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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Meikles Limited | LSE:MIK | London | Ordinary Share | ZW0009012114 | ZWR 0.1 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Hotels And Motels | 230.86B | 6.25B | - | N/A | 0 |
TIDMMIK MEIKLES LIMITED ABRIDGED AUDITED FINANCIAL RESULTS FOR THE YEARED 31 MARCH 2020 CHAIRMAN'S STATEMENT It gives me pleasure to present the Chairman's Statement for the financial year ended 31 March 2020. FINANCIAL OVERVIEW The Group did not anticipate the advent of COVID-19. The impact of the virus has affected the latter part of the financial year under review. It is apparent that the continued impact of the virus will affect the world and Zimbabwe for an unpredictable period into the Group's new financial year. The Group restructured its finances in recognition of stresses in the local environment. It is fortunate that the structural adjustments will also enable the Group to withstand damages caused by the virus. The Group decided sometime ago to ensure that it remains in a position to fund capital expansion projects, replacement requirements, provide working capital and be in a position to continue paying dividends to shareholders, without placing adverse pressure on Group resources. Shareholders are advised that the Group financial restructuring has been successfully implemented. The Group is in a net cash in hand position, but in the process of achieving this position most Group bank borrowings were repaid within the year under review and subsequent to the year-end, the remaining out of term bank borrowings have been repaid. This position has been achieved from normal operating cash flows and puts the Group in an unsurpassed financial position since the dollarisation in 2009. The sale of the Harare based hotel has increased the Group's total current assets which are substantially more than current liabilities. FINANCIAL REPORTING There were two developments during the financial year under review with significant impact to financial reporting: - IAS 29 - Financial Reporting in Hyperinflationary economies The Public Accountants and Auditors Board (PAAB) issued a pronouncement in October 2019 indicating that factors and conditions to apply International Accounting Standard (IAS) 29 - Financial Reporting in Hyperinflationary Economies had been met in Zimbabwe. In accordance with IAS 29, historical cost financial information has been restated for changes in general purchasing power of the Zimbabwean Dollar (ZWL). Accordingly, the inflation adjusted financial statements represent the primary financial statements of the Group. The historical cost financial statements have been provided as supplementary information. Adoption of IFRS 16 - Leases The Group adopted International Financial Reporting Standard (IFRS) 16 for the first time on 1 April 2019. The impact of the adoption of IFRS 16 is set out in note 8 of these abridged financial results. GROUP FINANCIAL PERFORMANCE The Group delivered strong financial results in a tough operating environment with several impediments. Commentary on financial performance is based on inflation adjusted figures. Group revenue for continuing operations grew by 6% from ZWL 8.3 billion in 2019 to ZWL 8.8 billion in the year under review. Profit for the year grew from ZWL 320.6 million in prior year to ZWL 1.4 billion. Growth in Profit for the year was boosted by ZWL 118.7 million profit on disposal of Meikles Hotel. Total comprehensive income for the year was ZWL 1.1 billion (2019: ZWL 561.4 million), of which ZWL 790.8 million was attributable to the owners of the parent with the remaining balance of ZWL 340.7 million being for minority shareholders. Segmental contributions to the Group's financial performance is set out in note 5 of these abridged financial results.. REVIEW OF OPERATIONS Supermarkets - trading as TM Pick n Pay Revenue increased by 2% over the previous year in inflation adjusted terms. Sales volume declined by 22% due to diminishing customer disposable income over the period. Profit after tax grew to ZWL 674.8 million from a loss of ZWL 21 million in the previous year. Profit growth was achieved through a focussed approach to margin and operating expenditure control. The profit after tax was after deducting exchange losses of ZWL 380.6 million. These exchange losses arose from foreign currency denominated liabilities (legacy debt) accumulated prior to introduction of local currency on 22 February 2019. Going forward, there will be no exchange losses as legacy debt exposure has now been eliminated. Legacy debt reduced to US$ 2.23 million at 31 March 2020 from US$ 13.3 million at the beginning of the financial year. The payment of legacy debt was funded from internally generated funds. After year-end, US$ 0.6 million was paid, leaving the outstanding balance at US$ 1.63 million. In addition, ZWL 1.63 million was remitted to the Reserve Bank of Zimbabwe (RBZ) to complete all processes according to the RBZ's guidelines on blocked funds or "legacy debt" contained in Exchange Control Directive RU28 dated 21 February 2019 and Exchange Control Circular No.8 of 24 July 2019. Accordingly, it is anticipated the RBZ will issue an instrument that will settle US$ 1.63 million without further costs to the segment. The segment invested ZWL 386.6 million in seven (7) store upgrades and construction of an upmarket mall in Marondera. The clearance of foreign currency denominated liabilities has well positioned the segment for accelerated store upgrades, branch network expansion, commencement of dividend payment to shareholders and a boost on the working capital front. Agriculture Profit after tax was ZWL 157.2 million (2019: ZWL 332 million). The hailstorm of January 2019, Cyclone Idai in March 2019 as well as very dry and hot September to November 2019 period affected our tea production and ensuing season's macadamia crop. The Company's annual made tea production of 8 319 tonnes (2019: 10 171 tonnes) was reflective of these adverse weather conditions. International tea prices weakened by 14% from US$ 1.64 per kilogram in prior year to US$ 1.44 per kilogram in the year ended 31 March 2020 due to increased supply of tea by Kenya which has not been matched by corresponding world demand. The much-needed RBZ authority to increase promotional spend in South Africa has been secured. This will help to support market penetration efforts to grow packed tea exports. Export earnings from macadamia nuts, avocadoes and coffee grew by 78% from US$ 4.5 million in prior year to US$ 8 million in the year ended 31 March 2020. As a percentage of total exports, these three crops contributed 43% up from 25% in the prior year. Contribution of the high value crops to the Company's export earnings is expected to rise to 60% by March 2022 as the bulk of them reach maturity. In volume terms, macadamia and avocado export sales grew by 129% and 39% respectively. To mitigate the inefficiencies caused by power shortages in the country, the Company has embarked on a 7.5 Mega Watt solar project covering all estates and Mutare factory. Phases 1 to 3 of the project covering Ratelshoek, Tingamira and Jersey estates are already under implementation. Ratelshoek's 1.8 Mega Watt solar plant is expected to be completed by September 2020. Tingamira's 1.6 Mega Watt and Jersey's 2.0 Mega Watt plants are expected to be completed by December 2020. By end of December 2020 we will have implemented 72% of the project. This project is expected to result in an efficient and integrated power supply system that will give impetus to the growth and maturity of our high value crops and efficient crop processing. Hospitality Profit after tax from continuing operations increased to ZWL 184.7 million in the current year from ZWL 72.5 million in the previous year. The disposal of Meikles Hotel was completed at the end of February 2020 and control was transferred to the buyer in March 2020. The financial results of the hotel for the period up to the date of disposal as well as the profit on disposal are included under discontinued operations. The refurbishment of The Victoria Falls Hotel was due to commence in April 2020 but has been disrupted by the outbreak of the COVID-19 pandemic. The hotel closed in March 2020 when international travel and tourism stopped as countries implemented travel restrictions and lockdowns to contain the spread of the corona virus. Properties Plans to renovate and upgrade the Group's property portfolio are at an advanced stage and the roll out is anticipated to commence during the second half of the forthcoming financial year. Several tenants have expressed interest to lease the properties which had been left vacant following the closure of the Group's departmental stores. Security Services Meikles Guard Services fared well during the financial year and was not disrupted by loss of contract when the departmental stores closed. The segment secured additional contracts from third parties during the year. MEIKLES FOUNDATION During the year under review, Meikles Foundation played its part in providing much needed help to disadvantaged members of society. Further details on the Foundation's activities are provided in the Annual Report. CORPORATE SUSTAINABILITY With the growing call for sustainability following the COVID-19 pandemic, the Group made a strategic decision to realign existing practices with consistent sustainability values across the Group. In doing so, the Group opted to adopt the Global Reporting Initiatives (GRI) Standards as a catalyst and business strategy for re-engineering our value chains for long term business success and sustainable decision making into the future. Sustainability will be the cornerstone for maintaining the Meikles legacy created over a century. Our sustainability strategy will now anchor how our brands compete and deliver value to our customers and stakeholders in our markets. The Group will calibrate practices across all subsidiaries for the successful implementation of the strategy. DIVID In view of the Group's financial results for the year ended 31 March 2020, the
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Board has declared a final dividend of 42.5 ZWL cents per share, bringing the
total dividend for the year to 60 ZWL cents. The final dividend will amount to
ZWL 111 million. A full dividend announcement will be published separately in
due course.
DIRECTORATE
The Board welcomed, Ms Cathrine Chitiyo, Mr Stewart Cranswick and Mr Simon
Hammond as Independent Non-Executive Directors of the Company as part of the
steps to comply with the requirements of the Companies and Other Business
Entities Act (Chapter 24:31) and Statutory Instrument (SI) 134 of 2019
(Zimbabwe Stock Exchange Listings Requirements).
STRATEGY AND OUTLOOK
The financial strategy set out under Financial Overview in this report will
continue to be applied during the forthcoming year. The Group is well placed to
support its long-term objectives.
Despite the absence of income from Hospitality together with its continuing
cost commitments, the Group's profit performance to date for the new financial
year is ahead of expectations, but there are uncertainties going forward in
terms of risk.
The COVID-19 impact is causing supermarkets to close for periods to facilitate
disinfection whenever a case of the disease is identified. The cost of such
closures is significant but necessary. Nevertheless, the Group is to continue
with its expansion and renovation plans with a focus on both Tanganda and
Supermarkets.
The Victoria Falls Hotel is closed and is on care and maintenance basis.
Fortunately, the hotel has working capital resources which will enable it to
maintain its financial independence well into the next calendar year.
Shareholders are advised that the Cape Grace hotel is in the same position
APPRECIATION
I would like to extend my appreciation to our customers as well as suppliers
for their continued support and to our shareholders, stakeholders and
regulatory authorities for their assistance 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
19 August 2020
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEARED 31 MARCH 2020
INFLATION ADJUSTED HISTORICAL COST*
31 March 31 March 31 March 31 March
2020 2019 2020 2019
CONTINUING OPERATIONS ZWL 000 ZWL 000 ZWL 000 ZWL 000
Revenue 8,835,523 8,285,324 4,201,837 790,828
Net operating costs (8,325,514) (7,157,752) (3,513,677) (698,600)
Operating profit 510,009 1,127,572 688,160 92,228
Investment income 4,944 802 3,807 43
Finance costs (75,119) (90,921) (38,156) (8,432)
Net exchange gains / (losses) 29,861 (47,604) 111,784 (6,413)
Fair value adjustments on biological assets 90,312 49,171 183,515 9,433
Net monetary gain / (loss) 1,174,469 (688,815) - -
Profit before tax 1,734,476 350,205 949,110 86,859
Income tax expense (459,521) (153,900) (230,413) (16,845)
Profit for the year from continuing operations 1,274,955 196,305 718,697 70,014
DISCONTINUED OPERATIONS
Profit / (loss) for the year from discontinued 118,718 124,248 307,969 (4,056)
operations
PROFIT FOR THE YEAR 1,393,673 320,553 1,026,666 65,958
Other comprehensive (loss) / income, net of tax
Items that will not be reclassified subsequently
to profit or loss:
Fair value loss on investments in equity (249,651) (74,536) (249,651) (9,600)
instruments designated as at FVTOCI
Items that may be reclassified subsequently to
profit or loss:
Exchange rate and monetary adjustments on (12,608) 315,355 606,925 61,970
translation of foreign operations
Other comprehensive (loss) / income for the (262,259) 240,819 357,274 52,370
year, net of tax
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 1,131,414 561,372 1,383,940 118,328
Profit / (loss) for the year attributable to:
Owners of the parent 1,053,010 325,054 907,868 53,827
Non-controlling interests 340,663 (4,501) 118,798 12,131
1,393,673 320,553 1,026,666 65,958
Total comprehensive income / (loss) attributable
to:
Owners of the parent 790,751 565,873 1,265,142 106,197
Non-controlling interests 340,663 (4,501) 118,798 12,131
1,131,414 561,372 1,383,940 118,328
Earnings per share in cents
Basic earnings per share - continuing and 403.35 126.76 347.76 20.99
discontinued operations
Basic earnings per share - continuing operations 357.88 78.31 229.79 22.57
Diluted earnings per share - continuing and 378.39 118.78 326.24 19.67
discontinued operations
Diluted earnings per share - continuing 335.73 73.38 215.57 21.15
operations
Headline earnings per share - continuing and 377.25 127.93 221.12 21.43
discontinued operations
Headline earnings per share - continuing 360.18 79.48 229.63 23.01
operations
Diluted headline earning per share - continuing 353.90 119.87 207.44 20.09
and discontinued operations
Diluted headline earnings per share - continuing 337.89 74.47 215.43 21.57
operations
*Historical cost financial results are provided only as supplementary
information. The primary financial statements are the inflation adjusted
results. The auditor's opinion relates only to the inflation adjusted financial
results.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2020
INFLATION ADJUSTED HISTORICAL COST*
31 Mar 31 Mar 31 Mar 31 Mar
2020 2019 2020 2019
ZWL 000 ZWL 000 ZWL 000 ZWL 000
ASSETS
Non-current assets
Property, plant and equipment 2,441,525 2,162,976 403,617 172,267
Investment property 2,938 2,980 231 236
Right of use assets 399,412 - 75,885 -
Investment in Mentor Africa (Pty) 171,813 394,236 171,813 50,778
Limited
Biological assets 22,503 22,547 22,503 2,905
Intangible assets 1,570 1,570 124 124
Other financial assets 264,369 304,590 263,440 31,847
Deferred tax 69 50,845 20,637 9,111
Total non-current assets 3,304,199 2,939,744 958,250 267,268
Current assets
Inventories 775,296 824,382 565,008 100,163
Trade and other receivables 622,101 316,583 606,212 40,471
Biological assets - produce on bearer 187,052 86,785 187,052 11,178
plants
Other financial assets 3,543 354 3,543 9
Cash and bank balances 262,469 256,255 262,469 33,006
1,850,461 1,484,359 1,624,284 184,827
Assets held for sale 388 380,983 9 30,032
Total current assets 1,850,849 1,865,342 1,624,293 214,859
Total assets 4,805,086 2,582,543 482,127
5,155,048
EQUITY AND LIABILITIES
Capital and reserves
Share capital 32,854 32,854 2,611 2,611
Share premium 40,997 40,997 3,925 3,925
Other reserves (34,362) 564,409 395,603 64,929
Retained earnings 2,735,739 1,428,204 1,020,252 131,914
Equity attributable to equity holders 2,775,228 2,066,464 1,422,391 203,379
of the parent
Non-controlling interests 835,177 461,908 177,063 48,999
Total equity 3,610,405 2,528,372 1,599,454 252,378
Non-current liabilities
Borrowings 29,314 95,063 29,314 12,244
Deferred tax 649,576 596,360 88,022 25,617
Lease liabilities 91,527 - 91,527 -
Total non-current liabilities 770,417 691,423 208,863 37,861
Current liabilities
Trade and other payables 736,775 1,185,296 736,775 140,368
Borrowings 30,788 399,995 30,788 51,520
Lease liabilities 6,663 - 6,663 -
Total current liabilities 774,226 1,585,291 774,226 191,888
Total liabilities 1,544,643 2,276,714 983,089 229,749
Total equity and liabilities 5,155,048 4,805,086 2,582,543 482,127
*Historical cost financial results are provided only as supplementary
information. The primary financial statements are the inflation adjusted
results. The auditor's opinion relates only to the inflation adjusted financial
results.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 MARCH 2020
INFLATION ADJUSTED
Share Share Other
capital premium reserves Investments Retained
revaluation earnings
ZWL ZWL ZWL ZWL ZWL
000 000 000 000 000
2020
Balance at 1 April 2019 32,854 40,997 638,945 (74,536) 1,428,204
Profit for the year - - - - 1,053,010
Transfer from non-distributable - - (336,512) - 336,512
reserves
Other comprehensive income / - - (12,608) (249,651) -
(loss) for the year
Dividend paid - ordinary - - - - (81,987)
shareholders
Non-controlling interests - -
arising from Mopani Property - - -
Development (Private) Limited
Balance at 31 March 2020 32,854 40,997 289,825 (324,187) 2,735,739
2019
Balance at 1 April 2018 as 32,406 18,582 323,590 - 1,128,057
restated
Profit / (loss) for the year - - - - 325,054
Issue of shares - scrip 448 22,415 - - -
dividend
Dividend paid - ordinary - - - - (24,907)
shareholders
Other comprehensive income / - - 315,355 (74,536)
(loss) for the year
Non-controlling interests - - -
arising from Mopani Property - -
Development (Private) Limited
Balance at 31 March 2019 32,854 40,997 638,945 (74,536) 1,428,204
Attributable Non-controlling Total
to owners of interests
parent
ZWL ZWL ZWL
000 000 000
2020
Balance at 1 April 2019 2,066,464 461,908 2,528,372
Profit for the year 1,053,010 340,663 1,393,673
Transfer from - - -
non-distributable reserves
Other comprehensive income / (262,259) - (262,259)
(loss) for the year
Dividend paid - ordinary (81,987) - (81,987)
shareholders
Non-controlling interests - 32,606 32,606
arising from Mopani Property
Development (Private) Limited
Balance at 31 March 2020 2,775,228 835,177 3,610,405
2019
Balance at 1 April 2018 as 1,502,635 458,484 1,961,119
restated
Profit / (loss) for the year 325,054 (4,501) 320,553
Issue of shares - scrip 22,863 - 22,863
dividend
Dividend paid - ordinary (24,907) - (24,907)
shareholders
Other comprehensive income / 240,819 - 240,819
(loss) for the year
Non-controlling interests 7,925 7,925
arising from Mopani Property -
Development (Private) Limited
Balance at 31 March 2019 2,066,464 461,908 2,528,372
HISTORICAL COST*
Share Share Other
capital premium reserves Investments Retained
revaluation earnings
ZWL ZWL ZWL ZWL ZWL
000 000 000 000 000
2020
Balance at 1 April 2019 2,611 3,925 74,529 (9,600) 131,914
Profit for the year - - - - 907,868
Transfer from non-distributable - - (26,600) - 26,600
reserves
Other comprehensive income / - - 606,925 (249,651) -
(loss) for the year
Dividend paid - ordinary - - - - (46,130)
shareholders
Non-controlling interests - -
arising from Mopani Property - - -
Development (Private) Limited
Balance at 31 March 2020 2,611 3,925 654,854 (259,251) 1,020,252
2019
Balance at 1 April 2018 as 2,562 1,469 12,559 - 81,160
restated
Profit / (loss) for the year - - - - 53,827
Issue of shares - scrip 49 2,456 - - -
dividend
Dividend paid - ordinary - - 61,970 (9,600) -
shareholders
Other comprehensive income / - - - - (3,073)
(loss) for the year
Non-controlling interests - -
arising from Mopani Property - - -
Development (Private) Limited
Balance at 31 March 2019 2,611 3,925 74,529 (9,600) 131,914
Attributable Non-controlling Total
to owners of interests
parent
ZWL ZWL ZWL
000 000 000
2020
Balance at 1 April 2019 203,379 48,999 252,378
Profit for the year 907,868 118,798 1,026,666
Transfer from - - -
non-distributable reserves
Other comprehensive income / 357,274 - 357,274
(loss) for the year
Dividend paid - ordinary (46,130) - (46,130)
shareholders
Non-controlling interests - 9,266 9,266
arising from Mopani Property
Development (Private) Limited
Balance at 31 March 2020 1,422,391 177,063 1,599,454
2019
Balance at 1 April 2018 as 97,750 36,241 133,991
restated
Profit / (loss) for the year 53,827 12,131 65,958
Issue of shares - scrip 2,505 - 2,505
dividend
Dividend paid - ordinary 52,370 - 52,370
shareholders
Other comprehensive income / (3,073) - (3,073)
(loss) for the year
Non-controlling interests - 627 627
arising from Mopani Property
Development (Private) Limited
Balance at 31 March 2019 203,379 48,999 252,378
*Historical cost financial results are provided only as supplementary
information. The primary financial statements are the inflation adjusted
results. The auditor's opinion relates only to the inflation adjusted financial
results.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 MARCH 2020
INFLATION ADJUSTED HISTORICAL COST*
31 March 31 March 31 March 31 March
2020 2019 2020 2019
ZWL 000 ZWL 000 ZWL 000 ZWL 000
Cash flows from operating activities
Profit / (loss) before tax - continuing 1,734,476 350,205 949,110 86,859
operations
- discontinued 147,633 127,620 336,884 (4,231)
operations
1,882,109 477,825 1,285,994 82,628
Adjustments for:
- Depreciation and impairment of property, 231,255 155,987 36,266 14,376
plant and equipment; investment property
and right-of-use assets
- Net interest 74,379 97,114 35,621 8,591
- Net exchange (gains) / losses (20,038) 52,425 (108,886) 7,031
- Fair value adjustments on biological (90,312) (49,171) (183,515) (9,433)
assets
* Reversal of impairment of other (3,324) - (3,324) -
financial assets
- (Profit) / loss on disposal of property, (3,033) 241 (2,731) 42
plant and equipment - continuing operations
- (Profit) / loss on disposal of property, (74,157) 420 (330,192) 17
plant and equipment - discontinued
operations
Operating cash flow before working capital 1,996,879 734,841 729,233 103,252
changes
Decrease / (increase) in inventories 49,086 (4,781) (464,845) (56,293)
Increase in trade and other receivables (98,874) (64,668) (359,102) (11,522)
(Decrease) / increase in trade and other (717,365) (42,562) 301,070 34,088
payables
Cash generated from operations 1,229,726 622,830 206,356 69,525
Income taxes paid (271,271) (148,807) (62,905) (18,038)
Net cash generated from operating 958,455 474,023 143,451 51,487
activities
Cash flows from investing activities
Payment for property, plant and equipment (492,592) (182,057) (41,870)
(258,175)
Proceeds from disposal of property, plant 464,845 3,256 364,749 355
and equipment
Net movement in service assets (497) 429 (141) 51
Net movement in other investments 3,551 83 3,352 11
Net movement on biological assets (9,911) (10,977) (11,957) (541)
Investment income 1,414 796 276 43
Net cash (used in) / generated from (33,190) (188,470) 98,104 (41,951)
investing activities
Cash flows from financing activities
Net decrease in interest bearing borrowings (434,956) (432,018) (3,662) (9,518)
Non-controlling interests arising from 32,606 7,925 9,266 627
Mopani Property Development (Private)
Limited
Finance costs (79,326) (97,928) (39,429) (8,635)
Lease payments 11,206 - 11,206 -
Dividend paid - ordinary shareholders (46,724) (2,046) (16,743) (568)
Net cash used in financing activities (517,194) (524,067) (39,362) (18,094)
Net increase / (decrease) in cash and bank 408,071 (238,514) 202,193 (8,558)
balances
Cash and bank balances at the beginning of 256,255 432,348 33,006 34,175
the year
Translation of foreign entity (71,084) 110,657 4,617 1,646
Net effect of exchange rate changes on cash (66,196) 117,487 22,653 5,743
and bank balances
Effects of inflation adjustments (264,577) (165,723) - -
Cash and bank balances at the end of the 262,469 256,255 262,469 33,006
year
*Historical cost financial results are provided only as supplementary
information. The primary financial statements are the inflation adjusted
results. The auditor's opinion relates only to the inflation adjusted financial
results.
NOTES TO THE ABRIDGED AUDITED FINANCIAL RESULTS
1. Basis of preparation
The abridged audited financial results 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. The historical costs have been adjusted for the effects of applying
International Accounting Standard ("IAS") 29 - 'Financial Reporting in
Hyperinflationary Economies' . Refer to note 2.2 for further details.
2. Accounting policies
Accounting policies and methods of computation applied in the preparation of
these abridged financial results are consistent, in all material respects, with
those used in the prior year. New applicable standards and improvements which
became effective in the current year have been complied with.
2.1 Functional and presentation currency
On 22 February 2019, the Company and its subsidiaries changed their functional
currency from the US$ to the RTGS$ following the promulgation of Statutory
Instrument 33 of 2019 (SI 33/19). SI 33/19 prescribed exchange rates and
treatment of foreign currency transactions which conflicted with IAS 21 - "The
Effects of Changes in Foreign Exchange Rates".
The Group opted to comply with SI 33/19 in translating foreign currency
denominated transactions conducted from October 2018 to 22 February 2019. The
decision to comply with SI 33/19 restricted full compliance with IAS 21. The
Group's deviation from IAS 21 was not intentional but was necessitated by the
requirement to comply with laws and regulations within Zimbabwe. In the current
year, the Group has appropriately accounted for foreign currency transactions.
However, the comparative statement of profit or loss and other comprehensive
income and statement of cash flows have USD transactions between the period 1
October 2018 and 22 February 2019 which were translated at a rate of US$1:
ZWL1.
2.2 Hyperinflation
On 11 October 2019, the Public Accountants and Auditors Board ("PAAB") issued a
pronouncement on the application of IAS 29. The pronouncement requires that
entities operating in Zimbabwe with financial periods ending on or after 1 July
2019, prepare and present financial statements in line with the requirements of
IAS 29.
The Directors have made appropriate adjustments to reflect the changes in the
general purchasing power on the ZWL and for the purposes of fair presentation
in accordance with IAS 29, these changes have been made on the historical cost
financial information. Various assumptions have been made, with the significant
assumption being the use of the consumer price indices ("CPI"), for the various
years. Accordingly, the inflation adjusted financial statements represent the
primary financial statements of the Group. The historical cost financial
results are provided as supplementary information and as a result the auditors
have not expressed an opinion on them.
The source of the price indices used was the Reserve Bank of Zimbabwe website.
Below are the indices and adjustment factors used up to 31 March 2020:
Adjustment
Indices Factor
CPI as at 31 March 2020 810.40 1.00
CPI as at 31 March 2019 104.38 7.76
CPI as at 1 October 2018 (for opening balances) 64.06 12.65
Average CPI 2020 382.91
Average CPI 2019 77.18
3. 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
2020, the Directors have assessed the Group's ability to continue operating as
a going concern and believe that the preparation of these financial results on
a going concern basis is still appropriate.
The Group's segments have put in place various measures to mitigate the adverse
impact of COVID-19 pandemic to the businesses. Apart from the hospitality
segment, the rest of the Group's segments are operating as they are classified
as part of essential services. Their trading performance for three months to
June 2020 is not significantly different from the period prior to outbreak of
the pandemic. The hospitality segment closed at the end of March 2020 and its
date of reopening remains uncertain. Both the hospitality segment and the Group
have cash resources to fund operations for a prolonged period of care and
maintenance.
4. Audit opinion
These abridged financial results should be read in conjunction with the
complete set of financial statements for the year ended 31 March 2020, which
have been audited by Deloitte & Touche Chartered Accountants (Zimbabwe) in
accordance with International Standards on Auditing. The auditors issued a
qualified opinion on the financial statements for the carryover effects of
non-compliance with IAS 21 -'The Effects of Changes in Foreign Exchange Rates'
from the prior year. The audit report includes a section on Key Audit Matters.
The Key Audit Matters are on valuation of investment in Mentor Africa (Pty)
Limited and valuation of biological assets. The auditor's report is available
for inspection at the Company's registered address. The Engagement Partner
responsible for the audit was Charity Mtwazi.
5. Segment information
INFLATION ADJUSTED HISTORICAL COST
31 Mar 31 Mar 31 Mar 2020 31 Mar
2020 2019 2019
ZWL 000 ZWL 000 ZWL 000 ZWL 000
Revenue - continuing operations
Supermarkets 7,954,179 7,827,634 3,819,565 747,338
Agriculture 719,593 389,051 321,456 37,015
Hotels 198,899 96,722 79,263 9,101
Corporate* (37,148) (28,083) (18,447) (2,626)
8,835,523 8,285,324 4,201,837 790,828
Profit after tax - continuing operations
Supermarkets 674,849 (21,047) 240,262 24,788
Agriculture 157,159 332,016 387,011 40,428
Hotels 184,747 72,544 125,417 9,280
Corporate* 258,200 (187,208) (33,993) (4,482)
1,274,955 196,305 718,697 70,014
Segment assets
Supermarkets 2,550,143 2,042,532 938,668 204,081
Agriculture 1,396,472 1,247,548 635,265 120,763
Hotels 686,453 629,818 547,585 54,930
Corporate* 521,980 885,188 461,025 102,353
5,155,048 4,805,086 2,582,543 482,127
Segment liabilities
Supermarkets 963,254 1,163,097 593,171 108,112
Agriculture 296,449 292,586 172,704 33,385
Hotels 148,805 227,540 143,733 26,761
Corporate* 136,135 593,491 73,481 61,491
1,544,643 2,276,714 983,089 229,749
*Included in the corporate revenue amount is an adjustment of ZWL62.3 million
(2019: ZWL55.5 million); (Historical cost ZWL30 million (2019: ZWL5.2 million)
against revenue in respect of inter-segment sales. Inter-company balances have
been eliminated in the corporate amounts. Corporate also includes other
operating segments that are immaterial to warrant separate disclosure.
5.1 Discontinued operations
Meikles Hotel
The Group disposed of Meikles Hotel as a going concern. The disposal included
the property, plant and equipment and transfer of employees. The disposal was
effected on the 1st of March 2020, on which date control of the hotel passed.
The summary of the profit / (loss) position from the discontinued operation and
details of assets and liabilities disposed of are as set out below.
Greatermans Stores
The group exited the departmental stores segment during the first quarter of
the financial year. The results of the departmental stores for the current year
are disclosed as discontinued operations. The summary of the profit / (loss)
position from the discontinued operation and details of assets and liabilities
disposed of are as set out below.
The prior year comparative financial information from discontinued operations
has been re-presented to include the operations classified as discontinued in
the current period.
5.1 Discontinued operations (continued)
INFLATION ADJUSTED HISTORICAL COST
31 Mar 31 Mar 31 Mar 31 Mar 2019
2020 2019 2020
ZWL 000 ZWL 000 ZWL 000 ZWL 000
Profit / (loss) for the period from
discontinued operations
Revenue 225,566 160,540 91,550 15,377
Net operating costs (187,222) (200,213) (83,978) (19,339)
Other operating income 6,601 10,089 3,290 563
Operating profit / (loss) 44,945 (29,584) 10,862 (3,399)
Investment income 2 12 1 1
Interest expense (4,206) (7,007) (1,273) (198)
Exchange gains (9,823) (4,821) (2,898) (618)
Profit / (loss) on disposal of property, 74,157 (420) 330,192 (17)
plant and equipment
Net monetary adjustment 42,558 169,440 -
Profit / (loss) before tax 147,633 127,620 336,884 (4,231)
Taxation (28,915) (3,372) (28,915) 175
Profit / (loss) for the year from 118,718 124,248 307,969 (4,056)
discontinued operations
Cash flows from discontinued operations
Net cash outflows from operating activities (504,675) (136,644) (364,449) (10,020)
Net cash flows from investing activities 547,387 104,127 359,274 2
Net cash flows from financing activities (71,335) 39,849 12,901 12,050
Net cash flows from discontinued operations (28,623) 7,332 7,726 2,032
Analysis of assets disposed of INFLATION HISTORICAL
ADJUSTED COST
31 Mar 31 Mar 2020
2020
ZWL 000 ZWL 000
Non-current assets
Property, plant and equipment (385,401) (31,546)
Net assets disposed of (385,401) (31,546)
Proceeds on disposal 459,558 361,738
Profit on disposal of operation 74,157 330,192
NOTES TO THE ABRIDGED UNAUDITED FINANCIAL RESULTS
INFLATION ADJUSTED HISTORICAL COST
31 Mar 31 Mar 31 Mar 31 Mar
2020 2019 2020 2019
6. Other information ZWL 000 ZWL 000 ZWL 000 ZWL 000
Capital commitments authorised but not 1,339,413 922,167 1,339,413 118,836
contracted for
Group's share of capital commitments of joint 110,245 94,602 110,245 12,191
operation
7. Net borrowings
Non-current borrowings 29,314 95,063 29,314 12,244
Current borrowings 30,788 399,995 30,788 51,520
Total borrowings 60,102 495,058 60,102 63,764
Cash and cash equivalents (262,469) (256,255) (262,469) (33,006)
Net (cash) / borrowings (202,367) 238,803 (202,367) 30,758
Comprising:
Secured 41,937 452,981 41,937 56,622
Unsecured 18,165 42,077 18,165 7,142
60,102 495,058 60,102 63,764
7.1 Breach of loan covenants
During the course of the current year, the Group was in default on some of its
loan covenants with lenders. These defaults were carried over prior years.
Subsequent to year end all past due loans were expunged.
8. Implementation of IFRS 16
The Group has applied the new IFRS 16 that is effective for the current year.
The Group used the modified retrospective approach, with no adjustment to
equity and no restatement of the comparative information. IFRS 16 allows for
the recognition of right of use asset and lease liability and the impact of the
adoption of IFRS 16 on the Group's consolidated financial statements is set out
below:
8.1 Right of use assets
INFLATION ADJUSTED HISTORICAL COST
31 Mar 2020 31 Mar 31 Mar 31 Mar
2019 2020 2019
ZWL 000 ZWL 000 ZWL 000 ZWL 000
Opening carrying value - - - -
Additions 424,059 - 86,984 -
Depreciation (24,647) - (11,099) -
Closing carrying value 399,412 - 75,885 -
Comprising
Cost 424,059 - 86,984 -
Accumulated depreciation (24,647) - (11,099) -
399,412 - 75,885 -
The Group's leases include leases of offices, retail stores and residential
property in Zimbabwe.
8.2 Lease liabilities
INFLATION ADJUSTED HISTORICAL COST
31 Mar 2020 31 Mar 31 Mar 31 Mar
2019 2020 2019
ZWL 000 ZWL 000 ZWL 000 ZWL 000
Opening balance - - - -
Additions 86,984 - 86,984 -
Interest expense 28,630 - 28,630 -
Rental payments (17,424) - (17,424) -
98,190 - 98,190 -
Less current portion (6,663) - (6,663) -
Non-current portion 91,527 - 91,527 -
Maturity profile
On demand 6,663 - 6,663 -
Between one and two years 6,446 - 6,446 -
Between two and three years 6,830 - 6,830 -
Between three and four years 8,899 - 8,899 -
Between four and five years 7,388 - 7,388 -
After five years 61,964 - 61,964 -
98,190 - 98,190 -
Meikles Limited Website: www.meiklesltd.com
END
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August 24, 2020 06:21 ET (10:21 GMT)
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