s of

IF

RS

2,

the

fair

val

ue

of t

he

dee

med

opti

on a

risi

ng

up

on t

he

TS

B B

EE

Tra

nsa

ctio

n i

s an

ex

pen

se w

hic

h w

ill

be c

har

ged

th

rou

gh

th

e in

com

e st

atem

ent

of R

CL

Foo

ds.

Th

e fa

ir v

alu

e of

th

e dee

med

opti

on i

s as

sum

ed t

o be

R25

mil

lion

der

ived

usi

ng

opti

on p

rici

ng

met

hod

olog

y, b

ased

on

th

e der

ived

su

bscr

ipti

on p

rice

an

d t

he

clos

ing

Sh

are

pri

ce o

n 1

9 N

ovem

ber

201

3 o

f R

18 .5

0.

Th

e ac

tual

IF

RS

2 c

ost

wil

l be

det

erm

ined

on

th

e ef

fect

ive

dat

e of

th

e T

SB

BE

E T

ran

sact

ion

.

8.

Tra

nsa

ctio

n c

osts

of

R7

mil

lion

are

ass

um

ed.

RC

L F

ood

s B

EE

Tra

nsa

ctio

ns

Re-

intr

odu

ctio

n o

f R

CL

Foo

ds

Str

ateg

ic P

artn

ers

9.

Th

e re

intr

odu

ctio

n o

f th

e R

CL

Foo

ds

Str

ateg

ic P

artn

ers

resu

lts

in a

tot

al e

con

omic

cos

t of

R8

3 m

illi

on d

eriv

ed u

sin

g o

pti

on p

rici

ng

met

hod

olog

y. T

he

key

ass

um

pti

ons

incl

ude

a 3

0 -d

ay V

WA

P o

f R

17.3

2,

clos

ing

sh

are

pri

ce o

n 1

9 N

ovem

ber

201

3 o

f R

18 .5

0,

RC

L F

ood

s d

ivid

end

yie

ld o

f 4%

, sh

are

vola

tili

ty o

f 2

8%

an

d p

refe

ren

ce s

har

es d

ivid

end

yie

ld b

ased

on

pri

me

inte

rest

rat

e. T

he

por

tion

of

the

dee

med

op

tion

val

ue

attr

ibu

tabl

e to

th

e R

CL

Foo

ds

Str

ateg

ic P

artn

ers,

am

oun

tin

g t

o R

83

mil

lion

, w

ill

be e

xp

ense

d u

p-f

ron

t. T

he

actu

al I

FR

S 2

cos

t w

ill

be d

eter

min

ed o

n t

he

effe

ctiv

e d

ate

of t

he

RC

L F

ood

s B

EE

T

ran

sact

ion

.

10.

Tra

nsa

ctio

n c

osts

of

R2

mil

lion

are

ass

um

ed.

Un

win

din

g o

f C

urr

ent

RC

L F

ood

s B

EE

Str

uct

ure

an

d r

e-in

trod

uct

ion

of

an E

SO

P T

rust

11.

An

acc

eler

ated

ch

arg

e of

R16

.9 m

illi

on w

ill

be i

ncu

rred

in

rel

atio

n t

o th

e E

SO

P T

rust

du

e to

ter

min

atio

n o

f th

e ag

reem

ent

pu

rsu

ant

to t

he

New

RC

L F

ood

s B

EE

Tra

nsa

ctio

n.

Th

e ac

cele

rate

d c

har

ge

is

base

d o

n a

n a

ssu

med

rem

ain

ing

per

iod

for

th

e ve

stin

g o

f th

e op

tion

s fr

om 1

Ju

ly 2

013

to

30

Ju

ne

201

8.

12.

Th

e re

intr

odu

ctio

n o

f th

e E

SO

P T

rust

res

ult

s in

a t

otal

eco

nom

ic c

ost

of R

193

mil

lion

der

ived

usi

ng

opti

on p

rici

ng

met

hod

olog

y. T

he

key

ass

um

pti

ons

incl

ude

a 3

0 -d

ay V

WA

P o

f R

17.3

2,

clos

ing

sh

are

pri

ce o

n 1

9 N

ovem

ber

201

3 o

f R

18 .5

0,

RC

L F

ood

s d

ivid

end

yie

ld o

f 4%

, sh

are

vola

tili

ty o

f 2

8%

an

d p

refe

ren

ce s

har

es d

ivid

end

yie

ld b

ased

on

pri

me

inte

rest

rat

e. T

he

dee

med

opti

on v

alu

e re

lati

ng

to

the

new

ES

OP

Tru

st i

s am

orti

sed

eq

ual

ly o

ver

the

vest

ing

per

iod

of

8 y

ears

. T

he

actu

al I

FR

S 2

cos

t w

ill

be d

eter

min

ed o

n t

he

effe

ctiv

e d

ate

of t

he

RC

L F

ood

s B

EE

Tra

nsa

ctio

n.

13.

Tra

nsa

ctio

n c

osts

of

R5

mil

lion

are

ass

um

ed.

Eq

uit

y C

apit

al

Ra

isin

g

14.

Th

e ef

fect

s of

th

e E

qu

ity

Cap

ital

Rai

sin

g a

re b

ased

on

th

e as

sum

pti

on t

hat

th

e fu

ll R

2.5

bil

lion

wil

l be

tak

en u

p a

t an

ass

um

ed p

rice

of

R17

.32

an

d r

esu

lts

in a

n i

ssu

e of

14

4 3

41 8

01 s

har

es.

Th

e ac

tual

n

um

ber

of s

har

es a

nd

sh

are

issu

e pri

ce w

ill

be d

eter

min

ed o

n t

he

resp

ecti

ve d

ates

of

the

Pro

Rat

a O

ffer

an

d t

he

Pla

cem

ent.

15.

Tra

nsa

ctio

n c

osts

of

R3

mil

lion

are

ass

um

ed a

nd

cap

ital

ised

to

equ

ity.

76

PR

O F

OR

MA

IN

CO

ME

ST

AT

EM

EN

T O

F R

CL

FO

OD

S

TS

B T

ran

sact

ion

s14R

CL

Foo

ds

BE

E T

ran

sact

ion

s14

R’m

illi

ons

Pu

bli

shed

au

dit

ed

12 m

onth

s en

ded

3

0 J

un

e 2

013

2

TS

B S

ug

ar

Hol

din

gs

Au

dit

ed

12 m

onth

s en

ded

3

0 J

un

e 2

013

3

Adj

ust

men

ts

rela

tin

g

to t

he

TS

B

Acq

uis

itio

n4

, 5

TS

B B

EE

T

ran

sact

ion

6,8

Pro

for

ma

aft

er T

SB

T

ran

sact

ion

s

Intr

odu

ctio

n

of

Str

ate

gic

P

art

ner

s9,1

0

Un

win

din

g

of C

urr

ent

RC

L F

ood

s B

EE

S

tru

ctu

re

an

d r

ein

tro-

du

ctio

n o

f a

n E

SO

P

Tru

st11

,13

Pro

for

ma

aft

er T

SB

T

ran

sact

ion

s a

nd

RC

L

Foo

ds

BE

E

Tra

nsa

ctio

ns

Adj

ust

men

ts

for

the

Eq

uit

y

Ca

pit

al

Ra

isin

g15

, 16

Pro

for

ma

aft

er T

SB

T

ran

sact

ion

s,

RC

L F

ood

s B

EE

T

ran

sact

ion

s a

nd

th

e E

qu

ity

C

apit

al

Ra

isin

g

Rev

enu

e10

10

95

02

215

131

15 1

3115

131

Op

erat

ing

pro

fi t

befo

re d

epre

ciat

ion

an

d

amor

tisa

tion

44

4456

(8)

(32)

86

0(8

5)

(43)

732

73 2

Dep

reci

atio

n a

nd

am

orti

sati

on(2

78)

(127)

(40

5)

(40

5)

(40

5)

Op

erati

ng

pro

fi t

166

32

9(8

) (

32)

45

5(8

5)

(43)

327

3

2 7

Fin

ance

cos

ts(1

54)

(44)

(19

8)(1

98)

(19

8)

Fin

ance

in

com

e5

48

62

62

120

182

Sh

are

of p

rofi

t fr

om j

oin

t ve

ntu

res

30

30

30

30

Sh

are

of p

rofi

t fr

om a

ssoc

iate

s12

112

112

112

1

Pro

fi t

bef

ore

tax

66

44

4(8

)(3

2)47 0

(85)

(43)

34

21 2

04

6 2

Inco

me

tax

ex

pen

se(7

5)

(96)

( 171

)

(171

)(3

4)(2

05)

Pro

fi t/

(los

s) f

or t

he

yea

r(9

)3

48

(8)

(32)

29

9(8

5)

(43)

171

86

2 57

Pro

fi t

for

the

yea

r fr

om d

isco

nti

nu

ed

oper

atio

ns

15

1515

15

Pro

fi t

for

the

yea

r

34

8(8

)(3

2)31

4(8

5)

(43)

186

86

27

2

Att

ribu

table

to:

Non

-con

trol

lin

g i

nte

rest

s(2

0)

(20)

(20)

(20)

Eq

uit

y h

older

s of

th

e co

mpan

y26

34

8(8

)

33

4(8

5)

(43)

20

68

6292

63

48

(8)

(32)

31 4

(85)

(43)

186

86

27

2

Rec

onci

liati

on t

o h

ead

lin

e ea

rnin

gs:

Pro

fi t/

(los

s) f

or t

he

yea

r2

63

48

(8)

(32)

33

4(8

5)

(43)

20

68

62 92

(Pro

fi t)

/ los

s on

dis

pos

al o

f P

PE

1(3

0)

(2

9)(2

9)(2

9)

Pro

fi t

on s

ale

of b

usi

nes

s(9

)(9

)(9

)(9

)

Net

im

pai

rmen

t of

ass

ets

11

11

Net

im

pai

rmen

t of

bio

log

ical

ass

ets

33

33

Insu

ran

ce p

roce

eds

(2)

(2)

(2)

(2)

Hea

dli

ne

earn

ing

s27

311

(8)

(32)

29

8(8

5)

(43)

170

86

25

6

Att

ribu

tabl

e h

ead

lin

e ea

rnin

gs

27

311

(8)

(32)

29

8(8

5)

(43)

170

86

256

Att

ribu

tabl

e h

ead

lin

e ea

rnin

gs

from

d

isco

nti

nu

ed o

per

atio

ns

1010

1010

77

Not

es a

nd

ass

um

pti

ons:

1.

Th

e pr

o fo

rma

inco

me

stat

emen

t w

as p

rep

ared

on

th

e as

sum

pti

on t

hat

th

e T

SB

Tra

nsa

ctio

ns ,

th

e R

CL

Foo

ds

BE

E T

ran

sact

ion

s a

nd

th

e E

qu

ity

Cap

ital

Rai

sin

g w

ere

effe

ctiv

e 1

Ju

ly 2

012.

2.

Th

e in

com

e st

atem

ent

of R

CL

Foo

ds

was

ex

trac

ted

fro

m i

ts a

ud

ited

fi n

anci

al s

tate

men

ts f

or t

he

yea

r en

ded

30

Ju

ne

201

3.

TS

B A

cqu

isit

ion

3.

Th

e in

com

e st

atem

ent

of T

SB

Su

gar

Hol

din

gs

was

ex

trac

ted

fro

m i

ts a

ud

ited

fi n

anci

al s

tate

men

ts f

or t

he

yea

r en

ded

30

Ju

ne

201

3.

4.

Th

e pu

rch

ase

con

sider

atio

n f

or t

he

TS

B A

cqu

isit

ion

is

R4

bil

lion

wh

ich

wil

l be

set

tled

by

th

e is

suan

ce o

f 23

0 9

46

88

2 S

har

es,

at a

n i

ssu

e pri

ce o

f R

17.3

2 p

er s

har

e, b

ein

g t

he

30

-day

vol

um

e w

eig

hte

d

aver

age

pri

ce p

er S

har

e to

19

Nov

embe

r 2

013.

5.

Tra

nsa

ctio

n c

osts

of

R8

mil

lion

hav

e be

en a

ssu

med

an

d a

re o

nce

-off

in

nat

ure

.

TS

B B

EE

Tra

nsa

ctio

n

6.

In t

erm

s of

IF

RS

2, th

e fa

ir v

alu

e of

th

e dee

med

opti

on i

s an

ex

pen

se w

hic

h w

ill

be c

har

ged

th

rou

gh

th

e in

com

e st

atem

ent

of R

CL

Foo

ds.

Th

e fa

ir v

alu

e of

th

e dee

med

Opti

on f

or t

he

TS

B B

EE

Tra

nsa

ctio

n

is a

ssu

med

to

be R

25

mil

lion

usi

ng

th

e B

lack

-Sch

oles

opti

on v

alu

atio

n m

eth

od.

7.

Th

e T

SB

BE

E T

ran

sact

ion

s re

sult

in

a o

nce

-off

cos

t of

R25

mil

lion

. T

he

actu

al I

FR

S 2

cos

t w

ill

be d

eter

min

ed o

n t

he

effe

ctiv

e d

ate

of t

he

TS

B B

EE

Tra

nsa

ctio

n.

8.

Tra

nsa

ctio

n f

ees

of R

7 m

illi

on a

re a

ssu

med

an

d a

re o

nce

-off

in

nat

ure

.

RC

L F

ood

s B

EE

Tra

nsa

ctio

ns

Re-

intr

odu

ctio

n o

f R

CL

Foo

ds

Str

ateg

ic P

artn

er

9.

Th

e re

intr

odu

ctio

n o

f th

e R

CL

Foo

ds

Str

ateg

ic P

artn

ers

resu

lts

in a

tot

al e

con

omic

cos

t of

R8

3 m

illi

on u

sin

g t

he

Bla

ck -S

chol

es o

pti

on v

alu

atio

n m

eth

od. T

he

por

tion

of

the

dee

med

opti

on v

alu

e at

trib

uta

ble

to t

he

RC

L F

ood

s S

trat

egic

Par

tner

s, a

mou

nti

ng

to

R8

3 m

illi

on, w

ill

be e

xp

ense

d u

p-f

ron

t.

10.

Tra

nsa

ctio

n c

osts

of

R2

mil

lion

are

ass

um

ed.

Un

win

din

g o

f C

urr

ent

BE

E S

tru

ctu

re a

nd

re-

intr

odu

ctio

n o

f an

ES

OP

Tru

st

11.

An

acc

eler

ated

ch

arg

e of

R16

.9 m

illi

on w

ill

be i

ncu

rred

in

rel

atio

n t

o th

e E

SO

P T

rust

du

e to

ter

min

atio

n o

f th

e ag

reem

ent

pu

rsu

ant

to t

he

New

RC

L F

ood

s B

EE

Tra

nsa

ctio

ns.

Th

e ac

cele

rate

d c

har

ge

is

base

d o

n a

n a

ssu

med

rem

ain

ing

per

iod

for

th

e ve

stin

g o

f th

e op

tion

s fr

om 1

Ju

ly 2

013

to

30

Ju

ne

201

8 a

nd

are

on

ce-o

ff i

n n

atu

re. A

rev

ersa

l of

an

am

oun

t of

R3,3

mil

lion

in

res

pec

t of

th

e ch

arg

e fo

r th

e 2

013

fi n

anci

al y

ear

was

ass

um

ed.

12.

Th

e re

intr

odu

ctio

n o

f an

ES

OP

tru

st r

esu

lts

in a

tot

al e

con

omic

cos

t of

R19

3 m

illi

on u

sin

g t

he

Bla

ck -S

chol

es o

pti

on v

alu

atio

n m

eth

od. T

he

dee

med

opti

on v

alu

e re

lati

ng

to

the

RC

L F

ood

s em

plo

yee

sh

are

own

ersh

ip T

rust

is

amor

tise

d e

qu

ally

ove

r th

e ve

stin

g p

erio

d o

f 8

yea

rs.

13.

Tra

nsa

ctio

n f

ees

of R

5 m

illi

on a

re a

ssu

med

an

d a

re o

nce

-off

in

nat

ure

.

Eq

uit

y C

apit

al

Ra

isin

g

14.

Th

e ef

fect

s of

th

e E

qu

ity

Cap

ital

Rai

sin

g a

re b

ased

on

th

e as

sum

pti

on t

hat

th

e fu

ll R

2.5

bil

lion

wil

l be

tak

en u

p a

t an

ass

um

ed p

rice

of

R17

.32

an

d r

esu

lts

in a

n i

ssu

e of

14

4 3

41 8

01 s

har

es.

Th

e ac

tual

n

um

ber

of s

har

es a

nd

sh

are

issu

e pri

ce w

ill

be d

eter

min

ed o

n t

he

resp

ecti

ve d

ates

of

the

Pro

Rat

a O

ffer

an

d t

he

Pla

cem

ent.

15.

Th

e ef

fect

s of

th

e E

qu

ity

Cap

ital

Rai

sin

g a

re b

ased

on

th

e as

sum

pti

on t

hat

th

e fu

ll R

2.5

bil

lion

wil

l be

tak

en u

p. T

he

Eq

uit

y C

apit

al R

aisi

ng

has

bee

n a

ssu

med

to

occu

r at

th

e 3

0 d

ay V

WA

P o

f R

17.3

2 a

nd

re

sult

s in

an

ass

um

ed i

ssu

e of

14

4 3

41 8

01 s

har

es.

Th

e ac

tual

nu

mbe

r of

sh

ares

an

d s

har

e is

sue

pri

ce w

ill

be d

eter

min

ed o

n t

he

tran

sact

ion

dat

e.

16.

It i

s as

sum

ed t

hat

th

e pro

ceed

s fr

om t

he

Eq

uit

y C

apit

al R

aisi

ng

wil

l be

in

vest

ed w

ith

fi n

anci

al i

nst

itu

tion

s at

an

in

tere

st r

ate

of 4

.8%

res

ult

ing

in

in

tere

st i

nco

me

of R

120

mil

lion

for

th

e yea

r. T

he

tax

ex

pen

se i

n r

esp

ect

of t

he

inte

rest

in

com

e w

as c

alcu

late

d b

ased

on

a s

tatu

tory

tax

rat

e of

28%

.

∆

78

ANNEXURE 3

INDEPENDENT REPORTING ACCOUNTANT S’ ASSURANCE REPORT

The Board of DirectorsRCL Foods LimitedSix The BoulevardWestway Offi ce ParkWestville3629

4 December 2013

Dear Sirs

Independent reporting accountant s’ assurance report on the compilation of pro forma fi nancial information of RCL Foods Limited and its subsidiaries (“RCL Foods” or “the Group”)

Introduction

The Group is issuing a circular to its shareholders (“the Circular”) regarding, inter alia, the proposed acquisition of TSB Sugar International Proprietary Limited and TSB Sugar RSA Proprietary Limited (“the TSB Acquisition”), a transaction with strategic BEE partners of TSB Sugar Holdings (“the TSB BEE Transaction”), the restructure of the current RCL Foods BEE structure (“the RCL Foods BEE Transactions”) and an Equity Capital Raising of up to R2 500 000 000 (collectively “the Proposed Transactions”).

At your request and for the purposes of the Circular to be dated on or about 12 December 2013 , we present our assurance report on the compilation of the pro forma fi nancial information of the Group by the Directors. The pro forma fi nancial information, presented in Section D paragraph 2 and Annexure 2 to the Circular, consists of the pro forma statement of fi nancial position as at 30 June 2013, the pro forma income statement for the 12 months ended 30 June 2013 and the pro forma fi nancial effects (“the pro forma fi nancial information”). The applicable criteria on the basis of which the Directors have compiled the pro forma fi nancial information are specifi ed in the JSE Limited (“JSE”) Listings Requirements and described in Section D, paragraph 2 and Annexure 2 to the Circular.

The pro forma fi nancial information has been compiled by the directors to illustrate the impact of the Proposed Transactions on the Group’s reported fi nancial position as at 30 June 2013, on the basis that the Proposed Transactions had taken place at that date and the Group’s fi nancial performance for the period then ended, as if the Proposed Transactions had taken place at 1 July 2012. As part of this process, information about the Group’s fi nancial position and fi nancial performance has been extracted by the directors from the Group’s fi nancial statements for the period ended 30 June 2013, on which an auditor’s report was issued on 27 August 2013.

Directors’ Responsibility

The Directors of the Group are responsible for the compilation, contents and presentation of the pro forma fi nancial information on the basis of the applicable criteria specifi ed in the JSE Listings Requirements and described in Section D, paragraph 2 and Annexure 2 to the Circular. The Directors of the Group are also responsible for the fi nancial information from which it has been prepared.

Reporting Accountant’s Responsibility

Our responsibility is to express an opinion about whether the pro forma fi nancial information has been compiled, in all material respects, by the directors on the basis specifi ed in the JSE Listings Requirements based on our procedures performed. We conducted our engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro forma Financial Information Included in a Prospectus. This standard requires that we comply with ethical requirements and plan and perform our procedures to obtain reasonable assurance about whether the pro forma fi nancial information has been compiled, in all material respects, on the basis specifi ed in the JSE Listings Requirements.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical fi nancial information used in compiling the pro forma fi nancial information, nor have we, in the course of this engagement, performed an audit or review of the fi nancial information used in compiling the pro forma fi nancial information.

79

As the purpose of pro forma fi nancial information included in a circular is solely to illustrate the impact of a signifi cant corporate action or event on unadjusted fi nancial information of the entity as if the corporate action or event had occurred or had been undertaken at an earlier date selected for purposes of the illustration, we do not provide any assurance that the actual outcome of the event or transaction would have been as presented.

A reasonable assurance engagement to report on whether the pro forma fi nancial information has been compiled, in all material respects, on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used in the compilation of the pro forma fi nancial information provides a reasonable basis for presenting the signifi cant effects directly attributable to the corporate action or event, and to obtain suffi cient appropriate evidence about whether:

• the related pro forma adjustments give appropriate effect to those criteria; and

• the pro forma fi nancial information refl ects the proper application of those adjustments to the unadjusted fi nancial information.

Our procedures selected depend on our judgment, having regard to our understanding of the nature of the Group, the corporate action or event in respect of which the pro forma fi nancial information has been compiled, and other relevant engagement circumstances.

Our engagement also involves evaluating the overall presentation of the pro forma fi nancial information.

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

Opinion

In our opinion, the pro forma fi nancial information has been compiled, in all material respects, on the basis of the applicable criteria specifi ed by the JSE Listings Requirements and described in Section D, paragraph 2 and Annexure 2 to the Circular.

Yours faithfully

PricewaterhouseCoopers Inc.Director: H RamsumerRegistered Auditor

80

ANNEXURE 4

TRADING HISTORY OF RCL FOODS SHARES ON THE JSE

The trading history of RCL Foods Shares on the JSE, for each day over the 30 Business Days preceding and including the Last Practicable Date, each month over the 12 months prior to the Last Practicable Date, and each quarter over the 2 years prior to such 12 -month period are set out below:

High(cents)

Low(cents)

Volume traded

(shares)Value traded

(R’million)

Day ended22/10/13 1 715 1 705 28 142 0.4807223/10/13 1 750 1 715 42 328 0.7276424/10/13 1 715 1 715 63 797 1.0941225/10/13 1 715 1 715 3 544 0.0607828/10/13 1 765 1 710 81 680 1.4003229/10/13 1 756 1 710 4 185 0.0722830/10/13 1 757 1 710 26 284 0.4544131/10/13 1 726 1 710 6 806 0.1165801/11/13 1 727 1 710 26 505 0.4534004/11/13 1 758 1 711 25 223 0.4384505/11/13 1 750 1 720 21 791 0.3784306/11/13 1 760 1 735 22 189 0.3867207/11/13 1 769 1 735 125 163 2.1972908/11/13 1 767 1 767 312 0.0055111/11/13 1 900 1 780 38 388 0.7070512/11/13 1 849 1 752 41 818 0.7521813/11/13 1 784 1 710 28 886 0.5002214/11/13 1 770 1 731 5 390 0.0950615/11/13 1 819 1 735 41 212 0.7348818/11/13 1 855 1 800 170 550 3.1281519/11/13 1 900 1 830 402 298 7.4742620/11/13 1 900 1 841 524 751 9.7020621/11/13 1 845 1 829 100 845 1.8456322/11/13 1 865 1 797 61 772 1.1282425/11/13 1 820 1 750 187 708 3.3748326/11/13 1 790 1 757 22 250 0.3974927/11/13 1 785 1 765 10 966 0.1949228/11/13 1 785 1 691 583 971 10.0860629/11/13 1 775 1 680 276 279 4.7407702/12/13 1 825 1 734 710 873 12.46989

Month ended31/12/12 1 500 1 318 4 696 325 65.1680631/01/13 1 715 1 455 5 027 905 82.0257828/02/13 1 650 1 400 2 661 081 40.2915231/03/13 1 750 1 424 5 312 428 85.5120230/04/13 1 640 1 462 6 318 631 96.9508631/05/13 1 751 1 485 2 979 299 46.9434630/06/13 1 635 1 470 3 879 241 61.1123931/07/13 1 800 1 525 3 104 786 50.7738031/08/13 1 720 1 560 2 497 939 41.3728030/09/13 1 770 1 585 2 922 448 47.3009231/10/13 1 832 1 610 4 463 354 76.0164830/11/13 1 900 1 680 2 718 267 48.72158

81

High(cents)

Low(cents)

Volume traded

(shares)Value traded

(R’million)

Quarter ended31/12/11 1 650 1 489 3 883 616 61.0441731/03/12 1 599 1 400 3 822 077 56.4900530/06/12 1 560 1 400 2 449 523 36.3122630/09/12 1 499 1 300 7 656 317 109.0754731/12/12 1 500 1 249 12 201 387 165.7074231/03/13 1 750 1 400 13 001 414 207.8293230/06/13 1 751 1 462 13 177 171 205.0067130/09/13 1 800 1 525 8 525 173 139.44752

Source: I- Net Bridge.

82

ANNEXURE 5

HISTORICAL FINANCIAL INFORMATION OF TSB SUGAR HOLDINGS

INTRODUCTION

The fi nancial report for the period ended 30 June 2011 was for a period of 15 months due to a change in the year-end from 31 March to 30 June.

The consolidated fi nancial information of TSB Sugar Holdings for the three periods ended 30 June 2011 (fi fteen months), 30 June 2012 and 30 June 2013 is set out below. The annual fi nancial statements of TSB Sugar Holdings for the last three fi nancial periods have been audited by PricewaterhouseCoopers Inc. An unqualifi ed audit opinion was issued in all three periods. The audited fi nancial statements for the three periods ended 30 June 2011, 30 June 2012 and 30 June 2013 will be available for inspection as described in Section E paragraph 19 of th e Circular.

The Directors of RCL Foods are responsible for the preparation, contents and presentation of the Circular and are responsible for ensuring that RCL Foods complies with the Listings Requirements. The Directors of TSB Sugar Holdings are responsible for the preparation and fair presentation of the audited TSB Sugar Holdings fi nancial statements in accordance with International Financial Reporting Standards from which this historical fi nancial information of TSB Sugar Holdings has been prepared. No material fact or circumstance has occurred between the latest fi nancial year-end of TSB Sugar Holdings and the Last Practicable Date.

Whilst the TSB Acquisition entails the acquisition of the shares in TSB Sugar International and TSB Sugar RSA, both held 100% by TSB Sugar Holdings, the consolidated fi nancial information of TSB Sugar Holdings is presented. However, TSB Sugar Holdings is an investment holding company and does not trade.

COMMENTARY ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Salient features

• Headline EBITDA decreased by 20.5% over the comparable 12 months in 2012 and increased by 44.2% over the comparable 15 months in 2011.

• Headline earnings decreased by 11.8% over the comparable 12 months in 2012 and increased by 88.7% over the comparable 15 months in 2011.

• Total dividends paid for the year amounted to R 372.2 million inclusive of a special dividend of R196 million. (2012: R49.9 million; 2011: R38.4 million).

• Net asset value of R1 878.9 million at 30 June 2013 (R1 911.6 million at 30 June 2012; R1 546.5 million at 30 June 2011).

Commentary

Overview and market conditions

The year under review has not demonstrated any meaningful signs of recovery from the global recession. Volatility, especially in the grains and oil markets, has increased signifi cantly during this year. Oil is one of the major risk factors plaguing the global recovery, with the price of oil having risen on the back of supply concerns following the geopolitical disruptions in the Middle East and North Africa.

South Africa’s GDP grew modestly in calendar 2012 . However, 2013’s second quarter growth was negatively impacted by the widespread industrial action across the mining sector of the economy. Interest rates are at a 50 year low in an attempt to encourage growth and employment. The slowdown in international demand for hard commodities such as platinum, a key contributor to South Africa’s GDP, has resulted in signifi cant lay-offs in the mining sector further exacerbating the high unemployment levels. Although the latest employment statistics refl ect that employment in the government sector has increased marginally, the resultant contribution to economic growth is unlikely to be meaningful in the short-term. The relief from lower interest rates to debt laden consumers is largely negated by higher fuel and electricity tariff increases, and the impact of higher unemployment in the formal sector remains signifi cant. At present market demand is typically impacted by a fragile consumer with household consumption growth unlikely to materialise in the short to medium term.

The South African market is impacted upon by a high level of sugar imports at low prices. This is likely to put margins and sugar sales under pressure. World market raw sugar prices have decreased to levels of 17 – 19 USc/lb from the 25 USc/lb prices seen a year ago.

83

Business overview

TSB Sugar Holdings’ headline earnings for the year under review amounted to R311 million (2012: R352 million; 2011: R187 million). This decrease in 2013 was mainly due to the negative impact of lower sugar production, lower sales volumes and increased costs that resulted in lower margins. The TSB Sugar Holdings’ performance was good considering the diffi cult market conditions. The increase in headline earnings from the 2011 to 2012 fi nancial period was mainly driven by a positive price variance due to favourable exchange rates, domestic market price increases and an increase in TSB Sugar Holdings’ production share in the South African Industry.

Turnover for the year under review increased by 8,6% to R 5 022 million (2012: R4 621 million; 2011: R4 905 million). The increase in 2013 was mainly attributable to higher sugar prices and an increase in export volumes. The decrease in 2012 from 2011 was partially due to the fact that the 2011 reporting period was a fi fteen-month period.

TSB Sugar Holdings’ raw sugar production for the season (April 2012 to March 2013) decreased by 8.9% to 560 244 tons (2011/2012 season: 615 046 tons) while the South African sugar industry’s total production for the same period increased by 7.1% post the drought in the KwaZulu-Natal. This resulted in TSB Sugar Holdings’ production share decreasing from 33.7% in the 2011/2012 season to 28.7% in the 2012/2013 season. The decrease in TSB’s production was mainly attributed to the countrywide transport strike and higher than normal rainfall during the crushing season. During the fi rst three months of the new season (April 2013 to June 2013) TSB produced 246 282 tons of sugar compared to 233 684 tons in the comparative period for the previous year. This was due to favourable climatic conditions and good factory performances.

TSB Sugar Holdings’ raw sugar production for the 2011/2012 season increased by 4.9% to 615,046 tons (2010/2011 season: 586,239 tons) while the sugar industry’s total production for the season decreased by 4.5% resulting in the TSB Sugar Holdings’ production share increasing from 30.7% in the 2010/2011 season to 33.7% in the 2011/2012 season. The international sugar prices remained strong during the 2012 fi nancial year and combined with a weaker Rand resulted in an increase in the export price of sugar. The 2011/2012 average sugar price increased by 17.1% compared to the 2010/2011 season.

The contribution of the Molatek animal feeds division to TSB Sugar Holdings’ operating profi t in 2013 increased to 25.2% (2012: 16.1%; 2011: 34.5%) due to improved margins and volumes. The higher percentage in 2011 was due to lower contributions from other divisions.

The Royal Swaziland Sugar Corporation’s contribution to TSB Sugar Holdings’ headline earnings for 2013 amounted to R121 million (2012: R73 million; 2011: R42 million) and was positively impacted over the three years by an increase in production as well as better than anticipated sugar prices.

The company has shown consistent growth in profi tability with headline earnings increasing from R144.6 million in 2008 to R310 .7 million in 2013 with a record high of R352.3 million in 2012.

Finance costs

The decrease in net fi nance cost of R1.4 million in 2013 is mainly a consequence of strict cash fl ow management and the postponement of capital expenditure. Interest for 2011 was for a fi fteen-month period.

Effective tax rate

The effective tax rate has decreased from 21.8% in 2012 to 21.7% in 2013 excluding the impact of Secondary Tax on Companies, the effective taxation rate remains unchanged. The low level of the tax rate in the last two years is ascribed to the income from associates and joint ventures reported net of tax. In the 2011 year the relative contributions of the income from associates were smaller and thus the impact on the tax rate was lower.

Statement of fi nancial position

Non-current assets

Fixed assets were increased by R50.2 million in 2013 and R24.2 million in 2012 mainly due the investment in the mills to maintain production capacity.

Investments in associates increased with R54.7 million in 2013 and R26.8 million in 2012 due to the excellent performance of the Royal Swazi Sugar Company and the increase in their retained profi ts.

There has been no major change in the nature of property, plant and equipment nor has there been any change in policy regarding the use thereof.

Current assets

Current assets increased with R84.1 million in 2013 and R358.9 million in 2012 mainly due to a higher investment in sugar stocks. The higher investment was due to bigger volumes as well as an increase in value per ton.

There have been no material loan receivables.

84

Current liabilities

Current liabilities increased by R71.3 million to R1 279.4 million in 2013 (2012: R1 208.1 million; 2011: R1 196.5 million).

Return on equity

Return on equity decreased in 2013 to 18.5% (2012: 21.6%) being impacted by the non-recurring profi t on sale of land with regards to the land restitution process in the previous year. The return on equity in 2011 was 14.0% due to the lower profi tability.

Prospects for TSB Sugar RSA and TSB Sugar International

With its three sugar mills, cane supply from irrigated fi elds and it’s well known Selati brand TSB Sugar RSA is well positioned to deliver value in the future. The northern irrigated area of the South African Sugar Industry, where TSB Sugar RSA’s mills are situated, has the lowest cost of production in the Industry.

With the current levels of irrigation sources production of cane and sugar should exceed levels of the previous year. Marketing is infl uenced by the high volumes of cheap sugar imports which impact on sales and margins.

Molatek, TSB Sugar RSA’s animal feed division, has shown consistent growth and is near the completion of an expansion project which will contribute to further growth in volumes.

TSB Sugar International is also busy with the feasibility of the Massingir project in Mozambique which has the potential to add considerable value in future if implemented.

The commentary presented on page 82 – 84 has not been audited.

85

CONSOLIDATED HISTORICAL FINANCIAL INFORMATION

STATEMENT OF FINANCIAL POSITION

Group 30 June 30 June 30 June

2013 2012 2011Notes R’000 R’000 R’000

ASSETSNon-current assetsProperty, plant and equipment 6 1 269 710 1 219 528 1 195 285Investment property 8 – – 1 866Intangible assets 9 13 646 13 696 13 746Biological assets 10 106 912 98 896 130 917Interest in subsidiaries 11 – – –Long-term loans and receivables 12 1 555 1 555 1 555Investment in associates 13 318 489 263 766 236 921Investment in joint ventures 14 141 077 118 534 107 809Available-for-sale fi nancial assets 15 – 6 000 7 457

1 851 389 1 721 975 1 695 556Current assetsInventories 16 1 019 826 954 543 665 257Trade and other receivables 17 505 297 485 636 457 697Amounts owing by Group companies 26 – – 8 880Derivative fi nancial instruments 28 2 387 3 560 3 599Taxation pre-paid 1 819 – –Cash and cash equivalents and restricted cash 18 133 660 135 159 84 521

1 662 989 1 578 898 1 219 954Assets classifi ed as held for sale 7 4 651 46 704 175 205

1 667 640 1 625 602 1 395 159Total assets 3 519 029 3 347 577 3 090 715

EQUITYCapital and reserves attributable to equity holdersOrdinary shares 19 * * *Fair value and other reserves 20 693 18 508 26 384Retained earnings 29 1 876 479 1 891 406 1 519 699

1 877 172 1 909 914 1 546 083Non-controlling interest in equity 1 765 1 730 398Total equity 1 878 937 1 911 644 1 546 481

LIABILITIESNon-current liabilitiesDeferred income tax 21 138 091 137 042 148 355Retirement benefi t obligations 22 64 997 55 265 49 418Other non-current liabilities 23 37 608 34 794 –Borrowings 24 120 000 – 150 000

360 696 227 101 347 773

Current liabilitiesCurrent portion of borrowings 24 50 786 232 000 412 000Retirement benefi t obligations 22 – – 54 885Amounts owing to Group companies 26 585 500 310 400 148 200Derivative fi nancial instruments 28 20 560 4 473 2 379Taxation payable – 7 313 2 519Trade and other payables 25 622 550 653 923 576 478

1 279 396 1 208 109 1 196 461Liabilities directly associated with assets classifi ed as held for sale 7 – 723 –

1 279 396 1 208 832 1 196 461Total liabilities 1 640 092 1 435 933 1 544 234Total equity and liabilities 3 519 029 3 347 577 3 090 715

* Amounts less than R1 000

86

INCOME STATEMENTS

Group

30 June

201330 June

2012

15 months to 30 June

2011Notes R’000 R’000 R’000

Continuing operationsRevenue 2.1 5 021 848 4 621 220 4 905 358Cost of sales (3 982 285) (3 611 529) (4 158 885)

Gross profi t 1 039 563 1 009 691 746 473Other operating income 2.2 160 586 115 098 151 413Fair value adjustments on biological assets 2.2 67 853 91 050 122 643Administrative expenses (9 522) (8 887) (10 358)Selling and marketing costs 2.2 (86 946) (72 598) (125 700)Other operating expenses 2.2 (842 620) (661 210) (609 696)

Operating profi t 2.2 328 914 473 144 274 775

Finance income 4 8 447 5 184 4 700Finance costs 4 (44 098) (42 262) (58 607)

Finance costs – net 4 (35 651) (37 078) (53 907)

Share of profi t of associates 13 120 897 73 357 42 044Share of profi t in joint ventures 14 30 493 20 961 17 368

Profi t before income tax 444 653 530 384 280 280Income tax expense 5 (96 553) (116 136) (87 533)

Profi t for the year from continuing operations 348 100 414 248 192 747

Discontinued operationsProfi t for the period from discontinued operations 7.2 – – 23 767

Profi t for the period 348 100 414 248 216 514

Attributable to:Equity holders of the Company 348 167 412 916 216 116Non-controlling interest (67) 1 332 398

348 100 414 248 216 514

STATEMENT OF OTHER COMPREHENSIVE INCOME

Group30 June

201330 June

201215 months to

30 June 2011R’000 R’000 R’000

Profi t for the period 348 100 414 248 216 514Other comprehensive income:Available-for-sale fi nancial assets 44 (1 706) (1 404)Cash fl ow hedges – Charged to equity (13 085) (188) 1 881Cash fl ow hedges – Realisation of reserve 188 (1 881) (8 908)Exchange differences on translating foreign operations 4 114 4 641 1 444

Other comprehensive expense for the year, net of tax (8 739) 866 (6 987)

Total comprehensive income for the period 339 361 415 114 209 527

Attributable to:Equity holders of the Company 339 428 413 782 209 129Non-controlling interest (67) 1 332 398

Total comprehensive income for the period 339 361 415 114 209 527

Items in the statement above are disclosed net of tax. The income tax relating to each component of other comprehensive income is disclosed in Note 5.

87

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STATEMENTS OF CASH FLOWS

Notes

Group30 June

2013R’000

30 June 2012R’000

30 June 2011R’000

Cash fl ow from operating activitiesNet profi t before income tax 444 653 530 384 309 019Adjustment for:Depreciation 6 126 852 120 528 137 723Amortisation of intangible assets 9 50 50 63Biological assets – Fair value gain 7, 10 (67 853) (91 050) (125 844)Biological assets charged to cost of sales 10 51 776 89 369 102 573Increase in derivative fi nancial instruments (652) (741) (998)Increase in post retirement liability 22 11 884 8 094 50 422Net profi t on disposal of property, plant and equipment and assets classifi ed as held for sale 2 (9 937) (53 145) 196Net profi t on disposal of investment property – (244) –Net profi t on disposal of available-for-sale fi nancial asset – – (76)Net profi t on disposal of business 33 (7 807) – (24 633)Disposal and loss of control in associates – – 272Deferred tax other movement – – 75Deferred tax realised on disposal of available-for-sale fi nancial asset 2 459 – 546Realisation of reserves on disposal of available-for-sale fi nancial asset (8 781) – (1 950)Loss of control in investment in joint venture – – (315)Impairment of available-for-sale fi nancial assets – 382 –Impairment of assets classifi ed as hel d for sale 7 1 150 2 213 –Impairment of biological assets 10 1 257 – –Increase in other non-current liabilities 2 814 34 794 –Increase in assets classifi ed as held for sale: Post -retirement medical asset – (104) –Dividends received (3 636) – (325)Interest received 4 (8 447) (5 184) (5 676)Interest paid 4 44 098 42 262 64 778Share of profi t from joint ventures (30 493) (20 962) (17 368)Share of profi t from associates (120 897) (73 357) (42 044)

Operating profi t before working capital changes 428 490 583 289 446 438Working capital changes:Increase in inventory (65 467) (289 470) (339 043)Increase in trade and other receivables (19 661) (27 937) (223 638)(Decrease)/increase in trade and other payables (16 783) 57 764 (122 475)

Cash generated from operations 326 580 323 646 (238 718)Interest paid 4 (44 098) (42 262) (64 778)Normal taxation paid 30 (102 096) (121 187) (73 334)

Net cash infl ow from operating activities 180 386 160 197 (376 829)

Cash fl ow from investing activitiesPurchase of property, plant and equipment (191 304) (138 477) (229 989)Proceeds on disposal of property, plant and equipment 23 700 399 8 527Proceeds on disposal of investment property – 2 110 –Proceed on disposal of available-for-sale fi nancial asset 15 180 – 2 484Proceeds on disposal of biological assets 6 804 – –Proceed on disposal of business – net of cash 33 47 793 – 9 917Additions to biological assets – – (11 561)Purchase of assets classifi ed as held for sale – – (4 294)Proceeds on disposal of assets classifi ed as held for sale – 206 797 535Proceed on mentorship agreement – restricted cash received 18 (6 539) (20 220) –Restricted cash excluded from statement of cash fl ows 6 539 20 220 –Capital invested by minorities 102 – –Post retirement contribution and settlement period 22 (2 152) (56 946) (2 417)

90

Notes

Group30 June

2013R’000

30 June 2012R’000

30 June 2011R’000

Decrease in loans to Group companies – 8 880 (4 010)Interest received 4 8 447 5 184 5 676Dividends paid (372 171) (49 951) (38 405)Dividends received 79 359 58 156 17 087

Net cash (outfl ow)/infl ow from investing activities (384 242) 36 152 (246 451)

Cash fl ow from fi nancing activitiesIncrease in long and short-term borrowings – – 42 033Increase/(decrease) in loans from Group companies 275 100 162 200 (36 914)Decrease in long-term loans and receivables – – 108

Net cash infl ow from fi nancing activities 275 100 162 200 5 227

Net increase in cash and cash equivalents 71 244 358 547 (618 054)Cash and cash equivalents at beginning of the period 32 939 (327 479) 288 875Effect of exchange differences 2 153 1 871 1 700

Cash and cash equivalents at end of the period 18 106 335 32 939 (327 479)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to both years presented, unless otherwise stated.

1.1 Basis of preparation

These consolidated financial statements of TSB Sugar Holdings Proprietary Limited (the “TSB Group”) and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (IFRS) and the Companies Act, as amended. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of biological assets, available-for-sale financial assets and financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 1.21.

(a) New and amended standards adopted by the group

The following new standards and amendments to standards are mandatory for the first time for financial years beginning 1 July 2012:

Amendment to IAS 12, ‘Income Taxes’, on deferred tax: Currently IAS 12, ‘Income Taxes’, requires an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. It can be difficult and subjective to assess whether recovery will be through use or through sale when the asset is measured using the fair value model in IAS 40, Investment Property. Hence this amendment introduces an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. As a result of the amendments, SIC 21, ‘Income Taxes – Recovery of Revalued Non-depreciable Assets’, would no longer apply to investment properties carried at fair value. The amendments also incorporate into IAS 12 the remaining guidance previously contained in SIC 21, which is accordingly withdrawn. Applicable to periods beginning on or after 1 January 2012. This amendment had no impact on the Group.

Amendment to IAS 1, ‘Financial Statement Presentation’, regarding other comprehensive income: The main change resulting from these amendments is a requirement for entities to group items presented in ‘other comprehensive income’ (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address which items are presented in OCI. Applicable to periods beginning on or after 1 July 2012. This amendment had no impact on the Group.

91

(b) New and amended standards, and interpretations mandatory for the fi rst time for the fi nancial period beginning 1 July 2012 but not currently relevant to the Group (although they may affect the accounting for future transactions and events).

New and amended standards, and interpretations mandatory for the first time for the financial period beginning 1 July 2012 but not currently relevant to the Group (although they may affect the accounting for future transactions and events) are considered to have no material impact on the Group:

None

(c) New standards, amendments and interpretations issued but not effective for the fi nancial period beginning 1 July 2012 and not early adopted.

Amendment to IAS 19, ‘Employee Benefits’: These amendments eliminate the corridor approach and calculate finance costs on a net funding basis. Applicable to periods beginning on or after 1 January 2013. This amendment will have no impact on the Group.

Amendment to IFRS 1, ‘First -time Adoption’, on government loans: This amendment addresses how a first-time adopter would account for a government loan with a below market rate of interest when transitioning to IFRS. It also adds an exception to the retrospective application of IFRS, which provides the same relief to first-time adopters granted to existing preparers of IFRS financial statements when the requirement was incorporated into IAS 20 in 2008. Applicable to periods beginning on or after 1 January 2013. This amendment will have no impact on the Group.

Amendment to IFRS 7, ‘Financial Instruments: Disclosures’, on asset and liability offsetting: This amendment includes new disclosures to facilitate comparison between those entities that prepare IFRS financial statements to those that prepare financial statements in accordance with US GAAP. Applicable to periods beginning on or after 1 January 2013. This amendment will have no impact on the Group.

Amendment to IFRSs 10, 11 and 12 on transition guidance: These amendments provide additional transition relief to IFRSs 10, 11 and 12, limiting the requirement to provide adjusted comparative information to only the preceding comparative period. For disclosures related to unconsolidated structured entities, the amendments will remove the requirement to present comparative information for periods before IFRS 12 is first applied. Applicable to periods beginning on or after 1 January 2013. This amendment will have no impact on the Group.

Annual improvements 2011: These annual improvements, address six issues in the 2009 – 2011 reporting cycle. It includes changes to:

• IFRS 1, ‘First -time Adoption’

• IAS 1, ‘Financial Statement Presentation’

• IAS 16, ‘Property, Plant and Equipment’

• IAS 32, ‘Financial Instruments; Presentation’

• IAS 34, ‘Interim Financial Reporting’

Applicable to periods beginning on or after 1 January 2013. This amendment will have no impact on the Group.

IFRS 10, ‘Consolidated Financial Statements’: The objective of IFRS 10 is to establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entity (an entity that controls one or more other entities) to present consolidated financial statements. It defines the principle of control, and establishes controls as the basis for consolidation. It sets out how to apply the principle of control to identify whether an investor controls an investee and therefore must consolidate the investee. It also sets out the accounting requirements for the preparation of consolidated financial statements. The Group is yet to assess IFRS 10’s full impact and intends to adopt IFRS 10 no later than the accounting period beginning on or after 1 July 2013.

IFRS 11, ‘Joint Arrangements’: IFRS 11 is a more realistic reflection of joint arrangements by focusing on the rights and obligations of the parties to the arrangement rather than its legal form. There are two types of joint arrangement: joint operations and joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and therefore accounts for its share of assets, liabilities, revenue and expenses. Joint ventures arise where the joint venture has rights to the net assets of the arrangement and therefore equity accounts for its interest. Proportional consolidation of joint ventures is no longer allowed. The group is yet to assess IFRS 11’s full impact and intends to adopt IFRS 11 no later than the accounting period beginning on or after 1 July 2013.

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IFRS 12, ‘Disclosures of interests in other entities’: IFRS 12 includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off -balance sheet vehicles. Applicable to periods beginning on or after 1 January 2013. This new standard will have no impact on the Group.

IFRS 13, ‘Fair value measurement’: IFRS 13 aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRS and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP. Applicable to periods beginning on or after 1 January 2013. This new standard will have limited impact on the Group.

IAS 27 (revised 2011), ‘Separate Financial Statements’: IAS 27 (revised 2011) includes the requirements relating to separate financial statements. Applicable to periods beginning on or after 1 January 2013. This revision will have no impact on the Group.

IAS 28 (revised 2011), ‘Associates and Joint Ventures’: IAS 28 (revised 2011) includes the requirements for associates and joint ventures that have to be equity accounted following the issue of IFRS 11. Applicable to periods beginning on or after 1 January 2013. This revision will have no impact on the Group.

IFRIC 20, ‘Stripping Costs in the Production Phase of a Surface Mine’: This interpretation sets out the accounting for overburden waste removal (stripping) costs in the production phase of a surface mine. The interpretation may require mining entities reporting under IFRS to write off existing stripping assets to opening retained earnings if the assets cannot be attributed to an identifiable component of an ore body. Applicable to periods beginning on or after 1 January 2013. This interpretation is not relevant to the Group.

Amendment to IAS 32, ‘Financial Instruments: Presentation’, on asset and liability offsetting: These amendments are to the application guidance in IAS 32, ‘Financial Instruments: Presentation’, and clarify some of the requirements for offsetting financial assets and financial liabilities on the balance sheet. Applicable to periods beginning on or after 1 January 2014. This amendment will have no impact on the Group.

IFRS 9, ‘Financial Instruments’: IFRS 9 is the first standard issued as part of a wider project to replace IAS 39. IFRS 9 retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortised cost and fair value. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset. The guidance in IAS 39 on impairment of financial assets and hedge accounting continues to apply. Applicable to periods beginning on or after 1 January 2015. The group is yet to assess IFRS 9’s full impact and intends to adopt IFRS 9 no later than the accounting period beginning on or after 1 July 2015.

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

1.2 Consolidation

(a) 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. The Group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de-facto control. De-facto control may arise in circumstances where the size of the group’s voting rights relative to the size and dispersion of holdings of other shareholders give the group the power to govern the financial and operating policies, etc.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling

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interest in the acquiree on an acquisition- by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of the acquiree’s identifiable net assets.

Acquisition-related costs are expensed as incurred.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non -controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(b) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

(c) Disposal of subsidiaries

When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

(d) Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after the date of acquisition. The Group’s investment in associates includes goodwill identified on acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

The Group’s share of post-acquisition profit or loss is recognised in the income statement, and its share of post -acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to ‘share of profit/(loss) of an associate’ in the income statement.

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Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group’s financial statements only to the extent of unrelated investor’s interests in the associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

Dilution gains and losses arising in investments in associates are recognised in the income statement.

(e) Joint venture companies

Joint ventures are those entities over which the Group exercises joint control by way of a contractual agreement between the Group and other ventures.

The Group’s interests in jointly controlled entities are accounted for by the equity method of accounting and are initially recognised at cost. The Group’s investment in interests in jointly controlled entities includes goodwill identified on acquisition, net of any accumulated impairment loss. See Note 9 for the impairment of non-financial assets including goodwill.

The Group’s share of post-acquisition profits or losses in its interest in jointly controlled entities are recognised in the income statement, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in a jointly controlled entity equals or exceeds its interest in the jointly controlled entity, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the jointly controlled entity.

Unrealised gains on transactions between the Group and its jointly controlled entities are eliminated to the extent of the Group’s interest in the jointly controlled entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Dilution gains and losses arising in interest in joint ventures are recognised in the income statement.

Goodwill or discount at acquisition of an interest in jointly controlled entity is accounted for in the same manner as with the consolidation of subsidiaries.

Dilutionary and anti-dilutionary effects of equity transactions by joint venture companies are accounted for directly against reserves.

1.3 Property, plant and equipment

Industrial and office buildings, plant, machinery, vehicles and equipment, implements and furniture are stated at cost, less subsequent depreciation and impairment, except for land, which is shown at cost less impairment. Cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance expenditures are charged to the income statement during the financial period in which they are incurred.

Depreciation is not provided on land. Depreciation is calculated using the straight-line method to allocate the cost of each asset to its residual value over its estimated useful life as follows:

YearsIndustrial and offi ce buildings 20 – 50Plant, equipment and furniture 1 – 20Motor vehicles 4 – 10Aircraft 8 – 20

Major renovations are depreciated over the remaining useful life of the related asset or to the date of the next major renovation, whichever is sooner.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of fi nancial position date. 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.

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Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are recognised within other (losses)/gains – net, in the income statement.

Borrowing costs directly attributable to the acquisition or construction of an asset that necessarily takes a substantial period of time to prepare for its intended use is added to the cost of the asset, until such time as the asset is substantially complete. Capitalisation is suspended during extended periods in which active development is interrupted. During the current and prior year, no borrowing costs have been capitalised.

1.4 Investment property

Investment properties are held to generate rental income and appreciate in capital value. Investment properties are treated as long-term investments and are carried at cost less accumulated depreciation. Buildings are depreciated to their estimated residual values on a straight-line basis over their expected useful lives. Where assets are identified as being impaired the carrying amount is reduced to its recoverable amount. Such written-off amounts are accounted for in the income statement.

Investment properties are being valued by external independent professional valuers every third year.

1.5 Intangible assets

(a) Trade names

A trade name, also called a brand name, is used to identify a commercial product or service, which may or may not be registered as a trademark. Trade names are shown at fair value on initial recognition and are subsequently measured at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of the trade names over their estimated useful lives (20 years).

The trade name recorded above was recognised in a prior year at fair value by the Group in terms of IFRS 3 on acquisition of the shares in Booker Tate Limited. The fair value was determined by independent valuation experts.

(b) Customer contracts

Customer relationships are established through contractual and non -contractual relationships with customers. These customer relationships, recognised as part of various business combinations, were valued at fair value. Customer relationships which arise from contracts are intangible assets that meet the contractual legal recognition criteria in terms of IAS 38. Where a customer relationship does not arise from a legal contract, it is recognised as an intangible asset apart from goodwill where it meets the separability criterion in terms of IAS 38. Customer contracts are shown at fair value on initial recognition and are subsequently measured at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of customer contracts over their estimated useful lives on the following bas es:

Customer contracts: Useful life: Greater than 5 years 10 years 3 to 5 years 5 years 1 to 3 years 3 years Less than 1 year 1 year

(c) Goodwill

Goodwill arises on the acquisition of subsidiaries, associates and joint ventures and represents the excess of the consideration transferred over TSB Sugar Holding Proprietary Limited’s interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the CGUs, or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is recognised immediately as an expense and is not subsequently reversed.

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(d) Trademarks

Separately acquired trademarks and licences are shown at historical cost. Trademarks and licences acquired in a business combination are recognised at fair value at the acquisition date. Trademarks and licences have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of trademarks licences over their estimated useful lives of 20 years.

A trademark is a word, name, symbol or device, or a combination of them, used by commercial enterprises to identify their services and distinguish them from services of competitors. Virtually any supplier of any product or service has competition, and the role of a trademark is to identify and distinguish brands and suppliers. Certain trademarks may be generic in that they do not promote specific branded products, but rather the name and reputation of the business as a whole.

1.6 Impairment of non-financial assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

1.7 Biological assets and produce

Biological assets are measured on initial recognition and at each statement of financial position date at their fair values less costs to sell and any change in values are included in the net profit or loss for the period in which it arises.

Bearer biological assets consist of sugar cane roots and banana plants. Consumable biological assets are standing sugar cane and bananas.

The fair value of biological assets is determined with reference to the following:

• estimated market prices adjusted for the expected quality and yields of the agricultural produce;

• certain costs such as harvesting, transport, packing, point-of-sale and other cost; and

• replacement cost and age of the bearer biological assets.

1.8 Financial instruments

The Group recognises a financial asset or a financial liability on its statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instrument.

Financial assets are derecognised when the rights to receive cash flows from the financial asset have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Financial liabilities (or part of a financial liability) are removed from its statement of financial position when, and only when, they are extinguished – i.e. when the obligation specified in the contract is discharged or cancelled or expires.

Financial assets

The Group classifi es its fi nancial assets in the following categories: at fair value through profi t or loss, loans and receivables and available for sale. The classifi cation depends on the purpose for which the fi nancial assets were acquired. Management determines the classifi cation of its fi nancial assets at initial recognition.

(1) Financial assets at fair value through profi t or loss

Financial assets at fair value through profi t or loss are fi nancial assets held for trading. A fi nancial asset is classifi ed in this category if acquired principally for the purpose of selling in the short term. Derivatives are classifi ed as held for trading unless they are designated as hedges. Assets in this category are classifi ed as current assets.

(2) Loans and receivables

Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities

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greater than 12 months after the statement of fi nancial position date. These are classifi ed as non-current assets. Loans and receivables comprise long-term loans, amounts owing by Group companies, cash and cash equivalents and trade and other receivables (excluding pre-payments) in the statement of fi nancial position.

(3) “Available-for-sale” fi nancial assets

“Available-for-sale” fi nancial assets are non-derivatives that are either designated in this category or not classifi ed in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the statement of fi nancial position date.

Recognition and measurement

Regular purchases and sales of fi nancial assets are recognised on trade-date – the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all fi nancial assets not carried at fair value through profi t and loss. Financial assets carried at fair value through profi t or loss are initially recognised at fair value, and transaction costs are expensed in the income statement. “Available-for-sale” fi nancial assets and fi nancial assets at fair value through profi t or loss are subsequently carried at fair value. Loans and receivables are carried at amortised cost using the effective interest method.

Gains or losses arising from changes in the fair value of the ‘fi nancial assets at fair value through profi t or loss’ category are presented in the income statement within other operating income and other operating expenses in the period in which they arise. Dividend income from fi nancial assets at fair value through profi t or loss is recognised in the income statement as part of other income when the Group’s right to receive payments is established.

Changes in the fair value of fi nancial assets classifi ed as “available-for-sale” are recognised in the statement of other comprehensive income. When securities classifi ed as “available-for-sale” are sold or impaired, the accumulated fair value adjustments recognised in the statement of other comprehensive income are included in the income statement as other operating income or other operating expenses.

Dividend income from “available-for-sale” fi nancial assets are recognised in the income statement as part of other operating income when the Group’s right to receive payments is established.

The Group assesses at each statement of fi nancial position date whether there is objective evidence that a fi nancial asset or a group of fi nancial assets is impaired. In the case of equity securities classifi ed as “available-for-sale”, a signifi cant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for “available-for-sale” fi nancial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that fi nancial asset previously recognised in profi t or loss – is removed from the statement of other comprehensive income and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.

Financial liabilities

The Group classifi es its fi nancial liabilities in the following categories: at fair value through profi t or loss (derivatives that are not designated as hedges) and fi nancial liabilities at amortised cost (borrowings, amounts owing to Group companies and trade and other payables, excluding deferred income). Management determines the classifi cation of its fi nancial liabilities at initial recognition.

(1) Financial liabilities at fair value through profi t or loss

Financial liabilities at fair value through profi t or loss are fi nancial liabilities held for trading. A fi nancial liability is classifi ed in this category if acquired principally for the purpose of settling in the short term. Derivatives are classifi ed as held for trading unless they are designated as hedges. Assets in this category are classifi ed as current liabilities. The Group does not currently hold liabilities of this nature.

(2) Financial liabilities at amortised cost

Financial liabilities at amortised cost are non-derivatives that are either designated in this category or not classifi ed in any of the other categories.

Financial liabilities at amortised cost are non-derivative fi nancial liabilities with fi xed or determinable payments that are not quoted in an active market. They are included in current liabilities, except for maturities greater than 12 months after the statement of fi nancial position date. These are classifi ed as non-current liabilities.

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1.9 Inventories

Inventories are stated at the lower of cost or net realisable value. Cost is determined on the following bas es:

• Raw materials are valued at average cost.

• Consumables and maintenance stock are valued at average cost.

• Finished goods are valued at average cost, which includes direct manufacturing costs and an applicable proportion of manufacturing overhead expenses based on normal capacity.

Provision is made for obsolete and slow -moving stock, if necessary.

Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

1.10 Current and deferred income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the statement of fi nancial position date in the countries where the Company and the Company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated fi nancial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profi t or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the statement of fi nancial position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profi t will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

South African resident companies are subject to a dual corporate tax system, one part of the tax being levied on taxable income and the other, a secondary tax, on distributed income. A company incurs Secondary Tax on Companies (“STC”) charges on the declaration or deemed declaration of dividends to its shareholders. STC is not a withholding tax on shareholders, but a tax on companies.

The STC tax consequence of dividends is recognised as a taxation charge in the income statement in the same period that the related dividend is accrued as a liability. The STC liability is reduced by dividends received during the dividend cycle. Where dividends declared exceed the dividends received during a cycle, STC is payable at the current STC rate on the net amount. Where dividends received exceed dividends declared within a cycle, there is no liability to pay STC.

The potential tax benefi t related to excess dividends received is carried forward to the next dividend cycle as an STC credit. Deferred tax assets are recognised on unutilised STC credits to the extent that it is probable that the Group will declare future dividends to utilise such STC credits.

STC was abolished effective 1 April 2012 and has been replaced by a new withholding tax which is levied on the shareholder and not the company, with the exception of non-cash dividends. Existing STC credits will expire on 1 April 2015 if not utilised.

Capital Gains Tax (“CGT”) is levied when capital assets is disposed off or deemed to be disposed off. CGT is levied on the difference between the proceeds on the sale of capital assets and the base cost (tax value) of the capital asset. The capital gain is included at a rate of 66.6% in the taxable income of the company. Capital losses are ring fenced.

1.11 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Rand, which is the Company’s functional and presentation currency.

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(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when deferred in the statement of other comprehensive income as qualifying cash flow hedges.

Translation differences on non-monetary financial assets and liabilities are reported as part of the fair value gain or loss. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets such as equities classified as available-for-sale are included in the available-for-sale reserve in the statement of other comprehensive income.

(c) Group companies

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) assets and liabilities for each statement of fi nancial position presented are translated at the closing rate at the date of that statement of fi nancial position;

(ii) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

(iii) all resulting exchange differences are recognised as a separate component of equity through the statement of other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders’ equity through the statement of other comprehensive income. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in the income statement as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

1.12 Leased assets

Leases of plant, equipment and motor vehicles where the Group has substantially all the risks and rewards of ownership are classifi ed as fi nance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased plant, equipment and motor vehicles or the present value of the minimum lease payments. Each lease payment is allocated between the liability and fi nance charges to achieve a constant rate on the fi nance balance outstanding. The corresponding rental obligations, net of fi nance charges, are included in other long-term payables. The interest element of the fi nance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The plant and equipment acquired under fi nance leases is depreciated over the shorter of the useful life of the asset or the lease term.

Leases in which a signifi cant portion of all the risks and rewards of ownership are retained by the lessor are classifi ed as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

When the operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.

1.13 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, returns, rebates and discounts and after eliminated sales within the Group. Revenue is recognised as follows:

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The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefi ts will fl ow to the entity and specifi c criteria have been met for each of the Group’s activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifi cs of each arrangement.

(a) Sales of goods

Sales of goods are recognised when the risk and rewards of ownership of the goods are transferred to the buyer when the Group entity has delivered products to the customer, the customer has accepted the products and collectability of the related receivables is reasonably assured. Goods include sugar and sugar -related products and animal feeds.

(b) Sales of services

Sales of services are recognised in the accounting period in which the services are rendered, by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided. Sale of services include consulting, cane transport and cane loading services.

(c) Interest income

Interest income is recognised on a time-proportion basis using the effective interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans is recognised using the original effective interest rate.

(d) Dividend income

Dividend income is recognised when the right to receive payment is established.

1.14 Financial risk management

(1) Financial risk factors

The Group’s activities expose it to a variety of fi nancial risks: market risk (including currency risk, cash fl ow interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of fi nancial markets and seeks to minimise potential adverse effects on the Group’s fi nancial performance. The Group uses derivative fi nancial instruments to hedge certain risk exposures.

Risk management is carried out by management under policies approved by the Board of Directors. Group management identifi es, evaluates and hedges fi nancial risks in close co-operation with the Group’s operating units. The Board provides principles for overall risk management.

In view of the volatility and uncertainty which currently exists in the markets in which the Group operates, the directors are unable to accurately predict what movements will occur in the ensuing 12 months and consider a 5% movement in relevant foreign exchange rates and quoted prices and a 50 basis points interest movement as reasonably possible for the purpose of all IFRS 7 sensitivity analyses.

(2) Market risk

(i) Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US Dollar (USD) (in respect of exports of sugar and imports of consumables), the UK Pound (GBP) and the European Euro. Other foreign exchange exposures include the Swaziland Lilangeni (E) and various African and other Asian currencies. To manage the foreign exchange risk arising from future commercial transactions and recognised assets and liabilities in foreign currencies, entities in the Group use forward contracts. Foreign exchange risk arises when future commercial transactions or recognised assets and liabilities are denominated in a currency that is not the entity’s functional currency. Except for sugar exports, foreign exchange risk and hedging is measured on an individual transaction level. All sugar exports foreign currency income are hedged using cash fl ow hedges.

The Group has certain investments in foreign operations whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the Group’s foreign operations in the UK and Mozambique is managed primarily through borrowings denominated in the relevant foreign currencies. Forward foreign exchange

101

contracts are not entered into in respect of the year -end translation of subsidiaries whose functional and reporting currencies are not the Rand. Note that foreign currency translation risk is excluded from the scope of IFRS 7 and hence the foreign exchange sensitivity analyses.

At 30 June 2013, if the Rand had weakened by 5% against the GBP with all other variables held constant, using the available-for-sale fi nancial assets denominated in GBP, the post-tax effect on equity of the Group for the year would have been R0 (2012: R216 007; 2011: R254 703) higher, as a result of foreign exchange gains/losses on translation of the GBP -denominated available-for-sale fi nancial assets.

At 30 June 2013, if the Rand had weakened by 5% against the US D with all other variables held constant, using the foreign trade receivable balance outstanding at the end of the year, post-tax profi ts for the year would have been R1 741 876 (2012: R241 740; 2011: R254 703) higher, as a result of translation of the US D-denominated trade receivable balances at year -end.

The Group did not have any USD trade payables on 30 June 2013 , 30 June 2012 and 30 June 2011.

At 30 June 2013, if the Rand had weakened by 5% against the US Dollar with all other variables held constant, using the US D -denominated cash and cash equivalents balance at the year -end, post-tax profi ts for the year would have been R822 784 (2012: R79 513; 2011: R1 017 618) higher, as a result of translation of the USD -denominated cash and cash equivalents balance at year -end.

(ii) Price risk

Equity securities price risk

The Group is not exposed to equity securities price risk.

(iii) Cash flow and fair value interest rate risk

As the Group has signifi cant interest-bearing assets, the Group’s income and operating cash fl ows are impacted by changes in the market interest rates in this regard. The interest bearing assets include long-term loans, amounts owing by Group companies and cash and cash equivalents.

The Group’s interest rate risk also arises from long-term and short-term borrowings. Borrowings issued at variable rates expose the Group to cash fl ow interest rate risk. During 2013, 2012 and 2011, the Group’s borrowings at variable rates were denominated in Rand. There is no formal policy between fi xed and variable rated borrowings.

The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration refi nancing, renewal of existing positions, alternative fi nancing and hedging. The scenarios are run only for liabilities that represent the major interest-bearing positions. Based on the simulations performed, using the variable rate borrowings, the impact on profi t or loss before tax of a 50 basis point move in interest rates would be a maximum increase/decrease of R3 781 430 (2012: R2 700 000; 2011: R535 000), respectively, per year. The simulation is done on a regular basis to verify that the maximum loss potential is within the limit given by management.

At 30 June 2013, if interest rates on Rand-denominated borrowings had been 50 basis points higher with all other variables held constant, post-tax profi t for the year would have been R2 722 630 (2012: R1 944 000; 2011: R385 200) lower, mainly as a result of higher interest expense on fl oating rate borrowings. It will not have any impact on other components of equity, except for retained earnings (via the impact on profi t). Refer to Notes 24 and 26 for details regarding fl oating rate borrowings.

At 30 June 2013, if interest rates on cash in bank and on hand had been 50 basis points higher with all other variables held constant, post-tax profi t for the year would have been R457 636 (2012: R413 780; 2011: R304 276) higher, mainly as a result of higher interest income on fl oating rate borrowings. It will not have any impact on other components of equity, except for retained earnings (via the impact on profi t).

(iv) Credit risk

Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, long-term loans, amounts owing by Group companies and derivative fi nancial instruments, as well as credit exposures to customers. The Group’s cash and cash equivalents are placed with high credit quality fi nancial institutions. Risk control assesses the credit quality of the customer, taking into account its fi nancial position, past experience and other factors. The utilisation of credit limits is regularly monitored.

102

The gross carrying amounts of these fi nancial assets in the statement of fi nancial position represent the Group’s maximum exposure to credit risk.

The table below shows the credit limit and balance of the major counterparties with outstanding balances above R5 million at the statement of fi nancial position date :

30 June 2013

30 June 2012

30 June 2011

R’000 R’000 R’000 R’000 R’000 R’000Counterparty Credit Undrawn Credit Undrawn Credit Undrawn

Rating limit facility limit facility limit Facility

Counterparties with externalcredit rating A3 1 020 000 645 714 1 263 300 1 181 300 1 370 000 958 000

30 June 2013

30 June 2012

30 June 2011

R’000 R’000 R’000 R’000 R’000 R’000

Credit limit

Balancereceivable

Credit limit

Balancereceivable

Credit limit

Balancereceivable

Customerswithoutexternal creditratings

Low risk 288 135 142 602 206 635 144 299 190 214 140 563

Generalrisk 65 250 51 588 12 600 16 497 26 000 23 229High risk – – 11 250 9 055 5 000 7 487

353 385 194 191 230 485 169 851 221 214 171 279

Management does not expect material losses from non-performance by these counterparties.

Credit insurance via Lombard Insurance is in place on all debtor balances in excess of R300 000. Any movements in credit exposures in excess of R3 .5 million are covered by credit insurance, subject to the terms and conditions of the policy. Credit insurance premiums are paid on a monthly basis based on net invoiced sales.

Refer to Note 31 for further information regarding the credit quality of fi nancial assets.

The Company does not have other signifi cant exposure to any other individual customer or counterparty.

(v) Liquidity risk

Prudent liquidity risk management includes maintaining suffi cient cash and marketable securities, the availability of funding from an adequate amount of committed credit facilities. The Company aims at maintaining fl exibility in funding by keeping committed credit limits available.

Management monitors rolling forecasts of the Group’s liquidity reserve (comprises undrawn borrowing facility and cash and cash equivalents) on the basis of expected cash fl ow on a weekly basis.

The table below analyses the Group’s fi nancial liabilities and net-settled derivative fi nancial liabilities into relevant maturity groupings based on the remaining period at the statement of fi nancial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash fl ows.

103

Less than 1 year

Between 2 and5 years

Over 5 years

At 30 June 2013 R’000 R’000 R’000Borrowings 61 554 140 681 –Trade and other payables 622 550 – –Amounts owing to Group companies 585 500 – –

Less than 1 year

Between 2 and 5 years

Over 5 years

At 30 June 2012 R’000 R’000 R’000Borrowings 232 000 – –Trade and other payables 653 923 – –Amounts owing to Group companies 310 400 – –

Less than 1 year

Between 2 and5 years

Over 5 Years

At 30 June 2011 R’000 R’000 R’000Borrowings 422 503 159 747 –Trade and other payables 576 478 – –Amounts owing to Group companies 148 200 – –

The Group will use its undrawn borrowing facilities and future operating profi ts to cover the above obligations.

The table below analyses the Group’s derivative fi nancial instruments which will be settled on a gross basis into relevant maturity groupings based on the remaining period at the statement of fi nancial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash fl ows.

Less than 1 year


Over 5 years

At 30 June 2013 R’000 R’000 R’000Forward foreign exchange contracts – cash fl ow hedges– Outfl ow (8 313) – –– Infl ow 462 245 – –Forward foreign exchange contracts – fair value hedges– Outfl ow – – –– Infl ow – – –Interest rate swap– Outfl ow – – –

Less than 1 year


Over 5 years

At 30 June 2012 R’000 R’000 R’000Forward foreign exchange – Infl ow 267 295 – –Forward foreign exchange contracts – fair value hedges– Outfl ow (13 268) – –– Infl ow – – –Interest rate swap– Outfl ow (14 055) – –

Less than 1 year


Over 5 years

At 30 June 2011 R’000 R’000 R’000Forward foreign exchange contracts – cash fl ow hedges– Outfl ow – – –– Infl ow 190 656 – –Interest rate swap– Outfl ow (14 055) (14 055) –

104

( 3) 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 and benefi ts for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to Shareholders, return capital to Shareholders, issue new shares or sell assets to reduce debt or enter into further fi nancing as applicable. The Group is not subject to any external capital requirements.

The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including current and non-current borrowings and amounts owing to Group companies) and sugar stock creditors included in trade payables as shown in the consolidated statement of fi nancial position less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated statement of fi nancial position plus net debt.

During 2013, the Group’s strategy, which was unchanged from 2012, was to maintain the gearing ratio smaller than 50%. The gearing ratios at 30 June 2013 and 30 June 2012 were as follows:

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

Total borrowings 756 286 542 400 710 200Less: Cash and cash equivalents (133 660) (135 159) (84 521)

Net debt 622 626 407 241 625 679Total equity 1 878 937 1 911 644 1 546 481

Total capital 2 501 563 2 318 885 2 172 160

Gearing ratio 25% 18% 29%

( 4) Fair value estimation

The table below analyses fi nancial instruments carried at fair value, by valuation method. The different levels have been defi ned as follows:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).

• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The following table presents the Group’s assets and liabilities that are measured at fair value at 30 June 2013:

Level 1R’000

Level 2R’000

Level 3R’000

Total balance

R’000

AssetsDerivatives used for hedging – 2 387 – 2 387Available-for-sale fi nancial assets– Equity securities – – – –

Total assets – 2 387 – 2 387

LiabilitiesDerivatives used for hedging – (20 560) – (20 560)

Total liabilities – (20 560) – (20 560)

105


Level 1 R’000

Level 2 R’000

Level 3 R’000

Total balance

R’000

AssetsDerivatives used for hedging – 3 560 – 3 560Available-for-sale fi nancial assets– Equity securities – – 6 000 6 000

Total assets – 3 560 6 000 9 560




Level 1 R’000

Level 2 R’000

Level 3 R’000

Total balance

R’000

AssetsDerivatives used for hedging – 3 599 – 3 599Available-for-sale fi nancial assets– Equity securities – – 7 457 7 457

Total assets – 3 599 7 457 11 056



The fair value of fi nancial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, Broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for fi nancial assets is the current bid price. These instruments are included in level 1. Instruments included in level 1 comprise primarily listed equity investments classifi ed as trading securities or available-for-sale.

The fair value of fi nancial instruments that are not traded in an active market (for example, over the counter derivatives) is determined by using valuation techniques. These valuation techniques maximi se the use of observable market data where it is available and rely as little as possible on entity specifi c estimates. If all signifi cant inputs required to fair value an instrument are observable, the instrument is included in level 2.

If one or more of the signifi cant inputs is not based on observable market data, the instrument is included in level 3.

Specifi c valuation techniques used to value fi nancial instruments include:

• Quoted market prices or dealer quotes for similar instruments.

• The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves.

• The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with the resulting value discounted back to present value.

• Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.

The following table presents the changes in level 3 instruments for the year ended 30 June 2013:

106

Available-for-salefi nancial assets


TotalOpening balance 6 000 6 000Disposals (5 943) (5 943)Gains or losses through profi t and loss (9 237) (9 237)Gains and losses recognised through the statement of other comprehensive income 9 180 9 180

Closing balance – –

Total gains or losses for the year included in the statement of other comprehensive income for assets held at the end of the reporting period 9 180 9 180

The carrying value of trade receivables and payables are assumed to approximate their fair values due to the short-term nature of these fi nancial instruments. The fair value of fi nancial liabilities for disclosure purposes is estimated by discounting the future contractual cash fl ows at the current market interest rate that is available to the Group for similar fi nancial instruments.

For fi nancial assets and liabilities with maturity of less than one year, the face value less any estimated credit adjustments are assumed to approximate their fair values.

1.15 Employee benefits

Pension obligations

Group companies operate various pension schemes. The schemes are generally funded through payments to insurance companies or trustee-administered funds, determined by periodic actuarial calculations. The Group has both defi ned benefi t and defi ned contribution plans. A defi ned contribution plan is a pension plan under which the Group pays fi xed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold suffi cient assets to pay all employees the benefi ts relating to employee service in the current and prior periods. A defi ned benefi t plan is a pension plan that is not a defi ned contribution plan. Typically, defi ned benefi t plans defi ne an amount of pension benefi t that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

The liability recognised in the statement of fi nancial position in respect of defi ned benefi t pension plans is the present value of the defi ned benefi t obligation at the statement of fi nancial position date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defi ned benefi t obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defi ned benefi t obligation is determined by discounting the estimated future cash outfl ows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefi ts will be paid and that have terms to maturity approximating to the terms of the related pension liability.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in excess of the greater of 10% of the value of plan assets or 10% of the defi ned benefi t obligation are charged or credited to income over the employees’ expected average remaining working lives.

Past-service costs are recognised immediately in income, unless the changes to the pension plan are conditional on the employees remaining in service for a specifi ed period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period.

For defi ned contribution plans, the Group pays contributions to privately administered pension insurance plans on a contractual basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefi t expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

The group has established a number of pension schemes that substantially cover all employees. One of the pension schemes is a post-retirement healthcare benefi t plan and is funded. This scheme is valued annually by independent actuaries using the projected unit credit method. The latest actuarial valuation was carried out on 30 June 2013.

107

Post-retirement medical benefi ts

The Group provides post-retirement healthcare benefi ts to certain of its retirees. The entitlement to post-retirement medical benefi ts is based on the employees remaining in service up to retirement age and the completion of a minimum service period. The projected unit credit method of valuation is used to calculate the liability for post-retirement medical benefi ts. The expected costs of these benefi ts are expensed and the liabilities accumulated over the period of employment, using accounting methodology similar to that for defi ned-benefi t pension plans. Independent qualifi ed actuaries value these obligations. All appointments as from 1 December 1998 are excluded from post-retirement medical benefi ts.

Bonus plans

A liability for employee benefi ts in the form of bonus plans is recognised in accruals when there is no realistic alternative but to settle the liability and at least one of the following conditions is met:

• there is a formal plan and the amounts to be paid are determined before the time of issuing the financial statements; or

• past practices have created a valid expectation by employees that they will receive a bonus and the amount can be determined before the time of issuing the financial statements.

Short-term benefi ts

Employee entitlements to leave are recognised when they accrue to employees involved. A provision is made for the estimated liability for leave as a result of services rendered by employees up to the statement of fi nancial position date.

Termination benefi ts

Termination benefi ts are payable when employment is terminated by the group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefi ts. The Group recognises termination benefi ts when it is demonstrably committed to a termination when the entity has a detailed formal plan to terminate the employment of current employees without the possibility of withdrawal. In the case of an offer made to encourage voluntary redundancy, the termination benefi ts are measured based on the number of employees expected to accept the offer. Benefi ts falling due more than 12 months after the end of the reporting period are discounted to their present value.

1.16 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outfl ow of resources will be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outfl ow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outfl ow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that refl ects current market assessments of the time value of money and the risks specifi c to the obligation. The increase in the provision due to passage of time is recogni sed as interest expense.

1.17 Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with bank and bank overdrafts. Bank overdrafts are included within borrowings in current liabilities on the statement of fi nancial position. For the purpose of the statement of cash fl ow, cash and cash equivalents comprise cash on hand, deposits held with banks and net of bank overdrafts.

1.18 Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables.

108

Signifi cant fi nancial diffi culties of the debtor, probability that the debtor will enter bankruptcy or fi nancial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash fl ows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within other operating expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables.

Subsequent recoveries of amounts previously written off are credited against other operating income or expenses in the income statement.

1.19 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

Borrowings are classifi ed 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 fi nancial position date. Amounts owing to group companies are also measured as set out above.

1.20 Trade and other payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

1.21 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by defi nition, rarely equal the related actual results. The estimates and assumptions that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial year are discussed below.

(a) Customer contracts

Customer relationships are established through contractual and non contractual relationships with its customers. These customer relationships were valued as part of a business combination in a prior year. Customer relationships which arise from contracts were recognised as intangible assets as they meet the contractual legal recognition criteria in terms of IAS 38. Where a customer relationship did not arise from a legal contract, it was recognised as an intangible asset apart from goodwill where it met the separability criterion in terms of IAS 38. These intangible assets arising out of these contracts were impaired in a previous fi nancial period.

(b) Trade name

A trade mark is a word, name, symbol or device, or a combination of them, used by a commercial enterprise to i dentify its services and distinguish them from services of competitors. Virtually any supplier of any product or service has competition, and the role of a trademark is to indentify and distinguish brands and suppliers. Certain trademarks may be generic in that they do not promote specifi c branded products, but rather the name and reputation of the business as a whole. A trade name, also called a brand name, is used to identify a commercial product or service, which may or may not be registered as a trademark. The Booker Tate trade name has signifi cant value to the continuing operations of the business. The Booker Tate brand name has a high degree of recognition and assists in attracting and retaining customers. Accordingly the Booker Tate trade name was valued as part of a business combination which occurred in a previous fi nancial year. These intangible assets were impaired in the prior fi nancial period.

(c) Provision for sugar shortage

The provision relates principally to the sugar shortage at year- end. The purpose of the provision is to calculate on an acceptable method the handling losses in those stockholding areas where accurate stock counts can not be performed and reliance is placed on the work of quantity surveyors.

109

(d) Biological assets – standing cane and bananas

Standing cane is valued at its best-estimated recoverable value less harvesting, transport, agricultural levies and other over the weighbridge costs. In determining the fair value an estimate is made of the yield of the standing cane. This estimate can vary from the actual yield when the cane is harvested. The yield is based on history and industry statistics and experience.

Bananas are valued at their best-estimated fair value less harvesting and other estimated point-of-sale costs. Point-of-sale costs includes transport, agricultural levies and other costs.

(e) Post -employment benefi t obligations

Post-retirement benefi t obligations are provided for certain existing and former employees. Actuarial valuations are based on assumptions which include employee turnover, mortality rates, the discount rate, the expected long-term rate of return of retirement plan assets, healthcare costs, infl ation rates and salary increases.

(f) Valuations of fi nancial instruments

The value of the derivative instruments fl uctuates on a daily basis and the actual amounts realised may differ materially from their value at the statement of fi nancial position date.

1.22 Share capital

Ordinary shares are classifi ed as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

1.23 Derivative financial instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either: (a) hedges of the fair value of recognised assets or liabilities or a fi rm commitment (fair value hedge); (b) hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (cash fl ow hedge) or (c) derivatives which are not designated in effective hedge relationships are classifi ed in the category at fair value through profi t or loss.

The Group documents, at the inception of the transaction, the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash fl ows of hedged items. The full fair value of a hedging derivative is classifi ed as a non-current asset or liability when the remaining hedge item is more than 12 months; it is classifi ed as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classifi ed as a current asset or liability.

(a) Fair value hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The gain or loss relating to the effective and ineffective portion is recognised in the income statement within other operating income or expenses. If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedge item for which the effective interest method is used is amortised to profi t or loss over the period to maturity. Also refer to Notes 1.14 and 28 to the fi nancial statements.

(b) Cash fl ow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash fl ow hedges are recognised in the statement of other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in the income statement within other operating income or expenses.

110

Amounts accumulated in the statement of other comprehensive income are recycled in the income statement in the periods when the hedged item affects profi t or loss (for example, when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of forward foreign exchange contracts hedging export sales is recognised in the income statement within sales. However, when the forecast transaction that is hedged results in the recognition of a non-fi nancial asset (for example, inventory or fi xed assets) or a non-fi nancial liability, the gains and losses previously deferred in the statement of other comprehensive income are transferred from equity and included in the initial measurement of the cost of the asset or liability. The deferred amounts are ultimately recognised in cost of goods sold in case of inventory, or in depreciation in case of fi xed assets.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement within other operating income or expenses. Also refer to Notes 1.14 and 28 to the fi nancial statements.

(c) Derivatives at fair value through profi t or loss

Changes in the fair value of these derivative instruments that do not qualify for hedge accounting are recognised immediately in the income statement within other operating income or expenses.

Also refer to Note 28 to the fi nancial statements.

1.24 Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s fi nancial statements in the period in which the dividends are approved by the Company’s Shareholders.

1.25 Non-current assets (or disposal groups) held for sale

Non-current assets (or disposal groups) are classifi ed as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell if their carrying amount is to be recovered principally through a sale transaction rather than through continuing use.

111

2. REVENUE AND OPERATING PROFIT – INCOME AND EXPENSES BY NATURE

2.1 Revenue

Group

30 June

2013R’000

30 June2012

R’000

15 months to

30 June 2011R’000

Revenue consists of the following:– Sales of goods 4 947 566 4 548 240 4 807 650– Sales of services 74 282 72 980 97 708

5 021 848 4 621 220 4 905 358

2.2 Operating profi t – income and expenses by nature

Operating profi t is arrived at after taking into account the following items of income and expenses by nature:

Raw materials and consumables used 3 370 678 3 036 840 3 431 011Selling and marketing costs 86 946 72 598 125 700Other expenses 178 812 38 575 95 405Other operating income:Net (profi t)/loss on sale of property, plant and equipment and assets classifi ed as held for sale (9 937) (53 145) 196Net profi t on sale of business (7 807) – –Net profi t on sale of investment property – (244) –Foreign exchange profi ts – – (34 640)Net profi t on sale of biological assets (3 838) – –Profi t from insurance proceeds (2 485) (253) (7 546)Realisation of reserves on disposal of available-for-sale fi nancial asset (6 778) – –Rental income (13 304) (4 718) (11 421)Service fees received (17 678) (10 448) (22 960)Management fee income (264) – (3 104)Electricity income (38 436) (21 848) (19 651)Bagasse income (36 302) (31 505) (32 771)Dividends received (3 636) – (325)Other income (20 121) 7 063 (19 191)

(160 586) (115 098) (151 413)

Realisation of reserves on disposal of available-for-sale fi nancial asset – – (1 481)Foreign exchange losses 18 904 20 371 –Fair value adjustment on interest rate swap (479) (914) (997)Repairs and maintenance expense 212 674 193 230 198 695Managerial remuneration:– Holding company 9 522 8 887 10 358Auditor’s remuneration:– Audit fees 5 548 6 624 7 926– Other services and expenses 1 424 1 308 1 667

6 972 7 932 9 593

Staff costs ( Note 3) 726 832 711 790 766 472Directors’ remuneration:– Executive directors 37 333 22 955 18 511– Non-executive directors 1 773 1 680 1 703

39 106 24 635 20 214

Amortisation of intangible assets ( Note 9) 50 50 63Impairment of assets classifi ed as held for sale 1 150 2 213 –Impairment of available-for-sale fi nancial assets – 382 –Impairment of Massingir project 11 825 13 484 –Impairment of biological assets 1 257 – –

112

Group

30 June

2013R’000

30 June2012

R’000

15 months to

30 June 2011R’000

Depreciation of fi xed assets:– buildings 7 709 7 036 6 982– plant, equipment and furniture 102 632 97 517 111 997– aircraft 1 184 1 184 989– motor vehicles 15 326 14 791 14 927

126 852 120 528 134 895

Consulting fees paid 24 443 14 797 32 288Fair value hedges (gains)/losses (173) 173 –Operating lease rentals:– machinery and equipment 42 453 38 348 24 418– land and buildings 38 156 20 998 21 460– vehicles 11 905 12 763 15 598– offi ce equipment 200 3 167 4 134– computer equipment 13 288 13 377 16 813Biological assets – fair value gains (67 853) (91 050) (122 643)

4 692 934 4 148 076 4 630 583

The above total consists of the following items: Cost of sales, Other operating income, Fair value adjustments on biological assets, administrative expenses, selling and marketing costs and other operating expenses.

3. STAFF COSTS

Group

30 June

2013R’000

30 June 2012R’000


2011R’000

Wages and salaries 672 331 664 038 671 251Pension costs – defi ned contribution plan 42 617 39 658 44 594Pension costs – defi ned benefi t plan – – 39 798

Post -retirement medical aid costs 11 884 8 094 10 829

726 832 711 790 766 472

Persons employed at year -end 3 102 2 990 2 981

4. FINANCE COSTS

Group

30 June

2013R’000

30 June 2012R’000


2011R’000

Interest received– Group companies 1 391 537 2 872– Other 7 056 4 647 1 828

8 447 5 184 4 700

Interest paid– Group companies (28 924) (27 872) (36 935)– Other (16 263) (14 390) (21 672)Less: Amounts capitalised on qualifying assets 1 089 – –

(44 098) (42 262) (58 607)

(35 651) (37 078) (53 907)

113

5. TAXATION

Group

30 June 2013R’000

30 June 2012R’000


2011R’000

Taxation for the year is calculated as follows:South African normal taxation– current year (83 335) (108 433) (55 851)– prior year 303 * 1 449Deferred taxation– current year (3 589) 9 963 (29 087)– prior year – (118) –Capital Gains Tax (1 096) (10 251) (292)Foreign tax– current year (8 836) (7 297) (3 752)

(96 553) (116 136) (87 533)

Reconciliation of standard rate of taxation to taxation charged: % % %Standard rate of taxation 28 28 28Adjustments for:Non-taxable income (31) (19) 8Prior period adjustments * * (1)Associates’ and joint ventures’ results reported, net of tax 23 10 (6)Other 1 * 1Foreign taxation – current year 2 1 1Capital Gains Tax * 2 *

Tax charged 22 22 31

*Amounts less than R1 000 and percentages less than 1%

No charge for Dividend Tax on Companies arose on the dividend paid of R372 171 000 as the Group made use of the election for exemption from Dividend Tax on Companies in terms of section 64F(1)(a) of the Income Tax Act in South Africa.

No charge for Secondary Tax on Companies arose on the dividend paid of R49 951 000 (2011: R38 405 000) during the previous year as the Group made use of the election for exemption from Secondary Tax on Companies in terms of section 64B(5)(f) of the Income Tax Act in South Africa.

The standard rate of taxation has been provided by the South African Revenue Service.

114

The tax (charge)/credit relating to components of other comprehensive income is as follows:

Group

30 June

2013 Before tax

R’000

30 June 2013

Tax (charge)/

creditR’000

30 June 2013

After taxR’000

Fair value gains/(losses):– Available-for-sale fi nancial assets 61 (17) 44Cash fl ow hedges (17 912) 5 015 (12 897)Currency translation differences 4 114 – 4 114

Other comprehensive income (13 737) 4 998 (8 739)

Current tax – – –Deferred tax (13 737) 4 998 (8 739)

(13 737) 4 998 (8 739)

Group

30 June 2012

Before taxR’000

30 June 2012

Tax (charge)/

creditR’000

30 June 2012

After taxR’000

Fair value gains/(losses):– Available-for-sale fi nancial assets (2 369) 663 (1 706)Cash fl ow hedges (2 874) 805 (2 069)Currency translation differences 4 641 – 4 641

Other comprehensive income (602) 1 468 866

Current tax – – –Deferred tax (602) 1 468 866

(602) 1 468 866

Group


2011Before tax

R’000


2011Tax

(charge)/creditR’000


2011After tax

R’000

Fair value gains/(losses):– Available-for-sale fi nancial assets (1 950) 546 (1 404)Cash fl ow hedges (9 758) 2 732 (7 026)Currency translation differences 1 444 – 1 444

Other comprehensive income (10 264) 3 278 (6 986)

Current tax – – –Deferred tax (10 264) 3 278 (6 986)

(10 264) 3 278 (6 986)

115

6. PROPERTY, PLANT AND EQUIPMENT

Opening carrying

amountR’000

AdditionsR’000

DisposalsR’000

DepreciationR’000

TransfersR’000

Exchange differences

R’000

Closing carrying

amountR’000

GroupYear ended 30 June 2013Land andbuildings 201 224 30 936 (7 405) (7 709) 3 787 – 220 833Plant, equipmentand furniture 842 690 74 231 (4 058) (102 632) 25 327 37 835 596Aircraft 23 763 – – (1 184) – – 22 578Motor vehicles 117 456 7 653 (2 834) (15 326) 62 (10) 107 000Capital work inprogress 34 396 78 483 – – (29 176) – 83 703

1 219 528 191 304 (14 296) (126 852) – 26 1 269 710

CostR’000

Accumulated Depreciation

R’000

Net book valueR’000

At 30 June 2013Land and buildings 299 697 (78 864) 220 833Plant, equipment and furniture 1 838 026 (1 002 431) 835 596Aircraft 25 341 (2 762) 22 578Motor vehicles 174 896 (67 895) 107 000Capital work in progress 83 703 – 83 703

2 421 662 (1 151 952) 1 269 710

No assets have been pledged as security for borrowings.

Included in land and buildings is land to the value of R26 195 183 (2012: R31 682 223; 2011: R34 361 507 ).

A register of land and buildings is kept at the registered offi ce of the Company and is open for inspection by members or their duly authorised agents.

Material items included in capital work in progress are costs incurred in relation to the Molatek expansion project, Turbine alternator refurbishment, Sugar Transport Trucks, Sugar Dust Extraction, B Seed Receiver, Diffuser Repairs, Carbonated Liquor Press Filter, B Strike Receiver, Brown Sugar packaging capacity increase, Food Safety Compliance, B Molasses storage tank, Sugar Sachet Stick Machine and Road Feeder Table Chain.

No material items of property, plant and equipment were held under fi nance leases.

Refer to Note 2 for the lease payments included in the income statement for items leased under operating leases.

Opening carrying amount

R’000Additions

R’000Disposals

R’000Depreciation

R’000Transfers

R’000

Exchange differences

R’000

Transferred from assets held for sale

R’000

Closing carrying

amountR’000

GroupYear ended 30 June 2012Land and buildings 182 464 11 677 – (7 036) 7 291 – 6 827 201 224Plant, equipment and furniture 833 542 71 051 (1 163) (97 517) 34 967 66 1 745 842 690Aircraft 24 947 – – (1 184) – – – 23 763Motor vehicles 97 494 29 868 (1 182) (14 791) 6 066 – – 117 456Capital work in progress 56 838 25 881 – – (48 324) – – 34 396

1 195 285 138 477 (2 344) (120 528) – 66 8 572 1 219 528Note 7

116

CostR’000

Accumulated depreciation

R’000


At 30 June 2012Land and buildings 274 747 (73 524) 201 223Plant, equipment and furniture 1 750 946 (908 255) 842 691Aircraft 25 341 (1 578) 23 763Motor vehicles 177 413 (59 958) 117 455Capital work in progress 34 396 – 34 396

2 262 843 (1 043 315) 1 219 528

Opening carrying amount

R’000Additions

R’000Disposals

R’000Depreciation

R’000Transfers

R’000

Exchangedifferences

R’000

Transferred to assets

held forsale

R’000

Closing carrying

amountR’000

GroupYear ended 30 June 2011Land and buildings 176 325 20 150 (22 280) (7 208) 15 477 – 182 464Plant, equipment and furniture 828 416 76 267 (24 510) (114 124) 63 942 7 3 544 833 542Aircraft 8 043 25 341 – (989) 566 – (8 014) 24 947Motor vehicles 83 016 44 875 (7 074) (15 402) (7 688) – (233) 97 494Capital work in progress 66 375 63 356 (596) – (72 297) – 56 838

1 162 175 229 989 (54 460) (137 723) – 7 (4 703) 1 195 285

CostR’000


R’000


At 30 June 2011Land and buildings 232 327 (49 863) 182 464Plant, equipment and furniture 1 644 627 (811 085) 833 542Aircraft 25 341 (394) 24 947Motor vehicles 144 518 (47 024) 97 494Capital work in progress 56 838 – 56 838

2 103 651 (908 366) 1 195 285

7. ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS

7.1 Assets and liabilities classified as held for sale

During the 2008 financial year, land claims on 6,056 hectares were lodged by the Matsamo Communual Property Association. These claims, which initially were anticipated to have been finalised during the 2009 financial year were settled by TSB Sugar RSA (Pty) Ltd on 6 June 2012. Consequently all assets and liabilities subject to these disposal transactions have been derecognised. The Middenin portion of the land claim consisting of 393 hectares was not disposed in the previous year and consequently was transferred back into property, plant and equipment in the previous year.

Friedshelf 920 (Pty) Ltd has disposed of its business to Sivunosetfu (Pty) Ltd according to the sale of business agreement in place on 1 July 2012. Fiedshelf 920 (Pty) Ltd previously carried out farming operations on the land of TSB Sugar RSA (Pty) Ltd, Shell Case 255 (Pty) Ltd and Break Even 76 (Pty) Ltd that was disposed to the Matsamo Communual Property Association. Consequently these assets are separately disclosed in the financial statements as “held for sale” in compliance with the requirements of IFRS 5 in the prior year and now disposed in the current year.

During a previous financial period a decision was taken to dispose of the old aircraft within Sukramark (Pty) Ltd. The aircraft is actively marketed and consequently it is continued to be separately disclosed in the financial statements as “held for sale” in compliance with the requirements of IFRS 5.

117

Details of the assets and liabilities classified as held for sale are as follows:

Group 30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

AssetsBiological assets – 40 081 47 367Land and buildings – – 62 838Plant, equipment and furniture – – 56 453Post -employment medical benefi ts asset – 104 –Inventory – 184 –Aircraft 4 651 5 802 8 014Motor vehicles – 533 533

4 651 46 704 175 205

LiabilitiesPost -employment medical benefi ts liability – (186) –Provision for leave pay – (446) –Rental deposits – (24) –Employees saving scheme – (67) –

– (723) –

Movements during the period:AssetsOpening balance 46 705 175 205 166 810Transfers (to)/from property, plant and equipment, biological assets, accounts receivable and inventory – (8 572) 4 703Transfers to biological assets from assets classifi ed as held for sale – (4 197) (277)Additions to plant, equipment and furniture – – 4 571Fair value adjustment on biological assets – (2 182) (67)Transferred from inventory – 184 –Transferred from post -employment medical benefi ts asset – 104 –Impairment on aircraft (1 150) (2 213) –Transfer from biological assets to assets classifi ed as held for sale – 40 081 –Land and buildings transferred from plant, equipment and furniture within assets classifi ed as held for sale – – 4 622Plant, equipment and furniture transferred to land and buildings within assets classifi ed as held for sale – – (4 622)Motor vehicles transferred to plant, equipment and furniture within assets classifi ed as held for sale – – (612)Plant, equipment and furniture transferred from motor vehicles within assets classifi ed as held for sale – – 612Disposals (40 903) (151 706) (535)

Closing balance 4 651 46 705 175 204

LiabilitiesOpening balance (723) – –Disposals 723 – –Transfers to assets classifi ed as held for sale – (723) –

Closing balance – (723) –

118

7.2 Discontinued operations

On 1 April 2010, TSB Citrus Holdings (Pty) Ltd disposed of its 50% investment in Komati Fruits (Pty) Ltd to Golden Frontiers Citrus (Pty) Ltd and as a result 24.5% of the original 50% investment in Komati Fruits (Pty) Ltd was disposed of. TSB Citrus Holdings (Pty) Ltd still had a 25.5% indirect investment in Komati Fruits (Pty) Ltd via its 51% subsidiary Golden Frontiers Citrus (Pty) Ltd. As at 31 March 2011, TSB Citrus Holdings (Pty) Ltd disposed of its 51% investment in Golden Frontiers Citrus (Pty) Ltd. As a result, the indirect investment in Komati Fruits (Pty) Ltd was also disposed of.

The assets and liabilities that relate to the disposal of Golden Frontiers Citrus (Pty) Ltd and Komati Fruits (Pty) Ltd are the following:

30 June 2013R’000

Group30 June

2012R’000

30 June 2011R’000

ASSETSProperty, plant and equipment – – 45 737Biological assets – – 60 853Investment in associates – – 315Investment in joint ventures – – –Inventories – – 10 091Trade and other receivables – – 1 820Taxation – – 484Cash and cash equivalents – – 7 464

Total assets – – 126 764

LIABILITIESDeferred income tax – – (20 384)Retirement benefi t obligations – – (2 049)Borrowings – – (16 281)Current portion of borrowings – – (82 748)Trade and other payables – – (2 817)

Total liabilities – – (124 279)

Non-controlling interest in equity – – (9 737)

Total net asset value disposed of – – (7 252)Proceeds – – 9 917Cash disposed – – 7 464

Profi t on sale of investment – – 24 633

Analysis of results of discontinued operations and the results recognised in profi t or loss:

Revenue – – 310 151Cost of sales – – (187 910)

Gross profi t – – 122 241Other operating income – – 1 785Fair value adjustments on biological assets – – 3 201Administrative expenses – – –Selling and marketing costs – – (119 179)Other operating income – – 1 210

Operating profi t – – 9 258

Finance income – – 976Finance costs – – (6 171)

Finance costs – net – – (5 195)

Share of profit in joint ventures – – –Share of profi t of associates – – 43

Profi t before income tax – – 4 106Income tax expense – – (1 013)

Profi t for the period before non-controlling interest – – 3 093Non-controlling interest – – (1 495)

119

30 June 2013R’000

Group30 June

2012R’000

30 June 2011R’000

Profi t for the period – – 1 598

Profi t on disposal of discontinued operations – – 24 633Income tax expense – – (2 464)

Profi t for the period discontinued operations – – 23 767

Cash fl ows:Operating cash fl ows – – 4 006Investing cash fl ows – – (19 468)Financing cash fl ows – – (6 747)

Total cash fl ows – – (22 209)

8. INVESTMENT PROPERTY

30 June 2013R’000

Group30 June

2012R’000

30 June 2011R’000

At beginning of period – 1 866 1 888Disposal – (1 866) –Exchange differences – – (22)

At end of period – – 1 866

The fair value of investment property amounted to R1 866 000 (2012: R1 866 000; 2011: R1 866 000) upon date of disposal. This investment property has been disposed on 15 July 2011 for £171 500.

Investment property, principally comprising freehold office buildings, was held for long-term rental yields and was not occupied by the Group. Investment property was carried at cost, less accumulated depreciation and accumulated impairment losses.

9. INTANGIBLE ASSETS

Tradename:

BookerTate

Limited Customer contracts

GoodwillR’000

Trademark:SelatiR’000

TotalR’000

GroupYear ended 30 June 2013Opening net book amount – – 13 316 380 13 696Amortisation charge – – – (50) (50)

Closing net book amount – – 13 316 330 13 646

At 30 June 2013Cost 5 847 50 206 23 477 1 000 80 530Accumulated amortisation and impairment charges (5 847) (50 206) (10 161) (670) (66 884)

Net book amount – – 13 316 330 13 646

Year ended 30 June 2012Opening net book amount – – 13 316 430 13 746Amortisation charge – – – (50) (50)


120

Tradename:

BookerTate

Limited Customer contracts

GoodwillR’000

Trademark:SelatiR’000

TotalR’000


Net book amount – – 13 316 380 13 696

Year ended 30 June 2011Opening net book amount – – 13 316 493 13 809Amortisation charge – – – (63) (63)



Net book amount – – 13 316 430 13 746

Impairment test for Booker Tate Holdings Limited goodwill

Goodwill of R10 161 000 was allocated to the Booker Tate Holdings Limited acquisition in previous years.

An impairment charge arose in the previous financial years on the goodwill and intangible assets of Booker Tate Holdings Limited, as the value in use (recoverable amount) was lower than the carrying amount. Impairment indicators were present as Booker Tate Holdings Limited forecasted negative cash flows and operating losses due to the economic crisis in the world and consulting and management projects were not assured. This resulted in all the intangible assets of Booker Tate Holdings Limited being impaired in full in prior years. The circumstances have not improved for Booker Tate Holdings Limited and the values of the intangible assets are still not considered to be recoverable and no reversal of the impairment charges previously recognised is considered appropriate.

The recoverable amount of Booker Tate Holdings Limited is determined based on a value-in-use calculation. This calculation uses pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. The growth rate does not exceed the long-term average growth rate for Booker Tate Limited.

The key assumptions used for the value-in-use calculation are as follows:

30 June 2013

30 June 2012

30 June 2011

Growth rate 2.7% 2.8% 4.2%Infl ation rate 2.7% 2.8% 4.2%Discount rate 13.97% 13.97% 13.97%Tax rate 23% 24% 26%

Management determined the budgeted free cash flow based on past performance and its expectations of market development. The weighted average growth rate used is consistent with the forecasts and inflation. The discount rate used is pre-tax and reflects specific risks relating to Booker Tate Holdings Limited.

Impairment test for TSB Sugar RSA (Pty) Ltd goodwill

During previous years TSB Sugar RSA (Pty) Ltd acquired the Pongola Mill from Illovo (Pty) Ltd. After the completion of the purchase price allocation in terms of IFRS 3, goodwill arose to the amount of R5 462 860.

The recoverable amount of TSB Sugar RSA (Pty) Ltd Pongola Mill division is determined based on a value-in-use calculation. This calculation uses pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. The growth rate does not exceed the long-term average growth rate for TSB Sugar RSA (Pty) Ltd.

Nkomazi Cane Carriers (Pty) Ltd goodwill of R4 101 633 was allocated to the acquisition of Komati Transport Company in previous years. On 31 March 2012 this goodwill was sold to TSB Sugar RSA (Pty) Ltd in terms of the disposal of business agreement.

121

The recoverable amount of the Transport Division is determined based on a value-in-use calculation. This calculation uses pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. The growth rate does not exceed the long-term average growth rate for TSB Sugar RSA (Pty) Ltd.


30 June 2013

30 June 2012

30 June 2011


Management determined the budgeted free cash flow based on past performance and its expectations of market development. The weighted average growth rate used is consistent with the forecasts and inflation. The discount rate used is pre-tax and reflects specific risks relating to TSB Sugar RSA (Pty) Ltd.

No impairment charge arose on the goodwill of TSB Sugar RSA (Pty) Ltd, as the value in use (recoverable amount) is higher than the carrying amount.

Impairment test for Quality Sugars (Pty) Ltd goodwill

Goodwill of R3,751,388 was allocated to the Cape Sugars (Pty) Ltd acquisition in previous years. During previous years, the goodwill was transferred to TSB Sugar RSA (Pty) Ltd’s local marketing division. On 1 April 2011 this goodwill was sold to Quality Sugars (Pty) Ltd, the marketing company of TSB Sugar RSA (Pty) Ltd.

The recoverable amount of Quality Sugar (Pty) Ltd is determined based on a value-in-use calculation. This calculation uses pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. The growth rate does not exceed the long-term average growth rate for Quality Sugar (Pty) Ltd.


30 June 2013

30 June 2012

30 June 2011


Management determined the budgeted free cash flow based on past performance and its expectations of market development. The weighted average growth rate used is consistent with the forecasts and inflation. The discount rate used is pre-tax and reflects specific risks relating to Quality Sugar (Pty) Ltd.

No impairment charge arose on the goodwill of Quality Sugar (Pty) Ltd, as the value in use (recoverable amount) is higher than the carrying amount.

122

10. BIOLOGICAL ASSETS

Banana fruit

R’000

Banana trees

R’000

Cane roots

R’000

Standing caneR’000

Citrus trees

R’000

Citrus produce

R’000TotalR’000

GroupYear ended 30 June 2013Carrying amount beginning of year 2 834 5 181 41 939 48 942 – – 98 896Transferred to cost of sales (2 834) – – (48 942) – – (51 776)Disposals – – (5 959) (845) – – (6 804)Impairment of biological assets – – (1 257) – – – (1 257)Fair value adjustments 2 774 256 11 590 53 233 – – 67 853

Carrying amount end of year 2 774 5 437 46 313 52 388 – – 106 912

Year ended 30 June 2012Carrying amount beginning of year 1 486 4 521 37 027 87 883 – – 130 917Transferred to cost of sales (1 486) – – (87 883) – – (89 369)Transferred from assets classifi ed as held for sale – – 4 197 – – – 4 197Transferred to assets classifi ed as held for sale – – – (40 081) – – (40 081)Fair value adjustments 2 834 660 715 89 023 – – 93 232


Year ended 30 June 2011Carrying amount beginning of year 6 045 1 352 29 821 75 403 17 081 27 170 156 872Transferred to cost of sales – – – (75 403) – (27 170) (102 573)Additions – – – – 6 371 5 190 11 561Fair value adjustments (3 036) 3 169 7 206 87 883 1 634 29 054 125 910Disposals (1 523) – – – (25 086) (34 244) (60 853)


Banana fruit

R’000

Banana trees

R’000

Cane roots

R’000

Standing caneR’000

Citrus trees

R’000

Citrus produce

R’000

Quantities at year -end: 30 June 2013Area harvested 156 ha 156 ha 3,380 ha 3,380 ha – –Tons harvested 5 288 – – 398 748 – –Tons harvested/hectare 33.90 – – 117.97 – –

30 June 2012Area harvested 141 ha 141 ha 3,939 ha 3,939 ha – –Tons harvested 3 927 – – 442 328 – –Tons harvested/hectare 27.85 – – 112.29 – –

30 June 2011Area harvested 141 ha 141 ha 4,348 ha 8,105 ha – –Tons harvested 3 730 – – 901 033 – –Tons harvested/hectare 26.45 – – 111.17 – –

Valuation method:

Recoverable value

Currentestablishment

and replacement

cost


and replacement

cost

Recoverable value


and replacement

cost

Recoverable value

123

TSB Sugar Holdings (Pty) Ltd make use of the standard costing sys tem to account for inventory and the fair value of the agricultural produce has been included in the cost of inventory.

11. INTEREST IN SUBSIDIARIES

All the companies form part of the TSB Sugar Holdings (Pty) Ltd Group and the same ultimate Group holding company being Remgro Limited.

Nature of business

30 June 2013Issued share

capitalR

Direct interest

%

DirectSukramark (Pty) Ltd Aircraft fl ight services 200 100TSB Sugar RSA (Pty) Ltd Sugar production 8 100TSB Citrus Holdings (Pty) Ltd (Impaired) Investment holding – 100TSB Sugar International (Pty) Ltd International investments 100 100

30 June 2012

DirectSukramark (Pty) Ltd Aircraft fl ight services 200 100TSB Sugar RSA L imited Sugar production 8 100TSB Citrus Holdings (Pty) Ltd (Impaired) Investment holding – 100TSB Sugar International (Pty) Ltd International investments 100 100

30 June 2011

DirectSukramark (Pty) Ltd Aircraft fl ight services 200 100TSB Sugar RSA L imited Sugar production 8 100TSB Citrus Holdings (Pty) Ltd Citrus operations – 100TSB Sugar International (Pty) Ltd International investments 100 100

124

Company

Unlisted shares at cost

30 June2013

R’000

30 June2012

R’000

30 June2011

R’000

DirectSukramark (Pty) Ltd– Shares at cost * * *– Loans 20 917 20 917 20 917– Impairment of Sukramark (Pty) Ltd loan account (13 962) (14 014) (10 528)– Balance end of year 6 955 6 903 10 389TSB Sugar RSA (Pty) Ltd– Shares at cost 94 388 94 388 94 388TSB Citrus Holdings (Pty) Ltd– Shares at cost – * *– Impairment of TSB Citrus Holdings (Pty) Ltd investment – (*) –– Loans – – –– Balance end of year – – *TSB Sugar International (Pty) Ltd– Shares at cost * * *– Loans 200 000 200 000 200 000– Impairment of TSB Sugar International (Pty) Ltd loan

account – (27 590) (54 339)– Balance end of year 200 000 172 410 145 661Total investment in subsidiaries 301 343 273 701 250 438Impairment provision reconciliation:– Balance beginning of year (41 604) (64 867) (12 900)– Reversal of previous impairment provisions 27 642 26 749 53– Additional impairments provided for – (3 486) (52 020)– Balance end of year (13 962) (41 604) (64 867)

*Amounts less than R1 000.

The impairments arose as a result of the accumulated deficit balances recorded in the trading results of Sukramark (Pty) Ltd and TSB Sugar International (Pty) Ltd. The impairment provision is provided for in the balance of the recorded accumulated deficit balance. TSB Sugar Holdings (Pty) Ltd also impaired the investment in TSB Citrus Holdings (Pty) Ltd during the previous financial year.

The loans are unsecured, interest free with no fixed repayment terms and payable on demand.

TSB Sugar Holdings (Pty) Ltd has subordinated its right to claim payment of the amounts owed by Sukramark (Pty) Ltd in favour of present and future creditors of the subsidiary company until such time the assets of the subsidiary company, fairly valued, exceed its liabilities. TSB Sugar Holdings (Pty) Ltd has undertaken to provide continuing financial support to the subsidiary company.

Indirect

TSB Sugar RSA (Pty) Ltd has the following interests in subsidiaries as at 30 June 2013:

Nature of business

30 June 2013Issuedshare

capitalR

Direct and indirect interest

%

Break Even 76 (Pty) Ltd Property (Impaired) 100 100Friedshelf 920 (Pty) Ltd Farming 300 100Selati Sugar (Pty) Ltd Dormant 300 100Nkomazi Cane Carriers (Pty) Ltd Cane transport (Impaired) – 100Nzila Farming Services (Pty) Ltd Farming (Impaired) – 100Laeveldse Suikermeule (Pty) Ltd Dormant (Impaired) – 100Middenin Ontwikkeling (Pty) Ltd Property 6 100Quality Sugars (Pty) Ltd Marketing 100 75TSB Sugar Marketing (Pty) Ltd Dormant (Impaired) 1 000 100Shubombo Agricultural Services (Pty) Ltd Farming 100 100Shell Case 255 (Pty) Ltd Property (Impaired) 100 100

125


Nature of business


capitalR


%

Break Even 76 (Pty) Ltd Property 100 100Friedshelf 920 (Pty) Ltd Farming 300 100Selati Sugar (Pty) Ltd Dormant 300 100Nkomazi Cane Carriers (Pty) Ltd Cane transport (Impaired) – 100Nzila Farming Services (Pty) Ltd Farming (Impaired) – 100Laeveldse Suikermeule (Pty) Ltd Dormant (Impaired) – 100Middenin Ontwikkeling (Pty) Ltd Property 6 100Sivunosetfu (Pty) Ltd Dormant 100 100Quality Sugars (Pty) Ltd Marketing 100 75TSB Sugar Marketing (Pty) Ltd Dormant 1 000 100Shubombo Agricultural Services (Pty) Ltd Farming 100 100Shell Case 255 (Pty) Ltd Property 100 100


Nature of business


capitalR


%

Break Even (Pty) Ltd Property 100 100Friedshelf 920 (Pty) Ltd Farming 300 100Selati Sugar (Pty) Ltd Dormant 300 100Nkomazi Cane Carriers (Pty) Ltd Cane transport 300 100Nzila Farming Services (Pty) Ltd Farming 300 100Laeveldse Suikermeule (Pty) Ltd Dormant 100 100Middenin Ontwikkeling (Pty) Ltd Property 6 100Prozisync (Pty) Ltd Dormant 100 100Quality Sugars (Pty) Ltd Marketing 100 75TSB Sugar Marketing (Pty) Ltd Dormant 1 000 100Shubombo Agricultural Services (Pty) Ltd Farming 100 100Shell Case 255 (Pty) Ltd Property 100 100

TSB Citrus Holdings Proprietary Limited disposed the following investment in a subsidiary on 31 March 2011:

R %

Golden Frontiers Citrus (Pty) Ltd Citrus Production 200 51

Nature of business


capital


TSB Sugar International (Pty) Ltd has the following investments in subsidiaries as at 30 June 2013:TSB Sugar Mozambique (Pty) Ltd Investment holding R 100 100Massingir Agro Industrial Lda Greenfi eld Sugar Mill

Feasibility ProjectR 207 578 51

Booker Tate Holdings L imited Management Services GBP 13 067 846 100

TSB Sugar Mozambique (Pty) Ltd is incorporated in South Africa. Massingir Agro Industrial Lda is incorporated in Mozambique. Booker Tate Holdings Ltd is incorporated in the United Kingdom.

126

Nature of business

30 June 2012

Issuedshare

capital


TSB Sugar International (Pty) Ltd has the following investments in subsidiaries as at 30 June 2012:Booker Tate Holdings L imited Management Services GBP 13 067 846 100

Nature of business

30 June 2011

Issuedshare

capital


TSB Sugar International (Pty) Ltd has the following investments in subsidiaries as at 30 June 2011:Booker Tate Holdings L imited Management Services GBP 13 067 846 100

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

TSB Sugar Holdings (Pty) Ltd share of profi ts in subsidiaries comprise the following:– Subsidiaries 196 777 318 598 156 704

12. LONG-TERM LOANS AND RECEIVABLES

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

Long-term loans:Loans beginning of year 1 555 1 555 1 555Loans provided/(repaid) during the year – – –

Loans end of year 1 555 1 555 1 555

Total long-term loans and receivables 1 555 1 555 1 555

Secured loans in the amount of R1 555 364 (2012: R1 555 364; 2011: R1 555 364) were made to black owned medium scale growers which bear interest at the prime rate of interest. The loans are recoverable over periods of 1 to 15 years, with no fixed repayment terms. The Group holds the following cession agreements as security for the recoverability of these loans:

• cession on sale of shares of Siyathuthuka Sugar Estate (Pty) Ltd (independent company) with the value of R700; and

• cession on sale of claims of the shareholders of Siyathuthuka Sugar Estate (Pty) Ltd with a value of R5 307 866.

No amounts included above are past due or impaired.

Receivables

Guardrisk Self Insurance Investment Fund

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

At beginning of period – – 108Underwriting fees – – –Claims paid by fund – – (108)Investment bonus received – – –Repayment received – – –

At end of period – – –

Total long-term loans and receivables 1 555 1 555 1 555

127

13. INVESTMENT IN ASSOCIATES

The Royal Swaziland Sugar Corporation Limited

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

At beginning of year 263 766 236 921 208 775Dividend received – current year (67 771) (47 921) (13 801)Exchange differences 1 597 1 409 (97)Share of net income – current year 120 897 73 357 42 044

At end of year 318 489 263 766 236 921

Komati Fruits (Pty) LtdAt beginning of year – – –Loss of joint control – transferred from investment in joint ventures – – 139Share of net profi t – current year – – 43Disposal – – (182)

At end of year – – –

Total 318 489 263 766 236 921

TSB Sugar International (Pty) Ltd holds a total effective shareholding of 27.42% in The Royal Swaziland Sugar Corporation Limited (“RSSC”) of which Booker Tate Holdings L imited holds 1.1328%. At year -end, the shares were trading at E12.90 (2012: E12.90; 2011: E12.00) per share on the Swaziland Stock Exchange, at a total market value for the Group’s investment in RSSC of R340 796 470 (2012: R340 796 470; 2011: R317 019 972).

During the previous fi nancial period TSB Citrus Holdings (Pty) Ltd disposed of its investment in Komati Fruits (Pty) Ltd through the disposal of its 51% investment Golden Frontiers Citrus (Pty) Ltd. Refer to Note 7.2.

The results of the associate and its aggregated assets and liabilities, are as follows:

Name30 June 2013

Country of incorporation

AssetsR’000

LiabilitiesR’000

RevenuesR’000

Profi t R’000

% interest

held

The Royal Swaziland Sugar Corporation Limited

The Kingdom of Swaziland

2 464 038 (959 597) 2 869 923 440 904 27.42

2 464 038 (959 597) 2 869 923 440 904

30 June 2012The Royal Swaziland Sugar Corporation Limited


2 294 887 (979 551) 2 895 901 267 529 27.42

2 294 887 (979 551) 2 895 901 267 529

30 June 2011The Royal Swaziland Sugar Corporation Limited


2 054 931 (828 609) 2 297 487 153 331 27.42

2 054 931 (828 609) 2 297 487 153 331

14. INVESTMENT IN JOINT VENTURES

The equity investments of the jointly controlled entities at 30 June 2013 and 30 June 2012 and 30 June 2011 and for the periods then ended, which are included in the consolidated financial statements, are as follows:

128

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

Komati Fruits (Pty) LtdAt beginning of year – – 272Disposal of 24.5% on 1 April 2011 – – (133)Loss of control – transferred to investment in associates – – (139)

At end of year – – –

Sivunosetfu (Pty) LtdAt beginning of year – – –Additions * – –Share of net income 14 640 – –

At end of year 14 640 – –

Akwandze Agricultural Finance (Pty) LtdAt beginning of year 9 298 7 751 7 366Dividend received (440) – –Share of net income 4 077 1 547 385

At end of year 12 935 9 298 7 751

Libuyile Farming Services (Pty) LtdAt beginning of year 30 911 28 444 20 567Dividend received (1 679) (3 123) (2 146)Share of net income 634 5 590 10 023

At end of year 29 867 30 911 28 444

Mgubho Farming Services (Pty) LtdAt beginning of year 19 929 21 448 18 181Dividend received – (1 225) (815)Share of net loss (1 587) (295) 4 082

At end of year 18 341 19 929 21 448

Mananga Sugar Packers (Pty) LtdAt beginning of year 58 397 50 166 47 288Dividend received (5 832) (5 888) –Share of net income 12 729 14 119 2 878At end of year 65 294 58 397 50 166

Total 141 076 118 534 107 809


The results of the joint ventures and their aggregated assets and liabilities, are as follows:

Name30 June 2013


AssetsR’000

LiabilitiesR’000

RevenuesR’000

Profi t/(loss)

R’000

%interest

held

Akwandze Agricultural Finance (Pty) Ltd

South Africa 160 832 (144 833) 20 133 8 158 50

Libuyile Farming Services (Pty) Ltd

South Africa 146 006 (86 273) 157 287 1 268 50

Mgubho Farming Services (Pty) Ltd

South Africa 114 770 (78 088) 107 093 (3 174) 50

Mananga Sugar Packers (Pty) Ltd

Swaziland 229 527 (99 135) 584 445 25 457 50

Sivunosetfu (Pty) Ltd South Africa 111 587 (97 311) 96 785 29 280 50

762 722 (505 640) 965 743 60 989

129

Name30 June 2013


AssetsR’000

LiabilitiesR’000

RevenuesR’000

Profi t/(loss)

R’000

%interest

held

30 June 2012Akwandze Agricultural Finance (Pty) Ltd

South Africa 95 447 (86 724) 8 233 2 850 50


South Africa 141 691 (79 872) 180 016 11 180 50


South Africa 106 157 (66 301) 131 280 (592) 50


Swaziland 162 313 (46 068) 535 913 28 248 50

505 608 (278 965) 855 442 41 687

30 June 2011Akwandze Agricultural Finance (Pty) Ltd

South Africa 15 945 (10 318) 1 022 508 50


South Africa 117 218 (60 333) 191 472 20 821 50


South Africa 81 971 (39 073) 100 837 8 165 50


Swaziland 170 512 (70 747) 599 952 5 757 50

385 646 (180 471) 893 283 35 251

15. AVAILABLE-FOR-SALE FINANCIAL ASSETS

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

Available-for-sale fi nancial assetsThe unlisted available-for-sale fi nancial assets at fair value comprise the following:Capespan Group Holdings L imited– 1 910 546 ordinary shares – – –

Carrying amount at beginning of the year – – 2 408Fair value adjustments – – –Disposals – – (2 408)

Carrying amount end of the year – – –

Sukramark Air Services Partnership– Capital account – – 111

Belize Sugar Industries L imited– 4 399 998 ordinary shares at cost 4 953 4 953 4 953

Carrying amount at beginning of the year 6 000 7 075 7 219Exchange difference 338 1 294 (144)Fair value adjustments 8 842 (2 369) –Disposal (15 180) – –

Carrying amount end of the year – 6 000 7 075

New Komati Sugar Millers Partnership– Capital accounts – – 20– Working capital contributions – – 251

Carrying amount end of the year – – 271

Total carrying amount of unlisted investments at the end of the year – 6 000 7 457

Director’s valuation – – 382Fair value – 6 000 7 075

– 6 000 7 457


130

During the current financial year the investment in Belize Sugar Industries Ltd was disposed for an amount of R15 180 074.

During the previous financial year the investment in New Komati Sugar Millers Partnership to the value of R271 000 and Sukramark Air Services Partnership to the value of R111 000 were impaired. There were no impairment provisions on available-for-sale financial assets during 2011.

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

Available-for-sale fi nancial assets (continued)Available-for-sale fi nancial assets include the following:Unlisted securities:– Equity shares – GBP – 6 000 7 075– Equity shares – Rand – – 382

– 6 000 7 457

Available-for-sale fi nancial assets are denominated in the following currencies:GBP – 6 000 7 075Rand – – 382

– 6 000 7 457

The fair values of unlisted securities are based on directors valuation of unlisted securities.

The directors valuation techniques comprise the following:

– Capespan Group Holdings L imited Market value of shares in active market– Sukramark Air Services Partnership Capital contribution made– Belize Sugar Industries L imited Fair value – Multiple EBITDA method– New Komati Sugar Millers Partnership Capital contribution made

No available-for-sale financial assets were pledged as collateral.

Currency risk

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

– Valuation of GBP investments on 5% movement in currency conversion – 6 300 7 428

– Amount profi t affected – – –– Amount equity affected – 300 354Price risk

The unlisted investments are not exposed to price risk.

16. INVENTORIES

Finished goods 923 125 857 061 568 427Provision for sugar shortage (2 015) (7 413) (4 798)

921 110 849 648 563 629

Raw materials 18 087 11 677 13 709Consumables and maintenance spares 90 942 99 499 92 320Provision for obsolete consumables and maintenance spares (10 313) (6 281) (4 401)

1 019 826 954 543 665 257

No inventory has been pledged as security for borrowings.The cost of inventories recognised as expenses and included in cost of sales amounted to R3 853 859 769 (2012: R3 259 631 331; 2011: R3 801 200 589).

Provision for sugar shortage:

The provision relates to the sugar shortages inherent in the Group’s stockpile of sugar inventory at the end of the year. The purpose of the provision is to calculate on an acceptable method, the handling losses in those stockholding areas where accurate stock counts cannot be performed and the work of quantity surveyors is used to test the reasonableness of the Group’s records.

131

17. TRADE AND OTHER RECEIVABLES

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

Trade and other receivablesTrade receivables (fi nancial instruments) 433 729 400 358 375 891Less: Impairment provision (20 264) (17 574) (13 211)

Trade receivables – net 413 465 382 784 362 680Other receivables (fi nancial and non-fi nancial instruments) 88 761 87 135 62 736Pre-payments (non-fi nancial instruments) 3 071 15 717 32 281

505 297 485 636 457 697

The fair values of trade and other receivables are as follows:Trade receivables 413 465 382 784 362 680Other receivables 39 988 18 390 9 097

Included in other receivables are non-financial instruments of R48 772 779 (2012: R68 744 546; 2011: R53 639 044), respectively.

The above values of trade and other receivables approximate fair value.

There is limited concentration of credit risk with respect to trade receivables, as the Group has a large number of customers, dispersed across different industries and geographical areas.

The Group’s historical experience in collection of accounts receivable falls within the recorded allowances. Due to these factors, management believes that no additional credit risk beyond amounts provided for collection losses is inherent in the Group’s trade receivables.

The Group does not hold any collateral as security.

No trade and other receivables were pledged as security.

Trade receivables that are less than six months past due are not considered impaired. As of 30 June 2013, trade receivables of R76 898 490 (2012: R90 400 403; 2011: R40 573 004) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

Up to 3 months 58 665 64 925 28 3683 to 6 months 18 234 25 475 12 205

76 898 90 400 40 573

The amount of the provision for impairment was R20 263 345 as at 30 June 2013 (2012: R17 574 053; 2011: R13 210 587). The individually impaired receivables mainly relate to wholesalers, which are in unexpected difficult economic situations. The ageing of these receivables is as follows:

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

Over 6 months 20 264 17 574 13 211

The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

Rand 425 843 448 961 434 880USD 48 385 6 715 14 208GBP 31 068 29 960 8 609

505 297 485 636 457 697

132

Movements on the Group provision for impairment of trade receivables are as follows:

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

At beginning of year 17 574 13 211 13 313Provision for receivables impairment 3 235 7 861 6 776Provision for receivables reversed (1 993) (3 946) (5 126)Receivables written off during the year as uncollectible (99) (695) (919)Exchange difference 1 547 1 143 (833)

At end of year 20 264 17 574 13 211

The creation and release of provision for impaired receivables have been included in ‘operating expenses’ in the income statement. Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash.

The other classes within trade and other receivables do not contain past due or impaired assets.

18. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

Cash in bank and on hand 133 660 135 159 84 521For the purpose of the statement of cash fl ow, the end of the year cash and cash equivalents comprise of the following:Cash and bank balances 133 660 135 159 84 521Restricted cash (6 539) (20 220) –Bank overdraft – Note 24 (20 786) (82 000) (412 000)

106 335 32 939 (327 479)

Cash and cash equivalents includes amounts denominated in the following currencies:Rand 84 329 127 944 48 513USD 22 855 2 209 28 748GBP 26 084 4 930 7 143EURO * * –Meticals 250 – –Indonesian Rupees 142 76 117

133 660 135 159 84 521

*Amounts less than R1 000

During the current financial year TSB Sugar RSA (Pty) Ltd received R6 583 907 (2012: R20 219 973; 2011: R0) from the National Department of Rural Development and Land Reform in terms of a Mentorship Agreement. These funds are required to be administered and spent for the benefit of third party beneficiaries in terms of the Mentorship Agreement and hence this cash, although physically in possession of the Group is not available to the Group to conduct its operations.

This is restricted cash, as TSB Sugar RSA (Pty) Ltd is required to spend and manage this cash on behalf of the approved beneficiaries.

19. ORDINARY SHARES

Company30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

Ordinary sharesAuthorised4 000 ordinary shares of R1.00 each 4 4 4

Issued100 ordinary shares of R1.00 each * * *


133

20. FAIR VALUE AND OTHER RESERVES

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

Fair value reservesBalance beginning of the year 20 506 29 248 29 248Realised reserves transferred to retained earnings on disposal of property, plant and equipment (6 174) (8 742) –

Balance end of the year 14 332 20 506 29 248

Available-for-sale fi nancial assets reserveBalance beginning of the year 1 646 4 015 5 965Realisation of reserves (8 781) – (1 950)Charged to equity 8 842 (2 369) –Transferred to retained earnings (1 707) – –

Balance end of the year – 1 646 4 015

Cash fl ow hedge reserveBalance beginning of the year (261) 2 613 12 372Realisation of reserve 261 (2 613) (12 372)Charged to equity (18 173) (261) 2 613

Balance end of the year (18 173) (261) 2 613

Exchange differences on translating foreign operationsBalance beginning of the year (12 752) (17 393) (18 837)Charged to equity 4 114 4 641 1 444

Balance end of the year (8 638) (12 752) (17 393)

Deferred taxation reserveBalance beginning of the year 1 285 (183) (3 461)Realisation of reserves 2 459 (732) 546Charged to equity 2 540 2 200 2 732Transferred to retained earnings (1 196) – –

Balance end of the year 5 088 1 285 (183)

Other reserve 8 084 8 084 8 084

693 18 508 26 384

Fair value reserves: This includes the fair value adjustment on assets when IFRS was adopted.

Available-for-sale financial assets reserve: This includes the fair value adjustments on available-for-sale financial assets that are recognised in equity.

Cash flow hedge reserve: This includes the fair value adjustments on cash flow hedges that are recognised in equity.

Foreign currency translation reserve: This includes the cumulative net translation difference of foreign subsidiaries results to the presentation currency on consolidation.

Other reserve: Other reserves includes reserves on consolidation of subsidiaries.

Deferred taxation reserve: This includes the deferred tax on the revaluation of the available-for-sale-financial assets and cash flow hedges.

134

21. DEFERRED INCOME TAX

Deferred income taxes are calculated on all temporary differences under the liability method using a principal tax rate of 28% (2012: 28%; 2011: 28%).

The movement of the deferred income tax account is as follows:

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

Balance at beginning of year 137 042 148 355 141 296Charge per statement of other comprehensive income (including discontinued operations) 3 589 (9 845) 30 100Disposed – Refer to Note 7 – – (20 384)Other – – 75Charge to equity (2 540) (1 468) (2 732)

Balance at end of the year 138 091 137 042 148 355

No deferred tax asset has been recognised for assessed losses amounting to R69 079 800 (2012: R45 470 275; 2011: R20 342 296) as it is not envisaged that the asset will be recovered in the foreseeable future.

Deferred income tax assets and liabilities are offset as the income taxes relate to the same fiscal authorities. The following amounts are shown in the statement of financial position:

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

Deferred tax assets (174 916) (181 016) (177 501)Deferred tax liabilities 313 007 318 058 325 856

138 091 137 042 148 355

135

30

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ne

201

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’00

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th

e fo

llow

ing

ite

ms:

Def

erre

d i

nco

me

tax

lia

bili

ties

Pro

per

ty, pla

nt

and e

qu

ipm

ent

273

803

1 0

75

–274

878

(1 0

99)

–273

779

Ava

ilab

le-f

or-s

ale

fi n

anci

al a

sset

s6

46

–(6

46)

––

––

Inve

stm

ent

in a

ssoc

iate

s–

2 5

44

–2

54

45

313

–7

856

Pro

visi

ons

–246

–2

46

42

–2

88

Oth

er48

0–

–4

80

––

48

0B

iolo

gic

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sset

s49

919

(11

00

6)–

38

913

(8 9

78)

–2

9 9

35

Fin

anci

al i

nst

rum

ents

1 0

08

166

(177)

997

(167

)(1

62)

66

8

325

856

(6 9

75)

(823)

318

058

(4 8

89)

(16

2)31

3 0

07

Def

erre

d i

nco

me

tax

ass

ets

Pro

visi

ons

(31

652)

(9 5

35)

–(4

1 1

87

)(6

87

7)

–(4

8 0

64)

Pro

per

ty, pla

nt

and e

qu

ipm

ent

(126 9

93)

7 0

49

–(1

19 9

44)

17 3

75–

(10

2 5

69)

Ava

ilab

le-f

or-s

ale

fi n

anci

al a

sset

s–

–(1

7)

(17

)(2

459)

2 4

76–

Fin

anci

al i

nst

rum

ents

(666)

41(6

28)

(1 2

53)

35

0(4

85

4)(5

757

)O

ther

(292)

90

–(2

02)

90

–(1

12)

Tax

los

ses

carr

y f

orw

ard

(17

898)

(515

)–

(18

413

)(1

)–

(18

414

)

(177

501

)(2

869)

(645)

(181

016

)8

478

(2 3

78)

(174

916

)

Net

def

erre

d i

nco

me

tax

lia

bili

ty14

8 3

55

(9 8

45)

(1 4

68)

137

04

23

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54

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8 0

91

136

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

Deferred income tax liabilities– Deferred tax liability to be recovered after more than

12 months 317 804 325 670 272 866– Deferred tax liability to be recovered within 12 months (4 797) (7 612) 52 990

313 007 318 058 325 856

Deferred income tax assets– Deferred tax asset to be recovered after more than

12 months (180 810) (177 431) (153 598)– Deferred tax asset to be recovered within 12 months 5 894 (3 585) (23 903)

(174 916) (181 016) (177 501)

22. RETIREMENT BENEFIT OBLIGATIONS

Statement of financial position obligations for:

Post -employment medical benefits 64 997 55 265 49 418Pension benefi ts – current – – 54 885

64 997 55 265 104 303

Income statement charge for:Post -employment medical benefi ts 11 884 8 094 10 974Pension benefi ts – – 39 798

11 884 8 094 50 772

Pension schemes

The Group has established a number of pension schemes that substantially cover all employees. The Booker Tate Holdings Limited pension schemes are defined benefit plans and are funded. These schemes are valued annually by independent actuaries using the projected unit credit method. The latest actuarial valuations were carried out on 30 June 2012. Booker Tate Holdings Limited separated the Booker Tate Overseas Pension Scheme and the Booker Tate UK Pension Scheme from Booker Tate Holdings Limited, resulting in the TSB Group being absolved from its obligations in this regard .

Group30 June 2013

R’000Current

30 June 2012R’000

Current

30 June 2011R’000

Current

The amounts recognised in the statement of fi nancial position are as follows:Present value of funded obligation – – 429 203Fair value of plan assets – – (403 462)

– – 25 741

Curtailment provision – – 29 144Unrecognised actuarial losses – – –

Liability in the statement of fi nancial position – – 54 885

The amounts recognised in the income statement are as follows:Current service cost – – –Interest cost – – 34 480Expected return on plan assets – – (32 773)Curtailment profi t and provision – – (42 125)Actuarial losses recognised – – 80 216

– – 39 798

137

Group30 June 2013

R’000Current

30 June 2012R’000

Current

30 June 2011R’000

Current

The movement in the net liability recognised in the statement of fi nancial position is as follows:Opening net liability – 54 885 15 437Total expenses charged to the income statement – – 39 798Foreign exchange differences – – (350)Settlement – (54 885) –

End of year – – 54 885

Movement in liabilityOpening liability – 429 203 524 110Interest cost – – 34 480Settlement – (429 203) –Curtailment – – (71 269)Benefi ts paid – – (31 446)Foreign exchange differences – – (4 686)Actuarial losses – – (21 986)

End of year – – 429 203

Movement in plan assetsOpening asset balance – 403 462 417 695Expected return on plan assets – – 32 773Employer contributions – – –Member contributions – – –Settlement – (403 462) –Benefi ts paid – – (31 446)Foreign exchange differences – – (4 729)Actuarial losses – – (10 831)

End of year – – 403 462

Scheme assetsEquities – – –Bonds – – 308 938Other – – 94 524

Total assets at end of year – – 403 462

The actual return on plan assets is as follows:Expected return on plan assets – – 32 773Actuarial loss on plan assets – – (10 831)

Actuarial return on plan assets – – 21 942

The amounts recognised in current and previous years are as follows:

30 June2013

R’000

30 June 2012R’000

30 June 2011

R’000

31 March 2010

R’000

31 March 2009

R’000

31 March 2008

R’000

Present value of funded obligation – – 429 203 524 110 525 410 663 104Fair value of plan assets – – (403 462) (417 695) (424 843) (536 293)

– – 25 741 106 415 100 567 126 811Foreign exchange differences – – – – 12 565 (5 304)Curtailment provision – – 29 144 – – –Unrecognised actuarial losses – – – (90 978) (104 912) (30 923)

Liability in the statement of fi nancial position – – 54 885 15 437 8 220 90 584

138

Group30 June 2013

%30 June 2012

%30 June 2011

%

The principal actuarial assumptions used for accounting purposes were:Discount rate – – 5.5Expected return on plan assets – – 4.7Future pension increases – – 3.5Infl ation rate – – 3.5Future salary increases – – –Average worklife of employees – – –

Post -employment medical benefits

The Group provides post-retirement healthcare benefits to certain of its retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period.

The method of accounting is similar to that used for defined benefit schemes and actuarial valuations are carried out annually by qualified actuaries.

The amounts recognised in the statement of financial position are as follows:

Group30 June 2013 30 June 2012 30 June 2011

Present value of obligation 64 997 55 265 49 418

The amounts recognised in the income statement are as follows:Interest cost 4 742 4 355 4 879Actuarial losses 5 808 2 591 4 774Current service costs 1 334 1 148 1 321

11 884 8 094 10 974

Movement in the liability recognised in the statement of fi nancial position:At the beginning of the year 55 265 49 418 42 910Total expenses as above 11 884 8 094 10 974Disposal of business – – (2 049)Transferred to liabilities classifi ed as held for sale – (186) –Contributions paid (2 152) (2 061) (2 417)

Liability in the statement of fi nancial position 64 997 55 265 49 418

The main actuarial assumptions were as follows:– Long-term increase in health costs 6.41% 6.00% 6.00%– Discount rate 8.49% 8.75% 9.00%– Medical infl ation 6.41% 6.00% 6.00%– Infl ation rate 6.41% 6.00% 6.00%– Future salary increases 6.41% 6.00% 6.00%– Average worklife of employees 12.1 12.2 12.9

R’000 R’000 R’000

– Contributions expected to be paid to the plan during the annual period beginning after the statement of fi nancial position date 2 364 2 282 2 184

The mortality rates used were as follows for the current and previous financial year:

The published SA1985-90 (light) mortality rates were used for male members in respect of the period before retirement.

In case of female lives, mortality rates were reduced by 3 years to allow for longer life expectancy.

In respect of the period after retirement, the published PA90 – 2 mortality rates were used in the calculations.

139

Of the total charge R11 884 000 (2012: R8 094 000; 2011: R10 974 000) was included in other operating expenses.

The effect of a 1% movement in the assumed medical cost trend rate is as follows:

30 June 2013Increase

R’000Decrease

R’000

– Effect on the aggregate of the current service cost and interest cost 1 063 (857)– Effect on the accumulated post-employment benefi t obligation for medical

costs 10 400 (8 450)

30 June 2012– Effect on the aggregate of the current service cost and interest cost 908 (743)– Effect on the accumulated post-employment benefi t obligation for medical

costs 8 290 (6 798)

30 June 2011– Effect on the aggregate of the current service cost and interest cost 1 017 (825)– Effect on the accumulated post-employment benefi t obligation for medical

costs 7 314 (6 029)

The amounts recognised in current and previous years are as follows:

30 June 2013

R’000

30 June 2012R’000

30 June 2011

R’000

31 March 2010

R’000

31 March 2009

R’000

31 March 2008

R’000

– Present value of obligation 64 997 55 265 49 418 42 910 38 404 34 739

23. OTHER NON-CURRENT LIABILITIES

Other non-current liabilities relate to various deferred bonus and retention schemes within the Group 37 608 34 794 –

24. BORROWINGS

Non-current borrowingsInterest -bearing borrowingsLong-term loansCapital outstanding 150 000 – 150 000– Less: Current portion of interest -bearing borrowings (30 000) – –

120 000 – 150 000

The long -term loans comprise the following:Credit Suisse First Boston Finance (Pty) Ltd – – 150 000

R43 000 000 of the loan boar interest at 9.37% p.a. and R107 000 000 of the loan boar interest at prime less 3% p.a. with the interest payable in quarterly instal ments. The capital was repaid early on 29 February 2012 and replaced with the new ABSA loan.

The loan was secured by a letter of comfort from Hunt Leuchars & Hepburn Holdings L imited.

First National Bank (FNB) 150 000 – –

The FNB long-term loan is unsecured, bears interest at the Jibar rate (5.14% p.a.) + 2.3% p.a. and the interest is payable in quarterly payments and the capital is repayable in five equal yearly instalments of R30 000 000 on 15 April of each year starting on 15 April 2014.

Current borrowings

ABSA: Short-term loan – 150 000 –

The ABSA loan is unsecured, bears interest at the Jibar rate (5.14%) + 1.2% p.a. and the interest is payable in quarterly payments and repayable on 2 April 2013.

TSB Sugar RSA (Pty) Ltd obtained the ABSA loan as a replacement loan for the Credit Suisse First Boston Finance (Pty) Ltd loan.

150 000 150 000 150 000

140

The maturity of non-current and current interest -bearing borrowings (Excluding fi nance charges):

R’000 R’000 R’000

Within 1 year 30 000 150 000 –Between 2 and 5 years 120 000 – 150 000Over 5 years – – –

150 000 150 000 150 000

No default or breach has occurred.

Short-term borrowings

Total current borrowings consist of the following:

Group30 June 2013

R’00030 June 2012

R’00030 June 2011

R’000

– Short-term portion of interest -bearing borrowings 30 000 150 000 –– Bank overdraft and loans 20 786 82 000 412 000

50 786 232 000 412 000

Bank overdraft and loans

The ABSA bank overdraft amounting to R0 (2012: R82 000 000; 2011: R0) was obtained for the purpose of working capital at the prime rate (8.5%) of interest per annum in South Africa and is unsecured and payable on demand – 82 000 –

The Remgro Management Services L imited loan amounting to R0 (2012: R0; 2011: R412 000 000) was obtained for the purpose of working capital at the inter-company rate of interest (5.58%) per annum and is unsecured and payable on demand – – 412 000

The FNB bank overdraft amounting to R20 786 000 (2012: R0; 2011: R412 000 000) was obtained for the purpose of working capital at the prime rate (8.5%) less 2% of interest per annum in South Africa and is unsecured and payable on demand 20 786 – –

20 786 82 000 412 000

The exposure of the Group’s borrowings to interest rate changes at the statement of fi nancial position dates are as follows:

Within 1 year 50 786 232 000 412 000Between 2 and 5 years 120 000 – 150 000Over 5 years – – –

170 786 232 000 562 000

The carrying amounts and fair value of the non-current borrowings are as follows:

Group GroupCarrying amount Fair value

30 June2013

R’000

30 June 2012

R’000

30 June2011

R’000

30 June 2013

R’000

30 June2012

R’000

30 June2011

R’000

Bank borrowings 170 786 232 000 150 000 170 786 232 000 150 000

170 786 232 000 150 000 170 786 232 000 150 000

The fair value of current borrowings approximates their carrying amount, as the impact of discounting is not signifi cant.

141

Group

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

The carrying amounts of the Group’s borrowings are denominated in the following currenc y:Rand 170 786 232 000 562 000

170 786 232 000 562 000

The Group has the following undrawn borrowing facilities:Floating rate:

– Expiring within one year 645 714 1 228 000 958 000

The facilities expiring within one year are annual facilities subject to review at various dates during the financial period. The other facilities have been arranged to help finance the operating activities of the Group.

25. TRADE AND OTHER PAYABLES

Group

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

Trade payables 406 448 418 365 390 875Accruals 173 827 199 986 163 723Deferred income 1 086 1 072 934Other payables 41 189 34 500 20 946

622 550 653 923 576 478

Included in accruals and other payables above are non-financial instruments of R39 801 518 (2012: R36 278 677; 2011: R32 917 084), respectively.

26. AMOUNTS OWING TO GROUP COMPANIES

Group

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

Amounts owing by Group companies:– Akwandze Agricultural Finance (Pty) Lt d

– (Joint venture) – – 891– The Royal Swaziland Sugar Corporation L imited

– ( Associate) – – *– Mananga Sugar Packers (Pty) Ltd – (Joint venture) – – 7 989

– – 8 880

Amounts owing to group companies– Remgro Management Services L imited (585 500) (308 000) (144 000)– TSB Sugar RSA (Pty) Ltd – – –– Khula-Akwandze Fund (Pty) Ltd

(Non-controlling interest) – (2 400) (4 200)

(585 500) (310 400) (148 200)


The Remgro Management Services L imited loan for the Pongila Mill acquisition R72 000 000 (2012: R108 000 000; 2011: R144 000 000) is unsecured, bears interest at the Jibar rate (5.14% p.a.) + 3.5% p.a. and the interest is payable in quarterly payments and repayable on 3 months’ notice.

The Remgro Management Services L imited working capital loan of R160 000 000 (2012: R200 000 000; 2011: R0) is unsecured, bears interest at the Jibar rate (5.14% p.a.) + 3.5% p.a. and the interest is payable in quarterly payments and repayable on 3 months’ notice.

The Remgro Management Services L imited overdraft facility of R353 500 000 (2012: R0; 2011: R0) is unsecured, bears interest at the rate of 5.5% p.a. and the interest is payable monthly in arrears and repayable on demand.

142

Except for the loans mentioned above, all the other loans are unsecured, interest free with no fixed repayment terms and payable on demand.

The concentration of credit risk with respect to amounts owing by/(to) Group companies are limited to the amounts mentioned above. The Group does not hold any collateral as security.

No amounts included above are past due or impaired.

27. COMMITMENTS

Group

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

Capital commitments:Contracted, but not yet incurred 75 361 18 062 23 974Authorised, but not yet contracted 73 886 52 230 28 952

149 247 70 292 52 926

The capital expenditure is to be fi nanced by the Group through internally generated funds and external credit facilities.Operating lease commitmentsNot later than one year 27 090 21 285 13 669Later than one year but not later than fi ve years 22 877 19 481 20 437Later than fi ve years – 1 989 3 510

49 967 42 755 37 616

The Group also has exposure to variable lease commitments in relation to assets.Guarantee:

Long-term Loan Guarantee for Land Bank on behalf of Akwandze Agricultural Finance (Pty) Ltd 75 000 50 000 –

No losses are expected as the risk of default of debtors are limited due to the fact that some debtors are joint ventures to the Group with no history of default. The loan of the debtor not relating to the Group is supported by Crookes Brothers Limited.

28. DERIVATIVE FINANCIAL INSTRUMENTS

Group

30 June 2013

AssetsR’000

30 June 2013

LiabilitiesR’000

30 June 2012

AssetsR’000

30 June 2012

LiabilitiesR’000

30 June 2011

AssetsR’000

30 June 2011

LiabilitiesR’000

Forward foreign exchange contracts – cash fl ow hedges 2 387 (20 560) 2 965 (3 226) 3 599 (986)Forward foreign exchange contracts – fair value hedges – – 595 (768) – –Interest rate swap – – – (479) – (1 393)

Total 2 387 (20 560) 3 560 (4 473) 3 599 (2 379)

Trading derivatives are classified as a current asset or liability. The full fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months and, as a current asset or liability, if the maturity of the hedge item is less than 12 months.

There was no ineffectiveness to be recorded from the cash flow hedges.

Forward exchange contracts that constitute designated hedges of currency risk at the end of the year are summarised as follows:

143

Group

Averagecontract

rateCommitment

R’000

30 June2013Fair

value ofFEC

R’000

30 June 2012Fair

value of FEC

R’000

30 June2011Fair

value of FEC

R’000

Forward contracts to sell foreign currencyUS Dollars Current asset 10.36285 170 987 2 387 2 965 3 599US Dollars Current liability 9.45642 291 258 (19 686) (3 226) (986)Forward contracts to buy foreign currencyEuro Current asset – – – 595 –Euro Current liability 11.92938 8 313 (874) (768) –

470 558 (18 173) (434) 2 613

The hedges in respect of currency risk are expected to mature within approximately one year.

The fair value is the estimated amount that would be paid or received to terminate the forward exchange contracts in arm’s length transactions at the statement of financial position date.

Period when cash flow expected to occur 2014 2013 2012When expected to effect profi t 2014 2013 2012

Group

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

Interest rate swapFair value of the interest rate swap liability – (479) (1 393)Amount recognised in equity during the year – cash fl ow hedge asset and liability (18 173) (261) 2 613Amount recognised in profi t /(loss) – fair value hedges 173 (173) –Amount recognised in profi t /(loss) – interest rate swap 479 914 997Amount removed from equity and recognised in profi t / (loss) – cash fl ow hedges – – –

At 30 June 2013, if the Rand had weakened by 5% against the US D and European Euro, with all other variables held constant, the revised fair values of the related derivatives, and the impact on post-tax profits, equity, asset and liabilities, would be as follows:

Group

Asset valueR’000

P&L effectR’000

Equity effectR’000

Forward foreign exchange contracts – cash fl ow hedges (909) – (654)Forward foreign exchange contracts – fair value hedges – – –

At 30 June 2012, if the Rand had weakened by 5% against the US D, with all other variables held constant, the revised fair values of the related derivatives, and the impact on post-tax profits, equity, asset and liabilities, would be as follows:

Group

Asset valueR’000

P&L effectR’000


Forward foreign exchange contracts – cash fl ow hedges (13) – (9)Forward foreign exchange contracts – fair value hedges (9) (6) –

144

At 30 June 2011, if the Rand had weakened by 5% against the US D with all other variables held constant, the revised fair values of the related derivatives, and the impact on post-tax profits, equity, asset and liabilities, would be as follows:

Group

Asset valueR’000

P&L effectR’000


Forward foreign exchange contracts – cash fl ow hedges 131 – 94

At 30 June 2013, 30 June 2012 and 30 June 2011, if the variable interest rate on the interest rate swap contract had been 50 basis points higher with all other variables held constant, the impact on post-tax profits, equity, asset and liabilities, would be as follows:

Group

Liability valueR’000

P&L effectR’000


Interest rate swap liability – 30 June 2013 – – –Interest rate swap asset – 30 June 2012 (750) 540 –Interest rate swap asset – 30 June 2011 (750) 540 –

It will not have any impact on other components of equity, except for retained earnings (via the impact on profit).

(a) Forward foreign exchange contracts

The notional principal amounts of the outstanding forward foreign exchange contracts (cash flow hedges) at 30 June 2013 were $47,300,000 (2012: $32,000,000; 2011: $27,400,000) and €696,866 (2012: €0; 2011: €0).

The notional principal amounts of the outstanding forward foreign exchange contracts (fair value hedges) at 30 June 2013 were €0 (2012: €1,176,599; 2011: €0).

The hedged highly probable forecast transactions denominated in foreign currency are expected to occur at various dates during the next 12 months. Gains and losses recognised on cash flow hedges on forward foreign exchange contracts to hedge sugar sales are recognised in equity. Gains and losses recognised on fair value hedges on forward foreign exchange contracts to hedge currency risk for purchases/investments are recognised in the income statement in the period or periods during which the hedged transaction affects the income statement. This is generally within 12 months from the statement of financial position date unless the gain or loss is included in the initial amount recognised for the purchase of fixed assets, in which case recognition is over the lifetime of the asset.

(b) Interest rate swap

The notional principal amounts of the outstanding interest rate swap contract at 30 June 2013 were R0 (2012: R150 000 000; 2011: R150 000 000).

At 30 June 2013, the fixed interest rate was 9.37% p.a. (2012:9.37% p.a.; 2011: 9.37% p.a.) and the main floating rate was at the prime rate of interest (8.5% p.a.) in South-Africa less 3% p.a. being 5.5% p.a. (2012: 6% p.a.; 2011: 6% p.a.). Gains and losses on the interest rate swap contract are recognised in the income statement.

29. RETAINED EARNINGS

Group

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

Group retained earnings at the end of the year comprise:– Company (2 926) (30 567) (69 239)– Subsidiary companies 1 879 405 1 921 973 1 588 938

1 876 479 1 891 406 1 519 699

145

30. NORMAL TAXATION PAID

Group

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

Net balance refundable beginning of year (7 313) (2 519) (14 459)Taxation as per income statement (92 964) (125 981) (60 910)Disposal of business – – (484)Net balance (refundable) /payable at the end of the year (1 819) 7 313 2 519

Taxation paid (102 096) (121 187) (73 334)

31. (a) Financial instruments by category

The accounting policies for financial instruments have been applied to the line items below:

GroupLoans and

receivablesR’000

DerivativesR’000

Available-for-sale

R’000TotalR’000

30 June 2013Assets as per statement of fi nancial positionAvailable-for-sale fi nancial assets – – – –Long-term loans 1 555 – – 1 555Derivative fi nancial instruments – 2 387 – 2 387Trade and other receivables 453 453 – – 453 453Cash and cash equivalents 133 660 – – 133 660

588 668 2 387 – 591 055

Financial liabilities at

amortised cost

R’000Derivatives

R’000TotalR’000

Liabilities as per statement of fi nancial positionBorrowings (including bank overdrafts) 170 786 – 170 786Amounts owing to Group companies 585 500 – 585 500Other non-current liabilities 37 608 – 37 608Derivative fi nancial instruments – 20 560 20 560Trade and other payables 582 749 – 582 749

1 376 643 20 560 1 397 203

GroupLoans and

receivablesR’000

DerivativesR’000

Available-for-sale

R’000TotalR’000

30 June 2012Assets as per statement of fi nancial positionAvailable-for-sale fi nancial assets – – 6 000 6 000Long-term loans 1 555 – – 1 555Derivative fi nancial instruments – 3 560 – 3 560Trade and other receivables 401 174 – – 401 174Cash and cash equivalents 135 159 – – 135 159

537 888 3 560 6 000 547 448

146


amortised cost

R’000Derivatives

R’000TotalR’000

Liabilities as per statement of fi nancial positionBorrowings (including bank overdrafts) 232 000 – 232 000Amounts owing to group companies 310 400 – 310 400Other non-current liabilities 34 794 – 34 794Derivative fi nancial instruments – 4 473 4 473Trade and other payables 617 644 – 617 644

1 194 838 4 473 1 199 311

GroupLoans and

receivablesR’000

DerivativesR’000

Available-for-sale

R’000TotalR’000

30 June 2011Assets as per statement of fi nancial positionAvailable-for-sale fi nancial assets – – 7 457 7 457Long-term loans 1 555 – – 1 555Derivative fi nancial instruments – 3 599 – 3 599Trade and other receivables 371 777 – – 371 777Amounts owing by Group companies 8 880 – – 8 880Cash and cash equivalents 84 521 – – 84 521

466 733 3 599 7 457 477 789


amortised cost

R’000Derivatives

R’000TotalR’000

Liabilities as per statement of fi nancial positionBorrowings (including bank overdrafts) 562 000 – 562 000Amounts owing to Group companies 148 200 – 148 200Derivative fi nancial instruments – 2 379 2 379Trade and other payables 543 561 – 543 561

1 253 761 2 379 1 256 140

(b) Credit quality of financial assets

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to the credit rating about the counterparty:

Group

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

Trade receivablesCounterparties without external credit ratings as rated by TSB Sugar Group internally:– Low risk 315 069 298 079 276 078– General risk 108 241 84 325 81 995– High risk 10 419 17 954 17 818

Total trade receivables 433 729 400 358 375 891

147

Group

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

Trade receivablesCounterparties without external credit ratings:– New counterparties (less than 6 months) 1 940 4 456 1 669– Existing (6 months+) with no defaults 426 649 394 306 327 999– Existing (6 months+) with some defaults – all

recovered 5 140 1 429 29 826– Existing (6 months+) with some defaults – not all

recovered – 167 16 397

Total trade receivables 433 729 400 358 375 891

Cash at bank and short-term deposits

External Credit Rating (if available):Moody’s rating:

ABSA Baa1 41 854 109 760 76 781ABSA – Restricted cash Baa1 6 539 20 220 –Barclays Bank Mozambique Not available 250 – –First National Bank Baa1 57 546 – –Standard Chartered Bank Not available 1 264 1 165 480PT Bank CIMB Niaga TBK Baa3 142 78 117Royal Bank of Scotland Baa1 26 065 3 936 7 143

133 660 135 159 84 521

Derivative fi nancial assetsForward foreign exchange contracts – cash fl ow hedges Effective hedge (18 173) (261) 2 613Forward foreign exchange contracts – fair value hedges Ineffective hedge – (173) –Interest rate swap Ineffective hedge – (479) (1 393)

(18 173) (913) 1 220

Derivative fi nancial instruments are held with the following fi nancial institutions:

External credit ratingMoody’s rating:ABSA Baa1First National Bank Baa1Standard Bank Baa1Investec Baa1

None of the fi nancial assets that are fully performing has been renegotiated in the last year.

No external or internal credit ratings exist for available-for-sale fi nancial assets, long-term loans and amounts owing by and to Group companies. The credit quality is analysed by the directors interpretation of the fi nancial asset as low risk. Available-for-sale fi nancial assets are carried at fair value and the risks associated with these investments are discounted for in the fair value valuations performed. Long-term loans and amounts owing by and to Group companies are supported by their respective statement of fi nancial position.

Trade accounts receivable

Customers are allocated to the following risk categories as determined by management at the time the credit application process is concluded:

Low risk – This category is only utilised for the national customers with low credit risk according to credit policy.

General risk – This category is for all customers where a moderate credit risk is taken according to credit policy.

High risk – This category is for all high-risk customers according to credit policy.

148

32. RELATED PARTY TRANSACTIONS

The Company is controlled by Hunt Leuchars & Hepburn Holdings Limited which owns 100% of the Company’s shares. The ultimate holding company of the Group is Remgro Limited and is incorporated in South Africa. Also refer to Note 11 for direct and indirect interests held in subsidiaries.

Group

30 June 2013R’000

30 June 2012R’000

30 June 2011R’000

Outstanding balancesLoans receivable from group companies Refer to Note 26 – – 8 880Loans payable to Group companies Refer to Note 26 (585 500) (310 400) (148 200)Interest received from Group companies 1 391 537 2 872Interest paid to Group companies (28 924) (27 872) (36 935)Managerial fees paid to Remgro Management Services Limited 9 522 8 887 10 358The following transactions were entered into with the directors:Directors’ remuneration:– Executive directors 37 333 22 955 18 511– Non-executive directors 1 773 1 680 1 703

39 106 24 635 20 214

The following transactions were entered into with parties that are related to the ultimate holding company of the Group:

Related party

Sales torelated parties

30 June 2013R’000

Purchases from related

parties30 June 2013

R’000

Tradedebtors

30 June 2013R’000

Trade creditors

30 June 2013R’000

Falconair (Pty) Ltd – 2 – –Remgro Management Services L imited – 9 522 – (786)PG Glass (Pty) Ltd – 128 – –Total South Africa (Pty) Ltd – 8 763 – –

Total for the year – 18 415 – (786)


30 June 2012R’000


parties30 June 2012

R’000

Tradedebtors

30 June 2012R’000

Trade creditors

30 June 2012R’000

Falconair (Pty) Ltd 4 54 – –Remgro Management Services L imited – 9 406 – (421)PG Glass (Pty) Ltd – 3 – –Total South Africa (Pty) Ltd – 16 436 – (419)

Total for the year 4 25 899 – (840)


30 June 2012R’000


parties30 June 2012

R’000

Tradedebtors

30 June 2012R’000

Trade creditors

30 June 2012R’000

Falconair (Pty) Ltd 13 31 – –Remgro Management Services L imited – 10 358 – 1 253PG Glass (Pty) Ltd – 2 – –Perstan (Pty) Ltd – 25 341 – –Total South Africa (Pty) Ltd – 11 503 – 345Tosaco Commercial Services (Pty) Ltd – 26 359 – –

Total for the year 13 73 594 – 1 598

149

The above balances are not secured and are payable or receivable within normal operating terms and conditions.

The following transactions were entered into with related associates and joint ventures within the group:

Related party:

Sales to associates and joint ventures30 June 2013

R’000

Purchases from associates and joint ventures30 June 2013

R’000

Trade debtors30 June 2013

R’000

Trade creditors

30 June 2013R’000

The Royal Swaziland Sugar Corporation L imited (Associate) 3 012 – 366 –Akwandze Agricultural Finance (Pty) Ltd (Joint venture) 217 – 68 –Libuyile Farming Services (Pty) Ltd (Joint venture) 41 280 80 5 408 13Mgubho Farming Services (Pty) Ltd (Joint venture) 32 453 1 318 4 057 378Mananga Sugar Packers (Pty) Ltd (Joint venture) 4 164 502 495 2 118 33 516Sivunosetfu (Pty) Ltd (Joint venture) 51 379 722 1 672 –

Total for the year 132 505 504 615 13 689 33 907

Sales to associates and joint ventures

30 June 2012R’000

Purchases from associates and joint ventures

30 June 2012R’000

Trade debtors30 June 2012

R’000

Trade creditors30 June

2012R’000

The Royal Swaziland Sugar Corporation L imited (Associate) 6 722 – 1 612 76Akwandze Agricultural Finance (Pty) Ltd (Joint venture) 213 3 289 60 –Libuyile Farming Services (Pty) Ltd (Joint venture) 43 913 403 6 946 14Mgubho Farming Services (Pty) Ltd (Joint venture) 39 007 1 697 6 477 1 149Mananga Sugar Packers (Pty) Ltd (Joint venture) 2 068 517 827 853 36 901


Sales to associates and joint ventures30 June 2011

R’000

Purchases from associates and joint ventures30 June 2011

R’000

Trade debtors 30 June 2011

R’000

Trade creditors 30 June

2011R’000

The Royal Swaziland Sugar Corporation L imited (Associate) 12 484 450 311 –Akwandze Agricultural Finance (Pty) Ltd (Joint venture) 190 – 49 –Libuyile Farming Services (Pty) Ltd (Joint venture) 42 604 203 3 880 143Mgubho Farming Services (Pty) Ltd (Joint venture) 30 067 1 217 3 341 225Mananga Sugar Packers (Pty) Ltd (Joint venture) 9 218 173 344 1 191 55 066


150

Group

30 June 2013

R’000

30 June 2012

R’000

15 months to30 June 2011

R’000

Interest received from associates and joint ventures:Akwandze Agricultural Finance (Pty) Ltd – – 23Libuyile Farming Services (Pty) Ltd 103 635 600Mgubho Farming Services (Pty) Ltd 1 078 896 286Mananga Sugar Packers (Pty) Ltd – 122 1Sivunosetfu (Pty) Ltd 211 – –

1 392 1 653 887Interest paid to associates and joint ventures:Akwandze Agricultural Finance (Pty) Ltd 559 1 522 670Libuyile Farming Services (Pty) Ltd 287 664 457Mgubho Farming Services (Pty) Ltd – 209 161Sivunosetfu (Pty) Ltd 445 – –

1 291 2 395 1 288

Management fees received

Mananga Sugar Packers (Pty) Ltd 1 166 1 258 1 875

Service fees receivedLibuyile Farming Services (Pty) Ltd 5 611 5 244 6 190Mgubho Farming Services (Pty) Ltd 5 656 5 204 6 143Sivunosetfu (Pty) Ltd 6 411 – –

17 678 10 448 12 333

Rental income receivedMgubho Farming Services (Pty) Ltd 36 – –

36 – –

Rental paid

Mgubho Farming Services (Pty) Ltd 34 42 –

34 42 –

Group30 June

2013R’000

30 June 2012

R’000

15 months to30 June 2011

R’000

Dividends received from associates and joint ventures:The Royal Swaziland Sugar Corporation L imited 67 771 47 921 13 801Akwandze Agricultural Finance (Pty) Ltd 440 – –Libuyile Farming Services (Pty) Ltd 1 679 3 123 2 146Mgubho Farming Services (Pty) Ltd – 1 225 815Mananga Sugar Packers (Pty) Ltd 5 832 5 888 –

75 723 58 156 16 762

151

Key management compensation

Key management includes directors (executive and non-executive), members of the Executive Committee and the Company Secretary. The compensation paid or payable to key management for employee services is shown below:

Group30 June

2013R’000

30 June 2012

R’000

30 June 2011

R’000

Salaries and other short-term employee benefi ts 35 716 33 019 37 122Incentive bonus and profi t share 19 762 708 10 946Other 10 665 9 722 7 330

66 143 43 449 55 398

33. DISPOSAL OF BUSINESS

Friedshelf 920 (Pty) Ltd disposed of its business to Sivunosetfu (Pty) Ltd in terms of a sale of business agreement effective 1 July 2012. Friedshelf 920 (Pty) Ltd previously performed farming operations on land owned by TSB Sugar RSA (Pty) Ltd, Shell Case 255 (Pty) Ltd and Break Even 76 (Pty) Ltd which has now been disposed of to the Matsamo Communual Property Association.

TSB Sugar Holdings Group holds 100% of the issued shares in Friedshelf 920 (Pty) Ltd. TSB Sugar Holdings Group has a 50% shareholding in Sivunosetfu (Pty) Ltd in terms of a joint venture agreement together with the Matsamo Communual Property Association. The proceeds from the disposal were calculated based on the purchase price payable calculation formula included in the sale of business agreement.

The assets and liabilities disposed are the following:

30 June 2013R’000

AssetsBiological assets 40 081Post -employment medical benefi ts asset 104Inventory 184Motor vehicles 533

40 902

LiabilitiesPost -employment medical liability (186)Provision for leave pay (445)Rental deposits (24)Employees saving scheme (261)

(916)

Net assets disposed 39 986

Proceeds on disposal 47 793

Profi t realised on disposal 7 807

152

34. ADDITIONAL INFORMATION

(a) Refer to Notes 24 and 26 for details on material borrowings. Borrowing repayable within 12 months will be repaid from operating cash flows.

The borrowing arose as follows:

Name of lender Purpose of loan

Balanceoutstanding

30 June 2013R’000

Balanceoutstanding

30 June 2012R’000

Balanceoutstanding

30 June 2011R’000

First National BankWorking capital requirements 150 000 – –

Remgro Management Services L imited

Acquisition of the Pongola Mill (purchase of assets) 72 000 108 000 144 000


Working capital requirements 160 000 200 000 –


Overdraft facility: Working capital requirements 353 500 – 412 000

ABSAWorking capital requirements – 150 000 –

ABSA

Overdraft facility: Working capital requirements – 82 000 –

Credit Suisse First Boston Finance (Pty) Ltd

Working capital requirements – – 150 000

735 500 540 000 706 000

(b) The Company has the following incentive schemes in place :

The Executive Long-term Incentive Scheme (ELTI) can be summarised by the following high-level overview of the scheme:

(A) The ELTI is a phantom unit scheme where Executives are awarded units that vest after 3, 4 and 5 years;

(B) A fi xed number of units is used to determine the value of TSB Group for purposes of the ELTI;

(C) The number of units available for use in the ELTI is capped as a % of the total units representing the value of TSB Group;

(D) On an annual basis, the Human Resources Committee (HRC) will, at its discretion, and within the Terms of Reference of the Committee, award units to Executives. Each annual award will effectively be a separate ELTI scheme with its own 5-year cycle;

(E) The value of the units to be awarded will be determined by taking each Executive’s Guaranteed Package x a %. The % in each year will be determined by the HRC in line with market benchmarks. For 2nd tier participants (see section 7), the HRC may allocate different award %’s to individual participants within each tier;

(F) The value of TSB Group for purposes of the ELTI at the award date will be determined by applying a Price/Earnings (“PE”) multiple to the average Headline Earnings for the preceding 3 years;

(G) The value per unit will be determined by dividing the ELTI value of TSB Group by the number of units;

(H) The number of units awarded to each Executive will thus be the value of the award under E above divided by the value per unit under G above;

(I) The units will force-vest as follows:(a) 3 years after award – 331/3%;(b) 4 years after award – 331/3%;(c) 5 years after award – 331/3% ;

(J) The value of the units at the vesting dates will be determined on the same basis as when the awards are made per F above, i.e. by applying a PE multiple to the average PAT for the preceding 3 years;

(K) The value of the units at vesting per J above will be geared (upwards or downwards) based upon Company (TSB Group) performance as measured by average Return on Shareholders’ Equity (“ROSE”) over the preceding 3 years compared to average ROSE Target for the preceding 3 years.

153

The Senior Management Incentive Scheme (SMLTI) can be summarised by the following high-level overview of the scheme:

(A) The SMLTI is a bonus matching scheme where the annual incentives earned by Senior Managers under the Senior Management Short Term Incentive Scheme (“SSMSTI”) are matched for purposes of the SMLTI;

(B) On an annual basis, the HRC will, at its discretion, and within the Terms of Reference of the Committee, match the SSMSTI earnings according to a ratio that will be determined by the HRC;

(C) Each annual award will effectively be a separate SMLTI scheme with its own 5-year cycle;

(D) The value of each SMLTI award will increase at the prevailing 12-month fi xed deposit interest prevailing at the time of the award, and will remain constant for the 5-year cycle; and

(E) The SMLTI award, together with accrued interest, will force-vest as follows:

(a) 3 years after award – 331/3%;

(b) 4 years after award – 331/3%;

(c) 5 years after award – 331/3% .

(c) Refer to Note 13 Investment in associates and Note 14 Investment in joint ventures for net profits/(losses) in associates and joint ventures.

The subsidiaries profi ts/(losses) are as follows:

Subsidiary

Profi t/(Losses)30 June 2013

R’000

Profi t/(Losses)30 June 2012

R’000

Profi t/(Losses)15 months to 30 June 2011

R’000

Sukramark (Pty) Ltd (1 406) (2 867) 140TSB Sugar RSA (Pty) Ltd 249 913 450 984 131 307TSB Citrus Holdings (Pty) Ltd – * 15 139TSB Sugar International (Pty) Ltd 47 492 26 749 (52 020)Break Even 76 (Pty) Ltd * 5 066 129Friedshelf 920 (Pty) Ltd 2 721 105 49Golden Frontiers Citrus (Pty) Ltd – – 3 051Selati Sugar (Pty) Ltd – – –Nkomazi Cane Carriers (Pty) Ltd – 7 838 9 888Nzila Farming Services (Pty) Ltd – 275 –Laeveldse Suikermeule (Pty) Ltd – 8 580 8 631Middenin Ontwikkeling (Pty) Ltd 10 122 (42) 100Quality Sugars (Pty) Ltd 6 158 5 329 1 590TSB Sugar Marketing (Pty) Ltd – (1) –Shubombo Agricultural Services (Pty) Ltd 12 768 7 345 2 960Shell Case 255 (Pty) Ltd 4 6 018 101TSB Sugar Mozambique (Pty) Ltd – – –Massingir Agro Industrial Lda (3 279) – –Booker Tate Holdings L imited 11 706 (9 125) (20 677)

Total profi ts in subsidiaries 336 200 506 254 100 388

154

(d) Reconciliation of headline earnings for the latest financial year:

Headline earnings per share

2013

Amount before tax

R’000Taxation

R’000Minorities

R’000

Attributableamount

R’000

Net profi t attributable to equity holders 444 653 (96 553) 67 348 167Subsidiaries (24 601) (15 181) – (39 782) (Profi t) /Loss on disposal of property, plant and equipment (17 744) (12 745) (30 488)(Profi t)/Loss on sale of investments (6 778) (2 459) (9 237)Net impairment of assets 2 407 ( 674) (1 733)Insurance proceeds (2 485) 696 (1 790)Associates 128 (38) – 90(Profi t)/Loss on disposal of property, plant and equipment 203 (61) 142(Profi t)/Loss on sale of investmentsNet impairment of assetsNet impairment of biological assetsInsurance proceeds (75) 23 (53)Joint ventures 3 062 (857) – 2 204(Profi t)/Loss on disposal of property, plant and equipment(Profi t)/Loss on sale of investmentsNet impairment of assets 3 062 (857) 2 204

Head line Earnings 423 242 (112 630) 67 310 679

2012

Amount before tax

R’000Taxation

R’000Minorities

R’000

Attributable amount

R’000

Net profi t attributable to equity holders 530 384 (116 136) (1 332) 412 916Plus/( Minus) – portion attributable to equity holders from:Subsidiaries (51 131) (9 264) – (60 395)(Profi t)/ Loss on sale of PPE (53 389) (8 715) (62 105)Profi t/( Loss) on sale of intangible assets –Profi t/( Loss) on sale of investment properties –(Profi t)/ Loss on sale of investments – – –Net impairment of assets 2 213 (620) 1 593Net impairment of investments 299 – 299Net impairment of goodwill –Negative goodwill –

Insurance proceeds (253) 71 (182)

Associates (259) 78 – (182)(Profi t)/ Loss on sale of PPE 6 (2) 4Profi t/( Loss) on sale of intangible assets –Profi t/( Loss) on sale of investment properties – –Profi t/( Loss) on sale of investments – –Net impairment of assets, investments and goodwill – –Negative goodwill – –Insurance proceeds (265) 80 (186)

155

2012

Amount before taxR’000

TaxationR’000

MinoritiesR’000

Attributable amountR’000

Joint Ventures: 2 – – 1(Profi t)/ Loss on sale of PPE 2 – 1 –Profi t/( Loss) on sale of intangible assets – – – –Profi t/( Loss) on sale of investment properties – – – –Profi t/( Loss) on sale of investments – – – –Net impairment of assets, investments and goodwill – – – –Negative goodwill – – – –Headline earnings 478 995 (125 322) (1 332) 352 340

2011

Amount before tax

R’000Taxation

R’000Minorities

R’000

Attributable amount

R’000

Net profi t attributable to equity holders ( including discontinued operation) 309 019 (91 010) (1 893) 216 116Plus/( Minus) – portion attributable to equity holders from:Subsidiaries (33 461) 4 323 – (29 138)(Profi t)/ Loss on sale of PPE 199 8 207Profi t/( Loss) on sale of intangible assets – – –Profi t/( Loss) on sale of investment properties – – –(Profi t)/ Loss on sale of investments (26 114) 2 202 – (23 912)Net impairment of assets – – –Net impairment of investments – – –Net impairment of goodwill – – –Negative goodwill – – –Insurance proceeds (7 546) 2 113 2 113 (5 433)Associates (320) 96 – (224)(Profi t)/ Loss on sale of PPE (320) 96 – (224)Profi t/( Loss) on sale of intangible assets – – – –Profi t/( Loss) on sale of investment properties – – – –Profi t/( Loss) on sale of investments – - - –Net impairment of assets, investments and goodwill – – - –Negative goodwill – - - –Joint ventures: (62) 18 – (43)(Profi t)/ Loss on sale of PPE (62) 18 – (43)Profi t/( Loss) on sale of intangible assets – – – –Profi t/( Loss) on sale of investment properties –Profi t/( Loss) on sale of investments –Net impairment of assets, investments and goodwill –Negative goodwill –Headline earnings 275 176 (86 573) (1 893) 186 711

156

The net asset value and tangible net asset value per share comprise the following for the latest fi nancial year:

30 June 2013

Cents

30 June 2012

Cents

15 months to 30 June 2011

Cents

Net asset value per share 2 239 632 780 2 138 745 000 1 894 254 000Tangible net asset value per share 2 225 986 780 2 125 049 000 1 880 508 000Dividends per share 372 171 000 49 951 000 38 405 000

157

ANNEXURE 6

INDEPENDENT REPORTING ACCOUNTANT’S AUDIT REPORT ON THE CONSOLIDATED HISTORICAL FINANCIAL INFORMATION

OF TSB SUGAR HOLDINGS

The Board of DirectorsRCL FoodsSix The BoulevardWestway Offi ce ParkWestville3629

Dear Sirs

Independent reporting accountant ’s audit report on the Consolidated Historical Financial Information of TSB Sugar Holdings Proprietary Limited (‘’TSB Sugar Holdings’’)

Introduction

RCL Foods Limited (“RCL Foods”) is issuing a circular to its shareholders (“the Circular”) regarding, inter alia, the proposed acquisition of TSB Sugar International Proprietary Limited and TSB Sugar RSA Proprietary Limited (“the TSB Acquisition”).

At your request and for the purpose of the Circular to be dated on or about 12 December 2013 , we have audited the Consolidated Historical Financial Information of TSB Sugar Holdings, which comprises the consolidated statement of fi nancial position as at 30 June 2013, 2012 and 2011 and the consolidated income statement and consolidated statement s of other comprehensive income, changes in equity and cash fl ows for the fi nancial periods then ended, and the notes, comprising a summary of signifi cant accounting policies and other explanatory information (“the Consolidated Historical Financial Information”), as presented in Annexure 5 to the Circular .

Responsibility

Directors’ responsibility

The directors of RCL Foods are responsible for the preparation, contents and presentation of the Circular and are responsible for ensuring that RCL Foods complies with the JSE Listings Requirements. The directors of TSB Sugar Holdings are responsible for the preparation and fair presentation of the Consolidated Historical Financial Information in accordance with International Financial Reporting Standards, and for such internal controls as the directors of TSB Sugar Holdings determine is necessary to enable the preparation of Consolidated Historical Financial Information that is free from material misstatement, whether due to fraud or error.

Reporting accountant’s responsibility

Our responsibility is to express an opinion on the Consolidated Historical Financial Information based on our audits. We conducted our audits in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements, and plan and perform the audits to obtain reasonable assurance whether the Consolidated Historical Financial Information of TSB Sugar Holdings is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Consolidated Historical Financial Information of TSB Sugar Holdings . The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the Consolidated Historical Financial Information, 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 Consolidated Historical Financial Information 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 of TSB Sugar Holdings, as well as evaluating the overall presentation of the Consolidated Historical Financial Information.

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

158

Opinion

In our opinion, the Consolidated Historical Financial Information of TSB Sugar Holdings as set out in Annexure 5 to the Circular, presents fairly, in all material respects, the fi nancial position of TSB Sugar Holdings at 30 June 2013, 2012 and 2011 and its fi nancial performance and cash fl ows for the fi nancial periods then ended in accordance with International Financial Reporting Standards and the relevant sections of the JSE Listings Requirements.

PricewaterhouseCoopers Inc.

Director: D.B. von HoesslinRegistered Auditor

Sunninghill4 December 2013

159

ANNEXURE 7

HISTORICAL FINANCIAL INFORMATION OF RCL FOODS

INTRODUCTION

The consolidated fi nancial information of RCL Foods for the three periods ended 30 June 2011, 30 June 2012 and 30 June 2013 is set out below. The annual fi nancial statements of RCL Foods for the last three fi nancial periods have been audited by PricewaterhouseCoopers Inc. An unqualifi ed audit opinion was issued in all three periods. The audited fi nancial statements for the three periods ended 30 June 2011, 30 June 2012 and 30 June 2013 will be available for inspection as described in Section E, paragraph 19 of th e Circular.

This report on historical fi nancial information is the responsibility of the directors of RCL Foods. No material fact or circumstance has occurred between the latest fi nancial year-end of RCL Foods and the Last Practicable Date.

No adjustments concerning the correction of fundamental errors or application of changes in accounting policies have been made in preparing the report of historical fi nancial information. Non-material adjustments have been made for comparative purposes only. There have been no subsidiaries, foreign subsidiaries included, whose fi nancial reports were not completed according to IFRS.

COMMENTARY ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Salient features

• Headline EBITDA decreased by 27.4% over the comparable 12 months in 2012

• HEPS from continuing operations decreased by 94.8% over the comparable 12 months in 2012

• Record chicken imports and feed raw material costs severely impacted the chicken market

• Net asset value per ordinary share of 1 228.8 cents at 30 June 2013 (985.2 cents at 30 June 2012)

• The Foodcorp Acquisition had a material impact on the statement of fi nancial position

Commentary

The year under review has been a tumultuous one characterised by uncertainty and volatility. Evidence that the global economy is on track for a sustained recovery proved elusive. Although crude oil prices declined sharply in early calendar 2013 on the back of a lacklustre global economy, poor demand and higher stocks, lingering geo-political concerns played their role in supporting prices.

South Africa posted a 2012 GDP growth rate of 2,5%, a fi gure that fell below aspirations as strife in the mining sector, especially in the latter part of calendar 2012, hurt economic growth and rattled foreign investors. The threat of protracted and violent industrial action continues to loom large. South Africa’s economic growth for 2013 is forecast at a meagre 1 .8%, a growth number that can’t be expected to help South Africa’s worsening unemployment fi gure of 25 .6%.

Over the course of the last 12 months the Rand weakened, fi rstly in response to the Marikana incident and then again sharply in the second quarter of calendar 2013 on concerns that the United States of America (‘’U.S.’’) Federal Reserve was to curtail its bond buying programme. The weaker rand has made imports more expensive, resulting in an already stressed consumer having to manage record fuel prices. Infl ation has remained within the Reserve Bank’s target band of 3% and 6%, though the full effect of higher fuel prices is expected to push the consumer price index through the 6% level in the months ahead. Interest rates have remained at record lows over the period. The Monetary Policy Committee fi nds itself in the unfortunate position of having little room to manoeuvre, as further rate cuts to stimulate growth risk pushing infl ation through the 6% level, hurting economically depressed households further.

Exchange rate volatility has continued during the current year. The R/USD exchange rate increased from R8 .38 at the beginning of the current fi nancial year to R9 .95 at the end of June 2013, an 18 .7% increase. The average year-on-year increase was 15%. As RCL Foods’ entire soya requirements are imported, the foreign exchange exposure is signifi cant.

The acquisition of Foodcorp has meant that the Group now has signifi cant exposure to the Euro through Foodcorp’s Senior Secured Notes. Partial hedges are in place, however, the Rand depreciated against the Euro in the two months since 1 May 2013 by 7 .9% from 11 .89 to 12 .83 at year-end.

160

Soft commodity procurement

During the period all commodities experienced signifi cant volatility and generally increasing price levels. Over the past decade the pressure on global grain stocks has risen as a consequence of the switch to biofuels in the U.S. and rising demand for food from the growing middle class in developing countries.

The drought in the US last year caused grain and oilseed prices to rise sharply. Higher food prices are part of a structural change in the global economy. As expected, there was some rebalancing as farmers planted more maize crops to take advantage of higher prices. Maize and soya are the key ingredients in Rainbow’s chicken feed, and wheat in Foodcorp’s milling and baking operations, and are therefore covered below.

Maize

The consequences of the drought in the US from June 2012 onwards resulted in the record high price for corn of $8,43 per bushel ($332 per ton) in August 2012 on CBOT. Although volatility remained high, the corn price declined during the reporting period to end at $6,79 per bushel ($267 per ton).

The high corn price encouraged producers in the US to increase corn planting during the US spring in 2013, resulting in the highest area planted to corn in decades.

Other areas in the world (South America and the former Soviet Union states) also increased plantings of corn. The impact of the expected replenishment of corn stock will only be seen after the current reporting period.

South African maize producers increased maize plantings during the spring of 2012 to 2,78 million hectares, up from the previous season’s fi gure of 2,69 million hectares. The maize crop experienced an excellent start during the early part of the season, giving rise to expectations of a crop size in the order of 13 million tons.

Production conditions remained excellent in the eastern part of the South African production area, but a drought in the western part of the Free State and the North West Province reduced the expected crop size to the latest offi cial fi gure of 11,39 million tons. This is down from the previous season’s crop size of 12,1 million tons.

Despite the tight stock situation, maize exports continued during the reporting period. The price of yellow maize peaked at R2 830/ton at the beginning of August 2012 and then subsequently declined to R2 220/ton at the end of June 2013.

The average market price for maize over the reporting period was R2 368/ton, which compares with the average market price of R2 246/ton for the previous period, an average increase of 5%.

Soya

The price of soybean meal as traded on CBOT commenced the fi nancial year at a price of $427 per short ton, increasing to a record high of $548 per short ton in August 2012 and then decreasing to $480 per short ton at the end of June 2013. The average market price for soybean meal for this period was $455 per short ton compared to the average market price of $351 per short ton over the previous 12-month period, an increase of 30%. The signifi cant volatility in the international price of soybean meal was driven by the severe drought in the US in 2012. More recently a record South American crop and the prospect of a record US crop later in the year could see CBOT prices return to the low $300 range.

Wheat

Local wheat prices have been at high levels throughout the reporting period. The average market price for local wheat for this period was R3 488/ton compared to the average market price of R2 849/ton over the previous 12-month period, an increase of 22%.

South Africa is a net importer of wheat and wheat prices are therefore correlated to international wheat prices and the exchange rate.

INCOME STATEMENT

Revenue increased by 28,7% for the year ended 30 June 2013 largely due to the inclusion of Foodcorp’s results for two months.

Despite the increase in revenue and inclusion of the Foodcorp results for two months, headline EBITDA decreased by 27,4% refl ecting the current diffi cult trading environment in the South African economy. Rainbow has experienced a diffi cult year with high import volumes and record feed input costs decimating margins. Whilst Rainbow’s added value products have delivered an acceptable performance, IQF products have sold below cost for most of the fi nancial year. Vector’s operating profi t decreased by 15,1% to R143,3 million due to investment in additional capacity and a slowdown in volumes in the second half of the year. Foodcorp’s operating profi t for the two months to June was R99,0 million but earnings were compromised due to a R70,9 million negative adjustment on the Euro denominated debt arising from the depreciation in the exchange rate from 1 May to 30 June.

161

Finance cost

The increase in net fi nance cost to R99,8 million is mainly a consequence of the signifi cant levels of debt in Foodcorp.

Foodcorp debt and hedging profi le

First priority Senior Secured Notes

On 4 March 2011, Foodcorp issued €390,0 million Senior Secured Notes with a coupon rate of 8,75% per annum and a maturity date of 1 March 2018.

Payments under the 2018 Senior Secured Notes consist of two components, namely the principal due on 1 March 2018 and coupon payments due semi-annually on 1 September and 1 March. In order to hedge the foreign currency exposure, the following foreign exchange contracts were entered into:

• The principal was hedged 50% through a performance participating foreign exchange contract and 50% through a vanilla forward exchange contract, both for six years maturing on 1 March 2017

• The semi-annual coupon payments have been partially hedged (50%) at inception using forward exchange contracts maturing on each coupon payment date, until 1 March 2017.

The mark-to-market effects of the hedging arrangements are accounted for in the income statement under fi nancing costs.

Payment-in-kind (PIK) note debt instrument

During May 2013 the Group repurchased and held a €52,9 million PIK note within the Foodcorp funding structure. The principal amount and accrued interest are eliminated for the RCL Foods consolidated accounts.

Effective tax rate

The effective tax rate has increased from 35,0% to 113,5%. The abnormal tax rate is largely due to non-deductible transaction costs (R45,6 million) and the non-allowance of certain funding costs and foreign exchange losses (R83,0 million) within the Foodcorp holding structure.

STATEMENT OF FINANCIAL POSITION

The Foodcorp Acquisition during the current fi nancial year has had a signifi cant impact on the Group’s statement of fi nancial position with IFRS 3 (Statement of Business Combinations) requiring recognition of net assets acquired at fair value. This resulted in assets and liabilities acquired on 1 May 2013 amounting to R6,6 billion and R7,8 billion, respectively. The purchase price of the Foodcorp Acquisition was R1,0 billion resulting in goodwill of R2,6 billion being recognised after the completion of a preliminary purchase price allocation (PPA) exercise. The statement of fi nancial position refl ects an increase in working capital balances due to the scale of the Foodcorp business. Certain key items are highlighted below.

Non-current assets

Property, plant and equipment (PP&E)

In addition to the R1 611,8 million of PP&E acquired as part of Foodcorp, capital expenditure for the 12-month period was R477,0 million (2012: R451,0 million). Signifi cant individual capex initiatives included the Rustenburg and Bushvalley expansions (R137,0 million), conversion of chicken house heating from gas to coal (R71,8 million) and investment in additional freezing and chilling capacity in Worcester (R44,2 million). All expansion capex spend related to prior year approvals was completed in the current fi nancial year.

Intangible assets

Trademarks and customer relationship intangible assets of R2,9 billion were recognised on the acquisition of Foodcorp. The signifi cant value of these intangibles acquired shows the wealth of the brands added to the Group by the Foodcorp Acquisition. Capital expenditure relating to intangible assets amounted to R8,9 million (2012: R29,9 million) and is mainly in respect of Rainbow’s continued investment in the SAP ERP system which went live on 1 July 2012.

The investment in joint venture relates to the purchase of 49,0% of Zambeef’s shareholding in Zam Chick Limited for US$14,25 million (R129,0 million) (‘’Zam Chick’’).

Current assets and current liabilities

The movement in inventories, trade and other receivables and trade and other payables are all largely attributable to the inclusion of Foodcorp. The valuation of inventories and biological assets have also increased due to higher raw material and feed prices and Vector’s take-on of the new Customer Secondary Distribution (“CSD”) customers. Despite diffi cult economic conditions, trade debtors continue to be well managed across the Group.

162

The preference shares receivable of R130,3 million relates to amounts receivable from the Foodcorp management share ownership structure, which has been settled subsequent to year-end as part of the acquisition of management’s shares.

The sale agreement that has been entered into to dispose of the Fishing division of Foodcorp has resulted in R536,6 million of assets and R178,7 million of liabilities being classifi ed as held for sale. Completion of the transaction is subject to the fulfi lment of certain conditions, including approval by the South African competition authorities.

The signifi cant increase in derivative assets of R340,7 million primarily relates to the hedging arrangements put in place in order to hedge the foreign currency exposure on the Foodcorp foreign debt.

Cash on hand and investment in money market fund has increased from R305,8 million in 2012 to R2 763,2 million in 2013 as a result of the R3,9 billion rights offer in January 2013, offset by the Foodcorp and Zam Chick investments.

Non-current liabilities

The deferred tax of R1 409,3 million (2012: R432,7 million) arises from numerous temporary differences across the Group. The signifi cant increase has arisen due to the inclusion of Foodcorp.

The post-retirement medical obligation of R155,4 million (2012: R108,6 million) arises from the actuarial valuation of the Group’s potential liability arising from post-retirement medical aid contributions in respect of current and future retirees. This liability is unfunded. The obligation of the RCL Foods Group to pay medical aid benefi ts after retirement is no longer part of the conditions of employment for Rainbow employees engaged after 1 October 2003 and for Vector employees engaged after 1 January 1997. Foodcorp provides post-retirement medical benefi ts to certain retired employees. The Group has an unrecognised actuarial loss of R14,9 million (2012: R14,2 million) which arises mainly due to differences in the actuarial assumptions applied from year to year. This actuarial loss will be recognised to the extent that it is in excess of 10% of the obligation over the remaining working lives of the participating employees.

The signifi cant increase in interest-bearing liabilities primarily relates to Foodcorp’s €390,0 million Senior Secured Notes. These liabilities are offset by a positive R340,7 million of derivative fi nancial instruments relating to the hedging structure.

Gearing and capital structure

Year-end gearing of 83,5% (interest-bearing liabilities to equity) is higher than management’s view of the optimal capital structure. Net gearing, taking into account cash and cash equivalents and investment in money market fund at the reporting date is 44,3%. The short-term focus will be to eliminate intragroup debt ineffi ciencies within the funding structure and to assess capital requirements taking into account future investment opportunities.

Minority interests

A minority interest of R331,4 million has been refl ected in the statement of changes in equity and arose due to the outside shareholding in Foodcorp by Foodcorp management and Capitau Investment Advisory (Proprietary) Limited. The minority interest value has been determined on the basis of a minority interest stake with no control premium included.

Cash fl ow and working capital

Cash generated by operations increased by 32,2% or R162,9 million in comparison to the prior period. The increase in cash generation is attributable to the inclusion of the Foodcorp results for two months which has been offset to a certain degree by the negative cash generation in Rainbow as a result of poor trading results.

The R117,3 million increase in inventories and biological assets was mainly impacted by Vector’s take-on of the new CSD customers. The higher feed commodity prices also impacted the valuation of feed raw materials and biological assets. Offsetting the inventory increase, trade and other payables were R160,7 million higher than the comparative period.

The lower net tax outfl ow of R60,9 million is a function of the lower 2013 taxable profi t base with Rainbow and Foodcorp in a nil tax paying position.

163

Cash movement (including investment in money market funds) for the period is summarised as follows:

Rm

Opening balance 305,8Operating profi t adjusted for non-cash fl ow items 516,8Working capital changes 152,5Net fi nance income 43,4Tax paid (61,0)Dividends paid (94,4)Capital expenditure (including intangibles) (485,9)Acquisition of subsidiary and joint venture (875,9)Issue of shares 3 881,0Interest-bearing liabilities (715,3)Discontinued operation – net cash infl ows 52,4Other 43,8

Closing balance 2 763,2

Return on equity

Return on equity decreased to 0,5% (2012: 9,3%) being impacted by Rainbow’s poor operating performance.

164

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Note

30 June 2013

R’000

30 June 2012

R’000

30 June 2011

R’000

ASSETSNon-current assets 9 557 596 2 141 390 1 887 452

Property, plant and equipment 1 3 647 206 1 824 072 1 600 008Intangible assets 2 5 777 108 317 318 287 444Deferred income tax asset 17 4 327Investment in joint venture 3 128 955

Current assets 7 794 864 3 054 901 2 880 851

Inventories 5 1 322 055 873 040 664 804Biological assets 6 537 059 476 427 445 226Trade and other receivables 7 2 111 849 1 347 671 1 259 552Preference shares receivable 4 130 275Derivative fi nancial instruments 8 361 505 20 811Tax receivable 32 325 31 160 41 773Cash and cash equivalents 2 313 191 305 792 469 496Investment in money market fund 450 000Assets of disposal group classifi ed as held for sale 9 536 605

Total assets 17 352 460 5 196 291 4 768 303

EQUITY

Stated capital 10 5 079 194 1 198 253 1 189 684Share-based payments reserve 11 185 188 160 724 138 788Other reserves 12 1 041Retained earnings 1 479 480 1 547 382 1 527 861Equity attributable to equity holders of the company 6 744 903 2 906 359 2 856 333Non-controlling interests 311 306

Total equity 7 056 209 2 906 359 2 856 333

LIABILITIESNon-current liabilities 7 177 269 606 884 474 360

Interest-bearing liabilities 15 5 515 289 65 642Deferred income tax liabilities 17 1 409 273 432 655 372 198Preference share liabilities 13 72 959Retirement benefi t obligations 14 155 350 108 587 102 162Trade and other payables 16 24 398

Current liabilities 3 118 982 1 683 048 1 437 610

Trade and other payables 16 2 630 899 1 648 147 1 433 243Interest-bearing liabilities 15 297 229 33 243Preference share liabilities 13 5 089Derivative fi nancial instruments 8 5 766 3 3 469Current income tax liabilities 1 343 1 655 898Liabilities of disposal group classifi ed as held for sale 9 178 656

Total liabilities 10 296 251 2 289 932 1 911 970

Total equity and liabilities 17 352 460 5 196 291 4 768 303

165

CONSOLIDATED INCOME STATEMENT

Note

12 months ended

30 June2013

R’000

12 months ended

30 June2012

R’000

15 months ended

30 June2011

R’000

Continuing operationsRevenue 10 108 812 7 855 142 8 621 389

Operating profi t before depreciation and amortisation (EBITDA) 444 321 614 510 762 617Depreciation and amortisation 18 (278 294) (200 286) (210 340)

Operating profi t 19 166 027 414 224 552 277Finance costs 20 (153 675) (11 358) (1 808)Finance income 21 53 874 7 370 21 520

Profi t before tax 66 226 410 236 571 989Income tax expense 22 (75 148) (143 469) (188 139)

(Loss)/ Profi t after tax from continuing operations (8 922) 266 767 383 850Profi t for the period from discontinued operation 9 15 311

Profi t for the year 6 389 266 767 383 850

Profi t for the period attributable to:Equity holders of the company 26 507 266 767 383 850Non-controlling interests (20 118)

6 389 266 767 383 850

Earnings per share from continuing and discontinued operationsattributable to equity holders of the company 23Basic earnings per shareFrom continuing operations (cents) 4,3 88,3* 131,0From discontinued operation (cents) 2,5

From profi t for the period attributable to equity holders of the company (cents) 6,8 88,3 131,0

Diluted earnings per shareFrom continuing operations (cents) 4,3 88,1* 130, 1From discontinued operation (cents) 2,5

From profi t for the period (cents) 6,8 88,1 130, 1

* Adjusted for the effects of the rights offer, refer to Note 23.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

2013 R’000

2012 R’000

2011R’000

Profi t for the year 6 389 266 767 383 850Other comprehensive incomeItems that may be reclassifi ed subsequently to profi t or loss:Cash fl ow hedges 1 019Currency translation differences 22

Other comprehensive income for the year, net of tax 1 041

Total comprehensive income for the year 7 430 266 767 383 850

Total comprehensive income for the year attributable to:Equity holders of the company 27 548 266 767 383 850Non-controlling interests (20 118)

7 430 266 767 383 850

166

CONSOLIDATED STATEMENT OF CASH FLOWS

12 months ended

30 June 2013

R’000

12 months ended

30 June 2012

R’000

1 5 months ended

30 June 2011

R’000

NoteInfl ow/

(outfl ow)Infl ow/

(outfl ow)Infl ow/

(outfl ow)

CASH FLOWS FROM OPERATING ACTIVITIESCash generated by operations A 669 279 506 369 643 331Finance costs paid (8 599) (11 358) (1 808)Finance income received 51 980 7 370 21 520Net cash infl ows from operating activities – discontinued operation 53 293Tax paid B (60 938) (71 642) (170 448)

Cash available from operating activities 705 015 430 739 492 595

Dividends paid (94 409) (247 246) (222 540)

Net cash infl ow from operating activities 610 606 183 493 270 055

CASH FLOWS FROM INVESTING ACTIVITIES

Replacement property, plant and equipment (298 083) (305 354) (169 251)

Expansion property, plant and equipment (178 921) (56 805) (190 789)Intangible asset additions (8 853) (26 248)Acquisition of subsidiary C (747 008) (92 500)Acquisition of joint venture (128 955)Proceeds on disposal of property, plant and equipment 2 581 26 256 7 787Proceeds on preference shares receivable 41 264Investment in money market fund (450 000)Net cash outfl ow from investing activities – discontinued operation (759)

Net cash outfl ow from investing activities (1 768 734) (454 651) (352 253)

CASH FLOWS FROM FINANCING ACTIVITIES

Repayments of interest-bearing liabilities (827 777)Advances of interest-bearing liabilities 112 472 98 885Issue of shares 3 880 941 8 569 12 627Net cash outfl ow from fi nancing activities – discontinued operation (109)

Net cash infl ow from fi nancing activities 3 165 527 107 454 12 627

Net movement in cash and cash equivalents 2 007 399 (163 704) (69 571)Cash and cash equivalents at the beginning of the year 305 792 469 496 539 067

Cash and cash equivalents at the end of the year D 2 313 191 305 792 469 496

167

12 months ended

30 June 2013

12 months ended

30 June 2012

15 months ended

30 June 2011

R’000 R’000 R’000

A. CASH GENERATED BY OPERATIONSOperating profi t 166 027 414 224 552 277Adjusted for:Depreciation and amortisation 278 294 200 286 210 340Loss on disposal of property, plant and equipment 1 906 427 6 834Movement in retirement benefi t obligations 6 677 6 425 7 492Movement in derivative fi nancial instruments – non-cash fl ow hedges 17 685 (24 277) 2 465Fair value adjustment in biological assets (1 513) 2 767 (10 500)Unrealised foreign exchange gains 14 630Share-based payments – BEE charge 3 336 3 383 4 260Share-based payments – Employee Share Option Scheme 21 128 18 553 17 954Cash fl ow hedges released 2 737Other non-cash items 5 905

516 812 621 788 791 122

Working capital changes:Movement in inventories (58 176) (208 236) (126 391)Movement in biological assets (59 119) (33 968) (11 928)Movement in trade and other receivables 109 106 (88 119) (104 905)Movement in trade and other payables 160 656 214 904 95 433

152 467 (115 419) (147 791)

669 279 506 369 643 331

B. TAX PAIDAmount refundable at the beginning of the year 29 505 40 875 6 690Acquisition of subsidiary (149)Charged to the income statement (59 312) (83 012) (136 263)Normal tax (59 157) (60 930) (131 979)Prior year over provision (155) 2 642 17 970Secondary Tax on Companies (24 724) (22 254)Amount refundable at the end of the year (30 982) (29 505) (40 875)

(60 938) (71 642) (170 448)

C. ACQUISITION OF SUBSIDIARY/BUSINESS COMBINATIONCash paid for subsidiary (1 026 225) (92 500)Cash acquired from business 279 217

(747 008) (92 500)

D. CASH AND CASH EQUIVALENTS

Cash and cash equivalents include restricted balances of R39 .2 million (2012: R29 .7 million). Restricted cash balances consist of initial margin balances with the JSE Limited which serve as collateral for derivative positions held at year-end. This cash will only be accessible by the Group when the related derivative positions are closed. Certain cash and cash equivalents have been pledged as security for certain borrowings (refer to note 15).

The carrying amount of cash and cash equivalents approximates their fair value.

168

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169

ACCOUNTING POLICIES FOR THE YEAR ENDED 30 JUNE 2013

BASIS OF PREPARATION

The RCL Foods Group and Company fi nancial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), IFRIC interpretations, SAICA Financial Reporting guides, the requirements of the Companies Act of South Africa and the Listings Requirements of the JSE Limited under the supervision of the Chief Financial Offi cer, Robert Field, CA(SA). The fi nancial statements have been prepared using the historical cost convention, except for biological assets and fi nancial instruments at fair value through profi t and loss. The accounting policies comply with IFRS and have been consistently applied to all years presented except for the amendments to IAS 1 (Presentation of Financial Statements) that became effective 1 July 2012. The adoption of this standard has no effect on the results, nor has it required any restatement of the results.

The preparation of fi nancial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity or where assumptions and estimates are signifi cant to the consolidated fi nancial statements, are disclosed on page 178.

BASIS OF CONSOLIDATION

Subsidiaries

Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the fi nancial 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. The Group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the fi nancial and operating policies by virtue of de facto control.

De facto control may arise in circumstances where the size of the Group’s voting rights relative to the size and dispersion of holdings of other shareholders give the Group power to govern the fi nancial and operating policies.

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 Group applies the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date through profi t or loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profi t or loss or as a change to other comprehensive income. Contingent consideration that is classifi ed as equity is not re-measured, and its subsequent settlement is accounted for within equity.

Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to refl ect changes in consideration arising from contingent consideration amendments. Cost also includes direct attributable costs of investment.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifi able net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised in profi t or loss.

Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Profi ts and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

170

Changes in ownership in subsidiaries without Group control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions, that is as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains and losses on disposals to non-controlling interests are also recorded in equity.

Disposal of subsidiaries

When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profi t and loss. The fair value is the initial carrying amount for the purpose of subsequently accounting for the retained interest as an associate, joint venture or fi nancial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassifi ed to profi t and loss.

Joint ventures

Entities that are jointly controlled through contractual arrangements between the Group and other parties are classifi ed as joint ventures and accounted for according to the equity method. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of profi t or loss of the investee after the date of acquisition.

The Group determines at each reporting date whether there is any objective evidence that the joint venture is impaired. If this is the case, the Group calculates the amount of the impairment as the difference between the recoverable amount of the joint venture and its carrying value and recognises the amount adjacent to share of profi t/(loss) of associates in the income statement.

Accounting treatment for subsidiaries in company fi nancial statements

Dividend income from subsidiaries is recognised in the income statement when the right to receive payment is established.

FOREIGN CURRENCY TRANSLATION

(Functional and presentation currency)

Items included in the fi nancial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The functional currency of the Group and the presentation currency of the Group is Rand.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash fl ow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within “fi nance income or costs”. All other foreign exchange gains and losses are presented in the income statement within “other (losses)/gains”. Translation differences related to changes in amortised cost are recognised in profi t and loss, and other changes in carrying amount are recognised in other comprehensive income.

Translation differences on non-monetary fi nancial assets and liabilities such as equities held at fair value through profi t and loss are recognised in profi t and loss as part of the fair value gain or loss. Translation differences on non-monetary fi nancial assets, such as equities classifi ed as available for sale, are included in other comprehensive income.

The results and fi nancial position of all the Group entities (none of which has the currency of a hyper-infl ationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each statement of fi nancial position presented is translated at the closing rate at the date of that statement of fi nancial position;

• income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions) ; and

• all resulting exchange differences are recognised in other comprehensive income.

171

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at historical cost less accumulated depreciation less impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the assets. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefi ts associated with the item will fl ow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance costs are charged to the income statement during the fi nancial period in which they are incurred.

Depreciation is provided on property, plant and equipment at rates that reduce the cost thereof to estimated residual values over the expected useful lives of the asset on a straight-line basis. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Where assets are identifi ed as being impaired, that is when the recoverable amount has declined below its carrying amount, the carrying amount is reduced to refl ect the decline in value.

Gains or losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the income statement.

Depreciation is calculated over the following estimated useful lives:

Buildings 20 to 50 years

Leasehold improvements period of lease

Plant and equipment

– capitalised and owned 3 to 25 years

Vehicles

– capitalised and owned 3 to 8 years

Furniture 10 to 20 years

Capital work in progress is not depreciated until such a time as the asset is available for use.

Land is not depreciated.

INTANGIBLE ASSETS

Trademarks and customer relationships

Separately acquired trademarks are shown at historical cost. Trademarks and customer relationships acquired in a business combination are recognised at fair value at the acquisition date.

The useful lives of trademarks are assessed to be either fi nite or indefi nite. The useful lives of customer relationships are considered to be fi nite. Trademarks with fi nite lives and customer relationships are amortised over the useful life on a straight-line basis and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Amortisation periods and amortisation methods are reviewed annually.

The useful lives of intangible assets are as follows:

Trademarks Indefi nite/15 years

Customer relationships 10 to 20 years

Trademarks with indefi nite lives are not amortised but are reviewed annually to determine whether indefi nite life assessment continues to be supportable. If not, the change in the useful life assessment to a fi nite life is made on a prospective basis. These tests are done either individually or at the cash-generating level. Factors considered in reaching a conclusion include the economic viability of the asset itself and where it is a component of a larger economic unit, the viability of that unit itself.

Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Group’s interest in net fair value of the net identifi able assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree. It is reported in the statement of fi nancial position as a non-current asset and carried at cost less accumulated impairment losses. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level. Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is recognised immediately as an expense and is not subsequently reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

172

Computer software

Costs associated with maintaining computer software programs are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifi able and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met:

• it is technically feasible to complete the software product so that it will be available for use;

• management intends to complete the software product to use;

• there is an ability to use or sell the software product;

• the software product will generate probable future economic benefi ts;

• adequate technical, fi nancial and other resources to complete the development and to use are available; and

• the expenditure attributable to the software product during its development can be reliably measured.

Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads.

Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

Computer software development costs recognised as assets are amortised over their estimated useful lives, which does not exceed 10 years and are stated at cost less accumulated amortisation.

IMPAIRMENT OF NON-FINANCIAL ASSETS

Assets that have an indefi nite useful life, for example goodwill and certain trademarks, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifi able cash fl ows (cash-generating units). Non-fi nancial assets other than goodwill, that were impaired, are reviewed for possible reversal of the impairment at each reporting date.

DISPOSAL GROUPS HELD FOR SALE

Disposal groups are classifi ed as assets and liabilities held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less cost to sell.

INVENTORIES

Finished goods, raw materials, ingredients and consumables are valued at the lower of cost, determined on a fi rst-in fi rst-out basis, and net realisable value. Costs include expenditure incurred in acquiring the inventories and bringing them to their present location and condition, all direct production costs and an appropriate portion of overheads based on normal capacity. Slaughtered chickens are transferred to inventory at fair value less estimated point-of-sale costs. Net realisable value is the estimated selling price in the ordinary course of business, less estimated selling expenses.

BIOLOGICAL ASSETS

Live broiler birds and breeding stock are measured at fair value less estimated point-of-sale costs at reporting dates. Fair value is determined based on market prices or, where market prices are not available, by reference to sector benchmarks.

Breeding stock includes the Cobb grandparent breeding and the parent rearing and laying operations. Broiler hatching eggs are included in breeding stock.

Gains and losses arising on the initial recognition of biological assets at fair value less estimated point-of-sale costs and from a change in fair value less estimated point-of-sale costs are recognised in the income statement in the period in which they arise.

STATED CAPITAL

Ordinary shares are classifi ed as equity.

Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

173

Treasury shares

Shares in the company held by the Group companies are classifi ed as treasury shares and are held at cost. These shares are treated as a deduction from the issued number of shares and taken into account in the calculation of the weighted average number of shares. The cost price of the shares is deducted from the Group’s equity.

CURRENT AND DEFERRED TAX

The tax expense for the period comprises current and deferred tax.

The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation, and establishes provisions where appropriate on the basis of amounts expected to be paid to tax authorities.

Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively.

Deferred tax is calculated using tax rates that have been enacted or substantively enacted at the reporting date and that are expected to apply to the period when the liability is settled or asset realised. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the fi nancial statements and the corresponding tax value used in the computation of taxable income. Deferred tax assets are raised only to the extent that their recoverability is probable.

A deferred tax liability is recognised for taxable temporary differences arising on investments in subsidiaries and joint ventures except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that suffi cient taxable profi ts will be available to allow all or part of the asset to be recovered.

However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profi t or loss.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same tax authority and the Group intends to settle its current tax assets and liabilities on a net basis.

SECONDARY TAX ON COMPANIES (STC)

STC was provided on dividend payments made before 1 April 2012, net of dividends received, and was recognised as a taxation charge. STC was abolished effective 1 April 2012 and has been replaced by a new withholding tax which is levied on the shareholder and not the company, with the exception of non-cash dividends.

EMPLOYEE BENEFITS

Retirement funds

The Group has defi ned contribution plans. A defi ned contribution plan is a pension plan under which the Group pays fi xed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold suffi cient assets to pay all employees the benefi ts relating to employee service in current and prior periods.

The assets of the plans are held in separate trustee-administered funds. These plans are funded by payments from the employees and the Group, taking into account recommendations of independent qualifi ed actuaries.

The Group’s contributions to the defi ned contribution pension plans are charged to the income statement in the period to which they relate.

Post-retirement medical benefi ts – Defi ned benefi t plan

For Rainbow and Vector employees engaged pre-October 2003 and January 1997, respectively, the Group provides post-retirement medical benefi ts to its retirees. Foodcorp provides post-retirement medical benefi ts to certain retired employees. The entitlement to post-retirement medical benefi ts is based on the employees remaining in service up to retirement age. The projected unit credit method of valuation is used to calculate the liability for post-retirement medical benefi ts and is calculated annually by independent actuaries.

174

If the cumulative unrecognised actuarial gains and losses at the end of the previous reporting period exceed 10% of the obligation, that excess is recognised in future periods over the expected average remaining working lives of the participating employees in the income statement. Past service costs are recognised in the income statement in the period that they arise.

Bonus plan

The Group recognises a liability where contractually obliged or where there is past practice that has created a constructive obligation. Management participates in a bonus plan whereby bonuses are paid in respect of out-performance against targets. All bonuses are authorised by the Remuneration and Nominations Committee.

Share-based payments

The Group operates share-based compensation plans under which the Group receives services from employees as consideration for equity instruments (options and rights) of the Group. The fair value of the employees’ services received in exchange for the grant of the options or rights is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted:

• including any market performance conditions;

• excluding the impact of any service and non-market performance vesting conditions; and

• including the impact of any non-vesting conditions.

Non-market performance and service conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specifi ed vesting conditions are satisfi ed.

The fair value determined at the grant date is expensed on a straight-line basis over the vesting period with a corresponding increase in equity and is based on the Group’s estimate of options that will eventually vest. Fair value is measured by the use of a binomial model excluding non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options and rights that are expected to vest.

At each reporting date, the Group revises its estimates of the number of options or rights that are expected to vest based on non-market vesting conditions. The Group recognises the impact on the original estimates, if any, in the income statement with a corresponding adjustment to equity.

When the options or rights are exercised, the company issues new shares. The proceeds, net of any directly attributable transaction costs received, are credited to share capital when the options or rights are exercised.

The grant by the Group of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity in the parent entity accounts.

BEE TRANSACTIONS

BEE transactions where the Group receives or acquires goods or services as consideration for the issue of equity instruments of the Group are treated as share-based payment transactions.

BEE transactions where employees are involved are measured and accounted for on the same basis as share-based payments as disclosed above.

Transactions in which share-based payments are made to parties other than employees are measured by reference to the fair value of equity instruments granted if no specifi c goods or services are received. Vesting of the equity instrument occurs immediately and an expense and related increase in equity is recognised on the date that the instrument is granted. No further measurement or adjustments are required as it is presumed that the BEE credentials are received upfront.

LEASES

Leases of property, plant and equipment where the Group assumes substantially all of the risks and rewards of ownership are classifi ed as fi nance leases. Finance leased assets are capitalised at the lease’s commencement at the lower of the fair value of the leased asset and the present value of the future minimum lease payments. Each lease payment is allocated between the liability and fi nance charges so as to achieve a constant rate on the fi nance balance outstanding. The corresponding rental obligations, net of fi nance charges, are included in non-current liabilities. The assets are depreciated over the shorter of the period of the lease or the period over which the particular category of asset is otherwise depreciated. Lease fi nance charges are charged to the income statement over the term of the relevant lease using the effective interest rate method.

175

Leases where the lessor retains a signifi cant portion of the risks and rewards of ownership are classifi ed as operating leases. Payments made under operating leases are charged to the income statement on a straight-line basis over the period of the lease.

The Group ensures that the following two requirements are met in order for an arrangement transacted by the Group to be classifi ed as a lease:

• fulfi lment of the arrangement is dependent on the use of an asset or assets, and this fact is not necessarily explicitly stated by the contract but rather implied; and

• the arrangement in substance conveys a right to use the asset.

The Group’s assessment of whether an arrangement contains a lease is made at the inception of the arrangement, with reassessment occurring in the event of limited changes in circumstances.

Where the Group concludes that it is impracticable to separate payments for the lease from other payments required by the arrangement:

• in the case of a fi nance lease, the Group recognises an asset and a liability at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed fi nance charge on the liability is recognised using the Group’s incremental borrowing rate of interest; and

• in the case of an operating lease, all payments under the arrangement are treated as lease payments.

REVENUE

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is disclosed net of value added tax, returns, rebates and discounts and after eliminating sales within the Group.

Sales of goods comprise the sale of milling, agricultural produce and consumer goods. Sales of services comprise logistics and distribution services where the Group acts as an agent on behalf of a principal and earns commission and fees.

Revenue is recognised when a Group entity has delivered products to the customer (in the case of services when the underlying products have been delivered), the customer has accepted the products, the amount of revenue can be reliably measured, and collectability of the related receivable is reasonably assured.

The Group bases its estimates of incentive rebates and settlement discounts on historical results.

Interest income

Interest income is recognised using the effective interest method. When a loan and receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash fl ow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans and receivables is recognised using the original effective interest rate.

FINANCIAL INSTRUMENTS

Financial instruments recognised on the statement of fi nancial position include investments, preference shares, derivative instruments, trade and other receivables, cash and cash equivalents, investment in money market funds, trade and other payables and interest-bearing debt. Financial instruments are recognised when the Group is party to a contractual arrangement and are initially measured at fair value.

The Group classifi es its fi nancial assets at fair value through profi t and loss and loans and receivables. The classifi cation depends on the purpose for which the fi nancial assets were acquired. Management determines the classifi cation of its fi nancial assets at initial recognition.

Financial instruments at fair value through profi t and loss

Financial assets at fair value through profi t and loss, which comprise derivative instruments, unless designated as hedges, are fi nancial assets held for trading. A fi nancial asset is classifi ed in this category if acquired principally for the purpose of selling in the short-term. Assets in this category are classifi ed as current assets. Gains or losses arising from changes in the fair value of the fi nancial assets at fair value through profi t and loss are recognised in the income statement in the period in which they arise.

Financial assets carried at fair value through profi t and loss are initially recognised at fair value and transaction costs are expensed in the income statement.

176

Loans and receivables

Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classifi ed as non-current assets. The Group’s loans and receivables comprise trade and other receivables, preference shares receivable and cash and cash equivalents in the statement of fi nancial position.

Investment in money market funds

Investment in money market funds relate to investments in shares in liquidity funds of which the underlying investments have maturities of up to one year. The shares in these funds are callable on a daily basis.

Derecognition

Financial assets (or a portion thereof) are derecognised when the Group has substantially transferred all risks and rewards of ownership. On derecognition, the difference between the carrying amount of the fi nancial asset and the proceeds receivable is included in the income statement.

Financial liabilities (or a portion thereof) are derecognised when the obligation specifi ed in the contract is discharged, cancelled or expires. On derecognition, the difference between the carrying amount of the fi nancial liability, including related unamortised costs, and any amount paid is included in the income statement.

Recognition and measurement

Regular purchases and sales of fi nancial assets are recognised on the trade-date, the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all fi nancial assets not carried at fair value through profi t and loss.

Accounting for derivative fi nancial instruments and hedging activities

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as hedges of highly probable forecast transactions (cash fl ow hedge).

The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash fl ows of hedged items.

The fair values of various derivative instruments used for hedging purposes are disclosed in note 8. Movements on the hedging reserve in shareholders’ equity are shown in the statement of changes in equity.

Trading derivatives are classifi ed as a current asset or liability. The full fair value of a hedging derivative is classifi ed as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months and, as a current asset or liability, if the maturity of the hedged item is less than 12 months.

Cash fl ow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash fl ow hedges are recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.

Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item will affect profi t and loss (for instance when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non-fi nancial asset (for example, inventory) or a liability, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.

Derivatives that do not qualify for hedge accounting

Certain derivative instruments do not qualify for hedge accounting and are accounted for at fair value through profi t and loss. Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognised immediately in the income statement.

177

Forward commitments to purchase maize for own use and consumption are designated executory in nature, and excluded from the fair value adjustment. Embedded derivatives are treated as separate derivatives when their risk and characteristics are not closely related to those of the host contract.

Impairment of fi nancial assets

Assets carried at amortised cost

The Group assesses at the end of each reporting date whether there is objective evidence that a fi nancial asset or group of fi nancial assets is impaired. A fi nancial asset or a group of fi nancial 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 fl ows of the fi nancial asset or group of fi nancial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a group of debtors is experiencing signifi cant fi nancial diffi culty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other fi nancial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash fl ows, such as changes in arrears or economic conditions that correlate with defaults.

For the loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows (excluding future credit losses that have not been incurred) discounted at the fi nancial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the income statement. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the income statement.

Fair value estimation

The fair value of fi nancial instruments traded in active markets (such as publicly traded derivatives) is based on quoted market prices at the statement of fi nancialposition date. The quoted market price used for fi nancialassets held by the Group is the current market price; the appropriate quoted market price for fi nancial liabilities is the current ask price.

The fair value of fi nancial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. The Group used a variety of methods and makes assumptions that are based on market conditions existing at each statement of fi nancial position date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt. Other techniques, such as estimated discounted cash fl ows, are used to determine fair value for the remaining fi nancial instruments. The fair value of forward exchange contracts is determined using forward exchange market rates at the statement of fi nancial position date.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of fi nancial liabilities for disclosure purposes is estimated by discounting the future contractual cash fl ows at the current market interest rate that is available to the Group for similar fi nancial instruments.

Trade and other receivables

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classifi ed as current assets. If not, they are presented as non-current assets. Trade receivables and preference shares are recognised initially at fair value and are subsequently measured at amortised cost using the effective interest rate method, less accumulated impairment losses. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Signifi cant fi nancial diffi culties or delinquency in payments are considered to be indicators that trade receivables are impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash fl ows discounted at the original effective interest rate. The difference is recognised as an expense in the income statement. When a trade receivable is uncollectable it is written off against the provision account for trade receivables. Subsequent recoveries of amounts previously written off are credited in the income statement.

178

Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held on call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts.

Trade and other payables

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.

Accounts payable are classifi ed as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

Foreign borrowings are valued at spot rates at year-end and changes in fair value are accounted for in terms of hedging accounting policy.

Preference shares

Preference shares are mandatorily redeemable on a specifi c date and are thus classifi ed as liabilities. The dividends on these preference shares are recognised in the income statement as fi nance costs.

Offset

Financial assets and fi nancial liabilities are offset if there is a currently enforceable legal right to offset and there is an intention either to settle on a net basis or to realise the asset and settle the liability simultaneously.

DIVIDEND DISTRIBUTION

Dividend distribution to the company’s shareholders is recognised as a liability in the Group’s fi nancial statements in the period in which the dividends are approved by the company’s Board.

OPERATING SEGMENTS

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identifi ed as the Chief Executive Offi cer.

STATEMENT OF COMPREHENSIVE INCOME LINE ITEMS

The following additional line items, headings and subtotals are presented on the face of the income statement as management believes them to be relevant to the understanding of the Group’s fi nancial performance:

• operating profi t before depreciation and amortisation, being the trading income of the Group.

CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The key assumptions and sources of estimation uncertainty at the reporting date that could have signifi cant risk of causing material adjustment to the carrying amounts of the assets and liabilities within the new fi nancial year:

Useful lives and residual values of assets

Items of property, plant and equipment are depreciated over their useful lives taking into account residual values. Useful lives and residual values are reviewed annually, taking into account factors such as the expected usage, physical output, market demand for the output of the assets and legal or similar limits on the assets.

Impairment of assets

In view of the losses being incurred in Rainbow, and in compliance with the requirements of IAS 36 (Impairment of Assets), the Board of Rainbow and RCL Foods have considered the need for an impairment of assets. Based on the outcome of the discounted cash fl ow model and the need to await the outcome of the application for anti-dumping protection, the Boards have decided that it would be inappropriate to impair poultry assets at this point. It must however be stated that if there is not a notable improvement in operating margins within the next 12 months then an impairment of assets will become necessary.

179

Goodwill and trademarks

Goodwill and indefi nite life trademarks are considered for impairment at least annually.

Determining whether goodwill is impaired requires an estimation of the value-in-use of the cash-generating units to which goodwill has been allocated. The value-in-use calculation requires the entity to estimate the future cash fl ows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value of future cash fl ows. Management estimates the discount rate using pre-tax rates that refl ect current market assessments of the time value of money and risks specifi c to the cash-generating units. The growth rates are based on industry and customer growth forecasts.

Determining whether trademarks are impaired requires an estimation of the value-in-use of the trademark. The value-in-use calculation requires the entity to estimate the future cash fl ows expected to arise from the trademark and a suitable discount rate in order to calculate the present value of future cash fl ows. Management estimates the discount rate using pre-tax rates that refl ect current market assessments of the time value of money and risks specifi c to the cash-generating units. The growth rates are based on industry and customer growth forecasts.

The key assumptions used in the calculations are disclosed in note 2 to the fi nancial statements.

Fair value assessment of biological assets

The determination of fair value is based on active market values, where appropriate, or management’s assessment of the fair value based on available industry data and benchmark statistics. The key assumptions used in the calculation of the fair value are the day old chick prices and the market price of feed consumed.

Liability for post-retirement medical benefi ts

The liability is determined by annual actuarial assumptions. The key estimates and assumptions relating to the actuarial calculation are disclosed in note 14 to the fi nancial statements.

Business combinations

Critical accounting estimates and assumptions were also made during the purchase price allocation process in accounting for acquisitions as business combinations in accordance with IFRS 3 (Business combinations). These estimates and assumptions relate to the determination of useful lives of assets, discount rates, growth rates and valuation of unlisted investments.

The key assumptions used in the calculations are disclosed in note 33 to the fi nancial statements.

IMPACT OF FUTURE AMENDMENTS TO ACCOUNTING STANDARDS AND INTERPRETATIONS

Management has considered all standards, interpretations and amendments that are in issue but not yet effective. The standards, interpretations and amendments that are relevant to the Group but which the Group has not early adopted are as follows:

NUMBER TITLE AND SUMMARY

IAS 19 Amendments to employee benefi ts (1 January 2013) – Recognition of Actuarial Gains and Losses (remeasurements)

“Actuarial gains and losses” are renamed “remeasurements” and will be recognised immediately in “other comprehensive income” (OCI). Actuarial gains and losses will no longer be deferred using the corridor approach or recognised in profi t and loss; this is likely to increase statement of fi nancial position and OCI volatility.

Remeasurements recognised in OCI will not be recycled through profi t and loss in subsequent periods.

Recognition of past-service cost/curtailment

Past-service costs will be recognised in the period of a plan amendment; unvested benefi tswill no longer be spread over a future-service period. A curtailment now occurs only when there is a signifi cant reduction in the number of employees.

Curtailment gains/losses are accounted for as past-service costs.

Measurement of pension expense

Annual expense for a funded benefi t plan will include net interest expense or income, calculated by applying the discount rate to the net defi ned benefi t asset or liability. This will replace the fi nance charge and expected return on plan assets, and will increase benefi t expenses for most entities. There will be no change in the discount rate, which remains a high-quality corporate bond rate where there is a deep market in such bonds, and a government bond rate in other markets.

180

Presentation in the income statement

There will be less fl exibility in income statement presentation. Benefi t cost will be split between (i) the cost of benefi ts accrued in the current period (service cost) and benefi t changes (past-service cost, settlements and curtailments), and (ii) fi nance expense or income. This analysis can be in the income statement or in the notes.

Disclosure requirements

Additional disclosures are required to present the characteristics of benefi t plans, the amounts recognised in the fi nancial statements, and the risks arising from defi ned benefi t plans and multi-employer plans. The objectives and principles underlying disclosures are provided; these are likely to require more extensive disclosures and more judgement to determine what disclosure is required.

Distinction between “short-term” and “other long-term” benefi ts

The distinction between short- and long-term benefi ts for measurement purposes is based on when payment is expected, not when payment can be demanded. An obligation measured as a long-term benefi t could therefore be presented as a current liability when it is expected to be settled after more than one year, but does not have the unconditional ability to defer settlement for more than one year.

Treatment of expenses and taxes relating to employee benefi t plans

Taxes related to benefi t plans should be included either in the return on assets or the calculation of the benefi t obligation, depending on their nature. Investment management costs should be recognised as part of the return on assets; other costs of running a benefi t plan should be recognised as period costs when incurred. This should reduce diversity in practice but might make the actuarial calculations more complex.

Termination benefi ts

Any benefi t that has a future-service obligation is not a termination benefi t. This will reduce the number of arrangements that meet the defi nition of termination benefi ts. A liability for a termination benefi t is recognised when the entity can no longer withdraw the offer of the termination benefi t or recognises any related restructuring costs. This might delay recognition of voluntary termination benefi ts.

Risk or cost sharing features

The measurement of obligations should refl ect the substance of arrangements where the employer’s exposure is limited or where the employer can use contributions from employees to meet a defi cit. This might reduce the defi ned benefi t obligation in some situations. Determining the substance of such arrangements will require judgement and signifi cant disclosure.

IAS 27 Separate Financial Statements (1 January 2013)

IAS 27 has been renamed “Separate Financial Statements”; it continues to be a standard dealing solely with separate fi nancial statements. The existing guidance for separate fi nancial statements is unchanged.

IAS 28 Investments in Associates and Joint Ventures (1 January 2013)

This standard includes the requirements for joint ventures, as well as associates, to be equity accounted following the issue of IFRS 11.

IFRS 10 Consolidated Financial Statements (1 January 2013)

IFRS 10 replaces all of the guidance on control and consolidation in IAS 27 “Consolidated and Separate Financial Statements”, and SIC-12, “Consolidation – Special Purpose Entities”. IAS 27 is renamed “Separate Financial Statements”; it continues to be a standard dealing solely with separate fi nancial statements. The existing guidance for separate fi nancial statements is unchanged.

IFRS 10 changes the defi nition of control so that the same criteria are applied to all entities to determine control. This defi nition is supported by extensive application guidance that addresses the different ways in which a reporting entity (investor) might control another entity (investee). The changed defi nition and application guidance is not expected to result in widespread change in the consolidation decisions made by IFRS reporting entities, although some entities could see signifi cant changes.

All entities will need to consider the new guidance. The core principle that a consolidated entity presents a parent and its subsidiaries as if they are a single entity remains unchanged, as do the mechanics of consolidation.

IFRS 10 excludes guidance specifi cally for investment companies, as the IASB continues to work on a project on accounting by investment companies for controlled entities.

181

The new standard also includes guidance on agent/principal relationships. An investor (the agent) may be engaged to act on behalf of a single party or a group of parties (the principals). Certain power is delegated to the agent − for example, to manage investments. The investor may or may not have control over the pooled investment funds. IFRS 10 includes a number of factors to consider when determining whether the investor has control or is acting as an agent.

IFRS 11 Joint Arrangements (1 January 2013)

Changes in the defi nitions have reduced the “types” of joint arrangements to two: joint operations and joint ventures. The existing policy choice of proportionate consolidation for jointly controlled entities has been eliminated. Equity accounting is mandatory for participants in joint ventures. Entities that participate in joint operations will follow accounting much like that for joint assets or joint operations today.

The standard also provides guidance for parties that participate in joint arrangements but do not have joint control.

IFRS 9 Financial Instruments (1 January 2015)

Financial Assets

IFRS 9 addresses classifi cation and measurement of fi nancial assets.

The standard replaces the multiple classifi cation and measurement models in IAS 39 with a single model that has only two classifi cation categories: amortised cost and fair value.

Classifi cation under IFRS 9 is driven by the entity’s business model for managing the fi nancial assets and the contractual characteristics of the fi nancial assets. A fi nancial asset is measured at amortised cost if two criteria are met:

• the objective of the business model is to hold the fi nancial asset for the collection of the contractual cash fl ows; and

• the contractual cash fl ows solely represent payments of principal and interest.

The new standard removes the requirement to separate embedded derivatives from fi nancial asset hosts. It requires a hybrid contract to be classifi ed in its entirety at either amortised cost or fair value. Most embedded derivatives introduce variability to cash fl ows. This is not consistent with the notion that the instrument’s contractual cash fl ows solely represent the payment of principal and interest. Most hybrid contracts with fi nancial asset hosts will therefore be measured at fair value in their entirety.

Two of the existing three fair value option criteria become obsolete under IFRS 9, as a fair value driven business model requires fair value accounting, and hybrid contracts are classifi ed in their entirety. The remaining fair value option condition in IAS 39 is carried forward to the new standard – that is, management may still designate a fi nancial asset as at fair value through profi t and loss on initial recognition if this signifi cantly reduces an accounting mismatch. The designation at fair value through profi t and loss will continue to be irrevocable.

IFRS 9 prohibits reclassifi cations except in rare circumstances when the entity’s business model changes; in this case, the entity is required to reclassify affected fi nancial assets prospectively.

There is specifi c guidance for contractually linked instruments that create concentrations of credit risk, which is often the case with investment tranches in a securitisation. In addition to assessing the instrument itself against the IFRS 9 classifi cation criteria, management should also “look through” to the underlying pool of instruments that generate cash fl ows to assess their characteristics. To qualify for amortised cost, the investment must have equal or lower credit risk than the weighted-average credit risk in the underlying pool of instruments, and those instruments must meet certain criteria. If “a look through” is impracticable, the tranche must be classifi ed at fair value through profi t and loss.

IFRS 9 classifi cation principles indicate that all equity investments should be measured at fair value. However, management has an option to present in other comprehensive income unrealised and realised fair value gains and losses on equity investments that are not held for trading. Such designation is available on initial recognition on an instrument-by-instrument basis and is irrevocable. There is no subsequent recycling of fair value gains and losses to profi t and loss; however, dividends from such investments will continue to be recognised in profi t and loss.

The cost exemption for unquoted equities and derivatives on unquoted equities has been removed, but guidance is provided on when cost may be an appropriate estimate of fair value.

Financial liabilities

The requirements in IAS 39 regarding the classifi cation and measurement of fi nancial liabilities have been retained, including the related application and implementation guidance.

182

Under the new standard, entities with fi nancial liabilities designated at fair value through profi t and loss (FVTPL) recognise changes in the fair value due to changes in the liability’s credit risk directly in OCI. There is no subsequent recycling of the amounts in OCI to profi t and loss, but accumulated gains or losses may be transferred within equity.

However, if presenting the change in fair value attributable to the credit risk of the liability in OCI would create an accounting mismatch in profi t and loss, all fair value movements are recognised in profi t and loss. An entity is required to determine whether an accounting mismatch is created when the fi nancial liability is fi rst recognised, and this determination is not reassessed. The mismatch must arise due to an economic relationship between the fi nancial liability and a fi nancial asset that results in the liability’s credit risk being offset by a change in the fair value of the asset.

Financial liabilities that are required to be measured at FVTPL (as distinct from those that the entity has designated at FVTPL), including fi nancial guarantees and loan commitments measured at FVTPL, will continue to have all fair value movement recognised in profi t and loss. Derivatives such as foreign currency forwards and interest rate swaps, or a bank’s own liabilities that it holds in its trading portfolio, continue to have all fair value movements recognised in profi t and loss.

Derecognition of fi nancial instruments

The requirements in IAS 39 for determining when fi nancial instruments are derecognised from the statement of fi nancial position have also been relocated to IFRS 9 without change.

IFRS 7 Amendment to IFRS 7 Disclosures – Offsetting Financial Assets and Financial Liabilities (1 January 2013)

The amended disclosures will require more extensive disclosures than are currently required under IFRS and US GAAP. The disclosures focus on quantitative information about recognised fi nancial instruments that are offset in the statement of fi nancial position, as well as those recognised fi nancial instruments that are subject to master netting or similar arrangements irrespective of whether they are offset.

IFRS 12 Disclosure of Interests in Other Entities (1 January 2013)

IFRS 12 sets out the required disclosures for entities reporting under the two new standards, IFRS 10 (Consolidated Financial Statements ), and IFRS 11, (Joint Arrangements ); it replaces the disclosure requirements currently found in IAS 28, (Investments in associates ).

IFRS 13 Fair Value Measurement (1 January 2013)

This standard aims to improve consistency and reduce complexity by providing a precise defi nition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP.

IFRS 32 Offsetting Financial Assets and Financial Liabilities (1 January 2014)

The amendments do not change the current offsetting model in IAS 32, which requires an entity to offset a fi nancial asset and fi nancial liability in the statement of fi nancial position only when the entity currently has a legally enforceable right of set-off and intends either to settle the asset and liability on a net basis or to realise the asset and settle the liability simultaneously.

The amendments clarify that the right of set-off must be available today – that is, it is not contingent on a future event. It also must be legally enforceable for all counterparties in the normal course of business, as well as in the event of default, insolvency or bankruptcy.

Improvements to IFRS 2011

Amendment to IAS 1 Presentation of Financial Statements

The amendment clarifi es the disclosure requirements for comparative information when an entity provides a third statement of fi nancial position either:

• as required by IAS 8 (Accounting Policies, Changes in Accounting Estimates and Errors ); or

• voluntarily.

When an entity produces an additional statement of fi nancial position as required by IAS 8, the statement of fi nancial position should be as at the date of the beginning of the preceding period – that is, the opening position. No notes are required to support this statement of fi nancial position.

183

When management provides additional comparative information voluntarily – for example, statement of profi t and loss, statement of fi nancial position – it should present the supporting notes to these additional statements.

Amendment to IFRS 1 as a result of the above amendment to IAS 1

The consequential amendment clarifi es that a fi rst-time adopter should provide the supporting notes for all statements presented.

Amendment to IAS 16 (Property, Plant and Equipment)

The amendment clarifi es that spare parts and servicing equipment are classifi ed as property, plant and equipment rather than inventory when they meet the defi nition of property, plant and equipment.

The previous wording of IAS 16 indicated that servicing equipment should be classifi ed as inventory, even if it was used for more than one period. Following the amendment, this equipment used for more than one period is classifi ed as property, plant and equipment.

Amendment to IAS 32 (Financial Instruments: Presentation)

The amendment clarifi es the treatment of income tax relating to distributions and transaction costs.

Prior to the amendment, IAS 32 was ambiguous as to whether the tax effects of distributions and the tax effects of equity transactions should be accounted for in the income statement or in equity.

The amendment clarifi es that the treatment is in accordance with IAS 12. Therefore, income tax related to distributions is recognised in the income statement, and income tax related to the costs of equity transactions is recognised in equity.

Amendment to IAS 34 (Interim Financial Reporting)

The amendment clarifi es the disclosure requirements for segment assets and liabilities in interim fi nancial statements.

The amendment brings IAS 34 into line with the requirements of IFRS 8, (Operating Segments ).

A measure of total assets and liabilities is required for an operating segment in interim fi nancial statements if such information is regularly provided to the CODM and there has been a material change in those measures since the last annual fi nancial statements.

Amendment to IAS 36 (Recoverable Amount Disclosures for Non-fi nancial Assets)

This amendment addresses the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal.

Amendment to IAS 39 (Novation of Derivatives and Continuation of Hedge Accounting)

This amendment will allow hedge accounting to continue in a situation where a derivative, which has been designated as a hedging instrument, is novated to effect clearing with a central counterparty as a result of laws or regulation, if specifi c conditions are met (in this context, a novation indicates that parties to a contract agree to replace their original counterparty with a new one). This relief has been introduced in response to legislative changes across many jurisdictions that would lead to the widespread novation of over-the-counter derivatives. These legislative changes were prompted by a G20 commitment to improve transparency and regulatory oversight of over-the-counter derivatives in an internationally consistent and non-discriminatory way. Similar relief will be included in IFRS 9 (Financial Instruments ).

Adoption of these standards by the Group in future reporting periods is not expected to have a signifi cant impact on the fi nancial statements of the Group or company, apart from the application of IAS 19. IAS 19 eliminates the option to defer the recognition of actuarial gains and losses. The remeasurement will be required to be presented in other comprehensive income in full.

184

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 June 2013

1. PROPERTY, PLANT AND EQUIPMENT

Land and buildings

Plant, equipment

and furniture Vehicles

Capitalised leased assets:

Plant

Capitalised leased assets:

Vehicles

Leasehold improve-

ments

Capital work-inprogress Total

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

30 June 2013Cost

At the beginning of the year 1 192 144 1 910 666 269 305 7 918 155 863 3 535 896Transfers out of capital work-in-progress* (63 458) (63 458)Acquisition of subsidiary** 571 446 687 279 106 881 53 219 36 824 25 530 130 659 1 611 838Additions 100 640 343 756 68 079 8 006 2 535 1 287 23 631 547 934Disposals (1 078) (25 989) (15 425) (42 492)

At the end of the year 1 863 152 2 915 712 428 840 69 143 39 359 26 817 246 695 5 589 718


At the beginning of the year 503 686 1 069 410 136 748 1 980 1 711 824Disposals (841) (17 389) (12 304) (30 534)Depreciation 53 020 171 018 32 078 3 020 1 161 925 261 222

At the end of the year 555 865 1 223 039 156 522 5 000 1 161 925 1 942 512

Net book amount 1 307 287 1 692 673 272 318 64 143 38 198 25 892 246 695 3 647 206

30 June 2012

Cost

At the beginning of the year 1 077 483 1 743 582 244 381 98 497 3 163 943

Transfers out of capital

work-in-progress* (98 497) (98 497)

Additions 92 660 164 328 35 355 7 918 155 863 456 124

Acquired in a business combination** 35 000 47 851 9 649 92 500

Disposals (12 999) (45 095) (20 080) (78 174)

At the end of the year 1 192 144 1 910 666 269 305 7 918 155 863 3 535 896


At the beginning of the year 466 034 973 129 124 772 1 563 935

Disposals (3 442) (35 276) (12 773) (51 491)

Depreciation 41 094 131 557 24 749 1 980 199 380

At the end of the year 503 686 1 069 410 136 748 1 980 1 711 824

Net book amount 688 458 841 256 132 557 5 938 155 863 1 824 072

* Transfers out of capital work-in-progress have been disclosed within additions of each of the appropriate individual categories.

** Refer to note 33 for details of business combinations.

185

1. PROPERTY, PLANT AND EQUIPMENT continued

2013 R’000

2012 R’000

Depreciation expense charged in:Cost of sales 188 836 142 383Selling and marketing expenses 7 543 1 769Administration expenses 23 918 32 832Distribution expenses 40 925 22 396

261 222 199 380

Continuing operationsCapital commitments:Contracted and committed 110 702 186 831Approved but not contracted 184 529 73 703

295 231 260 534

There are no capital commitments for the discontinued operation.

The Group has reviewed the residual values and useful lives used in the calculation of the depreciation charge for the year. The review did not highlight any requirement for an adjustment to the residual values and useful lives.

Capital commitments include all projects for which specifi c Board approval has been obtained up to reporting date. Projects for which specifi c Board approval has not yet been obtained are excluded. The capital expenditure will be fi nanced from available resources.

A register of land and buildings is available for inspection at the registered offi ce of the Company.

The Group leases various offi ce equipment, plant and machinery and vehicles under fi nance lease arrangements. The lease term is fi ve years. The net book value of the assets leased amounts to R102 341 000 (2012: R5 938 000).

Certain items of property, plant and equipment have been pledged as security for certain borrowings (refer to Note 15).

Software TrademarksCustomer

relationships Goodwill TotalR’000 R’000 R’000 R’000 R’000

2. INTANGIBLE ASSETS30 June 2013Opening net book amount 29 874 287 444 317 318Acquisition of subsidiary* 7 289 1 864 389 978 471 2 617 860 5 468 009Additions 8 853 8 853Amortisation charge (5 169) (11 903) (17 072)Closing net book amount 40 847 1 864 389 966 568 2 905 304 5 777 108Cost 46 922 1 914 889 978 471 2 905 304 5 845 586Accumulated amortisation and impairment (6 075) (50 500) (11 903) (68 478)

Net book amount 40 847 1 864 389 966 568 2 905 304 5 777 108

30 June 2012Opening net book amount 287 444 287 444Transfer from work-in-progress 4 532 4 532Additions 26 248 26 248Amortisation charge (906) (906)

Closing net book amount 29 874 287 444 317 318

Cost 30 780 50 500 287 444 368 724Accumulated amortisation and impairment (906) (50 500) (51 406)

Net book amount 29 874 287 444 317 318

* Refer to Note 33 for details of business combination.

186

2013 2012

2. INTANGIBLE ASSETS continued

SoftwareFinite life/indefi nite life Finite life Finite lifeAmortisation period 3 – 10 years 10 yearsMethod of amortisation Straight-line Straight-lineIs intangible title restricted in any way yes no

TrademarksFinite lifeFinite life/indefi nite life Finite life Finite lifeAmortisation period 15 years 15 yearsMethod of amortisation Straight-line Straight-lineIs intangible title restricted in any way no no

Trademarks comprise: Farmer Brown, Bonny Bird, FarmFare and Epol, all of which were acquired on acquisition of Bonny Bird Farms Proprietary Limited and Epol Proprietary Limited in 1991.

Indefi nite lifeFinite life/indefi nite life Indefi niteIs intangible title restricted in any way yes

Trademarks comprise: Ouma, Nola, Yum Yum, Nutso, Bobtail, Catmor, Dogmor, Sunbake,Ultra dog, Canine Cuisine, Mageu, Monati , Optimizer, Glenryk, 5 Star, Mnandi, Supreme, Tafelberg, Safari and Piemans, all of which were acquired on acquisition of New Foodcorp Holdings Proprietary Limited (indirectly Foodcorp) (refer to note 33 for further details).

Customer relationshipsFinite life/indefi nite life Finite lifeAmortisation period 10 – 20 yearsMethod of amortisation Straight-lineIs intangible title restricted in any way yes

GoodwillGoodwill relates to the acquisition of Vector Logistics Proprietary Limited in 2005 and New Foodcorp Holdings Proprietary Limited (indirectly Foodcorp) in the current fi nancial year.Goodwill is made up as follows:

Vector Logistics Proprietary Limited 287 444 287 444New Foodcorp Holdings Proprietary Limited 2 617 860

2 905 304 287 444

187


Goodwill relating to the acquisition of Vector Logistics Proprietary Limited

The recoverable amount of a cash-generating unit is determined based on value-in-use calculations. These calculations use cash fl ow projections based on fi nancial budgets approved by management and future periods based on estimated growth rates. Cash fl ows beyond a fi ve-year period are extrapolated using the estimated growth rates stated below.

Key assumptions used in the goodwill impairment test:

2013R’000

2012R’000

Discount rate – pre-tax (%) 20,8 17,3Discount rate – post-tax (%) 15,0 12,3Perpetuity growth rate (%) 5,0 5,5Period (years) 5 5The perpetuity growth rate is consistent with long-term infl ation forecasts. The discount rate refl ects specifi c risks relating to the cash-generating unit.No impairment was required in the current year or prior year.Sensitivity analysis of assumptions used in the goodwill impairment test:Discount rate– movement (%) +2 +2– impairment nil nilPerpetuity growth rate– movement (%) (0,5) (2)– impairment nil nil

Goodwill relating to the acquisition of New Foodcorp Holdings Proprietary Limited

Goodwill is allocated to the Group’s cash-generating unit (CGUs) identifi ed according to business segment. The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash fl ow projections based on fi nancial budgets approved by management and future periods based on estimated growth rates. Cash fl ows beyond a fi ve-year period are extrapolated using the estimated growth rates stated below.

Key assumptions used in the goodwill impairment test:

2013R’000

2012R’000

Discount rate – pre-tax (%) 14,2Discount rate – post-tax (%) 10,2Perpetuity growth rate (%) 5,0Period (years) 5

The perpetuity growth rate is consistent with long-term infl ation forecasts. The discount rate refl ects specifi c risks relating to the CGUs.No impairment was required in the current year.Sensitivity analysis of assumptions used in the goodwill impairment test:Discount rate– movement (%) +2– impairment (Rm) 700

Perpetuity growth rate– movement (%) (0,5)– impairment R’m 1,764

188


Trademarks – indefi nite useful life

The recoverable amount of each CGU is determined based on value-in-use calculations. These calculations use cash fl ow projections based on fi nancial budgets approved by management and future periods based on estimated growth rates. Cash fl ows beyond a fi ve-year period are extrapolated using the estimated growth rates stated below.

Key assumptions used in the impairment test:

2013R’000

2012R’000

Discount rate – pre-tax (%) 14,2Discount rate – post-tax (%) 10,2Perpetuity growth rate (%) 5,0Period (years) 5

The perpetuity growth rate is consistent with long-term infl ation forecasts. The discount rate refl ects specifi c risks relating to the cash-generating unit.No impairment was required in the current year.Sensitivity analysis of assumptions used in the goodwill impairment test:

Discount rate– movement (%) +2– impairment R’m nil

Perpetuity growth rate– movement (%) (2)– impairment R’m nil

Certain intangible assets have been pledged as security for certain borrowings (refer to note 15).

3. INVESTMENT IN JOINT VENTUREShares – at cost 128 955Carrying value 128 955Relates to 49,0% shareholding in Zam Chick Limited (a company incorporated in Zambia).The effective date of the transaction was 1 April 2013 and as Zam Chick has a year-end of 31 March, the Group will equity account for Zam Chick’s 12-month results to March 2014 in the Group’s 2014 fi nancial reporting period.The purchase allocation is not considered to be fi nal.The Group’s share of the joint venture’s aggregate assets and liabilities is as follows:Assets 48 708Liabilities 8 335Interest held (%) 49,0

4. PREFERENCE SHARES RECEIVABLEPreference shares in Foodcorp Management Holdings (Proprietary) Limited 130 275Preference shares are measured at amortised cost.The investment in preference shares consist of shares in aggregate of R1,00 each.The preference shares are redeemable. The dividends are cumulative at a dividend rate of 8,28%.The preference shares receivable have been pledged as security for certain borrowings (refer to note 15).The preference shares receivable have been redeemed after year-end.The carrying amount of the preference shares receivable approximates their fair value.

189

2013R’000

2012R’000

5. INVENTORIES

Finished goods 493 768 556 411Raw materials and ingredients 751 123 260 879Consumables 77 164 55 750

At the end of the year 1 322 055 873 040

Amount of inventory written down to net realisable value 184 295 135 335Amount included in inventory as write down to net realisable value 31 821 31 637

Certain inventories have been pledged as security for certain borrowings (refer to note 15).

6. BIOLOGICAL ASSETS

Breeding stock

At the beginning of the year at fair value 254 912 224 095Gain arising from cost inputs 853 918 777 803Decrease due to harvest (841 879) (750 921)Fair value adjustment 5 045 3 935

At the end of the year at fair value 271 996 254 912

Broiler stock

At the beginning of the year at fair value 221 515 221 131Gain arising from cost inputs 3 756 212 3 562 041Decrease due to harvest (3 737 954) (3 586 544)Fair value adjustment 25 290 24 887

At the end of the year at fair value 265 063 221 515

Total at the end of the year at fair value 537 059 476 427

190

2013R’000

2012R’000

7. TRADE AND OTHER RECEIVABLES

Trade receivables 1 933 349 1 234 904Less: Provision for impairment of trade receivables (31 273) (24 798)

Net trade receivables 1 902 076 1 210 106Pre-payments 125 374 45 096Other receivables 84 399 92 469

At the end of the year 2 111 849 1 347 671

Credit risk:Collateral held/insurance yes yesTerms (days) 30 30Credit Guarantee Insurance Cover (CGIC) 994 916 994 237Mortgage bonds – registered value 30 600 43 000Notarial bonds – registered value 100 990Cessions – book value 300 800Bank guarantees – actual value 3 400 3 000

1 029 316 1 042 027

Provision for impairment movementAt the beginning of the year (24 798) (25 222)Acquisition of subsidiary (10 325)Receivables impaired (4 100) (7 377)Impairments utilised 586 538Unused amounts reversed 7 364 7 263

At the end of the year (31 273) (24 798)

The other classes within trade and other receivables do not contain impaired assets.Trade receivables that are less than 30 days are not considered past due. Receivables, not impaired, relate to a number of independent customers for whom there is no recent history of default. The ageing relating to these trade receivables is as follows:30 to 90 days 141 791 178 870Over 90 days 7 770 16 034

149 561 194 904

The individually impaired receivables relate mainly to customers in unexpected diffi cult economic situations. The ageing of these receivables is as follows:30 to 90 days (9 459) (1 612)Over 90 days (21 814) (23 186)

(31 273) (24 798)

In the current year, 54% (2012: 84%) of the Group’s trade receivables have been covered by CGIC and other collateral in the form of bonds and guarantees. The Group’s trade receivables that are not covered by CGIC relate to a number of independent customers for whom there is no recent history of default. Other receivables do not include any amounts that are past due or impaired.

All trade and other receivables are due within one year of the reporting date.

The carrying amount of trade and other receivables approximates their fair values.

Certain trade receivables have been pledged as security for certain borrowings (refer to Note 15).

191

2013 2012Assets Liabilities Assets LiabilitiesR’000 R’000 R’000 R’000

8. DERIVATIVE FINANCIAL INSTRUMENTS

Derivative fi nancial assets and liabilities

Soya options 7 296 14 375Soya oil options 1 012 12Diesel hedge 1 593Maize options 4 613 6 424Forward exchange contracts 336 849 141 3Euro participation hedge 15 767

Total 361 505 5 766 20 811 3

Gains and losses recognised in the hedging reserve in equity on forward foreign exchange contracts that qualify for hedge accounting as of 30 June 2013 will be recognised in the income statement in the period or periods during which the hedged forecast transaction affects the income statement.

There has been no ineffective portion recognised in profi t or loss from the cash fl ow hedges.

192

9. NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATION

The assets and liabilities of the Fishing division, included in the Foodcorp segment, have been presented as held for sale. The Group has concluded a heads of agreement with Oceana Group Limited.

Completion of the sale is subject to the fulfi lment of certain conditions, including but not limited to, approval from the Department of Agriculture, Forestry and Fishing and Competition Authorities.

The effective date of the transaction will be the fi rst business day of the month, immediately following the month during which the transaction becomes unconditional.

2013R’000

2012R’000

Net cash infl ow from operating activities 53 293Net cash outfl ow from investing activities (759)Net cash outfl ow from fi nancing activities (109)

Total cash fl ows – discontinued operation 52 425

Assets of disposal group classifi ed as held for saleProperty, plant and equipment 118 538Goodwill 138 867Trademarks and other intangibles 120 074Investments 12Inventory 69 075Trade and other receivables 56 561Trade receivables intercompany 33 409Tax receivable 69

Total assets 536 605

Liabilities of disposal group classifi ed as held for saleInterest-bearing liabilities 1 876Trade and other payables 85 425Current income tax liabilities 1 648Derivative fi nancial instruments 89 707

Total liabilities 178 656

Non-controlling interest classifi ed as held for sale 5 490As the assets and liabilities presented as held for sale were acquired in a businesscombination, no income/expenses have been recognised in other comprehensive incomerelating to disposal group classifi ed as held for sale.Analysis of the result of the discontinued operation, and the result recognised on themeasurement of assets or disposal group, is as follows:Revenue 122 039Expenses (100 631)

Profi t before tax 21 408

Income tax expense (6 097)

Profi t for the year 15 311

Attributable to:Equity holders of the company 9 821Non-controlling interests 5 490

193

2013R’000

2012R’000

10. STATED CAPITAL

Authorised

1 000 000 000 (2012: 575 525 772) RCL Foods Shares. Issued RCL Foods Shares:

Number of shares

At the beginning of the year 294 991 606 1 198 253 1 189 684Rights issue 276 964 802 3 857 469Shares issued in terms of Share Incentive Plans 2 300 076 23 472 8 569

At the end of the year 574 256 484 5 079 194 1 198 253

Details pertaining to the rights issueProceeds from rights issue 3 932 900Transaction costs (75 431)

3 857 469

Statutory shares in issue 625 433 701Less: Shares issued in terms of Current RCL Foods BEE

Structure* (51 177 217)

Total 574 256 484

* On 30 July 2008, 51 177 217 Shares were issued to Eagle Creek Investments 620 Proprietary Limited in terms of the Current RCL BEE Structure. For accounting purposes, these Shares are not treated as issued (refer to note 32 for further details).

The unissued ordinary Shares are under the control of the directors until the forthcoming annual general meeting.

RCL Share Incentive Scheme

Details of Share options granted under this plan are as follows:

Issuepriceprior

to rightsissue(cents)

Issuepricepost-

rightsissue*(cents)

DateOptionsgranted

Options at30 June

2012

Adjustmentin respect ofrights issue*

Optionsexercised

duringthe year

Optionsforfeited

duringthe year

Options at30 June

2013

Optionsexercisable

at30 June

2013

510 475 21 May 2004 15 801 768 (12 811) 3 758 3 758 1 039 967 25 May 2006 1 724 173 126 947 (1 851 120)

1 011 941 1 September 2006 92 318 6 934 (99 252)

1 660 1 545 1 April 2007 312 650 23 047 335 697 335 6971 635 1 521 1 August 2007 5 063 875 392 563 (46 209) (115 571) 5 294 658 5 294 6581 659 1 544 23 November 2007 102 986 7 480 110 466 110 4661 420 1 321 22 May 2008 3 041 605 220 123 (251 905) (119 064) 2 890 759 2 890 7591 400 1 303 1 February 2009 125 000 9 355 (34 000) 100 355 100 355

10 478 408 787 217 (2 295 297) (234 635) 8 735 693 8 735 693

* The issue price and number of outstanding options were amended as a result of the rights issue in order to place the holders in the same position as they were before the rights issue. The amendments have no fi nancial effect for the Group as they have placed the participants in the same economic position before the rights issue.

2013Rand

2012Rand

The weighted average share prices were as follows:

Weighted average issue price of options in issue at the beginning of the year 14 ,66 14 ,08Weighted average issue price of options in issue at the end of the year 14 ,53 14 ,66Weighted average exercise price of options exercised during the year 10 ,19 8 ,04Weighted average issue price of rights forfeited during the year 15 ,26 16 ,14Weighted average share price at date options exercised during the year 15 ,82 15 ,29

194

10. STATED CAPITAL continued

RCL Share Appreciation Rights Scheme

Details of Share appreciation rights awarded under this plan are as follows:

Issueprice

prior torightsissue(cents)

Issuepricepost-

rightsissue*(cents)

Daterightsawarded

Rightsat

30 June2012

Rightsawarded

duringthe year

Adjust-ment

in respectof

rightsissue*

Rightsexercised

duringthe year

Rightsforfeited

duringthe year

Rightsat

30 June2013

Rightsexercisable

at30 June

2013

1 534 1 427 1 August 2009 5 150 981 376 797 (60 015) (161 963) 5 305 800 1 726 3861 583 1 473 2 June 2010 5 458 275 394 251 (150 489) 5 702 037 1 886 145

1 526 1 4201 September 2010 141 546 10 507 (152 053)

1 768 1 645 1 June 2011 5 594 913 408 805 (307 323) 5 696 3951 521 1 415 1 December 2011 108 872 8 175 117 0471 504 1 400 1 January 2012 166 223 12 306 178 5291 543 1 436 1 April 2012 267 337 19 991 287 328

1 419 1 3205 September 2012 5 641 697 415 652 (259 222) 5 798 127

1 458 1 45827 February 2013 126 961 126 961

1 612 1 612 1 June 2013 967 742 967 742

16 888 147 6 736 400 1 646 484 (60 015) (1 031 050) 24 179 966 3 612 531

* The issue price and number of outstanding rights were amended as a result of the rights issue in order to place the holders in the same position as they were before the rights issue. These amendments have no fi nancial effect for the Group as they have placed the participants in the same economic position before the rights issue.

The weighted average fair value of rights awarded during the year was R3,02 (2012: R3,80).

2013Rand

2012Rand

The weighted average share prices were as follows:Weighted average issue price of rights in issue at the beginning of the year 16,27 16,30Weighted average issue price of rights in issue at the end of the year 14,71 16,27Weighted average issue price of rights exercised during the year 14,27Weighted average issue price of rights forfeited during the year 15,17 16,23Weighted average award price of rights awarded during the year 14,47 15,27Weighted average share price at date options exercised during the year 15,81

RCL Foods Conditional Share Plan

Details of the conditional share plan rights awarded under this scheme are as follows:

DateConditional sharesawarded

Conditionalshares

at30 June

2012

Conditionalshares

awarded during

the year

Adjustmentin respect ofrights issue*

Conditionalshares

exercisedduring

the year

Conditionalshares

forfeitedduring

the year

Conditionalshares

at30 June

2013

Conditionalshares

exercisableat 30 June

2013

14 December 2012 1 840 476 137 270 1 977 746

* The number of outstanding conditional shares was amended as a result of the rights issue in order to place the holders in the same position as they were before the issue. These amendments have no fi nancial effect for the Group as they have placed the participants in the same economic position as they were before the rights issue.

The weighted average fair value of conditional shares awarded during the year was R10,74 (2012: R nil).

The weighted average share prices were as follows: 2013 2012

Weighted average issue price of rights in issue at the beginning of the year nil nil Weighted average issue price of rights in issue at the end of the year nil nil Weighted average exercise price of rights exercised during the year nil nil Weighted average issue price of rights forfeited during the year nil nil Weighted average share price at date options exercised during the year nil nil

195

10. STATED CAPITAL continued

Expected volatility for all of the schemes was determined calculating the historical volatility of the share price over the previous four years, adjusted for the impact on the share price of the offer by Remgro to minorities in March 2007. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

These fair values were calculated using the binomial options pricing model. The inputs into the model were as follows:

2013 2012

Expected volatility (%) 19,8 – 24,7 24,9 – 25,8Risk-free rate (%) 5,6 – 6,3 7,1 – 7,2Expected dividend yield (%) 4,4 4,6Contractual life (years) 7 or 10 7 or 10Weighted average contractual life – options (years) 1,36 2,1Weighted average contractual life – rights (years) 4,69 5,1

2013R’000

2012R’000

11. SHARE-BASED PAYMENTS RESERVE

Employee share scheme

At the beginning of the year 100 847 82 294Value of employee services expensed during the year 21 128 18 553

At the end of the year 121 975 100 847

BEE transactionAt the beginning of the year 59 877 56 494Employee portion – recurring 3 336 3 383

At the end of the year 63 213 59 877

Total at the end of the year 185 188 160 724

12. OTHER RESERVES

Cash fl ow hedges

At the beginning of the yearRevaluation of cash fl ow hedges 797Taxation impact 222

At the end of the year 1 019

Foreign currency translation reserveAt the beginning of the yearCurrency translation on foreign subsidiary 22

At the end of the year 22

Total at the end of the year 1 041

There were no ineffi ciencies to be recorded from cash fl ow hedges (2012: R nil).

196

2013R’000

2012R’000

13. PREFERENCE SHARE LIABILITIESThe preference share liabilities are made up as follows:Preference shares issued at a par value of R0,00001and a premium of R0,9999 per share – long term 30 000Cumulative dividend 5 089

35 089The cumulative preferential cash dividend is calculated at a dividend rate of 19,5% accrued on a semi-annual basis. The cumulative redeemable preference shares are redeemable on or before 19 September 2018.Preference shares issued at a par value of R1 737,51 per share – long term 42 959The cumulative preferential cash dividend is calculated at a dividend rate equal to prime accrued on a annual basis.The cumulative redeemable preference shares are redeemable on or before 10 May 2019.The carrying amount of the preference share liabilities apprcximates their fair values.

14. RETIREMENT BENEFIT OBLIGATIONSPost-retirement medical benefi ts 155 350 108 587

Post-retirement medical obligation

The obligation of the Group to pay certain medical aid benefi ts after retirement is no longer part of the conditions of employment for Rainbow employees engaged after 1 October 2003 and for Vector employees engaged after 1 January 1997. A number of pensioners and current employees, however, remain entitled to this benefi t. The entitlement to this benefi t is dependent upon the employee remaining in service until retirement age. The Group also provides certain medical aid benefi ts to certain retired employees of Foodcorp. The last valuation date was 30 June 2013 for Rainbow, Vector and Foodcorp. The unfunded liability for post-retirement medical aid benefi ts is determined actuarially each year and comprises:

At the beginning of the year 108 587 102 162Recognised as an expense in the current year 15 116 10 461

Interest costs 11 789 8 521Current service costs 2 301 2 262Actuarial loss/(gain) recognised 1 026 (322)

Benefi ts paid (8 439) (4 036)Acquisition of subsidiary 40 086

At the end of the year 155 350 108 587Unrecognised past service costs (13 097) (14 325)Unrecognised actuarial loss 28 081 28 549

Balance per actuarial valuation 170 334 122 811

The principal actuarial assumptions are:Discount rate (%) 8,60 8,25Health care cost infl ation (%) 8,10 7,75Mortality – pre-retirement * *Mortality – post-retirement ** **

Impact of 1% movement in the assumed medical cost trend on:– accrued liability increase 21 816 19 081– accrued liability decrease (19 861) (15 587)– current service and interest costs increase 2 402 2 122– current service and interest costs decrease (1 959) (1 711)Expected contributions for the years ended June 9 346 4 839

* SA85/90 (light) ultimate.** PA(90) ultimate table rated down two years plus 1% improvement per annum from 2006.

197

14. RETIREMENT BENEFIT OBLIGATIONS continued

Historical information2013

R’0002012

R’0002011

R’0002010

R’000

Present value of unfunded obligations 170 334 122 811 105 676 89 936Experience (gain)/loss on plan liabilities (471) 3 422 2 991 (5 746)

Retirement contribution plans

Pension and provident fund schemes

The Group contributes towards retirement funds for all permanent employees who are required to be a member of a Group implemented scheme. These schemes, detailed below are governed by the Pension Funds Act, 1956. Their assets consist primarily of listed shares, fi xed income securities, property investments and money market instruments and are held separately from those of the Group. The schemes’ assets are administered by a Board of trustees, each of which includes elected employee representatives. The Rainbow Workers Provident Fund is a union fund, administrated by Negotiated Benefi ts Consultants Proprietary Limited, and had no employer representatives on its Board of trustees. All members of the Rainbow Workers Provident Fund re-joined the Rainbow Farms Provident fund with effect 1 May 2012. The Pension Funds Second Amendment Bill was enacted with effect 7 December 2001. This Bill requires that the actuarial valuations at 31 March 2004, together with a plan for the apportionment on a fair basis to past and current members of the funds of any surplus established by this valuation date, must be approved by the Financial Services Board (FSB). The FSB has approved a Nil Surplus Apportionment for both the Rainbow Pension and Provident Funds and the Foodcorp Provident Fund.

Defi ned contribution pension and provident fund schemes

The latest audited fi nancial information of the schemes that are administered by the Group all refl ect a satisfactory state of affairs. Amounts charged to the income statement are as follows:

2013R’000

2012R’000

Defi ned contribution pension and provident schemes:– Rainbow Pension Fund 24 644 22 692– Rainbow Provident Fund 59 944 51 077– Rainbow Workers Provident Fund 4 703– Namfl ex Pension Fund 354 341– Foodcorp Funds:– Alexander Forbes 6 835– Liberty Life 134– Sanlam Umbrella Fund 303– NBC Provident Fund 628– Old Mutual – SACCAWU 907– Setshaba 158– FAWU 475– Metropolitan IMC Fund 391

94 773 78 813

198

2013R’000

2012R’000

15. INTEREST-BEARING LIABILITIES

Long term

Bank borrowings 61 828Finance lease liabilities 46 940 3 814Senior Secured Notes 5 468 349

5 515 289 65 642

Short termBank borrowings 115 723 30 833Finance lease liabilities 39 228 2 410Senior Secured Notes 142 278

297 229 33 243

Bank borrowings

The unsecured loan bears interest of between Jibar +1,5% and Jibar +1,65%. The outstanding loan together with the accrued interest shall be repaid in quarterly instalments on the last day of the month.

The carrying amount of bank borrowings approximates their fair values.

Finance lease liabilities

The fi nance lease liabilities bear interest at a rate between 6,5% and 10,0%.

Finance lease liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of default. The carrying amount of the fi nance lease liabilities approximates their fair values.

Senior Secured Notes

The Senior Secured Notes are listed on the Irish Stock Exchange, are Euro denominated and bear interest at a fi xed rate of 8,75%. The Senior Secured Notes have been translated at year-end at a spot rate of R12,86. The Senior Secured Notes will mature in March 2018. The fair value of the Senior Secured Notes at year-end was R5,291 million.

The Group has provided fi nancial institutions relating to the Senior Secured Notes with the following security for its borrowing facilities:

• A pledge and reversionary pledge of trade receivables for an amount of R856,6 million.

• A pledge of inventory for an amount of R417,1 million.

• A pledge of trademarks for an amount of R1 864,4 million.

• A pledge of customer relationships for an amount of R966,6 million.

• A pledge of software for an amount of R7,2 million.

• Special notarial bond over plant and equipment for an amount of R400,0 million and R1,4 billion.

• First covering mortgage bonds over certain specifi ed immovable property for an aggregate amount of R122,0 million and R2,8 billion.

• General notarial bond over moveable assets for an amount of R200,0 million and R1,4 billion.

• First deed of mortgage with the Registrar of Ships over certain fi shing vessels for the amount of R160,0 million.

• Pledge and cession of the ordinary shares in Foodcorp and each of Foodcorp’s subsidiaries; and

• Cash and cash equivalents have been pledged for an amount of R48,5 million.

All interest-bearing borrowings are approved by the Board.

199

2013R’000

2012R’000

16. TRADE AND OTHER PAYABLES

Long term

Trade payables 24 398

24 398

Short term

Trade payables 1 622 902 1 435 348Accruals 414 732 195 524Other payables 593 265 17 275

2 630 899 1 648 147

The carrying amount of trade and other payables approximates their fair values.

17. DEFERRED INCOME TAX

Deferred income tax liability movement:At the beginning of the year 432 655 372 198Acquisition of subsidiary* 955 689Charge for the year – income statement 20 378 67 832Charge for the year – other 988Charge for the year – other comprehensive income (222)Prior year over provision (215) (7 375)

At the end of the year 1 409 273 432 655

Deferred income tax liability comprises:Trademarks, property, plant and equipment 1 401 112 321 073Inventories and biological assets 166 123 156 879Provisions (93 074) (50 457)Derivative fi nancial instruments 914 5 824Assessed loss (158 719)Disposal group classifi ed as held for sale 33 634Interest-bearing liabilities 37 014Other 22 269 (664)

1 409 273 432 655

Deferred tax liability due after 12 months 1 256 510 304 850Deferred tax liability due within 12 months 152 763 127 805

1 409 273 432 655

Deferred income tax asset movement:At the beginning of the yearCharge for the year – income statement 4 327

At the end of the year 4 327

Deferred income tax asset comprises:Provisions 4 327

4 327

Deferred tax assets due after 12 monthsDeferred tax assets due within 12 months 4 327

* Refer to Note 33 for details on the acquisition of subsidiary.** Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related

tax benefi t through future taxable profi ts is probable.

200

2013R’000

2012R’000

18. DEPRECIATION AND AMORTISATIONBuildings 53 020 41 094Plant, equipment and furniture 171 018 131 557Vehicles 32 078 24 749Leased assets 4 181 1 980Leasehold improvements 925

261 222 199 380Amortisation – intangible assets 17 072 906

Total depreciation and amortisation 278 294 200 286

19. OPERATING PROFITRevenue 10 108 812 7 855 142Cost of sales (7 824 101) (5 913 470)

Gross profi t 2 284 711 1 941 672Administration expenses (679 788) (487 082)Selling and marketing expenses (356 101) (240 652)Distribution expenses (1 282 437) (898 942)Other income 199 642 99 228

Operating profi t 166 027 414 224

Disclosable items – income:Fair value adjustment on biological assets 30 355 28 822Fair value adjustment on derivatives 102 472 67 868Foreign exchange gains 66 815 1 572Disclosable items – expense:Operating lease charges 100 424 67 383

– land and buildings 77 463 50 760– plant and equipment 18 497 13 907– other 4 464 2 716

Arrangements containing an operating lease* 660 713 632 888

– contract grower fees 224 554 172 682– outsourced transport 436 159 460 206

Technical consultants’ and legal fees 51 713 34 629Acquisition costs 45 599Foreign exchange losses 58 321 5 268Feed costs 3 149 169 2 507 748Utilities 571 323 494 797Loss on disposal of property, plant and equipment 1 906 427Directors’ remuneration 11 289 10 226Staff costs 1 572 952 1 269 554

– salaries and wages 1 260 169 1 099 174– share-based payments 23 508 18 553– retirement benefi t costs 94 773 78 813– other post-employment benefi ts 15 116 10 461– other 179 386 62 553

Administration fee paid to Group holding company 6 656 5 417Auditors’ remuneration 7 774 5 326

– fees for the audit 6 485 5 262– prior year under/(over) provision 3 (976)– disbursements 252 170– fees for other services 1 034 870

* It is not practical to separate the lease element from the total costs paid in respect of these arrangements and accordingly only total costs have been disclosed.

201

2013 2012R’000 R’000

20. FINANCE COSTS

Interest – overdraft 5 304 242Interest – other 5 094 3 484Interest – interest-bearing liabilities 76 493 162Interest – preference shares 1 560Interest – Group company 8 834 7 470Foreign exchange losses* 56 390

153 675 11 358

* Includes loss on re-measurement of Eurobonds at year-end spot rate of R378 million (2012: R nil) and gains on re-measurement of forward exchange contracts of R360 million (2012: R nil).

21. FINANCE INCOME

Interest – other 2 389 2 227Interest – preference shares 1 894Call funds with fi nancial institutions and money market fund 49 591 5 143

53 874 7 370

22. INCOME TAX EXPENSE

Current tax 59 312 58 288

South African 59 157 60 930Prior year under/(over) provision 155 (2 642)

Deferred tax 15 836 60 457

South African 15 678 67 832Foreign 373Prior year over provision (215) (7 375)

Secondary Tax on Companies 24 724

75 148 143 469

Reconciliation of tax rate:Normal rate of tax (%) 28,0 28,0Adjusted for:– secondary tax on companies (%) 6,0– prior year under/(over) provision – current (%) 0,2 (0,5)– prior year over provision – deferred (%) (0,3) (1,8)– tax loss utilised (%) 0,3– non-deductible items (%) 85,3 3,3

Effective rate of tax (%) 113,5 35,0

23. EARNINGS AND HEPSBasic

Basic earnings per share is calculated by dividing the profi t attributable to equity holders of the Company by the weighted average number of shares in issue during the year.

Diluted

Diluted earnings are calculated using the fully diluted weighted average ordinary shares in issue. Dilution is due to Shares offered, but not paid and delivered to participants in the Current RCL BEE Structure, the RCL Share Appreciation Rights Scheme and RCL Conditional Share Plan (refer to Notes 10 and 11). A calculation is performed to determine the number of shares that could have been acquired at fair value based on the monetary value of the subscription rights attached to outstanding scheme shares. The number of shares calculated below is compared with the number of shares that would have been issued assuming the exercise of the share scheme options.

202

23. EARNINGS AND HEPS continued

2013 2012R’000 R’000

EarningsProfi t from continuing operations attributable to equity holders of the Company 16 686 266 767Profi t from discontinued operation attributable to equity holders of the Company 9 821

Total 26 507 266 767

Weighted average number of ordinary shares in issueWeighted average number of ordinary shares in issue – basic earnings per share 391 076 302 193*Share option dilution impact 1 113 683

Weighted average number of shares – diluted earnings per share 392 189 302 876*

Headline earningsHeadline earnings reconciliation – continuing operations:Profi t for the year attributable to equity holders of the Company 16 686 266 767Loss on disposal of property, plant and equipment – net of tax of R0 .5 million (2012: R0 .1 million) 1 373 307

Headline earnings 18 059 267 074

Headline earnings reconciliation – discontinued operation:Profi t for the year attributable to equity holders of the Company 9 821

Headline earnings 9 821

From continuing operationsEarnings per Share– basic (cents) 4,3 88,3*

– diluted (cents) 4,3 88,1*Headline earnings per Share– basic (cents) 4,6 88,4*– diluted (cents) 4,6 88,2*

From discontinued operation

Earnings per Share– basic (cents) 2,5– diluted (cents) 2,5

Headline earnings per Share– basic (cents) 2,5– diluted (cents) 2,5

* In January 2013, the Group embarked on a fully underwritten (by Remgro via Industrial Partnership Investments Limited) R3,9 billion rights issue which was concluded in March 2013. The prior period weighted average number of shares has been adjusted by a factor of 1,03 (the adjustment factor). The adjustment factor is calculated using the Share price on 1 March 2013, being the Share price immediately prior to the rights issue (share price cum-rights) divided by the theoretical ex-rights price (TERP). TERP is the number of new shares multiplied by the subscription price plus the number of shares held multiplied by the ex-dividend Share price, all divided by the number of new Shares plus the number of Shares held prior to the rights issue.

2013 2012R’000 R’000

24. DIVIDENDS PER SHARE

Interim – paid: 0,0 cents (2012: 28,0 cents) 82 568Final – declared: 0,0 cents (2012: paid 32,0 cents) 94 397

Total: 0,0 cents (2012: 60,0 cents) 176 965

203

2013 2012R’000 R’000

25. LEASE COMMITMENTS

Continuing operationsOperating leases:Due within one year 111 121 81 670Due within two to fi ve years 166 703 205 634

277 824 287 304

In respect of:– property 233 542 246 619– plant and equipment 34 316 32 908– other 9 966 7 777

277 824 287 304

Discontinued operationOperating leases:Due within one year 3 636Due within two to fi ve years 2 055

5 691

In respect of:– property 5 497– plant and equipment 194

5 691

In addition, the Group has operating lease commitments with rentals determined in relation to volumes of activity. It is not possible to quantify accurately future rentals payable under such lease arrangements.

26. CONTINGENCIES

Legal dispute 2 250 6 000Contract grower guarantees 12 487 22 433

14 737 28 433

The Group has a contingent liability in respect of a legal claim for the dismissal of employees. The matter is ongoing and legal counsel are of the opinion that the Group will be successful. The Directors have concluded that it is highly unlikely that the Group will incur a fi nancial loss.

The Group has contingencies in respect of contract grower arrangements whereby the Group has guaranteed bank loans given to certain contract growers. These guarantees continue for a remaining three years. It is not anticipated that any material liabilities will arise from these contingencies. However, should they arise, the Group will acquire claims against the growers’ farms which would reduce the net exposure.

204

27. OPERATING SEGMENTS

The Chief Executive Offi cer (CEO) is the chief operating decision-maker. The CEO assesses the performance of the operating segments based on operating profi t (EBIT).

The Rainbow segment is a vertically integrated chicken producer. The Vector segment is a specialist frozen third-party logistics provider, providing integrated logistics. The Foodcorp segment is a food producer and manufacturer with a diverse product basket that ranges from staples to some of South Africa’s best-known consumer brands and ready-to-eat meals.

2013 2012R’000 R’000

Revenue 10 108 812 7 855 142Rainbow 8 143 587 7 196 632Vector 1 476 888 1 339 580Foodcorp 1 217 505Sales between segments:Vector to Rainbow (725 790) (681 070)Vector to Foodcorp (3 378)

Operating (loss)/profi tRainbow (3 680) 245 487Vector 143 303 168 737Foodcorp 99 010Unallocated Group costs (72 606)

Operating profi t 166 027 414 224Finance costs (153 675) (11 358)Finance income 53 874 7 370

Profi t before tax 66 226 410 236

AssetsRainbow 6 259 613 3 791 566Vector 4 112 394 2 925 978Foodcorp 9 884 468Unallocated segment 15 587Investment in joint venture 128 955Set-off of inter-segment balances (3 048 557) (1 521 253)

Total per statement of fi nancial position 17 352 460 5 196 291

LiabilitiesRainbow 2 014 182 2 261 363Vector 2 709 538 1 549 822Foodcorp 8 610 517Unallocated segment 10 571Set-off of inter-segment balances (3 048 557) (1 521 253)

Total per statement of fi nancial position 10 296 251 2 289 932

205

2013 2012R’000 R’000

27. OPERATING SEGMENTS continued

Additions to property, plant and equipment and intangible assetsRainbowProperty, plant and equipment 328 183 408 371Intangible assets 7 714 26 248VectorProperty, plant and equipment 82 497 46 288FoodcorpProperty, plant and equipment 66 324Intangible assets 1 139

Depreciation and amortisationRainbow 196 620 163 871Vector 42 024 36 415Foodcorp 39 650

Major customersRevenue from the Group’s top fi ve customers is:– customer A 1 817 595 1 579 724– customer B 1 274 359 1 261 853– customer C 480 061 331 385– customer D 357 490 320 196– customer E 407 020 318 845All of the above revenue is included in the Rainbow and Foodcorp segment.

Analysis of revenueSale of food products 8 153 863 6 248 474Sale of feed 1 201 359 948 158Sale of services 753 590 658 510

10 108 812 7 855 142

There is no signifi cant revenue outside of South Africa.

28. FINANCIAL RISK MANAGEMENT

Financial risk factors

This note presents information about the Group’s exposure to fi nancial risks, the Group’s objectives, policies and processes for measuring and managing these risks and the Group’s management of capital.

The Group’s fi nancial instruments consist primarily of cash resources with fi nancial institutions, derivatives, accounts receivable and payable, preferences shares receivable and interest-bearing liabilities. In the normal course of business, the Group is exposed to credit, interest, liquidity and market risk. In order to manage these risks, the Group may enter into transactions which make use of derivatives. They include forward exchange contracts, options, interest rate swaps and commodity futures and options. A separate committee is used to manage the risks and the hedging activities of the Group. The Group does not speculate in derivative instruments. Certain of the Group’s forward exchange contracts qualify as designated hedges for accounting purposes. Their fair values are disclosed in note 8.

The Board has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Board has established the Risk Committee which is responsible for developing and monitoring the Group’s risk management policies. The Risk Committee reports regularly to the Board 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 refl ect changes in market conditions and the Group’s activities. The Group, through its training, management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

Due to the recent acquisition of Foodcorp, the Board is currently assessing the impact of the acquisition on the Group’s risk management framework.

206

28. FINANCIAL RISK MANAGEMENT continued

The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

Credit risk

Credit risk is the risk of fi nancial loss to the Group if a customer or counterparty to a fi nancial instrument fails to meet its contractual obligations. Credit risk primarily relates to trade receivables, cash investments, preference shares receivable and derivative fi nancial instruments.

The Group’s exposure to credit risk is infl uenced mainly by the individual characteristics of each customer and there is no signifi cant concentration of risk related to industry segments. The granting of credit is controlled by well established criteria which are reviewed on an annual basis. The maximum exposure to credit risk at the reporting date is the carrying amount of each class of fi nancial asset and fi nancial guarantee amounting to R14,7 million (refer to note 26).

In the current year, 54% (2012: 84%) of the Group’s trade receivables have been covered by Credit Guarantee Insurance Cover (CGIC) and other collateral in the form of bonds and guarantees. The insurance covers 90% of outstanding debt. The reduction in cover during the current year is due to the acquisition of Foodcorp which has resulted in additional trade receivables of R793,5 million. Based on Foodcorp’s stringent credit procedures and the fact that there is no signifi cant concentration of risk related to the customers, the Board is satisfi ed that the trade receivables are not covered by CGIC and other collateral. The Board will reassess the need for cover in the next fi nancial year. The credit policy requires each new customer to be analysed individually for creditworthiness before delivery and payment terms are offered. The Group’s review includes external ratings where available and in some cases bank references. Limits are established for each customer which represents the maximum trading amount without requiring further approval. These limits are reviewed on an ongoing basis. Customers that fail to meet the Group’s benchmark creditworthiness may transact with the Group on a cash basis. Customers that default on payments are closely monitored and put on “stop supply” if required.

The preference shares receivable are secured against shares in Foodcorp and have been settled subsequent to year-end.

The Group deposits cash surpluses with fi nancial institutions of high quality and standing. The following table shows the cash and cash equivalents allocated in terms of bank rating. These ratings are based on Moody’s bank ratings.

2013 2012R’000 R’000

RatingBAA1 2 312 135 305 329Cash on hand 1 056 463

2 313 191 305 792

Investment in money market fund of R450 million relates to investments in Nedbank Limited. The investment has an AA+ rating. The fund invests in call deposits, treasury bills, negotiable certifi cates of deposit, fi xed deposits, promissory notes and commercial paper. These instruments carry very low risk and provides a 48 hour liquidity, but cannot be classifi ed as cash and cash equivalents as the individual instruments held by the fund do not meet the maturity criteria of IAS 7: (Statement of cash fl ow). These instruments are considered to be equity instruments categorised as fi nancial assets of fair value through profi t and loss.

The Group has minimal risk of illiquidity. Its unutilised borrowing capacity is R615 million (2012: R470 million). Due to the dynamic nature of the underlying businesses, the Group maintains fl exibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Group’s cash and cash equivalents on the basis of expected cash fl ow.

The Group’s derivative fi nancial liabilities, and current trade and other payables are all due within one year and the impact of discounting them is not signifi cant.

207


The table below summarises the maturity profi le of the Group’s fi nancial liabilities based on contractual undiscounted payments:

Less thanone year

R’000

One totwo years

R’000

Two tothree years

R’000

Greater thanthree years

R’000TotalR’000

2013Interest-bearing liabilities – current 609 746 609 746Interest-bearing liabilities – non-current 486 463 490 121 5 505 321 6 481 905Preference share liabilities 5 089 151 090 156 179Trade and other payables (excluding employee benefi t payables) 2 337 408 29 500 2 366 908Derivative fi nancial liabilities 5 766 5 766

2 958 009 515 963 490 121 5 656 411 9 620 504

2012Interest-bearing liabilities – current 39 917 39 917Interest-bearing liabilities – non-current 36 400 34 652 71 052Trade and other payables (excluding employee benefi t payables) 1 515 731 1 515 731Derivative fi nancial liabilities 3 3

1 555 651 36 400 34 652 1 626 703

Market risk

Interest rate risk

The Group is exposed to interest rate risk on its cash deposits and interest-bearing liabilities, which can impact on the cash fl ows of these instruments. The exposure to interest rate risk is managed through the Group’s cash management system which enables the Group to maximise returns whilst minimising risk. The effective interest rate for the year was 8,04% (2012: 5,57%).

The post-tax impact on the income statement as at 30 June for fl uctuations in variable interest rates, with all other variables held constant, would have been as follows:

2013R’000

2012R’000

+3% 18 861 (4 469)

Foreign currency risk

In the normal course of business the Group enters into transactions denominated in foreign currencies. Trade and other payables include net payables of R0,3 million (2012: R4,6 million), trade and other receivables of R1,2 million (2012: R nil) in respect of sales and purchases in foreign currencies. The Group also has substantial foreign currency Senior Secured Notes that are Euro denominated. The currencies predominantly traded in by the Group are USD, GBP and EUR. As a result, the Group is subject to exposure from fl uctuations in foreign currency exchange rates. The Group utilises forward exchange contracts and currency options to minimise foreign currency exchange risk in terms of its risk management policy. All forward exchange contracts and currency options are supported by underlying transactions.

First priority Senior Secured Notes

On 4 March 2011, Foodcorp issued €390,0 million Senior Secured Notes with a coupon rate of 8,75% per annum and a maturity date of 1 March 2018.

Payments under the 2018 Senior Secured Notes consists of two components, namely the principal due on 1 March 2018 and coupon payments due semi-annually on 1 September and 1 March. In order to hedge the foreign currency exposure, the following foreign exchange contracts were entered into:• the principal was hedged 50% through a performance participating foreign exchange and 50% through

a vanilla forward exchange contract, both for six years maturing on 1 March 2017;• the semi-annual coupon payments have been partially hedged (50%) at inception using forward

exchange contracts maturing on each coupon payment date, until 1 March 2017; and• in addition, the remaining portion of the coupon payment due on 1 September 2013 was recently

hedged using a vanilla forward exchange contract.

208


The mark-to-market effects of the hedging arrangements are accounted for in the income statement under fi nancing costs.

A 10% appreciation or depreciation in the EUR will have a R565 million impact on the carrying amount of the loan. Refer below for impact of the forward exchange contract (FEC) and participation hedge, which offsets these adjustments.

Averagerate

R

Foreigncontractamount

’000

Fair valueof FECs

R’000

30 June 2013EUR FECs – assets* 13,97 263 250 336 847EUR FECs – liabilities 11,7 296 (64)USD FECs – assets 9,5 12 412 7 023USD FECs – liabilities 9,4 1 280 894AUD FECs – liabilities 9,4 189 77

30 June 2012EUR FECs – liabilities 10,54 30 3

* Relates to Senior Secured Notes.

Foreignoption

amount’000

Fair valueof options

R’000

30 June 2013USD currency options – assets 12 000 7 630USD currency options – liabilities 12 000 1 552EUR currency options – assets 900 658EUR currency options – liabilities 900 141

30 June 2012USD currency options – assets 53 000 7 685USD currency options – liabilities 35 000 6 941

30 June 2013Euro participation hedgeForeign currency amount 195 000

Currency

Sensitivity of future (post-tax) income statement impact arising on the maturity of currency option contracts and trade payables:

Profi t/( Loss) as a result of a movement of the USD and EUR at 30 June assuming the spot price remains constant thereafter until the maturity of the contracts.

2013R’000

2012R’000

10% increase in the value of the USD against the Rand 23 239 29 32310% decrease in the value of the USD against the Rand (21 378) (29 323)10% increase in the value of the EUR against the Rand 653 85710% decrease in the value of the EUR against the Rand (493 443)

Commodity price and procurement risk

Commodity price risk arises from the risk of an adverse effect on current or future earnings from fl uctuations in the prices of commodities. To stabilise prices for the Group’s substantial commodity requirements, derivative instruments including forward contracts, commodity options and futures contracts are used to hedge its exposure to commodity price risk.

209


The overriding directive is to procure commodities at the lowest cost to meet forecast requirements, both internally and for external sales. Call and put options are utilised within this framework to manage commodity requirements and supply. The use of written options is restricted to the hedging of existing long positions and is limited to put options.

The overall procurement strategy and net positions are reported monthly to the Board and an oversight committee. The oversight committee is responsible for the setting of the monthly company view with regard to future price movements. The daily trading by the procurement team is restricted in terms of this company view, unless prior approval is obtained from the Procurement Committee.

Maize and soya

Sensitivity of future (post-tax) income statement impact arising on the maturity of maize and soya derivative contracts:

Profi t/(loss) as a result of a movement in the spot price of maize and soya and resulting impact on tonnage at 30 June, assuming the spot price remains constant thereafter until the maturity of the contracts.

2013R’000

2012R’000

Maize – 5% increase 510 19 194Maize – 5% decrease (510) (19 194)Soya – 15% increase 1 745 28 225Soya – 15% decrease (1 745) (28 225)

Rainbow Farms Proprietary Limited has entered into contract grower agreements with various counterparties to procure broiler chickens for the forthcoming fi nancial year.

The commitment value as at 30 June 2013 was R80,6 million (2012: R19,9 million).

Capital risk management

The Board’s policy is to maintain a strong capital base so as to maintain shareholder, creditor and market confi dence and to sustain the future development needs of the business. The Board monitors both the spread of shareholders and return on equity (which is defi ned as profi t for the year expressed as a percentage of average total equity) and the level of dividends paid to shareholders.

The Group’s target is to achieve a return on shareholders’ equity in excess of 25%. In 2013 the return was 0,5 % (2012: 9,3%). There were no changes to the Group’s approach to capital management during the year.

Fair value estimation

IFRS 7 requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

– quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);

– inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and

– inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The following table presents the Group’s assets and liabilities that are measured at fair value at 30 June :

Level 1R’000

Level 2R’000

Level 3R’000

TotalR’000

30 June 2013AssetsTrading derivatives 361 505 361 505

Total assets 361 505 361 505

LiabilitiesTrading derivatives 5 766 5 766

Total liabilities 5 766 5 766

210

Level 1R’000

Level 2R’000

Level 3R’000

TotalR’000

30 June 2012AssetsTrading derivatives 20 811 20 811

Total assets 20 811 20 811

LiabilitiesTrading derivatives 3 3

Total liabilities 3 3

The fair value of fi nancial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specifi c estimates. If all signifi cant inputs required to fair value an instrument are observable, the instrument is included in level 2.

29. FINANCIAL INSTRUMENTS BY CATEGORY

The accounting policies for fi nancial instruments have been applied to the line items below:

Loans andreceivables

R’000

Assets at fairvalue throughprofi t and loss

R’000

Derivativesused for

hedgeaccounting

R’000TotalR’000

Assets per the statement of fi nancial position

30 June 2013Trade and other receivables 1 977 564 1 977 564Preference shares receivable 130 275 130 275Derivative fi nancial instruments 360 708 797 361 505Cash and cash equivalents 2 313 191 2 313 191Investment in money market fund 450 000 450 000

At the end of the year 4 421 030 810 708 797 5 232 535

30 June 2012Trade and other receivables 1 272 042 1 272 042Derivative fi nancial instruments 20 811 20 811Cash and cash equivalents 305 792 305 792

At the end of the year 1 577 834 20 811 1 598 645

Otherfi nancial

liabilitiesR’000

Liabilitiesat fair value

throughprofi t and loss

R’000

Derivativesused

for hedgeaccounting

R’000TotalR’000

Liabilities per the statement of fi nancial position

30 June 2013Interest-bearing liabilities – long term 5 515 289 5 515 289Interest-bearing liabilities – short term 297 229 297 229Preference share liabilities – long term 72 959 72 959Preference share liabilities – short term 5 089 5 089Derivative fi nancial instruments 5 766 5 766Trade and other payables 2 359 894 2 359 894

At the end of the year 8 250 460 5 766 8 256 226

30 June 2012Interest-bearing liabilities – long term 65 642 65 642Interest-bearing liabilities – short term 33 243 33 243Derivative fi nancial instruments 3 3Trade and other payables 1 515 731 1 515 731

At the end of the year 1 614 616 3 1 614 619

211

30. RELATED PARTY TRANSACTIONS

Related party relationships exist between RCL Foods, its subsidiaries and Remgro and its subsidiaries, associates and joint ventures. Remgro Management Services provides treasury services to the Group. In addition, there is preference shares receivable of R130,3 million which relate to amounts receivable from Foodcorp management share ownership structure.

Group

2013 R’000

2012 R’000

Interest paid to Remgro Management Services Limited * 8 834 7 470Administration fee paid to Remgro Management Services Limited 6 656 5 417Amount owing to Remgro Management Services Limited included in payables 1 820 991Underwriting fee paid to Industrial Partnership Investments Limited 58 994Bank charges paid to First National Bank Limited 807 550Corporate fi nance transaction costs paid to Rand Merchant Bank 27 360Net interest received from First National Bank Limited 7 764Purchases from Unilever South Africa Proprietary Limited 63 809 2 287Amount owing to Unilever South Africa Proprietary Limited included in payables 3 353 273Purchases from Quality Sugars Proprietary Limited 11 309 6 641Amount owing to Quality Sugars Proprietary Limited included in payables 1 476 910Purchases from Grindrod South Africa Proprietary Limited 4 055Amount owing to Grindrod South Africa Proprietary Limited included in payables 388Purchases from PG Glass Proprietary Limited 1Preference shares receivable – Foodcorp Management Holdings Proprietary Limited 130 275Preference shares dividend – Foodcorp Management Holdings Proprietary Limited 1 894Key managementExecutive management and the senior leadership team are classifi ed as key management:– short-term and post-employment benefi ts 113 353 96 354– share-based payments 21 128 18 553

134 481 114 907

* There were no outstanding loans with Remgro Management Services at year-end.

31. DIRECTORS’ EMOLUMENTS

Basic Salary R’000

Pension contribution

R’000

Other benefi ts*


2013M Dally 5 344 387 118 5 849RH Field 2 595 258 64 2 917

7 939 645 182 8 766

2012M Dally 4 962 359 108 5 429RH Field 2 334 232 59 2 625

7 296 591 167 8 054

* Other benefi ts include Company contributions to disability insurance, medical aid and UIF.

212

31. DIRECTORS’ EMOLUMENTS continued

2013 R’000

2012 R’000

Non-executives (for services as a director)Present directorsHJ Carse* 71JJ Durand* 189 172Dr M Griessel 307 278PR Louw* 189 172NP Mageza 335 304JB Magwaza 232 211MM Nhlanhla 232 186RV Smither 425 355GC Zondi** 406 313

2 386 1 991

Past directorsCM van den Heever* 109 9MH Visser* 172

109 181

Total 2 495 2 172

* Paid to Remgro Management Services.** Paid to Imbewu Capital Partners Consulting Proprietary Limited.

Interests of directors of the Company in share options granted under the RCL Share Incentive Scheme Options granted to executive directors and unexpired or unexercised as at 30 June 2013 are as follows:

Options exercisable at 30 June

2012

Issue price prior to

rights issue Rand

Options at 30 June

2012

Rights issue

adjustment*

Issue price post -rights

issue* Rand

Options exercised

during the year

Options at 30 June

2013Exercise

price

Gain on options

exercised R’000

M Dally 779 211 10,39 779 211 58 442 9,67 (837 653) 15,05 4 5061 101 317 16,35 1 101 317 87 371 15,21 1 188 688

504 245 14,20 504 245 37 979 13,21 542 224

2 384 773 2 384 773 183 792 (837 653) 1 730 912 4 506

RH Field 154 328 10,39 154 328 11 575 9,67 (165 903) 16,80 1 167573 639 16,35 573 639 45 508 15,21 619 147264 404 14,20 264 404 19 915 13,21 284 319

992 371 992 371 76 998 (165 903) 903 466 1 167

Total 3 377 144 3 377 144 260 790 (1 003 556) 2 634 378 5 673

* The issue price and number of oustanding options were amended as a result of the rights issue in order to place the holders in the same position as they were before the rights issue. These amendments have no fi nancial effect for the Group as they have placed the participants in the same economic position as they were before the rights issue.

213


No options were issued during the year, nor will any further options be issued under the RCL Share Incentive Scheme, as this scheme has been replaced by the RCL Share Appreciation Rights Scheme approved at the 43rd annual general meeting of the shareholders held on 31 July 2009. The scheme will be simply allowed to run its course in respect of existing options.

Options exercisable at 30 June

2011


rights issue Rand

Options at 30 June

2011

Issue price post -rights

issue Rand

Options exercised

during the year

Options at 30 June

2012Exercise

price

Gain on options

exercised R’000

M Dally 464 000 6,65 464 000 (464 000) 15,10 3 922

779 211 10,39 779 211 779 211

734 211 16,35 1 101 317 1 101 317

336 163 14,20 504 245 504 245

2 313 585 2 848 773 (464 000) 2 384 773 3 922

RH Field 128 000 6,65 128 000 (128 000) 15,13 1 085

154 328 10,39 154 328 154 328

382 426 16,35 573 639 573 639

176 269 14,20 264 404 264 404

841 023 1 120 371 (128 000) 992 371 1 085

Total 3 154 608 3 969 144 (592 000) 3 377 144 5 007

Interests of Directors of the Company in Share Appreciation Rights awarded under the RCL Share Appreciation Rights Scheme

Share Appreciation Rights awarded to Executive Directors and unexpired or unexercised as at 30 June 2013 are as follows:

Rights exercisable at 30 June

2012


rights issue Rand

Issue price post-

rights issue* Rand

Rights at 30 June

2012

Rights awarded

during the year

Adjustment in respect

of rights issue*

Rights exercised

during the year

Rights at 30 June

2013Exercise

price

Gain on rights

exercised R’000

Grant date fair value of rights awarded

during the year**

R’000

M Dally 15,34 14,27 845 679 63 266 908 945

15,83 14,73 865 465 63 791 929 256

17,68 16,45 665 120 49 452 714 572

14,19 13,20 714 404 53 713 768 117 1 984

2 376 264 714 404 230 222 3 320 890 1 984

RH Field 15,34 14,27 397 932 29 770 427 702

15,83 14,73 401 989 29 629 431 618

17,68 16,45 339 739 25 260 364 999

14,19 13,20 348 317 26 188 374 505 968

1 139 660 348 317 110 847 1 598 824 968

Total 3 515 924 1 062 721 341 069 4 919 714 2 952

* The issue price and number of outstanding options were amended as a result of the rights issue in order to place the holders in the same position as they were before the rights issue. These amendments have no fi nancial effect for the Group as they have placed the participants in the same economic position as they were before the rights issue.

Rights exercisable at 30 June

2011


rights issue Rand

Rights at 30 June

2011

Rights awarded

during the year

Rights exercised

during the year

Rights at of rights 30 June

2012Exercise

price

Gain on rights

exercised R’000

Grant date fair value of rights awarded

during the year

R’000**

M Dally 15,34 845 679 845 67915,83 865 465 865 46517,68 665 120 665 120

2 376 264 2 376 264

RH Field 15,34 397 932 397 93215,83 401 989 401 98917,68 339 739 339 739

1 139 660 1 139 660

Total 3 515 924 3 515 924

214


Interests of Directors of the Company in Conditional Shares awarded under the RCL Conditional Share Plan

Conditional Shares at

30 June 2012

Conditional Shares

awarded during

the year

Adjustment in respect

of rights issue*

Conditional Shares settled during

the year

Conditional Shares at

30 June 2013

M Dally 628 659 46 888 675 547RH Field 316 517 23 607 340 124

Total 945 176 70 495 1 015 671

* The number of outstanding conditional shares were amended as a result of the rights issue in order to place the holders in the same position as they were before the rights issue. These amendments have no fi nancial effect for the Group as they have placed the participants in the same economic position as they were before the rights issue.

** Grant date fair value of rights awarded represents the total fair value of rights awarded during the year. This cost will be expensed over the right’s vesting period.

Interests of Directors of the Company in Stated Capital

The aggregate benefi cial holdings as at 30 June 2013 of those Directors of the Company holding Shares are detailed below:

Direct

benefi cial

2013Indirect

benefi cial

Direct

benefi cial

2012Indirect

benefi cial

Executive directorsM Dally 1 201 653 964 000RH Field 250 000 378 000

Non-executive directorsDr M Griessel 24 680 4 680NP Mageza 252JB Magwaza * 2 558 861 2 558 861MM Nhlanhla * 342 887 342 887GC Zondi * 3 766 643 3 766 643

1 451 653 6 693 323 1 342 000 6 673 071

* Assumes 100% vesting in terms of BEE transaction.

There has been no change in the interest of the Directors in the Stated Capital of the Company since the end of the fi nancial year to the date of this report.

Directors’ emoluments paid by Remgro Limited

Fixed payFees

R’000Salaries

R’000

Retirement fund

R’000

Other benefi ts 4


2013ExecutiveHJ Carse1 1 494 296 204 1 994JJ Durand 213 7 080 1 447 265 9 005PR Louw 1 209 240 204 1 653CM van den Heever2 1 322 262 207 1 791

Sub-total 213 11 105 2 245 880 14 443


NP Mageza 285 285

Sub-total 285 285

Total 498 11 105 2 245 880 14 728

215

Fixed payFees

R’000Salaries

R’000

Retirement fund

R’000

Other benefi ts 4



2012

ExecutiveMH Visser3 166 7 311 1 696 534 9 707JJ Durand 199 5 030 1 037 248 6 514PR Louw 1 118 222 192 1 532CM van den Heever 1 233 245 192 1 670

Sub-total 365 14 692 3 200 1 166 19 423


NP Mageza 266 266

Sub-total 266 266

Total 631 14 692 3 200 1 166 19 689

1. Mr HJ Carse was appointed as a Director on 19 February 2013. The remuneration refl ected is for 12 months ended June 2013.

2. Mr CM van den Heever resigned as a Director on 31 January 2013. The remuneration refl ected is for 12 months ended 30 June 2013.

3. Mr MH Visser passed away on 26 April 2012.

4. Other benefi ts include medical aid contributions and vehicle benefi ts.

Variable pay – long-term incentive plans

Remgro Share Scheme June 2013 Ordinary shares

Participant

Balance of shares accepted

as at 30 June

2012

Shares accepted

during the period

Date of acceptance

of shares

Offer price Rand

Number of shares paid and delivered1

Date of payment

and delivery

of shares2

Share price on date of payment

and delivery

of shares2 Rand

Increase in value2

R’000


as at 30 June

2013

ExecutiveMH Visser1 172 681 135,00 172 861 26/04/2012 129,60

68 230 186,70 68 230 26/04/2012 129,60

Total 240 911 240 911

1. In terms of the rules of the Remgro Share Scheme, the executor of the estate of the late Mr MH Visser was entitled to effect payment of all the shares offered to him within 12 months after the date of his death or before the expiry of the offer periods, whichever was the earlier. Full payment of all shares offered was effected during the year under review.

2. It refers to the increase in value of the scheme shares of the indicated participant from the offer date to the date of payment and delivery. The share price used to calculate the deemed increase in value for the late Mr Visser, is the Remgro share price on the date that he passed away.

Participant


as at 30 June

2011

Shares accepted

during the period

Date of acceptance

of shares

Offer price Rand

Number of shares paid and delivered1

Date of payment

and delivery

of shares2

Share price on date of payment

and delivery

of shares2 Rand

Increase in value2

R’000


as at 30 June

2012

ExecutiveMH Visser1 172 681 135,00 172 681

68 230 186,70 68 230

Total 240 911 240 911

1. In terms of the rules of the Remgro Share Scheme, the executor of the estate of the late Mr MH Visser was entitled to effect payment of all the shares offered to him within 12 months after the date of his death or before the expiry of the offer periods, whichever was the earlier. Full payment of all shares offered was effected during the year under review.

2. It refers to the increase in value of the scheme shares of the indicated participant from the offer date to the date of payment and delivery. The share price used to calculate the deemed increase in value for the late Mr Visser, is the Remgro share price on the date that he passed away, namely 26 April 2012.

216


Remgro Equity Settled Share Appreciation Right Scheme (SARs) – 2013

Participant

Balance of SARs

accepted as at

30 June 2012

SARs accepted

during the period

Offer date

Offer price2 Rand

Number of SARs

exercised

Date exercising

SARs

Share price on exercise

date

Increase in value2

R’000

Balance of SARs

accepted as at

30 June 2013


SARs granted during

the period

Executive

MH Visser1 542 424 65,50 542 424 26/04/2012 129,60 34 769

486 465 97,55 486 465 26/04/2012 129,60 15 591

HJ Carse 20 613 78,30 20 613

2 933 75,38 2 933

1 624 82,60 1 624

38 062 97,55 38 062

7 546 29/11/2012 147,25 7 546 299 400

JJ Durand 162 354 78,30 54 118 03/04/2013 185,50 5 801 108 236

15 144 75,38 7 572 03/04/2013 185,50 834 7 572

4 220 82,60 4 220 03/04/2013 185,50 434

235 895 97,55 235 895

271 258 29/11/2012 147,25 271 258 10 762 613

PR Louw 7 066 63,97 7 066

9 058 64,23 9 058 03/04/2013 185,50 1 098

26 995 65,50 26 995

8 860 40,62 8 860 02/04/2013 183,15 1 263

27 432 97,55 27 432

22 646 29/11/2012 147,25 22 646 898 518

CM van den Heever 46 976 31,43 46 976 30/10/2012 147,05 5 431

17 961 78,30 17 961

2 680 75,38 2 680

1 419 82,60 1 419

34 292 97,55 34 292

6 830 29/11/2012 147,25 6 830 270 992

1 692 473 308 280 1 159 693 65 221 841 060 12 231 523

1. In terms of the rules of the SARs scheme, the executor of the estate of the late Mr MH Visser was entitled to exercise all the SARs granted to him at any time within 12 months after the date of his death, or before the expiry of the SARs period (being seven years from the grant date), whichever was the earlier. This right was exercised during the year under review.

2. It refers to the increase in value of the SAR Scheme shares of the indicated participants from the offer date to the date of payment and delivery. The share price used to calculate the deemed increase in value for the late Mr Visser, is the Remgro share price on the date that he passed away, namely 26 April 2012.

Remgro Equity Settled Share Appreciation Right Scheme (SARs) – 2012

Participant

Balance of SARs accepted

as at 30 June

2011

SARs accepted

during the period

Offer date

Offer price2 Rand

Number of SARs

exercised

Date exercising

SARs

Share price on exercise

date

Increase in value 3

R’000

Balance of SARs accepted

as at 30 June

2012


SARs granted during

the period

Executive

MH Visser1 542 424 65,50 542 424

486 465 97,55 486 465

JJ Durand 427 047 38,90 427 047 26/10/2011 117,75 33 673

162 354 78,30 162 354

22 717 75,38 7 573 26/10/2011 117,75 258 15 144

12 662 82,60 8 442 26/10/2011 117,75 230 4 220

235 895 97,55 235 895

PR Louw 7 000 63,97 7 000

9 058 64,23 9 058

26 995 65,50 26 995

8 860 40,62 8 860

27 432 97,55 27 432

CM van den Heever 46 976 31,43 46 976

17 961 78,30 17 961

2 680 75,38 2 680

1 419 82,60 1 419

34 292 97,55 34 292

2 072 237 443 062 34 161 1 629 175

217


1. In terms of the rules of the SARs scheme, the executor of the estate of the late Mr MH Visser was entitled to exercise all the SARs granted to him at any time within 12 months after the date of his death, or before the expiry of the SARs period (being seven years from the grant date), whichever was the earlier. This right was exercised during the year under review.

2. In terms of the rules of the SARs scheme, the offer price of SARs that were awarded prior to the unbundling of the investment in Implats, was reduced by between R7,58 and R13,19 (depending on the offer date) to ensure that the participants were placed in substantially the same position as they were prior to the unbundling.

3. It refers to the increase in value of the SAR Scheme shares of the indicated participants from the offer date to the date of payment and delivery.

32. BEE TRANSACTION

On 18 March 2008, shareholders approved the Current RCL BEE Structure. The participants in the Current RCL BEE Structure are the RCL Strategic Partners.

Details of the transaction

In terms of the transaction a special purpose entity ECI, acquired an effective 15% of RCL Food s’ entire issued share capital for R915,6 million on 30 July 2008. The purchase price was settled by issuing variable rate (CPIX plus 6%) cumulative redeemable preference shares in Eagle Creek to RCL Foods.

Ordinary dividends paid to Eagle Creek will be applied immediately to reduce the outstanding redemption amount.

The shares issued to Eagle Creek are also subject to restrictions on alienation and encumbrance until 30 July 2018. Should Eagle Creek be unable to pay the full redemption amount payable upon redemption of the preference shares, RCL Foods is entitled to effect a buy-back in terms of section 48 of the Companies Act of the number of shares whose value at that time is equivalent to the outstanding redemption amount. At 30 June 2013 the outstanding redemption amount was R1426,6 million (2012: R1 292,7 million).

Accounting principles and assumptions

The terms of issuance of the ordinary shares and acquisition of the preference shares are deemed for accounting purposes to constitute the issuance of an option in RCL Foods shares granted to Eagle Creek, effective on 18 March 2008, when the shareholders’ approval was obtained. Accordingly, the issuance of the shares and the subscription by RCL Foods to the Eagle Creek Preference Shares, has not been recognised.

The RCL Foods Shares attributed to the Rainbow Employee Trust, net of any shares that may be bought back by RCL Foods to settle the redemption amount, will be distributed to employees who are in service of RCL Foods at the end of the 10-year period. The basis of apportionment of shares to employees is set out in the trust deed and rewards longer service.

33. BUSINESS COMBINATIONS

New Foodcorp Holdings Proprietary Limited

On 1 May 2013 the Group acquired an effective holding of 64,18% in Foodcorp through the investment vehicle Capitau Investment Management. The purchase consideration paid by Capitau Investment Management was R1,026 billion, of which R997,6 million was paid by the Group. Foodcorp manufactures, markets and distributes a diversifi ed portfolio of food products ranging from basic essentials to top-end desserts and convenience meals. Many of the products are associated with South African tradition and heritage, and are therefore among the leading and best recognised brands in South Africa. The acquisition is in line with the Group’s strategic growth plan.

Goodwill of R2,618 billion arose from the acquisition. Goodwill mainly represents the ability of the combined business of sale to target consumer markets in sub-Saharan Africa. None of the goodwill recognised is deductible for tax purposes.

The following table summarises the consideration paid, for the fair value of assets acquired, liabilities assumed and the non-controlling interest at the acquisition date.

218

33. BUSINESS COMBINATIONS continued

2013R’000

2012R’000

Consideration at 1 May 2013Cash 1 026 225

Total consideration 1 026 225

Recognised amounts of identifi able assets acquired and liabilities assumedCash and cash equivalents 279 217Property, plant and equipment 1 611 838Intangible assets 2 850 149Preference shares receivable 169 648Inventories 390 839Net assets for a disposal group classifi ed as held for sale 397 000Derivative fi nancial instruments (16 349)Current income tax liabilities (149)Trade and other receivables 878 519Trade and other payables (845 062)Retirement benefi t obligations (40 086)Interest-bearing liabilities (5 980 086)Deferred income tax liabilities (955 689)

Total identifi able net liabilities (1 260 211)

Non-controlling interest 331 424Goodwill 2 617 860

Acquisition -related costs of R44,6 million have been charged to administration expenses in the income statement for the year ended 30 June 2013.

The fair value of the non-controlling interest, in the unlisted company, was estimated by using the purchase price paid for the acquisition by Capitau Investment Management. This purchase price was adjusted for the lack of control and lack of marketability that market participants would consider when estimating the fair value of the non-controlling interest.

The revenue included in the income statement since 1 May 2013 contributed by Foodcorp was R1 217 million. Foodcorp also contributed operating profi t of R99,0 million over the same period. Had New Foodcorp Holdings Proprietary Limited been consolidated from 1 July 2012, the income statement would show pro forma revenue of R6 471,0 million and operating profi t of R502 million.

The purchase allocation is not considered to be fi nal.

BushValley Chickens

The Group acquired the fi xed assets and poultry processing operations of BushValley Chickens, located near Tzaneen in the Limpopo Province, for a purchase consideration in cash of R92,5 million. The acquisition is in line with the Group’s strategic growth plan. The impact on the Group’s results are minimal as the effective date of the acquisition was only 12 March 2012 and includes the following:

30 June2013

R’000

30 June2012

R’000

Revenue 57 049Operating loss (including start-up costs) (4 723)

The impact on the Group’s results, had the acquisition occurred on 1 July 2011, is not presented as it is not practical to calculate due to different input costs prior to the acquisition. Details of net assets acquired and the cost of the investment are as follows:Land 1 232Buildings 33 768Plant and equipment 47 851Vehicles 9 649

Net assets acquired 92 500

219

33. BUSINESS COMBINATIONS continued

Carrying value

As the Group acquired the assets and liabilities of this business rather than the shares of the legal entity that previously owned such assets and liabilities, it is impractical to disclose the carrying amounts in the accounting records of the previous owners prior to the acquisition. In these circumstances the Group does not have access to such carrying values.

No goodwill arose from the acquisition as the purchase consideration determined in accordance with IFRS is equal to the fair value. The purchase allocation has been performed and was considered fi nal in the prior fi nancial year.

34. SHARE AND SHAREHOLDER INFORMATION

Stated capital

Authorised 1 000 000 000Issued 625 433 701*Number of shareholders 5 457Financial year-end JuneAnnual general meeting November

Number of shareholders %

Number of shares %

Shareholder spread1 – 1 000 3 435 62,9 905 345 0,11 001 – 10 000 1 545 28,3 5 598 746 0,910 001 – 100 000 381 7,0 10 148 777 1,6100 001 – 1 000 000 74 1,4 23 449 099 3,81 000 001 and over 22 0,4 585 331 734 93,6

Total 5 457 100,0 625 433 701* 100,0

Distribution of shareholdersHolding company 3 0,1 436 553 868 69,7Empowerment 1 51 177 217 8,1Mutual funds 59 1,1 54 407 467 8,7Pension funds 73 1,3 31 548 363 5,0Individuals 4 765 87,3 14 290 844 2,2Investment companies 16 0,3 20 342 853 3,3Nominees and trusts 292 5,4 6 133 568 1,0Insurance companies 13 0,2 2 833 857 0,5Endowment funds 6 0,1 252 095 0,1Private companies 90 1,7 1 832 811 0,3Banks 26 0,5 3 218 184 0,5Public companies 4 0,1 60 995 0,1Medical aid schemes 4 0,1 259 078 0,1Other corporations 28 0,5 105 507 0,1Brokers 19 0,4 1 571 828 0,2Close corporations 58 1,1 845 166 0,1

Total 5 457 100,0 625 433 701 100,0

* Includes 51 177 217 shares issued to Eagle Creek Investments 620 Proprietary Limited in terms of the BEE scheme (refer to note 32 for details).

220

Number of shareholders %

Number of shares %

34. SHARE AND SHAREHOLDER INFORMATION continued

Public and non-public ShareholdersStrategic holdings (more than 10%) 3 0,1 436 553 868 69,7Empowerment 1 51 177 217 8,1Directors and associates of the Company holdings 6 0,1 1 557 850 0,4

Total non-public Shareholders 10 0,2 489 288 935 78,2Public Shareholders 5 447 99,8 136 144 766 21,8

Total 5 457 100,0 625 433 701 100,0

Benefi cial shareholders’ holding of 1% or moreRemgro Limited 436 553 868 69,7Eagle Creek Investments 620 Proprietary Limited 51 177 217 8,1Oasis Crescent Global Equity Fund 30 235 064 4,8Government Employees Pension Fund 10 621 762 3,4Investment Solutions Limited 21 640 268 1,7

35. SUBSEQUENT EVENTS

On 1 July 2013, RCL Foods Limited agreed with Foodcorp management to purchase their 23,9% shareholding in New Foodcorp Holdings Proprietary Limited for a cash consideration of R393 million. No other material change has taken place in the affairs of the Group between the end of the fi nancial year and the date of this report.

221

ANNEXURE 8

MATERIAL LIABILITIES AND COMMITMENTS – RCL FOODS

1. BORROWINGS

Bank borrowings

RCL Foods has a short-term unsecured loan amounting to R116 million (one hundred and sixteen million Rands) as at 30 June 2013. The unsecured loan bears interest of between JIBAR +1 .5% and JIBAR +1 .65%. The outstanding loan together with the accrued interest shall be repaid in quarterly instal ments on the last day of the month.

Foodcorp Senior Secured Notes

The Foodcorp Senior Secured Notes are listed on the Irish Stock Exchange, are Euro denominated and bear interest at a fixed rate of 8 .75%. The Foodcorp Senior Secured Notes have been translated at year-end at a spot rate of R12 .86. The Senior Secured Notes will mature in March 2018. The fair value of the Foodcorp Senior Secured Notes at year-end was R5.291 billion (five thousand two hundred and ninety one billion Rands).

The Group has provided financial institutions relating to the Foodcorp Senior Secured Notes with the following security for its borrowing facilities:

• A pledge and reversionary pledge of trade receivables for an amount of R856.6 million.

• A pledge of inventory for an amount of R417.1 million (four hundred and seventeen point one million Rands).

• A pledge of trademarks for an amount of R1 864.4 million (one thousand eight hundred and sixty four million Rands) .

• A pledge of customer relationships for an amount of R966.6 million (nine hundred and sixty six million Rands).

• A pledge of software for an amount of R7.2 million (Seven point two million Rands).

• Special notarial bond over plant and equipment for an amount of R400.0 million and R1,4 billion (Four hundred million and one point four billion Rands).

• First covering mortgage bonds over certain specified immovable property for an aggregate amount of R122.0 million and R2.8 billion (One hndred and twenty two million and two point eight billion Rands).

• General notarial bond over moveable assets for an amount of R200.0 million and R1.4 billion (Two hundred million Rands and one point four billion Rands).

• First deed of mortgage with the Registrar of Ships over certain fishing vessels for the amount of R160.0 million (One hundred and sixty million Rands).

• Pledge and cession of the ordinary shares in Foodcorp and each of Foodcorp’s subsidiaries .

• Cash and cash equivalents have been pledged for an amount of R48.5 million (Forty eight point five million Rands).

2. INTER-COMPANY FINANCING

There are no material inter-company loans between RCL Foods and Remgro or any other Remgro group companies.

No loans were granted or security furnished by the Company or its subsidiaries to or for the benefit of any third parties, including any Directors or managers or any associates of any Directors or managers of the Company or its subsidiaries as at the Last Practicable Date.

222

3. COMMITMENTS

Material commitments, lease payments and contingent liabilities as at 30 June 2013.

Lease commitments

30 June2013

R’000

30 June2012

R’000

Operating leases:

Due within one year 111 121 81 670

Due within two to fi ve years 166 703 205 634

277 824 287 304

Due thereafter

In respect of:

– property 233 542 246 619

– plant and equipment 34 316 32 908

– other 9 966 7 777

277 824 287 304

In addition, the RCL Foods Group has operating lease commitments with rentals determined in relation to volumes of activity. It is not possible to quantify accurately future rentals payable under such lease arrangements.

Contingencies

30 June2013

R’000

30 June2012

R’000

Legal dispute 2 250 6 000

Contract grower guarantees 12 487 22 433

14 737 28 433

The RCL Foods Group has a contingent liability in respect of a legal claim for the dismissal of employees. The matter is ongoing and legal counsel is of the opinion that the RCL Foods Group will be successful. The Directors have concluded that it is highly unlikely that the RCL Foods Group will incur a financial loss. The RCL Foods Group has contingencies in respect of contract grower arrangements whereby the RCL Foods Group has guaranteed bank loans given to certain contract growers. These guarantees will continue in place for a further three years. It is not anticipated that any material liabilities will arise from these contingencies. However, should they arise the RCL Foods Group will acquire claims against the growers’ farms which would reduce the net exposure.

There have been no material changes in commitments, lease payments and contingent liabilities between 30 June 2013 and the Last Practicable Date.

223

ANNEXURE 9

MATERIAL LIABILITIES AND COMMITMENTS – TSB SUGAR HOLDINGS

1. BORROWINGS

TSB Sugar Holdings have a long-term loan in place with First National Bank, a division of FirstRand Bank Limited, (‘’FNB’’) amounting to R150 million as at 30 June 2013 and a bank overdraft with FNB amounting to R20.8 million (the ‘’FNB Long-term loan’’).

The FNB long-term loan is unsecured, bears interest at the JIBAR (5.14% p.a.) + 2.3% p.a. and the interest is payable in quarterly payments and the capital is repayable in 5 equal yearly instalments of R30 000 000 on 15 April of each year starting on 15 April 2014.

The FNB bank overdraft amounting to R20 786 000 (2012: R0) was obtained for the purpose of working capital at the prime rate (8.5%) less 2% of interest per annum in South Africa and is unsecured and payable on demand.

Subsequent to 30 June 2013 TSB Sugar Holdings obtained an additional R120 million as a long-term loan from FNB.

2. INTER-COMPANY FINANCING

TSB Sugar Holdings had the following material inter-company loans in place as at 30 June 2013:

The Remgro Management Services loan for the Pongola Mill acquisition R72 000 000 (2012: R108 000 000) is unsecured, bears interest at JIBAR (5.14% p.a.) + 3.5% p.a. and the interest is payable in quarterly payments and repayable on 3 months’ notice .

The Remgro Management Services working capital loan of R160 000 000 (2012: R200 000 000) is unsecured, bears interest at J IBAR (5.14% p.a.) + 3.5% p.a. and the interest is payable in quarterly payments and repayable on 3 months’ notice.

The Remgro Management Services overdraft of R353 500 000 (2012: R nil) is unsecured, bears interest at the rate of 5.5% p.a. and the interest is payable monthly in arrears and repayable on demand.

3. COMMITMENTS

Material commitments, lease payments and contingent liabilities as at 30 June 2013 :

Capital commitments

30 June2013

R’000

30 June2012

R’000

Contracted, but not yet incurred 75 361 18 062

Authorised, but not yet contracted 73 886 52 230

149 247 70 292

The capital expenditure is to be financed by the TSB Sugar Holdings group through internally generated funds and external credit facilities.

30 June2013

R’000

30 June2012

R’000

Lease commitments

Operating leases:

Due within one year 27 090 21 285

Due within two to fi ve years 22 877 19 481

Due thereafter – 1 989

Total 49 967 42 755

224

30 June2013

R’000

30 June2012

R’000

In respect of:

– property 30 605 25 973

– plant and equipment 12 757 9 893

– other 6 605 6 889

49 967 42 755

The TSB Sugar Holdings group also has exposure to variable lease commitments in relation to assets.

ContingenciesGuarantee 75 000 50 000

TSB Sugar Holdings provided a long-term loan guarantee in favour of the Land Bank on behalf of Akwandze Agricultural Finance Proprietary Limited. No losses are expected as the risk of default of debtors are limited due to the fact that some debtors are joint ventures to the TSB Sugar Holdings group with no history of default. The loan of the debtor not relating to the TSB Sugar Holding group is supported by Crookes Brothers Limited.

225

ANNEXURE 10

INFORMATION ON THE DIRECTORS AND EXECUTIVE MANAGEMENT OF RCL FOODS AND ITS MAJOR SUBSIDIARIES

DIRECTORS OF RCL FOODS LIMITED

JJ (Jannie) Durand

Position Non-executive Chairman

Appointed June 2012

Nationality South AfricanSouth African

Business address Remgro Limited, Millennia Park, 16 Stellentia Avenue Stellenbosch, 7600

Qualifi cations B.Acc. (Hons), M.Phil. (Management Studies), CA(SA)

Experience Jannie is a Chartered Accountant and was previously the Chief Investment Offi cer of Remgro. He was also previously the Financial Director and Chief Executive Offi cer of VenFin Limited. Prior to his appointment as Chairman, Jannie had served as a non-executive Director of RCL Foods since March 2010.

Other directorships in the past fi ve years Capevin Investments Limited, Discovery Holdings Limited (and various subsidiaries), Mediclinic International Limited, Distell Group Limited, Unilever South Africa Holdings Proprietary Limited, Grindrod Limited, Innovus Tegnologie Oordrag Proprietary Limited, Leopard Creek Country Club Limited, Leopard Creek Share Block Limited, Premier Team Holdings Limited (UK), RCL Foods Limited, Remgro (Chief Executive Offi cer) (and various subsidiaries), RMI Holdings Limited, Retdur Properties Proprietary Limited, Saracens Limited (UK), Stand 218 LC Properties Proprietary Limited, Stellenbosch University.

Dr M (Munro) Griessel (Retired 18 November 2013)

Position Independent non-executive DirectorMember of the Audit Committee and the Risk Committee

Appointed November 2002

Age 46

Nationality South African

Business address Villa 7512, San Lameer Estate, Southbroom, 4277

Qualifi cations Ph.D. (Animal Science)

Experience Munro has over forty years’ experience in the animal feed and livestock industries. He is an honorary life member of the Animal Feed Manufacturers Association and the South African Poultry Association.

Other directorships in the past fi ve years None

226

N P (Peter) Mageza

Position Independent non-executive Director

Member of the Audit Committee, Chairman of the Remuneration and Nominations Committee

Appointed September 2009

Age 58


Business address Unit 6, Kintamani, 34 Pont Road, Bryanston, 2021

Qualifi cations ACCA (UK)

Experience Peter was formerly the Chief Operations Offi cer of the Absa Group. He is a Chartered Certifi ed Accountant and a fellow of The Association of Chartered Certifi ed Accountants (ACCA) UK. He has gained extensive experience through holding various executive positions in the audit, fi nancial services and the transport and logistics sectors.

Other directorships in the past fi ve years Bidvest Group Limited, Clover Industries Limited, MTN Group Limited, Remgro Limited, Eqstra Holdings Limited and Sappi Limited.

D T V (Derrick) Msibi


Appointed August 2013

Age 44


Business address Building 1, Inanda Greens Offi ce Park, 54 Wierda Road, West Wierda Valley, 2196

Qualifi cations BBusSc, BCom (Hons), MCom, CA(SA)

Experience Derrick has extensive business experience, having worked as a manager at KPMG and subsequently as an Executive Director of Old Mutual Asset Managers and Old Mutual Investment Group (SA) Proprietary Limited. He also served as a director of Foodcorp Proprietary Limited and Air Liquide Proprietary Limited.

Other directorships in the past fi ve years Investment Solutions Holdings Limited (Managing Director).

227

M M (Manana) Nhlanhla


Member of the Social and Ethics Committee

Appointed May 2005

Age 61


Business address Mion Investments Proprietary Limited, 77 Old Main Road, Bothas Hill, 3610

Qualifi cations B.Sc., M.A. (Information Science)

Experience Manana is a former university lecturer in information science. Over the past ten years Manana has been involved in building Mion Holdings Limited, an investment company based in KwaZulu-Natal. Manana’s business experience stems from working for Thebe Investments Limited (“Thebe”), also serving as non-executive director on Thebe’s various companies. In 2004 Manana was a founding member of the Batho Bonke Consortium and in 2010 a founding member of the Manyoro consortium in Foskor Proprietary Limited.

Other directorships in the past fi ve years Mion Investments Limited, Batho Bonke Limited, Smit Amandla Marine and Manyoro Limited.

R V (Roy) Smither

Position Independent non-executive DirectorChairman of the Audit Committee, member of the Risk Committee and the Remuneration and Nominations Committee

Appointed December 2008

Age 68


Business address House No 7, 74 Mandeville Road, Bryanston, 2191

Qualifi cations CA(SA)

Experience Roy has a wealth of corporate experience, having served as a director and Chief Executive Offi cer of the ICS Group from 1987 to 1998 and as an executive director of Tiger Brands Limited from 1998 to 2006. Roy is also a member of the First Rand Bank Limited Credit Committee.

Other directorships in the past fi ve years Nampak Limited

228

G M (George) Steyn



Age 54


Business address VDA Capital Proprietary Limited, Corner of Church and Ryneveld Streets, First Floor, Devonshire House, Stellenbosch, 7600

Qualifi cations BA (Law) LLB

Experience George has extensive experience in the retail sector, having joined the Pepkor Group in 1986 and having served as an Executive Director of Pep Retail Limited and Pepkor Retail Limited from 1991 to 1994 and Managing Director from 2005 to 2011. He is actively involved in the broader community, and has been an elected board and council member of Stellenbosch University since 2010. He is currently the Chairman of Council, and also serves on their Audit Committee.

Other directorships in the past fi ve years Du Toit Group Proprietary Limited, Kaap Agri Limited (Chairman), Pepkor Holdings Proprietary Limited.

H J (Hein) Carse

Position Non-executive Director

Appointed February 2013

Age 52


Business address Remgro Limited, Millennia Park, 16 Stellentia Avenue, Stellenbosch, 7600

Qualifi cations M Ing (US), MBA (UP)

Experience Hein joined Rupert International in 1996 and continued to serve the Remgro group in the capacity of Investment Manager of VenFin Limited until November 2009, when he assumed his current position as an Investment Manager of Remgro Limited. He has gained extensive knowledge through holding positions on various boards and committees during his career.


P R (Pieter) Louw



Age 44


Business address Remgro Limited, Millennia Park, 16 Stellentia Avenue, Stellenbosch, 7600


Experience Pieter is a Chartered Accountant who qualifi ed with PricewaterhouseCoopers Inc. in Stellenbosch before joining the Remgro group in 2001. He is currently the Remgro group Financial Manager.

Other directorships in the past fi ve years Various wholly -owned subsidiaries within the Remgro group

229

J B (JB) Magwaza (Retired 18 November 2013)

Position Non-executive DirectorMember of the Remuneration and Nominations Committee


Age 71


Business address 42 Addison Avenue, La Lucia, 4051

Qualifi cations MA (UK)

Experience JB served as an industrial relations consultant to Tongaat-Hulett Sugar from 1975 to 1988. Thereafter he held various directorships within the Tongaat Group and was appointed an executive director of The Tongaat-Hulett Group Limited in May 1994, a position he held until he retired in August 2003.

Other directorships in the past fi ve years Chairman of Tongaat-Hulett and Motseng Property Investment Holdings and director of Richards Bay Minerals, Imbewu Capital Partners, NPC-Cimpor and KAP International.

G C (Gcina) Zondi


Chairman of the Risk Committee and the Social and Ethics Committee

Appointed July 2008

Age 40


Business address Imbewu Capital Partners, Suite 5, Rydall Vale Offi ce Park, 10 Rydall Vale Crescent, La Lucia Ridge Offi ce Estate, La Lucia, 4051

Qualifi cations B.Compt. (Hons), AGA (SA)

Experience Gcina is the founding chief executive and shareholder of Imbewu Capital Partners. He is a qualifi ed General Accountant and is an associate of The South African Institute of Chartered Accountants. He has more than ten years’ experience in the private equity industry of which six years were spent with Nedbank Capital Private Equity as a private equity specialist. Prior to joining Nedbank Capital, Gcina completed his articles of clerkship at KPMG Inc in Durban and has also worked for Hulamin Limited in the fi nance division for two and a half years prior to joining KPMG.

Other directorships in the past fi ve years Imbewu Capital Partners, Reebok South Africa, Isegen South Africa, Container Conversions, Icon Construction, Bo Hire and Sales and Autovest Limited , International Facilities Services South Africa.

230

M (Miles) Dally

Position Chief Executive Offi cer, executive Director

Member of the Risk Committee and the Social and Ethics Committee

Appointed February 2003

Age 56


Business address RCL Foods Limited, Six The Boulevard, Westway Offi ce Park, Westville, 3629

Qualifi cations B.Com.

Experience Miles has 31 years’ experience in the consumer goods industry and served as group Managing Director of Robertsons Holdings Proprietary Limited from 1995 to 2002. After the unbundling of Robertsons Holdings Proprietary Limited he accepted the position of Chief Executive Offi cer at RCL Foods. He was appointed non-executive Chairman of SC Johnson in June 2008. Miles has previously served as Co-Chairman of the Consumer Goods Council of South Africa (CGCSA).

Other directorships in the past fi ve years RCL Foods and its subsidiary companies and SC Johnson & Son of South Africa Proprietary Limited .

R H (Rob) Field

Position Chief Financial Offi cer, executive Director

Member of the Risk Committee and the Social and Ethics Committee

Appointed July 2004

Age 42




Experience Rob is a Chartered Accountant who qualifi ed with Deloitte & Touche in Durban. Prior to joining RCL Foods in May 2003 he spent four years as Commercial Director of Robertsons Homecare Proprietary Limited. During 2009 Rob was appointed as a non-executive director of McCord Hospital.

Other directorships in the past fi ve years RCL Foods and its subsidiary companies and McCord Hospital.

231

EXECUTIVE MANAGEMENT OF RCL FOODS GROUP

T J (Trevor) Harding

Position Group IT Director


Age 51



Qualifi cations B.Comm, Higher Diplomas in Accounting and Tax, CA(SA)

Experience Trevor has over 25 years’ experience in information technology and business systems process management. Prior to joining RCL Foods, he held the positions of IT director of Unilever South Africa and Robertsons. Following the Group restructure in January 2011, Trevor was also appointed to the board of Vector.

Other directorships in the past fi ve years Rainbow Farms and Vector.

S B (Stephen) Heath

Position Group Legal and Corporate Affairs Director


Age 57



Qualifi cations B.A., L.L.B., Grad Dip Industrial Relations, Attorney of the High Court of South Africa

Experience Stephen spent 18 years with RCL Foods as Group Secretary and Legal Advisor prior to his appointment to the board of Rainbow Farms Proprietary Limited. Before joining the Group he gained experience both as a public prosecutor in the Department of Justice and subsequently as an attorney in private practice. He was appointed Human Resource and Legal Director in August 2007 and subsequently Group Human Resources and Corporate Affairs Director. Following the Group restructure in January 2011, Stephen was also appointed to the board of Vector.

Other directorships in the past fi ve years Rainbow Farms, Vector, Lifeline Durban and the South African Agricultural Processors Association.

W S (Wayne) Hoare

Position Group HR Director

Appointed June 2013

Age 50



Qualifi cations BA (Hons)

Experience Wayne has over 25 years’ experience in human resources and people and organi sation management. Prior to joining RCL Foods, he held various positions in HR locally and internationally with Unilever and returned to South Africa in January 2013 after completing a UK -based assignment as Senior Vice president of Leadership and Organisation Development.

232

EXECUTIVE MANAGEMENT OF RAINBOW FARMS PROPRIETARY LIMITED

D S (Scott) Pitman

Position Managing director

Appointed April 2007

Age 51


Business address Rainbow Farms Proprietary Limited, One The Boulevard, Westway Offi ce Park, Westville, 3629

Qualifi cations B.Bus.Sci

Experience Scott has 19 years’ experience in marketing and sales where he has headed up marketing for Robertsons, Distell and Unilever and most recently as Customer Director at Unilever. Scott was appointed Managing Director of Rainbow in January 2011.

Other directorships in the past fi ve years Current: None

P D (Paul) Cruickshank

Position Commercial director

Appointed January 2011

Age 39




Experience Paul is a Chartered Accountant who qualifi ed with Deloitte & Touche in Durban. He joined Rainbow Farms in 2004 as Group Financial Manager and worked in this position until being appointed to the Board in January 2011.


W A (Wouter) de Wet

Position Processing and milling director


Age 47



Qualifi cations BA (Industrial Psychology)

Experience Wouter has 14 years’ management consulting experience in various industries. He served as consultant to Rainbow Farms from 1997 to 2006, when he was appointed as National Supply Chain Manager. His project experience in Rainbow Farms covers the entire value chain. He was appointed Processing Director in September 2006 and took on the additional responsibility for feed milling during 2009. Wouter is also responsible for the Group sustainability function.


233

J B (Jason) Livesey

Position Customer and marketing director

Appointed April 2012

Age 38



Qualifi cations B.Com.

Experience Jason was appointed as Customer and Marketing Director on 1 April 2012. Prior to this appointment, Jason spent 16 years at Unilever, of which 13 years were in the customer division (three of these in Australia), and the last three years in the marketing division. He has a wealth of experience in leading customer initiatives in a multinational fast moving consumer goods grocery environment, and more recently in heading up the marketing of a division.


D B (Bonga) Mavume

Position Agriculture director


Age 39



Qualifi cations BSc. Agric. (Hons), MBA (USB)

Experience Bonga has over 10 years farm operations and business management experience with Pioneer Foods Limited Agri Business and Baking division. He joined Rainbow Farms as Supply Chain Manager in February 2007 and was appointed Breed Director in November 2007 and Agriculture Director in April 2010. Bonga currently serves on the Board of the South African Agricultural Processors Association and the South African Poultry Association.


D S (Daryl) Milne

Position FoodSolutions director


Age 38



Experience Daryl joined Rainbow in 2004 after working for Unilever in their Foods division for eight years in various customer and brand development roles. Following several years’ experience in FoodSolutions marketing, Daryl was appointed as FoodSolutions director on 1 January 2011.


234

EXECUTIVE MANAGEMENT OF VECTOR LOGISTICS PROPRIETARY LIMITED

C D (Chris) Creed

Position Managing director


Age 54


Business address Vector Logistics Proprietary Limited, 30 The Boulevard, Westend Offi ce Park, Westville, 3629

Qualifi cations IMM Dip (SA)

Experience Prior to joining Rainbow Farms, Chris held various trade marketing and sales roles within Bristol Myers Squibb and Adcock Ingram and then was responsible for marketing and sales of Capespan Proprietary Limited products in Europe and served as a director of London based Capespan plc. Chris was appointed as a director of Rainbow FoodSolutions in June 2005 and Distribution Director in March 2007. In January 2011, Chris resigned from the Rainbow Farms board to concentrate on his role as Managing Director of Vector.


P E (Paul) Gibbons

Position Customer director


Age 40



Qualifi cations B.Com., MBA

Experience Paul joined Vector in 1998 and spent time in fi nancial, commercial and supply chain roles. In 2010, Paul was appointed as Supply Chain Manager and in December 2011 he was appointed as Customer Director.


I (Ilse) Gravett-Hultzer

Position Supply chain director


Age 41



Qualifi cations B.Soc.Sci. (Hons), ACMA, CGMA

Experience Ilse started her career with Unilever and held various supply chain and commercial positions during her 12- year tenure, including Supply Chain Planning Director and Works Director. She served as Managing Executive for Manufacturing at Famous Brands Limited and then took up the position of Managing Director for Fairfi eld Dairy in 2009. She was appointed as Supply Chain Director of Vector in January 2012.


235

B M (Bruce) Mackenzie ( Resigned 30 November 2013)

Position Financial Director


Age 52



Qualifi cations ACMA

Experience Bruce has held various fi nancial positions with the following companies: Blue Bell Wrangler, Divpac (Nampak) and the last 20 years with I&J and Vector. In 2004, Bruce was appointed as the KwaZulu-Natal Regional Operations Manager. In 2008, Bruce moved back into fi nance to head up Vector’s fi nance function and in January 2011 was appointed as Financial Director of Vector.

Other directorships in the past fi ve years Current: None

G A S (Gary) King

Position Financial Director


Age 37



Qualifi cations B.Com. (Hons), CA (SA)

Experience Gary completed his Articles of Clerkship with Deloitte & Touche in 2001 and remained with them as a Consultant and Manager until 2004. After serving as Financial Manager at Super Group Limited and Group Financial Manage at Astrapak Limited he joined Tiger Brands Limited as Corporate Financial Executive in 2008. Gary was Financial Executive – Snacks, Treats & Beverages at TBL from March 2012 until joining Vector.


R J (Rory) Matthews

Position Operations Director

Appointed March 2013

Age 53



Qualifi cations BSc (Biochemistry/Genetics) PGD Industrial Relations Management

Experience Rory has held leadership positions in both Rainbow and Vector. These positions covered human and industrial resource management, Rainbow inbound and outbound supply chain management, processing management and Vector operations management.


236

S (Shun) Pillay

Position IT director


Age 46



Qualifi cations B.Paed. (Sc) (Education)

Experience Shun has more than 20 years’ experience in the retail and logistics industry and served as Chief Information Offi cer of Vector from 2002 to 2010. Shun was appointed as IT Director of Vector in January 2011.


237

EXECUTIVE MANAGEMENT OF FOODCORP PROPRIETARY LIMITED

C B (Cliff) Sampson

Position Managing Director

Appointed March 2008

Age 54


Business address Foodcorp Proprietary Limited

Qualifi cations MBA (Henley), MAP (Wits), Dip. Inst.

Experience Cliff has been the managing Director of the Consumer Brands Division since joining Foodcorp in January 2008. Prior to joining Foodcorp he was Managing Director of National Brands (AVI) for eight years.


O J (Ockert) Janse van Rensburg

Position Chief Financial Offi cer

Appointed May 2010

Age 40



Qualifi cations CA(SA), Higher Diploma in Corporate Law

Experience Ockert joined Foodcorp in July 2007 in an executive fi nancial role. Ockert has served as the Chief Financial Offi cer and member of the Foodcorp board since May 2010. Prior to joining Foodcorp, Ockert held the position of partner and director of PricewaterhouseCoopers.


M S G (Mafahle) Mareletse

Position Executive Director – Ready To Eat Division


Age 54



Qualifi cations BA, Certifi cate in Financial Analysis

Experience Mafahle has served as the managing Director of the Ready To Eat Division since January 2008. Prior to this Mafahle held the position of Marketing Director. Before joining Foodcorp, he was Managing Director at Cell C.


238

ANNEXURE 11

EXTRACTS FROM THE RCL FOODS MOI RELATING TO THE DIRECTORS

Directors’ remuneration

The Company may pay remuneration to the Directors for their services as Directors in accordance with a special resolution approved by the Shareholders within the previous 2 (two) years, as set out in sections 66(8) and (9), and the power of the Company in this regard is not limited or restricted by this Memorandum of Incorporation.

Any Director who:

• serves on any executive or other committee; or

• devotes special attention to the business of the Company; or

• goes or resides outside South Africa for the purpose of the Company; or

• otherwise performs or binds himself to perform services which, in the opinion of the Directors, are outside the scope of the ordinary duties of a Director,

may be paid such extra remuneration or allowances in addition to or in substitution of the remuneration to which he may be entitled as a Director, as a disinterested quorum of the Directors may from time to time determine.

The Directors may also be paid all their travelling and other expenses necessarily incurred by them in connection with:

• the business of the Company; and

• attending meetings of the Directors or of committees of the Directors of the Company.

The Board may, as contemplated in and subject to the requirements of section 45, authorise the Company to provide fi nancial assistance to a Director, Prescribed Offi cer or other person referred to in section 45(2), and the power of the Board in this regard is not limited or restricted by this Memorandum of Incorporation.

Borrowing powers

Subject to the provisions of this Memorandum of Incorporation, the Directors may from time to time :

• borrow for the purposes of the Company such sums as they think fit;

• secure the payment or repayment of any such sums, or any other sum, as they think fit, whether by the creation and issue of Securities, mortgage or charge upon all or any of the property or assets of the Company.

The Board shall procure (but as regards subsidiaries of the Company only insofar as by the exercise of voting and other rights or powers of control exercisable by the Company they can procure) that the aggregate principal amount at any one time outstanding in respect of moneys so borrowed or raised by:

• the Company; and

• all the subsidiaries for the time being of the Company (excluding moneys borrowed or raised by any of such companies from any other such companies but including the principal amount secured by any outstanding guarantees or suretyships given by the Company of any of its subsidiaries for the time being for the share capital or indebtedness of any other company or companies whatsoever and not already included in the aggregate amount of the moneys so borrowed or raised),

shall not exceed the aggregate amount at that time authorized to be borrowed or secured by the directors of the Company’s holding company (if any) in respect of that holding company and all the then subsidiaries of that holding company, provided that no such sanction shall be required to the borrowing of any moneys intended to be applied and actually applied within 90 (ninety) days in the repayment (with or without any premium) of any moneys then already borrowed and outstanding and notwithstanding that new borrowing may result in the abovementioned limit being exceeded.

Executive Directors

The Directors may from time to time appoint:

• managing and other executive Directors (with or without specific designation) of the Company, subject to the provisions of clause 27.3.6;

• any Director to any other executive office with the Company,

as the Directors shall think fi t, for a period as the Directors shall think fi t, and may from time to time remove or dismiss such persons from offi ce and appoint another or others in his or their place or places.

239

Any Director appointed in terms of clause 30.1:

• shall (subject to the provisions of the contract under which he is appointed) whilst he continues to hold that position or office, be subject to retirement by rotation; and

• shall be subject to the same provisions as to removal as the other Directors of the Company, and if he ceases to hold office as a Director, his appointment to such position or executive office shall ipso facto terminate, without prejudice to any claims for damages which may accrue to him as a result of such termination.

The remuneration of a Director appointed to any position or executive offi ce in terms of clause 30.1:

• shall be determined by a disinterested quorum of the Directors or a remuneration committee appointed by the Directors;

• shall be in addition to or in substitution of any ordinary remuneration as a Director of the Company, as the Directors may determine;

• may consist of a salary or a commission on profits or dividends or both, as the Directors may direct.

The Directors may from time to time entrust to and confer upon an executive Director for the time being such of the powers exercisable in terms of this Memorandum of Incorporation by the Directors as they may think fi t, and may confer such powers for such time and to be exercised for such objects and purposes, and upon such terms and conditions, and with such restrictions, as they think expedient; and they may confer such powers either collaterally with or to the exclusion of and in substitution for all or any of the powers of the Directors in that behalf, and may from time to time revoke, withdraw, alter or vary all or any of such powers.

Eligibility, resignation and retirement of Directors

Apart from satisfying the qualifi cation and eligibility requirements set out in section 69 and subject to the below mentioned provisions of this clause 27.4, a person shall not be required to hold any qualifying Shares or to satisfy any eligibility requirements or qualifi cations to become or remain a Director or a Prescribed Offi cer of the Company.

Subject to any provisions of clause 27.4.3, a Director shall vacate his offi ce as Director if:

• his estate is sequestrated or he surrenders his estate or enters into a general compromise with his creditors;

• he is found to be or become of unsound mind;

• a majority of his co-Directors sign a written notice in which he is requested to vacate his office and lodge it at the principal place of business of the Company (which shall come into effect upon lodging thereof at the principal place of business of the Company), but without prejudice to any claim for damages;

• he is removed from office by a resolution of the Company of which proper notice have been given in term of the Act, but without prejudice to any claim for damages;

• he is, pursuant to the provisions of the Act or any order made thereunder, prohibited from acting as a Director;

• he resigns his office as Director by notice in writing to the Company;

• he is absent from meetings of the Board for 6 (six) consecutive months without leave of the Directors while not engaged in the business of the Company, and he is not represented at any such meeting during such 6 (six) consecutive months by an alternate Director; and the Directors resolve that his office be, by reason of such absence, vacated, provided that the Directors shall have the power to grant to any Director leave of absence for a definite or indefinite period.

No Director shall be appointed for life or for an indefi nite period and the Directors shall rotate in accordance with the following provisions:

• at each annual general meeting referred to in clause 21.2.1, 1/3 (one -third) of the Directors for the time being, or if their number is not 3 (three) or a multiple of 3 (three), the number nearest to 1/3 (one -third), but not less than 1/3 (one -third), shall retire from office;

• the Directors to retire in every year shall be those who have been longest in office since their last election, but as between persons who were elected as Directors on the same day, those to retire shall, unless they otherwise agree among themselves, be determined by lot;

• notwithstanding the provisions of this clause, a Director who has already held his office for a period of 3 (three) years since his last election for appointment by the date of any annual general meeting shall retire at such meeting, either as one of the Directors retiring according to the roster referred to above, or over and above such Directors;

• the length of time a director has been in office shall be computed from his last election, appointment or date upon which he was deemed re-elected;

• a Director retiring at a meeting shall retain office until the election of Directors at that meeting has been completed;

• a retiring Director shall be eligible for re-election;

240

• the Company, at the general meeting at which a Director retires in the above manner, or at any other general meeting, may fill the vacancy by electing a person thereto, and in default the retiring Director, if willing to continue to act, shall be deemed to have been re-elected, unless it is expressly resolved at the meeting not to fill such vacated office; or a resolution for the re-election of such Director was put to the meeting and rejected, provided that the Company shall not be entitled to fill the vacancy by means of a resolution passed in accordance with clause 26.

The Board shall, through its nomination committee (if such nomination committee has been constituted in terms of clause 33.2), provide the Shareholders with a recommendation in the notice of the meeting at which the re-election of a retiring Director is proposed, as to which retiring Directors are eligible for re-election, taking into account that Director’s past performance and contribution.

Nomination and appointment of Directors

Except for the Directors appointed in terms of clause 30 , all Directors shall be elected as such by an ordinary resolution of the Shareholders at a general or annual general meeting of the Company and no appointment of a Director in accordance with a resolution passed in terms of section 60 shall be competent.

Subject to the provisions of clauses 27.4 and 27.3.6, a person as envisaged in clause 27.3.1 shall only be eligible for election as a Director if he is recommended by the Board or nominated in the manner referred to in clause 27.3.3.

No person, other than a Director retiring at the meeting shall, unless recommended by the Board, be eligible for election as a Director at any general meeting, unless:

• not more than 28 (twenty -eight) days, but at least 7 (seven) clear days before the day appointed for the meeting, there shall have been delivered at the principal place of business of the Company a notice in writing by a Shareholder (who may be the proposed Director) duly qualified to be present and to vote at the meeting for which such notice is given;

• such notice sets out the Shareholder’s intention to propose a specific person for election as Director; and

• notice in writing by the proposed person of his willingness to be elected is attached thereto (except where the proposer is the same person as the proposed).

In any election of Directors:

• the election is to be conducted as a series of votes, each of which is on the candidacy of a single individual to fill a single vacancy, with the series of votes continuing until all vacancies on the Board have been filled; and

• in each vote to fill a vacancy :

• each vote entitled to be exercised may be exercised once; and

• the vacancy is filled only if a majority of the votes exercised support the candidate.

• if the election process results therein that:

– more nominees are elected as Directors than there are vacancies, those nominees (being a number of the nominees that are equal to the number of vacancies) that received the highest majority of votes will be the elected Directors, provided that in the event that a number of nominees that compete for a lesser number of vacancies received an equal number of majority votes, the Director or Directors elected to fill those vacancies will be determined by lot in the manner that the chairperson of the meeting will determine;

– less nominees are elected as Directors than there are vacancies, the remaining vacancies will remain unless filled in terms of the provisions of the relevant clauses ;

– if no or insufficient candidates are nominated to fill the number of vacancies on the Board, the vacancies so caused shall be regarded as interim vacancies which shall be filled in terms of the provisions of clause 27.3.6.

• Save as provided for in clauses 27.3.6 and 30, the Company shall only have elected Directors and there shall be no appointed or ex offıcio Directors as contemplated in section 66(4).

The Board has the power to appoint or co-opt any person as Director, whether to fi ll any vacancy on the Board on a temporary basis, as set out in section 68(3), or as additional Director, provided that such appointment must be confi rmed by the Shareholders, in accordance with clause 27.2.2 at the next annual general meeting of the Company, as required in terms of section 70(3)(b)(i).

241

ANNEXURE 12

INVESTMENTS IN SUBSIDIARIES

Details of the principal subsidiary companies of RCL Foods as at 30 June 2013 are set out below:

Issued share capital

Ownershippercentage

held

Votingpercentage

held

Rights held by other

persons tovary voting

rights

R % %

East End Court Proprietary Limited 1 100 100

Epol Proprietary Limited 78 000 100 100

Farmer Brown Proprietary Limited 1 100 100

New Foodcorp Holdings Proprietary Limited 1 100 100

Rainbow Chicken Foods Proprietary Limited 100 100 100

Rainbow Farms Proprietary Limited 40 000 100 100

Rainbow Farms Investments Proprietary Limited 99 900 100 100

RCL Group Services Proprietary Limited 312 100 100

Vector Logistics Proprietary Limited 50 100 100

Vector Logistics Limited 100 100 100

Details of all subsidiary companies of RCL Foods as at 30 June 2013 are set out below:

NameRegistrationnumber

Place anddate ofincorporation

Date itbecame a

subsidiary

Issued/stated

capitalPercentage

heldNature ofbusiness

R %

East End Court Proprietary Limited 1983/002520/07 RSA17/03/1983

06/03/1985 1 100 Dormant

Epol Proprietary Limited 1952/002660/07 RSA23/10/1952

29/10/1997 78 000 100 Dormant

Farmer Brown Proprietary Limited 1994/001279/07 RSA24/02/1994

24/02/1994 1 100 Dormant

New Foodcorp Holdings Proprietary Limited 2009/022279/07 RSA 17/11/2009

15/05/2012 1 100 Investment holding company

Rainbow Chicken Foods Proprietary Limited 2004/012689/07 RSA14/05/2004

02/07/2004 100 100 Dormant

Rainbow Farms Proprietary Limited 1960/002377/07 RSA23/06/1960

01/07/1966 40 000 100 Poultry producer

Rainbow Farms Investments Proprietary Limited 1962/000300/07 RSA03/02/1962

15/12/1983 99 900 100 Investment holding company

RCL Group Services Proprietary Limited 1957/004291/07 RSA31/12/1957

01/03/1991 312 100 Group services

Vector Logistics Proprietary Limited 2002/009081/07 RSA19/04/2002

03/12/2004 50 100 Logistics provider

Vector Logistics Limited 06/01557/07 Namibia25/04/1960

03/12/2004 100 000 100 Logistics provider

None of the above subsidiaries are listed.

242

Capitau Investment Management as well as all Foodcorp subsidiaries:

NameRegistrationnumber

Place anddate ofincorporation

Issued/stated

capital

Effective Percentage

heldNature ofbusiness

R %

Capitau Investment Management 2006/030161/06 South Africa 2006/04/01

1 000 100 Investment holding company

New Foodcorp Holdings 2009/022279/07 South Africa 2009/11/17

1 100 Investment holding company

Astoria Bakery 1996/010419/07 South Africa 1996/08/07

100 100 Dormant

Bongolethu Fishing Enterprizes 1998/016997/07 South Africa 1998/08/28

100 100 Catching & processing of fi sh & fi sh related products

Boot Nr 7 Belange 1999/015373/07 South Africa 1999/07/19

1 000 77 Operates fi shing vessel

Emachibini Fisheries 1997/012114/07 South Africa 1997/07/25


Ezintlanzini Fishing 1996/009434/07 South Africa 1996/07/22


Ezolwandle Fishing 1996/009516/07 South Africa 1996/07/22


Firlig 5 1982/005432/07 South Africa 1982/06/07

100 100 Dormant

Firlig 6 1996/014694/07 South Africa 1996/10/25

1 100 Dormant

First Lifestyle Group 2007/003874/07 South Africa 2007/02/07

1 100 Dormant

First Lifestyle 2008/013996/07 South Africa 2008/06/30

1 100 Dormant

Foodcorp Anchovy 2009/006376/07 South Africa 2009/03/27

200 100 Investment in fi shing company

Foodcorp Consumer Brands 2008/026802/07 South Africa 2008/11/13

1 100 Dormant

Foodcorp Fishing 2009/003155/07 South Africa 2009/02/18


Foodcorp Hake 2009/006128/07 South Africa 2009/03/26


Foodcorp Lobster 2009/006133/07 South Africa 2009/03/26


Foodcorp Pilchards 2009/006124/07 South Africa 2009/03/26


Foodcorp 2004/000743/07 South Africa 2004/01/15

1 100 Company engaged primarily in the production, marketing and distribution of food.

Hammer Street Investments 1997/001660/07 South Africa 1997/02/06

1 000 100 Dormant

Jafprop 1996/007832/07 South Africa 1996/06/21

100 100 Dormant

Lexshell 652 Investments 2005/006949/07 South Africa 2005/03/08

100 100 Company that holds all of the security for the Foodcorp Euro Bond

Maxitrade 102 General Trading 2007/003776/07 South Africa 2007/02/07

1 100 Dormant

Mkhuhlu Bakery 1977/004038/07 South Africa1977/12/05

450 000 100 Bakery

NIB 5 Share Block 1998/011941/07 South Africa 1998/06/23

1 100 Dormant

NIB 6 Share Block 1998/012204/07 South Africa 1998/06/26

1 100 Dormant

Ntabeni Fishing 1968/000369/07 South africa 1968/01/12

200 74 Operates fi shing vessel

Orgel Vismaatskappy 1999/006287/06 South Africa 1999/03/25

25 000 100 Pilchard and Anchovy rights holder.

Pamodzi Foods 1997/015350/07 South Africa 1997/09/12

1 100 Dormant

Sea-Ice Manufacturers 1998/006923/07 South Africa 1998/09/04


Siyasebenza Fishing 2000/025420/07 South Africa 2000/10/05


Trade Motto 106 2002/019136/07 South Africa 2002/08/07

1 000 100 Catching & processing of fi sh & fi sh related products

Umfondini Fishing 1997/013991/07 South Africa 1997/08/22


Wark Investments 1996/006176/07 South Africa 1996/05/21

1 100 Dormant

Astoria Bakery Lesotho 1979/26 Lesotho 1979/03/14

L100 100 Dormant

Fed-Cape International Limited 104242 Jersey 2009/10/22

US$10,000 100 Investment company

243

ANNEXURE 13

PRINCIPAL IMMOVABLE PROPERTIES OWNED OR LEASED

In the ordinary course of its business, RCL Foods is the registered owner of in excess of 300 individual immovable properties. These individual properties have not been disclosed as the Company believes that the disclosure thereof would not be meaningful to Shareholders. The full list of properties owned by RCL Foods has been made available for inspection by Shareholders, (refer to Section E paragraph 19).

244

ANNEXURE 14

CORPORATE GOVERNANCE

Extracts from the 2013 integrated annual report

RCL Foods is committed to the highest level of corporate governance and ethical business behaviour. The Directors recognise that good corporate governance is essentially about leadership and that there exists the need to conduct the enterprise with integrity and in compliance with legislation, regulations and best practices relevant to the Group’s business. Governance in the Group extends beyond mere legislative and regulatory compliance and the Directors strive to entrench an enterprise wide culture of good governance and ethical conduct. The Board therefore sets the tone and standards that must be consistently applied by executive management and all employees. These standards are applicable to the day-to-day operations of the Group and interactions with all stakeholders. Appropriate corporate governance structures, practices and processes are in place and are actively monitored and revised periodically to refl ect best practice.

1. COMPLIANCE

For the 2013 financial year, the Board is of the opinion that the Group applied the requirements of King III, except as disclosed in the King III Index provided below. The Board is further satisfied that it met the requirements of the Companies Act, and the Listings Requirements unless otherwise explained.

The following provides an assessment of RCL Foods’ compliance with King III:

Key:√ Compliant¥ Partially compliant (refer to notes for explanation of non-compliance) # Under review• Not applicable

Ethical leadership and corporate citizenship Audit Committee

The governance of information technology

√ Effective leadership based on an ethical foundation

√ Effective and independent √ The Board is responsible for Information Technology (IT) governance

√ Responsible corporate citizen √ Suitably skilled and experienced independent non-executive directors

√ IT is aligned with the performance and sustainability objectives of the Company

√ Effective management of Company’s ethics

√ Chaired by an independent non-executive director

√ Management is responsible for the implementation of an IT governance framework

Boards and directors √ Oversees integrated reporting √ The Board monitors and evaluates signifi cant IT investments and expenditure

√ The Board is the focal point for and custodian of corporate governance

√ A combined assurance model is applied to improve effi ciency in assurance activities

√ IT is an integral part of the company’s risk management

√ Strategy, risk, performance and sustainability are inseparable

√ Information assets are managed effectively

• The Board should consider business rescue proceedings (BRP) when appropriate1

√ Satisfi es itself of the expertise, resources and experience of the company’s fi nance function

√ The Risk Committee and Audit Committee assist the Board in carrying out its IT responsibilities

√ Directors act in the best interests of the Company

The governance of risk

245



¥ The Chairman of the Board is an independent non-executive director2

√ Overseas internal audit √ The Board should be responsible for the governance of risk and setting levels of risk tolerance

√ Framework for the delegation of authority has been established

√ Integral to the risk management process

√ The Board should determine the levels of risk tolerance

# The Board comprises a balance of power, with a majority of non-executive directors who are independent3

√ The Risk Committee assists the Board in carrying out its risk responsibilities

√ Directors are appointed through a formal process

√ Oversees the external audit process

√ The Board delegates the risk management plan to management

√ Formal induction and ongoing training of directors is conducted

√ The Board should ensure that risk assessments and monitoring are performed on a continual basis

√ The Board is assisted by a competent, suitably qualifi ed and experienced Company Secretary

√ Reports to the Board and shareholders on how it has discharged its duties

√ Frameworks and methodologies are implemented to increase the probability of anticipating unpredictable risks

¥ Regular performance evaluations of the Board, its committees and the individual Directors4

Compliance with laws, codes, rules and standards

√ Management implements appropriate risk responses

¥ Appointment of well-structured committees and oversight of key functions5

√ Reports to the Board and shareholders on how it has discharged its duties Compliance with laws, codes, rules and standards

√ The Board receives assurance on the effectiveness of the risk management process

√ A governance framework should be agreed between the Group and its subsidiary boards

√ The Board ensures that the company complies with relevant laws

√ Suffi cient risk disclosure to stakeholders

√ Directors and executives are fairly and responsibly remunerated6

√ The Board and directors have a working understanding of the relevance and implications of non-compliance

Integrated reporting and disclosure

√ Remuneration of Directors and prescribed offi cers disclosed

√ Compliance risk forms an integral part of the Company’s risk management process

√ Ensures the integrity of the Company’s integrated report

√ The Company’s remuneration policy is approved by its shareholders7

√ Sustainability reporting and disclosure is integrated with the Company’s fi nancial reporting

Internal audit √ The Board has delegated to management the implementation of an effective compliance framework and processes

# Sustainability reporting and disclosure is independently assured9

√ Effective risk-based internal audit

√ Written assessment of the effectiveness of the Company’s system of internal controls and risk management

246



Governing stakeholder relationships

√ Internal audit is strategically positioned to achieve its objectives

√ The Board has delegated to management the implementation of an effective compliance framework and processes Governing stakeholder relationships

√ Appreciat on that stakeholders’ perceptions affect a Company’s reputation

√ Management proactively deals with stakeholder relationships

√ There is an appropriate balance between its various stakeholder groupings

√ Equitable treatment of shareholders

√ Transparent and effective communication to stakeholders

¥ Disputes are resolved effectively and timeously8

247

Note Explanation Further reading

1. The Board has however adopted a BRP policy

2. The Chairman of the Board is not independent due to his position as CEO of Remgro Limited who is the major shareholder of RCL Foods. Mr RV Smither maintains his role as RCL Food s’ lead independent director

Board structure and composition on pages 12 and 13 of the RCL Foods Annual Report

3. The majority of the directors are currently not independent, however, an appropriate balance of power exists where the decision-making process cannot be dominated by one individual or group of individuals

Board structure and composition on pages 12 and 13 of the RCL Foods Annual Report

4. The Board and committees perform a self-evaluation annually, but have decided not to disclose results and action plans in the integrated report due to the potentially sensitive nature thereof

5. The Chairman of the Risk and Social and Ethics Committees is not independent. Other Committee directors however take responsibility for ensuring that the Chairman encourages proper deliberation of all matters requiring the Committee’s attention

6. The Board does not believe that directors should earn attendance fees in addition to a base fee. Many directors add signifi cant value to the Group outside of the formal Board and committee meetings

Remuneration report on page 39 of the RCL Foods Annual Report

7. The Board does not intend to ask the shareholders for a non-binding approval for RCL Food s’ remuneration policy. The rationale and basis for the Group’s executive remuneration policy is carefully considered by the Remuneration and Nominations Committee and is documented in the annual report

8. The Board does not intend to institute a formal dispute resolution process as it believes that the existing processes within the Group operate satisfactorily and do not require a more formal and separate mechanism. Shareholders have remedies in terms of the Companies Act

9. Independent assurance in respect of sustainability reporting and disclosures will be considered for the 2014 annual report

Internal assurance on page 52 of the RCL Foods Annual Report

2. BOARD OF DIRECTORS

(a) Board structure and composition

The Board is the highest governing authority within the Group and has ultimate responsibility for governance. The Group has a unitary Board that comprises 11 (eleven) non-executive (6 (six) of whom are independent) and two executive Directors.

The Chairman is not independent but the roles of Chairman and Chief Executive Officer are separate and a clear division of responsibility exists. The non-executive Directors take responsibility for ensuring that the Chairman encourages proper deliberation of all matters requiring the Board’s attention, and the Board ensures that there is an appropriate balance of power and authority so that no one individual or block of individuals can dominate the Board’s decision-making process. To ensure good governance and as recommended by King III, Mr RV Smither maintains his role as lead independent Director.

The executive Directors have overall responsibility for implementing the Group’s strategy. Non-executive Directors complement the skills and experience of the executive Directors and bring judgement to bear, independent of management, on the Board’s deliberations and decisions through, inter alia, their knowledge and experience.

248

(b) Board responsibilities

The Board gives strategic direction to the Group under the chairmanship of Mr JJ Durand. The Board retains full and effective control over the Group and monitors executive management in implementing plans and strategies. Currently, the Board’s responsibility extends to all dependent subsidiaries including Foodcorp. In the new year, the Board will review how it further incorporates certain functions relating to Foodcorp into the relevant Board committees.

The roles and responsibilities of the Board and its committees are set out in formal charters which are reviewed annually to ensure that they remain relevant. The Board and its committees are supplied with complete and timely information which enables them to discharge their responsibilities efficiently and effectively. Directors have unrestricted access to all Group information, records, documents and property. Non-executive Directors have access to management and may meet separately with management, without the attendance of executive Directors. The information needs of the Board are well defined and regularly monitored. All Directors have access to the advice and services of the Company Secretary, and Directors may obtain independent professional advice at the Group’s expense, should they deem this necessary. In terms of the Board Charter, the Board has responsibility for:

• Acting as a focal point for, and custodian of, corporate governance

• Providing strategic leadership, integrity and judgement and directing RCL Foods so as to achieve its goals and objectives

• Ensuring that RCL Foods is seen as a responsible corporate citizen by having due regard for financial and non-financial aspects of its business

• Ensuring that RCL Foods’ ethics are effectively managed

• Ensuring that RCL Foods has an effective and independent Audit Committee

• Ensuring the effective governance of risk

• Ensuring the effective governance of Information Technology

• Ensuring that RCL Foods complies with applicable laws, regulations and codes of business practice

• Ensuring that there is an effective risk based Internal Audit function

• Ensuring the integrity of RCL Foods’ Integrated Report

• Ensuring that individual Directors act in the best interest of RCL Foods

• Defining levels of authority, reserving specific powers to itself and delegating other matters to management

• Establishing the Board committees’ terms of reference

• Ensuring that the evaluation of the Board, its committees and individual Directors is performed on an annual basis

To enable the Board to properly discharge its responsibilities and duties, certain responsibilities of the Board have been delegated to Board committees.

(c) Board committees and attendance

The Board has established four principal Board committees to assist in discharging its responsibilities. The creation of Board committees does not reduce the Directors’ overall responsibilities and therefore all committees must report and make recommendations to the Board. The Board committees are as follows:

• Audit Committee

• Risk Committee

• Remuneration and Nominations Committee

• Social and Ethics Committee

249

FIGURE 1: BOARD AND SUB-COMMITTEE COMPOSITION

Board Audit Committee

Executive Directors:M DallyRH Field

Dr M GriesselNP MagezaRV Smither

Non-executive Directors: Risk Committee

JJ Durand

HJ CarsePR LouwJB MagwazaGC Zondi

M DallyRH FieldDr M GriesselRV SmitherGC Zondi

Independent non-executive Directors: Remuneration and Nominations Committee

Dr M GriesselNP MagezaDTV MsibiMM NhlanhlaRV SmitherGM Steyn

NP MagezaJB MagwazaRV Smither

Social and Ethics Committee

M DallyRH FieldMM NhlanhlaGC Zondi

(d) Governance structure: RCL Foods Board committees

Specific responsibilities have been formally delegated to the Audit Committee, the Risk Committee, the Remuneration and Nominations Committee and the Social and Ethics Committee. Formal documented charters define terms of reference, duration and functions, clearly agreed upon reporting procedures and scope of authority for each committee. There is transparency and full disclosure from the committees to the Board. Committees are free to obtain independent external professional advice as and when necessary and are subject to evaluation by the Board to ascertain their performance and effectiveness.

(e) Directors’ independence

All independent non-executive Directors are subject to an independence evaluation by the Board. The Board considers whether the Director is independent in character and judgement and whether there are any relationships or circumstances which are likely to affect, or could appear to affect, the Director’s independence. Having considered the responses, the Board is of the opinion that Messrs NP Mageza, DTV Msibi, RV Smither, GM Steyn, Mrs MM Nhlanhla and Dr M Griessel are independent. All other non-executive Directors are not considered independent due to their capacities as Directors of either Remgro Limited or the RCL Foods Strategic Partners, who are major shareholders in RCL Foods.

All Directors are required to declare, on an annual basis, any interest in proposed transactions or arrangements with the Group. In addition, all other material interests are disclosed by Directors, as and when they arise.

(f) Company Secretary

The Board is cognisant of the duties imposed on the Company Secretary who is accordingly empowered to properly fulfil those duties.

In addition to the statutory duties, the Company Secretary fulfils the following functions in line with the Board Charter:

• Induction of Directors

• Provides the Board and Directors individually with guidance as to how their responsibilities should be properly discharged in the best interests of the Group

• Provides guidance to the Board on the duties of the Directors, matters of ethics and good governance

• Acts as the primary point of contact between Shareholders and the Group

250

(g) Dealing in securities

The Group has a formal policy, established by the Board and implemented by the Company Secretary, prohibiting dealing in securities by Directors, officers and other selected employees for a designated period preceding the announcement of its financial results or in any other period considered sensitive. The Chairman, through the Company Secretary, approves all dealings by Directors during “open” periods .

(h) Appointments to the Board

Procedures for appointment to the Board are formal and transparent and a matter for the Remuneration and Nominations Committee. The Remuneration and Nominations Committee consists of three non-executive Directors and meets at least twice a year. Mr NP Mageza is the Chairman of the Remuneration and Nominations Committee. The other members during the year were Messrs JB Magwaza and RV Smither. The Chief Executive Officer and Group HR Director also attend meetings of the Remuneration and Nominations Committee .

The committee considers the Board’s composition, retirements and appointments of additional and replacement Directors. Executive Directors are appointed to the Board on the basis of skill, experience and level of contribution to the Group and are responsible for the running of the business. Non-executive Directors are selected on the basis of industry knowledge, professional skills and experience. On appointment to the Board, new Directors visit the Group’s businesses and meet with senior management, as appropriate, to facilitate their understanding of the Group and their fiduciary responsibilities. The Board has reviewed its required mix of skills and experience and other qualities such as demographics and diversity in order to assess its effectiveness and that of its committees and the contribution of each Director .

In accordance with the Memorandum of Incorporation, one-third of Directors are subject to retirement and re-election by Shareholders on an annual basis. As a result of this requirement, at the 2013 annual general meeting, the following Directors will retire by rotation but all offer themselves for re-election: Mr JJ Durand, Mr PR Louw, Mrs MM Nhlanhla and Mr GC Zondi .

(i) Remuneration

Annualised fees payable to Board and committee members are as follows:

Chairman R

Member R

RCL Foods Board 193 600 193 600Audit Committee 154 000 77 000Remuneration and Nominations Committee 72 600 43 560Risk Committee 72 600 43 560Social and Ethics Committee 72 600 43 560

The Remuneration and Nominations Committee determines the remuneration of Directors at levels sufficient to attract, retain and incentivise individuals of quality. Only non-executive Directors receive fees for their services on the Board and on Board committees. Executive Directors are remunerated in terms of their contracts of employment with the Group. Except for executive Directors’ employment contracts, there are no other contracts of service between any of the Directors and any subsidiaries within the Group.

(j) Board effectiveness

For the year ended 30 June 2013, the Company Secretary facilitated a performance evaluation of the Board and its committees. Each director was requested to complete a questionnaire which assessed the effectiveness of the following categories:

• Board composition and meetings

• Board committees

• Board information

• Board orientation and development

• Board functioning and processes

• Chairman

• Personal evaluation

The results of the individual assessments are consolidated by the Company Secretary and the Chairman of the Board is responsible for determining any actions required to enhance the effectiveness of the Board .

251

3. AUDIT COMMITTEE

The role of the Audit Committee is to review the Group’s financial position and make recommendations to the Board on all financial matters, business risks, internal controls and compliance. This includes assessing the integrity and effectiveness of related control systems to ensure that the Group’s business is conducted in a proper and economically sound manner.

The responsibilities of the Audit Committee are incorporated into the committee’s charter which is reviewed annually and approved by the Board. The committee has conducted its affairs in compliance with this charter and has discharged its responsibilities contained therein.

(a) Audit Committee membership and resources

The Audit Committee consists of three independent non-executive Directors. Mr RV Smither chairs the committee and its other members are Dr M Griessel and Mr NP Mageza. All members of the committee have the requisite financial knowledge and commercial skills and experience to contribute effectively to committee deliberations.

The committee meets at least twice a year as per the Audit Committee charter. The Chairman of the Board, Chief Executive Officer, Chief Financial Officer, Group Audit and Risk Manager (“GARM”) and representatives from the external auditors attend meetings by invitation. Other members of the Board and management team attend as required. The committee meets separately with the external auditors and internal auditors at least once a year without management present, to ensure that all relevant matters have been identified and discussed without undue influence.

(b) Roles and responsibilities

The Audit Committee’s roles and responsibilities include its statutory duties per the Companies Act of South Africa and the responsibilities assigned to it by the Board. The Audit Committee fulfils an oversight role regarding financial reporting risks, internal financial controls and fraud risk and Information Technology (“IT”) risks as it relates to financial reporting.

The Audit Committee has discharged its key responsibilities as follows:

• Reviewed the interim results, period-end financial statements, sustainability disclosure and integrated report, culminating in a recommendation to the Board. In the course of its review the committee:

– took appropriate steps to ensure that the financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) ; and

– considered and, when appropriate, made recommendations on financial statements, accounting practices and internal financial controls

• Confirmed the Internal Audit charter and audit plan

• Evaluated the effectiveness of risk management, controls and governance processes and satisfied itself about the adequacy and effectiveness of the Group’s system of internal financial controls

• Reviewed the appropriateness of the combined assurance model in addressing all significant risks facing the Group

• Considered and recommended to the Board the appointment and retention of external auditors

• Evaluated the independence and effectiveness of the external auditors

• Approved the audit fees and engagement terms of the external auditors

• Determined the nature and extent of allowable non-audit services and approved the terms for the provision of non-audit services by the external auditors

(c) Expertise and experience of the CFO and finance function

As required by the Listings Requirements, the Audit Committee is satisfied that the CFO and his management team have appropriate expertise and experience for the Group.

(d) External audit

The reporting Accountants are the incumbent auditors for all the Group companies. The committee continually monitors the independence and objectivity of the external auditors.

During the period, the reporting Accountants provided certain non-audit services, including tax services and a review of Rainbow’s feed raw material procurement process. Total fees incurred during the 2013 financial year to PWC were R7 800 000 (seven million eight hundred thousand rand) of which R1 000 000 (one million Rand) related to non-audit services. During the course of the year under review, the Audit Committee reviewed a report by the external auditors of relationships they consider may have a bearing on their independence and objectivity. The Audit Committee concluded that there were no areas of conflict.

252

The Audit Committee has nominated, for election at the annual general meeting, the reporting Accountants as the external audit firm and Mr Harish Ramsumer as the designated auditor responsible for performing the functions of auditor for the 2014 financial year. The Audit Committee has satisfied itself that the audit firm and designated auditor are accredited as such on the JSE list of auditors.

(e) Risk management

The Board has assigned oversight of the Group’s risk management function to the Risk Committee. The Chairman of the Audit Committee is also a member of the Risk Committee, thereby ensuring that information relevant to these committees is transferred regularly.

(f) Internal Audit function

Internal Audit is an independent, objective function that provides assurance on the Group’s activities geared towards creating value and improving business processes. Internal Audit is responsible for:

• Monitoring the adequacy and effectiveness of the Group’s risk management process

• Evaluating the Group’s governance processes

• Evaluating internal controls continuously to determine whether they are adequately designed, operating efficiently and effectively and recommending improvements

• Providing a source of information, as appropriate, for instances of fraud, corruption, unethical behaviour and irregularities

Internal controls reviewed consist of strategic, operating, financial reporting and compliance controls and include controls relating to:

• The information management environment

• The reliability and integrity of financial and operating information

• The safeguarding of assets

• The effective and efficient use of company resources

• Compliance with relevant policies, procedures, laws and regulations

The purpose, authority and responsibility of the Internal Audit activity is defined and governed by an Internal Audit Charter approved by the Audit Committee and Board. The activities of the Internal Audit function are co-ordinated by the GARM. To ensure independence, the GARM reports functionally to the Audit Committee and, only from an administrative perspective, to the CEO. The GARM holds a senior position in the organisation and his appointment or dismissal is subject to ratification by the Audit Committee. Internal Audit has free and unrestricted access to management, employees, activities, physical locations and to all information considered necessary for the proper execution of Internal Audit’s work, at the discretion of the GARM. Confidentiality of information is maintained and information is not disclosed without proper authority.

The annual Internal Audit plan is based on an assessment of risk areas identified by management, as well as focus areas highlighted by the Audit Committee and executive Directors which ensures that a risk based audit approach is applied. The annual plan is also updated as appropriate to ensure that it is responsive to changes in the business. A comprehensive report of Internal Audit findings is presented to the Executive Management regularly and the Audit Committee when it meets.

Follow-up audits are performed in areas where control weaknesses are found. In addition to the Internal Audit findings, the report to the Audit Committee includes an update on the progress made against the audit plan, and statistics on follow-up audits conducted. Internal Audit is also involved in IT throughout the Group to ensure satisfactory IT governance and assurance. All new major IT projects are subject to pre- and/or post-implementation reviews.

Internal Audit co-ordinates its scope and efforts with External Audit in order to provide efficient and effective assurance to the Audit Committee.

Internal Audit comprises a dedicated team of appropriately qualified and technically experienced personnel. Where necessary certain audits are outsourced to consultants with appropriate skills and technical expertise, for example specialised IT reviews.

The Audit Committee, External Audit and the GARM completed an assessment of the Internal Audit function for the year. This assessment was supplemented by the results of the Audit Satisfaction Questionnaires (“ASQ”) that were completed by management during the year. The Chairman of the Audit Committee and the GARM are responsible for determining any actions required to enhance the effectiveness of the Internal Audit function. The Audit Committee will commission an independent quality assurance review at an appropriate future date.

253

(g) Internal controls

The executive Directors are responsible for ensuring that internal control systems exist that provide reasonable assurance regarding the safeguarding of assets and the prevention of their unauthorised use or disposition, proper accounting records are maintained and the financial and operational information used in the business is reliable.

Having considered:

• The results of the formal documented review of the Group’s system of internal control and risk management, including the design, implementation and effectiveness of the Group’s system of internal financial controls conducted by the Internal Audit function during the year

• Information and explanations given by management

• Discussions with the External Auditors on the results of their audit

• The report from the Audit Committee,

nothing has come to the attention of the Board that causes it to believe that the Group’s system of internal controls and risk management is not effective and that the internal financial controls do not form a basis for the preparation of reliable financial statements.

(h) Going concern

The Audit Committee reviewed a documented assessment by management of the going concern premise of the Group before concluding to the Board that the company will be a going concern in the foreseeable future.

4. RISK COMMITTEE AND MANAGEMENT

The Board considers risk management to be a key business discipline designed to balance risk and reward and to protect the Group against uncertainties that could threaten the achievement of business objectives.

The Board has documented a corporate risk management policy.

The Risk Committee is responsible for overseeing the adequacy and overall effectiveness of the Group’s risk management function and its implementation by management. The terms of reference of the Risk Committee also includes oversight of sustainability within the Group.

(a) Risk Committee membership

The Risk Committee comprises Messrs GC Zondi (Chairman), M Dally (Chief Executive Officer), RH Field (Chief Financial Officer), RV Smither (Audit Committee Chairman) and Dr M Griessel. In order to facilitate the effective assessment of risks at all levels in the Group, the GARM and director in charge of sustainability attended the committee’s bi-annual meetings by invitation.

(b) Responsibilities

The Committee Charter includes the following key responsibilities:

• Risk management

• Oversee the development and annual review of a policy and plan for risk management to recommend for approval to the Board

• Monitor implementation of the policy and plan for risk management taking place by means of risk management systems and processes

• Make recommendations to the Board concerning the levels of tolerance and appetite, and monitoring that risks are managed within the levels of tolerance and appetite as approved by the Board

• Oversee that the risk management plan is widely disseminated throughout the Group and integrated in the day-to-day activities of the Group

• Ensure that risk management assessments are performed on a continuous basis

• Ensure that frameworks and methodologies are implemented to increase the possibility of anticipating unpredictable risks

• Ensure that management considers and implements appropriate risk responses

• Ensure that continuous risk monitoring by management takes place

• Liaise closely with the Audit Committee to exchange information relevant to risk

• Express the committee’s formal opinion to the Board on the effectiveness of the system and process of risk management

254

• Review reporting concerning risk management that is to be included in the integrated report to ensure that it is timely, comprehensive and relevant

• Sustainability

• Make recommendations to the Board concerning key policies, strategies and performance indicators

• Provide appropriate guidance and strategic direction on sustainability issues affecting the Group

• Review the Group’s annual sustainability report prior to submission to the Board for approval

The Risk Committee is satisfied that it has carried out its responsibilities for the year in compliance with its approved mandate.

(c) Risk assessment

Formal risk assessments are performed bi-annually in May and November where existing risks are re-assessed and new and emerging risks are identified through a combination of facilitated workshops and interviews with Group executives and management.

The RCL Foods risk universe is the foundation for conducting the strategic risk assessment and provides management with another filter to determine if any key business risk areas have been overlooked which could make the organisation vulnerable. Risk reviews are proactive in not only determining negative areas but also identifying areas of opportunity where effective risk management can be turned into competitive advantage.

The Group risk register summarises the significant risks faced by the Group, taking into account the likelihood of occurrence, the potential impact, velocity and the related mitigating factors and compensating controls. Management’s treatment of risks are aligned to the risk appetite and tolerance approved by the Board.

Appropriate risk response strategies in relation to the Group’s major risks have been developed and implemented. The adequacy and effectiveness of these strategies are reviewed on an on-going basis to ensure that they are responsive to changes in the dynamic environment in which the Group operates.

(d) Combined assurance

RCL Foods operates a combined assurance framework, which aims to optimise the assurance coverage obtained from management, internal assurance providers and external assurance providers on the risk areas affecting the Group.

RCL Foods’ combined assurance framework is integrated with the Group’s risk management approach. Risks facing the Group are identified, evaluated and managed by implementing risk mitigations. Assurance on the effectiveness of the internal controls is obtained from various assurance providers in a co-ordinated manner, which avoids duplication of effort. The combined assurance helps to identify gaps or improvement areas in the internal controls.

The Risk Committee considers the risks and the assurance provided through the combined assurance framework and periodically advises the Board on the state of risks and controls in RCL Foods’ operating environment. This information is used as the basis for the Board’s review, sign-off and reporting to stakeholders via the annual integrated report, on risk management and the effectiveness of internal controls within the Group.

(e) Key risks

The table below provides a brief description of the key operational and strategic risks to which the Group is exposed and the mitigating controls in place to manage these risks.

Business risk Context Risk response

Volatility in raw material prices and exchange rates

Signifi cant increase in feed raw material costs which cannot be passed onto customers

• Raw material procurement is centralised

• Clear strategy and policy defi ned

• The Group Feed Procurement Committee meets at least monthly to review the market factors and set mandates

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Recovery of required realisations

Market demand and product price fl uctuations due to:

• competition from other domestic and international poultry producers and processors

• High levels of imports

• Consumer disposal income and spend

• Regular management forecasts and reviews that focus on actions required to deliver desired performance

• Participation in industry bodies, e.g. SAPA that represent the interest of poultry producers

• Building RCL Foods’ brands through innovation and marketing programmes

Level of injection cap proposed by government

The much publicised topic of poultry meat injection and government’s proposal to introduce a cap is another issue facing the local poultry industry. An injection cap is likely to result in an erosion of IQF profi t margins across all poultry producers, the extent of which will only be determined once the legislated injection level is introduced

RCL Foods is playing an active role in working with government and the industry to adopt a responsible approach to the injection of poultry meat which is more in line with RCL Foods’s current practice and international best practice

Energy and water security and pricing

The Group is aware of the need to reduce the usage of both water and electricity in light of constrained availability and recent price increases

• A sustainability framework is in place for defi ning and reviewing environmental objectives and targets

• Continual focus on waste water reduction and introduction of water re-use systems

• Research into ways to reduce energy consumption, e.g. use of energy saving lighting on farms and alternative energy sources, i.e. chicken litter, wind and solar energy

Non-compliance with laws and regulations

The Group’s operations are subject to legislation and regulations by authorities that oversee, including but not limited to:

• Financial standards

• Food labelling requirements

• Facility and product requirements

• Safety, health and environmental requirements and standards for staff, consumers and customers

• Legal compliance framework is established

• RCL Foods’s Total Integrated Management System (TIMS) facilitates the validation of RCL Foods’ systems and product information to ensure compliance to South African regulatory and statutory requirements

• On going employee awareness programmes

• External assurance providers

• Compliance is monitored and tested on an on going basis by Internal Audit, External Audit and third party providers

256


Disease outbreaks at farms

The outbreak of poultry diseases can impact negatively on the ability to conduct operations and the demand for RCL Foods’s products

The Group adheres to good farming practices and extensive precautionary measures are in place to ensure the health of the fl ocks:

• Bio-exclusion procedures are in place (physical access controls, shower procedures, site clothes, foot dip tanks, vehicle sprays at key sites, insulated houses, trained employees)

• Testing of fl ocks every month for Avian Infl uenza, Newcastle, Salmonella and Infectious Bronchitis

Fire at distribution facilities, plants and farms

Fires will affect the ability to conduct operations which will impact on fi nancial results

The Group works closely with external risk assessors and insurers to ensure that all facilities have the highest level of fi re detection and prevention. Key controls include:

• All equipment is subject to regular Infrared Inspection (IRIS) audits

• Fire hydrants and sprinkler systems

• CO2 systems for electrics

• Fire teams and training

• Fire alarms and smoke detectors

• New panels are fi re retardant

• Flammable substances are stored separately

Non- conforming food products

Products could potentially be subjected to food hazards if not managed within the supply chain. As a result we may be subject to product liability claims and product recalls and consumer safety

• These food safety risks are controlled by introducing Hazard Analysis and Critical Control Points (HACCP) methodology across the supply chain to manage food risks from farm to fork

• The Group’s TIMS allows the Group to manage risks associated with incoming material, minimise and reduce risks during production, transportation and distribution to customers

257


IT systems failure The Group operations are dependent on reliable, secure, effective and effi cient IT systems

• Business continuity plans and security controls are reviewed and tested regularly and updated accordingly

• Key centralised IT systems are backed up and supported by a suitable disaster recovery plan

• Key applications are hosted out of genuine data centre facilities accompanied by appropriate UPS and generator redundancy with appropriate network redundancy provided into the data centre

• Physical security at the data centre facilities are robust with the required access and environmental monitoring in place

• The targeted technology refresh cycle is between three to fi ve years, thus ensuring key applications run on supported platforms

• The Group’s wide area network communications platform is supported by a back-up virtual private network (VPN)

The Group’s risk management processes and practises were independently assessed during the 2011 financial year and were categorised as “developed”. Opportunities for further enhancement are evaluated on an on going basis.

(f) Legal compliance

The Group has implemented an enterprise wide Legal Compliance Framework which is designed to provide assurance to the Board that the risks posed by non-compliance with legislative and regulatory obligations are being addressed.

The key elements of the framework include:

• A comprehensive legal register which is updated on an on going basis

• Divisional legal champions who ensure that their respective divisions monitor and comply with all regulations and legislation

• Legal compliance prevention and monitoring strategies

The Group attempts to keep up to date with all intended or promulgated legislation through regular interaction with the Group’s corporate attorneys.

The audit and risk teams assess significant legal risks and the level of compliance as part of their annual audit activities , and reports from the various functions are submitted to the Risk, Audit and Social and Ethics Committees on a regular basis.

258

(g) IT governance

IT is an integral part of RCL Foods’ business and is fundamental to the support, growth and sustainability of the Group. IT within the Group is directed by a dedicated IT director and the overall responsibility for IT governance lies with the Board. Through the IT strategy, the IT roadmap is aligned to the Group’s business objectives to ensure that IT consistently enables sustainable value driven solutions and services to the Group.

The Group has adopted Control Objectives for Information and Related Technology (“COBIT”) as a guideline for establishing and maintaining effective internal controls, including compliance, continuity management and risk. An IT Project Portfolio Management (“PPM”) tool is in place to align and structure processes to better measure and manage the overall IT portfolio by ensuring that appropriate project management principles are applied to all new IT projects. These frameworks and associated IT policies and standards ensure that IT risks within the Group are minimised. The IT risk management process is included into the Group combined assurance process. Back-up and disaster recovery plans over key financial systems have been formalised and are tested on a regular basis.

Internal Audit performed an assessment of IT governance processes against best practice principles as espoused in King III which confirmed that the maturity of the Group’s IT processes are largely aligned to its desired maturity levels. The Group’s current focus is on enhancing its IT platform to deliver greater value and efficiency.

5. SOCIAL AND ETHICS COMMITTEE

Responsibilities

The role of the Social and Ethics committee is to assist the Board with monitoring and reporting on social, ethical and transformational practices that are consistent with good and responsible corporate citizenship. The committee has adopted formal terms of reference which is subject to an annual review by the Board. Responsibilities of the committee include the statutory duties as per the Companies Act. The responsibility of monitoring sustainability, health and public safety practices remains with the Risk Committee, however, the governance of ethics was transferred from the Audit Committee during the year of review.

Committee membership and meetings

The Social and Ethics Committee comprises Messrs GC Zondi (Chairman), M Dally (CEO), RH Field (CFO) and Mrs MM Nhlanhla. The Group Legal and Corporate Affairs Director and the GARM are permanent invitees to this committee. The Committee met twice during the financial year with the objective of setting out its annual work plan and reviewing the Group’s progress on key performance areas relating to:

• Corporate social investment

• Stakeholder relations

• Broad-based black economic development

• Labour relations and working conditions

• Employment equity

• Consumer relations; and

• Ethics and compliance.

The committee’s role also includes the monitoring of the Group’s participation and results achieved in various sustainability surveys and indices.

Code of corporate conduct and ethics

During the year under review, the Group reviewed and updated its Corporate Code of Conduct and Ethics Policy to ensure alignment with statutory requirements and the business philosophy of the Group. RCL’s induction programme educates new employees on the ethics, values and business culture of the Group. It is a requirement that all employees sign an acknowledgement that they have read and understood the contents of the policy and that contravention of the basic standards contained therein may result in disciplinary action, including dismissal. The Corporate Code of Conduct and Ethics Policy is available to all employees on the Group’s intranet.

The Corporate Code of Conduct and Ethics Policy promotes commitment to:

• Applying the highest standards of integrity in all its dealings with all stakeholders

• Carrying on of business through fair commercial competitive practices

259

• Trading with customers and suppliers who subscribe to ethical business practices

• Non-discriminatory employment practices and the promotion of employees to realise their potential through training and development of their skills; and

• Being proactive toward environmental and social sustainability issues.

• Further, through the policy the Board is able to:

• Clearly state acceptable and unacceptable practices

• Guide policy by providing a set of ethical corporate standards

• Encourage ethical behaviour of the Board, managers and employees at all levels

• Guide ethical decision-making

• Make ethical infringements easy to identify

• Promote awareness of, and sensitivity to, ethical issues; and

• Facilitate dispute resolution.

Tipp-Offs Anonymous hotline

In addition to the Group’s other compliance and enforcement activities, the Board recognises the need for a confidential reporting mechanism covering fraud and other risks (whistle-blowing). The whistle-blowing hotline, an anonymous toll-free number, is part of the Group’s anti-fraud and anti-corruption efforts and is supported by the Corporate Code of Conduct. This hotline provides an impartial facility for all stakeholders to report fraud, statutory malpractice, crime and deviations from policy.

In line with its commitment to transparency and accountability, the Group takes action against employees and others who are guilty of fraud, corruption or other misconduct, or who are in breach of Group policies. Procedures are in place for the independent investigation of matters reported and for appropriate follow-up action.

During the 2013 financial year, 50% of calls that were classified as criminal were resolved resulting in either resignations or disciplinary action against the relevant individuals. The balance of the calls were closed due to either insufficient information supplied by the caller or that the allegations were found to be untrue.

The following aspects also fall within the ambit of the Social and Ethics Committee but are dealt with in more detail in the Abridged Sustainability Report included on pages 41 to 53.

• Consumer relationships, including the company’s advertising, public relations and compliance with consumer protection laws

• Labour and Employment; and

• Corporate Social Investment.

The Social and Ethics Committee is satisfied that it has carried out its responsibilities for the year in compliance with its approved mandate.

The Chairman of the Social and Ethics Committee, Mr GC Zondi, will be available at the Annual General Meeting to answer any questions relating to the statutory obligations of the committee.

6. REMUNERATION AND NOMINATIONS COMMITTEE

The Remuneration and Nominations Committee is responsible for the assessment and approval of the remuneration strategy for the Group, determination of short- and long-term incentive pay structures for Group executives, positioning of senior executive pay levels relative to local and international industry benchmarks and assessment and authorisation of specific reward proposals for the Group’s executive Directors and management.

The objective of the remuneration strategy is to employ the necessary skills for the company to achieve its business goals and to base remuneration on personal and company performance in accordance with competitive market practices. The Remuneration and Nominations Committee operates under the delegated authority of the Board and consists of three non-executive Directors and meets at least twice a year. Mr NP Mageza is the Chairman of the Remuneration and Nominations Committee. The other members during the year were Messrs JB Magwaza and RV Smither. The Chief Executive Officer and Group HR Director attend meetings of the Remuneration and Nominations Committee but are excluded from the review of their own remuneration.

The mandate of the Remuneration and Nominations Committee also includes:

• Providing guidance on evaluating the performance of executive Directors

• Reviewing and recommending to the Board the remuneration of executive Directors

• Reviewing and approving general proposals for salary adjustments in the Group

260

• Approving principles on which short-term incentives for all staff are based

• Approving all awards pursuant to the RCL Foods Share Appreciation Rights Scheme

• Approving the overall cost of remuneration increases awarded

• Approving annual performance bonuses

• Reviewing the executive succession plan

The committee considers the views of the Chief Executive Officer on the performance and remuneration of his colleagues. The Chief Executive Officer and Group HR Director assist the Remuneration and Nominations Committee with analysis of external market data and trends.

In applying agreed remuneration policies, the Remuneration and Nominations Committee is committed to the principles of accountability and transparency and to ensuring that the reward arrangements are linked to Group performance, and are market related and support the business strategies.

7. GOVERNING STAKEHOLDER RELATIONSHIPS

The Group subscribes to a partnership approach in the way business is conducted. It seeks to constructively engage its key stakeholders so as to understand and be able to respond to their needs. Interaction occurs with key stakeholders in the business through a number of formal and informal channels, including participation in industry forums, the investor relations function and consumer careline.

While shareholders are primarily concerned with value creation, government and local communities are looking to the Group to create direct and indirect job opportunities, improve community infrastructures and protect the environment. The Group’s stakeholder process is therefore underpinned by management’s responsibility to remain visible and accessible to all its stakeholders and will continue to emphasise open and transparent dialogue in order to anticipate trends and make changes where possible to the way it currently operates.

The Board accepts its duty to present a balanced and understandable assessment of the Group’s position in reporting to stakeholders and the greater demands for transparency and accountability regarding non-financial matters. The quality of the information is based on the principles of openness and substance over form. The integrated annual report seeks to address matters of significant interest and concern to all stakeholders and to present a comprehensive and objective assessment of the Group, so that all stakeholders with a legitimate interest in the Group’s affairs can obtain a complete, fair and honest account of its performance.

The table below sets out the Group’s key stakeholders and a brief description of the nature of interactions :

Key stakeholders

Dialogue channels and forms of engagement

Shareholders and other providers of capital

• Annual general meeting

• Investor relations

• Bi-annual results announcements

• Trading updates

• SENS releases

• Integrated annual report

• Websites

Business partners and customers

• Face to face interventions

• Regular meetings and workshops

• Market, customer and in-store surveys

Local community • Selected projects as part of Corporate Social Investment

• Regular meetings with municipalities and civic organisations

Government and regulators

• Corporate affairs, legal and investor relations functions

Industry • Southern African Poultry Association (“SAPA”)

• Consumer Goods Council of South Africa (“CGCSA”)

• Animal Feed Manufacturers Association (“AFMA”)

• South African Agricultural Processors Association (“SAAPA”)

Consumers • Consumer careline

• Consumer and product surveys

• Advertising campaigns in print and media

• Consumer immersions

261

Key stakeholders

Dialogue channels and forms of engagement

Staff and unions • Roadshows

• Good to Great leadership journey

• Intranet

• Staff meetings and training

• Performance reviews and career planning

• Management and Union meetings

• Confi dential hotline through “Tip -Offs Anonymous”

Suppliers • Direct relationships with suppliers to enable partnerships

• Face to face interventions

• Regular meetings and workshops

8. ATTENDANCE OF MEETINGS

Board member Meeting attendance

BoardAudit

CommitteeRisk

Committee

Remunerationand

NominationsCommittee

Socialand

EthicsCommittee

Dr M Griessel 5/5 3/3 2/2NP Mageza 4/5 3/3 3/3MM Nhlanhla 3/5 2/2RV Smither 5/5 3/3 1/2 3/3HJ Carse 3/3JJ Durand 5/5 3/3PR Louw 5/5JB Magwaza 5/5 3/3CM van den Heever 2/2GC Zondi 5/5 2/2 2/2M Dally 5/5 2/2 2/2RH Field 5/5 2/2 2/2

262

ANNEXURE 15

TABLE OF ENTITLEMENT

The number of Pro Rata Offer Shares to which Qualifying RCL Foods Minority Shareholders will be entitled is set out below, on the basis that Qualifying RCL Foods Minority Shareholders will be entitled to 53.10646 (fi fty three point one zero six four six) Pro Rata Offer Shares for every 100 (one hundred) RCL Foods Shares held on the Record Date. Shareholders’ entitlements will be rounded up or down, as appropriate in accordance with the standard rounding convention with fractions of 0.5 (zero point fi ve) and above being rounded up and fractions of less than 0.5 (zero point fi ve) being rounded down, and only whole numbers of Pro Rata Offer Shares will be issued, in accordance with the Listings Requirements.

Shares held Entitlement Shares held Entitlement

1 1 47 252 1 48 253 2 49 264 2 50 275 3 51 276 3 52 287 4 53 288 4 54 299 5 55 2910 5 56 3011 6 57 3012 6 58 3113 7 59 3114 7 60 3215 8 61 3216 8 62 3317 9 63 3318 10 64 3419 10 65 3520 11 66 3521 11 67 3622 12 68 3623 12 69 3724 13 70 3725 13 71 3826 14 72 3827 14 73 3928 15 74 3929 15 75 4030 16 76 4031 16 77 4132 17 78 4133 18 79 4234 18 80 4235 19 81 4336 19 82 4437 20 83 4438 20 84 4539 21 85 4540 21 86 4641 22 87 4642 22 88 4743 23 89 4744 23 90 4845 24 91 4846 24 92 49

263

Shares held Entitlement Shares held Entitlement

93 49 2 400 1 27594 50 2 500 1 32895 50 2 600 1 38196 51 2 700 1 43497 52 2 800 1 48798 52 2 900 1 54099 53 3 000 1 593100 53 3 100 1 646200 106 3 200 1 699300 159 3 300 1 753400 212 3 400 1 806500 266 3 500 1 859600 319 3 600 1 912700 372 3 700 1 965800 425 3 800 2 018900 478 3 900 2 071

1 000 531 4 000 2 1241 100 584 4 100 2 1771 200 637 4 200 2 2301 300 690 4 300 2 2841 400 743 4 400 2 3371 500 797 4 500 2 3901 600 850 4 600 2 4431 700 903 4 700 2 4961 800 956 4 800 2 5491 900 1 009 4 900 2 6022 000 1 062 5 000 2 6552 100 1 115 10 000 5 3112 200 1 168 100 000 53 1062 300 1 221 1 000 000 531 065

10 000 000 5 310 646

264

ANNEXURE 16

FOODCORP VENDOR DETAILS

Vendor Name Description Address

“BlueBay” BlueBay Asset Management LLP, a limited liability partnership incorporated under the laws of England and Wales with registered number OC370085

77 Grosvenor Street London W1K 3JR United Kingdom

“BlueBay Funds” collectively, the following UK-based funds: BlueBay High Yield Bond Fund; BlueBay Structured Funds; High Yield Enhanced Fund; BlueBay Specialised Funds; Credit Opportunity (Master) Fund; BlueBay Funds – BlueBay High Yield Corporate Bond Fund; The BlueBay Distressed Opportunities (Master) Fund Limited; BlueBay Funds – BlueBay High Yield Bond Fund and BlueBay Structured Funds – High Yield Institutional Credit Select Fund

77 Grosvenor Street London W1K 3JR United Kingdom

“Capitau Holdings” Capitau Holdings Limited, registration number 2006/030178/06, a public company duly incorporated and registered with limited liability in accordance with the laws of South Africa

5 Viscount RoadBedfordview, 2007JohannesburgSouth Africa

“Capitau Partnership” Capitau General Partner Proprietary Limited, in its capacity as the general partner of Capitau SA Partnership, an en commandite partnership established in South Africa


“Capitau SPV” Capitau FC Investment Proprietary Limited (previously Iningi Investments 195 Proprietary Limited), registration number 2011/117650/07, a private company duly incorporated and registered with limited liability in accordance with the laws of South Africa


“Foodcorp Staff Trust” The Trustees of the Foodcorp Employee Share Trust, Master’s reference number IT7399

Parc NicolBuilding No. 13001 William Nicol DriveBryanston, 2021South Africa

“ Foodcorp Management Holdings”

Foodcorp Management Holdings (Proprietary) Limited, registration number 2009/022279/07


Individual shareholders of Foodcorp

AJ Williamson, MSG Mareletse, P Coetzer; F Roetz; JA van Niekerk; C Gildenhuys; D Heyneke and G Nel


265


NOTICE OF GENERAL MEETING

Unless otherwise apparent from the context, the defi nitions and interpretations commencing on page 6 of the Circular to which this notice of General Meeting is attached apply to this notice of General Meeting.

Notice is hereby given that a General Meeting of RCL Foods Shareholders will be held at 13:30 on Thursday, 16 January 2014 at the Company’s registered offi ce, Six The Boulevard, Westway Offi ce Park, Westville, Durban for the purpose of considering and, if deemed fi t, passing, with or without modifi cation, the ordinary and special resolutions set out in this notice.

TSB ACQUISITION

Ordinary Resolution Number 1

RESOLVED THAT, the acquisition by the Company of the TSB Acquisition Shares from TSB Sugar Holdings at the TSB Acquisition Consideration, which will be discharged through the issue by RCL Foods of the TSB Consideration Shares to TSB Sugar Holdings, be and is hereby approved as a related party transaction in terms of paragraph 10.4(d) of the Listings Requirements, it being recorded that TSB Sugar Holdings is an associate of IPI which is a “material” shareholder of the Company (as envisaged in the Listings Requirements) and TSB Sugar Holdings is therefore a related party in respect of the Company.

* The percentage of voting rights that will be required for this ordinary resolution to be adopted is more than 50% (fi fty percent) of the voting rights exercised on the resolution excluding the votes of IPI and its associates .

Special Resolution Number 1

RESOLVED THAT, in accordance with section 41(1)(b) and section 41(3) of the Companies Act, the Company be and is hereby authorised to issue the TSB Consideration Shares to TSB Sugar Holdings pursuant to the TSB Acquisition.

* The percentage of voting rights that will be required for this special resolution to be adopted is at least 75% (seventy fi ve percent) of the votes exercised on the resolution excluding the votes of IPI and its associates.

TSB BEE TRANSACTION


RESOLVED THAT, in accordance with paragraph 5.51(g) of the Listings Requirements and clause 6.7 of the MOI, the Company be and is hereby authorised, by way of a specifi c approval, to issue the TSB BEE Shares to TSB BEE Co at a subscription price of R0.01 (one cent) per TSB BEE Share, in accordance with the provisions of the TSB BEE Subscription and Relationship Agreement.

* The percentage of voting rights that will be required for this ordinary resolution to be adopted is a 75% (seventy fi ve percent) majority of the votes cast in favour of the resolution by all equity securities holders present in person or represented by proxy at the General Meeting.


RESOLVED THAT, in accordance with section 44(3)(a)(ii) of the Companies Act, the Company be and is hereby authorised to provide fi nancial assistance:

(i) to TSB BEE Co in terms of the TSB BEE NVF in order to enable TSB BEE Co to subscribe for the TSB BEE Shares pursuant to the TSB BEE Subscription and Relationship Agreement and to provide any further financial assistance which may be required pursuant to any of the other agreements or transactions forming part of the TSB BEE Transaction; and

266

(ii) in the future in relation to the TSB BEE NVF, or in relation to the syndication or the refinancing of the TSB BEE NVF, and whether through the granting of a loan, the issue of a guarantee, the granting of a put or call option, the giving of security or in any other manner whatsoever.

* The percentage of voting rights that will be required for this special resolution to be adopted is at least 75% (seventy fi ve percent) of the votes exercised on the resolution.


RESOLVED THAT, in accordance with paragraph 5.69(b) of the Listings Requirements, the Company be and is hereby specifi cally authorised to repurchase TSB BEE Shares held by TSB BEE Co pursuant to the TSB BEE Maturity Call Option, the TSB BEE Trigger Event Call Option, the TSB BEE Exit Call Option and/or the TSB BEE Pre-emptive Right, in accordance with the provisions of the TSB BEE Subscription and Relationship Agreement.

* The percentage of voting rights that will be required for this special resolution to be adopted is not less than 75% (seventy fi ve percent) of the voting rights exercised on the resolution and Shareholders holding at least 25% (twenty-fi ve percent) of all the voting rights are present at the General Meeting in person, by proxy or via electronic communication.

SPECIFIC REPURCHASE


RESOLVED THAT, in accordance with section 48(8)(b) as read together with section 115(2) of the Companies Act and paragraph 5.69(b) of the Listings Requirements, the Company be and is hereby specifi cally authorised to repurchase the Current RCL Foods BEE Shares from ECI (which amount to more than 5% (fi ve percent) of the issued RCL Foods Shares as at the date on which the repurchase is implemented) pursuant to the Specifi c Repurchase, which repurchase shall be funded out of sources other than the contributed tax capital of the Company in accordance with the provisions of the Redemption and Repurchase Agreement.

Note: For purposes of this Special Resolution Number 4, please refer to Appendix A to this notice of General Meeting for copies of sections 115 and 164 of the Companies Act.

* The percentage of voting rights that will be required for this special resolution to be adopted is not less than 75% (seventy fi ve percent of the voting rights exercised on the resolution and Shareholders holding at least 25% (twenty fi ve percent) of all the voting rights are present at the General Meeting in person, by proxy or via electronic communication excluding the votes of ECI and its associates.

RCL FOODS BEE TRANSACTION


RESOLVED THAT, in accordance with paragraph 5.51(g) of the Listings Requirements and clause 6.7 of the MOI, the Company be and is hereby authorised, by way of a specifi c approval, to issue 44 681 162 (forty four million six hundred and eighty one thousand one hundred and sixty two) RCL Foods Shares to the ESOP Trust for an aggregate subscription consideration of R242 143 970.15 (two hundred and forty two million one hundred and forty three thousand nine hundred and seventy Rand and fi fteen cents), in accordance with the provisions of the relevant RCL Foods BEE Subscription Agreement.



RESOLVED THAT, in accordance with paragraph 5.51(g) of the Listings Requirements and clause 6.7 of the MOI, the Company be and is hereby authorised, by way of a specifi c approval, to issue 19 149 069 (nineteen million one hundred and forty nine thousand and sixty nine) RCL Foods Shares to SPV 2 for an aggregate subscription consideration of R103 775 984.73 (one hundred and three million seven hundred and seventy fi ve thousand nine hundred and eighty four Rand and seventy three cents), in accordance with the provisions of the relevant RCL Foods BEE Subscription Agreement.




(i) to each of SPV 1 and the ESOP Trust in terms of the RCL Foods BEE NVF and the SPV 1 Preference Shares in accordance with the relevant RCL Foods BEE Relationship Agreement and the relevant RCL Foods BEE Preference Share Subscription Agreement in order to enable the ESOP Trust to subscribe for the relevant number of RCL Foods BEE Shares, and to provide any further financial assistance which may be required pursuant to any of the other agreements or transactions forming part of the New RCL Foods BEE Transaction; and

267

(ii) in the future in relation to the RCL Foods BEE NVF and the SPV 1 Preference Share funding, or in relation to the syndication or the refinancing of any of the aforegoing, and whether through the granting of a loan, the issue of a guarantee, the granting of a put or call option, the giving of security, the purchase and/or subordination of any of the SPV 1 Preference Shares or in any other manner whatsoever.




(i) to SPV 2 in terms of the RCL Foods BEE NVF and the SPV 2 Preference Shares in accordance with the RCL Foods BEE Relationship Agreement and the relevant RCL Foods BEE Preference Share Subscription Agreement in order to enable SPV 2 to subscribe for the relevant number of RCL Foods BEE Shares, and to provide any further financial assistance which may be required pursuant to any of the other agreements or transactions forming part of the New RCL Foods BEE Transaction; and

(ii) in the future in relation to the RCL Foods BEE NVF and the SPV 2 Preference Share funding, or in relation to the syndication or the refinancing of any of the aforegoing, and whether through the granting of a loan, the issue of a guarantee, the granting of a put or call option, the giving of security, the purchase and/or subordination of any of the SPV 2 Preference Shares or in any other manner whatsoever.



RESOLVED THAT, in accordance with paragraph 5.69(b) of the Listings Requirements, the Company be and is hereby specifi cally authorised to repurchase RCL Foods BEE Shares held by the ESOP Trust pursuant to the exercise by the Company of the RCL Foods BEE Repurchase Option or the RCL Foods BEE Compulsory Subscription Right or pursuant to the exercise by the ESOP Trust of the RCL Foods BEE Subscription Option, in accordance with the provisions of the RCL Foods BEE Relationship Agreement.



RESOLVED THAT, in accordance with paragraph 5.69(b) of the Listings Requirements, the Company be and is hereby specifi cally authorised to repurchase RCL Foods BEE Shares held by SPV 2 pursuant to the exercise by the Company of the RCL Foods BEE Repurchase Option or the RCL Foods BEE Compulsory Subscription Right or pursuant to the exercise by SPV 2 of the RCL Foods BEE Subscription Option, in accordance with the provisions of the RCL Foods BEE Relationship Agreement.



RESOLVED THAT, in accordance with paragraph 5.51(g) of the Listings Requirements and clause 6.7 of the MOI, the Company be and is hereby authorised, by way of a specifi c approval, to issue RCL Foods Shares to the ESOP Trust at a subscription price per RCL Foods Share equal to the RCL Foods BEE Notional Outstandings in respect of the RCL Foods BEE Nominal Shares held by the ESOP Trust, pursuant to the exercise of the RCL Foods BEE Compulsory Subscription Right by RCL Foods or the RCL Foods BEE Subscription Option by the ESOP Trust, in accordance with the provisions of the RCL Foods BEE Relationship Agreement.



RESOLVED THAT, in accordance with paragraph 5.51(g) of the Listings Requirements and clause 6.7 of the MOI, the Company be and is hereby authorised, by way of a specifi c approval, to issue RCL Foods Shares to SPV 2 at a subscription price per RCL Foods Share equal to the RCL Foods BEE Notional Outstandings in respect of the RCL Foods BEE Nominal Shares held by SPV 2, pursuant to the exercise of the RCL Foods BEE Compulsory Subscription Right by RCL Foods or the RCL Foods BEE Subscription Option by SPV 2, in accordance with the provisions of the RCL Foods BEE Relationship Agreement.


268

PRO RATA OFFER


RESOLVED THAT, subject to and conditional upon the implementation of the TSB Acquisition, and in accordance with paragraph 5.51(g) of the Listings Requirements and clause 6.7 of the MOI, the Company be and is hereby authorised, by way of a specifi c approval, to issue up to 74 214 642 (seventy four million two hundred and fourteen thousand six hundred and forty two) Pro Rata Offer Shares at the Pro Rata Offer Subscription Price in the ratio of 53.10646 (fi fty three point one zero six four six) Pro Rata Offer Shares for every 100 (one hundred) RCL Foods Shares held on the Record Date to RCL Foods Minority Shareholders registered as such on the Register on the Record Date, pursuant to the Pro Rata Offer.


PLACEMENT


RESOLVED THAT, in accordance with paragraph 5.51(g) of the Listings Requirements and clause 6.7 of the MOI, the Company be and is hereby authorised, by way of a specifi c approval, to issue so many RCL Foods Shares as may be equal in value to the balance of R2 500 000 000 (two billion and fi ve hundred million Rand) not raised pursuant to the Pro Rata Offer, to qualifying investors, provided that the maximum discount at which such shares may be issued in terms of this authority is 10% (ten percent) of the VWAP per RCL Foods Share measured over the 30 (thirty) Business Days prior to the date on which the subscription price is agreed to between the Company and the parties subscribing for the RCL Foods Shares pursuant to the Placement.



RESOLVED THAT, in accordance with section 41(1)(b) of the Companies Act, the Company be and is hereby authorised to issue RCL Foods Shares to TSB Sugar Holdings pursuant to the Placement, provided that if the Placement Subscription Price is at a discount to the VWAP per RCL Foods Share over the 30 (thirty) Business Days prior to the date on which the Placement Subscription Price is agreed, then the issue of Placement Shares to TSB Sugar Holdings shall be subject to the Board confi rming whether such issue is fair insofar as other Shareholders are concerned based on the advice received from an independent expert which is acceptable to the JSE Limited.

* The percentage of voting rights that will be required for this special resolution to be adopted is at least 75% (seventy fi ve percent) of the votes exercised on the resolution excluding the votes of IPI and its associates.

PROPOSED RCL FOODS SHARE CAPITAL INCREASE


RESOLVED THAT, in accordance with section 36(2)(a) as read together with section 16(1)(c) of the Companies Act, the number of the Company’s authorised shares be and is hereby increased from 1 000 000 000 (one billion) RCL Foods Shares to 2 000 000 000 (two billion) RCL Foods Shares by the creation of an additional 1 000 000 000 (one billion) RCL Foods Shares and that the MOI be and is hereby amended by the deletion of the phrase “1 000 000 000 (one billion) ordinary shares” where it appears in clause 6.1.1 of the MOI and the substitution thereof with the phrase “2 000 000 000 (two billion) ordinary shares”.


NOTES TO THE NOTICE OF GENERAL MEETING

Record date

The record date in terms of section 59 of the Companies Act for Shareholders to be recorded on the Register in order to:

• receive notice of the General Meeting is Friday, 6 December 2013; and

• attend, participate in and vote at the General Meeting, is Friday, 10 January 2014 and, accordingly, the last day to trade in order to be eligible to vote at the General Meeting is Friday, 3 January 2014.

269

Voting and proxies

Shareholders are reminded that:

• a Shareholder entitled to attend and vote at the General Meeting is entitled to appoint a proxy (or more than one proxy) to attend, participate in and vote at the General Meeting in place of the Shareholder and Shareholders are referred to the attached form of proxy (blue);

• a proxy need not also be a Shareholder of the Company; and

• in terms of section 63(1) of the Companies Act, any person attending or participating in a meeting of Shareholders must present reasonably satisfactory identification and the person presiding at the General Meeting must be reasonably satisfied that the right of any person to participate in and vote (whether as Shareholder or as proxy for a Shareholder ) has been reasonably verified.

Certifi cated Shareholders and Dematerialised Shareholders with “own name” registration who are unable to attend the General Meeting and who wish to be represented at the General Meeting, must complete and deliver the attached form of proxy (blue) in accordance with the instructions contained therein, so as to be received by the Transfer Secretary, Computershare Investor Services (Proprietary) Limited, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) by no later than 13: 30 on Tuesday, 14 January 2014 or handed to the chairperson of the General Meeting before the appointed proxy exercises any of the relevant Shareholder’s rights at the General Meeting (or any postponement or adjournment of the General Meeting).

Dematerialised Shareholders without “own name” registration who wish to attend the General Meeting in person should request their CSDP or Broker to provide them with the necessary letter of representation in accordance with the relevant custody agreement. Dematerialised Shareholders without “own name” registration who do not wish to attend the General Meeting but wish to be represented at the General Meeting must advise their CSDP or Broker of their voting instructions. Such Shareholders should contact their CSDP or Broker with regard to the cut-off time for their voting instructions.

By order of the Board

R H FieldChief Financial Offi cer

Durban 12 December 201 3

Registered Office Transfer Secretary

Six The Boulevard Computershare Investor Services Proprietary LimitedWestway Office Park 70 Marshall Street Westville, 3629 Johannesburg, 2001 (PO Box 2734, Westway Office Park, 3635) (PO Box 61051, Marshalltown, 2107)

270

Appendix A

COP IES OF SECTIONS 115 AND 164 OF THE COMPANIES ACT

“115. Required approval for transactions contemplated in Part :

(1) Despite section 65, and any provision of a company’s Memorandum of Incorporation, or any resolution adopted by its board or holders of its securities, to the contrary, a company may not dispose of, or give effect to an agreement or series of agreements to dispose of, all or the greater part of its assets or undertaking, implement an amalgamation or a merger, or implement a scheme of arrangement, unless:

(a) the disposal, amalgamation or merger, or scheme of arrangement:

(i) has been approved in terms of this section; or

(ii) is pursuant to or contemplated in an approved business rescue plan for that company, in terms of Chapter 6; and

(b) to the extent that Parts B and C of this Chapter, and the Takeover Regulations, apply to a company that proposes to:

(i) dispose of all or the greater part of its assets or undertaking;

(ii) amalgamate or merge with another company; or

(iii) implement a scheme of arrangement,

the Panel has issued a compliance certifi cate in respect of the transaction, in terms of section 119(4)(b), or exempted the transaction in terms of section 119(6).

(2) A proposed transaction contemplated in subsection (1) must be approved:

(a) by a special resolution adopted by persons entitled to exercise voting rights on such a matter, at a meeting called for that purpose and at which sufficient persons are present to exercise, in aggregate, at least 25% of all of the voting rights that are entitled to be exercised on that matter, or any higher percentage as may be required by the company’s Memorandum of Incorporation, as contemplated in section 64(2); and

(b) by a special resolution, also adopted in the manner required by paragraph (a), by the shareholders of the company’s holding company if any, if:

(i) the holding company is a company or an external company;

(ii) the proposed transaction concerns a disposal of all or the greater part of the assets or undertaking of the subsidiary; and

(iii) having regard to the consolidated financial statements of the holding company, the disposal by the subsidiary constitutes a disposal of all or the greater part of the assets or undertaking of the holding company; and

(c) by the court, to the extent required in the circumstances and manner contemplated in subsections (3) to (6).

(3) Despite a resolution having been adopted as contemplated in subsections (2) (a) and (b), a company may not proceed to implement that resolution without the approval of a court if:

(a) the resolution was opposed by at least 15% of the voting rights that were exercised on that resolution and, within five business days after the vote, any person who voted against the resolution requires the company to seek court approval; or

(b) the court, on an application within 10 business days after the vote by any person who voted against the resolution, grants that person leave, in terms of subsection (6), to apply to a court for a review of the transaction in accordance with subsection (7).

(4) For the purposes of subsections (2) and (3), any voting rights controlled by an acquiring party, a person related to an acquiring party, or a person acting in concert with either of them, must not be included in calculating the percentage of voting rights:

(a) required to be present, or actually present, in determining whether the applicable quorum requirements are satisfied; or

(b) required to be voted in support of a resolution, or actually voted in support of the resolution.

(4A) In subsection (4), “act in concert” has the meaning set out in section 117(1)(b).

(5) If a resolution requires approval by a court as contemplated in terms of subsection (3) (a), the company must either:

271

(a) within 10 business days after the vote, apply to the court for approval, and bear the costs of that application; or

(b) treat the resolution as a nullity.

(6) On an application contemplated in subsection (3)(b), the court may grant leave only if it is satisfi ed that the applicant:

(a) is acting in good faith;

(b) appears prepared and able to sustain the proceedings; and

(c) has alleged facts which, if proved, would support an order in terms of subsection (7).

(7) On reviewing a resolution that is the subject of an application in terms of subsection (5)(a), or after granting leave in terms of subsection (6), the court may set aside the resolution only if:

(a) the resolution is manifestly unfair to any class of holders of the company’s securities; or

(b) the vote was materially tainted by conflict of interest, inadequate disclosure, failure to comply with the Act, the Memorandum of Incorporation or any applicable rules of the company, or other significant and material procedural irregularity.

(8) The holder of any voting rights in a company is entitled to seek relief in terms of section 164 if that person:

(a) notified the company in advance of the intention to oppose a special resolution contemplated in this section; and

(b) was present at the meeting and voted against that special resolution.

(9) If a transaction contemplated in this Part has been approved, any person to whom assets are, or an undertaking is, to be transferred, may apply to a court for an order to effect:

(a) the transfer of the whole or any part of the undertaking, assets and liabilities of a company contemplated in that transaction;

(b) the allotment and appropriation of any shares or similar interests to be allotted or appropriated as a consequence of the transaction;

(c) the transfer of shares from one person to another;

(d) the dissolution, without winding-up, of a company, as contemplated in the transaction;

(e) incidental, consequential and supplemental matters that are necessary for the effectiveness and completion of the transaction; or

(f) any other relief that may be necessary or appropriate to give effect to, and properly implement, the amalgamation or merger. ”

“164. Dissenting shareholders’ appraisal rights:

(1) This section does not apply in any circumstances relating to a transaction, agreement or offer pursuant to a business rescue plan that was approved by shareholders of a company, in terms of section 152.

(2) If a company has given notice to shareholders of a meeting to consider adopting a resolution to:

(a) amend its Memorandum of Incorporation by altering the preferences, rights, limitations or other terms of any class of its shares in any manner materially adverse to the rights or interests of holders of that class of shares, as contemplated in section 37(8); or

(b) enter into a transaction contemplated in section 112, 113 or 114,

that notice must include a statement informing shareholders of their rights under this section.

(3) At any time before a resolution referred to in subsection (2) is to be voted on, a dissenting shareholder may give the company a written notice objecting to the resolution.

(4) Within 10 business days after a company has adopted a resolution contemplated in this section, the company must send a notice that the resolution has been adopted to each shareholder who:

(a) gave the company a written notice of objection in terms of subsection (3); and

(b) has neither:

(i) withdrawn that notice; or

(ii) voted in support of the resolution.

(5) A shareholder may demand that the company pay the shareholder the fair value for all of the shares of the company held by that person if:

(a) the shareholder:

(i) sent the company a notice of objection, subject to subsection (6); and

272

(ii) in the case of an amendment to the company’s Memorandum of Incorporation, holds shares of a class that is materially and adversely affected by the amendment;

(b) the company has adopted the resolution contemplated in subsection (2); and

(c) the shareholder:

(i) voted against that resolution; and

(ii) has complied with all of the procedural requirements of this section.

(6) The requirement of subsection (5)(a)(i) does not apply if the company failed to give notice of the meeting, or failed to include in that notice a statement of the shareholders rights under this section.

(7) A shareholder who satisfi es the requirements of subsection (5) may make a demand contemplated in that subsection by delivering a written notice to the company within:

(a) 20 business days after receiving a notice under subsection (4); or

(b) if the shareholder does not receive a notice under subsection (4), within 20 business days after learning that the resolution has been adopted.

(8) A demand delivered in terms of subsections (5) to (7) must also be delivered to the Panel, and must state:

(a) the shareholder’s name and address;

(b) the number and class of shares in respect of which the shareholder seeks payment; and

(c) a demand for payment of the fair value of those shares.

(9) A shareholder who has sent a demand in terms of subsections (5) to (8) has no further rights in respect of those shares, other than to be paid their fair value, unless:

(a) the shareholder withdraws that demand before the company makes an offer under subsection (11), or allows an offer made by the company to lapse, as contemplated in subsection (12)(b);

(b) the company fails to make an offer in accordance with subsection (11) and the shareholder withdraws the demand; or

(c) the company, by a subsequent special resolution, revokes the adopted resolution that gave rise to the shareholder’s rights under this section.

(10) If any of the events contemplated in subsection (9) occur, all of the shareholder’s rights in respect of the shares are reinstated without interruption.

(11) Within fi ve business days after the later of:

(a) the day on which the action approved by the resolution is effective;

(b) the last day for the receipt of demands in terms of subsection (7)(a); or

(c) the day the company received a demand as contemplated in subsection (7)(b), if applicable, the company must send to each shareholder who has sent such a demand a written offer to pay an amount considered by the company’s directors to be the fair value of the relevant shares, subject to subsection (16), accompanied by a statement showing how that value was determined.

(12) Every offer made under subsection (11):

(a) in respect of shares of the same class or series must be on the same terms; and

(b) lapses if it has not been accepted within 30 business days after it was made.

(13) If a shareholder accepts an offer made under subsection (12):

(a) the shareholder must either in the case of:

(i) shares evidenced by certificates, tender the relevant share certificates to the company or the company’s transfer agent; or

(ii) uncertificated shares, take the steps required in terms of section 53 to direct the transfer of those shares to the company or the company’s transfer agent; and

(b) the company must pay that shareholder the agreed amount within 10 business days after the shareholder accepted the offer and:

(i) tendered the share certificates; or

(ii) directed the transfer to the company of uncertificated shares.

(14) A shareholder who has made a demand in terms of subsections (5) to (8) may apply to a court to determine a fair value in respect of the shares that were the subject of that demand, and an order requiring the company to pay the shareholder the fair value so determined, if the company has:

(a) failed to make an offer under subsection (11); or

273

(b) made an offer that the shareholder considers to be inadequate, and that offer has not lapsed.

(15) On an application to the court under subsection (14):

(a) all dissenting shareholders who have not accepted an offer from the company as at the date of the application must be joined as parties and are bound by the decision of the court;

(b) the company must notify each affected dissenting shareholder of the date, place and consequences of the application and of their right to participate in the court proceedings; and

(c) the court:

(i) may determine whether any other person is a dissenting shareholder who should be joined as a party;

(ii) must determine a fair value in respect of the shares of all dissenting shareholders, subject to subsection (16);

(iii) in its discretion may:

(aa) appoint one or more appraisers to assist it in determining the fair value in respect of the shares; or

(bb) allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution is effective, until the date of payment;

(iv) may make an appropriate order of costs, having regard to any offer made by the company, and the final determination of the fair value by the court; and

(v) must make an order requiring:

(aa) the dissenting shareholders to either withdraw their respective demands or to comply with subsection (13) (a); and

(bb) the company to pay the fair value in respect of their shares to each dissenting shareholder who complies with subsection (13)(a), subject to any conditions the court considers necessary to ensure that the company fulfi ls its obligations under this section.

(15A) At any time before the court has made an order contemplated in subsection (15)(c)(v), a dissenting shareholder may accept the offer made by the company in terms of subsection (11), in which case:

(a) that shareholder must comply with the requirements of subsection 13(a); and

(b) the company must comply with the requirements of subsection 13(b).

(16) The fair value in respect of any shares must be determined as at the date on which, and time immediately before, the company adopted the resolution that gave rise to a shareholder’s rights under this section.

(17) If there are reasonable grounds to believe that compliance by a company with subsection (13) (b), or with a court order in terms of subsection (15)(c)(v)(bb), would result in the company being unable to pays its debts as they fall due and payable for the ensuing 12 months:

(a) the company may apply to a court for an order varying the company’s obligations in terms of the relevant subsection; and

(b) the court may make an order that:

(i) is just and equitable, having regard to the financial circumstances of the company; and

(ii) ensures that the person to whom the company owes money in terms of this section is paid at the earliest possible date compatible with the company satisfying its other financial obligations as they fall due and payable.

(18) If the resolution that gave rise to a shareholder’s rights under this section authorised the company to amalgamate or merge with one or more other companies, such that the company whose shares are the subject of a demand in terms of this section has ceased to exist, the obligations of that company under this section are obligations of the successor to that company resulting from the amalgamation or merger.

(19) For greater certainty, the making of a demand, tendering of shares and payment by a company to a shareholder in terms of this section do not constitute a distribution by the company, or an acquisition of its shares by the company within the meaning of section 48, and therefore are not subject to:

(a) the provisions of that section; or

(b) the application by the company of the solvency and liquidity test set out in section 4.

(20) Except to the extent:

(a) expressly provided in this section; or

(b) that the Panel rules otherwise in a particular case,

a payment by a company to a shareholder in terms of this section does not obligate any person to make a comparable offer under section 125 to any other person.”

274 PRINTED BY INCE (PTY) LTD REF. W2CF 16939


FORM OF PROXY (FOR USE BY CERTIFICATED SHAREHOLDERS AND “OWN NAME” DEMATERIALISED

SHAREHOLDERS ONLY)

The defi nitions and interpretations commencing on page 6 of the Circular with which this form of proxy is enclosed apply to this form of proxy.

For use by Certifi cated Shareholders and Dematerialised Shareholders with “own name” registration only, at the General Meeting of Shareholders of the Company to be held at 13:30 on Thursday, 16 January 2014 at the Company’s registered offi ce, Six The Boulevard, Westway Offi ce Park, Westville, Durban.

Dematerialised Shareholders without “own name” registration must not use this form of proxy. Dematerialised Shareholders who wish to attend the General Meeting in person must inform their CSDP or Broker of their intention to attend the General Meeting and request their CSDP or Broker to issue them with the necessary letter of representation to attend the General Meeting in person and vote or, should they not wish to attend the General Meeting in person, provide their CSDP or Broker with their voting instructions..

Forms of proxy must be completed and delivered to the Company’s Transfer Secretary, by not later than 1 3: 30 on Tuesday, 14 January 2014. Thereafter, forms of proxy may be handed to the chairperson of the General Meeting at any time before the appointed proxy exercises any of the Shareholder rights at the General Meeting.

I/We

( full name in BLOCK LETTERS)

of

(address)

being the holder(s) of RCL Foods Shares, do hereby appoint (see note):

1. or failing him/her;

2. or failing him/her;

3. the chairperson of the General Meeting,

as my/our proxy to attend, speak and vote on my/our behalf at the General Meeting (or any postponement or adjournment thereof ).

I/We desire to vote as follows:

Insert number of votes (one vote per RCL Foods Share)

For Against Abstain


Approval of the TSB Acquisition


Specifi c authority to issue the TSB Consideration Shares to TSB Sugar Holdings


Specifi c authority to issue the TSB BEE Shares to TSB BEE Co


Authorisation for the provision of fi nancial assistance to TSB BEE Co


Authorisation to repurchase TSB BEE Shares from TSB BEE Co


Authorisation of the Specifi c Repurchase


Specifi c authority to issue RCL Foods Shares to the ESOP Trust


Specifi c authority to issue RCL Foods Shares to SPV 2


Authorisation for the provision of fi nancial assistance to the ESOP Trust and SPV 1


Authorisation for the provision of fi nancial assistance to SPV 2


Specifi c authority to repurchase RCL Foods BEE Shares from the ESOP Trust pursuant to the RCL Foods BEE Repurchase Option, the RCL Foods BEE Compulsory Subscription Right and the RCL Foods BEE Subscription Option


Specifi c authority to repurchase RCL Foods BEE Shares from SPV 2 pursuant to the RCL Foods BEE Repurchase Option, the RCL Foods BEE Compulsory Subscription Right and the RCL Foods BEE Subscription Option


Specifi c authority to issue RCL Foods Shares to the ESOP Trust pursuant to the exercise of the RCL Foods BEE Compulsory Subscription Right or the RCL Foods BEE Subscription Option


Specifi c authority to issue RCL Foods Shares to SPV 2 pursuant to the exercise of the RCL Foods BEE Compulsory Subscription Right or the RCL Foods BEE Subscription Option

Insert number of votes (one vote per RCL Foods Share)

For Against Abstain

Ordinary Resolution Number 7Specifi c authority to issue the Pro Rata Offer Shares pursuant to the Pro Rata Offer

Ordinary Resolution Number 8Specifi c authority to issue RCL Foods Shares pursuant to the Placement

Special Resolution Number 9Specifi c authority to issue RCL Foods Shares to TSB Sugar Holdings pursuant to the Placement

Special Resolution Number 10Authorisation to increase the authorised share capital of RCL Foods and to amend the MOI accordingly

Signed at on 2013/2014

Signature Authority of signatory

to be assisted by (where applicable)

Please read the following summary of the rights contained in section 58 of the Companies Act and the following notes to this form of proxy.

SUMMARY OF RIGHTS CONTAINED IN SECTION 58 OF THE COMPANIES ACT

In terms of section 58 of the Companies Act:• a shareholder of a company may, at any time and in accordance with the provisions of section 58 of the Companies Act, appoint any individual

(including an individual who is not a shareholder) as a proxy to participate in, and speak and vote at, a shareholders’ meeting on behalf of such shareholder;

• a proxy may delegate her or his authority to act on behalf of a shareholder to another person, subject to any restriction set out in the instrument appointing such proxy (see note 12 below);

• irrespective of the form of instrument used to appoint a proxy, the appointment of a proxy is suspended at any time and to the extent that the relevant shareholder chooses to act directly and in person in the exercise of any of such shareholder’s rights as a shareholder (see note 6 below);

• any appointment by a shareholder of a proxy is revocable, unless the form of instrument used to appoint such proxy states otherwise;• if an appointment of a proxy is revocable, a shareholder may revoke the proxy appointment by: (i) cancelling it in writing, or making a later inconsistent

appointment of a proxy and (ii) delivering a copy of the revocation instrument to the proxy and to the relevant company;• a proxy appointed by a shareholder is entitled to exercise, or abstain from exercising, any voting right of such shareholder without direction, except

to the extent that the relevant company’s Memorandum of Incorporation, or the instrument appointing the proxy, provides otherwise (see note 3 below);

• if the instrument appointing a proxy or proxies has been delivered by a shareholder to a company, then, for so long as that appointment remains in effect, any notice that is required in terms of the Companies Act or such company’s Memorandum of Incorporation to be delivered to a shareholder must be delivered by such company to:• the relevant shareholder; or• the proxy or proxies, if the relevant shareholder has: (i) directed such company to do so, in writing and (ii) paid any reasonable fee charged by

such company for doing so; and• if a company issues an invitation to its shareholders to appoint one or more persons named by the company as a proxy, or supplies a form of proxy

instrument:• the invitation must be sent to every shareholder entitled to receive the notice of the meeting at which the proxy is intended to be exercised;• the invitation or form of proxy instrument supplied by the company must:

• bear a reasonably prominent summary of the rights established in section 58 of the Companies Act;• contain adequate blank space, immediately preceding the name(s) of any person(s) named in it, to enable a shareholder to write the name and,

if desired, an alternative name of a proxy chosen by the shareholder; and• provide adequate space for the shareholder to indicate whether the appointed proxy is to vote in favour of or against any resolution(s) to be

put to the meeting, or is to abstain from voting;• the Company must not require that the proxy appointment be made irrevocable; and• the proxy appointment remains valid only until the end of the meeting at which it was intended to be used, subject to the above.

NOTES TO THE FORM OF PROXY:1. The form of proxy must only be used by Certifi cated Shareholders or Dematerialised Shareholders with “ own name ” registration.2. Each Shareholder entitled to attend and vote at the General Meeting may appoint one or more persons as proxies to attend, participate in and vote at the General

Meeting in the place of the Shareholder. A proxy need not be a Shareholder .3. A Shareholder is entitled to one vote on a show of hands and, on a poll, one vote in respect of each Share held. A Shareholder’s instructions to the proxy must

be indicated by inserting the relevant number of votes exercisable by the Shareholder on a poll in the appropriate box(es). Failure to comply with this will be deemed to authorise the proxy to vote or to abstain from voting at the General Meeting as he/she deems fi t in respect of all the Shareholder’s votes. Further, should any further resolution(s) or any amendment(s) which may properly be put before the General Meeting be proposed, the proxy shall be entitled to vote as he/she thinks fi t.

4. A vote given in terms of an instrument of proxy shall be valid in relation to the General Meeting notwithstanding the death of the person granting it, or the revocation of the proxy, or the transfer of the RCL Foods Shares in respect of which the vote is given, unless an intimation of such death, revocation or transfer shall have been received by the Company or the Transfer Secretary before the commencement of the General Meeting or postponed or adjourned General Meeting at which the proxy is used.

5. The chairperson of the General Meeting may reject or accept any form of proxy which is completed and/or received other than in compliance with these notes.6. The completion and lodging of this form of proxy will not preclude the relevant Shareholder from attending the General Meeting and speaking and voting in

person thereat to the exclusion of any proxy appointed in terms hereof, should such Shareholder wish to do so.7. Documentary evidence establishing the authority of a person signing th is form of proxy in a representative capacity must be attached to this form of proxy,

unless previously recorded by the Company or unless this requirement is waived by the chairperson of the General Meeting.8. A minor or any other person under legal incapacity must be assisted by his/her parent or guardian, as applicable, unless the relevant documents establishing

her/her capacity are produced or have been registered by the Company.9. Where there are joint holders of ordinary Shares:

(i) any one holder may sign th is form of proxy;(ii) the vote(s) of the senior Shareholders (for that purpose seniority will be determined by the order in which the names of Shareholders appear on the

Register ) who tenders a vote (whether in person or by proxy) will be accepted to the exclusion of the vote(s) of the other joint Shareholder(s).10. Forms of proxy should be delivered or mailed to Computershare Investor Services P roprietary L imited as follows:

Hand deliveries to: Postal deliveries to:Computershare Investor Services P roprietary Limited Computershare Investor Services P roprietary Limited70 Marshall Street PO Box 61051Johannesburg, 2001 Marshalltown, 2107

to be received by no later than 1 3: 30 on Tuesday, 14 January 2014 (or 48 hours before any postponement or adjournment of the General Meeting which date, if necessary, will be notifi ed in the press). Any form of proxy not returned to Computershare Investor Services P roprietary Limited by such time may be handed to the chairperson of the General Meeting any time before the appointed proxy exercises any of the Shareholder’s rights at the General Meeting (or any postponement or adjournment thereof).

11. Any alteration or correction made to this form of proxy, other than the deletion of alternatives, must be initialled by the signatory/ies.12. Any proxy appointed pursuant to this form of proxy may not delegate his/her authority to act on behalf of the relevant Shareholder.13. In terms of section 58 of the Companies Act, unless revoked, an appointment of a proxy pursuant to this form of proxy remains valid only until the end of the

General Meeting or any postponement or adjournment of the General Meeting.14. If the General Meeting is adjourned or postponed, valid forms of proxy submitted for the initial General Meeting will remain valid in respect of any adjournment

or postponement of the General Meeting.

1


FORM OF ACCEPTANCE IN RESPECT OF THE PRO RATA OFFER

(FOR USE BY QUALIFYING CERTIFICATED SHAREHOLDERS ONLY)

This Form of Acceptance should be read together with the Circular with which this Form of Acceptance is enclosed (“Circular”). The defi nitions and interpretations commencing on page 6 of the Circular apply to this Form of Acceptance.

The making of the Pro Rata Offer and the distribution of the Circular and the Form of Acceptance to certain persons who have registered addresses outside of South Africa, or who are resident or located in, or who are citizens of, countries other than South Africa, may be restricted by the laws of the relevant jurisdiction and failure to comply with any of those restrictions may constitute a contravention of the laws of any such territory. The Pro Rata Offer does not constitute an offer of RCL Foods Shares in any jurisdiction in which it is illegal to make such an offer and in such circumstances, the Circular and this Form of Acceptance are sent for information purposes only. Shareholders not resident in South Africa are referred to Section C paragraph 2.2.9 of the Circular for further information regarding the restrictions applicable to them in terms of the Pro Rata Offer.

This Form of Acceptance is only for use by Qualifying Certifi cated Shareholders who elect to participate in the Pro Rata Offer in respect of all or part of their RCL Foods Shares held at the close of business on the Record Date, being Friday, 31 January 2014 .

Dematerialised Shareholders who wish to participate in the Pro Rata Offer are required to notify their duly appointed CSDP or Broker of their acceptance in the manner and the time stipulated in the agreement governing the relationship between the relevant Dematerialised Shareholders and their CSDP or Broker and must not complete this Form of Acceptance. Please refer to Section C, paragraph 2.2. 5.2 of the Circular with which this Form of Acceptance is enclosed.

This Form of Acceptance must be completed in its entirety and returned to the Transfer Secretary (at the physical or postal address or the fax number or email address set out below) so as to be received by no later than 12:00 on Tuesday, 4 February 2014 . Forms of Acceptance received after this time and date will not be accepted.

Computershare Investor Services (Proprietary) Limited(Registration number 2004/003647/07)70 Marshall StreetJohannesburg 2001South Africa(PO Box 61763, Marshalltown, 2107)

Telephone number: 0861 100 933Email address:[email protected]

Enquiries in connection with this Form of Acceptance should be addressed to the Transfer Secretary by quoting the account number

printed below:

Account number

SALIENT DATES AND TIMES

2014

Finalisation date for the Pro Rata Offer on Friday, 17 January

Last day to trade in RCL Foods Shares in order to participate in the Pro Rata Offer on Friday, 24 January

RCL Foods Shares trade ex-Entitlements on Monday, 27 January

Record Date at 17:00 on Friday, 31 January

For Qualifying Certifi cated Shareholders wishing to subscribe for Pro Rata Offer Shares, payment to be made and Forms of Acceptance to be delivered to the Transfer Secretary by 12:00 on Tuesday, 4 February

Pro Rata Offer closes at 1 2:00 on Tuesday, 4 February

Expected issue and listing of Pro Rata Offer Shares on Monday, 10 February

CSDP or Broker accounts in respect of Qualifying Dematerialised Shareholders debited with the aggregate Pro Rata Offer Subscription Price due, in terms of the Pro Rata Offer and credited with Pro Rata Offer Shares, and Share certifi cates in respect of the Pro Rata Offer Shares posted to Qualifying Certifi cated Shareholders on or about Monday, 10 February

Notes:

1. The abovementioned times are South African times and dates and are subject to change. Any such change will be released on SENS and published in the South African press.

2. RCL Foods Shares may not be Dematerialised or rematerialised between Monday, 27 January 2014 and Friday, 31 January 2014, both days inclusive.

3. Qualifying Dematerialised Shareholders are required to notify their duly appointed CSDP or Broker of their acceptance of the Pro Rat a Offer Shares in the manner and within the time stipulated in the agreement governing the relationship between the relevant Shareholder and his CSDP or Broker.

4. The CSDP or Broker accounts of Qualifying Dematerialised Shareholders will be automatically credited with Pro Rata Offer Shares to the extent to which they have accepted the Pro Rata Offer.

5. If applicable, share certifi cates will be posted, by registered post, to Qualifying Certifi cated Shareholders at their own risk in respect of the Pro Rat a Offer Shares which have been subscribed for.

6. CSDPs effect payment in respect of Qualifying Dematerialised Shareholders on a delivery versus payment basis.

2

QUALIFYING CERTIFICATED SHAREHOLDERS ARE REQUIRED TO COMPLETE THE INFORMATION IN THE BLOCKS BELOW:

Name:

Address:

Contact telephone number: ( )

Name of RCL Foods Shareholder Number of RCL Foods Shares held as at the Last Practicable Date, deemed to be held by you on the Record Date

( A)

Expected number of Pro Rata Offer Shares for which you are entitled to subscribe1

(The actual Pro Rata Offer entitlement as at the Record Date will be calculated by the Transfer Secretar y.)

( B)= ( A) x 0. 5310646

Note 1: Should the number of RCL Foods Shares held on the Record Date differ from the number of RCL Foods Shares shown in Block (A) above, then the number of Pro Rata Offer Shares for which you are entitled to subscribe as refl ected in Block (B) above will be recalculated by the Transfer Secretary based on the actual number of RCL Foods Shares held by you on the Record Date. If you do not hold any Shares on the Record Date, then you will not be entitled to subscribe for any Pro Rata Offer Shares.

Number of Pro Rata Offer Shares in respect of which you wish to accept the Pro Rata Offer (namely, all or part of your entitlement)

The maximum number of Pro Rata Offer Shares that can be subscribed for is based on the entitlement ratio of 53.10646 (fi fty three point one zero six four six) Pro Rata Offer Shares for every 100 (one hundred) RCL Foods Shares held on the Record Date


( C)

Aggregate Pro Rata Offer Subscription Price due (being the aggregate Pro Rata Offer Subscription Price in respect of all the Pro Rata Offer Shares for which you wish to subscribe ).

( D)

= ( C) x Pro Rata Offer Subscription Price 2

R

Note 2: The Pro Rata Offer Subscription Price will be announced on the fi nalisation date of the Pro Rata Offer, which is expected to be Friday, 17 January 2014 . You are advised not to complete this Form of Acceptance until such time as the Pro Rata Offer Subscription Price has been announced.

By completing this Form of Acceptance and subscribing for Pro Rata Offer Shares you hereby represent and warrant to RCL Foods that, except where proof has been provided to the Company’s satisfaction that your subscription for Pro Rata Offer Shares will not result in the contravention of any applicable legal requirement in any jurisdiction, you are not:

(i) subscribing for Pro Rata Offer Shares from within a Restricted Territory;

(ii) in any jurisdiction in which it is unlawful to make or accept the Pro Rata Offer or subscribe for Pro Rata Offer Shares;

(iii) subscribing for Pro Rata Offer Shares for the account of a person located within the U.S. unless:

(a ) the instruction to accept or renounce was received from a person outside the U.S; and

(b) the instructing person has advised such person that it has the authority to give such instruction and that either it: ( A) has investment discretion or authority over such account or ( B) is an investment manager or investment company and that in the case of each of ( A) and ( B), is acquiring the Pro Rata Offer Shares in terms of an exemption from the registration requirements of the U.S. Securities Act;

(iv) acquiring Pro Rata Offer Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Pro Rata Offer Shares into a Restricted Territory.

The Company reserves the right to treat as invalid any subscription or p roposed subscription for Pro Rata Offer Shares if it: (i) appears to the Company or its agents to have been executed or effected in, or dispatched from, a Restricted Territory or otherwise in a manner which may involve a breach of the laws of any jurisdiction or if it believes the same may violate any applicable legal or regulatory requirement; (ii) provides a securities account in a Restricted Territory for the crediting of Pro Rata Offer Shares or an address in a Restricted Territory for delivery of Share certifi cates evidencing Pro Rata Offer Shares or (iii) purports to exclude the warrant ies required by this paragraph.

Signed at on 2014

Assisted by (where applicable):

Signature:

Telephone numbers (including international and area codes):

Home: ( )

Work: ( )

Cellphone/mobile number:

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NOTES:

(a) Invalid Forms of Acceptance: RCL Foods reserves the right, in its sole discretion, to treat as invalid any Form of Acceptance not complying with the instructions set out herein or with any instruction contained in the Circular.

(b) Fractional entitlements: No fractional entitlements to Pro Rata Offer Shares will arise, in accordance with standard rounding convention. Namely, fractional entitlements will be rounded up to the nearest whole number where the fraction is greater than or equal to 0.5 (zero point fi ve) and rounded down to the nearest whole number where the fraction is less than 0.5 (zero point fi ve).

(c) Minors and persons without legal capacity: The signature on this Form of Acceptance of any person who is under legal capacity shall be accompanied by the signature of such person’s parent or guardian or legal representative, as the case may be.

(d) Alterations: Any alteration or correction made to this Form of Acceptance must be initialled by the signatory(ies).

(e) Married persons: Married persons wishing to subscribe for Pro Rata Offer Shares must comply with the provisions of the Matrimonial Property Act (No 88 of 1984) and proof of such person’s capacity to subscribe for Pro Rata Offer Shares may be required by the Transfer Secretary.

(f) Powers of attorney: If this Form of Acceptance is signed under a power of attorney, then the original, or certifi ed copy thereof, must be sent to the Transfer Secretary for noting unless it has already been noted by the Company or the Transfer Secretary.

(g) Companies and close corporations: A company or close corporation wishing to subscribe for Pro Rata Offer Shares must send the original or certifi ed copy of the directors’ or members’ resolution authorising such subscription to the Transfer Secretary for noting.

(h) Joint holders: Where applicable, all joint holders of RCL Foods Shares must sign the Form of Acceptance.

(i) Share certifi cates: New Share certifi cates in respect of those Pro Rata Offer Shares for which you have subscribed, will be posted to you, by registered post, at your own risk, on Monday, 10 February 2014 . Shares in companies listed on the JSE can not be traded unless they have been Dematerialised and are held in the Strate system. A Certifi cated Shareholder may therefore wish to Dematerialise his/her/its RCL Foods Share/s. A holder of Certifi cated Shares may contact either a CSDP or Broker, details of which are available from Strate at [email protected] or telephone +27 11 759 5300 or facsimile +27 11 759 5503.

( j) Exchange Control Regulations: Shareholders are referred to Section C, paragraph 2.2.8 of the Circular concerning Exchange Control Regulations.

( k) Shareholders outside of South Africa: The attention of Shareholders resident outside of South Africa is drawn to Section C, paragraph 2.2.9 of the Circular. It is the responsibility of all such persons (including without limitation, nominees and trustees) wishing to subscribe for Pro Rata Offer Shares to satisfy themselves of the full observance of the laws of any relevant territory in connection therewith, including obtaining any requisite governmental or other consents, observing any other requisite formalities and paying any issue, transfer or other taxes in connection therewith due in such territory.

INSTRUCTIONS:1. For the terms and conditions governing the Pro Rata Offer, refer to the Circular.2. If you wish to subscribe for Pro Rata Offer Shares in respect of all or part of your shareholding, you must complete Blocks (C) and (D) above in

accordance with the instructions contained herein and deliver th is completed Form of Acceptance, together with payment for the aggregate Pro Rata Offer Subscription Price payable in respect of the Pro Rata Offer Shares for which you wish to subscribe as set out in Block (D) to the Transfer Secretary (at the physical or postal address or the fax number of email address set out on page 2 of this Form of Acceptance) so as to be received by no later than 12:00 on Tuesday, 4 February 2014.

3. Payment must be made by way of a bank-guaranteed cheque, a bankers’ draft or an EFT into the designated bank account (details of which is available from the corporate actions department of the Transfer Secretary, contactable during ordinary business hours on +27 (0)11 713 0800 ) and quoting the account number (as printed on page 1 of this Form of Acceptance).

4. If you do not wish to subscribe for any Pro Rata Offer Shares, no further action is required by you.5. Should you have any queries as to the completion of this Form of Acceptance, please contact the Transfer Secretary.

RCL FOODS LIMITED...CORPORATE INFORMATION AND ADVISORS Company secretary and registered office JMJ...

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Transcript of RCL FOODS LIMITED...CORPORATE INFORMATION AND ADVISORS Company secretary and registered office JMJ...