PIONEER FOOD GROUP LIMITED

notes to the annual financial statements for the year ended 30 September 2009

			COMPANY
			2009	2008
			R'000	R'000
1.	Accounting policies
	The Company applies the same principal accounting policies as the Group in the preparation of these financial statements. Refer to note 1 of the Group financial statements.

2.	Critical accounting estimates and judgements
	The Company applies the same accounting estimates and judgements as the Group. Refer to note 2 of the Group financial statements.

3.	Operating profit
	Operating profit is calculated after taking into account the following:

	*3.1*	*Other income*
		Administration fees received	3 200	3 000
	*3.2*	*Operating expenditure*
		Administration fees paid	1 200	720
		Technical services from non-employees	–	5 832

4.	Investment income
	Interest income on financial assets: loans and receivables
		Cash and cash equivalents	2	4
	Dividends received
		Unlisted shares in subsidiary: Pioneer Foods Holdings Ltd	208 889	177 851
			208 891	177 855

5.	Income tax expense
	Current income tax
		Current year	2	166
	Secondary taxation on companies
		Current year	48	172
			50	338
	The income tax on the Company’s profit before income tax differs from the theoretical amount that would arise using the statutory rate of 28% (2008: 28%) as follows:
			%	%
	Standard rate for companies		28.0	28.0
	Increase/(decrease) in rate:
	Exempt income		(28.0)	(28.9)
	Secondary taxation on companies		–	0.1
	Non-deductible expenditure		–	1.0
	Effective rate		–	0.2

6.	Investment in subsidiaries
	Unlisted shares in other companies at cost
		Pioneer Foods Holdings Ltd	–	–
	Capital contribution towards subsidiaries
		Pioneer Foods (Pty) Ltd	100 772	54 319
		Ceres Fruit Juices (Pty) Ltd	6 179	6 179
			106 951	60 498

7.	Cash and cash equivalents
	Cash at bank and on hand		1 750	1 749
	For the purposes of the cash flow statement, the year-end cash, cash
	equivalents and bank overdrafts comprise of the following:
	Cash and short-term investments		1 750	1 749

8.	Share capital
	Refer to note 21 of the Group financial statements.

9.	Share-based payment liability
	Balance at beginning of year		19 424	–
	Transfer from equity compensation reserve		–	28 164
	Share-based payment		41 363	(4 829)
	Dividends paid to class A ordinary shares		(3 680)	(3 911)
			57 107	19 424

10.	Trade and other payables
	Value-added tax		276	319

11.	Related party transactions
	During the financial year the Company conducted the following
	transactions with its subsidiaries:

	*11.1*	*Sale of services*
		Administration fees charged to Group subsidiary	3 200	3 000

	*11.2*	*Purchase of services*
		Administration fees charged by Group subsidiary	1 200	720

	*11.3*	*Loans to related parties*
		Loan to Pioneer Foods Holdings Ltd
		Beginning of year	1 818 562	1 640 711
		Loans advanced during the year	208 889	177 851
		End of year	2 027 451	1 818 562
		Unsecured interest free loan with no fixed terms of repayment.

	*11.4*	*Loans from related parties*
		Loan from Pioneer Foods (Pty) Ltd
		Beginning of year	252 946	553 003
		Loans received during the year	216 186	205 450
		Loan repayments made	(6 258)	(505 507)
		End of year	462 874	252 946
		Unsecured interest free loan with no fixed terms of repayment.

12.	Net cash profit/(loss) from operating activities
	Reconciliation of profit before income tax and cash profit/(loss) from operating activities:
	Profit before income tax		208 898	172 659
	Adjusted for:
	Dividends received		(208 889)	(177 851)
	Interest received		(2)	(4)
			7	(5 196)

13.	Working capital changes
	Decrease in trade and other payables		(43)	(296)

14.	Dividends paid
	*Ordinary shareholders*
	Amounts unpaid at beginning of year		(223)	(304)
	As disclosed in statement of changes in equity		(205 207)	(173 936)
	Amounts unpaid at end of year		147	223
			(205 283)	(174 017)
	*Class A ordinary shareholders*
	Amounts unpaid at beginning of year		–	(2)
	As accounted for against share-based payment liability		(3 680)	(3 911)
	Amounts unpaid at end of year		–	–
			(3 680)	(3 913)

15.	Income tax paid
	Amounts unpaid at beginning of year		(29)	(19)
	As disclosed in the income statement		(50)	(338)
	Amounts unpaid at end of year		(152)	29
			(231)	(328)

		COMPANY
		Capital	Interest	Total
		R’000	R’000	R’000
16.	Maturity analysis of financial liabilities
	30 September 2009
	Not later than 1 year
	Borrowings inter group	462 874	–	462 874
	Dividends payable	147	–	147
		463 021	–	463 021
	30 September 2008
	Not later than 1 year
	Borrowings inter group	252 946	–	252 946
	Dividends payable	223	–	223
		253 169	–	253 169

	Note: Trade and other payables do not include amounts for value-added tax payable.

				COMPANY
				Loans and
				receivables
				R’000
17.	Financial instruments by category
	30 September 2009
	Assets as per balance sheet
	Loan to subsidiary			2 027 451
	Cash and cash equivalents			1 750
	Total			2 029 201

				Other
				financial
				liabilities
				R’000
	Liabilities as per balance sheet
	Borrowings from related parties			462 874
	Dividends payable			147
	Total			463 021

				Loans and
				receivables
				R’000
	30 September 2008
	Assets as per balance sheet
	Loan to subsidiary			1 818 562
	Cash and cash equivalents			1 749
	Total			1 820 311

				Other
				financial
				liabilities
				R’000
	Liabilities as per balance sheet
	Borrowings from related parties			252 946
	Dividends payable			223
	Total			253 169

	Note: Trade and other payables do not include amounts for value-added tax payable.

Annual financial statements

Directors’ responsibility
Secretarial certification
Report of the audit and risk committee
Independent auditor’s report
Directors’ report
Accounting policy
Group financial statements
Notes to the annual financial statements
Company financial statements
Notes to the company financial statements