Cambria Africa plc Annual Report 2015

Plain-text annual report

Cambria Africa Plc Annual report 2015 Table of Contents Annual Report 2015 Results for the year Chief Execu(cid:415) ve Oﬃ cer’s Statement Directors Statement of Directors’ Responsibili(cid:415) es Directors’ Report Report of the Independent Auditors, Baker Tilly Isle of Man 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 Posi(cid:415) on Consolidated Statement of Cash Flows Notes to the Financial Statements Corporate informa(cid:415) on Shareholder informa(cid:415) on 3 4 8 9 10 14 16 17 18 20 21 22 - 65 66 67 Results for the year Cambria Africa Plc (AIM:CMB) announces its full year results for the year ending 31 August 2015. The audited Financial Statements will be made available on the Company’s website (www.cambriaafrica.com). All references to con(cid:415) nuing opera(cid:415) ons relate to the Group’s Payserv Africa (“Payserv”) and Millchem Holdings (“Millchem”) investments and head oﬃ ce ac(cid:415) vi(cid:415) es. Sub-Saharan Africa. Results summary: Key events for the 2015 ﬁ nancial year were: • On 21 October 2014 the Group disposed of its 100% shareholding in Lonzim Hotel Holdings Limited (“the Leopard Rock Hotel Group”), the owner of the Leopard Rock Hotel and related en(cid:415) (cid:415) es, for a total considera(cid:415) on of $2.5 million. The net asset value of the Leopard Rock Hotel Group had been impaired in the prior year by $8.9 million to reﬂ ect its net realisable value of $2.5 million at that date. During the year ended 31 August 2015, Payserv and Mill- chem combined, grew revenues and gross proﬁ t by 10% and 12% year-on-year, respec(cid:415) vely. Cambria’s central costs were reduced by 32% when com- pared to the equivalent period last year. As noted above, a further cost reduc(cid:415) on has been implemented, the annu- alised result of which will reﬂ ect substan(cid:415) ally in the next repor(cid:415) ng period. • On 3 September 2015, in the post balance sheet period, the Company entered into a Se(cid:425) lement Agreement with Lonrho Limited rela(cid:415) ng to the Company’s Jet Claims in terms of which Cambria received $4.752 million in full and ﬁ nal se(cid:425) lement of the Jet Claims. Including the net Jet Claim li(cid:415) ga(cid:415) on se(cid:425) lement proceeds of $3.47 million, Cambria’s EBITDA from con(cid:415) nuing opera- (cid:415) ons for the year ended 31 August 2015 was $1.65 million compared to an EBITDA loss of $3.75 million for the 2014 ﬁ nancial year. • The Company’s remaining assets are Payserv Africa (“Payserv”) and Millchem Holdings (“Millchem”) and the board is of the view that these two assets provide signiﬁ cant value crea(cid:415) on opportuni(cid:415) es to Cambria and its shareholders. • The execu(cid:415) ve team con(cid:415) nues its focus on: • Ra(cid:415) onalising and simplifying the head oﬃ ce func(cid:415) on and central overheads. Signiﬁ cant progress has been made in reducing overheads, the full beneﬁ t of which will reﬂ ect in the next repor(cid:415) ng period; • Restoring the momentum lost in Millchem by re-establishing key supplier and customer rela(cid:415) onships. Loss making subsidiaries, Millchem Zambia and Millchem Malawi have been discon(cid:415) nued a(cid:332) er the ﬁ nancial year end, with focus restored on Millchem Zimbabwe, Millchem’s core opera(cid:415) ng en(cid:415) ty; • Suppor(cid:415) ng the Payserv management team to con(cid:415) nue the good growth in its core markets through an expanded service oﬀ ering. Payserv Zambia is making progress towards achieving its maiden proﬁ ts; and The Group recorded a proﬁ t from con(cid:415) nuing opera(cid:415) ons of $0.55 million for the year ended 31 August 2015 (2014 loss of $5.7 million). Consilium dispute: The Consilium dispute arose over the validity of CCRMF’s a(cid:425) empt to accelerate the repayment of the loans provided to the Company by Consilium Corporate Recovery Master Fund (“CCRMF” or “Consilium”) as a result of the subscrip(cid:415) on by Ventures Africa Limited (“VAL”) in Cambria in April 2015. On 13 April 2015, Cambria shareholders approved the subscrip(cid:415) on by VAL of 107,000,000 ordinary shares in the Company which resulted in VAL owning 50.55% of Cambria. CCRMF and related par(cid:415) es hold 14.9% of Cambria’s shares. Cambria announced on 26 October 2015 that it received a statutory demand in the Isle of Man in which CCRMF had formally demanded repayment of the loans. In response to the statutory demand, the Company submi(cid:425) ed that there was a genuine and substan(cid:415) al dispute as to whether the debt was then payable and that any future presenta(cid:415) on of a winding up pe(cid:415) (cid:415) on would cons(cid:415) tute an abuse of the Court’s process. • Enhancing the value of Payserv by replica(cid:415) ng its successful technology pla(cid:414) orms, products and services in the rest of CCRMF withdrew their statutory demand in response to Cambria’s applica(cid:415) on for an injunc(cid:415) on. In addi(cid:415) on, CCRMF was CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 3 Chief Executive Of(cid:976)icer’s Statement ordered by the High Court of Jus(cid:415) ce of the Isle of Man to pay the Company’s costs of and incidentals to the Statutory Demand claim on a standard basis. On 9 June 2015, Cambria announced the provision of a standby facility of $1.12m made available by VAL to the Company which was to be used as security for costs in rela(cid:415) on to the now se(cid:425) led li(cid:415) ga(cid:415) on against Lonrho. Pending the resolu(cid:415) on of the dispute with CCRMF, as a consequence of which CCRMF has converted their ﬂ oa(cid:415) ng charge on Cambria’s assets, par(cid:415) cularly the Com- pany’s primary bank accounts, the Lonrho se(cid:425) lement as well as the shares of Lonzim Holdings Limited, the Company is relying on this standby facility to fund its day-to-day opera(cid:415) ons. Cambria con(cid:415) nues to strongly dispute CCRMF’s claim that there has been an event of default that en(cid:415) tles Consilium to acceler- ate repayment of the loans and maintains that the due date of the loans as disclosed in its audited ﬁ nancial statements and as deﬁ ned in the loan agreements, as amended, is 30 April 2016. CCRMF and Cambria have agreed to the li(cid:415) ga(cid:415) on arising from the dispute being stayed un(cid:415) l 30 April 2016. Cambria howev- er con(cid:415) nues to diligently inves(cid:415) gate all the claims it may have against CCRMF and the former CEO and Chairman of Cambria, both also directors of Consilium. Introduction The ﬁ rst 6 months since having assumed the CEO role with eﬀ ect from 3 August 2015, have been largely overshadowed by the unexpected Consilium dispute. Considerable (cid:415) me, cost and energy have been invest- ed in defending the Consilium claims and in uncover- ing the true state of aﬀ airs in which Cambria was le(cid:332) by the previous execu(cid:415) ve management. With a signiﬁ cant cash equity investment through VAL’s subscrip(cid:415) on in April 2015, my interests as CEO are aligned with that of shareholders. Shareholders of Cambria have suﬀ ered a tremendous loss of value in their investment in the Company. It is my aim to guide the Group back to proﬁ tability and restore shareholder value. Notwithstanding the signiﬁ cant distrac(cid:415) on caused by the above, Cambria has con(cid:415) nued its restructuring whereby the Company’s central overheads have been reduced to be ﬁ t-for- purpose. In addi(cid:415) on, the Group’s ﬁ nancial posi(cid:415) on has been substan(cid:415) ally strengthened following the se(cid:425) lement of the legal dispute with Lonrho. During the 2015 ﬁ nancial year, revenues and gross proﬁ t of the con(cid:415) nuing opera(cid:415) ons of Cambria, Payserv and Millchem, were $10.3 million (2014: $9.4 million) and $5.6 million (2014: $5.0 million) represen(cid:415) ng an increase of 10% and 12% respec(cid:415) vely compared to the ﬁ scal year 2014. Including the net Jet Claim li(cid:415) ga(cid:415) on se(cid:425) lement proceeds of $3.47 million, Cambria’s EBITDA from con(cid:415) nuing opera(cid:415) ons for 2015 was $1.65 million, compared to the prior year’s EBITDA loss from con(cid:415) nuing opera(cid:415) ons of $3.75 million. The Group proﬁ t for the year is $0.55 million for con(cid:415) nuing opera(cid:415) ons. Cambria’s earnings per share for the ﬁ nancial year was 0.1c per share, compared to a loss of 19.5c per share for the same period last year. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 4 Main Investments CONSOLIDATED RESULTS Payserv and Millchem jointly had an aggregated performance as follows: (cid:904)US$ THOUSANDS(cid:905) 2015 2014 GROWTH Chief Executive Of(cid:976)icer’s Statement Payserv Africa Payserv provides EDI switching services (Paynet), ‘payslip’ processing (Autopay) and payroll based micro-ﬁ nance loan processing (Tradanet). (cid:904)US$ THOUSANDS(cid:905) 2015 2014 GROWTH Revenues Gross proﬁ t 10,306 9,405 5,637 5,017 Gross margin 55% 53% 10% 12% 4% (5%) Revenues Gross proﬁ t 5,012 4,594 4,745 4,196 Gross margin 95% 91% 9% 13% 4% (9%) SG&A EBITDA (5,365) (5,650) 272 (633) >(100%) SG&A EBITDA (3,519) (3,871) 1,226 325 >100% EBITDA margin 3% (7%) >(100%) EBITDA Margin 24% 7% >100% The following factors had a signiﬁ cant impact on ﬁ nancial per- formance: • • EBITDA for 2014 was impacted by once-oﬀ costs of $0.7 million incurred on inves(cid:415) ga(cid:415) ng the acquisi(cid:415) on of CelPay Zambia which was not concluded following the discovery of a signiﬁ cant deteriora(cid:415) on in the ﬁ nancial posi(cid:415) on of CelPay Zambia; EBITDA for 2015 con(cid:415) nued to be eﬀ ected by Payserv’s investment in expanding its presence and oﬀ ering in Zambia, the costs of which are expensed in full; and • Challenges experienced by Millchem Zambia and Millchem Malawi in the ramp up of these subsidiaries to full trading capacity. Investment in these territories has been discon(cid:415) nued in the post balance sheet period to refocus opera(cid:415) ons and investment in Millchem’s core Zimbabwe market. Paynet provides Electronic Data Interchange (EDI) services to all the banks and building socie(cid:415) es in Zimbabwe, as well as to over 1,500 corporates. Paynet processed 17.3 million transac(cid:415) ons (2014: 16.4 million) during the period under review, a 5.5% increase. Autopay provides payroll services to more than 150 customers and processed over 345 000 pay slips (2014: 313 000) during the period under review, a 10% increase. Tradanet processed approximately 134,000 (2014: 121,000) loans during the period, represen(cid:415) ng a value of $176 million (2014: $154 million), an 11% increase and a 14% increase respec(cid:415) vely. During the year under review, Payserv con(cid:415) nued to invest into product upgrades, new oﬀ erings, entry into the Zambian market, as well as explora(cid:415) on of other geographic markets. These investments have not been capitalised and have therefore directly impacted the income statement during the year under review. The previous repor(cid:415) ng period included an excep(cid:415) onal item of $0.7 million a(cid:425) ributable to the write-oﬀ of transac(cid:415) on costs related to CelPay Zambia discussed above. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 5 Revenues Gross proﬁ t Gross margin SG&A EBITDA Chief Executive Of(cid:976)icer’s Statement Millchem Holdings Central costs (continued) Millchem is a value-added chemicals distributor with a leading market posi(cid:415) on in Zimbabwe. Current total central costs have been reduced to an es(cid:415) mated normalised annual cost of $0.3 million (excluding once-oﬀ costs legal costs), from US3.1 million before VAL’s investment. (cid:904)US$ THOUSANDS(cid:905) 2015 2014 GROWTH 5,294 4,811 10% 892 821 17% 17% 9% - As the new CEO of Cambria, I will con(cid:415) nue not to collect compensa(cid:415) on including beneﬁ ts un(cid:415) l such (cid:415) me as the cash ﬂ ow from the Company’s underlying opera(cid:415) ons supports it. Similarly, my fellow directors have not received any compensa(cid:415) on or beneﬁ ts since VAL’s investment. (1,846) (1,779) (4%) Tradanet (954) (958) - EBITDA margin (18%) (20%) (10%) Despite the challenging and uncertain business environment during the year, Millchem grew revenues by 10%. Overheads were nega(cid:415) vely impacted by the expansion and in- vestment in establishing Millchem Zambia and Millchem Ma- lawi under the Group’s previous management. A(cid:332) er the year- end, Millchem Malawi has been closed while Millchem Zambia has been disposed of. The Company is defending a claim brought by the minority shareholder in Tradanet, O(cid:425) onby Trading (Private) Limited, re- la(cid:415) ng to its right to acquire Payserv’s 51% share in Tradanet, allegedly triggered by the change in control of Cambria as a re- sult of VAL’s subscrip(cid:415) on in April 2015. The Company’s legal ad- visers, having considered the terms of the related shareholders agreement, are conﬁ dent that the claim will be unsuccessful. The par(cid:415) es have agreed to follow an arbitra(cid:415) on process to re- solve this dispute, which is expected to be completed shortly. Events following the end of the period under review Establishing Millchem as a proﬁ table unit con(cid:415) nues to be an important priority. The key focus areas are: SALE OF MILLCHEM ZAMBIA • Strengthening the execu(cid:415) ve leadership team following departure of senior execu(cid:415) ves; • Rebuilding rela(cid:415) onships with key customers; Millchem Holdings has agreed to the sale of the Zambian oper- a(cid:415) ons for net asset value of US$46 thousand, with eﬀ ect from 1 September 2015. The rights to the name “Millchem Zambia” are not included in the sale. • Re-establishing credit lines with key suppliers; and SETTLEMENT WITH LONRHO On 3 September 2015, the Company concluded a se(cid:425) lement agreement with Lonrho with respect to the Jet claims and coun- terclaims between the par(cid:415) es, in terms of which the Compa- ny received US$4.752 million in full and ﬁ nal se(cid:425) lement of the claims. A(cid:332) er outstanding li(cid:415) ga(cid:415) on and other associated costs, the net proceeds were US$3.47 million. • Streamlining overheads and trading eﬃ ciencies. Central costs Cambria incurred $2.0 million in central costs for the period un- der review, compared to $3.1 million in the prior year, a reduc- (cid:415) on of 32%. Included in the above are salaries and beneﬁ ts paid to the Company’s previous CEO and Chairman, Messrs E Wisman and I Perkins of $0.4 million and $0.2 million, respec(cid:415) vely. These amounts include once-oﬀ “change in control” payments amoun(cid:415) ng to $0.2 million. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 6 Chief Executive Of(cid:976)icer’s Statement Strategy going forward and closing The Company is now focused on crea(cid:415) ng value for shareholders through its investments in Millchem and Payserv. In addi(cid:415) on, the Board is in the process of formula(cid:415) ng its investment strategy to implement strategic value-crea(cid:415) ng acquisi(cid:415) ons as appropriate opportuni(cid:415) es arise. We will con(cid:415) nue to focus on Zimbabwe, which we believe provides the best opportunity for successful investment and growth in the short to medium term. SAMIR SHASHA CHIEF EXECUTIVE OFFICER 29 FEBRUARY 2016 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 7 Directors Paul Turner, 69 NON(cid:487)EXECUTIVE CHAIRMAN Paul Turner is a Chartered Accountant and past President of the Ins(cid:415) tute 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 opera(cid:415) on of businesses in Zimbabwe. Ini(cid:415) ally appointed to the Cambria board on 1 July 2008, he was appointed as Chairman on 8 July 2015. Samir Shasha, 55 CHIEF EXECUTIVE OFFICER Samir Shasha started his involvement in Southern Africa with supplying and leasing trucks for the opera(cid:415) ons of a transport company focused on relief aid. In 1995 he established S. Shasha & Associates in Zimbabwe and introduced Freightliner Trucks in Southern Africa for the ﬁ rst (cid:415) me. In 2002, S. Shasha & Associates purchased Zimbabwe Online, an Internet Service Provider in Zimbabwe, and took on the role of CEO un(cid:415) l 2006. The company was sold to Liquid Telecom in 2012. Mr. Shasha received his Bachelors from Vassar College with Honors in Economics in 1981. Following Ventures Africa Limited’s investment in the Company in April 2015, Mr Shasha was appointed to the Cambria board on 5 June 2015 and as CEO on 3 August 2015. Josephine Petra Watenphul, 35 CHIEF FINANCIAL OFFICER Josephine Watenphul is a qualiﬁ ed Chartered Accountant (South Africa). She joined the UCS Group Limited (“UCS”), a Johannesburg-based investment holding company in technology and associated businesses listed on the Johannesburg Stock Exchange, in April 2004. In April 2009, Josie was appointed Group CFO, a posi(cid:415) on which she held un(cid:415) l May 2015. During her tenure at UCS, which was later renamed Capitaleye Investments upon delis(cid:415) ng in October 2011, Josie assisted in various corporate ac(cid:415) ons and restructurings. She was appointed to the Cambria board on 17 June 2015. Dipak Champaklal Pandya, 57 NON(cid:487)EXECUTIVE DIRECTOR Dipak Pandya is a Chartered Accountant and has since March 2009 been the ﬁ nancial controller at Strauss Logis(cid:415) cs Limited, a fuel trading and distribu(cid:415) on company ac(cid:415) ve in central and southern Africa. Prior to this, Dipak was the ﬁ nancial controller at Playwize Plc, a computer so(cid:332) ware development company. Dipak was appointed to the Cambria board on 26 June 2015. Changes to the board Director resigna(cid:415) ons: Name Ex-posi(cid:415) on/designa(cid:415) on Date Paul Turner Non-execu(cid:415) ve 6 May 2015 Edzo Wisman CEO Ian Perkins Chairman 13 July 2015 14 July 2015 Director appointments: Name Posi(cid:415) on/designa(cid:415) on Date Samir Shasha Josephine Petra Watenphul CEO CFO 5 June 2015 17 June 2015 Dipak Champaklal Pandya Non-execu(cid:415) ve director 26 June 2015 Paul Turner Chairman 8 July 2015 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 8 Directors’ Responsibility Statement in Respect of the Directors’ Report and the Financial Statements. Directors Cambria The Directors are responsible for keeping proper accoun(cid:415) ng records that are suﬃ cient to show and explain the Group and Parent Company’s transac(cid:415) ons and disclose with reasonable accuracy at any (cid:415) me its ﬁ nancial posi(cid:415) on. 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 irregulari(cid:415) es. The Directors are responsible for the maintenance and integrity of the corporate and ﬁ nancial informa(cid:415) on included on the Company’s website. Legisla(cid:415) on governing the prepara(cid:415) on and dissemina(cid:415) on of ﬁ nancial statements may diﬀ er from one jurisdic(cid:415) on to another. The Directors are responsible for preparing the Directors’ Report and the ﬁ nancial statements in accordance with applicable law and regula(cid:415) ons. The Directors have elected to prepare the Group and Parent Company ﬁ nancial statements in accordance with Interna(cid:415) onal Financial Repor(cid:415) ng Standards as adopted by the European Union. The Group and Parent Company ﬁ nancial statements are required to give a true and fair view of the state of aﬀ airs of the Group and Parent Company and of the proﬁ t or loss of the Group for that period. In preparing these ﬁ nancial statements, the Directors are required to: • select suitable accoun(cid:415) ng policies and then apply them consistently; • make judgements and es(cid:415) mates that are reasonable and prudent; • • state whether they have been prepared in accordance with Interna(cid:415) onal Financial Repor(cid:415) ng Standards as adopted by the European Union; and prepare the ﬁ nancial statements on the going concern basis unless it is inappropriate to presume that the Group and Parent Company will con(cid:415) nue in business. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 9 Directors’ Report FOR THE YEAR ENDED 31 AUGUST 2015 The Directors of Cambria Africa Plc (the “Company”) and its subsidiaries (together the “Group”) submit their report, together with the audited ﬁ nancial statements for the year ended 31 August 2015. Principal activities During the year, the Group was an investment company with a por(cid:414) olio of investments in Zimbabwe, countries surrounding Zimbabwe, as well as the remainder of Sub-Saharan Africa, with a bias towards Southern and Eastern Africa. Investing policy The Company’s investment objec(cid:415) ve is to provide Shareholders with long term capital apprecia(cid:415) on. While the Company does not have a par(cid:415) cular sectoral focus, u(cid:415) lising the investment skills of the Directors and their advisors, the Company seeks to iden(cid:415) fy individual companies in sectors best posi(cid:415) oned to beneﬁ t should there be radical improvements in Zimbabwe’s economy. The Company may make investments in the tourism, accommoda(cid:415) on, infrastructure, transport, commercial and residen(cid:415) al property, technology, communica(cid:415) ons, 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 signiﬁ cant exposure to assets, businesses or opera(cid:415) ons within the deﬁ ned region. The Company will only be able to achieve its investment objec(cid:415) ve in the event the Zimbabwean economy radically improves. Whilst there will not be any limit on the number or size of investments the Company can make in any sector, the Directors seek to diversify the Company’s investments across various sectors in order to mi(cid:415) gate risk and to avoid concentra(cid:415) ng the por(cid:414) olio in any single sector. The Company’s interest in a proposed investment or acquisi(cid:415) on may range from a minority posi(cid:415) on to full ownership. The Company intends to ac(cid:415) vely manage the opera(cid:415) ons of the companies it has invested in. Wherever possible the Company will seek to achieve Board control or ﬁ nancial control of legisla(cid:415) on within its por(cid:414) olio companies. Zimbabwe may, however, prevent the Company from acquiring or maintaining a majority control in a Zimbabwean business. Indigenisa(cid:415) on The Directors believe that through their individual and collec(cid:415) ve experience of inves(cid:415) ng and managing acquisi(cid:415) ons and disposals in Africa, they have the necessary skills to manage the Company and to source deal ﬂ ow. Prior to any investment decisions being taken by the Board of the Company, a due diligence process is undertaken by the Company’s appointed specialist ﬁ nancial and legal advisors. investment strategy The Company’s is dependent upon future radical improvement in the economy of Zimbabwe and expansion into the immediate region. It is therefore possible that a signiﬁ cant period of (cid:415) me may elapse before an investment by the Company will produce any returns and there is no guarantee that the economy in Zimbabwe will improve. Accordingly, the Company may not be able to make any proﬁ ts and may incur losses. The Directors intend to seek the consent of the Shareholders for the investment policy on an annual basis. The Company Directors will comply as a ma(cid:425) er of policy with the US Oﬃ ce of Foreign Assets Control and the European Union Council Regula(cid:415) on (EC) No. 314/2004 regula(cid:415) ons. Results The Group made a consolidated pro(cid:332) a(cid:332) er non-controlling interests of US$164 thousand (2014: loss US$16,138 thousand) during the year and this has been set against reserves. Business review and development The Chief Execu(cid:415) ve’s review of opera(cid:415) ons contains informa(cid:415) on on developments during the year and key poten(cid:415) al future developments. The requirements of the enhanced business review in rela(cid:415) on to strategy and progress thereon are contained in the Chief Execu(cid:415) ve’s review of opera(cid:415) ons. The principal risks and uncertain(cid:415) es relate to the revenue genera(cid:415) on in the Group’s businesses which, being located in Africa, are subject to respec(cid:415) ve government policies, poli(cid:415) cal stability, general economic condi(cid:415) ons in the relevant country and exposure to foreign currency movements. The Group monitors cash ﬂ ow as one of its primary key indicators. Given current global ﬁ nancial performance condi(cid:415) ons, as well as current developments in Zimbabwe, the Directors are carefully monitoring cash resources within the CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 10 Business review and development (con- tinued) Group and have ins(cid:415) gated a number of ini(cid:415) a(cid:415) ves to ensure funding will be available to meet obliga(cid:415) ons as they fall due and for planned projects 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 resources for the foreseeable future. The Group also uses a number of other key performance indicators which are measured at diﬀ erent (cid:415) ers in the opera(cid:415) on. At the top level, the Group tracks revenues, gross proﬁ t, EBITDA and cash genera(cid:415) on against budget of the underlying subsidiaries. The Directors mi(cid:415) gate risk by evalua(cid:415) on of every investment that is made and have therefore developed a risk analysis repor(cid:415) ng procedure, which links into the Company’s Corporate Governance procedures. Further informa(cid:415) on regarding the Group’s policies and exposure to ﬁ nancial risk can be found in note 31 to the ﬁ nancial statements. Share capital Details of changes to the Company’s share capital and share premium during the ﬁ nancial year are contained in note 23 to the ﬁ nancial statements. Post statement of (cid:976)inancial position events Details of signiﬁ cant events since the repor(cid:415) ng date are contained in note 39 to the ﬁ nancial statements. Directors’ Report For the year ended 31 August 2015 Corporate Governance COMPLIANCE WITH THE UK CORPORATE GOVER(cid:487) NANCE CODE The Directors recognise the value of the UK Corporate Governance Code (formerly the Combined Code on Corporate Governance) and, whilst under AIM rules full compliance is not required, the Directors are considering the recommenda(cid:415) ons and applicability in respect of the Company insofar as is prac(cid:415) cable and appropriate for a public company of its size and will con(cid:415) nue to implement appropriate compliance measures. BOARD OF DIRECTORS At the date of this report the Board of Directors comprises of two Execu(cid:415) ve Directors, and two Non-Execu(cid:415) ve Directors, one of whom is the Chairman. The Directors are of the opinion that the Board comprises a suitable balance to enable the recommenda(cid:415) ons of the Code to be implemented to an appropriate level. The Board, through the Chairman and Chief Execu(cid:415) ve Oﬃ cer in par(cid:415) cular, maintains regular contact with its advisors, and ins(cid:415) tu(cid:415) onal 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 formula(cid:415) ng, reviewing and approving the Company’s strategy, ﬁ nancial ac(cid:415) vi(cid:415) es and opera(cid:415) ng performance. Day-to-day management is devolved to the execu(cid:415) ve management who are charged with consul(cid:415) ng the Board on all signiﬁ cant ﬁ nancial and opera(cid:415) onal ma(cid:425) ers. Consequently, decisions are made promptly following consulta(cid:415) on amongst the Directors and managers concerned, where necessary and appropriate. All necessary informa(cid:415) on is supplied to the Directors on a (cid:415) mely basis to enable them to discharge their du(cid:415) es eﬀ ec(cid:415) vely and all Directors have access to independent professional advice at the Company’s expense, as and when required. is available The Chairman ins(cid:415) tu(cid:415) onal shareholders to discuss any issues and concerns regarding the Group’s governance. The Non-Execu(cid:415) ve Directors can also a(cid:425) end mee(cid:415) ngs with major shareholders, if requested. to meet with The par(cid:415) cipa(cid:415) on of both private and ins(cid:415) tu(cid:415) onal investors at the Annual General Mee(cid:415) ng is welcomed by the Board. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 11 Directors’ Report For the year ended 31 August 2015 Corporate Governance (continued) NOMINATION COMMITTEE INTERNAL CONTROLS for the The Directors acknowledge their responsibility Company’s and the Group’s systems of internal control, which are designed to safeguard the assets of the Group and ensure the reliability of ﬁ nancial informa(cid:415) on for both internal use and external publica(cid:415) on. Overall control is ensured by a regular detailed repor(cid:415) ng system covering the state of the Group’s ﬁ nancial aﬀ airs. The Board has implemented procedures for iden(cid:415) fying, evalua(cid:415) ng and managing the signiﬁ cant risks that face the Group. Any system of internal control can provide only reasonable, and not absolute, assurance that material ﬁ nancial irregulari(cid:415) es will be detected or that the risk of failure to achieve business objec- (cid:415) ves is eliminated. The Nomina(cid:415) on Commi(cid:425) ee will be responsible for iden(cid:415) fying candidates to ﬁ ll vacancies on the Board, as and when they arise, and nominate them for approval by the Board. The Nomina(cid:415) on Commi(cid:425) ee will comprise Paul Turner (Chairman), Samir Shasha and Dipak Pandya. Declared substantial shareholdings The Directors have been advised of the following shareholdings at 31 January 2016 of 3 per cent or more of the Company’s is- sued share capital: NUMBER OF SHARES PERCENT(cid:883) AGE OF THE ISSUED CAPITAL COMMITTEES Ventures Africa Ltd* 107,000,000 50.55% The Board is in the process of establishing the following com- mi(cid:425) ees: Consilium Investment Man- agement LLC 16,262,798 7.68% Russell Investments Ltd 14,252,663 Roald Sommersel 7,168,458 6.73% 3.39% * Ventures Africa Limited is beneﬁ cially owned by Samir Shasha, director and CEO of the Company. Directors Biographical details of all Directors as well dates of appointment and resigna(cid:415) on are set out on page 8. AUDIT COMMITTEE The role of the Audit Commi(cid:425) ee will be to oversee the nature and scope of the annual audit, management’s repor(cid:415) ng on internal accoun(cid:415) ng standards and prac(cid:415) ces, ﬁ nancial informa(cid:415) on and accoun(cid:415) ng systems and procedures and the Company’s ﬁ nancial repor(cid:415) ng statements. The Audit Commi(cid:425) ee’s primary objec(cid:415) ves will include assis(cid:415) ng the Directors in mee(cid:415) ng their responsibili(cid:415) es in respect of the Company’s con(cid:415) nuous ﬁ nancial disclosure obliga(cid:415) ons and overseeing the work of the Company’s external auditors. The Audit Commi(cid:425) ee will comprise Paul Turner (Chairman) and Dipak Pandya. REMUNERATION COMMITTEE The Remunera(cid:415) on Commi(cid:425) ee will make recommenda(cid:415) ons to the Board on the remunera(cid:415) on policy that applies to Execu(cid:415) ve Directors and senior employees. The Remunera(cid:415) on Commi(cid:425) ee will comprise Dipak Pandya (Chairman) and Paul Turner. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 12 Directors’ share interests The Directors’ who were in oﬃ ce at the beginning and end of the ﬁ nancial year, had the following interests in the shares of the Company: DIRECTORS AT 31.08.15 NO. OF SHARES AT 31.08.14 NO. OF SHARES Samir Shasha* 107,000,000 Josephine Watenphul Dipak Pandya Paul Turner Ian Perkins** n/a n/a n/a Nil Nil Nil Nil 880,250 880,250 Edzo Wisman** 1,428,705 1,428,705 Total 109,308,955 2,308,955 * Indirectly through Ventures Africa Limited. **Edzo Wisman and Ian Perkins resigned on 13 July 2015 and 14 July 2015 re- spec(cid:415) vely. Directors’ Report For the year ended 31 August 2015 and dona(cid:415) ons. Insurance The Company has Directors’ and Oﬃ cers’ liability insurance cover in place for Group Directors. Share price performance Between 1 September 2014 and 31 August 2015 the share price varied between a high of 5.38p and a low of 0.60p. At 31 August 2015 the closing market price of the shares at close of business was 0.825p (2014: 5.38p). On 26 February 2016 the closing price of the shares was 0.40p. Auditors A resolu(cid:415) on to re-appoint Baker Tilly Isle of Man LLC and to authorise the Directors to ﬁ x their remunera(cid:415) on will be proposed at the Annual General Mee(cid:415) ng. The Directors who held oﬃ ce at the date of approval of this Directors’ Report conﬁ rm that, so far as they are each aware, there is no relevant audit informa(cid:415) on 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 informa(cid:415) on and to establish that the Company’s Auditors are aware of that informa(cid:415) on. Share op(cid:415) ons held by the Directors are detailed in note 24 of the ﬁ nancial statements Annual General Meeting The no(cid:415) ce of mee(cid:415) ng, together with a form of proxy, will be sent out separately at a later date. ON BEHALF OF THE BOARD. PAUL TURNER CHAIRMAN 29 FEBRUARY 2016 All of the above interests are recorded in the Company’s Register of Directors’ Share and Debenture Interests. No Director has a beneﬁ cial interest in the shares or debentures of any of the Company’s subsidiary undertakings. Anti-Corruption and Bribery Policy The Company has in place an An(cid:415) -Corrup(cid:415) on 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 associated with the Group with applicable legal and ethical obliga(cid:415) ons. The Company’s Chief Execu(cid:415) ve Oﬃ cer has primary and day-to-day responsibility for implementa(cid:415) on of the policy. Management at all levels of the Group are responsible for ensuring those repor(cid:415) ng to them are made aware of, and understand, the policy. The policy gives guidance on risk iden(cid:415) ﬁ ca(cid:415) on and the procedures to follow where a risk is iden(cid:415) ﬁ ed, together with clear guidelines on gi(cid:332) s, entertainment CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 13 Report of the Independent Auditors For the year ended 31 August 2015 Report of the Independent Auditors, Baker Tilly Isle of Man LLC, to the members of Cambria Africa Plc We have audited the Group and Parent Company ﬁ nancial Statements (the “ﬁ nancial statements”) of Cambria Africa Plc for the year ended 31 August 2015 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 Posi(cid:415) on, the Consolidated Statement of Cash Flows and the related notes. The ﬁ nancial repor(cid:415) ng framework that has been applied in their prepara(cid:415) on is applicable law and Interna(cid:415) onal Financial Repor(cid:415) ng Standards (IFRSs) as adopted by the European Union. 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 ma(cid:425) ers we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permi(cid:425) ed 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. Respective responsibilities of Directors and Auditor As explained more fully in the Directors’ Responsibili(cid:415) es Statement set out on page 9, the Directors are responsible for the prepa- ra(cid:415) on of ﬁ nancial statements that give a true and fair view. Our responsibility is to audit, and express an opinion on, the ﬁ nancial statements in accordance with applicable law and Interna(cid:415) onal Standards on Audi(cid:415) ng (UK and Ireland). Those standards require us to comply with the Audi(cid:415) ng Prac(cid:415) ces Board’s Ethical Standards for Auditors. Scope of the audit of the (cid:976)inancial statements An audit involves obtaining evidence about the amounts and disclosures in the ﬁ nancial statements suﬃ cient to give reasonable assurance that the ﬁ nancial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accoun(cid:415) ng policies are appropriate to the Group’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of signiﬁ cant accoun(cid:415) ng es(cid:415) mates made by the Directors; and the overall presenta- (cid:415) on of the ﬁ nancial statements. In addi(cid:415) on, we read all the ﬁ nancial and non-ﬁ nancial informa(cid:415) on in the Directors Report to iden- (cid:415) fy material inconsistencies with the audited ﬁ nancial statements. If we become aware of any apparent material misstatements or inconsistencies we consider implica(cid:415) ons for our report. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 14 Report of the Independent Auditors, Baker Tilly Isle of Man LLC, to the members of Cambria Africa Plc (continued) Opinion on the (cid:976)inancial statements In our opinion the ﬁ nancial statements: • • give a true and fair view of the state of the Group and Parent Company’s aﬀ airs as at 31 August 2015 and of the Group’s proﬁ t for the year then ended; and have been properly prepared in accordance with IFRS as adopted by the European Union. Emphasis of matter In forming our opinion on the ﬁ nancial statements, which is not modiﬁ ed, we have considered the adequacy of the disclosure made in note 2 to the ﬁ nancial statements concerning the Group’s ability to con(cid:415) nue as a going concern. The group, which at 31 August 2015 has net current liabili(cid:415) es of $2.35 million, has signiﬁ cant external borrowings which mature during 2016. $5.08m is due for repayment in April 2016 and a further $2.00m is due for repayment in July 2016. Although the directors are taking steps to reﬁ nance these loans , these circumstances, along with other ma(cid:425) ers set out in note 2 to the ﬁ nancial statements, indicate the existence of a material uncertainty which may cast signiﬁ cant doubt about the Group’s ability to con(cid:415) nue as a going concern. The ﬁ nancial statements do not include the adjustments that would result if the Group was unable to con(cid:415) nue as a going concern. Baker Tilly Isle of Man LLC Chartered Accountants 2a Lord Street Douglas Isle of Man IM99 1HP 29 February 2016 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 15 Consolidated Income Statement For the year ended 31 August 2015 Revenue Cost of sales Gross proﬁ t Opera(cid:415) ng costs Other income Net proceeds on lil(cid:415) ga(cid:415) on se(cid:425) lement Net proﬁ ts/(losses) on disposal of investments and impairment of assets Opera(cid:415) ng proﬁ t/(loss) Finance income Finance costs Net ﬁ nance costs Proﬁ t/(loss) before tax Income tax NOTE 5 6 6 8 8 9 Proﬁ t/(loss) for the period from con(cid:415) nuing opera(cid:415) ons Discon(cid:415) nued opera(cid:415) ons Loss for the year from discon(cid:415) nued opera(cid:415) ons, net of tax 5/10 Proﬁ t/(loss) for the year A(cid:425) ributable to: Owners of the company Non-controlling Interests Proﬁ t/(loss) for the year Earnings per share - all opera(cid:415) ons Basic and diluted proﬁ t/(loss) per share (Cents) Earnings per share-con(cid:415) nuing opera(cid:415) ons Basic and diluted proﬁ t/(loss) per share (Cents) 11 11 2015 TOTAL US$’000 10,306 (4,670) 5,636 (7,766) 7 3,474 199 1,550 10 (740) (730) 820 (271) 549 (94) 455 164 291 455 0.1c 0.2c 2014 TOTAL US$’000 9,405 (4,388) 5,017 (8,513) 17 - (774) (4,253) 21 (1,128) (1,107) (5,360) (319) (5,679) (10,166) (15,845) (16,138) 293 (15,845) (19.5c) (7.2c) The notes on pages 22 to 65 are an integral part of these consolidated ﬁ nancial statements. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 16 Consolidated Statement of Comprehensive Income For the year ended 31 August 2015 Proﬁ t/(loss) for the year Other comprehensive income Foreign currency transla(cid:415) on diﬀ erences for overseas opera(cid:415) ons Total comprehensive proﬁ t/(loss) for the year A(cid:425) ributable to: Owners of the company Non-controlling interest Total comprehensive proﬁ t/(loss) for the year 2015 US$’000 455 97 552 261 291 552 2014 US$’000 (15,845) 12 (15,833) (16,126) 293 (15,833) The notes on pages 22 to 65 are an integral part of these consolidated ﬁ nancial statements CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 17 Consolidated Statement of Changes in Equity For the year ended 31 August 2015 ATTRIBUTABLE TO OWNERS OF THE COMPANY SHARE CAPITAL SHARE PREMIUM RE(cid:883) VALUA(cid:883) TION RESERVE FOREIGN EXCHANGE RESERVE SHARE BASED PAYMENT RESERVE RETAINED EARNINGS NDR TOTAL NON(cid:883) CON(cid:883) TROLLING INTERESTS TOTAL EQUITY US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 Balance at 31 August 2014 18 82,487 438 (10,629) 86 (75,890) 2,241 (1,249) Proﬁ t for the year Foreign currency transla(cid:415) on diﬀ erences for overseas opera(cid:415) ons Total comprehensive proﬁ t for the year Contribu(cid:415) ons by and dis- tribu(cid:415) ons to owners of the Company recognised directly in equity Disposal of subsidiary Dividends paid Issue of ordinary shares Total contribu(cid:415) ons by and distribu(cid:415) ons to owners of the Company Balance at 31 August 2015 - - - - - 15 15 34 - - - - - 1,463 1,463 - - - - - - - - 97 97 - - - - - - - - - - - 164 - 164 - - - 9 291 - (1,240) 455 97 164 97 261 291 552 341 (341) - - - - - - 1,479 - (235) - - (235) 1,479 341 (341) 1,479 (235) 1,244 83,950 438 (10,532) 86 (75,385) 1,900 491 65 556 The notes on pages 22 to 65 are an integral part of these consolidated ﬁ nancial statements CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 18 Consolidated Statement of Changes in Equity For the year ended 31 August 2015 ATTRIBUTABLE TO OWNERS OF THE COMPANY SHARE CAPITAL SHARE PREMIUM RE(cid:883) VALUA(cid:883) TION RESERVE FOREIGN EXCHANGE RESERVE SHARE BASED PAYMENT RESERVE RETAINED EARNINGS NDR TOTAL NON(cid:883) CON(cid:883) TROLLING INTERESTS TOTAL EQUITY US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 Balance at 31 August 2013 12 78,798 77 (10,641) 86 (59,752) 2,241 10,821 Loss for the year Deferred tax adjustment Foreign currency transla(cid:415) on diﬀ erences for overseas opera(cid:415) ons Total comprehensive loss for the year Contribu(cid:415) ons by and dis- tribu(cid:415) ons to owners of the Company recognised directly in equity Deferred tax adjustment Dividends paid Issue of ordinary shares Share based payment release Total contribu(cid:415) ons by and distribu(cid:415) ons to owners of the Company - - - - - - 6 - 6 - - - - - - 3,689 - - - - - 361 - - - 3,689 361 - - 12 12 - - - - - - - - - - - - - - (16,138) - - (16,138) - - - - - - - - - - - - - - (16,138) - 12 (80) 293 10,741 (15,845) - - - 12 (16,126) 293 (15,833) 361 - 3,695 - - (204) - - 361 (204) 3,695 - 4,056 (204) 3,852 Balance at 31 August 2014 18 82,487 438 (10,629) 86 (75,890) 2,241 (1,249) 9 (1,240) The notes on pages 22 to 65 are an integral part of these consolidated ﬁ nancial statements CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 19 Consolidated and Company Statement of Financial Position As at 31 August 2015 NOTES GROUP 2015 COMPANY 2015 GROUP 2014 COMPANY 2014 US$’000 US$’000 US$’000 US$’000 Assets Property, plant and equipment Biological assets Goodwill Intangible assets Investment in subsidiaries Total non-current assets Inventories Financial assets at fair value through proﬁ t 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 Revalua(cid:415) on reserve Share based payment reserve Foreign exchange reserve Non distributable reserves Retained losses Equity a(cid:425) ributable to owners of company Non-controlling interests Total equity Liabili(cid:415) es Loans and borrowing Provisions Deferred tax liabili(cid:415) es Total non-current liabili(cid:415) es Bank overdra(cid:332) Current tax liabili(cid:415) es Loans and borrowings Trade and other payables Liabili(cid:415) es held for sale Total current liabili(cid:415) es Total liabili(cid:415) es Total equity and liabili(cid:415) es 12 13 14 15 17 18 19 20 21 5 22,23 22,23 22,23 22,23,24 22 22 25 26 27 21 29 25,28 29 5 2,594 - 717 2 - 3,313 761 50 5,993 645 - 7,449 10,762 34 83,950 438 86 (10,532) 1,900 (75,385) 491 65 556 45 183 177 405 - 200 6,877 2,724 - 9,801 10,206 10,762 - - - - - - - - 8,383 50 - 8,433 8,433 34 83,950 - 86 (13,186) - (70,270) 614 - 614 - - - - - - 4,812 3,007 - 7,819 7,819 8,433 2,705 - 717 14 - 3,436 1,385 66 1,408 405 6,469 9,733 13,169 18 82,487 438 86 (10,629) 2,241 (75,890) (1,249) 9 (1,240) 6,745 182 178 7,105 - 269 348 2,865 3,822 7,304 14,409 13,169 18 - - - - 18 - - 12,378 38 - 12,416 12,434 18 82,487 - 86 (13,186) - (65,055) 4,350 - 4,350 4,685 - - 4,685 - - 249 3,150 - 3,399 8,084 12,434 These ﬁ nancial statements were approved by the Board of Directors and authorised for issue on 29 February 2016. They were signed on their behalf by: MR SAMIR SHASHA EXECUTIVE DIRECTOR The notes on pages 22 to 65 are an integral part of these consolidated ﬁ nancial statements. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 20 Cash used in opera(cid:415) ons Taxa(cid:415) on paid Cash used in opera(cid:415) ng ac(cid:415) vi(cid:415) es Cash ﬂ ows from inves(cid:415) ng ac(cid:415) vi(cid:415) es Proceeds on disposal of property, plant and equipment Purchase of property, plant and equipment Proceeds on disposal of subsidiary Other inves(cid:415) ng ac(cid:415) vi(cid:415) es Interest received Net cash from inves(cid:415) ng ac(cid:415) vi(cid:415) es Cash ﬂ ows from ﬁ nancing ac(cid:415) vi(cid:415) es Dividends paid to non-controlling interests Interest paid Proceeds from issue of share capital Loans repaid Proceeds from drawdoan of loans Net cash generated by ﬁ nancing ac(cid:415) vi(cid:415) es Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at 1 September Foreign exchange Net cash and cash equivalents at 31 August Cash and cash equivalents as above comprise the following: Cash and cash equivalents Bank overdra(cid:332) Net cash and cash equivalents at 31 August Consolidated Statement of Cash Flows For the year ended 31 August 2015 NOTES GROUP 2015 GROUP 2014 30 US$’000 (2,590) (342) (2,932) 126 (88) 2,445 - 10 2,493 (235) (363) 1,479 (595) 62 348 (91) 639 97 645 645 - 645 25/28 25/28 21 21 US$’000 (3,647) (287) (3,934) 673 (169) - (349) 21 176 (204) (1,174) 3,694 (187) 530 2,659 (1,099) 1,738 - 639 639 - 639 The notes on pages 22 to 65 are an integral part of these consolidated ﬁ nancial statements. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 21 Notes to the Financial Statements For the year ended 31 August 2015 1. Reporting entity Cambria Africa Plc (the “Company”) is a public limited compa- ny listed on the Alterna(cid:415) ve Investment Market (AIM) and in- corporated in the Isle of Man under the Companies Act 2006. The consolidated ﬁ nancial statements of the Group for the year ended 31 August 2015 comprise the Company and its subsid- iaries (together referred to as the “Group” and individually as “Group en(cid:415) (cid:415) es”). IAS 39 Nova(cid:415) on of Deriva(cid:415) ves and Con(cid:415) nua(cid:415) on of Hedge Accoun(cid:415) ng 1 January 2014 NEW AND AMENDED STANDARDS EFFECTIVE FOR FUTURE PERIODS The following standards and interpreta(cid:415) ons were in issue but not yet eﬀ ec(cid:415) ve and were not applied in these ﬁ nancial state- ments. The majority shareholder is Ventures Africa Limited and the ul- (cid:415) mate controlling en(cid:415) ty is S Shasha and Associates. STANDARD/INTERPRETATION EU EFFECTIVE DATE The ﬁ nancial statements were authorised for issue by the Direc- tors on 29 February 2016. Duverse IFRS Annual improvements IFRS 2010 - 2012 1 February 2015 2. Basis of preparation STATEMENT OF COMPLIANCE Diverse IFRS Annual improvements IFRS 2011 - 2013 1 January 2015 Diverse IFRS Annual improvements IFRS 2012 - 2014 1 January 2016 The consolidated ﬁ nancial statements have been prepared in accordance with Interna(cid:415) onal Financial Repor(cid:415) ng Standards (IFRSs) as adopted by the E.U. On publishing the Company statement of ﬁ nancial posi(cid:415) on here together with the Group ﬁ nancial 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 ﬁ nancial statements. IFRS 14 IFRS 15 IAS 19 IFRS 11 STANDARDS ADOPTED IN THE CURRENT PERIOD IAS 16 & 38 STANDARD/INTERPRETATION EU EFFECTIVE DATE IAS 16 & 41 IFRS 10 Consolidated Financial Statements* 1 January 2014 IFRS 11 Joint Arrangements* 1 January 2014 IFRS 12 Disclosure of Interests in Other En(cid:415) (cid:415) es* 1 January 2014 IAS 27 Separate Financial Statements 1 January 2014 IAS 27 IAS 1 Regulatory Deferral Accounts 1 January 2016 Revenue with Contracts from Customers 1 January 2018 Deﬁ ned Beneﬁ t Plans: Employee Contribu(cid:415) ons 1 February 2015 Accoun(cid:415) ng for Acquisi(cid:415) ons of Interests in Joint Opera(cid:415) ons (Amendments) Clariﬁ ca(cid:415) on of Acceptable Methods of Deprecia(cid:415) on and Amor(cid:415) sa(cid:415) on (Amendments) 1 January 2016 1 January 2016 Agriculture: Bearer Plants (Amendments) 1 January 2016 Equity Method in Separate Financial Statements (Amend- ments) 1 January 2016 Disclosure ini(cid:415) a(cid:415) ve (Amend- ments) 1 January 2016 IAS 28 Inv. in Associates and Joint Ventures 1 January 2014 BASIS OF MEASUREMENT * Transi(cid:415) on Guidance 1 January 2014 IAS 32 Oﬀ se(cid:427) ng Financial Assets and Liabili(cid:415) es 1 January 2014 IFRS 10,12 & IAS 27 Investment En(cid:415) (cid:415) es 1 January 2014 IAS 36 Recoverable Amount Disclosures for Non-ﬁ nancial Assets 1 January 2014 The consolidated ﬁ nancial statements have been prepared on the historical cost basis except for the following: • biological assets measured at fair value less cost to sell • • land and buildings measured at revalued amounts. share-based payments measured at fair value. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 22 Notes to the Financial Statements For the year ended 31 August 2015 2. Basis of preparation (continued) GOING CONCERN FUNCTIONAL AND PRESENTATION CURRENCY The consolidated ﬁ nancial statements are presented in United States Dollars, which, with eﬀ ect from 1 September 2011, is the Company’s func(cid:415) onal currency. The change in presenta(cid:415) onal currency made at 1 September 2011 was to be(cid:425) er reﬂ ect the Group’s business ac(cid:415) vi(cid:415) es since cash ﬂ ows and economic returns are principally denominated in United States Dollars. USE OF ESTIMATES AND JUDGEMENTS The prepara(cid:415) on of ﬁ nancial statements in conformity with IFRSs requires management to make judgements, es(cid:415) mates and assump(cid:415) ons that aﬀ ect the applica(cid:415) on of policies and reported amounts of assets and liabili(cid:415) es, income and expenses. The es(cid:415) mates and associated assump(cid:415) ons are based on historical 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 liabili(cid:415) es that are not readily apparent from other sources. Actual results may diﬀ er from these es(cid:415) mates. The es(cid:415) mates and underlying assump(cid:415) ons are reviewed on an ongoing basis. Revisions to accoun(cid:415) ng es(cid:415) mates are recognised in the period in which the es(cid:415) mate is revised if the revision aﬀ ects only that period, or in the period of the revision and future periods if the revision aﬀ ects both current and future periods. Informa(cid:415) on about cri(cid:415) cal judgements in applying accoun(cid:415) ng policies and assump(cid:415) ons and es(cid:415) ma(cid:415) on uncertain(cid:415) es that have the most signiﬁ cant eﬀ ect on the amounts recognised in the consolidated ﬁ nancial statements is included in the follow- ing notes: • Note 13 – Biological assets • Note 14 – Goodwill • Note 12 – Property, plant and equipment • Note 26 – Provisions By their nature, these es(cid:415) mates and assump(cid:415) ons are subject to an inherent measurement of uncertainty and the eﬀ ect on the Group’s ﬁ nancial statements of changes in es(cid:415) mates in future periods could be signiﬁ cant. The Group’s business ac(cid:415) vi(cid:415) es and ﬁ nancial performance are set out in the Chief Execu(cid:415) ve’s Review on pages 3 to 7. In addi- (cid:415) on, note 31 to the ﬁ nancial statements includes the Group’s objec(cid:415) ves, policies and processes for managing its capital; its ﬁ nancial risk management objec(cid:415) ves; details of its ﬁ nancial instruments and its exposure to credit and liquidity risk. The Board has considered the cash ﬂ ow forecasts for the en- suing 12 months including the maturity proﬁ le of its contrac- tual debt obliga(cid:415) ons. The Lonrho se(cid:425) lement has improved the Group’s cash posi(cid:415) on and the Board is conﬁ dent that it will have access to suﬃ cient ﬁ nancial resources for its immediate needs and will be able to reﬁ nance its contractual debt obliga(cid:415) ons. Further relevant informa(cid:415) on is available in notes 25 and 28. A(cid:332) er making enquiries, the Directors have a reasonable ex- pecta(cid:415) on that the Company and the Group have adequate re- sources to con(cid:415) nue in opera(cid:415) onal existence for the foreseeable future. Accordingly, they con(cid:415) nue to adopt the going concern basis in preparing the annual report and ﬁ nancial statements. 3. Signi(cid:976)icant accounting policies The following accoun(cid:415) ng policies have been applied consistent- ly by the Group. (cid:525)A(cid:526) BASIS OF CONSOLIDATION The consolidated ﬁ nancial statements incorporate the ﬁ nancial statements of the Company and Group en(cid:415) (cid:415) es controlled by the Company (its subsidiaries). Control is achieved where the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to aﬀ ect those returns through its power over the investee. The ﬁ nancial state- ments of subsidiaries are included in the consolidated ﬁ nancial statements from the date that control commenced un(cid:415) l the date that control ceases. The interest of non-controlling shareholders is stated at their propor(cid:415) on of the fair values of the assets and liabili(cid:415) es rec- ognised. Subsequently, losses applicable to the non-controlling interests are allocated against their interests even if doing so causes the non-controlling interests to have a deﬁ cit balance. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 23 Notes to the Financial Statements For the year ended 31 August 2015 3. Signi(cid:976)icant accounting policies (con- tinued) (cid:525)B(cid:526) INTANGIBLE ASSETS GOODWILL (cid:525)A(cid:526) BASIS OF CONSOLIDATION (cid:525)CONTINUED(cid:526) The results of en(cid:415) (cid:415) es acquired or disposed of during the year are included in the consolidated income statement from the ef- fec(cid:415) ve date of acquisi(cid:415) on or up to the eﬀ ec(cid:415) ve date of dispos- al as appropriate. Where necessary, the ﬁ nancial statements of the subsidiaries are adjusted to conform to the Group’s ac- coun(cid:415) ng policies. All intra-group transac(cid:415) ons, balances, income and expenses are eliminated on consolida(cid:415) on. BUSINESS COMBINATIONS The acquisi(cid:415) on of subsidiaries is accounted for using the acqui- si(cid:415) on method. The cost of the acquisi(cid:415) on is measured at the aggregate of the fair values at the date of exchange of assets given, liabili(cid:415) es incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisi(cid:415) on related costs are expensed as incurred unless they relate to the cost of issuing debt or equity securi(cid:415) es. The ac- quiree’s iden(cid:415) ﬁ able assets, liabili(cid:415) es and con(cid:415) ngent liabili(cid:415) es that meet the condi(cid:415) ons for recogni(cid:415) on under IFRS 3 are rec- ognised at their fair values at the acquisi(cid:415) on date, except for non-current assets that are classiﬁ ed as held for sale in accor- dance with IFRS 5, which are recognised and measured at fair value less costs to sell. Goodwill arising on consolida(cid:415) on is recognised as an asset. Following ini(cid:415) al recogni(cid:415) on, goodwill is subject to impairment reviews, at least annually, and measured at cost less accumulat- ed impairment losses. The recoverable amount is es(cid:415) mated at each repor(cid:415) ng 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 genera(cid:415) ng units are allocated ﬁ rst to reduce the carrying amount of any goodwill allocated to cash-genera(cid:415) ng 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 a(cid:425) ributable amount of goodwill is included in the determina(cid:415) on of the gain or loss on disposal. OTHER INTANGIBLE ASSETS Other intangible assets are measured ini(cid:415) ally at cost and are amor(cid:415) sed on a straight-line basis over their es(cid:415) mated useful lives. The carrying amount is reduced by any provision for im- pairment where necessary. Goodwill arising on acquisi(cid:415) on is recognised as an asset at the date that control is assumed (the acquisi(cid:415) on date) and ini(cid:415) al- ly measured at cost, being the excess of the cost of the busi- ness combina(cid:415) on over the Group’s interest in the fair value of the iden(cid:415) ﬁ able assets, liabili(cid:415) es and con(cid:415) ngent liabili(cid:415) es rec- ognised. On a business combina(cid:415) on, as well as recording separable in- tangible assets already recognised in the statement of ﬁ nancial posi(cid:415) on of the acquired en(cid:415) ty at their fair value, iden(cid:415) ﬁ able intangible assets that are separable or arise from contractual or other legal rights are also included in the acquisi(cid:415) on statement of ﬁ nancial posi(cid:415) on at fair value. If, a(cid:332) er reassessment, the Group’s interest in the net fair value of the acquiree’s iden(cid:415) ﬁ able assets, liabili(cid:415) es and con(cid:415) ngent liabili(cid:415) es exceeds the cost of the business combina(cid:415) on, the ex- cess is recognised immediately in the income statement. Amor(cid:415) sa(cid:415) on of intangible assets, disclosed under opera(cid:415) ng costs and in note 6, is charged over their useful economic life, as follows:- The interest of non-controlling shareholders in the acquiree is ini(cid:415) ally measured at the non-controlling interests’ propor(cid:415) on of the net fair value of the assets, liabili(cid:415) es and con(cid:415) ngent lia- bili(cid:415) es recognised. Licences Brand name 5-6 years 7 years (cid:525)C(cid:526) FOREIGN CURRENCIES The individual ﬁ nancial statements of each Group en(cid:415) ty are presented in the currency of the primary economic environ- ment in which it operates (its func(cid:415) onal currency). CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 24 Notes to the Financial Statements For the year ended 31 August 2015 3. Signi(cid:976)icant accounting policies (con- tinued) comprehensive income and are transferred to the Group’s for- eign currency transla(cid:415) on reserve within equity. (cid:525)C(cid:526) FOREIGN CURRENCIES (cid:525)CONTINUED(cid:526) (cid:525)D(cid:526) TAXATION For the purpose of the consolidated ﬁ nancial statements, the results and ﬁ nancial posi(cid:415) on of each of the Group en(cid:415) (cid:415) es are expressed in United States Dollars, which is the func(cid:415) onal cur- rency of the Company, and the presenta(cid:415) onal currency for the consolidated ﬁ nancial statements. In preparing the ﬁ nancial statements of the individual Group en(cid:415) (cid:415) es, transac(cid:415) ons denominated in foreign currencies are translated into the respec(cid:415) ve func(cid:415) onal currency of the Group en(cid:415) (cid:415) es using the exchange rates prevailing at the dates of transac(cid:415) ons. Non-monetary assets and liabili(cid:415) es are translated at the histor- ic rate. Monetary assets and liabili(cid:415) es denominated in foreign currencies are translated into the func(cid:415) onal currency at the rates of exchange ruling at the repor(cid:415) ng date. Non-monetary assets and liabili(cid:415) es denominated in foreign currencies that are measured at fair value are retranslated to the func(cid:415) onal cur- rency at the exchange rate at the date that the fair value was determined. Exchange diﬀ erences arising on the se(cid:425) lement of monetary items, and on the retransla(cid:415) on of monetary items, are included in the income statement for the year, as either ﬁ nance income or ﬁ nance costs depending on whether foreign currency move- ments are in a net gain or net loss posi(cid:415) on. Exchange diﬀ erences arising on the retransla(cid:415) on of non-mone- tary items earned at fair value are included within the income statement for the period except for diﬀ erences arising on the retransla(cid:415) on 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 presen(cid:415) ng consolidated ﬁ nancial state- ments, the assets and liabili(cid:415) es of the Group’s foreign opera- (cid:415) ons 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 ﬂ uctuate so as to have a material impact on the ﬁ nancial statements during that period, in which case the exchange rates at the date of transac(cid:415) ons are used. Exchange diﬀ erences arising, if any, are recognised in other The tax expense represents the sum of current and deferred tax. CURRENT TAXATION Current tax is based on taxable proﬁ t for the period for the Group. Taxable proﬁ t diﬀ ers from net proﬁ t in the income state- ment because it excludes items of income or expense that are taxable or deduc(cid:415) ble in other years and it further excludes items that are never taxable or deduc(cid:415) ble. The Group’s liability for current tax is calculated using tax rates that have been en- acted or substan(cid:415) vely enacted by the repor(cid:415) ng date. DEFERRED TAXATION Deferred tax is the tax expected to be payable or recoverable on diﬀ erences between the carrying amounts of assets and liabili- (cid:415) es in the ﬁ nancial statements and the corresponding tax bases used in the computa(cid:415) on of taxable proﬁ t, and is accounted for using the balance sheet liability method. Deferred tax liabili(cid:415) es are generally recognised for all taxable temporary diﬀ erences and deferred tax assets are recognised to the extent that it is probable that taxable proﬁ ts will be available against which deduc(cid:415) ble temporary diﬀ erences can be u(cid:415) lised. Such assets and liabili(cid:415) es are not recognised if the temporary diﬀ erence arises from goodwill or from the ini(cid:415) al recogni(cid:415) on (other than in a business combina(cid:415) on) of other assets and liabili(cid:415) es in a transac(cid:415) on that aﬀ ects neither the tax proﬁ t nor the accoun(cid:415) ng proﬁ t. Deferred tax liabili(cid:415) es are recognised for taxable tempo- rary diﬀ erences arising on the investments in subsidiaries and associates, except where the Group is able to control the re- versal of the temporary diﬀ erence and it is probable that the temporary diﬀ erence will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each repor(cid:415) ng date and reduced to the extent that it is no longer probable that suﬃ cient taxable proﬁ ts 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 se(cid:425) led 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. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 25 Notes to the Financial Statements For the year ended 31 August 2015 3. Signi(cid:976)icant accounting policies (con- tinued) (cid:525)D(cid:526) TAXATION (cid:525)CONTINUED(cid:526) Deferred tax assets and liabili(cid:415) es are oﬀ set when there is a legally enforceable right to set oﬀ current tax assets against current tax liabili(cid:415) es, when they relate to income taxes levied by the same taxa(cid:415) on authority and the Group intends to se(cid:425) le its current tax assets and liabili(cid:415) es on a net basis. (cid:525)E(cid:526) OTHER INVESTMENTS Other asset investments are stated at fair value, adjusted for impairment losses. (cid:525)F(cid:526) PROPERTY, PLANT AND EQUIPMENT Land and buildings are stated at their revalued amounts, being the fair value at the date of revalua(cid:415) on, less any impairment losses. Revalua(cid:415) ons are performed with suﬃ cient regularity such that the carrying amount does not diﬀ er materially from that which would be determined using fair values at the report- ing date. Any revalua(cid:415) on increase arising on the revalua(cid:415) on of such as- sets is credited to the revalua(cid:415) on reserve, except to the extent that it reverses a revalua(cid:415) on 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 revalua(cid:415) on of such asset is charged as an expense to the extent that it exceeds the balance, if any, held in the revalua(cid:415) on reserve rela(cid:415) ng to a previous revalua(cid:415) on of that asset. Depre- cia(cid:415) on on revalued assets is charged to the income statement. On subsequent sale or re(cid:415) rement of a revalued asset, the at- tributable revalua(cid:415) on surplus remaining is transferred directly to retained earnings. Deprecia(cid:415) on is charged straight line so as to write oﬀ the cost or valua(cid:415) on of assets, other than land and buildings, over their es(cid:415) mated useful lives. The annual deprecia(cid:415) on rates used for this purpose are: Freehold buildings Plant and machinery Motor vehicles 2% 10% 15%-25% Fixtures and ﬁ (cid:427) ngs 15%-25% The gain or loss arising on the disposal of an asset is determined as the diﬀ erence between the sales proceeds and the carrying amount of the asset and is recognised in the income statement for the year. Assets held under ﬁ nance 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 deprecia(cid:415) on is provid- ed on land and buildings. Property, plant and equipment iden(cid:415) ﬁ ed for disposal are re- classiﬁ ed as assets held for resale. (cid:525)G(cid:526) BIOLOGICAL ASSETS Biological assets which consist of living animals (game) are mea- sured on ini(cid:415) al recogni(cid:415) on and at subsequent repor(cid:415) ng dates at fair value less es(cid:415) mated 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. (cid:525)H(cid:526) IMPAIRMENT OF ASSETS EXCLUDING GOODWILL At each repor(cid:415) ng date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indica(cid:415) on that those assets have suﬀ ered an impairment loss. If any such indica(cid:415) on exists, the recoverable amount of the asset is es(cid:415) mated in order to determine the extent of any impairment loss. Where the asset does not generate cash ﬂ ows that are independent from other assets, the Group es(cid:415) mates the recoverable amount of the cash-genera(cid:415) ng 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 es(cid:415) mated future cash ﬂ ows are discounted to their present value using a pre-tax discount rate that reﬂ ects current market assessments of the (cid:415) me value and the risks speciﬁ c to the as- set for which the es(cid:415) mates of future cash ﬂ ows have not been adjusted. If the recoverable amount of an asset (or cash-genera(cid:415) ng unit) is es(cid:415) mated to be less than its carrying amount, the carrying amount of the asset (or cash-genera(cid:415) ng 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 revalua(cid:415) on decrease. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 26 3. Signi(cid:976)icant accounting policies (con- tinued) (cid:525)H(cid:526) IMPAIRMENT OF ASSETS EXCLUDING GOODWILL (cid:525)CONTINUED(cid:526) Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-genera(cid:415) ng unit) is increased to the revised es(cid:415) mate 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-genera(cid:415) ng 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 revalua(cid:415) on increase. (cid:525)I(cid:526) FINANCIAL INSTRUMENTS Non-deriva(cid:415) ve ﬁ nancial instruments comprise investments in equity, trade and other receivables, cash and cash equivalents, loans and borrowings and trade and other payables. Financial assets and ﬁ nancial liabili(cid:415) es are recognised in the Group’s statement of ﬁ nancial posi(cid:415) on when the Group becomes a par- ty to the contractual provisions of the instrument. Notes to the Financial Statements For the year ended 31 August 2015 FINANCIAL LIABILITIES Financial liabili(cid:415) es are classiﬁ ed according to the substance of the contractual arrangements entered into. CAPITAL MANAGEMENT The new Board’s objec(cid:415) ve, following the poor results of the last few years, is to restore and rebuild the group’s capital base to maintain investor, creditor and market conﬁ dence and to sus- tain future development of the business. BANK BORROWINGS Interest bearing bank loans and overdra(cid:332) s are recorded at the proceeds received, net of direct issue costs. Finance charges, in- cluding premiums payable on se(cid:425) lement or redemp(cid:415) on and di- rect issue costs, are accounted for on an amor(cid:415) sed cost basis to the income statement using the eﬀ ec(cid:415) ve interest method and are added to the carrying amount of the instrument to the ex- tent that they are not se(cid:425) led 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. CASH AND CASH EQUIVALENTS (cid:525)J(cid:526) INVENTORIES Cash and cash equivalents comprise cash in hand and demand deposits and other short term highly liquid investments that are readily conver(cid:415) ble to a known amount of cash and are sub- ject to an insigniﬁ cant risk of changes in value. Bank overdra(cid:332) s 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 ﬂ ows. Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and where applicable di- rect expenditure and a(cid:425) ributable overheads that have been in- curred in bringing the inventories to their present loca(cid:415) on and condi(cid:415) on. Net realisable value represents the es(cid:415) mated selling price less all es(cid:415) mated costs of comple(cid:415) on and costs to be in- curred in marke(cid:415) ng, selling and distribu(cid:415) on. TRADE RECEIVABLES Trade receivables are ini(cid:415) ally measured at fair value and are subsequently measured at amor(cid:415) sed cost using the eﬀ ec(cid:415) ve interest rate method. Appropriate allowances for es(cid:415) mated re- coverable amounts are recognised in proﬁ t or loss when there is objec(cid:415) ve evidence the asset is impaired. TRADE PAYABLES Trade payables are ini(cid:415) ally measured at fair value and are sub- sequently measured at amor(cid:415) sed cost using the eﬀ ec(cid:415) ve inter- est rate method. (cid:525)K(cid:526) SHARE BASED PAYMENTS The Group provides beneﬁ ts to certain employees (including senior execu(cid:415) ves) of the Group in the form of share based payments, whereby employees render services in exchange for shares or rights over shares (equity-se(cid:425) led transac(cid:415) ons). The cost of these equity-se(cid:425) led transac(cid:415) ons 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 dilu(cid:415) ve eﬀ ect, if any, of outstanding op(cid:415) ons is reﬂ ected as addi(cid:415) onal share di- lu(cid:415) on in the computa(cid:415) on of earnings per share. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 27 Notes to the Financial Statements For the year ended 31 August 2015 3. Signi(cid:976)icant accounting policies (con- tinued) er and the goods have been delivered to a contractually agreed loca(cid:415) on. A sale of services is recognised when the service has been rendered. (cid:525)K(cid:526) SHARE BASED PAYMENTS (cid:525)CONTINUED(cid:526) (cid:525)P(cid:526) LEASES The grant date fair value of op(cid:415) ons granted to employees is rec- ognised as an employee expense with a corresponding increase in equity over the period the employees become uncondi(cid:415) on- ally en(cid:415) tled to the op(cid:415) ons. Leases are classiﬁ ed according to the substance of the transac- (cid:415) on. A lease that transfers substan(cid:415) ally all the risks and rewards of ownership to the lessee is classiﬁ ed as a ﬁ nance lease. All other leases are classiﬁ ed as opera(cid:415) ng leases. (cid:525)L(cid:526) INTEREST(cid:487)BEARING BORROWINGS FINANCE LEASES Interest-bearing borrowings are recognised ini(cid:415) ally at fair value less a(cid:425) ributable transac(cid:415) on costs. Subsequent to ini(cid:415) al recog- ni(cid:415) on, interest-bearing borrowings are stated at amor(cid:415) sed cost with any diﬀ erence between cost and redemp(cid:415) on value being recognised in the income statement over the period of the bor- rowings on an eﬀ ec(cid:415) ve interest basis. (cid:525)M(cid:526) 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. (cid:525)N(cid:526) PROVISIONS A provision is recognised in the statement of ﬁ nancial posi(cid:415) on when the Group has a present legal or construc(cid:415) ve obliga(cid:415) on as a result of a past event and it is probable that an ou(cid:414) low of economic beneﬁ ts will be required to se(cid:425) le the obliga(cid:415) on. If the eﬀ ect is material, provisions are determined by discoun(cid:415) ng the expected future cash ﬂ ows at a pre-tax rate that reﬂ ects current market assessments of the (cid:415) me value of money and, where appropriate, the risks speciﬁ c to the liability. (cid:525)O(cid:526) REVENUE RECOGNITION Revenue is derived from the sale of goods and services and is measured at the fair value of considera(cid:415) on received or receiv- able a(cid:332) er deduc(cid:415) ng discounts, volume rebates, value-added tax and other sales taxes. A sale of goods and services is rec- ognised when recovery of the considera(cid:415) on is probable, there is no con(cid:415) nuing management involvement with the goods and services and the amount of revenue can be measured reliably. A sale of goods is recognised when the signiﬁ cant risks and re- wards of ownership have passed to the buyer, the associated costs and possible return of goods can be es(cid:415) mated reliably. This is when (cid:415) tle and insurance risk have passed to the custom- 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 incep(cid:415) on of the lease. The corresponding liabili- ty is shown as a ﬁ nance lease obliga(cid:415) on to the lessor. Leasing repayments comprise both a capital and ﬁ nance element. The ﬁ nance element is wri(cid:425) en oﬀ to the income statement so as to produce an approximately constant periodic rate of charge on the outstanding obliga(cid:415) ons. Such assets are depreciated over the shorter of their es(cid:415) mated useful lives and the period of the lease. OPERATING LEASES Opera(cid:415) ng lease rentals are charged to the income statement on a straight line basis over the period of the lease. (cid:525)Q(cid:526) BORROWING COST Borrowing costs directly a(cid:425) ributable to the acquisi(cid:415) on, con- struc(cid:415) on or produc(cid:415) on of a qualifying asset, which are assets that necessarily take a substan(cid:415) al period of (cid:415) me to get ready for their intended use or sale, are added to the cost of those assets, un(cid:415) l such (cid:415) me as the assets are substan(cid:415) ally ready for their intended use or sale. Investment income earned on the temporary investment of speciﬁ c borrowings pending their ex- penditure on qualifying assets is deducted from the borrowing costs eligible for capitalisa(cid:415) on. All other borrowing costs are recognised in the income statement in the period in which they are incurred. (cid:525)R(cid:526) EARNINGS/(cid:525)LOSS(cid:526) PER SHARE Basic learnings/(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 av- erage number of shares in issue throughout the year, adjusted for the dilu(cid:415) ve eﬀ ect of poten(cid:415) al ordinary shares. The only po- ten(cid:415) al ordinary shares in issue are employee share op(cid:415) ons. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 28 3. Signi(cid:976)icant accounting policies (con- tinued) (cid:525)S(cid:526) SEGMENT REPORTING A segment is a dis(cid:415) nguishable component of the Group that is engaged either in providing products or services (business seg- ment), or in providing products or services within a par(cid:415) cular economic environment (geographical segment), which is sub- ject to risks and rewards that are diﬀ erent from those of other segments. (cid:525)T(cid:526) ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS ASSETS HELD FOR SALE Notes to the Financial Statements For the year ended 31 August 2015 DISCONTINUED OPERATIONS A discon(cid:415) nued opera(cid:415) on is a component of the Group’s busi- ness, the opera(cid:415) ons and cash ﬂ ows of which can be clearly dis- (cid:415) nguished from the rest of the Group and which: • • • represents a separate major line of business or geo- graphical area of opera(cid:415) ons; is part of a single co-ordinated plan to dispose of a sep- arate major line of business or geographical area of op- era(cid:415) ons; or is a subsidiary acquired exclusively with a view to re- sale. Classiﬁ ca(cid:415) on as a discon(cid:415) nued opera(cid:415) on occurs on disposal or when the opera(cid:415) on meets the criteria to be classiﬁ ed as held- for-sale, if earlier. Non-current assets, or disposal groups comprising assets and liabili(cid:415) es, are classiﬁ ed as held-for-sale or held-for-distribu- (cid:415) on if it is highly probable that they will be recovered primarily through sale or distribu(cid:415) on rather than through con(cid:415) nuing use. When an opera(cid:415) on is classiﬁ ed as a discon(cid:415) nued opera(cid:415) on, the compara(cid:415) ve statement of comprehensive income is re-present- ed as if the opera(cid:415) on had been discon(cid:415) nued from the start of the compara(cid:415) ve year. Immediately before classiﬁ ca(cid:415) on as held-for-sale or held-for-dis- tribu(cid:415) on, the assets, or components of a disposal group, are remeasured in accordance with the Group’s other accoun(cid:415) ng policies. Therea(cid:332) er, 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 ﬁ rst to goodwill, and then to the remaining assets and liabili(cid:415) es on a pro rata basis, except that no loss is allocated to inventories, ﬁ nancial assets, deferred tax assets, employee beneﬁ t assets, investment property or biological assets, which con(cid:415) nue to be measured in accordance with the Group’s other accoun(cid:415) ng policies. Impairment losses on ini(cid:415) al classiﬁ ca(cid:415) on as held-for-sale or held-for-distribu(cid:415) on and subsequent gains and losses on remeasurement are recognised in proﬁ t or loss. Gains are not recognised in excess of any cumula(cid:415) ve impairment loss. Once classiﬁ ed as held-for-sale or held-for-distribu(cid:415) on, intan- gible assets and property, plant and equipment are no longer amor(cid:415) sed or depreciated, and any equity-accounted investee is no longer equity accounted. 4. Determination of fair values A number of the Group’s accoun(cid:415) ng policies and disclosures require the determina(cid:415) on of fair value, for both ﬁ nancial and non-ﬁ nancial assets and liabili(cid:415) es. Fair values have been deter- mined for measurement and/or disclosure purposes based on the following methods. Where applicable, further informa(cid:415) on about the assump(cid:415) ons made in determining fair values is dis- closed in the notes speciﬁ c to that asset or liability. INVENTORIES The fair value of inventories acquired in a business combina(cid:415) on is determined based on the es(cid:415) mated selling price in the ordi- nary course of business less the es(cid:415) mated costs of comple(cid:415) on and sale, and a reasonable proﬁ t margin based on the eﬀ ort required to complete and sell the inventories. EQUITY AND DEBT SECURITIES The fair values of investments for equity and debt securi(cid:415) es are determined with reference to their quoted closing bid price at the measurement date. Subsequent to ini(cid:415) al recogni(cid:415) on, the fair values of held-to-maturity investments are determined for disclosure purposes only. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 29 Notes to the Financial Statements For the year ended 31 August 2015 4. Determination of fair values (contin- ued) own knowledge of the proper(cid:415) es and in par(cid:415) cular where there has been interest from third par(cid:415) es in purchasing the proper- (cid:415) es, the Directors may refer to amounts oﬀ ered for purchase. TRADE AND OTHER RECEIVABLES 5. Segment reporting The fair values of trade and other receivables are es(cid:415) mated at the present value of future cash ﬂ ows, 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 eﬀ ect of discoun(cid:415) ng is immaterial. Fair value is determined at ini(cid:415) al recogni(cid:415) on and, for disclosure purposes, at each annual repor(cid:415) ng date. PROPERTY, PLANT AND EQUIPMENT The fair value of property, plant and equipment recognised as a result of a business combina(cid:415) on is the es(cid:415) mated amount for which property could be exchanged on the acquisi(cid:415) on date be- tween a willing buyer and a willing seller in an arm’s length trans- ac(cid:415) on a(cid:332) er proper marke(cid:415) ng wherein the par(cid:415) es had each act- ed knowledgeably. The fair value of items of plant, equipment, ﬁ xtures and ﬁ (cid:427) ngs 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 reﬂ ects adjustments for physical deteriora(cid:415) on as well as func(cid:415) onal and economic obsolescence. Segment informa(cid:415) on is presented in respect of the Group’s business segments based on the Group’s management and in- ternal repor(cid:415) ng 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 ﬁ nancial informa(cid:415) on 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 a(cid:425) ributable 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 rela(cid:415) ng to Company’s head oﬃ ce. 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 GEOGRAPHICAL SEGMENTS An external independent valua(cid:415) on company having appropriate recognised professional qualiﬁ ca(cid:415) ons and recent experience in the loca(cid:415) on and category of property being valued, values the Group’s property por(cid:414) olio. The fair values are based on market values, being the es(cid:415) mated amount for which a property could be exchanged on the date of the valua(cid:415) on between a willing buyer and a willing seller in an arm’s length transac(cid:415) on a(cid:332) er proper marke(cid:415) ng wherein the par(cid:415) es had each acted knowl- edgeably. Support services and industrial chemicals operate primarily in Zimbabwe, with industrial chemicals start up opera(cid:415) ons com- mencing in the period under review in bordering countries in Sub-Saharan Africa. Separate geographical analysis is therefore not presented. BUSINESS SEGMENTS For management purposes, con(cid:415) nuing opera(cid:415) ons are organ- ised into three main business segments. In the absence of current prices in an ac(cid:415) ve market, the valua- (cid:415) ons are prepared by considering the es(cid:415) mated rental value of the property. A market yield is applied to the es(cid:415) mated rent- al value to arrive at the gross property valua(cid:415) on. When actual rents diﬀ er materially from the es(cid:415) mated rental value, adjust- ments are made to reﬂ ect actual rents. • Outsource and IT services - includes payments and busi- ness process outsourcing and payroll services • Industrial chemicals - includes the manufacture and dis- tribu(cid:415) on of industrial solvents and mining chemicals • Head oﬃ ce Due to the unique nature of a number of proper(cid:415) es within the Group’s por(cid:414) olio, external valua(cid:415) ons are obtained, however the Directors also review the valua(cid:415) ons and may determine the need for impairment for the ﬁ nancial statements given their In addi(cid:415) on, the following segments are reported separately as discon(cid:415) nued opera(cid:415) ons: Hotels; Avia(cid:415) on; IT hardware and out- source service including pharmaceu(cid:415) cal outsourcing, and com- mercial prin(cid:415) ng. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 30 Notes to the Financial Statements For the year ended 31 August 2015 5. Segment reporting (continued) CONTINUING OPERATIONS FOR THE YEAR ENDED 31 AUGUST 2015 Revenue Inter-segment revenue Revenue from external customers Cost of sales to external customers Gross proﬁ t Opera(cid:415) ng costs Other opera(cid:415) ng income Impairment of assets Deprecia(cid:415) on Amor(cid:415) sa(cid:415) on Opera(cid:415) ng proﬁ t/(loss) for the year Finance income Finance expense Income tax expense Proﬁ t/(loss) for the year EBITDA * CONTINUING OPERATIONS FOR THE YEAR ENDED 31 AUGUST 2014 Revenue Inter-segment revenue Revenue from external customers Cost of sales to external customers Gross proﬁ t Opera(cid:415) ng costs Other opera(cid:415) ng income Impairment of assets Deprecia(cid:415) on Amor(cid:415) sa(cid:415) on Opera(cid:415) ng proﬁ t/(loss) for the year Finance income Finance expense Income tax expense Loss for the year EBITDA * INDUSTRIAL CHEMICALS OUTSOURCE AND IT SERVICES HEAD OFFICE LITIGATION SETTLEMENT US$’000 US$’000 US$’000 US$’000 5,294 - 5,294 (4,402) 892 (1,852) - - (50) (1) (1,011) 1 (9) - (1,019) * (954) - - - - - (1,278) 4,752 - - - 5,021 (9) 5,012 (268) 4,744 - - - - - (3,525) (2,000) - - 18 - 7 - (146) (11) 1,069 9 (306) (269) 503 1,226 (1,982) 3,474 - (425) (2) (2,409) (2,000) - - - 3,474 3,474 INDUSTRIAL CHEMICALS OUTSOURCE AND IT SERVICES HEAD OFFICE US$’000 US$’000 US$’000 4,811 - 4,811 (3,990) 821 (1,786) 2 - (45) (1) (1,009) 9 (42) - (1,042) * (958) 4,609 (15) 4,594 (398) 4,196 - - - - - (3,176) (3,115) 14 (709) (175) (25) 125 13 (327) (317) (506) 325 - - (77) (178) (3,370) (1) (758) (2) (4,131) (3,115) TOTAL US$’000 10,315 (9) 10,306 (4,670) 5,636 (8,655) 4,759 - (178) (12) 1,550 10 (740) (271) 549 1,746 TOTAL US$’000 9,420 (15) 9,405 (4,388) 5,017 (8,077) 16 (709) (297) (204) (4,254) 21 (1,127) (319) (5,679) (3,748) * Earnings Before Interest, Taxa(cid:415) on, Deprecia(cid:415) on and Amor(cid:415) sa(cid:415) on. Adjusted for deprecia(cid:415) on included in cost of sales CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 31 HOTELS US$’000 AVIATION US$’000 PRINTING & PROPS OUTSOURCE AND IT SERVICES US$’000 US$’000 TOTAL US$’000 Notes to the Financial Statements For the year ended 31 August 2015 5. Segment reporting (continued) DISCONTINUED OPERATIONS FOR THE YEAR ENDED 31 AUGUST 2015 Revenue Inter segment revenue Revenue from external customers Cost of sales to external customers Gross proﬁ t Opera(cid:415) ng costs Other opera(cid:415) ng income (Impairment)/write-back of PPE and receivables Loss on disposal of property Deprecia(cid:415) on Amor(cid:415) sa(cid:415) on Opera(cid:415) ng loss Finance income Finance expense Income tax credit/(expense) Loss for the year EBITDA* DISCONTINUED OPERATIONS FOR THE YEAR ENDED 31 AUGUST 2014 Revenue Inter segment revenue Revenue from external customers Cost of sales to external customers Gross proﬁ t Opera(cid:415) ng costs Other opera(cid:415) ng income (Impairment)/write-back of PPE and receivables Loss on disposal of property Deprecia(cid:415) on Amor(cid:415) sa(cid:415) on Opera(cid:415) ng loss Finance income Finance expense Income tax credit/(expense) Loss for the year EBITDA* 276 - 276 (70) 206 (300) - - - - - (94) - - - (94) (94) HOTELS US$’000 2,032 4 2,036 (488) 1,548 (1,983) 64 (8,818) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - AVIATION US$’000 PRINTING & PROPS OUTSOURCE AND IT SERVICES US$’000 US$’000 - - - - - (802) - - - - - 27 - 27 - 27 (14) 29 - (357) - - (9,189) (802) (315) - (46) 223 (9,012) (371) - - - (802) (802) - - (37) (352) (344) - - - - - - - - - - - - - - - - - 276 - 276 (70) 206 (300) - - - - - (94) - - - (94) (94) TOTAL US$’000 2,059 4 2,063 (488) 1,575 (2,799) 93 (8,818) (357) - - (10,306) - (46) 186 (10,166) (1,488) * Earnings Before Interest, Taxa(cid:415) on, Deprecia(cid:415) on and Amor(cid:415) sa(cid:415) on. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 32 5. Segment reporting (continued) CONTINUING OPERATIONS FOR THE YEAR ENDED 31 AUGUST 2015 Segment assets Segment liabili(cid:415) es Capital expenditure FOR THE YEAR ENDED 31 AUGUST 2014 Segment assets Segment liabili(cid:415) es Capital expenditure ASSETS AND LIABILITIES HELD FOR SALE FOR THE YEAR ENDED 31 AUGUST 2015 Property, plant and equipment Biological assets Inventories Trade and other receivables Cash and cash equivalents Total assets held for sale Trade and other payables and ST loan Provisions Deferred tax liabili(cid:415) es Total liabili(cid:415) es held for sale Net assets of disposal groups held for sale DISPOSAL OF HOTEL GROUP Notes to the Financial Statements For the year ended 31 August 2015 INDUSTRIAL CHEMICALS OUTSOURCE AND IT SERVICES HEAD OFFICE US$’000 1,758 641 37 US$’000 US$’000 1,074 2,797 71 7,930 6,768 - INDUSTRIAL CHEMICALS OUTSOURCE AND IT SERVICES HEAD OFFICE US$’000 US$’000 US$’000 930 2,916 40 3,242 6,635 9 TOTAL US$’000 10,762 10,206 108 TOTAL US$’000 6,700 10,588 148 2,528 1,037 99 NOTE 13 HOTELS US$’000 PRINTING US$’000 TOTAL US$’000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - On 21 October 2014 the Group disposed of its 100% shareholding in Lonzim Hotel Holdings Limited (“the Leopard Rock Hotel Group”), the owner of the Leopard Rock Hotel and related en(cid:415) (cid:415) es, for a total considera(cid:415) on of $2.5 million, se(cid:425) led in cash. The net asset value of the Leopard Rock Hotel Group had been impaired in the prior year by $8.9 million to reﬂ ect its net realisable value of $2.5 million at that date. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 33 Notes to the Financial Statements For the year ended 31 August 2015 5. Segment reporting (continued) ASSETS AND LIABILITIES HELD FOR SALE (cid:525)CONTINUED(cid:526) FOR THE YEAR ENDED 31 AUGUST 2014 Property, plant and equipment Biological assets Inventories Trade and other receivables Cash and cash equivalents Total assets held for sale Trade and other payables and ST loan Provisions Deferred tax liabili(cid:415) es Total liabili(cid:415) es held for sale Net assets of disposal groups held for sale NOTE 13 HOTELS US$’000 5,973 69 125 65 55 6,287 582 127 3,078 3,787 2,500 PRINTING US$’000 - - - 3 179 182 35 - - 35 TOTAL US$’000 5,973 69 125 68 234 6,469 617 127 3,078 3,822 147 2,647 At 31 August 2014, the Group considered its Hotel and the remaining assets of its prin(cid:415) ng and property division as being held for sale. They were therefore presented within discon(cid:415) nued opera(cid:415) ons. Income and expenses of discon(cid:415) nued opera(cid:415) ons were reported separately from those of con(cid:415) nuing opera(cid:415) ons in 2014. Held for sale assets were stated at their expected net realisable value at that date. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 34 Notes to the Financial Statements For the year ended 31 August 2015 6. Group net operating costs Cost of sales Administra(cid:415) ve expenses Net opera(cid:415) ng costs Administra(cid:415) ve expenses include management related overheads for opera(cid:415) ons and head oﬃ ce. Opera(cid:415) ng costs include, inter alia: Deprecia(cid:415) on of property, plant and equipment Deprecia(cid:415) on of property plant and equipment in cost of sales Amor(cid:415) sa(cid:415) on Opera(cid:415) ng lease rentals: Land and buildings Personnel expenses Gain on investments and subsidiaries disposed of Auditors remunera(cid:415) on Fees Payable to the Company Auditors for: Current year audit of the Group’s ﬁ nancial statements Prior year audit of the Group’s ﬁ nancial statements Current year audit of the Company’s subsidiaries pursuant to legisla(cid:415) on Prior year audit of the Company’s subsidiaries pursuant to legisla(cid:415) on Total audit fees 7. Personnel expenses The aggregate remunera(cid:415) on comprised (including Execu(cid:415) ve Directors): Wages and salaries Compulsory social security contribu(cid:415) ons Total personnel expenses Of which: Remunera(cid:415) on of Group Execu(cid:415) ve Directors and Key Personnel Directors’ and key personnels’ emoluments (see note 38) The average number of employees (including Execu(cid:415) ve Directors) in con(cid:415) nuing opera(cid:415) ons was: Outsource and IT services Industrial chemicals Head Oﬃ ce Total 2015 US$’000 2014 US$’000 4,670 7,397 12,067 4,388 7,311 11,699 2015 US$’000 2014 US$’000 177 6 12 305 4,052 94 75 4 - 79 297 5 204 404 4,003 66 121 (36) - 31 116 2015 US$’000 3,908 144 4,052 2014 US$’000 3,898 105 4,003 755 1,084 2015 Number 2014 Number 60 25 2 87 62 30 6 98 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 35 Notes to the Financial Statements For the year ended 31 August 2015 8. Net (cid:976)inance (costs)/income Recognised in income statement: Bank interest receivable Loan interest receivable Finance income Bank interest payable Loan interest payable Finance costs Net ﬁ nance costs 9. Taxation Income tax recognised in the income statement Current tax expense Current period Deferred tax credit Origina(cid:415) on and reversal of temporary diﬀ erences Total income tax charge in income statement 2015 US$’000 2014 US$’000 9 1 10 - (740) (740) (730) 13 8 21 (43) (1,085) (1,128) (1,107) 2015 US$’000 2014 US$’000 273 (2) 271 333 (14) 319 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 36 9. Taxation (continued) RECONCILIATION OF EFFECTIVE TAX RATE Proﬁ t/(loss) before tax Income tax using the Zimbabwean corpora(cid:415) on tax rate 25.75% (2014: 25.75%) Net losses where no group relief is available Total income tax charge in income statement DEFERRED TAX Rela(cid:415) ng to losses in subsidiaries Total Notes to the Financial Statements For the year ended 31 August 2015 2015 US$000 2014 US$000 820 (5,360) 211 60 271 (1,380) 1,699 319 2015 US$’000 (2) (2) 2014 US$’000 (14) (14) Corpora(cid:415) on tax is calculated as 25.75% (2014: 25.75%) of the es(cid:415) mated assessable proﬁ t for the year. Taxa(cid:415) on for other jurisdic- (cid:415) ons is calculated at the rates prevailing in the respec(cid:415) ve jurisdic(cid:415) ons. Deferred tax assets are only recognised to the extent that there are available oﬀ se(cid:427) ng deferred tax liabili(cid:415) es, unless the en(cid:415) ty is reasonably assured of earning suﬃ cient future proﬁ ts to oﬀ set against any future tax liabili(cid:415) es. 10. Disposals and discontinued operations The following en(cid:415) (cid:415) es were classiﬁ ed as held for disposal in the 2015 ﬁ nancial year: • LonZim Hotels Limited and its subsidiaries The ﬁ nancial eﬀ ect of these discon(cid:415) nued opera(cid:415) ons on the proﬁ t or loss and ﬁ nancial posi(cid:415) on is shown in the opera(cid:415) ng segment disclosures in note 5. CASH FLOWS FROM/(cid:525)USED IN(cid:526) DISCONTINUED OPERATIONS Net cash used in opera(cid:415) ng ac(cid:415) vi(cid:415) es Net cash (used in)/generated by inves(cid:415) ng ac(cid:415) vi(cid:415) es Net cash (used in)/generated by ﬁ nancing ac(cid:415) vi(cid:415) es Net cash ﬂ ows for the year Cash and cash equivalents held for sale 2015 US$’000 2014 US$’000 (127) (55) (52) (234) - (386) 621 (111) 124 234 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 37 Notes to the Financial Statements For the year ended 31 August 2015 10. Disposals and discontinued operations(continued) ASSETS AND LIABILITIES OF SUBSIDIARY DISPOSED OF DURING THE YEAR: Property, plant and equipment Biological assets Inventories Trade and other receivables Total assets of disposal subsidiary Trade and other payables and ST loan Provisions Deferred tax liabili(cid:415) es Total liabili(cid:415) es of disposal subsidiary Cash and cash equivalents HOTELS US$’000 5,973 69 125 65 6,232 582 127 3,078 3,787 55 11. Earnings/(loss) per share The calcula(cid:415) on of basic and diluted earnings/(loss) per share at 31 August 2015 has been based on the proﬁ t/(loss) a(cid:425) ributable to ordinary shareholders for con(cid:415) nuing and discon(cid:415) nued opera(cid:415) ons at a weighted average number of ordinary shares outstanding during the period as detailed in the table below: LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS Proﬁ t/(loss) for the purposes of basic earnings/(loss) and dilu(cid:415) ve per share being net proﬁ t/(loss) a(cid:425) ributable to equity holders of the parent* Proﬁ t/(loss) for the purposes of basic earnings/(loss) and dilu(cid:415) ve per share being net proﬁ t/(loss) a(cid:425) ributable to equity holders of the parent 2015 EARNINGS PER SHARE US$’CENTS 2014 EARNINGS PER SHARE US$’CENTS 2015 US$’000 2014 US$’000 0.1 164 (19.5) (16,138) - con(cid:415) nuing opera(cid:415) ons - discon(cid:415) nued opera(cid:415) ons 0.2 (0.1) 258 (94) (7.2) (12.3) (5,972) (10,166) WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES Weighted average number of ordinary shares for the purposes of basic and dilu(cid:415) ve loss per share for all calcula(cid:415) ons* NOTE 2015 000’S 2014 000’S 141,518 82,707 Actual number of shares outstanding at the end of the period 23 207,920 99,155 *In the current and prior year the eﬀ ect of the share op(cid:415) ons (note 24) were an(cid:415) -dilu(cid:415) ve as the share op(cid:415) ons were, at all (cid:415) mes, priced above the trading value of the shares. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 38 12. Property, plant and equipment Notes to the Financial Statements For the year ended 31 August 2015 2015 GROUP Cost or valua(cid:415) on At 1 September 2014 Addi(cid:415) ons in year Disposals in year Balance at 31 August 2015 Accumulated deprecia(cid:415) on At 1 September 2014 Disposals in year Deprecia(cid:415) on charge for the year Balance at 31 August 2015 Carrying amounts At 31 August 2015 At 31 August 2014 2014 GROUP Cost or valua(cid:415) on At 1 September 2013 Addi(cid:415) ons in year Disposals in year Revalua(cid:415) on Other Balance at 31 August 2014 Accumulated deprecia(cid:415) on At 1 September 2013 Addi(cid:415) ons in year Disposals in year Deprecia(cid:415) on charge for the year Balance at 31 August 2014 Carrying amounts At 31 August 2014 At 31 August 2013 TOTAL US$’000 4,157 88 (284) 3,961 (1,452) 269 (184) (1,367) 2,594 2,705 TOTAL US$’000 4,120 148 (100) (4) (7) 4,157 FREEHOLD LAND & BUILDINGS US$’000 PLANT & MACHINERY US$’000 MOTOR VEHICLES US$’000 FURNITURE FIXTURES & FITTINGS US$’000 2,317 - - 2,317 (34) - - (34) 2,283 2,283 71 6 (1) 76 (41) 1 (9) (49) 27 30 782 48 (250) 580 (528) 236 (120) (412) 168 254 987 34 (33) 988 (849) 32 (55) (872) 116 138 FREEHOLD LAND & BUILDINGS US$’000 PLANT & MACHINERY US$’000 MOTOR VEHICLES US$’000 FURNITURE FIXTURES & FITTINGS US$’000 2,304 13 - - - 2,317 (3) - - (31) (34) 2,283 2,301 71 - - - - 71 (36) - - (5) (41) 30 35 801 80 (88) (4) (7) 782 (449) (13) 80 (146) (528) 254 352 944 55 (12) - - 987 (751) (1,239) (2) 9 (105) (849) 138 193 (15) 89 (287) (1,452) 2,705 2,881 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 39 Notes to the Financial Statements For the year ended 31 August 2015 12. Property, plant and equipment (continued) 2015 COMPANY Cost or valua(cid:415) on At 1 September 2014 Addi(cid:415) ons in year Disposals in year Balance at 31 August 2015 Accumulated deprecia(cid:415) on At 1 September 2014 Addi(cid:415) ons in year Disposals in year Deprecia(cid:415) on charge for the year Balance at 31 August 2015 Carrying amounts At 31 August 2015 At 31 August 2014 2014 COMPANY Cost or valua(cid:415) on At 1 September 2013 Addi(cid:415) ons in year Disposals in year Balance at 31 August 2014 Accumulated deprecia(cid:415) on At 1 September 2013 Addi(cid:415) ons in year Disposals in year Deprecia(cid:415) on charge for the year Balance at 31 August 2014 Carrying amounts At 31 August 2014 At 31 August 2013 FREEHOLD LAND & BUILDINGS US$’000 PLANT & MACHINERY US$’000 MOTOR VEHICLES US$’000 FURNITURE FIXTURES & FITTINGS US$’000 TOTAL US$’000 - - - - - - - - - - - - - - - - - - - - - - 212 - (212) - (200) 207 (7) - - 12 43 - (33) 10 (37) 31 (4) (10) - 6 255 - (245) 10 (237) 238 (12) (10) - 18 FREEHOLD LAND & BUILDINGS US$’000 PLANT & MACHINERY US$’000 MOTOR VEHICLES US$’000 FURNITURE FIXTURES & FITTINGS US$’000 TOTAL US$’000 - - - - - - - - - - - - - - - - - - - - - - 243 5 (36) 212 (202) 36 (34) (200) 12 41 47 3 (8) 42 (33) 8 (12) (37) 6 14 290 8 (44) 254 (235) 44 (45) (236) 18 55 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 40 Notes to the Financial Statements For the year ended 31 August 2015 12. Property, plant and equipment (continued) Valuations LE HAR (cid:525)PRIVATE(cid:526) LIMITED VALUATION (cid:515) PROPERTY An external, professional and independent valuer with appropriate and recognised qualiﬁ ca(cid:415) ons, T.W.R.E Zimbabwe (Pvt) Limit- ed (“TWRE”) carried out a valua(cid:415) on of the freehold land and buildings as at 31 August 2013 with reference to observed market evidence. TWRE performed a desktop update of their valua(cid:415) on as at 31 August 2015. The directors having considered the TWRE updated report, consider this value to s(cid:415) ll be an accurate reﬂ ec(cid:415) on of the fair value at 31 August 2015 being US$2,300 thousand (2014: US$2, 300 thousand). The Directors consider the fair value at the repor(cid:415) ng date to not be materially diﬀ erent from the carrying value. 13. Biological assets Included in discon(cid:415) nued opera(cid:415) ons are biological assets as detailed below. Balance at 1 September Acquired during the year Increase/(decrease) due to births/(deaths) Loss on fair valua(cid:415) on during the year Total* *Included in Assets Held for Sale in the Statement of Financial Posi(cid:415) on. GROUP 2015 GROUP 2014 US$’000 US$’000 - - - - - 67 - 2 - 69 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 41 Notes to the Financial Statements For the year ended 31 August 2015 14. Goodwill As at 31 August 2015, the consolidated statement of ﬁ nancial posi(cid:415) on included goodwill of US$717 thousand (2014: US$717 thou- sand). Goodwill is allocated to the Group’s cash-genera(cid:415) ng units (“CGUs”), or groups of cash-genera(cid:415) ng units, that are expected to beneﬁ t from the synergies of the business combina(cid:415) on that gave rise to the goodwill as follows: CASH GENERATING UNIT (cid:904)CGU(cid:905) ORIGINAL COST COST AT 1 SEPTEMBER 2014 CARRYING VALUE AT 1 SEPTEMBER 2014 ACCELERATED WRITE(cid:883)OFF CARRYING VALUE AT 31 AUGUST 2015 Paynet Limited Total US$’000 US$’000 US$’000 US$’000 US$’000 717 717 717 717 717 717 - - 717 717 ESTIMATES AND JUDGEMENTS The following assump(cid:415) ons are held in the assessment on the impairment or otherwise of goodwill: • Growth rates are based on a range of growth rates that reﬂ ect 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 normalisa(cid:415) on of the Zimbabwean economy. • • • • • The key assump(cid:415) ons on which the cash ﬂ ow projec(cid:415) ons for the most recent forecast are based relate to discount rates, growth rates, expected changes in selling prices and direct costs. The cash ﬂ ow projec(cid:415) ons 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 calcula(cid:415) ons for goodwill allocated to each of the CGUs or groups of CGUs that is signiﬁ cant 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 expecta(cid:415) ons of future changes in the market. In respect of the value in use calcula(cid:415) ons, cash ﬂ ows have been considered for both the conserva(cid:415) ve and the full forecast poten(cid:415) al of future cash-ﬂ ows with no impact to the valua(cid:415) on of goodwill. IMPAIRMENT LOSS The Group tests goodwill annually for impairment, or more frequently if there are indica(cid:415) ons 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. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 42 Notes to the Financial Statements For the year ended 31 August 2015 15. Intangible assets Payserv so(cid:332) ware licences Total AMORTISATION NET BOOK VAL(cid:883) UE AT 1 SEPTEMBER 2014 US$’000 14 14 RECLASSIFIED FROM TANGIBLE ASSETS AMORTISATION US$’000 - - (12) (12) CLOSING BALANCE AT 31 AUGUST 2015 US$’000 2 2 ORIGINAL COST US$’000 1,425 1,425 The amor(cid:415) sa(cid:415) on charge is recognised within administra(cid:415) on expenses (note 6) in the income statement. The Group tests other intangible assets for impairment if there are indica(cid:415) ons that they might be impaired. The amor(cid:415) sa(cid:415) on periods for intangible assets are: So(cid:332) ware licences 3-6 years 16. Long-term receivables Celpay Interna(cid:415) onal BV receivable Impairment of Celpay Interna(cid:415) onal BV receiv- able ForgetMe Not Africa (BVI) Limited sale proceeds Provision against sale proceeds Total Celpay Interna(cid:415) onal BV GROUP 2015 US$’000 COMPANY 2015 US$’000 GROUP 2014 US$’000 COMPANY 2014 US$’000 - - - - - - - - - - 709 (709) 250 (250) - - - - - - On 29 April 2013, the Group entered into a memorandum of understanding with Celpay Interna(cid:415) onal 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 termina(cid:415) on of the contract or through a change in shareholding of Celpay. The full amount was impaired in the 2014 ﬁ nancial year following a signiﬁ cant deteriora(cid:415) on in the ﬁ nancial aﬀ airs of Celpay leading to the withdrawal by Payserv from the proposed acquisi(cid:415) on of Celpay. The amount is now fully wri(cid:425) en-oﬀ . ForgetMeNot Africa (BVI) The proceeds on sale of shares of ForgetMeNot Africa (BVI) Limited on 14 February 2013, were receivable based on various deﬁ ned milestones but by no later than the second anniversary of the agreement. Given that these milestones have not been achieved and the weak ﬁ nancial posi(cid:415) on of ForgetMeNot Africa (BVI) Limited, the Directors, in the previous repor(cid:415) ng periods, determined that it would be appropriate to provide fully against the receivable. The amount is now fully wri(cid:425) en-oﬀ . CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 43 Notes to the Financial Statements For the year ended 31 August 2015 17. Investments in subsidiaries and associates The Company has investments in the following subsidiaries which principally aﬀ ected the proﬁ ts or net assets of the Company. The direct investments in subsidiaries held by the Company are stated at cost. This is subject to impairment tes(cid:415) ng. CONTINUING OPERATIONS African Solu(cid:415) ons 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 MillChem (Lilongwe) Limited MSA Chemicals (Pty) Limited MSA Sourcing BV Para Meter Computers (Pvt) Limited Paynet Limited Paynet Zimbabwe (Pvt) Limited Payserv (Pvt) Limited Payserve Africa Limited (previously Paynet Limited) Payserv Zimbabwe (Pvt) Limited Payserv Zambia Limited Tradanet (Pvt) Limited Yellowwood Projects (Pvt) Limited + Held directly by Cambria Africa Plc. COUNTRY OF INCORPORATION OWNERSHIP INTEREST Mauri(cid:415) us Zimbabwe Zimbabwe Zimbabwe United Kingdom Isle of Man Isle of Man Isle of Man Zambia Malawi South Africa Netherlands Zimbabwe Mauri(cid:415) us Zimbabwe Zimbabwe Mauri(cid:415) us Zimbabwe Zambia Zimbabwe Zimbabwe 2015 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 51% 100% 2014 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 51% 100% NON(cid:487)CONTROLLING INTERESTS (cid:525)“NCI”(cid:526) O(cid:425) onby Trading (Pvt) Ltd (address: CABSA Head Oﬃ ce, Northridge Park, Harare) holds a 49% interest in Tradanet (Pvt) Ltd. Tra- danet salient ﬁ nancial informa(cid:415) on: Proﬁ t a(cid:425) ributable to NCI Dividends paid to NCI Accumulated NCI at year end Non-current assets Current assets Non-current liabili(cid:415) es Current liabili(cid:415) es Cash ﬂ ow from opera(cid:415) ons Cash u(cid:415) lised in inves(cid:415) ng ac(cid:415) vi(cid:415) es Cash u(cid:415) lised in ﬁ nancing ac(cid:415) vi(cid:415) es Cash and cash equivalents CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 2015 US$’000 291 (235) 65 54 387 16 291 701 (54) (507) 311 2014 US$’000 293 (204) 9 11 229 - 222 551 (9) (442) 171 PAGE 44 Notes to the Financial Statements For the year ended 31 August 2015 17. Investments in subsidiaries and associates (continued) DISCONTINUED OPERATIONS COUNTRY OF INCORPORATION OWNERSHIP INTEREST Zimbabwe Zimbabwe Zimbabwe Zimbabwe Bri(cid:415) sh Virgin Islands Bri(cid:415) sh Virgin Islands Isle of Man Netherlands United Kingdom Zimbabwe Zimbabwe South Africa South Africa Zimbabwe Mauri(cid:415) us South Africa Chenyakwaremba Farm (Pvt) Limited ++ Eas(cid:415) nteg Investments (Pvt) Ltd ++ Leopard Rock Hotel Company (Pvt) Limited ++ Linus Business Op(cid:415) ons (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 Proper(cid:415) es Limited ++ Panafmed (Pty) Limited Quickvest525 (Pty) Limited Quintech Investments (Pvt) Limited Southern Africa Management Services Limited W S Foods (Pty) Limited ++ ++ Held for Sale in 2014 18. Inventory Raw materials and consumables Goods in transit Finished goods Total 2015 - - - - 100% 100% - - - 100% 100% 100% 100% 100% 100% - 2014 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% GROUP 2015 GROUP 2014 US$’000 US$’000 222 36 503 761 213 453 719 1,385 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 45 Notes to the Financial Statements For the year ended 31 August 2015 19. Financial assets at fair value through pro(cid:976)it or loss CONTINUING OPERATIONS Quoted investments por(cid:414) olio Total QUOTED INVESTMENTS PORTFOLIO: Balance at 1 September Acquired during the year Disposed during the year (Loss)/gain on fair valua(cid:415) on during the year At end of the year GROUP 2015 GROUP 2014 US$’000 US$’000 50 50 66 66 GROUP 2015 GROUP 2014 US$’000 US$’000 66 - - (16) 50 58 - - 8 66 The por(cid:414) olio is managed by an asset management company who makes the decisions regarding the sale and purchase of listed shares. This investment is held at fair value. The por(cid:414) olio, which was purchased in “payment” of a trade vendor liability which could not be se(cid:425) led due to Zimbabwe foreign currency constraints at the (cid:415) me, is callable at the op(cid:415) on of the vendor. See note 25. 20. Trade and other receivables NOTE GROUP 2015 US$’000 - 933 4,921 139 5,993 COMPANY 2015 US$’000 8,273 - 110 - 8,383 GROUP 2014 US$’000 - 902 213 293 COMPANY 2014 US$’000 12,181 - 110 87 1,408 12,378 Amounts owed by Group undertakings Trade receivables Other receivables Prepayments and accrued income Total 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 ini(cid:415) ally granted up to the repor(cid:415) ng date. The concentra(cid:415) on 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 a(cid:425) ributable to its trade receivables. The amounts presented in the statement of ﬁ nancial posi- (cid:415) on are net of allowances for doub(cid:414) ul receivables. An allowance for impairment is made where there is an iden(cid:415) ﬁ ed loss event which, based on previous experience, is evidence of a reduc(cid:415) on in the recoverability of the cashﬂ ows. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 46 Notes to the Financial Statements For the year ended 31 August 2015 GROUP 2015 US$’000 COMPANY 2015 US$’000 GROUP 2014 US$’000 COMPANY 2014 US$’000 645 - 645 - 645 50 - 50 - 50 405 - 405 234 639 38 - 38 - 38 21. Cash and cash equivalents Bank balances Bank overdra(cid:332) s Net cash and cash equivalents Net cash included in held for sale Total cash and cash equivalents in statement of ﬁ nancial posi(cid:415) on 22. Capital and reserves REVALUATION RESERVE The revalua(cid:415) on 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 transla(cid:415) on of subsidiary en(cid:415) (cid:415) es where their func(cid:415) onal currency is not United States Dollars, the presen- ta(cid:415) onal currency of the Group. The Company foreign exchange currency reserve relates to the transla(cid:415) on of net assets due to a change in the func(cid:415) onal 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 calcula(cid:415) on of the share based payment posted to the income statement in 2008 and 2012, and par(cid:415) ally released on expira(cid:415) on of op(cid:415) ons never exercised, in 2013, restated to US$ at closing rates. NON DISTRIBUTABLE RESERVE The non distributable reserve arises on the restatement of the assets and liabili(cid:415) es on dollarisa(cid:415) on in Zimbabwe. Amounts held within this reserve are ring fenced from retained earnings. Distribu(cid:415) ons 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 speciﬁ cally required to do so as part of any ﬁ nancing arrangements. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 47 Notes to the Financial Statements For the year ended 31 August 2015 23. Share capital & share premium Issued and fully paid At 1 September 2014 Issued in period At 31 August 2015 ORDINARY SHARES 2015 ORDINARY SHARES 2014 NUMBER US$’000 NUMBER US$’000 99 155 162 108 765 244 207 920 406 18 16 34 66,749,023 32,406,139 99,155,162 12 6 18 The Group has also issued share op(cid:415) ons (see note 24). At 31 August 2015, 1,000,000 shares were held in reserve to issue in the event that these op(cid:415) ons are exercised. No warrants were granted during the current ﬁ nancial year. The following warrants over the ordinary shares of the Company were granted in in previous ﬁ nancial repor(cid:415) ng periods: 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 en(cid:415) tled to receive dividends as declared from (cid:415) me to (cid:415) me and are en(cid:415) tled to one vote per share at mee(cid:415) ngs of the Company. All shares rank equally with regard to the Company’s residual assets. The Directors are authorised in any period between consecu(cid:415) ve annual general mee(cid:415) ngs, to allot any number of ordinary shares on such terms as they shall, in their discre(cid:415) on, 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 allo(cid:425) ed on terms determined by the Directors but subject to the pre-emp(cid:415) on rights prescribed by Sec(cid:415) on 36 of the Isle of Man Companies Act 2006. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 48 Notes to the Financial Statements For the year ended 31 August 2015 23. Share capital & share premium (continued) SHARE PREMIUM The share premium represents the value of the premium arising on shares issued as follows: 17 April 2015 107,000,000 ordinary shares at a price of 0.85p per share (US$1, 337 thousand) 6 March 2014 4,133,333 ordinary shares at a price of 7.5p per share (US$ 508 thousand). 4 March 2014 28,272,806 ordinary shares at a price of 7.5p per share (US$ 3,475 thousand of which US$ 719 thousand relat- ed to se(cid:425) lement of expenses and liabili(cid:415) es). 1 Oct 2012 8,615,115 ordinary shares at a price of 10p per share (US$1,400 thousand). 16 Sep 2011 3,988,439 ordinary shares at a price of 23p per share (US$1,448 thousand). 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). CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 49 Notes to the Financial Statements For the year ended 31 August 2015 24. Share options The following share op(cid:415) ons over ordinary shares have been granted over the last 5 years under an Unapproved Share Op(cid:415) on scheme: NAME Edzo Wisman Edzo Wisman Total DATE OF GRANT 10.03.2011 10.03.2011 NUMBER OF SHARE OPTIONS GRANTED 500,000 500,000 1,000,000 EXERCISE PRICE PERIOD DURING WHICH EXERCIS(cid:883) 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 In accordance with IFRS 2 ‘Share-based payments’ the equity se(cid:425) led share op(cid:415) ons granted have been measured (at the (cid:415) me of grant) 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 op(cid:415) ons granted has been es(cid:415) mated at the date of grant using the Black-Scholes op(cid:415) on pricing model. The es(cid:415) mated value of the op(cid:415) ons granted on 10 March 2011 was £53 thousand (US$85 thousand). Op(cid:415) ons may be exercised in whole or in part un(cid:415) l the expiry of the exercise period. Holders of the op(cid:415) ons are en(cid:415) tled to receive no(cid:415) ce of certain proposed transac(cid:415) ons or events of the Company which may dilute or otherwise aﬀ ect their op(cid:415) ons, and may exercise or be deemed to have exercised their op(cid:415) ons prior to the occurrence thereof. The Company shall keep available suﬃ cient authorised but unissued share capital to sa(cid:415) sfy the exercise of the op(cid:415) ons. Ordinary Shares issued pursuant to an exercise of the op(cid:415) ons shall rank pari passu in all respects with the Company’s exis(cid:415) ng Ordinary Shares save as regards any rights a(cid:425) aching by reference to a record date prior to the receipt by the Company of the no(cid:415) ce of exercise of op(cid:415) ons. The Company shall apply to admit to trading on AIM the Ordinary Shares issued pursuant to the exercise of op(cid:415) ons. The following assump(cid:415) ons have been used at the date of grant: Number of shares Share price at ves(cid:415) ng date (Date of Grant) Exercise price Expected vola(cid:415) lity Expected life Expected dividends Risk-free interest rate DATE GRANT 10 MARCH 2011 DATE OF GRANT 10 MARCH 2011 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% Vola(cid:415) lity has been calculated by reference to industry indices at ves(cid:415) ng dates. All share op(cid:415) ons vested at date of grant and the basis of se(cid:425) lement is in shares of the company. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 50 Notes to the Financial Statements For the year ended 31 August 2015 24. Share options (continued) The number and weighted average exercise price of share op(cid:415) ons are as follows: Outstanding and exercisable at 31 August 2014 Outstanding and exercisable at 31 August 2015 WEIGHTED AVERAGE EXERCISE PRICE PENCE 30 30 NUMBER OF OPTIONS 1,000,000 1,000,000 The Directors are authorised to grant op(cid:415) ons over the Ordinary Shares on such terms as they shall in their discre(cid:415) on 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 mee(cid:415) ng. 99,155,162 Ordinary Shares were in issue at the annual general mee(cid:415) ng of 23 April 2014. 25. Loans and borrowings - long term Consilium facility* Nurture conver(cid:415) ble loan* Other trade payables Total GROUP 2015 US$’000 - - 45 45 COMPANY 2015 US$’000 - - - - GROUP 2014 US$’000 4,685 2,000 60 6,745 COMPANY 2014 US$’000 4,685 - - 4,685 * These loans are payable in the next 12 months and have accordingly been classiﬁ ed under Loans and borrowings - short term (note 28) at the repor(cid:415) ng date . On 9 March 2012, the Company entered into a secured loan facility agreement 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 Consil- ium Emerging Markets Absolute Return Master Fund Ltd for US$1,000 thousand respec(cid:415) vely (“Consilium”). Both these loans were secured by a ﬁ xed and ﬂ oa(cid:415) ng charge over the assets of the Group. On 6 December 2012, the Company entered into an agreement with Consilium to extend the maturity of the short term facility to 8 March 2014. Consilium simultaneously agreed to li(cid:332) 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 23. On 18 February 2013, the Company entered into a further secured loan agreement with Consilium for US$1,500 thousand . Con- silium was also granted 5,000,000 warrants, as disclosed in note 23. This facility was originally intended to expire in tandem with all the Consilium debt on 8 March 2014. On 1 May 2013, the Company and Consilium agreed to extend the maturity of the debt facility to 30 April 2016. The debt facility was further amended to allow, with eﬀ ect from 1 July 2014, for interest to be capi(cid:415) lized and, with eﬀ ect from 1 August 2014, for a reduc(cid:415) on in interest rate from 15% p.a to 8% p.a. In the event of default, Consilium shall have the op(cid:415) on to convert all, or any por(cid:415) on of the outstanding indebtedness at the (cid:415) me of default into shares in Cambria at a 15% discount to the share price at the date of the facility agreements. The op(cid:415) on price is 14.50p. 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 substan(cid:415) al shareholder of Cambria, and the transac(cid:415) ons are therefore deemed a related party transac(cid:415) on for the purpose of the AIM Rules for Companies. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 51 Notes to the Financial Statements For the year ended 31 August 2015 25. Loans and Borrowings - long term (continued) On 8 May 2013, the Company executed agreements with Cerulean (Mauri(cid:415) us) PCC, (“Nisela” or “the lender”) a special purpose vehicle created by a subsidiary of Nisela Capital rela(cid:415) ng to the placement of US$2,000 thousand secured, conver(cid:415) ble debt into Payserv Africa Limited (previously named Paynet Limited). The conversion feature with the debt represents and embedded de- riva(cid:415) ve for accoun(cid:415) ng purposes. Included within the loan balance above is an amount of $91 thousand represen(cid:415) ng the value of the conversion feature. The Nisela secured loan facility carries a 15% coupon, matures on 17 July 2016, and is conver(cid:415) ble into 21.3% of Payserv Africa Limited’s ordinary share capital at the op(cid:415) on of the lender at any (cid:415) me between 17 July 2014 and 12 July 2016. The loan facility is conver(cid:415) ble at the elec(cid:415) on of Nisela if there is a change in control in the shareholders or Board of Directors of the beneﬁ cial own- ers of Payserv Africa Limited or if there is an ini(cid:415) al public oﬀ ering of the ordinary shares in Payserv Africa Limited on a securi(cid:415) es exchange. The Nisela facility is secured over the shares in Le Har (Private) Ltd (which holds the property in Mount Pleasant, Harare) and by the cession of the en(cid:415) re por(cid:414) olio of Payserv Africa Limited’s trade debtors as existed at the date of the agreement and in the future. Other non-current trade payables are in respect of historic Paywell so(cid:332) ware licence fees with the Payserv Group, which could not be remi(cid:425) ed due to Zimbabwe foreign currency constraints at the (cid:415) me. The amounts due were invested in a listed por(cid:414) olio (see note 19). 26. Provisions Provisions Total GROUP 2015 US$’000 183 183 COMPANY 2015 US$’000 - - GROUP 2014 US$’000 182 182 COMPANY 2014 US$’000 - - Provisions at 31 August 2015, are in respect of the maximum Leave Pay and Re(cid:415) rement Gratuity, which may become payable by individual companies on termina(cid:415) on of employment. 27. Deferred tax liability RECOGNISED DEFERRED LIABILITY The following are the major deferred tax liabili(cid:415) es recognised by the Group and movements thereon during the current year. GROUP At 1 September Recognised directly in reserves Other movements At 31 August 2015 ACCELERATED TAX DEPRECIATION US$’000 2014 TOTAL US$’000 ACCELERATED TAX DEPRECIATION US$’000 178 - (1) 177 178 - (1) 177 553 (360) (15) 178 TOTAL US$’000 553 (360) (15) 178 Deferred tax assets oﬀ set against deferred tax liabili(cid:415) es in the period were US$ nil (2014:US$ nil). CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 52 28. Loans and borrowings - short term Consilium facility* Nurture conver(cid:415) ble loan* Ventures Africa Limited ValuChem BV Loan from related par(cid:415) es: Edzo Wisman and Ian Perkins (directors) Finance Leases Total Notes to the Financial Statements For the year ended 31 August 2015 GROUP 2015 US$’000 4,812 2,000 60 - - 5 COMPANY 2015 US$’000 4,812 - - - - - 6,877 4,812 GROUP 2014 US$’000 COMPANY 2014 US$’000 - - - 96 249 3 348 - - - - 249 - 249 * The related summarised terms and condi(cid:415) ons are included under note 25 above. On 28 August 2015, Ventures Africa Limited advanced $60 thousand to Millchem Zimbabwe. This loan is interest free and has mostly been repaid a(cid:332) er year end. On 27 May 2014, MillChem Holdings Limited entered into a Bridge Financing Agreement with ValuChem BV for a short term loan facility of up to $100 thousand. The balance at 31 August 2014 was $96 thousand, carried interest at 9% per annum and was re- payable within 180 days of drawdown. The ValueChem loan was unsecured. On 19 August 2014, Mr Ian Perkins and Mr Edzo Wisman advanced a US$ equivalent amount of US$ 249 thousand under a short term loan facility to the Company. The loan bore a ﬂ at cost of GBP 1.3 thousand (US$ 2.2 thousand) and was repayable on 30 Sep- tember 2014. The loan was unsecured. 29. Trade and other payables Trade payables Non trade payables and accrued expenses Total Current tax liability Total GROUP 2015 US$’000 1,659 1,065 2,724 200 2,924 COMPANY 2015 US$’000 1,230 1,777 3,007 - 3,007 GROUP 2014 US$’000 1,964 901 2,865 269 3,134 COMPANY 2014 US$’000 2,720 432 3,152 - 3,152 Trade payables and accruals principally comprise amounts outstanding for trade purchases and on-going costs. The Directors consider that the carrying amount of trade payables approximates to their fair value. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 53 Notes to the Financial Statements For the year ended 31 August 2015 30. Notes to the statement of cash (cid:976)lows Proﬁ t/(loss) for the year Amor(cid:415) sa(cid:415) on of intangible assets Impairment of held for sale assets Deprecia(cid:415) on of property, plant and equipment (Proﬁ t)/loss on sale of property, plant and equipment Impairment of long term receivables Valua(cid:415) on adjustments to inventories, receivables and other assets Finance income Finance costs Increase in provisions Income tax charge Opera(cid:415) ng cash ﬂ ows before movements in working capital Increase/(decrease) in inventories Increase in trade and other receivables (Decrease)/increase in trade and other payables Cash used in opera(cid:415) ons GROUP 2015 US$’000 455 12 - 183 (109) - 2 (10) 740 1 271 1,545 624 (4,581) (178) (2,590) GROUP 2014 US$’000 (15,845) 204 8,818 302 339 709 84 (21) 1,174 46 133 (4,057) (450) (574) 1,434 (3,647) * All amounts include both con(cid:415) nuing and discon(cid:415) nued opera(cid:415) ons. Cash ﬂ ows for discon(cid:415) nued opera(cid:415) ons are given in note 10. 31. Financial instruments The Group has exposure to the following risks from its use of ﬁ nancial instruments: • • credit risk liquidity risk • market risk (comprises: foreign currency risk and interest rate risk) This note presents informa(cid:415) on about the Group’s exposure to each of the above risks, the Group’s objec(cid:415) ves, policies and pro- cesses for measuring and managing risk, and the Group’s management of capital. Further quan(cid:415) ta(cid:415) ve disclosures are included throughout these consolidated ﬁ nancial 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 iden(cid:415) fy 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 iden(cid:415) fy and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 54 Notes to the Financial Statements For the year ended 31 August 2015 31. Financial instruments (continued) CREDIT RISK MANAGEMENT Credit risk refers to the risk that a counterparty will default on its contractual obliga(cid:415) ons resul(cid:415) ng in ﬁ nancial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterpar(cid:415) es and obtaining suﬃ cient collateral where appropriate, as a means of mi(cid:415) ga(cid:415) ng the risk of ﬁ nancial loss from defaults. The Group’s exposure and the credit ra(cid:415) ngs of its counterpar(cid:415) es are regularly monitored and the aggregate value of transac(cid:415) ons concluded is spread amongst approved counterpar(cid:415) es. Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evalua(cid:415) on is performed on the ﬁ nancial condi(cid:415) on of accounts receivable and, where appropriate, credit guarantee insurance cover is purchased. The Group does not have any signiﬁ cant credit risk exposure to any single counterparty or any group of coun- terpar(cid:415) es having similar characteris(cid:415) cs. The credit risk on liquid funds and deriva(cid:415) ve ﬁ nancial instruments is limited because the counterpar(cid:415) es are banks with high credit- ra(cid:415) ngs assigned by interna(cid:415) onal credit ra(cid:415) ng agencies. The carrying amount of ﬁ nancial assets recorded in the ﬁ nancial 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 repor(cid:415) ng date, there were no signiﬁ cant credit risks. EXPOSURE TO CREDIT RISK The carrying amount of ﬁ nancial assets represents the maximum credit exposure. Therefore, the Group and Company’s maximum exposure to credit risk at the repor(cid:415) ng date, being the total of the carrying amount of ﬁ nancial assets, excluding equity invest- ments is shown in the table below. Cash and cash equivalents Trade and other receivables Amounts owed by group undertakings Other investments Total NOTE 21 20 20 19 GROUP 2015 US$’000 645 5,993 - 50 6,688 COMPANY 2015 US$’000 50 110 8,273 - 8,433 GROUP 2014 US$’000 639 1,476 - 66 2,181 The maximum exposure to credit risk for trade and other receivables at the repor(cid:415) ng date by geographic region was: United Kingdom Southern Africa Mauri(cid:415) us Europe Total GROUP 2015 US$’000 4,912 1,673 60 43 6,688 COMPANY 2015 US$’000 160 8,170 60 43 8,433 GROUP 2014 US$’000 235 1,946 - - 2,181 12,416 COMPANY 2014 US$’000 38 197 12,181 - 12,416 COMPANY 2014 US$’000 235 12,073 65 43 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 55 Notes to the Financial Statements For the year ended 31 August 2015 31. Financial instruments (continued) The maximum exposure to credit risk for trade and other receivables (excluding trade creditors which are linked to listed invest- ments per contract with the supplier - see note 19 US$50 thousand (2014: US$66 thousand)) at the repor(cid:415) ng date by type of counterparty was: Trade customers and other receivables Li(cid:415) ga(cid:415) on se(cid:425) lement proceeds Amounts owed by Group undertakings Total GROUP 2015 US$’000 1,241 4,752 - 5,993 COMPANY 2015 US$’000 110 - 8,273 8,383 The ageing of trade and other receivables at the repor(cid:415) ng date was: COMPANY 2014 US$’000 197 - 12,181 12,378 GROUP 2014 US$’000 1,408 - - 1,408 GROUP Neither past nor impaired Past due 1-30 days Past due 31-60 days Past due 61-90 days Past due 91-days + Other receivables Total GROSS 2015 US$’000 IMPAIRMENT 2015 US$’000 TOTAL 2015 US$’000 734 135 125 43 118 237 1,392 - (3) (11) (37) (100) - (151) 734 132 114 6 18 237 1,241 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 diﬃ culty in mee(cid:415) ng the obliga(cid:415) ons associated with its ﬁ nancial liabili(cid:415) es that are se(cid:425) led by delivering cash and another ﬁ nancial asset. Ul(cid:415) mate 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 new board plans to manage liquidity risk by raising adequate reserves, banking facili(cid:415) es and reserve borrowing facili(cid:415) es and by regularly monitoring forecast and actual cash ﬂ ows and matching the maturity proﬁ les of ﬁ nancial assets and liabili(cid:415) es. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 56 Notes to the Financial Statements For the year ended 31 August 2015 31. Financial instruments (continued) LIQUIDITY RISK MANAGEMENT (cid:525)CONTINUED(cid:526) The following are the contractual, undiscounted maturi(cid:415) es of ﬁ nancial liabili(cid:415) es, including es(cid:415) mated interest payments and ex- cluding the eﬀ ect of ne(cid:427) ng arrangements: GROUP CONTRACTUAL CASH FLOWS 2015 CONTRACTUAL CASH FLOWS 2014 Trade and other payables Loans and borrowings Total CARRYING AMOUNT US$’000 1 YEAR OR LESS US$’000 2 TO < 5 YEARS US$’000 2,724 6,872 9,596 2,724 7,490 10,214 - - - CARRYING AMOUNT US$’000 1 YEAR OR LESS US$’000 3,482 7,093 10,575 3,482 735 4,217 2 TO < 5 YEARS US$’000 - 7,454 7,454 COMPANY CONTRACTUAL CASH FLOWS 2015 CONTRACTUAL CASH FLOWS 2014 Trade and other payables Loans and borrowings (note 28) Total CARRYING AMOUNT US$’000 1 YEAR OR LESS US$’000 2 TO < 5 YEARS US$’000 3,007 4,812 7,819 3,007 5,167 8,174 - - - CARRYING AMOUNT US$’000 1 YEAR OR LESS US$’000 1,615 4,934 6,549 1,615 435 2,050 2 TO < 5 YEARS US$’000 - 5,167 5,167 As disclosed in note 25 the loans and borrowings amounts due to Consilium are secured by a ﬁ xed and ﬂ oa(cid:415) ng charge over the assets of the Group. In the event of default, Consilium shall have the op(cid:415) on to convert all, or any por(cid:415) on of the outstanding in- debtedness at the (cid:415) me of default into shares in Cambria at a 15% discount to the share price at the date of the facility agreements. The eﬀ ec(cid:415) ve op(cid:415) on price is 14.50p. It is not expected that the cash ﬂ ows included in the maturity analysis will occur signiﬁ cantly earlier, or at signiﬁ cantly diﬀ erent 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, Malawian Kwacha and the South African Rand. In respect of other monetary assets and liabili(cid:415) es 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 signiﬁ cant exchange rates applied during the year: Pounds Sterling (GBP) Euro (EUR) Zambian Kwacha (ZMW) South African Rand ( ZAR) Malawian Kwacha (MWK) AVERAGE RATE 2015 REPORTING DATE SPOT RATE 2015 AVERAGE RATE 2014 REPORTING DATE SPOT RATE 2014 0.64 0.86 11.77 7.01 454.29 0.65 0.89 13.31 8.64 556.19 0.61 0.73 5.87 10.49 396.50 0.60 0.76 6.02 10.66 394.10 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 57 Notes to the Financial Statements For the year ended 31 August 2015 31. Financial instruments (continued) FOREIGN CURRENCY RISK MANAGEMENT (cid:525)CONTINUED(cid:526) The Company does not have any exposure to currency forward exchange contracts at the repor(cid:415) ng date (2014: US$nil). SENSITIVITY ANALYSIS In managing foreign currency risks the Group aims to reduce the impact of short and long-term ﬂ uctua(cid:415) ons on the Group’s earn- ings. A 10 percent strengthening/weakening of the listed currencies against the USD at 31 August 2015 would have increased (de- creased) equity and proﬁ t or loss by the amounts shown below. This analysis assumes that all other variables, in par(cid:415) cular interest rates, remain constant and ignores any impact of forecast sales and purchases. This analysis is performed on the same basis for 2014 and assumes that all other variables remain the same. The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabili(cid:415) es at the repor(cid:415) ng date and their sensi(cid:415) vity is as follows: 31 AUGUST 2015 Pounds Sterling (GBP) Euro (EUR) South African Rand (ZAR) Zambian Kwacha (ZMW) Malawian Kwacha (MWA) 31 AUGUST 2014 Pounds Sterling (GBP) Euro (EUR) South African Rand (ZAR) Zambian Kwacha (ZMW) Malawian Kwacha (MWA) EXPOSURE IN FINANCIAL STATE(cid:883) MENT POSITION US$’000 STRENGTHENING PROFIT OR LOSS US$’000 WEAKENING PROFIT OR LOSS US$’000 (1,064) (7) (51) (23) 12 (1,769) (11) (55) 110 12 63 1 - - - 96 1 1 1 - (63) - - - - (96) 1 1 1 - INTEREST RATE RISK MANAGEMENT Due to the liquidity constraints in the Zimbabwean economy, the consequen(cid:415) al 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 ﬁ xed interest rate overdra(cid:332) and loan agreements with its bankers in Zimbabwe. Addi(cid:415) onally, the Company has, mi(cid:415) gated its interest rate risk, by entering into a number of long term, oﬀ shore facility agreements with ﬁ xed rates of interest. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 58 Notes to the Financial Statements For the year ended 31 August 2015 31. Financial instruments (continued) The Group does not account for any ﬁ xed rate ﬁ nancial assets or liabili(cid:415) es at fair value through proﬁ t or loss. At the repor(cid:415) ng date the interest rate proﬁ le of the Group’s interest bearing ﬁ nancial instruments was as follows : CARRYING VALUE FIXED RATE INSTRUMENTS Financial assets Financial liabili(cid:415) es Total VARIABLE RATE INSTRUMENTS Financial assets Financial liabili(cid:415) es Total CAPITAL MANAGEMENT 2015 US$’000 2014 US$’000 - (6,877) (6,877) 645 - 645 - (7,033) (7,033) 639 - 639 The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market conﬁ dence 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 deﬁ nes as net opera(cid:415) ng 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 alterna(cid:415) ves for extending the Group’s share op(cid:415) on 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 aﬀ orded by a sound capital posi(cid:415) on. The Group’s target is to achieve a long term return on capital above 20%. In 2015 the return was 33.7%, (2014: >(100%)). In comparison the weighted average interest expense on interest bearing borrowings (excluding liabili(cid:415) es with imputed interest) was 10.6% (2014: 16.4%). CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 59 Notes to the Financial Statements For the year ended 31 August 2015 31. Financial instruments (continued) FAIR VALUES The fair values of ﬁ nancial assets and liabili(cid:415) es, together with the carrying amounts shown in the statement of ﬁ nancial posi(cid:415) on are as follows: GROUP Cash and cash equivalents Trade and other receivables Quoted investment por(cid:414) olio Trade and other payables Loans and borrowings Total GROUP Cash and cash equivalents Trade and other receivables Quoted investment por(cid:414) olio Trade and other payables Loans and borrowings Total COMPANY Cash and cash equivalents Trade and other receivables Trade and other payables Loans and borrowings Total COMPANY Cash and cash equivalents Trade and other receivables Trade and other payables Loans and borrowings Total HIERARCHY Level 3 Level 3 Level 1 Level 3 Level 3 CARRYING AMOUNT 2015 US$’000 FAIR VALUE 2015 US$’000 645 5,993 50 (2,724) (6,877) (2,913) 645 5,993 50 (2,724) (6,877) (2,913) CARRYING AMOUNT 2014 US$’000 FAIR VALUE 2014 US$’000 639 1,476 66 (3,542) (7,033) (8,394) 639 1,476 66 (3,542) (7,033) (8,394) CARRYING AMOUNT 2015 US$’000 FAIR VALUE 2015 US$’000 50 8,383 (3,007) (4,812) 614 50 8,383 (3,007) (4,812) 614 CARRYING AMOUNT 2014 US$’000 FAIR VALUE 2014 US$’000 38 12,378 (3,152) (4,934) 4,330 38 12,378 (3,152) (4,934) 4,330 Level 3 Level 3 Level 1 Level 3 Level 3 Level 3 Level 3 Level 3 Level 3 Level 3 Level 3 Level 3 Level 3 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 60 Notes to the Financial Statements For the year ended 31 August 2015 31. 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 ac(cid:415) ve markets for iden(cid:415) cal assets or liabili(cid:415) es. 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). ESTIMATION OF FAIR VALUES The following summarises the major methods and assump(cid:415) ons used in es(cid:415) ma(cid:415) ng the fair values of ﬁ nancial instruments reﬂ ect- ed in the above table. CASH AND CASH EQUIVALENTS Fair value approximates its carrying amount largely due to the short-term maturi(cid:415) es of this instrument. LOANS AND BORROWINGS Fair value has been derived from discoun(cid:415) ng future cash ﬂ ows at the cost of debt. TRADE RECEIVABLES AND PAYABLES For receivables and payables with a remaining life of less than one year, the no(cid:415) onal amount is deemed to reﬂ ect the fair value. QUOTED INVESTMENT PORTFOLIO Fair value has been derived from quoted prices. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 61 Notes to the Financial Statements For the year ended 31 August 2015 32. Operating leases LEASES AS LESSEE At the repor(cid:415) ng date, the Group had the following outstanding annual commitments for future minimum lease payments un- der non-cancellable opera(cid:415) ng leases: 34. Income statement of Cambria Africa Plc There is no requirement under the Isle of Man Companies Act 2006 to present a company income statement. The loss for the year to 31 August 2015 was US$5,215 thousand (2014: US$19,525 thousand). Opera(cid:415) ng lease commitments US$’000 35. Capital commitments Payable in next 12 months Payable in 1 to 5 years Payable therea(cid:332) er (> 5 years) Total 35 125 - 160 During the year ended 31 August 2015, US$305 thousand (2014: US$405 thousand, as restated) was recognised as an expense in the income statement in respect of opera(cid:415) ng leases. Opera(cid:415) ng lease payments represents rentals payable by the Group for cer- tain of its proper(cid:415) es. Leases are nego(cid:415) ated for a minimum term of 1 year and rentals are ﬁ xed for the period. 33. Finance leases CREDFIN LOAN Minimum lease payments Finance cost Present value GROUP 2015 GROUP 2014 US$’000 US$’000 6 (1) 5 4 (1) 3 The above current ﬁ nancial liability, measured at amor(cid:415) sed cost is secured by a ﬁ nance lease agreement in respect of mo- tor vehicles. Ownership will transfer to Paynet Zimbabwe (Pvt) Ltd, a(cid:332) er payment of the nominal amount. Interest is charged at 28.27% per annum for one agreement and 25.7% for the other. The capital commitments at 31 August 2015 totalled US$nil (2014: US$nil). 36. Guarantees Chemicals & Marketing Company Limited (“C&M”) It was announced on 26 August 2013 that the Company had concluded the acquisi(cid:415) on of the en(cid:415) re issued share capital of Malawi chemical distributor Chemicals & Marke(cid:415) ng Company Limited (“C&M”) and that the related 5.5 million considera(cid:415) on shares (“considera(cid:415) on shares”) have been admi(cid:425) ed to lis(cid:415) ng on AIM. Subsequent to that announcement, and following a more in- depth understanding of the ﬁ nancial aﬀ airs of C&M, the Com- pany and the C&M vendors entered into a Disengagement Agreement (dated 29 June 2015) in terms of which the par(cid:415) es agreed that the C&M acquisi(cid:415) on will be reversed and the par- (cid:415) es be restored to their ini(cid:415) al posi(cid:415) ons. The considera(cid:415) on shares, net of shares sold to sa(cid:415) sfy obliga- (cid:415) ons to C&M, will be cancelled. The Company’s subsidiary MillChem Holdings Limited (“MHL”), has provided guarantees to creditors of C&M to the value of $592 thousand. C&M has undertaken to release MHL from these guarantees and indemniﬁ ed MHL against any related loss. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 62 Notes to the Financial Statements For the year ended 31 August 2015 37. Contingent liabilities and assets 38. Related parties CONTINGENT LIABILITIES IDENTITY OF RELATED PARTIES The Group has a related party rela(cid:415) onship with its subsidiaries (see note 17), and with its Directors and execu(cid:415) ve oﬃ cers. Transac(cid:415) ons between the Company and its subsidiaries, which are related par(cid:415) es, have been eliminated on consolida(cid:415) on and are not disclosed in this note. GROUP AND COMPANY At 31 August 2015, no amounts were due to Directors in respect of Directors fees . Consilium through the Consilium Corporate Recovery Master Fund Ltd and the Consilium Emerging Markets Absolute Return Master Fund Ltd (jointly “Consilium”), is a substan(cid:415) al share- holders of Cambria. Consilium has provided loan funding to the Group (see note 25). Interest and Fees accrued during the pe- riod amounted to US$425 thousand (2014: US$758 thousand). An amount of $250 thousand was repaid in October 2014. TRANSACTIONS WITH SUBSIDIARY ENTITIES WITHIN THE GROUP Leopard Rock Hotel Company (Private) Limit- ed (“LRH”) LRH, a former 100% subsidiary of the Group, provided hospital- ity services to the Group amoun(cid:415) ng to US$4thousand during the previous ﬁ nancial year. All charges were at market value, arms length rates. On 30 July 2013, the Group, pursuant to its disposal of Blue- berry Interna(cid:415) onal Limited, (“Blueberry”), provided warran(cid:415) es to the Purchaser, rela(cid:415) ng to the disclosure of assets and liabili- (cid:415) es and certain representa(cid:415) ons made during the sale process. These warran(cid:415) es remain in force and eﬀ ect un(cid:415) l 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. On 26 August 2011, the Group, pursuant to its disposal of Sol Avia(cid:415) on (Pvt) Ltd, (“Sol Avia(cid:415) on”) entered into a Memorandum of Understanding with the purchaser, whereby the purchaser would be fully indemniﬁ ed in respect of any claim, made ei- ther by Royal Khmer Airlines Interna(cid:415) onal (Pte) Limited (“Royal Khmer”) or Fly540 Avia(cid:415) on Limited (“Fly540”) pursuant to the Memorandum of Understanding entered into by Sol Avia(cid:415) on and Royal Khmer and a licence agreement entered into between Sol Avia(cid:415) on 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 aircra(cid:332) owned by LonZim Air (BVI) Limited, indemniﬁ ed the purchaser, against any claims or costs arising in connec(cid:415) on with any claim made by 540 (Uganda) Limited against Lonzim Air (BVI) Limited to a maximum value of US$50 thousand. To the date of this report no claims have been lodged under this indemnity against the Group. On 21 October 2014, the Group, pursuant to its disposal of Lonzim Hotels Limited, provided warran(cid:415) es rela(cid:415) ng to ma(cid:425) ers fairly disclosed to the Purchaser in terms of the relevant sale and purchase agreement and the related disclosure le(cid:425) er and/ or due diligence data room. General warran(cid:415) es remain in force and eﬀ ect un(cid:415) l 31 August 2015 and Title warran(cid:415) es remain in force and eﬀ ect un(cid:415) l 21 October 2016. The liability of the Group in respect of the aggregate of all Title warran(cid:415) es shall not ex- ceed $2 000 thousand; and in respect of the aggregate of all General warran(cid:415) es, shall not exceed $350 thousand. The Group will have no liabiilty in respect of General warranty claims in ag- gregate less than $100 thousand and General warranty claims shall not be less than US$25 thousand for a single claim. To the date of the report, no formal warranty claim has been lodged. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 63 Notes to the Financial Statements For the year ended 31 August 2015 38. Related parties (continued) TRANSACTIONS WITH SUBSIDIARY ENTITIES WITHIN THE GROUP (cid:525)CONTINUED(cid:526) Paynet Zimbabwe (Private) Limited (“Paynet Zimbabwe”) Paynet Zimbabwe, a 100% subsidiary of the Group provides ser- vices including payroll processing, so(cid:332) ware licensing, training and u(cid:415) lity and property sublets to fellow subsidiaries which amounted to US$9 thousand (2014: US$15 thousand). All charges were at market value, arms length rates. Paynet Zimbabwe holds a licence to use, sell and develop so(cid:332) - ware owned by Paynet Limited and uses the Paywell so(cid:332) ware through a licence with fellow subsidiary African Solu(cid:415) ons Limit- ed. Total licence fees paid in the period were US$354 thousand (2014: US$824thousand). MSA Sourcing BV MSA Sourcing BV acts as the sourcing agent for the MillChem Group in respect of certain chemical supplies. Chemicals to the value of $217 thousand were so supplied to Millchem subsid- aires. TRANSACTIONS WITH KEY MANAGEMENT PERSON(cid:487) NEL Key management personnel are the holding Company Directors and execu(cid:415) ve oﬃ cers. Edzo Wisman a former Execu(cid:415) ve Direc- tor, par(cid:415) cipated in the share op(cid:415) on scheme. Other Directors and key personnel are eligible to par(cid:415) cipate in the share op(cid:415) on scheme (see note 24). Total remunera(cid:415) on is included in “personnel expenses” (see note 7). E Wisman T Sanders I Perkins P Turner I Mazaiwana F Jones R Wells Total TOTAL 2015 US$000 TOTAL 2014 US$000 438 - 177 34 32 13 61 755 495 89 133 50 63 20 235 1,084 Included in the above is US$189.1 thousand in change of con- trol payments made to Messrs Wisman and Perkins. On 19 August 2014, Messrs. Wisman and Perkins advanced a US$ equivalent amount of US$249 thousand under a short term loan facility to the Company. The loan bore a ﬂ at cost of GBP of 1.3 thousand (US$ 2.2 thousand) and wasrepayable on 30 Sep- tember 2014. The loan was unsecured. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 64 Notes to the Financial Statements For the year ended 31 August 2015 39. Events after the reporting date (con- tinued) Consilium dispute (continued) On 9 June 2015, Cambria announced the provision of a standby facility of $1.12m made available by VAL to the Company which was to be used as security for costs in rela(cid:415) on to the now se(cid:425) led li(cid:415) ga(cid:415) on against Lonrho. Pending the resolu(cid:415) on of the dispute with CCRMF, as a consequence of which CCRMF has converted their ﬂ oa(cid:415) ng charge on Cambria’s assets, par(cid:415) cularly the Com- pany’s primary bank accounts, the Lonhro se(cid:425) lement as well as the shares of Lonzim Holdings Limited, the Company is relying on this standby facility to fund its day-to-day opera(cid:415) ons. CCRMF and Cambria have agreed to the li(cid:415) ga(cid:415) on arising from the dispute being stayed un(cid:415) l 30 April 2016. Cambria howev- er con(cid:415) nues to diligently inves(cid:415) gate all the claims it may have against CCRMF and the former CEO and Chairman of Cambria, both also directors of Consilium. 39. Events after the reporting date Disposal of Millchem Zambia Millchem has agreed to the sale of the Zambian opera(cid:415) ons for net asset value of $46 thousand with eﬀ ect from 1 September 2015. The rights to the name “Millchem Zambia” are not in- cluded in the sale. Litigation settlement On 3 September 2015, in the post balance sheet period, the Company entered into a Se(cid:425) lement Agreement with Lonrho Limited rela(cid:415) ng to the Company’s Jet Claims in terms of which Cambria received gross proceeds of $4,752,000 in full and ﬁ nal se(cid:425) lement of the Jet Claims. Consilium dispute The Consilium dispute arose over loans (“the loans”) provided to the Company by Consilium Corporate Recovery Master Fund (“CCRMF” or “Consilium”) and the validity of CCRMF’s a(cid:425) empt to accelerate the repayment of the loans as a result of an alleged change of control on 13 April 2015. On 13 April 2015, Cam- bria shareholders approved the subscrip(cid:415) on by Ventures Africa Limited (“VAL”) of 107,000,000 ordinary shares in the Company which resulted in VAL owning 50.55% of Cambria. CCRMF and related par(cid:415) es hold 14.9% of Cambria Africa’s shares. Cambria announced on 26 October 2015 that it received a stat- utory demand in the Isle of Man in which CCRMF has formally demanded repayment of the loans. In response to the statutory demand, the Company submi(cid:425) ed that there was a genuine and substan(cid:415) al dispute as to whether the debt was then payable and that any future presenta(cid:415) on of a winding up pe(cid:415) (cid:415) on would cons(cid:415) tute an abuse of the Court’s process. CCRMF withdrew their statutory demand in response to Cam- bria’s applica(cid:415) on for an injunc(cid:415) on. In addi(cid:415) on, CCRMF was or- dered by the High Court of Jus(cid:415) ce of the Isle of Man to pay the Company’s costs of and incidentals to the Statutory Demand claim on a standard basis. Cambria con(cid:415) nues to strongly dispute CCRMF’s claim that there has been an event of default that en(cid:415) tles Consilium to acceler- ate repayment of the loans and maintains that the due date of the loans as disclosed in its audited ﬁ nancial statements and as deﬁ ned in the loan agreements, as amended, is 30 April 2016. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 65 Corporate Information For the year ended 31 August 2015 COMPANY SECRETARY AND CONTACT DETAILS AUDITORS Northern Wychwood Limited 1st Floor, Exchange House 54-58 Athol Street Douglas Isle of Man IM99 1JD Tel: +44 (0) 1624 678259 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 Baker Tilly Isle of Man LLC 2a Lord Street Douglas Isle of Man IM99 1HP T: +44 (0) 1624 693900 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 Mar(cid:415) n Lane London EC4R 0DR Tel: +44 (0) 20 7220 1666 CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 66 Shareholder Information For the year ended 31 August 2015 Analysis of ordinary shareholdings as at 31 January 2016 Note: the shareholding analysis has been performed on 31 January 2016 incorpora(cid:415) ng changes since the year end of 31 August 2015 Category of shareholder Private shareholder Banks, nominees and other corporate bodies Total Shareholding range 1 – 5,000 5,001 – 50,000 50,001 – 500,000 500,001 – 5,000,000 5,000,001 – 50,000,000 50,000,001 – 150,000,000 Total REGISTRARS NUMBER OF HOLDERS % OF TOTAL HOLDERS NUMBER OF SHARES % OF TOTAL SHARES 91 132 223 76 53 53 36 4 1 223 40.8% 59.2% 100.0% 34.1% 23.8% 23.8% 16.1% 1.8% 0.4% 100.0% 20 706 232 190 948 930 211 655 162 181 002 1 085 866 9 704 725 56 065 948 37 617 621 107 000 000 211 655 162 9.8% 90.2% 100.0% 0.1% 0.5% 4.6% 26.5% 17.8% 50.6% 100.0% All administra(cid:415) ve enquiries rela(cid:415) ng to shareholdings, such as queries concerning dividend payments, no(cid:415) ﬁ ca(cid:415) on of change of address or the loss of a share cer(cid:415) ﬁ cate, should be addressed to the Company’s registrars. UNSOLICITED MAIL As the Company’s share register is, by law, open to public inspec(cid:415) on, shareholders may receive unsolicited mail from organisa(cid:415) ons 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. CAMBRIA AFRICA PLC FINANCIAL REPORT 2015 PAGE 67 Cambria Africa Plc 1 Berkeley Street Mayfair London W1J 8DJ Tel: +44 (0) 20 3402 2366 Fax: +44 (0) 20 3402 2367 info@cambriaafrica.com www.cambriaafrica.com

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