TIDMMIK
MEIKLES LIMITED
(REGISTRATION NO. 1/37)
25 July 2011
ANNUAL FINANCIAL REPORT & NOTICE OF MEETING 2011
Following release on 21 June 2011 of its preliminary results for the period
ended 31 March 2011, Meikles Limited announces that the 2011 Annual Report and
Notice of Meeting have been posted to shareholders on 25 July 2011 and are
available on the company's website www.meiklesinvestor.com
Copies of these documents have been submitted to the National Storage Mechanism
and will shortly be available for inspection at: www.Hemscott.com/nsm.do
In accordance with the FSA's Disclosure and Transparency Rules, additional
information as required, is set out in this announcement.
DIRECTORS' RESPONSIBILITY AND CONCLUSION
The Directors of the Company are responsible for the maintenance of adequate
accounting records, and the preparation of financial statements for each
financial period, that give a true and fair view of the state of affairs of the
Company and the Group at the end of the financial period, and of the results
and cash flows for that period. They are also required to select appropriate
accounting policies, to safeguard the assets of the Company and the Group and
to make reasonable and prudent judgements and estimates. Accounting policies,
which follow International Financial Reporting Standards (IFRS), have been
consistently applied, where practicable. Critical judgmental areas are
disclosed in note 4 to the financial statements.
The Directors are also responsible for the systems of internal control. These
are designed to provide reasonable but not absolute assurances as to the
reliability of the financial statements, and to safeguard, verify and maintain
accountability of assets, and to prevent and detect material misstatements and
losses. The systems are implemented and monitored by the Directors to indicate
that any material breakdown in the functioning of these controls, procedures
and systems has occurred during the period under review.
The financial statements have been prepared in accordance with the accounting
policies set out in the accounting policy notes.
The Directors have reviewed the Group's budgets and cash flow forecasts for the
year to 31 March 2012 and, in light of this review and the current financial
position, they are satisfied that the Group has or has access to adequate
resources to continue in operational existence for the foreseeable future.
However, the Directors believe that under the current economic environment a
continuous assessment of the ability of the Company to continue to operate as a
going concern will need to be performed.
J.R.T. Moxon
Executive Chairman
Harare, 7 July 2011
B.J. Beaumont
Group Chief Executive Officer
Harare, 7 July 2011
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2011
Unaudited
31 March 31 December 1 January
2011 2009 2009
Notes US$ US$ US$
ASSETS
Non-current assets
Property, plant and 17 201,197 - -
equipment
Investments in 21 74,129,078 82,125,148 123,974,684
subsidiaries
Other financial assets 21 373,181 180,391 140,728
Balances with Reserve 22 36,824,671 - -
Bank of Zimbabwe
Total non-current assets 111,528,127 82,305,539 124,115,412
Current assets
Inventories 24 8,653 - -
Other receivables 25 30,431,635 8,185,398 6,365,757
Cash and bank balances 22 381,817 - -
30,822,105 8,185,398 6,365,757
Assets held for sale or 15 11,814 34,660,464 -
distribution
Total current assets 30,833,919 42,845,862 6,365,757
Total assets 142,362,046 125,151,401 130,481,169
EQUITY AND LIABILITIES
Capital and reserves
Share capital 26 2,453,747 1 1
Non-distributable 30,303,613 103,757,359 103,757,359
reserves
Retained earnings/ 98,631,052 (6,007,023) -
(accumulated losses)
Total equity 131,388,412 97,750,337 103,757,360
Non-current liabilities
Deferred tax 13 2,796,179 4,106,257 4,106,257
Current liabilities
Trade and other payables 28 1,626,777 23,294,807 22,617,552
Short term borrowings 27 6,550,678 - -
Total liabilities 8,177,455 23,294,807 22,617,552
Total equity and 142,362,046 125,151,401 130,481,169
liabilities
J.R.T. Moxon
7 July 2011
B.J. Beaumont
7 July 2011
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2011
Company
Non (Accumulated
distributable losses)/
Share reserves retained Total
capital earnings
US$ US$ US$ US$
2011
Balance at the 1 103,757,359 (6,007,023) 97,750,337
beginning of the
period
Profit for the period - - 48,162,106 48,162,106
Transfer from - (71,000,000) 71,000,000 -
non-distributable
reserves
Share capital 2,453,746 (2,453,746) - -
redenomination
Dividend in specie - - (14,524,030) (14,524,030)
(note 31)
Balance at the end of 2,453,747 30,303,613 98,631,053 131,388,413
the period
2009
Balance at the 1 103,757,359 - 103,757,359
beginning of the year
Loss for the year - - (6,007,023) (6,007,023)
Balance at the end of 1 103,757,359 (6,007,023) 97,750,337
the year
NOTES
3.13. Property, plant and equipment
Property, plant and equipment are stated at cost or deemed cost less
accumulated depreciation and accumulated impairment losses. Where the carrying
amount of an asset is greater than its estimated recoverable amount, it is
written down to its recoverable amount. Interest costs on borrowings to finance
property expenditure during the course of construction are capitalised.
Improvements to buildings are recognised whilst repairs and renewals are
charged to the profit and loss when the expenditure is incurred. Gains and
losses on the diposal of assets are determined by reference to their carrying
amount and are taken into account in determining operating profit.
Leased assets under a finance lease are initially measured at an amount equal
to the lower of its fair value and the present value of the minimum lease
payments. Subsequent to initial recognition, the asset is accounted for in
accordance with the accounting policy applicable to the asset.
Purchased software that is integral to the funcationality of the related
equipment is capitalised as part of that equipment. Where parts of an item of
property or equipment have different useful lives, they are accounted for as
separate items (major components) of property and equipment.
3.13.1. Depreciation
Freehold land is not depreciated. Depreciation on property, plant and equipment
other than land and capital work in progress is calcuated on a straight line
basis so as to write off the assets over their estimated useful lives to their
anticipated residual values. The estimated useful lives, residual values and
depreciation method are reviewed at each year end, with the effect of any
changes in estimate accounted for on a prospective basis. Assets held under
finance leases are depreciated over their expected useful lives on the same
basis as owned assets or, where shorter, the term of the relevant lease.
The gain or loss arising on the diposal or retirement of an item of property,
plant and equipment is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in profit or loss.
4. Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgements,
estimates and assumptions that affect the application of accounting policies
and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
The following are the critical judgements, apart from those involving
estimations, that the Directors have made in the process of applying the
entity's accounting policies and that have the most signicant effect on the
amounts recognised in the financial statements.
4.1. Classification of the Cape Grace Hotel as held for sale
The Cape Grace Hotel operations in South Africa have been maintained as a
non-current asset held for sale. Further details are disclosed in note 14.
4.2. Going concern
The Directors assess the ability of the Group to continue in operational
existence in the foreseeable future at each reporting date. As at 31 March
2011, the Directors have assessed the Group's ability to continue operating as
a going concern and believe that the preparation of these financial statements
on a going concern basis is still appropriate.
4.3. Useful lives and residual values of property, plant and equipment
As described in note 3.13 above, the Group reviews the estimated useful lives
and residual values of property, plant and equipment at the end of the
reporting period.
During the period, the Directors engaged independent professional valuers to
reassess the carrying amounts of certain property, plant and equipment for the
stores and agriculture segments. The property, plant and equipment carrying
amounts were out of line with similar items in the other group entities. The
financial effect of this reassessment, assuming the assets are held until the
end of their estimated useful lives, is to increase the consolidated plant and
equipment carrying amounts and the consolidated depreciation expense in the
current financial year and for the next 3 years, by the following amounts:
Depreciation expense Carrying amount
US$ US$
2009 862,866 3,857,888
2011 862,866 2,995,022
2012 862,866 2,132,156
2013 696,530 1,435,626
The remaining useful lives and residual values were reassessed based on
business trends, technological developments, assets conditions and mangement's
future plans. The useful lives and residual values so determined involved the
exercise of significant levels of judgement based on data that was not readily
observable.
4.4. Biological assets valuation
Tea, macadamia and timber plantations are stated at their fair value less point
of sale costs. The present value of expected net cash flows from plantations,
discounted at a current market determined pre-tax rate of 12%, ws used to
determine fair value. The pre tax rate is the average cost of borrowing for the
loans with the longest tenure of 5 years for the agriculture segment.
4.5. Funds earmarked for investment
Certain provisions wre made in the financial statements for the year ended 31
December 2008, at the instigation of the previous Board of Directors. The
resolution of the boardroom and shareholder disputes has allowed the Group a
recoverable sum of US$11,737,013 denominated in South African rand to be
reinstated in the current financials. The timing of future cash flows or gains
arising from this investment is yet to be determined. Refer to note 21.
4.6 Balances with the Reserve Bank of Zimbabwe
The deposit with the Reserve Bank of Zimbabwe (RBZ) arose from proceeds arising
from the Initial Public Offer undertaken by the Copany. These funds were raised
in international markets. The Company has not had access to these funds in cash
and the timing of future cash flows is uncertain. These amounts are required to
assist with the recapitalisation of the Group. The Directors are engaging the
RBZ with a view to the establishment of an agreed drawdown on these funds.
Refer to note 22.
13. Income Tax
13.1 Income tax recognised in profit/(loss) for the period
Group
Restated
31 March 2011 31 December 2009
US$ US$
Tax credit comprises the following:
Current tax (expense)/credit in respect (184,325) 53,325
of the current period
Deferred tax credit relating to the 1,739,305 5,236,247
origination and reversal of temporary
differences
Withholding tax on investment revenue (36,574) (903)
1,518,406 5,228,669
Capital gains tax arising on demerger (725,024)
of KFHL
Total tax credit relating to continuing 793,382 5,288,669
operations
The credit for the period can be
reconciled to the account profit/(loss)
as follows:
Profit/(loss) before tax from 2,857,477 (7,943,262)
continuing operations
Income tax calculated at 25.75% (2009: (735,800) 2,454,468
30.9%)
Effect of revenue that is exempt from 3,371,157 801,451
income tax
Effect of expenses that are not (360,693) 1,985,755
deductible in determining taxable
profit
Effect of change in tax rate* (1,147,201) -
Effect of previously unrecognised and 417,693 -
unused tax losses
Effect of revenue taxed at other rates (26,750) 46,995
1,518,406 5,288,699
Capital gains tax arising on demerger (725,024) -
of KFHL
Income tax credit recognised in profit/ 793,382 5,288,669
(loss) for the period
The income tax rate used for the 2011 reconciliation above is the corporate
rate of 25.75% (31 December 2009: 30.9%) payable by corporate entities in
Zimbabwe. The deferred tax rate used for 2011 is the corporate tax rate of
25.75%. The principal rate for the taxable foreign operation is 29% (31
December 2009: 29%).
*Tanganda Tea Company Limited was taxed at 20% for the year ended 31 December
2009 due to some export incentives. The incentives were repealed in the current
period resulting in the tax rate of 25.75%.
13.2 Income tax recognised in other comprehensive income
Group
Restated
31 March 2011 31 December 2009
US$ US$
Deferred tax
Arising on income and expenses
recognised in other comprehensive
income:
Translation of foreign operations 188,631 193,659
Revaluation of available for sale 0 (272,390)
financial assets
Provisions - (12,378)
Property revaluations - 1,123,875
Other movements - 1,239,135
Total income tax recognised in other 188,631 2,271,901
comprehensive income
13.3 Current tax liabilities
Group
Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Current tax liabilities
Value added tax 487,727 403,096 11,041
Income tax payable - 11,056 106,849
487,727 414,152 117,890
13.4 Deferred tax balances
Group
Beginning Recoginsed Disposed
of the in profit with
period or loss subsidiaries
US$ US$ US$
The deferred tax balance is
attributable to the following
items:
Current period:
Assessed losses (4,363,523) (3,140,578) 1,512,202
Property, plant and equipment 16,233,891 (146,196) (2,367,306)
Biological assets 749,825 1,664,410 -
Exchange differences 559,740 666 (325,267)
Provisions 331,165 304,487 -
Receivables and prepayments 49,412 121,893 -
Other 157,211 74,392 -
Deferred capital gains tax on 157,211 74,392 -
land
13,931,241 (1,555,956) (958,861)
Prior year:
Assessed losses - (4,363,523) -
Property, plant and equipment 20,483,718 (2,741,622) -
Property, plant and equipment - - (384,330) -
prior year adjustment
Biological assets 917,357 (712,646) -
Biological assets - prior year - 545,114 -
adjustment
Available for sale financial (272,390) - -
assets
Exchange differences 754,080 (681) -
Provisions 199,777 119,010 -
Receivables and prepayments 4,080 45,332 -
Other - 1,452,655 -
Deferred capital gains tax on 245,249 (88,048) -
land
22,331,881 (6,128,739) -
Recognised
in End
other period
comprehensive
income
US$ US$
The deferred tax balance is attributable
to the following items:
Current period:
Assessed losses - (5,991,899)
Property, plant and equipment - 13,720,389
Biological assets - 2,414,235
Exchange differences 3,233 238,372
Provisions - 635,652
Receivables and prepayments - 171,305
Other - -
Deferred capital gains tax on land - 231,603
3,233 11,491,657
Prior year:
Assessed losses - (4,363,523)
Property, plant and equipment (1,123,875) 16,618,221
Property, plant and equipment - prior - (384,330)
year adjustment
Biological assets - 204,711
Biological assets - prior year adjustment - 545,114
Available for sale financial assets 272,390 -
Exchange differences (193,659) -
Provisions 12,378 331,165
Receivables and prepayments - 49,412
Other (1,239,135) 213,520
Deferred capital gains tax on land - 157,211
(2,271,901) 13,931,241
Group
Restated Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Comprising:
Deferred tax asset - (2,355,680) - -
continuing operations
Deferred tax liability - 15,996,723 15,346,508 23,318,471
continuing operations
Deferred tax asset - disposal (2,221,386) (2,370,901) (1,986,500)
group (note 15)
Deferred tax liability - - 955,634 -
disposal group (note 15)
11,419,657 13,931,241 23,331,881
The deferred tax credit is
recognised in the profit/
(loss) for the period as
follows:
Deferred tax credit as above (1,555,956) (6,128,739)
Directly associated with (183,349) 892,492
assets held for sale disposal
group
(1,739,305) (5,236,247)
Company
Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Assessed loss (322,230) - -
Plant and equipment 35,493 - -
Prepayments 24,504 - -
Unrealised exchange gains 182,935 - -
(79,298) - -
Deferred capital gains tax on 2,875,477 4,106,257 4,106,257
unlisted investments
2,796,179 4,106,257 4,106,257
14. Discontinued operations
Demerger of Kingdom Financial Holdings Limited (KFHL) from the Group. Following
the 13 October 2010 EGM of the Company and subsequent court and regulatory
approvals, KFHL was demerged from the Group effective 31 October 2010. Details
of the assets and liabilities disposed of, and the calculation of the loss on
disposal are disclosed in note 31.
Voluntary liquidation of Cotton Printers (Private) Limited
Cotton Printers was liquidated during 2010. The company had encountered
significant viability problems pre and post dollarisation resulting in it
applying for voluntary liquidation in October 2009. The order for final
liquidation was granted on 10 May 2010. Cotton Printers did not trade during
the period ended 31 March 2011.
Details of the assets and liabilities disposed of, and the calcuation of the
loss on disposal are disclosed in note 31.
Cape Grace Hotel operations in South Africa
In March 2008, a binding put and call option agreement for the sale of the Cape
Grace Hotel to Mentor was entered into between Meikles, Cape Grace Hotel
Limited (BVI) and its subisidiaries which own the Cape Grace Hotel on the one
hand, and Mentor on the other. In November 2008, a notice to exercise the
option for the purchase of Meikles Group's interests in the Cape Grace Group
was sent from Mentor to Meikles, and receipt thereof was acknowledged by
Meikles. This resulted in a legally binding agreement for the purchase by
Mentor of the Cape Grace Hotel. The consummation and implementation of this
transaction was delayed as a consequence of the litigation initiated by Meikles
against Mentor, which litigation has now been settled and withdrawn. Mentor
stands ready to comply with its obligation to purchase the Cape Grace Hotel as
a result of the binding agreement referred to aforesaid, and is ready to
consummate such transaction and deliver the proceeds of the sale against the
delivery of the Cape Grace Hotel in compliance with the agreement.
31 March 2011 31 December 2009
US$ US$
Revenue 21,137,436 13,856,206
Net interest 6,518,823 6,287,976
Fees and commissions 18,271,363 5,281,660
Other gains 4,711,984 6,225,105
Total income 50,639,606 31,650,947
Expenses* (43,016,973) (33,219,392)
Profit/(loss) before tax 7,622,633 (1,568,445)
Income tax (1,306,421) 660,405
Profit/(loss) for the year 6,316,212 (908,040)
from discontinued operations
Loss on disposal of (3,842,146) -
subsidiaries
Profit/(loss) for the year 2,474,066 (908,040)
from discontinued operations
(attributable to owners of the
parent)
Other comprehensive income
Exchange differences on 1,033,239 1,696,818
translating foreign entities
Losses on property - (1,641,125)
revaluations
Movement in other reserves - 2,000
Other comprehensive income for 1,033,239 57,693
the period, net of tax
Total comprehensive profit/ 3,507,305 (850,347)
(loss) for the period
*The expenses exclude
depreciation expense of
US$3,220,794 (2009:
US$2,091,470) which has been
written back in line with the
requirements of IFRS 5.
Cash flows from discontinued
operations
Net cash flows from operating (3,501,547) 6,301,615
activities
Net cas flows from investing 304,735 619,241
activities
Net cash flows from financing (613,708) 132,296
activities
Net cash (outflows)/inflows (3,810,520) 7,053,152
15. Assets held for sale or distribution
Group
Restated Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Assets
Property, plant and equipment 27,793,954 37,988,372 21,389,918
Investment property - 186,900 950,000
Other, financial assets and 4,293,626 8,427,883 729,381
investments
Investments in associates - 2,498,655 1,025,929
Balances at the RBZ - 24,163,308 -
Deferred taxation 2,221,386 2,370,901 1,986,500
Goodwill 4,092,008 4,092,008 4,092,008
Inventories 535,333 624,312 322,414
Trade and other receivables 1,005,047 42,113,836 1,011,510
Other cash and bank balances 1,498,927 22,972,784 67,158
Balances owed by other Group 1,900,705 3,796,101 1,440,165
entities
Total assets held for sale or 43,340,986 149,235,600 33,015,073
distribution before Group
elimination
Group balances elimination (1,900,705) (3,796,101) (1,440,165)
Total assets held for sale or 41,440,281 145,438,959 31,574,908
distribution
Liabilities
Borrowings 2,572,656 3,875,878 3,028,334
Trade and other payables 1,976,816 39,994,943 2,866,130
Deferred and tax liabilities - 955,634 -
Other financial liabilities 10,528,861 8,982,286 6,595,941
Customer deposits - 34,819,728 -
Balances owed to Group 8,716,527 8,933,154 6,365,750
entities
Liabilities relating to 23,794,860 97,561,623 18,856,155
assets held for sale before
Group elimination
Group balances elimination (8,716,527) (8,933,154) (6,365,750)
Total liabilities relating to 15,078,333 88,628,469 12,490,405
assets held for sale or
distribution
Net assets for sale or 26,361,948 56,810,490 19,084,503
distribution
Capital and reserves relating 18,083,332 140,316,463 10,621,312
to assets held for sale or
distribution
Comprising:
Assets held for sale:
Cape Grace Hotel group of 39,977,389 36,847,922 28,037,302
companies
Cotton Printers (Private) - 4,497,374 2,587,606
Limited
Motor Vehicles1 1,462,892 - -
Assets held for distribution
to members:
Kingdom Financial Holdings - 104,093,663 950,000
Limited
Total assets held for sale or 41,440,281 145,438,959 31,574,908
distribution
Liabilities relating to
assets held for sale:
Cape Grace Hotel group of 15,078,333 16,363,112 12,490,405
companies
Cotton Printers (Private) - 1,641,364 -
Limited
Liabilities relating to
assets held for distribution
to members:
Kingdom Financial Holdings - 70,623,993 -
Limited
Total liabilities relating to 15,078,333 88,628,469 12,490,405
assets held for sale or
distribution
Net assets held for sale or 26,361,948 58,810,490 19,084,503
for distribution
Equity relating to assets
held for sale:
Cape Grace Hotel group of 18,083,232 14,231,541 10,621,312
companies
Cotton Printers (Private) - 2,766,220 -
Limited
Equity relating to assets
held for distribution to
members:
Kingdom Financial Holdings - 34,660,364 -
Limited
Total equity relating to 18,083,232 51,658,125 10,621,312
assets held for sale or
distribution
Company
31 March 2011 31 December 2009
US$ US$
Assets held for distribution - 34,660,364
to members - Kingdom Financial
Holdings Limited2
Assets held for sale - Cotton - 100
Printers (Private) Limited2
Motor vehicles1 11,814 -
11,814 34,660,464
1The Group intends to dispose of certain motor vehicles to staff and
anticipates that the disposal will be completed by 31 July 2011.
2Refer to note 14 for details
17. Property, plant and equipment
Group
Land and Leasehold Furniture and
buildings improvements equipment
US$ US$ US$
At 31 March 2011
Opening carrying value 63,715,669 477,524 12,888,741
Transfer from investment 27,046 - -
property
Additons - replacement 2,137,450 781,578 6,791,532
Service assets adjustment - - 65,325
Disposals - cost (932) - (260,359)
Disposals - accumulated 23 - 69,472
depreciation
Depreciation expense (893,568) (69,186) (2,401,486)
Transfer to assets held for - - -
sale (see note 15)
Closing carrying value 64,985,688 1,189,916 17,153,225
At cost or deemed cost 68,009,708 1,377,983 21,351,011
Accumulated depreciation (1,613,565) (188,067) (4,197,786)
Accumulated impairment (1,410,455) - -
Carrying value at 31 March 64,985,688 1,189,916 17,153,225
2011
Motor Work in
vehicles progress Total
US$ US$ US$
At 31 March 2011
Opening carrying value 3,345,157 103,604 80,530,695
Transfer from investment - - 27,046
property
Additons - replacement 415,257 (103,604) 10,022,213
Service assets adjustment - - 65,325
Disposals - cost (239,455) - (500,746)
Disposals - accumulated 122,544 - 192,039
depreciation
Depreciation expense (1,231,432) - (4,595,672)
Transfer to assets held (1,462,892) - (1,462,892)
for sale (see note 15)
Closing carrying value 949,179 - 84,278,008
At cost or deemed cost 1,863,573 - 92,602,275
Accumulated depreciation (914,394) - (6,913,812)
Accumulated impairment - - (1,410,455)
Carrying value at 31 March 949,179 - 84,278,00884,278,008
2011
Group
Land and Leasehold Furniture and
buildings improvements equipment
US$ US$ US$
At 31 December 2009
Opening carrying value 74,855,102 513,742 8,57,828
(unaudited)
Prior period adjustment (note 204,465 - 3,234,497
32)
Opening carrying value - 75,059,567 513,742 11,792,325
restated
Transferred to assets held (9,910,000) - (619,397)
for sale
Impairment (1,410,455) - -
Additions - expansion 518,746 20,702 2,530,216
Additions - replacement - - 527,477
Service assets adjustment - - 154,504
Disposals - cost - - (63,337)
Disposals - accumulated - - 11,015
depreciation
Closing carrying value 63,715,669 477,524 12,888,741
At cost or deemed cost 65,846,144 596,405 14,754,513
Accumulated depreciation (720,020) (118,881) (1,865,772)
Accumulated impairment (1,410,455) - -
Carrying value at 31 December 63,715,669 477,524 12,888,741
2009
Motor Work in
vehicles progress Total
US$ US$ US$
At 31 December 2009
Opening carrying value 5,585,658 138,212 89,650,542
(unaudited)
Prior period adjustment (note 1,281,792 - 4,720,754
32)
Opening carrying value - 6,867,450 138,212 94,371,296
restated
Transferred to assets held (3,382,864) - (13,912,261)
for sale
Impairment - - (1,410,455)
Additions - expansion 673,932 9,246 3,752,842
Additions - replacement 303,910 59,018 890,405
Service assets adjustment - (102,872) 51,632
Disposals - cost (201,249) - (264,586)
Disposals - accumulated 70,993 - 82,008
depreciation
Closing carrying value 3,345,157 103,604 80,530,695
At cost or deemed cost 4,376,565 206,476 85,780,103
Accumulated depreciation (1,031,408) (102,872) (3,838,953)
Accumulated impairment - - (1,410,455)
Carrying value at 31 December 3,345,157 103,604 80,530,695
2009
A valuation of the Group's land and buildings, other than those on the estates,
was performed by independent valuers not connected to the Group to determine
the market value of the land and buildings at 31 December 2008 and at 31
December 2009. The valuation, which conforms to International Valuation
Standards, was determined by reference to market evidence on the transaction
prices for similar properties. The value of Tanganda Tea Company buildings
which are on the estates was estimated by the Directors due to their
specialised nature. The valuation at 31 December 2008 was utilised to determine
the deemed cost at 1 January 2009 while the valuation performed at 31 December
2009 was used for impairment assessment, with carrying values impaired were
appropriate.
Assets pledged as security
Freehold land and buildings with carrying amounts of US$1.9 million and US$1.25
million (2009: US$2.2 million and US$600,000) have been pledged to secure a
loan of the Group (see note 27) and a trade credit facility (see note 28)
respectively. Freehold land and buildings have been pledged as security under a
mortgage. The Group is not allowed to pledge these assets as security for other
borrowings or sell them to another entity.
Company
Furniture and Motor Total
equipment vehicles
US$ US$ US$
At 31 March 2011
Acquisitions through internal 177,205 84,328 261,553
reorganisation (refer to note
21.2)
Additions - replacements 6,650 - 6,650
Disposals (7,549) (13,549) (21,098)
Disposals accumulated 4,623 9,325 13,948
depreciation
Depreciation expense (24,742) (23,280) (48,022)
Transferred to assets held - (11,814) (11,814)
for sale (see note 15)
Closing carrying value 156,187 45,010 201,197
At cost or deemed cost 250,299 104,500 354,799
Accumulated depreciation (94,112) (59,490) (153,602)
Carrying value at 31 March 156,187 45,010 201,197
2011
21. Other financial assets and investments
Group
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Opening carrying value (short 4,554,984 5,237,499 5,237,499
term and long term portions)
Balances transferred to - (781,199) -
assets held for sale
4,554,984 4,456,300 5,237,499
Exchange differences (22,246) (44,243) -
Interest accrual 143,956 111,793 -
Additions 151,620 17,792 -
Fair value adjustments 34,774 37,540 -
Reinstatement of funds 11,737,013 - -
emarked for investment
16,660,101 4,579,182 5,237,499
Less: short term portion in - (24,198) (787,605)
current assets
Non-current closing carrying 16,600,101 4,554,984 4,449,894
value
Comprising:
Funds earmarked for 11,737,013 - -
investment by shareholder
entities1
Funds earmarked for 4,702,518 4,545,293 4,404,492
investments - Mentor Africa
Limited
Other 160,570 9,691 45,402
Closing carrying value 16,600,101 4,554,984 4,449,894
*Unaudited
1Refer to note 4.5 for details
21.1 Investments in subsidiaries and other financial assets
Investments in subsidiaries
Company
31 March 2011 31 December 2009
Investments in subisidiaries US$ US$
Opening net carrying value 82,125,148 123,974,684
Balances transferred to assets held - (39,501,137)
for sale
82,125,148 84,473,547
Impairment losses on investments in (24,615,605) (2,348,399)
subsidiaries
Additions through internal 16,619,535 -
reorganisation (refer to note 21.2)
Closing net carrying value 74,129,078 82,125,148
Comprising:
Investment in Thomas Meikle Centre 32,760,711 57,376,316
(Private) Limited
Investment in Greatermans (1979) 16,619,535 -
(Private) Limited
Investment in TM Supermarkets 3,977,344 3,977,344
(Private) Limited
Investment in Tanganda Tea Company 20,771,488 20,711,488
Limited
74,129,078 82,125,148
Other financial assets
Opening carrying amount 180,391 140,728
Interest accrued on funds earmarked 19,184 10,682
for investment
Additions 160,685 -
Exchange difference on funds earmarked 13,521 29,981
for investment
Closing net carrying value 373,181 180,391
Comprising:
Funds earmarked for investment with 213,024 180,391
Mentor Africa Limited (see above)
Investment in unlisted shares 151,620 -
Other investments 8,537 -
373,181 180,391
*Unaudited
Entity Holding Business Country of
Incorporation
Continuing operations:
Thomas Meikle Centre (Private) 100% Hotels Zimbabwe
Limited
Taganda Tea Company Limited 100% Agriculture Zimbabwe
Thomas Meikle Properties (Private) 100% Property owning Zimbabwe
Limited
Ninety Speke Avenue (Private) 100% Property owning Zimbabwe
Limited
TM Supermarkets (Private) Limited 75% Supermarkets Zimbabwe
Greatermans (1979) (Private) 100% Retail Zimbabwe
Limited
Cape Grace Hotel Limited 100% Investments British Virgin
holding Islands
Cape Grace Investments Limited 100% Investments British Virgin
holding Islands
Chapin Hotel and Resorts Limited 100% Hotel Channel Islands
Investments
Assets held for sale:
Cape Grace Hotel (Proprietary) 100% Hotel South Africa
Limited
Cape Grace Investments 100% Property owning South Africa
(Proprietary) Limited
Plumway Investments (Proprietary) 100% Property owning South Africa
Limited
Thomas Meikle Centre (Private) Limited (TMC) was unbundled during the year
resulting in the retail operations being moved to Greatermans (1979) (Private)
Limited and TMC head office operations being moved to Meikles Limited. Only the
hotel operations remain in TMC.
21.3 Interest in joint venture
The Group has a 50% interest in a joint venture which operates The Victoria
Falls Hotel in Zimbabwe. There has been no change in the Group's ownership or
voting interests in this joint venture since inception.
The following amounts are included in the Group financial statements as a
result of the proportionate consolidation of The Victoria Falls Hotel:
Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Non-current assets 1,523,122 1,573,217 1,419,799
Current assets 3,059,424 2,995,290 2,815,734
4,582,546 4,568,507 4,235,533
Non-current liabilities (362,773) - -
Current liabilities (814,454) (991,923) (419,972)
(1,177,227) (991,923) (419,972)
Net assets 3,405,319 3,576,584 3,815,561
Revenue 4,297,071 2,004,978
Operating loss (261,866) (351,598)
Profit/(loss) for the period 171,265 (238,976)
There are no contingent liabilities relating to the Group's interest in the
joint venture. The Victoria Falls Hotel partnership leases the property on an
operating lease which is valid until 2021. The partnership has the first right
to renew the lease at the end of this period for a further ten years. Lease
payments are computed as 10% of the Hotel's revenue as defined in the lease
agreement.
22. Cash and bank balances
Group
Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Banking:
Balances with the Reserve Bank
of Zimbabwe
- Statutory deposit - - 23,042,839
- Nostro accounts - - 10,555,333
Non-banking:
Balances with the Reserve Bank 36,824,671 12,541,825 11,960,252
of Zimbabwe*
Cash and other bank balances 3,285,599 2,536,106 5,933,515
40,11,270 15,077,931 51,491,939
Less: Non-current balances with (36,824,671) (12,541,825) (35,003,091)
Reserve Bank of Zimbabwe
Cash and bank balances 3,285,599 2,536,106 16,488,848
disclosed in the consolidated
statement of fiancial position
Add: Cash and bank balances 1,498,927 22,972,784 67,158
relating to disposal group
(note 15)
Cash and cash equivalents 4,784,526 25,508,890 16,556,006
disclosed in the consolidated
statement of cash flows
*Refer to note 4.6 for details
Company
Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Balances with the Reserve Bank 36,824,671 - -
of Zimbabwe*
Cash and other bank balances 381,817 - -
37,206,488 - -
Less: Non-current balances with (36,824,671) - -
the Reserve Bank of Zimbabwe
Cash and bank balances 381,817 - -
disclosed in the company
statement of financial position
*Refer to note 4.6 for details
24. Inventories
Group
Restated Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Inventories comprise:
Raw materials and consumables 5,655,819 6,711,341 3,613,497
Merchandise and manufactured 33,439,547 9,958,912 1,093,837
goods
Work in progress 1,617,265 445,017 356,236
40,712,631 17,115,270 5,063,570
See note 32 for details of the restatement of prior year figures.
The cost of inventories recognised as an expense includes US$3.5 million (2009:
US$3.3 million) in respect of write-offs of inventory due to shrinkage.
Inventories worth US$4.3 million (2009: US$3.5 million) were pledged to secure
borrowings of the Group (see note 27).
Company
Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Consumables 8,653 - -
25. Trade and other receivables
Group
Restated Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Trade receivables 10,317,279 3,389,814 6,350,264
Allowance for doubtful (428,319) (13,838) -
receivables
9,888,960 3,375,976 6,350,264
Advance crop expenditure 735,122 824,644 5,676
Other receivables and 5,528,847 3,133,269 3,772,492
prepayments
16,152,929 7,333,889 10,128,432
See note 32 for details of the restatement of prior year figures.
* The average credit period on sale of goods and services is 193 days for
department stores, 35 days for hotels and 60 to 90 days for agriculture.
Interest is charged on the department stores debtors after 30 days. The
allowance for doubtful receivables is in respect of specific customers.
* Overdue but not impaired amounts were US$215,690 (2009: US$177,881) in the
30 to 60 days category, US$50,625 (2009: US$73,008) in the 60 to 90 days
category and US$1,395,203 (2009: US$263,092) over 90 days.
* Receivables amounting to US$6.6 million (2009: US$1.5 million) were pledged
to secure borrowings of the Group (see note 27).
* The Directors consider that the carrying amount of trade and other
receivables approximates their fair value.
Company
Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Inter-company balances 30,264,330 8,018,658 6,365,757
Other receivables 167,303 166,740 -
30,431,633 8,185,398 6,365,757
The inter-company balances have no fixed repayment terms.
The Directors consider that the carrying amount of the other receivables
approximates their fair value.
26. Share capital and Directors' beneficial interests
26.1 Share capital
Ordinary shares of US1 cent each
Group and Company
Number Number Numer
31 March 31 December 1 January
2011 2009 2009
Opening shares in issue 245,374,791 245,374,791 242,301,554
Scrip dividend - - 1,419,425
Issued to share purchase - - 1,191,901
scheme of companies
Issued to IMARA - discharge of - - 461,911
share based payment reserve
Closing shares in issue 245,374,791 245,374,791 245,374,791
Unissued 154,625,209 154,625,209 154,625,209
Authorised 400,000,000 400,000,000 400,000,000
At the Annual General Meeting held on 23 July 2010, the shareholders authorised
a redenomination of the authorised share capital of the Company from 10
Zimbabwean cents per share (that is Z$ prior to any restatement to address
inflation) to US1 cent per share. Shareholders further authorised that a
transfer be made from non-distributable reserves to share capital of an amount
sufficient to fudn the redenomination.
In 2009, the share capital ws presented at US$1 pending the aforesaid
redenomination.
26.2 Directors' beneifical interests
As at 31 March 2011 the direct and indirect beneficial interests of the
Directors in the ordinary shares of the Company are shown below:
Fully paid ordinary shares
31 March 31 December
2011 2009
F. Rwodzi (resigned 15 June 2011) - -
J.R.T. Moxon (appointed 16 June 2011) 21,337,915 21,337,915
B.J. Beaumont 214,284 -
T.B. Cameron 468,614 468,614
R. Chidembo 3,874 4,613,046
B. Chimhini 10,703 10,703
O. Makamba 492,285 278,353
R.H. Meiring (resigned 8 April 2011) 600,601 600,601
A.C. Mills (resigned 15 June 2011) 129,149 129,149
K. Ncube - -
M.L. Wood 1,054,714 840,782
Mr. J.R.T Moxon is also a director of shareholder entities namely JRTM
Investments (Private) Limited, ASH Investments (Private) Limited, FPS
Investments (Private) Limited, ACM Investments (Private) Limited and APWM
Investments (Private) Limited.
27. Borrowings
Group
Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Secured:
Acceptance credits, loans and 37,868,270 6,539,768 -
overdrafts
Unsecured:
Acceptance credits, loans and 14,912,408 1,290,618 981,514
overdrafts
52,780,678 7,830,386 981,514
Less portion repayable in 12 (49,031,109) (6,985,213) (769,330)
months
3,749,569 845,173 212,184
Due for repayment:
On demand and within one year 49,031,109 6,985,213 769,330
In second year 3,111,167 - -
In forth year 638,402 845,173 212,814
52,780,678 7,830,386 981,514
Secured:
Acceptance credits, loans and 5,276,386 - -
overdrafts
Unsecured:
Acceptance credits, loans and 1,274,292 - -
overdrafts
6,550,678 - -
Due for repayment:
On demand and within one year 6,550,678
* US$4.3 million (2009: US$3.5 million) worth of the acceptance credits,
loans and overdrafts are secured by inventories.
* US$6.6 million (2009: US$1.15 million) worth of loans are secured by
receivables.
* US$9 million (2009: nil) worth of loans are secured by a negative pledge
over assets.
* US$1.9 million (2009: US$2.2 million) in freehold land and buildings has
been pledged as security for a loan of US$2.4 million (2009: US$1.5
million) which bears interest at 8% (2009: 8.9%) per annum and matures on
14 May 2012.
* The Group has issued cross guarantees for subisidary facilities worth
US$24.8 million (2009: US$15 million).
28. Trade and other payables
Group
Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Trade payables 23,588,524 16,310,121 1,924,837
Accruals and deferred income 4,691,517 4,405,152 774,441
Other payables 1,723,881 2,172,862 2,544,738
30,003,922 22,888,135 5,244,016
* The credit period on purchases ranges from 30 to 60 days (2009: 30 days).
However, payments are made within 30 to 120 days. Foreign suppliers are
predominantly on prepayment and cash bases. Interest is charged by certain
but not all suppliers on overdue payables.
* US$1.25 million (2009: US$600,000) in freehold land and buildings has been
pledged as security for a credit facility offered by a supplier.
* Trade payables comprise amounts outstanding for trade purchases. The
Directors consider that the carrying amount of trade payables approximates
their fair values.
Company
Unaudited
31 March 31 December 1 January
2011 2009 2009
US$ US$ US$
Group balances 495,999 23,036,151 22,459,571
Provisions and other payables 1,130,778 258,656 157,981
1,626,777 23,294,807 22,617,552
31. Disposal of subsidiaries
31.1 Kingdom Financial Holdings Limited (KFHL)
The Group disposed of the financial services group, KFHL, effective 31 October
2010 by way of a dividend in specie to Meikles Limited shareholders.
Shareholders received two (2) shares in KFHL for every share held in Meikles
Limited.
Analysis of assets and liabilities over which control was lost
Balances as at
31 October
2010
US$
Current assets
Cash and cash equivalents 18,626,867
Trade and other receivables 101,829,018
Other financial assets 4,207,858
124,663,743
Non-current assets
Property, plant and equipment 8,254,525
Investment property 176,000
Investment in associates 2,769,094
11,199,619
Current liabilities
Customer deposits (43,918,271)
Trade and other payables (27,250,151)
Other financial liabilities (48,177,196)
(119,345)618)
Non-current liabilities
Deferred tax liabilities (917,788)
Net assets disposed of 15,599,956
Loss on disposal of subsidiary
Non cash consideration received 14,524,030
Net assets disposed of (15,599,956)
Loss on disposal (1,075,926)
31.2 Cotton Printers (Private) Limited
Following viability problems, Cotton Printers (Private) Limited was voluntary
liquidated during 2010.
Analysis of assets and liabilities over which control was lost
Balances as at
1 January
2010
US$
Current assets
Cash and cash equivalents 31,602
Trade and other receivables 120
Inventory 133,564
165,286
Non-current assets
Property, plant and equipment 4,345,796
Current liabilities
Trade and other payables (1,513,994)
Short term borrowings (223,358)
(1,737,352)
Non-current liabilities
Deferred tax liabilities (7,510)
Net assets disposed of 2,766,220
Loss on disposal of subsidiary
Consideration received -
Net assets disposed of (2,766,220)
Loss on disposal (2,766,220)
32. Prior year adjustments
32.1 Opening balances of property, plant and equipment
During the period errors were identified on the 1 January 2009 carrying amounts
of certain property, plant and equipment for the stores and agricultural
operations. The assets wre omitted from the valuation exercise carried out at 1
January 2009 when the functional currency was changed from ZW$ to US$. This has
been corrected by the restatement of the 2009 comparatives included in these
financial statements.
32.2 Opening balances of biological assets, other receivables and nursery
stocks
During the period, it was discovered that the carrying amount of certain
biological assets of the agricultural segment were understated while certain
receivables and nursery stocks were incorrectly valued at 1 January 2009,
resulting in a misstatement of the opening carrying amounts. The error has been
corrected in the comparative statements of financial position.
Presented below are only those statement of comprehensive income and statement
of financial position items which have been impacted by the prior year
adjustments.
Statement of comprehensive income
31 December 2009 Adjustments to
previously stated property, plant
and equipment
US$ US$
Other operating costs (16,067,056) (862,866)
Fair value adjustments (35,712) -
Income tax 5,449,453 384,330
Loss for the year from continuing (3,747,889) (478,536)
operations
Total comprehensive loss for the year (3,824,645) (478,536)
Adjustments to 31 December 2009
biological restated
assets
US$ US$
Other operating costs - (16,929,922)
Fair value adjustments 2,116,946 2,081,234
Income tax (545,114) 5,288,669
Loss for the year from continuing 1,571,832 (2,654,593)
operations
Total comprehensive loss for the year 1,571,832 (2,731,349)
Statements of financial position
1 January 2009 Adjustments to Adjustments to
as previously property, plant inventories
stated and equipment
US$ US$ US$
Property, plant and 89,650,542 4,720,754 -
equipment
Inventories 5,565,764 - (502,194)
Trade and other 10,280,439 - -
receivables
Total assets 200,489,141 4,720,754 (502,194)
Non-distributable reserves (148,118,994) (3,476,943) 502,194
Deferred tax liability (23,074,660) (1,243,811) -
total equity and (200,489,141) (4,720,754) 502,194
liabilities
Adjustments to 1 January 2009
trade and other restated
receivables
US$ US$
Property, plant and equipment - 94,371,296
Inventories - 5,063,570
Trade and other receivables (152,007) 10,128,432
Total assets (152,007) 204,555,694
Non-distributable reserves 152,007 (150,941,736)
Deferred tax liability - (24,318,471)
total equity and liabilities 152,007 (204,555,694)
31 December 2009 1 January 2009 Adjustments to
as previously net adjustments property, plant
stated as above and equipment
US$ US$ US$
Property, plant and 76,672,807 4,720,754 (862,866)
equipment
Biological assets 4,193,614 - -
Inventory 17,617,464 (502,194) -
Trade and other 7,485,896 (152,007) -
receivables
Total assets 271,429,262 4,066,553 (862,866)
Non-distributable (107,160,978) (2,822,742) -
reserves
Accumulated loss 22,418,679 - 478,536
Deferred tax (13,941,913) (1,243,811) 384,330
Total equity and (271,429,262) (4,066,553) 862,866
liabilities
Adjustments to 31 December 2009
biological restated
assets
US$ US$
Property, plant and equipment - 80,530,695
Biological assets 2,116,946 6,310,560
Inventory - 17,115,270
Trade and other receivables - 7,333,889
Total assets 2,116,946 276,749,895
Non-distributable reserves - (109,983,720)
Accumulated loss (1,571,832) 21,325,383
Deferred tax (545,114) (15,346,508)
Total equity and liabilities (2,116,946) (276,749,895)
32.3 Prior year cost reclassification
Certain prior year costs have been reclassified to conform to current year
presentation.
END
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