TIDMMIK
RNS Number : 7615P
Kingdom Meikles Limited
30 March 2009
KINGDOM MEIKLES LIMITED
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008
+----------------------------------------------------------------------------+
| SALIENT FEATURES |
| References are to Zimbabwe dollars (quintillions) |
+----------------------------------------------------------------------------+
| Revenue |
| $237,378 |
| |
+----------------------------------------------------------------------------+
| Operating profit |
| $980,479 |
| |
+----------------------------------------------------------------------------+
| Attributable profit |
| $1,279,000 |
| |
+----------------------------------------------------------------------------+
| Cash generated and funds available |
| Funds generated from operations were $3,303 |
| Funds on hand amount to $1,762,071 |
| |
+----------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------+
| References are to unaudited United States Dollars ( in full) |
+----------------------------------------------------------------------------+
| Revenue |
| $55,762,864 |
| |
+----------------------------------------------------------------------------+
| Operating profit |
| $10,225,863 |
| |
+----------------------------------------------------------------------------+
| Attributable loss |
| $127,484,452 |
| |
+----------------------------------------------------------------------------+
| Cash generated and funds available |
| Funds generated from operations were $13,072,707 |
| Funds on hand amount to $50,398,987 |
| |
+----------------------------------------------------------------------------+
Chairman's Statement
The results of Kingdom Meikles Limited (KML) for the year ended 31 December 2008
are presented during extremely trying times externally and internally for the
Group in its inaugural year as a merged entity. The business environment in 2008
was characterised by unprecedented socio-economic and political developments in
Zimbabwe where most of the Group's subsidiaries are located. The Zimbabwe
economy was bedevilled by the use of multi-currencies, world-record
hyper-inflation figures, multiple exchange rates and currency debasing, to
mention a few. On the other hand, the world economy experienced an astonishing
global melt-down triggered by the US and UK mortgage and banking crises which
had a drag on regional economies of South Africa, Malawi and Botswana, where KML
has subsidiary and associate companies.
The financial information is in historical cost and is presented solely to meet
statutory requirements. Inflation-adjusted figures are not available because of
the lack of Consumer Price Indices (CPI) information but, in any case, the
validity of such presentations and what can be drawn from the financials has no
real meaning. Due to the usage of multi-currencies in our trading, the volatile
exchange rate experienced in Zimbabwe and the resultant accounting complexities,
our auditors' opinion on the historical cost financial statements is qualified
on the basis that this information does not present a true and fair view of the
financial status of the Group. The Institute of Chartered Accountants of
Zimbabwe, along with the Zimbabwe Stock Exchange, have provided guidelines to
all preparers as to the content of the accounting qualification and these have
been incorporated in the final presentation of the financial statements of the
Group. With the introduction of FOLIWARS trading (retailing licences to trade in
foreign currency) combined with other direct export related Group operations,
the shift during the latter part of the year was towards the US Dollar as a
functional currency for operations, excluding the Kingdom Financial Holdings
Limited Group. The Board has taken a view that exchange rates applied to our
accounts enable fair presentation at the appropriate time and US Dollar
financial statements have thus been presented as supplementary information for
the benefit of shareholders.
Key features of operations (any reference to amounts is in respect of US Dollar
figures)
Operating profit for the Group amounted to US$10,2 million compared with US$20,6
million for the prior year. Operations were affected by the hostile business
environment, aggravated in the last quarter by the dispute between significant
shareholders.
Corporate
There is dispute over the status of funds amounting to US$22,0 million (the
funds "earmarked for investment") held with Coolbay Investments (Pty) Ltd
(Coolbay), US$17, 8 million and Mentor Holdings Limited (Mentor), US$4,2
million, in South Africa. Neither the Board nor the Group's auditors have been
able to obtain satisfactory evidence that the funds exist in tangible forms in
respect of Coolbay. In the circumstances, a full provision has been made for the
sum of US$17,8 million in respect of the capital and interest. Confirmation has
been received by the external auditors that the US$4,2 million held by Mentor is
recoverable in a form other than cash. Satisfactory confirmation of the
existence of the funds was provided by Coolbay and Mentor in the prior year. The
US$22,0 million is the subject of current litigation in South Africa for the
recovery of the full value and the Directors are pursuing all means to minimise
the risk of permanent loss in value to shareholders. So far as concerns the
Mentor funds, the litigation claim is on the basis of recoverability of the cash
on terms that are acceptable to the Directors.
The measurement of goodwill, which originates from the merger last year and the
acquisition of the Cape Grace, has been reviewed at 31 December 2008. At 31
December 2007 the carrying value was US$131,3 million being the translation from
Zimbabwe dollars at the exchange rate at 31 December 2007. During 2008 the
economy became stressed and the view taken at the time of the merger has
changed. These factors together with the current uncertainty about the future,
makes it necessary to examine the carrying value of this intangible asset.
Accordingly, an impairment of US$127,2 million has been made. The remaining
balance of US$4,1 million is in respect of the Cape Grace Hotel, which was
impaired from US$9,4 million.
KML is now integrated as one entity with broad operating policies, standards,
structures and systems. Synergistic benefits were obtained in pooled treasury
services, financial structures and shared technologies and infrastructure. A job
grading exercise throughout the Group has now been completed. In addition,
merged facilities with critical mass in the pension fund and private medical aid
services have been obtained. The Group's balance sheet strength and enhanced
investor relations profile enabled borrowing facilities with local banks and
international development financial institutions throughout the year. KML
successfully re-negotiated a term sheet for the Group's US$34 million resources
at the Reserve Bank of Zimbabwe (RBZ) and capitalised the Zimbabwe financial
services subsidiaries to the tune of US$22,5 million. Regrettably, the Group has
not yet made any progress in accessing a further US22,0 million which was lodged
with Coolbay and Mentor, at significant opportunity cost.
Kingdom Financial Holdings Limited
* Operating profit decreased from US$8,2 million in 2007 to US$6,5 million in
2008.
* Customer deposits increased by 71% from US$10,2 million in 2007 to US$17,4
million in 2008.
* Loans and advances as a percentage of total assets were constant for both years
at 8%.
* Non-interest income to total income increased from 10% in 2007 to 60% in 2008.
* Prior to mid November 2008 the Group had achieved organic growth across core
businesses.
* For November and December 2008 the Group did not record any meaningful income
from its core business.
* The Group met the new Reserve Bank of Zimbabwe (RBZ) capitalisation rules with
the transfer of US$22,5 million of KML's funds held with the RBZ.
* Kingdom Bank Limited successfully upgraded its Globus Banking system and
introduced POS devices in some major retail outlets in Zimbabwe with encouraging
results.
Meikles Africa Hotels
* Operating profit was US$5,4 million (2007 - US$7,7 million).
* Group occupancy decreased from 43% in 2007 to 41% with the major decrease coming
from Victoria Falls Hotel (45% to 38%).
* Victoria Falls Hotel was affected by the global economic slowdown, particularly
in the USA and travel warnings to Zimbabwe.
* Meikles Hotel was slightly up (30% to 31%) on prior year and the Cape Grace
Hotel slightly down (74% to 70%).
* Presidential and Government elections during the year contributed to Meikles
Hotel maintaining prior year occupancies.
* The refashioning programme of all rooms and public areas at the Cape Grace was
completed at a cost of US$6 million (R60 million). Occupancy was affected
adversely during the programme.
Tanganda Tea Company Limited
* Operating profit was US$4,2 million compared to US$7,2 million for the prior
year.
* Bulk tea production of 5124 tonnes was 23% down on the prior year. Poor rains in
November and December 2008 affected production at the beginning of the season.
* Export Sales of bulk tea were 4233 tonnes for 2008 compared with 4162 tonnes for
2007.
* Domestic beverage volumes were 1159 tonnes compared to 2363 tonnes last year,
largely a result of the change in trading terms between suppliers and retailers,
as well as erratic supplies of packaging material. Export sales of 209 tonnes
were in line with last year.
* The capital expenditure programme totalling US$1,5m for mechanisation of
plucking was completed during the year and this is beginning to improve yields.
* Both the quality and the prices of tea have improved in 2009.
Retail
* The division recorded an operating loss of US$5,1 million compared with a loss
of US$3,9 million for 2007.
* Lack of stock and the inability to source working capital cost-effectively
severely constrained cash flows and profitability during the year.
* Terms of trade moved more to consignment stock transactions particularly for
Department Stores.
* Security of tenure in key branches was maintained whilst three leases expired
and were not renewed.
* Department Stores closed seven marginal Meikles and Clicks branches countrywide
and opened a Barbours branch at Borrowdale Village, while two new TM
Supermarkets, in Bulawayo and Victoria Falls respectively, will be opened in the
second quarter of 2009.
* Due to lack of access to some of the Group's own capital of US$22,0 million, the
retail division officially commenced trading in forex on 1 December 2008 with
meagre forex resources.
* On 30 December 2008, the flagship and restocked TM Supermarket at Borrowdale
Village experienced a fire which destroyed the electrical wiring and parts of
the roof of the building. Very little stock was lost but trading ceased from
that outlet. Repairs are estimated at about US$500 000 and the branch will be
restored within the next couple of months.
* Since the introduction of FOLIWARS licences in October 2008, with effect from 1
December 2008 Pick 'n Pay have supported TM Supermarkets with stock.
* TM Supermarkets (Pvt) Ltd was specified by the Minister of State on 16 January
2009 following investigations into the affairs of KML. KML has appealed against
this specification.
* POS services linking with Kingdom Bank have been installed in major branches.
* The short term emphasis is on stock holding that will turn quickly.
Cotton Printers
* Operating profit was US$334 000 compared with a profit of US$1,2 million for the
prior year.
* The focus has been on yarn production with the weaving factory non-operational.
The future viability of weaving is under review.
* Yarn production did not meet targets because of erratic lint supply and
difficulties in meeting seasonal funding requirements. However, the position has
improved in the new financial year.
* Facilities of US$1 million are being sought to restore machinery and increase
capacity to supply regional markets.
Board, Shareholder and Litigation issues
Shareholders will recall that on 22 September 2008, a notice ("the Notice")
requesting an Extraordinary General Meeting (EGM) was issued by the "convening
Shareholders" led by the former Chairman, Mr J. R. T. Moxon, who sought to
reconstitute the Board of Directors of KML.
Prior to the issuance of the Notice, in March 2008 a call and put option
agreement ("the option agreement") for the sale of the Cape Grace Hotel was
entered into between KML and Cape Grace Hotel Limited (CGHL), (a wholly owned
KML subsidiary incorporated in the British Virgin Islands, which in turn wholly
owns the South African Cape Grace Group of Companies, including the Cape Grace
Hotel) on the one hand, and Mentor Africa Limited, on the other. In August 2008
"long form" agreements of this option agreement were prepared. Also, in August
2008, without the authority of the Board, Mr Moxon signed these "long form"
agreements. The former Chairman then sought to have his action ratified by the
Board as he believed it was in the interests of the Group, since he felt that
there was a breakdown in trust between management and Mentor Africa on the
transaction. He was also concerned that Mentor Africa might litigate if the
agreements were not ratified. He believed it was not in the interests of the
Group to be involved in any litigation as it could potentially lead to financial
prejudice and a loss of reputation to the Group. The Board did not ratify the
signing of the "long form" agreements as it was of the view that certain issues
which included an independent valuation of the Cape Grace Hotel and compliance
with all regulatory issues, including RBZ exchange control and Zimbabwe Stock
Exchange (ZSE) requirements, had to be addressed and resolved first before there
could be ratification.
It has subsequently become clear that central to the alleged discord in the
Notice to Shareholders is the failure by the Board to ratify Mr Moxon's signing
of the "long form" agreements and the request by management for the repayment of
the monies deposited with Mentor. Management had requested the repayment of
these funds in July 2008, as the Group urgently needed the funds to recapitalise
its businesses, particularly the restocking of its retail operations. Such
request came after the Group was unable to raise US Dollar finance for
operations from a private placement with international investors, due to the
then political and economic uncertainty in Zimbabwe. Such private placement was
attempted both before and after the 2008 March elections.
Following the issuance of the Notice, a Board Meeting was convened at the end of
September 2008, to discuss the Company's response to the convening shareholders
notice for the EGM, as Mr Moxon had given the Board no prior notice that the
Notice was to be issued. At such meeting Mr Moxon was appraised of the
potentially cataclysmic consequences if he proceeded with the action detailed in
the Notice and instead, he was urged to negotiate an amicable settlement with
the parties he was at loggerheads with, principally the Group Chief Executive
Officer (GCEO) Mr N. M. K. Chanakira. At this meeting a motion was moved for Mr
Moxon to step down as Chairman and which motion was passed. The Board members
then nominated me as Acting Chairman until the EGM. At the Board meeting held on
1 November 2008, my mandate was extended.
Following this very public spat, Mr Chanakira saw fit to make a formal report of
externalisation of funds and exchange control issues concerning Mr Moxon and
Coolbay Investments (Pty) Ltd. Subsequently a court action was instituted in the
High Court by African First Renaissance Corporation Ltd against both the
convening shareholders and KML. After hearing the matter, the High Court ruled
that the Notice issued by the Convening Shareholders was not done in accordance
with the law and accordingly was of no force or effect. In the circumstances the
EGM was not held. The convening shareholders for the EGM have lodged an appeal
against this ruling which is still to be heard by the Courts.
Numerous Board and informal meetings have been held since October 2008 in an
endeavour to resolve the impasse between the former Chairman and the GCEO and
their respective shareholder groups. Through time, it became increasingly clear
that there were material issues surrounding the Group's funds "earmarked for
investment", which management and the Board were not aware of together with
issues of detail in respect of the Cape Grace transaction which the Board
believed were not in the best interests of KML and which came to the Board's
attention subsequent to the signing of the option agreement.
The Board has focused its attention on running the business affairs of KML in
the best interests of all shareholders as a bank holding company and listed
entity.
KML has been the subject of intensive investigations by the RBZ, Zimbabwe
Republic Police (ZRP), and enquiries from the Anti-Corruption Commission,
Ministry of Industry and International Trade and the Ministry of Indigenisation.
It is appreciated that the longer they drag on the more difficult it will become
for all shareholders to maintain value and for stakeholder relationships to
continue with the business confidence that has existed. Efforts continue to try
and resolve the issues.
Audit Opinion on Statutory Financial Statements
Reference is made above to the auditors' opinion on the statutory financial
statements because of the current problems in the accounting environment. In
addition to these, there are specific issues relating to the Group which the
auditors have been unable to satisfy themselves on as to fair presentation.
At the balance sheet date material amounts receivable from related parties and
the shareholding of the Cape Grace Hotel were the subject of dispute or
litigation. Provision has been made in respect of the uncertainty of the
carrying value of any investment purportedly made from funds, that were held by
Coolbay, but confirmation has been received that the funds held by Mentor are
recoverable in a form other than cash, this itself being the subject of
litigation between KML and Mentor. The option agreement for the sale of Cape
Grace Hotel could also be the subject of litigation. KML has separately
disclosed the carrying value of the Cape Grace Hotel as a disposal group.
The auditors of Cape Grace Investments (Pty) Ltd (CGI), which is associated with
the Cape Grace Hotel and which ultimately owns the rights to the head lease of
the Cape Grace, will issue a qualified opinion on CGI as shares representing 26%
of its issued share capital were allotted to a third party, the Prelude Trust,
in February 2008, in contravention of the South African Companies Act as the
consideration price of R13 million has not been paid. This matter is connected
with the alleged Cape Grace Hotel transaction.
Because the satisfactory conclusion of the matters referred to above is
uncertain, the auditors have not been able to obtain sufficient audit evidence
to provide a basis for an audit opinion. Accordingly, they do not express an
opinion on the financial statements.
Way forward
* Although the plans for the future of the Group depend to a major extent on the
recovery of foreign funds and the resolution of the current shareholder dispute,
operations on the ground will continue in order to enhance the Group's viability
and sustainability.
* The financial services Group is adapting to changing markets which include
leveraging off foreign currency capacity in both the private and public sectors.
* Our Hotel Group is gearing itself for an upturn in the hospitality industry
through product enhancement for its local operations.
* The agriculture division will see improved production from the mechanisation
programme and will continue to examine the potential of agricultural projects in
the region.
* On the trading front in Zimbabwe, the transitional period of the mix in local
currency and US Dollars ceased from 1 February 2009 with full Dollarisation and
henceforth, the Group will focus on US Dollar accounting.
* KML's retail division is expected to continue to regain lost ground through
revamped business strategies, a new executive team, better terms of credit and
improved output from local manufacturers.
* The textiles business will focus on regional yarn supply as demand for its
product increases.
The Group has the backing of an asset base to implement these strategies and to
continue as a going concern, but all these plans are dependent on a return to a
normal business environment, which includes a resolution of the previously
mentioned issues.
Conclusion
The trading environment has stretched the loyalty and resilience of management
and staff to extreme limits. During the year Michael Wilson and Dave Mills
retired as Directors. The Board thanks them for their contributions. I thank my
fellow Directors for their respective valuable contributions and sound advice. I
wish to pay particular tribute to all management and staff who have performed
admirably, in spite of the odds which were heavily stacked against them.
M. A. Masunda
CHAIRMAN
27 March 2009
CONSOLIDATED INCOME STATEMENT - ZIMBABWE DOLLARS
For the year ended 31 December 2008
+--------------------------------------+------+------+---+---------------------------+
| | | |
+--------------------------------------+-----------------+---------------------------+
| (all amounts in quintillions of | | | |
| Zimbabwe dollars) | | | |
+--------------------------------------+-------------+---+---------------------------+
| | | | 31 December 2008 |
+--------------------------------------+-------------+---+---------------------------+
| | | | |
+--------------------------------------+-------------+---+---------------------------+
| | | | |
+--------------------------------------+-------------+---+---------------------------+
| Revenue | | | 237,378 |
+--------------------------------------+-------------+---+---------------------------+
| Operating profit before exchange | | | 982,423 |
| losses | | | |
+--------------------------------------+-------------+---+---------------------------+
| Exchange losses on net current assets | | | (1,944) |
+---------------------------------------------+------+---+---------------------------+
| Operating profit | | | 980,479 |
+--------------------------------------+-------------+---+---------------------------+
| Investment income | | | 11,967 |
+--------------------------------------+-------------+---+---------------------------+
| Finance costs | | | (1,318) |
+--------------------------------------+-------------+---+---------------------------+
| Net exchange gains on foreign funds | | | 1,185,308 |
+--------------------------------------+-------------+---+---------------------------+
| Provision for funds earmarked for | | | (623,877) |
| investment | | | |
+--------------------------------------+-------------+---+---------------------------+
| Share of profit of associate | | | 7,896 |
+--------------------------------------+-------------+---+---------------------------+
| Profit before taxation | | | 1,560,455 |
+--------------------------------------+-------------+---+---------------------------+
| | | | |
+--------------------------------------+-------------+---+---------------------------+
| Income tax expense | | | (284,708) |
+--------------------------------------+-------------+---+---------------------------+
| | | | |
+--------------------------------------+-------------+---+---------------------------+
| Profit for the year | | | 1,275,747 |
+--------------------------------------+-------------+---+---------------------------+
| Attributable to: | | | |
+--------------------------------------+-------------+---+---------------------------+
| Equity holders of the parent | | | 1,279,000 |
+--------------------------------------+-------------+---+---------------------------+
| Minority interest | | | (3,253) |
+--------------------------------------+-------------+---+---------------------------+
| | | | 1,275,747 |
+--------------------------------------+-------------+---+---------------------------+
| | | | |
+--------------------------------------+-------------+---+---------------------------+
| Basic earnings per share | | | 0.01 |
+--------------------------------------+-------------+---+---------------------------+
| IIMR Headline earnings per share | | | 0.01 |
+--------------------------------------+-------------+---+---------------------------+
| Weighted average number of shares | | | 243,857,762 |
+--------------------------------------+-------------+---+---------------------------+
| | | | |
+--------------------------------------+-------------+---+---------------------------+
| | | | |
+--------------------------------------+-------------+---+---------------------------+
| | | | |
+--------------------------------------+------+------+---+---------------------------+
CONSOLIDATED BALANCE SHEET - ZIMBABWE DOLLARS
At 31 December 2008
+--------------------------------------+--+------------+-----+---------+--------------+
| | | | |
+--------------------------------------+---------------+-----+------------------------+
| (all amounts in quintillions of | | | | |
| Zimbabwe dollars) | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| | | | | 31 December |
| | | | | 2008 |
+--------------------------------------+--+------------+---------------+--------------+
| | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| ASSETS | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Non-current assets | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Property, plant and equipment - | | | | 47 |
| banking | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Property, plant and equipment - non | | | | 1,148 |
| -banking | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Investment property - banking | | | | 10,028 |
+--------------------------------------+--+------------+---------------+--------------+
| Biological assets | | | | 43,506 |
+--------------------------------------+--+------------+---------------+--------------+
| Investment in associate - banking | | | | 35,908 |
+--------------------------------------+--+------------+---------------+--------------+
| Financial assets - non-banking | | | | 154,729 |
+--------------------------------------+--+------------+---------------+--------------+
| Other intangible assets | | | | 1 |
+--------------------------------------+--+------------+---------------+--------------+
| Balances with the Reserve Bank of | | | | 418,609 |
| Zimbabwe - non-banking | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Current assets - banking | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Balances with banks and | | | | 455,801 |
| cash | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Balances with the | | | | 832,322 |
| Reserve Bank of | | | | |
| Zimbabwe | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Financial assets at | | | | 1,412 |
| fair value through | | | | |
| profit and loss | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Advances and other | | | | 183,168 |
| accounts | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Available for sale | | | | 4,252 |
+--------------------------------------+--+------------+---------------+--------------+
| Current assets - non-banking | | | | 259,788 |
+--------------------------------------+--+------------+---------------+--------------+
| Disposal group assets | | | | 810,649 |
+--------------------------------------+--+------------+---------------+--------------+
| Total assets | | | | 3,211,368 |
+--------------------------------------+--+------------+---------------+--------------+
| | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| EQUITY AND LIABILITIES | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Attributable to equity holders of | | | | 1,512,168 |
| the parent | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Amounts in equity relating to | | | | 217,454 |
| disposal group | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Minority interest | | | | (3,253) |
+--------------------------------------+--+------------+---------------+--------------+
| Deferred tax | | | | 249,729 |
+--------------------------------------+--+------------+---------------+--------------+
| Other non-current liabilities | | | | 7,426 |
+--------------------------------------+--+------------+---------------+--------------+
| Current liabilities - banking | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Financial liabilities | | | | 15,484 |
| at fair value through | | | | |
| profit and loss | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Customer deposits | | | | 609,864 |
+--------------------------------------+--+------------+---------------+--------------+
| Other current | | | | 29,142 |
| liabilities | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Current liabilities- non-banking | | | | 13,409 |
+--------------------------------------+--+------------+---------------+--------------+
| Liabilities directly associated with | | | | 559,945 |
| disposal group | | | | |
+--------------------------------------+--+------------+---------------+--------------+
| Total equity and liabilities | | | | 3,211,368 |
+--------------------------------------+--+------------+-----+---------+--------------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - ZIMBABWE DOLLARS
For the year ended 31 December 2008
+-------------------------------------+----------+------------+----------+----------+----------+----------------+--------------+
| (all amounts in quintillions of | | | | | |
| Zimbabwe dollars) | | | | | |
+-------------------------------------+----------+------------+----------+--------------------------------------+--------------+
| | | | | | 31 December |
| | | | | | 2008 |
+-------------------------------------+----------+------------+----------+--------------------------------------+--------------+
| | | | | | |
+-------------------------------------+----------+------------+----------+--------------------------------------+--------------+
| Profit for the year | | | | | 1,279,000 |
+-------------------------------------+----------+------------+---------------------+---------------------------+--------------+
| Translation of foreign entity | | | | | 447,684 |
+-------------------------------------+----------+------------+---------------------+---------------------------+--------------+
| Available for sale | | | | | 2,938 |
+-------------------------------------+----------+------------+---------------------+---------------------------+--------------+
| Attributable to equity holders of | | | | | 1,729,622 |
| parent | | | | | |
+-------------------------------------+----------+------------+--------------------------------+----------------+--------------+
| Minorities | | | | | (3,253) |
+-------------------------------------+----------+------------+--------------------------------+----------------+--------------+
| Shareholders' equity at the end of | | | | | 1,726,369 |
| the year | | | | | |
+-------------------------------------+----------+------------+----------+----------+----------+----------------+--------------+
CONSOLIDATED CASH FLOW STATEMENT- ZIMBABWE DOLLARS
For the year ended 31 December 2008
+----------------------------------------+--+---------+----------+-----------+--------+
| | | | |
+----------------------------------------+--+--------------------+--------------------+
| | | | | | |
+----------------------------------------+--+---------+----------+-----------+--------+
| (all amounts in quintillions of | | | | | |
| Zimbabwe dollars) | | | | | |
+----------------------------------------+--+---------+----------+-----------+--------+
| | | | | 31 December 2008 |
+----------------------------------------+--+---------+----------+--------------------+
| Cash flows from operating activities | | | | |
+----------------------------------------+--+---------+----------+--------------------+
| Profit before taxation | | | | 1,560,455 |
+----------------------------------------+--+---------+----------+--------------------+
| Adjustments for: | | | | |
+----------------------------------------+--+---------+----------+--------------------+
| Non-operating cash flow | | | | (1,339,196) |
+----------------------------------------+--+---------+----------+--------------------+
| Non-cash items | | | | (10,649) |
+----------------------------------------+--+---------+----------+--------------------+
| Operating cash flow before working | | | | 210,610 |
| capital changes | | | | |
+----------------------------------------+--+---------+----------+--------------------+
| Working capital changes | | | | (207,307) |
+----------------------------------------+--+---------+----------+--------------------+
| Cash generated from operations | | | | 3,303 |
+----------------------------------------+--+---------+----------+--------------------+
| Income taxes paid | | | | (4,181) |
+----------------------------------------+--+---------+----------+--------------------+
| Net cash used in operating activities | | | | (878) |
+----------------------------------------+--+---------+----------+--------------------+
| | | | | |
+----------------------------------------+--+---------+----------+--------------------+
| Net cash used in investing activities | | | | (250,347) |
+----------------------------------------+--+---------+----------+--------------------+
| | | | | |
+----------------------------------------+--+---------+----------+--------------------+
| Net cash generated from financing | | | | 62,221 |
| activities | | | | |
+----------------------------------------+--+---------+----------+--------------------+
| | | | | |
+----------------------------------------+--+---------+----------+--------------------+
| Net decrease in cash and cash | | | | (189,004) |
| equivalents | | | | |
+----------------------------------------+--+---------+----------+--------------------+
| | | | | |
+----------------------------------------+--+---------+----------+--------------------+
| Cash and cash equivalents at the | | | | - |
| beginning of the year | | | | |
+----------------------------------------+--+---------+----------+--------------------+
| Net effect of exchange rate changes on | | | | 2,942,039 |
| cash and cash equivalents | | | | |
+----------------------------------------+--+---------+----------+--------------------+
| | | | | |
+----------------------------------------+--+---------+----------+--------------------+
| Translation of foreign entity | | | | (990,964) |
+----------------------------------------+--+---------+----------+--------------------+
| | | | | |
+----------------------------------------+--+---------+----------+--------------------+
| Cash and cash equivalents at the end | | | | 1,762,071 |
| of the year | | | | |
+----------------------------------------+--+---------+----------+-----------+--------+
SEGMENT INFORMATION - ZIMBABWE DOLLARS
For the year ended 31 December 2008
+------------------------+-------------------+----------+------------------------+--------------+
| | | |
+------------------------+------------------------------+---------------------------------------+
| (all amounts in quintillions of Zimbabwe | | | |
| dollars) | | | |
+--------------------------------------------+----------+------------------------+--------------+
| | | | 31 December |
| | | | 2008 |
+------------------------+-------------------+-----------------------------------+--------------+
| Revenue | | | |
+------------------------+-------------------+-----------------------------------+--------------+
| Banking | | | 10,363 |
+------------------------+-------------------+-----------------------------------+--------------+
| Retail | | | 67,450 |
+------------------------+-------------------+-----------------------------------+--------------+
| Hotels | | | 130,247 |
+------------------------+-------------------+-----------------------------------+--------------+
| Agriculture | | | 28,672 |
+------------------------+-------------------+-----------------------------------+--------------+
| Textiles | | | 646 |
+------------------------+-------------------+-----------------------------------+--------------+
| | | | 237,378 |
+------------------------+-------------------+-----------------------------------+--------------+
| Operating profit | | | |
+------------------------+-------------------+-----------------------------------+--------------+
| Banking | | | 911,509 |
+------------------------+-------------------+-----------------------------------+--------------+
| Retail | | | 5,583 |
+------------------------+-------------------+-----------------------------------+--------------+
| Hotels | | | 21,899 |
+------------------------+-------------------+-----------------------------------+--------------+
| Agriculture | | | 65,740 |
+------------------------+-------------------+-----------------------------------+--------------+
| Textiles | | | (1,315) |
+------------------------+-------------------+-----------------------------------+--------------+
| Corporate | | | (22,937) |
+------------------------+-------------------+-----------------------------------+--------------+
| | | | 980,479 |
+------------------------+-------------------+-----------------------------------+--------------+
| Segment assets | | | |
+------------------------+-------------------+-----------------------------------+--------------+
| Banking | | | 1,814,527 |
+------------------------+-------------------+-----------------------------------+--------------+
| Retail | | | 80,658 |
+------------------------+-------------------+-----------------------------------+--------------+
| Hotels | | | 925,094 |
+------------------------+-------------------+-----------------------------------+--------------+
| Agriculture | | | 85,585 |
+------------------------+-------------------+-----------------------------------+--------------+
| Textiles | | | 5,574 |
+------------------------+-------------------+-----------------------------------+--------------+
| Corporate | | | 299,930 |
+------------------------+-------------------+-----------------------------------+--------------+
| | | | 3,211,368 |
+------------------------+-------------------+----------+------------------------+--------------+
+--------------------------------------------+----+--------------+-----+--------------+
| SUPPLEMENTARY INFORMATION | | | |
| For the year ended 31 December 2008 | | | |
+--------------------------------------------+-------------------+-----+--------------+
| (all amounts in quintillions of Zimbabwe | | | | |
| dollars) | | | | |
+--------------------------------------------+----+--------------+-----+--------------+
| | | | | 31 |
| | | | | December |
| | | | | 2008 |
+--------------------------------------------+----+--------------+-----+--------------+
| | | | | |
+--------------------------------------------+----+--------------+-----+--------------+
| Capital expenditure | | | | 256,995 |
+--------------------------------------------+----+--------------+-----+--------------+
| Capital commitments authorised but not yet | | | | 553,689 |
| contracted for | | | | |
+--------------------------------------------+----+--------------+-----+--------------+
| Depreciation and impairment | | | | 8,972 |
+--------------------------------------------+----+--------------+-----+--------------+
| Borrowings | | | | 149,548 |
+--------------------------------------------+----+--------------+-----+--------------+
UNAUDITED CONSOLIDATED INCOME STATEMENT - US DOLLARS
For the year ended 31 December 2008
FOR CONVENIENCE PURPOSES ONLY
+--------------------------------+---+-------------------+--+---------------+-------------+
| | | |
+------------------------------------+----------------------+-----------------------------+
| (all amounts in full) | | | | |
+------------------------------------+-------------------+--+---------------+-------------+
| | | | 31 | 31 |
| | | | December | December |
| | | | 2008 | 2007 |
+------------------------------------+-------------------+--+---------------+-------------+
| | | | USD | USD |
+------------------------------------+-------------------+--+---------------+-------------+
| | | | | |
+------------------------------------+-------------------+--+---------------+-------------+
| Revenue | | | 55,762,864 | 90,779,848 |
+------------------------------------+-------------------+--+---------------+-------------+
| Operating profit | | | 10,225,863 | 20,577,562 |
+------------------------------------+-------------------+--+---------------+-------------+
| Investment income | | | 6,795,701 | 36,114 |
+------------------------------------+-------------------+--+---------------+-------------+
| Finance costs | | | (1,302,042) | (9,266) |
+------------------------------------+-------------------+--+---------------+-------------+
| Exchange gains and translation | | | 2,119,531 | 6,462,838 |
| adjustments | | | | |
+--------------------------------+-----------------------+--+---------------+-------------+
| Increase in value of quoted | | | 5,778 | 280,995 |
| investments | | | | |
+------------------------------------+-------------------+--+---------------+-------------+
| Share of profit of associate | | | 245,099 | 10,493 |
+------------------------------------+-------------------+--+---------------+-------------+
| Goodwill impairment | | | (127,178,851) | - |
+------------------------------------+-------------------+--+---------------+-------------+
| Provision for funds earmarked for | | | (17,825,063) | - |
| investment | | | | |
+------------------------------------+-------------------+--+---------------+-------------+
| (Loss) / profit before taxation | | | (126,913,984) | 27,358,736 |
+------------------------------------+-------------------+--+---------------+-------------+
| | | | | |
+------------------------------------+-------------------+--+---------------+-------------+
| Income tax (expense)/credit | | | (742,192) | 247,753 |
+------------------------------------+-------------------+--+---------------+-------------+
| | | | | |
+------------------------------------+-------------------+--+---------------+-------------+
| (Loss) / profit for the year | | | (127,656,176) | 27,606,489 |
+------------------------------------+-------------------+--+---------------+-------------+
| Attributable to: | | | | |
+------------------------------------+-------------------+--+---------------+-------------+
| Equity holders of the parent | | | (127,484,452) | 27,670,883 |
+------------------------------------+-------------------+--+---------------+-------------+
| Minority interest | | | (171,724) | (64,394) |
+------------------------------------+-------------------+--+---------------+-------------+
| | | | (127,656,176) | 27,606,489 |
+------------------------------------+-------------------+--+---------------+-------------+
| | | | | |
+------------------------------------+-------------------+--+---------------+-------------+
| Basic (loss) / earnings per share | | | (52.28) | 11.42 |
| (cents) | | | | |
+------------------------------------+-------------------+--+---------------+-------------+
| IIMR Headline earnings per share | | | 7.28 | 11.42 |
| (cents) | | | | |
+------------------------------------+-------------------+--+---------------+-------------+
| Weighted average number of shares | | | 243,857,762 | 242,301,554 |
+------------------------------------+-------------------+--+---------------+-------------+
| | | | | |
+------------------------------------+-------------------+--+---------------+-------------+
| | | | | |
+------------------------------------+-------------------+--+---------------+-------------+
| | | | | |
+--------------------------------+---+-------------------+--+---------------+-------------+
UNAUDITED CONSOLIDATED BALANCE SHEET - US DOLLARS
At 31 December 2008
FOR CONVENIENCE PURPOSES ONLY
+--------------------------------------+--+----+-------+--------------+-------------+
| | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| (all amounts in full) | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| | | | | 31 December | 31 December |
| | | | | 2008 | 2007 |
+--------------------------------------+--+----+-------+--------------+-------------+
| | | | | USD | USD |
+--------------------------------------+--+----+-------+--------------+-------------+
| ASSETS | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Non-current assets | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Property, plant and equipment - | | | | 11,237,521 | 2,710,649 |
| banking | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Property, plant and equipment - | | | | 70,245,424 | 60,402,159 |
| non-banking | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Investment property | | | | 286,500 | 703,615 |
+--------------------------------------+--+----+-------+--------------+-------------+
| Biological assets | | | | 4,857,050 | 3,357,438 |
+--------------------------------------+--+----+-------+--------------+-------------+
| Investment in associate - banking | | | | 1,025,927 | 91,047 |
+--------------------------------------+--+----+-------+--------------+-------------+
| Financial assets - non-banking | | | | 4,404,946 | 21,513,062 |
+--------------------------------------+--+----+-------+--------------+-------------+
| Goodwill | | | | - | 131,270,859 |
+--------------------------------------+--+----+-------+--------------+-------------+
| Other intangible assets | | | | 268,579 | 205,689 |
+--------------------------------------+--+----+-------+--------------+-------------+
| Balances with the Reserve Bank of | | | | 11,960,252 | 29,951,676 |
| Zimbabwe - non-banking | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Current assets - banking | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Balances with banks | | | | 13,022,886 | 4,742,682 |
| and cash | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Balances with the | | | | 23,780,635 | - |
| Reserve Bank of | | | | | |
| Zimbabwe | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Financial assets at | | | | 631,381 | 9,113,160 |
| fair value through | | | | | |
| profit and loss | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Advances and other | | | | 5,233,368 | 3,317,635 |
| accounts | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Available for sale | | | | 121,508 | - |
+--------------------------------------+--+----+-------+--------------+-------------+
| Acceptances | | | | - | 13,452 |
+--------------------------------------+--+----+-------+--------------+-------------+
| Current assets non-banking | | | | 10,881,254 | 17,779,552 |
+--------------------------------------+--+----+-------+--------------+-------------+
| Disposal group assets | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Other assets | | | | 25,748,996 | - |
+--------------------------------------+--+----+-------+--------------+-------------+
| Goodwill | | | | 4,092,008 | - |
+--------------------------------------+--+----+-------+--------------+-------------+
| Total assets | | | | 187,798,235 | 285,172,675 |
+--------------------------------------+--+----+-------+--------------+-------------+
| | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| EQUITY AND LIABILITIES | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Attributable to equity holders of | | | | 123,678,525 | 234,718,187 |
| the parent | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Amounts in equity relating to | | | | 6,384,502 | - |
| disposal group | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Minority interest | | | | 1,661,070 | 459,612 |
+--------------------------------------+--+----+-------+--------------+-------------+
| Deferred tax | | | | 20,546,415 | 16,401,348 |
+--------------------------------------+--+----+-------+--------------+-------------+
| Other non-current liabilities | | | | 212,184 | 10,465,772 |
+--------------------------------------+--+----+-------+--------------+-------------+
| Current liabilities - banking | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Customer deposits | | | | 17,424,673 | 10,217,658 |
+--------------------------------------+--+----+-------+--------------+-------------+
| Other current | | | | 1,246,523 | 2,330,551 |
| liabilities | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Current liabilities- non-banking | | | | 817,455 | 10,579,547 |
+--------------------------------------+--+----+-------+--------------+-------------+
| Liabilities directly associated with | | | | 15,826,888 | - |
| disposal group | | | | | |
+--------------------------------------+--+----+-------+--------------+-------------+
| Total equity and liabilities | | | | 187,798,235 | 285,172,675 |
+--------------------------------------+--+----+-------+--------------+-------------+
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - US DOLLARS
For the year ended 31 December 2008
FOR CONVENIENCE PURPOSES ONLY
+-----------------------------------------+----+----------+----------+--------+--------+-----------------+---------------+
| (all amounts in full) | | | | | |
+-----------------------------------------+----+----------+----------+-----------------------------------+---------------+
| | | | | | 31 December |
| | | | | | 2008 |
+-----------------------------------------+----+----------+----------+-----------------------------------+---------------+
| | | | | | USD |
+-----------------------------------------+----+----------+----------+-----------------------------------+---------------+
| | | | | | |
+-----------------------------------------+----+----------+----------+-----------------------------------+---------------+
| Loss for the year attributable to | | | | | (127,484,452) |
| equity holders of the parent | | | | | |
+-----------------------------------------+----+----------+-------------------+--------------------------+---------------+
| Translation of foreign entity | | | | | (1,244,138) |
+-----------------------------------------+----+----------+-------------------+--------------------------+---------------+
| Property revaluation | | | | | 24,156,867 |
+-----------------------------------------+----+----------+-------------------+--------------------------+---------------+
| Shares issued to staff share purchase | | | | | 781,803 |
| scheme | | | | | |
+-----------------------------------------+----+----------+-------------------+--------------------------+---------------+
| Scrip dividend - 2008 | | | | | 4,494 |
+-----------------------------------------+----+----------+-------------------+--------------------------+---------------+
| Available for sale | | | | | (849,884) |
+-----------------------------------------+----+----------+-------------------+--------------------------+---------------+
| Other reserves | | | | | (19,850) |
+-----------------------------------------+----+----------+-------------------+--------------------------+---------------+
| Attributable to equity holders of | | | | | (104,655,160) |
| parent | | | | | |
+-----------------------------------------+----+----------+----------------------------+-----------------+---------------+
| Minorities | | | | | 1,201,458 |
+-----------------------------------------+----+----------+----------------------------+-----------------+---------------+
| Shareholders' equity at the beginning | | | | | 235,177,799 |
| of the year | | | | | |
+-----------------------------------------+----+----------+-------------------+--------------------------+---------------+
| Shareholders' equity at the end of the | | | | | 131,724,097 |
| year | | | | | |
+-----------------------------------------+----+----------+----------+--------+--------+-----------------+---------------+
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT - US DOLLARS
For the year ended 31 December 2008
FOR CONVENIENCE PURPOSES ONLY
+-----------------------------------------+--+------------+---------------------+
| | | |
+-----------------------------------------+--+----------------------------------+
| (all amounts in full) | | | |
+-----------------------------------------+--+------------+---------------------+
| | | | 31 December 2008 |
+-----------------------------------------+--+------------+---------------------+
| | | | USD |
+-----------------------------------------+--+------------+---------------------+
| Cash flows from operating activities | | | |
+-----------------------------------------+--+------------+---------------------+
| Loss before taxation | | | (126,913,984) |
+-----------------------------------------+--+------------+---------------------+
| Adjustments for: | | | |
+-----------------------------------------+--+------------+---------------------+
| Non-operating cash flow | | | (5,341,818) |
+-----------------------------------------+--+------------+---------------------+
| Non-cash items | | | 136,135,118 |
+-----------------------------------------+--+------------+---------------------+
| Operating cash flow before working | | | 3,879,316 |
| capital changes | | | |
+-----------------------------------------+--+------------+---------------------+
| Working capital changes | | | 9,193,391 |
+-----------------------------------------+--+------------+---------------------+
| Cash generated from operations | | | 13,072,707 |
+-----------------------------------------+--+------------+---------------------+
| Income taxes paid | | | (276,880) |
+-----------------------------------------+--+------------+---------------------+
| Net cash generated from operating | | | 12,795,827 |
| activities | | | |
+-----------------------------------------+--+------------+---------------------+
| | | | |
+-----------------------------------------+--+------------+---------------------+
| Net cash used in investing activities | | | (6,852,241) |
+-----------------------------------------+--+------------+---------------------+
| | | | |
+-----------------------------------------+--+------------+---------------------+
| Net cash used in financing activities | | | (3,085,228) |
+-----------------------------------------+--+------------+---------------------+
| | | | |
+-----------------------------------------+--+------------+---------------------+
| Net increase in cash and cash | | | 2,858,358 |
| equivalents | | | |
+-----------------------------------------+--+------------+---------------------+
| | | | |
+-----------------------------------------+--+------------+---------------------+
| Cash and cash equivalents at the | | | 44,935,726 |
| beginning of the year | | | |
+-----------------------------------------+--+------------+---------------------+
| | | | |
+-----------------------------------------+--+------------+---------------------+
| Translation of foreign entity | | | 2,604,903 |
+-----------------------------------------+--+------------+---------------------+
| | | | |
+-----------------------------------------+--+------------+---------------------+
| Cash and cash equivalents at the end of | | | 50,398,987 |
| the year | | | |
+-----------------------------------------+--+------------+---------------------+
| | | | |
+-----------------------------------------+--+------------+---------------------+
| | | | |
+-----------------------------------------+--+------------+---------------------+
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT - US DOLLARS
For the year ended 31 December 2008
FOR CONVENIENCE PURPOSES ONLY
+-----------------------------------------+--+-------------+--------------------------+
| | | ALTERNATIVE 1 |
+-----------------------------------------+--+----------------------------------------+
| (all amounts in full) | | | |
+-----------------------------------------+--+-------------+--------------------------+
| | | | 31 December 2008 |
+-----------------------------------------+--+-------------+--------------------------+
| | | | USD |
+-----------------------------------------+--+-------------+--------------------------+
| Cash flows from operating activities | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Loss before taxation | | | (126,913,984) |
+-----------------------------------------+--+-------------+--------------------------+
| Adjustments for: | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Non-operating cash flow | | | (5,341,818) |
+-----------------------------------------+--+-------------+--------------------------+
| Non-cash items | | | 136,135,118 |
+-----------------------------------------+--+-------------+--------------------------+
| Operating cash flow before working | | | 3,879,316 |
| capital changes | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Working capital changes | | | 9,193,391 |
+-----------------------------------------+--+-------------+--------------------------+
| Cash generated from operations | | | 13,072,707 |
+-----------------------------------------+--+-------------+--------------------------+
| Income taxes paid | | | (276,880) |
+-----------------------------------------+--+-------------+--------------------------+
| Net cash generated from operating | | | 12,795,827 |
| activities | | | |
+-----------------------------------------+--+-------------+--------------------------+
| | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Net cash used in investing activities | | | (11,360,818) |
+-----------------------------------------+--+-------------+--------------------------+
| | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Net cash used in financing activities | | | (3,085,229) |
+-----------------------------------------+--+-------------+--------------------------+
| | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Net decrease in cash and cash | | | (1,650,220) |
| equivalents | | | |
+-----------------------------------------+--+-------------+--------------------------+
| | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Cash and cash equivalents at the | | | 14,984,050 |
| beginning of the year | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Transfer from non-current bank balances | | | 22,500,000 |
+-----------------------------------------+--+-------------+--------------------------+
| Translation of foreign entity | | | 2,604,903 |
+-----------------------------------------+--+-------------+--------------------------+
| | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Cash and cash equivalents at the end of | | | 38,438,733 |
| the year | | | |
+-----------------------------------------+--+-------------+--------------------------+
| | | | |
+-----------------------------------------+--+-------------+--------------------------+
| | | | |
+-----------------------------------------+--+-------------+--------------------------+
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT - US DOLLARS
For the year ended 31 December 2008
FOR CONVENIENCE PURPOSES ONLY
+-----------------------------------------+--+-------------+--------------------------+
| | | ALTERNATIVE 2 |
+-----------------------------------------+--+----------------------------------------+
| (all amounts in full) | | | |
+-----------------------------------------+--+-------------+--------------------------+
| | | | 31 December 2008 |
+-----------------------------------------+--+-------------+--------------------------+
| | | | USD |
+-----------------------------------------+--+-------------+--------------------------+
| Cash flows from operating activities | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Loss before taxation | | | (126,913,984) |
+-----------------------------------------+--+-------------+--------------------------+
| Adjustments for: | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Non-operating cash flow | | | (5,341,818) |
+-----------------------------------------+--+-------------+--------------------------+
| Non-cash items | | | 136,135,118 |
+-----------------------------------------+--+-------------+--------------------------+
| Operating cash flow before working | | | 3,879,316 |
| capital changes | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Working capital changes | | | 9,193,391 |
+-----------------------------------------+--+-------------+--------------------------+
| Cash generated from operations | | | 13,072,707 |
+-----------------------------------------+--+-------------+--------------------------+
| Income taxes paid | | | (276,880) |
+-----------------------------------------+--+-------------+--------------------------+
| Net cash generated from operating | | | 12,795,827 |
| activities | | | |
+-----------------------------------------+--+-------------+--------------------------+
| | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Net cash used in investing activities | | | (11,360,818) |
+-----------------------------------------+--+-------------+--------------------------+
| | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Net cash used in financing activities | | | (3,085,229) |
+-----------------------------------------+--+-------------+--------------------------+
| | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Net increase in cash and cash | | | (1,650,220) |
| equivalents | | | |
+-----------------------------------------+--+-------------+--------------------------+
| | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Cash and cash equivalents at the | | | 37,484,050 |
| beginning of the year | | | |
+-----------------------------------------+--+-------------+--------------------------+
| | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Translation of foreign entity | | | 2,604,903 |
+-----------------------------------------+--+-------------+--------------------------+
| | | | |
+-----------------------------------------+--+-------------+--------------------------+
| Cash and cash equivalents at the end of | | | 38,438,733 |
| the year | | | |
+-----------------------------------------+--+-------------+--------------------------+
UNAUDITED CONSOLIDATED SEGMENT INFORMATION - US DOLLARS
At 31 December 2008
FOR CONVENIENCE PURPOSES ONLY
+-------------------------------+--------------+------------------+--------------+
| | | |
+-------------------------------+---------------------------------+--------------+
| (all amounts in full) | | | |
+-------------------------------+--------------+------------------+--------------+
| | | 31 December 2008 | 31 December |
| | | | 2007 |
+-------------------------------+--------------+------------------+--------------+
| | | USD | USD |
+-------------------------------+--------------+------------------+--------------+
| Revenue | | | |
+-------------------------------+--------------+------------------+--------------+
| Banking | | 4,600,281 | 13,503,819 |
+-------------------------------+--------------+------------------+--------------+
| Retail | | 19,902,306 | 34,877,191 |
+-------------------------------+--------------+------------------+--------------+
| Hotels | | 22,613,299 | 24,176,891 |
+-------------------------------+--------------+------------------+--------------+
| Agriculture | | 8,014,138 | 11,234,910 |
+-------------------------------+--------------+------------------+--------------+
| Textiles | | 632,840 | 6,987,037 |
+-------------------------------+--------------+------------------+--------------+
| | | 55,762,864 | 90,779,848 |
+-------------------------------+--------------+------------------+--------------+
| Operating profit | | | |
+-------------------------------+--------------+------------------+--------------+
| Banking | | 6,539,409 | 8,247,754 |
+-------------------------------+--------------+------------------+--------------+
| Retail | | (5,076,823) | (3,944,465) |
+-------------------------------+--------------+------------------+--------------+
| Hotels | | 5,361,645 | 7,736,510 |
+-------------------------------+--------------+------------------+--------------+
| Agriculture | | 4,159,407 | 7,247,194 |
+-------------------------------+--------------+------------------+--------------+
| Textiles | | 334,071 | 1,262,749 |
+-------------------------------+--------------+------------------+--------------+
| Corporate | | (1,091,846) | 27,820 |
+-------------------------------+--------------+------------------+--------------+
| | | 10,225,863 | 20,577,562 |
+-------------------------------+--------------+------------------+--------------+
| Segments assets | | | |
+-------------------------------+--------------+------------------+--------------+
| Banking | | 56,289,778 | 20,692,240 |
+-------------------------------+--------------+------------------+--------------+
| Retail | | 37,474,391 | 30,545,047 |
+-------------------------------+--------------+------------------+--------------+
| Hotels | | 61,793,783 | 53,862,794 |
+-------------------------------+--------------+------------------+--------------+
| Agriculture | | 18,049,357 | 15,064,974 |
+-------------------------------+--------------+------------------+--------------+
| Textiles | | 5,529,084 | 4,771,901 |
+-------------------------------+--------------+------------------+--------------+
| Corporate | | 8,661,842 | 160,235,719 |
+-------------------------------+--------------+------------------+--------------+
| | | 187,798,235 | 285,172,675 |
+-------------------------------+--------------+------------------+--------------+
UNAUDITED SUPPLEMENTARY INFORMATION - US DOLLARS
FOR CONVENIENCE PURPOSES ONLY
+-------------------------------------------------------+----------------------+
| | |
+-------------------------------------------------------+----------------------+
| (all amounts in full) | |
+-------------------------------------------------------+----------------------+
| | 31 December 2008 |
+-------------------------------------------------------+----------------------+
| | USD |
+-------------------------------------------------------+----------------------+
| | |
+-------------------------------------------------------+----------------------+
| Capital expenditure | 12,124,210 |
+-------------------------------------------------------+----------------------+
| Capital commitments authorised but not yet contracted | 15,819,687 |
| for | |
+-------------------------------------------------------+----------------------+
| Depreciation and impairment | 130,501,214 |
+-------------------------------------------------------+----------------------+
| Borrowings | 10,868,740 |
+-------------------------------------------------------+----------------------+
Notes to the consolidated financial statements
1. Accounting policies
Accounting policies for the statutory financial statements are consistent with
those used in the previous year. In the case of the US Dollar financial
statements property has been adjusted to market value.
2. Comparatives
No comparatives are reflected for the Zimbabwe dollar figures as the 31 December
2007 figures are now insignificant due to currency revaluations.
The US Dollar comparative income statement includes pre-merger results for all
entities to reflect a more meaningful comparison of operations.
3. IAS 29 - Financial Reporting in Hyperinflationary Economies
As at the date of this publication, the Consumer Price Indices from August
2008 have not been published. Therefore IAS 29 restated financial statements
could not be produced and the audit report will be qualified for this
non-compliance.
4. IAS 21 - The Effects of Changes in Foreign Exchange Rates
All foreign currency denominated transactions carried out during the year were
translated to the reporting currency (Zimbabwe Dollar) by applying the average
of the lower of the Old Mutual Implied Rate (OMIR) and the Real Time Gross
Settlement System Rate (RTGS Rate) in the month in which the transactions
occurred. From 17 November 2008 until 31 December 2008, the OMIR was no longer
reflective of fair value as there was no actual trade on the Zimbabwe Stock
Exchange and therefore the RTGS rate was adopted as the fair rate for
translation purposes from that date. The average monthly rates varied
significantly and the closing rate was $35 quadrillion to 1 USD.
5. Disposal group
Comprising:
+------------------------------------------+------------+--------------+--------------+
| | | ZWD | USD |
| | | Quintillions | 31 December |
| | | 31 December | 2008 |
| | | 2008 | |
+------------------------------------------+------------+--------------+--------------+
| Disposal group assets | | | |
+------------------------------------------+------------+--------------+--------------+
| Cape Grace Hotel | | 777,399 | 26,303,398 |
+------------------------------------------+------------+--------------+--------------+
| Cotton Printers | | - | 2,587,606 |
| Weaving Division | | | |
| property, plant and | | | |
| equipment | | | |
+------------------------------------------+------------+--------------+--------------+
| Kingdom Financial | | 33,250 | 950,000 |
| Holdings property | | | |
+------------------------------------------+------------+--------------+--------------+
| | | 810,649 | 29,841,004 |
+------------------------------------------+------------+--------------+--------------+
| Amounts in equity | | | |
| relating to disposal | | | |
| group | | | |
+------------------------------------------+------------+--------------+--------------+
| Cape Grace Hotel | | 217,454 | 6,384,502 |
+------------------------------------------+------------+--------------+--------------+
| | | 217,454 | 6,384,502 |
+------------------------------------------+------------+--------------+--------------+
| | | | |
+------------------------------------------+------------+--------------+--------------+
| Liabilities directly | | | |
| associated | | | |
| with disposal group | | | |
+------------------------------------------+------------+--------------+--------------+
| Cape Grace Hotel | | 559,945 | 15,826,888 |
+------------------------------------------+------------+--------------+--------------+
| | | 559,945 | 15,826,888 |
+------------------------------------------+------------+--------------+--------------+
| | | | |
+------------------------------------------+------------+--------------+--------------+
Any disposal decision in respect of foreign assets will be subject to the
required regulatory approvals.
For further information contact:
Zimbabwe Nigel Chanakira or Bryan Thorn +263-4-252068/78
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR URRWRKWROOAR
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