MEIKLES
LIMITED
ABRIDGED AUDITED
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31
MARCH 2019
CHAIRMAN’S STATEMENT
It gives me pleasure to present the Chairman’s Report for the
financial year ended 31 March
2019.
FINANCIAL OVERVIEW
There were significant developments in the operating environment
during the year under review. The main highlights impacting the
financial statements are as follows:-
-
Year on year inflation was 66.8% at the end of March 2019.
-
In October 2018, Reserve Bank of
Zimbabwe (“RBZ”), through a
Monetary Policy announcement separated bank accounts into RTGS FCA
and Nostro FCA and maintained the exchange rate between them at
1:1.
-
Government promulgated Statutory Instruments (“SI”) 32 & 33
of 2019 that introduced RTGS Dollar (“RTGS$”) as legal tender in
Zimbabwe. SI 33 of 2019 prescribes
the manner in which certain balances in the financial statements
should be treated as a consequence of the recognition of the RTGS$
as a currency in Zimbabwe.
-
RBZ issued Exchange Control Directive RU 28 of 2019 on
22 February 2019 introducing an
interbank market for trading RTGS$ against other foreign
currencies. The opening exchange rate was set at 2.5 RTGS$ to one
United States Dollar (“US$”).
The functional currency of the Group changed in the current year
to RTGS$ from US$ in the previous years as a consequence of the
above. The Group also changed its presentation currency to RTGS$.
Financial statements for the year ended 31
March 2019 are presented in RTGS$. Comparative financial
information was translated to RTGS$ using an exchange rate of 1:1.
The Group opted to comply with the requirements of SI 33 of 2019
and the treatment of foreign currency denominated transactions does
not fully comply with International Accounting Standard (“IAS”) 21
– “The Effects of Changes in Foreign Exchange Rates”.
GROUP FINANCIAL PERFORMANCE
Despite the changes in the economic environment during the year
under review, the Group performed well.
Revenue grew from RTGS$524.9 million in 2018 to RTGS$791.6
million in the year under review.
Group earnings before interest, taxation, depreciation and
amortisation (“EBITDA”) for continuing operations increased to
RTGS$101.5 million from RTGS$40.6 million in the financial year to
31 March 2018.
Profit for the year grew to RTGS$66.0 million (2018: RTGS$8.2
million).
Total comprehensive income for the year increased to RTGS$118.3
million, (2018: RTGS$8.2 million), of which RTGS$106.2 million was
attributable to owners of the parent and the remaining balance of
RTGS$12.1 million for minority shareholders.
Segmental contributions to the Group’s financial performance is
set out in note 7 of these abridged audited financial
statements.
REVIEW OF OPERATIONS
Supermarkets - trading as TM Pick n
Pay
Revenue increased by 53.2% over the previous year. EBITDA
increased to RTGS$69.0 million from RTGS$34.5 million in the
previous comparative year. Profit for the year is after a provision
for exchange losses on foreign currency denominated liabilities
accumulated prior to the introduction of the RTGS$ commonly
referred as “legacy debt” of RTGS$23.9 million.
Increase in revenue and profit was achieved through growth in
units sold and inflation induced price increases, however the
segment was continuously competitive in its pricing policies.
A new branch was opened in Victoria
Falls in March 2019 and
upgrades of more branches have commenced.
Agriculture
EBITDA rose to RTGS$31.7 million from RTGS$10.3 million in the
previous year.
From November 2018, international
bulk tea export prices that had remained firm at an average
US$1.68/kg up to October 2018 started to decline by between 10%
and 15% due to oversupply by Kenya. The segment’s annual made tea
production of 10,171 tonnes was commendable. Made tea production
during the year ended 31 March 2018
was 10,601 tonnes.
Export earnings from the new crops being macadamia nuts,
avocadoes and coffee grew by 96% from US$2.3
million in the prior year to US$4.5
million in the year ended 31 March
2019. As a percentage of total exports, the new crops
contributed 25% up from 13% in the prior year. The contribution of
the new crops to the segment’s export earnings is expected to
increase to 60% within three years as these crops reach maturity.
In September 2018, Tanganda Tea
Company Limited received the Confederation of Zimbabwe Industries
(CZI) Exporter of The Year Award.
Pick n Pay South Africa opened shelf space to Tanganda’s packed
tea brands during the last quarter of fiscal year 2018. The
endorsement by Pick n Pay South Africa will assist our efforts to
penetrate the South African tea market. With anticipated growth in
packed tea sales to the regional market, the segment invested in a
new world-class IMA tagless tea-bagging machine. The machine
arrived from Italy in March 2019 and was successfully installed. Export
earnings from tea are poised to grow through higher prices from
increased exports to the regional market.
Effects of both the hailstorm of January
2019 and Cyclone Idai of March
2019 have been mitigated by special silviculture on affected
macadamia plantations, our investment in microjet irrigation
systems and US$ denominated insurance cover. Tea was not affected
by the phenomenon. The monetary value of damage caused by Cyclone
Idai to standalone structures such as toilets, irrigation equipment
covering 30 hectares of macadamia plantations and 5 hectares of
macadamia trees was quantified at RTGS$222,343.
The segment contributed labour and machinery to repair some of
the damaged infrastructure in Chipinge. In addition, Tanganda also
assisted affected communities in both Manicaland and Manica
provinces of Zimbabwe and
Mozambique respectively with food
and water supplies.
Hospitality
EBITDA for continuing operations increased to RTGS$8.5 million
in the current year from RTGS$3.6 million in the previous year.
Meikles Hotel now requires substantial modernisation of guest
facilities as well as electro mechanical and plumbing
infrastructure to restore it to a 5-star property by international
standards. Initial forecasts suggests up to US$30 million needs to be spent on the hotel. The
Group does not consider that it is in a position to commit the
necessary funds to the hotel and it is best for the future of the
hotel to place its development in the hands of skilled
international operators. Processes to dispose of the hotel are in
progress, hence the financial statements reflect the hotel as an
asset held for sale. The Company will be seeking the approval of
its shareholders for the proposed disposal at an Extraordinary
General Meeting to be convened at a future date.
A refurbishment programme for The Victoria Falls Hotel will
commence during the last quarter of fiscal year 2019 after our peak
season. Funding for these works has already been secured.
Department stores and properties
The EBITDA loss in the department stores segment reduced to
RTGS$2.7 million from RTGS$4.2 million in the previous year.
The influx of cheap imports by several sections of society
created a tough trading environment for the department stores
segment. The Group will not commit additional resources to
resuscitate this segment in its current form but will focus on
developing the commercial real estate properties that the retail
stores used to occupy.
Security Services
Meikles Guard Services continues to provide security services to
both Group companies and to certain third parties. It is
anticipated that further third party contracts will be secured.
MEIKLES FOUNDATION
During the year under review, Meikles Foundation continued to
work closely with Group entities in raising funds to help
disadvantaged members of society. TM Pick n Pay remained the key
partner in fundraising efforts through its sponsorship from funds
raised at the Charity Golf Day. Rainbow Children’s Home received a
substantial donation from the proceeds of the Charity Golf Day. The
objective of the Home is to allow disadvantaged children with no
relatives or friends in Harare, a
welcoming, clean home with healthy sustaining food, to recover from
their chemotherapy treatment before their journey home.
Meikles Foundation partnered with three other institutions in a
pilot project utilising the existing soccer teams within the prison
system in Harare to assist
Zimbabwe Prisons with their programme of rehabilitation. The
project was granted permission to film the events and the various
participating prisons to create a video clip which will be aired
locally and internationally shining a light on the Zimbabwe Prison system.
DIVIDEND
In view of the Group’s financial results for the year ended
31 March 2019, the board declared a
final dividend of 7.67 RTGS cents per share, bringing the total
dividend for the year to 8.87 RTGS cents. The final dividend will
amount to RTGS$20.02 million. A full dividend announcement will be
published separately in due course.
STRATEGY AND OUTLOOK
The Group has commenced trading in the new financial year on a
more favourable basis relative to the comparable period of the
previous financial year, in terms of revenue and profit. Post year
end, the exchange rate between RTGS$ and US$ moved significantly
impacting favourably on the Group’s exporting segments.
Consequently, the Group now has an ability to eliminiate all short
term borrowings and creditors in arrears from operating cash flows.
In this regard shareholders should also consider sums to be
realised from the sale of Meikles Hotel, and the additional planned
funding initiaves set out below.
The Group will interact more closely with its majority
shareholder. It is believed that such interaction will accelerate
progress towards unlocking shareholder value. The Group will
benefit from the provision of both local and international
investment funds for the use of Group expansion and financial
security.
The forward commercial environment will be challenging. The
board recognises that additional skills at board level in the
Holding Company and at board level in Group companies will be
required to ensure the Group responds to challenges and meets the
stringent requirements that will emanate from the investment
funding that will be sourced from the efforts of the majority
shareholder.
Shareholders are advised that this essential part of the Group
restructuring process is to be progressed with urgency. It
follows that this process will be accompanied by an assessment,
followed by required implementation of future requirements for
operational skills in the Group.
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 July 2019
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME |
FOR THE YEAR ENDED
31 MARCH 2019 |
|
|
|
|
|
|
|
|
|
31
March 2019 |
31 March
2018 |
|
Notes |
RTGS$
000 |
RTGS$
000 |
CONTINUING
OPERATIONS |
|
|
|
Revenue |
7 |
791,620 |
524,935 |
Net operating
costs |
|
(703,426) |
(497,611) |
|
|
|
|
Operating
profit |
|
88,194 |
27,324 |
Investment income |
|
44 |
271 |
Finance costs |
|
(8,635) |
(8,640) |
Net exchange
losses |
|
(7,529) |
(466) |
Loss recognised on
discounting Treasury Bills |
|
- |
(6) |
Fair value adjustments
on biological assets |
|
9,433 |
1,336 |
Profit before
tax |
|
81,507 |
19,819 |
Income tax
expense |
|
(16,670) |
(11,533) |
Profit for the year
from continuing operations |
|
64,837 |
8,286 |
|
|
|
|
DISCONTINUED
OPERATIONS |
|
|
|
Profit / (loss) for
the year from discontinued operations |
10 |
1,121 |
(92) |
PROFIT FOR THE
YEAR |
|
65,958 |
8,194 |
|
|
|
|
Other comprehensive
income, net of tax |
|
|
|
Items that may be
reclassified subsequently to profit or loss: |
|
|
|
Exchange gain on translation of foreign
operation |
|
61,970 |
- |
Fair value loss on financial assets
classified at fair value through other comprehensive income |
|
(9,600) |
- |
Reclassification adjustment arising from
disposal of available-for-sale financial assets |
|
- |
47 |
Income tax relating to items that may be
reclassified subsequently to profit or loss |
|
- |
- |
Other comprehensive
income for the year, net of tax |
|
52,370 |
47 |
|
|
|
|
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR |
|
118,328 |
8,241 |
|
|
|
|
Profit / (loss) for
the year attributable to: |
|
|
|
Owners of the parent |
|
53,827 |
(829) |
Non-controlling interests |
|
12,131 |
9,023 |
|
|
65,958 |
8,194 |
Total comprehensive
income / (loss) attributable to: |
|
|
|
Owners of the parent |
|
106,197 |
(782) |
Non-controlling interests |
|
12,131 |
9,023 |
|
|
118,328 |
8,241 |
Earnings / (loss)
per share in cents |
|
|
|
Basic earnings /
(loss) per share from continuing and discontinued operations |
|
20.99 |
(0.32) |
Basic earnings /
(loss) per share from continuing operations |
|
20.55 |
(0.29) |
|
|
|
|
Diluted earnings /
(loss) per share from continuing and discontinued operations |
|
19.67 |
(0.30) |
Diluted earnings /
(loss) per share from continuing operations |
|
19.26 |
(0.27) |
|
|
|
|
Headline earnings per
share from continuing and discontinued operations |
|
21.43 |
0.08 |
Headline earnings per
share from continuing operations |
|
20.99 |
0.12 |
|
|
|
|
Diluted headline
earnings per share from continuing and discontinued operations |
|
20.09 |
0.05 |
Diluted headline
earnings per share from continuing operations |
|
19.68 |
0.08 |
|
|
|
|
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 31 MARCH
2019
|
|
|
|
|
|
31
March 2019 |
31 March
2018 |
|
Notes |
RTGS$
000 |
RTGS$
000 |
ASSETS |
|
|
|
Non-current
assets |
|
|
|
Property, plant and
equipment |
|
172,267 |
175,267 |
Investment
property |
|
236 |
239 |
Investment in Mentor
Africa (Pty) Limited |
|
50,778 |
20,046 |
Biological assets |
|
2,905 |
1,299 |
Intangible assets |
|
124 |
124 |
Other financial
assets |
|
31,847 |
11,815 |
Deferred tax |
|
9,111 |
121 |
Total non-current
assets |
|
267,268 |
208,911 |
|
|
|
|
Current
assets |
|
|
|
Inventories |
|
100,163 |
43,870 |
Trade and other
receivables |
|
40,471 |
17,341 |
Biological assets –
produce on bearer plants |
|
11,178 |
2,810 |
Other financial
assets |
|
9 |
59 |
Cash and bank
balances |
|
33,006 |
34,175 |
|
|
184,827 |
98,255 |
Assets held for
sale |
10 |
30,032 |
- |
Total current
assets |
|
214,859 |
98,255 |
|
|
|
|
Total
assets |
7 |
482,127 |
307,166 |
|
|
|
|
EQUITY AND
LIABILITIES |
|
|
|
Capital and
reserves |
|
|
|
Share capital |
|
2,611 |
2,562 |
Share premium |
|
3,925 |
1,469 |
Other reserves |
|
64,929 |
12,559 |
Retained earnings |
|
131,914 |
82,854 |
Equity attributable to
equity holders of the parent |
|
203,379 |
99,444 |
Non-controlling
interests |
|
48,999 |
36,241 |
Total
equity |
|
252,378 |
135,685 |
|
|
|
|
Non-current
liabilities |
|
|
|
Borrowings |
|
12,244 |
17,309 |
Deferred tax |
|
25,617 |
19,189 |
Total non-current
liabilities |
|
37,861 |
36,498 |
|
|
|
|
Current
liabilities |
|
|
|
Trade and other
payables |
|
140,368 |
79,010 |
Borrowings |
|
51,520 |
55,973 |
Total current
liabilities |
|
191,888 |
134,983 |
|
|
|
|
Total liabilities |
7 |
229,749 |
171,481 |
|
|
|
|
Total equity and
liabilities |
|
482,127 |
307,166 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2019 |
|
Share
capital |
Share
premium |
Other
reserves |
Investments revaluation |
Retained earnings |
Attributable to owners of parent |
Non-controlling
interests |
Total |
|
RTGS
$ 000 |
RTGS
$ 000 |
RTGS
$ 000 |
RTGS
$ 000 |
RTGS
$ 000 |
RTGS
$ 000 |
RTGS
$ 000 |
RTGS
$ 000 |
2019 |
|
|
|
|
|
|
|
|
Balance at 1 April
2018 – as previously stated |
2,562 |
1,469 |
12,559 |
- |
82,854 |
99,444 |
36,241 |
135,685 |
Change in accounting
policy – note 11 |
- |
- |
- |
- |
(1,694) |
(1,694) |
- |
(1,694) |
Balance at 1 April
2018 - restated |
2,562 |
1,469 |
12,559 |
- |
81,160 |
97,750 |
36,241 |
133,991 |
Profit for the
year |
- |
- |
- |
- |
53,827 |
53,827 |
12,131 |
65,958 |
Issue of shares –
scrip dividend |
49 |
2,456 |
- |
- |
- |
2,505 |
- |
2,505 |
Other comprehensive
income for the year |
- |
- |
61,970 |
(9,600) |
- |
52,370 |
- |
52,370 |
Dividend paid –
ordinary shareholders |
- |
- |
- |
- |
(3,073) |
(3,073) |
- |
(3,073) |
Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
- |
- |
- |
- |
- |
- |
627 |
627 |
Balance at 31 March
2019 |
2,611 |
3,925 |
74,529 |
(9,600) |
131,914 |
203,379 |
48,999 |
252,378 |
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
|
|
|
|
|
Balance at 1 April
2017 |
2,538 |
1,316 |
12,559 |
(47) |
83,683 |
100,049 |
28,591 |
128,640 |
(Loss) / profit for
the year |
- |
- |
- |
- |
(829) |
(829) |
9,023 |
8,194 |
Issue of shares |
24 |
153 |
- |
- |
- |
177 |
- |
177 |
Other comprehensive
income for the year |
- |
- |
- |
47 |
- |
47 |
- |
47 |
Dividend paid –
minority shareholders |
- |
- |
- |
- |
- |
- |
(1,715) |
(1,715) |
Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
- |
- |
- |
- |
- |
- |
342 |
342 |
Balance at 31 March
2018 |
2,562 |
1,469 |
12,559 |
- |
82,854 |
99,444 |
36,241 |
135,685 |
CONSOLIDATED
STATEMENT OF CASH FLOWS |
|
|
|
FOR THE YEAR ENDED
31 MARCH 2019 |
|
|
|
|
|
|
|
|
|
31
March 2019 |
31 March
2018 |
|
|
RTGS$ 000 |
RTGS$ 000 |
|
|
|
|
Cash flows from
operating activities |
|
|
|
Profit before tax –
continuing operations |
|
81,507 |
19,819 |
–
discontinued operations |
|
1,121 |
(39) |
|
|
82,628 |
19,780 |
Adjustments for: |
|
|
|
- Depreciation and
impairment of property, plant and equipment and investment
property |
|
14,376 |
13,311 |
- Net interest |
|
8,591 |
8,415 |
|
|
- |
(53) |
- Net exchange
losses |
|
7,031 |
468 |
- Profit on disposal
of operation |
|
- |
(768) |
- Fair value
adjustments on biological assets |
|
(9,433) |
(1,336) |
- Loss recognised on discounting Treasury Bills
|
|
- |
6 |
- Loss on disposal of
property, plant and equipment |
|
59 |
1,545 |
Operating cash flow
before working capital changes |
|
103,252 |
41,368 |
|
|
|
|
Increase in
inventories |
|
(56,293) |
(9,403) |
Increase in trade and
other receivables |
|
(11,522) |
(3,627) |
Increase in trade and
other payables |
|
34,088 |
11,895 |
Cash generated from
operations |
|
69,525 |
40,233 |
Income taxes paid |
|
(18,038) |
(6,447) |
Net cash generated
from operating activities |
|
51,487 |
33,786 |
|
|
|
|
Cash flows from
investing activities |
|
|
|
Payment for property,
plant and equipment |
|
(41,870) |
(17,717) |
Proceeds from disposal
of property, plant and equipment |
|
355 |
350 |
Proceeds from sale of
Treasury Bills and coupon interest |
|
- |
3,075 |
Net movement in
service assets |
|
51 |
(89) |
Net movement in
other investments |
|
11 |
847 |
Net movement on
biological assets |
|
(540) |
241 |
Net cash flow on
disposal of subsidiary |
|
- |
1,060 |
Investment income |
|
42 |
208 |
Net cash used in
investing activities |
|
(41,951) |
(12,025) |
|
|
|
|
Cash flows from
financing activities |
|
|
|
Net (decrease) /
increase in interest bearing borrowings |
|
(9,518) |
7,064 |
Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
|
627 |
519 |
Finance costs |
|
(8,635) |
(8,640) |
Dividend paid –
ordinary shareholders |
|
(568) |
- |
Dividend paid –
non-controlling interests |
|
- |
(1,715) |
Net cash used in
financing activities |
|
(18,094) |
(2,772) |
|
|
|
|
Net (decrease) /
increase in cash and bank balances |
|
(8,558) |
18,989 |
Cash and bank balances
at the beginning of the year |
|
34,175 |
15,637 |
Net effect of exchange
rate changes on cash and bank balances |
|
5,743 |
(451) |
Translation of foreign
entity |
|
1,646 |
- |
Cash and bank
balances at the end of the year |
|
33,006 |
34,175 |
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. These abridged financial statements are
presented in RTGS$, which is the Group’s new functional
currency.
2. Change in functional and presentation
currency
Both the functional and presentation currency changed to RTGS$
in the year ended 31 March 2019 from
US$ in prior years. The change in both functional and presentation
currency was necessitated by significant developments in the
economic environment in Zimbabwe.
In February 2019, Government of
Zimbabwe issued Statutory
Instrument “SI” 33 of 2019, which directed that certain assets and
liabilities that were in US$ before 20
February 2019 be deemed to be denominated in RTGS$ at a rate
of 1:1 to US$. The Group opted to comply with the
requirements of SI 33 of 2019 and translated assets and liabilities
from US$ to RTGS$ at an exchange of 1:1 with the
exception of balances in Nostro FCAs, foreign creditors and debtors
at the date of change. Foreign currency denominated transactions
were translated at 1:1 in the Statement of Profit or loss and Other
Comprehensive Income from the beginning of the financial year up to
21 February 2019 and at the ruling
interbank exchange rate thereafter. SI 33 of 2019, restricted full
compliance with IAS 21 and the guidance issued by the Public
Accountants and Auditors Board.
3. Statement of compliance
While full compliance with International Financial Reporting
Standards (“IFRS”); International Accounting Standards (“IAS”); and
the International Financial Reporting Interpretations Committee
(“IFRIC”) interpretations was achieved in previous reporting
periods, only partial compliance was achieved for the year ended
31 March 2019 as a result of
non-compliance with IAS 21 as set out in note 2. These abridged
financial results do not include all the information and
disclosures required to comply with IFRS and should be read in
conjunction with the Group’s consolidated financial statements as
at 31 March 2019 available at the
Company’s registered office.
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 2019, which have
been audited by Deloitte & Touche Chartered Accountants
(Zimbabwe) in accordance with
International Standards on Auditing. The auditors issued an adverse
opinion on the financial statements for non-compliance with IAS 21.
The audit report includes a section on Key Audit Matters. The Key
Audit Matters are on valuation of expected credit losses on
financial assets and valuation of investment in Mentor Africa (Pty)
Limited. The auditor’s report is available for inspection at the
Company’s registered address.
5. Accounting policies
Accounting policies and methods of computation applied in the
preparation of these abridged financial statements are consistent,
in all material respects, with those used in the prior year, except
for the adoption of IFRS 9 at the beginning of the currenct
financial year, which resulted in changes in accounting policies to
financial assets and liabilities.
6. 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 2019, 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.
7. Segment information
|
31
March 2019 |
31 March
2018 |
Revenue –
Continuing operations |
RTGS$
000 |
RTGS$
000 |
Supermarkets |
747,338 |
487,822 |
Agriculture |
37,015 |
28,847 |
Hotels |
9,101 |
7,651 |
Departmental
stores# |
792 |
2,105 |
Corporate* |
(2,626) |
(1,490) |
|
791,620 |
524,935 |
EBITDA – Continuing
operations |
|
|
Supermarkets |
69,010 |
34,514 |
Agriculture? |
31,743 |
10,289 |
Hotels |
8,531 |
3,594 |
Departmental
stores# |
(2,698) |
(4,216) |
Corporate* |
(5,107) |
(3,570) |
|
101,479 |
40,611 |
Segment
assets |
|
|
Supermarkets |
204,081 |
126,701 |
Agriculture |
120,763 |
85,582 |
Hotels |
54,930 |
46,966 |
Departmental
stores# |
20,285 |
24,517 |
Corporate* |
82,068 |
23,400 |
|
482,127 |
307,166 |
7. Segment information (continued)
|
31 March 2019 |
31 March 2018 |
Segment
liabilities |
RTGS$ 000 |
RTGS$ 000 |
Supermarkets |
108,112 |
56,148 |
Agriculture |
33,385 |
32,779 |
Hotels |
26,761 |
23,515 |
Departmental
stores# |
18,102 |
29,031 |
Corporate* |
43,389 |
30,008 |
|
229,749 |
171,481 |
*Intercompany transactions and balances have been eliminated
from the corporate amounts. Corporate also includes other
subsidiaries that are immaterial to warrant separate
disclosure.
? Prior year EBITDA is after adding back RTGS$1.25
million loss on disposal of coffee bearer plants, which were
uprooted to pave way for macadamia trees.
#Prior year numbers for the wholesale segment have been
re-presented under Department stores.
EBITDA figures are before group management fees. |
|
31 March
2019 |
31 March 2018 |
8. Other
information |
RTGS$
000 |
RTGS$ 000 |
Capital commitments
authorised by the Directors but not contracted for |
118,836 |
23,583 |
Group’s share of capital
commitments of joint operations |
12,191 |
3,000 |
|
|
|
9. Net
borrowings |
|
|
Non-current
borrowings |
12,244 |
17,309 |
Current borrowings |
51,520 |
55,973 |
Total borrowings |
63,764 |
73,282 |
Cash and cash
equivalents |
(33,006) |
(34,175) |
Net
borrowings |
30,758 |
39,107 |
|
|
|
Comprising: |
|
|
Secured |
56,622 |
57,505 |
Unsecured |
7,142 |
15,777 |
|
63,764 |
73,282 |
The
weighted average cost of borrowings for the year was 13.18% per
annum (2018: 13.39% per annum).
9.1 Summary of borrowing arrangements
(ii) RTGS$2.0 million which bears interest at 8.4% per annum with
final repayment on 31 March 2021.
(iii) RTGS$0.8 million which bears interest at 11% per annum, with
final repayment on 30 September 2019.
(iv) RTGS$3.0 million which bears interest at 15.5% per annum with
final repayment on 31 December 2019.
(v) RTGS$2.3 million which bears interest at 11% per annum with
final repayment on 31 December 2019.
(vi) RTGS$3.2 million which bears interest at 11% per annum with
final repayment on 31 July 2021.
9.2 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 arose as a
result financial difficulties facing some of the Group’s
components. The affected lenders had called on the loans but the
Group managed to renegotiate new payment agreements with these
lenders by 31 March 2019. Details of the revised loan expiry dates
are as disclosed in note 9.1 above. |
|
|
|
|
|
10. Discontinued
operations
Meikles Hotel
The Directors of the Company resolved to dispose of the entire
Meikles Hotel property, plant and equipment. Meikles Hotel is a
division within the Group’s hospitality segment, Meikles
Hospitality (Private) Limited. As at the reporting date, sale
agreements had been concluded in principle subject to approval by
shareholders of the Company and regulatory authorities. Processes
to procure approvals requisite to the transaction had commenced by
31 March 2019. The expected proceeds
of sale exceed the carrying amount of the related net assets and,
accordingly, no impairment losses were recognised. The assets to be
disposed have been classified as held for sale on the consolidated
statement of financial position. The summary of the profit / (loss)
position from the discontinued operation and the non-current assets
held for sale have been shown below.
10. Discontinued
operations (continued)
Meikles Financial Services
As reported in the prior year, the Company disposed of Tuscarora
Investments (Private) Limited (trading as Meikles Financial
Services), which carried out the Group’s financial services
operations. The proceeds of sale exceeded the carrying amount of
the related net assets and, accordingly, no impairment losses were
recognised. The disposal of the financial services operations is
consistent with the Group’s long-term policy to focus its
activities on its main segments, namely retail, agriculture,
hospitality, wholesaling and security services. The results of the
discontinued operations included in profit for the period are as
set out below.
The prior year comparative financial information from
discontinued operation have been re-presented to include the
operation classified as discontinued in the current period.
|
31 March
2019 |
31 March 2018 |
|
RTGS$ 000 |
RTGS$ 000 |
Profit / (loss) for the period
from discontinued operation |
|
|
Revenue |
14,585 |
9,995 |
Net fees and commission income |
- |
297 |
Net operating costs |
(14,658) |
(11,453) |
Other operating income |
696 |
349 |
Operating profit / (loss) |
623 |
(812) |
Investment income |
- |
11 |
Interest expense |
- |
(4) |
Exchange gains / (losses) |
498 |
(2) |
Profit on disposal of operation |
- |
768 |
Profit / (loss) before
tax |
1,121 |
(39) |
Taxation |
- |
(53) |
Profit / (loss) for the year from
discontinued operations |
1,121 |
(92) |
|
|
|
Cash flows from discontinued
operation |
|
|
Net cash inflows from operating
activities |
3,104 |
4,035 |
Net cash flows from investing
activities |
(306) |
71 |
Net cash outflows from financing
activities |
(1,317) |
(3,913) |
Net cash flows from discontinued
operation |
1,481 |
193 |
|
|
|
Analysis of assets to be disposed
of |
|
31 March
2019 |
|
|
RTGS$ 000 |
Non-current assets |
|
|
Property, plant and equipment |
|
30,032 |
|
|
|
Net assets to be disposed
of |
|
30,032 |
11. Change in accounting policy – IFRS
9 adjustments
The Group has adopted IFRS 9 as issued by the IASB in
July 2014 with a date of transition
of 1 April 2018, which resulted in
changes in accounting policies and adjustments to the amounts and
disclosures in these abridged consolidated financial statements.
The Group did not early adopt any of IFRS 9 components in previous
periods.
The adoption of IFRS 9 has resulted in changes in accounting
policies for recognition, classification and measurement of
financial assets and financial liabilities as well as impairment of
financial assets. IFRS 9 also significantly amends other standards
dealing with financial instruments such as IFRS 7 Financial
Instruments Disclosure.
As permitted by the transitional provisions of IFRS 9, The Group
elected not to restate comparative figures. Any adjustment to the
carrying amounts of financial assets and liabilities at the date of
transition were recognised in the opening retained earnings.
Below is the reconciliation of retained earnings at 1 April 2018 to show the effects of adopting IFRS
9:
|
|
Retained
earnings |
|
RTGS$’000 |
RTGS$’000 |
Balance at 1 April 2018 – as
previously stated |
|
82,854 |
Decrease in trade and other
receivables |
(638) |
|
Decrease in other financial
assets |
(1,203) |
|
Increase in deferred tax |
147 |
|
|
|
(1,694) |
Balance at 1 April 2018 –
restated |
|
81,160 |