Barinor Holdings (Pty) Ltd (Registration number 1998/003570/07) Consolidated Annual Financial Statements for the year ended 30 June 2017

Transcription

1 BARINOR HOLDINGS (PTY) LTD (REGISTRATION NUMBER 1998/003570/07) CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

2 GENERAL INFORMATION Country of incorporation and domicile Nature of business and principal activities Directors South Africa Investment Holding GW Boshoff GR Gous JL Seeliger PJ Badenhorst GW Deans Registered office Farm 3 The Vineyards Office Estate 99 Jip De Jager Road Bellville 7530 Postal address P.O Box 3556 Tyger Valley 7536 Bankers Auditor ABSA C2M Chartered Accountants Incorporated Chartered Accountant (SA) Registered Auditor registration number 1998/003570/07 Level of assurance Preparer These consolidated annual financial statements have been audited in compliance with the applicable requirements of the Companies Act 71 of The consolidated annual financial statements were independently compiled by: MD Dreyer Professional Accountant (S.A.) Issued 24 July

3 INDEX The reports and statements set out below comprise the consolidated annual financial statements presented to the shareholders: Index Page Directors' Responsibilities and Approval 3 Independent Auditor's Report 4-6 Directors' Report 7-9 Statement of Financial Position 10 Statement of Comprehensive Income 11 Statement of Changes in Equity Statement of Cash Flows 14 Accounting Policies Notes to the Consolidated Annual Financial Statements The following supplementary information does not form part of the consolidated annual financial statements and is unaudited: Detailed Income Statement Tax Computation 37 2

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5 INDEPENDENT AUDITOR'S REPORT To the shareholders of Barinor Holdings (Pty) Ltd Opinion I have audited the consolidated annual financial statements of Barinor Holdings (Pty) Ltd set out on pages 10 to 34, which comprise the statement of financial position as at 30 June 2017, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the consolidated annual financial statements, including a summary of significant accounting policies. In my opinion, the consolidated annual financial statements present fairly, in all material respects, the financial position of Barinor Holdings (Pty) Ltd as at 30 June 2017, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Companies Act 71 of Basis for opinion I conducted my audit in accordance with International Standards on Auditing. My responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the consolidated annual financial statements section of my report. I am independent of the company in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of consolidated annual financial statements in South Africa. I have fulfilled my other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. 4

6 INDEPENDENT AUDITOR'S REPORT Emphasis of matter We draw attention to Note 10 of the consolidated annual financial statements, which reflects the fair value of the Investment portfolio held by Barinor Holdings (Pty) Ltd. These assets have been classified by election as Financial assets measured at Fair value through Other comprehensive income. In terms of IFRS 9, where an election was made to classify a Financial asset as being measured at Fair value through Other comprehensive income, then upon realisation/derecognition of such assets, the cumulative profit previously recognised through Other comprehensive income must be transferred within Equity. The board of directors however are of the opinion that disclosure of such realised gains via equity do not adequaltly reflect the realised profits previously recorded as unrealised gains through Other comprehensive income, and have accordingly reclassified the cumulative profit previously recognised through Other comprehensive income, to profit or loss. The treatment of the reclassification of realised profits by the board of directors does not effect the balances as reflected in the Statement of Financial Position at year end, nor does it effect the balance in the Statement of Comprehensive Income reflected as Total comprehensive income for the year (this being inclusive of both the Profit or loss, as well as the Other comrehensive income or loss at year end). The reclassification does however effect the individual balances disclosed as Profit for the year, as well as Other comprehensive loss for the year. Refer Note 19 for the balance reclassified from equity to profit or loss (Profit and loss on disposal of assets). Our opinion is not modified in respect of this matter. Other information The directors are responsible for the other information. The other information comprises the Directors' Report as required by the Companies Act 71 of 2008, which we obtained prior to the date of this report. Other information does not include the consolidated annual financial statements and my auditor's report thereon. My opinion on the consolidated annual financial statements does not cover the other information and I do not express an audit opinion or any form of assurance conclusion thereon. In connection with my audit of the consolidated annual financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated annual financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. Responsibilities of the directors for the Consolidated Annual Financial Statements The directors are responsible for the preparation and fair presentation of the consolidated annual financial statements in accordance with International Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Companies Act 71 of 2008, and for such internal control as the directors determine is necessary to enable the preparation of consolidated annual financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated annual financial statements, the directors are responsible for assessing the group s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so. 5

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8 DIRECTORS' REPORT The directors have pleasure in submitting their report on the consolidated annual financial statements of Barinor Holdings (Pty) Ltd and the group for the year ended 30 June Nature of business Barinor Holdings (Pty) Ltd is a holding company incorporated in South Africa with interests in the Investment holding industry. The activities of the group are undertaken through the company and its principal subsidiaries, associates and joint arrangements. The group operates principally in South Africa. The activities of subsidiaries, Joint Ventures and Associates consist of: - Grape Farming; - Hospitality; - Insurance Brokerage (Long term); - Management and Administration services; - Manufacture; - Property Development; - Property Investment and Rental income; - Venture Capital Investment 2. Review of financial results and activities The consolidated consolidated annual financial statements have been prepared in accordance with International Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Companies Act 71 of The accounting policies have been applied consistently compared to the prior year. Full details of the financial position, results of operations and cash flows of the group are set out in these consolidated consolidated annual financial statements. 3. Share capital Authorised Number of shares 1,000,000,000 Ordinary shares of 1 cent each Issued R R Number of shares 12,877,641 Ordinary shares of 1 cent each There have been no changes to the authorised or issued share capital during the year under review. 4. Control over unissued shares The unissued ordinary shares are the subject of a general authority granted to the directors in terms of section 38 of the Companies Act 71 of As this general authority remains valid only until the next AGM, the shareholder will be asked at that meeting to consider an ordinary resolution placing the said unissued ordinary shares, up to a maximum of 100% of the company's issued share capital, under the control of the directors until the next AGM. 5. Dividends The company's dividend policy is to consider an interim and a final dividend in respect of each financial year. At its discretion, the board of directors may consider a special dividend, where appropriate. Depending on the perceived need to retain funds for expansion or operating purposes, the board of directors may pass on the payment of dividends. Final dividend of R was declared and approved by the board of directors on Monday, 20 February 2017 in respect of the year ended 30 June The local dividends tax rate increased from 15% to 20% effective 22 February

9 6. Insurance and risk management The group follows a policy of reviewing the risks relating to assets and possible liabilities arising from business transactions with its insurers on an annual basis. Wherever possible assets are automatically included. There is also a continuous asset risk control program, which is carried out in conjunction with the group's insurance brokers. All risks are considered to be adequately covered, except for political risks, in the case of which as much cover as is reasonably available has been arranged. 7. Directors The directors in office at the date of this report are as follows: Directors Designation Changes WP Esterhuyse Non-executive Chairman Resigned Monday, 28 November 2016 GW Boshoff Chief Executive Officer GR Gous Non-executive Director JL Seeliger Non-executive Director PJ Badenhorst Executive Director Appointed Monday, 28 November 2016 GW Deans Executive Director Appointed Monday, 28 November 2016 Mr WP Esterhuyse resigned as a non-executive director effective Monday, 28 November Mr PJ Badenhorst and Mr GW Deans was appointed on Monday, 28 November The board of directors expressed their sincere appreciation to the outgoing directors for their contributions during their respective periods of office. 8. Directors' interests in contracts During the financial year, no contracts were entered into which directors or officers of the group had an interest and which significantly affected the business of the group. 9. Property, plant and equipment There was no change in the nature of the property, plant and equipment of the group or in the policy regarding their use. 10. Events after the reporting period The directors are not aware of any material event which occurred after the reporting date and up to the date of this report. 11. Going concern The directors believe that the group has adequate financial resources to continue in operation for the foreseeable future and accordingly the consolidated consolidated annual financial statements have been prepared on a going concern basis. The directors have satisfied themselves that the group is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements. The directors are not aware of any new material changes that may adversely impact the group. The directors are also not aware of any material non-compliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the group. 12. Litigation statement The group becomes involved from time to time in various claims and lawsuits incidental to the ordinary course of business. The group is not currently involved in any such claims or lawsuits, which individually or in the aggregate, are expected to have a material adverse effect on the business or its assets. 8

10 13. Liquidity and solvency The directors have performed the required liquidity and solvency tests required by the Companies Act 71 of Secretary The company secretary is BC Lotter. Postal address Business address P.O Box 3556 Tyger Valley 7536 Farm 3 The Vineyards Offie Estate 99 Jip De Jager Road Bellville Auditors C2M Chartered Accountants Incorporated continued in office as auditors for the company and its subsidiaries for At the AGM, the shareholder will be requested to reappoint C2M Chartered Accountants Incorporated as the independent external auditors of the company and to confirm CG Steenkamp as the designated lead audit partner for the 2018 financial year. 16. Date of authorisation for issue of financial statements The consolidated consolidated annual financial statements have been authorised for issue by the directors on Thursday, 30 November No authority was given to anyone to amend the financial statements after the date of issue. 9

11 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017 Note(s) R R R R Assets Non-Current Assets Property, plant and equipment Investment property Biological assets Intangible assets Investments in subsidiaries Investments in jointly controlled entities Investments in associates Loans to group companies Other financial assets Deferred tax Current Assets Inventories Trade and other receivables Current tax receivable Cash and cash equivalents Total Assets Equity and Liabilities Equity Share capital Reserves Retained income Liabilities Non-Current Liabilities Loans from group companies Other financial liabilities Deferred tax Current Liabilities Trade and other payables Other financial liabilities Current tax payable Provisions Bank overdraft Total Liabilities Total Equity and Liabilities

12 STATEMENT OF COMPREHENSIVE INCOME Note(s) R R R R Revenue Cost of sales 18 ( ) ( ) - - Gross profit Other income Operating expenses ( ) ( ) ( ) ( ) Operating profit (loss) ( ) Investment revenue Fair value adjustments Finance costs ( ) ( ) ( ) (67 491) Profit before taxation Taxation ( ) - ( ) Profit for the year Other comprehensive income: Unrealised gains on Listed Investments ( ) ( ) ( ) ( ) Taxation related to components of other comprehensive income Other comprehensive loss for the year net of taxation 22 ( ) ( ) ( ) ( ) Total comprehensive income (loss) for the year ( )

13 STATEMENT OF CHANGES IN EQUITY Share capital Share premium Total share capital Unrealised profit / (loss) on Investments Revaluation reserve Total reserves Retained income Total equity R R R R R R R R Balance at 01 July Profit for the year Other comprehensive income ( ) - ( ) - ( ) Total comprehensive income for the year ( ) - ( ) Issue of shares Cancellation os shares (10 210) ( ) ( ) ( ) Business Combination (17 143) ( ) ( ) Dividends ( ) ( ) Total changes (10 210) ( ) ( ) ( ) Balance at 01 July Profit for the year Other comprehensive income ( ) - ( ) - ( ) Total comprehensive income for the year ( ) - ( ) Dividends ( ) ( ) Total changes ( ) ( ) Balance at 30 June Note(s) &

14 STATEMENT OF CHANGES IN EQUITY Share capital Share premium Total share capital Unrealised profit / (loss) on Investments Revaluation reserve Total reserves Retained income Total equity R R R R R R R R Balance at 01 July Profit for the year Other comprehensive income ( ) - ( ) - ( ) Total comprehensive income for the year ( ) - ( ) Issue of shares Cancellation of shares (10 210) ( ) ( ) ( ) Dividends ( ) ( ) Total changes ( ) Balance at 01 July Profit for the year Other comprehensive income ( ) - ( ) - ( ) Total comprehensive income for the year ( ) - ( ) ( ) Dividends ( ) ( ) Total changes ( ) ( ) Balance at 30 June Note

15 STATEMENT OF CASH FLOWS Note(s) R R R R Cash flows from operating activities Cash used in operations 23 ( ) ( ) ( ) ( ) Interest income Dividends received Finance costs ( ) ( ) ( ) (67 491) Tax (paid) received 24 ( ) (4 684) ( ) Net cash from operating activities ( ) ( ) (48 740) Cash flows from investing activities Purchase of property, plant and equipment 2 ( ) ( ) - - Purchase of investment property 3 ( ) ( ) - - Purchase of other intangible assets 5 - (54 791) - - Acquisition of businesses (incl subs, JVs & Assocs) Loans advanced to group companies - - ( ) ( ) Sale of financial assets Purchase of biological assets 4 ( ) ( ) - - Net cash from investing activities ( ) ( ) ( ) Cash flows from financing activities Proceeds from other financial liabilities Net proceeds from shareholders loan ( ) Dividends paid 25 ( ) ( ) ( ) ( ) Net cash from financing activities ( ) ( ) Total cash movement for the year ( ) ( ) ( ) Cash at the beginning of the year ( ) Total cash at end of the year 14 ( ) ( ) ( )

16 ACCOUNTING POLICIES 1. Presentation of consolidated annual financial statements The consolidated annual financial statements have been prepared in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities, and the Companies Act 71 of The consolidated annual financial statements have been prepared on the historical cost basis, except for biological assets at fair value less point of sale costs, and incorporate the principal accounting policies set out below. They are presented in South African Rands. These accounting policies are consistent with the previous period. 1.1 Consolidation Basis of consolidation The consolidated consolidated annual financial statements incorporate the consolidated annual financial statements of the company and all of its subsidiaries. Control exists when the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries are included in the consolidated consolidated annual financial statements from the effective date of acquisition to the effective date of disposal. All intragroup transactions, balances, income and expenses are eliminated. Investments in subsidiaries are carried at cost less any accumulated impairment losses, in the company's separate consolidated annual financial statements. 1.2 Investments in joint ventures Jointly controlled entities Investments in jointly controlled entities are accounted for using the equity method. Investments in jointly controlled entities are accounted for at cost less any accumulated impairment in the company's separate consolidated annual financial statements. Jointly controlled operations In respect of its interests in jointly controlled operations, the company recognises in its consolidated annual financial statements: the assets that it controls and the liabilities that it incurs; and the expenses that it incurs and its share of the income that it earns from the sale of goods or services by the joint venture. 1.3 Investments in associates Investments in associates are accounted for using the equity method. Investments in associates are accounted for at cost less any accumulated impairment in the company's separate consolidated annual financial statements. 1.4 Significant judgements and sources of estimation uncertainty Critical judgements in applying accounting policies Management did not make critical judgements in the application of accounting policies, apart from those involving estimations, which would significantly affect the consolidated annual financial statements. Key sources of estimation uncertainty The financial statements do not include assets or liabilities whose carrying amounts were determined based on estimations for which there is a significant risk of material adjustments in the following financial year as a result of the key estimation assumptions. 15

17 ACCOUNTING POLICIES 1.5 Biological assets and agricultural produce Biological assets for which fair value is determinable without undue cost or effort are measured at fair value less costs to sell, with changes in fair value recognised in profit or loss. All other biological assets are measured at cost less accumulated depreciation and accumulated impairment losses. Accordingly, vine plantations are measured using the fair value model. Depreciation is provided on biological assets where fair value cannot be determined, to write down the cost, by equal instalments over their useful lives as follows: Item Vineyards Useful life 20 Years Agricultural produce is measured at fair value less costs to sell at the point of harvest. Such measurement is regarded as the cost on the date of applying section 13 Inventories. Gains or losses on initial measurement are recognised in profit or loss in the period in which they occur. 1.6 Investment property Investment property is land and buildings held to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services or for administrative purposes; or for sale in the ordinary course of business. Investment property is initially recognised at cost and subsequently at fair value with changes in fair value recognised in profit or loss. If the fair value of investment property cannot be measured reliably without undue cost or effort, then it is included in property, plant and equipment. The cost of investment property comprises its purchase price and any directly attributable costs incurred to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. 1.7 Property, plant and equipment Property, plant and equipment is carried at cost less accumulated depreciation and accumulated impairment losses. Cost include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised. Depreciation is provided using the straight-line method to write down the cost, less estimated residual value over the useful life of the property, plant and equipment as follows: Item Depreciation method Average useful life Land and Buildings Straight line Indefinite Plant and machinery Straight line 5 Years Furniture and fixtures Straight line 3-10 Years Motor vehicles Straight line 5 Years Office equipment Straight line 5 Years IT equipment Straight line 2-3 Years Cellar equipment and furniture Straight line 0-20 Years Wine Barrels Straight line 3 Years If the major components of an item of property, plant and equipment have significantly different patterns of consumption of economic benefits, the cost of the asset is allocated to its major components and each such component is depreciated separately over its useful life. The residual value, depreciation method and useful life of each asset are reviewed only where there is an indication that there has been a significant change from the previous estimate. 16

18 ACCOUNTING POLICIES 1.8 Intangible assets Intangible assets are initially recognised at cost and subsequently at cost less accumulated amortisation and accumulated impairment losses. Research and development costs are recognised as an expense in the period incurred. Amortisation is provided to write down the intangible assets, on a straight-line basis, as follows: Item Patents, trademarks and other rights Useful life 20 Years If the group is unable to make a reliable estimate of the useful life of an intangible asset, the life is presumed to be 10 years. The residual value, amortisation period and amortisation method for intangible assets are reassessed when there is an indication that there is a change from the previous estimate. 1.9 Financial instruments Initial measurement Financial instruments are initially measured at the transaction price (including transaction costs except in the initial measurement of financial assets and liabilities that are measured at fair value through profit or loss) unless the arrangement constitutes, in effect, a financing transaction in which case it is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Financial instruments at amortised cost These include loans, trade receivables and trade payables. Those debt instruments which meet the criteria in section 11.8(b) of the standard, are subsequently measured at amortised cost using the effective interest method. Debt instruments which are classified as current assets or current liabilities are measured at the undiscounted amount of the cash expected to be received or paid, unless the arrangement effectively constitutes a financing transaction. At each reporting date, the carrying amounts of assets held in this category are reviewed to determine whether there is any objective evidence of impairment. If there is objective evidence, the recoverable amount is estimated and compared with the carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss. Financial instruments at cost Equity instruments that are not publicly traded and whose fair value cannot otherwise be measured reliably are measured at cost less impairment. Financial instruments at fair value All other financial instruments, including equity instruments that are publicly traded or whose fair value can otherwise be measured reliably, are measured at fair value through profit and loss, except where an election has been made to measure the fair value through other comprehensive income. 17

19 ACCOUNTING POLICIES 1.10 Tax Current tax assets and liabilities Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset. Deferred tax assets and liabilities A deferred tax liability is recognised for all taxable temporary differences. A deferred tax asset is recognised for all deductible temporary differences and for the carry forward of unused tax losses and unused tax credits. Deferred tax assets and liabilities are measured at an amount that includes the effect of the possible outcomes of a review by the tax authorities using tax rates that, on the basis of enacted or substantively enacted tax law at the end of the reporting period, are expected to apply when the deferred tax asset is realised or the deferred tax liability is settled. Deferred tax asset balances are reviewed at every reporting date. When necessary, a valuation allowance is recognised against the deferred tax assets so that the net amount equals the highest amount that is more likely than not to be realised on the basis of current or future taxable profit. Tax expenses Tax expense is recognised in the same component of total comprehensive income or equity as the transaction or other event that resulted in the tax expense Leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership to the lessee. All other leases are operating leases. Finance leases - lessor Finance lease receivables are measured at an amount equal to the net investment in the lease. Finance income is recognised using the effective interest method. Finance leases lessee Finance leases are recognised as assets and liabilities at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The lease payments are apportioned between the finance charge and the reduction of the outstanding liability using the effective interest method. Operating leases - lessor Operating lease income is recognised as an income on a straight-line basis over the lease term unless: another systematic basis is representative of the time pattern of the benefit from the leased asset, even if the receipt of payments is not on that basis, or the payments are structured to increase in line with expected general inflation (based on published indexes or statistics) to compensate for the lessor s expected inflationary cost increases. 18

20 ACCOUNTING POLICIES 1.11 Leases (continued) Operating leases lessee Operating lease payments are recognised as an expense on a straight-line basis over the lease term unless: another systematic basis is representative of the time pattern of the benefit from the leased asset, even if the payments are not on that basis, or the payments are structured to increase in line with expected general inflation (based on published indexes or statistics) to compensate for the lessor s expected inflationary cost increases. Any contingent rents are expensed in the period they are incurred Inventories Inventories are measured at the lower of cost and estimated selling price less costs to complete and sell, on the first-in, first-out (FIFO) basis Impairment of assets The group assesses at each reporting date whether there is any indication that property, plant and equipment or intangible assets or goodwill may be impaired. If there is any such indication, the recoverable amount of any affected asset (or group of related assets) is estimated and compared with its carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss. If an impairment loss subsequently reverses, the carrying amount of the asset (or group of related assets) is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset (or group of assets) in prior years. A reversal of impairment is recognised immediately in profit or loss Share capital and equity If the group reacquires its own equity instruments, those instruments are deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the group s own equity instruments. Consideration paid or received shall be recognised directly in equity Employee benefits Short-term employee benefits The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as leave pay and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted Provisions and contingencies Provisions are recognised when the group has an obligation at the reporting date as a result of a past event; it is probable that the group will be required to transfer economic benefits in settlement; and the amount of the obligation can be estimated reliably. Provisions are measured at the present value of the amount expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as interest expense. Provisions are not recognised for future operating losses. 19

21 ACCOUNTING POLICIES 1.17 Revenue Revenue is recognised to the extent that the group has transferred the significant risks and rewards of ownership of goods to the buyer, or has rendered services under an agreement provided the amount of revenue can be measured reliably and it is probable that economic benefits associated with the transaction will flow to the group. Revenue is measured at the fair value of the consideration received or receivable, excluding sales taxes and discounts. Service revenue is recognised by reference to the stage of completion of the transaction at the end of the reporting period. The Stage of completion is determined by surveys of work performed. When the outcome of a transaction involving the rendering of services cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable. Interest is recognised, in profit or loss, using the effective interest rate method. Dividends are recognised, in profit or loss, when the company s right to receive payment has been established. Service fees included in the price of the product are recognised as revenue over the period during which the service is performed Borrowing costs All borrowing costs are recognised as an expense in the period in which they are incurred. 20

22 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS R R R R 2. Property, plant and equipment Cost Accumulated depreciation Carrying value Cost Accumulated depreciation Carrying value Land Plant and machinery ( ) ( ) - Furniture and fixtures ( ) ( ) Motor vehicles ( ) ( ) Cellar equipment and furniture ( ) ( ) IT equipment ( ) ( ) Wine barrels ( ) ( ) Capitalised development costs ( ) ( ) Other property, plant and equipment (14 800) (12 999) - Total ( ) ( ) Reconciliation of property, plant and equipment Opening balance Additions Depreciation Total Land Furniture and fixtures ( ) Motor vehicles ( ) Cellar equipment and furniture ( ) IT equipment (15 984) Wine barrels ( ) Capitalised development costs (68 840) Other property, plant and equipment (1 801) ( ) Reconciliation of property, plant and equipment Opening balance Additions Additions through business combinations Depreciation Total Land Furniture and fixtures ( ) Motor vehicles (97 478) Cellar equipment and furniture ( ) IT equipment (2 176) Wine barrels ( ) Capitalised development costs (68 841) ( )

23 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS R R R R 2. Property, plant and equipment (continued) Details of properties Property 1 Doordekraal Erf (DDK FARM HA) - Value at at 30 June Registers with details of property, plant and equipment are available for inspection by shareholders or their duly authorised representatives at the registered office of the company and its respective subsidiaries. 3. Investment property Reconciliation of investment property Opening balance Additions Fair value Total adjustments Investment property Reconciliation of investment property Opening balance Additions Additions resulting from capitalised subsequent expenditure Fair value adjustments Investment property Total Details of property Property 1 Erf 39696, Bellville, also known as Farm 3, The Vineyards Office Estate - Purchase price: Additions since purchase or valuation Re-classification ( ) ( ) Fair value adjustments Fair value adjustment

24 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS R R R R 3. Investment property (continued) Property 2 Springfield property - Farmland Main House Manager's House Barn Administration building Administration building Entrance gate Guest cottages Tourist centre Cellar Tasting room Property 3 Doordekraal property - Residential Erf Block A Erf Block B Erf Block D Erf Block E Erf Block F Erf Remainder Erf A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available for inspection at the registered office of the company. 23

25 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS R R R R 4. Biological assets Cost Accumulated depreciation Carrying value Cost Accumulated depreciation Carrying value Vineyards ( ) Reconciliation of biological assets Opening balance Additions Depreciation Total Vineyards ( ) Reconciliation of biological assets Opening balance Additions Additions Depreciation Total through business combinations Vineyards ( )

26 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS R R R R 5. Intangible assets Cost Accumulated amortisation Carrying value Cost Accumulated amortisation Carrying value Trademarks ( ) ( ) Cost Accumulated amortisation Carrying value Cost Accumulated amortisation Carrying value Trademarks (21 123) (19 173) Reconciliation of intangible assets Opening balance Amortisation Total Trademarks (9 244) Reconciliation of intangible assets Opening balance Additions Amortisation Total through business combinations Trademarks (9 244) Reconciliation of intangible assets Opening balance Amortisation Total Trademarks (1 950) Reconciliation of intangible assets Opening balance Amortisation Total Trademarks (1 950) Investments in subsidiaries Name of subsidiary % holding % holding Carrying amount Carrying amount Arid Ventures (Pty) Ltd 100,00 % 100,00 % Barinor Brokers (Pty) Ltd 100,00 % 100,00 % Barinor Investments (Pty) Ltd 100,00 % 100,00 % Barinor Properties (Pty) Ltd 100,00 % 100,00 % D'Aria Vineyards (Pty) Ltd 100,00 % 100,00 %

27 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS R R R R 7. Investments in jointly controlled entities Name of company Carrying amount Carrying amount Barinor / Bridgeport Joint Venture The Vineyards Office Estate (Pty) Ltd Fair values of equity accounted investments in joint ventures are only presented when there are published price quotations. All the entities are incorporated in South Africa and share the year end of the group. The carrying amount of joint ventures are shown gross of impairment losses. 8. Investments in associates Name of company Carrying amount Carrying amount Bridgeport No. 88 (Pty) Ltd Loans to (from) group companies Subsidiaries Arid Ventures (Pty) Ltd Barinor Properties (Pty) Ltd Barinor Investments (Pty) Ltd - - ( ) ( ) Barinor Brokers (Pty) Ltd - - (64 826) D'Aria Vineyards (Pty) Ltd Impairment of loans to subsidiaries - - (64 826) (65 594) Joint ventures The Vineyards Office Estate (Pty) Ltd Impairment of loans to joint ventures ( ) ( ) ( ) ( ) Associates Bridgeport No. 88 (Pty) Ltd ( ) - ( ) ( ) Non-current assets Non-current liabilities ( ) - ( ) ( ) ( )

28 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS R R R R 10. Other financial assets At fair value Portfolio of listed shares At amortised cost Barinor New Business Ventures Metson Foliar Feeds (Pty) Ltd Durbanville Inner Valley Development Bitflow Investments 89 (Pty) Ltd Impairment ( ) ( ) ( ) ( ) Total other financial assets These unsecured loans do not bear interest and are not repayable within the next twelve months. The terms and conditions are reviewed on an annual basis. Non-current assets At fair value At amortised cost

29 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS R R R R 11. Deferred tax The deferred tax assets and the deferred tax liability relate to income tax in the same jurisdiction, and the law allows net settlement. Therefore, they have been offset in the statement of financial position as follows: Deferred tax liability ( ) ( ) ( ) Deferred tax asset Total net deferred tax asset (liability) ( ) ( ) Reconciliation of deferred tax asset \ (liability) At beginning of year ( ) ( ) ( ) Adjustment due to rate change - ( ) - - Increases (decrease) in tax loss available for set off against future taxable income - gross of valuation allowance Taxable / (deductible) temporary difference on other transactions Taxable / (deductible) temporary difference on Property, ( ) - - Plant and Equipment Taxable / (deductible) temporary difference on health care - (81 066) - - benefits Taxable / (deductible) temporary difference movement ( ) ( ) - - investment property at fair value Deferred tax on unrealised profits ( ) ( ) Originating temporary difference on provisions Taxable / (deductible) difference on Income received in (5 541) (5 192) - - advance Deferred tax realised on sale of Investments ( ) ( ) 12. Trade and other receivables Trade receivables Prepayments Deposits VAT Sundries Staff loans Rivers Edge receivable Inventories Merchandise Wine merchandise

30 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS R R R R 14. Cash and cash equivalents Cash and cash equivalents consist of: Cash on hand Bank balances Short-term deposits Bank overdraft ( ) ( ) ( ) ( ) ( ) ( ) ( ) Current assets Current liabilities ( ) ( ) ( ) ( ) ( ) ( ) ( ) The company has an unsecured bank overdraft facility of R7,000,000 The banking facilities of other group companies are secured as follows: - Barinor Properties (Pty) Ltd: An overdraft facility of R800,000 secured by a limited deed of suretyship of R1,000,000 by Barinor Holdings (Pty) Ltd - Barinor Brokers (Pty) Ltd: An overdraft facility of R100,000 secured by a limited deed of suretyship of R100,000 by Barinor Holdings (Pty) Ltd - D'Aria Vineyards (Pty) Ltd: An overdraft facility of R15,400,000 had been converted to a term loan. A limited deed of suretyship of R15,400,000 provided by Barinor Holdings (Pty) Ltd. 15. Share capital Authorised Ordinary shares of 1 cent each unissued ordinary shares are under the control of the directors in terms of a resolution of members passed at the last annual general meeting. This authority remains in force until the next annual general meeting. Issued Ordinary shares of 1 cent each Share premium Shares issued in lieu of Investments have been eliminated on consolidation. 29

31 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS R R R R 16. Trade and other payables Trade payables Amounts received in advance VAT Other payables Accrued expenses Deposits received Revenue Sale of goods Rendering of services Rental income on investment property Sale of goods (Winery) Cost of sales Sale of goods Cost of goods sold Other income Administration and management fees received Fees earned Government grants Impairment reversals Other income Profit on sale of assets and liabilities Recoveries