PureCircle Annual Report 2014 · are looking to meet this demand while continually driving cost...

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Annual Report 2014

EverythingStevia

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To deliver our mission to make stevia the natural mainstream ingredient of choice, PureCircle remains committed to five platforms:

Innovation and Technical Development Creating competitive advantage through world class innovation and customer technical support

Fully Sustainable Supply Chain Translating supply chain integration into environmental advantage

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Since our incorporation in 2001, PureCircle has focused exclusively on stevia. Our vision is to create a global mass volume natural ingredient market based on stevia. Working with partners, customers, and suppliers, we are focused on what is needed to make this vision a reality: delivering great taste, ensuring consumer acceptance, fostering ingredient advocacy and delivering scaled supply in a responsible, sustainable manner. We encapsulate all these activities as “Everything Stevia”.

Growing public health concerns around obesity and increasing need to improve diets continue to fuel consumer demands for solutions from the food and beverage industry. Around the globe, consumers want more natural, healthy, sustainable ingredients: they want products that are good for them, their families and the planet.

In FY2014, we have demonstrated that stevia can be part of this solution. Our innovations have delivered breakthroughs in taste across all major food and beverage categories and have enabled the food and beverage industry to successfully launch new products, brand extensions and reformulations. In FY2011, we announced our 2020 corporate goals to reduce food and beverage impacts and since then, PureCircle has supplied enough stevia ingredients to enable the food and beverage industry to remove 1.3 trillion calories and lower water consumption by 200 billion liters.

543Health Professional Advocacy Providing confidence to the industry through the Global Stevia Institute (www.globalsteviainstitute.com)

Consumer Insights and CommunicationExpanding the adoption of the Stevia PureCircle trustmark to support compelling consumer communications

Everything Stevia Establishing ourselves as the “Everything Stevia” company— from marketing services to integrated communications

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Reduction of

13 trillioncalories

Reduction of

1 millionmetric tons

of carbon

Reduction of

2 trillionliters of water

PureCircle®

2020SustainabilityGoals

1 2 43 5

Fully Sustainable Supply Chain

We believe that what you do and how you do it matters. This is why from seedling to sweetener, our goal is to fully integrate environmental and socially responsible practices throughout the stevia supply chain.

With these best practices, PureCircle has achieved a carbon footprint that is 82% lower than sugar and a water footprint that is as much as 97% lower than high fructose corn syrup when compared against publicly available benchmarks.

Driven by our mission to sustainably scale stevia as the next mainstream sweetener, we continue to set ambitious goals for ourselves and have been recognized for our progress and impact on the broader food and beverage industry.

Our corporate goals cover each aspect of our operation from farm to product.

By 2020, we aspire to enable the Food & Beverage Industry to reduce:

• Carbon emissions by 1 million metric tons• Water consumption by 2 trillion liters • Calories in global diets by 13 trillion

At the same time:

• Reduce our own Carbon, Energy and Water intensity by 20% • Ensure zero untreated landfill waste from across our supply chain by 2015• Adopt a Sustainable Agricultural policy that empowers up to 100,000 small

scale farmers• Maintain and extend our traceability program as we grow

Since announcing these goals in FY2011, PureCircle has lowered water consumption by 200 billion liters, removed 1.3 trillion calories, and removed 100,000 metric tons of carbon emissions. The industry has supported our progress and commitment with awards, nominations, as well as customer collaborations on environmental footprint studies across the globe.

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Lab facilitiesexpansion

PureCircleStevia 3.0™

program

Innovation and Technical Development

1 2 43 5

At its core, PureCircle is an innovation company and continues to lead the way in stevia innovation and application development. We are constantly assessing ways to deliver the perfect taste profile across all food and beverage categories. In 2014, we launched six new products that further rounded out the PureCircle portfolio of sweeteners and flavors. Each of these innovations played a critical role in enabling brands to find a customized stevia solution that delivered consumer expectations and met company goals.

Enabling this growth in innovation has been the company’s continued investment to building infrastructure and scientific talent around the world. 2014 brought lab expansions in the US, China and Europe along with new facilities in Mexico and Malaysia.

These successes reflect the PureCircle Stevia 3.0™ approach, in which different parts of the stevia leaf come together to create a tailored sweetening solution that is right for the product. Knowing which particular stevia ingredients or blends of ingredients work best in specific food and beverage matrices, enables our product developers achieve deeper calorie reductions with better taste profiles than ever before.

To introduce these taste breakthroughs to the market faster, the company expanded its PureCircle University program. Started in 2013, this program allows customers to take advantage of PureCircle expertise and actively engage in extensive side by side development. 2014 brought over 100+ PureCircle University programs around the globe to Fortune 500 companies across all food and beverage categories.

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101,000+Global Digital Outreach

Increasing mediacoverage worldwide

6,000+ KOLs*reached at scientific forums

* KOLs –Key Opinion Leaders

www.

1 2 43 5

Health Professional Advocacy

The Global Stevia Institute (www.globalsteviainstitute.com) remains a driving force for science-based stevia education and has played an important role in ingredient reputation management with established and emerging markets.

The GSI continues to disseminate science-based information about stevia— its safety, natural origin and its role in improving and encouraging healthier diets throughout the world. The GSI has taken stakeholder engagement to a new level this year to enhance relationships with health professionals around the world. Through advisory board member-led activity at health and nutrition events, speaking engagements and seminars, the GSI was able to reach to more than 6,000 health professionals and influencers in FY14. In addition, the GSI is working in tighter collaboration than ever before with key customers to tailor advocacy support for significant product launches and reformulations.

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Products launched

across 30+ countries

Launch campaignsacross marketing media

www.

SteviaPureCircle®

trustmark uselicensing

1 2 43 5

Consumer Insights and Communication

In addition to the GSI, PureCircle provides other educational tools that can be used directly with the consumer.

The Stevia PureCircle Trustmark program is an on-pack logo that provides consumers reassurance of quality and traceability and directs consumers to engage with key content on www.steviapurecircle.com. This program has grown steadily to over 30+ countries with a presence on all major continents.

2014 launched PureCircle’s digital consumer outreach via social media. For the interested consumer, PureCircle is able to provide key content and information related to the benefits and safety of stevia.

Through its Stevia PureCircle trademark program, as well as its own digital outreach, PureCircle remains committed to being a credible source for its customers and their engaged consumers around the world.

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CUSTOMIZATION

INNOVATION

REALIZATION

F&B

1 2 43 5

Everything Stevia

As the Everything Stevia company, which focuses solely on stevia, we feel that we are in a unique position to bring a deep level of industry knowledge, technical knowledge and consumer insights to the market, our customers and their products.

With its vision to develop stevia into the next mainstream sweetener, PureCircle continues to bring its thought leadership to the food & beverage industry through speaking engagements and presence at key conferences around the world. On a smaller stage, we are dedicated to sharing our deep technical expertise to current and future partners. This past year, PureCircle hosted 100+ technical seminars and 50+ lab sessions. For customers that want to take these technical sessions to the next level, we also offer side by side technical collaboration through our PureCircle University program.

Over the years, the PureCircle Insights Group has grown to be recognized as the leading authority for consumer and market insights on stevia. This group continues to invest in proprietary consumer research and market data that help drive concept development, messaging strategy, packaging and product decisions for our customers. With our deep internal capabilities and integration of cutting edge social media trackers, PureCircle is able to share up to the minute insights with its customers on stevia and their brands around the world. As such, our group has supported a wide range of company functions from R&D to marketing and helped our customers launch their next successful stevia product.

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PureCircle’s Integrated Supply Chain:From Seedling to Sweetener

Extraction Producing our own extract to ensure quality standards are met

Plant BreedingBreeding proprietary Stevia varieties with higher sweet glycoside content

Finished Product Providing our customers with a level of transparency that is superior to any other stevia manufacturer

Harvesting Cultivating best sustainability practices and providing training and materials to ensure success with local farmers across four continents

Application Providing formulation expertise to deliver great-tasting products

Purification Purifying steviol glycosides with an unmatched scale and consistency

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Contents

Our Business and Strategy 18

Vision and Strategy 19

Our Market 19

Our Performance 20

Highlight for the Year 20

Chairman’s Statement 23

CEO Review 23

Our Governance 30

Corporate Governance Report 30

Report of the Remuneration Committee 33

Board of Directors 36

Our Financials 39

Director’s Report 41

Independent Auditors Report 42

Statement of Financial Position 44

Consolidated Statement of Comprehensive Income 45

Consolidated Statement of Changes in Equity 46

Consolidated Statement of Cash Flows 48

Notes to the Consolidated Financial Statements 50

Shareholder’s Information 92

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Our Business and Strategy

PureCircle is the global leader in the production, marketing and distribution of high purity stevia ingredients, the world’s first all natural sweetener and flavor solutions regarded as a viable complement to sugar and corn (High Fructose Corn Syrup) in mainstream food and beverage production.

Through our innovative technologies and processes we are able to extract the highest purity natural sweeteners and flavor from the stevia plant, enabling our customers to develop healthier, lower calorie formulations for their mainstream consumer products.

As leaders in this industry, we are continually developing this global market in partnership with our blue chip customers and business partners in a transparent and responsible manner.

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PureCircle’s vision is to lead the global expansion of stevia as the next mass volume natural sweetener and flavor ingredients.All mass volume natural sweeteners have four characteristics:

• Great taste• Economic pricing• Scalable supply• Sustainable supply

Only sugar, corn and stevia fulfill these four criteria. Of these only stevia has the added advantage of moderating calories in food and beverage formulations and has a low glycemic index, making it safe for diabetics. Additionally stevia has the benefit of having excellent application synergies with sugar and corn as well as cost advantages that can offset corn and sugar sweetener input costs. In today’s market where consumers are requiring healthier, more natural choices and manufacturers are looking to meet this demand while continually driving cost efficiencies, stevia is a clear solution.

Our vision is to unlock and then grow the stevia market into a multi-billion dollar global market. With sustained growth over several decades, we expect it to take a significant share of the USD70 billion natural mass volume sweetener market. In achieving this vision, it is expected stevia will be commonly used as a complement to sugar and corn sweeteners – reducing calories in major mainstream brands around the world.

With this vision in mind, PureCircle is focused on three core strategies:

1. Developing the global stevia market and securing market share – Our sales and marketing activities are directed towards contracts with the world’s leading food and beverage manufacturers and supporting them with consumer insights and education and technical support and innovation for their product formulation and development.

2. Scaling and sustaining supply – Our supply chain focus is on all elements necessary to ensure we are prepared to scale rapidly in line with global demand on a sustainable basis, through such activities as plant breeding, agricultural diversification, processing efficiencies and expansion. In the process, we will deliver mass volume supply at economic prices.

3. Delivering innovation leadership – The high purity stevia industry will develop over many decades. Innovation will enable wider and deeper usage across all food and beverage categories. Innovation is at the core of our business and we will use innovation to continue to lead the growth of the industry.

Consumers are seeking an ingredient that provides great tasting sweetness but which also supports the natural and healthy lifestyle characteristics being demanded of 21st century food and beverage products. Stevia ingredients are well positioned to meet the mainstream consumer requirements for a complementary ingredient to sugar and corn.

As well as looking to address the growing health concernsof consumers, food and beverage producers are continuallyseeking for efficient solutions to offset commodity priceincreases of recent years.

Stevia is a plant-based, no-calorie, natural ingredient that has been used for hundreds of years as a regular part of some regional diets. Extracts from stevia have been used as forms of sweetener for many centuries without ever becoming mainstream. PureCircle has addressed the technological issues and overcome the hurdles associated with developing a major new ingredient market.

High purity stevia is the only viable mass volume natural ingredient complement to sugar and corn currently in commercial development. PureCircle believes it is unique in its ability to produce a portfolio of high purity stevia ingredients sustainably and in scale.

Our MarketVision and Strategy

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Financial Highlights

Summary financials

Financial year ended 30 June

FY14

USD’ m

FY13(Restated)*

USD’ m

Change

% or USD

Sales 101.0 70.2 +44%

Gross margin 36.6 17.8 +106%

Operating profit 17.2 1.0 +$16.2m

EBITDA** 22.9 9.1 +$13.8m

Net profit/(loss) after tax 2.3 (9.4) +$11.7m

Operating cashflow before financing 15.5 (9.6) +$25.1m

Net debt (79.9) (75.2) ($4.7m)

Net assets 147.5 141.8 +$5.7m

Net assets per share (US cents) 0.90 0.86 +0.04

* FY13 results are restated for adoption of IFRS 11 “Joint Arrangements” (i.e.:- accounting for Joint Ventures) that the Group implemented from 1 July

2013. The impact is to reduce FY13 sales by $1m).

** Gross margin, operating profit and EBITDA are as per management segmental reporting in the Group Financial Review note set out below. The full

consolidated statement of income is set out on page 27.

Sales:

• FY14 sales increased $31m (44%) to $101m. The Group now has twelve products in market under our proprietary Stevia 3.0™ portfolio (FY13 six). The whole portfolio showed growth in FY14, most notably new innovations and our natural flavour range. All sales regions grew compared with FY13.

• Average pricing increased 5% in FY14 principally due to product mix including some increases in Reb A volumes against FY13 and continued reduction in lower value co-product sales in line with our strategy of focusing on our Stevia 3.0™ portfolio.

• Sales to our Global Key Accounts grew slightly faster than sales to smaller regional customers.

• FY14 sales do not include sales by our Joint Ventures as these are now equity accounted. FY13 sales have been restated on the same basis which has the effect of reducing FY13 sales by $1m.

Sales volumes:

• Volumes increased 37% led by sales of new ingredients from our Stevia 3.0™ portfolio. Overall volumes of new innovations showed strong year on year growth, offset by lower co-product volumes.

• Growing use by customers of blends of our proprietary Stevia 3.0™ portfolio to formulate great tasting consumer products. The use of blends increases market usage, provides PureCircle with a balanced revenue portfolio and enhances our market share.

Gross margin:

• $37m, an increase of 106% (FY13: $18m) reflecting increased volumes and improved sales mix, with a continued higher proportion of Stevia 3.0™ products. The FY14 gross margin percentage of 36% was an 11 percentage point improvement against FY13.

• Capacity utilisation remains modest and we expect further improvements in gross margin as sales volumes increase further.

Operating profit and EBITDA:

• Operating profit improved $16m to $17m and EBITDA increased $14m (152%) to $23m compared with FY13 reflecting growth in sales volumes and improving gross

margin percentage, partially offset by increased investment in our market application capacity.

• The Group has an operationally geared business model. Higher sales volumes translate to higher operating profit and EBITDA due to the high fixed costs of the Group’s global sales, marketing and production capacity.

Our Performance

Highlights for the Year

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PureCircle’s business model is designed to service mass volumes sustainably, underpinned by continued product innovation. With increased market adoption of blends and with six new products added to our portfolio, FY14 has again confirmed that our inno-vation unlocks market access thereby increasing sales volumes. Looking ahead our priorities will continue to focus on sustainable sales volumes underpinned by innovation. The December 2013 GRAS approval for Reb M is one indication of the further potential we have in our innovation pipeline.

Carbonated Soft Drinks: FY14 was an important year for the development of stevia as a mainstream ingredient in the Carbonated Soft Drink category, which is likely to represent the largest single category by volume for PureCircle’s Stevia 3.0™. Following its success in Argentina and Chile, The Coca Cola Company announced the roll out of Coca-Cola Life into the USA, Mexico, UK and Sweden in calendar year 2014. PepsiCo has also extended Pepsi Next into Canada, Finland and the Netherlands. Dr Pepper has launched a range of products with stevia in the USA. Reformulations of global brands such as Sprite and Fanta are in markets in Europe, Latin Americaand Asia.

Taken together the Carbonated Soft Drink launches in FY14 represent a step change in market adoption of stevia and numerous other Carbonated Soft Drinks using stevia are already in development pipelines for launch.

Other F&B product launches: as noted earlier, adoption of PureCircle Stevia 3.0™ has accelerated across more categories and countries in FY14. Mintel data shows adoption by numbers of product continuing to grow at more than 50% a year. Notable new categories adopting across multiple regions include dairy andconfectionery. Again more launches are mainstream reformulations.

Customer base: having built a well-diversified customer base of more than 300 clients during FY11 to FY13, in FY14 PureCircle consolidated its customer base with an increased focus on larger accounts. In FY14 our Global Key Accounts contributed approximately 50% of sales and a proportion of smaller clients were serviced by value added ingredient distributors that act as PureCircle extensions into the market.

Regulatory: FY14 saw PureCircle secure regulatory approvals for important next generation innovation. GRAS Letter of No Objection from the U.S. FDA for Reb M a new, zero-calorie sweetener from the stevia leaf jointly developed by The Coca-Cola Company and PureCircle is an important milestone for us. It is another example of our ongoing commitment to sweetener innovation and our global commitment to offering solutions to help the food and beverage industry to develop more reduced, low and no-calorie food and beverage options.

In FY14 PureCircle also secured approval for an increased range of natural flavours. There are now four approved flavours in market and they provided a significant contribution to FY14 sales growth.

Net profit after tax:

• $2m net profit in FY14, an $11m improvement on FY13.

• This reflects the $14m EBITDA improvement partially offset by higher interest charge.

Net cash from operations before financing:

• $16m of cash from operations before financing, an improvement of $25m against FY13 reflecting stronger EBITDA and a levelling of inventory. Further improvements are expected as sales volumes increase.

Inventories:

• FY14 inventories of $86m steady against FY13 $86m. In FY13 the Group built inventory volumes of new innovation products in anticipation of higher and sustained sales growth in FY14 and FY15 in line with accelerating market demand.

• Higher inventory volumes have been sustained again in anticipation of higher sustained future sales volume growth.

Financing and funding headroom:

• The Group ended FY14 with cash and facility headroom of $60m and net debt of $80m.

• Since the FY14 year end the Group has repaid early $34m of gross debt and has accepted an offer of a new five year $71m facility with its existing bankers to replace its principal debt facilities that were due to expire in June 2015. The new facility is expected to complete in September 2014 with a lower interest rate.

• The Group is sufficiently funded for its current expansion plans.

Business developments

Overview

Market adoption of PureCircle Stevia 3.0™ ingredients has accelerated across all Food and Beverage categories and all regions of the world. The scale, breadth and rapidity of adoption is strong evidence of stevia being accepted as a mainstream ingredient with the real potential to develop further into a mass volume ingredient.

At a macro level the health and regulatory pressures to moderate calorific intakes continue to increase with FY14 seeing a series of reports and legislation drafted on this issue.

At a product level, Mintel estimates there are now over 5,000 Food and Beverage products in the market using stevia and within these the average size of brand adopting continues to increase. Carbonated Soft Drinks, discussed in more detail below, are a particularly important example of increased market usage.

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PureCircle continues to work with regulatory authorities to widen the range of Stevia 3.0™ product available to consumers around the world. During FY14 the Indonesian market opened and further regulatory approvals, including India, are in the pipeline for subsequent years.

Integrated business model: Our business model is based on proprietary innovation, supported by a fully integrated supply chain. PureCircle is unique as a Stevia producer and marketer in that we 100% control our supply chain from leaf through production to end customer relationship and formulationsupport. Our in-market application and formulation support with customers enables us to identify developing market needs. Our integrated supply chain enables us to develop and deliver solutions to those market needs at pace.

PureCircle Stevia 3.0™ is the name we use to describe our proprietary portfolio of high purity stevia ingredient solutions. PureCircle Stevia 3.0™ is a range of stevia products that provide customers with formulating flexibility across calorie reduction, specific taste and formulation requirements and price points. Frequently used in blend combinations of products, Stevia 3.0™ provides unparalleled operationalflexibility for our clients. During FY14 our Stevia 3.0™portfolio comprised eight sweetener and four naturalflavour ingredients.

PureCircle product portfolio: PureCircle continued its expansion of proprietary ingredients this year with the launch of six new products that further rounded out the PureCircle Stevia 3.0™ portfolio of sweeteners and flavours. Each of these innovations played a critical role in enabling major Food and Beverage brands to find a customized stevia solution that surpasses consumer expectations and meets their company goals.

An important development in FY14 was the increased use by customers of blends of PureCircle products. Facilitated by our extensive in-market application laboratory support, the growing use of blends further enables great tasting formulations to be created thereby driving market adoption. In addition blended formulations using PureCircle proprietary products further strengthen our market share.

Application formulation and technical support: During FY14 in-market application laboratories were opened in Mexico and Malaysia to support the important LATAM and South East Asia Markets.

To introduce the newest taste breakthroughs to the market faster, PureCircle expanded its PureCircle University program. Started in 2013, this program allows customers to take advantage of PureCircle’s expertise and actively engages in extensive side-by-side development. In FY14, our PureCircle Technical Team hosted more than 100 PureCircle University programs around the globe for Fortune 500 companies across all food and beverage categories.

A key output from the FY14 PureCircle University program has been the accelerated use by customers of blends of proprietary PureCircle Stevia 3.0™ products.

Stevia advocacy: The Global Stevia Institute (“GSI”) (www.globalsteviainstitute.com) has taken stakeholder engagement to a new level this year through partnering with key customers to enhance relationships with health professionals in all areas of the world on events, speaking engagements andseminars. Through advisory board member led activity, the GSI was able to reach to more than 6,000 health professionals and influencers in FY14. In addition, the GSI is working in tighter collaboration than ever before with key customers to tailor advocacy support for significant product launches and reformulations.

Supply chain: In FY14 the Group supply chain delivered record sales volumes across a wider product portfolio to a wider range of delivery locations than ever before. The supply chain achieved this whilst also supporting the practical aspects of scaling up new innovation and whilst reducing unit costs of production. Overall this provides a sound platform for future profitable growth and confirmation of the scalable nature of the Group’s business model.

Within the supply chain, investment in leaf supply was increased sharply in anticipation of sustained growth in market demand. Our leaf businesses in Africa and South America increased supply and looking ahead we expect these regions to significantly contribute in overall supply.

Organisation: In FY14 in anticipation of sustained sales growth, the Group further strengthened its senior management team. Jordi Ferre, previously President of our Commercial division, was appointed Chief Operating Officer (COO) and effective 1 July 2014 relocated to Kuala Lumpur. Jordi Ferre was replaced as President of Commercial Division by Jason Hecker, formerly Group Head of Marketing who has been with PureCircle since 2009 and is based in our Global Sales and Marketing headquarters in Oakbrook, Illinois.

A new Operating Committee reporting to the COO has been implemented including new senior hires in key areas of Leaf Development and Supply, Quality Control, Operational Finance and Human Resources.

The Group will continue to invest in management to support growth effectively in a sustained manner.

The audited results for the year to 30 June 2014 comprisingthe Group’s Consolidated Statement of Comprehensive Income, Statement of Financial Position and Statement of Cashflows are set out in pages 27 to 29. The Group’s full Annual Report and accounts will be posted to shareholders in November 2014.

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Commenting on the FY14 performance and outlook, the Chairman Paul Selway-Swift said:

“Our strategy of introducing new and innovative ingredients and customizable ingredient combinations to meet growing market needs is winning business for PureCircle. We are generating revenues from a well-balanced range of natural sweetener and flavour products and from a wide range of customers and regions directly and through ourbusiness partners.

I commented in our FY13 results statement that FY13 had seen the first tangible market indications of stevia developing into a mainstream ingredient. Developments in all our markets during FY14 have clearly confirmed this and adoption is accelerating. In particular, recent Carbonated Soft Drinks launches with PureCircle’s natural ingredients, most notably reformulated Cola drinks by major soft drink companies into large markets, provide enhanced confidence of sustainable sizeable growth for our business.

Our operationally geared business model means that larger sales volumes translate directly into improved profitability. FY14 has again confirmed this and has ndorsed our earlier decision to invest in production facilities capable of delivering stevia in the volume we anticipated the market would demand. Since 1 July 2012 we have achieved a $56m (124%) increase in annual sales which has led to a $25m improvement in annual net profit.

We remain confident in the future growth of the PureCircle Stevia 3.0™ enabled market and that it will generatesustained sales growth for our business. Once delivered we expect the increased sales volumes to generate further improved profitability.”

Chairman’s Statement

FY14 saw strong evidence of stevia becoming established as a sustainable mainstream ingredient of choice for the world’s leading Food and Beverage brands. The range of categories and regions using stevia is now truly global and continues to accelerate. The combination of product successes enabled by PureCircle’s Stevia 3.0™ and the continued pressures to moderate calorific content in Food and Beverage suggest stevia adoption will continue to grow. In this context the FY14 developments in Carbonated Soft Drink use of proprietary PureCircle stevia blends warrant particular mention.

At a Company level FY13 and FY14 demonstrated the robustness and scalability of our business model. Our proprietary innovation unlocks additional market and leads to improved sales volumes which in turn improve margins and profitability. Encouragingly, in FY14 we again broadened our Stevia 3.0™ portfolio and further increased our innovation pipeline which gives further confidence about future sustainable sales growth.

We remain confident about the long term future of the high purity stevia market and of the opportunity for PureCircle to play the leading role in it. Sustainable mainstream usage of PureCircle stevia will lead to increased sales which, when realised, will drive future profitability.

CEO Review

Market: In FY14 the stevia market continued to accelerate. Mintel data indicates that more than 2,200 Food and Beverage products using Stevia were launched in FY14 alone, a cumulative annual increase of over 55% a year since FY09. Importantly, in FY14 adoption included larger brands in larger categories, as well as continued penetration of new categories and new regions. In this context, the accelerated adoption of stevia by the important Carbonated Soft Drink category warrants particular note. Currently over 4.1 billion people across 68 countries have access to products with PureCircle ingredients, helping to cut an estimated 500 billion calories a year.

With increased product usage, consumer awareness and positive sentiment for stevia continues to grow across all major markets. In all of the key markets we have been tracking, awareness levels have jumped significantly in just a few short years. For example, US awareness levels are now over 60%, up from only 23% in 2010. In both the UK and Mexico, CY2013 awareness levels jumped to over 20% from only 8% in 2011.

The consumer and brand trends indicate a growing mainstream adoption of stevia and a strong platform for sustainable sales growth.

Regulatory: Having secured regulatory access for more than a billion new consumers in FY13, new regulatory approvals have continued in FY14. Product approvals have included new flavour ingredients and in December 2013 FDA GRAS approval for Reb M, (formerly Reb X) a new zero-calorie sweetener from the stevia leaf jointly developed by The Coca-Cola Company and PureCircle, was granted.

Business Review

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Regional approvals achieved have included Indonesia with India, Bangladesh and Sri Lanka in final stages of approval.

Marketing and technical support: As the Everything Stevia company, PureCircle’s marketing strategy is to offer our customers a unique combination of consumer insights, stevia advocacy support, practical in-region application formulation support and ongoing unparalleled innovation. The improved FY14 results endorse this strategy.

The PureCircle Consumer Insights Group continued to strengthen its global expertise with industry-leading market and consumer research on the sweeteners category. In FY14 we have expanded our proprietary database of research to include markets such as Russia, Turkey and Sweden, expanding the total number of countries to 15.

The Global Stevia Institute (“GSI”) (www.globalsteviainstitute.com), already recognised as the leader in stevia advocacy, was strengthened with additional Advisory Board members and its reach now extends to cover regularly more than 6,000 health and food professionals. In addition, the GSI works in tight collaboration with key customers, to tailor advocacy support for significant product launches and reformulations.

Our in region formulation support was strengthened with the opening of application laboratories in Mexico and Malaysia. Our PureCircle university program was extended to more than 100 customer sessions in FY14.

All our marketing activity is underpinned by sustainedproduct innovation.

Joint Ventures: The Group goes to market in mainland EU through its two joint ventures NP Sweet and TPCS. FY14 was only the second full year of EU approval for stevia. Both JVs continue to develop their businesses in line with our wider Group innovation led strategy. We increased investment in the EU in market application support in FY14 and this is helping to build market.

Supply chain: In FY14 our factories produced record volumes of finished goods including twelve Stevia 3.0™ products commercially for market against six in FY13 and just two in FY12. At the same time our production team was engaged in scaling production of new innovation to come on stream in FY15. In FY14 our product unit costs were reduced due to the benefits of innovation, higher volumes and process efficiency. We expect further improvements with continued innovation and volume increases.

Investment in leaf supply was increased sharply in anticipation of sustained growth in market demand. Our leaf businesses in Africa and South America increased supply and moving forward we expect these regions to contribute significantly in overall supply.

R&D: We strengthened our position as the stevia industry innovation leader in significant ways this year. The PureCircle Leaf Research scientists successfully sequenced the entire stevia genome. This proprietary, scientific breakthrough will significantly accelerate the development of naturally sourced, superior-tasting stevia leaf extracts through PureCircle’s traditional plant breeding program.

In addition, we expanded the Global Innovation Lab based in the US and the created a dedicated Global Innovation Group. The Group evaluated over 100 new items, leading to the successful launch of six new products, each incrementally adding distinct technical advantages and benefits to our portfolio of offerings. We also expanded our pipeline of innovation projects to include more fundamental glycoside research and focused research against still largely untapped segments of the global food and beverage market such as flavour enhancement and geographic specific opportunities.

Management: PureCircle continues to invest in management with the skills and experience to drive and support our ambitious growth plans across all aspects of our business. In FY14 our investments have had a particular emphasis on product application development and increased in region sales and marketing including the opening of sales offices in Mexico, India, Malaysia and Turkey and additional investment into the UK and Shanghai.

Effective 1 July 2014 Jordi Ferre, previously President of our Commercial division, was appointed Chief Operating Officer (COO) and relocated to Kuala Lumpur. Jason Hecker, formerly Group Head of Marketing, took over as President of Commercial division based in our Global Sales and Marketing headquarters in Oakbrook, Illinois.

A new Operating Committee reporting to the COO has been implemented including new senior hires in key areas of Leaf Development and Supply, Quality Control, Operational Finance and Human Resources.

Looking forward we will further upgrade our IT systems including the implementation of a global ERP system across FY15 and FY16 and further strengthen our supply chain and customer service organisation to support sustained sales growth.

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The Group’s FY14 financial year covers the year from 1 July 2013 to 30 June 2014. FY13 comparatives are for the year from 1 July 2012 to 30 June 2013.

Set out below is an extract from the audited FY14 financial statements. The full consolidated statement of comprehensive income, statement of financial position and statement of cash flows follow in pages 27 to 29.

FY14USD’000

FY13 USD’000

(Restated)

Trading

Revenue 101,045 70,200

Cost of sales (64,403) (52,382)

Gross margin 36,642 17,818

Gross margin % 36% 25%

Other income 434 423

Administrative expenses (19,860) (17,260)

Adjusted operating profit 17,216 981

Other expenses (6,140) (3,917)

Foreign exchange gain 1,265 2,381

Finance costs (9,253) (8,416)

Share of loss in joint ventures* (503) (355)

Taxation (265) (102)

Profit/(Loss) for the financial year 2,320 (9,428)

Net debt and funding headroom

Gross debt 125,850 124,070

Gross cash (45,865) (48,919)

Net debt 79,985 75,151

Financing and funding headroom 60,000 55,000

EBITDA** 22,862 9,062

* Share of loss in joint ventures includes group margin on sales by Joint Ventures to external parties.

** EBITDA is defined as EBITDA with other expenses (principally the charge for the Group’s LTIP scheme) added back.

Segmental reporting: The Group operates as a single segment company comprising of the integrated production and marketing of PureCircle Stevia 3.0™ products.

Sales: FY14 sales were $31m (44%) higher than FY13, reflecting higher sales across all products and regions, led by our innovation and flavour range in particular. Average prices improved 5% due to sales mix including more Reb A sales and less co-products than FY13. Sales to Global Key Accounts increased slightly faster than sales to Regional and smaller accounts.

Sales volumes: FY14 total volumes increased by 37% led by the accelerating usage of stevia by Food and Beverages companies and underpinned by PureCircle’s proprietary Stevia 3.0™ portfolio of innovation which continues to enable market adoption. Our flavour range which now has four products in market showed the highest rate of growth. Volume growth was partially offset by reduced co-product sales.

Gross margin: In FY14 gross margin was $37m, an increase of $19m (106%) over FY13 reflecting improved sales volumes, better sales mix and lower production unit costs. At 36%, the FY14 gross margin represents an 11 percentage point improvement over the 25% in FY13. However, sales volume utilisation of capacity remains modest and gross margin percentage should improve further as sales volumes increase.

Group Financial Review

25

Operating profit and EBITDA: The Group has a highly geared operational business model and increases in sales volumes should flow through to improved profitability due to the high fixed cost nature of the Group’s sales, marketing and production capacity. FY14 Operating profit and EBITDA again confirm that this is the case. On a $31m increase in sales FY14, Operating profit was $16m higher than FY13 at $17m and EBITDA was $14m (152%) higher at $23m.

Other expenses: FY14 other expenses principally comprise non-cash costs of the Group’s LTIP scheme and similar discretionary remuneration.

Share of loss of Joint Ventures: the Group goes to market in mainland EU through its two joint ventures NP Sweet and TPCS. FY14 was only the second full year of EU approval for stevia and both JVs are developing their businesses in line with PureCircle’s innovation led strategy. The FY14 JV share of results reflect the Group’s full gross margin realised on sales by the JVs to third parties and increased investment in in-market application support made during the year.

Finance costs: As expected the Group has run a higher net debt balance across FY14 reflecting the decision to build inventories in H2 FY13 ahead of anticipated sales growth in FY14 and FY15. The higher average net debt has resulted in an increased interest charge of $9m (FY13 $8m). This will reduce with sustained higher operational cashflow and reduced interest rates on the newly secured principal debt facility.

Net profit after tax: The Group moved to a $2m net profit in FY14, an $11m improvement on FY13. This reflects the $14m EBITDA improvement partially offset by higher interest charge and lower tax credit as all entities improved profitability.

Net cash from operations before financing: The Group generated $16m of cash from operations before financing, an improvement of $25m against FY13. The improvement reflects stronger EBITDA and a levelling of inventory volumes from historic highs. Further improvements are expected as sales volumes increase.

Financing and funding headroom: The Group ended FY14 with cash and facility headroom of $60m and net debt of $80m.

Since the FY14 year end the Group has repaid early $34m of gross debt and has accepted an offer of a new five year $71m facility with its existing bankers to renew and extend its principal debt facilities that were due to expire in June 2015. The new facility is expected to complete in September 2014 and will attract a lower interest rate than the existing facility. The Group is sufficiently funded for its current expansion plans.

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Audited Consolidated Statement of Comprehensive Income

FY14USD’000

FY13USD’000

(Restated)

Revenue 101,045 70,200

Cost of sales (63,570) (52,167)

Gross profit 37,475 18,033


Other income 1,426 2,625


Finance income 273 180


Share of loss in joint ventures (1,336) (570)

Profit/(Loss) before taxation 2,585 (9,326)

Income tax (265) (102)


Other comprehensive income/(loss) (net of tax)

Items that may be reclassified subsequently to profit or loss:

Exchange differences arising on translation of foreign operations (514) (379)

Share of other comprehensive income/(loss) of joint ventures 5 (53)

Total comprehensive income/(loss) for the financial year (net of tax) 1,811 (9,860)

Profit/(Loss) for the financial year

Attributable to:

Owners of the company 2,316 (9,492)

Non-controlling interest 4 64

2,320 (9,428)

Total comprehensive income/(loss)

Attributable to:



1,811 (9,860)

Profit/(Loss) per share (US cents)

- Basic 1.41 (5.80)

- Diluted 1.37 (5.80)

27

Audited Statement of Financial Position

FY14USD’000

FY13USD’000

(Restated)

FY12USD’000

(Restated)

ASSETS

NON-CURRENT ASSETS

Investment in joint ventures 149 330 171

Intangible assets 38,023 32,280 26,684

Property, plant and equipment 63,715 65,889 66,586

Biological assets 4,237 4,172 6,047

Prepaid land lease payments 2,999 3,181 3,102

Deferred tax assets 5,876 5,661 6,048

Trade receivables 1,950 - -

Other receivables, deposits and prepayments 553 - -

117,502 111,513 108,638

CURRENT ASSETS

Inventories 86,519 86,475 66,315

Trade receivables 37,362 34,779 28,910

Other receivables, deposits and prepayments 4,962 5,924 4,425

Tax recoverable 581 47 44

Short-term deposits with licensed banks 10,718 37,599 9,733

Cash and bank balances 35,147 11,320 14,246

175,289 176,144 123,673

TOTAL ASSETS 292,791 287,657 232,311

EQUITY AND LIABILITIES

EQUITY

Share capital 16,472 16,460 15,449

Share premium 163,240 162,898 132,330

Foreign exchange translation reserve 920 1,432 1,868

Share option reserve 5,076 1,530 204

Accumulated losses (38,203) (40,519) (31,027)

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY 147,505 141,801 118,824

NON-CONTROLLING INTEREST 722 715 652

TOTAL EQUITY 148,227 142,516 19,476

NON-CURRENT LIABILITIES

Deferred tax liabilities - 59 594

Long-term borrowings 2,169 96,581 84,026

Deferred income 360 483 548

Other payables and accruals 2,111 1,147 1,069

4,640 98,270 86,237

CURRENT LIABILITIES

Trade payables 5,879 11,714 3,572

Other payables and accruals 10,364 7,420 5,923

Income tax liabilities - 248 34

Short-term borrowings 123,681 27,489 17,069

139,924 46,871 26,598

TOTAL LIABILITIES 144,564 145,141 112,835

TOTAL EQUITY AND LIABILITIES 292,791 287,657 232,311

NET ASSETS PER SHARE (USD) 0.90 0.86 0.77

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Audited Consolidated Statement of Cash Flows

2014USD’000

2013USD’000

(Restated)

CASH FLOWS FROM OPERATING ACTIVITIES


Adjustments for:

Amortisation of prepaid land lease payments 140 136

Amortisation of deferred income (105) (88)

Amortisation of intangible assets 168 126

Depreciation of property, plant and equipment 6,016 5,793

Interest expense 9,253 8,416

Interest income (273) (181)

Loss on disposal of plant and equipment 14 54

Share based payment (credit)/expense 3,768 1,481

Intangible assets written off 105 40

Inventories written off 78 209

Change in fair value of biological asset - 628

Unrealised exchange gain (408) (1,234)

Share of loss in joint ventures 1,336 570

Operating cash flow before working capital changes 22,677 6,624

Decrease/(Increase) in inventories 121 (20,584)

Decrease in biological assets - 1,352

Increase in trade and other receivables (4,423) (6,883)

(Decrease)/Increase in trade and other payables (2,906) 9,898

NET CASH FROM/(USED IN) OPERATIONS 15,469 (9,593)

Interest received 273 181

Interest paid (9,253) (8,416)

Tax paid (1,248) (19)

NET CASH FROM/(USED IN) OPERATING ACTIVITIES 5,241 (17,847)

CASH FLOWS FOR INVESTING ACTIVITIES

Addition of intangible assets (6,200) (5,856)

Addition of property, plant and equipment (4,495) (4,299)

Proceeds from disposal of property, plant and equipment 30 147

Increase in investment in joint ventures (684) (613)

NET CASH USED IN INVESTING ACTIVITIES (11,349) (10,621)

CASH FLOWS FROM FINANCING ACTIVITIES

Drawdown of borrowings 34,648 42,768

Repayment of borrowings (31,521) (20,296)

Repayment of hire purchase (45) (40)

Proceeds from private placement - 31,322

Proceeds from share options exercised 133 102

Increase in restricted cash (5,537) (1,373)

NET CASH FROM FINANCING ACTIVITIES (2,322) 52,483

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (8,430) 24,015

Effects of foreign exchange rate changes on cash and cash equivalents (161) (448)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 46,605 23,038

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 38,014 46,605

29

Our Governance

The Financial Services Authority requires London Stock Exchange main Board listed companies incorporated in the UK to state in their report and accounts whether they comply with the UK Corporate Governance Code and identify and give reasons for any areas of non-compliance. PureCircle is listed on AIM and incorporated in Bermuda and therefore, no formal disclosures are required.

However, the Board is fully aware and is committed to achieving good standards of corporate governance, integrity and business ethics for all activities. The Directors of PureCircle regard corporate governance as important to the success of the Company’sbusiness and are committed to applying the principles necessary to ensure that good governance is practised in all of its business dealings in respect of all its stakeholders.

The following section sets out how PureCircle has applied theprinciples and provisions of the Code in the running of the Board.

The Board

Board composition and Board independence

The Board comprises a Non-Executive Chairman, two Executive Directors and three other Non-Executive Directors. Collectively, they have a diverse range of knowledge and commercial experience and serve the function of bringing objective judgement on the development, performance and risk management of the Group through their contributions in board meetings.

At the date of this report, the Board considers all Non-Executive Directors to be independent.

The roles of the Chairman and Chief Executive are separate and clearly defined.

Board changes

During the financial year ended 2014, the following changes to members of the Board took place:-

• retirement of Sunny Verghese and John Slosar as Non-Executive Directors in March 2014; and

• appointment of Christopher Pratt as Non-Executive Director in March 2014.

The role of the Board

The Board’s principal responsibility is to deliver shareholder value and provide an overall vision and leadership for the Group. It also has an oversight role, monitoring operational plans and ensuring internal controls and risk management are effective. There is a formal schedule of matters reserved for the Board, which provides a framework for it to oversee the control of the Group’s direction and affairs.

The schedule of matters reserved include the approval of the financial statements and dividends, strategy, acquisitions and disposals, major projects, contracts, delegated authorities, major capital expenditure, risk management strategies, health and

safety and succession planning. Whilst the CEO and CFO are responsible for recommending the overall strategy of the Group, the Board meets at least once a year to review strategy and the future of the business. Implementation of the strategy is delegated by the CEO and CFO to the Executive management team.

The Directors are satisfied that the Board continues to deliver a strategic vision and effective leadership for the Group.

Meeting attendance

The table below shows the number of formal board meetings held during the year and the attendance of individual Directors.

Number of Board meetings held in FY2014 3

Paul Selway-Swift 3

Magomet Malsagov 3

William Mitchell 3

Olivier Maes 3

John Slosar* 3

Peter Lai Hock Meng 3

Sunny Verghese* 2

Christopher Pratt† 1

* Resigned as a Non-Executive Director on 18 March 2014† Appointed as a Non-Executive Director on 18 March 2014

In addition to these meetings, the Board met in July and September 2014 after the FY14 year end and before signing of these audited accounts.

Chairman

Paul Selway-Swift who is the Chairman of PureCircle Limited also chairs the Nomination Committee.

The Chairman carries responsibility for ensuring the efficient operation of the Board and its Committees, for ensuring that corporate governance matters are addressed, and for representing the Group externally and communicating with shareholders when required.

Chief Executive Officer

The CEO, Magomet Malsagov, is responsible for the Executive management of the Group. He has responsibility to recommend and to implement the Group’s strategic objectives.

Independent directors

The Independent Directors are Paul Selway-Swift, Olivier Maes, Peter Lai Hock Meng and Christopher Pratt. Their responsibilities include being available to liaise with shareholders should this be necessary.

Corporate Governance Report

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and the Company’s auditors on the financial accounts and internal control systems used throughout the Company. The Board believes that members of the Committee have recent and relevant financial experience.

The external Auditors, the CEO, CFO and relevant senior finance management will regularly attend meetings at the invitation of the Committee.

Group financial statements

The Audit Committee is responsible for the integrity of the financial statements and the Group’s internal controls and risk management structure. The Committee’s deliberations will include the following matters:-

• the review of the financial results in advance of their consideration by the Board, paying particular attention to significant financial reporting judgements, any changes in accounting policies and practices and any findings post audit;

• the review of the nature and scope of the external audit and the findings of the Auditors in respect of Annual and Interim Reports;

• the review of the Auditors’ independence and the policy on the provision of non-audit services;

• monitoring the Group’s financial and non-financial risk and internal controls;

• the review of the effectiveness of the internal systems with respect to financial control and Group risk;

• a review of the necessity for an internal audit function; and

• a review of the means by which employees may raise concerns regarding the systems of internal financial control.

It is the Board’s intention for the Group to prepare Financial Statements that are fair, balanced and understandable in line with the UK Corporate Governance Code. It is the Board’s assessment that the FY14 Financial Statements achieve this.

Nomination Committee

Number of meetings held in FY2014 1

Paul Selway-Swift (Chairman) 1

Magomet Malsagov 1

Olivier Maes 1

In addition the Nomination Committee met in September 2014 after the FY14 year end and before signing of these accounts.

The Committee is responsible for reviewing the structure, size, composition and skills of the Board, presenting suitable candidates to fill Board vacancies, reviewing succession planning for the Board and senior managers, evaluating the time commitment of the Chairman and Non-Executive Directors, undertaking the performance evaluation of the Board and reviewing thereappointment of Non-Executive Directors.

Board processes

The Board is scheduled to meet on a quarterly basis, and in any event no less than four times a year. The Board will meet at least once a year to review the strategic direction of the Group. In addition to normal scheduled meetings, the Board will convene as required.

All Directors have access to and may, in furtherance of their duties, seek independent professional advice at the Company’s expense.

The Chairman and Non-Executive Directors will meet annually without the Executive Directors present. In accordance with the Company’s Bye-Law, one-third of the Board is required to retire by rotation each year, but if any Director has, at the start of the AGM, been in office for three years or more since his last appointment or re-appointment, he shall retire at the AGM. In addition, any Director appointed during the year is subject to election at the AGM after their appointment. The Non-Executive Directors are appointed for an initial three-year term after which they are subject to annual re-appointment.

Board performance and evaluation

The Board is committed to evaluating its own performance.This is an ongoing process led by the Chairman and the Independent Directors.

Board Committees

The Board is assisted in discharging its responsibilities through three principal committees: Audit Committee; Remuneration Committee and Nomination Committee which were formally established in March 2008. Membership of the Audit and Remuneration Committees consists wholly of Non-Executive Directors.

The Chairman of each Committee provides a report of that Committee at the next Board meeting.

A summary of the Committees of the Board and their membership is set out below:

Audit Committee


Peter Lai (Chairman) 2

John Slosar 2

Olivier Maes 2

In addition the Audit Committee met in July and September 2014 after the FY14 year end and before signing of these accounts. Mr. Christopher Pratt replaced Mr. John Slosar on the Audit Committee effective from March 2014.

The Audit Committee is responsible for making recommendations to the Board on the appointment and terms of reference of the auditors and to receive and review reports from management

31

The Committee is responsible for assessing the composition, diversity and skill set of the Board and is aware that as the Company grows there may be a future need to expand the size of the Board. The Committee will regularly review this need. There is a robust procedure for selecting candidates for vacancies. The Committee’s performance is evaluated as part of the overall Board evaluation exercise.

Remuneration Committee


Olivier Maes (Chairman) 2

Paul Selway-Swift 2

John Slosar 2

In addition the Remuneration Committee met in July and September 2014 prior to signing of these accounts. Mr. Christopher Pratt replaced Mr. John Slosar on the Remuneration Committee effective from March 2014.

The Executive Directors and relevant management attend the meeting by invitation as required. No individual is present when his or her own remuneration is under consideration.

The role of the Remuneration Committee is to review the performance of the Executive Directors and other senior executives and to set the scale and structure of their remuneration, including annual bonus arrangements and Long Term Incentive Plan with due regard to the interest of shareholders. The Remuneration Committee administers and establishes performance targets for share incentive schemes and determine the allocation of share incentives to employees.

The Report of the Remuneration Committee can be found on pages 33 to 35 of the Report.

Internal control and risk management

The Board is responsible for establishing, reviewing and maintaining the Group’s systems of internal control and risk management and ensuring that these systems are effective for managing the business risk within the Group.

The Group will annually review the effectiveness of the risk management system and its internal controls to safeguard shareholders’ investments and the Group’s assets whilst ensuring that proper accounting records are maintained.

The Company and its Shareholders

The Board is committed to a continuing dialogue with its shareholders.

Following the announcement and presentation of the year-endresults, there are a series of formal meetings with shareholders. These meetings are a two-way dialogue whereby the Executive Directors can apprise the investors of the Group’s business and future plans and the shareholders can communicate any concerns

they may have. The Non-Executive Directors and Chairman are available to attend these meetings if requested. The Company’s brokers provide feedback from the shareholder and analyst meetings and present the results tothe Board.

The Group’s investor relations section on its website contains information on the Group’s financial results, its corporate policies, its press releases and announcements as well as analysts’ presentations.

The Group holds a series of meeting with institutional investors whereas the principal method of communication with private investors are by way of Annual Report and Accounts, press releases and announcements, the Annual General Meeting and the Group’s corporate website (www.purecircle.com).

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The Company’s Remuneration Committee is chaired by Olivier Maes with Paul Selway-Swift and John Slosar as members. Mr. Slosar resigned on 18 March 2014 and was replaced by Mr. Christopher Pratt effective the same date. The Remuneration Committee meets at least once a year and is tasked to advise on remuneration policy for the Executive Directors and senior management. It also reviews and approves Long-Term Incentive Plan for eligible employees.

Remuneration Policy

The Remuneration Committee sets the overall remuneration policy designed in line with the Company’s long-term business goals. Individual remuneration packages are determined by the Remuneration Committee within the framework of the following policy.

The Executive Directors’ remuneration packages comprise the following components:-

a) Annual salary – the actual salary for each of the Executive Director that reflects the experience and performance of each individual and taking into account of market competitiveness;

b) Annual incentive payment – the Executive Directors are entitled to annual bonuses that relates to performance of the Company and other internal targets; and

c) Share awards or options under the Long-Term Incentive Plan (“LTIP”) that are approved by the Remuneration Committee.

The aggregate amount of emoluments received by Directors of the Group during the financial year are as follows:-

FY 2014 USD’000

FY 2013 USD’000

Executive Directors

Magomet Malsagov 377 260

William Mitchell 315 294

Non-Executive Directors

Paul Selway-Swift 88 88

John Slosar* 21 40

Olivier Maes 46 45

Peter Lai Hock Meng 50 50

Sunny Verghese* Nil Nil

Christopher Pratt† Nil N/A

897 777

* Resigned on 18 March 2014

† Appointed on 18 March 2014

Report of the Remuneration Committee

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Directors’ interests in share options

Directors’ interests in share options of the Company as at 30 June 2014 were as follows:

1 July 2013 Granted Exercised 30 June 2014Exercise

priceDate from which

exercisable Note

Magomet Malsagov 30,000 - - 30,000 158p 16 Apr 2010 1

215,000 - - 215,000 Nil 30 Nov 2013 2

211,000 - - 211,000 Nil 20 Sept 2014 2

126,000 2,520 - 128,520 Nil 30 June 2015 3

- 102,120 - 102,120 Nil 30 June 2016 3

582,000 104,640 - 686,640

William Mitchell 215,000 - - 215,000 Nil 30 Nov 2013 2

66,000 - - 66,000 Nil 20 Sept 2014 2

35,000 - - 35,000 Nil 7 June 2015 4

121,000 2,420 - 123,420 Nil 30 June 2015 3

- 89,750 - 89,750 Nil 30 June 2016 3

437,000 92,170 - 529,170

Non-Executive Directors

John Slosar 5,100 3,800 (8,900) - N/A N/A

Olivier Maes - 7,100 (4,200) 2,900 Nil 4 July 2014 5

Peter Lai Hock Meng 6,400 7,900 (11,100) 3,200 Nil 4 July 2014 5

Christopher Pratt - - - - N/A N/A

11,500 18,800 (24,200) 6,100

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Share awards or options to Executive Directors are awarded by the Remuneration Committee under the Company’s Long-Term Incentive Plan. The following notes provide details of each option or award scheme on page 34:-

1. Options granted on 15 April 2008 and end on 16 April 2015.

2. Awards granted can only be exercised if certain Performance Conditions are satisfied. The Performance Conditions are measured every year commencing from the date of grant of the awards and ends on 30 June 2015.

The Group Sales Turnover target (performance condition) that has been approved by the Remuneration Committee has a yearly upper and lower band. PureCircle’s Group actual turnover will be measured against these “turnover targets”.

If the actual Group turnover is below the lower band, then the awards shall not vest and shall lapse at the end of the awards’ life. If the Group’s actual turnover is at the lower band, then the awards shall be exercisable as to 50%. If the Group’s actual turnover is at the upper band, then the awards shall be exercisable as to 100%. If the Group’s actual turnover is between the upper and lower band, a percentage above 50% and up to 100% of the awards shall vest.

3. Similar to Note 2 above, the awards granted can only be exercisable if certain Group Sales Turnover target (performance condition) is satisfied.

If the actual Group turnover is below the lower band, then the awards shall not vest and shall lapse at the end of the awards’ life. If the Group’s actual turnover is at the lower band, then the awards shall be exercisable as to 100%. If the Group’s actual turnover is at the upper band, then the awards shall be exercisable as to 200%. If the Group’s actual turnover is between the upper and lower band, a percentage above 100% and up to 200% of the awards shall vest.

4. Award granted on 10 July 2013.

5. The share options outstanding to Non-Executive Directors were issued in lieu of fees for period from January to June 2014 and were calculated using the 20-days volume weighted average price (“VWAP”) to 31 December 2013 of GBP4.78 per share (US$7.84 per share).

Subsequent to the FY2014 financial year-end and prior to the signing the audited accounts, these options were converted to shares. An additional share options totalled 11,750 options were granted to Olivier Maes (4,110); Peter Lai Hock Meng (4,360); and Christopher Pratt (3,280) in lieu of fees for period July to December 2014 at 20-days VWAP of GBP6.04 (or US$10.21 per share).

The Company’s Remuneration Committee is responsible for administering the Long-Term Incentive Plan (‘LTIP’) approved by the Board in June 2008. LTIP is a 10-year discretionary benefit offered by the Company to eligible employees, including the Executive Directors. The principal terms of the LTIP include:-

• A restriction on the Company issuing (or granting rights to issue) more than 10 per cent of its issued ordinary share capital under the LTIP (and any other employee share plan) in a ten calendar year period; and

• Lapsed awards (due to unmet performance condition) do not count in calculating the total number of awards or options issued under the LTIP.

Please refer to Note 23 Share Option Reserve of the Notes to the Financial Statements.

35

William MitchellChief Financial Officer

William joined PureCircle in June 2008 as Chief Financial Officer.

He is a FCA who trained withPriceWaterhouse London and has extensive experience in the global food and beverage and technology industries. At PriceWaterhouse, he advised major international food and beveragebusinesses and private equity firms on mergers and acquisitions and post acquisition integrations. William was then part of the management buyin-buyout team that acquired Tetley Tea, the number two global tea brand, from Allied Domecq.

As Chief Financial Officer, he supports the Chief Executive and his responsibilities include financial planning and reporting, group treasury, investor relations and the development of the Group’s joint ventures.

Paul Selway-SwiftNon-Executive Chairman

Paul has extensive experience in the financial industry, having worked with the HSBC Group for 30 years. He was a director of The Hong Kong & Shanghai Banking Corporation from 1992 to 1998 and of HSBC Investment Bank plc from 1996 to 1998. He is also serving as a Non-Executive Director in Li & Fung Ltd as well as Global Brands Group Ltd.

Paul was appointed Chairman of the Company in December 2007 and also chairs the Nomination Committee.

Magomet MalsagovChief Executive Officer

Magomet has held the position of Chief Executive since founding the business in 2001.

He is primarily responsible for leading the successful establishment of the Group’s entire supply chain from the plantations and extraction facilities to the refinery plants around the world. As CEO, he further establishes the Group’s business direction and strategies along with his management team and is responsible for managing the growth and development of the Group’s business.

Board of Directors

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Peter Lai Hock Meng Non-Executive Director

Peter Lai Hock Meng has more than 30 years experience in financial services industry including central banking, investment banking, private banking, stock broking, venture capital, asset management, treasury management and private equity investments. He is currently chairman of a boutique corporate advisory firm HML Consulting Group Pte Ltd based in Singapore, and an executive director of an investment holding company CY Foundation Group Ltd listed on the Hong Kong Stock Exchange. He also sits on the board of several other companies listed on the Singapore Exchange as Independent Director. Peter graduated with a BA in Economics from University of Cambridge, England. He is also a CFA charter holder from the CFA Institute, USA, and a Fellow of the Chartered Institute of Marketing, UK. He joined PureCircle in June 2008 and is the Chairman of the Audit Committee.

Olivier Maes Non-Executive Director

Olivier is a French national who joined PureCircle in November 2006. He read business at Ecole des Hautes Etudes Commerciales (MBA HEC) Paris. Olivier has more than 25 years of experience in FMCGs markets. He formerly held CEO positions of various companies in Europe and Asia for Campofrio Food Group, Danone Group and Kraft Group. He currently oversees marketing, sales and quality assurance functions as the General Manager of Lactalis Group, a multi-national dairy products corporation based in France.

Olivier chairs the Remuneration Committee.

Christopher Pratt Non-Executive Director

Christopher Pratt, was formerly the Chairman of Swire Pacific Limited, John Swire & Sons (H.K.) Limited, Cathay Pacific Airways Limited, Hong Kong Aircraft Engineering Company Limited and Swire Properties Limited. He was also a director of The Hong Kong and Shanghai Banking Corporation Limited and Air China Limited. He joined the Swire Group in 1978 and has worked with the group in Hong Kong, China, Australia and Papua New Guinea. Mr. Pratt received a CBE (Commander of the Order of the British Empire) in 2000. He is also an Independent Director of the Noble Group, Johnson Electric and Grosvenor Estates.

He was appointed as Non-Executive Director of PureCircle in March 2014.

37

Our Financials

Financial Report for the Financial Year Ended 30 June 2014

Contents Directors’ Report 39

Independent Auditors’ Report 41

Statements of Financial Position 42

Consolidated Statement of Comprehensive Income 44

Consolidated Statement of Changes in Equity 45

Company Statement of Changes in Equity 46

Consolidated Statement of Cash Flows 48

Notes to the Financial Statements 50

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The Directors are pleased to present their report and the audited financial statements of the Group and the statement of financial position and summary of significant accounting policies and other explanatory notes of the Company for the financial year ended 30 June 2014.

Principal Activities

The Company is engaged principally in the business of investment holding whilst the principal activities of the rest of the Group are the production, marketing and distribution of natural sweeteners and flavours. There have been no significant changes in the nature of these activities during the financial year.

Business Review and Future Developments

The financial results of the Group and the financial position of the Group and of the Company for the financial year are shown in the annexed financial statements.

Results and Dividends

PureCircle Group’s turnover for the financial year ended 30 June 2014 was USD101 million. The PureCircle Group’s profit attributable to the owners of the Company was USD2.3 million, equivalent to a profit per share of USD1.39 cents.

The Group ended the year with net assets of USD148 million, gross assets of USD294 million and gross cash balances of USD46 million.

The Directors do not recommend payment of a dividend in respect of the year ended 30 June 2014.

Directors and Their Interests

The interests (all of which are beneficial interests save as otherwise stated) of the Directors and of the persons connected with them as at 30 June 2014 are as follows:

DirectorsNumber

of sharesNumber

of options

Paul Selway-Swift 202,300¹ -

Magomet Malsagov 14,855,612¹ 686,640¹

Peter Lai Hock Meng 191,400¹ 3,200¹

Christopher Pratt (appointed as at 18 March 2014) 686,916² -

Olivier Phillipe Marie Maes 408,410¹ 2,900¹

William Mitchell 910,890³ 529,170¹

¹ Held directly.

² 686,916 held indirectly by Apollo Operations Ltd.

³ 908,945 held directly and 1,945 held indirectly by his wife.

Significant Shareholders

At 30 June 2014, the Company had been notified of the following interests of 3% or more in its ordinary shares.

Beneficial Shareholders

Interestin issued

shares Interest

Wang Tak Company Limited 37,880,600 23.0%

Olam International Limited 30,544,609 18.5%

Asian Investment Management Services Ltd and related parties 10,990,603 6.7%

Magomet Malsagov 14,855,612 9.0%

Halfmoon Bay Capital Ltd 12,768,734 7.8%

Wellington Management Company LLP 7,261,801 4.4%

Swire Beverages Holdings Ltd 5,800,000 3.5%

Directors' Report

39

Statement of Directors’ Responsibilities

The Directors are responsible for the preparation of the financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of the Group at the end of the year and of the results of the Group for the year in preparing those financial statements, the Directors are required to:-

(a) select suitable accounting policies and then apply them consistently;

(b) make judgements and estimates that are reasonable and prudent;

(c) state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the Group financial statements, Company statement of financial position and the summary of significant accounting policies and other explanatory notes; and

(d) prepare the Group financial statements, Company statement of financial position and the summary of significant accounting policies and other explanatory notes on the going concern basis unless it is inappropriate to assume that the Group will continue in business.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and Company and to enable them to ensure that the financial statements comply with International Financial Reporting Standards. The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud or other irregularities.

The Directors are responsible for information contained in the Directors’ report and other information contained in the accounts.

Auditors

The auditors, Messrs. PricewaterhouseCoopers, have expressed their willingness to continue in office.

In accordance with a resolution of the Board of Directors dated 9 September 2014.

Magomet Malsagov William MitchellChief Executive Officer Chief Financial Officer

Directors' Report (continued)

40

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Independent Auditors’ Report

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the Financial Information give a true and fair view of the financial position of the Group and of the Company as of 30 June 2014, and of the Group’s financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards.

OTHER MATTERS

This report, including the opinion, has been prepared for and only for you, as a body and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

PRICEWATERHOUSECOOPERS(No. AF: 1146)Chartered Accountants

Kuala Lumpur9 September 2014

Independent Auditors’ Report to the Shareholders of Purecircle Limited

(Incorporated in Bermuda)Registration No: 40431

We have audited:

• the consolidated financial statements of PureCircle Limited and its subsidiaries (“the Group”) which comprise the consolidated statement of financial position as of 30 June 2014, and the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes, and

• the statement of financial position of PureCircle Limited (“the Company”) as of 30 June 2014, and a summary of significant accounting policies and other explanatory notes set out on pages 42 to 91 (collectively referred to as the “Financial Information”).

Directors’ responsibility for the Financial Information

The Directors of the Company are responsible for the preparation and fair presentation of the Financial Information in accordance with International Financial Reporting Standards, and for such internal control as the Directors determine is necessary to enable the preparation of Financial Information that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on the Financial Information based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the Financial Information are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Information. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the 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 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 the Directors, as well as evaluating theoverall presentation of the Financial Information.

41

Group Company

Note 30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

ASSETS

Non-Current Assets

Investment in subsidiaries 7 - - - 143,207 107,299 33,173

Investment in joint ventures 8 149 330 171 70 70 70

Intangible assets 9 38,023 32,280 26,684 472 1,165 1,034

Property, plant and equipment 10 63,715 65,889 66,586 278 184 174

Biological assets 11 4,237 4,172 6,047 - - -

Prepaid land lease payments 12 2,999 3,181 3,102 - - -

Deferred tax assets 13 5,876 5,661 6,048 - - -

Trade receivables 15 1,950 - - - - -

Other receivables, deposits and prepayments 16 553 - - - - -

117,502 111,513 108,638 144,027 108,718 34,451

Current Assets

Inventories 14 86,519 86,475 66,315 - - -

Trade receivables 15 37,362 34,779 28,910 - - -

Other receivables, deposits and prepayments 16 4,962 5,924 4,425 774 168 127

Tax recoverable 581 47 44 - - -

Amount owing by subsidiaries 17 - - - 4,866 52,950 98,308

Short-term deposits with licensed banks 19 10,718 37,599 9,733 2,002 2 690

Cash and bank balances 19 35,147 11,320 14,246 11,750 995 554

175,289 176,144 123,673 19,392 54,115 99,679

Total Assets 292,791 287,657 232,311 163,419 162,833 134,130

EQUITY AND LIABILITIES

Equity

Share capital 20 16,472 16,460 15,449 16,472 16,460 15,449

Share premium 21 163,240 162,898 132,330 163,240 162,898 132,330

Foreign exchange translation reserve 22 920 1,432 1,868 - - -

Share option reserve 23 5,076 1,530 204 5,076 1,530 204

Accumulated losses (38,203) (40,519) (31,027) (23,163) (18,929) (14,420)

Equity attributable to owners of the Company 147,505 141,801 118,824 161,625 161,959 133,563

Non-controlling interest 722 715 652 - - -

Total Equity 148,227 142,516 119,476 161,625 161,959 133,563

Statements of Financial Position at 30 June 2014

The annexed notes form an integral part of these financial statements.

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Group Company

Note 30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

Non-Current Liabilities

Deferred tax liabilities 13 - 59 594 - - -

Long-term borrowings 24 2,169 96,581 84,026 - - -

Deferred income 26 360 483 548 - - -

Other payables and accruals 26 2,111 1,147 1,069 - - -

4,640 98,270 86,237 - - -

Current Liabilities

Trade payables 25 5,879 11,714 3,572 - - -

Other payables and accruals 26 10,364 7,420 5,923 1,794 874 567

Income tax liabilities - 248 34 - - -

Short-term borrowings 24 123,681 27,489 17,069 - - -

139,924 46,871 26,598 1,794 874 567

TOTAL LIABILITIES 144,564 145,141 112,835 1,794 874 567

TOTAL EQUITY AND LIABILITIES 292,791 287,657 232,311 163,419 162,833 134,130

NET ASSETS PER SHARE (USD) 27 0.90 0.86 0.77

Approved and authorised for issue by the board of directors on 9 September 2014.

Magomet Malsagov William MitchellChief Executive Officer Chief Financial Officer

Statements of Financial Position at 30 June 2014 (continued)


43

The Group

Note 2014USD’000

2013USD’000

(Restated)

Revenue 28 101,045 70,200

Cost of sales (63,570) (52,167)

Gross profit 37,475 18,033


Other income 1,426 2,625


Finance income 273 180



Profit/(Loss) before taxation 30 2,585 (9,326)

Income tax 29 (265) (102)


Other comprehensive income/(loss) (net of tax):

Items that may be reclassified subsequently to profit or loss:

Exchange differences arising on translation of foreign operations (514) (379)

Share of other comprehensive income/(loss) of joint ventures 5 (53)

Total comprehensive income/(loss) for thefinancial year (net of tax) 1,811 (9,860)

Profit/(Loss) for the financial year

Attributable to:



2,320 (9,428)

Total comprehensive income/(loss)

Attributable to:



1,811 (9,860)

Profit/(Loss) per share (US cents)

- Basic 31 1.41 (5.80)

- Diluted 31 1.37 (5.80)

Consolidated Statement of Comprehensive Income for the Financial Year Ended 30 June 2014


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Attributable to owners of the Company

Sharecapital

USD’000

SharepremiumUSD’000

Foreigncurrency

translationreserve

USD’000

Shareoption

reserveUSD’000

(Accumulatedloss)

USD’000Sub-totalUSD’000

Non-controlling

interestsUSD’000

Totalequity

USD’000

The Group

Balance at 1.7.2013 16,460 162,898 1,432 1,530 (40,519) 141,801 715 142,516

Profit for the financial year - - - - 2,316 2,316 4 2,320

Other comprehensive income:

Exchange difference arising on translation of foreign operations - - (512) - - (512) 3 (509)

Total comprehensive income for the financial year - - (512) - 2,316 1,804 7 1,811

Transactions with owners:

Share option scheme compensation expense for the financial year - - - 3,768 - 3,768 - 3,768

Exercise of share options 12 342 - (222) - 132 - 132

12 342 - 3,546 - 3,900 - 3,900

Balance at 30.6.2014 16,472 163,240 920 5,076 (38,203) 147,505 722 148,227

Consolidated Statement of Changes in Equity for the Financial Year Ended 30 June 2014


45

Consolidated Statement of Changes in Equity for the Financial Year Ended 30 June 2014 (continued)


Sharecapital

USD’000


Foreigncurrency

translationreserve

USD’000

Shareoption

reserveUSD’000

(Accumulatedloss)

USD’000Sub-totalUSD’000

Non-controlling

interestsUSD’000

Totalequity

USD’000

The Group

Balance at 1.7.2012 15,449 132,330 1,868 204 (31,027) 118,824 652 119,476

Loss for the financial year - - - - (9,492) (9,492) 64 (9,428)

Other comprehensive income:

Exchange difference arising on translation of foreign operations - - (436) - - (436) 4 (432)

Total comprehensive income for the financial year - - (436) - (9,492) (9,928) 68 (9,860)


Share option scheme compensation expense for the financial year - - - 1,481 - 1,481 - 1,481

Exercise of share options 11 246 - (155) - 102 - 102

Issuance of shares 1,000 30,322 - - - 31,322 - 31,322

Dilution of non-controlling interests - - - - - - (5) (5)

1,011 30,568 - 1,326 - 32,905 (5) 32,900

Balance at 30.6.2013 16,460 162,898 1,432 1,530 (40,519) 141,801 715 142,516


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Consolidated Statement of Changes in Equity for the Financial Year Ended 30 June 2014 (continued)


Sharecapital

USD’000


Shareoption

reserveUSD’000

(Accumulatedlosses)

USD’000Total

USD’000

The Company

Balance at 1.7.2013 16,460 162,898 1,530 (18,929) 161,959

Loss for the financial year - - - (4,234) (4,234)


Share option scheme compensation expense for the financial year - - 3,768 - 3,768

Exercise of share options 12 342 (222) - 132

12 342 3,546 - 3,900

Balance at 30.6.2014 16,472 163,240 5,076 (23,163) 161,625

The Company

Balance at 1.7.2012 15,449 132,330 204 (14,420) 133,563

Loss for the financial year - - - (4,509) (4,509)


Share option scheme compensation expense for the financial year - - 1,481 - 1,481

Issuance of shares 1,000 30,322 - - 31,322

Exercise of share options 11 246 (155) - 102

1,011 30,568 1,326 - 32,905

Balance at 30.6.2013 16,460 162,898 1,530 (18,929) 161,959


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Consolidated Statement of Cash Flows for the Financial Year Ended 30 June 2014

The Group

Note 2014USD’000

2013USD’000

(Restated)

CASH FLOWS FROM OPERATING ACTIVITIES


Adjustments for:

Amortisation of prepaid land lease payments 140 136

Amortisation of deferred income (105) (88)

Amortisation of intangible assets 168 126

Depreciation of property, plant and equipment 6,016 5,793

Interest expense 9,253 8,416

Interest income (273) (181)

Loss on disposal of plant and equipment 14 54

Share based payment expense 3,768 1,481

Intangible assets written off 105 40

Inventories written off 78 209

Change in fair value of biological asset - 628

Unrealised exchange gain (408) (1,234)

Share of loss in joint ventures 1,336 570



Decrease in biological assets - 1,352

Increase in trade and other receivables (4,423) (6,883)

(Decrease)/Increase in trade and other payables (2,906) 9,898

NET CASH FROM/(USED IN) OPERATIONS 15,469 (9,593)

Interest received 273 181

Interest paid (9,253) (8,416)

Tax paid (1,248) (19)

NET CASH FROM/(USED IN) OPERATING ACTIVITIES 5,241 (17,847)

CASH FLOWS FROM INVESTING ACTIVITIES

Addition of intangible assets 9 (6,200) (5,856)

Addition of property, plant and equipment 10 (4,495) (4,299)

Proceeds from disposal of property, plant and equipment 30 147

Increase in investment in joint ventures 8 (684) (613)

NET CASH USED IN INVESTING ACTIVITIES (11,349) (10,621)


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Consolidated Statement of Cash Flows for the Financial Year Ended 30 June 2014 (continued)

The Group

Note 2014USD’000

2013USD’000

(Restated)

CASH FLOWS FROM FINANCING ACTIVITIES

Drawdown of borrowings 34,648 42,768

Repayment of borrowings (31,521) (20,296)

Repayment of hire purchase (45) (40)

Proceeds from private placement - 31,322

Proceeds from share options exercised 133 102

Increase in restricted cash (5,537) (1,373)

NET CASH FROM FINANCING ACTIVITIES (2,322) 52,483

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (8,430) 24,015

Effects of foreign exchange rate changes on cash and cash equivalents (161) (448)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 46,605 23,038

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 19 38,014 46,605


49

Notes to the Financial Statements for the Financial Year Ended 30 June 2014

1 GENERAL INFORMATION

The Company was incorporated and registered as a private limited company in Bermuda, under the Companies (Bermuda) Law 1981. The registered office and principal place of business are as follows:-

Registered office:Clarendon House, 2 Church Street,Hamilton HM 11, Bermuda.

Principal place of business:PT23419, Lengkuk Teknologi,Techpark @ Enstek, 71760, Bandar Enstek,Negeri Sembilan, Malaysia

The Company’s shares are publicly traded on the Alternative Investment Market (“AIM”) division of the London Stock Exchange.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors dated 9 September 2014.

2 PRINCIPAL ACTIVITIES

The Company is engaged principally in the business of investment holding whilst the principal activities of the rest of the Group are the production, marketing and distribution of natural ingredient including sweeteners and flavours.

There have been no significant changes in the nature of these activities during the financial year. The principal activities of the subsidiaries and joint ventures are set out in Notes 7 and 8 to the financial statements.

3 BASIS OF PREPARATION

The financial statements of the Group and Company have been prepared under the historical cost convention unless otherwise indicated in the significant accounting policies, and in compliance with International Financial Reporting Standards (“IFRSs”) and IFRIC Interpretations.

(a) The new accounting standards, amendments and improvements to published standards and interpretations that are effective for the Group and Company’s financial year beginning on or after 1 July 2013 are as follows:

• IFRS 10, ‘Consolidated Financial Statements’

• IFRS 11, ‘Joint Arrangements’

• IFRS 12, ‘Disclosures of Interests in Other Entities’

• IFRS 13, ‘Fair Value Measurement’

• The revised IAS 27, ‘Separate Financial Statements’

• The revised IAS 28, ‘Investments in Associates and Joint Ventures’

• Amendment to IAS 19, ‘Employee Benefits’

• Amendment to IFRS 7, ‘Financial Instruments: Disclosures’

• Amendments to IFRS 10, 11 & 12, ‘Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance’

• Annual improvements 2009 – 2011 Cycle

• Amendment to IAS 16, ‘Property, Plant and Equipment’

The adoptions of these standards do not have any material effect on the financial performance or position of the Group and the Company, some of which are as set out below:

IFRS 11 ‘Joint Arrangements’ requires a party to a joint arrangement to determine the type of joint arrangement in which it is involved by assessing its rights and obligations arising from the arrangement, rather than its legal form. There are two types of joint arrangements: joint operations and joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and hence accounts for its interest in assets, liabilities, revenue and expenses. Joint ventures arise where the joint venturer has rights to the net assets of the arrangement and hence equity accounts for its interest. Proportional consolidation of joint ventures is no longer allowed. Consistent with FY13, all joint arrangements are treated as joint venture upon adoption of IFRS 11. Please refer to Note 37 for the impact on the financial statements.

IFRS 12 ‘Disclosures of Interests in Other Entities’ sets out the required disclosures for all forms of interest in other entities, including joint arrangements, associates, structured entities and other off balance sheet vehicles. It requires entities to disclose information that helps financial statement readers to evaluate the nature, risks and financial effects associated with the entity’s interests in subsidiaries, associates, joint arrangements and unconsolidated structured entities. There is no financial impact on the results of the Group and the Company as these changes only affect disclosures.

IFRS 13 ‘Fair Value Measurement’ 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 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. The enhanced disclosure requirements are similar to those in IFRS 7 ‘Financial Instruments: Disclosures’, but apply to all assets and liabilities measured at fair value, not just financial ones. The adoption of this standard has not materially impacted the fair value measurement of the Group. Additional disclosures where required, are provided in the individual notes relating to the assets and liabilities whose fair values were determined.

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Notes to the Financial Statements for the Financial Year Ended 30 June 2014 (continued)

3 BASIS OF PREPARATION (continued)

(b) Amendment to existing standard early adopted by the Group and the Company

The Group and the Company has early adopted the following amendment to existing standard in the financial year beginning 1 July 2013:

Amendment to IAS 36 'Recoverable Amount Disclosures for Non-financial Assets' removed certain disclosures of the recoverable amount of cash generating unit which had been included in IAS 36 by the issuance of IFRS 13. The amendment to IAS 36 does not have a material impact on the financial statements of the Group and of the Company.

(c) Standards, amendments and interpretations that have been issued and are applicable to the Group but are not yet effective

The Group will apply the new standards, amendments to standards and interpretations in the following period:

(i) Financial year beginning on 1 July 2014

• Amendment to IAS 32, ‘Financial Instruments: Presentation’ does not change the current offsetting model in IAS 32. It clarifies the meaning of ‘currently has a legally enforceable right of set-off’ that the right of set-off must be available today (not contingent on a future event) and legally enforceable for all counterparties in the normal course of business. It clarifies that some gross settlement mechanisms with features that are effectively equivalent to net settlement will satisfy the IAS 32 offsetting criteria. It is not expected to have a material impact on the Group’s and the Company’s financial statements.

• Amendments to IFRS 10, IFRS 12 and IAS 27 introduce an exception to consolidation for investment entities. Investment entities are entities whose business purpose is to invest funds solely for returns from capital appreciation, investment income or both and evaluate the performance of its investments on fair value basis. The amendments require investment entities to measure particular subsidiaries at fair value instead of consolidating them. It is not expected to have a material impact on the Group’s and the Company’s financial statements.

• Amendment to IFRS 2 ‘Share-based Payment’ clarifies the definition of ‘vesting conditions’ by separately defining ‘performance condition’ and ‘service condition’ to ensure consistent classification of conditions attached to a share-based payment. It is not expected to have a material impact on the Group’s and the Company’s financial statements.

• Amendment to IFRS 8 ‘Operating Segments’ requires disclosure of the judgements made by management in aggregating operating segments. This includes a description of the segments which have been aggregated and the economic indicators which have been assessed in determining that the aggregated segments share similar economic characteristics.

The standard is further amended to require a reconciliation of segment assets to the entity’s assets when segment assets are reported. It is not expected to have a material impact on the Group’s and the Company’s financial statements, other than additional disclosures.

• Amendment to IFRS 13 ‘Fair Value Measurement’ relates to the Basis for Conclusions which is not an integral part of the Standard. The Basis for Conclusions clarifies that when International Accounting Standards Board (IASB) issued IFRS 13, it did not remove the practical ability to measure short-term receivables and payables with no stated interest rate at invoice amounts without discounting, if the effect of discounting is immaterial. It is not expected to have a material impact on the Group’s and the Company’s financial statements.

• Amendment to IAS 24 ‘Related Party Disclosures’ extends the definition of ‘related party’ to include an entity, or any member of a group of which it is a part, that provides key management personnel services to the reporting entity or to the parent of the reporting entity. It is not expected to have a material impact on the Group’s and the Company’s financial statements.

(ii) Financial year beginning on 1 July 2017

• Amendments to IAS 16 and IAS 41 ‘Agriculture: Bearer Plants’ are to be applied retrospectively and introduce a new category of biological asset, i.e. the bearer plants. A bearer plant is a living plant that is used in the production and supply of agricultural produce, is expected to bear produce for more than one period, and has remote likelihood of being sold as agricultural produce (except for incidental scrap sales).

Bearer plants are seen as similar to an item of machinery in a manufacturing plant, and therefore are treated the same way under IAS 16. Therefore, bearer plants are measured either at cost or revalued amounts, less accumulated depreciation and impairment losses. Before reaching maturity, bearer plants are measured at accumulated costs, similar to accounting for a self-constructed item of property, plant and equipment.

Agricultural produce growing on bearer plants continue to be measured at fair value less costs to sell under IAS 41, with fair value changes recognised in profit or loss as the produce grows. The Group is currently assessing the impact of the amendments to its financial statements.

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4 FINANCIAL RISK MANAGEMENT

The Group’s activities are exposed to a variety of financial risks including foreign currency risk, interest rate risk, credit risk, liquidity and cash flow risk, and capital risk management. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

(a) Financial risk management policies

(i) Foreign currency risk

The Group operates internationally and is exposed to foreign exchange risk when the Company and its subsidiaries enter into transactions that are not denominated in their functional currencies. Foreign exchange risk arises from commercial transactions, recognised assets and liabilities and net investments in foreign operations.

The Group manages its foreign exchange exposure by taking advantage of any natural offsets of the Group’s foreign exchange revenue and expenses and from time to time enters into foreign exchange forward contracts for a portion of the remaining exposure relating to these forecast transactions when deemed appropriate.

The following table demonstrates the sensitivity to a reasonably possible change in the United States Dollar, Renminbi, Euro and Sterling Pound exchange rates, with all other variables held constant of the Group’s results:

Changes inexchange rate

Effect onprofit/loss

after taxationUSD’000

2014

United States Dollar 7% 1,377

Chinese Renminbi 8% 588

Sterling Pound 15% 129

Euro 8% 695

2013

United States Dollar 9% 915

Chinese Renminbi 9% 2,402

Sterling Pound 20% 165

Euro 11% 257

The above represents favourable effects on the results of the Group should the respective currencies strengthen against the functional currencies of the entities within the Group, whilst weakening of the above currencies would have an equal but opposite effect to the amount shown above, on the basis that all other variables remain constant.

Management considered the current economic environment in arriving at the reasonable possible change in the above exchange rates.

3 BASIS OF PREPARATION (continued)

(c) Standards, amendments and interpretations that have been issued and are applicable to the Group but are not yet effective (continued)

The Group will apply the new standards, amendments to standards and interpretations in the following period (continued):

(iii) Financial year beginning on 1 July 2018

• IFRS 15 Revenue from Contracts with Customers - An entity recognises revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Revenue is recognised when a customer obtains control of goods or services, i.e. when the customer has the ability to direct the use of and obtain the benefits from the goods or services.

Transfer of control is not the same as transfer of risks and rewards as currently considered for revenue recognition. A company would recognise revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service). A performance obligation may be satisfied at a point in time (typically for promises to transfer goods to a customer) or over time (typically for promises to transfer services to a customer). It is not expected to have a material impact on the Group’s and the Company’s financial statements

(iv) Financial year beginning on 1 July 2019

• IFRS 9 ‘Financial Instruments - Classification and Measurement of Financial Asset and Financial Liabilities’ replaces the multiple classification and measurement models in IAS 39 with a single model that has only two classification categories: amortised cost and fair value. The basis of classification depends on the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset. The accounting and presentation for financial liabilities and for de-recognising financial instruments has been relocated from IAS 39, without change, except for financial liabilities that are designated at fair value through profit or loss (‘FVTPL’). Entities with financial liabilities designated at 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 profit or loss, but accumulated gains or losses may be transferred within equity.

The guidance in IAS 39 on impairment of financial assets and hedge accounting continues to apply.

IFRS 7 requires disclosures on transition from IAS 39 to IFRS 9.

The Group is currently assessing its impact to its financial statements.

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4 FINANCIAL RISK MANAGEMENT (continued)

(a) Financial risk management policies (continued)

(ii) Interest rate risk

Interest rate risk is the risk that the future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s exposure to interest rate risk arises mainly from interest-bearing borrowings at floating rates. The Group's interest rate profile is set out below:

2014 2013 2014 2013

Effective interest rate (%) USD’000 USD’000

Term loans 7.35 7.44 125,782 123,965

Borrowings issued at variables rates expose the Group to cash flow interest rate risk which is partially offset by cash held at variable rates. The Group actively reviews its debt portfolio to mitigate the impact of interest risk. The Group does not utilise interest swap contracts or other derivative instruments for trading or speculation purposes.

As at balance sheet date, if interest rates on borrowings are 1% higher/lower for a year with all other variables held constant post-tax profit for the year would be USD1,258,000 lower/higher (2013: post-tax loss for the year would be USD1,220,000 higher/ lower), mainly as a result of higher/ lower interest expense on floating rate borrowing.

(iii) Credit risk

The Group trades only with recognised, creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, the payment profile of the customers and credit exposure are monitored on an ongoing basis with the result that the Group’s exposure to bad debt is not significant. The Group also establishes an allowance account for impairment that represents its estimate of losses in respect of trade and other receivables. The Group and the Company’s maximum exposure is the carrying amount as disclosed in Notes 15, 16 and 17 to the financial statements. At 30 June 2014, 3 (2013: 1) customers each comprised more than 10% of total receivables and it took 14 customers (2013: 15) to comprise 75% of total receivables. See Note 15 for ageing of trade receivables that are past due but not impaired.

The Group’s cash and cash equivalents and short-term deposits are placed with creditworthy financial institutions and the risks arising thereof are minimised in view of the financial strength of these financial institutions.

The Group and Company consider that the credit risk relating to amounts due from joint ventures and subsidiaries respectively to be low. Both the joint ventures and subsidiaries are expected to repay fully the amounts owed to the Group and Company respectively as these related entities are expected to continue on a going concern basis. At year end, the Group believes there is no credit risk provision required for these receivables.

(iv) Liquidity and cash flow risks

Liquidity and cash flow risks arise mainly from general funding and business activities. The Group’s cash flow is reviewed regularly to ensure commitments are settled when they fall due.

Cash flow forecasting is performed both in the operating entities and on a Group consolidated basis. The Group monitors rolling forecasts of its liquidity requirements including projected sales revenues, inventory and capital expenditure requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or financial covenants on any of its borrowing facilities. The Group invest surplus cash into financial interest bearing accounts and money market deposits.

During the year the Group secured a flexible multi-jurisdictional receivables backed facility designed to increase liquidity in line with growth in the Group’s sales revenues. This was drawn down USD17 million at 30 June 2014. The facility has built in capacity to grow in line with sales growth.

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(iv) Liquidity and cash flow risks (continued)

The following tables detail the remaining contractualmaturities at the reporting date of the Group's and the Company's non-derivative financial liabilities, which are based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on rates current at the reporting date) and the earliest date the Group and the Company can be required to pay:

Carryingamount

USD’000

Totalcontractual

undiscountedcash flowUSD’000

Within1 year or

on demandUSD’000

Morethan 1

year butless than

2 yearsUSD’000

Morethan 2

years butless than

5 yearsUSD’000

More than5 years

USD’000

The Group

2014

At 30 June 2014

Financial liabilities:

Trade and other payables 18,316 18,316 16,205 2,111 - -

Borrowings 125,850 133,753 131,337 2,046 370 -

2013

At 30 June 2013



Borrowings 124,070 139,609 35,869 103,694 46 -

2012

At 30 June 2012



Borrowings 101,095 120,688 24,497 12,407 83,780 4

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(iv) Liquidity and cash flow risks (continued)

Subsequent to the year end USD34 million of existing borrowings have been repaid. The Group has then accepted an offer from its principal banker for a new 5 year RM235 million (USD71 million) facility. Subject to completion of legal contracts, the new facility is expected to be available for drawdown from September 2014. See Note 24 for more details.

Coupled with projected operating cash-flows, the new facility is expected to provide the Group with sufficient liquidity to fund repayment of existing loans as they fall due and support expected sales growth.

Carryingamount

USD’000

Totalcontractual

undiscountedcash flowUSD’000

Within1 year or

on demandUSD’000

Morethan 1

year butless than

2 yearsUSD’000

Morethan 2

years butless than

5 yearsUSD’000

The Company

2014

At 30 June 2014

Other payables and accruals 1,794 1,794 1,794 - -

2013

At 30 June 2013

Other payables and accruals 874 874 874 - -

2012

At 30 June 2012

Other payables and accruals 567 567 567 - -

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(b) Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance.

The capital structure of the Group consists of debts, which include the borrowings disclosed in Note 24, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, share premium, reserves and retained earnings.

The Group’s policy is to maintain a strong capital base by having low to moderate gearing. The Group monitors capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by total equity.

The gearing ratio at the financial year end was as follows:

2014USD’000

2013USD’000

Debts (i) 125,850 124,070

Less: Gross cash (45,865) (48,919)

Net debt (ii) 79,985 75,151

Equity (iii) 147,505 141,801

Net debt to equity ratio 54% 53%

(i) Debts relate to borrowings disclosed in Note 24 to the financial statements.

(ii) Net debt is calculated as total borrowings (including "current and non-current borrowings") as shown in the consolidated statement of financial position less cash and cash equivalents.

(iii) Equity includes all capital and reserves of the Group attributable to the equity holders of the Company.

(c) Fair value estimation

There are no significant fair value estimates to be made for the financial instruments measured at fair value for the Group and the Company as at the reporting date.

5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a) Financial assets

(i) Receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less allowance for impairment. An allowance for impairment of 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.

(ii) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.

(b) Financial liabilities

(i) Payables

Liabilities for trade and other payables, including amounts owing to related parties, are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

(ii) Interest-bearing loans and borrowings

All loans and borrowings are recognised initially at fair value of the consideration received, net of directly attributable transaction cost incurred, and are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction cost) and the redemption value is recognised in the profit or loss over the period of the loans and borrowings using the effective interest method.


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5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(c) Foreign currency translation

(i) Functional and presentation currency

The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which the entities operates.

The functional and presentation currency of the Company is United States Dollar (“USD”). The consolidated financial statements are presented in United States Dollar (“USD”) which is the Company’s presentation currency.

(ii) Transactions and balances

Transactions of the Company in foreign currency are converted into USD at the approximate rates of exchange ruling at the transaction dates.

Transactions in foreign currency are measured in the respective functional currencies of the Group’s entities and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates.

Monetary assets and liabilities at the reporting date are translated at the rates ruling as of that date. Exchange differences arising from the translation of monetary assets and liabilities are recognised in the profit or loss.

Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined.

(iii) Foreign operations

The results and financial position of the subsidiaries are translated into the presentation currency as follows:-

(a) assets and liabilities, including goodwill and fair value adjustments arising on the acquisition of foreign operations, for each statement of financial position presented are translated at the closing rate at the reporting date;

(b) income and expenses for each profit or loss are translated at the average exchange rates for the year;

(c) all resulting exchange differences are recognised as a separate component of equity; and

(d) on disposal, accumulated translation differences are recognised in the profit or loss as part of the gain or loss on sale of the foreign operation.

(d) Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries.

(i) Subsidiaries

Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity

when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. 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 uses 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 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. Acquisition-related costs are expensed as incurred. Identifiable 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. Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect 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 identifiable net assets acquired is recorded as goodwill. If, after reassessment, the Group’s interest in the fair values of the identifiable net assets of the subsidiaries exceeds the cost of the business combinations, the excess is recognised immediately in the profit or loss.

Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(ii) Transactions with non-controlling interests

The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between 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.


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(d) Basis of consolidation (continued)

(iii) Disposal of subsidiaries

When the Group ceases to have control or significant influence, any retained interest in the entity is re-measured to its fair value, 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.

(iv) Joint ventures

The Group’s interest in a joint venture is accounted for in the financial statements using the equity method of accounting. Under the equity method of accounting, interests in joint ventures are initially recognised at cost and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses and movements in other comprehensive income. When the Group’s share of losses in a joint venture equals or exceeds its interests in the joint ventures (which includes any long-term interests that, in substance, form part of the Group’s net investment in the joint ventures), the Group recognise the further losses to the extent of its incurred obligations.

Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the joint ventures have been changed where necessary to ensure consistency with the policies adopted by the Group.

(e) Goodwill on consolidation

Goodwill that arises upon acquisition of subsidiaries is included in intangible assets. The carrying value of goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate a potential impairment. Impairment losses on goodwill are recognised immediately in the profit or loss. An impairment loss recognised for goodwill is not reversed in a subsequent year. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose identified according to operating segment.

Acquisition of non-controlling interests are accounted for as transactions with equity holders in their capacity as equity holders and therefore no goodwill is recognised as a result of such transaction.

(f) Investments in subsidiaries and joint ventures

Investments in subsidiaries and joint ventures are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of the financial year if events or changes in circumstances indicate that their carrying values may not be recoverable.

On the disposal of the investments in subsidiaries and joint ventures, the difference between the net disposal proceeds and the carrying amount of the investments is taken to the profit or loss.

(g) Intangible assets (other than goodwill)

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair values as at the date of acquisition. Following initial recognition, intangible assets with finite useful lives are carried at cost less any accumulated amortisation and any accumulated impairment losses.

(i) Intellectual property

The intellectual property consists of the internal investment and external acquisition costs of the patents, trademarks, technological processes and all intellectual and industrial property rights (“intellectual property rights”) in connection therewith on the production of natural sweeteners, pharmaceutical products and chemical derivatives of bio-organic and physiologically active compounds. The acquisition cost is capitalised as an intangible asset as it is able to generate future economic benefits to the Group.

The useful life of these intellectual property rights, other than patented development costs is considered to be indefinite based on the Directors’ annual reassessment of the useful life; there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the Group. Intellectual property rights are stated at cost less impairment losses. They are not amortised but tested for impairment annually or more frequently when indicators of impairment are identified. The intellectual property rights are assessed to have an indefinite useful life because the Group’s natural sweeteners and flavours are expected to become mass volume ingredients in all foods and beverage categories. Similar to the sugar market, there is no expected end to the useful life of the natural sweeteners and flavours such as stevia. Accordingly, the Directors believe the useful life for intellectual property rights is indefinite. The Directors will continue to reassess the basis of that useful life of the intellectual property rights on an annual basis.


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(g) Intangible assets (other than goodwill) (continued)

(i) Intellectual property (continued)

Patented development costs are subject to estimated useful life of no more than 20 years and amortised starting from the financial year when the product are first viable for commercial use.

(ii) Development costs

All research costs are recognised in the profit or loss as incurred.

Development costs consist of expenditure incurred on product development and leaf development projects.

Expenditure incurred on these projects are capitalised as intangible assets only when the Group can demonstrate the technical feasibility of completing the intangible assets so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resource to complete the project and the ability to measure reliably the expenditure during the developments. Expenditures which do not meet these criteria are recognised in the profit or loss when incurred.

Product development costs are amortised on a straight line basis over their estimated useful life of no more than 20 years starting from the financial year when the product are first viable for commercial use.

Leaf development costs are amortised when Stevia plant demonstrates capability of producing high yielding strains of Stevia leaf at reasonable consistency on a mass volume basis. As at 30 June 2014, these development projects remain on-going as the development targets have not been fully met.

(h) Property, plant and equipment

Property, plant and equipment, other than freehold land, are stated at cost less accumulated depreciation and impairment losses, if any. Freehold land is stated at cost less impairment losses, if any, and is not depreciated. Cost includes expenditure that is directly attributable to the acquisition of the items. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located.

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 are charged to

the profit or loss during the financial period in which they are incurred.

Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-

Buildings 2%-5%

Extraction and refinery plant and machinery

2%-20%

Office equipment, furniture and fittings and motor vehicles

20%

The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at each reporting date.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is included in the profit or loss in the year the asset is derecognised.

Capital work-in-progress represents assets under construction, and which are not ready for commercial use at the reporting date. Capital work-in-progress is stated at cost, and will be transferred to the relevant category of long-term assets and depreciated accordingly when the assets are completed and ready for commercial use.

Cost of capital work-in-progress includes direct cost, related expenditure and interest cost on borrowings taken specifically to finance the purchase of the assets, net of interest income on the temporary investment of those borrowings.

(i) Impairment of non-financial assets

Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation but are tested annually for impairment. Assets that are subject to 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 impairment are reviewed for possible reversal of the impairment at each reporting date.


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(j) Biological assets

Biological assets comprise Stevia plants in the Group’s controlled nurseries (nursery plants) that are used to mass produce seedlings for third party farmers.

Seedlings produced from the nursery plants are deducted from the biological asset at fair value less cost to sell. Seedlings harvested from nursery plants are carried at their deemed cost under IAS 2 as inventories, which are then stated at lower of this deemed cost and net realisable value subject to any impairment loss.

Biological assets are stated at fair value less cost to sell. Fair value gains or losses on biological assets are recognised in the profit or loss.

Where little biological transformation has taken place since initial cost incurrences, or the impact of the biological transformation on price is not expected to be material, the cost of the biological assets is considered by management to approximate fair value.

(k) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis, and comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition. Cost of finished goods and work-in-progress includes the cost of materials, labour and production overheads.

Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.

Where necessary, due allowance is made for all damaged, obsolete and slow-moving items.

(l) Income taxes

Income taxes for the year comprise current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the applicable tax rates that have been enacted or substantively enacted at the reporting date in each of the jurisdictions in which the Group operates.

Deferred tax is provided in full, using the liability method, on the temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition of

an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unuse tax losses and unused tax credits can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to be applicable in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the reporting date.

Deferred tax is recognised in the profit or loss, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly to equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs. The carrying amounts of deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.

(m) Equity instruments

Ordinary shares are classified 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 proceeds.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(n) Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, deposits held at call with banks, short-term deposits with licensed banks with maturities of three month or less, and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents exclude restricted cash.

Restricted cash comprise cash balances held in an account solely for the purpose of utilising the forward contract facility, trade finance facility and credit card facility provided by a licensed financial institution.


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(o) Employee benefits

(i) Short-term benefits

Wages, salaries, paid annual leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Group.

(ii) Defined contribution plans

The Group’s contributions to defined contribution plans are charged to the profit or loss in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans. The Group has no defined benefit plan.

(p) Share-based payment

The Group operates a long term incentive programme which is an equity-settled, share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options or shares is recognised as an expense over the vesting period. The total amount to be expensed is determined by reference to the fair value of the options or shares granted excluding the impact of any non-market vesting conditions and the number of shares expected to vest. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable.

When the options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.

The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution in the subsidiary. 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.

(q) Provisions

A provision is recognised if, as a result of past event, the Group has a present legal and constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

(r) Leases

Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

When an 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 the termination takes place.

Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownerships are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges.

The corresponding rental obligations, net of finance charges, are included as borrowings. The interest element of the finance charge is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Plant and equipment acquired under a finance lease is depreciated over the shorter of the estimated useful life of the asset and the lease term.

(s) Segmental information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (i.e. the Chief Executive Officer (“CEO”)). The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

(t) Revenue recognition

(i) Sale of goods

Revenue from the sale of Stevia products is recognised when the significant risks and rewards of ownership of the Stevia products have passed to the buyer and customers’ acceptance and where applicable, net of sales tax, returns and trade discounts.

(ii) Interest income

Interest income is recognised on an accrual basis, based on the effective yield on the investment.


61


(u) Government grants

Government grants are recognised initially as deferred income at fair value when there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant. Grants that compensate the Group for expenses incurred are recognised in the profit or loss as other income on a systematic basis in the same periods in which the expenses are recognised. Grants that compensate the Group for the cost of an asset are recognised in profit or loss on a systematic basis over the useful life of the asset.

6 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated by the Directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group’s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below.

(i) Goodwill and other assets carrying values

(a) Key assumptions for value-in-use calculations

The recoverable amount of a cash generating unit (“CGU”) is determined based on value-in-use calculations using cash flow projections based on financial budgets approved by management covering a 5-year period including a terminal value as required by IAS 36 ‘Impairment of Assets’. The key assumptions used in the CGU’s value-in-use computation are:

(i) Growth rate

The average sales growth rate used is based on planned capacity and forecasted demands. The short to medium term growth rates used are in the range of 25% per annum (2013: 25% to 30%). The long term growth rate used is 2% (2013: 2.0%) per annum, based on sweetener industry’s long term growth rate ranging from 2% to 4% (2013: 2% to 4%) per annum.

(ii) Gross margin

Changes in selling price and direct costs are based on past results and expectations of future changes in the market.

(iii) Discount rate

The discount rate used is 12% (2013: 12%) per annum.

(b) Sensitivity to changes in assumptions

The Directors believe that a reasonable change in any of the above key assumptions would not cause the carrying value of the intangible assets to be impaired.

(ii) Indefinite useful life of intellectual property rights

The intellectual property rights are assessed to have indefinite useful lives because over the long term, the Group’s natural sweeteners and flavours are expected to become mass volume ingredients in all foods and beverage categories. Similar to the sugar market, there is no expected end to the useful life of the natural sweeteners and flavours such as Stevia. Accordingly, the Directors believe the useful life for intellectual property rights is indefinite. The Directors will continue to reassess the basis of that useful life of the intellectual property rights on an annual basis.


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7 INVESTMENT IN SUBSIDIARIES

The Company

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

At 1 July 107,299 33,173 22,156

Addition during the financial year 16,628 29,445 11,017

Advances to subsidiaries treated as quasi-investment 19,280 44,681 -

At 30 June 143,207 107,299 33,173

The advances to subsidiaries are treated as an extension of its investments in subsidiaries.

Details of the subsidiaries are as follows:-

Name of Company Country of Incorporation Effective Equity Interest Principal Activities

30.6.2014 30.6.2013 1.7.2012

Held directly by PCL

PureCircle Sdn. Bhd. (“PCSB”) Malaysia 100% 100% 100% Production and distribution of natural sweeteners and flavours.

PureCircle Mexico Inc. (“PCMEX”)* Mexico 100% 100% - Sales and marketing of natural sweeteners and flavours.

PureCircle S.A. Switzerland 100% 100% 100% Investment holding and sales and marketing of natural sweeteners and flavours.

PureCircle Australia Pty. Ltd. Australia 100% 100% 100% Sales and marketing of natural sweeteners and flavours.

PureCircle USA Holdings Inc. (“PCUSAH)

United States of America (“USA”)

100% 100% 100% Investment holding

PureCircle (UK) Limited (“PCUK”) England and Wales 100% 100% 100% Sales and marketing of natural sweeteners and flavours.

PureCircle Kenya Limited (“PCK”) Kenya 100% 100% 100% Supply and development of stevia agronomy.

PureCircle South America Sociedad Anonima (“PCSAM”)

Paraguay 100% 100% 100% Supply and development of stevia agronomy.

PureCircle (China) Limited (“PCC”) Hong Kong 100% 100% 100% Investment holding (Note 7(ii))

PureCircle USA Inc. (“PCUSA”) United States of America (“USA”)

100% 100% 100% Sales and marketing of natural sweeteners and flavours. (Note 7(iv))

PureCircle (S.E.A) Sdn. Bhd. (formerly known as PureCircle Stevia Sdn. Bhd.)

Malaysia 100% - - Sales and marketing of natural sweeteners and flavours. (Note 7(iii))

PureCircle Brazil Brazil 100% - - Sales and marketing of natural sweeteners and flavours. (Note 7(i))

Held by PCMEX

PCM PureCircle De Mexico S.A. de C.V. **

Mexico 100% - - Sales and marketing of natural sweeteners and flavours.


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7 INVESTMENT IN SUBSIDIARIES (continued)


30.6.2014 30.6.2013 1.7.2012

Held by PCUSA

PureCircle Company LLC United States of America (“USA”)

100% - - Sales and marketing of natural sweeteners and flavours. (Note 7(ii))

Held by PCUK

PureCircle Company UK Ltd England and Wales 100% - - Sales and marketing of natural sweeteners and flavours. (Note 7(ii))

Held by PCSB

PureCircle (Jiangxi) Co. Ltd. (“PCJX”)

The People’s Republic of China (“The PRC”)

98.62% 98.62% 98.58% Supply chain, production and distribution of natural sweeteners and flavours.

PureCircle (Shanghai) Co. Ltd. The People’s Republic of China (“The PRC”)

100% 100% 100% Sales and marketing of natural sweeteners and flavours.

PureCircle (S.E.A) Sdn. Bhd. (formerly known as PureCircle Stevia Sdn. Bhd.)

Malaysia - 51% 51% Sales and marketing of natural sweeteners and flavours. (Note 7(iii))

PureCircle Servicios Inc. Mexico 100% 100% - Dormant

Held by PCC

PureCircle China Agriculture Development Co. Ltd

The People’s Republic of China (“The PRC”)

100% 100% 100% Supply and development of stevia agronomy.

During the financial year:-(i) the Company incorporated a wholly-owned subsidiary, PureCircle Brazil for sales and marketing of natural sweeteners and

flavours; and

(ii) the Company increased its investment in PCC by USD395,000 through cash consideration; and

(iii) PCSB has transferred its 100% share on PureCircle Stevia Sdn Bhd to PCL and PureCircle Stevia Sdn Bhd has changed its name to PureCircle (S.E.A) Sdn Bhd; and

(iv) PCUSA issued 14 million ordinary shares at USD1 each. The shares were issued to PCL and the consideration was settled by reduction in liabilities due to PCL.

* 99% held directly by the Company and 1% held through PCUSAH

** 99% held directly by the Company and 1% held through PCMEX


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8 JOINT VENTURES

Details of joint ventures are as follows:-


30.6.2014 30.6.2013 1.7.2012

Tereos PureCircle Solutions

France 50% 50% 50% Production, marketing and distribution of natural sweeteners.

NP Sweet AS Denmark 50% 50% 50% Production, marketing and distribution of natural sweeteners.

Natural Sweet Ventures LLC (“NSV”)

USA - 50% 50% Production, marketing and distribution of natural sweeteners.

In 2013, the Group disposed of its 50% equity interest in its joint venture, Natural Sweet Ventures LLC (“NSV”) to its partner Imperial Sugar. Consideration of USD1 for the disposal resulted in a USD0.8 million non-cash book loss.

30.6.2014USD’000

30.6.2013USD’000

At 1 July (817) (897)

Share of loss (1,336) (570)

Additional investment 684 613

Exchange differences 6 37

At 30 June (1,463) (817)

Analysed as follows:

30.6.2014USD’000

30.6.2013USD’000

Investment in joint ventures 149 330

Other payables (1,612) (1,147)

At 30 June (1,463) (817)

The Group’s share of the results of the joint ventures, none of which is individually material to the Group, are shown in aggregate as follows:

30.6.2014USD’000

30.6.2013USD’000


Shares of other comprehensive income 5 (53)

Share of total comprehensive income (1,331) (623)


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9 INTANGIBLE ASSETS

Intellectual property

rightsUSD’000

Developmentcosts

USD’000GoodwillUSD’000

TotalUSD’000

The Group

Cost

At 1 July 2013 as previously reported 14,136 17,158 1,806 33,100

Adoption of IFRS 11 (Note 37) (226) - - (226)

At 1 July 2013 (Restated) 13,910 17,158 1,806 32,874

Additions 648 5,552 - 6,200

Written off during the year (53) (52) - (105)

Foreign exchange translation difference (150) (40) - (190)

At 30 June 2014 14,355 22,618 1,806 38,779

Accumulated amortisation

At 1 July 2013 as previously reported 515 113 - 628


At 1 July 2013 (Restated) 481 113 - 594

Charge for the financial year 8 160 - 168

Foreign exchange translation difference (6) - - (6)

At 30 June 2014 483 273 - 756

Net carrying amount

At 30 June 2014 13,872 22,345 1,806 38,023

Intellectual property

rightsUSD’000

Developmentcosts

USD’000GoodwillUSD’000

TotalUSD’000

The Group

Cost

At 1 July 2012 as previously reported 13,445 12,031 1,806 27,282


At 1 July 2012 (Restated) 13,317 12,031 1,806 27,154

Additions 372 5,484 - 5,856

Written off during the year (30) (10) - (40)

Foreign exchange translation difference 251 (347) - (96)

At 30 June 2013 13,910 17,158 1,806 32,874

Accumulated amortisation

At 1 July 2012 as previously reported 470 - - 470

Charge for the financial year (Restated) 9 117 - 126

Foreign exchange translation difference 2 (4) - (2)

At 30 June 2013 481 113 - 594

Net carrying amount

At 30 June 2013 13,429 17,045 1,806 32,280

At 1 July 2012 12,847 12,031 1,806 26,684


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9 INTANGIBLE ASSETS (continued)

Intellectualproperty

rightsUSD’000

Developmentcosts

USD’000Total

USD’000

The Company

Cost

At 1 July 2013 472 693 1,165

Additions during the financial year - 134 134

Disposal during the financial year - (827) (827)

At 30 June 2014 472 - 472

At 1 July 2012 472 562 1,034

Additions during the financial year - 131 131

At 30 June 2013 472 693 1,165

Intellectual property rights comprise the patents, trade mark technology process and all intellectual and industrial property rights in connection therewith on the production of natural sweetener, pharmaceutical products and derivatives of bio-organic and physiologically active compounds. As at 30 June 2014, the carrying value of indefinite life intangible assets is USD11,027,000 (2013: USD11,094,000).

Goodwill is allocated to the Group’s single cash generating unit (CGU) identified according to its only operating segment.See Note 6(i) for key assumptions used in the value-in-use calculations.

10 PROPERTY, PLANT AND EQUIPMENT

Freehold land

USD’000BuildingsUSD’000

Extractionand

refineryplants

USD’000

Officeequipment,

furnitureand fittingsand motor

vehiclesUSD’000

Capitalwork-in

progressUSD’000

TotalUSD’000

The Group

Cost

At 1 July 2013 1,169 20,723 63,877 4,156 1,991 91,916

Additions - 63 1,894 1,116 1,422 4,495

Disposals/write-offs - (6) (57) (137) - (200)

Reclassification 653 (26) 522 180 (1,329) -

Foreign exchange translation reserve (2) (162) (722) 6 (22) (902)

At 30 June 2014 1,820 20,592 65,514 5,321 2,062 95,309

Accumulated depreciation

At 1 July 2013 - 2,355 21,266 2,406 - 26,027

Charge for the financial year - 1,114 4,074 828 - 6,016

Disposals/write-offs - (3) (31) (122) - (156)

Reclassification - (9) - 9 - -

Foreign exchange translation reserve - (44) (239) (10) - (293)

At 30 June 2014 - 3,413 25,070 3,111 - 31,594

Net carrying amount

At 30 June 2014 1,820 17,179 40,444 2,210 2,062 63,715


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10 PROPERTY, PLANT AND EQUIPMENT (continued)

Freehold land

USD’000BuildingsUSD’000

Extractionand

refinery plants

USD’000

Officeequipment,


vehiclesUSD’000

Capitalwork-in

progressUSD’000

TotalUSD’000

The Group

Cost

At 1 July 2012 1,158 20,225 61,428 3,453 996 87,260

Additions 8 16 1,420 933 1,922 4,299

Disposals - (18) (605) (422) - (1,045)

Reclassification - - 733 162 (895) -

Foreign exchange translation reserve 3 500 901 30 (32) 1,402

At 30 June 2013 1,169 20,723 63,877 4,156 1,991 91,916


At 1 July 2012 - 1,911 16,830 1,933 - 20,674

Charge for the financial year - 367 4,646 780 - 5,793

Disposals - (4) (523) (317) - (844)

Foreign exchange translation reserve - 81 313 10 - 404

At 30 June 2013 - 2,355 21,266 2,406 - 26,027

Net carrying amount

At 30 June 2013 1,169 18,368 42,611 1,750 1,991 65,889

At 1 July 2012 1,158 18,314 44,598 1,520 996 66,586

Officeequipment,


vehiclesUSD’000

Capitalwork-in

progressUSD’000

TotalUSD’000

The Company

Cost

At 1 July 2013 225 - 225

Additions 157 - 157

At 30 June 2014 382 - 382


At 1 July 2013 41 - 41

Charge for the financial year 63 - 63

At 30 June 2014 104 - 104

Net carrying amount

At 30 June 2014 278 - 278


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10 PROPERTY, PLANT AND EQUIPMENT (continued)

Officeequipment,


vehiclesUSD’000

Capitalwork-in

progressUSD’000

TotalUSD’000

The Company

Cost

At 1 July 2012 13 162 175

Additions 50 - 50

Reclassification 162 (162) -

At 30 June 2013 225 - 225


At 1 July 2012 1 - 1

Charge for the financial year 40 - 40

At 30 June 2013 41 - 41

Net carrying amount

At 30 June 2013 184 - 184

At 1 July 2012 12 162 174

The carrying values of plant and equipment charged to financial institutions to secure banking facilities granted to the Group are as follows:

The Group

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

Freehold land 1,256 607 604

Building 17,122 14,844 14,683

Extraction and refinery plants 40,269 42,501 44,355

Office equipment, furniture & fittings 749 842 950

Capital working-progress 1,960 1,992 244

61,355 60,786 60,836

The carrying values of plant and equipment acquired under hire purchase terms are as follows:

The Group

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

Motor vehicles 28 50 119


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11 BIOLOGICAL ASSETS

As at 30 June 2014, total biological assets of USD 4,237,000 (2013: USD 4,172,000) represent 5.2 million nursery plants (2013: 5.4 million). Nursery plants are carried at cost as it is deemed to have limited biological transformation. Seedlings from nursery plants are sold to farmers upon harvest and are carried at a consistent unit cost.

12 PREPAID LAND LEASE PAYMENTS

The Group

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

At 1 July 3,181 3,102 3,094

Additions - 38 -

Amortisation for the financial year (140) (136) (134)

Foreign exchange translation reserve (42) 177 142

At 30 June 2,999 3,181 3,102

Cost 3,476 3,476 3,008

Accumulated amortisation (651) (511) (375)

Foreign exchange translation reserve 174 216 469

At 30 June 2,999 3,181 3,102

The prepaid land lease payments represent the Group’s right to use the land for 20 years. Accordingly, the amortisation of the prepaid land lease payments is on a straight line basis over 20 years. The prepaid land lease payments have been pledged as security for banking facilities granted to the Group.


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13 DEFERRED TAX

The Group

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

Deferred tax assets

At 1 July as previously reported 5,979 6,209 3,573

Adoption of IFRS 11 (Note 36) (318) (318) (161)

At 1 July (Restated) 5,661 5,891 3,412

Credit / (Debit) to profit or loss (Note 29): 144 (254) 2,636

Foreign exchange translation reserve 71 24 -

At 30 June 5,876 5,661 6,048

Deferred tax liabilities

At 1 July 59 594 1,458

Credit to profit or loss (Note 29) : (59) (540) (864)

Foreign exchange translation reserve - 5 -

At 30 June - 59 594

Represented by:

Deferred tax assets

Tax losses 5,777 5,540 6,048

Others 99 121 -

Offsetting - - -

5,876 5,661 6,048

Deferred tax liabilities

Intangible assets 59 59 594

Offsetting (59) - -

- 59 594

Deferred tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related tax benefit through future tax profit is probable based on projections and forecasts prepared by management and taking into consideration the expiry dates of carry forward losses. The group did not recognise deferred tax assets of USD4,536,000 (2013: USD4,591,000; 2012: USD4,352,000) in respect of losses amounting to USD18,151,000 (2013: USD18,365,000; 2012: USD17,406,000) that can be carried forward against future taxable income as it is not probable that the subsidiaries having these tax losses will be able to generate sufficient future taxable profit.


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13 DEFERRED TAX (continued)

An analysis of tax losses with expiry dates for which deferred tax assets have been recognised is as follows:

The Group

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

FY2016 - - 288

FY2017 164 164 1,724

FY2018 494 467 140

FY2019 122 - 54

FY2020 - - 1,726

FY2021 - - 1,158

FY2022 - - 850

FY2023 1,677 1,677 -

FY2024 and above 2,820 2,785 -

Indefinite 500 447 108

Total 5,777 5,540 6,048

14 INVENTORIESThe Group

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

Raw materials 14,422 13,687 11,352

Work-in-progress 11,898 11,569 10,863

Finished goods 60,199 61,219 44,100

86,519 86,475 66,315


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15 TRADE RECEIVABLESThe Group

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

Non-current

Joint ventures 1,950 - -

Current

Third party trade receivables 29,107 24,439 21,556

Joint ventures 8,255 10,340 7,354

37,362 34,779 28,910

The Group’s normal trade credit terms range from 30 to 60 days (2013: 30 to 60 days; 2012: 30 to 60 days). Terms for joint ventures are 30 days after consumption or onward sales of products. Other credit terms are assessed and approved on a case-by-case basis.

In line with all business, management reviews the credit terms and collectability of all balances on an on-going basis and exercises judgement in assessing the recoverability of amounts due.

As of 30 June 2014, trade receivables amounting to USD5,771,000 (2013: USD7,533,000; 2012: USD1,226,000) 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 of the trade receivables that are past due but not impaired is as follows:

The Group

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

Past due but not impaired:

Up to 3 months 5,554 6,901 545

3 to 6 months 203 314 280

6 months and above 14 308 169

5,771 7,523 994

The foreign currency exposure profile represents the carrying amounts arising from currencies other than the functional currency of the respective entities in the Group. The foreign currency exposure profile of the trade receivables at the reporting date was as follows:

The Group

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

United States Dollar 9,834 8,459 9,630

Euro 4,526 2,364 2,861

Chinese Renminbi 51 - -


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16 OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Group Company

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

Non-current

Other receivables 553 - - - - -

Current

Other receivables 2,992 4,184 3,059 11 - -

Prepayments 1,678 1,431 1,160 720 119 84

Deposits 292 309 206 43 49 43

As at 30 June 4,962 5,924 4,425 774 168 127

Other receivables include amounts due from farmers for planting material and other miscellaneous amounts due to the Group. These receivables have a different credit risk profile from the Group’s core trade customer base.

Receivables from farmers are assessed by the Group’s local agricultural management who assess credit risk at an individual debtor level on the basis of knowledge of each farmer’s circumstances. Other amounts due are assessed on a specific balance by balance basis.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables mentioned above.

The foreign currency exposure profile represents the carrying amounts arising from currencies other than the functional currency of the respective entities in the Group. The foreign currency exposure profile of the other receivables at the reporting date was as follows:

Group Company

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

Australian Dollar 19 19 - 19 19 -

United States Dollar 135 267 68 - - -

Euro 620 - 13 605 - -

Ringgit Malaysia 70 71 58 70 17 58

Sterling Pound 630 9 17 630 9 17


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17 AMOUNT OWING BY SUBSIDIARIES

The amounts owing by subsidiaries are unsecured, repayable on demand and are denominated in United States Dollar.

18 FINANCIAL INSTRUMENTS BY CATEGORY

Group Company

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

Loans and receivables at amortised cost

Trade receivables 37,362 34,779 28,910 - - -

Other receivables 3,545 4,184 3,059 - - -

Amount owing by subsidiaries - - - 4,866 52,950 98,308

Cash and bank balances 45,865 48,919 23,979 13,752 997 1,244

86,772 87,882 55,948 18,618 53,947 99,552

Other financial liabilities at amortised cost

Trade payables 5,879 11,714 3,572 - - -

Other payables and accruals 12,437 8,529 6,953 1,794 874 567

Borrowings 125,850 124,070 101,095 - - -

144,166 144,313 111,620 1,794 874 567


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19 CASH AND CASH EQUIVALENTSGroup Company

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

Short term deposits with licensed banks (a)

10,718 37,599 9,733 2,002 2 690

Cash at bank and on hand (b) 35,147 11,320 14,246 11,750 995 554

Deposits, cash and bank balances 45,865 48,919 23,979 13,752 997 1,244

Restricted cash (7,851) (2,314) (941) - - -

Cash and cash equivalents 38,014 46,605 23,038 13,752 997 1,244

Cash deposit of USD7,851,000 (2013: USD2,314,000; 2012: USD941,000) is pledged as security for banking facilities.

(a) Short term deposits with licensed banks

The weighted average interest rates of the short-term deposits at the reporting date was 2.11% (2013: 1.44%; 2012: 1.78%) per annum. The short-term deposits have weighted maturity period of 73 days (2013: 37 days; 2012: 32 days).

The foreign currency exposure profile represents the carrying amounts arising from currencies other than the functional currency of the respective entities in the Group. The foreign currency exposure profile of the short-term deposits with licensed banks at reporting date was as follows:

Group Company

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

United States Dollar - 61 - - - -

Ringgit Malaysia 2 2 - 2 2 -

Sterling Pound - 761 690 - 761 690

Chinese Renminbi 6,528 26,297 - - - -

(b) Cash at bank and on hand

The foreign currency exposure profile represents the carrying amounts arising from currencies other than the functional currency of the respective entities in the Group. The foreign currency exposure profile of the cash at bank and on hand at reporting date was as follows:

Group Company

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

United States Dollar 7,297 3,300 5,532 - - -

Euro 593 294 367 357 - -

Sterling Pound 176 96 64 151 89 64


Chinese Renminbi 705 388 - - - -


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20 SHARE CAPITAL

The movements in the authorised and paid-up share capital are as follows:

The Group/Company30.6.2014

The Group/Company30.6.2013

ParvalueUSD

Numberof shares

(’000)USD

(’000)

Numberof shares

(’000)USD

(’000)

Authorised

At 1 July / 30 June 0.10 250,000 25,000 250,000 25,000

Issued and fully paid-up

At 1 July 0.10 164,602 16,460 154,492 15,449

Exercise of share options 0.10 120 12 110 11

Issuance of shares 0.10 - - 10,000 1,000

At 30 June 0.10 164,722 16,472 164,602 16,460

21 SHARE PREMIUM

The Group/Company

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

At 1 July 162,898 132,330 131,620

Exercise of share options 342 246 710

Issuance of shares - 30,322 -

At 30 June 163,240 162,898 132,330

22 FOREIGN EXCHANGE TRANSLATION RESERVE

The foreign exchange translation reserve arose from the translation of the financial statements of the foreign operations into the Group’s presentation currency of USD.

The GroupUSD’000

At 1 July 2012 1,868

Exchange differences arising on translation of foreign operations for the financial year ended 30 June 2013

(436)

At 30 June 2013 1,432

Exchange differences arising on translation of foreign operations for the financial year ended 30 June 2014

(512)

At 30 June 2014 920


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23 SHARE OPTION RESERVE

The expense/(credit) arising from equity-settled share-based payment transaction recognised for employee services received during the year is shown as below:

Group Company

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

Expense/(credit)

arising from

equity-settled

share-based

payment

transactions 3,768 1,481 (595) 453 1,270 (1,522)

The Group/Company

30.6.2014USD’000

30.6.2013USD’000

At 1 July 1,530 204

Share option scheme compensation expense 3,768 1,481

5,298 1,685

Transfer to share capital and share premium (222) (155)

At 30 June 5,076 1,530

The Company maintains a Long-Term Incentive Plan (LTIP), the principal terms include a restriction on the Company issuing (or granting rights to issue) no more than 10 per cent of its issued ordinary share capital under the LTIP (and any other employee share plan) in any ten calendar year period. It is currently intended that, other than in exceptional circumstances, such as senior executive recruitment, all awards will be subject to performance conditions and that, the performance conditions will be linked principally to the Group’s sales growth. The awards are conditional on employment service requirements.

The LTIP recognises the fast growth and changing nature of the Company and the need to recruit and retain executives in different employment markets around the world. Accordingly, the LTIP allows for the Remuneration Committee to exercise significant discretion in exceptional cases where the Committee considers executives will bring particular value to shareholders.

The fair value of share options granted is estimated at the date of the grant using Black-Scholes, taking into account the terms and conditions upon which the options were granted.

30.6.2014 30.6.2013

Weightedaverageexerciseprice per

share

Numberof options

(’000)

Weightedaverageexerciseprice per

share

Numberof options

(’000)

At 1 July 0.05 6,356 0.06 4,773

Granted - 1,865 - 1,904

Exercised - (112) - (113)

Lapsed - (586) - (208)

At 30 June 0.01 7,523 0.05 6,356


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23 SHARE OPTION RESERVE (continued)

Details of share options granted that are outstanding as at 30 June 2014 are as follows:

Number ofoptions

outstanding’000

Weighted average

fair valueat grant date

(Sterling pound)Exercise price

per shareVesting

requirements Expiry

Grant-vest

Award 115 April 2008-15 April 2010

83 0.51 Sterling pound 1.58 Remain as employeeof the Company

17 April 2015

Award 230 November 2010-30 June 2015

1,553 1.29 Nil Sales target andthree years’ service

-NA-

Award 320 September 2011-30 June 2015

2,116 0.81 Nil Sales target andthree years’ services

-NA-

Award 414 March 2013-14 September 2015

247 2.53 – 3.84 Nil Three years’ service -NA

Award 57 June 2012-7 June 2015

307 1.36 Nil Three years’ services -NA-

Award 61 July 2012-7 June 2015

35 1.46 Nil Services rendered -NA-

Award 71 Jan 2014-30 June 2014

6 4.78 Nil Services rendered -NA-

Award 81 August 2012-31 July 2015

50 2.01 Nil Three years’ service -NA-

Award 93 October 2012-4 July 2015


-NA-

Award 108 October 2013-8 October 2016


-NA-

Total 7,523

The number of exercisable options as at the reporting date was 82,500 (2013: 132,500).

The related weighted average share price at the time of exercise was GBP6.06 (2013: GBP2.41) per share.


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24 BORROWINGS

The Group

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

Current portion:

- Term loans (a) 123,649 27,452 17,029

- Hire purchase (b) 32 37 40

Total current portion 123,681 27,489 17,069

Non-current portion:

- Term loans (a) 2,133 96,513 83,921

- Hire purchase (b) 36 68 105

Total non-current portion 2,169 96,581 84,026

125,850 124,070 101,095

There is no foreign currency exposure in relation to the borrowings of the Group from 2012 to 2014.

(a) Term loans

The term loans bore a weighted average effective interest rate of 7.35% (2013: 7.44%; 2012: 7.29%) per annum at the reporting date.

The Group

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

Current portion:

Secured:

- Term loan 1 - - 1,458

- Term loan 2 1,676 1,527 838

- Term loan 3 92,108 5,271 5,247

- Term loan 4 12,910 20,654 9,486

- Term loan 5 16,955 - -

Total current portion 123,649 27,452 17,029

Non-current portion:

Secured:

- Term loan 2 2,133 3,758 3,110

- Term loan 3 - 92,755 80,811

Total non-current portion 2,133 96,513 83,921

125,782 123,965 100,950


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24 BORROWINGS (continued)

(a) Term loans (continued)

Term loans 1 to 3 are secured by way of:-

(i) a fixed and floating charge over present and future assets and the freehold property of a subsidiary; (ii) corporate guarantee by the Company; and(iii) legal charge over landed property of a subsidiary.

Term loan 3 is a five year working capital facility starting from June 2010 with four year drawdown period to June 2014. Based on the drawdown on 30 June 2014, this has a monthly revolving service requirement covering USD92.1 million of repayments up to June 2015.

On 8 July 2014 the Group repaid early USD20 million of the outstanding balance of Term Loan 3.

On 3 September 2014, the Group was offered a new 5 year loan facility totalling RM235 million (USD 71 million) by its principal banker and provider of Term Loans 1, 2 and 3. The new facilities offer has been accepted and subject to contract will be available for drawdown from September 2014. At completion the new facility will be used to repay in full Term Loans 1, 2 and 3. Interest on the new facilities is expected to be 4.01%.

Term loan 4 is secured as follows:-

(i) a legal charge over certain assets of a subsidiary; and(ii) a legal charge over the prepaid land lease payments of a subsidiary.

By 31 August 2014 the Group had repaid early USD7 million of the outstanding balance of Term Loan 4.

Term loan 5 is secured through trade receivables financing.

By 31 August 2014 the Group had repaid USD7 million of Term Loan 5.

(b) Hire purchase

The Group leases motor vehicles under finance leases with lease terms of 5 to 9 years (2013: 5 to 9 years; 2012: 5 to 9 years). At the end of the lease term, title to the assets will be transferred to the Group upon full payment being made.

The Group

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

Analysis of hire purchase:

- No later than one year 40 46 50

- Later than 1 year and no later than 5 years 45 85 125

- Later than 5 years - - 5

85 131 180

Less: Future finance charges (17) (26) (35)

Present value 68 105 145

The present value of hire purchase is as follows:

- No later than one year 32 37 40

- Later than 1 year and no later than 5 years 36 68 101

- Later than 5 years - - 4

68 105 145

The hire purchases are secured by the rights to the leased motor vehicles which revert to the lessor in the event of defaults. The hire purchase bore a weighted average effective interest rate of 3.34% (2013: 3.34%; 2012: 3.13%) per annum at the reporting date.


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25 TRADE PAYABLES

The normal trade credit terms granted to the Group range from 0 to 90 days (2013: 0 to 90 days; 2012: 0 to 90 days).

The foreign currency exposure profile represents the carrying amounts arising from currencies other than the functional currency of the respective entities in the Group. The foreign currency exposure profile of the trade payables at the reporting date was as follows:

The Group

30.6.2014USD’000

30.6.201USD’000

31.7.2012USD’000

United States Dollar 126 814 51

Chinese Renminbi - 40 -

Sterling Pound - 64 -

26 OTHER PAYABLES, ACCRUALS AND DEFERRED INCOME

Group Company

30.6.2014USD’000

30.6.2013USD’000

(Restated)

1.7.2012USD’000

(Restated)

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

Non-current

Other payables 2,111 1,147 1,069 - - -

Deferred income 360 483 548 - - -

2,471 1,630 1,617 - - -

Current

Other payables 4,287 1,711 2,103 1,283 149 124

Deferred income 38 38 39 - - -

Accruals 6,039 5,671 3,781 511 725 443

10,364 7,420 5,923 1,794 874 567

Deferred income as at the reporting date represents a form of regional government financial assistance for the purchase of high technology plant equipment. The deferred income will be amortised over the useful life of 20 years.

The foreign currency exposure profile of the other payables at the reporting date was as follows:

Group Company

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

30.6.2014USD’000

30.6.2013USD’000

1.7.2012USD’000

United States Dollar 531 1,179 840 - - -

Euro 959 318 80 605 16 16

Sterling Pound 55 43 32 55 43 32

Australian Dollar 19 37 21 19 37 21



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27 NET ASSETS PER SHARE

The net assets per share is calculated based on the net assets book value at the reporting date of USD147,505,000 (2013: USD141,801,000; 2012: USD118,824,000) divided by the number of ordinary shares in issue at the reporting date of 164,722,000 (2013: 164,602,000; 2012: 154,492,000).

28 REVENUE

Revenue represents the invoiced value of products sold less sales tax, returns and trade discounts.

29 INCOME TAX EXPENSE

The Group

2014USD’000

2013USD’000

(Restated)

Current tax:

Current tax on profits for the year 393 325

Under/(Over) accruals in respect of prior years 74 (89)

467 236

Deferred tax:

Origination and reversal of temporary differences (202) (134)

265 102

The Company was granted a tax assurance certificate dated 18 August 2007 under the Exempted Undertakings Tax Protection Act, 1966 pursuant to which it is exempted from any Bermuda taxes (other than local property taxes) until 28 March 2016.

The subsidiary, PCSB, has been granted the Bio-Nexus Status by the Malaysian Biotechnology Corporation Sdn Bhd in which PCSB is entitled to a 100% income tax exemption for a period of 10 years on its first statutory income commencing in 2009. Upon the expiry of the 10-year incentive period, PCSB will be entitled to a concessionary tax rate of 20% on income derived from qualifying activities for a further period of 10 years.

A reconciliation of income tax expense applicable to the profit/loss before taxation at the applicable tax rate to income tax expense at the effective tax rate of the Group is as follows:-

The Group

2014USD’000

2013USD’000


Tax at the applicable tax rates in the respective countries 2,052 (1,091)

Tax effects of:

Non-deductible expenses 420 897

Non-taxable income (2,266) (23)

Under/(Over)provision of taxation 59 (89)

Tax losses not recognised - 408

Income tax expense 265 102


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30 PROFIT/LOSS FROM ORDINARY ACTIVITIES BEFORE TAXATION

Included in the profit/loss from ordinary activities before taxation are the following charges and credits:

The Group

2014USD’000

2013USD’000

Charges:

Raw materials and consumables used 36,685 30,633

Depreciation and amortisation 6,324 6,055

Directors remuneration 909 777

Share based payment expense 3,768 1,481

Interest expenses 9,253 8,416

Loss on fair value of biological assets - 628

Changes in inventories of finished goods 24,740 17,699

Wages and salaries 13,057 10,109

Defined contribution retirement plan 1,115 925

Operating lease 91 91

Credits:

Amortisation of deferred income 105 88


Interest income 273 181

31 PROFIT/(LOSS) PER SHARE

The basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to equity holders of the Company by the weighted average number of ordinary shares in issue:

The Group

2014 2013

Profit/(Loss) attributable to equity holders of the Company (USD’000) 2,316 (9,492)

Weighted average number of ordinary shares in issue (thousands) 164,638 163,515

Basic profit/(loss) per share (US Cents) 1.41 (5.80)

Diluted profit/(loss) per share (US Cents) 1.37 (5.80)

The calculation of diluted earnings per share in 2013 does not assume the issue of potential ordinary shares under the Company’s Long Term Incentive Plan as these shares would have an anti-dilutive effect.


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32 SIGNIFICANT RELATED PARTY TRANSACTIONS

(a) Identities of related parties

The Group has related party relationships with:-

(i) its subsidiaries as disclosed in Note 7 to the financial statements;(ii) its joint ventures as disclosed in Note 8 to the financial statements; and(iii) the directors who are the key management personnel

(b) In addition to the information detailed elsewhere in the financial statements, details of the Group’s transactions and balances with related parties during the financial year are set out below:

(i) Related parties

The Group

2014USD’000

2013USD’000

Related parties

Gross sales of goods to joint ventures 4,689 3,080

(ii) Key management personnel

Key management includes executive and non-executive directors. The compensation paid or payable to key management for employee services is shown as below:

The Group

2014USD’000

2013USD’000

Paul Selway-Swift 88 88

Magomet Malsagov 377 260

John Robert Slosar (resigned w.e.f 31 March 2014) 21 40

Olivier Phillipe Marie Maes 46 45

Peter Lai Hock Meng 50 50

William Mitchell 315 294

897 777

The Group

2014USD’000

2013USD’000

Remuneration 745 687

Share based payment expense 152 90

897 777


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32 SIGNIFICANT RELATED PARTY TRANSACTIONS

(b) In addition to the information detailed elsewhere in the financial statements, details of the Group’s transactions and balances with related parties during the financial year are set out below (continued):

(ii) Key management personnel (continued)

Key management includes executive and non-executive directors. The compensation paid or payable to key management for employee services is shown as below (continued):

The interests of the Directors as at 30 June 2014 are as follows:

Number of ordinary share of USD0.10 each

At1.7.2013

Bought/optionsexercised

Sold/Transfer

At30.6.2014

The Company

Direct Interests

Paul Selway-Swift 412,171 2,300 (212,171) 202,300

Magomet Malsagov 14,855,612 - - 14,855,612

Christopher Pratt - 686,916 - 686,916

Peter Lai Hock Meng 180,300 11,100 - 191,400

William Mitchell 887,000 23,890 - 910,890

Olivier Phillipe Marie Maes 404,210 4,200 - 408,210

Number of option over ordinary share of USD0.10 each

At1.7.2013 Award Exercise

At30.6.2014

The Company

Direct Interests

Magomet Malsagov 582,000 104,640 - 686,640

Christopher Pratt - - - -

Peter Lai Hock Meng 6,400 7,900 (11,100) 3,200

William Mitchell 437,000 92,170 - 529,170

Olivier Phillipe Marie Maes - 7,100 (4,200) 2,900


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33 SEGMENTAL REPORTING

Management determines the Group’s operating segments based on the criteria used by the Chief Executive Officer (CEO) for making strategic decisions. Management considers the Group to be a single operating segment whose activities are the production, marketing and distribution of natural sweeteners and flavours.

From a geographical perspective, the Group is a multinational with operations located on all continents, but managed as one unified global organization. The Group’s markets and its supply chain are based in the Americas, EMEA (Europe, Middle East and Africa) and Asia Pacific.

2014USD’000

2013USD’000

Trading

Revenue 101,045 70,200

Cost of sales (64,403) (52,382)

Gross margin 36,642 17,818

Gross margin % 36% 25%

Other income 434 423


Adjusted operating profit 17,216 981




Share of loss in joint ventures* (503) (355)



EBITDA 18,162 5,145

Adjusted EBITDA 22,862 9,062

Reconciliation of Adjusted EBITDA to profit/(loss) for the financial year:

Adjusted EBITDA 22,862 9,062

Share based payment (3,768) (2,379)

Other (932) (1,538)

(4,700) (3,917)

EBITDA 18,162 5,145



Depreciation and amortisation (6,324) (6,055)


* Under segmental reporting, share of loss in joint venture includes Group’s realised profit amounting to USD0.8 million, arising from its sales to the

joint ventures. Under the statement of comprehensive income, the profit is included within the gross profit line.


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33 SEGMENTAL REPORTING (continued)

2014USD’000

2013USD’000

Cash Flow



Increase in receivables (4,423) (6,883)

(Decrease)/Increase in payables (2,906) 9,898

Net cash from/(used in) operations 15,469 (9,593)

Net cash from financing activities (2,322) 52,483

Gross cash at end of the financial year 45,865 48,919

Statement of Financial Position

Property, plant and equipment 63,715 65,889

Inventories 86,519 86,475

Third party trade receivables 29,107 24,439

Receivables from joint ventures 10,205 10,340

Cash and bank balances 45,865 48,919

Total assets 292,791 287,657

Borrowings 125,850 124,070

Net debts 79,985 75,151

Geographical information

BermudaUSD’000

AsiaUSD’000

Europe*USD’000

AmericasUSD’000 Goodwill

TotalUSD’000

30 June 2014

Sales - 15,518 10,540 74,987 - 101,045

Non-current assets 1,577 100,894 1,624 11,601 1,806 117,502

30 June 2013

Sales - 14,933 6,802 48,465 - 70,200

Non-current assets 1,084 91,111 1,627 15,885 1,806 111,513

Basis of attributing sales by geographical region is based on location of sales.

The primary performance indicators used by the Group are revenues, gross margin %, adjusted EBITDA, net cash from operations, gross cash and borrowings.

EBITDA is calculated as net profit for the year reported on the face of the profit and loss account, adjusted for interest, taxation, depreciation and amortisation.

Adjusted EBITDA is defined as EBITDA with other expenses (principally the charge of the Group’s LTIP scheme) added back.

The entity is domiciled in Bermuda. The entity’s non-current assets are located in countries other than Bermuda. There is no revenue from Bermuda.

*The Europe segment includes results and sales to the Group’s European joint ventures - see Note 32.


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34 COMMITMENTS

(a) Capital commitments

Capital expenditure at the reporting date is as follows:

The Group

2014USD’000

2013USD’000

Approved and contracted for property, plant and equipment 1,736 544

(b) Operating lease commitments

The Group also leases corporate office under non-cancellable operating lease agreements. The lease expenditure charged to the profit or loss during the year is disclosed in Note 30.

The future aggregate minimum lease payments under non-cancellable operating lease are as follows:

Group and Company

2014USD’000

2013USD’000

The present value of operating lease is as follows:

- No later than one year 91 91

- Later than 1 year and no later than 5 years 217 308

308 399

35 EVENTS AFTER THE REPORTING PERIOD

Other than subsequent events relating to term loans and the securing of a new 5 year principal borrowing facility set out in Notes 4 and 24 previously, events after the period end comprise:

(a) Long-Term Incentive Plan (LTIP) Options – new options granted to directors

The Board of the Company had on 4 July 2014 granted options under the Group’s Long-Term Incentive Plan (LTIP) to certain Non-Executive Directors in lieu of their fees covering six months period from 1 July 2014 to 31 December 2014 amounting to 11,750 shares. These options have an exercise price of GBP6.04 per share (USD10.2 per share), calculated based on 20 days volume weighted average price ("VWAP") to 30 June 2014 and shall vest on 1 January 2015.

(b) Further investment in joint venture

On 7 August 2014 the Group invested a further USD0.3 million in its NP Sweet AS Joint Venture to support further sales growth.

36 FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES

Fair value is defined as the amount at which the financial instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced sale or liquidation.

The following methods and assumptions are used to estimate the fair value of each class of financial instruments:-

(a) Short-term receivables/payables

The carrying amounts approximate their fair values due to the relatively short-term maturity.

(b) Long-term borrowings

The carrying amounts approximate the fair values of these instruments as the long-term borrowings are based on floating market interest rates.


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37 IMPACT OF CHANGE IN ACCOUNTING POLICY

Upon adoption of IFRS 11, all joint arrangements are treated as joint venture. The impact on the financial statements are as follows:

(a) Statement of financial position

As at 30 June

2014USD’000

Change in accounting

policyUSD’000

As at 30 June 2014 as

presentedUSD’000

As at 30 June

2013 (previously

stated)USD’000


policyUSD’000

As at 30 June

2013 (restated)USD’000

As at 1 July 2012

(previously stated)

USD’000


policyUSD’000

As at 1 July 2012

(restated)USD’000

Investment in joint ventures

- 149 149 - 330 330 - 171 171

Other non-current assets 118,010 (657) 117,353 111,693 (510) 111,183 108,756 (289) 108,467

Non-current assets 118,010 (508) 117,502 111,693 (180) 111,513 108,756 (118) 108,638

Current assets 175,759 (470) 175,289 177,714 (1,570) 176,144 124,593 (920) 123,673

Total assets 293,769 (978) 292,791 289,407 (1,750) 287,657 233,349 (1,038) 232,311

Total equity 148,227 - 148,227 142,516 - 142,516 119,476 - 119,476

Amount due to joint venture partners(*)

100 (100) - 517 (517) - 789 (789) -

Other current liabilities 138,550 1,374 139,924 49,251 (2,380) 46,871 27,916 (1,318) 26,598

Current liabilities 138,650 1,274 139,924 49,768 (2,897) 46,871 28,705 (2,107) 26,598

Non-current liabilities 6,892 (2,252) 4,640 97,123 1,147 98,270 85,168 1,069 86,237

Total liabilities 145,542 (978) 144,564 146,891 (1,750) 145,141 113,873 (1,038) 112,835

Total equity and liabilities

293,769 (978) 292,791 289,407 (1,750) 287,657 233,349 (1,038) 232,311

(*) Amount due to joint venture partners were included in other payables and accruals as disclosed in consolidated statement of financial position


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37 IMPACT OF CHANGE IN ACCOUNTING POLICY (continued)

(b) Statement of comprehensive income

For the year ended

30 June 2014USD’000

Impact of change in accounting

policyUSD’000

For year ended 30 June 2014 as presented

USD’000

For year ended 30 June 2013

USD’000


policyUSD’000


(restated)USD’000

Revenue 101,605 (560) 101,045 71,206 (1,006) 70,200

Cost of sales (64,136) 566 (63,570) (53,023) 856 (52,167)

Other expenses (net) (35,029) 1,475 (33,554) (27,661) 872 (26,789)

Share of loss in joint ventures

- (1,336) (1,336) - (570) (570)

Profit/(loss) before taxation 2,440 145 2,585 (9,478) 152 (9,326)

Income tax (expense)/credit

(120) (145) (265) 50 (152) (102)

Profit/(Loss) for the period 2,320 - 2,320 (9,428) - (9,428)

Other comprehensive income/(loss) (net of tax):

(509) - (509) (432) - (432)

Total comprehensive income/( loss) for the period (net of tax)

1,811 - 1,811 (9,860) - (9,860)

(c) Statement of cash-flow

For the yearended

30 June 2014USD’000


policyUSD’000

For year ended 30 June 2014 as presented

USD’000


USD’000


policyUSD’000


(restated)USD’000

Cash flows for operating activities 4,316 925 5,241 (18,869) 1,022 (17,847)

Cash flows for investing activities (11,416) 67 (11,349) (10,101) (520) (10,621)

Cash flows for financing activities (1,356) (966) (2,322) 52,793 (310) 52,483Effects of foreign exchange rate changes on cash and cash equivalents

(161) - (161) (313) (135) (448)

Cash and cash equivalents at beginning of the financial period

46,681 (76) 46,605 23,171 (133) 23,038

Cash and cash equivalents at end of the financial period

38,064 (50) 38,014 46,681 (76) 46,605


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Internet

PureCircle Group operates three websites which are updated regularly to cater for different information needs:

Investors and corporate stakeholderswww.purecircle.com

Consumerswww.steviapurecircle.com

Health professionals, customers, policy makers, consumerswww.globalsteviainstitute.com

Investor Relations

Request for further copies of the annual report or other investor relations matters should be addressed to PureCircle’s office.

Annual General Meeting

The Annual General Meeting (AGM) will be held on 3 December 2014, a formal notice of AGM will be sent to shareholders together with the annual report for financial year 2014.

2015 Financial Year and Corporate Calendar

Half year end 31 December 2014Interim results March 2015Year end 30 June 2015Final results September 2015

designed and produced by dewende.comPrinted on recycled paper

PureCircle Offices

Registered officeClarendon House2 Church StreetHamilton HM 11Bermuda.

Corporate HeadquartersMalaysia

10th Floor, West WingRohas Perkasa No. 9 Jalan P. Ramlee 50250 Kuala Lumpur, Malaysia.T +603 2166 2206F +603 2166 2207

Sales & Marketing Head Office

USA915 Harger Road, Suite 250Oak Brook, IL 60523, USA.T +630 361 0374F +630 361 0384

Regional Sales

Contact details:

US or Canada : [email protected]

Latin America : [email protected]

Europe, Middle East or Africa : [email protected]

Asia Pacific : [email protected]

Auditors

PricewaterhouseCoopersChartered AccountantsLevel 10, 1 SentralJalan Travers, Kuala Lumpur SentralPO Box 1019250706 Kuala Lumpur, Malaysia.

Nominated Adviser

RFC Ambrian LimitedLevel 14, 19-31 Pitt StreetSydney NSW 2000Australia.

Level 28, QV1 Building 250 St George’s Terrace Perth WA 6000 Australia.

Brokers

Mirabaud Securities Limited 33 Grosvenor Place London SW1X 7HY United Kingdom.

Liberum Capital Limited Ropemaker Place, Level 1225 Ropemaker Street London EC2Y 9LYUnited Kingdom.

Macquarie Capital (Europe) LimitedRopemaker Place28 Ropemaker StreetLondon EC2Y 9HDUnited Kingdom.

Share Registrar

In Jersey (Shares)Computershare Investor Services (Jersey) LimitedQueensway House, Hilgrove StreetSt Helier, JerseyJE1 1ESChannel Islands.

In the UK (Depositary Interests)Computershare Investor Services plcThe Pavilions, Bridgwater RoadBristol BS13 8AE, United Kingdom.

Shareholder's Information

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Annual Report 2014

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