Chief Executive Officer’s Statement
Directors
Statement of Directors’ Responsibilities
Directors’ Report
Report of the Independent Auditors, KPMG Audit LLC, to the members of Cambria Africa Plc.
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated and Company Statement of Financial Position
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Corporate information
Shareholder information
Annual Report 2013
Table of Contents
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68
Chief Executive Officer’s Statement
EDZO WISMAN
During the period under review revenues and gross profit of the continuing operations of Cambria, being the
Payserv and Millchem investments, were US$8.5 million (2012: US$7.7 million) and US$4.6 million (2012:
US$4.3 million) respectively, representing corresponding increases of 10% and 6% to the equivalent prior period.
10%
6%
(4%)
32%
pursued by both Payserv and Millchem; and (iii) an unforesee-
able and unavoidable US$294 thousand multi-year VAT liability
related to Tradanet, accounting for 40% of the decrease in com-
bined EBITDA for the year.
(US$ THOUSANDS)
2013
2012 GROWTH
Revenues
Gross profit
8,487
7,721
4,581
4,326
Gross margin
54%
56%
SG&A
EBITDA
(4,209)
(3,194)
372
1,132
(67%)
EBITDA margin
4%
15%
(70%)
As Cambria continues to actively pursue scale and scope though
regional expansion and development of new products it will
continue to expense rather than capitalise these investments.
This will continue to impact EBITDA performance in the coming
periods.
Payserv provides EDI switching services (Paynet),
Payserv Africa
‘payslip’ processing (Autopay) and payroll based
micro-finance loan processing (Tradanet).
(US$ THOUSANDS)
2013
2012
GROWTH
Revenues
Gross profit
4,164
3,951
3,811
3,614
Gross margin
91%
91%
SG&A
EBITDA
EBITDA Margin
(3,369)
(2,274)
442
1,340
11%
34%
5%
5%
-
(48%)
(67%)
(69%)
There was a slowdown in the rate of growth when compared
to last year (when, for example, revenues grew 64% year-on-
year in those businesses) which can largely be attributed to a
high level of uncertainty in the business environment during
the second half of the financial year in Zimbabwe as a result of
the elections, which, irrespective of country, always negatively
impact economies. During this election year, Zimbabwe experi-
enced periods of liquidity shortages, resulting in cautious con-
sumer spending which directly contracted growth in our portfo-
lio. This slowdown continues to impact current performance of
our investments.
Our pursuit of scale for both Payserv and Millchem, together
with the prudent strategy to regionalise, has meant Cambria
continued to invest for the future throughout this period. We
are confident that the positive impact of regional expansion
into Zambia (and subsequent entry into Malawi for Millchem),
together with the launch of various new products, will yield re-
sults in the coming periods.
Cambria’s EBITDA loss for the period for continuing operations
was US$3,6 million, a 52% reduction when compared to last
year. The Group loss for the year is US$5.0 million for continuing
operations. Discontinued operations, including write-downs,
generated a loss of US$6.9 million. Cambria’s loss per share for
the year was 18.4c, compared to 47.1c for the same period last
year representing a decrease in loss per share of 61%.
On 1 October 2012 the Company raised US$1.4 million gross by
way of a placing with institutions of 8,615,115 new ordinary par
value shares of £0.0001 each at 10p per share.
Operational Review Main Investments
CONSOLIDATED RESULTS
Cambria’s two key investments consist of Payserv Af-
rica and Millchem Holdings. These investments joint-
ly had a consolidated performance as shown in the
table following:
The decrease in EBITDA shown therein can be attributed to
three factors: (i) significant investments made by Payserv into
new product upgrades, with the associated costs expensed
rather than capitalised; (ii) investments into regional expansion
PAGE 4
CAMBRIA AFRICA PLC Edzo Wisman
Chief Executive Officer’s Statement
Paynet provided Electronic Data Interchange (EDI) services to
Payserv Africa (continued)
all 22 banks and building societies in Zimbabwe, as well as to
over 1,500 corporates. Paynet processed 15.2 million transac-
tions (2012: 12.3 million) during the period under review, a 24%
increase.
Millchem is a value-added chemicals distributor with
Millchem Holdings
leading market positions in Zimbabwe. It recently es-
tablished a presence in Zambia, and is working to-
wards a presence in Malawi.
Autopay provided payroll services to 150 customers, processed
over 303 thousand payslips (2012: 286 thousand) during the pe-
riod under review, a 6% increase.
Tradanet processed 66,000 (2012: 55,000) loans during the
period, representing a value of US$131 million (2012: US$140
million), a 19% increase and a 6% decrease respectively. At the
end of the period the loan book under management stood at
US$110 million (2012: US$100 million), an increase of 10%.
Over the period, Payserv has invested significantly into product
upgrades, new offerings, entry into the Zambian market, as well
as exploration of other geographic markets. These investments
have not been capitalised and have therefore directly impacted
the income statement during the period under review.
New Paynet products recently launched include, among others,
eSchedules and PayZIMRA . It is also launching PayFT, a joint
venture with South African based BankServ. Geographically,
Paynet has established a presence in Zambia, received its Zam-
bian National Payments Licence during December 2013, signed
its first customers in that country and has commenced process-
ing payments. Moreover, Autopay now has a presence in Zam-
bia as well, processed its first payslips in Uganda, and reached
agreement with a trial customer regarding processing payslips
in Botswana.
The bottom line effect of these investments should come
through in the coming periods through enhanced revenue
growth as well as diversification of revenue streams.
There was an exceptional item of a US$294 thousand adjust-
ment to Payserv (and Group) EBITDA related to a multi-year VAT
liability related to Tradanet dating back to March 2010 that was
charged in one tranche during 2013.
(US$ MILLIONS)
2013
2012 GROWTH
Revenues
Gross profit
Gross margin
SG&A
EBITDA
EBITDA margin
4,323
3,770
770
712
18%
19%
(840)
(920)
(70)
(208)
(2%)
(6%)
15%
8%
(6%)
(9%)
66%
71%
In general, chemicals distribution tends to outpace econom-
ic growth, but it also tends to shrink faster when an economy
stagnates. Millchem was thus strongly affected by the uncertain
business environment during the year. During some weeks over
the period it was generating 50% less gross profit when com-
pared to equivalent weeks during the prior year. Importantly,
despite decreased revenue Millchem did not lose market share
or customers over the period, in fact new customers were add-
ed as competitors were struggling.
Despite the challenging environment in Zimbabwe, the Mill-
chem team, under new leadership after the appointment of
Matthijs Mulder as the CEO of Millchem Holdings, remained
focused on the long term and continued to launch new prod-
ucts as intended, opened up a branch in Bulawayo, opened up
warehouse space and offices in Zambia, made its first steps to-
wards opening a warehouse and offices in Malawi, established
buying entities in the in the Netherlands and South Africa, and
was able to add relationships with a number of attractive new
suppliers (e.g. BASF, ENI (Cent-Lube), Sasol). Moreover, in addi-
tion to the NACD, Millchem Africa is now also a member of the
FECC, as it seeks to position itself as a Responsible Distributor
in this territory. Investments required for this geographic expan-
sion have not been capitalised.
Alongside a new CEO, Millchem also appointed two Non-Exec-
utive Directors to the Millchem Board, Bernard West and David
Edgington, who jointly bring over 80 years of chemicals industry
experience, as well as extensive industry relationships.
PAGE 5
FINANCIAL REPORT 2013 Edzo Wisman
Chief Executive Officer’s Statement
Discontinued operations, other and cen-
tral costs
CELSYS LIMITED
The Company sold its investment in Blueberry International Ltd
on 25 July 2013 for US$1. This sale included, among others, a
60% stake in Celsys Limited. During the period, Celsys generated
US$1.8 million in sales and negative US$2.5 million in EBITDA,
excluding certain write-backs related to inter-company balanc-
es. Including write-backs Celsys generated US$0.5 million of
EBITDA losses.
THE LEOPARD ROCK HOTEL GROUP
During the period under review, the Leopard Rock Hotel was
classified by Cambria as held for sale. During the period, the
Leopard Rock Hotel Group generated US$2.3 million in sales
and negative US$669 thousand in EBITDA before write-downs
recognised in the income statement of US$2.8 million.
LONZIM AIR (B.V.I.) LIMITED
Through LonZim Air (BVI) Limited, Cambria previously owned
three aircraft. Over the years a number of disputes arose in re-
lation to these aircraft and certain associated contracts. At this
point, in summary, Cambria will pursue recovery of claims relat-
ed to these disputes that are now estimated to be in excess of
US$10 million. These amounts relate to, inter alia, maintenance
reserve and lease charges and related contractual interest, pay-
ment of insurance proceeds, deterioration in market value of
the aircraft, and the significantly lower amount the Company
was able to obtain through a sale, due to the poor condition the
aircraft were found to be in.
CENTRAL COSTS
Cambria incurred US$4.0 million in central EBITDA costs for the
period under review, compared to US$8.6 million last year, a
reduction of 54%.
Events following the end of the period
under review
EQUITY PLACEMENT
On 19 February 2014, Cambria announced that approximate-
ly US$4 million (before expenses), or UK£2.4 million, has been
raised by a placing with new and existing institutional and other
investors of 32,406,139 new ordinary shares in the Company.
The placing price was 7.5 pence per Ordinary Share being a
9.6% discount to the 30-day volume weighted average market
price on 10 February 2014.
The placing will provide working capital to support the Compa-
ny’s expansion strategy for Millchem and Payserv as outlined
below.
Cambria is continuing the disposal of its remaining non-core as-
Strategy going forward
sets, completion of which will mark the re-alignment away from
multiple investments operating in a single country, to a select
number of investments operating regionally. It is the Board’s
conviction this strategy marks the best route towards maximis-
ing shareholder value and ensuring continued future growth.
LonZim Air incurred US$205 thousand in operating losses for
the period under review, largely related to extraordinary legal
expenses related to the above mentioned claims.
As a result of this strategy, the Company is now solely focused
on Payserv and Millchem, growing their scale and scope, as well
as, importantly, their regionalisation.
SETTLEMENT WITH LONRHO
On 19 July 2013 Cambria reached final settlement with Lonrho
Plc with regards to all on-going disputes, other than claims re-
lated to three aircraft previously owned by Cambria and leased
to subsidiaries of Lonrho. As a result of this settlement, Cambria
received from Lonrho US$2.7 million. The settlement agreed
related to, among others, the Aldeamento Turistico de Macuti,
S.A.R.L loan, the Churchill Estates (1995) (Private) Limited loan,
the Lonrho Management Services Agreement, and the Hotel
Refurbishment and Management Agreement.
A multi-year, regional and product roll-out strategy for both
Millchem and Payserv has been developed and Cambria is ex-
cited about the growth and return prospects of the two invest-
ments.
Initial steps in the regional expansion have been made success-
fully. For example, Millchem now has warehouse and offices in
Zambia, has commenced operations there, and is in the process
of opening the same in Malawi. In Zambia, Payserv has received
its National Payment Licence, signed on its first customers, and
commenced the processing of payments.
PAGE 6
CAMBRIA AFRICA PLC Edzo Wisman
Chief Executive Officer’s Statement
In the coming years, both Millchem and Payserv will continue to
Strategy going forward (continued)
expand in additional geographies in a careful and coordinated
manner. Moreover, Cambria anticipates growth for both invest-
ments will include smaller acquisitions, which may or may not
be made using Cambria shares.
The Company requires funds for the expansion of Millchem and
Payserv, as well as for the Group’s working capital. The Compa-
ny is reviewing its options regarding funding in this regard and
this may include funds realised from the disposal of its non-core
operations and assets as well as the raising of additional equity
or debt capital.
Cambria has had a year of transition, which has seen the end
In closing
of many ongoing legal disputes and completion of the strate-
gy to focus on companies that can effectively pursue growth
and scale through regionalisation. We have significantly re-
duced operating costs, including central costs, streamlined our
business model, and significantly invested into new products
and into new markets. We close out the financial year with a
platform of two very strong companies, which have made sig-
nificant progress in their product rollout and regional strat-
egy, and which have a clear strategy for the next few years.
Implementing this strategy over the last 18 months came with
difficult choices for Cambria’s Board. However, having brought
Cambria to where it is now, the Board’s conviction is stron-
ger than ever that our current portfolio and focus marks the
best route forward towards maximising shareholder value.
EDZO WISMAN
CHIEF EXECUTIVE OFFICER
26 FEBRUARY 2014
PAGE 7
FINANCIAL REPORT 2013 Itai Mazaiwana, 53
NON-EXECUTIVE DIRECTOR
Itai Mazaiwana started his career in research and educa-
tion at the Institute of Mining Research at the University of
Zimbabwe as an Analytical Geochemist. During his
subsequent career in the private sector, Itai held senior
positions in the mining and chemicals industries at ZIS-
CO Steel, Anacal Laboratory, Ardington Exploration, and
Polokwane Chemicals (South Africa). Itai is currently a direc-
tor of Jeune Zimbabwe, Mining and Infrastructure Develop-
ment Corporation, a joint venture between Jeune and the
Government
Energy
Resources, a consortium of European and Zimbabwe-
an engineers and scientists developing a 2000MW power
station. In recent years, Itai has acted as a technical ad-
viser to Orange Advisory Alliance (South Africa), Line-
band/Scores Mining, and New Frontier Partners Zimba-
bwe. The latter organisation promotes local participation in
Zimbabwe’s mining and energy sectors. Itai holds a BSc in
Chemistry and Geology and a MSc in Analytical Chemistry, both
from the University of Zimbabwe. He has published a number
of papers on low level detection of gold. Appointed 24 February
2012.
Pan-African
Zimbabwe
and
of
Fred Jones, 44
NON-EXECUTIVE DIRECTOR
Fred Jones is the Chairman of Jutland Group, a private
Hong Kong based investment management and commod-
ity firm which he founded in 2006 to manage portfolios of
foreign exchange, precious metals and international debt.
International, a commodity
Fred also founded Jaramcor
supply-chain manager and supplier of pulp/paper, chem-
icals and agricultural products. He was previously Vice
President, Private Client Services, at Bear Stearns Global Wealth
Management. Fred was also with the International Private Cli-
ent Group of Merrill Lynch. He holds a BSc in Accountancy and
an MBA in Finance from Florida A&M University. Appointed 24
February 2012.
The following Directors resigned on the date shown during the
period under review and up to the date of report.
Paul Heber
Non-Executive Director
10 December 2012
Tania Sanders
Chief Financial Officer
30 November 2013
Directors
Ian Perkins, 64
EXECUTIVE CHAIRMAN
Ian Perkins has over 40 years of London City experience. Un-
til 1991 he was at James Capel & Co. where he was a Direc-
tor and Head of Fixed Income. Between 1991 and 1996,
Ian was Director and later Chief Executive Officer (CEO)
of listed bank King & Shaxson Holdings plc. When Ger-
rard Group acquired King & Shaxson in 1996, Ian became a
Director of Gerrard Group plc and Chairman of the Ger-
rard & King Bank. Following Gerrard Group’s takeover by
the Old Mutual Group in 2000, he became a Director of Old
Mutual Financial Services Plc, and the CEO and
later
Chairman of GNI Limited until 2003. Thereafter until 2010, Ian
was Chairman of fixed income and inter-dealer broking firm
King & Shaxson Limited. Appointed 24 February 2012.
Edzo Wisman, 40
CHIEF EXECUTIVE OFFICER
Prior to joining the Company in 2010, Edzo Wisman was Manag-
ing Director of Stuart Lammert & Co., a Toronto and New York
based corporate advisory firm that he founded in 2003. Prior
to that, Edzo was a Vice President, Investment Banking with
Toronto based CCFL Advisory Services. Previously, he was with
Wilshire Associates, first with the consultancy practice in Am-
sterdam servicing some of Europe’s largest institutional inves-
tors and then with the Private Markets Group at Wilshire’s San-
ta Monica, California headquarters, seeking opportunities in the
leveraged buyout markets. Edzo has also worked with the in-
vestment department of the pension funds of KLM Royal Dutch
Airlines. He holds a Doctorandus degree in Business Economics
from the University of Groningen. He has published a number
of papers on the buyout markets and corporate governance is-
sues. Appointed 24 February 2012.
Paul Turner, 67
NON-EXECUTIVE DIRECTOR AND DEPUTY CHAIR-
MANPaul Turner is a Chartered Accountant and past President
of the Institute of Chartered Accountants of Zimbabwe. He
is a highly respected and knowledgeable member of the
Zimbabwean business community. He was a partner at Ernst
& Young in Harare, Zimbabwe, for over thirty years and brings
an unparalleled level of experience in the structure and
operation of businesses in Zimbabwe. Appointed 1 July 2008.
PAGE 8
CAMBRIA AFRICA PLC
Cambria
Directors
Directors’ Responsibility Statement in Respect of the Directors’ Report and the
The Directors are responsible for preparing the Directors’ Re-
Financial Statements.
port and the financial statements in accordance with applicable
law and regulations. The Directors have elected to prepare the
Group and Parent Company financial statements in accordance
with International Financial Reporting Standards as adopted by
the European Union.
The Directors are responsible for keeping proper account-
ing records that are sufficient to show and explain the
Parent Company’s transactions and disclose with reasonable
accuracy at any time its financial position. They have general
responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included on
the Company’s website. Legislation governing the preparation
and dissemination of financial statements may differ from one
jurisdiction to another.
The Group and Parent Company financial statements are re-
quired to give a true and fair view of the state of affairs of the
Group and Parent Company and of the profit or loss of the
Group for that period.
In preparing these financial statements, the Directors are re-
quired to:
•
•
•
select suitable accounting policies and then apply them
consistently;
make judgements and estimates that are reasonable
and prudent;
state whether they have been prepared in accordance
with International Financial Reporting Standards as ad-
opted by the European Union; and
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group and Parent Company will continue in business.
PAGE 9
FINANCIAL REPORT 2013 FOR THE YEAR ENDED 31 AUGUST 2013
The Directors of Cambria Africa Plc (the “Company”) and its subsidiaries (together the “Group”) sub-
mit their report, together with the audited financial statements for the year ended 31 August 2013.
Directors’ Report
During the year, the Group was an investment company with
Principal activities
a portfolio of investments in Zimbabwe, countries surrounding
Zimbabwe, as well as the remainder of Sub-Saharan Africa, with
a bias towards Southern and Eastern Africa.
The Company’s investment objective is to provide Shareholders
Investment Strategy
with long term capital appreciation.
While the Company does not have a particular sectoral focus,
utilising the investment skills of the Directors and their advisors,
the Company seeks to identify individual companies in sectors
best positioned to benefit should there be radical improvements
in Zimbabwe’s economy. The Company may make investments
in the tourism, accommodation, infrastructure, transport, com-
mercial and residential property, technology, communications,
manufacturing, retail, services, leisure, agricultural and natural
resources sectors. The Company may also make investments in
businesses outside Zimbabwe and the countries surrounding
Zimbabwe as well as the remainder of Sub-Saharan Africa, that
have a significant exposure to assets, businesses or operations
within the defined region. The Company will only be able to
achieve its investment objective in the event the Zimbabwean
economy radically improves.
Whilst there will not be any limit on the number or size of in-
vestments the Company can make in any sector, the Directors
seek to diversify the Company’s investments across various
sectors in order to mitigate risk and to avoid concentrating the
portfolio in any single sector.
The Company’s interest in a proposed investment or acquisi-
tion may range from a minority position to full ownership. The
Company intends, in any event, to actively manage the oper-
ations of the companies it has invested in. Wherever possible
the Company will seek to achieve Board control or financial con-
trol of its portfolio companies. Indigenisation legislation within
Zimbabwe may, however, prevent the Company from acquiring
or maintaining a majority shareholder control in a Zimbabwean
business.
The Directors believe that through their individual and collec-
tive experience of investing and managing acquisitions and dis-
posals in Africa, they have the necessary skills to manage the
Company and to source deal flow. Prior to any investment deci-
sions being taken by the Board of the Company, a thorough due
diligence process is undertaken by the Company’s appointed
specialist financial and legal advisors.
The Company’s investment strategy is dependent upon future
radical improvement in the economy of Zimbabwe and expan-
sion into the immediate region. It is therefore possible that a
significant period of time may elapse before an investment by
the Company will produce any returns and there is no guaran-
tee that the economy in Zimbabwe will improve. Accordingly,
the Company may not be able to make any profits and may in-
cur losses.
The Directors intend to seek the consent of the Shareholders for
the investment policy on an annual basis. The Company Direc-
tors will comply as a matter of policy with the US Office of For-
eign Assets Control and the European Union Council Regulation
(EC) No. 314/2004 regulations.
The Group made a consolidated loss after non-controlling interests
Results
of US$12,048 thousand (2012: loss US$27,271 thousand) during the
year and this has been set against reserves.
The Chief Executive’s review of operations contains information
Business review and development
on developments during the year and key potential future de-
velopments.
The requirements of the enhanced business review in relation
to strategy and progress thereon are contained in the Chief Ex-
ecutive’s review of operations.
The principal risks and uncertainties relate to the revenue gen-
eration in the Group’s businesses which, being located in Africa,
are subject to respective government policies, political stability,
general economic conditions in the relevant country and expo-
sure to foreign currency movements.
The Group monitors cash flow as one of its primary key perfor-
mance indicators. Given current global financial conditions, as
PAGE 10
CAMBRIA AFRICA PLC Business review and development (con-
well as current developments in Zimbabwe, the Directors are
tinued)
carefully monitoring cash resources within the Group and have
instigated a number of initiatives to ensure funding will be avail-
able to meet obligations as they fall due and for planned proj-
ects and ongoing working capital support for its investments.
If such funding cannot be secured, the projects will be delayed
or cancelled to ensure that the Group can manage its cash re-
sources for the foreseeable future and accordingly the financial
statements have been prepared on a going concern basis.
The Group also uses a number of other key performance indi-
cators which are measured at different tiers in the operation. At
the top level, the Group tracks revenues, gross profit, EBITDA,
cash generation and performance against budget.
The Directors mitigate risk by proper evaluation of every invest-
ment that is made and have therefore developed a risk analysis
reporting procedure, which links into the Company’s Corporate
Governance procedures.
Further information regarding the Group’s policies and expo-
sure to financial risk can be found in note 32 to the financial
statements.
The Directors do not recommend the payment of a dividend
Dividends
(2012: US$nil).
On 1 October 2012, the Company announced that it had raised
Share capital
US$1,400 thousand (£860 thousand) by way of a placing of
8,615,115 new ordinary shares at 10p per share, resulting in the
issued share capital of the Company increasing to 66,749,023
ordinary shares.
Details of significant events since the reporting date are con-
Post balance sheet events
tained in note 40 to the financial statements.
For the year ended 31 August 2013
Directors’ Report
Corporate Governance
COMPLIANCE WITH THE UK CORPORATE GOVER-
NANCE CODE
The Directors recognise the value of the UK Corporate Gover-
nance Code (formerly the Combined Code on Corporate Gov-
ernance) and, whilst under AIM rules full compliance is not
required, the Directors have considered the recommendations
and applicability in respect of the Company insofar as is practi-
cable and appropriate for a public company of its size.
BOARD OF DIRECTORS
Following the Annual General meeting on 22 April 2013, the
Board of Directors comprised of two Executive Directors, and
four Non-Executive Directors, one of whom is the Chairman.
Paul Heber resigned as a Non-Executive Director on 10 Decem-
ber 2012. Tania Sanders resigned as an Executive Director on 30
November 2013.
The Directors are of the opinion that the Board comprises a suit-
able balance to enable the recommendations of the Code to be
implemented to an appropriate level. The Board, through the
Chairman and Chief Executive Officer in particular, maintains
regular contact with its advisors, and institutional investors in
order to ensure that the Board develops an understanding of
the views of the major shareholders of the Company.
The Board is responsible for formulating, reviewing and approv-
ing the Company’s strategy, financial activities and operating
performance. Day to day management is devolved to the exec-
utive management who are charged with consulting the Board
on all significant financial and operational matters. Consequent-
ly, decisions are made promptly following consultation amongst
the Directors and managers concerned, where necessary and
appropriate.
All necessary information is supplied to the Directors on a time-
ly basis to enable them to discharge their duties effectively and
all Directors have access to independent professional advice at
the Company’s expense, as and when required.
The Chairman is available to meet with institutional sharehold-
ers to discuss any issues and concerns regarding the Group’s
governance. The Non-Executive Directors can also attend meet-
ings with major shareholders, if requested.
The participation of both private and institutional investors at
the Annual General Meeting is welcomed by the Board.
PAGE 11
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Directors’ Report
Corporate Governance (continued)
INTERNAL CONTROLS
The Directors acknowledge their responsibility for the Com-
pany’s and the Group’s systems of internal control, which are
designed to safeguard the assets of the Group and ensure the
reliability of financial information for both internal use and
external publication. Overall control is ensured by a regular
detailed reporting system covering the state of the Group’s
financial affairs. The Board has implemented procedures for
identifying, evaluating and managing the significant risks that
face the Group.
Any system of internal control can provide only reasonable, and
not absolute, assurance that material financial irregularities will
be detected or that the risk of failure to achieve business objec-
tives is eliminated.
COMMITTEES
The Board has devolved duties to the following committees:
AUDIT COMMITTEE
The role of the Audit Committee is to oversee the nature and
scope of the annual audit, management’s reporting on inter-
nal accounting standards and practices, financial information
and accounting systems and procedures and the Company’s fi-
nancial reporting statements. The Audit Committee’s primary
objectives include assisting the Directors in meeting their re-
sponsibilities in respect of the Company’s continuous financial
disclosure obligations and overseeing the work of the Compa-
ny’s external auditors. The Audit Committee comprises Paul
Turner (Chairman), Ian Perkins and Fred Jones.
REMUNERATION COMMITTEE
The Remuneration Committee makes recommendations to the
Board on the remuneration policy that applies to Executive Di-
rectors and senior employees.
Subsequent to the resignation of Paul Heber, Paul Turner was
appointed to the Remuneration Committee. The Remuneration
Committee comprises Ian Perkins (Chairman), Fred Jones and
Paul Turner.
is responsible for
NOMINATION COMMITTEE
The Nomination Committee
identify-
ing candidates to fill vacancies on the Board, as and when
they arise, and nominate them for approval by the Board.
The Nomination Committee comprises Paul Turner (Chairman),
Edzo Wisman and Itai Mazaiwana.
CORPORATE GOVERNANCE COMMITTEE
The Corporate Governance Committee is responsible for en-
suring proper corporate governance of the Company and is au-
thorised by the Board to undertake regular reviews of external
issues which have the potential for serious impact on the Com-
pany’s business, and to have the oversight of social, environ-
mental and reputational management of the Company.
Subsequent to the resignation of Paul Heber, Itai Mazaiwana
was appointed to the Corporate Governance Committee. The
Corporate Governance Committee comprises Edzo Wisman
(Chairman), Fred Jones and Itai Mazaiwana.
The Directors have been advised of the following shareholdings
Declared substantial shareholdings
at 18 February 2014 3 per cent or more of the Company’s issued
share capital:
NUMBER OF
SHARES
PERCENT-
AGE OF
THE ISSUED
CAPITAL
Russell Investments Ltd
14,252,663
21.35%
Jutland Capital
Management Ltd
Consilium Emerging Market
Absolute Return Masters
Fund Ltd
Contrarian Capital Manage-
ment
10,102,352
15.13%
6,629,132
9.93%
4,860,000
7.28%
Biographical details of all Directors as well dates of appoint-
Directors
ment and resignation are set out on page 8.
PAGE 12
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Directors’ Report
The Directors’ interests in the shares of the Company at the be-
Directors’ share interests
ginning and end of the year were as follows:
The Company has Directors’ and Officers’ liability insurance cov-
Insurance
er in place for Group Directors.
DIRECTORS
AT
18.02.14
NO. OF
SHARES
AT
31.08.13
NO. OF
SHARES
AT
31.08.12
NO. OF
SHARES
Ian Perkins
880,250
880,250
265,000
Edzo Wisman
615,250
615,250
Itai Mazaiwana
Tania Sanders*
Nil
n/a
Nil
92,280
Fred Jones
615,250
615,250
Nil
Nil
Nil
Nil
Paul Heber *
Paul Turner
n/a
Nil
n/a
Nil
350,000
Nil
Total
2,110,750
2,203,030
615,000
Between 1 September 2012 and 31 August 2013 the share price
Share price performance
varied between a high of 11.0p and a low of 8.13p. At 31 August
2013 the mid-market price of the shares at close of business
was 8.25p (2012: 9.90p). On 18 February 2014 the mid-market
price of the shares was 7.5p.
The Group does not follow any code or standard with regard
Payment to suppliers
to the payment of its suppliers. The Group’s policy is to agree
terms and conditions with suppliers in advance; payment is then
made in accordance with the agreement provided the supplier
has met the terms and conditions. Amounts due to suppliers at
the reporting date are contained in note 30.
* Paul Heber and Tania Sanders resigned as Directors on 10 December 2012 and
30 November 2013 respectively.
Share options held by the Directors are detailed in note 25 of
the financial statements
All of the above interests are recorded in the Company’s Regis-
ter of Directors’ Share and Debenture Interests. No Director has
a beneficial interest in the shares or debentures of any of the
Company’s subsidiary undertakings.
A resolution to re-appoint KPMG Audit LLC and to authorise the
Auditors
Directors to fix their remuneration will be proposed at the An-
nual General Meeting.
The Directors who held office at the date of approval of this
Directors’ Report confirm that, so far as they are each aware,
there is no relevant audit information of which the Company’s
Auditors are unaware; and each Director has taken all the steps
that he/she ought to have taken as a Director to make himself/
herself aware of any relevant audit information and to establish
that the Company’s Auditors are aware of that information.
The Company has in place an Anti-Corruption and Bribery Policy
Anti-Corruption and Bribery Policy
which has been adopted by the Company across all divisions
of the Group. The Board has overall responsibility for ensuring
compliance by Directors, employees and other persons associ-
ated with the Group with applicable legal and ethical obliga-
tions. The Company’s Chief Executive Officer has primary and
day-to-day responsibility for implementation of the policy.
Management at all levels of the Group are responsible for en-
suring those reporting to them are made aware of, and under-
stand, the policy. The policy gives guidance on risk identification
and the procedures to follow where a risk is identified, together
with clear guidelines on gifts, entertainment and donations.
The notice of meeting, together with a form of proxy, will be
Annual General Meeting
sent out separately at a later date.
ON BEHALF OF THE BOARD.
PAUL TURNER
DEPUTY CHAIRMAN
26 FEBRUARY 2014
PAGE 13
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Report of the Independent Auditors
Report of the Independent Auditors, KPMG Audit
LLC, to the members of Cambria Africa Plc
We have audited the Group and Parent Company financial Statements (the “financial statements”) of Cambria Africa Plc for the
year ended 31 August 2013 which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive
Income, the Consolidated Statement of Changes in Equity, the Consolidated and Company Statements of Financial Position, the
Consolidated Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting Standards (IFRSs).
This report is made solely to the Company’s members, as a body. Our audit work has been undertaken so that we might state to
the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
As explained more fully in the Directors’ Responsibilities Statement set out on page 9, the Directors are responsible for the prepa-
Respective responsibilities of Directors and Auditor
ration of financial statements that give a true and fair view. Our responsibility is to audit, and express an opinion on, the financial
statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require
us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable
Scope of the audit of the financial statements
assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an
assessment of: whether the accounting policies are appropriate to the Group’s circumstances and have been consistently applied
and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presen-
tation of the financial statements.
In forming our opinion on the financial statements, which is not modified, we have considered the fair value of properties as dis-
Emphasis of matter
closed in note 4.
An impairment has been made against land and buildings within Leopard Rock Hotel Company (Private) Limited and Eastinteg
Investments (Private) Limited. This impairment is based on a valuation commissioned by the Directors in conjunction with the
marketing of the properties for sale. Whilst the Directors believe that this valuation provides an appropriate indication of the value
of the properties in the current market, it should be noted that it does not constitute a formal valuation prepared in accordance
with standard RICS methodology, and the actual proceeds realised on a successfully concluded sale transaction may vary materially
from the amount at which the properties are stated in the Financial Statements.
PAGE 14
CAMBRIA AFRICA PLC Report of the Independent Auditors, KPMG Audit
LLC, to the members of Cambria Africa Plc (contin-
ued)
In our opinion the financial statements:
Opinion on the financial statements
•
•
give a true and fair view of the state of the Group and Parent Company’s affairs as at 31 August 2013 and of the Group’s
loss for the year then ended; and
have been properly prepared in accordance with IFRS.
KPMG AUDIT LLC
CHARTERED ACCOUNTANTS
HERITAGE COURT
41 ATHOL STREET
DOUGLAS
ISLE OF MAN
IM99 1HN
26 FEBRUARY 2014
PAGE 15
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Consolidated Income Statement
Revenue
Cost of sales
Gross profit
Operating costs
Other income
Accelerated write-off of intangibles and goodwill Impairment
Net losses on disposal on investments and impairment of assets
Operating loss
Finance income
Finance costs
Net finance costs
Loss before tax
Income tax
Loss for the period from continuing operations
Discontinued operations
Loss for the year from discontinued operations, net of tax
Loss for the year
Attributable to:
Owners of the company
Non-controlling Interests
Loss for the year
Earnings per share - all operations
Basic and diluted loss per share (Cents)
Earnings per share-continuing operations
Basic and diluted loss per share (Cents)
NOTE
5
7
7
15/16
9
9
10
5/11
12
12
2013
TOTAL
US$’000
8,487
(3,906)
4,581
(8,647)
289
-
(348)
(4,125)
282
(967)
(685)
(4,810)
(204)
(5,014)
(6,890)
(11,904)
(12,048)
144
(11,904)
(18.4c)
(7.6c)
* Restated
2012
TOTAL
US$’000
7,721
(3,395)
4,326
(9,434)
-
(2,475)
(451)
(8,034)
312
(545)
(233)
(8,267)
(349)
(8,616)
(17,072)
(25,688)
(27,271)
1,583
(25,688)
(47.1c)
(18.6c)
The notes on pages 22 to 66 are an integral part of these consolidated financial statements.
*Amounts have been restated due to reclassification of certain entities to discontinued operations. (See note 2)
PAGE 16
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Consolidated Statement of Comprehensive Income
*Restated
2012
2013
Loss for the year
Other comprehensive income
Items that will never be reclassified to income statement:
Revaluation of property, plant and equipment
Related deferred tax adjustment
Impairment of previously revalued land and buildings in disposal group classified as
held for sale
Shareholder loans provided for in the prior year
Items that are or may be reclassified to income statement:
Foreign currency translation differences for overseas operations
Total comprehensive loss for the year
Attributable to:
Owners of the company
Non-controlling interest
Total comprehensive loss for the year
US$’000
(11,904)
422
(110)
(1,873)
(392)
(1)
(13,858)
(14,002)
144
(13,858)
US$’000
(25,688)
273
(2,839)
-
-
(1,601)
(29,855)
(31,438)
1,583
(29,855)
The notes on pages 22 to 66 are an integral part of these consolidated financial statements
*Amounts have been restated due to reclassification of certain entities to discontinued operations (see note 2).
PAGE 17
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Consolidated Statement of Changes in Equity
ATTRIBUTABLE TO OWNERS OF THE COMPANY
SHARE
CAPITAL
SHARE
PREMIUM
RE-
VALUA-
TION
RESERVE
FOREIGN
EXCHANGE
RESERVE
SHARE
BASED
PAYMENT
RESERVE
RETAINED
EARNINGS
NDR
TOTAL
NON- CON-
TROLLING
INTERESTS
TOTAL
EQUITY
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Balance at 31 August 2012
11
77,399
3,124
(10,629)
355
(47,312)
2,128
25,076
(1,785)
23,291
Loss for the year
Adjustment to opening
reserves in respect of share-
holder loans
Revaluation of property
Deferred tax adjustment
Impairment of (previously
revalued) land and buildings
in a disposal group classified
as held for sale.
Foreign currency translation
differences for overseas
operations
Total comprehensive loss
for the year
Contributions by and dis-
tributions to owners of the
Company recognised
directly in equity
Reclassification of reserves
Disposal of business
Dividends paid
Issue of ordinary shares
Share based payment
release
Total contributions by and
distributions to owners of
the Company
-
-
-
-
-
-
-
-
-
-
1
-
1
-
-
-
-
-
-
-
-
-
-
1,399
-
-
-
422
(110)
(1,873)
-
(1,561)
(621)
(865)
-
-
-
-
-
-
-
-
(1)
(1)
-
(11)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(269)
1,399
(1,486)
(11)
(269)
(12,048)
(392)
-
-
-
-
(12,440)
-
-
-
-
-
-
-
(12,048)
144
(11,904)
(392)
422
(110)
(1,873)
(1)
-
-
-
-
-
(392)
422
(110)
(1,873)
(1)
(14,002)
144
(13,858)
-
-
-
-
-
-
621
-
(508)
(1,384)
-
-
-
-
1,400
(269)
-
1,808
(247)
-
-
-
424
(247)
1,400
(269)
113
(253)
1,561
1,308
Balance at 31 August 2013
12
78,798
77
(10,641)
86
(59,752)
2,241
10,821
(80)
10,741
The notes on pages 22 to 66 are an integral part of these consolidated financial statements
PAGE 18
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Consolidated Statement of Changes in Equity
ATTRIBUTABLE TO OWNERS OF THE COMPANY
SHARE
CAPITAL
SHARE
PREMIUM
RE-
VALUA-
TION
RESERVE
FOREIGN
EXCHANGE
RESERVE
SHARE
BASED
PAYMENT
RESERVE
RETAINED
EARNINGS
NDR
TOTAL
NON- CON-
TRIBUTE
INTERESTS
TOTAL
EQUITY
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Balance at 31 August 2011
10
75,854
6,327
(12,276)
270
(20,676)
3,044
52,553
(492)
52,061
Loss for the year
Revaluation of property
Deferred tax
adjustment
Foreign currency translation
differences for overseas
operations
Total comprehensive loss
for the year
Contributions by and dis-
tributions to owners of the
Company recognised
directly in equity
Reclassification of reserves
Dividends paid
Issue of ordinary shares
Share based payment
transactions
Total contributions by and
distributions to owners of
the Company
-
-
-
-
-
-
-
1
-
1
-
-
-
-
-
-
-
1,545
-
-
273
(2,839)
-
-
-
(394)
1,626
(2,960)
1,626
(243)
21
-
-
-
-
-
-
1,545
(243)
21
-
-
-
-
-
-
-
-
85
85
(27,271)
-
-
(2,833)
(30,104)
-
-
-
-
-
(27,271)
1,583
(25,688)
273
(2,839)
(1,601)
-
-
-
273
(2,839)
(1,601)
(31,438)
1,583
(29,855)
3,468
(916)
2,330
(2,330)
-
-
-
-
-
-
-
(546)
1,546
85
-
-
-
(546)
1,546
85
3,468
(916)
3,961
(2,876)
1,085
Balance at 31 August 2012
11
77,399
3,124
(10,629)
355
(47,312)
2,128
25,076
(1,785)
23,291
The notes on pages 22 to 66 are an integral part of these consolidated financial statements.
PAGE 19
FINANCIAL REPORT 2013 As at 31 August 2013
Consolidated and Company Statement of Financial Position
NOTES
COMPANY 2013
GROUP 2013
GROUP 2012
COMPANY 2012
US$’000
US$’000
US$’000
US$’000
Assets
Property, plant and equipment
Biological assets
Goodwill
Intangible assets
Longterm receivables
Total non-current assets
Inventories
Financial assets at fair value through profit or loss
Trade and other receivables
Cash and cash equivalents
Assets held for sale
Total current assets
Total assets
Equity
Issued share capital
Share premium account
Revaluation reserve
Share based payment reserve
Foreign exchange reserve
Non distributable reserves
Retained losses
Equity attributable to owners of company
Non-controlling interests
Total equity
Liabilities
Loans and borrowing
Provisions
Deferred tax liabilities
Total non-current liabilities
Bank overdraft
Current tax liabilities
Loans and borrowings
Trade and other payables
Liabilities held for sale
Total current liabilities
Total liabilities
Total equity and liabilities
13
15
16
17
19
20
21
22
5
23,24
23,24
23,24
23,24,25
23
23
23
26
27
28
22
29
30
11
2,881
-
717
179
361
4,138
925
58
814
2,136
16,164
20,097
24,235
12
78,798
77
86
(10,641)
2,241
(59,752)
10,821
(80)
10,741
6,553
203
553
7,309
398
187
94
1,322
4,184
6,185
13,494
24,235
56
-
-
-
-
56
-
-
25,648
1,210
-
26,858
26,914
12
78,798
-
86
(13,186)
-
(45,530)
20,180
-
20,180
4,500
29
-
4,529
-
-
-
2,205
-
2,205
6,734
26,914
25,250
83
717
1,551
3,229
30,830
936
42
2,625
468
361
4,432
35,262
11
77,399
3,124
355
(10,629)
2,128
(47,312)
25,076
(1,785)
23,291
2,054
161
4,108
6,323
337
284
1,692
2,825
510
5,648
11,971
35,262
97
-
-
-
3,229
3,326
-
-
24,668
178
-
24,846
28,172
11
77,399
-
355
(13,186)
-
(40,907)
23,672
-
23,672
2,000
-
-
2,000
-
-
1,250
1,250
-
2,500
4,500
28,172
These financial statements were approved by the Board of Directors and authorised for issue on 26 February 2014. They were
signed on their behalf by:
EDZO WISMAN
EXECUTIVE DIRECTOR
The notes on pages 22 to 66 are an integral part of these consolidated financial statements.
PAGE 20
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Consolidated Statement of Cash Flows
* Restated
GROUP 2012
GROUP 2013
NOTES
Cash used in operations
Taxation paid
Cash used in operating activities
Cash flows from investing activities
Proceeds on disposal of property, plant and equipment
Purchase of property, plant and equipment
Other investing activities
Proceeds from the sale of investments
Write down of investments
Interest received
Net cash generated by investing activities
Cash flows from financing activities
Dividends paid to non-controlling interests
Interest paid
Proceeds from issue of share capital
Proceeds from drawdown of loans
Net cash generated by financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 September
Net cash and cash equivalents at 31 August
Cash and cash equivalents as above comprise the following:
Cash and cash equivalents
Bank overdraft
Net cash and cash equivalents at 31 August
31
18
23
26
22
22
US$’000
(1,379)
(335)
(1,714)
20
(400)
(361)
-
282
(459)
(247)
(967)
1,400
3,594
3,780
1,607
131
1,738
2,136
(398)
1,738
US$’000
(7,934)
(509)
(8,443)
312
(1,473)
-
1,197
4,418
326
4,780
(323)
(707)
1,546
2,249
2,765
(898)
1,029
131
468
(337)
131
*Amounts have been restated due to reclassification of certain entities to discontinued operations (see note 2).
The notes on pages 22 to 66 are an integral part of these consolidated financial statements.
PAGE 21
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
Cambria Africa Plc (the “Company”) is a public limited company
1. Reporting entity
listed in the Alternative Investment Market (AIM) and incorpo-
rated in the Isle of Man under the Companies Act 2006. The
consolidated financial statements of the Group for the year
ended 31 August 2013 comprise the Company and its subsid-
iaries (together referred to as the “Group” and individually as
“Group entities”).
The financial statements were authorised for issue by the Direc-
tors on 26 February 2014.
2. Basis of preparation
STATEMENT OF COMPLIANCE
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
(IFRSs) as adopted by the E.U. On publishing the Company
statement of financial position here together with the Group
financial statements, the Company complies with the Isle of
Man Companies Act 2006 under which there is no requirement
to present a company statement of comprehensive income in
consolidated financial statements.
NEW AND AMENDED STANDARDS EFFECTIVE FOR
FUTURE PERIODS
At the date of authorisation of these financial statements, the
following standards and interpretations were in issue but not
yet effective and were not applied in these financial statements.
STANDARD/INTERPRETATION
EU EFFECTIVE DATE FOR
ANNUAL PERIODS BEGIN-
NING ON OR AFTER
IFRS 1
IFRS 7
IFRS 10
IFRS 11
IFRS 12
Amendment - govern-
ment loans
Amendment - offsetting
financial assets and
liabilities
Consolidated financial
statements
1 January 2013
1 January 2013
1 January 2013
Joint arrangements
1 January 2013
Disclosure of interests
with other entities
IAS 28 (R)
Investments in associates
and joint ventures (2011)
Amendments to
IAS 32
Offsetting Financial
Assets and Financial
Liabilities
1 January 2013
1 January 2013
1 January 2013
RESTATEMENT OF COMPARATIVE NUMBERS
During the period, the Group reclassified certain items as dis-
continued and/or held for sale. Accordingly the information for
the prior period is restated such that comparative information
given in respect of discontinued and continuing operations is
consistent in each period.
IFRS 13
Fair Value Measurement
1 January 2014
Amendments to
IFRS 10, IFRS 12
and IAS 27
Investment Entities
1 January 2014
IFRS 9
Financial Instruments
1 January 2015
NEW AND AMENDED STANDARDS ADOPTED IN THE
CURRENT PERIOD
The amendment to IAS1 ‘Presentation of Financial Statements’
was adopted in the current period. It requires changes to the
presentation of other comprehensive income on the basis of
whether or not the respective items will be reclassified subse-
quently to profit and loss.
BASIS OF MEASUREMENT
The consolidated financial statements have been prepared on
the historical cost basis except for the following:
• biological assets measured at fair value less cost to sell;
•
•
land, buildings and plant and equipment measured at
revalued amounts.
Share-based payments measured at fair value.
PAGE 22
CAMBRIA AFRICA PLC 2. Basis of preparation (continued)
FUNCTIONAL AND PRESENTATION CURRENCY
The consolidated financial statements are presented in United
States Dollars, which, with effect from 1 September 2011, is the
Company’s functional currency. The change in presentational
currency made at 1 September 2011 was to better reflect the
Group’s business activities since cash flows and economic re-
turns are principally denominated in United States Dollars.
For the year ended 31 August 2013
Notes to the Financial Statements
GOING CONCERN
The Group’s business activities and financial performance are
set out in the Chief Executive’s Review on pages 2 to 8. In ad-
dition, note 32 to the financial statements includes the Group’s
objectives, policies and processes for managing its capital; its
financial risk management objectives; details of its financial in-
struments and its exposure to credit and liquidity risk.
The Group has completed a successful equity placement after
the reporting date (see note 40) which has secured further
working capital support in the region of US$4m
USE OF ESTIMATES AND JUDGEMENTS
The preparation of financial statements in conformity with
IFRSs requires management to make judgements, estimates
and assumptions that affect the application of policies and re-
ported amounts of assets and liabilities, income and expenses.
The estimates and associated assumptions are based on histori-
cal experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form
the basis of making the judgements about carrying values of
assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates.
The Group has access to sufficient financial resources for its
needs. As a consequence, the Directors believe that the Group
is well placed to manage its business risks successfully despite
the current economic outlook.
After making enquiries, the Directors have a reasonable ex-
pectation that the Company and the Group have adequate re-
sources to continue in operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern
basis in preparing the annual report and financial statements.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision af-
fects only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.
Information about critical judgements in applying accounting
policies and assumptions and estimation uncertainties that
have the most significant effect on the amounts recognised in
the consolidated financial statements is included in the follow-
ing notes:
• Note 14 – Biological assets
• Note 15 – Goodwill
• Note 13 – Property, plant and equipment
• Note 27 – Provisions
By their nature, these estimates and assumptions are subject to
an inherent measurement of uncertainty and the effect on the
Group’s financial statements of changes in estimates in future
periods could be significant.
The following accounting policies have been applied consistent-
3. Significant accounting policies
ly by the Group.
(A) BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial
statements of the Company and Group entities controlled by
the Company (its subsidiaries). Control is achieved where the
Company has both power and variable returns to govern the
financial and operating policies of an investee entity so as to
obtain benefits from its activities. The financial statements of
subsidiaries are included in the consolidated financial state-
ments from the date that control commenced until the date
that control ceases.
The interest of non-controlling shareholders is stated at the
their proportion of the fair values of the assets and liabilities
recognised. Subsequently, losses applicable to the non-con-
trolling interests are allocated against their interests even if
doing so causes the non-controlling interests to have a deficit
balance.
PAGE 23
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
3. Significant accounting policies (con-
tinued)
(A) BASIS OF CONSOLIDATION (CONTINUED)
The results of entities acquired or disposed of during the year
are included in the consolidated income statement from the ef-
fective date of acquisition or up to the effective date of dispos-
al as appropriate. Where necessary, the financial statements
of the subsidiaries are adjusted to conform to the Group’s ac-
counting policies. All intra-group transactions, balances, income
and expenses are eliminated on consolidation.
BUSINESS COMBINATIONS
The acquisition of subsidiaries is accounted for using the acqui-
sition method. The cost of the acquisition is measured at the
aggregate of the fair values at the date of exchange of assets
given, liabilities incurred or assumed, and equity instruments
issued by the Group in exchange for control of the acquiree.
Acquisition related costs are expensed as incurred unless they
relate to the cost of issuing debt or equity securities. The ac-
quiree’s identifiable assets, liabilities and contingent liabilities
that meet the conditions for recognition under IFRS 3 are rec-
ognised at their fair values at the acquisition date, except for
non-current assets that are classified as held for sale in accor-
dance with IFRS 5, which are recognised and measured at fair
value less costs to sell.
(B) INTANGIBLE ASSETS
GOODWILL
Goodwill arising on consolidations is recognised as an asset.
Following initial recognition, goodwill is subject to impairment
reviews, at least annually, and measured at cost less accumulat-
ed impairment losses. The recoverable amount is estimated at
each reporting date.
Any impairment loss is recognised immediately in the income
statement and is not subsequently reversed when the carrying
amount of the asset exceeds its recoverable amount.
Any impairment losses recognised in respect of cash generating
units are allocated first to reduce the carrying amount of any
goodwill allocated to cash-generating units (groups of units)
and then to reduce the carrying amount of other assets in the
unit (groups of units) on a pro rata basis.
On disposal of a subsidiary the attributable amount of goodwill
is included in the determination of the gain or loss on disposal.
OTHER INTANGIBLE ASSETS
Other intangible assets are measured initially at cost and are
amortised on a straight-line basis over their estimated useful
lives. The carrying amount is reduced by any provision for im-
pairment where necessary.
Goodwill arising on acquisition is recognised as an asset at the
date that control is assumed (the acquisition date) and initial-
ly measured at cost, being the excess of the cost of the busi-
ness combination over the Group’s interest in the fair value of
the identifiable assets, liabilities and contingent liabilities rec-
ognised.
On a business combination, as well as recording separable in-
tangible assets already recognised in the statement of financial
position of the acquired entity at their fair value, identifiable
intangible assets that are separable or arise from contractual or
other legal rights are also included in the acquisition statement
of financial position at fair value.
If, after reassessment, the Group’s interest in the net fair value
of the acquiree’s identifiable assets, liabilities and contingent
liabilities exceeds the cost of the business combination, the ex-
cess is recognised immediately in the income statement.
The interest of non-controlling shareholders in the acquiree is
initially measured at the non-controlling interests’ proportion
of the net fair value of the assets, liabilities and contingent lia-
bilities recognised.
Amortisation of intangible assets is charged over their useful
economic life, as follows:-
Licences
Brand name
5-6 years
7 years
(C) FOREIGN CURRENCIES
The individual financial statements of each Group entity are
presented in the currency of the primary economic environ-
ment in which it operates (its functional currency).
PAGE 24
CAMBRIA AFRICA PLC 3. Significant accounting policies (con-
tinued)
(C) FOREIGN CURRENCIES (CONTINUED)
For the purpose of the consolidated financial statements, the
results and financial position of each of the Group entities are
expressed in United States Dollars, which is the functional cur-
rency of the Company, and the presentational currency for the
consolidated financial statements.
In preparing the financial statements of the individual Group
entities, transactions denominated in foreign currencies are
translated into the respective functional currency of the Group
entities using the exchange rates prevailing at the dates of
transactions.
Non-monetary assets and liabilities are translated at the histor-
ic rate. Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at the
rates of exchange ruling at the reporting date. Non-monetary
assets and liabilities denominated in foreign currencies that are
measured at fair value are retranslated to the functional cur-
rency at the exchange rate at the date that the fair value was
determined.
Exchange differences arising on the settlement of monetary
items, and on the retranslation of monetary items, are included
in the income statement for the year, as either finance income
or finance costs depending on whether foreign currency move-
ments are in a net gain or net loss position.
Exchange differences arising on the retranslation of non-mone-
tary items earned at fair value are included within the income
statement for the period except for differences arising on the
retranslation of non-monetary items in respect of which gains
and losses are recognised directly in equity. For such non-mon-
etary items, any exchange component of that gain or loss is also
recognised directly in other comprehensive income.
For the purpose of presenting consolidated financial state-
ments, the assets and liabilities of the Group’s foreign opera-
tions are translated at exchange rates prevailing at the report-
ing date. Income and expenses are translated at the average
exchange rates for the period, unless exchange rates fluctuate
so as to have a material impact on the financial statements
during that period, in which case the exchange rates at the date
of transactions are used.
Exchange differences arising, if any, are recognised in other
For the year ended 31 August 2013
Notes to the Financial Statements
comprehensive income and are transferred to the Group’s for-
eign currency translation reserve within equity. Such translation
is recognised as income or as expenses in the period in which
the operation is disposed of.
(D) TAXATION
The tax expense represents the sum of current and deferred
tax.
CURRENT TAXATION
Current tax is based on taxable profit for the period for the
Group. Taxable profit differs from net profit in the income state-
ment because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes
items that are never taxable or deductible. The Group’s liability
for current tax is calculated using tax rates that have been en-
acted or substantively enacted by the reporting date.
DEFERRED TAXATION
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabili-
ties in the financial statements and the corresponding tax bases
used in the computation of taxable profit, and is accounted for
using the balance sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition (other than
in a business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting
profit. Deferred tax liabilities are recognised for taxable tempo-
rary differences arising on the investments in subsidiaries and
associates, except where the Group is able to control the re-
versal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is re-
alised. Deferred tax is charged or credited in the income state-
ment, except when it relates to items charged or credited to eq-
uity, in which case the deferred tax is also dealt with in equity.
PAGE 25
FINANCIAL REPORT 2013 The gain or loss arising on the disposal of an asset is determined
as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in the income statement
for the year.
Assets held under finance leases are depreciated over their ex-
pected useful lives on the same basis as owned assets, or where
shorter, over the relevant lease term. No depreciation is provid-
ed on freehold land.
Property, plant and equipment identified for disposal are re-
classified as assets held for resale.
(G) BIOLOGICAL ASSETS
Biological assets which consist of living animals (game) are mea-
sured on initial recognition and at subsequent reporting dates
at fair value less estimated costs to sell, unless fair value cannot
be reliably measured. All costs related to biological assets that
are measured at fair value are recognised as expenses when
incurred, other than costs to purchase biological assets.
(H) IMPAIRMENT OF ASSETS EXCLUDING GOODWILL
At each reporting date, the Group reviews the carrying amounts
of its tangible and intangible assets to determine whether there
is any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent of any
impairment loss. Where the asset does not generate cash flows
that are independent from other assets, the Group estimates
the recoverable amount of the cash-generating unit to which
the asset belongs. Recoverable amount is the higher of fair val-
ue less costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market
assessments of the time value and the risks specific to the as-
set for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an
expense immediately, unless the relevant asset is carried at a
revalued amount in which case the reversal of the impairment
loss is treated as a revaluation decrease.
For the year ended 31 August 2013
Notes to the Financial Statements
3. Significant accounting policies (con-
Deferred tax assets and liabilities are off set when there is a
tinued)
legally enforceable right to set off current tax assets against cur-
rent tax liabilities, when they relate to income taxes levied by
the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
(E) OTHER INVESTMENTS
Other asset investments are stated at fair value, adjusted for
impairment losses.
(F) PROPERTY, PLANT AND EQUIPMENT
Long leasehold land and buildings, plant and machinery, mo-
tor vehicles and fixtures and fittings are stated at their revalued
amounts, being the fair value at the date of revaluation, less
any subsequent accumulated depreciation and subsequent ac-
cumulated impairment losses. Revaluations are performed with
sufficient regularity such that the carrying amount does not dif-
fer materially from that which would be determined using fair
values at the reporting date.
Any revaluation increase arising on the revaluation of such as-
sets is credited to the revaluation reserve, except to the extent
that it reverses a revaluation decrease for the same asset pre-
viously recognised as an expense, in which case the increase is
credited to the income statement to the extent of the decrease
previously charged. A decrease in carrying amount arising on
the revaluation of such asset is charged as an expense to the
extent that it exceeds the balance, if any, held in the revaluation
reserve relating to a previous revaluation of that asset. Depre-
ciation on revalued assets is charged to the income statement.
On subsequent sale or retirement of a revalued asset, the at-
tributable revaluation surplus remaining is transferred directly
to retained earnings.
Depreciation is charged straight line so as to write off the cost or
valuation of assets, other than land, over their estimated useful
lives. The annual rates used for this purpose are:
2%
10%
15%-25%
15%-25%
Freehold buildings
Plant and machinery
Motor vehicles
Fixtures and fittings
PAGE 26
CAMBRIA AFRICA PLC 3. Significant accounting policies (con-
tinued)
(H) IMPAIRMENT OF ASSETS EXCLUDING GOODWILL
(CONTINUED)
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the in-
creased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior
years. A reversal of an impairment loss is recognised as income
immediately, unless the relevant asset is carried at a revalued
amount, in which case the reversal of the impairment loss is
treated as a revaluation increase.
(I) FINANCIAL INSTRUMENTS
Non-derivative financial instruments comprise investments in
equity, trade and other receivables, cash and cash equivalents,
loans and borrowings and trade and other payables. Financial
assets and financial liabilities are recognised in the Group’s
statement of financial position when the Group becomes a par-
ty to the contractual provisions of the instrument.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash in hand and demand
deposits and other short term highly liquid investments that
are readily convertible to a known amount of cash and are sub-
ject to an insignificant risk of changes in value. Bank overdrafts
that are repayable on demand and form an integral part of the
Group’s cash management are included as a component of cash
and cash equivalents for the purpose of the statement of cash
flows.
TRADE RECEIVABLES
Trade receivables are initially measured at fair value and are
subsequently measured at amortised cost using the effective
interest rate method. Appropriate allowances for estimated re-
coverable amounts are recognised in profit or loss when there
is objective evidence the asset is impaired.
TRADE PAYABLES
Trade payables are initially measured at fair value and are sub-
sequently measured at amortised cost using the effective inter-
est rate method.
For the year ended 31 August 2013
Notes to the Financial Statements
FINANCIAL LIABILITIES
Financial liabilities are classified according to the substance of
the contractual arrangements entered into.
CAPITAL MANAGEMENT
The Board’s policy is to maintain a strong capital base so as to
maintain investor, creditor and market confidence and to sus-
tain future development of the business. The Board of Directors
monitors the return on capital, which the Group defines as net
operating income divided by total shareholders’ equity, exclud-
ing non-controlling interests.
BANK BORROWINGS
Interest bearing bank loans and overdrafts are recorded at the
proceeds received, net of direct issue costs. Finance charges, in-
cluding premiums payable on settlement or redemption and di-
rect issue costs, are accounted for on an amortised cost basis to
the income statement using the effective interest method and
are added to the carrying amount of the instrument to the ex-
tent that they are not settled in the period in which they arise.
EQUITY INSTRUMENTS
Equity instruments issued by the Company are recorded at the
proceeds received, net of direct issue costs.
(J) INVENTORIES
Inventories are stated at the lower of cost and net realisable
value. Cost comprises direct materials and where applicable di-
rect expenditure and attributable overheads that have been in-
curred in bringing the inventories to their present location and
condition. Net realisable value represents the estimated selling
price less all estimated costs of completion and costs to be in-
curred in marketing, selling and distribution.
(K) SHARE BASED PAYMENTS
The Group provides benefits to certain employees (including
senior executives) of the Group in the form of share based
payments, whereby employees render services in exchange
for shares or rights over shares (equity-settled transactions).
The cost of these equity-settled transactions with employees is
measured by reference to the fair value of the equity instru-
ments at the date at which they are granted. The fair value is
determined by using a Black-Scholes model. The dilutive effect,
if any, of outstanding options is reflected as additional share di-
lution in the computation of earnings per share.
PAGE 27
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
3. Significant accounting policies (con-
tinued)
(K) SHARE BASED PAYMENTS (CONTINUED)
The grant date fair value of options granted to employees is rec-
ognised as an employee expense with a corresponding increase
in equity over the period the employees become uncondition-
ally entitled to the options.
(L) INTEREST-BEARING BORROWINGS
Interest-bearing borrowings are recognised initially at fair value
less attributable transaction costs. Subsequent to initial recog-
nition, interest-bearing borrowings are stated at amortised cost
with any difference between cost and redemption value being
recognised in the income statement over the period of the bor-
rowings on an effective interest basis.
(M) DIVIDENDS
Interim dividends are recognised as a liability in the period in
which they are proposed and declared. Final dividends are rec-
ognised when approved by the shareholders.
(N) PROVISIONS
A provision is recognised in the statement of financial position
when the Group has a present legal or constructive obligation
as a result of a past event and it is probable that an outflow of
economic benefits will be required to settle the obligation. If
the effect is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and,
where appropriate, the risks specific to the liability.
(O) REVENUE RECOGNITION
Revenue is derived from the sale of goods and services and is
measured at the fair value of consideration received or receiv-
able after deducting discounts, volume rebates, value-added
tax and other sales taxes. A sale of goods and services is rec-
ognised when recovery of the consideration is probable, there
is no continuing management involvement with the goods and
services and the amount of revenue can be measured reliably.
A sale of goods is recognised when the significant risks and re-
wards of ownership have passed to the buyer, the associated
costs and possible return of goods can be estimated reliably.
This is when title and insurance risk have passed to the custom-
er and the goods have been delivered to a contractually agreed
location. A sale of services is recognised when the service has
been rendered.
(P) LEASES
Leases are classified according to the substance of the transac-
tion. A lease that transfers substantially all the risks and rewards
of ownership to the lessee is classified as a finance lease. All
other leases are classified as operating leases.
FINANCE LEASES
Finance leases are capitalised at their fair value or, if lower, at
the present value of the minimum lease payments, each deter-
mined at the inception of the lease. The corresponding liabili-
ty is shown as a finance lease obligation to the lessor. Leasing
repayments comprise both a capital and finance element. The
finance element is written off to the income statement so as to
produce an approximately constant periodic rate of charge on
the outstanding obligations. Such assets are depreciated over
the shorter of their estimated useful lives and the period of the
lease.
OPERATING LEASES
Operating lease rentals are charged to the income statement on
a straight line basis over the period of the lease.
(Q) BORROWING COST
Borrowing costs directly attributable to the acquisition, con-
struction or production of a qualifying asset, which are assets
that necessarily take a substantial period of time to get ready
for their intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially ready for
their intended use or sale. Investment income earned on the
temporary investment of specific borrowings pending their ex-
penditure on qualifying assets is deducted from the borrowing
costs eligible for capitalisation. All other borrowing costs are
recognised in the income statement in the period in which they
are incurred.
(R) LOSS PER SHARE
Basic loss per share is calculated based on the weighted average
number of ordinary shares outstanding during the year. Diluted
loss per share is based upon the weighted average number of
shares in issue throughout the year, adjusted for the dilutive
effect of potential ordinary shares. The only potential ordinary
shares in issue are employee share options.
PAGE 28
CAMBRIA AFRICA PLC 3. Significant accounting policies (con-
tinued)
(S) NON-CURRENT ASSETS HELD FOR SALE
Non-current assets that are expected to be recovered primarily
through sale or distribution rather than through continuing use
are classified as held for sale, measured at the lower of carry-
ing amount and fair value less costs to sell. Immediately before
reclassification as held for sale, the assets are remeasured in
accordance with the Group’s accounting policies. Thereafter
generally the assets are measured at the lower of their carrying
amount and fair value less costs to sell. Impairment losses on
initial classification as held for sale and subsequent gains and
losses on re-measurement are recognised in profit or loss. Gains
are not recognised in excess of any cumulative impairment loss.
(T) SEGMENT REPORTING
A segment is a distinguishable component of the Group that is
engaged either in providing products or services (business seg-
ment), or in providing products or services within a particular
economic environment (geographical segment), which is sub-
ject to risks and rewards that are different from those of other
segments.
(U) ASSETS HELD FOR SALE AND DISCONTINUED
OPERATIONS
ASSETS HELD FOR SALE
Non-current assets, or disposal groups comprising assets and
liabilities, are classified as held-for-sale or held-for-distribu-
tion if it is highly probable that they will be recovered primarily
through sale or distribution rather than through continuing use.
Immediately before classification as held-for-sale or held-for-dis-
tribution, the assets, or components of a disposal group, are
remeasured in accordance with the Group’s other accounting
policies.
Thereafter, generally the assets, or disposal group, are mea-
sured at the lower of their carrying amount and fair value less
costs to sell. Any impairment loss on a disposal group is allo-
cated first to goodwill, and then to the remaining assets and
liabilities on a pro rata basis, except that no loss is allocated
to inventories, financial assets, deferred tax assets, employee
benefit assets, investment property or biological assets, which
continue to be measured in accordance with the Group’s other
accounting policies. Impairment losses on initial classification as
For the year ended 31 August 2013
Notes to the Financial Statements
held-for-sale or held-for-distribution and subsequent gains and
losses on remeasurement are recognised in profit or loss. Gains
are not recognised in excess of any cumulative impairment loss.
Once classified as held-for-sale or held-for-distribution, intan-
gible assets and property, plant and equipment are no longer
amortised or depreciated, and any equity-accounted investee is
no longer equity accounted.
DISCONTINUED OPERATIONS
A discontinued operation is a component of the Group’s busi-
ness, the operations and cash flows of which can be clearly dis-
tinguished from the rest of the Group and which:
•
•
•
represents a separate major line of business or geo-
graphical area of operations;
is part of a single co-ordinated plan to dispose of a sep-
arate major line of business or geographical area of op-
erations; or
is a subsidiary acquired exclusively with a view to re-
sale.
Classification as a discontinued operation occurs on disposal or
when the operation meets the criteria to be classified as held-
for-sale, if earlier.
When an operation is classified as a discontinued operation, the
comparative statement of comprehensive income is re-present-
ed as if the operation had been discontinued from the start of
the comparative year.
A number of the Group’s accounting policies and disclosures
4. Determination of fair values
require the determination of fair value, for both financial and
non-financial assets and liabilities. Fair values have been deter-
mined for measurement and/or disclosure purposes based on
the following methods. Where applicable, further information
about the assumptions made in determining fair values is dis-
closed in the notes specific to that asset or liability.
INVENTORIES
The fair value of inventories acquired in a business combination
is determined based on the estimated selling price in the ordi-
nary course of business less the estimated costs of completion
and sale, and a reasonable profit margin based on the effort
required to complete and sell the inventories.
PAGE 29
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
4. Determination of fair values (contin-
ued)
EQUITY AND DEBT SECURITIES
The fair values of investments for equity and debt securities are
determined with reference to their quoted closing bid price at
the measurement date. Subsequent to initial recognition, the
fair values of held-to-maturity investments are determined for
disclosure purposes only.
al value to arrive at the gross property valuation. When actual
rents differ materially from the estimated rental value, adjust-
ments are made to reflect actual rents.
Due to the unique nature of a number of properties within the
Group’s portfolio, external valuations are obtained, however
the Directors also review the valuations and may determine the
need for impairment for the financial statements given their
own knowledge of the properties and in particular where there
has been interest from third parties in purchasing the proper-
ties, the Directors may refer to amounts offered for purchase.
TRADE AND OTHER RECEIVABLES
The fair values of trade and other receivables are estimated at
the present value of future cash flows, discounted at the mar-
ket rate of interest at the measurement date. Short-term receiv-
ables with no stated interest rate are measured at the original
invoice amount if the effect of discounting is immaterial. Fair
value is determined at initial recognition and, for disclosure
purposes, at each annual reporting date.
PROPERTY, PLANT AND EQUIPMENT
The fair value of property, plant and equipment recognised as
a result of a business combination is the estimated amount for
which property could be exchanged on the acquisition date be-
tween a willing buyer and a willing seller in an arm’s length trans-
action after proper marketing wherein the parties had each act-
ed knowledgeably. The fair value of items of plant, equipment,
fixtures and fittings is based on the market approach and cost
approaches using quoted market prices for similar items when
available and depreciated replacement cost when appropriate.
Depreciated replacement cost reflects adjustments for physical
deterioration as well as functional and economic obsolescence.
Segment information is presented in respect of the Group’s
5. Segment reporting
business segments based on the Group’s management and in-
ternal reporting structure. The results of the business segments
are reviewed regularly by the Group’s CEO to make decisions
about resources to be allocated to the segment and to assess
its performance, and for which discrete financial information is
available.
Inter-segment pricing is determined on an arm’s length basis
and inter-segment revenue is eliminated.
Segment results that are reported to the CEO include items di-
rectly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items mainly inter-
est-bearing loans, borrowings and expenses, and corporate as-
sets and expenses primarily relating to Company’s head office.
Segment capital expenditure is the total cost incurred during
the period to acquire segment assets that are expected to be
used for more than one period.
INVESTMENT PROPERTY
An external independent valuation company having appropriate
recognised professional qualifications and recent experience in
the location and category of property being valued, values the
Group’s property portfolio. The fair values are based on market
values, being the estimated amount for which a property could
be exchanged on the date of the valuation between a willing
buyer and a willing seller in an arm’s length transaction after
proper marketing wherein the parties had each acted knowl-
edgeably.
In the absence of current prices in an active market, the valua-
tions are prepared by considering the estimated rental value of
the property. A market yield is applied to the estimated rent-
GEOGRAPHICAL SEGMENTS
Support services and industrial chemicals operate primarily in
Zimbabwe, with start up operations commencing in the period
under review in bordering countries in Sub-Saharan Africa. Sep-
arate geographical analysis is therefore not presented.
BUSINESS SEGMENTS
For management purposes, continuing operations are organ-
ised into two main business segments.
• Outsource and IT services - includes payments and busi-
ness process outsourcing and payroll services
•
Industrial chemicals - includes the manufacture and dis-
tribution of industrial solvents and mining chemicals
PAGE 30
CAMBRIA AFRICA PLC 5. Segment reporting (continued)
CONTINUING OPERATIONS
FOR THE YEAR ENDED
31 AUGUST 2013
INDUSTRIAL
CHEMICALS
OUTSOURCE AND
IT SERVICES
HEAD OFFICE
US$’000
US$’000
US$’000
For the year ended 31 August 2013
Notes to the Financial Statements
TOTAL
US$’000
8,509
(22)
8,487
(3,906)
4,581
(7,817)
(348)
(249)
(292)
4,186
(22)
4,164
(353)
3,811
-
-
-
-
-
(3,369)
(3,212)
(740)
(48)
-
-
(164)
(291)
(13)
84
(120)
(204)
(253)
442
(4,000)
(4,125)
196
(755)
-
(4,559)
(3,952)
282
(967)
(204)
(5,014)
* (3,580)
4,323
-
4,323
(3,553)
770
(1,236)
392
(37)
(1)
(112)
2
(92)
-
(202)
* (70)
INDUSTRIAL
CHEMICALS
OUTSOURCE AND
IT SERVICES
HEAD OFFICE
US$’000
US$’000
US$’000
Restated
TOTAL
US$’000
3,770
-
3,770
(3,058)
712
(920)
-
-
(36)
-
(244)
-
(34)
-
(278)
* (208)
3,971
(20)
3,951
(337)
3,614
(2,266)
(8)
-
(215)
(30)
1,095
8
-
(349)
754
1,340
-
-
-
-
-
(5,711)
(2,467)
(451)
(89)
-
7,741
(20)
7,721
(3,395)
4,326
(8,897)
(2,475)
(451)
(340)
(30)
(8,718)
(7,867)
304
(511)
-
(8,925)
(8,629)
312
(545)
(349)
(8,449)
* (7,497)
Revenue
Inter-segment revenue
Revenue from external customers
Cost of sales to external customers
Gross profit
Operating costs
Impairment of assets
Depreciation
Amortisation
Operating loss for the year
Finance income
Finance expense
Income tax expense
Loss for the year
EBITDA *
CONTINUING OPERATIONS
FOR THE YEAR ENDED
31 AUGUST 2012
Revenue
Inter segment revenue
Revenue from external customers
Cost of sales to external customers
Gross profit
Operating costs
Impairment of intangibles and goodwill
Impairment of assets
Depreciation
Amortisation
Operating (loss)/profit
Finance income
Finance expense
Income tax expense
(Loss)/profit for the year
EBITDA *
* Earnings Before Interest, Taxation, Depreciation and Amortisation. Adjusted for depreciation included in cost of sales
2012 amounts have been restated due to reclassification of certain entities to discontinued operations (see note 2).
PAGE 31
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
5. Segment reporting (continued)
DISCONTINUED OPERATIONS
FOR THE YEAR ENDED
31 AUGUST 2013
HOTELS
US$’000
AVIATION
US$’000
PRINTING
US$’000
OUTSOURCE
AND IT
SERVICES
US$’000
Revenue
Inter segment revenue
Revenue from external customers
Cost of sales to external customers
Gross profit
Operating costs
(Impairment)/write-back of PPE and receivables
Impairment of intangibles
Depreciation
Amortisation
Operating (loss)/profit
Finance income
Finance expense
Income tax credit/(expense)
(Loss)/profit for the year
EBITDA*
DISCONTINUED OPERATIONS
FOR THE YEAR ENDED
31 AUGUST 2012
Revenue
Inter segment revenue
Revenue from external customers
Cost of sales to external customers
Gross profit/(loss)
Operating costs
Accelerated write-off of intangibles
Impairment of assets
Other material non-cash items
Depreciation
Amortisation
Operating loss
Finance Income
Finance Cost
Income tax credit/(expense)
Loss for the year
EBITDA*
2,257
(4)
2,253
(505)
1,748
(2,317)
(2,084)
(825)
(574)
(347)
(4,399)
-
(81)
212
(4,268)
(3,487)
HOTELS
US$’000
2,462
(12)
2,450
(556)
1,894
(2,400)
-
-
-
(620)
(313)
(1,439)
-
(89)
200
(1,328)
(506)
-
-
-
-
-
(205)
-
-
-
-
1,807
(51)
1,756
(1,115)
641
(5,241)
2,081
-
(33)
(2)
(205)
(2,554)
-
-
-
(205)
(205)
-
(13)
(34)
(2,601)
(2,519)
653
(2)
651
(531)
120
(281)
362
-
(11)
(5)
185
1
(2)
-
184
201
TOTAL
US$’000
4,717
(57)
4,660
(2,151)
2,509
(8,044)
359
(825)
(618)
(354)
(6,973)
1
(96)
178
(6,890)
(6,001)
AVIATION
US$’000
PRINTING
US$’000
OUTSOURCE
AND IT
SERVICES
US$’000
Restated
TOTAL
US$’000
345
-
345
-
345
(987)
-
(3,223)
-
(254)
-
(4,119)
-
-
-
(4,119)
(3,865)
1,864
(47)
1,817
(1,249)
568
(1,190)
(6,779)
(296)
-
(236)
-
866
(113)
753
(1,017)
(264)
(238)
(1,371)
-
(601)
(17)
(961)
5,537
(172)
5,365
(2,822)
2,543
(4,815)
(8,150)
(3,519)
(601)
(1,127)
(1,274)
(7,933)
(3,452)
(16,943)
-
(40)
(347)
(8,320)
(7,697)
-
-
(20)
(3,472)
(2,474)
-
(129)
(167)
(17,239)
(14,542)
* Earnings Before Interest, Taxation, Depreciation and Amortisation.
2012 amounts have been restated due to reclassification of certain entities to discontinued operations (see note 2).
PAGE 32
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Notes to the Financial Statements
As detailed in note 2, the Group has reclassified certain items as discontinued. Accordingly the information for the prior period has
5. Segment reporting (continued)
been restated such that comparative information given in respect of discontinued and continuing operations is consistent in each
period. The tables below provide the comparative information as previously published to assist users in assessing the impact of the
restatement on the published results of the prior year.
(as previously stated)
INDUSTRIAL
CHEMICALS
US$’000
PRINTING
US$’000
OUTSOURCE AND
IT SERVICES
HEAD OFFICE
US$’000
US$’000
FOR THE YEAR ENDED
CONTINUING OPERATIONS
31 AUGUST 2012
Revenue
Inter segment revenue
Revenue from external customers
Cost of sales to external customers
Gross Profit
Operating costs
Accelerated write-off of intangibles
and goodwill impairment
Impairment of assets
Depreciation
Amortisation
Operating (loss)/profit
Finance income
Finance expense
Income tax credit/(expense)
(Loss)/profit for the year
EBITDA *
HOTELS
US$’000
2,462
(12)
2,450
(556)
1,894
(2,068)
-
-
(620)
(313)
(1,107)
-
(13)
200
(920)
(174)
3,770
-
3,770
(3,058)
712
(920)
-
-
(36)
-
(244)
-
(34)
-
(278)
* (204)
1,864
(47)
1,817
(1,249)
568
(1,347)
-
-
(236)
-
(1,015)
-
(10)
(381)
(1,406)
* (647)
TOTAL
US$’000
12,067
(79)
11,988
(5,200)
6,788
3,971
(20)
3,951
(337)
3,614
-
-
-
-
-
(1,448)
(5,836)
(11,619)
(788)
-
(215)
(30)
1,133
7
-
(195)
945
2,166
(9,830)
(1,621)
(89)
-
(10,618)
(1,621)
(1,196)
(343)
(17,376)
(18,609)
318
(630)
(120)
(17,808)
(5 836)
325
(687)
(496)
(19,467)
* (4,695)
FOR THE YEAR ENDED
DISCONTINUED OPERATIONS
31 AUGUST 2012
(as previously stated)
AVIATION
US$’000
OUTSOURCE AND IT
SERVICES
HEAD OFFICE
US$’000
US$’000
Revenue
Inter segment revenue
Revenue from external customers
Cost of sales to external customers
Gross profit/(loss)
Operating costs
Impairment of assets
Other material non-cash items
Depreciation
Amortisation
Operating loss
Finance cost
Loss for the year
EBITDA
345
-
345
-
345
(987)
(3,223)
-
(254)
-
(4,119)
-
(4,119)
(3,865)
866
(113)
753
(1,017)
(264)
(239)
-
(483)
(17)
(961)
(1,964)
(20)
(1,984)
(986)
-
-
-
-
-
-
-
(118)
-
-
(118)
-
(118)
(118)
* Earnings Before Interest, Taxation, Depreciation and Amortisation. Adjusted for depreciation included in cost of sales.
TOTAL
US$’000
1,211
(113)
1,098
(1,017)
81
(1,226)
(3,223)
(601)
(271)
(961)
(6,201)
(20)
(6,221)
(4,969)
PAGE 33
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
5. Segment reporting (continued)
CONTINUING OPERATIONS
FOR THE YEAR ENDED
31 AUGUST 2013
Segment assets
Segment liabilities
Capital expenditure
FOR THE YEAR ENDED
31 AUGUST 2012
Segment assets
Segment liabilities
Capital expenditure
ASSETS AND LIABILITIES HELD FOR SALE
FOR THE YEAR ENDED
31 AUGUST 2013
NOTE
14
Property, plant and equipment
Biological assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets held for sale
Trade and other payables
Provisions
Deferred tax liabilities
Total liabilities held for sale
Net assets of disposal groups held for sale
AVIATION
US$,000
-
-
-
-
-
-
-
-
-
-
-
INDUSTRIAL
CHEMICALS
OUTSOURCE AND
IT SERVICES
HEAD OFFICE
US$’000
1,961
766
26
US$’000
US$’000
4,850
3,454
265
1,297
5,127
38
INDUSTRIAL
CHEMICALS
OUTSOURCE AND
IT SERVICES
HEAD OFFICE
US$’000
US$’000
2,824
1,121
137
6,014
4,500
57
US$’000
1,522
508
95
HOTELS
US$’000
14,764
67
135
75
110
PRINTING
US$’000
1,000
-
-
13
-
15,151
1,013
790
60
3,301
4,151
33
-
-
33
11,000
980
OUTSOURCE
AND IT SERVICES
US$’000
-
-
-
-
-
-
-
-
-
-
-
TOTAL
US$’000
8,108
9,347
329
Restated
TOTAL
US$’000
10,360
6,129
289
TOTAL
US$’000
15,764
67
135
88
110
16,164
823
60
3,301
4,184
11,980
At 31 August 2013, the Group considered its Hotel and the remaining assets of its printing division as being held for sale. They
are therefore presented within discontinued operations. Income and expenses of discontinued operations are reported sep-
arately from those of continuing operations in 2013 and 2012 income and expense comparatives have been restated accord-
ingly. Held for sale assets are stated at their expected proceeds less costs to sell; previously revalued land and building as-
sets, and hotel intangible assets have been impaired to bring the held for sale disposal groups to their held for sale valuation.
PAGE 34
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Notes to the Financial Statements
5. Segment reporting (continued)
(as previously stated)
CONTINUING OPERATIONS
FOR THE YEAR ENDED
31 AUGUST 2012
For the year ended 31 August 2012
Segment assets
Segment liabilities
INDUSTRIAL
CHEMICALS
PRINTING
OUTSOURCE
AND IT SER-
VICES
HEAD OFFICE
US$’000
US$’000
US$’000
US$’000
1,522
508
4,381
725
4,889
1,121
3,488
4,529
HOTELS
US$’000
21,498
4,818
(as previously stated)
DISCONTINUED OPERATIONS
FOR THE YEAR ENDED
31 AUGUST 2012
For the year ended 31 August 2012
Segment assets
Segment liabilities
HOTELS
US$’000
AVIATION
US$’000
OUTSOURCE AND
IT SERVICES
HEAD OFFICE
US$’000
US$’000
-
-
222
(1)
139
(509)
-
-
TOTAL
US$’000
35,778
11,701
TOTAL
US$’000
361
(510)
6. Acquisition and incorporation of subsidiaries
PAYSERV ZAMBIA LIMITED
On 6 December 2012, the group incorporated a new entity, Payserv Zambia Limited and subscribed for 100% of the issued shares
and voting interests in the company for a total consideration of US$ 20 thousand (ZMW 100 thousand). This investment facilitates
the Group’s entry into the Zambian market with its EDI (electronic data interchange) switching technology as well as making its
other outsourcing products available.
MILLCHEM ZAMBIA LIMITED
On 22 July 2013, the Group incorporated a new entity Millchem Zambia Limited and subscribed for 100% of the shares and voting
interests in the company for a total consideration of US$ 98 thousand, (ZMW 543 thousand).
MSA CHEMICALS (PROPRIETARY) LIMITED
On 3 June 2013, the Group incorporated a new entity Millchem South Africa (Pty) Limited and subscribed for 100% of the shares
and voting interests in the company for a total consideration of US$ nil.
MSA SOURCING B.V.
On 4 October 2013, the Group incorporated a new entity MSA Sourcing B.V and subscribed for 100% of the shares and voting in-
terests in the company for a total consideration of US$ 272 thousand,(EUR 200 thousand).
Post-acquisition and incorporation to 31 August 2013, the new subsidiaries, in total, contributed US$ nil to revenue and losses
relating to start-up costs of US$ 146 thousand to the Group’s results.
PAGE 35
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
7. Group net operating costs
Cost of sales
Administrative expenses
Net operating costs
Administrative expenses include management related overheads for operations and head office.
Operating costs include:
Depreciation of property, plant and equipment
Depreciation of property plant and equipment in cost of sales
Amortisation
Operating lease rentals:
Land and buildings
Personnel expenses
Gain/(loss) on investments
Auditors remuneration
Fees Payable to the Company Auditors for:
Current year audit of the Group’s financial statements
Prior year audit of the Group’s financial statements
Current year audit of the Company’s subsidiaries pursuant to legislation
Prior year audit of the Company’s subsidiaries pursuant to legislation
Total audit fees
The aggregate remuneration comprised (including Executive Directors):
8. Personnel expenses
Wages and salaries
Compulsory social security contributions
Total personnel expenses
Of which: Remuneration of Group Executive Directors
Directors’ emoluments (see note 39)
The average number of employees (including Executive Directors) in continuing operations was:
Outsource and IT services
Industrial chemicals
Head Office
Total
PAGE 36
2013
US$’000
3,906
8,647
12,553
Restated
2012
US$’000
3,395
9,434
13,429
2013
US$’000
Restated
2012
US$’000
249
4
291
253
3,718
4
113
115
65
31
324
339
4
1,553
214
2,695
(7)
188
-
83
-
271
2013
US$’000
3,644
74
3,718
Restated
2012
US$’000
2,635
60
2,695
1,836
1,401
2013
Number
59
24
10
93
Restated
2012
Number
60
24
9
93
CAMBRIA AFRICA PLC 9. Net finance (costs)/income
Recognised in income statement:
Bank interest receivable
Loan interest receivable
Finance income
Bank interest payable
Loan interest payables
Finance costs
Net finance costs
10. Taxation
Income tax recognised in the income statement
Current tax expense
Current period
Deferred tax credit
Origination and reversal of temporary differences
Total income tax charge in income statement
RECONCILIATION OF EFFECTIVE TAX RATE
Loss before tax
Income tax using the Zimbabwean corporation tax rate 25.75% (2012: 25.75%)
Net losses where no group relief is available
Total income tax charge in income statement
DEFERRED TAX
Relating to losses in subsidiaries
For the year ended 31 August 2013
Notes to the Financial Statements
2013
US$’000
Restated
2012
US$’000
9
273
282
(212)
(755)
(967)
(685)
8
304
312
(216)
(329)
(545)
(233)
2013
US$’000
Restated
2012
US$’000
216
(12)
204
2013
US$000
(4,810)
(1,239)
1,443
204
2013
US$’000
(12)
(12)
388
(39)
349
Restated
2012
US$000
(8,267)
(2,129)
2,478
349
Restated
2012
US$’000
(38)
(38)
Corporation tax is calculated as 25.75% (2012: 25.75%) of the estimated assessable loss for the year. Taxation for other jurisdictions
is calculated at the rates prevailing in the respective jurisdictions.
Deferred tax assets are only recognised to the extent that there are available offsetting deferred tax liabilities, unless the entity is
reasonably assured of earning sufficient future profits to offset against any future tax liabilities.
PAGE 37
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
During the year, the Group sold its investments in the following entities (see note 18), which were disclosed as discontinuing op-
11. Disposals and discontinued operations
erations in 2012.
•
Forgot Me Not Africa (BVI) Limited (FMNA)
• Diospyros Investments (Pvt) Limited (trading as “CES Zimbabwe”)
On 24 July 2013, the Group sold its investment in the following entity (see note 18), which was not held for sale and disclosed as
a continuing operation in the prior period.
• Blueberry International Services Ltd
The following entities were reclassified as held for disposal in the period under review. As discussed in note 2 and note 5, the com-
paratives for the period ended 31 August 2012 are accordingly restated.
•
Southern Africa Management Services (SAMS)
• Medalspot Enterprises (Private) Limited
•
LonZim Hotels Limited and its subsidiaries
The financial effect of these discontinued operations on the profit or loss and financial position is shown in the operating segment
disclosures in note 5.
CASH FLOWS FROM (USED IN) DISCONTINUED OPERATIONS
Net cash used in operating activities
Net cash (used in)/generated by investing activities
Net cash generated by generated by financing activities
Net cash flows for the year
Cash and cash equivalents held for sale
Net cash (outflow)/inflow
2013
US$’000
(6,894)
(69)
5,521
(1,442)
110
(1,332)
Restated
2012
US$’000
(2,504)
1,306
898
(300)
(3)
(303)
PAGE 38
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Notes to the Financial Statements
The calculation of basic and diluted earnings per share at 31 August 2013 was based on the profit attributable to ordinary share-
12. Loss per share
holders for continuing and discontinued operations at a weighted average number of ordinary shares outstanding during the
period as detailed in the table below:
LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS
Loss for the purposes of basic loss and dilutive per share being net
loss attributable to equity holders of the parent*
Loss for the purposes of basic loss and dilutive per share being net
loss attributable to equity holders of the parent
2013
EARNINGS
PER SHARE
US$’CENTS
2013
US$’000
Restated
2012
EARNINGS
PER SHARE
US$’CENTS
Restated
2012
US$’000
(18.4)
(12,048)
(47.1)
(27,271)
- continuing operations
- discontinued operations
(7.6)
(10.8)
(5,158)
(6,890)
(17.6)
(28.5)
(10,199)
(17,072)
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES
Weighted average number of ordinary shares for the purposes of basic
and dilutive loss per share for all calculations*
NOTE
2013
000’S
2012
000’S
65,419
57,959
Actual number of shares outstanding at the end of the period
24
66,749
58,134
*In the current and prior year the effect of the share options (note 25) were anti-dilutive as the share options were, at all times, priced above the trading value of
the shares.
PAGE 39
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
13. Property, plant and equipment
2013 GROUP
FREEHOLD
LAND &
BUILDINGS
US$’000
PLANT &
MACHINERY
US$’000
MOTOR
VEHICLES
US$’000
FURNITURE
FIXTURES &
FITTINGS
US$’000
TOTAL
US$’000
27,315
400
(186)
(1,824)
(838)
(76)
(20,671)
4,120
73
588
116
(1,018)
15
1,052
(1,239)
2,881
25,250
TOTAL
US$’000
33,949
1,473
(8,315)
273
(65)
27,315
22,258
14
-
(207)
(838)
-
(18,923)
2,304
(132)
-
84
116
(398)
-
327
(3)
2,301
22,126
1,435
15
(55)
(1,324)
-
-
-
71
(254)
16
324
-
(122)
-
-
(36)
35
1,181
918
260
(108)
(84)
-
-
(185)
801
2,704
111
(23)
(209)
-
(76)
(1,563)
944
45
51
-
(188)
-
147
(449)
352
414
12
129
-
(310)
15
578
(751)
193
1,529
(504)
(1,175)
(2,065)
FREEHOLD
LAND &
BUILDINGS
US$’000
LONG LEASE-
HOLD LAND &
BUILDINGS
US$’000
PLANT &
MACHINERY
US$’000
MOTOR
VEHICLES
US$’000
FURNITURE
FIXTURES &
FITTINGS
US$’000
21,258
727
-
273
-
22,258
(103)
-
363
(392)
-
(132)
22,126
21,155
8,005
2
(8,005)
-
(2)
-
-
-
-
-
-
-
-
8,005
1,329
209
(103)
-
-
1,435
754
175
(11)
-
-
918
2,603
360
(196)
-
(63)
2,704
(118)
(295)
(739)
(1,255)
-
-
(136)
-
(254)
1,181
1,211
9
-
(218)
-
(504)
414
459
11
-
(471)
24
(1,175)
1,529
1,864
20
363
(1,217)
24
(2,065)
25,250
32,694
Cost or valuation
At 1 September 2012
Additions in year
Disposals in year
Sale of subsidiary
Revaluation
Transfer to intangible assets
Transferred to held for sale
Balance at 31 August 2013
Accumulated depreciation
At 1 September 2012
Disposals in year
Sale of subsidiary
Depreciation written back on revaluation
Depreciation charge for the year
Transfer to intangible assets
Transferred to held for sale
Balance at 31 August 2013
Carrying amounts
At 31 August 2013
At 31 August 2012
2012 GROUP
Cost or valuation
At 1 September 2011
Additions in year
Disposals in year
Revaluation
Transferred to assets held for sale
Balance at 31 August 2012
Accumulated depreciation
At 1 September 2011
Disposals in year
Depreciation written back on
revaluation
Depreciation on charge for the year
Transferred to assets held for sale
Balance at 31 August 2012
Carrying amounts
At 31 August 2012
At 31 August 2011
PAGE 40
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Notes to the Financial Statements
13. Property, plant and equipment (continued)
Valuations
LE HAR (PRIVATE) LIMITED
REVALUATION – PROPERTY
An external, professional and independent valuer with appropriate and recognised qualifications, T.W.R.E Zimbabwe (Pvt) Limited,
carried out a valuation of the freehold land and buildings as at 31 August 2013. Fair value at 31 August 2013 of US$2,300 thousand
(2012: US$1,900 thousand) was made by reference to observable market evidence. The Directors consider the fair value at the
reporting date to not be materially different from the carrying value. The change in the fair value of the property has been recorded
in the revaluation reserve.
Valuations within discontinued operations
LEOPARD ROCK HOTEL COMPANY (PRIVATE) LIMITED*
REVALUATION – LAND AND BUILDINGS
An external, professional and independent valuer with appropriate and recognised qualifications, C K Hollands, carried out a val-
uation of the land and buildings as at 31 August 2013 in accordance with the C K Hollands Valuation Manual and the Real Estate
Institute of Zimbabwe Standards. Fair value at 31 August 2013 of US$18,500 thousand (2012: US$18,500 thousand) was made by
reference to observable market evidence with adjustments made for:
- Age of the property
- Aesthetic quality and accommodation offered
- State of repair and maintenance and quality of fixture and fittings
- Location and size of land.
In considering the estimated valuation, and the useful lives of the assets and their estimated residual values, the directors deter-
mined that in accordance with prior year, a more prudent assessment of fair value should include a set-off in respect of the net
book value of the refurbishment completed in 2010. Additionally the adjustment to fair value representing depreciation charged in
the period under review was not reflected. The net effect is that land and buildings are recorded at US$16,996 thousand.
EASTINTEG INVESTMENTS (PRIVATE) LIMITED *
REVALUATION – LAND AND BUILDINGS
An external, professional and independent valuer with appropriate and recognised qualifications, C K Hollands, carried out a val-
uation of the land and buildings as at 31 August 2013 in accordance with the C K Hollands Valuation Manual and the Real Estate
Institute of Zimbabwe Standards. Fair value at 31 August 2013 of US$600 thousand (2012: not applicable) was made by reference
to observable market evidence with adjustments made for:
- Age of the property
- Aesthetic quality and accommodation offered
- State of repair and maintenance and quality of fixture and fittings
- Location and size of land.
*The land and buildings held by the Leopard Rock Hotel Company (Private) Limited and by Eastinteg Investments (Private) Limited
form part of the Hotel disposal group held for sale at the year end. The whole disposal group has been impaired to bring its car-
rying value down to its expected realisable value and US$3,855 thousand of this has been allocated to land and buildings of which
US$1,982 thousand was charged through the income statement and US$1,873 thousand via the revaluation reserve.
PAGE 41
FINANCIAL REPORT 2013
For the year ended 31 August 2013
Notes to the Financial Statements
13. Property, plant and equipment (continued)
Both the Leopard Rock Hotel and Eastinteg land and buildings are included in the Hotel held for sale disposal group. As such, in
Valuations within discontinued operations (continued)
addition to the valuations noted above, the disposal as a group has been considered for an impairment in assessing its expected
net disposal proceeds. The impairment assessed has been allocated to land and buildings after extinguishment of all intangible
assets in the disposal group (see note 5).
MEDALSPOT ENTERPRISES (PRIVATE) LIMITED
REVALUATION – LAND AND BUILDINGS
An external, professional and independent valuer with appropriate and recognised qualifications T.W.R.E Zimbabwe (Pvt) Limited
carried out a valuation of the property as at 31 August 2013. Fair value at 31 August 2013 US$2,200 thousand (2012: US$2,200
thousand) was made by reference to observable market evidence.
In assessing the valuation, the Directors also considered the intention to dispose of the asset in the short term. An appropriate
fair value at 31 August 2013 is deemed to be US$1,000 thousand. The change in the fair value of the property has been recorded
in the revaluation reserve to the full extent available and thereafter in the available non-distributable reserve which arose at dol-
larisation.
Included in discontinued operations are biological assets as detailed below.
14. Biological assets
Balance at 1 September
Acquired during the year
Increase/(decrease) due to births/(deaths)
Loss on fair valuation during the year
Total
GROUP 2013
GROUP 2012
US$’000
US$’000
83
-
2
(18)
67
82
3
(2)
-
83
Biological assets which consist of 276 (2012: 267) living animals for game viewing at the Leopard Rock Hotel are valued with the
assistance of African Wildlife Management and Conservation and their values are deemed as acceptable.
As at 31 August 2013, the consolidated statement of financial position included goodwill of US$717 thousand (2012: US$717 thou-
15. Goodwill
sand). Goodwill is allocated to the Group’s cash-generating units (“CGUs”), or groups of cash-generating units, that are expected
to benefit from the synergies of the business combination that gave rise to the goodwill as follows:
CASH GENERATING UNIT (CGU)
ORIGINAL COST
COST AT 1
SEPTEMBER 2012
CARRYING VALUE AT
1 SEPTEMBER 2012
ACCELERATED
WRITE-OFF
CARRYING VALUE AT
31 AUGUST 2013
Paynet Limited
Total
US$’000
US$’000
US$’000
US$’000
US$’000
717
717
717
717
717
717
-
-
717
717
PAGE 42
CAMBRIA AFRICA PLC
For the year ended 31 August 2013
Notes to the Financial Statements
15. Goodwill (continued)
ESTIMATES AND JUDGEMENTS
The following assumptions are held in the assessment on the impairment or otherwise of goodwill:
• Growth rates are based on a range of growth rates that reflect the products, industries and countries in which the relevant
CGU or group of CGUs operate. Growth rates have been calculated based on management’s expected forecast volumes and
market share increases on normalisation of the Zimbabwean economy.
•
•
•
•
•
The key assumptions on which the cash flow projections for the most recent forecast are based relate to discount rates,
growth rates, expected changes in selling prices and direct costs.
The cash flow projections have been discounted using rates based on the Group’s pre-tax weighted average cost of capital.
The rate used was 15%.
The growth rates applied in the value in use calculations for goodwill allocated to each of the CGUs or groups of CGUs that
is significant to the total carrying amount of goodwill were in a range between 0% and 5%.
Changes in selling price and direct costs are based on past results and expectations of future changes in the market.
In respect of the value in use calculations, cash flows have been considered for both the conservative and the full forecast
potential of future cash-flows with no impact to the valuation of goodwill.
IMPAIRMENT LOSS
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.
The Directors believe that the value of the Group’s investments are long term and will only be realised on the full recovery of the
Zimbabwean economy. The Directors do not believe any further impairment to goodwill is necessary in the current period.
16. Intangible assets ORIGINAL
COST
US$’000
NET BOOK VALUE
AT 1
SEPTEMBER 2012
US$’000
RECLASSIFIED
FROM TANGIBLE
ASSETS
AMORTISATION
US$’000
RECLASSIFIED
AS HELD FOR
SALE (NOTE 5)
US$’000
CLOSING
BALANCE AT 31
AUGUST 2013
US$’000
Payserv software licences
Leopard Rock Hotel brand name
Leopard Rock Hotel casino licence
Leopard Rock Hotel software
Total
1,425
1,129
1,000
76
3,630
447
758
346
-
1,551
-
-
-
61
61
(268)
(115)
(198)
(27)
(608)
-
(643)
(148)
(34)
(825)
179
-
-
179
AMORTISATION
The amortisation charge is recognised within administration expenses (note 7) in the income statement. The remaining amortisa-
tion period at 31 August 2013 is 9-67 months for other intangibles. The Group tests other intangible assets for impairment if there
are indications that they might be impaired.
The amortisation periods for other intangible assets are:
Software licences
Brand names
Casino licence
3-6 years
9 years
6 years
PAGE 43
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
17. Long-term receivables
Celpay International BV receivable
ATDM sale proceeds
ATDM Shareholder loan account
ForgetMe Not Africa (BVI) Limited sale proceeds
Provision against sale proceeds
Total
Celpay International BV
GROUP 2013
US$’000
COMPANY 2013
US$’000
GROUP 2012
US$’000
COMPANY 2012
US$’000
361
-
-
250
(250)
361
-
-
-
-
-
-
-
3,145
84
-
-
3,229
-
3,145
84
-
-
3,229
On 29 April 2013, the Group entered into a memorandum of understanding with Celpay International BV (“Celpay”), whereby
Paynet Limited agreed inter alia to provide working capital funding, while carrying out due diligence on the company, which capital
would be repayable to Paynet Limited, either on termination of the contract or through a change in shareholding of Celpay.
ATDM
The proceeds on sale of shares of Aldeamento Turistico de Macuti SARL (“ATDM”) on 30 September 2011 were receivable over a
period of 60 months. The Group’s Loan to ATDM at the date of sale, was repayable over a period of 24 months.
On 18 July 2013, the company entered into a Settlement Agreement with Lonrho Plc, whereby Cambria Africa Plc received US$2,665
thousand, which included inter alia the settlement of the outstanding balances related to the proceeds on sale of ATDM and the
ATDM shareholder loan. The Group loss on settlement of the loan balances was US$309 thousand.
ForgetMeNot Africa (BVI)
The proceeds on sale of shares of ForgetMeNot Africa (BVI) Limited on 14 February 2013, are receivable based on various defined
milestones but no later than the second anniversary of the agreement. Given the nature of the defined milestones and extended
period permitted until settlement, the Directors determined that it would be appropriate to provide fully against the receivable.
PAGE 44
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Notes to the Financial Statements
The Company has investments in the following subsidiaries which principally affected the profits or net assets of the Company.
18. Investments in subsidiaries and associates
The direct investments in subsidiaries held by the Company are stated at cost. This is subject to impairment testing.
CONTINUING OPERATIONS
COUNTRY OF INCORPORATION
OWNERSHIP INTEREST
African Solutions Limited
Autopay (Pvt) Limited
Gardoserve (Pvt) Limited
Le Har (Pvt) Limited
LonZim Enterprises Limited
LonZim Holdings Limited +
Millchem Africa Limited
Millchem Holdings Limited *
Millchem Zambia Limited
MSA Chemicals (Pty) Limited
MSA Sourcing BV
Para Meter Computers (Pvt) Limited
Paynet Limited
Paynet Zimbabwe (Pvt) Limited
Payserv (Pvt) Limited
Payserv Zimbabwe (Pvt) Limited **
Payserv Zambia Limited
Tradanet (Pvt) Limited
Yellowwood Projects (Pvt) Limited
+ Held directly by Cambria Africa Plc.
* Previously LonZim Properties Limited
** Previously Lanuarna Enterprises (Private) Limited
Mauritius
Zimbabwe
Zimbabwe
Zimbabwe
United Kingdom
Isle of Man
Isle of Man
Isle of Man
Zambia
South Africa
Netherlands
Zimbabwe
Mauritius
Zimbabwe
Zimbabwe
Zimbabwe
Zambia
Zimbabwe
Zimbabwe
2013
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
51%
100%
2012
100%
100%
100%
100%
100%
100%
0%
100%
0%
0%
0%
100%
100%
100%
0%
100%
0%
51%
100%
PAGE 45
FINANCIAL REPORT 2013
For the year ended 31 August 2013
Notes to the Financial Statements
18. Investments in subsidiaries and associates (continued)
DISCONTINUED OPERATIONS
COUNTRY OF INCORPORATION
OWNERSHIP INTEREST
British Virgin Islands
British Virgin Islands
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
British Virgin Islands
Nigeria
Zimbabwe
Zimbabwe
British Virgin Islands
British Virgin Islands
Isle of Man
Netherlands
United Kingdom
Zimbabwe
Zimbabwe
South Africa
Zimbabwe
South Africa
Zimbabwe
Zimbabwe
Mauritius
United Kingdom
South Africa
2013
0%
0%
0%
100%
0%
100%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
51%
0%
100%
100%
0%
100%
0%
100%
2012
100%
100%
60%
100%
100%
100%
51%
51%
100%
100%
100%
100%
100%
100%
100%
100%
100%
51%
100%
100%
0%
100%
100%
100%
100%
GROUP 2013
GROUP 2012
US$’000
US$’000
361
-
25
539
925
462
6
129
339
936
Blueberry International Services Limited #
Blueberry Print (Zambia) Limited #
Celsys Limited #
Chenyakwaremba Farm (Pvt) Limited ++
Diospyros Investments (Pvt) Limited #
Eastinteg Investments (Pvt) Ltd ++
ForgetMeNot Africa (BVI) Limited #
ForgetMeNot Nigeria Limited #
Leopard Rock Hotel Company (Pvt) Limited ++
Linus Business Options (Pvt) Limited ++
LonZim Agribusiness (BVI) Limited ++
LonZim Air (BVI) Limited
LonZim Hotels Limited ++
Lyons Africa Holdings BV ++
Lyons Africa Holdings Limited ++
Medalspot Enterprises (Pvt) Limited ++
Morningdale Properties Limited ++
Panafmed (Pty) Limited
Peak Mine (Pvt) Limited #
Quickvest525 (Pty) Limited
Quintech Investments (Pvt) Limited
Rex Mining Holdings (Pvt) Limited #
Southern Africa Management Services Limited
Wardlaw (1989) Limited #
W S Foods (Pty) Limited ++
++ Held for Sale
# Subsidiaries disposed in the year
19. Inventory
Raw materials and consumables
Work in progress
Goods in transit
Finished goods
Total
PAGE 46
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Notes to the Financial Statements
20. Financial assets at fair value through profit or loss
CONTINUING OPERATIONS
Quoted investments portfolio
Total
QUOTED INVESTMENTS PORTFOLIO:
Balance at 1 September
Acquired during the year
Disposed during the year
Gain/(loss) on fair valuation during the year
At end of the year
GROUP 2013
GROUP 2012
US$’000
US$’000
58
58
42
42
GROUP 2013
GROUP 2012
US$’000
US$’000
42
2
(5)
19
58
49
3
(3)
(7)
42
The portfolio is managed by an asset management company who makes the decisions regarding the sale and purchase of shares.
This investment is held at fair value. The portfolio, which was purchased in “payment” of a trade vendor liability which could not
be settled due to exchange control regulations, is callable at the option of the vendor. See note 26.
21. Trade and other receivables
Amounts owed by Group undertakings
Trade receivables
Other receivables
ATDM sale proceeds – current portion
ATDM shareholder loan account – current portion
Prepayments and accrued income
Total
NOTE
17
17
GROUP
2013
US$’000
-
619
80
-
-
115
814
COMPANY
2013
US$’000
25,617
-
-
-
-
31
25,648
GROUP
2012
US$’000
-
960
89
1,020
280
276
2,625
COMPANY
2012
US$’000
23,291
-
77
1,020
280
-
24,668
The average credit period taken on sales of goods is 45 days. No interest is charged on receivables.
The Directors consider the carrying amount of trade and other receivables approximates their fair value. In determining the re-
coverability of the trade receivable, the Group considers any change in the credit quality of trade receivables from the date credit
was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and
unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the allowance for doubt-
ful debts.
CREDIT RISK
The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the statement of financial posi-
tion are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event
which, based on previous experience, is evidence of a reduction in the recoverability of the cashflows.
PAGE 47
FINANCIAL REPORT 2013
For the year ended 31 August 2013
Notes to the Financial Statements
22. Cash and cash equivalents
Bank balances
Bank overdrafts
Net cash and cash equivalents
Net cash included in held for sale
Total cash and cash equivalents in statement of financial position
GROUP
2013
US$’000
2,136
(398)
1,738
110
1,838
COMPANY
2013
US$’000
GROUP
2012
US$’000
COMPANY
2012
US$’000
1,210
-
1,210
-
1,210
468
(337)
131
32
163
178
-
178
-
178
23. Capital and reserves
REVALUATION RESERVE
The revaluation reserve relates to property, plant and equipment which has been revalued in the Zimbabwean subsidiary Payserv
Zimbabwe (Private) Limited (“Payserv”) and Le Har (Private) Limited, which holds the property from which Payserv operates.
FOREIGN EXCHANGE RESERVE
This reserve arises on translation of subsidiary entities where their functional currency is not United States Dollars, the presen-
tational currency of the Group. The Company foreign exchange currency reserve relates to the translation of net assets due to a
change in the functional currency of the Company from Pounds Sterling to United States Dollars as at 1 September 2011.
SHARE BASED PAYMENT RESERVE
The share based payment reserve comprises of the charges arising from the calculation of the share based payment posted to the
income statement in 2008 and 2012, and partially released on expiration of options never exercised, in 2013, restated to US$ at
closing rates (see note 25).
NON DISTRIBUTABLE RESERVE
The non distributable reserve arises on the restatement of the assets and liabilities on dollarisation in Zimbabwe. Amounts held
within this reserve are ring fenced from retained earnings. Distributions can only be made from retained earnings and not from
the non distributable reserve. Amounts transferred to the non distributable reserve are determined by the directors as necessary,
unless specifically required to do so as part of any financing arrangements.
PAGE 48
CAMBRIA AFRICA PLC 24. Share capital & share premium
Authorised
Ordinary £0.0001 shares
Issued fully paid
At 1 September 2012
Issued in period
At 31 August 2013
For the year ended 31 August 2013
Notes to the Financial Statements
ORDINARY SHARES
2013
ORDINARY SHARES
2012
NUMBER
US$’000
NUMBER
US$’000
66,749,023
58,133,908
8,615,115
66,749,023
12
11
1
12
58,133,908
54,145,469
3,988,439
58,133,908
10
10
1
11
The Group has also issued share options (see note 25). At 31 August 2013, 1,000,000 shares were held in reserve to issue in the
event that these options are exercised. At 10 December 2012, 500,000 utilised share options expired and were not renewed.
The following warrants over the ordinary shares of the Company were granted in the period.
HOLDER
DATE OF GRANT
GRANTED WARRANT PRICE
NUMBER OF
WARRANTS
PERIOD DURING
WHICH EXERCISABLE
MARKET PRICE PER
SHARE AT DATE OF
GRANT
Consilium Corporate Recovery
Master Fund Limited
Consilium Corporate Recovery
Master Fund Limited
18.02.2013
3,000,000
13p
06.12.2012 - 06.12.2015
18.02.2013
5,000,000
13p
18.02.2013 - 18.02.2016
10.25p
9.63p
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets.
The Directors are authorised in any period between consecutive annual general meetings, to allot any number of ordinary shares
on such terms as they shall, in their discretion, determine up to such maximum number as represents 50 per cent of the issued
share capital at the beginning of such period. Further ordinary shares may be allotted on terms determined by the Directors but
subject to the pre-emption rights prescribed by Section 36 of the Isle of Man Companies Act 2006.
SHARE PREMIUM
The share premium represents the value of the premium arising on shares issued as follows:
1 Oct 2012
8,615,115 ordinary shares at a price of 10p (US$1,400 thousand) per share.
16 Sep 2011
3,988,439 ordinary shares at a price of 23p (US$1,448 thousand) per share net of issue costs of nil.
10 Dec 2010
17,813,944 ordinary shares at a price of 28p per share net of issue costs of £143 thousand (US$7,646 thou-
sand).
9 Dec 2009
4,255,525 ordinary shares at a price of 27.5p per share net of issue costs of £58 thousand (US$1,820 thou-
sand).
14 Jul 2009
Cost of purchasing and cancelling 4,374,000 shares at 30.5p per share (US$2,174 thousand).
11 Dec 2007
36,450,000 ordinary shares at a price of 100p per share net of issue costs of £2,753 thousand (US$68,659
thousand).
PAGE 49
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
The following share options over ordinary shares were granted under an Unapproved Share Option scheme:
25. Share options
NAME
Edzo Wisman
Edzo Wisman
Total
DATE OF GRANT
10.03.2011
10.03.2011
OPTIONS EXPIRED IN THE PERIOD
NUMBER OF
SHARE OPTIONS
GRANTED
500,000
500,000
1,000,000
EXERCISE PRICE
PERIOD DURING WHICH EXERCIS-
ABLE
30p
30p
01.07.2011 – 30.06.2016
01.07.2012 – 30.06.2017
MARKET PRICE PER
SHARE AT DATE OF
GRANT
21.75p
21.75p
Paul Heber
11.12.2007
500,000
150p
11.12.2007 - 10.12.2012
100p
In accordance with IFRS 2 ‘Share-based payments’ the equity settled share options granted have been measured at fair value and
recognised as an expense in the income statement with a corresponding increase in equity (other reserves). The fair value of the
options granted has been estimated at the date of grant using the Black-Scholes option pricing model. The estimated value of the
options granted on 11 December 2007 was £165 thousand (US$270 thousand). The estimated value of the options granted on 10
March 2011 was £53 thousand (US$85 thousand).
Options may be exercised in whole or in part until the expiry of the exercise period. Holders of the options are entitled to receive
notice of certain proposed transactions or events of the Company which may dilute or otherwise affect their options, and may
exercise or be deemed to have exercised their options prior to the occurrence thereof. The Company shall keep available sufficient
authorised but unissued share capital to satisfy the exercise of the options. Ordinary Shares issued pursuant to an exercise of the
options shall rank pari passu in all respects with the Company’s existing Ordinary Shares save as regards any rights attaching by
reference to a record date prior to the receipt by the Company of the notice of exercise of options. The Company shall apply to
admit to trading on AIM the Ordinary Shares issued pursuant to the exercise of options.
The following assumptions have been used:
Number of shares
Share price at vesting date (Date of Grant)
Exercise price
Expected volatility
Expected life
Expected dividends
Risk-free interest rate
DATE GRANT
10 MARCH 2011
DATE OF GRANT
10 MARCH 2011
DATE OF GRANT
11 DECEMBER 2007
500,000
21.75p
30p
30.2%
5.4 years
0.00%
5.00%
500,000
21.75p
30p
30.2%
6.4 years
0.00%
5.00%
500,000
100p
150p
44.0%
5.0 years
0.00%
5.00%
Volatility has been calculated by reference to industry indices at vesting dates.
All share options vested at date of grant and the basis of settlement is in shares of the company.
Share options which expired on 10 December 2012, expired without being renewed.
PAGE 50
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Notes to the Financial Statements
The number and weighted average exercise price of share options are as follows:
25. Share options (continued)
Exercisable at 1 September 2012
Outstanding at 31 August 2013
Exercisable at 31 August 2013
WEIGHTED AVERAGE EXERCISE PRICE PENCE
NUMBER OF OPTIONS
70
30
30
1,500,000
1,000,000
1,000,000
The Directors are authorised to grant options over the Ordinary Shares on such terms as they shall in their discretion determine up
to such maximum number as represents 10 per cent of the number of Ordinary Shares as was in issue at the date of the Company’s
most recent annual general meeting. 66,749,023 Ordinary Shares were in issue at the annual general meeting of 22 April 2013.
26. Loans and borrowings - long term GROUP
2013
US$’000
Consilium facility
Nurture Paynet
Other trade payables
Total
4,500
2,000
53
6,553
COMPANY
2013
US$’000
4,500
-
-
4,500
GROUP
2012
US$’000
2,000
-
54
2,054
COMPANY
2012
US$’000
2,000
-
-
2,000
The 2012 long term payables are in respect of a secured loan facility agreement which the Company entered into on 9 March 2012,
with Consilium Corporate Recovery Master Fund Ltd for US$2,000 thousand. On the same date, the Company entered into a short
term secured loan facility agreement with Consilium Emerging Markets Absolute Return Master Fund Ltd for US$1,000 thousand
respectively (“Consilium”). Both these loans were secured by a fixed and floating charge over the assets of the Group.
On 6 December 2012, the Company entered an agreement with Consilium to extend the maturity of the short term facility to 8
March 2014. Consilium simultaneously agreed to lift the general charge over the assets of the Group for 3,000,000 warrants over
the ordinary shares of the company as disclosed in note 24.
On 18 February 2013, the Company entered into a further secured loan agreement with Consilium for US$1,500 thousand for
5,000,000 warrants, as disclosed in note 24 and a first fixed charge over the assets of LonZim Hotels Limited. This facility expires in
tandem with all the Consilium debt on 8 March 2014. The total Consilium facility carries a 15% annualised interest rate and fees as
follows: 2% drawdown fee, 2% first anniversary fee and 2% repayment charge.
On 1 May 2013, the Company extended the maturity of it debt facility with Consilium to 30 April 2016.
In the event of default, Consilium shall have the option to convert all, or any portion of the outstanding indebtedness at the time of
default into shares in Cambria at a 15% discount to the share price at the date of the facility agreements. The option price is 14.05p.
The Consilium Corporate Recovery Master Fund Ltd and Consilium Emerging Markets Absolute Master Fund Ltd share the same
investment manager as Consilium Emerging Markets Absolute Return Master Fund Ltd, a substantial shareholder of Cambria, and
the transactions are therefore deemed a related party transaction for the purpose of the AIM Rules for Companies.
PAGE 51
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
On 8 May 2013, the Company executed agreements with Cerulean (Mauritius) PCC, (“Nisela”) a special purpose vehicle created
26. Loans and Borrowings - longterm (continued)
by a subsidiary of Nisela Capital relating to the placement of US$2,000 thousand secured, convertible debt into Paynet Limited, its
investee company. The conversion feature with the debt represents and embedded derivative for accounting purposes. Included
within the loan balance above is an amount of $91 thousand representing the value of the conversion feature.
The Nisela secured loan facility carries 2% drawdown fee, a 15% coupon, matures on 17 July 2016, and is convertible into 21.3%
of Paynet Limited’s ordinary share capital at the option of the lender at any time between 17 July 2014 and 12 July 2016. The loan
facility is immediately convertible if there is a change in control in the shareholders or Board of Directors of the beneficial owners
of Paynet Limited or if there is an initial public offering of the ordinary shares in Paynet Limited on a securities exchange.
The Nisela facility is secured over the property held by Le Har (Private) Ltd and by the cession of the entire portfolio of Paynet
Limited’s trade debtors as existed at the date of the agreement and in the future.
Other non-current trade payables are in respect of historic Paywell software licence fees with the Payserv Group, which could not
be remitted due to Zimbabwe Exchange Regulations. The amounts due were invested in a listed portfolio (see note 20).
27. Provisions
Provisions
Total
GROUP
2013
US$’000
203
203
COMPANY
2013
US$’000
29
29
GROUP
2012
US$’000
161
161
COMPANY
2012
US$’000
-
-
Provisions at 31 August 2013, are in respect of the maximum Leave Pay and Retirement Gratuity, which may become payable by
individual companies on termination of employment.
28. Deferred tax liability
RECOGNISED DEFERRED LIABILITY
The following are the major deferred tax liabilities recognised by the Group and movements thereon during the current year.
GROUP
At 1 September
Recognised directly in reserves
Other movements
Disposal of subsidiaries
Transfer to held for sale disposal group
At 31 August
2013
ACCELERATED TAX
DEPRECIATION
US$’000
2012
TOTAL
US$’000
ACCELERATED TAX
DEPRECIATION
US$’000
4,108
(111)
(12)
(131)
(3,301)
553
4,108
(111)
(12)
(131)
(3,301)
553
TOTAL
US$’000
1,269
2,839
-
-
-
1,269
2,839
-
-
-
4,108
4,108
Deferred tax assets off set against deferred tax liabilities in the period were US$ nil (2012:US$44 thousand).
PAGE 52
CAMBRIA AFRICA PLC
29. Loans and borrowings - short term
Consilium
Purchase of the castle at Leopard Rock Hotel
Finance Leases
Total
For the year ended 31 August 2013
Notes to the Financial Statements
GROUP
2013
US$’000
COMPANY
2013
US$’000
-
-
94
94
-
-
-
-
GROUP
2012
US$’000
1,250
442
-
1,692
COMPANY
2012
US$’000
1,250
-
-
1,250
The short term loans and borrowings in the prior year were in respect of secured loan facility agreements which the Company
entered into on 9 March 2012 and 9 October 2012 (as a rollover of an existing facility) with Consilium as discussed in note 26.
On 6 December 2012, the loan facilities were extended until 8 March 2014 and thus moved to long term borrowings discussed in
note 26.
30. Trade and other payables
Trade payables
Non trade payables and accrued expenses
Total
Current tax liability
Total
GROUP
2013
US$’000
861
461
1,322
187
1,509
COMPANY
2013
US$’000
-
2,205
2,205
-
2,204
GROUP
2012
US$’000
1,534
1,291
2,825
284
3,109
COMPANY
2012
US$’000
-
1,250
1,250
-
1,250
Trade payables and accruals principally comprise amounts outstanding for trade purchases and on-going costs. The average cred-
it period taken for trade purposes is 45 days.
The Directors consider that the carrying amount of trade payables approximates to their fair value.
PAGE 53
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
31. Notes to the statement of cash flows
Loss for the year
GROUP 2013
US$’000
(11,904)
GROUP 2012
US$’000
(25,688)
Adjusted for *:
Amortisation of intangible assets
Impairment of goodwill
Impairment of held for sale assets
Depreciation of property, plant and equipment
Loss on sale of property, plant and equipment
Impairment of current assets
Valuation adjustments to inventories, receivables and other assets
Fair value adjustment of intangibles
Gain on write-off of non Group shareholder loan
Loss on disposal of subsidiaries
Finance income
Finance costs
Share based payment reserve
Increase/(decrease) in provisions
Income tax charge
Foreign exchange
Operating cash flows before movements in working capital
Increase in inventories
Decrease/(increase) in trade and other receivables
Decrease in trade and other payables
Decrease/(increase) in long term receivables
Cash used in operations
608
-
2,807
871
93
626
49
-
-
1,823
(283)
1,063
(269)
102
204
-
(4,210)
(329)
308
(850)
3,702
(1,379)
2,019
7,363
-
1,217
3,243
3,301
7
3,428
(863)
-
(312)
674
85
(889)
496
11
(5,908)
(204)
(1,751)
(71)
-
(7,934)
* All amounts include both continuing and discontinued. Cash flows for discontinued operations are given in note 11.
The Group has exposure to the following risks from its use of financial instruments:
32. Financial instruments
•
•
credit risk
liquidity risk
• market risk (comprises: foreign currency risk and interest rate risk)
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and pro-
cesses for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included
throughout these consolidated financial statements. The Board of Directors has overall responsibility for the establishment and
oversight of the Group’s risk management framework.
RISK MANAGEMENT FRAMEWORK
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits. The Group’s risk management policies are established to identify
and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
PAGE 54
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Notes to the Financial Statements
32. Financial instruments (continued)
CREDIT RISK MANAGEMENT
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The
Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate,
as a means of mitigating the risk of financial loss from defaults. The Group’s exposure and the credit ratings of its counterparties
are regularly monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit
evaluation is performed on the financial condition of accounts receivable and, where appropriate, credit guarantee insurance
cover is purchased. The Group does not have any significant credit risk exposure to any single counterparty or any group of coun-
terparties having similar characteristics. The credit risk on liquid funds and derivative financial instruments is limited because the
counterparties are banks with high credit- ratings assigned by international credit rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the
Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained. At the reporting date,
there were no significant credit risks.
EXPOSURE TO CREDIT RISK
The carrying amount of financial assets represents the maximum credit exposure. Therefore, the Group and Company’s maximum
exposure to credit risk at the reporting date, being the total of the carrying amount of financial assets, excluding equity invest-
ments is shown in the table below.
Cash and cash equivalents
Trade and other receivables
Shareholder loan receivables
Other investments
Total
NOTE
22
5,17,21
21
20
GROUP
2013
US$’000
1,838
1,263
-
58
3,159
COMPANY
2013
US$’000
1,210
31
25,617
-
26,858
GROUP
2012
US$’000
131
5,579
-
42
5,752
The maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region was:
United Kingdom
Southern Africa
Mauritius
Europe
Total
GROUP
2013
US$’000
31
1,229
-
3
COMPANY
2013
US$’000
24,760
818
67
3
1,263
25,648
GROUP
2012
US$’000
4,529
-
1,050
-
5,579
COMPANY
2012
US$’000
178
4,606
23,291
-
28,075
COMPANY
2012
US$’000
27,897
-
-
-
27,897
PAGE 55
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
The maximum exposure to credit risk for trade and other receivables (excluding trade creditors which are linked to listed invest-
32. Financial instruments (continued)
ments per contract with the supplier - see note 20 US$58 thousand (2012: US$42 thousand)) at the reporting date by type of
counterparty was:
Trade customers
Sale of investment proceeds (note 17 and 21)
Amounts owed by Group undertakings
Total
GROSS
2013
US$’000
902
361
-
1,263
COMPANY
2013
US$’000
31
-
25,617
25,648
GROUP
2012
US$’000
1,050
4,529
-
5,579
COMPANY
2012
US$’000
77
4,529
23,291
27,897
The ageing of trade and other receivables at the reporting date was:
GROUP
GROSS
2013
US$’000
IMPAIRMENT
2013
US$’000
TOTAL
2013
US$’000
Neither past nor impaired
Past due 1-30 days
Past due 31-60 days
Past due 61-90 days
Past due 91-days +
Total
564
572
84
71
54
1,345
-
(19)
-
(9)
(54)
(82)
564
553
84
62
-
GROSS
2013
US$’000
25,617
31
-
-
-
COMPANY
IMPAIRMENT
2013
US$’000
-
-
-
-
-
-
TOTAL
2013
US$’000
25,617
31
-
-
-
25,648
1,263
25,648
Based on the Group’s monitoring of customer credit risk, the Group believes that no further impairment allowance is necessary
in respect of trade receivables not past due.
LIQUIDITY RISK MANAGEMENT
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash and another financial asset.
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity
risk management framework for the management of the Group’s short, medium and long term funding and liquidity management
requirements.
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by regularly
monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
PAGE 56
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Notes to the Financial Statements
32. Financial instruments (continued)
LIQUIDITY RISK MANAGEMENT (CONTINUED)
The following are the contractual, undiscounted maturities of financial liabilities, including estimated interest payments and ex-
cluding the effect of netting arrangements:
GROUP
CONTRACTUAL CASH FLOWS 2013
CONTRACTUAL CASH FLOWS 2012
Bank overdrafts
Trade and other payables
Loans and borrowings
Total
CARRYING
AMOUNT
US$’000
1 YEAR OR
LESS
US$’000
398
1,546
6,647
8,591
398
1,546
1,082
3,026
2 TO < 5
YEARS
US$’000
-
-
5,565
5,565
CARRYING
AMOUNT
US$’000
1 YEAR OR
LESS
US$’000
1 TO < 5
YEARS
US$’000
337
2,825
3,746
6,908
337
2,825
1,692
4,854
-
-
2,054
2,054
COMPANY
CONTRACTUAL CASH FLOWS 2013
CONTRACTUAL CASH FLOWS 2012
Trade and other payables
Shareholder loan payables
Loans and borrowings (note 27)
Total
CARRYING
AMOUNT
US$’000
1 YEAR OR
LESS
US$’000
598
1,607
4,500
6,705
598
1,607
666
2,871
2 TO < 5
YEARS
US$’000
-
-
3,834
3,834
CARRYING
AMOUNT
US$’000
1 YEAR OR
LESS
US$’000
1 TO < 5
YEARS
US$’000
1,250
-
3,250
4,500
1,250
-
1,250
2,500
-
-
2,000
2,000
As disclosed in note 26 the loans and borrowings amounts due to Consilium are secured by a fixed and floating charge over the
assets of the Group. In the event of default, Consilium shall have the option to convert all, or any portion of the outstanding in-
debtedness at the time of default into shares in Cambria at a 15% discount to the share price at the date of the facility agreements.
The effective option price is £14.05p.
It is not expected that the cash flows included in the maturity analysis will occur significantly earlier, or at significantly different
amounts.
FOREIGN CURRENCY RISK MANAGEMENT
The Group is exposed to foreign currency risk on sales, purchases and borrowings that are denominated in a currency other than
United States Dollars. The currencies giving rise to this risk are primarily the Pound Sterling, Euro , Zambian Kwacha, and the South
African Rand. In respect of other monetary assets and liabilities held in currencies other than United States Dollars, the Group
ensures that the net exposure is kept to an acceptable level, by buying or selling foreign currencies at spot rates where necessary
to address short-term imbalances. The following significant exchange rates applied during the year:
Pounds Sterling (GBP)
Euro (EUR)
Zambian Kwacha (ZMW)
South African Rand ( ZAR)
AVERAGE RATE
2013
REPORTING DATE
SPOT RATE
2013
AVERAGE RATE
2012
REPORTING DATE
SPOT RATE
2012
0.64
0.76
5.14
9.11
0.65
0.76
5.35
8.99
0.64
0.77
-
8.31
0.63
0.80
-
8.43
PAGE 57
FINANCIAL REPORT 2013
For the year ended 31 August 2013
Notes to the Financial Statements
32. Financial instruments (continued)
FOREIGN CURRENCY RISK MANAGEMENT (CONTINUED)
With effect from 1 January 2013, the Zambian Kwacha was re-denominated by dividing the currency denomination by one thou-
sand units. The currency ticker was amended to ZMW. The Group had no exposure to the Zambian Kwacha (ZMK) in the prior
period.
The Company does not have any exposure to currency forward exchange contracts at the reporting date (2012: US$nil).
SENSITIVITY ANALYSIS
In managing foreign currency risks the Group aims to reduce the impact of short and long-term fluctuations on the Group’s earn-
ings. A 10 percent strengthening/weakening of the listed currencies against the USD at 31 August 2013 would have increased (de-
creased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest
rates, remain constant and ignores any impact of forecast sales and purchases. This analysis is performed on the same basis for
2012 and assumes that all other variables remain the same.
The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date
and their sensitivity is as follows:
31 AUGUST 2013
Pounds Sterling (GBP)
Euro (EUR)
South African Rand (ZAR)
Zambian Kwacha (ZMW)
31 AUGUST 2012
Pounds Sterling (GBP)
Euro (EUR)
South African Rand (ZAR)
EXPOSURE IN
FINANCIAL STATE-
MENT POSITION
US$’000
STRENGTHENING
PROFIT OR LOSS
US$’000
WEAKENING
PROFIT OR LOSS
US$,000
(290)
13
(53)
22
(723)
(438)
51
17
(1)
1
-
42
32
-
(17)
1
(1)
-
(42)
(32)
-
INTEREST RATE RISK MANAGEMENT
Due to the liquidity constraints in the Zimbabwean economy, the consequential interest rate risk the Group would be subject to
if it relied solely on short term Zimbabwean sourced borrowings, would be marked. The Group has, where possible, secured one
year fixed interest rate overdraft and loan agreements with its bankers in Zimbabwe and has subsequent to year end, engaged
with ZETREF (Zimbabwe Economic and Trade Revival Facility) to provide longterm funding at rates linked to Libor, but significantly
discounted to that available directly from the Zimbabwean Banks. Additionally, the Company has, mitigated its interest rate risk, by
entering into a number of long term, offshore facility agreements with fixed rates of interest.
PAGE 58
CAMBRIA AFRICA PLC
For the year ended 31 August 2013
Notes to the Financial Statements
The Group does not account for any fixed rate financial assets or liabilities at fair value through profit or loss. At the reporting
32. Financial instruments (continued)
date the interest rate profile of the Group’s interest bearing financial instruments was as follows :
CARRYING VALUE
FIXED RATE INSTRUMENTS
Financial assets
Financial liabilities
Total
VARIABLE RATE INSTRUMENTS
Financial assets
Financial liabilities
Total
2013
US$’000
-
(6,594)
(6,594)
2,136
(398)
1,738
Restated
2012
US$,000
4,529
(3,250)
(1,279)
359
(199)
160
CAPITAL MANAGEMENT
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain
future development of the business. Capital consists of ordinary shares, retained earnings and non-controlling interests of the
Group. The Board of Directors monitors the return on capital, which the Group defines as net operating income divided by total
shareholders’ equity, excluding non-redeemable preference shares and non-controlling interests. The Board of Directors also mon-
itors the level of dividends to ordinary shareholders.
Currently management is discussing alternatives for extending the Group’s share option programme beyond key management and
other senior employees. No decisions have been made.
The Board seeks to maintain a balance between higher returns that might be possible with high levels of borrowings and the ad-
vantages and security afforded by a sound capital position. The Group’s target is to achieve a long term return on capital above
20%. In 2013 the return was (13%), (2012: (64%)). In comparison the weighted average interest expense on interest bearing bor-
rowings (excluding liabilities with imputed interest) was 15% (2012: 17%).
PAGE 59
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
32. Financial instruments (continued)
FAIR VALUES
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position
are as follows:
LOANS AND RECEIVABLES
2013
US$’000
CARRYING AMOUNT
2013
US$’000
FAIR VALUE
2013
US$’000
1,738
12,724
58
(1,546)
(6,647)
6,327
1,738
12,724
58
(1,546)
(6,647)
6,327
1,738
12,724
58
(1,546)
(6,647)
6,327
LOANS AND RECEIVABLES
2012
US$’000
CARRYING AMOUNT
2012
US$’000
FAIR VALUE
2012
US$’000
131
5,579
42
(2,825)
(3,746)
(819)
131
5,579
42
(2,825)
(3,746)
(819)
131
5,579
42
(2,825)
(3,746)
(819)
LOANS AND RECEIVABLES
2013
US$’000
CARRYING AMOUNT
2013
US$’000
FAIR VALUE
2013
US$’000
1,210
25,648
(2,205)
(4,500)
20,153
1,210
25,648
(2,205)
(4,500)
20,153
1,210
25,648
(2,205)
(4,500)
20,153
LOANS AND RECEIVABLES
2012
US$’000
CARRYING AMOUNT
2012
US$’000
FAIR VALUE
2012
US$’000
178
27,897
(1,250)
(3,250)
23,575
178
27,897
(1,250)
(3,250)
23,575
178
27,897
(1,250)
(3,250)
23,575
GROUP
Cash and cash equivalents
(net of bank overdraft)
Trade and other receivables
Other investments
Trade and other payables
Loans and borrowings
Total
GROUP
Cash and cash equivalents
(net of bank overdraft)
Trade and other receivables
Other investments
Trade and other payables
Loans and borrowings
Total
COMPANY
Cash and cash equivalents
(net of bank overdraft)
Trade and other receivables
Trade and other payables
Loans and borrowings
Total
COMPANY
Cash and cash equivalents
(net of bank overdraft)
Trade and other receivables
Trade and other payables
Loans and borrowings
Total
PAGE 60
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Notes to the Financial Statements
32. Financial instruments (continued)
THE FAIR VALUE OF ASSETS AND LIABILITIES CAN BE CLASSED IN THREE LEVELS.
Level 1
Fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2
Level 3
Fair values measured using inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Fair values measured using inputs for the asset or liability that are not based on observable market data (i.e. unob-
servable inputs).
As at 31 August 2013, the Group holds the following investment at fair value:
GROUP
Quoted investments portfolio
Total
GROUP
Quoted investments portfolio
Total
LEVEL 1
2013
US$’000
58
58
LEVEL 1
2012
US$’000
42
42
LEVEL 2
2013
US$’000
-
-
LEVEL 2
2012
US$’000
-
-
LEVEL 3
2013
US$’000
-
-
LEVEL 3
2012
US$’000
-
-
TOTAL
2013
US$’000
58
58
Restated
TOTAL
2012
US$’000
42
42
ESTIMATION OF FAIR VALUES
The following summarises the major methods and assumptions used in estimating the fair values of financial instruments reflect-
ed in the above table.
CASH AND CASH EQUIVALENTS (NET OF BANK OVERDRAFT)
Fair value approximates its carrying amount largely due to the short-term maturities of this instrument.
LOANS AND BORROWINGS
Fair value has been derived from quoted prices.
TRADE RECEIVABLES AND PAYABLES
For receivables and payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value.
LOANS AND BORROWINGS
Fair value has been derived from quoted prices.
PAGE 61
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
32. Financial instruments (continued)
OTHER INVESTMENTS
Fair value has been derived from quoted prices.
33. Operating leases
LEASES AS LESSEE
At the reporting date, the Group had US$nil (2012: US$ nil) out-
standing annual commitments for future minimum lease pay-
ments under non-cancellable operating leases.
During the year ended 31 August 2013, US$253 thousand (2012:
US$214 thousand, as restated) was recognised as an expense in
the income statement in respect of operating leases. Operating
lease payments represents rentals payable by the Group for cer-
tain of its properties. Leases are negotiated for a minimum term
of 1 year and rentals are fixed for the period.
LEASES AS LESSOR
At the reporting date, the Group had US$15 thousand (2012:
US$nil) outstanding annual commitments for future minimum
lease receipts under operating leases. These were not non-can-
cellable leases and amounts are receivable to 31 December
2013. During the year ended 31 August 2013, US$3 thousand
(2012: US$nil, as restated) was received under lease agree-
ments.
34. Finance leases
CREDFIN LOAN
Minimum lease payments
Finance cost
Present value
GROUP 2013
GROUP 2012
US$’000
US$’000
122
(28)
94
-
-
The above current financial liability, measure at amortised cost
is secured by a finance lease agreement in respect of motor ve-
hicles. Ownership will transfer to Paynet Zimbabwe (Pvt) Ltd,
after payment of the nominal amount. Interest is charged at
28.27% per annum for one agreement and 25.7% for the other.
The amount is included in current trade and other payables.
35. Income statement of Cambria Africa
There is no requirement under the Isle of Man Companies Act
Plc
2006 to present a company income statement. The loss for
the year to 31 August 2013 was US$4,662 thousand (2012:
US$22,587 thousand).
The capital commitments at 31 August 2013 totalled US$nil
36. Capital commitments
(2012: US$nil).
On 1 February 2013, the Company renewed an unsecured Deed of
37. Guarantees
Guarantee with MEKZ Limited for US$355 thousand, which expires
on 30 June 2014. The Guarantee is in respect of the credit facility
which is provided to Gardoserve (Pvt) Limited, a Group company.
38. Contingent liabilities and assets
CONTINGENT LIABILITIES
Tradanet (Private) Limited (“Tradanet”), a 51% subsidiary of
the Group, has formally appealed against the decision of the
Commissioner General of the Zimbabwe Revenue Authority
(“ZIMRA”) to levy penalty interest of US$53 thousand relating
to the payment of a Value Added Tax (“VAT”) liability. During
the period, ZIMRA re-assessed the tax status of Tradanet, and
determined that the entity should have been registered for VAT,
having initially declined registration. Due to the circumstances,
the potential 100% penalties were waived in full by ZIMRA. The
historic VAT liability of US$294 thousand has been charged to
income in the period under review.
On 30 July 2013, the Group, pursuant to its disposal of Blue-
berry International Limited, (“Blueberry”), provided warranties
to the Purchaser, relating to the disclosure of assets and liabili-
ties and certain representations made during the sale process.
These warranties remain in force and effect until 30 September
2014 in respect of a General Warranty Claim and 30 Septem-
ber 2015, for a Fundamental Warranty Claim. The liability of the
Group in respect of the aggregate of all warranty claims shall
not be less than US$25 thousand for a single claim and US$50
thousand in aggregate and all claims shall not in total exceed
US$1,000 thousand. To the date of the report, no formal war-
ranty claim has been lodged by the Purchaser.
PAGE 62
CAMBRIA AFRICA PLC 38. Contingent liabilities and assets
(continued)
CONTINGENT LIABILITIES (CONTINUED)
At the balance sheet date, the Leopard Rock Hotel Company
(Pvt) Ltd, a Group company, had eleven open labour cases with
the courts. Total exposure for unprovided settlement amounts
is not anticipated to exceed US$25 thousand.
On 26 August 2011, the Group, pursuant to its disposal of Sol
Aviation (Pvt) Ltd, (“Sol Aviation”) entered into a Memorandum
of Understanding with the purchaser, whereby the purchaser
would be fully indemnified in respect of any claim, made ei-
ther by Royal Khmer Airlines International (Pte) Limited (“Royal
Khmer”) or Fly540 Aviation Limited (“Fly540”) pursuant to the
Memorandum of Understanding entered into by Sol Aviation
and Royal Khmer and a licence agreement entered into between
Sol Aviation and Fly540. To the date of this report no claims
have been lodged under this indemnity against the Group.
On 16 August 2012, the Group, pursuant to its disposal of the
scrap remains of the aircraft owned by LonZim Air (BVI) Limited,
indemnified the purchaser, against any claims or costs arising
in connection with any claim made by 540 (Uganda) Limited
against Lonzim Air (BVI) Limited to a maximum value of US$50
thousand.
For the year ended 31 August 2013
Notes to the Financial Statements
39. Related parties
IDENTITY OF RELATED PARTIES
The Group has a related party relationship with its subsidiaries
(see note 18), and with its Directors and executive officers.
Transactions between the Company and its subsidiaries, which
are related parties, have been eliminated on consolidation and
are not disclosed in this note. All related party transactions are
conducted on terms equivalent to arms length transactions.
GROUP AND COMPANY
TRANSACTIONS WITH ENTITIES WITH SIGNIFICANT
INFLUENCE OVER THE ENTITY
At the date of listing on AIM, 11 December 2007, the Company
issued shares to the value of US$14,854 thousand (£7,290 thou-
sand) to Lonrho Plc in exchange for Lonrho Plc entering into a
non-compete agreement. The agreement covered a period of
five and a half years and had been initially recognised as an in-
tangible asset with a valuation of US$14,854 thousand (£7,290
thousand). The book value of this intangible asset which was
being amortised over the period of the agreement, was fully
written off in the prior period.
There are no other known contingent liabilities at the balance
sheet date.
On 12 September 2012, the company was advised that Lonrho
Plc had disposed of its 22% shareholding in the Company to an
interest of less than 3%, the minimum notification threshold.
CONTINGENT ASSETS
At the balance sheet date, the Company has the following con-
tingent assets:
LONZIM AIR (B.V.I.) LIMITED
Cambria owned two aircraft through its subsidiary LonZim Air
(B.V.I.) Limited, a Fokker F27-500 Cargo (F27) and an ATR 42-320
(ATR). The F27 was leased to 540 (Uganda) Limited in Septem-
ber 2008 and the ATR was leased to Five Forty Aviation Limited
in July 2009, (both entities collectively “540”). A third aircraft
leased by 540 was destroyed in an accident in January 2011.
Cambria considers that substantial sums are due from 540 which
relate to, inter alia, maintenance reserve and lease charges, re-
lated contractual interest payment of insurance proceeds, the
deterioration in market value of the aircraft and the significantly
lower amount the Company was able to obtain through a sale
due to the poor condition the aircraft were found to be in.
On 18 July 2013, the Company entered into a Settlement Agree-
ment with Lonrho Plc, whereby Cambria Africa Plc received
US$2,665 thousand, in settlement of various claims and receiv-
ables balances which included, inter alia, extinguishment of
outstanding balances related to the sale of ATDM (note 17), the
Churchill Estates receivable, which the group had fully provided
for in the prior year, claims related to the Management Services
and Continuing Relationship Agreement between the Company
and Lonrho Plc, claims relating to the Hotel Refurbishment and
Management Agreement between LonZim Hotels Limited and
Lonrho Hotels Management Services (BVI) Limited (“LHMS”)
(“Hotel Management Agreement”), the early termination of the
Hotel Management Agreement, and other claims between the
Company and its subsidiaries and Lonrho Plc Group companies.
The Group loss on the settlement agreement, before amounts
provided for in the prior period was US$348 thousand.
PAGE 63
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Notes to the Financial Statements
39. Related parties (continued)
TRANSACTIONS WITH ENTITIES WITH SIGNIFICANT
INFLUENCE OVER THE ENTITY (CONTINUED)
During the period up to 18 July 2013, LHMS, a subsidiary of Lon-
rho Plc provided Management Services to Leopard Rock Hotel
Company (Pvt) Ltd (the “Hotel”), a Group company, under con-
tract, fees for which are determined as a percentage of Turnover
and Operating Profit. Subsequent to the Settlement Agreement
entered into with Lonrho Plc and the Company, management
fees for the year were US$89 thousand (2012: US$187 thou-
sand). Other recharges from LHMS to the Hotel amounted to
US$1 thousand (2012: US$85 thousand). At 31 August 2013, the
amount payable to LHMS was US$nil (2012: US$221 thousand).
The gain on write-off the management fees and recharges relat-
ing to the prior year US$282 thousand, and other Lonrho debt-
ors US$33 thousand.
During the period Itai Mazaiwana, a director of the Compa-
ny, provided additional consultancy services to the Company
amounting to US$13 thousand (2012: US$44 thousand) At 31
August 2013, the amount payable to Itai Mazaiwana was US$nil
(2012: US$14 thousand).
During the period Paul Heber, a director of the Company until
10 December 2012, provided additional consultancy services to
the Company amounting to US$11 thousand (2012: US$nil) At
31 August 2012, the amount payable to Paul Heber was US$nil
(2012: US$nil)
At 31 August 2012, the following amounts were payable to Di-
rectors in respect of Directors fees : Edzo Wisman US$13 thou-
sand (2012: US$88 thousand), Tania Sanders US$11 thousand
(2012: US$nil), Ian Perkins US$nil (2012: US$81 thousand).
Rollex (Private) Limited (“Rollex”), a subsidiary of Lonrho Plc,
provided freight services and delivery of provisions to the Hotel.
Total purchases for the year ended 31 August 2013 was US$23
thousand (2012: US$21 thousand). At 31 August 2012, the
amount payable to Rollex was US$nil thousand (2012: US$23
thousand).
On 14 February 2013,FMNA was sold to ForgetMeNot Software
Limited (“FMNS”), the 49% shareholder in FMNA (see notes 11
and 18).
During the period up to 14 February, FMNS provided services
and processed recharges to FMNA in the period totalling US$3
thousand (2012: US$191 thousand).
Global Horizons Ltd T/A as AFEX, a subsidiary of Lonrho Plc, pro-
vided satellite landing rights to the Hotel for the provision of its
Internet Services. Total purchases for the year ended 31 August
2013 was US$31 thousand (2012: US$58 thousand). At 31 Au-
gust 2012, the amount payable to AFEX was US$ nil (2012: US$5
thousand).
FMN Research Limited (“FMNR”) (a company controlled by Mr
J George, the Chief Executive Office and Managing Director
of FMNA), provided services up to 14 February 2013 totalling
US$74 thousand (2012: US$218 thousand). The services provid-
ed by FMNR included technical support and software enhance-
ments for FMNA customers, and marketing support.
Diospyros Investments (Pvt) Limited, trading as CES Zimbabwe
has a franchise agreement with Complete Enterprise Solutions
Mauritius (“CES Mauritius”), a Lonrho Plc group company for
the use of its proprietary interest trademarks and brand names,
business model and management expertise. Under the agree-
ment CES Mauritius also provided working capital support to
CES Zimbabwe. During the period, under review, CES Zimbabwe
paid service charges of US$nil thousand (2012: US$38 thou-
sand). Other interest recharges amounted to US$nil (2012:
US$16 thousand). At 31 August 2012, the amount payable to
CES Mauritius was US$nil (2012: US$255 thousand). At 31 Au-
gust 2013 CES Zimbabwe was disposed for US$ nil (see note 11
and 18).
Lonrho Africa Holdings Limited (“LAHL”), a subsidiary of Lonrho
Plc, provided services to FMNA in the period for US$nil (2012:
US$17 thousand).
During the period the Company entered into a number of trans-
actions with The Consilium Corporate Recovery Master Fund
Ltd, the Consilium Emerging Markets Absolute Return Mas-
ter Fund Ltd (jointly “Consilium”) a substantial shareholder of
Cambria. Loan funding received during the period amounted to
US$1,500 thousand (2012: US$3,250 thousand). Interest and
Fees paid during the period amounted to US$755 thousand
(2012: US$240 thousand) (see notes 24 and 26).
PAGE 64
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Notes to the Financial Statements
Paynet Zimbabwe (Private) Limited (“Paynet
Zimbabwe”)
Paynet Zimbabwe, a 100% subsidiary of the Group provides ser-
vices including payroll processing, software licensing, training
and utility and property sublets to fellow subsidiaries which
amounted to US$21 thousand (2012: US$20 thousand). All
charges were at market value, arms length rates.
Up until 5 September 2013, Paynet Zimbabwe provided hard-
ware hosting services to Celsys Limited on a no charge basis.
The estimated market value of the hosting services provided
for the period under review was US$4 thousand (2012: US$4
thousand).
Paynet Zimbabwe holds a licence to use, sell and develop soft-
ware owned by Paynet Limited and uses the Paywell software
through a licence with fellow subsidiary African Solutions Limit-
ed. Total licence fees paid in the period were US$772 thousand
(2012: US$614 thousand).
TRANSACTIONS WITH KEY MANAGEMENT PERSON-
NELKey management personnel are the holding Company Directors
and executive officers. Edzo Wisman an Executive Director, par-
ticipates in the share option scheme. Other Directors and key
personnel are eligible to participate in the share option scheme
(see note 25). Total remuneration is included in “personnel ex-
penses” (see note 8).
Directors
Executive officers
YEAR ENDED 31
AUGUST 2013
US$’000
YEAR ENDED 31
AUGUST 2012
US$’000
783
1,053
751
847
39. Related parties (continued)
TRANSACTIONS WITH ENTITIES WITH SIGNIFICANT
INFLUENCE OVER THE ENTITY (CONTINUED)
On 1 October 2012, Consilium participated in the Company’s
equity placement, for US$375 thousand, purchasing 2,308,000
shares at 10p per share for total value US$375 thousand.
TRANSACTIONS WITH SUBSIDIARY ENTITIES WITHIN
THE GROUP
Celsys Limited
Celsys Limited, was until 31 July 2013, a 60% held subsidiary of
the Group and provided printing services to Group Companies
of US$16 thousand (2012: US$12 thousand). All charges were at
market value, arms length rates.
Leopard Rock Hotel Company (Private) Limited
(“LRH”)
LRH, a 100% subsidiary of the Group, provided hospitality ser-
vices to the Group amounting to US$4 thousand (2012: US$12
thousand). All charges were at market value, arms length rates.
Hospitality services provided to employees and individuals with
significant influence over the entity amounted to US$2 thou-
sand. The market value of such related party services provided
was US$3 thousand (2012: US$2 thousand, and US$2 thousand
respectively).
In the prior year, LRH provided short term bridge financing to
Gardoserve (Pvt) Ltd which reached a maximum amount of
US$130 thousand, over a period of 6 months from 1 December
2012 at an interest rate of 23% per annum. Interest paid on this
funding was US$ nil (2012: US$ 7,674). No balances remained
outstanding at year end (2012: US$ nil).
Diospyros Investments (Private) Limited – T/A
CES Zimbabwe (“CES”)
CES was until 31 August 2013, a 100% subsidiary of the Group.
CES provided IT hardware and IT maintenance services to Group
companies amounting to US$25 thousand (2012: US$113 thou-
sand. Group companies enjoyed a 5% discount to the market
price on all hardware and paid arms length prices for IT main-
tenance services.
PAGE 65
FINANCIAL REPORT 2013
TOTAL 2013
US$000
TOTAL 2012
US$000
317
237
120
50
38
15
6
-
-
-
-
-
-
783
239
83
80
200
19
-
68
19
9
9
9
9
7
751
For the year ended 31 August 2013
Notes to the Financial Statements
39. Related parties (continued)
DIRECTOR’S REMUNERATION
E Wisman
T Sanders
I Perkins
P Turner
I Mazaiwana
F Jones
P Heber
J Ellis
D Lenigas
G White
D Armstrong
E Priestley
C Orr-Ewing
Total
40. Events after the reporting date
Gardoserve (Private) Limited
On 13 September 2013, FBC Bank Limited, of Zimbabwe sub-
stituted a portion of Gardoserve (Private) Limited’s working
capital overdraft facility for funds amounting to US$300 thou-
sand, to be provided by Zimbabwe Economic and Trade Revival
Facility (ZETREF). The Government of Zimbabwe provides 30%
of the capital funding of ZETREF operations. The facility incurs
interest at Libor for 3 months deposit plus 8% per annum, and
is renewable on 21 August 2014.
Equity Placement
On 19 February 2014, Cambria announced that approximate-
ly US$4 million (before expenses), or UK£2.4 million, has been
raised by a placing with new and existing institutional and other
investors of 32,406,139 new ordinary shares in the Company.
The placing price was 7.5 pence per Ordinary Share being a
9.6% discount to the 30-day volume weighted average market
price on 10 February 2014.
The Placing will provide working capital to support the Com-
pany’s expansion strategy for Millchem and Payserv as in the
Chief Executive’s Report.
PAGE 66
CAMBRIA AFRICA PLC For the year ended 31 August 2013
Corporate Information
COMPANY SECRETARY AND CONTACT DETAILS
Northern Wychwood Limited
1st Floor, Exchange House
54-58 Athol Street
Douglas
Isle of Man
IM99 1JD
Tel: +44 (0) 1624 678259
AUDITORS
KPMG Audit LLC
Heritage Court
41 Athol Street
Douglas
Isle of Man
IM99 1HN
Tel: +44 (0) 1624 681000
REGISTRARS
Capita Registrars (Isle of Man) Limited
3rd Floor Exchange House
Clinch’s House
Lord Street
Douglas
Isle of Man
IM99 1RZ
Tel: +44 (0) 1624 641560
PRINCIPAL GROUP BANKERS
Barclays Corporate
Level 27, 1 Churchill Place
Canary Wharf
London
E14 5HP
Tel: +44 (0) 20 7116 1000
REGISTERED OFFICE AND AGENT
Appleby Trust (Isle of Man) Limited
33-37 Athol Street
Douglas
Isle of Man
IM1 1LB
Tel: +44 (0) 1624 647647
NOMINATED ADVISOR AND BROKER
WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Tel: +44 (0) 20 7220 1666
PAGE 67
FINANCIAL REPORT 2013 For the year ended 31 August 2013
Shareholder Information
Analysis of ordinary shareholdings as at 18 February 2014
Category of shareholder
Private shareholder
31.73
79
NUMBER OF HOLDERS
% OF TOTAL HOLDERS
NUMBER OF SHARES % OF TOTAL SHARES
Banks, nominees and other corporate
bodies
Total
Shareholding range
1 – 5,000
5,001 – 50,000
50,001 – 100,000
100,001 – 500,000
500,001 – 1,000,000
1,000,001 – 5,000,000
5,000,001 –10,000,000
10,000,001 – 50,000,000
Total
170
249
92
75
29
31
10
9
2
1
249
68.27
100%
36.95
30.12
11.65
12.45
4.02
3.61
0.80
0.40
100%
2,184,165
64,564,858
66,749,023
228,848
1,404,771
2,218,701
8,561,337
7,578,121
19,197,742
13,306,840
14,252,663
66,749,023
3.27
96.73
100%
0.35
2.10
3.32
12.83
11.35
28.76
19.94
21.35
100%
REGISTRARS
All administrative enquiries relating to shareholdings, such as queries concerning dividend payments, notification of change of
address or the loss of a share certificate, should be addressed to the Company’s registrars.
UNSOLICITED MAIL
As the Company’s share register is, by law, open to public inspection, shareholders may receive unsolicited mail from organisations
that use it as a mailing list. Shareholders wishing to limit the amount of such mail should write to the Mailing Preference Society,
Freepost 29 Lon20771, London W1E 0ZT.
PAGE 68
CAMBRIA AFRICA PLC Cambria Africa Plc
1 Berkeley Street
Mayfair
London WIJ 8DJ
Tel: +44 (0) 20 3402 2366
Fax: +44 (0) 20 3402 2367
info@cambriaafrica.com
www.cambriaafrica.com