MEIKLES
LIMITED
ABRIDGED AUDITED
FINANCIAL RESULTS FOR THE YEAR ENDED 31
MARCH 2016
CHAIRMAN’S STATEMENT
I present the report for the financial year ended 31 March 2016.
The financial results are presented excluding sums considered
due to the Company by the Government of Zimbabwe.
The basis for the calculation of sums due from Government have
been agreed in more than one meeting that the Company Chairman and
others, together, have attended with the Minister of Finance and
Economic Development. The calculations of sums due have been
subject to assessment by expert consultants. Sums considered due to
the Company that are not included in the financial statements
amount to US$42 million as at
30 September 2016 and continue to
accrue interest.
When Government failed to fulfill the terms of the agreement,
the Company sought relief from the courts with the objective of
securing the agreed position. Government has since acknowledged
their commitment to resolving this issue amicably.
In terms of The Zimbabwe Stock Exchange (“ZSE”) Listings
Requirements, the Company is required to publish its audited
financial statements for the year ended 31
March 2016 together with the unaudited financial statements
for the half year ended 30 September
2016. Hence the timing of publication. For record purposes,
the Company’s case against the ZSE has progressed very well with
initial success being achieved against the ZSE on an earlier
attempt by the ZSE to bar the Meikles’ claim. On the advice
received, the only issue for determination by the Courts will be
the quantum of damages as the liability of the ZSE is clearly
established. Disputed matters occurred in 2015 but the relationship
between the ZSE and the Company has since been satisfactorily
restored.
Shareholders will be aware that the Company issued a cautionary
statement on Wednesday, 9 March 2017.
The Company will keep shareholders informed of developments, as
appropriate.
It is pertinent to believe that the outcome of the transaction
may result in a restructure and refinancing opportunity for the
Group. Such an event will be of assistance to the Group,
which has been relying on the repayment of funds from Government to
recapitalize the Group and fund expansion opportunities.
Meikles Limited comprises six operating segments as follows:
Hospitality;
Stores (incorporating Department Stores and Wholesaling);
Supermarkets;
Agriculture;
Financial Services;
Security Services.
Turnover for the Group increased by 10% relative to the previous
year. All segments contributed to the increase except for
Hospitality. The increase in turnover suggests growth in market
share, a key objective that is expected to continue in the
forthcoming financial year.
Expenditure, driven primarily by a growth in occupancy costs
resulting from expansion, increased by 1% relative to the previous
year.
EBITDA increased by US$11.7
million. The contribution by each material segment to the
Group’s EBITDA is set out in the notes to these abridged audited
financial statements.
HOSPITALITY
The segment’s total revenue for the full year declined by 4% to
US$15.8 million (2015: US$16.4 million) due to the introduction of value
added tax of 15% on revenue from foreigners, which could not be
fully passed onto guests through price increases. At Meikles Hotel,
room occupancy grew by 1.64 percentage points, but the average
daily rate declined by 7% eclipsing the increase in the occupancy
growth. As a result, revenue per available room reduced by 3%.
Room occupancy at Victoria Falls Hotel was 52.71% (2015:
55.26%). The average daily rate declined by 2% resulting in revenue
per available room decreasing by 6%.
The drop in the average daily rate at both hotels was largely as
a result of the introduction of value added tax of 15% on revenues
from foreigners.
Food and beverage gross profit margins were maintained at the
previous year’s levels despite menu price reductions during the
course of the year.
Operating costs for the year reduced by 3%. Savings were
achieved in employee costs and certain cost items denominated in
South African Rand that benefited from the weakening of the Rand
against the US$ during the course of the year.
The decline in EBITDA was caused by the reduction in
revenue.
STORES
The segment’s revenue for the financial year ended 31 March 2016 was US$22.2
million (2015: US$17.3
million), reflecting an increase of 28% over the last year
due to the opening of new stores which operated for part of the
year. Total operating costs reduced by 18% with savings being
achieved in employee and occupancy costs. Cost containment
strategies are being implemented to reduce costs further in such
areas as utilities, occupancy, other operating and staff costs.
Despite the shrinking customers’ disposable income, the
collection rate on trade debtors was unaffected and remained at 23%
relative to the previous year. Bad debt write-off reduced to 2%
(2015: 2.9%) and customers’ arrears reduced to 14% (2015: 16%).
As part of its strategy to increase revenue streams and market
share, a total of ten stores were opened progressively during the
year comprising two Barbours stores, four M-store outlets and four
Meikles Mega Market branches. A number of Meikles Mega Market
branches and M-store outlets are planned to be opened in the 2017
financial year.
SUPERMARKETS – TRADING AS TM AND PICK
N PAY
The segment posted an excellent set of results for the financial
year ended 31 March 2016. These
positive results came in an environment characterised by a number
of impediments, mainly sluggish economic conditions and deflation
in food prices. Turnover for the year grew by 10% to US$395.3 million relative to the prior year.
Customer count increased by 7.6% leading to a growth in units sold
of 12.6%.
Despite the depressed macro-economic environment throughout the
financial year, the average basket size increased by 3% in the
current year. This is an indication that customers are spending
more in our stores with competitive prices and unique
promotions.
The gross margin for the year declined by 55 basis points from
19.72% to 19.17%. The investment in refrigeration and equipment
helped improve the gross margin in new and upgraded branches.
Enhanced focus on stock management helped to reduce shrinkage from
prior year level by 46 basis points.
Stock management efficiencies improved the stock turn from 12.6
to 14.4 times in the current year.
Operating costs were 16.8% of turnover, an improvement from the
prior year level of 17.1%. EBITDA for the year was US$15.9 million (2015: US$9.3 million). EBITDA growth was buoyed by
increased sales, better shrinkage control and improved cost
management.
The property development adjacent to TM Borrowdale has reached
an advanced stage. The centre is expected to officially open during
the first quarter of 2017.
AGRICULTURE
Tanganda’s revenue for the financial year ended 31 March 2016 of US$22.4
million was 6% higher than the revenue of US$21.12 million in the previous year, mainly due
to greater volumes of bulk tea sales. During the year under review,
bulk tea that had been stockpiled between December 2014 and March
2015 was sold following the granting of the Rainforest
Alliance certification. The segment’s EBITDA increased on the back
of growth in bulk tea export sales, an immediate positive impact of
the Rainforest Alliance certification and various cost containment
measures implemented during the period.
Operating expenses included a provision for a taxation penalty,
which affected Tanganda and certain other companies in the
industry. All companies involved are contesting the issue. The
provision in Tanganda’s financial statements amounted to
US$988,000.
Unfavourable weather conditions mainly drought, the most adverse
for a number of years, impacted negatively on yields of avocadoes,
coffee and tea. Bulk tea production to 31
March 2016 was 7,261 tonnes, 16% below the prior year of
8,609 tonnes. The cost of production for made tea was in line with
expectation, with cost controls offsetting the impact of the
decline in volumes. Average bulk tea export prices of US$1.37/kg was 3% firmer than the prior year’s
US$1.33/kg.
Coffee production at 181 tonnes was 14% higher than the prior
year yield of 159 tonnes but 33% below expectation of 272 tonnes
due to moisture stress caused by the drought conditions. The
average selling price for coffee at US$2.95/kg was 26% lower than the prior year of
US$3.99/kg.
FINANCIAL SERVICES
Meikles Financial Services (MFS) had a successful year to
31 March 2016, having experienced
uninterrupted growth. The segment has nearly completed its rollout
of MyCash Kiosks across the country, from which a range of
financial services are offered to a growing number of Zimbabweans.
Agency banking continues to dominate in terms of revenue
generation, though income from bill payments and other sources are
on the increase.
The highlight of the year has been the recent launch of the
MyCash Card, a low-cost bank account that can be opened with
reduced Know Your Customer (KYC) requirements. MyCash Card is a
‘ZimSwitch Ready’ debit card offering Mobile Banking (USSD and
Smartphone) to previously unbanked individuals allowing them to
benefit from formal financial services that would otherwise be
unavailable, at a minimal cost.
Given the current cash shortages in the economy, MyCash Card is
proving to be attractive to all demographic groups as well as being
a popular alternative to physical cash and a convenient method of
paying employee wages.
MFS continues to see opportunities in the financial markets and
is developing a growing range of revenue streams that include cross
border remittances, insurance and payroll services.
SECURITY SERVICES
Meikles Guard Services’ objective for the financial year ended
31 March 2016 of expanding the number
of contracts outside the group was achieved in part. Despite
the existing economic environment Meikles Guard Services obtained
contracts resulting in 21 posts outside the Group. Security
tenders have been lodged for various embassies, financial
institutions as well as a number of entities in the commercial
sector. Marketing will intensify through the provision of security
at fundraising functions for the Meikles Foundation.
MENTOR AFRICA LIMITED
The Group experienced an impairment loss of US$2.885 million on its investment in
South Africa due to the
devaluation of the South African Rand against the US Dollar. The
Rand value of the investment increased. A dividend of ZAR 18.4 million was received from the investment
(2015: ZAR17.3 million).
MEIKLES FOUNDATION
The Meikles Foundation has continued to grow from strength to
strength. Major achievements for 2016 is the partnership with
TM/Pick n Pay in their new annual golf day, where substantial funds
were raised for Island Hospice and Healthcare, Zorarai Old Age Home
in Mutare and Animal Welfare. Other initiatives include
participating in Kidz Can in
Zimbabwe with the commissioning of
a half way hospice for children.
The Foundation continues to work jointly with international
community, several corporates, charities and likeminded
individuals. Projects include prisons, with food and blankets,
dance therapy for mentally challenged and the Cups for Cancer
awareness week. In this current economic environment, the
Foundation has been frequently called upon to assist with
humanitarian emergencies.
Restructuring of the Foundation has seen the employment of an
Executive Director to assist in organizing and strengthening the
Foundation.
MINING
The Group’s foreign mining partner has withdrawn from
Zimbabwe. The Group is in a
position to encourage other partners to participate in mining
opportunities, but it is felt that the appropriate timing of any
further involvement is not yet clear.
OUTLOOK
The Group’s EBITDA performance in the 2017 financial year is
favourable relative to the year under review. It is now known
that rains are more than normal. The Group continues to pursue
opportunities for cost reduction, strong marketing and margin
control. Where possible, short term loans will be converted to
medium term loans. Market appetite for this conversion has
improved.
DIVIDEND
The Board resolved not to declare a dividend for the year.
APPRECIATION
I would like to extend my appreciation to our customers for
their continued support and to our shareholders and regulatory
authorities for their support and guidance. I would also like to
extend my thanks and appreciation to fellow Board members,
management and staff for their dedication and commitment.
JRT Moxon
Executive Chairman
15 March 2017
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEAR ENDED
31 MARCH 2016 |
|
|
|
|
|
|
|
|
|
31
March 2016 |
31 March
2015 |
|
|
US$
000 |
US$
000 |
|
|
|
|
Revenue |
|
453,648 |
413,349 |
Net operating
costs |
|
(451,596) |
(423,723) |
|
|
|
|
Operating profit /
(loss) |
|
2,052 |
(10,374) |
Investment income |
|
3,628 |
4,546 |
Finance costs |
|
(10,516) |
(12,527) |
Impairment of
investment in Mentor Africa Limited |
|
(2,885) |
(4,726) |
Net exchange (losses)
/ gains |
|
(274) |
329 |
Loss recognised on
discounting Treasury Bills |
|
(8,628) |
(9,019) |
Provision for
discount on RBZ balance |
|
- |
(14,705) |
Fair value adjustments
on biological assets |
|
2,590 |
8,590 |
Loss before
tax |
|
(14,033) |
(37,886) |
Income tax (expense) /
credit |
|
(5,309) |
3,400 |
Loss for the
year |
|
(19,342) |
(34,486) |
|
|
|
|
Other comprehensive
income / (loss), net of tax |
|
|
|
Items that may be
reclassified subsequently to profit or loss: |
|
|
|
Reclassification
adjustment relating to available-for-sale financial assets disposed
of in the current year |
|
4,471 |
- |
Fair value gain / (loss) on available-for-sale financial
assets |
|
6,860 |
(12,472) |
Other comprehensive
income / (loss) for the year, net of tax |
|
11,331 |
(12,472) |
|
|
|
|
TOTAL COMPREHENSIVE
LOSS FOR THE YEAR |
|
(8,011) |
(46,958) |
|
|
|
|
(Loss) / profit for
the year attributable to: |
|
|
|
Owners of the parent |
|
(22,712) |
(34,445) |
Non-controlling interests |
|
3,370 |
(41) |
|
|
(19,342) |
(34,486) |
Total comprehensive
(loss) / income attributable to: |
|
|
|
Owners of the parent |
|
(11,381) |
(46,917) |
Non-controlling interests |
|
3,370 |
(41) |
|
|
(8,011) |
(46,958) |
Loss per share
(cents) |
|
|
|
Basic |
|
(8.95) |
(13.57) |
|
|
|
|
Diluted |
|
(8.31) |
(12.60) |
|
|
|
|
Headline loss per
share (cents) |
|
(6.39) |
(4.38) |
|
|
|
|
Diluted headline
loss per share (cents) |
|
(5.93) |
(4.07) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH
2016 |
|
|
|
|
|
|
|
|
|
31
March 2016 |
31 March
2015 |
|
|
US$
000 |
US$
000 |
ASSETS |
|
|
|
Non-current
assets |
|
|
|
Property, plant and
equipment |
|
129,433 |
125,145 |
Investment
property |
|
248 |
249 |
Investment in Mentor
Africa Limited |
|
20,046 |
22,931 |
Biological assets |
|
45,945 |
41,083 |
Intangible assets |
|
124 |
124 |
Other financial
assets |
|
12,004 |
12,246 |
Deferred tax |
|
3,480 |
4,201 |
Total non-current
assets |
|
211,280 |
205,979 |
|
|
|
|
Current
assets |
|
|
|
Balance with the
Reserve Bank of Zimbabwe |
|
- |
7,229 |
Treasury Bills |
|
11,106 |
22,942 |
Inventories |
|
33,391 |
35,626 |
Trade and other
receivables |
|
14,611 |
19,893 |
Other financial
assets |
|
3,493 |
4,093 |
Cash and bank
balances |
|
10,494 |
8,883 |
Total current
assets |
|
73,095 |
98,666 |
|
|
|
|
Total
assets |
|
284,375 |
304,645 |
|
|
|
|
EQUITY AND
LIABILITIES |
|
|
|
Capital and
reserves |
|
|
|
Share capital |
|
2,538 |
2,538 |
Share premium |
|
1,316 |
1,316 |
Other reserves |
|
11,418 |
87 |
Retained earnings |
|
93,222 |
115,934 |
Equity attributable to
equity holders of the parent |
|
108,494 |
119,875 |
Non-controlling
interests |
|
21,182 |
17,281 |
Total equity |
|
129,676 |
137,156 |
|
|
|
|
Non-current
liabilities |
|
|
|
Borrowings |
|
11,063 |
24,402 |
Deferred tax |
|
16,036 |
12,508 |
Total non-current
liabilities |
|
27,099 |
36,910 |
|
|
|
|
Current
liabilities |
|
|
|
Trade and other
payables |
|
60,700 |
60,397 |
Borrowings |
|
66,900 |
70,182 |
Total current
liabilities |
|
127,600 |
130,579 |
|
|
|
|
Total liabilities |
|
154,699 |
167,489 |
|
|
|
|
Total equity and
liabilities |
|
284,375 |
304,645 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2016
|
Share
capital |
Share
premium |
Other reserves |
Retained earnings |
Attributable to owners of parent |
Non
controlling
interests |
Total |
|
US$ 000 |
US$ 000 |
US$ 000 |
US$ 000 |
US$ 000 |
US$ 000 |
US$ 000 |
2016 |
|
|
|
|
|
|
|
Balance at 1 April
2015 |
2,538 |
1,316 |
87 |
115,934 |
119,875 |
17,281 |
137,156 |
(Loss) / profit for
the year |
- |
- |
- |
(22,712) |
(22,712) |
3,370 |
(19,342) |
Other comprehensive
income for the year |
- |
- |
11,331 |
- |
11,331 |
- |
11,331 |
Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
- |
- |
- |
- |
- |
531 |
531 |
Balance at 31 March
2016 |
2,538 |
1,316 |
11,418 |
93,222 |
108,494 |
21,182 |
129,676 |
2015 |
|
|
|
|
|
|
|
Balance at 1 April
2014 |
2,538 |
1,316 |
12,559 |
155,455 |
171,868 |
14,222 |
186,090 |
Loss for the year |
- |
- |
- |
(34,445) |
(34,445) |
(41) |
(34,486) |
Dividend |
- |
- |
- |
(5,076) |
(5,076) |
- |
(5,076) |
Other comprehensive
loss for the year |
- |
- |
(12,472) |
- |
(12,472) |
- |
(12,472) |
Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
- |
- |
- |
- |
- |
3,100 |
3,100 |
Balance at 31 March
2015 |
2,538 |
1,316 |
87 |
115,934 |
119,875 |
17,281 |
137,156 |
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF
CASH FLOWS
FOR THE YEAR ENDED 31
MARCH 2016 |
|
|
|
|
|
|
|
|
|
|
|
31
March 2016 |
31 March
2015 |
|
|
US$ 000 |
US$
000 |
|
|
|
|
Cash flows from
operating activities |
|
|
|
Loss before
tax |
|
(14,033) |
(37,886) |
Adjustments for: |
|
|
|
- Depreciation and
impairment of property, plant and equipment and investment
property |
|
9,505 |
9,454 |
- Net interest |
|
7,927 |
9,199 |
|
|
(1,039) |
(1,217) |
- Net exchange losses
/ (gains) |
|
274 |
(329) |
- Impairment of
investment in Mentor Africa Limited |
|
2,885 |
4,726 |
- Fair value
adjustments on biological assets |
|
(2,590) |
(8,590) |
- Loss recognised on discounting Treasury Bills
|
|
8,628 |
9,019 |
- Provision for discount on RBZ balance
|
|
- |
14,705 |
- (Profit) / loss on
disposal of property, plant and equipment |
|
(25) |
230 |
- Impairment of intangible assets
|
|
- |
1,404 |
- Impairment of investment in Afrasia Zimbabwe Holdings
Limited
|
|
- |
152 |
Operating cash flow
before working capital changes |
|
11,532 |
867 |
|
|
|
|
Decrease in
inventories |
|
2,235 |
1,005 |
Decrease in trade and
other receivables |
|
6,025 |
396 |
Increase in trade and
other payables |
|
1,246 |
10,139 |
Cash generated from
operations |
|
21,038 |
12,407 |
Income taxes paid |
|
(915) |
(225) |
Net cash generated
from operating activities |
|
20,123 |
12,182 |
|
|
|
|
Cash flows from
investing activities |
|
|
|
Payment for property,
plant and equipment |
|
(14,601) |
(25,319) |
Proceeds from disposal
of property, plant and equipment |
|
203 |
158 |
Proceeds from sale of
Treasury Bills and coupon interest |
|
24,164 |
24,128 |
Net movement in
service assets |
|
630 |
(43) |
Net movement in
other investments |
|
885 |
255 |
Net expenditure on
biological assets |
|
(2,275) |
(2,337) |
Investment income |
|
152 |
590 |
Net cash generated
from / (used in) investing activities |
|
9,158 |
(2,568) |
|
|
|
|
Cash flows from
financing activities |
|
|
|
Net decrease in
interest bearing borrowings |
|
(16,621) |
(12,329) |
Proceeds on disposal
of partial interest in a subsidiary without loss of control |
|
531 |
3,100 |
Finance costs |
|
(10,516) |
(12,527) |
Dividend paid –
ordinary shareholders |
|
(1,063) |
(2,138) |
Net cash used in
financing activities |
|
(27,669) |
(23,894) |
|
|
|
|
Net increase /
(decrease) in cash and bank balances |
|
1,612 |
(14,280) |
Cash and bank balances
at the beginning of the year |
|
8,883 |
22,952 |
Net effect of exchange
rate changes on cash and bank balances |
|
(1) |
211 |
Cash and bank
balances at the end of the year |
|
10,494 |
8,883 |
NOTES TO THE ABRIDGED AUDITED FINANCIAL STATEMENTS
1. Basis of preparation
The abridged audited financial statements are prepared from
statutory records that are maintained under the historical cost
basis except for biological assets and certain financial
instruments which are measured at fair value. Historical cost is
generally based on the fair value of the consideration given in
exchange for assets.
2. Statement of compliance
The Group’s abridged audited financial results have been
extracted from financial statements prepared in accordance with
International Financial Reporting Standards and the Companies Act
(Chapter 24.03) and relevant statutory instruments (SI33/99 and
SI62/96). These abridged financial results should be read in
conjunction with the complete set of financial statements for the
year ended 31 March 2016 which have
been audited by Deloitte & Touche and an unmodified audit
opinion issued thereon together with an Emphasis of Matter on going
concern. The auditor’s report is available for inspection at the
Company’s registered address.
3. Accounting policies
Accounting policies and methods of computation applied in the
preparation of these abridged audited financial statements are
consistent, in all material respects, with those used in the prior
year with no significant impact arising from new and revised
International Financial Reporting Standards (IFRSs) applicable for
the year ended 31 March 2016.
4. 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 2016, the
Directors have assessed the Group’s ability to continue operating
as a going concern and believe that the preparation of these
audited financial statements on a going concern basis is still
appropriate.
5. Balance with the Reserve Bank of Zimbabwe
Below is an analysis of the movement in RBZ balance during the
year:
|
|
Group
and Company |
Group
and Company |
|
|
31
March 2016 |
31
March 2015 |
|
Note |
US$
000 |
US$
000 |
|
|
|
|
Balance at the
beginning of the year |
|
7,229 |
90,861 |
Treasury Bills
received |
i |
(6,500) |
(71,156) |
Compensation on
Treasury Bills issued in lieu of amount due in cash |
i |
1,500 |
- |
Interest uplift on
Treasury Bills reissued |
ii |
(2,229) |
- |
Provision for
settlement discount |
|
- |
(14,705) |
Interest |
|
- |
2,229 |
Balance at the end of
the year |
|
- |
7,229 |
Analysis of balance
at the end of the year |
|
|
|
Amount due in
cash |
|
- |
5,000 |
Interest |
|
- |
2,229 |
Closing balance |
|
- |
7,229 |
Notes:
- An amount of US$5 million was due
and payable in cash on 31 March 2015.
This amount was settled by the RBZ issuing new Treasury Bills with
a nominal value of US$6.5 million,
and a fair market value of US$5.8
million, on 31 August 2015.
The basis of calculating the fair market value of the Treasury
Bills is set out in note 6.
- This amount was settled on 7 April
2015 by the RBZ replacing Treasury Bills with a nominal
value of US$31.1 million on hand at
31 March 2015 with new Treasury Bills
with a nominal value of US$33.3
million. The US$2.2 million
increase in the nominal value of the Treasury Bills relates to
interest from previous years.
6. Treasury Bills
Below is an analysis of the movement in the Treasury Bills’
balance during the year:
|
|
Group
and Company |
Group
and Company |
Group and
Company |
Group and
Company |
|
|
31
March 2016 |
31
March 2016 |
31
March
2015 |
31
March
2015 |
|
Note |
US$
000 |
US$
000 |
US$
000 |
US$
000 |
|
|
Fair
(Market) value |
Nominal value |
Fair
(Market) value |
Nominal
value |
Balance at the
beginning of the year |
|
22,942 |
35,414 |
- |
- |
Treasury Bills
received during the year |
|
5,769 |
6,500 |
47,084 |
71,156 |
Gain on replacement of
Treasury Bills |
i |
8,320 |
2,229 |
- |
- |
Treasury Bills
disposed during the year |
|
(27,991) |
(32,179) |
(27,166) |
(36,185) |
Treasury Bills on hand
at year end |
|
9,040 |
11,964 |
19,918 |
34,971 |
Accrued interest |
|
2,066 |
283 |
3,024 |
443 |
Balance at the end of
the year |
|
11,106 |
12,247 |
22,942 |
35,414 |
Notes:
- On 7 April 2015 the RBZ replaced
Treasury Bills with a nominal value of US$31.1 million on hand at 31 March 2015 with new Treasury Bills with a
nominal value of US$33.3 million. The
US$2.2 million increase in the
nominal value of the Treasury Bills related to interest from
previous years. The change in the market value of the
Treasury Bills arose as a result of the higher coupon rates and
shorter maturity dates of the new Treasury Bills received.
The Treasury Bills have been designated as “available-for-sale”
(AFS) financial assets and were initially recognised/measured at
fair (market) value. The fair (market) value of the Treasury Bills
on initial recognition, and at 31 March
2016, was calculated based on a yield to maturity of 17%.
This yield to maturity was determined with reference to the
percentage discount to the nominal value of the Treasury Bills at
which the Company has been able to sell certain of the Treasury
Bills in the open market during the preceding and current financial
years.
Interest income on the Treasury Bills is recognised using the
effective interest rate method and is included in “Investment
income” in the Statement of Profit or Loss and Other Comprehensive
Income.
At 31 March 2016, Treasury Bills
with a nominal value of US$12.2
million (2015: US$14.7
million) were pledged as security for loans with a carrying
value of US$14.8 million (2015:
US$16.2 million).
Treasury Bills issued by the Reserve Bank of Zimbabwe held at 31
March 2016:
|
|
Group and
Company |
Group and Company |
|
|
31
March 2016 |
31 March 2015 |
At fair (market) value |
|
US$ 000 |
US$ 000 |
Treasury Bills maturing on 10 April
2017 with a coupon rate of 5% |
|
11,106 |
- |
Treasury Bills maturing on 11 June
2018 with a coupon rate of 2% |
|
- |
10,922 |
Treasury Bills maturing on 10 June
2019 with a coupon rate of 2% |
|
- |
8,375 |
Treasury Bills maturing on 23
December 2016 with a coupon rate of 5% |
|
- |
3,645 |
|
|
11,106 |
22,942 |
The salient terms of the Treasury Bills held at 31 March 2016 are as follows:
Treasury Bill number |
|
ZTB73120150410Z |
Issue date |
|
10/04/2015 |
Redemption date |
|
10/04/2017 |
Nominal value - including accrued
interest (US$ 000) |
|
12,247 |
Coupon |
|
5.0% |
Coupon payment dates |
|
10 April and 10
October |
Fair value - including accrued
interest (US$ 000) |
|
11,106 |
7. Segment information
|
31
March 2016 |
31
March
2015 |
|
US$
000 |
US$
000 |
Revenue |
|
|
Supermarkets |
395,297 |
360,328 |
Hotels |
15,812 |
16,398 |
Agriculture |
22,412 |
21,091 |
Departmental
stores |
6,465 |
7,035 |
Wholesaling |
15,740 |
10,308 |
Corporate* |
(2,078) |
(1,811) |
|
453,648 |
413,349 |
EBITDA |
|
|
Supermarkets |
15,911 |
9,307 |
Hotels |
1,699 |
1,992 |
Agriculture |
255 |
(104) |
Departmental
stores |
(186) |
(2,588) |
Wholesaling |
(2,326) |
(2,415) |
Corporate* |
(3,152) |
(5,708) |
|
12,201 |
484 |
The EBITDA figures are
before Group management fees. |
|
|
|
|
|
Segment
assets |
|
|
Supermarkets |
88,113 |
83,464 |
Hotels |
47,557 |
49,216 |
Agriculture |
77,522 |
75,270 |
Departmental
stores |
30,015 |
30,516 |
Wholesaling |
4,268 |
2,048 |
Corporate* |
36,900 |
64,131 |
|
284,375 |
304,645 |
Segment
liabilities |
|
|
Supermarkets |
46,716 |
49,524 |
Hotels |
22,887 |
20,922 |
Agriculture |
33,000 |
33,933 |
Departmental
stores |
16,984 |
16,533 |
Wholesaling |
6,049 |
3,542 |
Corporate* |
29,063 |
43,035 |
|
154,699 |
167,489 |
*Intercompany transactions and balances have been eliminated
from the corporate amounts. Corporate also includes other
subsidiaries that are immaterial to warrant separate
disclosure.
|
31 March
2016 |
31 March 2015 |
|
US$ 000 |
US$ 000 |
8. Depreciation, amortisation and
impairment |
|
|
Depreciation of property, plant and
equipment |
9,206 |
8,858 |
Impairment of property, plant and
equipment |
298 |
595 |
Depreciation of investment
property |
1 |
1 |
Impairment of investment in Mentor
Africa Limited |
2,885 |
4,726 |
Impairment of intangible assets |
- |
1,404 |
Impairment of
investment in Afrasia Zimbabwe Holdings Limited |
- |
152 |
|
12,390 |
15,736 |
9. Non-trading income |
|
|
Net investment revenue |
3,628 |
4,546 |
Fair value adjustments on biological
assets |
2,590 |
8,590 |
Net exchange (losses) / gains |
(274) |
329 |
|
5,944 |
13,465 |
Net investment revenue includes
US$1.0 million (2015: US$1.2 million) dividend receivable from
Mentor Africa Limited. |
|
|
|
|
|
10. Net borrowings |
|
|
Non-current borrowings |
11,063 |
24,402 |
Current borrowings |
66,900 |
70,182 |
Total borrowings |
77,963 |
94,584 |
Cash and cash equivalents |
(10,494) |
(8,883) |
Net borrowings |
67,469 |
85,701 |
|
|
|
Comprising: |
|
|
Secured |
68,454 |
85,836 |
Unsecured |
9,509 |
8,748 |
|
77,963 |
94,584 |
The weighted average cost of
borrowings for the year was 11.48% per annum (2015: 11.95% per
annum). |
|
|
11. Other information |
|
|
Capital commitments authorised by
the Directors but not contracted |
19,741 |
8,426 |
Group’s share of capital commitments
of joint operations |
2,651 |
2,600 |
|
Website : www.meiklesinvestor.com